Ask HTM - High Net Worth but still Paycheck to Paycheck, Better Investing for Freelancers, & the Necessity of Amazon Prime #1105

Summary

How to Money – Episode #1105 Summary

Episode Title: Ask HTM: High Net Worth but Still Paycheck to Paycheck, Better Investing for Freelancers, & the Necessity of Amazon Prime (#1105)
Date: February 23, 2026
Hosts: Joel & Matt
Podcast Theme: Listener Q&A on real-life financial conundrums, tricks for optimizing savings/investments, and critical looks at consumer habits.

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Main Theme or Purpose

This episode features Joel and Matt answering real listener questions spanning mounting student loan burdens, the conundrum of net worth versus monthly cash flow, maximizing investing options for freelancers, and whether Amazon Prime justifies its grip on family budgets. Through practical analogies and direct advice, they explore solutions, focus on action steps, and encourage listeners to optimize financial habits to thrive.

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Key Discussion Points & Insights

1. DIY Home Improvement: Matt’s New Hobby (Time: 03:10–08:32)

• Matt shares his home DIY journey: converting a powder room into a kitchen coffee bar and adding bathroom facilities, saving $13-15K in labor.
• Emphasis on learning new skills, using YouTube for specialized content, and the long-term value of picking up trade knowledge.
• Joel: “You're learning a little bit of all these different trades…you got decades to use these skills.” (08:32)

Notable Quotes

• Matt (05:41): “There are folks with entire YouTube channels dedicated to plumbing venting specifically. I signed up for his newsletter, got the free venting guide sent to me in email…between that and Gemini to figure out what the code is, you can really equip yourself.”
• Joel (07:14): “Personal finances. Yeah, I guess they can both shock you in a different way!”

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2. Listener Questions

a) Crushing Private Student Loan Debt: Alex’s Dilemma (09:22–20:36)

• Situation: Alex, a 56-year-old nurse, owes $41K with $53K already paid and 13.75% interest; unable to refinance due to nontraditional degree.
• Hosts’ Response Strategies:
  • Refinancing: Try every avenue, including specialist online lenders (Credible, Earnest). Use credit unions and direct appeals.
  • Balance Transfer: If possible, use 0% APR credit card offers for a portion—but only if it can be paid off in the promo window.
  • Negotiating with Lender: Call and use terms like “delinquency,” “default,” and “unsustainable” for hardship modifications.
  • Bare Bones Budget: Aggressively reduce spending, pause investing (except for critical matches).
  • Extreme Measures: Sell car or downgrade lifestyle for a lump sum payment.
• Analogies
  • Fighting an “escalator going up”—high interest making progress difficult (11:17)
  • Bailing water with a “teaspoon instead of a bucket” (12:51)
  • Medical triage: Stop the bleeding with a tourniquet—find every extra dollar (17:09)
  • Surgery: Sometimes extreme action is required for long-term financial health (20:03)

Memorable Quotes

• Matt (11:12): “She’s battling this compounding interest, escalator going up, but she’s walking down. You’re only taking one measured step at a time but that escalator is shooting upwards.”
• Joel (16:27): “Use the language: 'The balance is making it increasingly unlikely I’ll avoid default.' Lenders like to hear you’re acting in good faith.”
• Matt (17:29): “Find every spare dime in your budget to throw at this debt. It’s triage, a tourniquet to stop the bleeding.”

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b) High Net Worth, Paycheck-to-Paycheck Spending: Tom’s Question (21:24–33:37)

• Situation: Tom, a teacher, has ~$400K invested and a sizable emergency fund, mainly from windfalls (home sales), but spends more than his steady monthly income.
• Hosts’ Advice:
  • Recognition: Validate that front-loaded investing is valuable; coast FI may apply.
  • Math Check: Run clear numbers—how long does the nest egg last at current drawdown rate?
  • Optimize Spending: Re-examine “bare bones” for big wins (insurance, cell phone, etc.), find incremental monthly savings.
  • Boost Income: Consider upskilling for higher pay, moving to a higher-paying district, or leveraging side hustles (real estate license suggested).
  • Real Estate Play: In a high-value region, one side real-estate transaction could bridge his deficit.
  • Entrepreneurial Rhythms: Feast-or-famine years are normal; “personal” in personal finance means adopting a rhythm that fits the family and risk tolerance.
• Emotions & Perspective: Acknowledge discomfort of seeing savings dwindle but stress the benefit of clear-eyed analysis.

Memorable Quotes

• Joel (24:14): “You might not need to put pressure on yourself to invest a lot more. You’ve kind of frontloaded a lot. I don’t know that you necessarily do need to.”
• Matt (25:47): “All this is a math problem. Your ability to figure out where this will take you can provide a whole lot of peace of mind.”
• Matt (33:29): “Necessity being the mother of all invention…definitely rings true when entrepreneurs are pinched financially.”

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c) Brokerage Accounts & Better Investing for Freelancers: Issa’s Question (33:44–44:28)

• Situation: Issa, mid-20s, tracks expenses, maxes Roth IRA, has an emergency fund, and looks to invest surplus. Self-employed (1099).
• Hosts’ Guidance:
  • Solo 401(k): Affirm qualifies as a freelancer. Fidelity recommended for ease and zero fees.
  • Investment Sequence: Solo 401(k) allows higher limits than IRA and may suit a “super saver.”
  • Traditional IRA vs. Roth IRA: Stick to Roth unless tax bracket majorly changes.
  • Balancing Flexibility: Taxable brokerage accounts offer flexibility (for early retirement/medium-term goals) vs. locking everything away for age 59½.
  • Medium-Term “Peace Out” Money: Taxable accounts allow autonomy and optionality, not just funding old-age retirement.
• Practical Tips: Don’t inadvertently make yourself “retirement account poor” by locking all your savings away in untouchable accounts.

Notable Quotes

• Joel (38:13): “Solo 401K…lets you contribute as business owner and employee. You can stick $24,500 in as employee…and up to 20% of compensation as employer.”
• Matt (40:09): “That’s peace out money…medium term goals for freedom and optionality, not just a nice car or round-the-world trip.”
• Joel (43:07): “It’s similar to being house poor—if you put all your money in retirement accounts, you can feel constrained for decades, too.”

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d) Ditching Amazon Prime: Nicole’s Question (45:17–52:48)

• Issue: Canceling Prime—will Fire TV work? Is Prime necessary?
• Hosts’ Answers & Discussion:
  • Fire TV will still work; subscriptions managed directly may be cheaper.
  • Prime is designed to keep you buying in Amazon’s orbit (ease ≠ cheapest).
  • Loss aversion, convenience, and the psychological hurdles of giving up Prime.
  • Rethink value: make purchases weekly/bulk to unlock free shipping ($35+); “built-in cooling off period” helps reduce impulse buys.
  • Personal anecdotes about grappling with family convenience vs. saving $139/year.

Notable Quotes

• Joel (47:53): “Amazon’s trying to get you just to knee-jerk buy without even looking.”
• Matt (50:54): “Shut up, Bezos. I don’t want to hear your propaganda!”
• Joel (52:25): “Put things in your cart throughout the week, then check out once. You get free shipping at $35 without Prime, and a cooling-off period.”

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e) Best Business Savings Accounts: Michelle’s Question (52:56–57:47)

• Advice: Online business banking is far more competitive than a decade ago (examples: Lili, Bluevine, Axos, Novo).
• Focus on total package: perks, features, integrations like invoicing/tax help, not just rate.
• Lily now offers high-yield rate on “core” (free) tier; check how much money sits, select a platform accordingly.
• No one-size-fits-all “best”—match features to your workflow.

Notable Quotes

• Matt (56:47): “You’ve got to look at the full picture and what you need as a small business owner. It used to be, 10 years ago, there were no good options.”

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3. Beer Break/Social Connection (58:04–59:44)

• Beer: Incendiary Brewing Porter—enjoyed for bold flavor at an approachable ABV.
• Impressions: Classic, textbook porter—“tastes like brown” (in a good way).

