How to Money Podcast Summary: Episode #970 - Paying for DeleteMe, Investing like the Ivies, and When a New Car Makes Sense

Release Date: April 14, 2025 | Host: Joel & Matt | Provided by iHeartPodcasts

Introduction

In Episode #970 of How to Money, co-hosts Joel and Matt tackle a variety of listener-submitted questions, offering practical advice on topics ranging from online privacy and investment strategies to healthcare emergencies and major purchases. This episode delves deep into each query, providing insightful discussions to help listeners make informed financial decisions.

1. Investing Like the Ivies

Listener: Brendan from Temple, Texas
Timestamp: [07:58]

Brendan inquires about the Yale Endowment Fund's investment model devised by David Swensen. He wonders if adopting a similar diversified portfolio is worthwhile for individual investors.

Key Points:

• Yale Model Breakdown:

  • 30% U.S. stocks
  • 15% international developed markets
  • 5% emerging markets
  • 20% U.S. real estate
  • 15% U.S. Treasury bonds
  • 15% U.S. Treasury Inflation-Protected Securities (TIPS)

• Performance Analysis:
  The Yale model nearly matched the S&P 500 from 1997 to 2021 but with significantly reduced volatility and drawdowns.

• Diversification Benefits:
  While the model offers stability, Joel and Matt emphasize that individual investors might not achieve the same performance due to differences in scale, expertise, and goals.

• Simplicity vs. Complexity:
  The hosts advocate for simpler investment strategies, such as target date funds or low-cost S&P 500 index funds, which are more accessible and less management-intensive for the average investor.

Notable Quote:
Joel [10:21]: "If you want similar or close returns to the overall market, but you're kind of freaked out by stock market gyrations, greater diversification can make sense."

2. DeleteMe and Online Privacy

Listener: Kathleen from California
Timestamp: [21:13]

Kathleen seeks advice on whether subscribing to DeleteMe, a service that removes personal information from the internet, is worthwhile.

Key Points:

• Purpose of DeleteMe:
  Helps scrub personal data from various online platforms, enhancing privacy and reducing exposure to identity theft and spam.

• Cost vs. Benefit:
  DeleteMe costs approximately $11 per month. Joel and Matt weigh this against free methods like freezing credit with major bureaus and implementing strong online security measures.

• Alternative Solutions:

  • DIY Approach: Manually contacting websites to remove personal info.
  • Permission Slip by Consumer Reports: A free tool for managing online information.
  • GitHub Resources: Comprehensive guides on which sites to target first for maximum impact.

• Effectiveness and Limitations:
  While DeleteMe can significantly reduce online presence, it doesn't guarantee complete removal. Factors like public records and social engineering can still expose personal information.

Notable Quote:
Matt [25:21]: "DeleteMe is a legit product. And if that's something that... you could be okay with it."

3. Medevac Insurance for Healthcare

Listener: Beth from Shelbyville, Illinois
Timestamp: [30:26]

Beth and her church group members are contemplating medevac insurance to cover emergency transportation, especially given their rural location far from major hospitals.

Key Points:

• Medicare Coverage:

  • Medicare Part B covers emergency ambulance services when ground transportation poses a health risk and provides coverage for air ambulances if ground transport is insufficient.
  • Coverage is limited to medically necessary nearby facilities. International coverage requires separate insurance.

• Cost Considerations:

  • Includes annual deductibles and a 20% copay of the Medicare-approved amount for medevac services.
  • Secondary insurance options through credit cards (e.g., Chase Sapphire Reserve) offer additional coverage but may have limitations and high annual fees.

• Additional Resources:

  • SHIPhelp.org: Offers state-specific Medicare assistance.
  • Insurance Providers: Platforms like InsureMyTrip and World Nomads for international coverage.

Notable Quote:
Joel [34:16]: "A few mile ambulance ride can cost many hundreds, if not thousands of dollars. And think about how much the helicopter ride would cost."

4. Retirement Account Rollovers in a Down Market

Listener: Anonymous Facebook Poster
Timestamp: [41:13]

The listener questions whether to rollover retirement accounts during a market downturn, concerned about locking in losses versus buying low in a new account.

Key Points:

• Consolidation Without Timing the Market:
  Rolling over a 401(k) to an IRA during a down market is neutral in effect—comparable to exchanging one dollar for another.

• Direct vs. Indirect Rollovers:

  • Direct Rollover: Funds move directly between accounts without tax implications.
  • Indirect Rollover: Funds are sent to the individual, who must redeposit them within 60 days to avoid taxes and penalties.

• Conversions to Roth IRA:
  In a down market, converting a traditional IRA to a Roth IRA can be advantageous due to lower taxable amounts, but it's essential to consider one's income level and tax brackets.

• Resource Recommendation:

  • Capitalize: A service that assists with rollovers for free, funded by brokerage partnerships.

Notable Quote:
Matt [43:49]: "If you're talking about converting a 401k to a Roth IRA... that's a strategy worth considering."

5. Paying Cash for a New Car

Listener: Drew
Timestamp: [44:11]

Drew asks whether it's advisable to pay cash for a brand-new Toyota Highlander Hybrid, considering it's the family's sole vehicle.

Key Points:

• Depreciation Costs:
  New cars typically lose a significant portion of their value within the first few years. For example, a $55,000 Highlander might depreciate by over $25,000 in five years.

• Financial Prudence:
  Paying cash for a new car avoids hefty loan payments (averaging $750/month) but dealers may favor financing to increase their profits through marked-up loans.

• Alternative Approaches:

  • Negotiate Price: Secure a fair price before revealing payment method.
  • Immediate Payoff: Finance through the dealer's finance department and pay off the loan immediately to reap the benefits without long-term commitments.

• Personal Experiences:
  Joel mentions purchasing a second car for $4,000, which has minimal depreciation compared to new vehicles.

Notable Quote:
Matt [47:08]: "It's super cool, Drew, that you've got the cash on hand. Hopefully, you're thinking about paying for that straight up. That's a huge accomplishment."

Conclusion

In this episode, Joel and Matt provide thorough and relatable advice on navigating complex financial decisions. From adopting sophisticated investment strategies to safeguarding online privacy, managing healthcare emergencies, optimizing retirement accounts, and making wise purchasing choices, the hosts empower listeners with the knowledge to enhance their financial well-being.

Notable Quote:
Matt [53:04]: "Asking the right questions can greatly impact your future, especially when it comes to your finances."

Additional Resources Mentioned

• Capitalize: www.capitalize.com
• DeleteMe: www.deleteme.com
• SHIPhelp.org: www.shiphelp.org
• Permission Slip by Consumer Reports: Available through Consumer Reports website
• M1 Finance's David Swensen Portfolio: Check M1 Finance’s platform
• How to Money Website: www.howtomoney.com

Stay tuned to How to Money for more expert financial advice and tips to help you thrive on your money journey!