Ask HTM – Double Dipping Expense Ratios, Wealth Building with High Deductibles, and when 50 Year Mortgages Make Sense #1075

Summary

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Podcast Summary: How to Money, Episode #1075

Ask HTM – Double Dipping Expense Ratios, Wealth Building with High Deductibles, and When 50-Year Mortgages Make Sense
Release Date: December 15, 2025
Hosts: Joel & Matt

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Episode Overview

In this Ask HTM episode, Joel and Matt field a series of insightful listener questions spanning target date funds and expense ratios, picking the right high-deductible health plan, strategies for dealing with promissory notes on a house sale, pathways to become a personal finance volunteer, and a lively back-and-forth about the merits (or lack thereof) of 50-year mortgages. Their hallmark blend of practical advice, relatable stories, and occasional beer tasting delivers valuable financial wisdom for both new and seasoned listeners.

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Main Discussion Points and Insights

1. Decluttering for Cash and Sanity

• [03:42] Before diving into financial questions, Matt shares a PSA about decluttering before the holidays, highlighting quick wins from selling unused items online.
  • Matt sold a 2013 MacBook Pro for $100 and was surprised by the demand.
  • Joel recommends listing 20 things, two each day for 10 days, to build space and potentially raise some extra cash for holiday spending.

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2. Target Date Funds: Double Dipping Expense Ratios?

Listener: Steve from Northern Virginia

[07:13]

• Question: Are expense ratios for target date funds misleading because they're "funds of funds"? Does the stated ratio hide extra expenses?
• Key Insights:
  • No Double Dipping:

    “The stated expense ratio on Vanguard or even Fidelity site is exactly what you are paying... that already reflects the fact that it owns the underlying funds.” — Matt [10:32]

  • Analogy: Buffet pricing versus à la carte—you're paying the sticker price, not layered costs.
  • Practical Advice:
    • Two target date funds may be redundant unless for different people (e.g., spouses). Often, a blend with another higher-risk fund makes more sense.
    • The small added cost in target date funds pays for the convenience of automatic rebalancing (set-it-and-forget-it).
    • Most criticisms are around excessive bond allocation, even in long-dated funds.

    “How to Money listeners, Matt, they’re not average people! They can opt for something slightly more complex.” — Joel [15:43]

  • Only use target date funds in tax-advantaged accounts to avoid surprise capital gains, as highlighted by the 2023 Vanguard incident [16:14].
  • Not all target date funds are created equal. Warning: Some have much higher expenses outside of brokerages like Vanguard.

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3. Choosing Between High Deductible Health Plans

Listener: Greg from Tampa

[21:15]

• Question: Now that Greg has a well-funded Health Savings Account (HSA), should he pick the $6,000 high-deductible plan (with low premiums and no coinsurance) or a lower-deductible, higher premium plan for open enrollment?
• Key Insights:
  • Mathematically, the high-deductible ($6,000) plan makes most sense for healthy, low-usage individuals with HSA savings.
  • Example Calculation: $520/year in premiums for the $6,000 plan vs. $1,560/year for the $2,000 plan—a $1,040 difference to “buy” a lower deductible, which probably isn’t worth it.
  • If prepared to self-insure (having HSA funds available), a higher deductible lets you bank those savings year after year.
  • Self-insuring should always be balanced with the risk of a major medical event.

  “We advocate for personal responsibility... it’s more efficient if you as the individual bear the brunt of those expenses.” — Matt [27:37]

  • The more savings and financial discipline you have, the less you need to over-buy insurance for low-probability events.

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4. Dealing with a Defaulted Promissory Note on a Home Sale

Listener: Cheryl from Nebraska

[30:25]

• Scenario: Cheryl sold a house, accepted a $10,000 promissory note from the buyer (with a lien on the property), but can’t get paid—even after involving a lawyer.
• Key Insights:
  • Before escalating, try a human, direct approach: a friendly but firm personal reminder may work better (and cheaper) than legal threats.
  • Legal steps (demand letters, small claims, liens) often don’t guarantee you'll collect—especially if the individual has no assets.
  • Liens on a primary residence in Nebraska: $120,000 equity is protected and you’re paid last (after the mortgage and homeowner’s equity).
  • Other options (wage garnishment, bank levy) are tough unless you have detailed information about the debtor’s employer or accounts—and only yield results if there actually are wages/assets to seize.

  “Promissory notes... are kind of sketchy... there’s no power that they actually have in you being able to get your money.” — Matt [39:30]

  • Don’t throw good money after bad: legal fees may further compound your loss.
  • Takeaway for others: promissory notes sound great, but enforcement is tough unless buyer has substantial assets.

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5. Volunteer Personal Finance Coaching—What’s the Best Route?

Facebook Question: Victoria

[43:21]

• Question: How can you get qualified to offer pro bono 1:1 money help (not investing advice) without the cost and complexity of a CFP?
• Key Insights:
  • “You might not need any education... there are a lot of great money coaches out there offering advice based on their DIY knowledge.” — Joel [44:11]
  • If you want credentials, consider:
    • APFC (Accredited Personal Finance Coach): ~$1,500
    • AFC (Accredited Financial Counselor): Similar cost, reputable
    • Check if certifications require expensive annual renewals.
  • Even for free services, a modest client fee ($20/hour) can increase client engagement and accountability.
  • Build credibility through testimonials and sharing your personal finance journey.
  • Reach out to Joel & Matt to help publicize your resource when ready!

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6. Should 50-Year Mortgages Exist?

Facebook Comment: Ellen

[47:34]

• Comment: Critiques Joel & Matt’s skepticism about 50-year mortgages; says they help affordability and get renters onto the property ladder.
• Key Insights:
  • Home affordability is a crisis, but stretching a mortgage to 50 years only modestly reduces monthly payments (e.g., $3,000/month drops to ~$2,750).
  • Major downside: With a 50-year mortgage, after 10 years of payments, you’ve only built equity equal to 4% of the home’s price vs. 16% with a 30-year loan.
  • Joel: “A 50 year mortgage would allow you to buy a home, but it would also make it highly unlikely that you'd ever own it. And isn't that the ultimate point?” [49:59]
  • Matt concedes a point: Real estate is different (an appreciating asset), but the real risk is people locking themselves into massive, slow-to-build-equity debt.
  • Renting isn’t “throwing money away”—it buys flexibility, freedom from repair costs, and sometimes a higher savings rate.

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Notable Quotes & Memorable Moments

• On Target Date Funds:

  “How to Money listeners, Matt—they’re not average people! They can opt for something slightly more complex.” — Joel [15:43]

• On DIY Health Care:

  “Greg’s in Florida. Maybe there’s some really affordable health care… Back Alley MRI, and I hear they’re really good.” — Joel (joking) [23:21]

• On Promissory Notes:

  “Promissory notes... are kind of sketchy. There’s no power that they actually have in you being able to get your money.” — Matt [39:30]

• On 50-Year Mortgages:

  “A 50 year mortgage would allow you to buy a home, but it would also make it highly unlikely that you’d ever own it.” — Joel [49:59] “Even after a decade, you’d only have paid off 4% of your home’s equity.” — Matt [52:09]

• On Renting:

  “Renting is not throwing away money. I will preach that till I die. You get a roof over your head and you don’t have to pay for the maintenance. You get additional flexibility as a renter.” — Joel [53:55]

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Timestamps for Key Segments

• Decluttering for Cash: [03:42]
• Target Date Fund Fees/Double Dipping: [07:13] to [18:08]
• High Deductible Health Plan Strategy: [21:15] to [30:12]
• Promissory Note Collection Realities: [30:25] to [39:57]
• Becoming a Personal Finance Coach: [43:21] to [47:31]
• 50-Year Mortgages—Debate: [47:34] to [54:16]
• Beer Review (Contrast, Burial & Allagash): [54:16]

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Consistent Tone and Style

The episode maintains a conversational, lightly humorous, peer-to-peer tone, blending technical clarity with stories and metaphors (“buffet pricing,” “like holding a pile of ashes,” “bringing a bazooka to a knife fight”).