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Notable Quotes & Memorable Moments

• On Home DIY:
  “You’re learning a little bit of all these different trades…you’ll rack up a lot of savings over time.” – Joel (08:41)
• On Student Loan Struggles:
  “She’s battling an escalator going up…but she’s walking down.” – Matt (11:12)
• On Amazon Prime:
  “Don’t listen to what Amazon tells you the value is…Shut up, Bezos.” – Matt & Joel (50:54)
• On Entrepreneurial Adaptation:
  “Necessity being the mother of invention definitely rings true when you get pinched.” – Matt (33:29)
• On Financial Math:
  “All this is a math problem and your ability to figure out where you’ll land could provide peace of mind.” – Matt (25:47)

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Timestamps for Major Segments

• 03:10 – DIY Home Improvement & Money Skills
• 09:22 – Private Student Loan Debt Advice (Alex)
• 21:24 – High Net Worth but Cash Flow Problems (Tom)
• 33:44 – Better Investing for Freelancers (Issa)
• 45:17 – Cancelling Amazon Prime (Nicole)
• 52:56 – Business Savings Accounts (Michelle)
• 58:04 – Beer Break & Wrap-Up

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Tone and Style

Lively, friendly, nonjudgmental, relatable. The hosts acknowledge listeners’ struggles, balance optimism with realism, and pepper advice with stories, analogies, and the casual camaraderie of best friends sharing a beer.

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Summary Takeaways

• Persistence Pays: Whether negotiating debt relief or mastering new skills, relentless effort pays off.
• Financial Peace Requires Action: Run the numbers, focus on what you can control, and adapt both spending and earning as life changes.
• Personal Finance Is Personal: Customize your approach to fit your life stage, goals, and circumstances.
• Flexibility Matters: Avoid being “retirement account poor”—balance savings vehicles for both long- and medium-term goals.
• Consumer Subscriptions Should Be Questioned: Even small recurring costs deserve periodic reassessment.

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For more, visit How to Money or submit your questions for future episodes.

Transcript

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[Joel]

I'm Joel.

[Matt]

I'm Matt.

[Joel]

Today we're answering your listener question.

[Matt]

You know what buddy? We're gonna hear from listeners directly today. Their voices straight to your eardrums.

[Joel]

The pipeline for the people.

[Matt]

Cochlea. Is that the little snail? The snail shaped bone that's in your ear? Your inner ear.

[Joel]

That vibrates the inner ear.

[Matt]

It's been a minute since I've thought about the.

[Joel]

I've been thinking about it more actually lately. Listen, not as much as I think about like ancient Roman civilization of course, Matt, but it's I don't want to talk about why. So we'll move on.

[Matt]

Oh, oh, the ear thing.

[Joel]

Oh. We don't. Don't say anything.

[Matt]

Do we talk about this in the show?

[Joel]

No, we don't. I think this was too much. They don't want to know that.

[Matt]

They don't want to get that personal with you and your earbuds where you shove them into your ear.

[Joel]

That's enough. I'll stop. Quite enough.

[Matt]

I'll stop right there. Do you have anything want to share with us other than your medical misadventure?

[Joel]

No, I'm good.

[Matt]

Hey, I'll share. I got something to share. I want to share my new hobby that we. I don't think we've talked about this on the show, which is DIY Home Improvement, Joel. And this is something that you and I have talked about. You've actually engaged in some of this DIY improvement with me. But last summer, I helped you put a doorknob on. That counts. Didn't you help me take the door off of the old bathroom as well?

[Joel]

You'd already taken it off the hinges. I was just telling you, replacing that one.

[Matt]

You all came over for Christmas. I was like, hey, you know, do a little, tiny, little project while we're waiting on dinner to cook.

[Joel]

It did make me feel like, oh, we accomplished something before. We. I know. Even though it was, like, minor, it

[Matt]

was a tiny little, like, team building exercise. It felt kind of token, but it was fun. No, I was gonna share. So Kate and I, we've been wanting to essentially convert our old half powder room bath into, like, an extension of the kitchen. Right. And so in that case, specifically, I kind of want to turn it into a coffee bar, but it also means adding a toilet and a sink to our laundry room, which I started last summer, which we. I don't think we've talked about.

[Joel]

You finished? It looks great.

[Matt]

Yeah. Yeah. So I kind of kick that off then. And then it sat dormant up until about Christmas, and that's when I kind of got a fire lit. A fire lit under me again to tackle it, which was a bit more tricky than I was expecting because I had to redo a whole lot of plumbing in order to get it up to code, all that kind of stuff. But then over Christmas after that, so you got to see some of this. I had already taken out. Had I taken out the toilet yet?

[Joel]

Yeah, the toilet was out.

[Matt]

I can't remember. The sink was out. But, yeah, you helped me. Oh, we put the correct doorknob on the laundry Room. That's right, the one that locks in order for it for folks to have privacy. Anyway, I did a little bit of research and evidently just labor alone, it would have cost me somewhere in the range of $5,000 to add a new toilet and a new sink to the laundry room. And closer to seven or $8,000 at least to convert the existing powder room into what I'm hoping to turn it into.

[Joel]

So let's just say 15 grand total.

[Matt]

13 to 15 grand in two projects in labor alone as opposed to. And I don't. This is weird but I really enjoy doing this kind of work. The like learning something new. These are new skills that I'm acquiring with all the content and resources that are on the Internet. I mean there are like I found this guy, I forgot. Gosh, I forgot it now. But he dedicates, he's got an entire like YouTube channel dedicated to plumbing venting specifically, which is what something I needed to learn. That's what's so Amazing cool about YouTube

[Joel]

is the specialization and so you can find somebody who's an expert on almost anything. They might have like 350 views on the video but it could help you out.

[Matt]

Dude, it's so good. Well, and in this, in this case this guy had a ton and like I signed up for his newsletter, got the free venting guide sent to me in my email. But like between that and between chat or Gemini to be able to figure out what the code is. Oh, how much drop do I need in my, my toilet waistline? You know, over this distance you really can equip yourself with the knowledge to be able to do some of the stuff yourself now. So yes, it will be up to code and I'm going to save a lot of money and that's why I wanted to share it real quickly here with listeners. Will it be pretty. I don't know about that because I've never done a lot of this stuff.

[Joel]

I'm also doing it slowly but surely because this is one of those projects where I think there is something that makes it makes it a little bit easier to bite off this project. If you're not shutting something completely down that's, that's incredibly necessary to how your family functions in the house.

[Matt]

Right, right.

[Joel]

You're like oh, this is a coffee bar. Like it takes me nine months to finish this project. That's okay. And I can take off bite sized portions every weekend or every other weekend. Exactly.

[Matt]

So the reason I think it's on my mind is I wrapped up the framing so I've already done electrical. That was a whole nother thing to explore to make sure I'm doing all that correctly because I had to move some switches, add a receptacle, all that, make sure the load on that certain circuit was going to be enough to handle the electronics that are going to be on that line as well. Super nerdy, but fascinating stuff. It's not on, like, personal finances. It's like, how does this work? How can I ensure that this is going to be able to deliver the results I want in the end?

[Joel]

I guess they can both shock you in a different way. Exactly.

[Matt]

But. Oh, yeah. So last night I finished up framing it, and I don't know, I was able to step back and I got really excited because you could literally see the opening and how it's going to work with the space. It's not literally pretty yet, but, yeah, it just got me excited for what that's going to hold for us. And, yes, being able to slowly get to it over time. You just mentioned that, like, that is a big part of it not being rushed. Being like. I worked on it, like, for two hours, hour and a half maybe on Saturday as I kind of finalized some of the electrical and did some of the framing on Sunday, yesterday. But then I cleaned up my mess, make sure we're not living in a total construction zone. And luckily, Kate's very patient and kind as far as it not being completely done. But I wanted to put that out there because some hobbies that you take on that you choose to adopt can be not only money savers, but also just really satisfying in a way that maybe it's like a muscle that you don't get to use in other parts of your life. So it kind of scratches. Scratches. This itch I've got.

[Joel]

Yeah. You're not working with your hands Monday through Friday. You're working with your mouth.

[Matt]

Working with my fingertips.

[Joel]

Fingertips and mouth on the computer and my lips. And so I can see how that would be, like, soothing in a way. Right. To get to use, like, therapeutic a little bit. Yeah.

