Ask HTM – Newlywed Downpayment Debate, Good Car Loans, and Failing to Max Retirement Account #1072

Summary

How to Money — Ask HTM #1072: Newlywed Downpayment Debate, Good Car Loans, and Failing to Max Retirement Account
Release Date: December 8, 2025
Hosts: Joel & Matt
Podcast: How to Money, iHeartPodcasts

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Episode Overview

On this “Ask How to Money” episode, Joel and Matt answer listener questions focused on big personal finance milestones and dilemmas—down payments for newlyweds, navigating modern car dealership financing, special needs financial planning, annuities, and the pressure to max out retirement accounts. The hosts bring their accessible, conversational tone to practical advice, aiming to empower everyday listeners to make wise money choices.

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Key Discussion Points & Insights

1. Down Payment Debate for Newlyweds

Listener: Max from Seattle (08:40)

Situation: Max and his wife have saved enough to put down 20%—or even up to 50%—on their first home. Should they put down more to lower their mortgage, or let the rest ride in the market?

Hosts’ Advice & Reasoning:

• Historically, putting 20% down avoids PMI and gets the best rates. More than 20% often isn't worth the opportunity cost.
• Mortgage rates are higher today, but not as much as headlines suggest, especially from credit unions; shopping around is critical.
• Consider 15/15 ARMs at local credit unions (currently as low as 5.125%), which save thousands compared to 30-year mortgages. (14:16)
• Matt: “With rates in the low fives, the optionality you gain would be incredibly powerful—most folks don’t stay in the same home or mortgage for 15 years anyway.” (14:57)
• Keeping more money invested generally outpaces mortgage savings, and liquidity is undervalued—life changes, you may want/need flexibility.
• The only strong reason to put more down: if monthly payments would otherwise leave you feeling “house poor.”
• Smaller homes often make better future rentals—consider that for long-term flexibility and potential income.

Notable Quote:

• “The things you thought you were going to love forever, or the places you thought were forever homes, aren’t necessarily true, even if you really like those things.” — Joel (17:20)

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2. Modern Car Loan Tactics: Should You Finance for the Discount?

Listener: Kevin from Toronto (25:07)

Situation: Kevin found dealers give a $1,000 discount only to buyers who finance, even if ready to pay cash, but then tack on high interest and make payoff seem obscure or drawn out.

Hosts’ Analysis:

• Dealers push financing because it’s a major profit center. Often, paying cash means forgoing discounts.
• Many people are told they need a minimum finance term (e.g., 3–6 months), but these requirements are often vague or inconsistently enforced.
• Matt: “It’s intentionally archaic and suspicious. That’s the car-buying experience done the old school way.” (29:36)
• Dealers hope buyers forget to pay off early, incurring more interest. But many loans can be paid off almost immediately—check the online portal yourself.
• When in doubt, stand up for yourself, know the true payoff process, and calculate whether the discount offsets the required interest.
• Reporting such tactics probably isn’t necessary—it’s unfortunately standard practice. But honest reviews can help other buyers.

Notable Quote:

• “That’s the classic car sales dance—you handled yourself well, paying $100 interest to get a $1,000 discount. Worth the Karen hat!” — Joel (34:28)

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3. Financial Planning for a Special Needs Child

Listener: Casey from Utah (35:42)

Situation: After their child is born with Down Syndrome and needs lifelong care, Casey’s wife quits her job; how should they now plan, especially for three retirements on a reduced income?

Hosts’ Guidance:

• Start using an ABLE account—tax-advantaged, doesn’t affect Medicaid/SSI, and Utah’s plan offers a state deduction (38:07).
• If in another state, research for the lowest-fee ABLE plans (recommendations: Ohio, Florida).
• Give yourself grace—progress may slow, but you’re working toward new, vital goals.
• Make budgeting a collaborative, whole-family affair; small changes now (like one car, or moving for family support) add up.
• Keep investing for your own retirement, even if at reduced rates, and don’t abandon progress for your son’s care—it’s a marathon, not a sprint.
• Review goals and expenses regularly, and seek community/local resources as possible.

Notable Quote:

• “Circumstances may delay your path to financial independence and that’s okay. You just have new goals that you need to address—give yourself some grace.” — Joel (41:08)

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4. Annuities: Should Any Investors Ever Use Them?

Listener: Connie (48:00)

Situation: Two banks suggested annuities for Connie as a “safe alternative investment”—are they ever a good option?

Hosts’ Take:

• Never get investment advice from banks; their incentives bias them toward high-commission products.
• Most annuities (especially variable/indexed) have steep fees and cap your market returns.
• Annuities sometimes make sense late in life for guaranteed income only if they’re simple, ultra-low-cost, and needed for peace of mind—never as a basic investment vehicle.
• “Boo annuities,” says Joel—be extremely cautious, and do due diligence if you must consider them. (50:28)
• Always strive for the simplest possible solution (index funds, not exotic insurance products).

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5. Struggling to Max Out HSAs or Roths with Rising Contribution Limits

Anonymous Listener (50:48)

Situation: After years of successfully maxing out tax-advantaged accounts, rising limits and lack of raises are making it impossible to keep up—should they feel bad?

Hosts’ Reassurance:

• Many are in the same situation; rising costs (like healthcare) are eating into retirement savings.
• Celebrate your past wins and focus on your identity as an investor, not perfection.
• Matt: “I wouldn’t beat myself up. The limits may have gone up—but if you're still contributing roughly the same, you’re doing great.” (53:08)
• The impact of maxing out one year is small compared to the lifetime compounding you’ve already set in motion.
• Progress isn’t always linear; do your best, make steady contributions, and recognize the strength of your ongoing habits.

Notable Quote:

• "Once your investments are working harder for you than you are, the maximum contribution limits matter less and less." — Matt (54:34)

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Notable Quotes by Topic

• Down payments and liquidity:

  • “Liquidity is highly underrated right now. Priorities change, and when you’re locked into a house with a lot of equity, it can constrain options.” — Matt (16:15)

• Dealer financing:

  • “They hope you forget to pay off the loan quickly—most people don’t push back.” — Joel (30:49)
  • “Paying cash? That profit center for the dealership disappears.” — Joel (30:42)

• Special needs planning:

  • “The ability to know and have decades to prepare may make this doable—small rudder changes now will get you there over decades.” — Matt (37:17)

• On annuities:

  • “Stay away from banks for financial advice. If you want investments, annuities are not the best place to look.” — Joel (49:18, 49:50)

• Retirement account pressure:

  • “Your heart’s in the right place—you’re setting yourself up for an awesome future even if you can’t do it to perfection.” — Joel (51:59)
  • “Progress toward goals isn’t always up-and-to-the-right—even as a serious investor, sometimes your net worth goes down!” — Joel (53:38)

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Timestamps for Key Segments

• Down payment debate: 08:40–21:30
• Car loan dealership experience: 25:07–35:42
• Special needs child financial planning: 35:42–44:46
• Annuities discussion: 48:00–50:48
• Retirement account maxing pressure: 50:48–55:09

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Memorable Moments

• Car geekery and “middle-aged dad wins”: The episode opens with tales of car MPG improvements post-spark plug change, reinforcing the "love your old car and it’ll save you money” philosophy.
  • “Taking care of the car not only makes the MPG go up a bit, but you love it more—and you keep it longer.” — Joel (06:59)
• Listener brewery recommendation: Max recommends Seattle’s Ballard Brewery District. Joel laments he visited Ballard but didn’t have time for even one brewery: “Like a total and complete loser.” (09:48)
• Beer review (55:17): The hosts taste “A Measured Procession of Veracity,” an IPA from Burial—"gentle, luscious, not sharp, almost a donut-like sweetness."
• Marshmallows on Thanksgiving: Matt describes his aversion: “I think marshmallows are a worthless food that we should all avoid completely.” (57:19)

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Overall Tone

Friendly, honest, jargon-free, with a recurring focus on giving listeners permission to adapt their plans as life inevitably shifts. Joel and Matt encourage thoughtful, practical decisions, underlining that flexibility, self-advocacy, and living intentionally are the heart of financial success—no matter what the headlines or institutions say.