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Summary Takeaways

• Target date funds are NOT double-charging on expenses; you pay only the listed expense ratio.
• If your health and savings allow, go for the maximum deductible—you’ll save big over time.
• Promissory notes are weak if the payor has no assets—don’t chase after lost money with hefty legal bills.
• Pro bono financial coaching doesn’t require expensive credentials—real experience or lower-tier certifications suffice.
• 50-year mortgages may seem helpful, but they only marginally lower payments and slow wealth-building; renting is a solid, valid financial choice.

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For listeners: If you want actionable, bias-free money answers backed by experience and a little humor, this episode provides a wealth of practical advice, caveats, and encouragement to take control of your financial life—without falling for financial products or strategies that won’t truly help you build wealth.

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Transcript

[Joel]

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[Matt]

AARP has a bevy of free skill building courses for you to choose from because the steps that you choose to take today will help you to love what you do in the future. And that's why the younger you are, the more you need AARP. Learn more at aarp.org skills hey, it's.

[Joel]

Joel and Matt from how to Money. I was just in Seattle, Matt, and honestly, it's one of the greatest cities in the world, particularly in the summer. I went on this run by the water. We hopped a ferry across Puget Sound. Just an unforgettable trip.

[Matt]

That's what struck me. What seems normal to a homeowner. It can be the thing that makes a guest trip really special.

[Joel]

Which is why hosting your home on Airbnb makes sense, right? Travelers are looking for those authentic, memorable spaces. And if you don't have time to manage all that well, Airbnb's co host feature makes it easy. A local co host can help with everything from creating the listing to keeping your place running smooth.

[Matt]

Find a co [e-mail] host this message is brought to you by Navy Federal Credit Union. As a credit union dedicated to serving all veterans, active duty and their families. And Navy Federal knows that during the holiday season, every little bit counts.

[Joel]

That's why for a limited time, you could earn a $250 cash bonus when you spend $2,500 on the cash rewards and cash rewards plus cards in the first 90 days. GiveJoy GetJoy. Join now at Navy Federal.org@Navy Federal Credit Union, the members are the mission. Navy Federal is insured by NCUA. Visit Navy federal.org cashrewards for details. Cash back terms and conditions apply. All offer ends January 1st, 2026. Welcome to how to Money. I'm Joel.

[Matt]

And I am Matt.

[Joel]

Today we're answering your listener questions.

[Matt]

Hey, man, we're talking about personal finances today like we do every how.

[Joel]

That's our job.

[Matt]

Hey, let's switch it up. What did you go.

[Joel]

What do you want to do today, Pinky? Take over the world? Well, we'll talk personal finance. I was going to ask you, did.

[Matt]

You go for a run this morning?

[Joel]

Every morning or Most mornings. How far?

[Matt]

How far this morning?

[Joel]

Yeah. A little over eight miles.

[Matt]

Oh, my gosh.

[Joel]

Yeah.

[Matt]

Like the distances you throw out there now, I'm like, for me to scrape out a three or four mile run is quite the accomplishment. Did you read there was an article in the Times a couple weeks ago about cross country and like this race that this guy runs up and outside of New York City. I'll send it to you.

[Joel]

It just.

[Matt]

They talk about like the grit and the foul weather that you have to endure and how you just get tough. And it make. It made me want to make sure that my kids are running as they are getting older. Just to push them into cross country specifically too. Right. Like there's, there's. It's not flashy, it's not very sexy, but there's just a whole lot of grit that goes into running cross country. I ran cross country in high school, so I think it resonated with me.

[Joel]

It's an interesting distance because it requires a lot of you requires both aerobic and anaerobic because it's like that sweet spot distance where you really need the best of both worlds. But I was telling Emily on the way out the door, I was like, I just really don't want to go today.

[Matt]

Oh, really?

[Joel]

Just because it's so cold and like I just. You have to bundle up and it's not fun. Ideal running temps, like 50 degrees. It's colder than that right now. Yeah. And so. Yeah. But like once you get out there, it's the best thing in the world. And I'm just like so happy I didn't not go.

[Matt]

Yeah.

[Joel]

That I went.

[Matt]

They did actually go double negative.

[Joel]

Okay.

[Matt]

But we do have personal finance listener money questions to get to like paying fees in your target date funds. We'll get to that. Another listener is wanting to make sure he picks the right health care plan. We're gonna talk about 50 year mortgages. All that and more during our episode today. Really quickly though, I did want to share a little PSA for everyone out there, which is to consider decluttering before the holidays roll around, man. Before Christmas shows.

[Joel]

Before you reclutter before. Yes.

[Matt]

I mean quite literally to make sure you have room for all the. All those crap that we end up buying or receiving around the holidays. And the reason I bring this up is because I recently sold an old laptop on Facebook Marketplace. And this was a laptop dude that I thought, nobody is going to want this. It's over a decade old. 2013 MacBook Pro. And I was able to list that Thing, get it sold. Somebody is now the happy owner of this old laptop.

[Joel]

What'd you get for it?

[Matt]

100 bucks.

[Joel]

Okay.

[Matt]

Which.

[Joel]

Well, impressive considering you can get a computer that's way better than that now.

[Matt]

For like, not too much more.

[Joel]

$700, something like that.

[Matt]

So. Yeah, well, I think that's the thing. Like, in my mind, it's not worth it. But I also thought, well, somebody else is gonna want this thing. And if fact is, like, that's what prices are. Right. Like that communicates to me that this is worth it to somebody. And I even think I may have underpriced it because, like 20, 25 people reached out about this thing. So I'm thinking it's vintage, I guess. So I don't know what it was, but I could have priced this a bit more optimally and. But then again, then you deal with having to keep it listed for longer and I'll just. It was price to move.

[Joel]

Let's just. Sometimes that's the best way to do it. If you get. Want to get rid of a bunch of stuff in short order.

[Matt]

You just want to get.

[Joel]

Get it out the door, don't overprice it, and then deal with the haggling.

[Matt]

Make it accessible for somebody. They've got something affordable. You've got a little bit of extra cash in your wallet. And then obviously it's not sitting there on the shelf or in the closet gathering dust at a point, like, and eventually it's not going to be worth anything at all. And you just have to end up taking it in and recycling for Best Buy. Yeah, recycling it. But no, I think it's a good.

[Joel]

That's a good tip. And it's one, it'll help you raise a few dollars for your Christmas spending this year. And then two, yeah. Create that space like you're saying. So. Yeah, a little decluttering, maybe list a few things. Maybe make that. Make the goal to find 20 things and list two a day for the next 10 days. Something like that.

[Matt]

I think it'd be fun.

[Joel]

I don't know however you want to do it, but just. I like that idea.

[Matt]

You remember when we did the. One of the how to money money challenges.

[Joel]

Oh, yeah.

[Matt]

And the selling your stuff will throw back to that old worksheet if you were looking for a little bit of motivation to track the items that you're spending.

[Joel]

You know, I was just thinking.

[Matt]

I hadn't thought about that before.

[Joel]

We should resurrect those and put them in the newsletter for people. All of them. Yeah. Okay. Or but at least that one.

[Matt]

We gotta find them.

[Joel]

Yeah, but maybe we'll put those in an upcoming how to Money newsletter. That's right. All right, let's mention the beer we're having. This one's called Contrast. It's an American style wheat ale, and it's a collaboration between Burial and Allagash, too.

