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How to Money
Ask HTM - Inflating the 25x Rule, Online Car Refinancing, & Affordable ADUs (Bestie Ep) #1125
00:53:26
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- [00:00]
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Matt
Guaranteed Human 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.
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Joel
Get started@fidelity.com 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
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Matt
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Matt
Hey folks, Matt here. And just so you know where Joel and I live, it is the week of spring break, which means kids are out of school, which means we're spending more time with them. Which, you guessed it also means a bestie episode for y'. All. We've got a great ask how the money episode here for you and we'll see you back here with a fresh one on Monday.
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Joel
Welcome to how to money. I'm Joel. I'm Matt and today we're answering your listener questions.
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Matt
That is right. It's Monday. We've got listener questions to get to including. There is one listener and she's asking about the 25x rule. The 25 times your annual expenses rule. Whether or not it's something we still like, and in particular the impact of inflation on the 25x rule.
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Joel
We'll get to that question.
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Matt
Another listener is wondering whether or not she should refi her car loan with an online company. She's Come across a couple of them that were offering really competitive rates. We'll get to that. Plus another listener is wondering if he should finance an adu, an accessory dwelling unit. He's looking, looking to do some house hacking. By the way. Have you noticed the right down the street from us, there's like they're building an adu. It's like a little carriage house, garage in the back.
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Joel
That thing is huge. It's a big one.
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Matt
Like initially it looked like it was just going to be a small garage, but I mean two stories, certainly one garage door opening and then it's a house. It's like a 2,500 square foot house that they're building.
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Joel
Other buildings are usually what, like 5, 600 square feet? Maybe 700. This one might be even bigger. Yeah, I'm depending on how much it looks. Awesome. They've dedicated to garage space I guess, right?
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Matt
Yeah, yeah, just. I guess that's something I've been talking about recently too because like we're in a four bedroom house and there's six of us. Like we know like at some point it's not that we need six bedrooms, but five would be great, you know, for the girls, a couple of the girls to not have to share a room. We're trying to, man we're starting to wrestle with that.
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Joel
We're trying to figure out leaning in that little House on the Prairie lifestyle, man.
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Matt
It's not like as the kids get more stuff, it's. It's a discussion that we're having that's
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Joel
all older, more independent, want more of
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Matt
their own space with their own space. They're into different, like where are they gonna practice piano? Like the ability for them to do some of their own things doesn't, it doesn't always take place in like the public spaces. And I don't know when I saw that literally right before we sitting down right here to record, I walked past it and I was like that thing is nice. Just envisioning what we could do if we decided to build something like that. But I gotta think that that thing's gonna cost whoever, I don't know, whoever is building nothing. Like, what do you think? Like 150 easily, if not 200k to basically build another house. Anyway, tangent. That's not what we're talking about. We're going to talk about ADUs later in the episode. But real quick, I wanted to share, man, that I just dropped, speaking of the Almix family spending a lot of money. I just dropped 615 bucks in order to repair the van. It made me think a couple of things. First of all, it made me glad, first of all, that I had the cash on hand to be able to pay for that. The ability to not have to tap into your emergency fund, but to literally draw on the savings bucket where I'm sitting. Like, literally. We set aside 80 bucks a month to cover this expense because these things come up right. Not just your oil change or tires, whenever that happens, but some of this additional work that's going to be required. I got a valve cover, gasket, plus an adjustment.
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Joel
Sounds like a car part.
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Matt
Evidently it just helps the engine to run smoother. And I will say it's much, much quieter, which is nice.
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Joel
But.
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Matt
But the second thing I wanted to mention too, is that there might be some folks who find themselves in a similar position and they're like, man, that is so much money. Is it even worth it to go ahead and do that? Maybe instead I should just go buy a new car. Like, what's a. What's a new car payment? Well, it's a lot more than. Well, I guess it's not a lot more than 650. I looked it up. It's $725 for a new car. That's the average monthly car payment.
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Joel
That's the average monthly payment every single month.
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Matt
And so that is a ton of money. And so resist the urge. I'm just putting this out there. A little psa. Resist the urge to buy a new car. When you're facing, when you're looking down the barrel of some car maintenance issues. Take care of your car. Right. Like, go ahead and go in for that maintenance because that is what is going to allow you to continue to drive that old car. Like literally, not even for just years, but even for decades down the road.
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Joel
Yeah. The new TO US minivan that we bought this year after we got rear ended and the old minivan got totaled, well, we had two big expenses that happened within the first three, four months of ownership.
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Matt
How to get that AC topped off.
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Joel
Yeah, well, the ac, I forget. It was like basically the compressor needed to be replaced.
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Matt
The actual unit.
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Joel
Yeah. So that was like 800 and some dollars. And then. And the alternator crapped out on the way down to Florida. That was another 800 and something dollar fix. Or it was like seven, whatever. And so I'm like, a lot of
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Matt
folks are saying, whoa, a lot of money, boys.
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Joel
Yes.
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Matt
You're dropping on your old crappy van 100%.
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Joel
It certainly is. It is a lot of money. And some of those things, man, do I wish the alternator had lasted longer. Sure, of course I do. But these are the kind of things that come with owning an older car, and maybe the expenses are harder. I remember actually having a conversation with somebody about this on Twitter now X. I guess about kind of. She was like, well, once I bought a new car, it became easier to budget. And I get that it's easier to budget, but it doesn't mean that you're going to save money.
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Matt
It does not mean it's more affordable. Because, yeah, it's easier because at the beginning, you don't have any maintenance, like 25,000.
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Joel
So really, it's just. It's whatever the car payment is that, that I've taken out, it's. That's the monthly expense.
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Matt
And, like, I can then slowly start building up. That doesn't mean it's more affordable.
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Joel
I like predictability, but I would rather save money and have these less predictable expenses come up and just have saved more to be ready for them to be able to handle them. So.
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Matt
Absolutely.
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Joel
Yeah, I agree. When you see how much car payments are, how much new cars cost and how much interest rates are on cars as well, which we're actually going to talk about that in just a second with wanting to refinance a car. But, like, when you. When you take all those things into consideration, I would say, yeah, keeping that used car alive makes a whole lot of financial sense.
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Matt
Nice. All right, let's go ahead and introduce the beer that you and I are going to enjoy during this episode. This is, I guess it's a fest beer. And this is by Bold Monk Brewery, I guess. What are they? They're like a gastropub or.
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Joel
Yeah.
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Matt
What do you call them?
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Joel
Yeah, Emily and I'll go there for date night sometimes because. Not because the beer is awesome. The beer is solid. This is actually one of my favorite. We'll talk about it later. But yeah. Picked this beer up while we were there on a recent date night. Figured we should have it on the show. So we'll get to our thoughts on this one. That's the end of the episode.
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Matt
It's a good spot.
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Israel (Listener)
They.
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Matt
They had a Flanders red the last time I went, which is. I think we've said this maybe a few weeks ago. Underrated, that style of beer. I wish more breweries were making Flanders
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Joel
red hard to find.
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Matt
I love them.
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Joel
Yeah. All right, let's get to the first question that we have for this episode. And by the way, if you want to submit a question, we'd Love to hear from you. Just go to howtomoney.com ask basically, you're just recording a voice memo, emailing it over to us. We will hopefully take yours on the next Ask HTM episode. But Matt, this first question is all about saving for retirement and following the right thumb.
