Ask HTM – Assets to Boost My Credit Score, Lifestyle Geographic Arbitrage, and Car Loans to get Wealthier #1093

Summary

How to Money — Episode #1093: Listener Q&A — Boosting Credit Scores, Geographic Arbitrage, & Car Loan Math

Date: January 26, 2026
Hosts: Joel and Matt
Podcast: How to Money (iHeartPodcasts)

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Episode Overview

In this lively listener mailbag episode, Joel and Matt tackle a range of money dilemmas, with a special focus on actionable, practical advice for real-world financial scenarios. Topics covered include: the true drivers of a credit score, how to plan financially when moving internationally, what to do after maxing a Roth IRA, tackling the “car loan vs. invest instead” debate, and more. Expect clear explanations, playful banter, and tips you can use—delivered in the hosts’ down-to-earth, jargon-free style.

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Key Discussion Points & Insights

1. Is Flipping Lights Off Really a Big Deal? (01:44–09:11)

• Daily Life Anecdotes: Joel and Matt reflect on energy habits at home, such as kids leaving lights on and the negligible cost of running LED bulbs.
  • LED bulbs left on for 20 hours cost about 3 cents.
  • Emphasis on intentional living vs. penny-pinching for pennies' sake.
  • “Would you pick 3 cents up off the sidewalk, Joel?” — Matt (04:21)
• Life Lessons: Moderation in frugality—they want their kids to understand stewardship, not obsessive penny-counting.

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2. Q1: Which Assets Improve Your Credit Score? (10:37)

Listener: Phil from Annapolis
Main Q: Which assets (home, car, valuables) can improve credit and lower costs like insurance or borrowing rates?

The Truth About Credit Scoring (10:55–21:31)

• Main Takeaway:
  “It is not your assets that improve your score… it's your liabilities.” — Matt (10:54)
• Cash in hand, paid-off cars, investments: none directly improve your FICO score.
• Credit bureaus only care about how you handle debts, not what you own.
  • Big 3 factors: on-time bill payment, using a small part of available credit, having a good credit mix (credit cards, installment loans).
  • Paying off big loans (like your mortgage) can slightly lower your score due to less “credit mix.”
• Metaphor: Being a great earner/investor ≠ being a great borrower (like being good at work doesn’t mean you’re good at dating).
• Golden Rule: Don't take on new debt just to boost your score.
• Insurance Angle:
  • High credit scores can lower insurance premiums.
  • Keep your score in good shape both at major financial milestones and for those everyday costs like car insurance.

Key Quote:
“Just having loads of cash on hand… won't help improve your score. The system only rewards certain kinds of behavior.” — Matt (11:39)

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3. Q2: Navigating Finances When Moving to Italy (24:38)

Listener: Michael from Chicago
Situation: Financially independent, moving to Italy after securing Italian citizenship; unsure how to adapt his U.S.-optimized finances to Italian tax rules.

The Complexities of Cross-Border Finances (24:38–36:33)

• Michael has optimized everything for U.S. (HSAs, Roth IRAs, 403(b), index funds)—but Italian tax rules are a near-opposite.
  • Italy treats most U.S. tax-advantaged accounts as ordinary income, with higher taxation on gains/dividends, plus reporting burdens.
• Quality-of-life > taxes, but financial planning still critical.

Advice highlights:

• Ease Into the Move:
  • “I would be hesitant to sell my home right away… Don't burn bridges.” — Matt (29:09)
  • Consider renting in Italy short-term before full relocation.
• Financial tactics:
  • Keep most U.S. accounts/stateside, only transfer cash needed locally.
  • Use services like Wise for low-cost international transfers.
  • Remember: Italian authorities want full transparency on foreign assets (prepare for serious financial reporting).
• Professional Help Needed:
  • Seek a “cross-border CPA” with U.S.–Italy (or U.S.–EU) expertise.
  • May also need a local Italian tax pro after arrival.

Key Quote:
“You’re going to want to hire a professional—most importantly, a cross-border CPA who can help with withdrawal strategies, reporting, and sidestepping surprise expat taxes.” — Matt (35:28)

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4. Q3: After Maxing Out My Roth IRA, What Next? (36:40)

Listener: Stephanie from the Bay Area
Situation: Near 30, $80k salary, no 401(k) match, has maxed Roth IRA, invests monthly in index funds, holds $40k in high-yield savings, wishes to buy a house someday but no concrete plans yet.

Building on a Strong Foundation (38:19–46:09)

• Praise for Maxing Roth IRA:
  • “It’s totally possible to become a Roth IRA millionaire if you keep this up.” — Matt (38:34)
• Lamenting No 401(k) Match: Tough break, but you’re still ahead.
• On the Cash Pile:
  • Emergency fund rule: keep at least 3 months’ expenses in liquid savings.
  • If home purchase is far (5+ years) away: consider shifting surplus into a taxable brokerage account (index funds) to chase higher returns.
  • If home is imminent (within 2–3 years): keep extra cash in savings/CDs to avoid market risk.

Key Quotes:

“If your house timeline is 5-plus years, all signs point toward investing. If it’s only two? Keep it in savings.” — Joel (42:47)

“Even if you’re earning a decent high-yield rate, investing makes more sense over a longer time horizon.” — Matt (41:31)

• Risk tolerance matters: The odds strongly favor investing over long periods, but never risk homeownership funds you may need soon.

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5. Q4: Should I Keep My Car Loan and Invest the Extra? (49:20)

Listener: Ricky
Comment: Argues that sometimes, keeping a cheap car loan and investing the difference yields better returns due to "interest rate arbitrage."

Debt Payoff vs. Investing: The Real Math and Behavior (51:27–57:31)

• Hosts’ Stance:
  • They agree that in the right conditions (low interest, high discipline), keeping a loan and investing the difference can be rational.
    • “These are the kind of prompts that get us thinking.” — Matt (51:27)
  • But: Debt payments are guaranteed, investment gains are not.
• Behavioral risk:
  • “Not everyone thinks as logically as you do, Ricky … will you actually invest the payment difference or will it leak into spending?” — Matt (55:18)
  • Liquidity is powerful, but so is discipline.
• Slippery slope warning:
  • Rationalizing car loans may tempt people to overspend.
  • Joel’s rule: Never finance depreciating assets (like cars).
• Final thought: For most, paying cash for cars is simpler and aligns spending, investing, and risk more tightly.

Key Quotes:

“It all comes down to what you are doing with that debt... But as interest rates rise, the math gets trickier.” — Matt (53:09)

“Debt payments are guaranteed. Returns are not.” — Joel (54:11)

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6. [Bonus] Non-Alcoholic Beer Review

At the show’s end, Joel and Matt sample an NA beer (“Safe Sex Ride” by Incendiary Brewing), sharing honest, light-hearted reactions:

• “To me, it tastes like an alternate universe IPA… so much better than other NA beers I’ve had, though.” — Joel (59:55–60:22)

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Notable Quotes & Moments (with Timestamps)

• On minor frugality:
  “Would you pick 3 cents up off the sidewalk, Joel?” — Matt (04:21)
• On credit scoring reality:
  “It is not your assets that improve your score… it’s your liabilities.” — Matt (10:54)
• On mixing good money habits:
  “You might be a millionaire and have poor credit.” — Joel (12:12)
• On moving abroad:
  “Don’t burn bridges—ease into it… renting at first is wise.” — Matt (29:09, 31:16) “Italy is going to require a colonoscopy for your finances.” — Joel (34:12)
• On what to do after maxing your Roth:
  “If your house timeline is five-plus years, all signs point toward investing.” — Joel (42:47) “Even if you are earning a decent high-yield rate, investing makes more sense over a longer time horizon.” — Matt (41:31)
• On the car loan/investing debate:
  “Not everyone thinks as logically as you do… there’s an entire behavioral side to this.” — Matt (55:18) “Debt payments are guaranteed. Returns are not.” — Joel (54:11)

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Timestamps for Key Segments

00:00–01:21 — Sponsor promos/Intro
01:44–09:11 — The (tiny) cost of leaving on LED bulbs, intentional living
10:37–21:31 — Credit score Q&A (Phil): What really boosts your score
24:38–36:33 — Moving to Italy financial planning (Michael)
36:40–46:09 — After Roth IRA: What savings to invest (Stephanie)
49:20–57:31 — Car loan vs investing: arbitrage or risk? (Ricky)
59:55– End — NA Beer review & finale

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Episode Tone & Style

Warm and conversational, the hosts use humor and practical examples as they dig into listener questions, always aiming to de-mystify finance for “normal folks” while emphasizing intentional choices and avoiding dogma.

