Ask HTM - Parlaying Real Estate Equity into Stocks, FIRE Recommendations, & Unloading a Car with a Loan #943

Summary

Podcast Summary: How to Money | Episode #943

Title: Ask HTM - Parlaying Real Estate Equity into Stocks, FIRE Recommendations, & Unloading a Car with a Loan
Release Date: February 10, 2025
Hosts: Joel and Matt from iHeartPodcasts' How to Money

---

In this episode of "How to Money," hosts Joel and Matt tackle a range of listener questions surrounding real estate investment, early retirement strategies, and managing vehicle loans. Additionally, they delve into personal frugality, discuss portable sauna options, and explore the emotional aspects of pet ownership expenses.

---

1. Parlaying Real Estate Equity into Stocks

Listener: Alexis from New Jersey
Question Timestamp: [08:24]

Discussion Highlights: Alexis and her husband own two homes, with their first property now serving as a rental. Purchased in 2020 for $262,500, its current appraisal stands at $470,000, with a remaining mortgage of $200,000. They earn a profit of $600 monthly, which they reinvest, but are contemplating whether to continue this strategy or sell the property to invest the accrued equity into stocks.

Notable Insights:

• Locked-In Low Mortgage Rates: Joel emphasizes the advantage of Alexis's low mortgage rate (3.1% in 2020) as a significant hedge against inflation. He advises caution in selling a property with such favorable terms.

  "It's hard to assign a specific value to that locked-in low mortgage rate. I think it's actually one of the best protections you could have against inflation."
  — Joel [12:26]

• Tax Implications: If Alexis meets the "two in five" rule—living in the home for at least two out of the past five years—she can potentially avoid capital gains tax on the appreciated value.

  "If Alexis sold soon, she could save herself roughly $30,000 in tax that she would otherwise owe."
  — Joel [15:50]

• Investment Returns Comparison: While real estate has provided significant returns due to leverage and favorable market conditions, Joel and Matt caution that these returns might not sustain in the future. They compare real estate returns to the stock market's performance, noting that stocks have also historically provided robust growth.

Conclusion: Joel and Matt recommend that Alexis weigh both the financial benefits and lifestyle implications of either continuing to invest in real estate or reallocating her equity into the stock market. They stress the importance of making a swift decision to avoid potential tax burdens in the future.

---

2. Recommendations for Early Retirement (FIRE)

Listener: Evan Brooks from Omaha, Nebraska
Question Timestamp: [22:23]

Discussion Highlights: Evan seeks book recommendations to educate himself and his wife on early retirement strategies before consulting a financial advisor.

Notable Recommendations:

• "Your Money or Your Life" by Vicki Robin: An inspirational guide that intertwines personal stories with financial advice, emphasizing the relationship between money and life satisfaction.

  "Your Money or Your Life... it's less technical and it has stories that help drive home the point."
  — Joel [26:18]

• "The Simple Path to Wealth" by JL Collins: Focuses on straightforward investment strategies, particularly the merits of index fund investing, presented in an accessible manner.

  "JL's book is really good for people who are saying, 'But isn't that just not diversified enough?'"
  — Matt [27:19]

• "Quit Like a Millionaire" by Kristy Shen and Bryce Leung: Chronicles the authors' journey to financial independence, offering practical advice and motivation.

• "The Psychology of Money" by Morgan Housel: Explores the behavioral aspects of money management, highlighting the importance of mindset in financial success.

Additional Resources:

• Blogs: Matt and Joel recommend bloggers like Mr. Money Mustache and The Mad Fientist for in-depth strategies and personal insights into the FIRE movement.

Strategic Advice: Joel suggests that Evan focus on both the technical and psychological aspects of early retirement, ensuring a well-rounded understanding before making significant financial decisions.

---

3. Unloading a Car with an Active Loan

Listener: Josh
Question Timestamp: [51:14]

Discussion Highlights: Josh and his wife plan to sell their second car, a 2020 Hyundai Elantra, which still has $1,200 remaining on the loan. They are unsure whether to pay off the loan before selling or to sell the car with the loan active.

Hosts' Recommendations:

• Paying Off the Loan First: Both Joel and Matt advise paying off the remaining loan balance before selling to simplify the transaction and avoid potential complications with the lender.

  "If you only owe $1,200, pay that thing off, make the sales process just a whole lot easier."
  — Joel [52:01]

• Streamlining the Sale: By having a clean title in hand, Josh can present the car as a straightforward sale, making it more attractive to potential buyers.

• Financial Benefits: Eliminating the car reduces ongoing expenses like insurance, taxes, and depreciation. Joel highlights that the money saved from owning fewer vehicles can be invested elsewhere for better returns.

  "If you're selling it and you're not adding a different car into your fleet, this is money in the bank."
  — Matt [51:36]

Conclusion: Joel and Matt conclude that paying off the loan before selling is the most efficient approach, ensuring a smooth transaction and maximizing financial benefits.

---

4. Saving on Expensive Pet Surgery Costs

Listener: Sarah from South of Boston
Question Timestamp: [32:11]

Discussion Highlights: Sarah seeks advice on reducing the costs of a potential heart surgery for her 4-year-old Australian Shepherd, Maggie. Despite attending a teaching animal hospital and facing limited insurance coverage due to a pre-existing condition, she is exploring additional avenues to mitigate the $7,000 to $10,000 expense.

Hosts' Recommendations:

• Shop Around: Matt advises contacting multiple vets to obtain quotes, ensuring that Sarah is getting the best possible deal for the surgery.

  "Call around to a few other vets to see what some other well-reviewed vets might charge you."
  — Matt [35:39]

• Utilize Pet Discount Resources: Joel suggests using websites like pethelpfinder.org to find local vets offering discounted services.

• Avoid High-Interest Financing: They caution against using payment plans or credit services like CareCredit, which can impose exorbitant interest rates.

  "CareCredit... they charge rates north of 30%... maybe it's better to pay cash in full when the time comes."
  — Joel [39:15]

• Explore Financial Tools: Matt recommends using the podcast's credit card tool to find cards that offer rewards on large purchases, allowing Sarah to maximize benefits while managing expenses.

Conclusion: Joel and Matt encourage Sarah to thoroughly research and compare veterinary costs, utilize available discount resources, and consider smart financial tools to alleviate the burden of Maggie's surgery costs.

---

5. Frugal vs. Cheap: Personal Preferences and Practices

Timestamp: [02:55] - [07:48]

Discussion Highlights: Joel and Matt engage in a light-hearted debate on the terms "frugal" versus "cheap," ultimately expressing a preference for being frugal. They segue into a discussion about sauna options, highlighting Joel's interest in portable saunas as a cost-effective alternative to traditional models.

Notable Quote:

"I love frugal. Cheap."
— Joel [02:55]

Portable Sauna Discussion: Joel considers purchasing a $120 portable sauna from Costco, which is significantly cheaper than traditional wooden barrel saunas costing upwards of $3,000. They discuss the practicality, quality, and usability of the portable option versus the more expensive models.

Conclusion: The hosts advocate for cost-effective solutions that align with personal lifestyles and financial goals, demonstrating how frugality can lead to meaningful savings without compromising on desired experiences.

---

6. Crowdsourced Real Estate Investing

Listener: Celeste
Question Timestamp: [45:45]

Discussion Highlights: Celeste inquires about investing with Arrived, a platform for crowdsourced real estate investing. Joel and Matt critically evaluate the viability of such investment avenues.

Hosts' Recommendations:

• Avoid Crowdfunded Real Estate Platforms: Both hosts advise against using platforms like Arrived due to high fees, multiple layers of bureaucracy, and minimal liquidity.

  "Real estate always comes with fees, but the fees are even bigger when other people are sourcing the properties for you."
  — Matt [45:57]

• Compare Returns: Matt highlights that the average annualized return on Arrived is approximately 3.3%, which pales in comparison to the stock market's performance over the past decade.

  "Average annualized returns are not going to blow you away... compared to the S&P's 14.2% over the past decade."
  — Matt [48:33]

• Alternative Investment Options: They suggest traditional real estate investments or Real Estate Investment Trusts (REITs) like Vanguard's VNQ as more efficient and lucrative alternatives.