[Matt]

Oh, I didn't realize this was Burial. Because it didn't. It kind of has the Burial look, but not surprisingly has more of an.

[Joel]

Allagash look too, of the Great American Breweries. We'll give our thoughts on this one later on. And if you have a money question, please send it our way. We'd love to hear it. Go to howtomoney.com ask for specifics, but really just recording the voice memo, the app of your phone and emailing it over to us. Matt, let's get to question numero uno. This is a question about how much target aid funds are actually extracting from you.

[Steve]

Hi, Matt and Joel, this is Steve in Nova, just south of D.C. thanks for doing your podcast. I've been listening for about three or four years now, and I really appreciate the approach that you guys have. I've been growing my 401k for a number of years, and periodically I'll change or tweak things here. And there's. But one piece of advice that I really took from you guys is sticking with simplicity and low cost. I currently have AN S&P 500 fund, two target date funds, and a bond fund. All of them are Vanguard. All of them are low expenses. But that brings me to my question. My target date funds have an expense ratio of 0.08%. Fine. But they're both basically funds of funds. So is that expense ratio actually true? I mean, inside each one is maybe five other Vanguard funds. Two of them are the same as the S and P and bond fund that I have. So what about the expense ratios for those funds that are inside the target date fund? Basically, are my expenses actually higher than the 0.08% and they're just being hidden inside there by the other funds? Or am I really just being too anal about this? Thanks in advance. Best friends out.

[Matt]

Joel, Steve wants to know if Vanguard is double dipping. That's what he's trying to figure out here.

[Joel]

It's a good question. I should have asked their chief global economist when we had him on not too long ago, held his feet to the fire.

[Matt]

Well, we can. We can answer that question. We don't have to ask him. How do you feel about double Dipping, though, from you're at a party. You know, holidays are. Maybe you're attending a party here and there's. How do you feel about actually double dipping? Oh, man.

[Joel]

I think it's probably uncouth, like at your own. Yeah, it's uncouth at your own home. I think you can double dip as long as, like, you're not offending the people in your immediate family. But at a party.

[Matt]

No, man, that's how you get sick. Or that's how you get everybody else sick. We don't even certain things at home, like Greek yogurt and stuff. We're super anal about not touching the spoon to. To your plate or like your bowl of yogurt as to not get other items from your bowl back into the container. Because that's like when you introduce other bacteria back into the host container, like the tub.

[Joel]

Yeah.

[Matt]

That's when it ends up going bad, man. You know, I don't like wasting food, so. Yeah, we're all about that.

[Joel]

One of the things I caught in Steve's question, by the way, he said he had two target date funds. I thought that was really fascinating because.

[Matt]

Maybe for him and his wife.

[Joel]

Oh, maybe. Or maybe. Yeah, that's good.

[Matt]

Or he didn't say he's got a wife, but.

[Joel]

But if he has two for himself, that is a really interesting choice because I'm totally fine with people having a target date fund and then having exposure to another fund or two as well. Because really what you can do is say, hey, target date funds aren't quite. They're too risk averse for me, and I want more risk in my life.

[Matt]

The Paul Merriman approach.

[Joel]

Yeah. So the target date fund, along with AN S&P 500 total stock market or small cap value fund, something like that. Go for it. But two target date funds is an interesting choice because typically you choose the one based on when you're most likely to retire. So I just would tell Steve two.

[Matt]

Target date funds might be redundant.

[Joel]

Yeah. I mean, especially if they're five years apart, they're pretty dang similar. And so I just want the perfect blend. Right. I don't understand why you do that. So I just want to like, maybe point that out on the front end. We'll get to the heart of your question. But two target date funds might be overkill.

[Matt]

Yeah. So I will say, Steve, I totally get why you might think that you are paying an additional expense for target date funds, but the truth is you're not. The stated expenses expense ratio on Vanguard or even Fidelity site is exactly what you are paying. So let's say a target date funds expense ratio is 0.08% like you mentioned there, Steve. Well, that already reflects the fact that it owns the underlying funds that may each have their own costs. So in this case you are not double dipping. So no need to worry about paying that. You know, plus the expense of, let's say the, the total stock market fund or a bond fund that your target date fund is holding. So you, you're essentially paying the total blended expense ratio. Like it's the sticker price. Whatever it says right there on the, on the prospectus or on the page when you go and check it out, that is what you're paying. Maybe a helpful way to think about it. It makes me think about like paying a la carte. Like if you go to a restaurant or like a cafeteria, like you can either pay a la carte or you're paying like the buffet price. Target date funds you is akin to buffet pricing.

[Joel]

You're a buffet guy, Matt.

[Matt]

Yeah. You pay one price and whatever you want on there, that's what you get.

[Joel]

What are you the one who got into the fight at that Golden Corral? I saw the headlines about.

[Matt]

I'm trying to think of the last time I've been to a Golden Corral or no Orion's because they've got the yeasty rolls. Oh my gosh.

[Joel]

Are they still around Ryan's? Yeah, I don't know. Okay. No clue. Well, it makes me think of a blender. Right. So you said blended and I think like when you toss like three or four different things into a blender, like you mix them up like you're still, you have something kind of a new product, but really it's the element of all those underlying products.

[Matt]

Okay, so, so the electricity that goes to power the blend, it doesn't matter how many things you stick in the blender, you still are using the same amount of power to get the initial blend.

[Joel]

Yeah, maybe. Maybe. Is that it? So I don't know if that's a great analogy, Steve, but Matt's right. Like the listed expense ratio is the actual. That's the expenses that you're paying to own that fund. And we should note that the cost of a Target Date fund is higher than buying those funds individually. Right. But the slightly higher cost is likely worth it if you determine that a target Date fund is right for you and that that's because the fund is going to change its exposure of the underlying funds over time as you get closer to retirement. Age that is like the selling point of Target Date funds is set it and forget it. Allow someone else to do the hard work. The rebalancing for you, you're diversified with without really having to think about it. And so instead of rebalancing on your own, the Target Date fund with a slightly higher expense ratio, it's got a set glide path. It reduces stock exposure over time, it increases bond exposure as you get closer to needing to tap those funds. Target Date fund expense ratios are pretty darn competitive at our favorite low cost brokerages. So we say they're higher and yes, they are. But really when it comes down to it, they're I think a bargain for a lot of mom and pop investors who really want to put a blindfold on. They want to invest pretty wisely, but they just don't want to think about it.

[Matt]

Yeah, they are more expensive though. Like that's for me, honestly, that is my biggest hang up. And one of the reasons I have a difficult time like if somebody came to me and they're talking about what they're looking for with their investments to say, hey, even like the most affordable Target 8 funds out there at 0.08%, you're looking at something that's 250% more expensive than Voo, than an S&P 500 or something that costs nothing at Fidelity, if you are going with a total stock market fund. So I still have a really difficult time with the principle of paying much more if you can handle the risk, right, if you can handle the ups and downs. But oftentimes that risk pays literal dividends because that is how you're going to see your wealth grow the most. And that's one of the biggest criticisms with targeted funds is the fact that, that they are so bond heavy. Even for a Target Date fund that's set for 2065, there are still more bond exposure there than I am personally looking to expose my portfolio to. If you are a bit more of a conservative investor, I think a Target Date fund can make a bit more sense. But even a more moderate investor I think would be well served with either a total stock market fund or if you see yourself as like, no, no, no, I'm in this for the long haul, 20 plus years, looking to build wealth, looking to maybe retire early. Okay, The S and P 500 get after it.