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Bottom Line Takeaways

• Credit scores reward liability management, not asset accumulation.
• International relocation demands serious cross-border tax expertise—don’t DIY it.
• Maxing Roth IRAs is killer; invest extra cash unless your big goal is right around the corner.
• Car loan vs. invest? Sometimes the math works, but discipline and risk matter more than pure numbers.
• Financial decisions aren’t just math—they’re also about your behavior and values.

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Learn more / submit questions: howtomoney.com/ask
Show notes: howtomoney.com

“Until next time… best friends out!”

Transcript

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This show contains information subject to but not limited to personal takes, rumors not so accurate stats, and plenty more. What's up, man? It's your boy Nav Green from the Broken Play podcast. Look, it's the end of the season. The playoffs are here. Guess what? It ain't the end of. You can always tune in with Broken Play Podcast with Nav Green on the Black Effect Podcast Network. Not a team who ain't going to the playoffs. The Chief. It's time to rebuild. Listen to Broken Play with Nav Green from the Black Effect Podcast Network on the iHeartRadio app, Apple Podcast, or wherever you get your podcast.

[Joel]

Welcome to how to Money. I'm Joel.

[Matt]

I'm Matt.

[Joel]

Today we're answering your listener.

[Matt]

It's Monday, which means we are hearing directly from you listeners. Joel, we're going to hear from a listener who's looking to boost his credit score in order to save more money. It's always a nice reason to focus on your credit score. Another listener is moving abroad. Not for geographic arbitrage, but it's more like a geographic speculative move. Right. So I feel like speculation is the opposite of arbitrage.

[Joel]

Yeah.

[Matt]

Arbitrage is knowing that you're gonna come out ahead. This listener is like, I'm gonna roll the dice. And I think it might be better. Another listener is looking to invest his car payment. He thinks it's gonna lead to him saving more money over the long haul. We'll get to that one and a couple others today on the Ask how to Money listener questions episode.

[Joel]

No doubt. Okay, Matt. Something that I think annoys my kids, that I do, is is in the mornings when they're about to head off to school, I'm like, hey, run back upstairs, turn your lights off. I don't want your lights on all day. And to be honest, it probably happens.

[Matt]

All right, dad.

[Joel]

Almost never. And then I.

[Matt]

Wait, it happens never? You actually saying that or them actually going back upstairs?

[Joel]

No, I say it a lot. I guess when I say it, they go back up. But maybe I just. I think I just forget to say it. And so ultimately what happens, I come back home. Usually I'm going for a run. So before I go for my run, I jump upstairs and I turn off all the lights myself.

[Matt]

I do the exact same. Like, you know what I do? I call it shutting down the room. And so, like, I will tell them as well, just like, hey, make sure you shut down your room. But yeah, a lot of times they don't. But it's that. And it's also the toilets I hate. Like, we've gotten to the point to.

[Joel]

Where they leave the seats up.

[Matt]

No, I don't. I don't really care about seats up, seats down.

[Joel]

Then what is it?

[Matt]

Flushing the toilet? Just gettin that filth out of there, man. Like, we used to be more of a. If it's mellow or if it's yellow, let it mellow. But I'm at the point now where if it's yellow, let's go ahead and flush it.

[Joel]

Flush it. No, I think that actually came back to bite me. Cause early on I was a yellow lead it mellow guy. Taught my kids to be that. And then they didn't flush properly.

[Matt]

You have to reteach them.

[Joel]

And I'm like, no, actually guys, let's just flush them.

[Matt]

Every time. You're like, daddy's portfolio is doing okay. You can go ahead and flush it.

[Joel]

Okay. So speaking of which, not because I'm ridiculously loaded or anything like that, but a wire cutter article made me think maybe I should care a little bit less about this. Certainly not to the point where I'm annoying my kids over getting them to turn their lights off. Because they kind of talked about, well, how much does it actually cost if you leave your lights on?

[Matt]

Because it doesn't cost you anything.

[Joel]

It costs almost nothing. Yeah, with LED bulbs, right? And it would have been different with the old school incandescents, but the. They specifically calculated if you leave an LED bulb on, like a 60 watt equivalent for 20 hours, it costs 3 cents. 3 cents.

[Matt]

3 cents. Would you pick 3 cents up off the. Off the sidewalk, Joel? You probably wouldn't, would you?

[Joel]

Probably not be.

[Matt]

Except that pennies are now valuable so you're like, oh, three pennies. Heck yes.

[Joel]

I'll list them on ebay.

[Matt]

Yeah, I think I'm with you, man. Like it makes sense because back in the day, back in, back when we were, you know, back in the 90s, like you said, the incandescents, they used so much more power.

[Joel]

Yeah.

[Matt]

But technology, it's, it's evolved. We had that like little dark period. It's not. Well, it wasn't literally dark. We had that sketchy patch when everyone was rocking the compact fluorescence. The cfl.

[Joel]

Oh yeah, those are terrible. The ones that look like swirly ice cream cones. Uh huh.

[Matt]

And they kind of would vibe like the, the quality of light out of those was awful.

[Joel]

Oh yeah.

[Matt]

Not to mention some. Yeah, sometimes they'd flicker, but now we've got LEDs, which are.

[Joel]

The LED ones were bad too.

[Matt]

Well, yeah, you've got a lot better. Yeah, I forgot. Yeah, the early LEDs, the color was.

[Joel]

Awful and they were expensive.

[Matt]

You couldn't get them with like the 3700 Kelvin Warm Light, which is our go to temperature for lights in our house. But yeah, man, I'm with you. I don't want to be known as the guy, the parent who's always like barking at his kids like, go turn off your lights. Like if I'm known to my kids in that way, I feel like I've failed. But if there's other things that I'm also saying to them because it's a beautiful life and there are wonderful things that we like to talk about and things that we're excited about. In addition to that, if I'm also like, hey, there are other lessons to teach them. If I'm like, hey, we're called to be good stewards of our resources. Hey, we're trying to live intentionally. We're trying to live in such a way that shows that we are proactively living our life not because we're being lazy. Right. There's a big difference in my book between doing something just because we can versus oh, it doesn't cost hardly anything at all. And maybe, oh maybe we, we like leaving the light on. Like there are, I think there's like two or three lights now in our house that we like to leave on like small little lamps, really tiny LEDs. Like there's a little lamp that we keep in the kitchen now so that there's always like this little beacon even when the lights are off. It's kind of like, okay, we can find your way. It's sort of like a nightlight essentially. But we always leave that on. Look like same thing in the playroom. We always leave a lamp on in there. Take out this, like, pink Himalayan salt lamp that she got at Goodwill. What? What that? She was like, you know, I've always wanted one of those salt lamps. And now we keep that going in our. In our foyer as well. And I'm all for that because that's intentional. There's zero part of me that thinks, oh my gosh, I can't believe her. These are running. Forget 20 hours a day, Joel. These are running 24 hours a day.

[Joel]

Never turn them off.

[Matt]

There is no part of me that worries about that because there's something that we're trying to achieve by leaving those on. As opposed to kids forgetting to turn off their lights. Doesn't all you're achieving there is just like, irresponsibility.

[Joel]

Emily and I were on our post dinner walk last night, and she was telling me that her. She works at a therapy office, and her boss was like, hey, whoever left last night, you didn't turn all the lights out. And. And she was like, well, that was me. But sometimes I get scared, like when all the lights are off and I'm walking to my car and the damp parking, Dark parking lot alone, and so.

[Matt]

Maybe you could get a not so sketchy office buddy.

[Joel]

And I was like, well, just send her this article and tell her that it cost her essentially nothing to run that light bulb as long as it's an LED one. So that's.

[Matt]

That's pretty funny.

[Joel]

Helpful info. I will probably, still, out of habit, be the guy who runs upstairs to flip all the lights off, but I probably. I don't think I will be as annoyed that they don't.

[Matt]

Yeah. Or yeah, maybe even taking steps to kind of identify why it is that we do this. I don't know. Sometimes when kids get old enough, they can appreciate the why behind the action, not just being like, oh, dad always wants us to do this. Another note, the fact that one of our kids, a couple of our kids, one in particular, loves to leave her bathroom fans running. Like the exhaust fan.

[Joel]

Oh, I don't like that.