[Matt]

Yeah. It's just a different aspect of who we are as human beings.

[Joel]

Well, the cool thing is, too. Yeah. Not only saving, you know, 13 to 15 grand in labor on this project, but think about you. You're learning a little bit of all these different trades.

[Matt]

The additional skills I'm learning to be able to tackle future stuff. They kind of crop up in your

[Joel]

early 40s, man, you got decades to use these skills, so you'll save a lot of money. You're gonna rack up a lot of savings over time by just knowing how to do some of these basics. All right, let's, let's mention the beer we're having on this episode. This one is a porter by Incendiary Brewing. Our last beer, sadly, from Incendiary. We'll give our thoughts on this one later on. And if you have a money question, please do send it our way. We love to hear from you guys. We love taking your questions. It's so much fun and hopefully enlightening for everyone who listens. Go to howtomoney.com ask or literally just record the voice memo on your phone. Email it over to us. Matt, student loans still a pain in the butt for a lot of people. Let's take a question about that.

[iHeart Podcast Announcer]

Hi, Joel. Hi, Matt. My name is Alex. I'm calling from Pittsburgh, Pennsylvania. And this is regarding a private student loan that I had taken out in 2010 from Sallie Mae. It's been transferred to Mohela. I have a balance of $41,467. I have total paid $53,112.15 one with the principal being $11,957 total interest. And here's the kicker, $40,438.79. With $715 in fees. I pay $570 a month. I have 13.75% interest. And I have tried to refinance the

[iHeart Podcast Advertiser]

loan, but the problem is I went to a nursing school at my local

[iHeart Podcast Announcer]

hospital and even my local credit unions. I've tried all these different avenues to go to get this refinance. But the problem I'm finding is I

[iHeart Podcast Advertiser]

do not have a degree further than a diploma.

[iHeart Podcast Announcer]

I am an RN and it's not a Title 4 school. So I feel like I am locked in and I can't get out. My credit score is 720 and I am 56 years old. So I would like to be able to refinance this, if you have any suggestions.

[Matt]

Joel, this drives me crazy. The fact that Alex is in the situation. She owes more. Her balance on it is like four times larger than the original amount that she took out. She's already paid that much in interest payments alone.

[Joel]

It's hard to stomach. It feels like a gut punch just hearing Alex, you know, tell us what's going on.

[Matt]

Yeah, basically in large part because of that high interest rate. You've been battling this compounding interest, like essentially in the wrong direction. Right. Like the escalator is going up. You are trying to walk down, you are fighting against it, but you're only taking like one measured step at a time. And this escalator is like shooting upwards. And I think it can really feel debilitating. But we'll try to offer some advice to get you moving in the right direction down that escalator, down that load of debt.

[Joel]

I appreciate that Alex didn't seem to feel despondent, like she. I think she's probably frustrated or annoyed, but she's trying to look for a way forward. Right? Yeah. Despite kind of this growing balance.

[Matt]

Man.

[Joel]

Because it's really hard not to get just out of Ben. Out of shape over something like this.

[Matt]

Now I wonder if it has large, if I heard her correctly, on the balances. The balance, it sounds like the balance is approaching what she's already paid in interest as well.

[Joel]

Right.

[Matt]

It's not only the fact that it's obviously so much larger than the initial loan amounts, but. Yeah.

[Joel]

It's just a mint.

[Matt]

That there's like.

[Joel]

It's like a mental hurdle that you're.

[Matt]

Like a mental threshold that you're approaching that is causing you to say, wait a minute, what do I need to switch things up?

[Joel]

Because what's going on?

[Matt]

This is not working out.

[Joel]

Let me get to the bottom of it. And so, yeah, she mentioned that this student loan has nearly 14% interest rate attached to it, which means it's not all that dissimilar from a nasty credit card or something like that. Right. The minimum payment just isn't covering the interest that's accruing, which results in negative amortization.

[Matt]

Yeah.

[Joel]

And so the unpaid interest, it gets added to the balance like clockwork. And the student loan debt hole just continues to get bigger. Yeah, yeah.

[Matt]

It makes me think. It makes me envision her in a boat. And there's a leak.

[Joel]

Yeah.

[Matt]

Like there's like a gallon of water coming in and she's only got like a little cup and it's just like she's working and she's removing that water.

[Joel]

But more water can never be fast enough. Yeah. This is what it feels like, right?

[Matt]

Yeah, yeah, yeah. And you can be fast enough.

[Joel]

You need a better device.

[Matt]

Yeah.

[Joel]

You know what I'm saying? Like instead of the teaspoon, we gotta replace that with one of those five gallon Home Depot buckets. That's how we got a roll. And so it would have been easier to solve this years ago. Right. By finding ways to pay more than the minimum. But we are where we are. And so we would say, first things first, you need to look into refinancing again, I would bark up every tree I could because lowering your interest rate is a huge, it's not the only way, but it would be radically, it would radically change your situation if you could go from 14 to 5 or 6 or 7% interest. That would make a big difference in allowing you to pay more towards the balance instead of towards interest every single month. You got a great credit score and you got solid income. I would just look at some of those student loan refinancing websites like Credible and Earnest, that specialize in student loan refinances. Fingers crossed they can help. I can't promise that they will, but either way that's, that's just one step in the process of getting rid of this nefarious private student loan debt. But I just wouldn't leave that stone unturned. I just, I would want to see if anybody out there could possibly refinance your student loan because that, that'd be, that would take at least, that would be like kind of at least getting you to having a better water unloading device. Yeah, yeah.

[Matt]

And she, she started in the right place.

[Joel]

Right?

[Matt]

She mentioned going to a local credit union, but yeah, looked at maybe some of those more specialized online providers as

[Joel]

well, specifically, that's what they do. Student loan, student loan refinancing, all in

[Matt]

an attempt to get that rate down lower. But one product that might allow you to make more progress a little bit more quickly is if you are able to get that interest rate down to zero, at least for a time being. And I'm talking about potentially using a credit card balance transfer, you might be able to do a transfer at least on a portion of the balance that you have there. And I say this immediately following that suggestion, but make sure that you can truly pay that sum off in the 15 or the 18 or sometimes 22 month window. If not, it's going to do you even more harm because this is a, you know, this is a situation overall where minimum payments to your current lender aren't going to cut it. I think the lender is going to be happy just to watch the balance grow so that you are essentially going to stay in debt for the rest of your life. Who knows how much you might end up paying by the, by the end of it. But this is not a sort of scenario where we want you to just to sit by and watch this continue to like devolve essentially into you not being able to afford these payments.

[Joel]

And truly a system that allows for loans like this kind of sucks like, it's, it's hard to stomach, but this is. There are, I think, ways for you to navigate and move forward with this, Alex. You can even, even call your current lender. You can ask for help there. The wording matters, like how you ask your lender for help matters. But I would say something like, hey, I want to avoid delinquency. I want to pay this loan back. I have been paying this loan with regularity, but is there a way to modify the structure so that my balance isn't growing? Right. Because if it keeps doing that, it means I'll never be able to pay this loan off. What options do you have for me to get a temporary rate reduction or maybe a modification of this loan? Tell them that the growing balance is making it. I would use terms something like increasingly unlikely that I'm going to be able to avoid default.

[Matt]

That's totally true.

[Joel]

And that you're trying to address this before it becomes a problem. Lenders like to hear that, right? That proactive nature. Like, hey, I'm trying. I'm trying so hard. It's getting. It's becoming unsustainable. How can we move forward in a way that's positive for both of us? It shows that you're acting in good faith and you might be surprised at what they offer. And so, by the way, you might need to go beyond the initial representative. You might need to talk to a supervisor or something like that to get a real answer. But that's another tree. I would bark up and use some of that terminology, some of that language to try to see if that's what. Like that's. Those are trigger words for them, Matt. Right. They get them. My ears are up. Wait a second. You might not be able to. What? Oh, okay. Default. Oh, we gotta help this person out.

[Matt]

Yeah. Also I think a little bit of triage might be in order as well. So I'm not sure if you've made a bare bones budget or not. I don't think you addressed your spending side that side of things, Alex. Like that side of the equation. But now is definitely an opportune time to address that. It's sort of like. So I mentioned triage. It's like a tourniquet if you are experiencing like a massive blood loss.

