Let’s kick off the week with some fresh listener questions we have lined up for you! And don't just stand on the sidelines- if you have a question you’d like us to answer, toss your voice memo our way. It only takes about 90 seconds to record and you can find a step by step guide over at HowToMoney.com/ask . Regardless of how random or bizarre you might think it is, we want to hear it!
1 - How should I strike the balance between paying off my student loans versus investing?
2 - Since I loan money to friends, can I report their on-time payments to help them build their credit?
3 - What is the role of faith in your lives and how does it pertain to handling your personal finances?
4 - Should I use my company stock vests to pay extra towards my mortgage?
5 - I’m planning to travel internationally so what cell phone provider should I go with?
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- Massively reduce your cell phone bill each month by switching to a discount provider like Mint Mobile.
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Transcript
Episode Transcript
Available transcripts are automatically generated. Complete accuracy is not guaranteed.
Speaker 1 (00:00):
Welcome to Out of Money. I'm Joel, I'm Matt, and
today we're answering your listener questions.
Speaker 2 (00:24):
You know, a buddy, We have some listeners who have
inquired and they want to know what to do with
their money. We've got a listener who's looking to dial
in his student loan payoff strategy specifically, and he's got
both federal and private student loans, so we've got an
answer there for him. Another is asking about the best
options for cell coverage while abroad. They want to be
able to tap into some of that data while they're
(00:44):
traveling this summer.
Speaker 1 (00:45):
The price discrepancies in that area can be significance dramatic.
Speaker 2 (00:49):
And we're also going to talk about the role of
religion in our lives. We're going to have a faith
in finances kind of conversation.
Speaker 1 (00:55):
Are we going someone wants to peek behind the curtain
of who we are, not just what we think about money,
And it's kind of like how how we think about
money based on our views on.
Speaker 2 (01:04):
Baith totally, and we have talked about this in the past.
It's just not something we it's not a drum that
we'd beat regularly continuously on every single episode. So I'm
looking forward to that one. But from here on out,
we shall just kidding real quick. Did you so right
before we sat down a record, I just took a
walk around the block after lunch. Did you see that
they are resurfacing recoding the tennis courts in the public
(01:26):
park okay near our office? That's nice.
Speaker 1 (01:29):
Are they turning them into pickleball courts? That's exactly what
they're doing. They're not just recoding.
Speaker 2 (01:33):
The truck said, you know number one pickleball surfacing or whatever,
which kind of got me excited. It would be the
nearest pickleball court by far to where we live. I
might just have to splurge, get me a couple of paddles.
Maybe we'll pick it up and start playing. You want
to you want to get into it? Yes, I've been
wanting to try it out and I have not.
Speaker 1 (01:52):
It's fun, it's funny. I had the thought last night.
I was I was on a run and I ran
by like a bunch of tennis courts, and I saw
these young people playing tennis, and I was wondering if
the rise in pickleball is is it like a tide
that lifts all boats and tennis is also seeing a
resurgence or no, is it like gets people out on
the court. It's pickleball the thing, and people are like
kicking tennis to the curb. I'm not sure what the
answer is, but I was like, I think I've played tennis.
(02:12):
I enjoy tennis. I think I would like pickleball too.
Speaker 2 (02:15):
It's in my impression or in my experience, it's a
more social version of tennis, which I'm like, all right,
this is god Joel written a little quicker too, write yeah,
which a little more intense. Yeah, And you can fit
more people on the courts. I'm pretty sure. I don't
know the exact dimensions, but I think you can fit
probably four pickleball courts in the span of where there's
(02:35):
where there used to be two tennis courts. Okay, I
don't know the exact dimensions or anything, but I got
to imagine that there that they're gonna be able to
ramp up the number of folks who can get out
there and play. Which is I love that too. Man.
That's like density in housing, right, Like why not build
an apartment as opposed or a split not a split
quad plex as opposed to a single family. If that's
something that folks are winning. Yeah, and that doesn't have
to be a teaching moment or anything like that. But
(02:56):
I think this is a good just a good reminder
for people to use whatever resources are available. And if
it means ok, hey, I got to buy a pickball,
paddle and a ball, but where I play, I get
to play for free, then that's pretty awesome, I think
if it kind of like I think of disc golf,
where you buy a few discs and basically all the
courses are free to play on. And so yeah, I dropped,
(03:17):
not all of them. We've never played at some of
the high end courses which no are evidently kept up
like golf courses.
Speaker 1 (03:24):
Yeah, I've literally never paid to play, but I would.
I totally would if I went somewhere fancy and it
was a really cool course. But for the most part,
it's free to play and all you got to do
is buy a few discs, and you can even get
them at like a used sporting good store or something like.
Speaker 2 (03:35):
That is played against sports still still in existence, still around.
We have one not too far from us, so nice. Yeah,
something else I wanted to share real quick. Last week
was tax filing day, and I think there might be
a lot of folks who received or maybe they were
told recently that they're going to receive a nice fat check.
Speaker 1 (03:52):
It's like on the way coming through the internet into
your banking and they're already thinking of maybe different ways
to spend it. You know, you got that dopamine hit
and you're like, oh, yeah, that nice spring little bonus.
And I'm going to be the I'm going to rain
on your parade. I'm going to be the stick in
the mud who is going to like wag his finger
at you and recommend for you to do.
Speaker 2 (04:11):
Something smart with that money. And I'm not even going
to recommend for folks to do this the typical money gears.
You know, we harp on that all the time. What
I want folks to do is to think about an
expense that they know is coming but that they just
haven't budgeted for, because those are the kind of budget
derailers that can completely wreck your finances for a few
months maybe gosh, even where you're maybe even carrying a
(04:33):
balance on a credit card because it's something that you
didn't plan for because I didn't quite have enough money
set aside for that. I would hate for that to
be something that derails folks finances. Like I'm thinking of
deferred car maintenance or a repair at home. You know,
you got to get a contractor oute, even like a
medical bill like something where you know that, oh, I've
(04:53):
got this procedure. It's going to cost me, you know,
a few hundred bucks at a minimum. And being able
to prepare for these things that I think is really smart,
creating those little savings buckets that are dedicated to these
specific expenses.
Speaker 1 (05:05):
And we can debate the wisdom of getting a tax refund,
but I think more than anything.
Speaker 2 (05:10):
Reality is there are folks who are getting on.
Speaker 1 (05:11):
There are lots of folks, and the average refund has
actually gone up this year for taxpayers. So it's one
of those things where is it the most optimal thing.
Probably not, but it's a chance. It's really for most
people once in a year chance to get some sort
of lump sum to change your trajectory to their finances.
So like, you're ahead a little bit, right, so use it,
use it and do something with it. And so I'm
(05:32):
actually not nearly as against at least from a psychological perspective,
people getting a lump sum tax refund overpaying throughout the
year because it does give you a chance to tackle
something big with your finances in one fell swoop.
Speaker 2 (05:45):
That's right, man, Okay. The beer that you and I
are going to enjoy during this episode is called a
Birdie Putt. This is a pilsner by six Bridges. Looking
forward to drinking and enjoying and sharing our thoughts at
the end of the episode, no doubt.
Speaker 1 (05:59):
All right, So let's take listener questions, Matt, and if
you are listening and you've got a money question we
want to hear from you. Just go to how to
money dot com slash ask for the simple instructions, or
just say hey, what's my money question? A noodle it
out real quick, record yourself, email it over to us
at how to moneypod at gmail dot com. We look
forward to taking your question on the show asap. Matt,
(06:21):
let's get to a question specifically about paying off student
loans and the wisdom behind doing So.
Speaker 3 (06:28):
Hey, guys, my name's Donald. I'm originally from Maryland, but
I'm currently living in North Carolina with my wife Chelsea,
my two cats, Peanut Butter and Whiskey, so shout out
to them, Chelsea included. So my question is about student
loan payoff strategy. I've been out of college for about
four years now, and I'm paying off both a private
and a student at a public loan. My plan for
(06:49):
the public loan is to pay as little as possible
and after ten years have the resk forgiven as part
of the public student loan forgiveness program as I'm part
of the military. But I'm less sure about the private loan.
It's currently sitting around seventy thousand with a three point
eight percent interest rate. I'm paying seven hundred dollars a
month towards that, and I want to know if ever
I should prioritize paying that off versus investing in the market.
(07:13):
I currently put around four hundred a month in the
market and occasionally make a couple thousand dollars investment. Surely
there has to be somewhere between paying seven hundred dollars
a month for the next ten years and let's say
doubling my payment to fourteen hundred. I'm paying off in
less than five years, which would save me the most money. Right, So,
the sooner I paid off, the more I can invest.
But if I paid the minimum, I can invest less,
(07:34):
but for a longer time. So it is time in
the market always better came up the great work. Ps.
Chelsea and I often combined couple's names to save time,
so you guys would either be Mole or Jat. So
I'll let you guys pick your poison on that anyway,
have a great one.
Speaker 2 (07:49):
Guys, Ooh, Mole or Jat, which one do you prefer?
Don't get behind Mole, I can't. But if it was Moel,
I'm gonna go with Jet, I guess.
Speaker 1 (07:59):
So it's fun out of a out of a lack
of options for better choices.
Speaker 2 (08:02):
What's funny is that we've already done this with our
last names and so on our shared calendar. So technically
it's the business Gmail accounts calendar, but we put things
on there that pertain to both of our families, so
for instance, our summer vacation trip and our couple or
I guess our family combined family name is I guess
it is by default, but somehow we've actively decided this
(08:23):
is alt Guard, and so that it could have been
Lars mixed. It could have been Lars mixed, but I
think alt Guard is just stronger because you've got the alt.
I don't know, a nice hard tea there and then
the guard like both very strong. You put them together
and you got out of money.
Speaker 1 (08:38):
The last name combo is vastly superior to the first
tame combo, which.
Speaker 2 (08:42):
That's that's actually a thing. So a friend of ours,
her and her husband, when they got married, they blended
their last names together, like legally, yeah, Michelle, Yeah that's right. Yes,
So they got married, blended their their last names and
basically they met in the middle when it came to
what they're like new family name was I can respect that. Yeah,
It's just reminds me of like the was it in
(09:05):
the nineties, Like the couple name, like the celebrity couples
like Berendiford is when that comes to mind, Brad Pitt, Yeah,
Jennifer Andiston, that was the ultimate couple.
Speaker 1 (09:13):
I think people still Branjelina that was another. Yeah, everything
with all the leomon he was with, he had to
combine the names. Oh man, I think that happened to
other celebrities too. But all right, let's get to Donald's question. Donald,
it sounds sounds like you're making a smart move while
you know, trying to pay as little as possible in
hopes to have maximum forgiveness on that student loan under
(09:34):
the PSLF program. I will say, though, with all the
noise around student loan policy right now, banking on public
service loan forgiveness being there for years to come, it
might be a mistake. The current administration is taking a
more hostile attitude and approach toward PSLF, so we just
don't know if it's going to be around forever. You
(09:56):
can hope for it, but there could be a rug
pull coming at least it some point for folks who
are in the PSLF process but haven't achieved forgiveness yet.
Not trying to freaking out or anything like that, but
I wanted to mention what student loan stuff is just
in flux, right. It is, and we don't have a
clear answer at least to some of the questions that
student loan borrowers have. If Congress made a change, right,
(10:18):
you'd likely be grandfathered in, but that's also not guaranteed.
So I guess it's just I want to put that
on your in your headspace, Donald, just to be thinking
about that and not count your chickens before they hatch.
Speaker 2 (10:30):
True. Yeah, A nice little note before we answer Donald's question,
A little more directly here, But for multiple reasons, Donald,
we would prefer for you to keep that private student
loan around. And so if you head over to the
site and you hit start here, you will see the
money gears, but you don't pay off low interest debts
until you get to money gear six. You are investing
(10:50):
a lot, which is great, while simultaneously working to get
rid of those loans you want to. You're working to
eradicate them, and you are at the point where you
could opt to invest maybe a bit less in order
to get rid of those loans a bit faster. But
I just would not make that a priority. I wouldn't
be taking that option, at least not at this point,
given the data that you shared with us, Matt.