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Sarah (Listener)
Hi, Matt and Joel. This is Sarah in New Mexico. I've been listening to how to Money for about two years now, and I've learned so much from the two of you. Thank you. My question is about saving for retirement. I've heard you guys and others talk about the 25 times rule, which states that in order to estimate how much money you need to retire, assuming you retire at the normal age in your early to mid-60s, you multiply the annual amount you'll need to live on by 25. I'm wondering whether or not this formula takes inflation into account. So, for example, if I expect to need $75,000 a year in retirement in today's currency, do I simply multiply 75,000 by 25? Or do I need to estimate what $75,000 in today's money will be equivalent to by the time I retire in, say, 2050 or 10 years into retirement in 2060? If the latter, do you have any recommended calculators or tools for estimating inflation? Thanks for any insight you can offer on this and thank you for a terrific podcast, Matt.
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Joel
It almost sounds like we need to get Albert Einstein involved in this based on all of the things like this could be a complex financial mathematical formula.
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Matt
Gotta do it like Beautiful Mind style. Or write it up on the. Up on the window.
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Joel
Exactly.
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Matt
Well, first off, let's explain what the 25 times or the 25x rule is. And first of all, it's more like a, like a helpful guidepost as opposed to a scientific formula that Albert Einstein would be able to come up with. And what makes it powerful is, simply put, it's simplicity because it can help you to quickly understand just the ballpark nest egg that you're shooting for. And it specifically relates what you need to save to your expenses instead of your income, which we feel is a more accurate gauge. Some folks are like, okay, well, you need to base how much you have in retirement based on how much you're making. And we don't believe that to be true. In our case, it's not really about what you're making, it's about what it is that it actually costs you to live.
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Joel
What you're spending.
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Matt
Yeah, what you're spending. Exactly.
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Joel
It's a much more accurate gauge. Of what you need to save. The 25x rule is zeroing in specifically on that. And that's why we think it's so powerful. And basically where it comes from, it comes from this something called the Trinity study which calculated safe withdrawal rates over the years. It was basically trying to figure out how much you can take out of your portfolio every year when you're no longer working so that you don't run out of money on a 30 year timeline. I think Matt, this was done in the 80s when you and I, we were probably waddling around in diapers. But this still remains something that people quote that people look to.
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Matt
And they updated it a few years ago to take into account just recent changes. And it still holds.
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Joel
Still holds, yeah. And so they found that a 4% withdrawal rate was incredibly safe. Right. And in order to stick 4% withdrawal rate, you'll need to save up 25 extra annual expenses. Right. So it makes sense. And some folks, they're more conservative or want to be able to spend more in retirement. And some of those folks aim for something like 33 times their expenses. That's kind of another figure you might see thrown around for people who say I want to be fat, fire or whatever I want, I want more flexibility, more choice, more options. Well, that is something you might see them, a number you might see them aiming for. It's really just an individual choice though. But the 25x rule is a great rule of thumb. Tell you kind of quickly evaluate your investments, see where you stack up and where you're likely to be once you get closer to that retirement age.
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Matt
That's right. But given its simplicity, which we think is a good thing for what you would want to use this for. Right. Just again, just getting you in the ballpark. That being said, because of its simplicity, it also kind of comes up short when we're talking about specific retirement planning, which obviously comes with so many other factors. For instance, the 25x rule does not take Social Security into account. Or if you are planning to retire earlier, beyond that, where you're mapping out the 65 to 95 time frame, it's not taking into account other income that you might have in retirement, like rental properties. Maybe you are one of the rare breed left that where you're actually guaranteed a pension when you retire. And actually one of the professors, one of the folks who are part of that study who came up with the 4% withdrawal rate says that it's actually too conservative. He was saying that most folks could actually take out something more like a 4.8%. And this is in a, like a worst case scenario and still be okay. But then more recently, like Morningstar, which is a great resource that we like to often refer to, they say that actually 3.8%, that's actually the real safe
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Joel
withdrawal rate, under 4%. Some people say, oh no, you, some folks say more.
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Matt
But yeah, who should we actually trust?
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Joel
These are like those nerdy discussions, right, that would happen on a college campus when you're debating these, that, that these, these discussions are really, they happen in the nerdier realms of personal finance on sites like Morningstar with these pointy headed professors who are talking about safe withdrawal rates. And it's like, okay, so it's somewhere in between this 3.8 and 4% range that you can safely withdraw. Well, how much exactly? Well, I mean, that depends on a variety, like on the ways that these things get run. And it's tough to really zero in on perfection, right?
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Matt
But and honestly, like you're not going to be able to achieve perfection either because who knows what the future holds? Who knows what expenses you're going to be incurring. Who knows how it is you might even want to change your lifestyle.
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Joel
Who knows how the US economy does over the next 20 or 30 years? Like that's true. Does it, does it reflect the last 20 or 30 years? If so, then you know, like you
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Matt
could probably, we probably are sitting closer to that 4.8% withdrawal rate. But if it's. Yeah, like maybe the previous 30. Yeah, maybe, yeah, maybe 3.8 is a little bit better of a place to be in, right?
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Joel
Yeah. So these are all kind of questions that get tossed in there that don't have easy answers. And so let's say maybe you'd be paying off your mortgage right before you retire you, while your expenses are going to go down, which means your 25x number is, is lower than it was while you were saving up for retirement and still have that mortgage in your life. And, and then let's say you actually get a pretty solid Social Security check, right? And maybe you have a rental property too. Well, you don't necessarily need to accrue 25 extra expenses. Those people being conservative, saving up 33x. Well, you can be the opposite, right, because you have other sources of income that' a lot of your financial support for a lot of years to come. And, and plus like Matt just said, the, the 4% rule, according to, you know, one of the guys who helped established it, is conservative. Right? And so you don't want to Count your chickens before they hatch. But I would say checking out SSA.gov, the Social Security Administration's website that has a really good retirement benefit. Estimator Matt I logged in to mine today just to kind of see how much am I likely to get in retirement. And it tells you when you start taking your Social Security check, what you're likely to get you're going to share. I think it was like four grand a month.
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Matt
Nice.
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Joel
If I retired at the age of 67 and start taking like right now. If you were to start, can you
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Matt
start withdrawing on it at the rifle Age of 38?
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Joel
No, I can't take it now. It's going to be a while. It's going to be a few decades before I can tap into that. But then the longer you wait to take Social Security, the more it'll be. So it shows you that too. Well, if you wait till 70, you'll actually get this big of a check.
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Matt
But I'll say too real quick, what's so great about that is you're actually so you literally log into your account and it's looking at how much you've actually paid in. This isn't just a simple calculator. It's actually taking into your work history, your earnings and your work history as to how much.