[Joel]

She's a nurse. Right. She understands this terminology. You're speaking her language, man.

[Matt]

So find every spare dime in your budget that you can to be able to throw at this debt in order to stop the bleeding. Keep the balance from growing in a way that doesn't completely like, upend, like your way of living. You're just kind of dialing back in a lot of different areas. Maybe I'm not telling you not to eat food.

[Joel]

Yeah.

[Matt]

Or pay your rent, but I think if you haven't been paying attention to your expenses, now is definitely the time. As opposed to kind of living. Yeah. Living the same way that you've been living before. Certainly hit pause when it comes to investing. Right. Like, if you're talking about, like, maybe you are investing in your Roth IRA, maybe you. Gosh, if you've got a 4.3B match, certainly keep contributing there. But beyond that, I would say hold off on all additional investing because you want to concentrate all of your. Essentially all your, like, financial firepower on the student loan debt. Because this thing has been around for too long and it's getting too big.

[Joel]

Almost like a. A fire hose. Right. Think about how much water those emit. But a lot of water references in this one, Matt. But, like, it's just. It's a really. It's really water and blood when you focus that that extreme amount. I don't even know how many gallons per minute you get out of those fire hoses, but it's got to be insane. Right. And so no wonder it's easier to fight fire with that versus, like, the pesky little garden hose that you are working with right now, Alex. And so you might even want to look to more extreme ways of getting this down off your shoulders. Right. If you have a car that's worth a decent chunk of money, could you sell it for like, 25 grand and jump into a car that's like $10,000 or $15,000 in the. With the. Then you got like 10 or 15 extra grand by a little arbitrage move there to toss towards immediately reducing that balance. Yeah.

[Matt]

That coupled with maybe 10 or 15. That you're able to do a zero percent transfer. Yeah. That you have a plan to pay off Again, that's the key part there. I kind of don't like that. I didn't harp on that longer than I mentioned the 0% transfer. But you need to have a plan. Yeah, I think. Yeah. Those two things combined right there could totally do it.

[Joel]

The kind of thing I think most people would not consider. Sell my car, Downgrade my car to get rid of this loan. Well, yeah, I mean, when you think about how poorly this. This loan is treating you and how bad it's been for over a decade now, and it could continue to be bad for many, many years unless you do something drastic for Sure. I think uncomfortable suggestions outside of the box tactics or stuff you might need to employ so the balance doesn't continue to essentially be the bane of your existence for many, many years to come.

[Matt]

Totally. Yeah. And again, this is gonna sound uncomfortable and these are all things that you're gonna not want to do at this point in your life and at this point in your career even. But this is all for some like the greater good, right? This is for greater long term financial peace, like you are willingly accepting and choosing to embark on some of this short term pain in order to fix the thing over the long haul. Another medical analogy is like the surgery, right Going. And like, man, I wish we could have avoided the surgery. But here we are. The past is in the past. We got to address the issue at hand. We got to cut deep and find a way to make this thing right.

[Joel]

Gosh, there were some good analogies in that answer, man, if I do say so myself. We got more we got to get to including, man. What if your your spending outpaces your income? We'll talk about that and more right after this.

[iHeart Podcast Advertiser]

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. Let us show you at iheartadvertising.com that's iheartadvertising.com

[Matt]

all right y', all, we are back from the break. Let's now hear from a listener who is who's living beyond paycheck to paycheck. But somehow he's still wealthy. But it's not trending in the right direction, at least the direction where he feels comfortable. Let's take this question.

[Vanta Advertiser]

Hello, my name is Tom from Kalispell, Montana. I'm a 37 year old teacher with a wife and three children and need some advice. To date, our investing has been driven by large profit gains, primarily from the sale of our first home and with Summer's office, a teacher, the sale of a spec house I built. We currently have a substantial emergency fund and approximately $400,000 invested. However, we generally do not contribute to our Roth IRA or 401 unless we receive a large windfall. The primary issue is that on a month to month basis, our spending exceeds our income. Although we follow a fairly bare bones budget. We still struggle to balance the books, and I'm fairly uncomfortable watching our bank account balance decrease each month. I would appreciate your suggestions or answers like, should I consider taking on another job to balance our monthly budget? Given that we have this large cushion and emergency fund, should I be less stressed or concerned about the monthly deficit? Any ideas or suggestions would be super helpful. Thanks, guys.

[Joel]

All right, Matt, since I'm the optimist in this duo, between you and me, not that you're a pessimist, but I'm

[Matt]

just like an optimistic realist.

[Joel]

I'm not the most optimistic person I've ever met, but I'm probably. I'm probably top 5%.

[Matt]

You're up there.

[Joel]

Yeah, you're up there. Actually, our mutual friend Joel, he's the most optimistic person I ever met. There's.

[Matt]

There's a. There's a streak of realism when it comes to how he approaches things as well, he just has a friendly disposition.

[Joel]

Well, let me. What I'm trying to say, let me take the optimistic. What are you getting to here? And then I'll let. I'll let you maybe deliver the hard news. How does that sound?

[Matt]

I'm fine with that.

[Joel]

Good cop, bad cop. Sure. Okay, so I'll discuss the good. Tom, you got a great emergency fund. You've been investing diligently over a decently long period of time. And you said you're willing to get creative. Or at least you talked about building the spec house as a side hustle. That is getting creative in an attempt to build wealth. That's awesome. I love that you're thinking outside the box. You're working hard to be honest. You might not need to put pressure on yourself to be investing a lot more. Like you said. Oh, we're not really investing right now inside of the retirement accounts. Well, you've kind of frontloaded a lot of your investing. I'm not sure if you're officially coast fire or not, but like that, that's. That essentially means you never need to invest another dime because you did so much in those first decades or decade. But I guess I just want to alleviate the pressure on your shoulders of feeling like you need to invest more right now. I don't know that you necessarily do. You might be okay on that front. You might want to go back to it later. I don't know. But I'm just saying. $400,000, that's a lot. That's inside of investment account.

[Matt]

So you're giving Tom a pass, huh?

[Joel]

I'm Just saying.

[Matt]

You're saying, Tom, you ain't got to worry about it.

[Joel]

No, no, I'm not saying that. I think there is still worrying that needs to be done and there are still changes that need to be made. But yeah, like it's important. We need to work on closing the gap and. But I just don't think you necessarily need to be like, oh, on top of that, I need to be trying to max out my Roth IRAs and contributing 15% to my workplace retirement account. If you try to put all that pressure on yourself, you might spontaneously combust.

[Matt]

It's not like a light, your hair kind of on fire sort of moment where you're trying to. Yeah, okay, so I'm going to double. I'm going to tag on a little bit because I agree, I'm going to give Buck the sort of traditional financial advice and where I'm going to tell him to cut back dramatically. We've already done that. I mean that's important to do. But he actually, I'm getting ahead of myself. I'm thinking about the fact that I think Tom, he sees the fact that his accounts are decreasing and yes, that is generally not a great trend and what you want to see. But Tom isn't. Most people like he has done made moves in the past where he has made bank, which has allowed him to be in this incredibly strong sort of position. And I guess what I'm saying is that I know it is uncomfortable to see that number decrease over time. Like typically, especially when you are in your 30s, you want to see that number continuing to get larger. But run the numbers and not only might you already be coast fired, but you might, I'm assuming because of these, these are singular sort of windfalls. I'm assuming he's also got some money invested in a brokerage accounts as well. You can't just take all that and immediately dump it into retirement.

[Joel]

He's also a teacher and I'd be curious to know what sort of pension he's got coming in. He's got that going on the pike. So that's another reason. I just want to be like, you don't need to invest to the max total. Yeah. You don't need to like put yourself in a, in a ridiculously uncomfortable position to max out accounts when you probably need more of that money right now

[Matt]

than you will not even not 70 and not even not investing. But I'm, I think I might even be okay with him considering drawing down some because of where he is. Like, I don't know what his. He didn't say what his monthly expenses are. But if you run the numbers and see that actually we are good for another 15 years, most likely, and to have plenty on hand before maybe in the next decade we'll find another project to work on, something like that. But I think you are not happy with the direction, the fact that the number is getting smaller. But run the numbers like all this is, is a math problem and your ability to figure out, okay, where is this going to take us, where are we going to land? I think could provide a whole lot of peace of mind.