Conclusion: Joel and Matt conclude that while crowdfunded real estate investing may seem attractive, the high fees and lower returns make it a less favorable option compared to direct real estate investments or stock market investments.

---

7. Personal Reflections and Lifestyle Choices

Additional Insights: Throughout the episode, Joel and Matt share personal anecdotes and reflections on financial decisions, emphasizing the importance of aligning financial strategies with lifestyle choices. They discuss the emotional aspects of pet ownership costs and the challenges of balancing frugality with quality of life.

Notable Quote:

"Are you 100% sure you're doing all the smartest things for your money?"
— Joel [41:15]

Beer Discussion: Towards the end, Joel and Matt share their thoughts on a bourbon barrel-aged scotch ale by Monday Night Brewing, highlighting the sensory experiences and personal connections tied to their beverage choices.

---

Conclusion: Episode #943 of How to Money offers listeners thoughtful analysis and actionable advice on navigating complex financial decisions related to real estate, retirement planning, vehicle management, and pet care expenses. Joel and Matt’s balanced approach combines financial wisdom with personal experiences, providing valuable insights for anyone seeking to optimize their financial well-being.

---

Resources Mentioned:

• PetHelpFinder.org
• Vanguard VNQ
• Arrived
• How to Money Credit Card Tool
• Recommended Books:
  • Your Money or Your Life by Vicki Robin
  • The Simple Path to Wealth by JL Collins
  • Quit Like a Millionaire by Kristy Shen and Bryce Leung
  • The Psychology of Money by Morgan Housel

For more details and additional resources, visit howtomoney.com.

Transcript

[Joel]

This episode is brought to you by Navy Federal Credit Union. At Navy Federal, it's been their mission to help members of the military, veterans and their families reach their financial goals. There are a lot of great flexible savings and investing options like certificates with sky high rates that allow you to add money anytime throughout your term.

[Matt]

Plus, Navy Federal gives you access to financial advisors and online tools to help you find the investing and savings plan that work for you. Sign up@navy federal.org Navy Federal Credit Union members are the mission Savings products insured by NCUA Investment products are not insured not obligations of Navy Federal and may.

[Capital One]

Lose value this podcast is sponsored by Capital One. In households we subscribe to everything music, tv, even dog food. And it rocks until you have to manage it all, which is where Capital One comes in. Capital One credit card holders can easily track, block or cancel recurring charges right from the Capital One mobile app at no additional cost. With one sign in, you can manage all your subscriptions all in one place. Learn more at Capital1.comsubscriptions Terms and Conditions apply.

[Tech Stuff]

Do you want to see into the future? Do you want to understand an invisible force that's shaping your life? Do you want to experience the frontiers of what makes us human? On tech stuff, we travel from the mines of Congo to the surface of Mars, from conversations with Nobel Prize winners to the depths of TikTok to ask burning questions about technology. From high tech to low culture and everywhere in between. Join us Listen to tech stuff on the iHeartRadio app, Apple Podcasts, or wherever you get your podcasts.

[Joel]

Welcome to How To Money. I'm Joel. I'm Matt, and today we're answering your listener.

[Matt]

That's right, buddy. It's personal finance time. It's always personal finance, the clock over here at How To Money, PFT for short.

[Joel]

We are in fact taking its own distinct time zone. Matt pft.

[Matt]

It's maybe just like one click beyond Pacific, like somewhere in between Hawaii and California is pft.

[Joel]

That's where we reside.

[Matt]

But we do have several listener questions to get to. We've got a listener who's considering parlaying her real estate equity gains into stocks. She's thinking about selling while she feels ahead while she's on top. Another listener is interested in early retirement. He wants that life of leisure. We're going to explain to him how he can get that. And another listener is interested in unloading a car with a loan. These are new waters for him and his wife, so he's got some specific questions as to how it is he should Go about pulling that off. We'll get to those plus more during today's episode.

[Joel]

Plus, pets are expensive. We'll talk about that, too. Okay. Frugal or cheap for you real quick?

[Matt]

Yes, please.

[Joel]

I love frugal. Cheap. So, you know, Matt, you're super into the health space. Me, not so much. But I know that saunas, especially because of my Norwegian heritage, you can downplay.

[Matt]

Your draw into becoming, like, Bay Area tech bro who wants to live forever. But we know, I know. It's in your blood.

[Joel]

Yeah, not interested. But I do think that I've heard that saunas are good for your health. Literally. Haven't read on it upon it much. Haven't listened to the podcast about it, but I've also been like, ooh, I like warmth, and so I like warm, wet air. So saunas are of interest to me, unlike the cold plunge, which just sounds like pain and terribleness. But okay. So I have been looking over the years, and I'm like, oh, Costco sells saunas. You can get a pretty decent sauna for, like, two grand. 2,500 bucks. I was like, okay, that'd be kind of cool. You know, maybe I'd use it three, four nights a week. It'd be a nice way to wind down before bed. But you know what I found while perusing Costco's website? And you tell me if this is frugal or cheap. A portable sauna. So it's basically a fabric tent that you hook, like, the accoutrements up to. It takes, like, 15 minutes to get hot and steamy, and then you sit in it. I could even, like, literally set it up in my bedroom and then take it down when I'm done. Thoughts on the portable sauna?

[Matt]

Okay, full disclosure.

[Joel]

120 bucks, by the way. Big difference.

[Matt]

That's right, $120. A little peek behind the curtain. You told me about this a couple weeks ago when you were. I guess maybe when it first popped into your head, and you're like, hey, what do you think about this? And I'll be honest, when you first told me, I thought it was a dumb idea. I thought, here's Joel with another one of his silly. Like, when you were thinking cheap out, when you're thinking about getting the, like, the portable hot tub inflatable thing. This is maybe two years ago.

[Joel]

Which I never did that either.

[Matt]

That was a Black Friday deal that you missed out on.

[Joel]

Yeah, I tried.

[Matt]

Evidently, they only sold, like, five of them.

[Joel]

Walmart. I'm still mad at you for screwing me on that.

[Matt]

Oh, it was a Walmart.

[Joel]

I thought it was Costco. No, it was Walmart at that time.

[Matt]

Okay. So originally I thought this was dumb and then I clicked over. I went over to Costco's website to check it out and I will say I wasn't swayed by how it looked because it also looks pretty dumb.

[Joel]

Oh, it's not sexy.

[Matt]

Even though they do have this in the pictures. There's a male model or you know, like a dude in it and he looks like Hugh Jackman. It's like maybe you're thinking, oh, there's a tough guy that looks like Wolverine.

[Joel]

Maybe I'll look like that after using it myself.

[Matt]

But that also wasn't selling it for me. What sold it or what changed my mind slightly on it was the fact that below those, below the pop up sauna that you're considering is they've got a whole bunch of those big wooden barrel looking.

[Joel]

Yeah.

[Matt]

Like the real deal saunas. And at a minimum, you're looking at those cost like $3,000.

[Joel]

Sure.

[Matt]

Basically. More likely five or six thousand dollars if you're wanting one of the bigger ones where like Emily could sit in there with you. That kind of thing. Maybe it's a whole family affair, like what's his name from Frozen at the.

[Joel]

Trading Post, Taking all my business meetings in the sauna.

[Matt]

But those things are so expensive. And when you look at the financial impact that it would take, not only from a financial standpoint, but also the space, it's almost like getting a pool table. Yeah. Or like a piano. Like you are committing to this giant.

[Joel]

Thing from a financial and a space perspective.

[Matt]

Yeah. That's got that. You have to commit to being somewhere and you can't easily change your mind as opposed to trying out a sauna in a way that if it doesn't work out, no big deal. But I know for me personally, like I've only been in a sauna a few times in my whole life. Definitely never on a regular, consistent kind of basis. So now I think it's a totally legit way to test the waters.

[Joel]

Okay.

[Matt]

I am 100% fine with. Did you order one?

[Joel]

I haven't yet. Well, so it's been out of stock, sadly. It was like literally on sale for 120. I think it's normally 150. I read the reviews. 4.7 stars. And I didn't just look at the star level. I read the reviews and people.

[Matt]

You're getting serious.

[Joel]

People seem to love it. I mean, if it was in stock, I would have bought it already for sure.