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Resource links and detailed notes available at howtomoney.com. Have a question? Get in touch for a chance to be featured on a future episode!

Transcript

[A]

This is an iHeart podcast.

[B]

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[A]

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[B]

Welcome to how to Money. I'm Joel.

[A]

And I am Matt.

[B]

Today we're going to answer your listener question.

[A]

Happy gloomy, dreary Monday.

[B]

Joel, do you think not the nicest one. We're in that season, at least where we are.

[A]

Do you think people can tell when it's rainy outside?

[B]

I think my voice does get a little deeper.

[A]

I'm saying less peppy, you just get less. I was gonna say I feel like you tried to. Did you try to counter that with like the pep in your voice at the beginning? You came in with more energy than I've been feeling all morning. That's all I'm gonn.

[B]

I think it just was average, but it felt like it was over the top given the state of things.

[A]

Yeah, I get that. This is an Ask how to Money Monday episode we're going to talk about, actually a newlywed couple. They're having a down payment debate and Joel is going to step in the middle and he's going to settle the score.

[B]

Love to solve marital arguments.

[A]

Actually, I don't think they're arguing. I just wanted to say down payment.

[B]

But if anybody out there is having a marital spat, holler at me.

[A]

I'll help. Joel. He will do it for free. There's going to be a car payment or a car loan that a listener signed up for that I actually might approve of. Yeah. Can you believe that, Joel? We'll get to that one. Another listener is wondering whether or not it matters that he is able to or no longer able to max out some of his retirement accounts. So we'll get to that one plus more during our episode today. Quickly. Before we get started though, I want to share the most middle aged dad.

Win that I've recently experienced. Joel, which is. So was it last, last weekend, coming back from Thanksgiving or driving home and I looked down. Do you do this, do you, do you hit the, do you reset the trip meter on your car when you go on trips?

[B]

No, I don't. You should. I should.

[A]

You know why you should? Because it's a good practice. Because it helps you to see what your basically what your baseline is as far as what your vehicle is getting from a miles per gallon standpoint. Okay, so let's say you always know that you, you get it like 25.

[B]

My car has it always showing and I can reset it. I just never do. But maybe I should.

[A]

So you, you hit. Cause you got your running average and that includes driving around town. Yeah, but I also know what I typically get when I'm on the interstate. And so you reset it at the beginning of a trip. That way if it's, if it's in like in the teens, you're like, wait a minute, something's wrong. Like, my car is not running properly. I had the opposite problem.

[B]

Are you typically, by the way, trying to like beat your last effort? You're like, I got 25 miles to the gallon last time. Let me see if I can get 25 and a half.

[A]

Not really. I literally mainly do it just as a data gathering exercise, just to know that the old odyssey is chugging along like it's supposed to. But what I found most recently was that it was, and I say significant, but it was like a couple miles per gallon higher than what I have ever gotten interesting in that odyssey.

[B]

So typically you're like hypermiling.

[A]

No, I was just kind of the opposite. I was like, we're flying because I wanted to get home. And I looked down and we were like in the mid-20s, like around 26. 26 plus, which I had never gotten before. And so I tried a little. So I did do this for a little bit because I was like, I want to see it hit 27, which I've certainly never hit that PR before as well on the, with a Honda. And I, I don't want to drive that slow. So I was happy with 26.7. But what I realized with this, this was the first trip that we've taken since we had some work done to the van where we got it had a tune up where we had new spark plugs. And that's ashamed to say it's not something I had ever done. And this is like coming up on 10 years of car ownership. I don't think it's ever had new spark plugs. And so I'm assuming. And granted, come on, like I'm saying that this is a massive like middle aged dad win, but this is going to save me like a couple bucks.

[B]

Every time per gallon than average. So 26, like what is that? What is the normal.

[A]

Normally it's like 24 or something. Okay.

[B]

Talk about two extra miles to the gallon.

[A]

Yeah. Which again, that's not, that's not, that's hardly anything over like when you are talking about filling up your car.

[B]

It's not going to change your life.

[A]

It's more, I mean I know that when I take care of the vehicle that it's like that is how you keep the thing on the road over the long haul. Right. But it was just also, it was an emotional win for me to see that. Oh, okay. I know this is going to allow it to last longer, to allow it to hit 250, 300 maybe someday. Fingers, fingers crossed. Only be amazing if so. But it was also just emotionally encouraging to see that, oh, this is actually impacting, albeit in a very small way. This is impacting my miles per gallon here on the interstate.

[B]

That's cool. I was pumped about that. That's cool. And it just makes you love that thing even more. And the more you love your old car, the more you are likely to keep it around. Like I just put some, I mentioned recently on the, on the show I got some new tires on my, on, on the van and it just handles so much better.

[A]

And I'm like, you got some new kicks, some new shoes?

[B]

I don't know, man. I just like, like it more now. I'm like, yeah, taking it on the Thanksgiving.

[A]

It's a virtuous cycle, isn't It.

[B]

Yeah, it is. It is. So take care of those older vehicles, not just because maybe it'll get you some more miles to the gallon also, because you're going to like that car more, which means you're going to keep it around longer, which means you're going to save more money.

[A]

What kind of miles are you getting with those Mickey Thompsons on the Honda? Mickey Thompson's are.

[B]

No, Are they fancy or something?

[A]

Those are the. They're like super off road.

[B]

Okay. Yeah.

[A]

I remember, like, as a teenager who loved Jeeps, like, the guys that would, like, try to lift their trucks and they'd stick the Mickey Thompson's on. They're like the super gnarly off road, like, really thick tread. They're like monster truck tires, basically.

[B]

I don't track the miles per gallon on the van, although I should. I'll let you know once I get in there. You should do it. Yeah.

[A]

Hit the reset next time you go on a road trip or just when you're on the interstate for over an hour or two. And then you'll know you got your baseline.

[B]

I will. I will say on my 4Runner, my 064Runner, it's. It shows it on the display. So I get 19.1 on the 4Runner, which. It's mostly driving around town. That's not bad.

[A]

Probably what you should expect out of a. It's a V6, right? Yeah, V6 around town. I mean, you can't expect too much more than 20. Look at us out of that.

[B]

Going all car talk here.

[A]

Car talk. Like click and clack.

[B]

Let's go to the beer talk, Matt. The beer we're having on this episode is called a Measured procession of Veracity. All right. It's an IPA from Burial, of course, the most ridiculous name.

[A]

We haven't had a ridiculous beer from Burial, so time to scratch that itch.

[B]

It's always time for that. We'll give our thoughts on beer at the end of the episode. And if you have a money question, go to howtomoney.com ask or just record your money conundrum on the voice memo app of your phone and email it over to [e-mail] hopefully we can take it next week on the show. Always looking for fun and interesting listener questions. Your fellow listeners appreciate it too, Matt. Let's kick it off. Let's get to a question about how much to put down when you're buying a home.

