How to Money – Episode #1069 Summary

Episode Title: Ask HTM – Mortgage Payoff Loophole, DAFs to Maximize Tax Deductions, and Legally Evading a Medical Bill
Podcast: How to Money (iHeartPodcasts)
Hosts: Joel and Matt
Date: December 1, 2025

Episode Overview

In this engaging and information-packed listener Q&A episode, Joel and Matt address a variety of personal finance questions—ranging from the so-called "mortgage payoff loophole" (velocity banking), maximizing tax deductions with donor-advised funds (DAFs), and legally minimizing or potentially avoiding medical bills. The hosts retain their trademark friendly banter and accessible language, making even complex financial strategies easy to understand.

Other topics include selecting retirement accounts with a pension, single-parent life insurance decisions, and practical tips on handling debts and charitable giving. The episode is rich with actionable advice and memorable quotes, ideal for anyone looking to optimize their personal finances in realistic, effective ways.

Key Discussion Points & Insights

1. Industry News: The Demise of Rad Power Bikes

Timestamps: 03:08–07:07

• Joel laments the imminent closure of Rad Power Bikes, highlighting the changing economics post-pandemic for e-bike companies.
• Matt mentions the shift in demand and increasing competition, noting challenges from overseas manufacturers.
• Practical advice for listeners: Be cautious when buying from companies at risk of going out of business, especially if their products require specialized parts or warranty support.

Notable Quote:

"One good thing worth telling people is to think twice before you buy a bike from a manufacturer that might go out of business." – Joel (05:24)

2. Listener Question: Mortgage Payoff Loophole & Velocity Banking

Timestamps: 07:39–18:19
Question from: Brock, Western Illinois

• Brock asks about velocity banking: using a HELOC to pay down a mortgage faster by juggling low-interest debts.
• Matt and Joel explain the hype around velocity banking and break down its pitfalls and overcomplications.
• Key takeaway: For most, simply making regular extra payments toward the mortgage principal is just as effective—and less risky—than velocity banking.
• The hosts caution against prioritizing early mortgage payoff over other financial goals (like retirement savings), especially with reasonably low fixed rates.
• Liquidity is highlighted as an undervalued asset in personal finance.

Notable Quotes:

"The secret sauce to velocity banking is making regular extra payments. And that is something that you could do if you're so inclined." — Matt (13:49)
"It just doesn't fit into our framework of prioritizing financial goals correctly." — Joel (16:06)
"Liquidity is just an underrated thing in personal finance." — Joel (18:19)

3. Listener Question: Donor Advised Funds (DAFs) & Tax Deductions

Timestamps: 21:35–32:16
Question from: Austin, Alabama

• Austin wants to know if investment gains within a DAF offer additional tax deductions and seeks general guidance.
• Matt and Joel praise DAFs for making charitable giving easier and more tax-efficient, particularly Daffy, which boasts lower fees than Fidelity or Vanguard.
• The key tax insight: Your deduction is based on the contribution amount in the year you donate to the DAF—not any gains realized in the DAF thereafter.
• DAFs streamline tax receipts for donations and allow for appreciated asset gifting to further improve tax efficiency.
• There’s a philosophical discussion about the pros and cons of letting charitable dollars grow in a DAF versus distributing promptly to meet immediate needs.

Notable Quotes:

"You only get that tax donation based on what you initially put in." — Matt (26:11)
"Donating appreciated assets outside of retirement accounts is better than giving straight from the bank account." — Matt (31:19)
"I like the idea of putting money in my DAF to give it this year and next year, and also growing some of it for future giving." — Joel (29:26)

4. Listener Question: Retirement Account Prioritization with a Pension

Timestamps: 32:27–41:58
Question from: Matt from Scranton, PA

• Matt (listener) asks whether to contribute more to a Roth IRA, a 457 plan (traditional or Roth), in addition to a state pension.
• The hosts advise prioritizing the Roth IRA at a low-cost brokerage (like Fidelity) for maximum control and lower fees, unless the workplace plan offers a strong match (which, in this case, it does not).
• After maxing the Roth IRA ($7,000–$7,500 per year), excess should be contributed to the 457.
• They discuss the increasing accessibility of retirement accounts and the importance of slow, steady increases in savings rates.