[Joel]

So it's less and sometimes that could

[Matt]

be the direction that you're going to, but more at the speed at which you are going to arrive there. That, I think is important here.

[Joel]

I think what you're highlighting is that once you run the numbers, it can actually help take some of the emotion. Yes. Out of it. Because emotionally feels really crappy to watch the number go down. But like, by how much is it going down and how long can that run rate last you? And you know, let's say you've got a certain big chunk in your high yield savings account, like, and you're making 3.75% or something like that. Well, you know, what percentage are you drawing down of that high yield savings account? And are you able to leave your investments essentially untapped? I mean, there's just like, there's a lot to consider in that.

[Matt]

Yeah.

[Joel]

But I will say this too. I'm also not keen, especially at this stage in my life or in Tom's life, probably watching that cushion just dwindle. Right. Because that's also unsustainable. Kind of like we talked about recently with an inheritance mat, like just the idea of using it to pay for essentials. Well, at some point the cushion evaporates and then you still have a problem that you have to solve and it's just easier to solve it when you still have some cushion available. Right. He said they're living on a bare bones budget, which means there's not much wiggle room on the spending side of the equation. But can you check that again? Like, can you shop the big things that don't change your life much, like insurance and cell phone, and question some of the other expenses that you have in your life. Could you hodgepodge savings of something like $250 a month like that? That in and of itself could be

[Matt]

huge just by tightening up the budget.

[Joel]

And people like to talk smack about the latte factor or something like that, but truly, like this is the kind of thing, five bucks here, ten bucks there. It adds up. And if you're talking about a couple hundred bucks a month, well, that makes a big difference in at least that cushion. Dwindling less quickly.

[Matt]

That's right. If you don't want to deal with that, though, that's when it comes to the other side of the equation, which is making more money. So on the income front, I mean, teachers, it's tough to ask for a raise the way that others can, like in different industries and different sectors. But I think it is worth seeing what it would take to increase your pay, and a lot of times that comes with, with your training. So specifically, like, could you potentially get a certificate that would put you in a, like a different pay tier? I think a master's would take longer and obviously would cost more, but that could certainly increase your pay a good bit over time. And then the earlier you go down this path, obviously the more years you're going to have for that pay raise to impact your earnings in addition to your. To your pension as well. So I think that's. That's sort of a bigger question as to whether or not you want to continue teaching. If you see yourself doing that for the long haul, then, yeah, boost that experience. That teacher training, that's going to basically return dividends over the course of years and even decades.

[Joel]

A lot of the teachers I know have done very similar things to try to, like, get towards that upper echelon of pay that you can get as a teacher. And you're right, it's not as easy as just like, walking into your boss and looking at past results from last year and being like, I'm, I'm top tier. They're like, yeah, like, there's still a

[Matt]

pay scale that gives us this much.

[Joel]

Yeah, can't do much about that. But the other thing I guess Tom could consider is moving to a nearby district because especially if they'll, like, honor your current service time, you could maybe bump your salary by 5,000 bucks or more with just that one move. That can make a dent, too. And it is just worth asking, how much do you love teaching? We don't want to convince you to leave that profession or to pivot if you're not keen on that. You're like, I love teaching. I think we need more teachers, Matt, especially male teachers. That seems to be a dwindling subset of the teacher population. But it sounds, Tom, like you're gifted in other areas. You could do well if you shifted careers, if you desired to do that. It's just at least worth putting on the radar asking that question.

[Matt]

Totally. Especially if he's considering, like he mentioned in his email, a second income. Maybe it's his wife, maybe it's him. And I mean, let's say you love teaching and he mentioned the spec house. I would say like you obviously are drawn to real estate and so I would say continue to lean in that direction. Like you're obviously either handy. I don't know if you did it yourself. If you're not handy, then you've got a really good network of subs. I'm guessing who worked on that property. So look to other projects. I think like that or maybe you find that was a lot of physical labor or work and you don't want to necessarily do that again. But you do like real estate. You are familiar with the market. Maybe that means getting your real estate license. So in your email you mentioned that it's a gap of $1,000. And I looked, oh, I forgot to mention like he, where he's from in Montana is really close to Glacier, which is like gosh, a beautiful, beautiful part of not only the country but the state.

[Joel]

Building ADU in your backyard and dude, well have national park or stay there.

[Matt]

The average home that's listed is around $600,000 in that, in that market. So let's say you've got your real estate license and you're helping out friends. You could undercut competition. Let's say you're, you're only charging 2%, that's $12,000. That is $1,000 a month which would close the gap from selling and being involved in one transaction a year. So it could kind of be like this part time thing.

[Joel]

Barely more than the average realtor is involved in. When you look at it like most

[Matt]

realtors do so few deals because so many of them are doing it like this where it's just a little bit on the side. It's not their full time gig. And I think Tom, if you've got any interest that could be something that you do there, I would certainly look into that before and like that kind of gives you this sort of creative endeavor on the side where especially over the summers when you've got a little more time, maybe a little more energy to do something like that while maintaining the teaching gig. I'm assuming that you, that you love teaching. So it's a way to sort of flex your entrepreneurial muscles like that.

[Joel]

Right. What's the most demanding day for real estate agents, Matt? Closing day, where you know that. But Saturdays, that's what you're showing people around. Like, you're working Monday through Friday. You could probably hit some emails or hit a phone call in the morning or the night, but Saturdays are when you probably need it the most. And guess what? I guess so. Yeah. You gotta teach the kids on Saturdays.

[Matt]

I'm not a realtor, so I don't know my realtors. I feel like we're emailing a bunch

[Joel]

throughout the week, too, but I don't

[Matt]

know, like, you can make it whatever it is that you want it to be. But I think not discounting the fact that you have taken a more entrepreneurial approach to this, where you've had, like, feast and fame in kind of years, there's nothing wrong with that. Personal finance, like, it's in his literal name. The fact that this is personal to you and how it is that you, Tom, want to live your life and just the rhythms that are going to work for your family, there's not. I don't think there's anything wrong with that. You just have to be used to. Great. We've had a ton of cash in the savings account, and now we're seeing that slowly erode over time and then kind of coming up with the next sort of venture that you might want to. The next path that you want to go down, I think that that can provide a whole lot of motivation.

[Joel]

Right.

[Matt]

Like the necessity being the mother of all invention, I think definitely rings true for entrepreneurs when they find themselves pinched a little bit more financially.

[Joel]

Yeah. All right, let's get to the next question. This is about taxable brokerage accounts. What are those about? How do I know if I'm ready for one?

[iHeart Podcast Announcer]

Hi, Matt and Joel. My name is Issa and I live in Southern California. I am in my mid-20s and I have never had a job that has offered a 401k. I opened a Roth IRA about three years ago, but last year was my first year of maxing it out. I track all my spending very closely, and I have a detailed plan to max out my Roth again this year and invest a significant portion of my income. On top of that, I have a fully funded emergency fund and a little bit of low interest student debt. But it's not my biggest priority to pay it off since I know I can get higher returns in the stock market. I have already opened up a taxable brokerage account to invest the rest of my income since I cannot put it into a 401k. But my question is, is that the best next step? Should I open up a traditional IRA or a solo 401k for context. I'm on a 1099 as a contract employee, so I think I would qualify, but also not really sure. And I already open up a taxable brokerage account because that's just what I've heard about the most after maxing out your Roth. But I want to make sure I'm not overlooking a better tax advantaged option.

[Matt]

Joel, sounds like ESA is on the right track, doesn't it? I think so, yeah.

[Joel]

Yeah. She's crushing it. I mean, and it's always nice to hear from someone, Matt, who has reasonable student loan debt. Obviously, like, we are just in a time and place in our country where the average person graduates with more student loan debt than is ideal or than we would suggest. And so it's nice to hear from somebody who's got like a manageable amount that she. It's not like breaking the bank. And so love that for her. I'm glad she's prioritizing investing over getting rid of that debt in short order because I think, especially if the. I don't remember. Did she say what the interest rate was on that student?