Speaker 1 (11:11):
When I got my first real job out of college,
I kind of had it on my mind that I
wanted to get rid of the student loans that I had,
and I didn't have this insane amount. I think I
had like twelve thousand dollars with the student loans, and
I still remember getting to the point where I was
accelerating the payoff and I was like, all right, I
have a lump sum here I can pay off like
three thousand dollars and be done with them, and looking back,
(11:32):
it was a mistake. I did it, and I wouldn't.
I wouldn't do it if I could go back in time,
because my interest rate one point eight seventy five percent. Yeah,
that's a little bit of a humble bread.
Speaker 2 (11:41):
Can I refinance that that for another thirty years? Perhaps
I'd be willing to pay even a little bit more
to stretch that thing out. Of course, depending on what
you do with that money rightwise.
Speaker 1 (11:50):
I just thought that was worth mentioning that, just, you know,
a minor financial mistake. Think about what that could have
done in a roth iray for me over the years
if I had made a different move. And we shall
also mention that we're not typically fans of private student loans,
but during COVID, private student loan holders often had to
continue to make payments while folks with federal loans had
their payments paused for like three and a half years.
(12:11):
So you felt like you were on the outside looking
in if you had private student loans because you kind
of work because you were jealous of all the federal
people who had perpetual payment pauses, and you were still
paying In many cases, although when interest rates were low,
it did make sense for some folks Tory finance into
a private loan, even though protections for borrowers weren't nearly
(12:31):
as good. And so because of how low your interest
rate is here, Donald, I just don't see this as
a high priority for you, even if the balance is steep, right,
because you can you can make just as much, if
not more money, just by saving, right, you.
Speaker 3 (12:45):
Know what I mean.
Speaker 1 (12:45):
You don't even have to invest those dollars, because then
that's where you maybe fall into treacherous territory. If it's like, well,
if I invest in the S and P and the
returns are this good and you're making projections, it's not guaranteed.
It's not guaranteed. But when we're talking about an FDIC
ensure highyal savor's account through CIT or Betterment, which are
two of our favorite institutions paying the highest rates, you're
talking about guaranteed returns that are essentially on par with
(13:09):
what your student loan rate is.
Speaker 2 (13:10):
That's right. Yeah, it would be like paying off a
three ish percent mortgage early were you to attack these
student loans and pay them down a bit faster. But
the only reason we would suggest for you to pay
off your student loans early. Now is if that money
was burning a hole in your pocket, if you were
going to spend it instead of saving that money, instead
of investing it. It comes sort of like I was
(13:32):
saying earlier. It comes down to what you would otherwise
do with that money? What are the alternatives? But you
don't sound like that kind of guy, Donald. It sounds
like you are a diligent investor. You are young. And
while I certainly understand the hatred of having your student
loans around for a decade or more, paying off more
quickly would mean investing less. It would mean having less liquidity.
(13:53):
And that specific like that in and of itself right there,
Like some liquid cash reserves, they are underrated. And of
course we wouldn't want you to keep credit card at
aroun for instance. You know, like if we're talking about
paying the credit card companies twenty plus percent, that's a
different story. That's not what we're talking about here. There's
a difference between that versus a three point five to
four percent return on your cash. You know, you're at
(14:15):
parity and just cash accounts. Like again, like Joel said,
you are not even having to invest those dollars. There's
no need to funnel any more money towards the student
loans right now in our opinion.
Speaker 1 (14:24):
Yeah, I think it might be worth mentioning too. Match
just like some of the little idiosyncrasies of this. Yeah,
you're going to pay tax on the money that you
make in an interest bearing savings account. You're going to
get a ten ninety nine at the end of the year,
So there's that. But then on the flip side of that,
you can get a tax deduction for student loan interest
that you pay if you're itemizing. There's also a tax
(14:45):
break for investing more in tax advantaged accounts too. So
if you're saying, oh, well, by holding off on paying
down this student loan, it's allowing me to get additional
tax benefits in both of those areas, it might be
worth it.
Speaker 2 (14:58):
You know.
Speaker 1 (14:59):
Those are I think more minor factors in the decision,
but they're worth mentioning and worth thinking through. I think
it's another small check mark in the invest and save
over payoff category. And we love the idea of getting
rid of debt. Like I don't want it to sound
like we're in favor of you keeping any kind of
debt around for long periods of time. I mean, for
(15:20):
the most part, we are not fans of debt, but
we also love investing and we want you to have
the best holistic financial situation possible, and so we want
you to build your net worth intelligently. It's not like
there's a right or a wrong answer here. And we
can't assure you that savans, Raciel State or the market
returns are going to be higher than three point eight
(15:40):
percent annually over the next decade. Like I wouldn't sign
my name to that. I would say, if you look historically,
there's a good likelihood. But you know, if history repeats
or rhymes, putting more in the market is going to
be better than paying off the debt totally.
Speaker 2 (15:53):
And then if interest rates on savings, if they drop
back to where they were a few years ago, well
you can always pivot. You just drop a big old
chunk of savings to on those loans and then just
totally wipe them out. But Joel, we've got more to
get to. We're gonna hear from a listener who is
interested not in receiving information from the credit bureaus, but
actually reporting information to the bureaus. We'll get to that
(16:13):
and more. Right after this, all right, Matt, we're back.
Speaker 1 (16:23):
We get more listener questions and then we got to
take including this one from listener Vic. He wants to
help some folks out in his life. Let's see if
we can help him make that a reality.
Speaker 4 (16:34):
I was listening to your show earlier today and you
were talking about installment notes. I am constantly loaning money
to different people, some clients, some not well. I would
love to help them with their credit, to give them
another tradeline. Are you telling me that if I loan,
(16:54):
for example, if I loaned one hundred thousand dollars to
person X, I can report it to the bureau or
who reports it to the bureau? And how does it
actually work for their FIICO to go up? Or how
does the tradeline show up in their credit report showing
(17:17):
that it's active, meaning that they're consistently paying me? And
does me the beneficiary? Do I have to keep updating
the bureaus monthly, weekly, every other month? I'm not sure?
Thank you very much.
Speaker 2 (17:35):
All right, And that question was from Vic, who just
happened to forget to mention his name. They're at the
top of the question. We know via Yeah. I love
this though, because it shows that he is trying to
make his clients and friends those who he is lending
money to aware of the credit building possibilities of reporting
these on time payments to the bureaus, which is, by
(17:56):
the way, the biggest factor in your credit score. Being
able to help them to report on time payments for loans,
I mean, that would be a big help. But Vic,
we're sad to say, we're sad to hate's a burster
you bubble here, but it is actually not possible for
you as an individual to do that.
Speaker 1 (18:12):
I wish we had better news and that you could
help the people you're lending money to in that way,
you know, get that reported to the credit barriers to
boost or score, but sadly not possible. We'll get into
the details of that in just a second two. But
I also want to ask the question like who are
you lending money to and why? And not that I'm
against people lending money to each other, but be careful
(18:34):
because you made it sound like you're lending money to
clients and then other people too, And I don't know
who the other people are. Are they friends, are they
true acquaintances or they random strangers that you pass by
like you just you want to You don't want to
get taken advantage of when you're lending money to people
around you in your orbit, and don't lend more than
you can comfortably afford to. Also, it's crucial anytime you're
(18:55):
lending to someone who's in your friend circle know that
that lending money to people in your community or in
your family can harm relationships.
Speaker 4 (19:04):
Right.
Speaker 1 (19:04):
I've just seen too many folks lend to friends or
family not get paid back. They're irreparably harming that relationship
and their finances at the same time. It's such an
egregious mistake that I want big to avoid. I want
everyone else out there to avoid. Out of a generous spirit,
you're often like, well, let me lend to you. I'm
hoping to get paid back, maybe with a little lecture
on top. Then they're late or they don't pay up
(19:24):
at all, and it sours the relationship. And it's just
not money is not worth ruining a relationship over.
Speaker 2 (19:29):
That's true. Look at Joel with all the thoughtful, helpful
thoughts notes at the beginning of questions here it thoughts
from Jack and he was satday life that old school.
That's another right there. But vic you so on the
previous episode when you heard us talking about this, we
were referring to a fintech service. Most likely this is
what we're talking about called self and this allows folks
(19:50):
to take out an installment loan for the express purpose
of building up their credit scores. But only official data
furnishers are allowed to report things to the big three bureaus.
And as an individual, you there by yourself, you can't
just show up at their headquarters or write them an
email in an attempt to have those own payments reported
(20:11):
in order to influence their scores. If only you.
Speaker 1 (20:14):
Could guy with sign style stand in front of Equifax
and say, hey, here's my friend Gina. I want you
to report this so that she can have a credit
score increase.
Speaker 2 (20:22):
She is on time again. So there's a law called
the Fair Credit Reporting Act that passed back in nineteen
seventy and that kind of outlined how the payments that
you make on time, how it impacts your credit score.
And if you were granted that ability under the FCRA,
well you would have then the additional legal responsibilities around
potential disputes which individuals they're just not well equipped to handle.
(20:47):
Because that's like you said, that's true, Like because you
log in check your credit report, it's a monthly sort
of reporting that takes place. That's why you see like
the green circle around April. Yeah, yeah, yeah, And so
it's just one of the small things that goes into
creating these credit reports. So while you may not be
able to help these folks build their credit though, not
(21:07):
having this ability, I actually think it'll make your life
far less miserable of having these additional requirements that are
basically mandatory. Yeah, I agree.
Speaker 1 (21:18):
I think you don't want to sign yourself up for
that type of existence, and if.
Speaker 2 (21:24):
You did, then you would have to start charging them
like high rates of interest, which is what the banks do, right. Yeah.
Speaker 1 (21:29):
So let's talk about one maybe area where this has
developed in recent years, where private landlords in particular, they
haven't had the ability to directly report payments directly.
Speaker 2 (21:41):
To the bureaus.
Speaker 1 (21:41):
And that's one of those things where you would say,
of all people who should have that ability to report,
it would be individual small time landlords. But there just
hasn't been a mechanism I guess for them to report
on time or late payments of someone who's living in
a homer apartment that they own. You would think that
would be pertinent to the bureaus though, right, whether someone's
(22:03):
paying their rent on time, that would be an important
thing for them to consider. But there are now fortunately
indirect third party companies that make this reporting possible. Zillo,
for instance, offers this service for free, right, and your
tenant has to pay through Zilo to you. Landlord has
to then say, okay, cool, I'm willing to accept payments
through Zillo's platform. I believe there's no fee if you
(22:25):
pay certain ways on both ends. I think the tenant
can pay with a credit card maybe and then pay
a fee. But self whott you mentioned just a second ago.
They also offer a similar free service that connects to
your bank in order to report payments. You can even
i think, pay them, as an individual fifty bucks to
report on time payments over the past two years in
(22:46):
an effort to increase your score more quickly, so kind
of get some.
Speaker 2 (22:50):
Of that back history.
Speaker 1 (22:50):
Yeah, but it's amazing how you need this. You essentially
need a third party who is equipped and signed up
to make these reports, these monthly reports to the bureaus.
You as an individual me as an individual I own,
you know a handful of properties. You do as well, Matt,
and we can't if one of our tennis doesn't pay
on time unless we're signed up through Zillo and we
have that formal relationship. There's nothing, no real recourse we
(23:14):
have from a credit perspective.
Speaker 2 (23:15):
That being said, and I think this is one of
the reasons you're probably I don't know if you're planning
to mention these other companies, but the bureaus they also
have their services where you can do this as well.
We're just not huge fans of doing business with them
if you don't have to. As opposed to Zilla, who
does put out a fantastic product versus these other I
don't know what, feel more like government bureaus, and they're
not government agencies.
Speaker 1 (23:34):
They're like they're bureaucratic nightmares and just poorly run and it's.
Speaker 2 (23:38):
More closely aligned with the government. I will say, then
let's just say Zillo.
Speaker 1 (23:41):
But I mean we've talked about through the years, who
gets the most complaints essentially every year when the CFPB releases,
it's a credit bureaus, Like people are saying inaccurate reports,
there's my credit score gart tarnished for reasons that it
wasn't my fault exactly. The credit bureaus they don't like to.
