Ask HTM - Housing Rule of Thumb, Axing a Boat Payments, & Making Bank on the World Cup #1108

Summary

Podcast Summary: How to Money – "Ask HTM: Housing Rule of Thumb, Axing a Boat Payments, & Making Bank on the World Cup" (#1108)

Hosts: Joel & Matt
Date: March 2, 2026

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Episode Overview

In this lively and insightful episode of How to Money, Joel and Matt tackle a round of diverse listener questions about personal finance decisions. Key topics include setting a sensible budget for buying a home, the best way to get rid of a boat loan, strategies for making money on short-term rentals during the World Cup, and the nitty-gritty of retirement account rollovers. Throughout, the hosts apply their signature blend of practical advice, personal anecdotes, and humor—always with a focus on empowering listeners to make intentional financial choices that fit their lifestyles.

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Key Discussion Points & Insights

1. Personal Finance as Personal Happiness: Experiences Versus Things

[02:29–10:26]

• Matt confesses his dream of buying an expensive espresso machine, drawing parallels between valuing experiences vs. things.
• Joel relates this to his own sauna purchase, both viewing these items as "perpetual experience-inducing machines."
• Not every physical item is a good investment, but for certain passions, spending on "gear—that yields ongoing joy" can be wise.
• Quote:

  “Most people won’t say that they’d rather spend more on a coffee maker than a car, but that’s a choice you get to make.”
  (Joel, 09:52)

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2. How Much House Can I Afford? Housing Rule(s) of Thumb

[11:15–24:53]
Listener Question from Bailey (Texas):
What’s a reasonable amount to spend on a home? Are there good rules of thumb? What about fluctuating income over a 30-year mortgage?

• Avoid “top-of-budget” advice: Just because you “can” qualify doesn’t mean you should stretch.
• Past personal stories illustrate the risk of overbuying—a promotion or income boost isn’t guaranteed.
• Conservative Rules of Thumb:
  • Spend less than 25% of your gross monthly income on housing (including mortgage, taxes, insurance).
  • Alternatively, 30% of net (take-home) income.
  • For example: Take-home of $6,500/mo = max $2,200 payment = ~$300,000 house.
• Adjust depending on your overall frugality; if you spend very little elsewhere, you might stretch up to 35–40% of take-home for housing.
• Pro Tip: If you can “house hack” (e.g., rent out part of your home), you can responsibly buy more house.
• Quote:

  “Not having as many dollars dedicated towards a roof over your head is going to buy you more optionality over time.”
  (Joel, 20:43)

• Be especially cautious in today’s market—higher prices and rates make stretching even riskier.
• Don’t let the “rules of thumb” push you into overextending—downsize expectations if market realities dictate it.
• Quote:

  “Jumping into a mortgage that breaks the rules of thumb is really going to be detrimental… it’s going to impact the rest of your life.”
  (Joel, 21:32)

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3. Retirement Account Rollovers: Basics & Pitfalls

[27:52–37:44]
Listener Question from Charlotte (NC):
Can you discuss retirement rollovers, penalties, and benefits?

• You typically cannot roll over an active workplace retirement account unless your plan allows an “in-service” rollover.
• The main reason to roll over: High fees or poor investment options in your 401(k).
• If your only options have expense ratios under 0.2% and good index/target date funds, sticking put may be fine.
• Consolidating accounts for behavioral simplicity is a valid reason.
• Direct (trustee-to-trustee) rollovers are safest to avoid tax events; do not accept a check made out to you.
• Capitalize: Free tool/service to help handle rollovers (endorsed by Joel).
• Special Cases:
  • Company stock in 401(k): Net Unrealized Appreciation rules may offer big tax savings; rolling it into an IRA can lose this.
  • Rule of 55: Some access to funds before age 59½ lost if you convert to an IRA.
  • May impact backdoor Roth IRA ability.
• Quote:

  “Unplanned taxable events aren’t how you build wealth.”
  (Matt, 31:07)

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4. Axing a Boat Payment: Pay Off or Hold the Loan?

[37:51–47:17]
Listener Question from Bill (Chesapeake, VA):
Retired once, back to work, still owes $30k on a boat loan at a high rate. Use savings to pay it off or keep paying?

• Boats (like RVs) are depreciating assets; financing them is generally discouraged.
• Don’t zero out your emergency fund—never pay down debt at the expense of all liquidity.
• If the rate is double digits, it's nearly always best to pay down aggressively (from savings if possible, but leave a cushion).
• Ask: “If you didn’t own it, would you buy this boat at today’s rate instead of holding cash?” That clarifies priorities (avoid sunk-cost fallacy).
• Examine whether the boat is bringing ongoing value; ongoing costs, maintenance shocks, and usage frequency matter.
• If you truly love it and use it often, paying it off quickly (without busting your emergency fund) is reasonable, especially if you can replenish savings from your solid income.
• Quote:

  “Would you get this boat now, given the terms that you have? Or are you just keeping it around because of what you’ve already sunk into it?”
  (Matt, 43:32)

• Also, have a plan: Map out a concrete payoff timeline, so the debt feels finite.

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5. Making Bank on the World Cup: The 14-Day/Augusta Rule for Short-Term Rentals

[50:07–57:18]
Listener Michael (Boston, Facebook):
Can I rent my home for the FIFA World Cup tax-free under the 14-day rule? Tips for doing it well?

• 14-day/Augusta rule: Renting out your primary home for up to 14 days/year = no reporting required, no income tax! Great for rare big events.
• List on Airbnb (best platform for short stays); for longer, try Furnished Finder.
• Use AirDNA for smart pricing analysis—World Cup rentals could command $1,000+/night if in a prime location and/or on match days.
• Caution:
  • Rent only to highly rated guests, disable instant booking.
  • Consider a minimum stay length to cut down turns; tailor your listing for soccer fans (location, transport, amenities).
  • The closer to key matches (especially semis/finals), the higher the rate.
  • Meeting renters at check-in can help ensure they respect your property.
• Quote:

  “This offers a once-in-a-lifetime ability to make significant non-taxable money.”
  (Joel, 51:46)

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6. Using Stocks for a Down Payment: Timing & Mortgage Underwriting

[57:18–61:01]
Listener Lucas (Facebook):
Much of my down payment is in stocks, but our homebuying timeline has moved up. Should I sell now? Will that look suspicious to mortgage lenders?

• Yes—timing matters. Since purchase is soon, sell stocks now; don’t risk a sudden market dip.
• Be mindful of potential tax implications (short vs. long-term capital gains).
• Mortgage lenders are familiar with this scenario. Provide 2-3 months of brokerage statements, proof of sale, and proof of funds transferred.
• Online-only lenders may be less flexible or clear in their process—local banks/credit unions often offer lower rates and more personal service.
• Quote:

  “I just wouldn’t want to risk a quick market correction, a decline in purchasing capital at this point in the game.”
  (Joel, 57:50)

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Memorable Moments & Quotes

• “Perpetual experience-inducing machine” — a zinger about spending big on certain gear (Joel/Matt, 07:20)
• “Not having as many dollars dedicated to a roof over your head is going to buy you more optionality over time.” (Joel, 20:43)
• “Would you get this boat now, given the terms that you have?” (Matt, 43:32)
• “Unplanned taxable events aren’t how you build wealth.” (Matt, 31:07)
• “This offers a once-in-a-lifetime ability to make significant non-taxable money.” (Joel, 51:46)

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Timestamps for Key Segments

• 02:29–10:26 – Experiences vs. Things: Espresso machine/sauna discussion
• 11:15–24:53 – Housing affordability rules of thumb
• 27:52–37:44 – Retirement account rollovers and related pitfalls
• 37:51–47:17 – Axing a boat payment: should you use savings?
• 50:07–57:18 – World Cup & tax-free Airbnb: the 14-day/Augusta rule
• 57:18–61:01 – Selling stocks for down payment: timing for mortgages

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Tone & Style

The hosts maintain their trademark casual, friendly, and slightly nerdy tone throughout, blending practical personal finance advice with witty banter and relatability. They reinforce the idea that good money decisions are highly personalized, encouraging listeners to pursue what sparks joy—and to avoid common financial pitfalls by asking smart questions and thinking ahead.