[Matt]

She said manageable or reasonable.

[Joel]

So if we're not talking about something that's going to keep growing the balance, then, and it is truly manageable, then it probably does make sense to prioritize other financial goals. So keep an eye on the balance, though. Make sure you're actually making progress. I think some people are like, oh, it's not that much money, but if you're not paying attention to the details, it can grow.

[Matt]

Yeah, totally. And she's. I love that she's just preparing. She's looking off to the future. She's setting herself in a great position even though she doesn't have access to a workplace retirement retirement account. It just goes to show, like a lot of the articles these days are like, oh man, 401k millionaires. It's like the new thing, right? Like people are essentially becoming millionaires without even realizing it. And that's great and I love that for a lot of people, but I love that Issa is able to. She's going to make that happen without having access to a work sponsored 401k with a match. So I love that you have gone with the Roth IRA. She mentioned that she's in her 20s, so she's pretty. I think she's earlier on in her career and that is a huge step in your money progress where you're maxing that out without fail every single year. Make that a top priority. And you asked about the Solo 401K. And yes, you are eligible as a self employed 1099 contractor to set up a Solo 401K. Freelancers, independent consultants, they meet that definition. And man, I love the idea of you opening up a Solo 401k, putting some of your extra investment dollars in there. And of course, I'm sure you know this, but you know, we want you to have all of your accounts. So whether we're talking about your Roth, your. Your taxable brokerage account as well, this new Solo 401K that you might open up, we want all of these with our low cost favorites out there. And in particular, we personally have our solo 401k, our SE self employed 401k with fidelity. They made it really easy to set that up as well.

[Joel]

So they make it very easy. And the costs are super low, so virtually non existent. Yeah, I think that's. That's a good wreck, Matt. And in the Solo 401K, by the way, EC, you can opt for traditional or for Roth. Which one you pick comes down to your tax bracket now versus your expected tax bracket down the road. Lots of prior conversations on that topic on this podcast and in stuff that's written up on the [e-mail] you know, opening a solo 401k, it's. It's similar to getting your IRA going just from clicking around on the Internet standpoint. Right. So it's going to have a very similar look and feel to open and fund that account. And one of the cool perks is that you can actually contribute more than W2 employees can to their 401ks. So this is, this is where being self employed shines if you're a super saver.

[Matt]

It's the Solo 401k secret sauce.

[Joel]

It's like whatever they're putting on the Big Mac, which I haven't had a Big Mac, but. Gross. Yeah.

[Matt]

I prefer Chick Fil A sauce.

[Joel]

Yeah.

[Matt]

Have y' all purchased the Chick Fil A sauce at the store with like the big old squeezy?

[Joel]

Yeah, because my kids, My kids.

[Matt]

Do they really?

[Joel]

Yeah.

[Matt]

Oh, man. We haven't gone. We haven't done that.

[Joel]

I know. I hated breaking that seal because it felt ridiculous.

[Matt]

You're holding back.

[Joel]

Yeah. Felt ridiculous to have it in the fridge, but I think we do have a bottle.

[Matt]

See, anytime we get it, we always max out the number of packets that we get.

[Joel]

Take them home with you on the mobile order.

[Matt]

Yeah, we just got like a Little. Some people dedicate a whole drawer to the take home. Soy sauces, mustards, ketchups, you know, barbecues, Chick fil A sauces or whatever.

[Joel]

I think it's a reasonable approach. As long as you're not like shoving them into your pockets and being they.

[Matt]

Yeah, like if you go in, I guess they have free access to it. You get as much as you want.

[Joel]

But a lot of times that's over the top.

[Matt]

I mean, yeah, we're often only getting Chick Fil a when we're on like road trips, but even still, that's when we hit the max number. And because it's an option on the app, I'm saying that they're okay with it.

[Joel]

They're telling me it's fine, so do it. But yeah, I mean, you can contribute. The reason you can contribute more to a solo for 1k versus a traditional is because you get to contribute as the business owner and as the employee. So this year you can stick $24,500 in as an employee contribution and then you can stick 20% of your adjusted business compensation in there as well. This doesn't happen overnight typically. Right. To be able to max that thing out, some people never get there.

[Matt]

That's a lot of money.

[Joel]

It's a lot, a lot of money. Because I think the max total for solo 401k contributions between employee and employer contributions is like $70,000. That's insane, right? Think about that. In addition to your, that's almost $80,000 total, you'd be sucking away in investments.

[Matt]

So if that's what you got going on, if she gets there, good for you. Yeah, that means you're crushing it.

[Joel]

Impressive.

[Matt]

But that's a ton of money. It's just good to know that you can do that in a tax advantaged way. But you may not even want to lock away that much money for your future, for future esa. And that's where a mix of solo, like a solo 401k and a taxable brokerage account actually works pretty well together. Because taxable brokerage accounts, they can be more attractive than the Solo 401k, but it just kind of depends on what you're doing, what your goals are and what it is that you want to do with that money. Because it's nice to invest in tax advantaged accounts even if you don't have access to a match. But it's also nice to not have to wait until full retirement age in order to access that money. So, you know, like you on one hand, you might be Putting all your eggs in this sort of far off future, you basket to the exclusion of saving for whatever sort of medium term goals that you might have, right? Like it's cool to have $500,000 in retirement by age 33, but if it prevents you from reaching other life goals that you might have, like owning a home, then you're going to have to find a way to kind of balance those two. So it's good to know that those options exist. But you need to do a little bit of goal setting, a little bit of soul searching. And all this is also to say too that your medium term goals may not, may not even be physical tangible in nature as well. You being an independent contractor, I'm going to deduce that maybe you like the freedom that comes with that, right? You're like, oh yeah, I get to work on the projects I want to work on and then off in the future. I think it would be very easy for you to envision a scenario where you say, well I don't want to take on that project actually I don't even want to do this work anymore. I would love to be able to do this kind of work that aligns a little bit more with where my heart's at. Well, guess what, let's say that's in 15 years and you are like barely 40 years old. If you got a ton of money in your brokerage account that's going to allow you that freedom and those options to be able to say yes to that, to that sort of lifestyle. So what I'm saying is that's peace out money, right? That's peace out money. That's those medium term, like these are goals that align more with freedom and sort of optionality as opposed to only fixating on like oh, a really nice car or a globe, like an around the world sort of mass amazing trip that I go on with my friends, like that's totally fine but I just wanted to highlight some of the optionality that you can buy yourself in the future as well.

[Joel]

And I think if you go too hard into retirement accounts, you're like maxing out all the tax advantage stuff to the exclusion of the taxable brokerage account or other slightly more flexible accounts. You it's similar to the concept of being house poor, right? I spent most of my, most of my money every month goes to pay the mortgage and I just find yeah, granted that that home's gone up in value so I'm not totally sunk. But my goodness, it's a tough position to be in when you hear people who are house poor, it feels very constraining. And I think the same can be true if your retirement account poor. If you stick all of your investment dollars into accounts that you can't tap until like you're hitting retirement age.

[Matt]

Yeah.

[Joel]

That can feel incredibly constraining for many decades too. So balancing it at least a little bit and trying to grow some money in inside of investment accounts that's at least a little more accessible. Makes sense. Last thing I wanted to address here, Matt, is Issa mentioned contributing to a traditional IRA as well. You could, but you would have to reduce your Roth IRA contributions in order to do that. That's because the combined total Contribution limit is 7,500. You can't contribute 7,500 to each. If you could, that'd be cool, but you can't. So we prefer you to stick with the Roth all the way.

[Matt]

Assuming too. Yeah. That she's not making. That she's going to earn more off in the future and that she's fairly earlier on in her career where she's not in this higher tax brackets and

[Joel]

she might lose the ability to contribute to a Roth IRA someday. So I love the idea of max it, max out while you can, while you can. And the other cool thing. And you can read about this more on the site and stuff if you're interested. But the Roth ira, one of the things that makes it so fun is that it is tax advantaged and it's also got flexibility. Right. Ten years down the road you've been maxing it out. Well, you might have 70, $75,000. Right. Of contribution dollars that you can pull out to do other things with as well. So the Roth IRA is. That's what makes that such a great account, is because it's got the tax advantage status. Yes. Growing tax free for your future, but it also has the ability to tap at least some of those dollars down the road before you reach retirement age.