Speaker 2 (23:57):
Fix it, so I will mention though, so Equifact. They
have partnered with Built Experience, They've partnered with Rent Bureau
and then TransUnion. They've got their own thing. It's called
resident Credit, where if you are a collective rent via
these platforms that it also gets reported. And these aren't
platforms that I don't know if you've used any these
platforms to all, but I haven't. They're all relatively new.
(24:19):
I am very interested though in making this happen because
you know, if you're a great tenant who always pays
rent on time, well, for the tenant, this is great
because it boosts your score. The technology is just making
this process a whole lot easier. And then as a landlord,
I'll love it as well, because come on, man, there's
some accountability here and yes, a little extra skin in
the game. Yeah yeah, I would think is that a
(24:39):
tenant who's looking to, let's say, apply for a new property,
say hey, where you've been living for the past two years?
There's a gap here? I see that, and then oh,
maybe they didn't write your name don because they ended
up trashing your place and they know they're going to
give you a false report. Maybe that's how they could
approach it. I'm just pointing out that there are ways
around a previous landlords recommendation or not recommendation to allow
(25:02):
you to rent. But I am glad that there are
these third party companies stepping in the avoid because again,
it's just a massive expense. I'm thinking about just from
the standpoint of renters more than anybody else, because if
you are not choosing to rent with one of the
big some of these big corporations where there is you know,
where there are more systems in place, it feels like
you're almost making a sacrifice to rent in a cuter
(25:23):
home or a home in a neighborhood that happens to
be owned by a local landlord.
Speaker 1 (25:27):
Well, and you and I were just not aware though
at this point, of anything that does that for a
loan made between friends, right, so if I were to
make exactly we don't know of any service like that.
That's right back to Vix's question. But so you like
talking about real estate, and I just I don't think
we're likely to see individuals get direct access to bureaus
in order to and I don't say this in a
(25:48):
rude way, but in order to manipulate other people's credit
scores up or down. There's just too much possibility for
fraud and abuse, and I think it'd be hard from
a record keeping perspective for the bureaus to interact directly
with millions of individual Americans across the country.
Speaker 2 (26:02):
It's a good thought.
Speaker 1 (26:03):
We're glad that third party companies are making it easier
to report a variety of credit types, but there's just
no way for you as an individual to kind of
make this a possibility right now.
Speaker 2 (26:12):
Sorry, Vic, that's right, Joel, all right, this is not
something that we do regularly, but let's hear a question
from a listener who is asking about faith and finances.
Speaker 5 (26:20):
Hi, Joel and Matt, this is Jonathan and Dubuque Iowa.
A recent episode, you mentioned you might do and ask
me anything episode and if you ever do that. The
question that came to mind for me was what is
the role of religious faith, if any, in your lives
and your approach to finances. I know it doesn't have
(26:41):
to be relevant to your main topic, but I think
it might be anyway. Since faith does shape the way
we live our lives, set our priorities, and use our resources.
I greatly enjoy the show, look forward to hearing more.
Speaker 2 (26:54):
God bless Oh Matt, let's get to it. I like
this question.
Speaker 1 (26:58):
Yeah, And by the way Jonathan asked, he mentioned the
and ask Me Anything episode.
Speaker 2 (27:03):
We totally need to do that.
Speaker 1 (27:04):
We're going I think we're going to so you know
what's approaching quickly episode one thousand, that's when.
Speaker 2 (27:09):
We're gonna do it. That's what we're gonna do it.
So if it's like two three months out, I guess.
Speaker 1 (27:12):
If listening to the answer to this question or if
you're just like, man, there's something I've always wanted to
know about Matt and Joel.
Speaker 2 (27:18):
But it's not really a money question, right, So literally
like a reddits ask me anything, like honestly, should we
even take money related questions?
Speaker 1 (27:26):
Like if everything but everything or unless it's something specific
about how we it can pertain to.
Speaker 2 (27:32):
But yeah, not the typical investing kind of question. We
want just like crazy off the wall, completely random style questions.
That's that's what That's what I want that to be.
Speaker 1 (27:40):
Like what tattoo is on Matt's lower back?
Speaker 3 (27:42):
Right?
Speaker 1 (27:43):
We can answer that question on everyone everyone knows it's Aldie.
I appreciate you asking the Jonathan, because we're we're more
than willing to talk about the role of faith in
our lives, but we just don't typically do it in
this like a pushy way on the podcast because we
know we've got listeners out there who do subscribe to
just various different belief systems.
Speaker 2 (28:01):
Some don't have a belief system at all. And while
our faith does influence how we think about money, how
could it not. And of course we don't want to
purposefully alienate anyone from a money education just because we're
being a little too heavy handed when it comes to
what it is that we believe. It makes me even
think about how we talk about politics on the show.
We don't. We're not diving into partisan politics. We will
(28:22):
talk about policy, and it's not that you and I
don't have opinions or thoughts on that. No, we do
have opinions.
Speaker 3 (28:26):
You know.
Speaker 2 (28:26):
My favorite thing is when we do veer a little
bit too much into the political talk. And of course
we get emails from folks and they're like, hey, guys,
but what I love is when they incorrectly assume the
opposite belief that we're on the other side of the
aisle basically, because what that means is that I have
approached this from like a neutral point of view, Like
if the Republicans do something that's stupid, we talk about it.
(28:48):
If the Democrats are saying something dumb, we're talking about it.
Speaker 1 (28:51):
On the very rare occasion where either one of them
does something that's mildly good, we talk about that too.
Speaker 2 (28:57):
Not all negative here, but yes, and so that's a
big part of why we don't talk about it directly.
Is it who is Is it Michael Jordan who's just
like Republicans by sneakers? Yeah? Whatever, Yeah, like that whole thing.
So that's that's how we try to approach talking about
personal finance. Yeah, and and faith.
Speaker 1 (29:12):
So let's that being said, Like we're regular church goers
and our faith is an essential part of our lives.
And it is amazing, Matt, how much the Bible talks
about money. So how could you not be a Christian
and have the Bibles, Like everything that you read in
the scripture influence how you think and talk and react
to money issues that come up in your life. There's
(29:34):
like practical wisdom right in the Proverbs. There's a lot
of less practical, more heart related teaching that Jesus makes
in the New Testament. And I want to say this too.
If you're a listener and you've had, let's say, a
bad experience with the Church, or you disagree with the
claims of Christianity and you're like, oh, man, Joel, are Christians?
Speaker 2 (29:52):
I don't.
Speaker 1 (29:52):
I don't know if I want to listen to them anymore.
I think just just know that we don't necessarily align
ourselves with everybody who calls the a Christian publicly. And
there's a lot of i think popular Christians who believe
things differently than we believe. And there's also I think
it's important to mention there's a lot of helpful wisdom
for handling money in the scriptures. Even if you're the
(30:13):
kind of person that says, I don't really subscribe to
that whole Christian anything. I don't believe in miracles, blah
blah blah, just reading some parts of the Scriptures can
be really enlightening when it comes to how you think
about money.
Speaker 2 (30:24):
I think there's a lot of wisdom there that's true. Yeah,
I mean, there are some very direct, like practical things
that you can learn from Proverbs about specifically. The Proverbs
in particular has a lot to say about money. For
for instance, that's why our family tithes ten percent to
our local church, and then we give even beyond that
when we feel called to. So that's like a very
like pragmatic practical approach to like what you should do
(30:45):
with your money according to what the Bible says.
Speaker 1 (30:47):
Yeah, well, and people even come down varying beliefs on that,
whether tithing is like yeah.
Speaker 2 (30:52):
And at that point you're like nitpicking in my opinion,
I don't personally like to get bogged down in the details. Instead,
and you kind of touched on this, but like the
speaking to the heart, and the heart of my faith
comes down to loving God and loving your neighbor. And specifically,
because God is like this, all sovereign, all powerful being,
what that means and what that tells me is that
(31:13):
and this is the more sort of philosophical approach to
how faith impacts how I live my life and as
well as how I handle my money. But because everything
I have is basically from God, what that means is
that nothing I have is mine. And so especially when
it comes to my net, my personal net worth, the
net worth of my family, my house, my retirement, my
savings is not really mine. And so because of that
(31:35):
that it's also incredibly temporal, yes, exactly. And so I
guess the outflow of that kind of attitude is that
I just have a very open posture, like I have
very open hands to the things that are mine quote
unquote mine, and instead I'm called to steward those things. Well,
it doesn't mean that I make foolish decisions, like I
still try to be smart and wise and I work hard,
(31:59):
like we're still called to be. There's a lot of
the proverbs about that too. Yeah, yeah, like faithfully diligent
with the gifts that God has given me. But at
the same time, at the end of the day, my
faith tells me that it's not up to me. Uh Like,
at the end of the day, I don't have to
earn my way to salvation or heaven or whatever it
is that you think is you know, in the afterlife.
I believe that those are aspects that are completely controlled
(32:21):
by God and that have already been satisfied. Yeah. I
don't want to go down some long theological uh yeah, yeah,
well okay, but I felt like that that was the
most quasi generic way to talk about faith, and just
like the overall posture of my heart and kind of
how we relate to money.
Speaker 1 (32:39):
One of the things you're hinting at a little bit
is the reality of paradox in the Christian life. And
I think that's actually one of the most fascinating things
about being a Christian is like there's all it's like
many signs of a diamond or something like that, and
you turn it over and you see new realities of
it sparkling in the light. And that's that's how I
feel about faith too, and about the scriptures, is like
the more I dive in, the more that is to
(33:01):
kind of uncover and learn from. And what seems maybe
really bold and emphatic on the surface might have a
lot of layers underneath that are worth dissecting and kind
of goes to what you said, Matt, you said, Jesus
teaching is kind of it's always it's aimed at the heart.
And there's even scripture passages about being generous, not with
the poor and the downcast, although there is that, but
(33:22):
even with your enemies, right, which is a countercultural thing.
It goes against some of our most human instincts towards
self protection. And I think that's why you and I, Matt,
we talked purposefully about not looking to get rich but
to build wealth, which I think is very different, a
very different mentality, and why we should use money to
spend on things we care about within reason, like there
are scriptures to back up all those things that that
(33:46):
we kind of espouse here on the show, and we
discuss the joy that giving money away can engender. It's
obviously tough to filter all biblical teaching into our philosophy,
and we use outside resources too to help us think
about money well. But because that's what we're trying to
do personally, I think it's inevitably going to kind of
come across in the content we create. There's just no
(34:06):
way to kind of divorce the two completely totally.
Speaker 2 (34:09):
And you touched on this quickly. But don't assume that
because Joel and I are both practicing Christians that we
endorse everything that another Christian influencer or broadcaster or writer
or someone on the internet might say or that they
might espouse, because I mean, obviously Christians aren't perfect, neither
are we, but a lot of the incredibly vocal elements
can just be at odds. I would say, with maybe
(34:31):
what we believe, what we practice, if not in content
and what they're saying at least in the tone right
like both it's it's being delivered and sometimes sometimes both.
But but yeah, I don't know, I would totally recommend to.
Maybe there's a reason Joel that like the Bible has
there's been like an uptick in Bible sales over the
past like year or two compared to the past several decades.
(34:52):
Even there's been just.
Speaker 1 (34:53):
Because more hotel rooms have been built mat and they got
to put them in the top troll or.
Speaker 2 (34:57):
So I think it's. Yeah, Like there's also been that
flattening of folks who consider themselves nuns, not like a
Catholic nun, but like none as I don't practice in
any any religion, And so a lot of folks are
looking at that as like, oh, man, maybe there's going
to be a pendulum swinging back to faith and folks
practicing a more institutionalized style of religion.
Speaker 1 (35:18):
Well, it hasn't. A cultural obsession with money maybe pushed
us back into that a little bit too, realizing maybe
the lack of fulfillment that riches can provide that there
has to be more to this life than just a
fattern net worth, right, Yeah, that's that's part of why is.
Speaker 2 (35:36):
This you and announcing that we're changing how to money,
how the money is converting to how to how to
christian how how to faith, how to No, we're not
planning to do that podcast.
Speaker 1 (35:46):
No, but thank you so much Jonathan for asking and yeah,
looking forward to more deeper asking me anything questions in
the near future.