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Joel
And it says, hey, here's how much you made last year, here's how much you you paid into the system. And so here's how much you're going to get based on your working lifetime. And so the longer you've been working and the closer you are to retirement, the more you can take those numbers as gospel truth, the more accurate they're going to be. Right. So if you've been working for two years, you're 24. Well, there's not enough information to really tell you how much you're going to have in retirement. Mine is somewhat accurate, a lot more accurate than a 22, 24 year old, but someone who's in their late 50s or 60s, it's going to be pretty
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Matt
accurate, really dialed in. Yeah, yeah, exactly. Yeah. So that's what's great about that resource. We'll link to that in the show notes. But if you're looking for more general calculators, Vanguard, they've got a solid retirement nest egg calculator that, that we will link to as well. Actually NerdWallet, they've got one that includes a monthly distribution amount. And so what you could do then is to subtract the amount that you're likely to receive within social, once you start drawing on Social Security or other income like that.
- [16:59]
Joel
Like rental home income, stuff like that.
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Matt
Exactly. But then, Sarah, you also asked about estimating inflation, and so that's kind of one of the, I guess, the wild card here. And even the super nerds over at the Fed, they've been pretty off on that front.
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Israel (Listener)
Right.
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Matt
Like, they were pretty late in seeing that inflation wasn't just transitory and that they did, in fact, need to take action.
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Joel
That was like the word of the year. It seemed like transit, and it was the word of the year that didn't come to pass.
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Matt
But, yeah, I like to play devil's advocate.
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Joel
Depends on what you mean by transitory.
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Matt
Exactly. What's the meaning of just a slight disagreement over the definition of that word? Because in the moment, oh my gosh, it felt like inflation wasn't going away and we were seeing rates tick up closer to 10%. But you zoom out a little bit. It's been, you know, a couple years and we're a far cry from 10%.
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Joel
We're.
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Matt
Is it like something like 3% right now?
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Joel
We're back in the normal range.
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Matt
Pretty close. Yeah. And we're definitely getting closer, but I would say so. First of all, the Trinity study, it does take into account inflation. It takes into account increasing withdrawals on that amount. But also, I wouldn't worry too much about actually trying to forecast inflation because even though the Fed got it wrong when it came to determining, well, how long is this inflation actually going to stick around, they're pretty clear and they've been pretty firm with the target rate of inflation at 2%. And so basically, they're taking steps to get us there. And how long that takes, I'm not totally sure, but I mean, there are still a couple rate hikes planned for later this year. From that standpoint, I personally am not worried about inflation, runaway inflation, and just all the negative that's going to come with that.
- [18:33]
Joel
It's just that accurately predicting it is a difficult thing to do. You just have to know that you're taken care of. In the scenario where you save up 25x, that does account for inflation, you don't have to worry about doing some extra mathematical calculations. What if inflation sticks in the 5%, 6% range? Do I need to save up even more? No, not necessarily. That's. That you don't need to be thinking that way.
- [18:55]
Matt
Yeah, I personally am not worried about runaway inflation. Honestly, like, I would be shocked if. I mean, basically if inflation doesn't come down to closer to 2% by the. I mean, we're going to continue to see these, these, these rate hikes, and they may not nail it. Exactly. I think it'll continue to oscillate because anytime you have a massive shift to the economy, like we saw three years ago, where it's like, okay, let's completely turn off the economy. This is literally something that has never been done before. That all has an impact.
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Joel
And finding equilibrium.
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Matt
Rate of inflation.
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Joel
Finding equilibrium after kind of all the, all the mess and all the attempts.
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Matt
It's going to take a second.
- [19:29]
Joel
Yeah. Of getting us back on track. Yeah. It takes time. I think one last piece of advice for Sarah would just be to say you can always pat a little bit extra. Right. If that is a concern, but you also might not need to. And I think there's the one year syndrome. One more year syndrome. And I don't want Sarah to fall prey to that, being like, Well, I need 33x in addition to Social Security, in addition to this other income I have, and I got to wait till I pay down the mortgage, then you might find that you've exhausted some of those years, those younger retirement years where you could have really enjoyed yourself, and you kept working because you felt like you needed to hit a number you didn't need to hit. So.
- [20:03]
Matt
Exactly.
- [20:03]
Joel
Striking that balance is always hard to find. And it's tough to start drawing down on your portfolio. And it's tough to kind of, you know, at the same time you're drawing down your portfolio, stop making income. But at some point you got to be. You got to be confident in knowing what the numbers have proved over the decades, that the reality still holds. And I think you can feel comfortable knowing that that's the case. Having 25x is still a really good rule of thumb. That's going to make sense for most people.
- [20:26]
Matt
Totally. Yeah. And plus, you can't count on your health lasting forever. Right. Like you said, like being able to take advantage of some of those earlier years of retirement, I think are. It's incredibly underrated, in my opinion, but definitely something we want you to consider, Sarah. We hope that gets you pointed in the right direction. And Joel, one of the ways that you can invest more for the future is by doing a little thing called house hacking. We'll get to that question about the adu, the accessory dwelling unit, right after this.
- [20:58]
Joel
You love what you do. You also love the idea of not doing it one day. But it's getting harder to know the best way to move into the future towards retirement. Right. We hear about inflation, rate hikes, the changing market, got to get kids through college, build an emergency fund, and then there's retirement.
- [21:13]
Matt
Yeah, Here is where Fidelity comes in, though. Fidelity can help you to find clarity and saving for the future, even as your path and your priorities evolve. How? Well, they'll help you to create a free, personalized plan that adapts as your priorities change. They'll also show you what's called timely insights, small tips on ways to save and invest to help meet your goals. And you can monitor your plan so you stay on target.
- [21:36]
Joel
The future is coming, and so is retirement. Fidelity can help you take it on your way. Learn more@fidelity.com 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
- [21:53]
Matt
Struggling to see up close? Make it visible with VIZ VIZ is a once daily prescription eye drop to treat blurry near vision for up to 10 hours. The most common side effects that may be experienced while using VIZ include eye irritation, temporary dim or dark vision, headaches and eye redness. Talk to an eye doctor to learn if VIZ is right for you. Learn more@viz.com we are a gardening family. Well, at least Kate and I are.
- [22:20]
Joel
It's a tough sell for the kids
- [22:22]
Matt
and spring is such a rewarding time of year as we see the new
- [22:25]
Joel
spurts of growth right?
- [22:26]
Matt
We're tracking the fresh baby buds. We begin to enjoy some of the fruits of our labor, but it is a constant labor of love, truly pruning in the off season to weeding, making room for new growth and plants. Now we gotta stay on top of it. We have a renewed sense of responsibility and that is also how we should be thinking about protecting the life that we've built for our family. It is a priority for us and luckily policygenius makes finding the right life insurance policy a breeze.
- [22:55]
Joel
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- [23:14]
Matt
Protect your family with a policy that
- [23:15]
Joel
grows with your life.
- [23:17]
Matt
With Policygenius you can see if you can find 20 year life insurance policies starting at just $276 a year for $1 million in coverage. Head to Policygenius.com to compare life insurance quotes from top companies and see how much you could save. That's policygenius.com.
- [23:37]
Joel
All right, Matt, we got more money questions to get to on this episode. We're gonna take talk about building an ADU to bring in some extra income. It sounds like this listener is going to be able to do it on the cheap. I think he's going to be able to do this one really well, but we'll get to that. But first, Matt, let's get to a question about how to make a car loan less egregious.