[C]

Hey, Matt and Joel. My name is Max and I live in Seattle, Washington. I've been a Long time listener of the show since the Poor not Poor days, and I'm getting ready to buy my first home. My wife Rachel and I got married over the summer and we're grappling with the question of how much to put towards a down payment. Over the years, we've set aside money into individual investment accounts, into index funds, and that money has grown over time. Our plan is to put down at least 20% towards the down payment to avoid PMI. But if we have the means, we're wondering, does it make sense to try to put down 30, 40, maybe even 50% towards the down payment to lower our monthly mortgage? To me, it comes down to this question of do we let the money ride in the stock market and then take it out of the index funds as we need to cover that monthly mortgage, or do we just throw as much as possible towards the down payment to lower it? Right off the bat, we'd love your feedback on what you think makes the most sense. If you're ever out in Seattle, come check out the Ballard Brewery District. It's a whole neighborhood that has 13, 14 different breweries all within half a mile of each other. And it's a great spot to find a good beer.

[B]

Thanks so much, Matt. I'm ashamed to say this. I was just in Ballard. Oh, Max over the summer suggested we go to Ballard, check out the Prairie District, and guess what? Matt, I stayed. Or Max, I. Max and Matt, I stayed in Ballard. I was in the heart of the brewery district and guess how many breweries I went to.

[A]

Matt, you sound upset with yourself.

[B]

I went to none. Like a total and complete loser.

[A]

And rightly so, given the fact that he said there's 13 or 14 within a half mile. I've heard of this magical craft beer fantasy land. I did not realize there were that many in such a concentrated geographic location.

[B]

I drove past some. I ran past some.

[A]

What were you thinking? Dude, come on.

[B]

Did not darken the door of one. And I did go to the dip.

[A]

In for a quick pint in the middle of a run.

[B]

I know I should have.

[A]

Gotta get your priorities.

[B]

Well, it was my. I was there for only just a couple days and just really to explore with my family and to. For my cousin was there for my cousin's wedding. So tons of wedding festivities and time with extended family, stuff like that, that took up the majority of my time. But I obviously need to go back because what I need to do is a pub crawl with Max. We'll hit up all the breweries there.

[A]

Yeah, see, maybe not all in one. You say it like that and you're like, well, that's so ridiculous. I'm never gonna do that.

[B]

That sounds awesome.

[A]

I know. But like, in reality, are you actually gonna do that? Come on, let's be honest.

[B]

Am I gonna go have beer sooner?

[A]

What you are more likely to do is to go to a family friendly brewery where the K.

That's how you walk the line right there. You find ways to include the brewery hangs where the kids can be free. And gosh, one of our favorite breweries burial up in North Carolina. There's a Volkswagen, like a gutted Volkswagen that has benches in it that the kids can sit in there and pretend to drive.

[B]

So you're sipping on your beer and they're just playing.

[A]

Yes.

[B]

Yeah.

[A]

All the sharp edges have been filed off of the sheet metal of the vehicle. But that's the kind of place where the kids are like, oh, yeah, we love that place. Regardless, Max, you are newly married. You've got a substantial amount for down payment, which is just amazing, man. Kudos to you, you and your new wife for making that happen. And by the way, Seattle is not. It's not a cheap housing market. So it's even more impressive that he's got that much on hand to be able to put down.

[B]

So he wasn't like, I'm in Nowheresville, Alabama, or something like that. And not hating on Alabama, but it's just legitimately much cheaper to buy a house in Alabama.

[A]

Cost of living much lower. But he's not only got 20% put down, but he's. He's even thinking about putting down like half in cash on that new home. Amazing. Because of that, I think Max has put himself in a phenomenal position. And I'll say, when rates were lower, the answer to this question was a bit more clear cut.

[B]

Right.

[A]

You just put down your 20%, you stay invested with the rest of the money. But it is not as simple a decision now, though, that said, I still lean towards the 20% down payment and perhaps investing the rest.

[B]

Yeah, I think that's because you mentioned rates are not as good as they used to be, and that's true.

[A]

Is that an understatement?

[B]

An understatement. People feel very locked into the home purchase they've made. If they have an incredibly low rate, it is part of what's created a stagnating housing market in many ways. I think the further we get away from 2 and a half, 3% rates, the more the housing market is going to free up. But, you know, you get the best rates in terms once you hit the 20% down payment threshold. I think that's why Matt, we're so keen on that. Not that it's like a standard everyone has to meet, but for first time homebuyers I think there's more flexibility. But if you can hit the 20% down metric, you're able to avoid PMI. You're able to, if you do decide that you want to sell that house in on a shorter timeline, you're not like messing yourself up financially in the same way you would be if you had only put 3 1/2% down or something like that. And it's also important to mention that if you shop around with a few different lenders, which is always crucial when you're talking about getting a mortgage, especially shopping with a local credit union or two, you're likely to find rates that actually aren't all that bad, that are kind of coming back down into normal territory. We see like the headline numbers, especially for like 30 year mortgage varieties. I think I looked at the number the other day. The average 30 year mortgage rate is like 6.3%. So it has come down like half a point from last year. But there are other mortgage varieties. It's not just 30 year mortgages that are out there available to you. We mentioned like a 1515 ARM that exists at a local credit union nearby where we live. The rate right now is 5.125%.

[A]

Nice.

[B]

That's more than a full point lower than the 30 year mortgage average. And so yeah, unlike a million dollar home, you'd say something like $500 a month going with that 1515 mortgage versus a 30 year traditional, you'd be putting a lot more money towards principal because of that lower interest rate. I think what this pushes me towards, Max, and what I think maybe this should push you towards is shopping extensively for a mortgage and thinking outside the box when it comes to mortgage products. ARMs used to be this flashing red light because you're like, it's so risky, don't do it. But there are arms that are not all that risky for people who are in a financially secure position like you are. That's probably where I would be leaning towards.

[A]

Yeah. And plus most folks aren't even in the home 15 years down the road. Or, or if they are, if they are in the same home, maybe it's a different loan, like maybe they've refinanced. But you know, with, with rates in the low fives, the optionality that you gain would be incredibly powerful. Moving forward. And it's likely that you'll be better off financially by staying invested with, let's say, a low 5% mortgage, given the historical stock performance. So, Joel, kind of piggybacking off your numbers here. Let's say if you were to put down an additional $200,000 on a $1 million purchase price, you would lower your monthly payments by just over 1,000 bucks, and you would save almost $200,000 in interest, which is awesome.

[B]

Yeah.

[A]

But if you left that $200,000 in the markets, and this is just assuming average returns of a very conservative 7%, you're going to have $550,000 at the end of that. So the. The difference is substantial over 15 years, more than $350,000 in total. And on top of that, you have the perk of liquidity, which is highly underrated right now. Max. Maybe you're thinking, we're newlyweds. We're gonna get a house. We're gonna live here. We're gonna stay in this job. We love this neighborhood. Gonna stay near the Ballard district.

[B]

Yeah, we're gonna love this place forever because it's got so many breweries nearby.

[A]

But priorities change, and when you are locked into a house like that with a lot of equity, it can constrain some of your options. And maybe you want to do the. What is it? The digital nomad life may start a business. All of those kinds of things are going to be tougher to do when more of your money is tied up in your home.