Speaker 2 (35:54):
Or not so deep, like what's your favorite ilavor? It
can't all be how do you view the world? That's true?
What's the lens that you view and judge everything through?
Ul that's true? That's true.
Speaker 1 (36:05):
And honestly, we could probably talk about this subject in
particular for many, many hours, but we will leave it
there for now.
Speaker 2 (36:10):
Try to keep it short.
Speaker 1 (36:11):
Yeah, We've got more questions to get to though, including
one about investing one about cell phone usage overseas. We'll
get to those right after this.
Speaker 2 (36:26):
All right, buddy, we are back from the break. It
is now time for the Facebook Question of the Week,
which is from Merriweather, who wrote, I joined a new
company last year in about forty percent of my total
compensation is a stock grant that vests quarterly over a
few years. I'm also a new homeowner phone three thousand
dollars mortgage at a five point eight percent interest rate.
(36:47):
Prior to buying my home, my plan for those quarterly
stock vests was to immediately trade into something like VT
SACKS or VOW through my brokerage account. Now that I
look at how much of my first few years of
mortgage payments will go to interest right now, it's about
eighty percent. I'm entertaining the idea of selling some of
that stock as it vests and paying off some of
(37:07):
the principle of my mortgage until I reach a certain
loan to value. I'm at nine point six percent right
now for reference. The logical, financially independently minded side of
my brain says, just dump it in the market. But
I'm wondering if there's a little bit of nuance here
in the first few years of my mortgage when that
interest is front loaded. Additional information, Emergency Fund four one
(37:29):
k HSA and traditional IRA are fully funded major props.
Let's just start right there. That's awesome, And.
Speaker 1 (37:36):
I also get matt when you take out a mortgage,
and if you look at the amortization schedule and you
look at how much interest you're paying. First principle, it's shocking. Yeah,
especially in those initial years you're like, uh, is am
I putting anything towards the actual paying down of the
loan ballots and the truth is not really in.
Speaker 2 (37:54):
The Thanks for definitely getting their money.
Speaker 1 (37:56):
Yeah, and that's why I think it is particularly if
you take out a thirty of your mortgage every time
you move, if you're only there for five years, man,
think about how little of a dent you've made in
the balance of that loan. It's you've mostly been paying interest.
So that's not fun, which I get and I want
to say too. Meriwether's really smart here for not wanting
(38:17):
to hold too much company stock, right your head, Merriweather
was in the right place opting for an index fund instead,
because truth be told, the right amount of company stock to.
Speaker 2 (38:26):
Own is zero.
Speaker 1 (38:27):
Because you've already got so many eggs in that basket
that's where your paye come from. You don't necessarily want
significant holdings of stock in your company at the same time,
so it is smart to do something different with that
money as it bests, Although be sure to keep tax
consequences in mind too, that is true just because of taxes.
Though I would not want to hold far too much
(38:50):
company stock. I would rather, I think, pay tax that's
necessary in order to pivot my investments.
Speaker 2 (38:56):
Unload and diversify totally. Yeah, But the heart of Merriwether's question,
I don't think it has a super clear answer, because
you can't lose dumping it into the market if you
plan to hold on to those investments for decades to come.
But because of where your mortgage is at as far
as interest rate and your loan to value ratio goes,
you are likely paying pm I mortgage insurance. And so
(39:17):
I like the idea of taking this quarterly stockfests and
using them as a way to pay down your principle quickly,
at least until you get to the range of like
twenty percent twenty two percent loan to value, allowing you
to rid yourself of that super annoying PMI because you're
not only reducing the life of the loan by doing this,
you're also getting rid of that extra fee a lot
(39:38):
more quickly. And it's almost like there's like this there's
a lightweight finish line right there at the you know,
at the twenty percent to twenty two percent range, where
it would Audo is that that's when it automatically drops off.
Speaker 1 (39:49):
Twenty two percent is typically where automatically falls off. You
can petition ahead of twenty yeah. Yeah, but if you think, like,
let's say the value of your home has gone up
and the loan that yeah, yeah, but that's just.
Speaker 2 (39:59):
A great goal to strive after that. But then maybe
beyond that, just kind of pump your brakes up.
Speaker 1 (40:03):
Yes, one hundred percent. I think that's a wise move.
And then then once you get there, that's when you
invest more instead of continuing to pay down the mortgage,
because we don't we don't want you to pay off
the mortgage and just go hogwild with with those stock
investments and just say, oh, I'm gonna get rid of
this mortgage as quickly as possible. We really don't even
want you to go beyond getting rid of that private
mortgage insurance. We just want you to make that your
(40:26):
first goal. And then once pmis eradicated, then take those
future stock grants and ramp up your investments in a
diversified way. Of course, it's kind of a both and approach.
Right where you're going to be attacking this problem, which
is a good problem to have, right with an optimized approach,
I think is this is at least what I would do, Matt.
I would want to pay down that more. Especially we're
talking about five point eight percent, we're talking about PMI.
(40:47):
Let's frontload some of that mortgage payoff and then let's
back off pay only what's agreed and invest with those
additional dollars.
Speaker 2 (40:55):
That's right. Let's take another quick one from a deal
who wrote recommendations for an affordable cell phone provider with
international options. Thank you. What do you think, Joel? So
maybe you just lose ditch the phone all together and
just go with the old school Italy on the shoe string,
get your paper map.
Speaker 1 (41:13):
There you go, get the Rick Steves book. Yeah, and
then get a carrier pigeon. If you want to send
messages to your friends and left ones, you don't need
to send messages.
Speaker 2 (41:19):
That is one choice. Just uh yeah, throw at old school,
not even all that old school, like only twenty years ago,
that's true, you know, like you couldn't do that twenty
years ago.
Speaker 1 (41:27):
No, and now it's it's expected. Once you were able
to call, it was like crazy expensive and now the
price has gone down, but that doesn't mean that the
price is insignificant, at least with some carrier. So let's discuss.
I love the idea of having all your cell phone
service under one roof with a US based provider. I
think that would make things easiest for most people. But
(41:47):
sadly that's that's just too expensive in most cases. It's
just not the frugal move. The big cell phone companies,
they tend to charge a daily, a weekly, or a
monthly fee. I think like Verizon charges like twelve bucks
a day to use your phone overseas, which I mean
when you think about what it used to be, it's like, oh,
that's pretty cheap. But when you think about what other
competitors are offering, it's actually really expensive, and that can
(42:08):
add up. Let's say we're talking about a multi week trip,
and so Matt, you and I we tried using mint
mobiles plan when we were in Scotland. Our data ran
out what felt like instantly the first day. Yeah, and
it wasn't cheap, and it just felt insufficient, so sucked.
The only carrier that includes international coverage in the monthly
cost at a fairly reasonable rate I think is Google Fi,
(42:29):
and so the best price, you get the best price
from them if you have four lines that you're looking
to move over. But I think if you don't travel regularly,
let's say this is a one time a year, one
week a year sort of thing, there's just no need
to pay more every month, even at Google Five's pretty
solid rates.
Speaker 2 (42:44):
Yeah, and of course we got to talk about US
Mobile because they've got the lowest monthly price that we found.
They also, similar to Google Fi, they've got these premium
plans that include some international data calling and texting while
you are kicking it overseas while you're abroad. But those
more expensive plans likely only make sense if you also
have a smart watch because of the way their pricing works.
(43:05):
And then if you go, like if you are traveling
only like once or twice a year, like, why would
you then pay for the enhanced coverage twelve months out
of the year. That's not likely going to be the
case for most folks, And so your best bet is
going to be to go with a third party e
some seller because of how incredibly easy they've made it.
You don't have to scramble and find a local provider
(43:26):
once you land it's so incredibly affordable. It's the slam dunk.
It's the slam dunk option.
Speaker 1 (43:32):
I remember when people first started going overseas and they yeah,
they would find a local typically was.
Speaker 2 (43:38):
Like a corner bodega or is there something like, yeah.
Speaker 1 (43:40):
You just got to find something near behind it would
get the physical sim they would pop out the one
from their phone, they'd pop the new one in, and
they were able to save a good bit of money
going using their phone overseas, almost using it like they
were a local where they were traveling.
Speaker 2 (43:53):
To, which was cool.
Speaker 1 (43:54):
And now E Sims just said like, hold my beer,
this is We're gonna make this way way easier and
so air Low in particular seems to be the best
of the bunch. Yeah, but feel free to shop around
and I love that under I was looking at their website, Matt,
you can really just kind of buy what you need, right.
They have ladder like options. So, oh, hey, I need
it to I need this many gigs of data, this
much calling and texting, and you can say, well, here's
(44:16):
what I think i'm gonna need, or here's what I
think I'm gonna need, and you can just choose based
on your budget and how much you think you're gonna use.
Just remember you're likely gonna have Wi Fi where you're
staying and at restaurants if you need it. That's that's
also a nice perk is that it's easier just to
kind of even stumble upon a Wi Fi network and
hop on and just wing it if you got.
Speaker 2 (44:35):
To do a couple of things.
Speaker 1 (44:36):
Yeah, yeah, but it is I think nice to have
some connectivity while you're walking around. But instead of paying
twelve bucks a day, right, if you don't need tons
of data, you can get by paying something like ten
dollars a month. So that's how big of a price
effort it can be. Going with Aero low instead of
going with your your provider, your US based provider. And
so you're going to get a better deal if you
(44:56):
buy your eSIM for a specific country. But if you're
going to multiple counts in Europe, for instance, you can
buy a regional SIM. It just costs a little bit more.
So if you know, hey, I'm only going to Scotland
and you buy the Scotland SIM, you're gonna say money
versus getting kind of the euro eSIM. But if you're
going to multiple countries, that's probably going to be the
best option too.
Speaker 2 (45:14):
Yeah. Another option too, if you're traveling with a group
of folks and you're all wanting data is to have
a separate device, so you are, you know, you've got
sell your cellular data being provided to that device and
then everyone can just tap into that one singular pocket
router essentially. So that's a way to even save even
more as opposed to everyone kind of doing their own
their own which is great, especially if you've got kids
(45:36):
and multiple devices, And just think.
Speaker 1 (45:38):
About how like before you take off, you can or
why you're in the air or whatever, literally in the
settings of your phone go and switch so easy the
provider that you're using, you've already loaded the air low
up to your phone and that way, Yeah, you're not
even like I've heard horror stories of people turning on
their phone and all these texts come through and they're
charged a massive amount of money. It's like you don't
even have to wait until you land. And with that possibility,
(46:01):
I love it man, all right.
Speaker 2 (46:02):
The beer that you and I enjoyed today is called,
like I mentioned earlier, Birdie Putt, which is a beer
by Six Bridges. This is a brewery that's here quasi
local to us, it's over in John's Creek. Dude, was
this beer even wet? It was so dry? This was like,
I mean, they're calling it a Pilsner, so it was
totally a Pilsoner, had those Pilsoner flavors, but it's like
(46:24):
it's like it was evaporating off my tongue that before
I had a chance to swallow it. To me, I
thought this was one of the best Pillsons I've had
in a long time, super duper refreshing. But I could
not believe how how dry was it. It feels more
like a novelty like something maybe you would expect from
a brewery who does a lot of pisoners, like yeah,
broad speaking of a broad you know, like overseas, that
kind of thing. But it really surprised me for this
(46:45):
to be something that these guys are offering. Yeah, super
unique though, I.
Speaker 1 (46:49):
Agree, I really dug it. So the one word I
couldn't get on my mind drinking this beer was biscuity.
I swear it just tasted like I was eating a
biscuit but in liquid form. And I love biscuits, man,
So I really the spear have.
Speaker 2 (47:02):
You been to Stylesborough Biscuits. It's like a local Have
you heard of this place? No, it's like a mom
and pop place that's only opened like two days a
week or something. I guess I gotta get over there
look it up. I have not yet been able to
make it happen because, like I said, it's never opened.
Speaker 1 (47:15):
But when Emily and I were in Austin, I guess
a month ago. Now, uh, the we had a biscuit there. Oh,
that's right, was just intense biscuit boy?
Speaker 2 (47:21):
So good?
Speaker 1 (47:21):
Was that?