[Matt]

Especially this time of year. Dude, when it's cold outside, I thought of sitting in, like a warm. Oh, it's got to be so good for your sinuses to feel like that wet, healing, warm air. Yeah, well, sounds so good.

[Joel]

I will say, if there's anybody out there listening who has tried a portable sauna, let me know if you get some feedback. Because I've read the reviews on some of the other sites, and I guess what prevents me from ordering from elsewhere is the return policy. And I know, like, the zippers are terrible on some of them or whatever, so. Oh, it broke in three uses. And I don't want to do that, but I'm like, if I buy from Costco, they got the return policy, and so if it ends up not being up to snuff, I can take it back. Okay.

[Matt]

Is it up to snuff from the standpoint of how tall it is?

[Joel]

Because that is good.

[Matt]

I noticed that the dude's, like, sitting completely within this. This little pop up thing, whereas I've seen ones in the past that were the collapsible kind and their head pops out and it like, zips around their neck or something like that.

[Joel]

And you can, like, pop your hands out and read a book that. Those look even more goofy to me. Yeah, I'm not gonna read a book in there. I'm just gonna, like, close my eyes, chill out.

[Matt]

You have to, like, sit on the ground in, like, fetal position.

[Joel]

It comes like a little. Little chair or stool.

[Matt]

Portable stool. You'd be able to sit in it, though. That's what I'm saying. Because you're so tall. Okay.

[Joel]

I mean, my head might be in the top, but I don't know. I'll let you guys know if I get one and keep an eye on it. If anybody out there listening has used it and has thoughts, let me know.

[Matt]

All right, man. The beer that you and I are going to enjoy during this episode is a bourbon barrel drafty kilt. This is a scotch ale by Monday Night Brewing. And who? Listener Todd.

[Joel]

Listener Todd? Yeah, my new running buddy, so.

[Matt]

That's right.

[Joel]

We'll give our thoughts on this one at the end of the episode. Let's. Let's get to listener questions. If you have a money question, we'd love to hear from you. Just go to howtomoney.com ask or simply record your question on the voice memo app of your phone and send it over to us howtomoneypodmail.com all right, Matt, let's get to a question specifically about selling one investment to fund another.

[Alexis]

Hi, how to money folks, this is Alexis calling in from New Jersey. Really appreciate you guys opportunity for allowing us to call in. So cutting to the chase, my husband and I own two homes. Our first home now is used as a rental property. We purchased it in 2020 for $262,500. Today it's currently worth 470,000 and that's the amount that it was appraised for by the bank. We have a rental contract right now and we are currently receiving a profit of $600 a month which we typically then just reinves trying to decide if we should keep doing that or should we sell the home. Right now our the remaining mortgage balance is like 200,000 on that. So we're deciding should we keep just reinvesting the monthly profits or should we sell the home altogether and then take the $200,000 plus that we accrued and invest that. We really appreciate your input. Thanks so much.

[Joel]

Bye bye.

[Matt]

All right, Alexis, first off, thank you so much for listening to the podcast. Secondly, I love that you opted to use your first home as a rental property because it is amazing how holding onto that first home, how saving up for another down payment for your second property purchase, how that can jumpstart your wealth building efforts. It is one of our favorite ways for folks to become landlords.

[Joel]

Underrated.

[Matt]

If that is something that you are interested in doing, it's how well actually I take it back, it's how you sometimes I get your stories mixed up. It's how you became a landlord. So we continue to live in our first property and we love that house so much we decided to stay in it while we purchased.

[Joel]

But eventually you did move out of that and rent out that home and.

[Matt]

We still own it. But it's not, it wasn't how I first dipped my toe when you started to real estate investing.

[Joel]

But for a lot of folks I think that's the best. It makes a lot of sense especially if you're in some sort of like starter home. It's kind of smaller, you got it for a reasonable price. You got a good locked in rate which that will come up in the answer to this question. Matt. It can make sense. That's your, that's your stepping st as you save up that next down payment like you said. And I didn't hear necessarily a reason of why Alexis wants to get rid of this rental property. I don't know if you did, Matt. Like I didn't necessarily hear some angst or anything like that.

[Matt]

I think she's just wanting to make sure she's doing the right thing.

[Joel]

Yeah, exactly. And so is it because you think you can make more money investing in the stock market, or is it because you don't like being a landlord? My guess is it's the former one, Matt, that she maybe thinks she can do better investing in the market, because I just didn't hear those frustrations popping up in the voice memo. But the question about which one is going to be more profitable over time, that's a tough one. Like, in some ways it's saying like, well, where's our, what's our crystal ball say? Is the real estate market going to do better? Is the stock market going to do better? And I think, you know, buying a rental property now, right, with prices being inflated, with interest rates being sky high, or at least, you know, relative to the last few years, they're sky high. It's one thing, but you already own your, your home with favorable terms, Alexis, and part of the appeal of those terms is that you have a locked in low mortgage. Matt, I looked this up because I was curious. The average interest rate in 2020 was on a 30 year mortgage, 3.1%.

[Matt]

Oh my gosh.

[Joel]

Anybody trying to buy a home right now is like punching themselves in the face because they're like, why didn't I buy a home back then?

[Matt]

Lower than I would have guessed.

[Joel]

It's crazy. It was crazy low. And a lot of that was like pandemic induced uncertainty and stuff like that. So Alexis likely has just an incredible rate locked in on this home. You're bor. Literally, Alexis, at rates lower than what the federal government can borrow at right now. And so it's hard to assign a specific value to that locked in low mortgage rate. But I think it's actually one of the best protections you could have against inflation. I'm reluctant to get rid of my low interest rate mortgages. I think it's just worth mentioning that that's kind of a mini, little gold mine that you're sitting on right there.

[Matt]

Totally. Yeah. So the other thing is that returns in real estate are a little skewed because of leverage. So you've seen the value of your home increase by more than $200,000 in less than five years, which is awesome. Don't expect returns at that rate moving forward. Okay. But I'm not sure what it is or how much it is that you put down, but if you put down, let's say 20%, well, that means you turned $55,000 into $200,000, which is fantastic.

[Joel]

In half a decade. That's prop.

[Matt]

Yeah, kudos to you. But keep in mind that leverage cuts both ways. In the case of real estate investors over the last decade or so, it's been a massive boon to their bottom line. But it didn't necessarily, it could not have gone that way.

[Joel]

Talk to someone who bought a house in 2006 and 2007.

[Matt]

Exactly. So let's say that, let's compare those returns though to the stock market because let's say if you had invested that money within the s and P500 instead, you would have seen some fantastic growth compounding over the past five years that would have doubled your money. It's just not quite as much as what you've experienced though there with that first property. Both leverage and also the market conditions that we've experienced have been in your favor.

[Joel]

It's like wind at your back, baby.

[Matt]

It's so nice. But there are still some reasons, however, to consider selling. I guess it's not a slam dunk to say, like you said earlier, Joel, like you're sitting on a gold mine, you've seen incredible growth. That doesn't necessarily mean you should be hanging onto this thing forever, though.

[Joel]

At some point you cash out the gold mine, I guess to live a life of leisure. Maybe that's what Alexis is trying to do and maybe simplify her life, which I totally get. Getting out of the real estate game for that because it has more part time job aspects. And usually, Matt, we don't let the tax tail wag the investment dog because, yeah, taxes certainly factor into our strategy. But I think if you, if you overthink the tax thing, you might be liable to make mistakes just in terms of how you invest and what you invest in. But in this case, the tax bill for selling it could be so significant that it really does weigh heavily into the discussion. And that is because of a really important thing Alexa said initially and what we talked about at the very beginning, the fact that this house was a primary residence to begin with. Right. So because of that, if Alexis lived in this house for at least two years, she could potentially avoid tax altogether if she sells the property soon. The key for her is to meet the, what's known as the two in five rule. And it basically states that if you live in the home for at least 730 days of the past 18, 26 days, Matt, that's two out of the last five years, if you follow. Yeah, you won't owe capital gains tax on the appreciation that You've seen, which is quite a bit, right, more than $200,000 in appreciation. So basically, if Alexis sells soon, right, she could save herself roughly $30,000 in tax that she would otherwise owe if she waited just a bit longer. And, you know, that's not insignificant. And it's one of the only investment moves you can make that can help you avoid taxation no matter what. And so it really is that, hey, I owned the primary home, I lived in it for a couple of years, I rented out for a couple of years, now I'm selling, and boom shakalaka. All of those proceeds still accrue to you without paying a dime in tax. It's why our buddy Carl Matt, we've talked to him on the show about this, why he does live in flips, because if he lives in the house for two years and he's renovating it, all the while he has a place to stay. And when he sells market appreciation and forced appreciation, he's able to garner all the money that he gets from that sale and not pay a diamond tax.