- [23:54]
Podcast Announcer
Hi, this is Deanna from Youngstown, Ohio. I'm wondering if you've had any experience or knowledge of refinancing an auto loan with RateGenius or autopay, both recommended on Credit Karma. I have a 6.01% rate of interest at this point on my car and I have an 800 plus credit score. It says that I can be approved for 3.5%. I'd like to know what you think and your experiences with this company. Thanks.
- [24:23]
Matt
Alright, Deanna, thank you for that question and let's go ahead and get to it. You are asking. Well, specifically if either of us have experience when it comes to refinancing an auto loan, specifically with those two companies that you mentioned. And I'm proud to say that neither of us have. Not trying to brag here or anything, but we really don't like car loans. And the more often that you can save up and pay cash for your ride as opposed to financing it, the wealthier you're going to be in the long run. And that's not just because of the fact that you're not paying any interest to the banks. Right. Because you paid cash for the car. But it's also due to the fact that, that there is a behavioral shift that takes place when you pay with cash. Right. When you're financing, I think it can be easy to think, well, how much can I afford to pay a month? But when you're cutting a massive check or you're transferring thousands of dollars over, it's a little more painful. And this is a good pain, Joel. This is like the feeling, the burn after the workout. This is not the oh, I tweaked my back kind of pain, but like
- [25:25]
Joel
the good soreness like you're feeling today. Yeah, no, you're right.
- [25:28]
Matt
I think, I think I did something this morning.
- [25:29]
Joel
That good pain is what we want people to feel. There should some friction which causes you to change course or to think twice.
- [25:35]
Matt
At least ask yourself a question. Exactly. Yeah. It should push you to ask yourself like how much do I need to pay for a car? Like, how little could I get away with paying where? This car, this automobile, whatever will get the job done. So, Deanna, just some thoughts on our approach to car buying before we tackle your question. If it wasn't made clear enough, we're talking about car repairs at the top of the episode. But I will say great job getting out there, seeing what better rates are being offered. Just the ability to take a few steps, fill out some paperwork, and to drastically lower what you're paying every single month on that car loan that you already have. That is, that's awesome. That's fantastic.
- [26:14]
Joel
I mean, I think seeking better terms on debt you've already taken on is smart. Right? And this is whether you're refinancing a mortgage, which no one's doing now because rates are ridiculous, they're so high, or whether it was refinancing student loans, which no one's doing, of course, because rates are so much higher. But if you got maybe let's say your credit score was in the dumps when you took out the car loan. It was in the 6002 and so you ended up paying a higher rate and now you've improved the score. Well, now you can shop the market and find a better term, a better rate on that auto loan or same thing, Matt, with a balance transfer on a credit card, that can make sense for a whole lot of people who have the discipline at the same time to say, you know what, I'm going to take this 18 month window in order to pay off this credit card debt and the 0% APR is going to help me pay down the principal really quickly so that I don't have credit card debt anymore. That is a smart way to use better terms on debt.
- [27:05]
Matt
Totally.
- [27:05]
Joel
And part of the reason that you're able to score such an awesome quote is that you've done a killer job with your finances. Deanna, like an 800 plus credit score, that's a great place to be. So good work there. Sounds like you've really tended to that if you're logging into credit karma, clearly, like you're. You want to know the details, the finer points of your credit score. That's a great site to kind of check up and see what's going on behind just the score so you can figure out how to improve. But you're asking about a couple of specific companies, Rate Genius and Autopay. And as far as we can tell, they both seem solid. Like both have been in business for a number of years. So neither of them are some fly by night startup, right. Where they're likely going to be gone tomorrow. They've got solid to great reviews on the Internet. Right. In particular Rate Genius is accredited on the Better Business Bureau website. But something to keep in mind just because they dangle a sweet rate out in front of you when you initially click over, well that doesn't necessarily mean it's the rate that's going to end up being officially offered to you once you fill out the application. Right. And especially given the rising interest rate environment we're in. You might see a headline number on an advertisement or on Credit Karma site and then you get over there and they're like yeah, I mean that's for this kind of borrower. With this, who fits this particular mold, you meet a couple of the requirements. But actually you know your rate's going to look like more, more like 7% because you don't meet these other ones. And so just, just be aware you might get frustrated because that might be the case.
- [28:26]
Matt
Yeah, well and just given the environment too that we have seen when it comes to rising interest rates in particular with car loans, like it may not even necessarily be like a bait and a switch because there's a decent chance that rates have just simply increased since you saw that whatever thing popped up that you saw. But, and then again like, like Joel say, not to mention like they're always going to advertise the absolutely lowest rate that someone might qualify for and your credit score is great. But, but yeah, maybe they don't like your debt to income ratio, they don't like how much you're making or maybe they don't like how much other credit card debt you might have. So with that in mind, shopping around is definitely the path that we would recommend and not just with some of these online companies that make it easy, but doing it in person as well. Hopefully you're already a member at your local credit union, but if not, now is a great time to join. And they typically are going to offer lower interest rates than banks because they're non profits and that means that they're literally owned and controlled by their members. They're not seeking to maximize every single dollar. It also means they're not going to pay out the highest rates when it comes to what they're rewarding on their high yield savings accounts. But they're a fantastic place to go when it comes to some of the different financing products that you might find yourself in need of.
- [29:39]
Joel
Yeah, I think HELOCs and refinancing a car loan. Credit unions are great places for both of those things. I definitely check that. Check a couple of credit unions. Lots of times they post their rates website so you can find the closest three. Even if you're not a member yet. You can join by putting 20 bucks in an account usually. And then guess what you have access to even five dollars, Even five bucks sometimes. Yeah. And then you have access to all of the products that they offer. And so yeah, credit union is a great place to go for that kind of borrowing. And so yeah, while we don't have personal experience with the specific companies you mentioned, they seem solid. And we love that you're looking to snag yourself a better rate where you're going to be able to reduce the amount you'll end up paying over the total life of that car loan. I guess one other thing to caution against, Matt, was would be to dramatically lengthen the length of that car loan. Right.
- [30:27]
Matt
So that would caution against.
- [30:29]
Joel
Yeah, yeah, we'd say get a better rate, but man, if you can actually get a better rate and shorten the length of that loan too, maybe you got four years left on it and you can pay it. You get it paid off in two and a half. That would be ideal because yeah, the less amount of time overall you have a car payment in your life, the better. That's for sure. But good luck. The end of happy refinancing. Matt. Let's get to our next question. This one is about whether or not to pay cash or to take out a loan to build an accessory dwelling unit.
- [30:57]
Israel (Listener)
Hey guys, Israel here from Arizona. I have a question regarding construction loans. I have a property that I would like to build a guest house on and I'm wondering if maybe taking on a construction loan would be beneficial in any way. I have the funds to build the guest house without the construction loan and at this point I'm thinking I'm budgeting in about a hundred thousand dollars to build the guest house. Right now that money is sitting in a high yield savings account that is earning me 4.25% interest rate. And yeah, I'm just wondering if maybe holding on to the money would be any better in any way or if taking out the construction loan would be of any benefit. Any who love the show and thanks for your thoughts on this.
- [31:54]
Matt
Yeah, Israel, happy to provide our thoughts and of course love the idea of building what you're calling a guest house, what we're going to call an adu because hopefully you are looking to maximize the ROI of that actual structure.