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Final Note

This episode is packed with actionable advice for anyone grappling with major financial moves, from homebuying to big purchases to side hustles like short-term rental hosting. Joel and Matt make complex topics feel approachable, always emphasizing autonomy and intentionality in personal finance.

Transcript

[Joel]

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[Matt]

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[Joel]

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[Joel]

is such a life changing pursuit and my trip to Australia was one of the best investments I've ever made. I got to enjoy the bustling metropolis of Melbourne and some of the best coffee of my life while also driving the great ocean road and taking in spectacular views. I even hopped on a plane to the island of Tasmania. That was my favorite stop. I loved it all. A trip to Australia doesn't just offer a getaway, it's an investment in experiences that stay with you. Explore more destinations in Australia and start planning your Memorable [e-mail] Welcome to how to Money. I'm Joel.

[Matt]

I'm Matt.

[Joel]

Today we're answering your listener questions. That's right buddy.

[Matt]

Happy Monday to everybod. We are going to take a question regarding some housing Rules of thumb is specifically what this listener is asking for. Joel, we'll get to that. Another listener is trying to find a way out of boat payments. That's not something that we talk a lot about here on the show. Boat payments. I don't even like car payments, so I think a lot of folks know where we might end up Landing on

[Joel]

that one, pardoning us in particular. Insurance fraud. Like just big rock in the boat, sink it into the middle of the lake.

[Matt]

Yeah, insurance fraud.

[Joel]

And then file the claim. But we won't suggest that. Try to avoid a legal recommendation such terrible.

[Matt]

Another listener is looking to make bank on the World cup as well. So we're going to talk about maybe the best ways to do that. But let's get personal here for a second, Joel. I think it was last week we talked about the coffee bar that I've been working on there in the house. And a listener reached out was just like, oh, what? Like someone who knows I'm into coffee. And we're diving a little more into the specifics and what we didn't talk about was the fact that I want to get an espresso machine.

[Joel]

And most expensive thing is not the renovation, it's the machine you want to put in the finished product.

[Matt]

Because I'm looking at spending thousands of dollars specifically on this espresso machine. Which sounds ridiculous and it is. But I've been into coffee for quite a while, not like literally decades. We started out back in the day with the very affordable blade grinder with a little French press. As you do. Right. Like you kind of start off. That's the gateway coffee drug.

[Joel]

Oh, coffee.

[Matt]

Caffeine being an actual drug.

[Joel]

It's the thing you do after Mr. Coffee Maker feels a little subpar.

[Matt]

Exactly. You just kind of work your way up. And that's something we've done over the years. And all that's left, man, and I would love to take it to this next level to go full bore is to have an espresso machine at home. You know, I think I pinpointed why or when this all started. As far as me researching and getting into it. I think it was Zeke Fox. Do you remember what his craft beer equivalent was?

[Joel]

Well, it was coffee, wasn't it?

[Matt]

It was an espresso machine specifically. And he. We talked about it some after we.

[Joel]

And he got done in Manhattan with like three kids, didn't he? Uh huh.

[Matt]

And I'm like, that's my. You're my dude. Like this is exactly my thing. And I researched it and I've been kind of keeping an eye on.

[Joel]

Well, he was interesting too because he just, he had his finger on the pulse of what was happening in crazy cryptocurrency worldman free.

[Matt]

Yeah. Hanging out with him and interviewing him and all that. Anyway, all that to say this is not some sort of like, I guess, sudden realization that, oh, I would Love to be able to have espresso at home, but I'm imploring you to. Well, maybe I don't want you to talk me out of it, but do you think that this is a terrible idea? I was gonna say talk me out of it, but I truly don't want you to talk me out of it because this is something. It's something I want to do.

[Joel]

I was gonna say, I don't think you do want me to do that because this is something you've been talking about for a long enough time. And you and I were talking about this the other day how my sauna is kind of maybe the equivalent of this espresso purchase for you. Right? Espresso machine purchase.

[Matt]

Well, yeah. And specifically it's because of like the. If you view it as a tool and like that or as gear, like Michael Easter talks about. Like he talks about viewing certain purchases as gear, not as sort of like this consumption based product. And okay, so on that note, like, we were talking about this. I think the conversation that you're referring to that we had probably over pizza and beer or something. But it's different. Like when you talk about spending money in ways that bring you happiness, a lot of times it is experiences. Right. And the problem with that is you kind of have to continually, like you don't just want to rest on a great vacation or a great experience that

[Joel]

you had years ago, start planning the next one.

[Matt]

Yeah, exactly. You're looking ahead and you're. And you're not necessarily looking to top it, but you are looking to kind of maintain it. And an argument for something that kind of acts as a tool or as gear is that yes, there is a big upfront purchase cost associated with it. But dude, my ability to pull espresso shots and steam amazing milk at home like my DIY espresso, those additional ongoing costs are so minimal compared to, I think what I perceive. The joy and the memories that I'll be able to have making drinks not only for me and Kate, but also the kids for friends who come over as well. Right. Like, I see it more maybe like you do as a sauna.

[Joel]

Yeah, Well, I think we also something

[Matt]

that makes things hot.

[Joel]

Back in the day, you and I, we had an episode about. That's true. We did a full episode about experiences versus things. And you would think it seems like everybody comes down on the side of experiences.

[Matt]

It's the general prevailing wise choice.

[Joel]

But I think especially some things might be a better purchase than your money might be better spent buying certain Actual physical items that kind of are perpetual experience inducing machines.

[Matt]

Right?

[Joel]

Yeah.

[Matt]

Oh, I like that. And that's what I'll experience inducing.

[Joel]

That's what I think my sauna is

[Matt]

what I need to say to Kate.

[Joel]

Yeah.

[Matt]

Joel said, this is a perpetual experience inducing machine.

[Joel]

If we're honest. If we're honest, there are very few items that meet that reality, that meet that threshold. Right. Most of the stuff we buy is. Isn't going to. Even. Even the fancy car we get into. The experience oftentimes is lackluster after a month of ownership, and we're just like, kind of bored with it. I get just as jazzed to hop in my sauna now as I did when I first got it. And, you know, my wife and I hop in together and it's. It's just lovely time well spent not to imagine the supposed health benefits that we're getting. Right? Yeah. And I think the same for you, like making coffee for you, for your family, but then also for people who come over, you're like, hey, check out this.

[Matt]

I really am like, I would be so stoked for anybody who comes over and they're like, what is that over there? I'm like, oh, let me show you. Let me.

[Joel]

Yes.

[Matt]

I'm going to nerd out a little bit if you want to nerd out about it. Or I can just make you a killer flatte or flat white if that's what you're into.

[Joel]

So I guess from that, most of us don't think about that. And the truth is, not again, not many things hit that metric. But I think this will for you, especially as someone who's gone down the coffee rabbit hole to such, such an extent.

[Matt]

I like it so much.

[Joel]

I think you have to really be careful about what you go and dive into to that extent, because you are talking about this not too long ago as well, how that last 15 or 20%, oh, my gosh, you can get 80% of the way there on so many things for very little money. But that last 15 or 20%, whatever it is that you're committing to, can take so much extra time, so much extra money. And so maybe like limit your hobbies, your obsessiveness on certain hobbies, because it can get really expensive.

[Matt]

But what's so hard about it is that this is like a new category that I've sort of just somebody might say, oh, you've just created this brand new category of spending. Whereas, like, my mind immediately goes to vehicles where I'm like, dude, somebody, like, without even hardly thinking about it, somebody will spend like, I'm not even gonna say how much money. This machine, this little Mazarco one that I'm looking at is thousands of dollars. But like somebody would be more than willing to drop 10 times more than that. Even like 15 times more than that.