[Matt]

And those actually use significantly more energy than LEDs. I want to say, like three to five times more power than an LED. Okay. And in her case, there are two bathrooms. There's one over, like over the toilet and one in the shower. And sometimes you'll have them both running. And so that's like 6x to 10x the cost of one bulb. And I don't know, there's something about that. And in the winter, you're sucking out all the heat.

[Joel]

Yeah.

[Matt]

So it's a double whammy.

[Joel]

Right? That's the way I think of it, is like, oh, if I'm running the heat and that's going the heat, all the heat rises.

[Matt]

You're sucking that out. In the summer, it's one thing when you're dealing with moist humidity and moisture levels in the bathroom, but in the winter, dude, you want to trap that moisture. Like, I want to breathe that easy to breathe 45% humidity air as opposed to the dry finger skin cracking 30% humidity. I have dry skin in the winter.

[Joel]

You do. You actually, like, keep some stuff here that you rub on your hands all the time.

[Matt]

Cocoa butter.

[Joel]

Yeah, cocoa butter. Okay.

[Matt]

I like to sit there and while I'm reading, I, like, rub it on my hands.

[Joel]

Well, just. I think that's just a good PSA for all the parents out there. You know, if your kids are not good about turning their lights off, it's.

[Matt]

Not that big of a deal.

[Joel]

Yeah. Maybe we can let it go. All right, let's mention the beer we're having on this episode. This is honestly the name of the beer. I don't want to say it, but I will just because that is what we do here. It's called Safe Sex Ride. It's by Incendiary Brewing.

[Matt]

Yep. It's an odd name, this one.

[Joel]

Yep. But this is a.

[Matt]

Thanks a lot, Brandon. Brandon's the one who donated this one.

[Joel]

We do appreciate the beer having to say the name right now.

[Matt]

It's an NA And I'm actually looking forward to talking about this one.

[Joel]

Same at the end of the show because NA Beers. I've not been super impressed with the ones I've had up until this point, but they're getting better. And there are more breweries making good ones, apparently. So looking forward to tasting this one, giving our thoughts later. And if you have a money question we'd love to hear from you, just go to howtomoney.com ask. Submit your question there. Really? Just recording that question as a voice memo on the app on your phone, emailing it over to us. Let's take a question, Matt, specifically about improving your credit. Hi, Joel and Matt. This is Phil from Annapolis. This isn't exactly a first money here kind of question, but I thought I'd bring it into this discussion. My question is, which assets improve your credit and help save money? I'm thinking specifically of making your insurance cheaper or making future borrowing rates lower. As you would see With a better.

[Matt]

Credit score, for example.

[Joel]

I look forward to your answer. Thank you.

[Matt]

He's looking forward to your answer. Yours specifically, Joel, assuming you provide an answer.

[Joel]

Well, too bad for Phil. I've just taken a vow of silence. Too bad for my career too.

[Matt]

Gonna pull this one for the rest of the episode.

[Joel]

Phil.

[Matt]

First of all, I love that you're talking about credit because it is an important part of a healthy personal finance money life. Interestingly enough though, you asked about which assets are going to help improve your credit, but the truth is, it is not your assets that improve your score. So, for instance, owning a nice car, free and clear, that is not contributing to your FICO score. The credit bureaus, they don't care if you own, let's say, a fancy Rolex. That would be considered an asset too, right? That you paid cash for. It would be different if you're making payments on that Rolex though.

[Joel]

That would be an appreciating asset too, because when you actually look at the data, it seems like Rolex. Oh, do they? I think Rolexes do better than the S&P 500 over time.

[Matt]

No way.

[Joel]

I think so.

[Matt]

That's a great excuse for me to maybe get a fancy watch. Although I don't think I could afford a Rolex. It would have to be my craft beer equivalent, like 10x or 100x. But bottom line, like, just having loads of cash on hand, including assets, won't help improve your score. The system, the credit scoring system, it only rewards certain kinds of behavior that it wants to see and not the kinds of behavior that you typically like to see in yourself and some of the different achievements that you're able to reach.

[Joel]

And you might assume, right, that your credit score is at least somewhat influenced by just your general money behavior. And it's not in a lot of ways, like having a massive 401k balance, for example. You might think, oh, if I've got a million dollars in my 401k, that's probably going to have some sort of impact on my credit score because I'm crushing it. Like, I've got a lot of money invested for my future. But no, it's quite possible actually to be a millionaire and have poor credit. They just don't necessarily go hand in hand. And those good habits that you have in certain parts of your personal finance life, they just don't translate to credit score supremacy, to being in the 800s or anything like that. And so it's actually it's your liabilities that help improve your credit score, which shocks A whole lot of people granted that liability or the loan that you've taken on could be used to purchase an asset. Right. Like a house or a car. Your credit card usage as well, which can be used to pay for basically anything under the sun. That's an important factor too. But really what the credit bureaus are looking at is how are you handling the credit that you have been given, that you've taken out. And actually having taken out debts is really a big part of what makes them think that you might be good at handling future debts.

[Matt]

Exactly. Yeah. And essentially what that means is having access to like loads of credit, which then increases as you handle credit well over time, but then using very little of that available credit. Like that is what makes you look trustworthy, paying your, you know, obviously paying your bills on time and in full, which ensures that the bureau's get to see you as a responsible borrower. In addition to that, it's about having a good credit mix. And so that means having revolving credit lines, so credit cards, even a heloc, but also installment loans as well. So like car loans, mortgage, even student loans. But again, like a lot of folks will talk, there's a lot of shade. And I mean, we're kind of talking about it like it's silly as well, because it kind of is. Right.

[Ricky]

But.

[Matt]

But I guess I want to play devil's advocate a little bit. And if you think about it from the perspective and from the point of view of the actual lender, like, it kind of makes sense. Right? Like what you're looking for is the specific behavior that you want to see.

[Joel]

Which is what?

[Matt]

For them to be able to pay back the money that they have borrowed from you. Like you want a good paybacker. Like you don't really care if they're a good borrower. You don't really. I'm sorry, a good earner. You don't as you don't care as much if they're a good investor. Yeah, investor. Like, you just want to know that they will give back the money that they've borrowed from you. Like, it kind of makes me think about other.

[Joel]

In the best way to predict that is, did they do that last time to the other lenders that they borrowed money from in the past?

[Matt]

Yeah, exactly. Like they're related, but they're not exactly the same. Like, it makes me think about the kind of qualities that might make somebody like a good employee, like, or if you, if you are great at your job. Right. Like, oh man, you've gotten a ton of promotions oh, you're climbing the ranks. You're really getting after it. You got the bonus. Oh, he shows up on time. Well, all of these are great qualities if you are a worker, but it doesn't necessarily mean like, so then the other option or the other thing I'm thinking about are like relationships. Let's say you're in the dating scene, which it's been a while now, Joel, since you've been in the dating scene. So, like, stretch your imagination a little bit here. But all of those qualities don't directly translate to being a good date or to being a good boyfriend or being a good partner or a good spouse. There are some things that do relate, like showing up on time. Okay, that tells you something. You know, if you show up to your dates on time, oh great. He shows up to work on time, shows up to his dates on time. There's something good there.

[Joel]

But it doesn't automatically be decently well groomed. Right. That's helpful.

[Matt]

Wear pants.

[Joel]

I still try to do that. I'm not dating anymore. I just date my wife now.

[Matt]

But yeah, but it doesn't automatically mean that just because you're an all star in one sector of life that you're also going to be just totally rocking it in this other area. And I think the same is true when it comes to money. They're related, but it doesn't automatically translate to the fact that, oh, because he's killing it as far as what he's earning, that means he's going to be a killer borrower. Not necessarily.

[Joel]

That's true because like, actually when, when you look at statistics about people who are living paycheck to paycheck to paycheck making six figures, we still see a lot of people living on the financial precipice even when they're higher income earners. And I think that is there's just poor money management at all levels of income. Right? Like we know that's true. And it's easier to manage money better when you have a higher income. Still, that doesn't always translate either. I think that's why some people find that their score actually ends up dropping after they pay off a loan. Matt, because you were just talking about what makes a good credit score. Getting rid of your mortgage is this awesome personal finance feat, but you can actually see your score decline for a little while after doing that. People will ask us about that because of the nuances of the, the credit score. Hey, what should I be wary about paying off this loan that I have? And the truth is so much depends on your specific situation. You typically, though, don't want to let the credit score tail wag the dog of your paying off debt behavior. But. And then other people might say, well, this probably means that I should go take on more debt in order to increase my credit score. Because Matt and Joel said credit scores are important and part of having good credit score is having actual debt in my name. But no, that's not wise either. And that's doing this similar thing on the flip side. So having some credit, using it wisely in order to build your score up is a good thing. That's one of the reasons that we talk about credit cards as being a good method of payment. They're helping build your credit score at the same time, but you have to use them effectively. Follow the golden rules of plastic that we talk about here on the show. But don't go taking on new debts for the sole purpose of raising your score. That would be, I think, self defeating and could lead to some worse outcomes.