[Matt]

It's pretty sweet.

[Joel]

Yeah.

[Matt]

So taxes are at least one consideration. But you said you still have a balance on that property. You likely owe $200,000 at a really awesome interest rate. Again, you're making money every single month. Your property, it's appreciating in value. There are real reasons to hang on to this home as well. And so I think my biggest question for you and your husband is whether or not you could see yourselves renting this property out for the next, like, literally for decades to come. It could continue to do really well for you. But just, and you barely mentioned this earlier, Joel, but not everyone appreciates or likes that part time, the part time job element of owning investment properties, it's much less passive than just putting your, your money in the market.

[Joel]

And Alexis has to look at, you know, the duration and how long she lived in the house and how long she's rented it out. She's got to run those numbers for herself to make sure that she would be able to sell this and not incur any, any sort of capital gains tax. But I think what we're getting down to is if she, if, if that's the case, either sell it now or don't sell it at all kind of thing.

[Matt]

Literally is now or never.

[Joel]

Yeah, you don't want to, you don't want to rethink this in two years and be like, you know what? I think now it's time to sell. And then you got this too late. $40,000 tax bomb that you would have avoided. That'd be a real bummer. We don't want you to face that. So make that decision quick, but make that decision partially for tax purposes and partially for lifestyle purposes. I would kind of take both of those into consideration. But, Matt, we've got more to get to on this episode, including a listener wants to know about a really expensive surgery for her dog. How to save on that. We'll get to that and more right after this. Are you 100% sure you're doing all the smartest things for your money? To be completely honest, I wasn't. And that's coming from someone who has committed their life to personal finance for nearly two decades.

[Matt]

That's right. So you looked into a company called Domain Money. Their team of expert certified financial planners get to know what matters the most to you. They analyze every aspect of your financial life. They build you a personalized plan with clear steps to reach each one of your goals. They make it incredibly easy to make money. It's like having your own personal cfo, therapist, and money coach all in one.

[Joel]

Yeah. I personally worked with Katie Song. She's an absolute gem. And the best part is that you can work with Katie or one of the expert certified financial planners on her team. I'm always looking out for great resources to recommend to the how to Money community. And I can confidently tell you that Domain Money exceeded my expectations. And for a limited time, they're doing free 30 minute strategy sessions. So start today by booking a free strategy session with one of their experts by going to domainmoney.com howtomoney I am a current client of Domain Money. I received a financial plan as part of the compensation for Domain Money's advertising on the podcast. And therefore I have an incentive to promote Domain Money. Matt, we were at a restaurant the other night. The waiter had a cool suit on completed by a really dapper looking bolo. A bolo?

[Matt]

Yeah, you heard him right?

[Joel]

And of course, I had to congratulate him on his smart fashion sense. The truth is, you can tell a lot about a person just by the kind of suit they wear. Send the right message. With the perfect suit from Indochino, you can visit a showroom or go to Indochino.com and use code howtomoney for 20% off orders of $499 or more.

[Matt]

That's right. And Joel, the Indochino process was totally legit. We're talking about a customized suit made to order for you. We both went in store, we got measured up which was dude, it was a really cool process. This was totally new for me but it makes so much sense now I'm wondering like maybe all my clothes should be custom fitted as opposed to something that's pre made off the rack. Now I've got a great looking suit with all the accents and customized details that I picked out. Look like a million bucks but at a fraction of the cost. I was able to pick out a super high quality fabric and it's no surprise that Indochino that they work with fabrics from some of the best mills in the world. You get these European fabrics for an incredible price.

[Joel]

Yeah. Creates your next headlining look with a custom suit from Indochino. Visit Indochino.com and use code howtomoney to get 20% off any purchase of $499 or more. That's 20% off at Indochino.com promo code howtomoney as every business owner knows, inefficiency will cost you time and money. Too many meetings, for instance, can be burdensome and ineffective. That's why we schedule a quick planning meeting every morning. It helps HTM run smoothly.

[Matt]

It's a morning cuddle.

[Joel]

That's what we call it. Well, creating a trust and will is a very slow and time consuming, leaving you less time for more important tasks. But trust and will makes creating your will easy and time efficient, meaning you can focus on other important tasks. Plus you can get 10% [e-mail] howtomoney that's right Joel.

[Matt]

Yeah, it's easier than most people think. And trust and will's simple step by step process guides you from start to finish, one question at a time. Personally, I felt such a relief, just a weight off of my back once I was able to check that off my to do list a few years ago. It is a great idea to keep your family prepared and protected by managing your will or trust online. Each will or trust that you create is state specific. It's legally valid and customized to your needs. Ensure that your family and loved ones avoid that lengthy, expensive legal proceeding or the state deciding what happens to your assets by going with trust and will.

[Joel]

Uncomplicate the process with trust and will. Protect what matters most in [e-mail] HowToMoney and get 10% off plus free shipping. That's 10% off and free [e-mail] HowtoMoney.

[Capital One]

This podcast is sponsored by Capital One in households. We subscribe to everything music, TV, even dog food. And it rocks until you have to Manage it all, which is where Capital One comes in. Capital One credit card holders can easily track, block or cancel recurring charges right from the Capital One mobile app at no additional cost. With one sign in, you can manage all your subscriptions all in one place. Learn [e-mail] Subscriptions Terms and Conditions apply.

[Matt]

All right, Joe, we are back for the break. We've got more to get to, including a listener asking about maybe moving down to one car. This may or may not be the secret to my success, Joel.

[Joel]

There's so many secrets though, Matt.

[Matt]

Don't know if I want to boil it all down to that.

[Joel]

They're going to all come out in your tell all memoir one of these days.

[Matt]

But let's now hear from a listener who is interested in retiring maybe a little bit early.

[Joel]

Hey, Matt and Joel, this is Evan Brooks from Omaha, Nebraska, a longtime listener of the podcast. My wife and I have really enjoyed all the advice you've given us over the years. My question is we're interested in early retirement and aren't quite ready to pay a financial advisor yet. However, I'm sure there are some amazing books out there for early retirement. Can you suggest a book or two that I can read to get the basics down and under my belt before I go talk to a professional for $6,000? Just seems like a good place to start. Might be to read and educate myself at a level of detail that you don't typically get from just listening. Thanks for all the help you've given us thus far and hope to see you guys in Omaha, Nebraska someday. See ya. Oh, man. Omaha, Nebraska. We might, we actually might be in Omaha, Nebraska in May for the Berkshire Hathaway annual meeting.

[Matt]

So last week we talked with David Clark, who is the resident Warren Buffett expert. He's written a ton of books on Warren Buffett on value investing, and he actually invited us to the annual Berkshire Hathaway shareholder meeting.

[Joel]

It's not every day that happens.

[Matt]

No, I guess we could attend if we owned at least one share of the company. But how much does Berkshire Hathaway go for?

[Joel]

It only has to be B shares. I read in.

[Matt]

Oh, really?

[Joel]

And I think, how much does that cost? 465 bucks? Something like that. Too bad.

[Matt]

It's not bad just to throw some, you know, throw some money Warren's way. He doesn't have enough.

[Joel]

He deserves it. So, yeah, Evan, we'll let you know if that happens. And I love Matt that he said he's not willing to pay an advisor yet. He realizes that maybe at Some point in his financial journey, he will want to. And given where he's at now, though, he's curious. He's wanting to pursue this path of fire. He's kind of in the DIY information gathering stage. And so I do think the right way to move forward is that individual approach. Not necessarily hiring someone expensive to help you yet. But yeah, maybe that becomes necessary or at least helpful down the road.