[Joel]

It's quote normal for the.

[Matt]

Yeah. For like the family safe vehicle or the one that's got the good reviews or just one that they. Yeah, that seems normal to them. But like that's the thing. Like I don't care about vehicles. We were just talking about. Yeah, man. The fact that our car is going. Is going to be rolling over 200,000 miles here pretty soon and I can't. Yeah.

[Joel]

And you still don't want to upgrade, but you do want to upgrade your coffee maker. Exactly. And I get that.

[Matt]

I can't wait to for that.

[Joel]

And I think that's again, like that's what makes personal finance so fun, is you can be like, I don't care about any of that other stuff. But I do. I'm going to spend more on my coffee maker than on my car. And that's just like a choice. You can make the super rad that most people won't. And I.

[Matt]

The machine would be more worth more

[Joel]

than the actual car would be.

[Matt]

Like, Matt drives a 2012 Odyssey, but he's got a 2026 Lamar.

[Joel]

Right, exactly. But. And it's that I'm fine with that. That's part of knowing yourself and it's such an important part of personal finance because then you actually spend money on the stuff that's going to light you up, that's going to matter to you and not just the stuff that most people say is important.

[Matt]

Nice. Well, I appreciate you not totally shooting me down, but providing context and in fact encouraging me.

[Joel]

Go buy something. It's your fault. I can't wait to test it out. Or. Yeah, I'm not actually going to touch it because if I break it. I'll teach you. Then I have to pay for it. I'm not going to do that.

[Matt]

I'll teach you. Although it seems like less your thing to get into the nerdery behind it. I think you will definitely appreciate a great flat over over at the alt Mix mode.

[Joel]

Most def.

[Matt]

Okay.

[Joel]

All right, let's mention the beer we're having on this episode. It's called. It's a West Coast IPA by Living Waters Brewing. We'll give our thoughts on this one. Does it have an actual name? I don't know. We'll just call it Harpeth. All right, well, we'll just. That's a terrible name. We'll call it Double.

[Matt]

Is that the name of it right there? I don't know.

[Joel]

Maybe by Living Waters. And if you have a money question we'd love to hear from you. Just go to howtomoney.com ask for the directions and hopefully we can take your money question on the podcast next week.

[Matt]

That's right, Joel, let's kick things off. Let's take this listener question. He is debating how much to spend on one of the most expensive purchases you can make.

[Joel]

Let's hear it.

[Listener Bailey]

Hi, Matt and Joel. This is Bailey from Texas. My question today centers around a house purchase and how to decide what's a reasonable amount to spend on a home. I've heard a few different ideas tossed around. Things like don't spend more than three to four times in annual household income or maybe don't make mortgage payments monthly. That's more than 25% of a monthly household income. I worry though that these numbers may change quite a bit over the course of a 30 year mortgage, up or down. So I'm just looking for some guidance on how to pick that house number or how to decide what's a safe or reasonable amount to spend on a home purchase. Appreciate any advice you guys have. Thank you for all you do.

[Joel]

Oh, Matt, everyone's got advice on this. Everyone has their thoughts. And I think people prioritize homes differently and how much money they allocate towards their home differently.

[Matt]

That's right.

[Joel]

But I think there's a lot to cover in this question. A lot of wide open room to run. And so Bailey, I guess the first thing I would say is be careful who you listen to because some people will give you poor advice when they take the right.

[Matt]

Take the right advice.

[Joel]

Yeah. And I remember specifically, like my dad got advice about buying a home that was kind of near the top of his budget. He was in like middle management and some of his friends who he worked with were like, dude, you know, you can afford this house. It might feel like a stretch. Now you're going to get the promotions

[Matt]

you're going to get with me and my espresso, right?

[Joel]

Exactly.

[Matt]

Go ahead, get the nicest one out there, bud.

[Joel]

You got this top notch Cadillac version. Right? And man, this was such bad advice. But I can see why to that person who gave it, maybe they bought it, maybe they did that same exact thing. And maybe they did get the promotion and the raise and pretty quickly the mortgage that they signed up for based on the their salary you know, from a couple years ago, it felt more than reasonable. In fact, they wish they had bought more house because, my goodness, they're just, they're floating in the money now. Right. But it came back to bite my dad. And just in terms of, well, the promotion, the, the raise didn't happen in the way, and in fact, my dad lost his job. And so, you know, being able to afford that mortgage became incredibly difficult. And so a home, I think is, of course it's different than a car because it's an appreciating asset on average over time, but still overdoing it can have these cascading consequences that we want you to avoid.

[Matt]

Really. That's true. Yeah. And while we were talking about how much payment you can afford, Bailey, on your home, we want you to have saved a decent chunk to put down. So you didn't ask about that. But we're going to cover the, COVID our bases. Ideally, you want to have 20% in order to get the best terms for your mortgage, so start with that. But yeah, there are a few different rules of thumb you could follow. And I do think the advice is different for most American consumers out there, for mainstream America, than it is for folks who are listening to this podcast. Because for us, man, the goal is to not just be able to afford a home, to get your hands on the home, to live in it, but to be able to afford your craft beer equivalent or your craft coffee equivalent, whatever it might be. And also saving for your future goals alongside that monthly mortgage payment. By the way, Bailey, you mentioned, you know, should I be looking at the price of the home? Should I be looking at like the mortgage? And I don't think I'm going to share any rules of thumb as far as, like the price of the home because of financing. That is such a present reality when it comes to what, because normally we say, well, no, you don't want to be, you don't want to be a oh, what can I afford? Kind of person buyer. Oh, yeah, yeah. Like what's the monthly payment going to be? But there really isn't an alternative when it comes to purchasing, like very different

[Joel]

than buying a car.

[Matt]

There's such a small percentage of folks out there who could afford purchasing a home outright. And so, so much of it does come down to the terms of the loan to what you're able to, to afford on a month to month basis. That is where the rubber meets the mode, the road with your specific budget. So I think, yeah, mortgage specific advice is what we're going to be looking at here, but I'm talking about. So these additional goals that you might have, like financial independence, that is for a lot of folks, some degree of, that, some degree of financial freedom is the ultimate goal here. And being house poor isn't necessarily in the financial independence recipe. And so I think the best rule of thumb to consider is to spend less than 25% of your gross monthly income on housing. And I do think this includes like all of your housing spending. This, you know, not just the mortgage specifically. Like factor in taxes and insurance, like get real with these estimated payments. Don't just look at, you know, whatever it is that the bank might spit, spit all that at you. And whether or not they are including those additional numbers. I don't, I don't think it has to include utilities and other repairs but you do need to make sure you've got enough set aside to handle those as well. Especially if there's any deferred maintenance that hasn't been addressed there on that property.

[Joel]

Yeah, it's something you and I covered on a Friday flight recently, Matt. But just that's this, that's the thorn in a lot of homeowners sides right now is maintenance costs on housing and especially as costs have risen on housing a ton. Like I was just trying to get a quote on a minor like screen screen porch addition to my house. That's right. I was shocked. I was shocked and I was like I think I'm going to hold off on this like 2x more than I was expecting. Yeah, I don't know if I'm interested. And so that's one of the things. Whether you're doing something to your house or just normal maintenance, wear and tear repairs, you might be shocked at the cost that some of those, some of those repairs are going to set you back. So be very careful in planning for that potential reality. I think you can also use, I like the 25% rule of thumb you're giving. I think another good one is 30% of your take home pay, that being like an all in amount. I think I like this one best Matt, because you're including all of your likely monthly housing costs and you're not going above 30% of your monthly post tax pay. And this is like, it's great because you're including all the facts on the ground, including what, what you pay in taxes, which is another massive line item in your budget. You're already kind of factoring that in. So for example, let's say you make $100,000 a year, your take home pay might be like $6,500 a month. This means you could stomach a mortgage payment of about $2,200 and you could probably buy a house then. If you're looking at what's happening in financing right now that costs about $300,000 and be able to comfortably afford it, the better the terms and the rate, you might be able to inflate that just a little bit. Let's say you're able to get a sick rate from a local credit union or something like that. It's amazing how much those numbers can shift based on kind of like you alluded to Matt, the financing, where you get financing and what's being offered currently.