- [32:07]
Joel
And we've seen a lot of like, law changes in a bunch of places around the country to make ADUs easier to build and to dramatically reduce kind of the red tape around, like how and where you can build them. So they're becoming more and more popular too.
- [32:22]
Matt
That's right, yeah. And plus, so building costs, they've certainly gone up in recent years, but they haven't risen quite as much as the cost of financing and purchasing a home, the limited supply of housing that's out there. So what that means folks who might want to get into the, to the real estate game might find that their best bet is to build an adu, an accessory dwelling unit, instead of buying an existing single family or buying an existing duplex that might be out there on the market. Granted, this is general advice and every market, every individual circumstance is different, but literally.
- [32:55]
Joel
Nice disclaimer there.
- [32:56]
Matt
Yeah. But this is a strategy that folks are doing. Like, we've got a friendial, like he's a real estate investor, he's also a realtor, but over the past two or three years, this has been his approach. He's specifically looking for properties that are on corners that allow for him to build another, an ADU on the back part of that property. And guess what, the 80, it's still accessible via the road, which means that people who are renting there aren't disturbing the folks who are in the primary structure. I was like either the corner or he's looking at like properties that have alley access. So like a lot of the older in town neighborhoods, like, you've got blocks, city blocks, and you've got these old alleys that are kind of grandfathered in to where people could claim here in Atlanta, they're like 10, 12ft wide, that kind of thing. And so each property owner is entitled to half of that. But a lot of the blocks, they've just maintained those alleys and they're there. And so you can use them, especially if, again, if you are closer to the end of a block where you run less of a risk of that thing getting absorbed maybe by the neighbors, to where your, your property would be choked off eventually.
- [34:03]
Joel
Well, yeah, and I was, I was this close, Matt, to, to doing, to doing one of these at our corner lot back in town too. And this was when the price to build these things was a whole lot lower as well. They've gone up quite a bit.
- [34:12]
Matt
ATL ADU website.
- [34:14]
Joel
That's right. Yeah. It was like literally this company who has like three or four designs and you pick one, it's almost like buying a house out of a Sears Roebucks catalog they used to have back in the day. And I love kind of their business model where you're not necessarily hiring an architect to make some one of a kind. It's like, like. Do you like one of the three models we have?
- [34:30]
Matt
If not, put it here.
- [34:31]
Joel
Yeah, yeah, Just build that one.
- [34:33]
Matt
Yes, please. And stick it right here.
- [34:34]
Joel
Yeah. So I, I mean I love that model.
- [34:35]
Matt
There's more and more simpler times.
- [34:37]
Joel
Yes.
- [34:37]
Matt
Yes is what it makes me think of where you get to. Yeah. Pick a house out of a cattle.
- [34:41]
Joel
But they were adorable. They were beautiful. They would appeal to a whole lot of people and they made sense kind of in the neighborhood where, where we lived. But yeah, you're right. I think there's a whole lot of people who would say I feel like it's. You're almost doing God's work. If you build an ADU right now too.
- [34:53]
Matt
You're increasing the supply.
- [34:54]
Joel
Exactly. Which is, which is going to.
- [34:56]
Matt
There's a, there's literally a housing shortage right now. And, and builders, developers, they're, for one reason or the other, they just haven't been willing to take on that risk.
- [35:04]
Joel
Over the last few years, builders have been building more, but we still don't have enough. And by the way, Israel said he's had the cash on hand to do this, which is amazing. Like to save up that kind of cash is really incredible. It's quite a feat. And what a killer way to use it. Right? To put it into something that is going to increase the value of your property, but it's also going to hopefully allow you to make more and more money over time. And Matt, actually one thing he didn't really mention was how he was going to use it. He didn't mention, he said guest house.
- [35:31]
Matt
Yeah, that's. Yeah.
- [35:32]
Joel
I was like, is he going to use it for friends and family or is he actually going to use this as an investment? And so I think if he wasn't planning on renting it out like full time to tenants, he might want to consider the both end approach. If he's like, oh, it's kind of for friends and family when they're in town. But I don't know, maybe it could also be a short term rental that allows him to make, make money when you know people, he doesn't have friends or family visiting. And so that, that could help him make his savings back quickly and just cross off the calendar, don't allow bookings when you know that some of your People are going to be in town using it. This of course, does have like part time job characteristics. Right. It makes it, it makes it something that's something you have to manage. But, and you'd be, you'd kind of be dipping your toes into the hospitality industry, Israel. But depending on your specific location and what that 80 you can command per night, it might be worth it to you to kind of jump through those hoops because it could mean dialing up the income dial significantly.
- [36:26]
A.B. (Listener)
Yeah.
- [36:26]
Matt
Takes some of the pressure off of whether or not you should plunk down this much change in order to build this thing. If you know that you've got a time frame that you know in which you'll earn back that money. But while Israel said that he's got the cash on hand, he also mentioned that he's considering taking out a loan instead. And so should he keep his cash intact and instead borrow to get that thing built? We'd say probably not, and here's why. We don't want you to exhaust all of your cash reserves. But taking out a loan is going to come with some other fees and hassles in addition to the higher interest rates that you're going to be forced to deal with. And let's say if, you know, maybe you'd already taken out a loan that was in the 8% range, let's say, well, we tell you to use your savings to pay that thing off because that's pretty dang high. And even though you're say, getting a, he said a four and a quarter, I think, return in his high yield savings account, Well, a guaranteed 8% return is going to be even better.
- [37:24]
Joel
Right.
- [37:24]
Matt
So avoiding that loan in the first place, we think makes the most financial sense to us. And obviously it depends on your specifics, right? Like it depends on the rate that you're able to secure. If you've got a, like, say you've got a good friend who's a lender and he's able to say, hey, I got this construction loan. Once you complete the construction, we roll that into the third, a 30 year mortgage and it locks in a 4%.
- [37:43]
Joel
Oh, oh, that would change.
- [37:45]
Matt
If that was me, I would do that.
- [37:46]
Joel
Yes. Oh, yeah.
- [37:47]
Matt
So it depends on the specifics because
- [37:48]
Joel
then you remain liquid but you're taking out a loan at a really reasonable rate. Right. And so there's, and there's even a spread, a positive spread for you to, and an incentive to keep your cash in a high yield savings account. Right. Instead of putting it towards paying down the debt but you're right. I guess we're assuming that this is given a typical construction loan in the current environment, which is probably somewhere close
- [38:10]
Matt
to the 8% range, with mortgage rates also being. Yeah, higher in that range as well.
- [38:15]
Joel
So if we're talking about.
- [38:15]
Matt
Not rates that we like to see,
- [38:16]
Joel
if we're talking about that, then no bueno. If we're talking about a lower rate somewhere in that 4 to 5% range, the liquidity matters. And having access to that cash, keeping it on hand so you can do other things, I would probably take on the debt and be totally fine with it. I think one way to split the baby though, if you want to go Old Testament, Solomon style, if you're worried you're going to have to empty your savings to nothing at all because of this, take out a HELOC on your primary residence. You could borrow something like 20 or $30,000 instead of borrowing a much bigger amount. Those HELOCs, they always come with no closing costs or a lot of them come with no closing costs. And so we just suggest that you have a goal to pay it off quickly, like in 12 to 18 months with income, you know, that you're getting from potentially using that ADU as a short term rental or, or just from income from your job. But that is maybe a better way to do it instead of taking on this construction loan that comes with bigger, bigger closing costs and more, more annoyance,
- [39:11]
Matt
more hassle, and you're locked into for a longer period of time.