[Matt]

Exactly. And I will say one of the outcomes that he mentioned or one of the goals, for instance, getting your insurance rates down. I think that's one of the best reasons for me to want to pay attention to my credit score right now, because that's something that we all pay. It's not every month or every year that we're looking to take out a new massive loan where our interest rate might be, might be impacted by our credit score, but insurance rates, man, that's something that we've all seen.

[Joel]

You're right. There's sometimes it's more impactful, right. Having the high credit score than others. And it's like, especially you want to make sure you're dialed in on that if you're taking out a car loan or a home loan. If you listen to how to money, we don't want you taking out a car loan, but if you're taking out one of those loans, like, you want to pay special attention. But then even on a year where you're like, or multiple years, you're like, I'm not buying anything.

[Matt]

I don't need to pay attention to it.

[Joel]

It still impacts your life.

[Matt]

It's a perennial sort of thing that we need to pay attention to, which it kind of get. So he also mentioned too how like, oh, this isn't quite like a first money gear question. And you're right, because it's not the first thing you need to pay attention to, but it is something that you do need to pay attention to kind of regularly. Like whether you are in your, like the first Money Gear or if you're in Money Gear 7. Because it's just like, it's just good practice to make sure that you have a solid credit score. Whether it's because of the fact, like Joel said, oh, this is. We're applying for mortgages and we want to make sure that we get the best rate possible. Or if you're just way past that and you've got a house full of teenage drivers. Well, credit scores have an impact on insurance rates as well. And so that's certainly something I'm going to be. I'm looking ahead a little bit here, Joel. It's something that's. That's one of those cost centers as I look into the future that I'm a little afraid of. And I'm certainly going to be looking at every opportunity to reduce that cost.

[Joel]

I'm thinking this random, that Waymo is actually going to be the cheapest way to get my kids around if I'm not driving them. Just because when, dude, when you hear how expensive to add kids onto your insurance policy, I'm like, I don't know, maybe Waymo, especially at that point down, down the road, maybe that's gonna be like a slam dunk decision.

[Matt]

It's so funny that you said that because we were recently talking about there's. I might be helping, doing some volunteering that in occasional circumstances would require me to be somewhere else. Like, we're a one car family, right? And so we're like, oh, wow. Is this volunteer thing that you're doing gonna be what causes us to get a second vehicle? Which is like, obviously a lot of money up front, but then in addition to that, the cost of insurance. And I was like, you know what? It's going to. It's so infrequent that this is totally an instance where I could just order up an Uber, a Lyft, or have you ridden in a Waymo?

[Joel]

I haven't yet. I can't wait. I see. I'm driving around all the time now.

[Matt]

Yeah, yeah, yeah. But it would be a perfect instance for me to just take away mo get there, do what I need to do, and then y' all show up later and then we get to ride home together. Like, so much more affordable than saying, oh, now we have to finally get a second vehicle.

[Joel]

And especially with kids, you just. I would trust a way more Waymo more than I would trust a Lyft or Uber. So that's how a lot of people.

[Matt]

They'Ve got the teen accounts now. But yeah, there's something about getting in a clean, driverless vehicle that's programmed and is proven to get into fewer wrecks than human gig operated vehicles. But. But yeah, it'll still be weird the first time. First time I get in one. But Phil, we hope that that gets you pointed in the right direction and that you are able to build your wealth, at least in part because you've got a better credit score.

[Joel]

All right, Matt, we got more to get to on this episode. We're actually going to have someone question our belief on paying cash for cars. This listener disagrees. We'll get to that. Talk about what to do after maxing out a Roth ira. That and more. Right.

[Mind Games Narrator]

What if mind control is real?

[Matt]

If you could control the behavior of anybody around you, what kind of life would you have?

[Mind Games Narrator]

Can you hypnotically persuade someone to buy a car?

[Matt]

When you look at your car, you're going to become overwhelmed with such good feelings.

[Mind Games Narrator]

Can you hypnotize someone into sleeping with you?

[Ricky]

I gave her some suggestions to be sexually aroused.

[Mind Games Narrator]

Can you get someone to join your cult?

[Joel]

NLP was used on me to access my subconscious.

[Mind Games Narrator]

Nlp, AKA Neuro Linguistic programming, is a blend of hypnosis, linguistics, and psychology. Fans say it's like finally getting a user manual for your brain.

[Ricky]

It's about engineering consciousness.

[Mind Games Narrator]

Mind Games is the story of nlp, its crazy cast of disciples, and the fake doctor who invented it at a new age commune and sold it to guys in suits. He stood trial for murder and got acquitted. The biggest mind game of all, nlp, might actually work.

[Matt]

This is wild.

[Mind Games Narrator]

Listen to Mind Games on the iHeartRadio app, Apple Podcasts, or wherever you get your podcasts.

[iHeart Radio Announcer]

Run a business and not thinking about podcasting? Think again. More Americans listen to podcasts than ad supported streaming music from Spotify and Pandora. And as the number one podcaster, iHeart's twice as large as the next two combined. So whatever your customers listen to, they'll hear your message. Plus, only iHeart can extend your message to audiences across broadcast radio. Think podcasting can help your business? Think iHeart streaming radio and podcasting. Call 844-844, iHeart to get started. That's 844-844 iHeart.

[Nav Green]

This show contains information subject to but not limited to personal takes, rumors, not so accurate stats, and plenty more. What's up, man? This your boy, Nav Green from the Broken Play podcast? Look, it's the end of the season. The playoffs are here. But guess what? It ain't the end of your season. You can always tune in with Broken Play, podcast with Nav Green on the Black Effect Podcast Network. Not a team who ain't going to the playoffs. The Chiefs. What's a rap? It's time to rebuild. Who your MVP right now then Drake May up there. Josh Allen up there still. Oh, my boy Matthew Stafford.

[Matt]

Where did Bo Nicks at?

[Nav Green]

He ain't too far behind.

[Matt]

He did all this talking.

[Nav Green]

What Matthew Stafford is doing statistically, bro, is crazy. Bro, you know I ain't no Josh Allen fan, but Matthew Stafford got better weapon. Caleb Williams. Hey, he should be in that conversation.

[Matt]

In what conversation?

[Nav Green]

He should be in it. Listen to Broken Play with Nav Green from the Black Effect Podcast Network on the iHeartRadio app, Apple Podcast, or wherever you get your podcast.

[Matt]

All right, buddy, we are back from the break. Let's take a question from a listener who's looking to to move abroad, but he is still looking to make the smart financial move.

[iHeart Podcast Awards Announcer]

Hey, Matt and Joel, this is Michael from Chicago. I've got a quick question for you. I've optimized my financial situation pretty much tight as a drum for the US system, obviously, because that's where I live. HSAs, Roth, IRA, Workplace, 403s, index funds, all that stuff. My wife and I are still working for the moment, but we're financially independent at this point. But I also recently secured my Italian citizenship through the citizenship by descent process, which is incredibly exciting. I worked on it for years and we're planning to move to Italy in late 2026 or early 2027. Now, my whole financial life that I've optimized so perfectly for the US Is about to run up against a system that's almost the exact opposite of the US there's no version of the standard deduction in Italy. There's no recognition of US HSAs or IRAs as tax advantaged. Italy treats IRA withdrawals, brokerage and HSA dividends as ordinary income. They tax realized capital gains at a flat rate that's fairly high. It's almost kind of a mere opposite of the US and treats everything from the US As a foreign asset. We're still really excited to make the move because as you guys know, life isn't all about taxes and we think the quality of life is higher over there. But obviously I'm going to need a lot of help to make sense of all of this. I know there are a lot of places to get financial advice and you've referenced many of them over the years. You know, nectarine, domain, money, advice only, network facet etc. But I'm curious if you guys have recommendations for someone in my situation who needs help negotiating a financial life across two countries and will need to file taxes in both those countries going forward. I'm not even sure what kind of person I'm looking for. Do I need a tax lawyer? Some kind of super cfp? All of the above. Thanks for your help.

[Matt]

So you can tell that Michael listens to the show because he said, like, y' all talk about life isn't just about money. Like, that's when I was like, oh, Michael knows what's up. He listens to the show. He understands the purpose of money. I love it.