[Matt]

And especially given to the fact that he's talking about early retirement. I think if he was like purely focused on financial independence, where maybe it's. And maybe that, I don't know, maybe for him it's synonymous. Right. Like maybe it's one and the same thing, but there's a whole lot of thought around early retirement that I think you could do on your own. And if I were in your shoes, what I would do is I would read some folks who have put in the hard work to achieve financial independence or retiring early first, because there's going to be. There's positive experiences out there, but there's also negative experiences because some folks feel like that they gave up on too many good things in life in order to retire early. Like along the way, maybe the things that make life worth living. But they wish that they had extended the timeline a bit to where maybe they weren't quite as extreme.

[Joel]

Yeah, maybe there wasn't. No. To the grindstone as hard. And maybe they, you know, taken the foot off the pedal so they could enjoy life in the here and now and in the future.

[Matt]

Yeah. I've heard more than one person who has retired early has told me that they wish that they would have prioritized their health, for instance, all along the way, as opposed to having this chunk of time now at the sort of tail end of. I mean, not the tail end of their life, but like they're in midlife and now they realize that, man, there's a whole lot of habits that I wish I would have implemented earlier on. But then others have reached fire and have found that work, like the actual job that you had, at least in some capacity, that it provided meaning for them. And so because of that, they feel a bit aimless, they feel a little unmoored after hitting their net worth milestone, after hitting their number, calling it quits.

[Joel]

We've talked about friends who've hit fire, Matt, and they had great jobs or whatever, and then they start driving for Uber just to have that kind of relational connection. Right. And it's one of those things where you wouldn't expect that, but people do end up There.

[Matt]

Yeah, I think knowing why you want to achieve fire like that is an important place to start in order to make sure that you just aren't chasing something that won't actually make you happy in the end. Like think through sort of like all the different implications of achieving financial independence and retiring early.

[Joel]

I guess the type of books that we'd recommend first would probably be the ones that take that full human picture into account, I think. Your Money or your Life. That's kind of an original firebook, and rightly so. You know, it's less technical and it has stories that help drive home the point. And, you know, after reading that, I would pivot to maybe something like JL Collins, the Simple Path to Wealth. I love JL's writing. It's such a down to earth kind of folksy vibe and it's very approachable. Even though it's a book on investing, simple investing. It's just, I think it's really helpful to have someone explain in depth just how simple building wealth can be. Because simplicity on its face, I think it can seem like you're making a silly or ill informed choice because sometimes simplicity, it's like, well, you haven't thought through this enough. Right. But when you get a detailed why behind opting for the simple approach, it all clicks, I think. And I think JL's book is really good for people who are saying, but isn't that just not diversified enough? Isn't that just too basic? And you read his book and you're like, oh, no, no, There's a lot of good reasons for going that route.

[Matt]

Totally. Yeah. And so, yeah, the J.L. collins book is a little more kind of like nuts and boltsy. Whereas Vicki Robbins, like her book, or Vicki Robin, her book was more, I feel like it was a bit more inspirational and similar to that, I would say quit like a millionaire. That's another great book in the fire category, actually. We had her. So this was written by Christy Shen. We had her as well as J.L. collins on the show over the years, but Christie's episode was 118, so this is a while back. She's awesome, but her story is incredible and it helps you to see that almost anyone out there can achieve fire.

[Joel]

Yeah, her stories of growing up in China, dirt poor. I mean, awe inspiring.

[Matt]

Like what I remember is her talking about how she, like as a kid she would play basically at a landfill, but it's a landfill where there was medical waste. Waste like went. Medical trash. Which. Man, sounds horrifying. But one other book that we'll throw at you. And this is also another guest that we've had on the show is the Psychology of Money, which is by Morgan Houselike. It's not a fire specific book, but I think it's well worth a read because it just delves into the way you think about money, which we're always pushing folks out there to think about. Like the nuts and bolts are crucial, but books like Christie's or Morgan Housel's, I think they can help you to even sort of broaden how it is that you're thinking about your work and money. And just once you are investing, once you are able to get past kind of like the nuts and bolts of it, to be able to help identify maybe the why behind what it is that you're doing. J.L. collins, the Simple Path to Wealth it's not all that difficult, but I think the harder aspects of it are more the psychological aspects that are difficult for us to get past basically.

[Joel]

And you want to make sure you know what you're signing up for in advance. Kind of like you were saying, Matt, begin with the end in mind. And you can always get these books from the library, of course, or you know, you get the audiobooks for free on Libby and hopefully your library has these within their selection. But you know, if you love them, you want your own copy, buy them used on ebay. You also mentioned, by the way, 6,000 bucks to talk to a pro. I don't think it needs to cost that much. And this is something we talk about regularly on the show, Matt and I've talked about more and more is that financial planners for some people who are further along in progress reaching their financial goals. Well, maybe they want a second set of eyes. Maybe they do need the help of a pro at that point. And you know, Domain Money has flat fee plans. Two out of the three they offer are priced well below 6,000 bucks. Hello. Nectarine is a site where you can meet with a CFP for 150 bucks an hour. If you just need a couple of hours of advice, you just pay for as much time as you need. So I just want people to know there are options for seeing a financial planner that don't involve, you know, signing in blood to a 1% AUM sort of thing for in perpetuity. But it sounds like you're looking for more inspiration and insight. Evan. And so I, yeah, I'd save that money to fuel your path to financial independence for now and then as your nest egg grows and things get more and more complicated and you feel like you do need somebody else's opinion and help, then that's when you want to pivot there. But sounds like that's not necessary right now.

[Matt]

Yeah, one other thing too. Don't discount bloggers. I just think about how the simplest sort of path to figuring out if you have enough money to retire is having 25 times your annual expenses on hand. And that was, I think most popularized by Mr. Money Mustache. But there's a lot of folks out there like him in, I mean, I guess a lot of the bloggers that I don't even keep up with anymore, but a lot of times those folks like. I also think about the Mad Fientist who we've also had on the show because one of the things he said was that he was looking for, I guess, a level of detail beyond what we talk about on the podcast. That's Brandon all the way at the Mad Fientist because he dives in deep when it comes to figuring out exactly how to execute and pull off early retirement. Like whether it comes to accounts or how to set up a Roth conversion ladder. All of these things that take a little bit of finessing in order to pull off. But don't discount those folks as well. There's a lot of folks out there that create, that have written great books, but I think some of the more specific detail that these creators and these bloggers have written about, I think that might be really helpful as well.

[Joel]

You can get as nerdy as you want to with some of those blogs. Not super nerdy, but still nerdy. Is Carl's blog 1500 days and then.

[Matt]

He gets really specific with his numbers as well. He literally tracks his net worth and puts it out there. Tells you where his numbers are on a month to month basis.

[Joel]

That's right. And if you want to get even nerdier than that, early retirement now. Right. Or can I retire yet? Those are other great like fire oriented blogs. So. So check those out.

[Matt]

Crunching the numbers.

[Joel]

Yeah.

[Matt]

And not even like there's other man. There's so many writers out there. It makes me think of the Frugal Woods.

[Joel]

Oh yeah.

[Matt]

And like that's a little bit more maybe lifestyle inspired or Vermont homesteading.

[Joel]

Yeah, yeah.

[Matt]

Which is like a little bit less of the number crunching and more. Okay, what do I want my life to look like? So it doesn't necessarily have to be about the specific details. Maybe what you're looking for is a little inspiration on the. Yeah. On the lifestyle front. So don't discount all the great bloggers out there. We can link to some of those in our show notes.

[Joel]

The fire vibe can be nice.

[Matt]

Yeah.

[Joel]

All right, Matt, let's get to another question. This, this question comes from listener Sarah. It's specifically about saving money on a really big expense.