[B]

Yeah. Yeah. And that's not to say that, like, paying off debt, don't do it, because you should keep that debt around as long as possible. Home debt is, I think, different, Matt. We treat it differently than almost every other kind of debt, especially if you can get a reasonable mortgage product and a reasonable rate on that mortgage. And the one thing, kind of what you're getting at, too, Matt, that I have learned, maybe the hard way, I don't know, but just learned by growing up, is that the things you thought were going to. You were going to love forever or the places you were going to want to be, we're going to be like, this is a forever house or this is a forever job. That's not necessarily true, even if you really like those things. And so, like, we moved six months after we renovated our house in town, and it was not like the smartest financial move, but it was like, this is what our family needs to do, and we have the financial ability to withstand not the smartest decision at this point in time.

[A]

Yeah.

[B]

And it's just amazing how you're right, like priorities and what you want in life changes and the more liquidity you have, the more flexibility you have to kind of pull off that and go in a different direction, that maybe you weren't thinking that's the path you were going to go down.

[A]

It just gives you more margin. Right. Like, you're not counting on everything going exactly right in order for the ship to keep sailing.

[B]

Yeah. Yep. And you know, Max, we'd love to see you with a manageable monthly payment while putting 20% down. So that way you can leave the rest of those dollars invested and not feel like you have to sell. Right. Sell holdings. If the market is having a rough year to be able to afford the mortgage that maybe is stretching you. That's like a really crummy position to be in. To be like, I, yeah, I had the money, I didn't sell when I could have put more down. And now I have to sell when the market is down 30%. That's the only way I can afford the mortgage in the coming months. Like, that's a tough position to be in. We wouldn't want you to be there. And if you're leaning in that direction, though, like, we'd consider putting down a bit more of a lump sum. Like if you're like, I think we're looking for a home that does stretch us from a monthly payment perspective beyond what we feel really comfortable with, with a 20% down payment, then maybe I just don't like being put in that position. That feels like a little too much of being in the house. House, poor bucket. So maybe put down 30% or 35% or something like that. If you're planning on buying a little bit nicer of a house so that you have a monthly payment that feels eminently comfortable for years to come. And if you're still in this loan 15 years down the line, let's say, if you do say, I'm just going to put 20% down, you can always sell some stock in order to pay off a big chunk of your mortgage, then I guess, yeah, you lose optionality. But if you are biting off more than you can chew from a monthly payment perspective, you really might need to put more down just to feel like you can hack it for month to month.

[A]

And I would even encourage him too, if it is looking like they're going to be a bit cash strapped when it comes to the payment. I would even, I would push him to consider living, moving into a smaller House, similar to what you were saying, how our priorities change. You think, oh, this is going to be the forever home. Going into the decision making process, knowing that, all right, this is going to work for us for the next few years max. If you've ever thought about becoming a rental property owner, a landlord, essentially the ability to transition this, this primary home of Yalls into a rental property, if that is something that you're interested in, this would be a great way to do it.

[B]

Yeah.

[A]

And the typically homes that are a bit smaller, not like the big grand homes that you're thinking of, the smaller, more affordable kind of homes tend to make better rentals from a capitalization rate standpoint.

[B]

Yeah. If you're so inclined. If you're like, I think maybe being a landlord wouldn't be the worst thing in the world. I could do that in addition to my day job. Well, owning a rental property in the Ballard area in particular, Amazing. It's a good spot to own. I know how much we paid for an Airbnb that we shared with like my sister and my sisters and their families. Yes, it was short term, so expensive.

[A]

I was thinking long term leases, but I mean if you wanted to consider even doing short term and yeah, and obviously that's even more of a part time job than even a long term lease situation. But something to consider if you're interested. I don't at all want to push you in this direction if this, if these are not thoughts that you've already had. But if you've had these thoughts and it's something that y' all are interested in, see if you can find yourself a nice affordable 323 3, you know.

[B]

And that's, that's where putting 20 down, living in it for a while and then guess what, you make that a rental start. Already got the next down payment, your.

[A]

Cash flowing massively started.

[B]

Yeah, you move out of that thing but. And then you're really thinking about this initial property buy as kind of a place to live and kind of a future investment. And I love that mentality. Not enough people think that way. And not that you have to, but it really can jumpstart your ability to move towards financial independence and have financial security and have really income coming in from multiple different streams. So Max, hope that helps. Matt, we got more to get to, including. What about annuities? Like is that a good investment choice? We'll talk about that and more right after this.

[A]

This time of year it's got me thinking about presents I've received over the years. Joel. Specifically, I'M thinking of one family member in particular would often get me these overly grown up gifts when I was in high school, like for instance a super high quality socket wrench set or like a really nice stereo. Now at the time I thought it was silly, a bit unnecessary. But here's the thing. I still have and I still use those gifts today. They have endured. Similarly, policygenius can help you give your family a gift that could last a lifetime.

[B]

Security Man man, we wouldn't want any how to Money listener to be one of the nearly half of American adults who say they'd suffer financial hardship within six months if they lost their primary income earner. Policy Genius is the simplest way to shop for and buy life insurance. Policy Genius helps you find your most affordable policy that meets your needs. They answer questions, handle paperwork and advocate for you throughout the process.

[A]

That's right. With Policygenius, real users have gotten 20 year $2 million policies for just $53 a month. Don't wait until next year. Give your family the gift of security today with Policygenius. Head to Policygenius.com to compare life insurance quotes from the top companies and see how much you could save. That's policygenius.com this message is sponsored by Navy Federal Credit Union. As the holiday season rolls around, Navy Federal knows that you strive to do everything you can to bring cheer and joy to your loved ones. And and as a credit union dedicated to serving all veterans, active duty and their families, they understand that every little bit counts.

[B]

That's why, for a limited time, you could earn a $250 cash bonus when you spend $2,500 with Navy Federal's cash rewards and cash rewards plus cards in the first 90 days. But the giving doesn't stop there. You could also earn up to 2% unlimited cash back with these cards. So saving up for whatever the season brings just got a little easier.

[A]

Give joy, get joy. Join now@navy federal.org @navy federal Credit Union, the members are the mission. Navy Federal is insured by NCUA. Visit Navy federal.org cashrewards for details. Cash Back terms and conditions apply. Offer ends January 1, 2026. Hey y', all, it's Joel and Matt from how to Money. Joel, you were just out in Seattle recently, weren't you?

[B]

Yeah, man, it was amazing. I went for one of the most glorious runs of my life along the waterfront. It had everything you could ask for. Crisp air, mountain views, fairies gliding across the water.

[A]

Beautiful. I love it, man. Yeah, for us, our road trip through Charlottesville was a highlight. We actually splurged on a custom built Airbnb and it was well worth it. The house had these unique touches like a poured concrete counter there in the kitchen with a built in drying rack. Super functional. It even inspired some ideas for our house.

[B]

Plus, with a kitchen like that, you save money eating out.

[A]

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

[B]

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

[A]

Yeah. So while you are off making your travel memories, your home could be helping someone else make theirs. Find a co [e-mail] host.

All right buddy, we are back from the break. We're going to take a listener question here in a second about a special needs child. But first let's hear from a listener who's gone through quite the arduous process when it comes to purchasing a new vehicle. We don't typically take questions like this. It's more of a. It's almost like a psa. But we'll address some of his concerns. Let's hear from Kevin.