[Joel]

I mean, he also highlighted a bunch of different.

[Matt]

All the awesome ways. Crushing it.

[Joel]

Yeah. I mean, all that and all the services that we normally talk about, like, oh, these are better than a lot of the other places you could turn for financial advice.

[Matt]

That's true.

[Joel]

So, yeah, regular listener sounds like for sure. It sounds like he is financially independent. He is crushing it. But he might not be financially independent for long. And the truth is, financial independence can change. You can become financially independent, you can lose it.

[Matt]

The market giveth and the market can taketh away.

[Joel]

That's true. That's part of it. And then the other thing is your choices, the things you opt to do with your life can undermine your ability to be completely financially independent. That doesn't mean, though, like he said, it doesn't mean that we don't think that's how he should proceed. Just because you achieve financial independence, part of the joy and benefit of it is utilizing that independence, even if it makes you a little bit less ultimately financially independent, as long as it's going to produce a lot of joy. And yeah, yeah, it sounds like he's going to be paying more every month to live in Italy. His taxes are likely going to increase.

[Matt]

He's going to save money, Joel. He's going to sell his Hummer that he has here stateside and he's going to drive a little Vespa around a little city. What's it called? City Hopper. What's it on Mario Kart, The Little Scooter.

[Joel]

I don't remember what it's called there.

[Matt]

I love being toadstool on the little Vespa. Well, City Tripper.

[Joel]

That's what it's called. City Tripper. If you do that, that would be helpful, but it's. It's probably not going to make up for, you know, it's going to offset increased tax burden. Yeah. And, you know, moving to another country, though, is about so much more than just your money. There's. There's a reason. Matt, you remember not too long ago, I had somebody on an interview episode talking about moving to Puerto Rico for tax purposes. There's a reason neither you or I have actually done that. I thought it was a really interesting topic to cover. And I wanted that to be kind of food for thought because I think it can prompt so many other things in your mind about like, oh, cool. If that's outside of the box, what else outside of the box am I maybe not considering in my life? And I haven't heard from any how Dota Money listeners who have made the move to Puerto Rico either.

[Matt]

I haven't seen those emails.

[Joel]

Yeah. But again, I mean, it's one of those things that I could see some people being like, that sounds perfect for me. And for other people being like, no way, not interested.

[Matt]

Yeah. To each their own, though. Yeah. And for that reason, you know, I've decided, like, our family's gonna stay here because of the different opportunities, honestly, that are available. Family, friends. But he. And I guess one of the things before we actually answer your question too, Michael, Like, I would even just warn again, like, it sounds like I know you are excited. Cause he even says so. He's just like, I've been really excited. I've been working on this. It sounds like this is a goal of his that he has had for a while. The whole process sounds like it's taken. Taken a little bit of time.

[Joel]

That citizenship process he mentioned sounds interesting. Just how basically if your family of origin is from that country, like, yeah, well, go through the process to get citizenship yourself.

[Matt]

Which of course got me interested. I was like, wait a minute, I'm half Korean.

[Joel]

You getting that South Korean citizen.

[Matt]

So I looked it up, actually. If my dad was a Korean citizen, I would be able to, but because it was my mom. Oh, it's a patriarchal society.

[Joel]

Okay.

[Matt]

Or I also wonder too, if it was because of the Korean War and all the GIs that came over and met their wives, which is what happened in my family's situation. Regardless, that's not what I wanted to get to. What I wanted to get to was the fact that he said, I know he's excited. And Michael, I don't want to rain on your parade, but, man, I am a bit nervous for you. And you didn't mention that you've been over there visiting. You didn't mention that this is. I don't know. I'm sure there are other steps that you have taken to do perform your due diligence. But I would just be a bit wary of pulling the rip cord and heading over there. Definitely don't burn bridges.

[Joel]

Right.

[Matt]

So, like, whether that's from a work standpoint, you're in Chicago. You didn't say whether or not you're a homeowner. But I would be hesitant to sell my home right away because let's say you get over there, you say you think the quality of life over there is better, but maybe you're like, you know what? I can make Negronis back at home. I miss my friends. I miss whatever it is about the States or Chicago maybe that you're missing. And then if it's your home, like, you have the opportunity to kind of move back as opposed to having ripped up the roots and try to transplant yourself. On top of that, you're also talking about being like you are currently working, but then you're going to go over there and not work. These are two significant, major life changes that combined, like, these things compounded together make me a bit worried as opposed to saying, okay, let's, like, ease into it over there. Let's. I'll continue to work. Maybe I can maintain my, you know, my gig stateside. There are other considerations that I would do before going, like, whole hog. And I'm sure that Mike is being prudent and wise about it. But I just wanted to say that before we got to some of his specifics.

[Joel]

Yeah. And maybe you could rent a place for three to six months and give it a really long. Instead of just like, man, once every summer when we go for a week, it's great because it's a very different reality to living in a place, even if it sounds great and you've got these, like, familial roots and stuff like that. Like, it might not be all you imagine it to be once you're.

[Matt]

I hope it is for him week.

[Joel]

After week after week.

[Matt]

Exactly. I hope it's everything you thought it was going to be and more. But it might not be. That's what I'm concerned about.

[Joel]

Yeah. Because, like, that gelato is delicious. But you also.

[Matt]

He's putting on the pounds.

[Joel]

So much of it you can eat. Right. And you're not going to ruin your life financially by making this move, though, because of your mindset, because of how much you care about financial independence. But you do have to be prepared as somebody who is a financial optimizer for the downsides of the move. From a monetary perspective, it's tough to pay ordinary Income tax. Right. On withdrawals from accounts that you thought would be completely or at least partially sheltered from tax man. Matt, I'm thinking about that HSA in particular, the triple tax advantage. And it's just gone poof in smoke when you move to, when you move to Italy. And so instead of a triple tax.

[Matt]

Advantage is like a triple slap in the face. That's what it feels like, what it's going to feel like because like it was this thing that was available to you and now you have it taken aback like three times.

[Joel]

Again, not a reason not to go, but still something to keep in mind as someone who's going to probably feel the pain more than a lot of others would, as someone who's really dedicated his life to being great with his money. Totally.

[Matt]

Yeah. I think you'll also obviously want to establish some local bank accounts there, some Italian bank accounts to pay rent, just your different expenses, but similar to maybe what I wanted you to think about as far as like easing over there. I think you also likely don't want to move all of your money over all at once and just completely shut down all of your stateside US Accounts either. I think keeping most of your assets in the accounts that they're currently in is typically the best way to proceed for tracking purposes. But another quick tip too. As you're moving money internationally wise is often the best low cost service. So certainly look into that if you, if you haven't already.

[Joel]

Yeah, great rates make it easy. While you're going to need money locally, transferring it all in one fell swoop, kind of like you're talking about Matt, that's often more harmful than helpful from a tax and from a reporting perspective, Michael, I'm sure you've encountered this too, but reporting is crucial. Italy, for instance, they want to know everything about you. They want full transparency on all your assets. They're going to be up in your grill. Even if the assets that you hold are stateside, they want to know all about your bank, your retirement, your real estate assets. You'll be filing tax returns in both countries, by the way, but because of tax treaties, you're going to owe most, if not all of your tax in Italy, not in the United States, but still, it's important to know. Oh yeah, they're going to. It's like a colonoscopy for your finances. That's what Italy is going to require. They want the data dirty.

[Matt]

Why does it have to be dirty? Aren't they the ones are notoriously dirty, Matt? Are they? You're asking about like who you should.

[Joel]

To be when you get one. By the way, I haven't had one yet.

[Matt]

I haven't either. I thought it used to be when you're 40, but I went to, when I, I went and got a physical when I was 40 and I kind of mentioned it like, you know, I gotta do this. And he's like, oh, you actually don't.

[Joel]

Have to do that. Oh, nice.

[Matt]

Oh, really? Are you sure? I didn't want to make it seem.

[Joel]

Like you got a rogue doctor.

[Matt]

Didn't want to make it seem like I was begging for one or anything. But I'm like, oh, I mean, if the guidance is now different, then I'm totally down with that. Is there a pill I can take instead? But he's asking about getting professional help. And because of the complex nature of how assets and income are taxed over there, and of course just at the higher rate that you're going to be experiencing it, you're going to want to hire that professional help. And the most important person to look for would be a cross border CPA who can help you to think about where to keep funds and who can also help you to think through different withdrawal strategies when you need to tap those accounts as well. They can help you to figure out where it is that you should keep your funds in order to not tax evade, but to sidestep certain taxes that might catch many expats unaware. And so that's something specific to being international.