Notable Quotes:

"Given the Roth IRA's greater level of flexibility, given the greater levels of control that you have, that's totally what we would be opting for here." — Matt (38:08)
"It's a fun money challenge to go after." — Joel (41:38)

5. Listener Question: Paying Off Medical Debt—Should You Take the Discount?

Timestamps: 44:28–50:14
Question from: Drew, Richmond, VA

• Drew is offered a 30% discount on his remaining $1,037 medical bill if he pays it in a lump sum, but would need to use his emergency fund or a credit card.
• Matt and Joel recommend first checking if Drew qualifies for hospital financial aid or full/partial forgiveness, as hospitals often don’t proactively offer this.
• If not eligible, they suggest the discount is attractive—especially if Drew can replenish his emergency fund promptly. Using a credit card with a plan to pay it off before interest accrues (or leveraging a 0% promo card) could be justified.

Notable Quotes:

"The discount makes it pretty appetizing though, right? A 30% reduction in your bill is awesome." — Matt (48:39)
"If you can get it fully forgiven, that's the best. But yes, definitely take advantage of this discount." — Joel (49:05)

6. Facebook Question of the Week: Single Mom & Life Insurance

Timestamps: 50:14–54:56
Question from: Anonymous

• A single mom is deciding if she should buy extra life insurance through her employer beyond a $100,000 company-provided policy, given her rental properties and retirement accounts.
• Matt advises for most healthy people, it's usually cheaper and more flexible to buy term coverage on the open market (e.g., Policygenius, Costco) rather than through an employer.
• Amount recommended: $500,000–$1,000,000 for 20 years (to match child’s dependent years), with a guardian—not the minor—listed as beneficiary.
• Revisit the beneficiary regularly to ensure it reflects current wishes and guardianship plans.

Notable Quotes:

"Many companies offer these small amounts...but it's best to shop for a policy on the open market." — Matt (50:55)
"Don't name your baby as the beneficiary of this life insurance policy. If you do, the court controls where that money goes." — Matt (54:33)

7. Beer Review & Local Flavor

Timestamps: 54:59–57:52

• The hosts review Creature Comforts’ “Automatic IPA” (formerly “Automatic Pale Ale”), praising its approachable character and regional heritage.
• Matt shares backstory on local Athens, GA institution Weaver D’s—after which the beer is named.

Notable Quotes:

"It is luscious on the tongue, and I do appreciate that kind of voluminous feeling while simultaneously being radiant." — Joel (56:21)

Memorable Moments & Quotes

• On Velocity Banking:

  "It makes it seem like the paid off mortgage is the most important financial goal to strive for...But going all in...would be what we would say is an over prioritization...It's trying to solve a problem that doesn't really exist." — Joel (15:07–16:14)

• On Donor Advised Funds:

  "Basically, what Robinhood did to investing is what Daffy did to charitable giving." — Matt (26:11)

Important Timestamps

| Segment | Time Range | |-----------------------------------------|-------------| | Rad Power Bikes / Bike Industry Chat | 03:08–07:07 | | Velocity Banking (Mortgage Payoff) | 07:39–18:19 | | Donor Advised Funds / DAF Tax Q | 21:35–32:16 | | Retirement Accts & Pensions | 32:27–41:58 | | Medical Debt Repayment Strategies | 44:28–50:14 | | Life Insurance for Single Parent | 50:14–54:56 | | Beer Review / Local Athens Business | 54:59–57:52 |

Language, Tone, & Style

Joel and Matt keep the tone breezy, personable, and conversational, often interspersing practical financial wisdom with relatable humor and friendly jabs. They avoid jargon, making complex topics digestible for all listeners—and always encourage balance and flexibility in personal finance decisions.

Summary Takeaways

• Question bold claims: Many “shortcut” financial strategies aren’t worth their complexity.
• Prioritize liquidity and diversification: Don’t focus solely on debt payoff at the expense of flexibility and growth.
• Use tax advantages where you can: DAFs provide great, accessible ways to optimize charitable giving.
• Understand the fine print: With both insurance and debt repayment, always check eligibility, plan costs, and beneficiary implications.
• Celebrate steady progress: Building up your retirement savings is a marathon, not a sprint—mark your milestones.

For those seeking jargon-free, actionable financial advice—with a sense of humor—this episode delivers on all fronts.