[Sarah]

Hey Matt and Joel, this is Sarah from south of Boston. I've been listening to you guys since Poor Not Poor days and I've listened to almost every episode. At this point I just have a few left in my playlist. I'm excited to ask you guys a question but pretty sad that I actually have this reason to do so. So I have a 4 year old Australian shepherd dog named Maggie who has severe heart problems. At about six months old she had heart surgery which solved some of the problems but didn't alleviate all of them. We have to go annually at least usually every six months to the animal hospital to get a checkup to make sure she's still good. On our last appointment we found out that her numbers have been increasing and she's getting closer to pre surgery rates. And so we should probably consider soon another heart surgery. It's not really required at this moment, but it's more of a preliminary precaution before she actually hits heart failure or has other issues. So we have time and things to consider, but it probably should be done because she is part of our family. My question to you guys isn't about how to get the money or save for it since it is about 7 to $10,000, but about anything we could potentially do to help reduce that cost. We're already going to a teaching school for animal hospital so that helps reduce the cost. We tried to do health insurance for a while on her, but since it was a pre existing condition, it kind of didn't count really for anything and it wasn't covered. Any other ideas you have of how we can reduce this expensive cost would be greatly appreciated. Thank you. Best friends out.

[Joel]

Oh, Matt, is Sarah an honorary best friend?

[Matt]

I like it. I think so. If you've been listening to us for that long, since the poor not poor days.

[Joel]

Oh for sure.

[Matt]

You are an honorary bestie.

[Joel]

You put up with some crap at times, right?

[Matt]

Some shenanigans.

[Joel]

Surprised you have not gotten tired of us.

[Matt]

I will say I'm sorry to hear about Maggie's health problems. Your dog there. Glad you had a bit of time to plan to save for this really big expense. And Joel, I'm going to admit we're not experts on this, but we can at least offer some of our thoughts when it comes to Finding ways to perhaps pay less for this big unwelcome expense.

[Joel]

Let's start by talking about one thing that Sarah mentioned, which is pet insurance. And this is something that I have read enough about over the years where I feel pretty confident in kind of where I've landed. And because this is a pre existing condition, by the way, it's highly unlikely that any insurance out there would allow you to sign up and get a policy for Maggie and then they're going to pay for the surgery. Right. And it sounds like you know that Sarah, so I'm not telling you anything you don't know. But here's the other thing. Pet insurance isn't a great product for most folks anyway. We would rather see most pet owners self insure and that is going to mean typically having thousands of dollars extra in savings as a plan for a worst case scenario like this. And I think Matt, some people believe or want pet insurance to act like a security blanket. But every analysis that I've read finds that they're just not as great as they seem in the brochure or on the pet insurer's website and that there are just hoops to jump through. There are certain breeds that aren't covered, there are certain surgery types that aren't covered and the costs can outweigh the benefits. And so if something like this happens and the insurer does pay well, then hey, you may not like a bandit. But I think for the average person, self insuring is gonna be a better option than going with the pet insurance.

[Matt]

Totally. Yeah. I also love that Sarah said that she is at a or has been going to this teaching hospital which really should save you some serious money. But man, I would totally be calling around to a few other vets there who performed the surgery in order to get a quote as well. I don't know exactly what this surgery involves but. But based on a quick search, $7,000 does seem like a pretty dang good deal. It is worth casting your net though out there to see what some other well reviewed vets might charge you. Seems like you're already getting a good rate. But one website that we would encourage you to check out is pethelpfinder.org you should be able to find a list of local vets who offer discounted services. But they might also just be for more regular and inexpensive services like getting what is it, kennel cough injections and different things that the pets that your dogs and cats need on a more annual basis.

[Joel]

I think about this Matt, when I have like a bigger Expense for my car, let's say. I mean, you just had recently had a timing belt replaced, right? And sometimes I'll just Google and be like, well, okay, what should the average price be for this? And there are websites that list out that information of what mechanics in your area typically charge. And then I'll use that to say, oh, does this seem like a good price or not? And then, and I'll even just call other mechanics that I know and trust that are close by and say, hey, listen, this is what I'm looking to have done. And oftentimes they'll give me a quote over the phone like I don't even have to bring the car in. Right. Because that does sound like a pain. You might be able to do the same thing here, Sarah, just by calling a few vets and saying here's kind of the surgery we're up against. Can you tell me roughly how much it costs to perform this on my dog? Age and breed. Right, totally.

[Matt]

Which I will say I think there might be some criticism, some pushback if some folks are like, dudes, that's like way too pragmatic. Like, that's way. This isn't car insurance. This isn't a car repair. This is like, you know, a pet that I, who I love dearly. This is like a member of the family. But the fact is we say the same thing when it comes to personal health care as well. Like as far as calling around, even doing medical tourism and the fact that this isn't like an emergency surgery or a procedure that needs to be done right now, man, you've got time on your side to be able to call around and like if that's what healthcare.

[Joel]

Blue book is for, for humans. Right.

[Matt]

Yes, I would be completely willing to go to a different city or even drive a to a nearby state if it was going to save me a few thousand dollars because of the ability to not only find the best care that might be out there for my pet, but also to get the best price too.

[Joel]

Yeah, and I totally get the desire to shop around and save. I think it's a good desire. I mean, I think that is the. When you're in the catbird seat, when you have time on your side, which in this case Sarah has, I would be doing the same thing. So give it a go. But know that the savings might be slim to non existent. Kind of like you pointed out, Matt, that then maybe the rate you're getting is actually pretty good based on a quick Google search from us. And if you tell your vet Maybe that the surgery is expensive and you ask them for options for. For discounts. There's a good chance that they're going to recommend a payment plan or a credit card. And we would advise against that because, like one of the bigger companies in this space, CareCredit, they charge rates north of 30%. They're higher than what a credit card would cost you. And yeah, maybe they're going to offer some sort of intro rate, but still, it sounds like you have the money, Sarah. We just prefer you to get the service more cheaply if possible. Might not be, but just to pay cash in full when the time comes. Just rather you suck it up and fork the cash over than try to lessen the blow by paying off the surgery over time. It's kind of like buy now, pay later for your pet or something like that. And you're like, oh, I can pay it installments. It just won't feel as painful. And I get the desire to do that, but I just don't think it's the best financial decision. Totally.

[Matt]

I would also use this opportunity again because it's not. You're not on a tight time schedule. Head over to howtomoney.com credit card tool and get you a card that's going to work for you from a points or reward standpoint because again, this is something that you know you're going to spend. You got the cash on hand. So, like the way we use credit cards, there's no harm at all to make the most of these dollars that you're spending.

[Joel]

Yeah. Because you can pay it off in one fell swoop when you're done. And maybe you got some free flights out of it or a nice sweet signup bonus and a new credit card that it's gonna offer you some perks moving forward, too.

[Matt]

Totally. And I think that this is a good heads up to any aspiring pet owners. Like, if you're like, man, I really want a cat or a dog or horse or, I don't know, like whatever pet that it might have some of these expensive procedures, like it costs a lot of. Even if you are adopting a pet from the pet, like, there are additional, you know, you got your monthly medicines and food. The additional expenses that come along with pet ownership, there's more responsibility. So just make sure you're taking that into account before you go out there and add a member to your family.

[Joel]

Reminds me of our episode everything costs more than you think. Pets cost more than you think. That's a classic episode, Joel. Specifically, my buddy Mark just brought home a Little golden retriever puppy. The cutest thing ever. Got to play with it on New Year's Eve. And then I ran into him two days later and I was like, how's it going, buddy? And he said, oh, just spent the night at the emergency vet. And I spent like $900 because he had some sort of stomach issue. And. And he had been trying to convince me, would you feed him, Joel? He'd been trying to get. He's like, there's more in the litter. You can get one too. And I was like, oh, my gosh, you almost won my heart. These golden retriever puppy pictures. But alas, I said no.

[Matt]

And then I think I'm good.

[Joel]

When I had that combo with them, I was like, I made the right decision. Even though, yeah, it's a cute. It's a cute pup and animals are awesome. We've got two cats ourselves, but they're cheaper than dogs.

[Matt]

You don't need to throw a dog into them.

[Joel]

No, not right now, at least.

[Matt]

All right, we've got more to get to. We're going to talk about some crowdsourced real estate investing. We'll get to that right after this.

[Joel]

Are you 100% sure you're doing all the smartest things for your money? To be completely honest, I wasn't. And that's coming from someone who has committed their life to personal finance for nearly two decades.

[Matt]

That's right. So you looked into a company called Domain Money. Their team of expert certified financial planners get to know what matters the most to you. They analyze every aspect of your financial life. They build you a personalized plan with clear steps to reach each one of your goals. They make it incredibly easy to make money. It's like having your own personal cfo, therapist, and money coach all in one.