[C]

Hey Joel and Matt, this is Kevin from Toronto, longtime listener. Love what you guys are doing. So thank you and keep it up. I'm curious to hear your thoughts and also raise awareness for your listeners about an experience I had recently recently with buying a car. I'm well into money gear number seven with excellent credit money set aside for a while for a car for a car purchase that I've been delaying. I have a growing family with two kids and we're on a one car household. I'm a big fan of biking and I've been delaying the second car or upsizing for as long as possible. Unfortunately, over the summer my family and I were in a car accident on day one of a vacation and our beloved 10 year old Subaru was totaled. We were all fine and walked away thankfully as did the other driver. So I began my replacement car search with the intention of finding a newer but still used car and paying cash from the insurance settlement and the savings I mentioned. Several dealers these days offer a thousand dollar discount to finance or in other words, it would be an extra thousand dollars for a cash purchase. This was disappointing to somebody that was prepared to pay cash during a test drive. One of the salespeople told me that a lot of people just opt to finance and then pay off their loan immediately as it would be an open car loan. So I was begrudgingly mentally prepared to finance and carried on with the purchase of another major Japanese brand. So after the final negotiation with the salesperson and putting a small deposit down to secure the deal, I was ushered to the finance manager to finalize paperwork. The finance manager advised the minimum to Finance was 50% or about $20,000 Canadian dollars. In my case, the remaining $20k would be at their used car financing rate even with me being in the highest tier credit score of 8.99%. It's obviously obviously sky high, but didn't think much of it considering I intended to pay it off immediately. However, the finance manager then told me that I needed to have the loan for a minimum of six months before I could pay it off, with a bit of a wishy washy explanation that the title had to clear and the loan needed to be registered so the lender knew where to apply the payments and that typically takes six months. Coincidentally or not, the back of the envelope math turns out to be roughly $1,000 in interest for that principal, interest rate and term. Taking it further, I thought they probably hope that buyers like me agree to finance even with the intention of paying it off asap, but then forget and pay even more interest over the term. So I put on my Karen hat and marched over to the general manager to explain my frustration with what felt like a bait and switch sales tactic. The general manager conceded slightly and let me put another few thousand dollars down to reduce the financing amount, which I appreciated, but also thought at the same time that there doesn't seem to be any firm policy if he just bent the rules so easily. He also shared that it probably wouldn't take six months, but maybe three. I asked how I would know when the title clears and I was told I would just need to periodically call the lender to confirm. This lack of clarity seemed pretty archaic, manual and suspicious. All that said, I opted to roll the dice in finance for the $1,000 discount, assuming that the interest paid would be less than $1,000 so I'd be ultimately a net positive. Once the paperwork was signed, down payment paid, and direct debit set up for the financing payments, I was on my way. I immediately went home and searched for the lender which was associated with the dealership. I very quickly found a robust online owner portal that can be used to book service appointments, including making extra payments, getting a payoff quote and paying off a loan with the caveat that the first payment, which I set up as bi weekly, would need to clear the bank before I could download the payoff quote. While I was pleasantly surprised to see this payoff option, this solidified the sleazy feeling as there was absolutely no mention of this amazing owner portal that makes it easy to pay off a loan. When I was at the dealership or in my closing paperwork at this point, I was sure that they intentionally neglected to tell me about the owner portal and or really had no idea it was an option to pay off the car after as little as 15 days, which is what I did. I ended up paying about 100 bucks in interest and the owner portal immediately provided proof of ownership and closure of the loan. So sorry for the long story, but was curious if you've heard about this, what feels like an arbitrary loosey goosey six month or three months financing minimum. I've been stewing it over for a couple of months now, debating whether to report it to a consumer protection type of agency or something. So thanks in advance for listening and I appreciate your thoughts.

[A]

So I was just taking notes here as Kevin was talking and he said it seems overly manual, archaic and suspicious. And I would say, Kevin, that it's intentionally manual. It's intentionally archaic. And yes, you should be suspicious because that's. Yeah, that's, that's what's going on here.

[B]

That's the car buying experience, at least done the old school way. And so much of car buying is still done that way. And there are companies trying to Change that. Right. CarMax, Carvana, especially on the used car sales front, are trying to make it a little bit.

[A]

Although they've got finance financing now because I think about when I. I mean it's been the van. The Odyssey's getting a lot of love, this episode. When we purchased ours, they didn't have a financing department. And so the ability to walk in and pay cash, not literal, you know, cash. I didn't drop down $20,000, but they didn't have financing, but they do now. So I would be surprised if they do something similar to that as well, where it's just like, hey, if you, if you finance with us, you gotta.

[B]

They do, yeah.

[A]

You get a discount, I think.

[B]

And that's because like this is a profit center for so many dealerships. Right. They want you to take out a loan with them and in fact they're going to often charge you more for paying in cash. Makes me think of conversation we had with Zach and Ray. Shefska the Shevskas episode 845 and they man so much knowledge. Ray was a former car dealer and car salesman.

[A]

Which one was Ray?

[B]

Ray was the dad. The dad. And so he.

[A]

And I know that it was the dad who was. They used to work at the dealership. But I get their names.

[B]

The two of them basically started a website to help consumers shop well for a car. And it's because they have the insider knowledge of like how people. They used to rate people over the Kohl's to ensure that they got what they wanted and that consumers were ultimately paying more than they thought. And so yeah, they're hoping that you forget to pay off the loan in short order, as you mentioned. Right. That you'll rack up more in interest charges. They also get money for originating a new loan. They often get kickbacks for writing a higher interest rate loan. You mentioned the 8.9% or whatever. If you pay with cash, that profit center for the dealership disappears. Most people just don't push back the way you did. They accept what they're told. But that's exactly why they're trying to get you to think about paying the car off on a longer timeline. Not immediately. They're like that Kevin seems like a smart dude. Like he's going to pay this loan off real quick. Let's not give him all the details because he'll probably cost us a lot of money if he does. It sounds like you did about as well as you could have given. Kind of the, the funky nature of dealership sales and financing.

[A]

Yeah, that's right. Yeah. And going back to Ray and Zach, like, that's why they mentioned in that episode that many people, they essentially pretend that they're going to finance when they are negotiating the deal, but then they reveal that they are a cash buyer after they've agreed to a deal that they're happy with after a big turn.

[B]

Switch, but the opposite way.

[A]

Yeah, but I mean, it's true that the loan is funded within a week of your purchase, typically within 48 hours. And some dealerships do have early payoff restrictions baked into the contract. And so if you, let's say you pay the loan off within 90 days of funding, you could be subject to having that discount voided. And so it's important to know the terms. But if not, man, you did the right thing by advocating for yourself and by not, not buying every line coming out of the salesperson's mouth. And by the way, this man, this, this question is coming at a good time of year as well, because we're talking about the insider, the insider knowledge that Ray and Zach had and they, I remember them talking about how the dealerships man the lots, they're trying to move inventory and how essentially the end of the month is better, it's better time to buy than the beginning of the month. End of the quarter is better than that the beginning of the quarter. And then the ultimate is the end of the year is a better time to buy than at the beginning of the year. So right now if you are in the market for a new to you hopefully vehicle certified pre owned is great used vehicle from a dealership. So now is a great time to potentially snag a deal. But make sure you know the terms of the financing. If you're taking the path of trying to negotiate this discount, but you got to finance it. And to Kevin's point, the fat he said he like did some rough back of the napkin math and it's just like oh yeah, it turns out I'm going to pay $1,000 in interest. Were I had to keep this around for three months. This exact thing happened to my in laws.

[B]

Oh really? Yes.

[A]

And three months.

[B]

So very, very much a common time.

[A]

It was a thirteen hundred dollar discount. And he calculated the exact math and it was exactly, it was $1300. And I love the approach that the dealership for them that they took, it sounds like they took a slightly more honest approach. They just asked them if you could.