[Joel]

But even by the way, you might want to pull some money out of certain accounts before you migrate over to Italy. Right. They might say actually that hsa, if you've got the receipts, you should tap some of that money. Now that's true. You know, like there's like things maybe you haven't thought about yet that a cross border CPA could really push you towards.

[Matt]

Yeah, you would normally go ahead and pull those funds because you don't need them. But if you're going to get taxed at a much lower rate on those funds because they're qualified medical expenses, go ahead and take advantage of that tax advantage so you can sidestep that triple slap and take that cash over, which.

[Joel]

Sounds like a wrestling move. Triple slap probably is from somebody.

[Matt]

It probably is. But just make sure that you hire a financial expert who's got, you know, some significant expertise in this area, but who also has transparent pricing. I think there's a chance you're going to need a local Italian tax professional as well. But that's something that I think you can Figure out once you get there, asking around as you start to figure out the ins and outs of the Italian system and the significantly higher taxes over there.

[Joel]

No doubt, Michael. Best of luck though. And we hope that your Italian excursion is the best thing ever.

[Matt]

Yep.

[Joel]

All right, let's get to our next question. This one is specifically about maxing out one awesome tax advantaged account. What do you do next?

[Stephanie]

Hi there. My name is Stephanie and I'm located in the Bay Area. I'll get straight to it. I've maxed out my Roth IRA for the past couple of years. First time I've been able to do that. I have a small amount invested in my 401k since my job does not match and I've never had a job that matched, so it didn't really feel like that was much of a benefit. I have auto payments that total in about $300 a month into index funds. I also have about like 10k or so invested in CDs at the moment. But I do have about 40,000 in my high yield savings account. I do know that that's a large chunk to have there, but I am kind of scared of investing it even though it's index funds. I would love to own the house in the future, but I don't have any specific plans at the moment. So it's not like I need to necessarily keep a good chunk available. I'm 30 years old, about to be, and I make 80k annually before taxes. Of course, I think a big thing I need to do is, you know, get a better job in the future. Better paying job, but, you know, that's a work in progress. I primarily am just kind of wondering what you would recommend I do with those savings. Also, if there's anything else that I should be preparing for, you know, just any, any guidance would be helpful. Thank you.

[Matt]

All right, Stephanie, we're here to bring the guidance. And I want to go back to the fact that you've been maxing out your. Did she say for the last couple of years, last maybe two or three years, that you've been maxing out your ira. Amazing. That's a killer accomplishment.

[Joel]

And the Roth, especially in those early working years, right, like the Roth IRA is the ticket.

[Matt]

It's the lowest that you're probably ever going to pay when it comes to. So pay the tax now on your money. By the way, speaking of Roth, you can still contribute to your Roth for last year for 2025 if you haven't maxed it out yet. So don't sleep on that you might be thinking, well, guys, I'm like, I'm just gonna stick it to this year because there's no way I'm gonna max it out. You never know.

[Joel]

Never know.

[Matt]

Go ahead and put it in last year's. And what if you get some incredible raise? What if you. Yeah, there's just lots of different opportunities that might arise.

[Joel]

What if you rob a bank and all of a sudden you're like, what am I gonna do with this money?

[Matt]

You never know.

[Joel]

Right.

[Matt]

But the IRA contribution limits have increased this year to $7,500. And so just a nice little rule of thumb for everyone out there, if you wanna max it out, if you wanna be like Stephanie, that simply means putting aside $625 a month. And I said simply because it's an easy number, not because that's an easy amount of money to be able to sock away. It's still a lot of money. But I think this is a great goal to have. And it's also totally possible to become a Roth IRA millionaire over your working career. Stephanie, you said you're about to be 30. If you invest only in your IRA for the next 30 years, it is very, very possible for you to be in the million dollar range by the time you hit that age 59 and a half.

[Joel]

Or at least close to it. By the way, boo to the no match from your employer. That stinks. I always hate hearing that. It's a real bummer. Especially if you're the kind of person who's keen on investing more in tax advantaged accounts. That's just the next incentive that you're like, oh, good, someone's going to either 50 cents on the dollar or 100 cents on every dollar I contribute up to a certain point. Match it. Oh, man, great, let me go for that. And it can be a little like deflating, I think, if your employer doesn't participate. But yeah, let's talk about your next steps, because that doesn't exist. We want you to keep maxing out the Roth each and every year, partly because of how flexible a Roth IRA can be. A lot of people don't know this, but you can tap your Roth IRA if you need to once you're ready to buy a home. So you can take out $10,000 of earnings for a home down payment, plus all of the contributions that you've made over the years.

[Matt]

Yeah, first time home buyers, actual earnings, not just the contributions.

[Joel]

I know, Pretty slick even. Still, though ideally you leave it untouched. Right? But like, I guess the ultimate goal is to save for a down payment and to max out your Roth at the same time so that you never have to touch the Roth dollars. Because. Right, that's the, that's the Charlie Munger rule. You're interrupting. Compounding unnecessarily, at least you're putting that money into an asset that will likely increase in value, which is buying a home. But knowing that you can access some of that money in the event homeownership becomes a near term desire, something that you're keen on doing more quickly, it's nice to know that you can at least have some of those funds.

[Matt]

Exactly. Let's talk about how much cash you have set aside, whether or not that is too much to be hanging onto. I think that depends on when you're hoping to buy a home, how much your monthly expenses are as well, because you want to have three, at least three months worth of expenses on hand. And I think she said like 40 or $50,000 in total cash. I think that's, it's, I think there's a chance it's more than what you probably spend in that time frame in three months. And so the rest of that money would be better off going to investment accounts instead of sitting in cash, even if you are earning a pretty decent rate with one of the online high yield savings accounts. But I think you might be antsy about that because of your desire to buy a home, which does make sense. But even if the cash that you have on hand far exceeds what you need in an emergency fund, investing that money, it wouldn't make a ton of sense if you're, you know, if you've got your sights set on the house, if you want to use that for a down payment soon. That being said, she, it doesn't seem like a super near term goal of hers, you know, like she's talking about like, well, that's like someday I want to be able to do this. But she wasn't talking about homeownership. Like somebody who in my opinion is super pumped or super eager to get her hands on a home.

[Joel]

Sounds like it could be eight to 10 years away. Even like, I don't know, maybe, maybe it's 5, maybe it's 7, 8, 10. But if it's 5 plus, then I think everything points to yes, you should be investing more of those dollars. If you're like, I don't know, man, guys, it could be two years, then it's probably best to keep that money in a high yield savings account or high paying CDs. But you just wouldn't want to trade the chance of higher returns for the potential of lost capital, which could derail your homeownership goals. You're like, I'm going to invest it, I'm going to grow it, and then the market has a rough couple of years and you're like, dang it, I would have been better off saving. Right. If it's on this longer timeline, you're going to want to be investing those dollars in a taxable brokerage account instead. There's no guarantee that you out earn a high yield savings account, but the longer timeline every year you add on to that makes it far more likely that you're going to outpace savings. Almost never. Do savings outpace stocks. They might in a given year, let's say 20, 22, you would have been better off saving than investing. But when you're talking about even the combo of 22, 23, 24, you would have been far better off being an investor than you would have been being a saver. I do think savers aren't being punished to quite the same degree that they were six years ago, but I don't.

[Matt]

Think we can count on savings rates that the banks are paying to continue to stay where they have been as well.

[Joel]

Right.

[Matt]

Yeah, it'll be interesting to see where rates go over the next year. But yeah, I mean, that's also a bit more conservative advice because like, and like that is generally what we say to folks because I think a lot of folks can't handle like, it just makes them a bit nervous if there is a downturn in the market and they're like, no, that's the money I was counting on. So some of it could comes down to how much of a goal, how certain is it that you want to have this cash on hand to be able to.

[Joel]

Flexible is the goal.

[Matt]

Exactly. Yeah, exactly. Because like, honestly, so I mean, that's why that's like some general guidance. But rolling monthly returns, if you look at any three year period in the stock market going back 100 years, it is 85% that the market is in the green. That is, that is positive. And so if it was me personally, like, I think I'm investing that money like because of that, knowing what the stats are, I am much more likely to invest. Even though a lot of times on the show we talk about, well, if this is a serious goal of yours, yeah, you want to go ahead and park that money as cash, have it sitting as dry powder, ready to go, it's on the sidelines, ready to get subbed in. But I didn't necessarily hear that in her voice. She's kind of like, I want to be smart with it. And I do have some of these longer term goals. And so I don't know, there's. I think I might want to push her slightly more towards investing as opposed to reaching out for the super near term goal of hers.