Speaker 2 (47:22):
The name of the place? Paper Boy? Paper Boy.
Speaker 1 (47:23):
That's a great little expensive brunt restaurant in Austin, well
Worth going to though, very nice.
Speaker 2 (47:28):
All right, that's going to be it for this episode.
You can find our show notes up on the website
and howdomoney dot com. And that's going to be it, buddy.
So until next time, best Friends Out, Best Friends Out,
Welcome to Out of Money. I'm Joel, I'm Matt, and
today we're answering your listener questions.
Speaker 2 (00:24):
You know, a buddy, We have some listeners who have
inquired and they want to know what to do with
their money. We've got a listener who's looking to dial
in his student loan payoff strategy specifically, and he's got
both federal and private student loans, so we've got an
answer there for him. Another is asking about the best
options for cell coverage while abroad. They want to be
able to tap into some of that data while they're
(00:44):
traveling this summer.
Speaker 1 (00:45):
The price discrepancies in that area can be significance dramatic.
Speaker 2 (00:49):
And we're also going to talk about the role of
religion in our lives. We're going to have a faith
in finances kind of conversation.
Speaker 1 (00:55):
Are we going someone wants to peek behind the curtain
of who we are, not just what we think about money,
And it's kind of like how how we think about
money based on our views on.
Speaker 2 (01:04):
Baith totally, and we have talked about this in the past.
It's just not something we it's not a drum that
we'd beat regularly continuously on every single episode. So I'm
looking forward to that one. But from here on out,
we shall just kidding real quick. Did you so right
before we sat down a record, I just took a
walk around the block after lunch. Did you see that
they are resurfacing recoding the tennis courts in the public
(01:26):
park okay near our office? That's nice.
Speaker 1 (01:29):
Are they turning them into pickleball courts? That's exactly what
they're doing. They're not just recoding.
Speaker 2 (01:33):
The truck said, you know number one pickleball surfacing or whatever,
which kind of got me excited. It would be the
nearest pickleball court by far to where we live. I
might just have to splurge, get me a couple of paddles.
Maybe we'll pick it up and start playing. You want
to you want to get into it? Yes, I've been
wanting to try it out and I have not.
Speaker 1 (01:52):
It's fun, it's funny. I had the thought last night.
I was I was on a run and I ran
by like a bunch of tennis courts, and I saw
these young people playing tennis, and I was wondering if
the rise in pickleball is is it like a tide
that lifts all boats and tennis is also seeing a
resurgence or no, is it like gets people out on
the court. It's pickleball the thing, and people are like
kicking tennis to the curb. I'm not sure what the
answer is, but I was like, I think I've played tennis.
(02:12):
I enjoy tennis. I think I would like pickleball too.
Speaker 2 (02:15):
It's in my impression or in my experience, it's a
more social version of tennis, which I'm like, all right,
this is god Joel written a little quicker too, write yeah,
which a little more intense. Yeah, And you can fit
more people on the courts. I'm pretty sure. I don't
know the exact dimensions, but I think you can fit
probably four pickleball courts in the span of where there's
(02:35):
where there used to be two tennis courts. Okay, I
don't know the exact dimensions or anything, but I got
to imagine that there that they're gonna be able to
ramp up the number of folks who can get out
there and play. Which is I love that too. Man.
That's like density in housing, right, Like why not build
an apartment as opposed or a split not a split
quad plex as opposed to a single family. If that's
something that folks are winning. Yeah, and that doesn't have
to be a teaching moment or anything like that. But
(02:56):
I think this is a good just a good reminder
for people to use whatever resources are available. And if
it means ok, hey, I got to buy a pickball,
paddle and a ball, but where I play, I get
to play for free, then that's pretty awesome, I think
if it kind of like I think of disc golf,
where you buy a few discs and basically all the
courses are free to play on. And so yeah, I dropped,
(03:17):
not all of them. We've never played at some of
the high end courses which no are evidently kept up
like golf courses.
Speaker 1 (03:24):
Yeah, I've literally never paid to play, but I would.
I totally would if I went somewhere fancy and it
was a really cool course. But for the most part,
it's free to play and all you got to do
is buy a few discs, and you can even get
them at like a used sporting good store or something like.
Speaker 2 (03:35):
That is played against sports still still in existence, still around.
We have one not too far from us, so nice. Yeah,
something else I wanted to share real quick. Last week
was tax filing day, and I think there might be
a lot of folks who received or maybe they were
told recently that they're going to receive a nice fat check.
Speaker 1 (03:52):
It's like on the way coming through the internet into
your banking and they're already thinking of maybe different ways
to spend it. You know, you got that dopamine hit
and you're like, oh, yeah, that nice spring little bonus.
And I'm going to be the I'm going to rain
on your parade. I'm going to be the stick in
the mud who is going to like wag his finger
at you and recommend for you to do.
Speaker 2 (04:11):
Something smart with that money. And I'm not even going
to recommend for folks to do this the typical money gears.
You know, we harp on that all the time. What
I want folks to do is to think about an
expense that they know is coming but that they just
haven't budgeted for, because those are the kind of budget
derailers that can completely wreck your finances for a few
months maybe gosh, even where you're maybe even carrying a
(04:33):
balance on a credit card because it's something that you
didn't plan for because I didn't quite have enough money
set aside for that. I would hate for that to
be something that derails folks finances. Like I'm thinking of
deferred car maintenance or a repair at home. You know,
you got to get a contractor oute, even like a
medical bill like something where you know that, oh, I've
(04:53):
got this procedure. It's going to cost me, you know,
a few hundred bucks at a minimum. And being able
to prepare for these things that I think is really smart,
creating those little savings buckets that are dedicated to these
specific expenses.
Speaker 1 (05:05):
And we can debate the wisdom of getting a tax refund,
but I think more than anything.
Speaker 2 (05:10):
Reality is there are folks who are getting on.
Speaker 1 (05:11):
There are lots of folks, and the average refund has
actually gone up this year for taxpayers. So it's one
of those things where is it the most optimal thing.
Probably not, but it's a chance. It's really for most
people once in a year chance to get some sort
of lump sum to change your trajectory to their finances.
So like, you're ahead a little bit, right, so use it,
use it and do something with it. And so I'm
(05:32):
actually not nearly as against at least from a psychological perspective,
people getting a lump sum tax refund overpaying throughout the
year because it does give you a chance to tackle
something big with your finances in one fell swoop.
Speaker 2 (05:45):
That's right, man, Okay. The beer that you and I
are going to enjoy during this episode is called a
Birdie Putt. This is a pilsner by six Bridges. Looking
forward to drinking and enjoying and sharing our thoughts at
the end of the episode, no doubt.
Speaker 1 (05:59):
All right, So let's take listener questions, Matt, and if
you are listening and you've got a money question we
want to hear from you. Just go to how to
money dot com slash ask for the simple instructions, or
just say hey, what's my money question? A noodle it
out real quick, record yourself, email it over to us
at how to moneypod at gmail dot com. We look
forward to taking your question on the show asap. Matt,
(06:21):
let's get to a question specifically about paying off student
loans and the wisdom behind doing So.
Speaker 3 (06:28):
Hey, guys, my name's Donald. I'm originally from Maryland, but
I'm currently living in North Carolina with my wife Chelsea,
my two cats, Peanut Butter and Whiskey, so shout out
to them, Chelsea included. So my question is about student
loan payoff strategy. I've been out of college for about
four years now, and I'm paying off both a private
and a student at a public loan. My plan for
(06:49):
the public loan is to pay as little as possible
and after ten years have the resk forgiven as part
of the public student loan forgiveness program as I'm part
of the military. But I'm less sure about the private loan.
It's currently sitting around seventy thousand with a three point
eight percent interest rate. I'm paying seven hundred dollars a
month towards that, and I want to know if ever
I should prioritize paying that off versus investing in the market.
(07:13):
I currently put around four hundred a month in the
market and occasionally make a couple thousand dollars investment. Surely
there has to be somewhere between paying seven hundred dollars
a month for the next ten years and let's say
doubling my payment to fourteen hundred. I'm paying off in
less than five years, which would save me the most money. Right, So,
the sooner I paid off, the more I can invest.
But if I paid the minimum, I can invest less,
(07:34):
but for a longer time. So it is time in
the market always better came up the great work. Ps.
Chelsea and I often combined couple's names to save time,
so you guys would either be Mole or Jat. So
I'll let you guys pick your poison on that anyway,
have a great one.
Speaker 2 (07:49):
Guys, Ooh, Mole or Jat, which one do you prefer?
Don't get behind Mole, I can't. But if it was Moel,
I'm gonna go with Jet, I guess.
Speaker 1 (07:59):
So it's fun out of a out of a lack
of options for better choices.
Speaker 2 (08:02):
What's funny is that we've already done this with our
last names and so on our shared calendar. So technically
it's the business Gmail accounts calendar, but we put things
on there that pertain to both of our families, so
for instance, our summer vacation trip and our couple or
I guess our family combined family name is I guess
it is by default, but somehow we've actively decided this
(08:23):
is alt Guard, and so that it could have been
Lars mixed. It could have been Lars mixed, but I
think alt Guard is just stronger because you've got the alt.
I don't know, a nice hard tea there and then
the guard like both very strong. You put them together
and you got out of money.
Speaker 1 (08:38):
The last name combo is vastly superior to the first
tame combo, which.
Speaker 2 (08:42):
That's that's actually a thing. So a friend of ours,
her and her husband, when they got married, they blended
their last names together, like legally, yeah, Michelle, Yeah that's right. Yes,
So they got married, blended their their last names and
basically they met in the middle when it came to
what they're like new family name was I can respect that. Yeah,
It's just reminds me of like the was it in
(09:05):
the nineties, Like the couple name, like the celebrity couples
like Berendiford is when that comes to mind, Brad Pitt, Yeah,
Jennifer Andiston, that was the ultimate couple.
Speaker 1 (09:13):
I think people still Branjelina that was another. Yeah, everything
with all the leomon he was with, he had to
combine the names. Oh man, I think that happened to
other celebrities too. But all right, let's get to Donald's question. Donald,
it sounds sounds like you're making a smart move while
you know, trying to pay as little as possible in
hopes to have maximum forgiveness on that student loan under
(09:34):
the PSLF program. I will say, though, with all the
noise around student loan policy right now, banking on public
service loan forgiveness being there for years to come, it
might be a mistake. The current administration is taking a
more hostile attitude and approach toward PSLF, so we just
don't know if it's going to be around forever. You
(09:56):
can hope for it, but there could be a rug
pull coming at least it some point for folks who
are in the PSLF process but haven't achieved forgiveness yet.
Not trying to freaking out or anything like that, but
I wanted to mention what student loan stuff is just
in flux, right. It is, and we don't have a
clear answer at least to some of the questions that
student loan borrowers have. If Congress made a change, right,
(10:18):
you'd likely be grandfathered in, but that's also not guaranteed.
So I guess it's just I want to put that
on your in your headspace, Donald, just to be thinking
about that and not count your chickens before they hatch.
Speaker 2 (10:30):
True. Yeah, A nice little note before we answer Donald's question,
A little more directly here, But for multiple reasons, Donald,
we would prefer for you to keep that private student
loan around. And so if you head over to the
site and you hit start here, you will see the
money gears, but you don't pay off low interest debts
until you get to money gear six. You are investing
(10:50):
a lot, which is great, while simultaneously working to get
rid of those loans you want to. You're working to
eradicate them, and you are at the point where you
could opt to invest maybe a bit less in order
to get rid of those loans a bit faster. But
I just would not make that a priority. I wouldn't
be taking that option, at least not at this point,
given the data that you shared with us, Matt.
Speaker 1 (11:11):
When I got my first real job out of college,
I kind of had it on my mind that I
wanted to get rid of the student loans that I had,
and I didn't have this insane amount. I think I
had like twelve thousand dollars with the student loans, and
I still remember getting to the point where I was
accelerating the payoff and I was like, all right, I
have a lump sum here I can pay off like
three thousand dollars and be done with them, and looking back,
(11:32):
it was a mistake. I did it, and I wouldn't.