[Matt]

That's true. And again, Bailey, like, keep in mind these are just rough rules of thumb because I, I do think for some frugal folks out there that it is okay to intentionally spend more on your home if you find that you spend a lot less in a lot of other areas in your life. Like I'm thinking about transportation can vary wildly depending on what it is that you like to drive. But even on like how much you like month to month spending on groceries, for instance. And so I'm thinking of like early Kate and I and we didn't spend anything on transportation, we didn't spend anything on our groceries.

[Joel]

We were still a one car family. Transportation costs are incredibly low. So somebody like you can afford to if they want, inflate their housing budget a bit.

[Matt]

Yeah, but specifically with groceries per person, we were eating $1 per meal there for a stretch for a number of years. And because we were, we were just eating so frugally. Also minimizing the amount of protein, the amount of meat we're eating, which can be very expensive. But if you are also content to drive like a 20 year old car, maybe you rarely ever eat out. I think something like 35, even 40% of your take home pay on housing. It may not be all that crazy, but you really do have to be willing to reduce your spending in other areas in life in order to keep that housing budget. Budget reasonable. If you're, I do think if you're going to splurge anywhere, I think housing is a category that makes a big impact and it can feel a bit less wasteful. And I think it actually can be pretty consistent with frugality if you are very intentional with your spending.

[Joel]

Yeah. And especially if you can turn your housing cost into some sort of revenue stream.

[Matt]

Right.

[Joel]

Like house hacking or like you can, you can bite off even more if you're going to be able to rent that part of your home out or you're buying a duplex or you just have like a mother in law suite or something like that that you're going to, that you're going to rent out to cover some of those costs. That's a way too that you can actually turn your housing into a revenue stream is something we haven't talked about as much recently Matt. But it's just like something that deserves a lot of attention for people who are concerned or interested in becoming financially independent at an earlier age. Turning your housing from like one of the largest line items in your budget to something that comes closer to breaking even because you're renting out a portion of that, it can change the game significantly. And we've, we've seen a bunch of our of how to money listeners take that tactic and just completely change their financial lives for decades to come. And when it comes down to it, I think if you value optionality Bailey less is best. Like not having as many dollars dedicated towards a roof over your head is going to buy you more optionality over time. And we'll probably get pushback on this map. But it certainly feels like it's impossible to meet those standards as a young person trying to buy a home these days.

[Matt]

Yeah.

[Joel]

And it is 25%, 30%.

[Matt]

It's like yeah, good luck finding a house guys.

[Joel]

Yeah. Or you're just going to have to meaningfully red kind of what your expectations are. Right. You're going to have to opt for something that is maybe in not as great of a part of town or is smaller or needs more work. And yeah, it really is harder to meet these metrics that we're talking about in 2026. Much harder than it was in 2016, let's say. So we get that, we get that pushback but we are seeing some corrective moves in the housing market right now which is leading to lower prices. We're seeing more buyers have the ability to negotiate that price down whereas a few years ago that that wasn't the case basically ever. So jumping into a mortgage though that significantly bends or breaks the rules of thumb that we're outlining is really going to lead to, it's going to be detrimental to you. Not only does it make it harder to hit savings goals for retirement, for other near term goals, it's going to impact the rest of your life. Right. Think about saving for vacations down the road or updating your car later on or just the joyful spending you like to do. That's not housing. This is the real reason to keep your housing costs reasonable.

[Matt]

Yeah. Because absolutely.

[Joel]

You are hamstringing yourself if you dedicate too many of your financial resources toward your monthly housing costs.

[Matt]

Totally. Yeah. Yeah. Bailey, he mentioned, well, what if over the course of that 30 year mortgage, the percentage that I have going towards that house increases or decreases even. Right. Like, he was like, oh, it could be. It could go either way. Well, first of all, if it decreases, that's not really a problem. That's like. Because that just means you're making more money.

[Joel]

Like an anti. Problem.

[Matt]

Yeah, yeah. It's just like, it's like someone saying, oh, man, I'm in the 35% tax bracket now. It's like, okay, you're fine. Like, you're doing totally fine. You're gonna be okay. But this is an argument, like what Joel's laying out here, like, that is an argument for being a little more conservative. Because. Yes. Like, what if you do experience a job loss? What if all of a sudden your housing is a much, much larger percentage of your overall budget? Ooh, okay. Well, maybe it would have been better to have started out closer to the 15 to 20%. You know, somebody's looking to really keep things lean and to set themselves up with all the options down the road.

[Joel]

Okay.

[Matt]

You end up losing one of the two incomes that you're counting on as a household, and all of a sudden you shoot from, you know, let's say you were more on the conservative side and you're at 15% of overall take home. And now, okay, it jumped from 15 to 28%. That's not a deal breaker. Right. As opposed to having shot for. All right, we're going to push the envelope a little bit. This is like over a third of our take home. This is like 30 seconds of our take home. Someone loses a job and all of a sudden it shoots up to like 52% of your. Your overall take home. That's the kind of position that would put somebody in a really tight spot. And Bailey, I would certainly hate to see you there. I don't think that's the. Where he's going to end up. Agreed. I think for a lot of how to money listeners, it's honestly pushing them more into the direction of maybe taking more risks. I'm not, I don't want to encourage folks to do that, but I think we've got a lot of very smart, financially savvy listeners.

[Joel]

I have always. Matt, I think you and I view housing a little differently, and I think that's partly because you're more willing to cut back in some other areas of your life and spend more in housing. And I just think, like, that's just a way in which you and I differ. But that's totally cool. Like, you guys have remained one car. I really like having my second car, even though it's, even though it's old. It's sweet. But I love, I love the idea for me, like housing and transportation, my viewpoint has always been if I can keep those incredibly reasonable to where there, it wouldn't be painful, right, if something significant happened to us, trying to cover that monthly mortgage or something wouldn't be a worry. And maybe that's just my overly conservative nature. But I love living life like that, where I just, I know it's never going to be burdensome because of the way I've set my life up and because of what a minimal percentage. Right. Of my income is dedicated towards housing costs. Like, it's not insignificant, but it's far less significant than I think most people would assume you should be. I should have bitten off.

[Matt]

That's right. Hey, we got more to get to. We're going to take questions about Airbnb. We're going to talk about boats. Not in the same question. We'll get to all that more right after this.

[Joel]

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[Matt]

Yeah, posting a job, that's not always the hard part. It's the finding, connecting with and screening the right candidates. Hiring Pro streamlines the entire process from drafting your job to shortlisting candidates and conducting AI powered interviews for initial screenings, all through a conversational interface that lets you describe what you need in plain language. Nearly 60% of hires find a candidate to interview within a week. With Hiring Pro, you spend less time searching and more time connecting with the right talent.

[Joel]

Hire right the first time. Post your first job and get $100 off towards your job. [e-mail] howtomoney that's LinkedIn.com howtomoney Terms and conditions apply.

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[Matt]

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[Joel]

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[Listener Bailey]

you guys could talk about retirement rollovers, the penalties, benefits, anything like that.

[Joel]

Just the basics about retirement retirement account rollovers. Thanks. Rollovers.