[Joel]

I think there's a difference too between taking a simple approach, which is something we advocate, and taking the absolute simplest approach. And I think the Target Date fund, the reason they exist is because for the average person who doesn't care about personal finance, they do have at least a thought in their brain about investing for their future. And they've heard it from somewhere that they probably need to be doing something. And so inside of the 401k at work they're like, yeah, I'm going to put some money in there. Which fund should I pick? And it feels to, I think the average person who has very little knowledge, like an insurmountable task to pick the right fund for their future. And the Target Date Fund is kind of the solution to that problem for average people. But how do money listeners, Matt, they're not average people. They can opt for something slightly more complex. I think most of the time.

[Matt]

No more complex, just a bit more aggressive.

[Joel]

Yeah, like aggressive. Or they can at least think about maybe having like we talked about at the very beginning, two different funds, a Target Date fund and another fund that at least ramps up the risk appetite for the average person. Because that is, like we said, the biggest criticism of target Date funds. They're just not risky enough for the average investor. We also, by the way, learned last year after a Vanguard kerfuffle that triggered a taxable event for some of its customers.

[Matt]

That's right.

[Joel]

That you should hold a Target Date fund inside of your retirement account, never inside of your brokerage account. So that I think should be stressed. I think there was a lawsuit, I think Vanguard ended up settling and maybe making it right for a lot of investors. I need to go back and look at the details on that.

[Matt]

I mean that was more of a one time event. Like they're doing some restructuring re categorizing of what was considered like was it business account, like I forget the specifics. But regardless that the same practice of what's going on when they did that sort of one time newsworthy event that is still happening periodically and regularly within Target Date funds as they are rebalancing.

[Joel]

And if you don't mind the scenes, you're not really aware of it, but it's happening.

[Matt]

Yeah, yeah. You haven't sold anything but the, the fund has and you are required to take those as capital gains. And so if you are taxed on that, that's why it's much more efficient to have that sitting inside a tax exempt account like a Roth IRA or tax deferred 401k.

[Joel]

If you're going to go with a Target Date Fund, Vanguard is one of the best places to go. Because of those low expense ratios, you said. Yeah, Matt, they're higher than voo, but they're the cheapest in the industry. The actual differences in expense ratio between a Vanguard Target Date fund and let's say a random one from another brokerage or from let's say a bank or an insurance company. It could be insane. The difference in expense ratio. I would just encourage anybody who's like, okay, target date funds. It's a one stop shop. It is the easy thing. I should jump on that bandwagon. Getting your target date fund through Vanguard, if that's where your 401 is provided, is one thing. Getting it from somewhere else, it could be an even more dramatically worse decision because the expenses could be 10x or more the Vanguard expense ratio. And that's when you want to tread lightly. There are some really good target Date funds and then there are some really, truly awful ones that are not good for people.

[Matt]

That's right, man. We've got more to get to though. We're going to cover the topic of promissory notes. That's not something we've ever discussed here.

[Joel]

We'll get to Sounds like something out of Monopoly.

[Matt]

Never was a huge Monopoly fan myself, so I can't completely verify that, but we'll get to that question and more right after this. You probably think it's too soon to join aarp, right? Well, let's take a minute to talk about it. Where do you see yourself in 15 years? More specifically, your career, your health, your social social life? What are you doing now to help you to get there? Well, there are tons of ways for you to start preparing today for your future with aarp.

[Joel]

What about that dream job you've dreamt about? Sign up for AARP reskilling courses to help make it a reality. How about that active lifestyle you've only spoken about from the couch? AARP has health tips and wellness tools to keep you moving for years to come. But none of these experiences are without making friends along the way. Connect with your community through AARP volunteer events.

[Matt]

So it's safe to say it's never too soon to join aarp. They're here to help your money, your health and happiness live as long as you do. That's why the younger you are, the more you need AARP. Learn more at aarp.org wisefriend do you have an Airbnb vacation rental or second property? Then this is for you. Your rental isn't just extra income, it's an opportunity to build wealth and financial freedom. With Lodify, you are in control.

[Joel]

Lodgify helps you earn more by creating your own direct booking site, connecting to top channels and automating your day to day tasks so you can earn more with less effort. Turn your rental into a business that truly pays off.

[Matt]

How do Money listeners get 20% off any yearly plan? With code howtomoney20 Visit logify.com to get started if you've ever hired for your small business, you know how important it is to find the right person. That's why LinkedIn Jobs is stepping things up with their new AI assistant, so you can feel confident that you are finding top talent that you can't find anywhere else. The best part is those great candidates are already on LinkedIn. In fact, employees hired through LinkedIn are 30% more likely to stick around for at least a year compared to those hired through the leading competitor. That's a big deal whenever you hire counts.

[Joel]

It's crucial to the success of your business to hire the right person for your business. And it doesn't have to be complicated. With LinkedIn Jobs AI Assistant you can skip the confusing steps and recruiting jargon. It filters through applicants based on criteria you've set for your role and surfaces only the best matches so you're not stuck sorting through a mountain of resumes. When you have a business to run, you don't have hours to spend on hiring.

[Matt]

That's right, hire right the first time. Post your job for [e-mail] howtomoney. Then promote it to use LinkedIn Jobs new AI assistant, making it easier and faster to find top candidates. That's LinkedIn.com howtomoney to post your job for free. Terms and conditions apply.

[Joel]

All right, we're back. We got a question to get to on 50 year mortgages in just a bit. But let's get to a question now about picking the right health care plan during open enrollment.

[Greg]

Hey guys, this is Greg in Tampa with a question on your favorite topic. The HSA and high Deductible plans. So My employer offers three deductible levels, 6,000, $3,500 and $2,000 each is eligible for the HSA. Obviously each one costs different amounts per pay period, the most expensive being the $2,000 plan. It's about $60 per pay period. Then you drop to about 30 some dollars for the 3,500 and then the $6,000 one is only about 20 bucks a pay period. I have been playing around with these plans the last several years just like you've suggested paying out of pocket saving my hsa. So what I'm kind of thinking here is I have enough money in my HSA to pay that $6,000 deductible for several years. Once I hit that $6,000 deductible, I have zero responsibility for anything else after that. The other plans, I still would have 20% responsibility for any medical bill. So I can pay the $6,000 for several years and then owe nothing. It seems like now that I have enough money in my HSA to cover that for several years, it's the plan I should go with. Just as an example, a couple years ago I had a torn ligament from a run, one of my feet, doctor's visits, MRI, all of that. I was on the $2,000 plan and I still didn't hit my deductible because I went online and found the cheapest options for everything, including the MRI. So it just seems like the $6,000 one is the way to go. Especially since I have the HSA money. Just pay the lowest premium possible and be covered and kind of use the health insurance for really emergencies only. Anyway, let me know what you think. Am I being frugal? Am I being cheap? What do you think?

[Matt]

Man? Greg said he didn't even hit his $2,000 deductible with an MRI on the books plus doctor's visits. Greg's in Florida. Maybe there's some really affordable health care.

[Joel]

It's a place called Back Alley mri and I hear they're really good.

[Matt]

It always makes me think of that scene in Minority Report where he gets his eyes swapped out there in the bathtub and he's like, the chill died.

[Joel]

So gross.

[Matt]

Most disgusting quasi medical scene I think I've ever seen in at least a.

[Joel]

Sci fi movie, but it's a weird one. And Matt, by the way, like this question Greg said was about HSAs. We do love HSAs, but it actually sounds like what Greg is asking about is less really HSA related because he said that every plan that is being offered to him comes with HSA access. So it's not a choice between choosing the plan with or without an HSA eligibility and also HSA adjacent. Yeah, Greg knows what he's doing on the HSA front, so it doesn't sound like we have a lot that we need to discuss on that front. I think what he's really asking is whether it makes sense to go with the healthcare plan that costs less but has a higher deductible, which is one of the most important questions during open enrollment. I think it's one that people rack their brains over largely because can't predict the future perfectly. And there's big money at stake.