[Matt]

That's right, buddy. All right, we got more to get to. Well, let's talk about Amazon prime accounts. Joel, you excited? Excited about that?

[Joel]

Let's do it.

[Matt]

We'll get to that more.

[Joel]

Always. Always excited.

[Matt]

Yes, you are. We'll get to all that more right after this.

[iHeart Podcast Advertiser]

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.

[Joel]

All right, we're back. Let's get to the Facebook question of the week. I'm so excited, Matt. This one's from Nicole. She says, I'm finally canceling my Amazon Prime. Oh, man, such individual empowerment there. I'm so proud of her. She says, I wondered whether I will still be able to use my Fire TV and subscribe to individual channels using their platform. Can I first say I could see vindictiveness from Amazon at some point? Not disallowing you from using your Fire tv, but it's at least not the case right now. Wouldn't you think that it's what some vindictiveness from Amazon like saying, oh, you're not a Prime number anymore. We're gonna brick your device that you bought from us.

[Matt]

Oh, gotcha.

[Joel]

Not the case yet.

[Matt]

No. Yeah, yeah, yeah. Like, so, for instance, you cancel your Amazon prime, your Fire TV will still work just fine. And actually, you can still subscribe to individual streaming services through Amazon, though you might find better deals, especially in November. It seems like towards the end of the year, like Black Friday. That time of year, I think HBO

[Joel]

Max was like a dollar a month for the whole year. If you subscribe during that Black Friday window.

[Matt]

Yeah. So if you subscribe through those streaming services directly, I think you're going to come out on top. So just keep that in mind. That's to address your specific will my Fire tv, will that still work after I cancel Amazon Prime?

[Joel]

But I was also impressed.

[Matt]

You seem really excited to talk about Amazon Prime.

[Joel]

Generally speaking, in the comments section, a lot of how to Money listeners chimed in who have either never subscribed or have ditched Amazon prime. And they basically were like, I don't really miss it, all right? And I found that to be a powerful testimony, and it makes me want to reconsider my own prime subscription. I think Emily would have a harder time than I would, but, gosh, it makes me want to. I think ours is supposed to renew

[Matt]

because she's like, all right, buddy, how about you go out and run to the store and get all the crap that we need?

[Joel]

Exactly. She's like, you run to the Goodwill and get the boots for whatever. But like, yeah, maybe I'm willing to take on that burden. Okay.

[Matt]

You gonna give it a shot?

[Joel]

Well, I don't know yet. I think we renew in about a month. And I will say you think of it as 139 bucks and you get all these things and there is some truth to that, right. You get some free streaming options as far as music, as far as video, and you get the delivery. Like they're making a decent value proposition over there at Amazon, but the other thing they're doing is trying to get you 100% in their orbit so that when you think about buying stuff. You and I were talking about this just the other day, how you went over to Walmart's site and you were like, wait a second, oh, this stuff was way cheaper on Walmart.

[Matt]

But people still shop around, folks.

[Joel]

What Amazon's trying to get you to do is the knee jerk buy without even looking. Hey, you've already got the sunk cost of the prime membership and now, oh, it's just so easy to use. So you're just gonna spend more because you don't even think about shopping around.

[Matt]

Yeah. Cause okay, so it costs 140. That's not that much money. Right. And it would be different, especially when

[Joel]

you break it out over, you know, monthly basis. That's a fairly cheap subscription price.

[Matt]

Yeah, yeah, like what we're talking about getting value out of it. Like that's not that much. It would be different if they were, if they were raising prices. But because I think that for a lot of folks can be like, oh, here's a more natural time to reconsider. But I do think it might be tricky. I mean, you have, you go ahead and have the conversation with Emily, see what she says. Because like, you just get used to certain things, right. Like that's that loss aversion.

[Joel]

Right.

[Matt]

Like the fact that rolling back certain conveniences or rolling back certain luxuries is hard to do once you've kind of gotten used to those things.

[Joel]

Doesn't mean it's not worthwhile.

[Matt]

No.

[Joel]

Yeah.

[Matt]

But again, it would be different if it was like substantial. It makes me think about our beach. The beach house that we rented not last summer, but so three summers ago, it was by far the most expensive spot that we've rented for both of our families for a week over the summer. Right. And I remember my top reason that I was hesitant to rent that place to begin with was that I said, I don't know if we're going to be able to walk this thing back. And sure enough, the next summer we did it again. But then what happened? By the third summer, they almost doubled the price. And so in that case, it wasn't necessarily that we thought that the luxury, that the pool that came with the house wasn't worth it. It was, it wasn't worth it because of where the price was going. And so that was.

[Joel]

So we downgraded.

[Matt]

And so we downgraded also in part the. We downgraded to a house that actually had more. A better sleeping arrangement for the kids or whatever. But.

[Joel]

But we paid a lot less.

[Matt]

Yeah, we pay substantially, substantially less. But yeah, I don't know, I guess I'm just addressing that sort of loss aversion. Having something that's really nice taken away from you without there being a significant financial burden that's also being heaped. Heaped upon you. Maybe that's why. Because they haven't raised the prices for Amazon prime in years. I mean, I can't remember. I know it used to be. Yeah, I forget what it was. To be honest with you. I feel like it's been at this

[Joel]

price for when it launched, $99. Maybe when it first started, something like that. Trying to remember. And then maybe 119, then maybe one.

[Matt]

Oh, it was. Yeah, it was 120. It was, I think it was 120. I remember prepaying. It was 119. Yes, it was right at 120.

[Joel]

Fortunately for Nicole, Fire TV still going to work fine. So don't let that convince you to stick around. But I guess ultimately at the root of this conversation is just questioning, questioning what brings you value. Instead of saying, I don't know, we got it, it's pretty good, let's just keep it around. It's at least worth reassessing and saying, going through the checklist. Well, of all the services that Amazon prime offers. Actually we, Matt, you and I, we recently talked about free photo storage. I didn't, I didn't realize this till the other day. I was like, wait, Amazon prime gives you free photo storage? So maybe that's one reason I keep it around so that I don't have to pay Apple. I've already paying the fee to Amazon. Wait, I'll just take their free photo storage. But this is. Yeah, maybe that alone, that extra perk makes it worth it for me, but it's worth at least questioning and saying, am I getting the value from it or not?

[Matt]

Or.

[Joel]

And don't listen to what Amazon tells you. The value is because every time you make a purchase now they're like, you just say $15 on shipping costs and you're like, that's.

[Matt]

Shut up, Bezos.

[Joel]

That's not how much.

[Matt]

I don't want to hear your propaganda.

[Joel]

Yes, Jeff Bezos, that's just lies. So. And if it means that you would actually spend less and save on the prime membership fee, it could be worth it for you.

[Matt]

Yeah. I think one of the more nefarious things that Amazon Prime Shipping has done for us as well is the fact that we, because we expect our things so quickly, like normally it was just these one time items. It's just like, oh, I need a extension cord or I need like a pair of socks or like something for the house.

[Joel]

Right.

[Matt]

Like it's not something that you're buying on a recurring basis, but you get used to that and you're like, oh yeah, actually I see the option for this to show up between 3 and 7pm today. Of course I'm going to choose that as opposed to waiting for two days. I want my thing now is that we then expect that same sort of delivery with like other things and then when we see that sort of creep and find its way into like groceries for instance, that's when you're paying out the nose for a delivery or your

[Joel]

dinner that night from the even restaurant down the road.

[Matt]

Yes. Yeah. Even worse. As opposed to like we used to be totally fine with going to the grocery. We go to the grocery store like once a week. Maybe we'll stop in like one other time for something like, like you know,

[Joel]

one off supplementary supplies.

[Matt]

Yeah, exactly. What we need to do is see our one off items, the things that we normally buy from Amazon also shift to that sort of once a week timeline versus the opposite. Right. Like because we started with Amazon prime, now we expect all of our food to also show up that quickly. As opposed to being, getting back to the point where we were used to only going in the store like once or twice a week and being like, oh yeah, all the other things I need in life can also wait a few days before I get my hands on.