[Matt]

Joel, let's get to it man. Charlotte, thanks so much for sending this hour away. And the first question is whether or not I think you should do a rollover from your retirement account. Your retirement account so your 401k into an IRA. But the devil is in the details and we'll get to that here in a second. It's also important to mention that you likely won't be able to roll over from your workplace retirement account if you are still contributing to it. It is possible if your employer's plan makes an in service rollover exception. But you do need to know the details of your plan and even as well. I'll say even. Aside from that I'm thinking about I was considering you remember back when Robinhood was offering the match on rollovers as well. That's something I looked into because I'm like, man, that's. I think it was like 3%. And so it wasn't nothing. But because our current 401k, our solo 401k was still active, they're like, no, because we are the managers of our plan. And so I would, as manager of our plan, Jewel, say, yeah, that's totally fine, I allow for that. But even still, Fidelity and Robinhood were like, no, we're not going to allow. Even though you said that's okay, we're not going to do that.

[Joel]

Yeah. So there are just all sorts of like in the weed stipulations. And part of it is plan to plan. And so, yeah, if you are still currently in this plan, it's unlikely that you're going to be able to pull off a rollover. The main reason to get out of your current retirement account and to pursue a rollover, though, would be if the fees were too high or, and we're going to talk about this too, if your old 401s fees are too high. And so that largely depends on the brokerage that your employer uses. If they're using one of our low cost favorites, you're probably fine. Right? No need to make a change. No need to try to get out of there as quickly as possible and migrate into your own ira. If fees are reasonable on index funds or target date funds, like fees might be unreasonable on a bunch of other investment vehicles that your employer offers, but if they're at least reasonable on the funds that you want to choose. Right. Then stay put. Right. If I would say what is reasonable, that's kind of hard to define. It's a little nebulous. But if you can get access to funds that are widely diversified, that make sense for you, that are below 0.2% expense ratio, then I would say there's no need to stress yourself out and try to get out of there. And so typically when folks are talking about doing a rollover, though, it's from a plan they had with a former employer. That's most of the time what we're talking about. So, Charlotte, I'm not sure you didn't mention if you had a 401k that you are holding on to. It's got, you know, maybe a significant amount of money from a job you used to have. If that's the case and the fees are high in that plan, there's just almost no reason not to perform a rollover. Right. In order to give yourself Better investment choices. And it just also gives you the chance to consolidate and potentially have all your accounts under one login with a great low cost company. Which just from a behavioral and monitoring standpoint is just nice for a lot of people to be like, oh, all my money. Or it's all. Even if it's in a couple of different vehicles, couple of different accounts, it's all with one company. I can log in, I can see

[Matt]

it all in one place, one login to rule them all.

[Joel]

Which is nice.

[Matt]

I mean, that's what you're advocating for here.

[Joel]

You can kind of get that through a monitoring service, right? Let's say you, you sign up for Monarch, you can see all your accounts in one place there. So that's nice. But still, I think for a lot of people, from a behavioral perspective, they enjoy saying, oh, everything's with Vanguard, everything's with Fidelity, or everything's with Schwab.

[Matt]

Yeah. Or is it nice to have them all spread out? That way you don't feel richer than you are and end up spending perhaps more than you want to. But while we're talking about rollovers, it's important to go for that trustee to trustee transfer because what. So that's called a direct rollover. And basically you don't want to check mailed to you because the clock is ticking once you initiate the process. And if you fail to get that money into your new account on time, you have officially initiated a significant taxable event. And unplanned taxable events aren't how you build wealth. This is something you can do yourself for sure. That being said, we are fans of a company called Capitalize, which will help you to execute a rollover flawlessly for free. This is something that you, you participated in. Like you went with Capitalize many, many years ago now, right?

[Joel]

Yeah, it was with my wife's old workplace retirement account. And there were even. She was with such a small company that I couldn't even do everything through their automated website. I had to actually call a human at Capitalized. But they were so nice and helpful and they made it like, is it something I could have done myself? Yes. Was it easier because Capitalized helped me also. Also yes.

[Matt]

Kind of held your hand along.

[Joel]

It didn't cost me a dime, which is nice as well.

[Matt]

So that's nice.

[Joel]

Well, we'll put a link to our review of Capitalize up in the show notes. But if you're like, I think I do have an old 401K. It's been lingering around. Yeah, I'm probably am paying too much. Maybe I should clean up that part of my financial life. Capitalize is an awesome company who can help you do that for free. They'll make it a lot easier than it would be. Less, less painless than you trying to go it alone.

[Matt]

That's right.

[Joel]

Yeah. A couple of things too that you're going to want to consider before doing a rollover is I mean, hey, 401ks, they're actually more impervious to lawsuits like that. Money is essentially impossible to get if you're sued and found liable. Whereas your IRA money past a certain point is more easily accessible. So there's that. There's also something known as the rule of 55 which makes it easier to draw down funds without tax consequence at an earlier age that you lose when you turn $401 into IRA dollars. Those don't affect too many folks. I think one other thing that's worth mentioning is that it can be, it can become harder to do a backdoor Roth IRA in the future because of the pro rata rule as well. So there are just another, smaller things, not huge, major things that can impact whether you decide to do a rollover or not as well.

[Matt]

That's true. And those do impact almost everyone out there. I want to mention something that might impact, I think fewer folks out there, but the impact that it could have on them could be incredibly significant. That being something that's called the net unrealized appreciation. And basically this is a specialized tax strategy that allows you to essentially rescue companies stock from your 401k so that its growth is taxed at lower long term capital gains rates of so anywhere between 0 and 20% rather than higher ordinary income tax rates, say up to 37%. So, and this isn't something that you asked about Charlotte, but when you move these shares directly into a taxable brokerage account, you only pay ordinary income tax on the original price that you paid for that stock. So the basis, while the potentially massive mountain of growth remains tax deferred until you actually sell the shares. And so this might be a reason that you want to keep an old 401k around specifically to keep this as an option for you. Because as soon as you roll that company stock into a new 401k or an IRA, that net unrealized depreciation, so the NUA that eligibility is completely gone, which would then potentially cause you to have to pay a ton of money in tax payments. And that's assuming that the stock has significantly appreciated. And I mention this because I Think more, folks. I've been shocked because normally we say, when we talk about company stock being an option for folks that like, oh, get that. You don't really want to put all your eggs in one basket.

[Joel]

No, you don't.

[Matt]

The more people I talk to, I am surprised at how many people own their company in their 401ks. And I don't know what's going on, man. Like, I don't know if it's like this. Do it for the team. If there's like this unspoken pressure, like from hr, Rah, rah.

[Joel]

Rallying cry.

[Matt]

Yes. But the more people I talk to, they're like, oh, yeah, I've got a bunch of my company stock in my 401k, which it really surprises me. So I don't know, maybe if there's something I don't know, since we work for ourselves, Joel, and we're not like these kind of corporate tech guys, we might be out of the loop here. So reach out to us, fill us in if that's something that we're not aware of. But basically, when you keep that 401k alive, those shares of that stock are still considered company shares. But if you're trying to move that to another 401, well, all of a sudden those are just normal, ordinary stock shares. So they are no longer immune to tax at that point. So it's really fascinating and it's a great argument for moving it to a brokerage, taxable brokerage account, or I think the better option most likely is just to keep it there at the existing 401k so that you have that option down the road.

[Joel]

And probably the best option is just to not buy company stock in any form or fashion for the company you work for, because like you said, you are just creating more risk in your life than is necessary. Your income is already dependent on that single company. So don't own stock of that company. Unless we're talking about an espp, which is a topic for another day. But just really quickly, we've been talking about rollovers. Wanted to briefly mention conversions, which are different conversions, essentially turning those traditional dollars into Roth dollars, which can make sense for some folks who want to pay tax now in order to reduce future tax obligations. I don't know if that's what Charlotte is looking for either, but that's something you want to do really carefully, potentially with the help of an expert, because there's a lot of taxation at stake. And yeah, that's what you can read up on Roth conversion ladders and stuff like that. But hopefully that helps at least, Charlotte, you understand how rollovers work and whether or not it might make sense for you. That's right.