[Matt]

That's right. Yeah. So I'm going to cut to the chase, Greg, Based on what you said, I think the slam dunk answer here is yes. To go with the higher deductible plan, it sounds like, generally speaking, you are mostly healthy. And even when something does pop up, which it sounds like for you is rare, you don't even meet your deductible. So since you are going to be saving money every single paycheck on your premiums, I would go ahead and take those savings to the bank. So I even did the math here. Based on the numbers that you gave, as far as how much is coming out of your paycheck, and this is assuming you get paid every other week, your premiums are going to be $520 for the $6,000 deductible plan, as opposed to $1,560 for the $2,000 plan, which means that you're going to be shelling out more than $1,000 more for the guarantee of that lower deductible, which I don't think is worth it given your. Your situation here, given your circumstances.

[Greg]

Yeah.

[Joel]

When you look at the premium discrepancy between the cheapest and the middle plan, it's less. So I guess you could opt to spend a couple hundred more dollars over the course of a year for a reduced deductible. That might be the Goldilocks option. But the $6,000 deductible option doesn't have the 20% coinsurance cost to you after meeting your deductible. So it's less attractive to me is like a sweet perk to not have.

[Matt]

To worry about it at all.

[Joel]

Yeah. To know that that's literally the cap of what you would be paying out of pocket in a given year. Also, Greg, you're well prepared. You've saved. You've invested money for future healthcare expenses, so you can afford to take a higher level of deductible risk. It sounds like you're also more than willing to shop around if you need a procedure. Right. Like using Healthcare Blue Book and sites like that. It's. It's easier said than done. But if you're willing to do it and go through the work, then I think that'll also help you reduce healthcare costs. Meaning the higher deductible plan makes even more sense for you. That sort of scrappiness just makes us think high. The high deductible plan is like an awesome choice. Yeah.

[Matt]

And you can. There's no guarantee that this is Absolutely gonna be the right choice. Right? Like you can't look into the future. You don't know what your health events are gonna be in the future, but you are making an informed decision based on your likely healthcare needs. Plus the money that you have on hand. Makes me think about, like if you, makes me think about your house, like where you had the tree branch come.

[Joel]

Through your roof and I had the most expensive, or I had like a 1% deductible, which basically was a lot of money. Meant when the tree fell through, I was on the hook for a large chunk of the repairs.

[Matt]

Lots and lots of money. But you don't regret it, Ryan, like at the time you said, I do not regret that.

[Joel]

No, I don't regret it.

[Matt]

And you did not change your deductible.

[Joel]

It was still the right financial move and it will pay off. Let's say if I don't have a homeowner's claim for the next eight to 10 years, you just got unlucky. It'll easily, it'll easily pay having that higher deductible and lower premiums. But it's. Doesn't. Doesn't mean it works out all the time. Every year.

[Matt]

Exactly.

[Joel]

Yeah.

[Matt]

It's similarly like you could drop collision coverage on your vehicle and then like the very next day you could get in a wreck. And I think that sort of the what ifs and the fear, like that's what insurance companies, they kind of prey on that they prey on those emotions and get you to give them all your money.

[Joel]

Right.

[Matt]

As opposed to doing a degree of self insuring. And we are all for that. Like, so, like we talked about it from a financial standpoint, but like from a principled standpoint. We advocate for personal responsibility, right? Like taking personal responsibility for your own actions. That is personal finance. And so whether we're talking about earning or saving or spending or investing, or in the case of riskier behaviors that you could partake in that could lead to higher expenses, not only for you, but for everybody. Right? Like, that's the point of insurance is to. Is for those costs to be diffused among the public, but it's more efficient if you, as an individual who is the one making those decisions, if you bear the brunt of those expenses, right? Like you want to smoke, go for it. But your health insurance is going to be, and rightly so, should be a lot more expensive. Same thing with like, like people who bungee jump or skydive. Like these are risky or like rock climbing or something. Like these are riskier Endeavors. And there's a reason why different types of insurance ask the kind of activities that you participate in that you partake in.

[Joel]

Yeah. And when we're talking about self insuring, like there's a whole bunch of different kinds of insurance you can avoid or that you can pay less for the more money you have stacked up in your bank account there. It doesn't mean you like eradicate insurance from your life like you still want probably a term life policy unless you're completely financially independent. Right. There are certain kinds of insurance you're always going to want to have because the, the risk is so high and the cost is so seemingly low. Even though it's like your homeowner's insurance, it might cost thousands of dollars a year, but the cost of replacing your home if it were to burn down in a fire could be hundreds and hundreds and hundreds of thousands of dollars a year. And even if you, it would ruin you, quote, unquote, have that, like, yeah, you'd be, you'd be going back to square one. It makes me think, Matt, people who do not have a level of self insurance, a level of savings, they I think are more induced to buy products, insurance products out of fear, like extended warranties. This is one of those things where you're buying an electronics item and you're asked whether or not even like an airline ticket or a concert ticket, there's insurance for everything now. And I think the more tenuous your financial position, the more likely you are to be like, yeah, I guess I should get that insurance product just in case. And then you're spending more money on insurance because you didn't have the discipline to create the savings to self insure, especially for some of those smaller things in life. But Greg, he doesn't have to worry about that. He's well insured and he can opt for the higher deductible plan, save himself some money in the process.

[Matt]

That's right, man. All right, let's hear from another listener who has found herself in a sticky situation. She sold her house and at the center of this interaction is a promissory note. Let's hear what she has for us.

[Cheryl]

Hey guys, it's Cheryl from Nebraska. About a year ago, I sold a house in rural Nebraska. I only had one bid on the house and she couldn't come up with the extra $10,000 needed for the purchase of the house. So I let her sign a promissory note through an attorney and she promised to pay me this year and now she is not paying me. I hired an attorney, and they can't even seem to get the money. They've taken her court. I do have a lien on the house that she currently lives in. I didn't know if there was any other thing I could do legally. Thanks, guys.

[Matt]

Joel. This is gonna be a fun question. You know why?

[Joel]

Why?

[Matt]

Because we know nothing about. Because we're not attorneys.

[Joel]

We're not lawyers. That's true. And we have to say that at the beginning, I think, especially with a question like this.

[Matt]

Yeah, that's probably true.

[Joel]

But I did sleep at a Holiday Inn last night, so I'm pretty sure I'm well equipped to answer this question. No, but I think, you know, even though we're not lawyers, we wanted to take Cheryl's question because we thought we could offer some helpful advice. And I just want to start off from the outset. You. You might not even want to go the legal route. Like, if. If you met this woman at the closing table, you had a solid interaction, I would consider sending a kind note reminding her of her obligation to you. You might find that using a human touch instead of sending lawyers after her gets her engaging with you. It'll cost you a whole lot less money, too. Like, Matt, as anybody knows, like, lawyers fees can add up.

[Matt]

Cost a lot.

[Joel]

Makes me think of one time I had a tenant who was not paying me the balance that was owed after he moved out. He lived in the neighborhood. And so I just, like, kindly went to him in person, like, at a public place.

[Matt]

And did you arrive with your biggest, most buffest friend?

[Joel]

No. Me solo. Totally not buff. Totally not threatening. Not. Not true, guys.

[Matt]

Not threatening at all.

[Joel]

Now that I have the mustache, maybe a little more. But. And. And like, it was. It was a chance for me not to even shame him or get mad or angry, but just to. Just to be human, person to person. Be human and say, hey, man, like, you still owe me money. How do we remedy this? And he paid me. But that was one of those things where I could have gone the legal route and it would have cost me more than it was worth in terms of money and in terms of hassle. That's true.