[B]

Keep the loan around for a gentleman's.

[A]

Agreement at least for three months. But then they're like that's not in the contract. So is there a prepayment penalty? Are we able to eliminate this immediately? And they're like yep, you can. But we ask you please to keep this around. It's like okay, I think I have all the information I need.

[B]

It's more like a do me a solid if you don't mind. Yeah, you know, I don't know. Probably not. And not if it's Gonna cost me 1300 bucks, I'm not gonna do a salad.

[A]

I kind of appreciate the honesty though as opposed to like the runaround and not sharing the information. Yeah, I respect that a little bit more.

[B]

Yeah, me too. And so Kevin said, well, should I report this dealership to a consumer agency? Probably not. I mean these are fairly normal tactics that you're mentioning here. Like it's the classic car sales dance. And so you handle yourself well, right? Paying 100 bucks in interest to get a thousand dollar discount. It sounds like it was worth the annoyance and the Frustration and putting on your Karen hat, which you said, which was funny. You can always leave an accurate Google review. I wouldn't leave like a one star review and talk smack, but maybe like three stars and mention kind of the annoying financing combo. Help your fellow potential car buyers out. That can just make a difference for them. People who are out there thinking about buying a car in the future from that dealership. We hope you enjoy this car. We hope it lasts you a long. Just makes me think when a used car that you love, when you get into an accident, when, if someone runs into your car or something like that, it is such a bummer because oftentimes the value you get from the insurance company for that car, it doesn't match up to the value in your head and your heart for what that car is worth. Like, at least for me, like if one of my cars were to get damaged right now, like our van is worth. I looked up the value the other day. I was shocked. It's worth like $5,500. To me it's worth way more than that. And so if I get slammed in that car and that's the cash I get, I'll be bummed. So sorry that happened to you, Joel.

[A]

Let's hear from another listener. This is a listener with a new baby in tow and he wants to make sure he's taking the proper financial steps to prepare for this baby's future. Hi, guys. Casey from Utah here. My wife and I recently had a son with down syndrome and she needed to quit her job to help care for his needs. It's likely that he will live with us for the rest of our lives and we want to ensure that he is provided for and that whoever cares for him after we are gone has the resources they need. At the same time, I would still like to retire someday. How can I plan for retirement for three people instead of two, especially with a reduced household income? Any thoughts would be appreciated. Thanks, man.

[B]

Casey, first off, I just want to say it sounds like you're being intentional to love your son. Well, yeah, and I love how he's approaching this question and it's going to throw a wrench in things financially like this is this changes your future, your family's future, your financial future. Saving for retirement, of course, is still necessary and important, but the family is the top priority. And so this is going to make it harder, like you said. But I think I just want to say that I'm impressed by your dedication to make sure that your son is well taken care of, even if it means rearranging finances so your wife can stay at home. Like, those are the big kinds of decisions, Matt, that people face that just don't get talked about all that much. And so I'm glad Casey brought this up so we could address it on the show.

[A]

Totally. Yeah. And so I don't at all want to discount how hard it might be for Casey. I grew up with a special needs sister, so I certainly know. But at the same time.

[B]

And she needs care for the rest of her days from your family.

[A]

Absolutely.

[B]

And you'll probably be a part of that at some point in the future.

[A]

Absolutely. That being said, it's almost like, like the ability for Casey to know that now and have years and like decades ahead of him to prepare for that. I think it's almost like, I think I would rather that happen than let's say if you had a kid and something happened when they're like 18 and then all of a sudden, like. What I'm saying is that if you've got 20 years ahead of you to prepare and you've got time on your side and compounding that is totally doable as opposed to like, hey, we gotta do this thing that needs to be fixed by next year. There's not a lot that you can do within such. Just such a quick turnaround, like the.

[B]

Small rudder changes you can make now to the course of your ship. Like, you're going to get there over the course of 20 years. You have to make a much harder turn right. To get there in less in like a year or two. Exactly.

[A]

Yeah. So Casey mentioned saving for his son. He wants to obviously make sure that he's taken care of in the future. Casey, I'm not sure if you've heard of an ABLE account, but you have certainly heard it now. That is going to be the best way to sock money away for his future. Anyone who has a disability that is diagnosed before the age of 26 qualifies for an ABLE account. It's basically, it's akin to the 529 accounts out there, but was created specifically to help families save money for disabled children without losing out on federal benefits like Social Security income and Medicaid as well.

[B]

But.

[A]

So Casey specifically lives in Utah. So you can head over to the website ableut.com and they've got pretty good options over there. The expense ratios, the fees, they're fairly low. And that is going to be the best account to help your son to save up a nest egg for his future. And we're specifically mentioning Utah's account. Because, Casey, you get a state deduction for dollars that you contribute to that account. If you live in a state that didn't have a deduction, that's when you would want to start looking at other state plans. Just like we do with 529 accounts, right?

[B]

Yeah.

[A]

And so when it comes to able accounts, I think Ohio has a really good one. I think Florida has a really good one as well. So for everyone else out there who's interested in an able account, you don't get the in state deduction. Make sure to look to some of those better options out there. But Utah seems pretty solid.

[B]

Yeah. And that's one piece of the puzzle. Right. Matt is saving for the third member of the family for their son.

[A]

It's like a practical accounts.

[B]

Yeah. Answer. That's something that has to be, has to be mentioned. And it is one of the places you want to start funneling some amount of money to help him save for his own future. Because yeah, it's different than like we talk regularly about whether or not we're going to invest for our children's future and we kind of waffle on that and we do a little bit, but not a whole lot. And we think our children should largely be responsible for funding their own retirement. But it's different. Like when you have a special needs child who is going to need a lot more care and won't be able to do some of those things for himself. At the same time, Casey, you're also worried about your own future. Understandably, you're going to have higher expenses because your son is likely going to live with you for a long, long time. You've also gone down to being a one income household, which makes it harder to make ends meet and to deal with those escalating costs that we're all experiencing and at the same time to save well for your own retirement, that it feels like a mountain of necessities. And it's not that it isn't possible, it's just that it will inevitably take longer, which is why the time portion matters so much that Matt talked about. So I think the first piece of advice I would say is to maybe give yourself some grace, realizing that your circumstances are going to delay your path to financial independence and that's okay. Like, I think it could be demoralizing. Don't let it be demoralizing. You just have new goals in your life that you need to address.

[A]

Yeah, no, I think thinking about it in that way is really helpful because it just shows that there are all different Types of goals that we set for ourselves. And so how do we sacrifice in the here and now to make sure that we're able to achieve those goals? Right? Like that's how we are able to realize the life we envision for ourselves. And so practically speaking, I think what that can look like is just, I don't want this to seem so small and petty, but budgeting is what I'm thinking about. Assessing your income, assessing your expenses. You've certainly lost some income and you could stop prioritizing retirement altogether in order to meet your current needs. That would be an understandable reaction, but I think it would be a bad one for your future, for your desire to be financially independent and retire someday. Instead, I would be asking how can I reduce my expenses so that I'm not going to negatively impact my life in a significant way? Just start trimming wherever you can, wherever possible to create more margin. I think this will be important. As you just build up your savings, you are able to continue investing and also start saving for your son's future as well. It may not take, depending on how tight of a budget and how tight.

[B]

Of a, of a ship that you're.

[A]

Running within, that you might find, holy cow, all of a sudden all of these dollars that were kind of just getting spent willy nilly, we're able to funnel and harness in a way that's going to lead to significant wealth down the road. If you were already really on top of your budget, then I would say maybe it would take maybe some bigger cuts, some more drastic changes in your life as opposed to just trimming around the margins.