I wouldn't do it if I could go back in time,
because my interest rate one point eight seventy five percent. Yeah,
that's a little bit of a humble bread.
Speaker 2 (11:41):
Can I refinance that that for another thirty years? Perhaps
I'd be willing to pay even a little bit more
to stretch that thing out. Of course, depending on what
you do with that money rightwise.
Speaker 1 (11:50):
I just thought that was worth mentioning that, just, you know,
a minor financial mistake. Think about what that could have
done in a roth iray for me over the years
if I had made a different move. And we shall
also mention that we're not typically fans of private student loans,
but during COVID, private student loan holders often had to
continue to make payments while folks with federal loans had
their payments paused for like three and a half years.
(12:11):
So you felt like you were on the outside looking
in if you had private student loans because you kind
of work because you were jealous of all the federal
people who had perpetual payment pauses, and you were still
paying In many cases, although when interest rates were low,
it did make sense for some folks Tory finance into
a private loan, even though protections for borrowers weren't nearly
(12:31):
as good. And so because of how low your interest
rate is here, Donald, I just don't see this as
a high priority for you, even if the balance is steep, right,
because you can you can make just as much, if
not more money, just by saving, right, you.
Speaker 3 (12:45):
Know what I mean.
Speaker 1 (12:45):
You don't even have to invest those dollars, because then
that's where you maybe fall into treacherous territory. If it's like, well,
if I invest in the S and P and the
returns are this good and you're making projections, it's not guaranteed.
It's not guaranteed. But when we're talking about an FDIC
ensure highyal savor's account through CIT or Betterment, which are
two of our favorite institutions paying the highest rates, you're
talking about guaranteed returns that are essentially on par with
(13:09):
what your student loan rate is.
Speaker 2 (13:10):
That's right. Yeah, it would be like paying off a
three ish percent mortgage early were you to attack these
student loans and pay them down a bit faster. But
the only reason we would suggest for you to pay
off your student loans early. Now is if that money
was burning a hole in your pocket, if you were
going to spend it instead of saving that money, instead
of investing it. It comes sort of like I was
(13:32):
saying earlier. It comes down to what you would otherwise
do with that money? What are the alternatives? But you
don't sound like that kind of guy, Donald. It sounds
like you are a diligent investor. You are young. And
while I certainly understand the hatred of having your student
loans around for a decade or more, paying off more
quickly would mean investing less. It would mean having less liquidity.
(13:53):
And that specific like that in and of itself right there,
Like some liquid cash reserves, they are underrated. And of
course we wouldn't want you to keep credit card at
aroun for instance. You know, like if we're talking about
paying the credit card companies twenty plus percent, that's a
different story. That's not what we're talking about here. There's
a difference between that versus a three point five to
four percent return on your cash. You know, you're at
(14:15):
parity and just cash accounts. Like again, like Joel said,
you are not even having to invest those dollars. There's
no need to funnel any more money towards the student
loans right now in our opinion.
Speaker 1 (14:24):
Yeah, I think it might be worth mentioning too. Match
just like some of the little idiosyncrasies of this. Yeah,
you're going to pay tax on the money that you
make in an interest bearing savings account. You're going to
get a ten ninety nine at the end of the year,
So there's that. But then on the flip side of that,
you can get a tax deduction for student loan interest
that you pay if you're itemizing. There's also a tax
(14:45):
break for investing more in tax advantaged accounts too. So
if you're saying, oh, well, by holding off on paying
down this student loan, it's allowing me to get additional
tax benefits in both of those areas, it might be
worth it.
Speaker 2 (14:58):
You know.
Speaker 1 (14:59):
Those are I think more minor factors in the decision,
but they're worth mentioning and worth thinking through. I think
it's another small check mark in the invest and save
over payoff category. And we love the idea of getting
rid of debt. Like I don't want it to sound
like we're in favor of you keeping any kind of
debt around for long periods of time. I mean, for
(15:20):
the most part, we are not fans of debt, but
we also love investing and we want you to have
the best holistic financial situation possible, and so we want
you to build your net worth intelligently. It's not like
there's a right or a wrong answer here. And we
can't assure you that savans, Raciel State or the market
returns are going to be higher than three point eight
(15:40):
percent annually over the next decade. Like I wouldn't sign
my name to that. I would say, if you look historically,
there's a good likelihood. But you know, if history repeats
or rhymes, putting more in the market is going to
be better than paying off the debt totally.
Speaker 2 (15:53):
And then if interest rates on savings, if they drop
back to where they were a few years ago, well
you can always pivot. You just drop a big old
chunk of savings to on those loans and then just
totally wipe them out. But Joel, we've got more to
get to. We're gonna hear from a listener who is
interested not in receiving information from the credit bureaus, but
actually reporting information to the bureaus. We'll get to that
(16:13):
and more. Right after this, all right, Matt, we're back.
Speaker 1 (16:23):
We get more listener questions and then we got to
take including this one from listener Vic. He wants to
help some folks out in his life. Let's see if
we can help him make that a reality.
Speaker 4 (16:34):
I was listening to your show earlier today and you
were talking about installment notes. I am constantly loaning money
to different people, some clients, some not well. I would
love to help them with their credit, to give them
another tradeline. Are you telling me that if I loan,
(16:54):
for example, if I loaned one hundred thousand dollars to
person X, I can report it to the bureau or
who reports it to the bureau? And how does it
actually work for their FIICO to go up? Or how
does the tradeline show up in their credit report showing
(17:17):
that it's active, meaning that they're consistently paying me? And
does me the beneficiary? Do I have to keep updating
the bureaus monthly, weekly, every other month? I'm not sure?
Thank you very much.
Speaker 2 (17:35):
All right, And that question was from Vic, who just
happened to forget to mention his name. They're at the
top of the question. We know via Yeah. I love
this though, because it shows that he is trying to
make his clients and friends those who he is lending
money to aware of the credit building possibilities of reporting
these on time payments to the bureaus, which is, by
(17:56):
the way, the biggest factor in your credit score. Being
able to help them to report on time payments for loans,
I mean, that would be a big help. But Vic,
we're sad to say, we're sad to hate's a burster
you bubble here, but it is actually not possible for
you as an individual to do that.
Speaker 1 (18:12):
I wish we had better news and that you could
help the people you're lending money to in that way,
you know, get that reported to the credit barriers to
boost or score, but sadly not possible. We'll get into
the details of that in just a second two. But
I also want to ask the question like who are
you lending money to and why? And not that I'm
against people lending money to each other, but be careful
(18:34):
because you made it sound like you're lending money to
clients and then other people too, And I don't know
who the other people are. Are they friends, are they
true acquaintances or they random strangers that you pass by
like you just you want to You don't want to
get taken advantage of when you're lending money to people
around you in your orbit, and don't lend more than
you can comfortably afford to. Also, it's crucial anytime you're
(18:55):
lending to someone who's in your friend circle know that
that lending money to people in your community or in
your family can harm relationships.
Speaker 4 (19:04):
Right.
Speaker 1 (19:04):
I've just seen too many folks lend to friends or
family not get paid back. They're irreparably harming that relationship
and their finances at the same time. It's such an
egregious mistake that I want big to avoid. I want
everyone else out there to avoid. Out of a generous spirit,
you're often like, well, let me lend to you. I'm
hoping to get paid back, maybe with a little lecture
on top. Then they're late or they don't pay up
(19:24):
at all, and it sours the relationship. And it's just
not money is not worth ruining a relationship over.
Speaker 2 (19:29):
That's true. Look at Joel with all the thoughtful, helpful
thoughts notes at the beginning of questions here it thoughts
from Jack and he was satday life that old school.
That's another right there. But vic you so on the
previous episode when you heard us talking about this, we
were referring to a fintech service. Most likely this is
what we're talking about called self and this allows folks
(19:50):
to take out an installment loan for the express purpose
of building up their credit scores. But only official data
furnishers are allowed to report things to the big three bureaus.
And as an individual, you there by yourself, you can't
just show up at their headquarters or write them an
email in an attempt to have those own payments reported
(20:11):
in order to influence their scores. If only you.
Speaker 1 (20:14):
Could guy with sign style stand in front of Equifax
and say, hey, here's my friend Gina. I want you
to report this so that she can have a credit
score increase.
Speaker 2 (20:22):
She is on time again. So there's a law called
the Fair Credit Reporting Act that passed back in nineteen
seventy and that kind of outlined how the payments that
you make on time, how it impacts your credit score.
And if you were granted that ability under the FCRA,
well you would have then the additional legal responsibilities around
potential disputes which individuals they're just not well equipped to handle.
(20:47):
Because that's like you said, that's true, Like because you
log in check your credit report, it's a monthly sort
of reporting that takes place. That's why you see like
the green circle around April. Yeah, yeah, yeah, And so
it's just one of the small things that goes into
creating these credit reports. So while you may not be
able to help these folks build their credit though, not
(21:07):
having this ability, I actually think it'll make your life
far less miserable of having these additional requirements that are
basically mandatory. Yeah, I agree.
Speaker 1 (21:18):
I think you don't want to sign yourself up for
that type of existence, and if.
Speaker 2 (21:24):
You did, then you would have to start charging them
like high rates of interest, which is what the banks do, right. Yeah.
Speaker 1 (21:29):
So let's talk about one maybe area where this has
developed in recent years, where private landlords in particular, they
haven't had the ability to directly report payments directly.
Speaker 2 (21:41):
To the bureaus.
Speaker 1 (21:41):
And that's one of those things where you would say,
of all people who should have that ability to report,
it would be individual small time landlords. But there just
hasn't been a mechanism I guess for them to report
on time or late payments of someone who's living in
a homer apartment that they own. You would think that
would be pertinent to the bureaus though, right, whether someone's
(22:03):
paying their rent on time, that would be an important
thing for them to consider. But there are now fortunately
indirect third party companies that make this reporting possible. Zillo,
for instance, offers this service for free, right, and your
tenant has to pay through Zilo to you. Landlord has
to then say, okay, cool, I'm willing to accept payments
through Zillo's platform. I believe there's no fee if you
(22:25):
pay certain ways on both ends. I think the tenant
can pay with a credit card maybe and then pay
a fee. But self whott you mentioned just a second ago.
They also offer a similar free service that connects to
your bank in order to report payments. You can even
i think, pay them, as an individual fifty bucks to
report on time payments over the past two years in
(22:46):
an effort to increase your score more quickly, so kind
of get some.
Speaker 2 (22:50):
Of that back history.
Speaker 1 (22:50):
Yeah, but it's amazing how you need this. You essentially
need a third party who is equipped and signed up
to make these reports, these monthly reports to the bureaus.
You as an individual me as an individual I own,
you know a handful of properties. You do as well, Matt,
and we can't if one of our tennis doesn't pay
on time unless we're signed up through Zillo and we
have that formal relationship. There's nothing, no real recourse we
(23:14):
have from a credit perspective.
Speaker 2 (23:15):
That being said, and I think this is one of
the reasons you're probably I don't know if you're planning
to mention these other companies, but the bureaus they also
have their services where you can do this as well.
We're just not huge fans of doing business with them
if you don't have to. As opposed to Zilla, who
does put out a fantastic product versus these other I
don't know what, feel more like government bureaus, and they're
not government agencies.
Speaker 1 (23:34):
They're like they're bureaucratic nightmares and just poorly run and it's.
Speaker 2 (23:38):
More closely aligned with the government. I will say, then
let's just say Zillo.
Speaker 1 (23:41):
But I mean we've talked about through the years, who
gets the most complaints essentially every year when the CFPB releases,
it's a credit bureaus, Like people are saying inaccurate reports,
there's my credit score gart tarnished for reasons that it
wasn't my fault exactly. The credit bureaus they don't like to.
Speaker 2 (23:57):
Fix it, so I will mention though, so Equifact. They
have partnered with Built Experience, They've partnered with Rent Bureau
and then TransUnion. They've got their own thing. It's called
resident Credit, where if you are a collective rent via
these platforms that it also gets reported. And these aren't
platforms that I don't know if you've used any these
platforms to all, but I haven't. They're all relatively new.