[Matt]

Yeah. In Cheryl's case, it does sound like. And we're going to cover a bunch of this, I think, because it'll be helpful for other listeners who may not be as familiar with the situation and the steps that you can take. But it does sound like Cheryl has run through some of these. A lot of these steps already. But we will also get to the. The heart of. Of Cheryl's question later. But Joel, specifically you mentioned fees and just being able to avoid those. Not only attorneys fees, court fees, filing fees, all that kind of stuff adds up pretty dang quickly. And if this individual chooses not to pay, like, not only are you out the $10,000, but you're also out these additional legal fees as well, assuming that you don't win a judgment and she's not required to pay them. And I just wouldn't want to see you toss good money after bad. Like, obviously it sucks to be taken advantage of, but I think in your frustration, like, I still want you to make as wise of a decision as possible, not necessarily making one on principle, because it doesn't necessarily matter if you are moving forward on principle if there's no actual money to be to be gained, to be paid to you. But I would just be reluctant to spend thousands of dollars to go after this woman who may not even have the money to be able to recoup or to fulfill the promise that she made with that promissory note.

[Joel]

That's right. Yeah. I think the next step after kindly reaching out would likely to be send a formal demand letter. I'm sure you've already done that, but you send it certified mail, return receipt requested, you know, state in that letter that failure to pay could result in legal action. But you're basically like ramping up those tactics slowly, like gentle reminder, gradually tightening the screws. Right, Exactly. Then sending something more formal. You can write this yourself, you can hire an attorney, which costs money, but it could also be more likely to get her attention. But that might be the inexpensive use of an attorney. I've even been used in the past, Matt. Attorney friends who I'm like, hey, it says lawyer after your name, right? Like, will you write this letter for me or can I write it and.

[Matt]

Can you put it on your now my lawyer?

[Joel]

Right? Yeah, something like that. I mean, I don't know how kosher that is, but how good do they feel about that? That's a good question.

[Matt]

But also after that, though, Cheryl and I think we're kind of catching up to where you are now suing her, right? Suing her in small claims court, taking it up another notch. And you can do that without hiring a lawyer as well, depending on how into the weeds that you've gotten. But with that promissory note in hand, you should be able to argue your point. Well, without legal representation, because it's all spelled out as to what it is that she was supposed to do and the fact that she hasn't just a note, though, that you might win the case and still have trouble collecting. So that's the hard part is actually collecting, collecting the money after the judgment. So like, so she's already got a lien on the house. Right. And so again, this is sort of the crux of Cheryl's question. And she's asking, what else can she do? Even a lien on the house. There are so many hurdles before you can get money from the sale of that house. And so you're thinking, well, you wouldn't get paid, first of all, unless she refinanced or if the house sold. But you might be saying, well, no, can't you force the sale of her property? Like, you know, we're talking about an auction here. And yes, that's true. But also, in the state of Nebraska, there is $120,000 of equity that's protected from payments like this.

[Joel]

Wow.

[Matt]

In addition to that, though, she's, she's last on the list as far as people who are getting paid were they to force the sale of that home.

[Joel]

Meaning even after the current homeowners own equity, like, takes a primary seat in order.

[Matt]

Yeah. And then, and then you've got to pay the first lien holder, which is the mortgage company. So there's just a whole lot of hurdles before even having being able to do something with a lien where that will get you paid. In addition to that, though, you've got. There's like evidently two. And this is the fun part. This is why I think this is fun, because we get to do some research and learn things that we've not learned that we've not interacted with before, which is garnishing wages. But that's really hard to do a. Because you need to know the exact employer that she has their address for them to be able to be served to where they're siphoning off a portion of her paycheck. But even then, it takes a long time because only 25% of her paycheck can go towards this payment, what she owes you. So it can take a really long time. And that's assuming she's gainfully employed. If she's self employed, guess what? That's not a wage you can garnish.

[Joel]

Yeah.

[Matt]

And then the other, the other option, the third option is a bank levy. But similarly, you have to know the exact bank that she's with. And I think it really helps to know the exact bank account. And even once you have that information, if there's no money in the account, well, there's nothing. You can't take any funds out. Like, you can't make a. What's the term? You can't squeeze blood out of a stone, out of a rock or whatever. And so at the end of the day, that's where that promissory note, I don't know if it's going to come to bear much fruit because yes, you can say that this person owes you, but if they literally don't have any money, there's not, unfortunately, there's not a whole lot of additional options.

[Joel]

Sounds promising up front with the offer. It's like, hey, we're going to make a full size offer minus 10k.

[Matt]

Literally. Sounds promising, right?

[Joel]

It does. And then ultimately, when it comes down to it, holding the promissory note can feel like holding a pile of ashes. Like, it's just, there's not much to it, especially if the person is keen on avoiding paying. And so I hate that for you, Cheryl. So, so sorry. Like, it's really sucks, terrible position to be in. And this is, I think this should be a warning to other people out there, right. That the, the buyer might even had the best of intentions when signing the promissory note, but has either been unable or unwilling to pay. And yeah, you have a little bit of recourse here, but there's still a chance you don't fully collect or that it takes a lot of time and patience to get that money. And that's where I think the like kind of what I was talking about at the beginning, that sort of human approach, the kind human approach is potentially the best way to collect your money. Gosh, it's so frustrating to be in the right and then also to not be able to get paid what you're owed. I realize that that's a really tough position to be in, but to be honest, you also have to be pragmatic here. We just don't want you to spend lots of money on legal fees. Totally where you're like, yeah, they're going to be out not only the ten grand, but more money on top of it.

[Matt]

Yeah. Because if they don't have this person, if she doesn't have the money to be able to pay you the $10,000 that she owes you, she definitely doesn't have the money to be able to cover attorney's fees. It honestly puts promissory notes in a new light for me. Like, they are kind of sketchy, like they, they kind of outline everything, but there is, there's no power that they actually have in you being able to.

[Joel]

Get your money or they're just so impotent, right?

[Matt]

Yeah, they're kind of worthless.

[Joel]

Yeah.

[Matt]

You know, like it kind of outlines everything, but like, that's okay. Great, now we know what the problem is. But you know, it's sort of like getting a diagnosis, but then you're kind of like, well, I don't have the money to fix my car. It's great to know that. Whatever. I don't know. Timing belt's not timing like it used to. That's what a timing belt does, right?

[Joel]

Something like that.

[Matt]

I guess that's the first step, but it doesn't mean that you automatically get your funds.

[Joel]

Yeah. Wish you the best of luck though. Cheryl, Matt, we've got more to get to, including a listener who wants to help other people out with their money questions. We'll get to that and more right after this.

[Matt]

You probably think it's too soon to join aarp, right? Well, let's take a minute to talk about it. Where do you see yourself in 15 years? More specifically, your career, your health, your social life? What are you doing now to help you to get there? Well, there are tons of ways for you to start preparing today for your future with aarp.

[Joel]

What about that dream job you've dreamt about? Sign up for AARP reskilling courses to help make it a reality. How about that active lifestyle you've only spoken about from the couch? AARP has health tips and wellness tools to keep you moving for years to come. But none of these experiences are without making friends along the way. Connect with your community through AARP volunteer events.

[Matt]

So it's safe to say it's never too soon to join aarp. They're here to help your money, your health and happiness live as long as you do. That's why the younger you are, the more you need AARP. Learn more at aarp.org wisefriend Got a.

[Joel]

Rental on Airbnb or VRBO? What started as a side hustle might now feel like a full time job. But it doesn't have to. With Lodgify as your co host, you can make more money and stress less.

[Matt]

Build your own direct booking site to keep more of your profits, and automate guest messages, payments and bookings so you can focus on growing your income, not managing the chaos.