[Joel]

That's why I think the historical data that you reference is so helpful to know. All right, 85% of the time. All right, I can feel comfortable with that. What is your risk tolerance? Do you or don't you feel comfortable with taking that risk? That's a pretty high chance.

[Matt]

If I end up growing your money.

[Joel]

It is. But you feel like, gosh, I don't know, the 15% that would weigh over my head. And I am on a three year timeline. But again, you extrapolate that out even just a couple years further and the odds are even higher. Right. That the stock market is going to perform better than your high high yield savings account. So with, with every year you can wait and the more flexibility you can include in your plan, it makes it even more of a good idea to be investing those dollars and not saving them. You still want to keep. Right. That emergency fund money on hand. The rest of it should probably be invested. That's right.

[Matt]

All right, Joel, we are going to hear from a listener here in a second who is looking to keep his car payment around. He's getting friendly with it. We will take his question in more right after this.

[Mind Games Narrator]

What if mind control is real?

[Matt]

If you could control the behavior of anybody around you, what kind of life would you have?

[Mind Games Narrator]

Can you hypnotically persuade someone to buy a car?

[Matt]

When you look at your car, you're going to become overwhelmed with such good feelings.

[Mind Games Narrator]

Can you hypnotize someone into sleeping with you?

[Ricky]

I gave her some suggestions to be sexually aroused.

[Mind Games Narrator]

Can you get someone to join your cult?

[Joel]

NLP was used on me to access my subconscious.

[Mind Games Narrator]

Nlp, AKA Neuro Linguistic programming, is a blend of hypnosis, linguistics and psychology. Fans say it's like finally getting a user manual for your brain.

[Matt]

It's about engineering consciousness.

[Mind Games Narrator]

Mind Games is the story of nlp, its crazy cast of disciples and the fake doctor who invented it at a new age commune and sold it to guys in suits. He stood trial for murder and got acquitted. The biggest mind game of all, nlp, might actually work.

[Matt]

This is wild.

[Mind Games Narrator]

Listen to mind Games on the iHeartRadio app, Apple Podcasts, or wherever you get your podcasts.

[iHeart Radio Announcer]

Run a business and not thinking about podcasting? Think again. More Americans listen to podcasts than ad supported streaming music from Spotify and Pandora. And as the number one podcaster, iHeart's TW as large as the next two combined. So whatever your customers listen to, they'll hear your message. Plus, only iHeart can extend your message to audiences across broadcast radio. Think podcasting can help your business. Think iHeart streaming radio and podcasting. Let us show [e-mail] that's iheartadvertising.com this.

[Nav Green]

Show contains information subject to but not limited to personal takes, rumors not so accurate stats, and plenty more. What's up, man? This your boy Nav Green from the Broken Play podcast?

[Stephanie]

Ass.

[Nav Green]

Look, it's the end of the season. The playoffs are here. But guess what? It ain't the end of your season. You can always tune in with Broken Play podcast with Nav Green on the Black Effect podcast network. Another team who ain't going to the playoff? The Chiefs. What's a wrap? It's time to rebuild. Who your MVP right now then Drake May up there. Josh Allen up there still. Oh, my boy. Matthew Stafford.

[Matt]

Where did Bo Nicks at?

[Nav Green]

He ain't too far behind.

[Matt]

He did all this.

[Nav Green]

What Matthew Stafford is doing statistically, bro, is crazy. Bro, you know I ain't no Josh Allen fan, but Matthew Stafford got better weapon. Caleb Williams. Hey, he should be in that conversation.

[Joel]

In what conversation?

[Nav Green]

He should be in it. Listen to Broken Play with Nav Green from the Black Effect podcast Network on the iHeartRadio app, Apple Podcast, or wherever you get your podcast.

[Joel]

All right, Matt, we're back. We got more. More listener questions to get to. More stuff. Yeah, good stuff. And this next question comes from listener Ricky. It's actually more of a comment he actually wants to like. I want to put up fisticuffs and go go to town with you. Over and me bring it over. Advice about car loans.

[Ricky]

Hey, Matt and Joel, in a recent episode, you mentioned paying cash for a car. And while I totally get the psychological win of having no car payment and no interest, I don't think the math always supports that decision. If I can get a car loan at, let's say, 7%, but something like QQQ has compounded roughly 18 to 20% annually over the last decade, including dividends, then mathematically it often makes more sense to keep the loan and invest the cash. I say this from personal experience. I had a car loan at around 4% from that cheap Covid era fed money and I was aggressively paying it down faster than required. Toward the end of the loan, I ran a simple mental experiment. Option one, pay $500 a month and finish the loan a year early. Or option two, pay the minimum $250 a month, stretch the loan out for another year and invest the extra $250 instead. Well, what actually happened? The investment doubled during that period. Had I gone with option two, I could have sold the investment at any point, paid the car off entirely and still had cash left over. In effect, that last year of investing would have paid for the car for free. And the key part is liquidity. I wasn't locked in. I could have exited the investment at any time once it made sense instead of waiting for the loan term to end. This is really how people get ahead in a debt based economy. Wealthy people understand that borrowing cheap money is a tool. A 4% loan is cheap debt. You're investing in an appreciating asset while carrying low cost debt on a depreciating one. Even at higher rates, say a 10% car loan, if your investment returns 15%, there's still positive arbitrage there. Obviously this isn't about leverage gone wild or taking dumb risk, but purely from a math and capital allocation standpoint, paying cash isn't always the optimal move. Cheers, fellas.

[Matt]

All right, Joel. Man, I love it because these are the kind of questions, these are the kind of prompts that get us thinking. These are some of my favorites because we're talking about interest rate arbitrage here, which is where you are investing in a way that out earns the interest that you would pay for the debt products that you are carrying or servicing. And it can work, but it can also be risky. So let's dig in. This is, this is fun.

[Joel]

Yeah, yeah.

[Matt]

And I hope Ricky doesn't think that we're immediately like, you know, all that fighting language that was, it was just for fun.

[Joel]

I mean, I'm taking the gloves off. We're going to town. Ricky. And one of the things he mentioned was why this 4% car loan and I invested instead of paying it off and, or I don't remember if he said he did or if he could have if you ran the numbers post, I think he said he was accelerating payment. Right. For a while at least. And man, I think that's something that you and I would agree with him on. He already have a 4% car note. Yeah, I wouldn't hyper prioritize paying it off quickly. So there's a really big difference we have to note between paying off a low rate car loan that you currently have and taking out a new car loan. Right. So if you've got a car note 4 to 5% or something like that, interest rate, even if we would have advised against getting that loan on the front end. Right. Well, invest in tax advantaged accounts instead of paying it off. That would be our advice on the back end. So. And then, you know, once the car loan is paid off, we would still like to see you never have a car loan again in your life. You and I, Matt, we tend to view car loans differently than home loans because homes appreciate in value over time, cars don't. I don't know. One of my life mottos, that's something I strive to live by, is to never finance depreciating assets.

[Matt]

That's a good rule of thumb.

[Joel]

I think it's a slippery slope.

[Matt]

Yeah. And also we agree that cheap money can be a reasonable tool. This is something that we've talked about on many episodes in the past. And unlike other personal finance podcasters and folks who are in the money space, we distinguish the difference between what we'll call good debt and bad debt. It all comes down to what you are doing with that debt. And actually episode 637 was all about using debt in order to build wealth. There are pros to keeping some debts around in your life for longer if it allows you to invest more, especially in tax advantaged accounts. And we want how many listeners out there to use debt strategically and to be able to realize the power of liquidity more over time as well. Which is also something that folks don't always think about for sure.

[Joel]

Yeah. So I mean, if you haven't listened to that episode that was with an author who wrote a book called the Value of Debt, you would think, oh my gosh, Matt and Joel having a guy on who would write a book.

[Matt]

Titled that sounds like an oxymoron, does it not?