[Matt]

The potential tax implications specifically. All right, Joel, let's hear from another listener who actually, he is new to the show.

[Listener Bill]

Hey, guys, my name is Bill Tall. I'm a brand new listener to your podcast. Really appreciate what I'm hearing so far. I'm from Chesapeake, Virginia, and I have a question for both of you. Hopefully you can help me navigate it. I'm a little later in life. I've already retired from one job, have started a new job and making pretty good money. I currently have a boat debt that I've had since 2021, and interest rate's kind of high and I owe about $30,000 on this watercraft. I've been paying payments on it, but based on interest, I'm not really making a big dent in it.

[Joel]

It.

[Listener Bill]

I'm torn between pulling money out of savings to just pay the debt off in one fell swoop because I really don't want the monthly payment. Can you give me some strategies? I have a pretty robust savings. I have other investments, but I'm not interested in depleting those in order to pay this down more quickly. Any suggestions you might have, I'd greatly appreciate.

[Joel]

Bill, glad to have you on board. As a new listener, I was going to use some. I was going to tell him to swab the deck, Matt, but I don't know if that's.

[Matt]

I felt. I felt you going in that direction.

[Joel]

Yeah, Sorry.

[Matt]

Okay.

[Joel]

But, dad, puns are strong with me before.

[Matt]

I don't. I don't think you were. You were planning to talk about this before we even start talking about the boat and the debt and whatnot. I just noticed that he mentioned how he had already retired once from one job and how he's got a new job, which is awesome. Bill, I love that it seems like you shifted gears and essentially there's like another boat joke in there. Do other gears with boats.

[Joel]

How many knots are we going right now?

[Matt]

But it seems like he's taking more of a gradual approach to retirement. So I don't know. I'm just assuming that he quit something that was maybe higher paying but also higher demanding, and maybe he's doing something that allows him to have a little more time doing something like boating around, enjoying some of his free time. So I just love that approach to retirement. The fact that he said, I already retired now. I've got this other. This other gig that. This other side job.

[Joel]

It's paying him well, too. Yeah, exactly.

[Matt]

It's not even a side job. It's not like he's driving for Uber or something like that. This is something that.

[Joel]

Working by choice, it sounds like.

[Matt]

Yeah, he doesn't have to, but he's choosing to.

[Joel]

But. Okay, let's talk about the boat, because this is ultimately why we're against financing depreciating assets. Right. Especially non necessities. Financing a car is ill advised, but financing a boat or an RV is something we're even less keen on. We just don't want people to do it. Bill, you purchased this boat five years ago and you still owe 30,000 bucks on it. I know boats can be incredibly expensive. I kind of looked into it, Matt, and I was like, oh, sounds like it was an expensive boat. And then I did a little bit number crunching and I was like, actually, it probably wasn't that expensive a boat. Like boats can get really crazy expensive really quickly. So it's obvious he didn't buy a fancy yacht or anything like that. But that's still quite a balance to have after paying for half a decade. You didn't actually state what the interest rate was or how much you have in savings beyond the payoff amount. Those are key items that would help us deliver, I think. More specific advice, but getting rid of this boat debt is, I think, a very high priority.

[Matt]

Totally. Yeah. We also don't know what other debts he has, so he didn't share that as well. But we'll still do our best here. So, first off, I don't want you to zero out your savings completely, and it doesn't sound like you want to do that either. But let's just say, okay, so you owe $30,000. Let's say you've got 30,000 and savings. Well, I think it would be highly unwise to pay off the balance and then leave yourself completely exposed to any sort of financial emergency that could come along. But still, I understand that it's hard to ignore the emotional reality of feeling stuck with a big payment for potentially many, many more years. And the mathematical reality, honestly, of your. Of your interest rate being far worse than what your savings can earn. That's something you have to wrestle with as well. I'm not sure of the gap, but I mean, we could be talking about like 12% interest rate on this boat loan and, you know, 3, 4% easily on your savings. So there's that mathematical what do the numbers say reality as well, that might be causing him to want to jump ship.

[Joel]

Man overboard. Yeah. I mean, probably not as as bad as credit card debt is. My guess, like we don't know the interest rate on this, but also not as insignificant or not nearly as harmful as a mortgage loan that somebody took out six years ago. And guessing somewhere in between 3%. Right? Yeah. And so again, we don't know the interest rate, but if we're talking about something at that level in the double digits, lean towards reducing savings to digit. Because if you can pay off the boat in full and maintain a decent two month emergency fund, even do it if you can't take as much of your savings, I think as you possibly can to throw at the boat debt while still leaving a reasonable cushion and then you can pay down the rest of the balance after that. That way you're making meaningful progress either way. If the interest rate on this boat is closer to 6 or 7%, you might just want to be a touch more cautious. But I think a good question to ask that can shed some light is if I didn't already own this boat, would I take out a loan at this rate today in order to keep this cash on hand? If you think in those, while also avoiding a zero savings reality, I think that can be clarifying totally. But he also said, hey, I'm making good money in this job. I think if he eliminates the majority of his savings while keeping some intact to pay off the boat debt, he could probably replenish that emergency savings fairly quickly.

[Matt]

Yeah, he could get serious about it. I like what you said about hey, would you get this boat now given the terms that you have? Because essentially what you're getting him to not continue to do is potentially engaging in sunk cost fallacies which is that, oh, this thing isn't returning what I thought it would because of the money I've already poured into it. I'm going to keep going in that direction. Right. Like another, like a classic example I feel like is, oh, I spent a lot of money on these concert tickets. I'm deathly ill, I'm terribly sick and if I were to go to the concert I would, it would be a miserable time. But then you end up going because you're like, but I spent so much money on the concert tickets. And of course this.

[Joel]

And then you die at the concert. It's just woo one worth it.

[Matt]

This just assumes some magical concert ticket that you can't sell for some reason either. But we want to make sure that you're not keeping this thing around because of what you've already sunk into it. You need to not Pay attention to that, because then you'd be pouring more good money in after bad. And I think it's worth asking in a similar way, asking the question too. Are you getting the kind of value out of this boat just moving forward that you thought you were? Right. Like, there might be a part of you that's saying, well, man, I got some great memories. We had a great time. I think that's totally fine. And you can remember those great times that you had, but maybe it's not worth the additional expenses associated with the boat, like the slip fees. And maybe you have to store it somewhere.

[Joel]

Right.

[Matt]

Like, I know somebody, Joel, who, gosh, he didn't even tell me directly how much he spent, but he. The engine of the ski boat seized up because they, they weren't checking the oil. And I know he spent at least $10,000 in order to get this, this, this boat back up and running. And so, like, these are the kind of expenses that could just, man, really throw a wrench in, in your personal finances. So you kind of. Or an anchor.

[Joel]

Well, I don't, I don't want to hate on somebody. Some people purposely spend on boats because, like, my, my uncle loves his boat.

[Matt]

If you love it, I am all for you continuing to keep that thing around. I love that you love that thing,

[Joel]

but make sure that you love it enough. I think on the, on the front end, like, rent one for a whole summer. See how often you get out there.

[Matt]

Yeah.

[Joel]

And then if you're like, this is. Oh, this is my jam for all the would be boaters out there. Yes, exactly. Just it's. I've known way too many people who are just like, that sounds like fun. Let's go for it. With an RV and a boat. I feel like they're very, very similar type of purchases, kind of adventure vehicles. Like, it's. You can envision yourself doing certain things, but unless you have created a pattern and you're like, oh, this is definitely my thing. I've been out on my friend's boat like five dozen times and I, I truly love it. I've got, I'm bitten by the bug. I've got a passion for it now. Gotta find a way to sink to get the money so that I can sink it into this hobby. Because it's truly a hobby and a passion of mine now. But until you, I think, have proven that out, don't go all in and buy a boat or buy a ridiculously cheap one, I guess. So you're limiting your potential losses. Totally.