[Joel]

Whether you manage one property or 10, Lodify helps you run your rental like a real business. How to Money listeners get 20% off with code [e-mail] if you've ever hired.

[Matt]

For your small business, you know how important it is to find the right person. That's why LinkedIn Jobs is stepping things up with their new AI assistant. So you can feel confident that you are finding top talent that you can't find anywhere else. The best part is those great candidates are already on LinkedIn. In fact, employees hired through LinkedIn are 30% more likely to stick around for at least a year compared to those hired through the leading competitor. That's a big deal whenever you hire counts.

[Joel]

It's crucial to the success of your business to hire the right person for your business. And it doesn't have to be complicated. With LinkedIn Jobs AI Assistant, you can skip the confusing steps and recruiting jargon. It filters through applicants based on criteria you've set for your role and surfaces only the best matches so you're not stuck sorting through a mountain of resumes. When you have a business to run, you don't have hours to spend on hiring.

[Matt]

That's right. Hire right the first time. Post your job for [e-mail] howtomoney then promote it to use LinkedIn jobs new AI assistant, making it easier and faster to find top candidates. That's LinkedIn.com howtomoney to post your job for free. Terms and conditions apply. All right, buddy, we are back from the break. It's now time for the Facebook question of the week. You mentioned the personal finance Good Samaritan, and that's this listener right here, Victoria. She wrote, I'm interested in getting training to be able to offer people one on one, pro bono financial help, budget planning, saving money, debt relief, etc. Not investing advice. Becoming a CFP seems daunting and expensive. Are there any other trainings or certifications that can make me qualified to do this kind of volunteer work?

[Joel]

I think it's so cool that Victoria wants to help people with their money and that she wants to do it at no cost. Like that. She's just like, hey, I feel like I've learned a lot and I see that there's a need out there. How can I be a part of helping other people succeed with their finances? That rocks. And I'm also, I agree with her that she doesn't need to become a CFP to do this. I think that would be like bringing a bazooka to a knife fight. Like, you just, it'd be overkill. Especially since you're planning on focusing on like the building blocks of personal finance and you're not offering complex or specific investing advice. Avoiding the long and arduous and costly CFP route Makes the most sense. And honestly, you might not need any education. There are just a lot of great money coaches out there who are offering advice basically based on their hard earned wisdom and the DIY knowledge they have gained over the years.

[Matt]

The school of hard knocks.

[Joel]

Yeah, and like we've even had some of those people on the show in the past. Like they have a lot of wisdom to offer and they don't have a bunch of fancy letters after their name or even a bunch of years in a school and a degree hanging on the wall. It's just, hey, I've been through the wringer. Look at my story. Here's what I've done. I want to help you do the same.

[Matt]

Totally. And if so, I would totally be willing to consider Victoria coming on the show to talk about like her heart and why she wants to do this. But she's wanting specifics here. Let's talk about some of these different certifications. The APFC is the Accredited Personal Finance Coach designation. It's totally legit. Costs around 1500 bucks, which is worth looking into. There's another one as well that's called the afc. So that's the Accredited Financial Counselor designation. That's another one that's worth considering. It's also at a similar price point, not too expensive. And I think for both of those and just other certifications as well, I would check in and see if they require annual renewals and what those cost as well. And while we're talking about cost and fees, I really would consider charging your clients something like Truly, even if it's like a, like a massively discounted rate and like maybe you're only charging like 20 bucks an hour or something like that. I think this could lead to better results because when your clients, when they've got some skin in the game, I think it tends to lead to people taking things a bit more seriously. And then all of a sudden you're meeting with folks who are truly motivated to change their habits and they're listening to what you're saying, they're showing up for the meetings as opposed to you sitting there on zoom waiting for them to show up or at the coffee shop, maybe you're doing it in person. So this is not just a way to, I don't know, have enough money to be able to cover the cost of coffee while you are out. But also this truly could lead to better results down the road for the folks that you are actually trying to help.

[Joel]

That's right. Yeah. My wife is a therapist at a non profit organization and the people are free. No, but it's able to be significantly discounted.

[Matt]

There you go.

[Joel]

So she can see people who can pay as little as $25 per visit. And I think it makes sense that it's not just like free therapy for everyone and it's highly targeted, but also the expectation is that you pay a little something and if you miss your appointment, you are charged the fee. And it does keep people accountable to saying, like, if you're going to do this, let's do it. We'll give you a steep discount because therapy is expensive. We know that. But it's not totally free. And there is something, I think good about that model. So I think it's a good point, Matt. And again, you might not even need to have certification if you want to avoid that cost and you feel like you have enough knowledge. I would share the highlights of your story effectively if you can get that across. Maybe get some reviews from people who have used your services. Like you can have friends and family that you offer a session to for free as you're kind of building a portfolio of people who have used you for financial advice. Put those front and center on a website. Right. And then that effective marketing and doing great work is going to ensure that you're able to reach the audience you want. And please do, please do let us know when your business is live so we can let how to Money listeners know about this resource. Victoria?

[Matt]

Yeah, we got you. And do another one here real quick.

[Joel]

Let's do it.

[Matt]

All right. This is from Ellen. This is actually not a question, this is a comment. And she wrote, you are way off on the 50 year mortgage. This would allow people who cannot afford higher payments to qualify and to otherwise have the benefits of homeownership. Also, they would otherwise be paying rent, a useless thing. Not building toward anything, rather than building towards something. And again, having their first step into homeownership. As I note with you, you seem to tweak your comments to try and keep people out of the benefits of owning real estate. Joel, why do you hate renters? Why do you want people to just to stay locked up in their shabby apartments when they could be owning a home? This feels like this is targeted towards you.

[Joel]

Maybe, maybe it is.

[Matt]

And she wrote, with this type of mortgage, people would be able to afford their homes. So she's speaking to home affordability. Yeah, well, which I can, I understand.

[Joel]

We can all admit that homes are far less affordable than they have been in recent years. Especially, like, look at what's happened over the past 15 years, homes have become far less affordable. So the frustration that people feel towards the housing market and towards feeling like they are at least for the time being, left out of that part of the American dream. I get it. And so I think maybe this comment comes from some of that frustration point. So I just want to say I hear you. Makes sense to me. Like it's not falling on deaf ears. And we also, we always appreciate feedback. Matt, you're wrong so much of the time, me less so. But like, you know, occasionally we're wrong. And so it's more than occasionally. We're always willing to have our minds changed and to be open minded about like, well, did we miss that? Or is there something about this 50 year mortgage that actually is better than we thought it was going to be? And I think our minds have changed about multiple things during the course of this podcast over the years. I'm thinking about like prenups. I've come around on prenups, Matt. I don't know if you have, but like I, that kind. That conversation changed me.

[Matt]

It feels a bit more nuanced.

[Joel]

Yeah, but like, and I think Ellen does make a reasonable point here too, that this would make buying a home more affordable than from a monthly payment perspective. That is true. Having a 50 year mortgage versus a 30 year mortgage. But extending the timeline of your debt will always do that. Right, that's, that's also what tends to people, to get people in trouble. And that's why we are against seven year car loans, buy now, pay later, and 50 year mortgages. Like I put all three of those kind of in the same category. Yes, a 50 year mortgage would allow you to buy a home, but it would also make it highly unlikely that you'd ever own it. And isn't that the ultimate point?

[Matt]

Okay, so I, maybe I'm changing my mind during this particular episode.

[Joel]

Bring it.