[Joel]

Yeah. I personally worked with Katie Song. She's an absolute gem. And the best part is that you can work with Katie or one of the expert certified financial planners on her team. I'm always looking out for great resources to Recommend to the how2money community. And I can confidently tell you that Domain Money exceeded my expectations. And for a limited time, they're doing free 30 minute strategy sessions. So start today by booking a free strategy session with one of their experts by going to domainmoney.com howtomoney I am a current client of Domain Money. I received a financial plan as part of the compensation for Domain Money's advertising on the podcast, and therefore I have an incentive to promote Domain Money.

[Capital One]

This podcast is sponsored by Capital One. In households, we subscribe to everything music, tv, even dog food. And it rocks. Until you have to manage it all. Which is where Capital One comes in. Capital One credit card holders can easily track, block or cancel recurring charges right from the Capital One mobile app at no additional cost. With one sign in, you can manage all your subscriptions all in one place. Learn more at Capital1.comsubscriptions Terms and Conditions apply.

[Joel]

What does the future hold for business? Ask nine experts and you'll get 10 answers. Will we have another bull market in 2025 or we're going to get a bear market? What about inflation? Will it continue to calm or will higher prices remain sticky? Wouldn't it be cool if someone could invent a crystal ball that would give us some foresight?

[Matt]

Well, until then. Joel Over 41,000 businesses have future proofed their business with NetSuite by Oracle, the number one cloud ERP bringing accounting, financial management, inventory, HR into one fluid with one unified business management suite. There's one source of truth giving you the visibility and control you need to make quick decisions. With real time insights and forecasting, you're peering into the future with actionable data. When you're closing the books out in days, not weeks, you are spending less time looking backwards and more time on what is next. Our business is really small, but if we needed netsuite, we would be pumped about the time the cost savings that it provides. Whether your company is earning millions or even hundreds of millions of dollars, NetSuite helps you to respond to immediate challenges and seize your biggest opportunities.

[Joel]

Speaking of opportunity, download the CFO's guide to AI and machine learning at netsuite.com howtomoney the guide is free to you at netsuite.com howTomoney that's netsuite.com howtomone Living in the present is an important practice, but we simultaneously need to plan well for the future too, and ensuring that your family is taken care of is paramount. You can protect your family by securing their future with life insurance from policygenius. Policygenius makes finding and buying life insurance simple and ensures your loved ones have a financial safety net they can use to cover debts and routine expenses or even invest that money to earn interest over time. With policygenius, you can find life insurance policies that start at just $292 per year for $1 million of coverage. Some options are 100% online and let you avoid unnecessary medical exams.

[Matt]

That's right. And Joel, I will say as I get older, I think attempting to minimize reg has been a helpful lens in order for me to view the world. It helps me at least to make good decisions. And if that resonates with you, well, get this. 40% of people wish that they had gotten life insurance at a younger age. So we're trying to help you out here by getting policygenius on your radar. Let's get rid of that could've, should've, would've, regret. And I love that you can compare quotes from America's top insurers side by side for free with no hidden fees. It's the best online insurance marketplace out there.

[Joel]

Yeah. Secure your families tomorrow. So you have peace of mind today. Head to policygenius.com to get your free life insurance quotes and see how much you could save. That's policygenius.com all right, Matt, we're back. Now let's get to the Facebook question of the week. This one comes from Celeste. And by the way, if you're not a member of the how to Money Facebook group, go check it out.

[Matt]

What are you doing with your life?

[Joel]

I know. So here's her question. She says, has anyone invested with Arrived? We'd like to know your thoughts on this crowdsourcing style of real estate investing. Matt, you want to kick this off?

[Matt]

It's a short one.

[Joel]

Yeah.

[Matt]

These different crowdfunding, like, I mean, there's apps, but there's sites as well. This is a common question. Our answer is essentially always, don't do it. Real estate, it always comes with fees, but the fees are even bigger when other people are sourcing the properties for you, when there's other people out there who are managing the properties. And that's certainly true with Arrived.

[Joel]

It's always like layers of bureaucracy. You have to fund, right?

[Matt]

Yeah, yeah. So like assets under management, fees, there are sourcing fees, gross rents fees, property management fees. All of that is going to lead to you receiving less money from this company. But then on top of that, the liquidity that is also minimal when you invest in real estate via a crowdfunded website. And the same is true, certainly with Arrived. We just don't see enough of an upside to justify the fees as well as locking up your funds for years on end.

[Joel]

Yeah, yeah, right. And I think they can charge this much because they're selling a turnkey solution to investing in real estate. And so I think there are some people who just glorify this real estate investing in general, Matt, and they think of, oh, this is the way for me to build wealth, and if I don't have some skin in the game, some exposure to real estate. Then I'm just not doing it right. Stocks, they're so mid. Right. They're so beta. I don't know what the gen zers are saying these days, but, like, when you dig into the returns of the site, the returns of specific investments on Arrived, they make those public. We can link to that page in the show notes. The average total returns are not going to blow you away. And I think it just sounds sexy, at least to a certain type of person, to become a real estate investor. And again, Matt and I, we are real estate investors. We just don't sell it in a way that is unseemly and we don't talk about it in a way that isn't based in reality. But, you know, our take is that the whole goal of investing is to make money.

[Matt]

Yeah.

[Joel]

Not to, like, think you're cool. And so, you know, we think that investing in boring old index funds is going to take up less brain space. It's going to lead to better results. And by investing through specific real estate properties through Arrived. Yeah, maybe you'll do well. And you'll probably do better than sticking it in a Sami's account with a big bank, of course. But those are apples and tomatoes, right? Like, those are not even close comparison. I guess they're both red and about the same size. So maybe, maybe it's actually like both fruit, apples and broccoli. But yeah, I would say they're very different things. And the returns for a lot of the properties on Arrived don't even close to blow me away.

[Matt]

No. Well, on top of. So I actually, you know how I am with numbers. And so I actually created Google sheets.

[Joel]

Did you?

[Matt]

Because I wanted to figure out, like, okay, like, there are some on here that are pretty impressive, but then there's a whole lot of them that aren't. And if you average every single investment that they have listed there and calculate the annualized returns based on the timeframe that the money is invested, on average, you're looking at 3.3%.

[Joel]

That does not take into account appreciation of the property, though.

[Matt]

Yes, it does. It takes every reality. It takes appreciation, profits paid out. Basically the total return on investments of those properties.

[Joel]

All right, like, yes, there are some. Ran the numbers.

[Matt]

There are some that. And of course, they're closer to the top. Right. Like, but like, there are a couple where it's like annualized out to be something like close to 60%, I think, or. But literally it's only two of them. And there's over 300 projects and properties on there. And Some of those are negative and some of those are really dang close to zero.

[Joel]

So maybe a high yield savings account is better. Yeah, especially net of fees.

[Matt]

And I think like sometimes we'll mention REITs as well. So specifically Vanguard's VNQ that can offer you, offer you some real estate exposure for a low price if you are completely set on having some real estate in your portfolio. But even still, like if you head over there, you are like over the past 10 years, you're looking at an average annualized rate of 5% return. And again, that's not that far from 3.3% compared to guess what the S and P Joel has done over the past 10 years. Past decade.

[Joel]

I'm going to say 14.2.

[Matt]

So close over 13% is what I'll say.

[Joel]

I was gonna say 13.8, but like.

[Matt]

Come on, man, I went high.

[Joel]

Yeah.

[Matt]

I will say REITs are better because like you're looking at a pretty low expense ratio compared to the fees that you typically get with somebody like Arrived or even fundrise, because fundrise is pretty good from a fee standpoint. Like their fees are the lowest. But even still, I would not necessarily recommend it. I would recommend to save up, invest in real estate where you live because I think that's where you can get some of that edge of investing in real estate. But of course it comes with a little bit more of a hands on part time job, like quality. But maybe in addition to that, like finishing out your basement, maybe turning it into an Airbnb, maybe buying a duplex around the corner, maybe your first property, saving up a little bit more, and you buy the duplex you live in, half of it, you rent out the other half. I just think there are just too many downsides to the crowdfunded version of real estate investing. Yes, it's easy, but you pay for that.