[B]

Yeah, well, I think this is going to by necessity involve some more communication between you and your wife. Right. And it's often incumbent on the stay at home spouse to create that more frugal environment. I think it's going to take both of you really all hands on deck sort of approach in order to like feel comfortable to still invest for yourself while taking care of your son. And like you mentioned, Matt, you'll probably have to look beyond even low hanging fruit. I'm thinking about something like, okay, your wife is staying at home. Now, depending on your work situation, Casey, can y' all go down to being a one car family? Like that's one of those things that it's not just selling the car, it's the fact that you're not paying insurance on that car anymore. Like it's not a depreciating asset sitting in your driveway. So like what can you do that maybe might be a little outside the box that you haven't, you really haven't.

[A]

Thought about even a lower cost of living area. You know, I mean, maybe you were thinking before, oh, it's not that important that we're not close to family. Oh, maybe all of a sudden you're realizing that it's much more important for us to be closer to family because of the assistance that they're going to be able to provide.

[B]

For sure. I think ultimately financial independence is still doable over a longer timeline. It's going to mean thinking more about your own earning potential and working to increase your primary income as well. Especially since you are going to be the sole breadwinner. You're probably going to need to reduce some of your retirement contributions for a while. Make sure you're still getting the match though, and then increase them steadily over time as you get more comfortable with, with the one income lifestyle. So yeah, I would tend mostly to your own investments, some to the investing on your son's behalf as well. We wish you the best and man, it sounds like these new goals going to be more difficult, but these are goals that are going to be worthwhile for your family to thrive.

[A]

That's right, Joel. We've got more to get to. We're going to take a question about maximizing your retirement accounts. Maybe we'll even talk about annuities. We'll get to all that and more right after this.

This time of year it's got me thinking about presents I've received over the years, Joel. Specifically I'm thinking of one family member in particular would often get me these overly grown up gifts when I was in high school. Like for instance, a super high quality socket wrench set or like a really nice stereo. Now at the time I thought it was silly, a bit unnecessary, but here's the thing. I still have and I still use those gifts today. They have endured. Similarly, policygenius can help you give your family a gift that could last a lifetime. Security Man.

[B]

Man. We wouldn't want any how to money listener to be one of the nearly half of American adults who say they'd suffer financial hardship within six months if they lost their primary income earner. Policygenius is the simplest way to shop for and buy life insurance. Policygenius helps you find your most affordable policy that meets your needs. They answer questions, handle paperwork and and advocate for you throughout the process.

[A]

That's right. With Policygenius, real users have gotten 20 year $2 million policies for just $53 a month. Don't wait until next year. Give your family the Gift of security today with Policygenius. Head to Policygenius.com to compare life insurance quotes from the top companies and see how much you could save. That's policygenius.com this message is sponsored by Navy Federal Credit Union. As the holiday season rolls around, Navy Federal knows that you strive to do everything you can to bring cheer and joy to your loved ones. And as a credit union dedicated to serving all veterans, active duty and their families, they understand that every little bit counts.

[B]

That's why for a limited time, you could earn a $250 cash bonus when you spend $2,500 with Navy Federal's cash rewards and cash rewards plus cards in the first 90 days. But the giving doesn't stop there. You could also earn up to 2% unlimited cash back with these cards. So saving up for season brings just got a little easier.

[A]

Give joy, get joy. Join now@navy federal.org @navy federal Credit Union, the members are the mission. Navy Federal is insured by NCUA. Visit Navy federal.org cashrewards for details. Cash back terms and conditions apply. Offer ends January 1, 2026. Hey y', all, it's Joel and Matt from how to Money. Joel, you were just out in Seattle recently, weren't you?

[B]

Yeah, man, it was amazing. I went for one of the most glorious runs of my life. Along the waterfront. It had everything you could ask for. Crisp air, mountain views, fairies gliding across the water. Beautiful.

[A]

I love it, man. Yeah, for us, our road trip through Charlottesville was a highlight. We actually splurged on a custom built Airbnb and it was well worth it. The house had these unique touches like a poured concrete counter there in the kitchen with a built in drying rack. Super functional. It even inspired some ideas for our house.

[B]

Plus, with a kitchen like that, you save money eating out.

[A]

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

[B]

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

[A]

Yeah. So while you are off making your travel memories, your home could be helping someone else make theirs. Find a co [e-mail] host.

[B]

All right, we're back. Let's get to the Facebook Question of the week. This one comes from Connie. She says, what do you think about Annuities. Two different banks have advised me to get these. I understand they probably get a nice commission, but they have offered it as a safe alternative investment. Matt, what's your take?

[A]

I like that two different banks have recommended them. So she's been out there doing her shopping and she's like, well, the first time I thought, no, no thank you. But then when the second bank was just like, oh yeah, yeah, you need an annuity. She's probably like, everybody's saying Maybe there's some T.R.

[B]

Here.

[A]

No. Well, first off, I mean, I guess even the fact that she's going to a bank, right, like getting financial advice from a financial institution like a bank is, I mean, it's always a bad idea. Where it is that you get your financial advice matters so much. And the incentives often determine the kind of advice that you're going to receive. So as you mentioned, if the commission is steep, there is a much higher chance that they're going to recommend that product whether or not it is in your best interest. And so the, the fees that banks realize on annuities, like variable annuities, they can be massive. I'm talking like in the 2 to 3% range annually. I would say the first mistake was even going to your local banker and saying, hey, sell me a financial product. That's something you want to avoid. Generally speaking.

[B]

Agreed. Stay away from banks for financial advice. Also, an annuity, it's kind of an investment, but it's also an insurance product. With many forms of annuities, like an indexed annuity, your investment returns are capped. Think about the returns you would have been losing out on in this fantastic market run if you were to have opted for an annuity instead of putting your dollars in an annuity, instead of investing them in the market, you would have gotten creamed from a returns perspective. You would have lost out on so much upside, aiming for security and not. And trying to avoid risk. And so if you're looking for an investment, annuities are not the best place to look. If you're looking though, to create income based on the investment dollars, you've been able to grow as you get closer to retirement age. That's when, and I stress some, some, some, a few low cost types of annuities might maybe a decent choice for steady income, but annuities just are not a great choice for most folks. And if you're looking for a smart investing strategy, they're just not really a reasonable choice at all.

[A]

So they are an inferior financial product.

[B]

Boo annuities. And if you do Step into that space later in life seeking that sort of like income like clockwork every single month. Just be really, really careful and do your due diligence and know that you need to opt for a really low cost one and you're probably not going to get that at your bank.

[A]

That's right. Joel, let's take a question from an anonymous poster in the Facebook group. Is anyone else finding it harder to keep maxing out HSAs and Roths as the contribution limits increase? I don't think we can comfortably do it next year. Company raises have been non existent for two years and costs for everything are up, including health insurance. I'm glad we can still get some money in there and super grateful for the past years. We could max it out. Just feeling a bit sad that we can't hit the goal next year though. Joel, what you think?

[B]

Ooh, yeah. I mean you're not alone. Anonymous I think that's the first thing I want to mention. Especially you talk about the rising costs of health insurance. Depending on where you work, you might be seeing a double digit increase in what you're expected to pay for health insurance. And it makes sense with that being such a large expense. You're like, it's got to come from somewhere and I feel like I have to dial it back on retirement account contributions. I also want to say I'm so glad that you want to max out all those accounts that you've been able to even if you can't do it every single year. The fact that that is your goal, that's what you're striving after, it means a lot. It means that your heart's in the right place, you're shoveling your money in the right place and you're setting yourself up for an awesome future even if you can't do it to perfection.