[Matt]

Yeah. I think he Just needs to crunch the numbers as well. I think you need to find out how many, how much savings you can reasonably part with in order to reduce the balance and then find out how much free cash flow you can throw towards the debt in addition to that every single month. And you can kind of map this out and know the payoff timeline which when you have an end date in mind, I think that can go so far as far as keeping you motivated to know that, like this is when I'm going to hit this goal. Like right now I think he feels like he's just making these payments and it feels like it's going out into the lake. Like it's just money going overboard. It's going into the void as opposed to having a plan to where he knows that I will be done with his debt at this so and so date. And I think if you have that in mind, assuming that you love the boat, then you can boat with confidence. You know, like you can literally know that, oh, this is going to be limited by then and I'll own this thing free and clear and that'll be a great day.

[Joel]

Yeah, for sure. All right, we got a couple more questions to get to, including paying for your, your down payment by selling stocks. We'll talk about that and more right after this. For small businesses, every hire matters, but the time and resources required to hire right are Limited. Luckily, LinkedIn Hiring Pro is built for that reality. It's your hiring partner designed to help you hire with confidence by surfacing only the right candidates without turning hiring into another full time job.

[Matt]

Yeah, posting a job, that's not always the hard part. It's the finding, connecting with and screening the right candidates. Hiring Pro streamlines the entire process from drafting your job to shortlisting candidates and conducting AI powered interviews for initial screenings. All through a conversational interface that lets you describe what you need in plain language. Nearly 60% of hires find a candidate to interview within a week. With Hiring Pro, you spend less time searching and more time connecting with the right talent.

[Joel]

Hire right the first time. Post your first job and get $100 off towards your job. [e-mail] that's LinkedIn.com howtomoney Terms and conditions apply.

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[Joel]

I love to travel and one of the most rewarding experiences of my life was traveling all around Australia. I hit up the great city of Melbourne. The coffee scene was incredible. Had my first flat white there and now it's my morning drink of choice. I took a lovely road trip down to the 12 apostles, which is a beautiful collection of limestone rocks jutting out of the ocean, catching some breathtaking views on the Great Ocean Road. And of course I found a great local brewery, the Great Ocean Road Brewhouse. Snagged a couple of delicious beers and I've still got that T shirt. I even hopped on a plane to visit the delightful island of Tasmania. Hobart is one of my all time favorite towns and visiting the Mona while there was one of my highlights. My trip to Australia was one of the best investments I've ever made. I loved every minute. The wildlife, the culture, the people and those memory dividends of our epic excursion. They keep paying off every time I see a picture of that trip or I reminisce with my travel companions. Australia is a destination that proves joy and financial wisdom can go hand in hand. Explore more destinations in Australia and start planning your memorable [e-mail]

[Matt]

all right buddy, we are back from the break. It is now time for the Facebook Question of the week, which is from Michael. Does anyone have experience with renting out their primary residence under the 14 day rule? I live in Boston and the FIFA World cup is occurring this summer, so I'm exploring the idea of renting out my condo. It's on the commuter line that heads directly to Foxborough Gillette Stadium, but also near the T to spend time in the city so conveniently located. You're basically saying it's a good. It's gonna be a good rental. I'm looking for advice of 1 what sites to use, 2 reasonable precautions, 3 timelines and 4 I wish I'd known this before renting out my place. And dude, 14 day rule. This harkens back to Augusta, Georgia.

[Joel]

Where are you from?

[Matt]

My hometown. Because of the whole Masters.

[Joel]

That's right. This is literally where it came from.

[Matt]

Yeah, this.

[Joel]

This loophole in the tax code.

[Matt]

Yeah. Nobody knows the true. It's like 280 or 208 or something like that. Is the actual like 401k, you know, sort of. But no one, no one calls it that. It's the 14 day rule because it's

[Joel]

the 14 day or the Augusta rule

[Matt]

should be called the Augusta Rule.

[Joel]

Right. And this is because people would rent their house out for what, 10 days to two weeks for the Masters or.

[Matt]

Yeah, not quite. Yeah, one. One whole week. Yeah, for sure, for Masters week.

[Joel]

But I think they just expanded it a little bit just to just in case. Yeah, but, but yeah, if you rent a place out for 14 days or less in a calendar year, you do not have to report that income on your taxes. You also can't deduct rental expenses that you incur. Michael. But like, this is, this is a real loophole for people who like to rent their spot out occasionally, like for a massive worldwide sporting event. Right.

[Matt]

That only happens once every four years,

[Joel]

perhaps, and even still not in, not where you live. Right, Like Olympics or once in a lifetime World Cup. Exactly, exactly. But this, once, this offers a once in a lifetime ability to make significant non taxable money. And it just, it just doesn't get much bigger in the World Cup. Matt. I've got pretty cool a couple of rental properties, you know, within spitting distance or a couple miles, let's say, of the World cup site in Atlanta where we live. And I have them under long term rental obligations. But part of me was like, oh man, should I not sign another lease with you?

[Matt]

I wonder what I could do.

[Joel]

Are the stakes that high that I could have done much better and it would have been worth jumping through the hoops to do to turn them into short term rentals. I ultimately didn't do that. But I am curious when you look at some of the headlines and you read some about what some people are able to make it premier sporting events like the World cup, we're talking big money.

[Matt]

Yeah, yeah. By the way, if you rent it for 15 days, all bets are off and you're getting taxed on that money. So make sure you keep a good record or a good log, which I will say you're asking about site Airbnb even furnish finder, they make that pretty easily. Right. So they've got the records there as far as how much you've rented it. But honestly, Airbnb, they kind of corner the market for stuff like this furnish finder. It's typically best when you're looking for listing your place for longer stays. So. Yeah, and this Airbnb is not even paying for this. Us talking about it here, which by the way, they used to. No, I mean, not like the actual content I'm talking about.

[Joel]

We used to have Airbnb ads.

[Matt]

Yeah, Airbnb ads So reach out to your boys over at how to Money Airbnb. But, Michael, before putting your listing out there, do some research. Do a detailed analysis of what you should be asking. Air DNA is a site that's got a lot of great information and stats, and it's live. And so they're able to give you all the latest information because you really might be talking about close to like $1,000 a night, maybe like, maybe even more. It just depends on what folks are. Are spending.

[Joel]

Depends on the competition. Depends on. It sounds like proximity is really good. It also depends on which matches. Right. Like, are going to be at the stadium nearby. And I forget which rounds are where and whether in New England, if they're going to have, like, the semis. Semis, yeah. The closer you get to the finals, you're talking about bigger money than even

[Matt]

more, you know, like. Absolutely. I will say, like, while we're talking about Airbnb, having had experience there, I think the biggest thing I would be concerned about is someone showing up because, again, this is like a potentially once in a. Like, you don't go to the World cup all the time, so somebody who might be running for them, it's a once in a lifetime experience as well, and they may not care what happens to your place. And so I would be. I would turn off. Personally, I would turn off the instant book feature because I think I would want to review folks who are. Look or who are trying to book my place. And I would be. And this is something that you're totally allowed to do, but I would be, I would even spell it out and say, hey, I'm only accepting highly rated renters. That is totally something that you can do. Someone who has broken house rules previously, like, that is something that is somebody you can deny, you can't deny based on, like, vibes. Like, if that's the case, there's a

[Joel]

good chance you're discriminating A scowl, not a smile in their picture.

[Matt]

Yeah, you want. You want to avoid that. But you can totally only rent to people who are incredibly highly rated on Airbnb.