- [39:14]
Joel
The HELOC could be this like perfect little, Hey, I just need a little bit to make sure that I'm not literally taking my savings down to zero. And then I've got a little breathing room. And so that might be kind of the best way forward. Yeah.
- [39:26]
Matt
Because I do think a lot of folks, they might hear you say that and they're thinking, oh, HELOC man rates on HELOCs are crazy high too.
- [39:32]
Joel
Yes.
- [39:33]
Matt
But what's key is what you said, which is like a plan to really get after it. And when you know that the rates are higher and this is something that you can eliminate in a year, year and a half. I like the fire that lights under you as opposed to saying, all right, let's roll this into a 30 year. And this is something that you're now paying on for for 30 long time. 30 years. And so how it is that you mentally approach us really matters in this case Israel. But Joel, we've got another question. Plus a listener win that we're gonna get to. We'll get to both of those right after this.
- [40:08]
Joel
You love what you do. You also love the idea of not doing it one day. But it's getting harder to know the best way to move into the future towards retirement. Right? We hear about inflation, rate hikes, the changing market, gotta get kids through college, build an emerg fund, and then there's retirement.
- [40:23]
Matt
Yeah. Here is where fidelity comes in, though. Fidelity can help you to find clarity in saving for the future, even as your path and your priorities evolve. How? Well, they'll help you to create a free, personalized plan that adapts as your priorities change. They'll also show you what's called timely insights, small tips on ways to save and invest to help meet your goals. And you can monitor your plan so you stay on target.
- [40:46]
Joel
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- [41:03]
Matt
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- [41:28]
Joel
we're lost. It feels like we're going round in circles. I'm gonna ask that man for directions. Hi there. We're trying to get to the state fairgrounds.
- [41:37]
T-Mobile Advertiser
Well, you're gonna take a left at the old oak tree at this here road.
- [41:41]
Joel
Nah, I'm just kidding.
- [41:43]
T-Mobile Advertiser
Let me get my phone out.
- [41:44]
Joel
How is their signal out here?
- [41:45]
T-Mobile Advertiser
Here T Mobile and US Cellular are coming together so the network out here is huge. We get the same great signal as the city, saving a boatload with benefits. And there's a five year price guarantee too. Okay, here's the turn.
- [41:58]
Joel
Actually, can you pull up the way to a T Mobile store?
- [42:01]
T-Mobile Advertiser
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- [42:31]
Joel
All right, man, we've got, we got more money content. We got more stuff we got to cover on this episode before we call it quits. And we kind of start in something where we pull a question from Facebook occasionally because, man, there's just interesting stuff in the how to money Facebook group. If you're not a member of the how to money Facebook group, there's this, there's this website called facebook.com that you can log on to. Have you heard of it? It's been around for a minute. And you can type how to money in the search bar. You'll find, you'll find the group there. It's just people helping each other out and it's just a great place to be if you're looking for helpful money advice. And listener Leslie, she posted this week, she said, which would you do? She posted this question to the Facebook community. She said, $6,500 into a Roth, an HSA or a traditional 457B. She's basically saying, listen, if I've got a limited sum of money, which one of these three retirement accounts should I prioritize? And Matt, I just thought this was interesting that I was like, well, we should bet this one around because we're kind of pitting three retirement accounts against each other in this scenario.
- [43:24]
Matt
Three great options, right? Three good things.
- [43:27]
Joel
Which one's going to come come out on top in this prize fight, right?
- [43:29]
Matt
Like, it's not like one of them is. I'm also thinking about dropping 6,500 on. I don't know, what's something dumb you could spend money on? Yeah, like I rarely even like to say dumb things that people can spend money on because that might their craft beer equivalent. Or you don't. I don't want to be a hater.
- [43:42]
Joel
And you also don't want to plant an idea in their head it wasn't already there. Inception wise. They're like, hey, don't you want to
- [43:48]
Matt
open a hot dog food truck? No, I was thinking corn dog.
- [43:51]
Joel
Oh, no, I want a hot tub
- [43:53]
Matt
is what I want.
- [43:54]
Joel
Maybe I'll eat a hot dog in my hot tub.
- [43:56]
Matt
Other things that start with hot. Hot yoga studio. That's true too. Is that something that's always been a business you want to get into?
- [44:01]
Joel
I've heard goat yoga that just doesn't sound sanitary.
- [44:03]
Matt
Might be, might be good for my back.
- [44:05]
Joel
But it sounds adorable, right? But this one certainly is not a no brainer winner, that's for sure. But I Think there's one mat that we can eliminate first and foremost that stands out as not quite as good as the others, and that's the traditional 457B that Leslie mentioned. So those rarely come with a match. Plus, we're talking about a small tax benefit now while accruing a bigger tax bill down the road. So I think, and I don't know if you agree with me, that the 457 would probably be the least favorite of the three options that she presented. So now there's just two left standing. It's almost like, you know, Conor McGregor versus Khabib or something like that.
- [44:37]
Matt
I don't know.
- [44:38]
Joel
I'm not a big MMA guy. But which of these beautiful tax advantage offerings will win the day? Matt, in your opinion, do you have a preference?
- [44:45]
Matt
Well, so from purely tax and numbers and loopholes that are available to folks, the HSA is certainly superior when you use it properly. Right? And that's, of course, because of the triple tax advantage status. If this is something that your employer is offering, there's technically a quadruple tax advantage because you're not paying payroll tax on that. But what that means, though, is that there are also more hoops that you've got to jump through. And then sometimes, too, the fees that are associated with HSAs can be higher than what you'd pay opening up a Roth with Fidelity. But so much of this comes down to whether you're looking to completely optimize and maximize your tax shield. And if you're happy to take some of those additional steps that an HSA requires. So that's on one hand. If so, then, all right, HSA could be a good way to go. But if instead you are preferring simplicity, well, it's hard to beat a Roth IRA, right? Just taking that 6,500 bucks. And I'm assuming that was her default, because that's why I'm guessing she started with 6,500. I don't know. But shoving that into a Roth, investing within a total stock market or an S&P 500 fund, and they're just calling it a day, Right? Like, that is hitting the easy button. Plus, you get the advantage of, with a Roth, the ability to potentially tap that. It's like a backup to your backup emergency fund, Right? Like, those contributions can be withdrawn for any reason, tax and penalty free. It's not something we like to talk about often because we don't want you to necessarily have to draw on that. But hey, if you ever find yourself in a tight spot, that money Is there, There's. Forget the hot dog corn dog stand. There's. There's money in the banana stand. There's money in that Roth ira. But of course, with the hsa, you're gonna have to pay more attention to fees. You might even need to move the money to another provider to cut down on those fees. And then also, like, on top of that, you're gonna need to document all those medical expenses as well. And I'm a pretty organized person, but I don't know, I feel like I just talked myself into choosing the Roth ira. And because personally I've never actually been able to take advantage of an hsa. So in my mind, it's almost like this unicorn. It's this far off, fantastical thing that, I mean, I know it exists.