[Matt]

Well, so you're saying like you're putting buy, not pay later. What? Seven year car loans, 50 year mortgages. There is a difference. I will admit that there is a difference between buy now, pay later, which is typically for consumer products, even a car loan, which is, yes, it's for an asset, but it's for a depreciating asset. And there is a difference between those and your home, which is traditionally and appreciating asset. And so I guess I'm willing to concede slightly that a 50 year mortgage could be something that I would be okay with seeing someone getting into. I think specifically if they were also, I guess, more interested in refinancing. Like later down the road and potentially more aggressively paying it down.

[Joel]

Right.

[Matt]

Like, let's say, like if that is how you get your foot in the door for home ownership. And that's kind of what I'm picking up here with what she's saying that like they're not even able to consider getting a home. But if the 50 year mortgage allows them to consider that, then why not? Why is that not an option on the table in so much of it though? I like what you said though, because you said that like the 50 year mortgage, like them not actually being able to own their home. Like, like, yes, it's their home unless.

[Joel]

You do refinance at some point.

[Matt]

But as far as like what you're talking about is from an equity standpoint.

[Joel]

Right.

[Matt]

Let's say if you need, or let's say you want to sell your home after 10 years, what you're speaking to is the fact that you own so little of it. Were you to go with this, and this is purely fictional, the 50 year mortgage still, it's being floated, it's being talked about, but it's not an actual thing yet. But let's say you were looking to sell your home after 10 years. Well, you would have eradicated 16% of the principal on a 30 year mortgage. On a 50 year mortgage, you would have only eaten into 4% of the equity of that home. Decade of payments after a decade. So we're talking about a difference of 4x when it comes to home equity. That I also feel you when you mentioned that the fact that, oh yeah, yeah, you own this home, but you actually don't own much of it because you still owe so much money on this loan because it's amortized and spread out over such a long period of time. Yeah.

[Joel]

And even just from a financial perspective, depending on maintenance costs and the rate of appreciation, transaction costs, renting could easily be a better financial outcome for a whole lot of people than quote unquote, buying and getting a 50 year mortgage. It's not that we are against homeownership, it's that we're for it. And a 50 year mortgage won't boost people's ability really to achieve that goal. Maybe it'll get your foot in the door, but ultimately the 50 year mortgage is not helping people own their homes. Yes, maybe it's helping you buy, it's just not helping you own. I think that's maybe at the heart of my problem with it.

[Matt]

Yeah, I'm with you there. And even to my generous argument of like the 50 year mortgage allowing you to get your foot in the door when you break down the actual payments, the monthly payments aren't that much more affordable than a 30 year. And so that's the strike against it being a quote unquote, affordability tool for folks who are trying to get their first home.

[Joel]

If it was a $3,000 a month mortgage on a 30 year, I want to say on a 50 year, it'd be like 2750 or something like that. So it's like, yeah, it's saving 250 bucks a month, but at what cost? It's a significant one. And homeownership is awesome. Like, Matt and I own our own homes. We're not against it, we're for it.

[Matt]

Real estate has been great for us.

[Joel]

And we hope it has been for a lot of how to Money listeners. And we want more how to Money listeners, especially younger ones, to get in on homeownership if they are so inclined, but only if they want to because, yeah, it can allow you to put down roots and it's a goal worth saving for if that's what you want. But a lot of listeners also find. Matt, we hear this from a lot of how to Money listeners that renting, especially in the current environment, it doesn't feel like throwing money away. It actually allows them to have a much higher savings rate to reach other financial goals they have. We've even had listeners reach out and be like, I sold my home because it wasn't for me and I'm saving so much money.

[Matt]

I'm in money gear number seven and I'm doing everything that I want to do in life.

[Joel]

Renting is not throwing away money. I will preach that till I die. Because guess what? You get a roof over your head and you don't have to pay for the maintenance. You get additional flexibility as a renter. It's different strokes for different folks here. One is not right and wrong. I think there are just different methods of achieving secure housing in your life. And pick which one makes the most sense for you. That's right.

[Matt]

Joel, did you swim upstream with Contrast, the American style wheat beer that was a collaboration between Berrio and Allagash during.

[Joel]

This past 45 minutes.

[Matt]

I have been doing that 50 minutes, I think, to be exact.

[Joel]

Here.

[Matt]

Yeah. What'd you think?

[Joel]

I loved it.

[Matt]

Did you?

[Joel]

Yeah. I was surprised at how much I like this because.

[Matt]

Me too.

[Joel]

It was like golden was super citrusy, very like, like orange, heavy vibes.

[Matt]

Much better descriptive than golden. I was about to ask you what does golden taste like.

[Joel]

No, it's a citrusy look.

[Matt]

Yeah, yeah, citrusy. Oh my gosh.

[Joel]

Yeah, like almost like, like a cutie.

[Matt]

Right on the edge of your tongue. It had like, I thought like a very lemony kind of citrus is really bright on the front end for sure.

[Joel]

Yeah. I. And this was. This is like literally two of the craft beer heavyweights going. Going together to create something really tasty. And usually wheat beers. I'm like, I can take it or leave it. This one I will take though.

[Matt]

Yeah, yeah, it gave way. So like, I thought that after that limited, you kind of moved into that, like that weedy backbone and then it. It finished off like down in the basement with like this kind of funky dankness that I'm assuming burial brought to the party. It's not normally something that Allagash does.

[Joel]

They just like come up with a box of dank.

[Matt]

Yeah, just like. Oh, we just need two more touches of dank, please. Thank you, sir.

[Joel]

May have another.

[Matt]

But I. Yeah, I thought it was really good. Really enjoyed it. I would love to see more collabs with Allagash specifically. I feel like they are one of those old, not old timey breweries, but one of the original great breweries who are doing very creative and amazing things that have kind of fallen off my radar.

[Joel]

Some of their, like oak aged sours are incredible. Like Allagash. I just don't get them often enough. But every time I hear one, I'm thinking of curio. That's one of them.

[Matt]

That's from forever ago.

[Joel]

There's like a peach one that they've made in the past. I mean, they've just made some incredible like fruited sours. But yeah, it's been too long, so I'll have to revisit one soon.

[Matt]

The Belgian saisons, no doubt.

[Joel]

All right, Matty, that's gonna be it for this episode. We will put links in the show notes to some of the resources we mentioned today. You can. That's howtomoney.com if you're curious.

[Matt]

That's right. So until next time.

[Joel]

Best friends out.

[Matt]

Best friends.

[Steve]

10 athletes will face the toughest job.

[Joel]

Interview in fitness that will push past.

[Steve]

Physical and mental breaking points.

[Joel]

You are the fittest of the fit.

[Steve]

Only one of you will leave here.

[Joel]

With an IFIT contract for $250,000 dollars.

[Matt]

This is where mindset comes in.

[Joel]

Someone will be eliminated. Pressure is coming down. This is trainer games. Watch it on prime video starting January 8th.

[Commercial Voice]

What a matchup we got, y'.

[Joel]

All.

[Commercial Voice]

This is that classic HBCU vibe non stop action the band is rocking and the crowd lit Chance echo drum beat everybody showing that school pride game like this yeah, it calls for an ice cold Coca Cola. Ah, crisp and refreshing. That's a game changer right there.

[Joel]

Mmm.

[Commercial Voice]

Yeah, that taste always hits the right note. Just like the band at halftime. And just like that, we're back at it. Passionate fans, school colors everywhere and an ice cold Coca Cola that's a winning combo no matter the sport, no matter the yard Every everybody knows fan work is thirsty work so grab a Coca Cola and keep that HBCU pride going.

[Matt]

Only one movie answers the call. Hello, it's me, SpongeBob. For the biggest comedy event of the holiday season, do you know what the best part is?

[Joel]

What is it, Patrick?

[Matt]

No, I'm asking.

[Joel]

The SpongeBob movie rated DG Friday. This is an iHeart podcast. Guaranteed Human.