[Joel]

And I'd say don't forget to take great photos. Write a description that caters specifically to the World cup crowd. Like, you can actually soccer specific, tailor your listing. Sell your place well. Right. I'd want to list as soon as possible. A lot of those places have already gotten booked or people are booking now. Also, though, if you're willing to gamble a bit, you might find that prices go up closer to match date since there will be fewer options and maybe less competition out there. So that's at least worth considering if you're. If the trade off of potentially making more and maybe not being able to find someone at a last minute or with also the potential of being able to get a much higher price. If you're willing to make that trade off, that gamble, then consider it. And, and you might also want to. I think another way to protect yourself is consider a minimum stay length so you're not having like tons of turnover. Especially since you don't typically host. I don't know how far you're going to be staying. Are you going to go come in there and clean the unit yourself, like do all the laundry, get things set back up. But it's at least worth considering like oh, maybe if I have a minimum four night stay or something like that or a three night stay and target

[Matt]

again those highly desirable matches as opposed to. Because again we're talking about being able to take advantage of the 14 day. You're not listing it, listing it all summer, making sure you're targeting the specific matches. Yeah, I don't know how many are being played at Boston specifically, but it's

[Joel]

one of those things. Maybe they're coming for multiple matches or maybe they're coming for a match and to enjoy the city. But anything that prevents you from having like three or four one night stays that make it a little bit more difficult to manage. I think one other thing, Matt, you're highlighting like vetting people who are going to stay at your place, which I think is helpful. It's also helpful to meet them. I think when you shake somebody's hand, you look them in the eye like when they tend to take care of your place differently than if you just have an automatic code to let them in. Airbnb sure have more of those vibes. It doesn't anymore. But if you can be the host who's on the ground, who actually meets them, Even that just 15 minute interaction or 5 minute interaction can make a difference.

[Matt]

Less likely to trash your place. Yeah. All right, let's take another one from Lucas, who writes a lot of the money I'm planning to use for a down payment is in stocks right now. Our timeline for buying a home has moved up and we may be looking as soon as late March. That's really soon. Do I go ahead and sell those stocks now or is that much of a cash inflow going to look weirdly suspect? Normally we use better mortgage due to no fees, but. Not sure if I can explain my situation. Well to the online helpbots. Not sure if the timing of selling my stocks mattered. What'd you think, Joel?

[Joel]

Online helpbots not so helpful. Not always helpful. Well, it sounds like it's time to sell right from if I was in Lucas's seat in his position, I would want to sell the stock holdings. I just wouldn't want to risk a quick market correction, a decline in purchasing capital at this point in the game. We're very close. Typically we would suggest people sell far in advance. Although Lucas, like a year or two. Yeah. Lucas has benefited, I would say though from staying invested. One big thing to consider though is tax implications of this sale. How long you've owned those positions is important because it'll determine whether or not you pay the more favorable long term capital gains rate or not. Know that even if it doesn't change how you proceed, because it might not, it sounds like you need this money for the down payment no matter what. I guess I would also just consider yourself fortunate that your investment's done well and that despite this quicker timeline, you're in a great position to sell.

[Matt]

Yeah. And by the way, it's not going to look sus to sell your stock position. You need to be professional about it. You got your documents that you are likely going to need to submit there as you apply for your mortgage, like your most recent brokerage statements for the past two or three months. You're also going to need to have the proof of stock sale and then I think the corresponding bank statement showing that the funds actually landed there in the account that you're using. This is a totally normal thing. Lenders are, I think, are honestly more and more used to dealing with this these days than even they were, you know, 100% 10, 15 years ago.

[Joel]

Well, our friend Rob, who's a mortgage lender, who's awesome, I've used him before, he is a part of the how to money community in the Facebook group. He said in reply. He said you shouldn't be picking a lender solely based on fees. It should be the rate you're getting in any points paid for it plus fees. He said a higher rate would likely offset those fees in a short time period. And Rob's spot on here. Rob's got so much wisdom in this area. It's just crucial to mention that some online lenders, yeah, they might offer better rates and potentially lower fees, but some don't. Some of the overall best overall mortgage quotes we've received have come from local credit unions and banks. And one other benefit of using a local credit Union or bank is that many of those local lenders are better at sticking to a tight closing timeline. So if you're like, I gotta close in three weeks. Well, some of those online companies, they're not as adept, not quite as nimble. Yeah, yeah, not as nimble. And so when you have a personal relationship with somebody, and I'm not saying it justifies paying a much higher rate or much higher fees, but I think it has been beneficial for me in the past. I've been able to get kind of the best of both worlds. And this is another reason to get multiple quotes and not just go say, this is usually the best. And based on their marketing and based on the time I use them before they had the best rates and lowest fees, you need to check every time because the stakes are significant. And we've talked about, Matt, some of the mortgage products at local credit unions right now, how much better they are than what you're seeing out there on the major websites. So shopping around for a mortgage every time with multiple lenders is like a non negotiable necessity.

[Matt]

Heck, yeah. All right, dude. The beer that you and I enjoyed was Harpeth, which is a double IPA by Living Waters Brewing. What'd you think? This, by the way, this is a West Coast IPA with pecharine, pecorine, I don't know, Chinook and Columbus cryo hops.

[Joel]

Yeah.

[Matt]

Could you taste the cryo? I don't know. I don't know.

[Joel]

I don't know what it tastes like. But I will say I used to not Love West Coast IPAs very much. Just a little too bitter, too mouth punchy. This, this like new breed.

[Matt]

Yeah. New wave of West Coast.

[Joel]

It's like, oh, man, I'm getting kind of the grapefruit and the pine.

[Matt]

Dude, I totally wrote down, like, I feel like I was drinking grapefruit juice, which typically sounds thin and sharp, but like, this was so savory at the same time. This is a. Like, I'm normally not a fan of West Coast IPAs, but yeah, like, you have the immediate west coast sort of pith, but also it balanced out. It finished out real smooth. Didn't leave you just with that sting stinging on your cheek from slap.

[Joel]

Yeah.

[Matt]

Finish strong.

[Joel]

Yeah. Not. Not. It wasn't mouth busting in the way that I think old, old West Coast IPAs were.

[Matt]

That's what they're going for back in the day.

[Joel]

Yeah. Like ever.

[Matt]

I'm gonna wreck your palate.

[Joel]

Well, there was. Yeah. They literally had beer's name, palate record and. And and that ilk just was too much for me to handle after a while even though. And so I don't know, it's nice to get that flavor profile without the full on assault of your mouth. Totally agree.

[Matt]

This was a good one. Glad you and I got to enjoy that. We got to share this one but that's going to be it for this episode. Folks can find our show notes up on the [e-mail] including links to any resources we may have mentioned or past episodes that we may have mentioned. Like the conversation with Zeke Fox about Bitcoin. And you mentioned one too, I think

[Joel]

in that Capitalize article. Oh yes, you want to roll over your old 401k, avoid fees. Do it for free. Make it easy. That's a great place to turn.

[Matt]

Heck yeah. And of course that'[e-mail] buddy. That's gonna be it for this episode. So until next time, best friends out Best. Is it just me or is it getting really hard to figure out the best way to save for retirement? Well, Fidelity can help you to find clarity so you can save the best way for you. With a free personalized plan, goal tracking and timely insights, you'll be set to take on retirement your way.

[Joel]

Get [e-mail] future expenses charged by your investments and other costs and fees associated with trading or transacting in your account. Apply Fidelity Brokerage Services Member NYSE SIPC

[Julian Edelman]

this is Julian Edelman from Games With Names. I want to take a second to talk about something that's personal to me. I've had the privilege of working closely with Robert Kraft for a long time, and one thing I've always respected is how seriously he takes up standing up to hate. As a Jewish athlete, my identity is something I am proud of, but I also know what it feels like to be singled out for it.

[Matt]

It.

[Julian Edelman]

That's why this new commercial for the Blue Square Alliance Against Hate that aired during the Big Game really hit home. It's about showing up for someone when they're targeted, even if you don't have the perfect words. And sometimes standing next to someone is enough and you can show support by sharing the Blue Square.

[Matt]

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[Listener Bailey]

Savings with three plus lines include third

[Matt]

line free via monthly bill credits. Credits stop if you cancel any lines.

[Joel]

Qualifying credit required.

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