- [46:55]
Joel
Unicorns don't actually exist, though, man.
- [46:56]
Matt
I know.
- [46:58]
Joel
Well, and I think it's probably a good point. Is that because you've never had access to one. I never have either.
- [47:03]
Matt
I think I feel slightly biased.
- [47:04]
Joel
We know they're great, but it feels, it feels like a fiction book that we read about. Right. It's not actually reality, but for a lot of people it is. And actually my brother in law called me just yesterday to ask about his HSA and he was telling me, actually there's a $25 a month fee, but my employer, if I open an HSA, they put 500 bucks in there. So it's definitely worth it despite the fee. But at the same time, it's annoying, right? And it's annoying. Some people don't get the employer match into an HSA or any sort of employer contribution to an hsa. And so that fee is something you have to consider because for some, for some HSA plans, It could be 50 bucks a month. And that's like, hard to overcome, right? When that's a. That's a pretty big bite. That's a big fee, big chunk. So I guess another option too is to split the money equally between the top two, which would be a reasonable approach.
- [47:51]
Matt
Joel, splitting the baby again, I'm just
- [47:53]
Joel
trying to be Solomon over here with every piece of financial advice we dish out. You can always give yourself a goal of maxing out both accounts at some point in the future, but for now, maybe funnel 3250 into your Roth IRA and another 3250 into your HSA and then still be conscious of the fees if they're egregious, know that you can transfer funds from that HSA, by the way, to another provider once every 12 months. So that's one of the things I recommend to my brother in law. I'm like, stick the money in there. Once a year you can move that money over to Lively or Fidelity, who are the two best low cost HSA providers out there. And that way you're getting money into the hsa. It's the best tax structure. Right. The best way to shield yourself from tax. But at the same time, you're avoiding some of the fees or at least you're not getting pummeled and punished by the fees for too long.
- [48:41]
Matt
Exactly. And I like to the benefit that comes with trying both of these out is that you get to do just that. You get to try it out. You don't have to necessarily commit to one or it's not like you like once you get the ball rolling within one of those camps, you have to continue doing that forever. And so yeah, the ability to try them both out and be like, oh wow, I really like the ease of use that comes with a Roth IRA or oh, I'm pretty organized. I like to keep lists of expenses anyway, the hsa plus I get hurt a lot. Yeah, I mean literally, that, that's another check within on the side of going with the hsa. So I like the ability for you to try both of these out.
- [49:19]
Joel
If you're like Samuel L. Jackson, Mr. Glass from what was it, what was the M. Night Shyamalan movie.
- [49:23]
Matt
Oh, with Bruce Willis. Yeah, yeah.
- [49:25]
Joel
If you're that guy, the HSA Broken,
- [49:27]
Matt
Unbroken, one of the Shattered, Unshattered, something like that. But one of those four names.
- [49:32]
Joel
Such a good movie. But yeah, if you're like that guy and you get hurt all the time, the HSA comes in even more hands.
- [49:37]
Matt
Yeah, I liked it.
- [49:37]
Joel
All right.
- [49:38]
Matt
I like. Good.
- [49:39]
Joel
It was like a noir superhero.
- [49:41]
Matt
Yeah.
- [49:42]
Joel
Let's be honest, getting hurt all the time. Better than the modern Marvel ones.
- [49:45]
Matt
They went downhill pretty quickly. They need to find new content. That's the problem today, right? I mean, you got the writer strike, there's no new content. Which means, honestly, oh snap. What if that means there's going to be a content revival? Right. Because normally when you are on a tight truncated timeline and you're just forced to crank out scripts and episodes and whatever else it means, maybe the quality isn't so good, but by kind of close pinching that off and you've got all these writers who are no longer able to write, maybe that means next year, dude, we're gonna be spending so much money on streaming services because it's gonna be so good. I guess that's the downside to the writer strike, but. All right, we've got one more voice memo to get to. And this isn't a question. Let's hear a listener. Money win.
- [50:30]
A.B. (Listener)
Hey, Matt And Joe, it's A.B. in San Antonio.
- [50:32]
Joel
Know.
- [50:33]
A.B. (Listener)
So recently I went to movie theater with the family and you know how the movie theaters have this little arcade, you know, connected to them. So of course the kids, they want to go and play some games before the movie. Okay, great, let's, let's do it. We go into the arcade and some of the games were messed up. They weren't working. You know, I'd scanned the card, it wouldn't go through. And then I noticed that it is still taking money out of my card. So I brought it to the attention of one of the attendants and he said, oh, well, the best thing you could do is call the number on the side of the machine and talk to a representative. I feel like a lot of people, you know, just kind of blow this off and say, ah, it's fine, I'm not gonna do all that. So I didn't. I went ahead and called the number and, you know, talked to a representative, told him about which machines I was having a problem with and it wasn't giving my money back. And they went ahead and said, okay, they're gonna send the technician, check out the machines, and if they find that the machines were faulty, they would reimburse me. So they have my address, got all my information. And today I went to the mail, opened up a letter with the six bucks in it. So I mean, it's six bucks is six bucks. It might be frugal, might be cheap, but I mean, I, I think it's a win over a. I'm sure when
- [51:50]
Matt
AV gave them his address, he was like, yeah, this isn't going to go anywhere. You're not actually going to refund me any money. But it turns out they did.
- [51:58]
Joel
Yeah, I love that. I love the story. And I think there's something that we can probably all learn from just something, a random little thing that AB sends our way like this. And in my mind that is that every dollar matters, right? And AB is treating these dollars like every dollar matters. It's really easy to say, say it's six bucks, right? Like, okay, the bigger thing to handle here, the more the more annoying thing is probably like my kids disappointment that the machine is broken. But AB went through the trouble, made the phone call, and I think, Matt, it just. When you treat your dollars like they all matter, like, they all serve a purpose, whether it's fueling your financial independence or whether it's buying stuff that you care more about. Like, then your mindset shifts towards your money. Like, you start to think about your finances differently. But if you start to say, oh, five bucks here, five bucks there, it doesn't, you know, who cares? It doesn't really matter. You are inevitably going to be the person who wakes up and, you know, just isn't as far along when it comes to building towards financial independence as somebody like AB is going to be.
- [53:00]
Matt
So. I totally hear what you're saying, but I guess I'm going to have to, like, because at a certain point you think, like, you have to calculate, like, what your time is worth. And I'll be honest, I'm not sure if I would have actually made the call to, to be like, oh, like, let's see how much money I actually ended up losing to these stupid broken machines. So in my mind, like, it's. It's kind of less about the money and maybe more about the, the fact that you could take the lesson in this, this win, basically the AB has experienced and then roll that into other areas of life. Like, like, there's a sense the six
- [53:31]
Joel
bucks isn't going to change his life.
- [53:33]
Matt
Yeah.
- [53:33]
Joel
But the fact that he treats his money with care will.
- [53:35]
Matt
Yes. And the empowerment I think that that can provide can lead to even bigger wins down the road. Which in my. That's why sometimes I do things that, where it seems like a waste of time or people are just like, why would you do that, man? Like, you're only saving, like, literally cents on the dollar here. Or in AB's case, like six bucks. And by the way, literally, he sent us a picture when he sent this voicemail over as well, and it was literally a $5 bill and a $1 bill they just mailed to him. I didn't realize that companies mail cash in the mail.