[Joel]

There's a lot of middlemen. Right. And, and you're right, like all the advantages of real estate typically come from owning the property yourself and being able to make a good buy on the front end because that market is less efficient than the stock market. And you can with leverage. And smart, smart purchases of real estate come out ahead over time. Maybe not even on a month to month basis, but over the decades. And so it is a long term play owning real estate. But I think if you want to get into that, the crowdfunded sites are just not the way to go.

[Matt]

Yeah, let's take another quick one. This one is from Josh and he wrote, my wife and I have decided to get rid of our second car. But we've never sold a car before. The car still has about $1,200 due on the loan, which we could pay off now if we wanted to. Should we pay off the loan before selling or just sell it with the loan still active? The car is a 2020 Hyundai Elantra. Joel, what would you do?

[Joel]

Well, normally, Matt, we would say, don't sell that car. It's a baby. But if you're selling it and you're not adding a different car into your fleet, this is money in the bank. Yeah. Yeah. And this. What did you say? This is your. This is your claim to wealth and riches. Like owning one car for what, how long now?

[Matt]

Over 17 years. Like, literally. I mean, I don't want to boil it down to that, but because of the additional costs associated with owning a car, there's a lot to be gained were you to invest that money rather than see it depreciate.

[Joel]

I mean, if you think on the very, very, very low side, insurance, taxes, depreciation. Let's say you saved $8,000 a year, which I'm. For most people will be even more than that eight times. I mean, you're talking about having saved.

[Matt]

Like, a lot of money almost.

[Joel]

Yeah. And then when you talk about investing that money, it's amazing how quickly it adds up just having one fewer vehicle in your life.

[Matt]

Life.

[Joel]

Granted, it's a big decision, big life change, and it obviously doesn't work for everyone, but, man, Matt, more people really, really, really should consider going down this route. Totally.

[Matt]

Yeah. And I would suggest paying off the loan first before listing it for sale. I think it'll just make selling the car that much easier where you have the title in hand. Now, that seems like it would make for a smoother process, because I think there might be folks out there who try to sell a car that they can't pay off in advance. They're kind of stuck between a rock and a hard place. And it's totally doable, but you've got to include the lender in that process. But without a third party involved, I think you can just take that cash, you sign over the title, you've got it there on hand. That's the route that I would take, at least from a simplicity standpoint and even from a marketing sort of standpoint, to not have to be able to field all of these questions where folks are like, hey, what's the status of the title of the car? And being like, well, you don't want to have to start with well, just like, oh, yeah, I've got it clean title.

[Joel]

Yeah. Hey, I can meet you essentially wherever you want to. That's public versus, actually, we got to go to my credit union or we got to go to. We got to meet at my bank. And the minivan that we bought a few years back, Matt. The 2012 or 2013 Odyssey. I forget what year it is. I think ours is 2013.

[Matt]

But, yeah, I got a 13.

[Joel]

I had to, like, drive over to the ladies credit union. She still had a loan on the thing, and it wasn't that big of a deal, and it was a great car, but it's one of those things that just threw an extra wrench in the whole situation. If you only owe 1200 bucks, pay that thing off, make the. Make the sales process just a whole lot easier, and you won't have to. You won't have to deal with a third party when you're selling it.

[Matt]

Yeah. For someone who maybe wasn't so intent on getting such a great deal, like, you were on the van, they may have walked away. Like, you're probably excluding a certain number of buyers.

[Joel]

I think you probably expect that a little more with newer cars, but especially if it's, like, 10 years old, you're like, wait, wait, you still have a loan on this, so people might expect it with a 2020, but still, anything you can do, especially since it's such a limited amount of money, like, pay it off, be done with it, and just make the process easier for yourself.

[Matt]

Totally. All right, man. Bourbon barrel, drafty.

[Joel]

Kill it.

[Matt]

What'd you think, man?

[Joel]

I enjoyed it. It was a little bit thinner than I expected, but then I remembered, wait a second. This is a scotch ale. I was thinking stout. Yeah, it's exactly. I was like, it's because it was bourbon barrel age. I was assuming it was going to be this super duper thick stout. And then I was like, no, no, wait. This is just. There's their scotch ale thrown into barrels, and that is a style I gravitate towards. I love a good scotch ale because you get some of those darker, roastier flavors without some of the super duper thick vibes of a stout. And to me, this was a much better version of their drafty kill because it came with some of those boozy, oaky notes attached to it. So I liked it.

[Matt]

It's so good, man. Like, is it possible for you to have, like, taste memory? Is that a thing?

[Joel]

I think so.

[Matt]

For me, when I drink this beer, like, it just brings back old, like, early craft beer. Day nostalgia. And I will say that early.

[Joel]

Early.

[Matt]

I'm not gonna say I was responsible for this beer, but, like, I was friends with the Monday night brewery guys, and literally this was their first, like, awesome beer that they were making.

[Joel]

They owe you everything to you.

[Matt]

I think so, man. I think so. But, like, in this one specifically, I think this was their first beer that they won any awards. I think they won like a, I don't know, silver medal or something at the Great American Beer Fest way back in the day. But it just. It's so good. It's not overly sweet, but it's got these malty oaky woody notes. You got some, like, it reminds me of eating. Like, imagine if there's, like a candy bar that you loved as a kid and you haven't had it in forever, but then you go back to it and you take a bite of it and you're like, oh, yeah, this is so good. Like, there's something about that with this beer specifically, at least for me, every.

[Joel]

Time I have a three musketeers, which you make fun of me for.

[Matt]

So, yeah, I'm not a big.

[Joel]

It's like the most dumbed down version of a candy bar, I guess, but I still like it.

[Matt]

You love. You love that nougat.

[Joel]

I do. But, yeah. Big thanks to Todd for sharing this one with us. And Matt, Todd's gonna help me run my first marathon this year, so. Oh, yeah? Is he? He's gonna give me some input and advice.

[Matt]

Did you mention that he's like. He's a trainer. He's gonna train you up.

[Joel]

Well, I don't know about that, but I'd probably have to pay for his services, but maybe he'll give me a tip or two, so. Okay. Thanks, Todd. Appreciate it.

[Matt]

And don't take the cheap path.

[Joel]

Joel, should I pay? Should I fork over the money?

[Matt]

Maybe you want to be frugal, Ask for the discount, but don't expect it for free.

[Joel]

I'm just gonna go Forrest Gump and run a lot. That's my clean. Do it. But. All right, that's going to do it for this episode. For folks who want the show notes and links to some of the resources we mentioned, we'll put those up on the show [e-mail] you know it, buddy.

[Matt]

So until next time, best friends out. Best friends out.

[Joel]

Even if you're a money whiz, it can still be helpful to have some professional backup and advice. I talk about personal finance every day of my life, and I was still able to get massive value chatting with a CFP from Domain Money. They analyze every aspect of your financial life and help you build a personalized plan with clear steps to reach each one of your goals.

[Matt]

That's right, and for a limited time they're doing free 30 minute strategy sessions. So start today by booking a free free strategy session with one of their experts by going to domainmoney.com howtomoney I.

[Joel]

Am a current client of Domain Money. I received a financial plan as part of the compensation for Domain Money's advertising on the podcast, and therefore I have an incentive to promote Domain Money the.

[Matt]

New Year's here, which is the perfect time to refresh those household essentials and score cash back rewards with Colgate Palmolive. Here is how it works. Buy up to $30 of Colgate Palmolive products, snap a pic of your receipt, upload it to cprewards.com and get up to a $10 digital Visa prepaid card. Again, that's cprewards.com start your year fresh.

[Joel]

By earning cash back rewards with Colgate Palmolive rewards available while supplies last. Limits apply US only January 1, 2025 through March 31, 2025 for full terms, visit cprewards.com do you want to see into the future?

[Tech Stuff]

Do you want to understand an invisible force that's shaping your life? Do you want to experience the frontiers of what makes us human? On tech stuff, we travel from the mines of Congo to the surface of Mars, from conversations with Nobel Prize winners to the depths of TikTok to ask burning questions about technology, from high tech to low culture, and everywhere in between. Join us Listen to tech stuff on the iHeartRadio app, Apple Podcasts, or wherever you get your podcasts.