(24:19):
I am very interested though in making this happen because
you know, if you're a great tenant who always pays
rent on time, well, for the tenant, this is great
because it boosts your score. The technology is just making
this process a whole lot easier. And then as a landlord,
I'll love it as well, because come on, man, there's
some accountability here and yes, a little extra skin in
the game. Yeah yeah, I would think is that a
(24:39):
tenant who's looking to, let's say, apply for a new property,
say hey, where you've been living for the past two years?
There's a gap here? I see that, and then oh,
maybe they didn't write your name don because they ended
up trashing your place and they know they're going to
give you a false report. Maybe that's how they could
approach it. I'm just pointing out that there are ways
around a previous landlords recommendation or not recommendation to allow
(25:02):
you to rent. But I am glad that there are
these third party companies stepping in the avoid because again,
it's just a massive expense. I'm thinking about just from
the standpoint of renters more than anybody else, because if
you are not choosing to rent with one of the
big some of these big corporations where there is you know,
where there are more systems in place, it feels like
you're almost making a sacrifice to rent in a cuter
(25:23):
home or a home in a neighborhood that happens to
be owned by a local landlord.
Speaker 1 (25:27):
Well, and you and I were just not aware though
at this point, of anything that does that for a
loan made between friends, right, so if I were to
make exactly we don't know of any service like that.
That's right back to Vix's question. But so you like
talking about real estate, and I just I don't think
we're likely to see individuals get direct access to bureaus
in order to and I don't say this in a
(25:48):
rude way, but in order to manipulate other people's credit
scores up or down. There's just too much possibility for
fraud and abuse, and I think it'd be hard from
a record keeping perspective for the bureaus to interact directly
with millions of individual Americans across the country.
Speaker 2 (26:02):
It's a good thought.
Speaker 1 (26:03):
We're glad that third party companies are making it easier
to report a variety of credit types, but there's just
no way for you as an individual to kind of
make this a possibility right now.
Speaker 2 (26:12):
Sorry, Vic, that's right, Joel, all right, this is not
something that we do regularly, but let's hear a question
from a listener who is asking about faith and finances.
Speaker 5 (26:20):
Hi, Joel and Matt, this is Jonathan and Dubuque Iowa.
A recent episode, you mentioned you might do and ask
me anything episode and if you ever do that. The
question that came to mind for me was what is
the role of religious faith, if any, in your lives
and your approach to finances. I know it doesn't have
(26:41):
to be relevant to your main topic, but I think
it might be anyway. Since faith does shape the way
we live our lives, set our priorities, and use our resources.
I greatly enjoy the show, look forward to hearing more.
Speaker 2 (26:54):
God bless Oh Matt, let's get to it. I like
this question.
Speaker 1 (26:58):
Yeah, And by the way Jonathan asked, he mentioned the
and ask Me Anything episode.
Speaker 2 (27:03):
We totally need to do that.
Speaker 1 (27:04):
We're going I think we're going to so you know
what's approaching quickly episode one thousand, that's when.
Speaker 2 (27:09):
We're gonna do it. That's what we're gonna do it.
So if it's like two three months out, I guess.
Speaker 1 (27:12):
If listening to the answer to this question or if
you're just like, man, there's something I've always wanted to
know about Matt and Joel.
Speaker 2 (27:18):
But it's not really a money question, right, So literally
like a reddits ask me anything, like honestly, should we
even take money related questions?
Speaker 1 (27:26):
Like if everything but everything or unless it's something specific
about how we it can pertain to.
Speaker 2 (27:32):
But yeah, not the typical investing kind of question. We
want just like crazy off the wall, completely random style questions.
That's that's what That's what I want that to be.
Speaker 1 (27:40):
Like what tattoo is on Matt's lower back?
Speaker 3 (27:42):
Right?
Speaker 1 (27:43):
We can answer that question on everyone everyone knows it's Aldie.
I appreciate you asking the Jonathan, because we're we're more
than willing to talk about the role of faith in
our lives, but we just don't typically do it in
this like a pushy way on the podcast because we
know we've got listeners out there who do subscribe to
just various different belief systems.
Speaker 2 (28:01):
Some don't have a belief system at all. And while
our faith does influence how we think about money, how
could it not. And of course we don't want to
purposefully alienate anyone from a money education just because we're
being a little too heavy handed when it comes to
what it is that we believe. It makes me even
think about how we talk about politics on the show.
We don't. We're not diving into partisan politics. We will
(28:22):
talk about policy, and it's not that you and I
don't have opinions or thoughts on that. No, we do
have opinions.
Speaker 3 (28:26):
You know.
Speaker 2 (28:26):
My favorite thing is when we do veer a little
bit too much into the political talk. And of course
we get emails from folks and they're like, hey, guys,
but what I love is when they incorrectly assume the
opposite belief that we're on the other side of the
aisle basically, because what that means is that I have
approached this from like a neutral point of view, Like
if the Republicans do something that's stupid, we talk about it.
(28:48):
If the Democrats are saying something dumb, we're talking about it.
Speaker 1 (28:51):
On the very rare occasion where either one of them
does something that's mildly good, we talk about that too.
Speaker 2 (28:57):
Not all negative here, but yes, and so that's a
big part of why we don't talk about it directly.
Is it who is Is it Michael Jordan who's just
like Republicans by sneakers? Yeah? Whatever, Yeah, like that whole thing.
So that's that's how we try to approach talking about
personal finance. Yeah, and and faith.
Speaker 1 (29:12):
So let's that being said, Like we're regular church goers
and our faith is an essential part of our lives.
And it is amazing, Matt, how much the Bible talks
about money. So how could you not be a Christian
and have the Bibles, Like everything that you read in
the scripture influence how you think and talk and react
to money issues that come up in your life. There's
(29:34):
like practical wisdom right in the Proverbs. There's a lot
of less practical, more heart related teaching that Jesus makes
in the New Testament. And I want to say this too.
If you're a listener and you've had, let's say, a
bad experience with the Church, or you disagree with the
claims of Christianity and you're like, oh, man, Joel, are Christians?
Speaker 2 (29:52):
I don't.
Speaker 1 (29:52):
I don't know if I want to listen to them anymore.
I think just just know that we don't necessarily align
ourselves with everybody who calls the a Christian publicly. And
there's a lot of i think popular Christians who believe
things differently than we believe. And there's also I think
it's important to mention there's a lot of helpful wisdom
for handling money in the scriptures. Even if you're the
(30:13):
kind of person that says, I don't really subscribe to
that whole Christian anything. I don't believe in miracles, blah
blah blah, just reading some parts of the Scriptures can
be really enlightening when it comes to how you think
about money.
Speaker 2 (30:24):
I think there's a lot of wisdom there that's true. Yeah,
I mean, there are some very direct, like practical things
that you can learn from Proverbs about specifically. The Proverbs
in particular has a lot to say about money. For
for instance, that's why our family tithes ten percent to
our local church, and then we give even beyond that
when we feel called to. So that's like a very
like pragmatic practical approach to like what you should do
(30:45):
with your money according to what the Bible says.
Speaker 1 (30:47):
Yeah, well, and people even come down varying beliefs on that,
whether tithing is like yeah.
Speaker 2 (30:52):
And at that point you're like nitpicking in my opinion,
I don't personally like to get bogged down in the details. Instead,
and you kind of touched on this, but like the
speaking to the heart, and the heart of my faith
comes down to loving God and loving your neighbor. And specifically,
because God is like this, all sovereign, all powerful being,
what that means and what that tells me is that
(31:13):
and this is the more sort of philosophical approach to
how faith impacts how I live my life and as
well as how I handle my money. But because everything
I have is basically from God, what that means is
that nothing I have is mine. And so especially when
it comes to my net, my personal net worth, the
net worth of my family, my house, my retirement, my
savings is not really mine. And so because of that
(31:35):
that it's also incredibly temporal, yes, exactly. And so I
guess the outflow of that kind of attitude is that
I just have a very open posture, like I have
very open hands to the things that are mine quote
unquote mine, and instead I'm called to steward those things. Well,
it doesn't mean that I make foolish decisions, like I
still try to be smart and wise and I work hard,
(31:59):
like we're still called to be. There's a lot of
the proverbs about that too. Yeah, yeah, like faithfully diligent
with the gifts that God has given me. But at
the same time, at the end of the day, my
faith tells me that it's not up to me. Uh Like,
at the end of the day, I don't have to
earn my way to salvation or heaven or whatever it
is that you think is you know, in the afterlife.
I believe that those are aspects that are completely controlled
(32:21):
by God and that have already been satisfied. Yeah. I
don't want to go down some long theological uh yeah, yeah,
well okay, but I felt like that that was the
most quasi generic way to talk about faith, and just
like the overall posture of my heart and kind of
how we relate to money.
Speaker 1 (32:39):
One of the things you're hinting at a little bit
is the reality of paradox in the Christian life. And
I think that's actually one of the most fascinating things
about being a Christian is like there's all it's like
many signs of a diamond or something like that, and
you turn it over and you see new realities of
it sparkling in the light. And that's that's how I
feel about faith too, and about the scriptures, is like
the more I dive in, the more that is to
(33:01):
kind of uncover and learn from. And what seems maybe
really bold and emphatic on the surface might have a
lot of layers underneath that are worth dissecting and kind
of goes to what you said, Matt, you said, Jesus
teaching is kind of it's always it's aimed at the heart.
And there's even scripture passages about being generous, not with
the poor and the downcast, although there is that, but
(33:22):
even with your enemies, right, which is a countercultural thing.
It goes against some of our most human instincts towards
self protection. And I think that's why you and I, Matt,
we talked purposefully about not looking to get rich but
to build wealth, which I think is very different, a
very different mentality, and why we should use money to
spend on things we care about within reason, like there
are scriptures to back up all those things that that
(33:46):
we kind of espouse here on the show, and we
discuss the joy that giving money away can engender. It's
obviously tough to filter all biblical teaching into our philosophy,
and we use outside resources too to help us think
about money well. But because that's what we're trying to
do personally, I think it's inevitably going to kind of
come across in the content we create. There's just no
(34:06):
way to kind of divorce the two completely totally.
Speaker 2 (34:09):
And you touched on this quickly. But don't assume that
because Joel and I are both practicing Christians that we
endorse everything that another Christian influencer or broadcaster or writer
or someone on the internet might say or that they
might espouse, because I mean, obviously Christians aren't perfect, neither
are we, but a lot of the incredibly vocal elements
can just be at odds. I would say, with maybe
(34:31):
what we believe, what we practice, if not in content
and what they're saying at least in the tone right
like both it's it's being delivered and sometimes sometimes both.
But but yeah, I don't know, I would totally recommend to.
Maybe there's a reason Joel that like the Bible has
there's been like an uptick in Bible sales over the
past like year or two compared to the past several decades.
(34:52):
Even there's been just.
Speaker 1 (34:53):
Because more hotel rooms have been built mat and they got
to put them in the top troll or.
Speaker 2 (34:57):
So I think it's. Yeah, Like there's also been that
flattening of folks who consider themselves nuns, not like a
Catholic nun, but like none as I don't practice in
any any religion, And so a lot of folks are
looking at that as like, oh, man, maybe there's going
to be a pendulum swinging back to faith and folks
practicing a more institutionalized style of religion.
Speaker 1 (35:18):
Well, it hasn't. A cultural obsession with money maybe pushed
us back into that a little bit too, realizing maybe
the lack of fulfillment that riches can provide that there
has to be more to this life than just a
fattern net worth, right, Yeah, that's that's part of why is.
Speaker 2 (35:36):
This you and announcing that we're changing how to money,
how the money is converting to how to how to
christian how how to faith, how to No, we're not
planning to do that podcast.
Speaker 1 (35:46):
No, but thank you so much Jonathan for asking and yeah,
looking forward to more deeper asking me anything questions in
the near future.
Speaker 2 (35:54):
Or not so deep, like what's your favorite ilavor? It
can't all be how do you view the world? That's true?
What's the lens that you view and judge everything through?
Ul that's true? That's true.
Speaker 1 (36:05):
And honestly, we could probably talk about this subject in
particular for many, many hours, but we will leave it
there for now.
Speaker 2 (36:10):
Try to keep it short.
Speaker 1 (36:11):
Yeah, We've got more questions to get to though, including
one about investing one about cell phone usage overseas. We'll
get to those right after this.