- [54:06]
Joel
Yeah, mail cash.
- [54:08]
Matt
But I guess they figured it was. Was such a small amount that maybe it didn't really matter as much if it ended up in someone else's hands. But I really like that he got like, a taste of the glory of, like, of winning and the empowerment that you get from that to then say, I'm in control of my life. Like, there is more that I am in control of. Like, I can take life by the horns. There aren't businesses out there that are going to treat me poorly. I'm going to make them atone. I don't know. I'm getting Too religious or whatever, but the ability to stand up for yourself and say, hey, hey, are you going to make this right? This isn't something that I feel like this isn't how you should have handled this. Or this is a product that broke. Or even just dealing with, like, if you're negotiating with somebody to. The ability to, I don't know, like, draw a line in the sand that could lead to, like, if you're looking for a promotion, the ability to advocate for yourself is. That's what I love about this. And I hope that not only AB is able to take this to. And apply it to other areas in life, too, but also just all of our listeners. But specifically, when you experience a small win like this yourself, it does something to you. You feel good about it and you think, all right, I'm optimizing. Okay, it's time to be more efficient. I'm gonna stop wasting money.
- [55:15]
Joel
And like you said, you start seeing other opportunities.
- [55:18]
Matt
Yes. All of a sudden it's a paradigm shift, and you start seeing any interaction where you're in this current of life, of culture. But no, you can. You have the ability to, like, transcend that and you can almost set. Not make your own rules, but almost do what you want to a certain Outback Steakhouse. Just like ordering a Bloomin Onion.
- [55:38]
Joel
Well, it makes me. Went to a baseball game with one of my best friends, and we parked over a mile away and we walked. And it's not because I don't have $15 to spare on parking, but it's because I don't like my money going to pay for a parking lot. Plus, we had this lovely stroll. So I don't know.
- [55:56]
Matt
There's a good thing.
- [55:57]
Joel
Yeah. There's all of these ways in which we can test our preconceived notions. We can test the assumption, oh, well, if I'm going to go to the game, I have to pay 20 bucks to park, right? No, you don't. A lot of people just assume that that comes with the cost of admission, but it doesn't. And you have the choice to do something different with your life and with your money.
- [56:16]
Matt
You have options.
- [56:16]
Joel
Yeah.
- [56:17]
Matt
I mean, maybe we're reading way too
- [56:19]
Joel
much into this, but that was kind of. I was like, oh, man, there's a lot to take away from AB's win here.
- [56:23]
Matt
Absolutely.
- [56:24]
Joel
Yeah.
- [56:24]
Matt
And so hopefully folks are hearing this and they're thinking, all right, there's this little thing that it's been in the back of my mind, I'm going to actually do something about it and the ability to parlay that win into bigger wins in my mind is sort of the. My big takeaway. The ability to. To really set yourself up in some areas, like some of the big blocks, like some of the big things, whether it's a salary or housing or cars. Right. Like some of the big wins that could really, truly have a massive impact as you're talking about years of not spending that money compounding in the. Within the stock market.
- [56:54]
Joel
Yeah.
- [56:54]
Matt
But A.B. we appreciate you, man. Thank you for, for sharing your win with us. And by the way, again, you don't even necessarily have to have a question for us, but we love talking about. About anything that listeners are doing with their money. Pretty much it just gives us a way to connect with folks and to talk about money, which is what we love to do. While we are enjoying beers and Joel, you and I are enjoying a fest beer. This is an Oktoberfest by Bold Monk. What were your thoughts? You already said that. It's one of your favorite styles by them.
- [57:23]
Joel
Yeah, yeah, it is actually. Well, they had actually when we were there last time, they had a really good barrel age saison that was like nice and funky and I really enjoyed that one.
- [57:32]
Matt
Stick one of those up.
- [57:32]
Joel
They didn't have it bottled or canned, sadly, or I would have brought that, but so should fill up your water bottle.
- [57:37]
Matt
And I thought about it.
- [57:38]
Joel
I thought about it. I just went back behind there, put my mouth underneath growler style, pulled back on the handle. It was awesome. No. So this one was like bronze in color. It was malty and a little sweet. And I really do like a good Oktoberfest. And I don't know if you know, this Oktoberfest starts in September, which feels like false advertising, but I'm gonna let it. I'm gonna let it slide. But yeah, it's already going. It's starting in a few days or.
- [58:01]
Matt
No, it started like a couple weeks ago. It starts like halfway through September and it goes through, I think the beginning, beginning of October.
- [58:06]
Joel
But one of these days we'll make
- [58:07]
Matt
it out there, you know. Okay.
- [58:08]
Joel
We'll hang out with all of our German HTM listeners too.
- [58:11]
Matt
It's funny that you mentioned that because we recent episode we talked with Lacy Langford and that's when we enjoyed the Cantone, which was phenomenal. And it got me thinking about some of the different European beers. That's where I want to go. I don't like. I might want to swing through the Oktoberfest thing for like a day. Sure. Like it goes on for weeks. And people, it's all about just large volumes and quantity. Whereas I'm like, I would rather drink like a quarter of the amount of beer I would drink at like over in Munich, enjoy a fraction of that over in Belgium and go going over to three Fontaine and Cantillon.
- [58:47]
Joel
I'm partial those beers. I'm partial to the Belgian styles.
- [58:50]
Matt
Yeah, it'd be a fun party. But man, I want to. Yeah, I would much rather hit up Cantillon.
- [58:55]
Joel
And if you're in Atlanta, by the way, and you like Belgian style beers, that's what Bold Monk kind of does. And their food, their brew pub of the atmosphere there is.
- [59:03]
Matt
That's a good spot.
- [59:04]
Joel
Excellent. Yes.
- [59:05]
Matt
Yeah.
- [59:05]
Joel
Especially if you're, if it's nice weather and you're eating outside in their little beer garden. It's so lovely. It's a great spot.
- [59:10]
Matt
The upper floor.
- [59:11]
Joel
Yeah, yeah, yeah. So. All right, man, that's going to do it. For this episode. We'll post show notes up on the website@howtomoney.com with links to some of the things we referenced today, including some of those retirement calculators that we discussed in the 25x question.
- [59:24]
Matt
All right, that's going to be it for this one, buddy. Until next time, Best friends out. Best friends out.
- [59:29]
Israel (Listener)
Out.
- [59:45]
Matt
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, he'll be set to take on retirement your way.
- [60:00]
Joel
Get started@fidelity.com 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
- [60:13]
Matt
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- [60:38]
Podcast Announcer
Conversations about volleyball go beyond the court. Today we have a little best friend compatibility test. Okay, and how long have we been best friends?
- [60:44]
Matt
Since the day we met.
- [60:45]
Podcast Announcer
As the League1 volleyball season heads towards its final stretch, there's no better time to tune in. You'll hear unfiltered analysis, behind the scenes stories and conversations with leaders making an impact across the sport. Whether you're following the final push of love season or just love the game, Serving Pancakes brings you closer to the action and the people shaping the future of volleyball. Open your free iHeartradio app, search serving Pancakes and listen. Now Presented by Capital One, founding partner of iHeart Women's Sports, this is an iHeart podcast. Guaranteed human.