[A]

You know what this makes me think of? This makes me think of James Clear Atomic Habits where he talks about identity based habits. There are times when we latch onto certain habits and things that we're trying to implement because there's some sor of external marker, right? And in this case I think for this anonymous poster, maybe the external marker is being able to say that I maxed out the Roth IRA or I maxed out the hsa. But what I think is more important is the fact that this person sees themselves as an investor, right? Like this has become something that they do because I'm an investor, like because I am intelligent and I understand the power of compounding returns. I understand how tax advantage accounts lead to More wealth for me and my family down the road. I understand delayed gratification. Like these are all the kind of tenants that, that are at the core of what it means to be an investor.

[B]

The optionality I'm building for myself every year that I get at least close to maxing those out.

[A]

Yeah. And so I mean personally, I wouldn't beat myself up if I wasn't able to hit the new max amounts. Especially if you're, you know, contributing the same amount that you did, let's say.

[B]

Last year or the year before, but.

[A]

The limits have just gone up. And so you're qu, quote unquote, not maxing it out anymore. But you're investing pretty dang close to what you're investing before. What's it matter? You don't have the title anymore. But I don't know. My wife isn't giving me a gold star for maxing out our retirement accounts, so I don't know. Hopefully that is helpful. Yes, please still do invest. But personally, I wouldn't beat myself up over not being able to max those accounts.

[B]

I think it's just also important to note that as we make progress towards financial goals, it's not always and up into the right endeavor. That means even as a serious investor, your net worth is going to go down year over year. Sometimes not through any fault of your own, but just because, hey, 2022 was a rough year in the markets. And guess what? Even though I contributed, I'm worth less today than I was a year ago. That's just a frustrating thing to encounter. Or like, yeah, I can't put as much in as I did last year, but I'm still doing my best. That's okay. And as long as you're doing your best, you're still prioritizing, contributing and setting money aside for your future, then I think you are creating a bright financial future for yourself and you are taking the right tactic. Totally.

[A]

And not to mention too, over the years it's less about your contributions and it's more about the nest egg that you've accumulated and how much weight that that thing is pulling for you.

[B]

Right.

[A]

Like once your investments are working harder for you than you are, the, like, the maximum contribution limits, they matter less and less the further along the further down your financial journey you travel.

[B]

I think it's always good to look back at how far you've come to like, hey, what have I done over the past six, seven, eight years?

[A]

Celebrate those wins.

[B]

Yeah. As like my main goal has to been to max those out that I Think will hearten you. You're like, man, I have been crushing it. So the fact that this is a minor blip of $500 that I can't get to. To max it out, overall, I'm still crushing it. Totally agree, Joel.

[A]

Let's get back to the beer that you and I enjoy. I'm gonna say this time. Which was a measured. What was it? Procession.

[B]

You need a new prescription for your glasses.

[A]

No.

[B]

Well, it is very tiny type, and.

[A]

It'S written in, like, handwritten. Yeah, Procession. A measured procession of veracity. This is an IPA by burial. A 7 percenter, would you think? By.

[B]

And I'm saying this was gentle, it was luscious, like laying down in a bed of hops. And it's just not as abrasive as some of the double dry hopped IPAs that you might expect from burial. But still, like, packed to the gill with hop flavor, but just not. It didn't quite have that. What do you usually call it? Like, blue cheese? Yeah.

[A]

That sharpness.

[B]

That sharpness.

[A]

Yeah, it didn't quite have that. Didn't have that sharpness. It almost had, like. It seemed a little bit sweeter than usual. Like, it.

[C]

There's.

[A]

It almost had like a fried. I don't know why I'm thinking this. It made me almost think of like a fried donut. Like a.

[B]

Like, almost like a waffle House waffle. Yeah. There's like a pastry which tastes like a donut.

[A]

Yeah. There's something about it. I don't know what it is. Certainly delicious. And had the hops and all that going on. And like, this isn't a pastry stout or, you know, it's pastry sour.

[B]

Pastry IPA.

[A]

Yeah. Do they make pastry IPAs? I don't even know if that's the thing.

[B]

I bet somebody has somebody else tried it.

[A]

One of those wacky beers that you can get off the shelves. But yeah, something about the. Reminded me of, like, stepping into, like, a small hipster donut shop or something like that. But it was really good.

[C]

Glad.

[A]

You know, I don't know if I've.

[B]

Ever been in a small donut hipster shop.

[A]

Like, you've never been to, like, a local, locally owned donut place.

[B]

I have, but it wasn't hipster man.

[A]

We talked to that owned. I can't remember if that was both of us who interviewed her or if that was just you. Her husband has the donut shop.

[B]

Kristen Karriotti, Karate. Yes. Her husband owns a donut shop. I wonder if it's hipster. I don't know, but one of these days, by default, it is because it's.

[A]

Locally, responsibly, sustainably owned and operated.

[B]

Yeah, right.

[A]

That's what you try to do as a small business owner.

[B]

I'm just not a huge donut guy. So unless it's hot and fresh off the Krispy Kreme line, like, not interested.

[A]

You can't beat the mouthfeel of a Krispy Kreme.

[B]

It just melts, man.

[A]

Oh, my gosh. It's so good.

[B]

Straight in. So good.

[A]

How do you feel about toasted marshmallows? Cause that has a similar mouthfeel.

[B]

I think marshmallows are a worthless food that we should all avoid completely.

[A]

Yeah, I'm not.

[B]

I don't know.

[A]

I'm not a huge fan.

[B]

I think it's something that kids like. And then, like, even think back to Thanksgiving not long ago, and I'm like, there's so many random foods with marshmallows on them. Just get them out of my face, please.

[A]

So many. How many sides did you have?

[B]

Like, at least two. There's like, there's like a fruit dessert with like, or side with marshmallows in it. There's like the sweet potato.

[A]

Yeah, sweet. Sweet potato pie is. That's a little more traditional with the marshmallows. I'm trying to figure out what else you stuck marshmallows on. I know you didn't personally stick them on there, but it's indicative of your Southern heritage.

[B]

I guess it is.

[A]

Perhaps that everything had. Is that marshmallows on top of the turkey?

[B]

Come on, let's go. Not cool. You can put bacon on the turkey, just not marshmallows. All right, that's gonna do it for this episode. Thank you as always for listening. We'll put links to some of the resources we mentioned up in the show notes on our [e-mail] you can also sign up for the how to Money newsletter.

[A]

You know it.

[B]

Do it. It's great.

[A]

All right, that'll be it, though. Until next time.

[B]

Best friends out.

[A]

Best friends out.

Okay, only 10 more presents to wrap. You're almost at the finish line. But first.

[B]

There.

[A]

The last one.

Enjoy a Coca Cola for a pause that refreshes.

[B]

This podcast is brought to you by FedEx. The new power move. Hey, you know those people in your office who are always pulling old school corporate power moves? Like the guy who weaponizes eye contact? He's confident, he's engaged, he's often creepy. It's an old school power move. But this Alpha Dog laser gaze won't keep your supply chain moving across borders. The real power move Having a smart platform that keeps up with the changing trade landscape. That's why smart businesses partner with FedEx and use the power of digital intelligence to navigate around supply chain issues before they happen. Set your sights on something that will actually improve your business. FedEx the new power Move hey Ryan.

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