Speaker 2 (36:26):
All right, buddy, we are back from the break. It
is now time for the Facebook Question of the Week,
which is from Merriweather, who wrote, I joined a new
company last year in about forty percent of my total
compensation is a stock grant that vests quarterly over a
few years. I'm also a new homeowner phone three thousand
dollars mortgage at a five point eight percent interest rate.
(36:47):
Prior to buying my home, my plan for those quarterly
stock vests was to immediately trade into something like VT
SACKS or VOW through my brokerage account. Now that I
look at how much of my first few years of
mortgage payments will go to interest right now, it's about
eighty percent. I'm entertaining the idea of selling some of
that stock as it vests and paying off some of
(37:07):
the principle of my mortgage until I reach a certain
loan to value. I'm at nine point six percent right
now for reference. The logical, financially independently minded side of
my brain says, just dump it in the market. But
I'm wondering if there's a little bit of nuance here
in the first few years of my mortgage when that
interest is front loaded. Additional information, Emergency Fund four one
(37:29):
k HSA and traditional IRA are fully funded major props.
Let's just start right there. That's awesome, And.
Speaker 1 (37:36):
I also get matt when you take out a mortgage,
and if you look at the amortization schedule and you
look at how much interest you're paying. First principle, it's shocking. Yeah,
especially in those initial years you're like, uh, is am
I putting anything towards the actual paying down of the
loan ballots and the truth is not really in.
Speaker 2 (37:54):
The Thanks for definitely getting their money.
Speaker 1 (37:56):
Yeah, and that's why I think it is particularly if
you take out a thirty of your mortgage every time
you move, if you're only there for five years, man,
think about how little of a dent you've made in
the balance of that loan. It's you've mostly been paying interest.
So that's not fun, which I get and I want
to say too. Meriwether's really smart here for not wanting
(38:17):
to hold too much company stock, right your head, Merriweather
was in the right place opting for an index fund instead,
because truth be told, the right amount of company stock to.
Speaker 2 (38:26):
Own is zero.
Speaker 1 (38:27):
Because you've already got so many eggs in that basket
that's where your paye come from. You don't necessarily want
significant holdings of stock in your company at the same time,
so it is smart to do something different with that
money as it bests, Although be sure to keep tax
consequences in mind too, that is true just because of taxes.
Though I would not want to hold far too much
(38:50):
company stock. I would rather, I think, pay tax that's
necessary in order to pivot my investments.
Speaker 2 (38:56):
Unload and diversify totally. Yeah, But the heart of Merriwether's question,
I don't think it has a super clear answer, because
you can't lose dumping it into the market if you
plan to hold on to those investments for decades to come.
But because of where your mortgage is at as far
as interest rate and your loan to value ratio goes,
you are likely paying pm I mortgage insurance. And so
(39:17):
I like the idea of taking this quarterly stockfests and
using them as a way to pay down your principle quickly,
at least until you get to the range of like
twenty percent twenty two percent loan to value, allowing you
to rid yourself of that super annoying PMI because you're
not only reducing the life of the loan by doing this,
you're also getting rid of that extra fee a lot
(39:38):
more quickly. And it's almost like there's like this there's
a lightweight finish line right there at the you know,
at the twenty percent to twenty two percent range, where
it would Audo is that that's when it automatically drops off.
Speaker 1 (39:49):
Twenty two percent is typically where automatically falls off. You
can petition ahead of twenty yeah. Yeah, but if you think, like,
let's say the value of your home has gone up
and the loan that yeah, yeah, but that's just.
Speaker 2 (39:59):
A great goal to strive after that. But then maybe
beyond that, just kind of pump your brakes up.
Speaker 1 (40:03):
Yes, one hundred percent. I think that's a wise move.
And then then once you get there, that's when you
invest more instead of continuing to pay down the mortgage,
because we don't we don't want you to pay off
the mortgage and just go hogwild with with those stock
investments and just say, oh, I'm gonna get rid of
this mortgage as quickly as possible. We really don't even
want you to go beyond getting rid of that private
mortgage insurance. We just want you to make that your
(40:26):
first goal. And then once pmis eradicated, then take those
future stock grants and ramp up your investments in a
diversified way. Of course, it's kind of a both and approach.
Right where you're going to be attacking this problem, which
is a good problem to have, right with an optimized approach,
I think is this is at least what I would do, Matt.
I would want to pay down that more. Especially we're
talking about five point eight percent, we're talking about PMI.
(40:47):
Let's frontload some of that mortgage payoff and then let's
back off pay only what's agreed and invest with those
additional dollars.
Speaker 2 (40:55):
That's right. Let's take another quick one from a deal
who wrote recommendations for an affordable cell phone provider with
international options. Thank you. What do you think, Joel? So
maybe you just lose ditch the phone all together and
just go with the old school Italy on the shoe string,
get your paper map.
Speaker 1 (41:13):
There you go, get the Rick Steves book. Yeah, and
then get a carrier pigeon. If you want to send
messages to your friends and left ones, you don't need
to send messages.
Speaker 2 (41:19):
That is one choice. Just uh yeah, throw at old school,
not even all that old school, like only twenty years ago,
that's true, you know, like you couldn't do that twenty
years ago.
Speaker 1 (41:27):
No, and now it's it's expected. Once you were able
to call, it was like crazy expensive and now the
price has gone down, but that doesn't mean that the
price is insignificant, at least with some carrier. So let's discuss.
I love the idea of having all your cell phone
service under one roof with a US based provider. I
think that would make things easiest for most people. But
(41:47):
sadly that's that's just too expensive in most cases. It's
just not the frugal move. The big cell phone companies,
they tend to charge a daily, a weekly, or a
monthly fee. I think like Verizon charges like twelve bucks
a day to use your phone overseas, which I mean
when you think about what it used to be, it's like, oh,
that's pretty cheap. But when you think about what other
competitors are offering, it's actually really expensive, and that can
(42:08):
add up. Let's say we're talking about a multi week trip,
and so Matt, you and I we tried using mint
mobiles plan when we were in Scotland. Our data ran
out what felt like instantly the first day. Yeah, and
it wasn't cheap, and it just felt insufficient, so sucked.
The only carrier that includes international coverage in the monthly
cost at a fairly reasonable rate I think is Google Fi,
(42:29):
and so the best price, you get the best price
from them if you have four lines that you're looking
to move over. But I think if you don't travel regularly,
let's say this is a one time a year, one
week a year sort of thing, there's just no need
to pay more every month, even at Google Five's pretty
solid rates.
Speaker 2 (42:44):
Yeah, and of course we got to talk about US
Mobile because they've got the lowest monthly price that we found.
They also, similar to Google Fi, they've got these premium
plans that include some international data calling and texting while
you are kicking it overseas while you're abroad. But those
more expensive plans likely only make sense if you also
have a smart watch because of the way their pricing works.
(43:05):
And then if you go, like if you are traveling
only like once or twice a year, like, why would
you then pay for the enhanced coverage twelve months out
of the year. That's not likely going to be the
case for most folks, And so your best bet is
going to be to go with a third party e
some seller because of how incredibly easy they've made it.
You don't have to scramble and find a local provider
(43:26):
once you land it's so incredibly affordable. It's the slam dunk.
It's the slam dunk option.
Speaker 1 (43:32):
I remember when people first started going overseas and they yeah,
they would find a local typically was.
Speaker 2 (43:38):
Like a corner bodega or is there something like, yeah.
Speaker 1 (43:40):
You just got to find something near behind it would
get the physical sim they would pop out the one
from their phone, they'd pop the new one in, and
they were able to save a good bit of money
going using their phone overseas, almost using it like they
were a local where they were traveling.
Speaker 2 (43:53):
To, which was cool.
Speaker 1 (43:54):
And now E Sims just said like, hold my beer,
this is We're gonna make this way way easier and
so air Low in particular seems to be the best
of the bunch. Yeah, but feel free to shop around
and I love that under I was looking at their website, Matt,
you can really just kind of buy what you need, right.
They have ladder like options. So, oh, hey, I need
it to I need this many gigs of data, this
much calling and texting, and you can say, well, here's
(44:16):
what I think i'm gonna need, or here's what I
think I'm gonna need, and you can just choose based
on your budget and how much you think you're gonna use.
Just remember you're likely gonna have Wi Fi where you're
staying and at restaurants if you need it. That's that's
also a nice perk is that it's easier just to
kind of even stumble upon a Wi Fi network and
hop on and just wing it if you got.
Speaker 2 (44:35):
To do a couple of things.
Speaker 1 (44:36):
Yeah, yeah, but it is I think nice to have
some connectivity while you're walking around. But instead of paying
twelve bucks a day, right, if you don't need tons
of data, you can get by paying something like ten
dollars a month. So that's how big of a price
effort it can be. Going with Aero low instead of
going with your your provider, your US based provider. And
so you're going to get a better deal if you
(44:56):
buy your eSIM for a specific country. But if you're
going to multiple counts in Europe, for instance, you can
buy a regional SIM. It just costs a little bit more.
So if you know, hey, I'm only going to Scotland
and you buy the Scotland SIM, you're gonna say money
versus getting kind of the euro eSIM. But if you're
going to multiple countries, that's probably going to be the
best option too.
Speaker 2 (45:14):
Yeah. Another option too, if you're traveling with a group
of folks and you're all wanting data is to have
a separate device, so you are, you know, you've got
sell your cellular data being provided to that device and
then everyone can just tap into that one singular pocket
router essentially. So that's a way to even save even
more as opposed to everyone kind of doing their own
their own which is great, especially if you've got kids
(45:36):
and multiple devices, And just think.
Speaker 1 (45:38):
About how like before you take off, you can or
why you're in the air or whatever, literally in the
settings of your phone go and switch so easy the
provider that you're using, you've already loaded the air low
up to your phone and that way, Yeah, you're not
even like I've heard horror stories of people turning on
their phone and all these texts come through and they're
charged a massive amount of money. It's like you don't
even have to wait until you land. And with that possibility,
(46:01):
I love it man, all right.
Speaker 2 (46:02):
The beer that you and I enjoyed today is called,
like I mentioned earlier, Birdie Putt, which is a beer
by Six Bridges. This is a brewery that's here quasi
local to us, it's over in John's Creek. Dude, was
this beer even wet? It was so dry? This was like,
I mean, they're calling it a Pilsner, so it was
totally a Pilsoner, had those Pilsoner flavors, but it's like
(46:24):
it's like it was evaporating off my tongue that before
I had a chance to swallow it. To me, I
thought this was one of the best Pillsons I've had
in a long time, super duper refreshing. But I could
not believe how how dry was it. It feels more
like a novelty like something maybe you would expect from
a brewery who does a lot of pisoners, like yeah,
broad speaking of a broad you know, like overseas, that
kind of thing. But it really surprised me for this
(46:45):
to be something that these guys are offering. Yeah, super
unique though, I.
Speaker 1 (46:49):
Agree, I really dug it. So the one word I
couldn't get on my mind drinking this beer was biscuity.
I swear it just tasted like I was eating a
biscuit but in liquid form. And I love biscuits, man,
So I really the spear have.
Speaker 2 (47:02):
You been to Stylesborough Biscuits. It's like a local Have
you heard of this place? No, it's like a mom
and pop place that's only opened like two days a
week or something. I guess I gotta get over there
look it up. I have not yet been able to
make it happen because, like I said, it's never opened.
Speaker 1 (47:15):
But when Emily and I were in Austin, I guess
a month ago. Now, uh, the we had a biscuit there. Oh,
that's right, was just intense biscuit boy?
Speaker 2 (47:21):
So good?
Speaker 1 (47:21):
Was that?
Speaker 2 (47:22):
The name of the place? Paper Boy? Paper Boy.
Speaker 1 (47:23):
That's a great little expensive brunt restaurant in Austin, well
Worth going to though, very nice.
Speaker 2 (47:28):
All right, that's going to be it for this episode.
You can find our show notes up on the website
and howdomoney dot com. And that's going to be it, buddy.
So until next time, best Friends Out, Best Friends Out,
Hosts And Creators
Joel Larsgaard
Matthew Altmix
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