[Joel]

I think that's a great point. I think it, it actually it's worth considering that if you ditch prime, well, the way that you're gonna make Amazon work for you is to put stuff in your cart throughout the week and then check out once a week. Because guess what? You get free shipping on orders of $35 or more without a Prime membership. So maybe that's the best.

[Matt]

Then you've got the built in like you got a built in cooling off period.

[Joel]

That's right. Yeah.

[Matt]

I don't know, maybe I'll. Maybe I'm going to cut prime too.

[Joel]

And our wives are going to hate us.

[Matt]

Yeah.

[Joel]

All right, let's get to another question. This one's from Michelle. She says, what are the best business savings accounts?

[Matt]

Ooh, business savings or just savings?

[Joel]

Not checking. Yeah, but we can address both.

[Matt]

Yeah, yeah. We've talked about this before on the show a lot of times. So what's great? So one of the ones we have is Lili.

[Joel]

L I.

[Matt]

Or maybe it's Lili. Lili. I think it's Lili. I don't know how to say it.

[Joel]

L I, L, I. Lily. No, because that'd be L I, L,

[Matt]

Y. I think so.

[Joel]

Okay.

[Matt]

But they offer additional services with their online checking, and so I think that's something that's worth considering. What other services? Like invoicing? Different. Like, I do everything manually, so I don't.

[Joel]

I don't know.

[Matt]

But there are a lot of other services that some of these online banking platforms that they offer, so just keep that in mind. It depends, like, what is the quote, unquote best? I don't know. It depends what you're looking for. Are you looking for something to supplement your business to maybe replace some software that you would normally pay for? Are you looking for something that's got the sweetest app? Well, make sure to check out the reviews of the app for that bank. Maybe you're looking for the best rate, interest rates, specifically, which are typically going to be offered on savings accounts, not on checking. So even with Lilly or Lily, like, I have to manually keep money in the savings portion of it until we need to cut some checks or pay us.

[Joel]

And if you want the higher rate with Lili or whatever, you have to pay a monthly fee for that as well, right?

[Matt]

No, that changed.

[Joel]

Oh, that changed. Okay.

[Matt]

Yeah. Oh, thank you for bringing that up, actually. So that's a brand new thing. So up until this year, so 2026, it used to be where you had to pay for the. I think what they called it, the pro account, which was $15 a month. And we didn't have a ton of money in there, but it was worth paying the 50. So 200 bucks a year and we were earning, like, again, I don't know, this reveals too much, but, like, we were earning like a little over a thousand bucks in there just based on some of the money that we keep in there. Totally worth it. But now it's an even better proposition because you don't have to pay the free account. I think it's called the core account. You get the. You get the higher interest rate that's great. Yeah.

[Joel]

I didn't realize that it changed.

[Matt]

Yeah, well, it just, it just happened. So there you go, buddy.

[Joel]

Excellent breaking news.

[Matt]

Extra 100 bucks each.

[Joel]

26 high five. Yeah, well, and I think to what you're alluding to as far as business accounts is for personal accounts, it's a lot easier to compare apples to apples because you're mostly comparing rates, customer service and a few of the perks. Right. And so most of the. Our favorite online savings, high yield online savings accounts that we discuss regularly on the show, they are, they're pretty much in the same ballpark as far as interest rates and as far as perks. But when you're talking about online banks, there's a wider variety in the kind of perks you can get. Right. So like Bluevine, Axos and Novo are all worth looking into as well. They're all good because, yeah, there's different fees, there's different rates and there's, and there's different perks. So there is just no one easy best business bank. Right. That's best for everyone. Part of it, like when you're talking about, yeah, fees to get higher rates, you know, that just went away thankfully on the Lilly account. Lilly account. But the, the fact that we had to do that. Well, so much of whether or not you're going to get the value for that depends on how much money stays in your business account and for how long. So you have to think through a lot of individual things. But I would look towards, hey, if I like to make it, you want to easy to invoice companies or to file taxes, even your business taxes. Some of these business banks have made it easier to do some of those other things. So you might value that service pretty highly and say, well, that's going to save me money over here because I don't have to pay for this other service. I would just look at some of those extra perks that some of these business banks, online business banks offer because they can be significant and they can save you money in other areas.

[Matt]

Yeah, that's right. You got to look at the full picture and what you need as a small business owner. And all those other one options that you mentioned, they've only gotten better over the years. It used to be like, I mean, 10 years ago there were no good options.

[Joel]

Yeah.

[Matt]

It's like, okay, what online business banking or savings and checking account can I get that isn't going to charge me money. And now more and more perks and offerings are heading our way. I think that's a Large part why Lili extended the fact that you can earn money on your savings to the free account as well. Because you've got all this competition. That's right. And they're trying to attract business, and they're also trying to attract dollars. And so if you're a larger small, a big, small business, it's an oxymoron. But anything over $500,000 with them, and you're going to earn 4%. That's at the time of this recording. Yeah. Might change. But that's really great for a business savings as opposed to. I think we're earning something in the 2.2percent range.

[Joel]

Ten years ago, business banking accounts sucked. They were terrible.

[Matt]

They weren't paying anything, and they were charging you a lot of money.

[Joel]

So there's been a lot of competition in this space, and there have been a lot of newer online business accounts that have really opened it up. And so there's a wider variety of good options that entrepreneurs didn't used to have to have.

[Matt]

I love it.

[Joel]

All right, let's get back to the beer.

[Matt]

The beer that you and I enjoyed today was simply called porter. I don't see any other labeling on here.

[Joel]

Ooh.

[Matt]

World Beer cup winner, 2023 Gold Award for brown porter. Is this the brown porter?

[Joel]

It poured black.

[Matt]

I wonder if this was an instance where they were like, man, there's nobody entering into the competition for brown porter. Little can we be considered a brown porter? I don't know what is considered a brown porter versus traditional porter, but that's really good. What'd you think?

[Joel]

Honestly, I'm not a huge porter guy. I think sometimes they can be a little bland or uninteresting, and especially if it doesn't have any sort of adjuncts into it, sometimes that can spice up a porter, make it fascinating or at least more approachable, in my opinion. This was like the picture textbook definition of a porter, in my opinion, of what I wanted to taste like.

[Matt]

Yeah.

[Joel]

And so much flavor, nothing added to it.

[Matt]

With such a relatively light abv, I mean, yeah, we don't normally get into the to the numbers, like, when it comes to ABV on beers, but this was only a 5.6% beer on this porter. And there is so much flavor coming out of this thing, which I think is typically, like, a lot of times, some of the bigger stouts that we've historically had. I mean, you're in, like, the 13, 14% range, which is a really big beer. Makes it difficult to certainly to enjoy by yourself, but even to share sometimes. We're like, whoo. I don't know if I can finish this bad boy because there's so much going on there. But, yeah, certainly darker. It was toasty, but it wasn't like roasty, you know, like, I feel like toasty. It's got some of those darker flavors. Roasty is when it starts feeling a little bit more like roasted. Roasted marshmallows or coffee or something like that. Whereas this is like, oh, it's got that nice brown taste. Flavor.

[Joel]

Flavor profile going on. Tastes like brown.

[Matt]

Tastes like brown. I agree.

[Joel]

Which is a good thing. Gosh, I really did enjoy this one. And I was. I was thinking if it's just called porter, my guess is I'm gonna think it's meh. But no, it was.

[Matt]

No, it's really stinking good.

[Joel]

Quite good for a porter. So thanks again to the folks at Incendiary for donating this beer to the show. We will post show notes up on the [e-mail] and there's tons of other money saving information up there on the site. If you're like, I'm trying to figure out more about HSAs or Roth IRAs or even just kind of going back to the money gears, click. Start here at the top of the website. If you're looking for money help, that's a great place to turn. Or, hey, guess what? Send your question over to us. Hopefully we can take it next week on the show.

[Matt]

That's right. But we hope everyone has a fantastic week. We hope this has helped you to kick off your week right on this Monday. We'll see you back here in a couple days. So until next time, best friends out. Best friends out.

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