[Joel]

But we thought he had actually a pretty reasonable approach to the idea. It gets more complicated though, as interest rates rise and the discrepancy between what you might be able to earn on your money versus what you might pay in interest gets a heck of a lot closer, making it a much more difficult decision. I think what I'm getting at here too is that it's also important to note that debt payments are guaranteed and returns are, which is why that still doesn't mean car debt ever really makes sense, in my opinion, especially as interest rates have risen. Ricky is looking at QQQ returns for the past decade, which have been really good Hindsight is 2020 though, and we could pick other time periods where you would not have done as well. I think it is at least important to consider the fact that do you have enough liquidity on hand to pay the debt or are you just banking on the fact that your investment is over a short to medium term period of time going to outpace what you would owe in interest payments to, you know, to the, let's say the dealership, to the, to the car lender.

[Matt]

Yeah. And something else worth mentioning here too, Ricky, is that not everyone thinks as logically as you do. What is the opportunity cost in that were you to not actually make your car pay or, you know, if you're not paying extra on your car payment or if you are making payments as opposed to having purchased the car with cash, are you then going to take the difference and actually invest it? Right. So there's this entire behavioral side of things that maybe on the front end you tell yourself, oh, this is what I'm going to do with it. But then you start looking at something else that you want to spend money on and you're like, well, I don't know, it's kind of tight this month. Or actually it'd be really great to go on this trip that we're thinking about going on, like, oh, you know what I could do not invest, because I don't have to. There's nobody holding my feet to the fire. You got to be really disciplined. And you, I don't know whether that's through an accountability partner where you've got somebody there that you've shared this goal with. You know, if, especially if you've got a partner or a spouse, but there's no mechanism in place that's going to guarantee that you're actually going to take those, the money that you would have used to purchase the vehicle and instead funnel that into the market. And granted, at the end of the day, that's what money is for to actually spend. But still, there's something very much guaranteed about making, eliminating that car loan and not taking on that car loan debt.

[Joel]

I was going to say taking on this mindset could certainly increase people's ability to think they can afford more car than they might otherwise be able to because they're like, oh, okay, well I can afford that. Nice. Because guess what, I'm going to get this sweet 4.5% interest rate or something from my credit union and gosh, I'm totally going to do better than that in the market in the coming years. I might as well just buy the $38,000 car instead of the $28,000 car. I could just see how it could inch upwards in your ability to feel comfortable taking on more debt than you otherwise would. That's why I'm a lifestyle creep.

[Matt]

Happening there.

[Joel]

Yeah. I'm just straight up, like, no, car debt is the best way to live. And guess what? You can still, it makes it even easier to invest more money to get higher returns. Whether that's QQQ, whether that's Voo S and P500. No matter what fund you're investing in. I think just you have more money to invest when you don't owe money.

[Matt]

To people for the car you drive, you know, buddy. All right, let's get back to safe sex. Ride by Incendiary Brewing. I don't like sand it either.

[Joel]

I know it's weird.

[Matt]

I guess we know because, like, we listen to podcasts with our kids.

[Joel]

Does that make me a prude? I guess so.

[Matt]

We're probably, you and I are both probably a bit more conservative, a little more prudish when it comes to stuff like this. I don't think about kids who are.

[Joel]

I don't think of myself as prudish. You know, I don't.

[Matt]

But you probably are that compared to like the average or at least median sort of view of most Americans.

[Joel]

I hate that term, though. I'm like, I don't. Don't think of myself in those.

[Matt]

Think of a better, cooler, hipper, hip dad term.

[Joel]

Joel. I'll try to come up with something. So.

[Matt]

So what folks don't know is that while one of the listener questions was playing, I hopped up, went to our little clubhouse kitchen and grabbed another one of these beers. NA beers out of the fridge.

[Ricky]

Because you.

[Matt]

You only grabbed one and we're sharing it. And I realized, wait a minute, this is an na. And because you and I will typically.

[Joel]

Share a bigger beer off the top.

[Matt]

We'Re trying to get work done. You know, I don't want to convince that I should be taking a nap in 30 minutes based on what I'm. What I'm drinking.

[Joel]

Drink as much of this as you want. Yeah. So.

[Matt]

And on top of that, I just wanted to enjoy more of it because I thought this was really good.

[Joel]

Yeah.

[Matt]

I have actually been experimenting with some NA beers recently, and not all of them have been great over Christmas. I.

[Joel]

Of course there's some off putting flavors on some of them.

[Matt]

Yeah. So the algorithm knows what I'm into. And not surprisingly, they, they kept showing me these beero ads, which Is the new Tom Holland founded in a beer company or something?

[Joel]

Actor, not the historian, right?

[Matt]

Yes, 100%. The Spider Man, Tom Holland. And I thought, oh my gosh, this must be. And they've got like the different ads where there's somebody who's like blind taste testing them. There's like, oh, man. I would say this one actually has more flavor than this other one.

[Joel]

Come on.

[Matt]

I totally got sucked into it. And so when I stepped into Total Wine, I picked up a six pack of their hazy. It's like in this purple kind of box or coloring, whatever. I forget what it was called, but I didn't really like it. It wasn't that good. I think this is substantially better. I like athletic nabers, but I've only had one of the beeros, so I think there is room for them to win me over maybe with some of the other styles. This one, I would say this is really good. This is really tasty.

[Joel]

I agree. I mean, to me it tastes like an alternative universe ipa. Like it still tastes like an ipa, but not in quite the same way you're used to. But you're right, it is so much better than any really of the other non alcoholic beers I've ever had. It's.

[Matt]

It's like a light ipa. It still has very, very much has hoppy flavors going on. Has that IPA mouth feel like this really does drink like a typical ipa, man.

[Joel]

I wouldn't say that.

[Matt]

Or maybe not typical ipa. Like, I would say this drinks like a, like a zesty pale or something like that.

[Joel]

I think it's still not as satisfying as the real thing. It's like if you meant to put coke regular in your cup and you got Coke Zero and you're like, this is Coke Zero. Yeah, for sure. And you're like, oh, yeah. I mean, there's definitely similarities. And this is like. It's related. Yeah.

[Ricky]

Yes.

[Joel]

But it's not the same. I mean, they're both wet, so there is that. So I would say if you're keen on trying more non alcoholic beers and you want something that tastes at least more like what you're used to with an ipa, this is definitely a good one to go with. But totally agree. If you, like are IPA obsessed, you're not going to be like, oh, this is the exact same thing.

[Matt]

It's not the exact same thing. No. Yeah. You're definitely going to realize is that it ain't bringing it.

[Joel]

Yeah.

[Matt]

But also you're gonna be disappointed though, with some of the other NA beers that you try the more you have. Cause I've had some rough ones, but glad you and I got to share this one today on the show. You can find our show notes up on the [e-mail] and Buddy, that's gonna be it for this episode. We'll see you back here on Wednesday with a fresh episode and we'll see you back here on Friday as well. And let's just do the whole thing.

[Joel]

Over again next week and I don't know, watch, rinse and repeat for the next decade forever. Stay with us.

[Matt]

All right, buddy, until next time.

[Joel]

Best friends out.

[Matt]

Best friends out.

[Joel]

You love what you do. You also love the idea of not doing it one day. But it's getting harder to know the best way to move into the future towards retirement. Right? We hear about inflation, rate hikes, the changing market, got to get kids through college, build an emergency fund, and then there's retirement.

[Matt]

Yeah, Here is where fidelity comes in, though. Fidelity can help you to find clarity in saving for the future, even as your path and your priorities evolve. How? Well, they'll help you to create a free, personalized plan that adapts as your priorities change. They'll also show you what's called timely insights, small tips on ways to save and invest to help meet your goals. And you can monitor your plan so you stay on target.

[Joel]

The future is coming, and so is retirement. Fidelity can help you take it on your way. Learn [e-mail] future expenses charged by your investments and other costs and fees associated with trading or transacting in your account. Apply Fidelity Brokerage Services Member NYSE SIPC.

[Nav Green]

This show contains information subject to, but not limited to personal takes, rumors, not so accurate stats, and plenty more. What's up, man? It's your boy, Nab Green for From the Broken Play Podcast. Look, it's the end of the season. The playoffs are here. But guess what? It ain't the end of your season. You can always tune in with Broken Play Podcast with Nav Green on the Black Effect Podcast Network. Not a team who ain't going to the playoffs. The Chief it's time to rebuild. Listen to Broken Play with Nav Green from the Black Effect Podcast Network on the iHeartRadio app, Apple Podcast or wherever you get your podcast.

[Matt]

And the winner of the iHeart Podcast Award is.

[iHeart Podcast Awards Announcer]

You can decide who takes home the.

[Matt]

2026 iHeart Podcast Awards podcast episode the.

[iHeart Podcast Awards Announcer]

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[Matt]

See all the nominees and place your.

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[Matt]

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[Matt]

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