Ask HTM - Teenage Homebuyers, Best Type of Life Insurance, & Making Easy Money with Securities Lending #994

Summary

Podcast Summary: How to Money Episode: Ask HTM - Teenage Homebuyers, Best Type of Life Insurance, & Making Easy Money with Securities Lending #994 Release Date: June 9, 2025 Host: Joel and Matt | iHeartPodcasts

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Introduction

In episode #994 of How to Money, co-hosts Joel and Matt tackle listener-submitted questions that delve into pivotal personal finance topics. This episode focuses on teenage homebuying strategies, the optimal type of life insurance, and the viability of making easy money through securities lending. Throughout the discussion, Joel and Matt provide actionable insights, backed by their extensive experience in personal finance.

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1. Teenage Homebuyers and Credit Management

Listener Question:
Caden from Council Bluffs, Iowa, aged 19, inquired about adding an Apple credit card to his existing three credit cards, aiming to boost his credit score in preparation for purchasing a home in the next two years.

Key Discussion Points:

• Credit Utilization: Expanding credit lines can lower the overall credit utilization rate, positively impacting credit scores.
• Benefits of the Apple Card: Offers 2% cash back on all purchases made via Apple Pay and potentially increases available credit, aiding in score improvement.
• Risk Management: Emphasized the importance of maintaining low credit utilization and paying off balances in full monthly to avoid debt accumulation.

Notable Quotes:

• Matt (10:59): “If you use it well, it really is a good card for a lot of folks to have.”
• Joel (40:12): “Your credit utilization rate has gone down. Let's talk about timing here as well…”

Conclusion:
Joel and Matt encourage responsible credit management, suggesting that adding a well-structured credit card like the Apple Card can be beneficial for young individuals aiming to strengthen their credit profiles for future significant purchases like a home.

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2. Best Type of Life Insurance

Listener Question:
Colin from Lancaster, Pennsylvania, sought advice on life insurance options as he and his wife plan to buy a home and start a family within the next few years. They currently have a basic employer-provided life insurance plan.

Key Discussion Points:

• Term Life Insurance vs. Permanent Life Insurance:
  • Term Life Insurance is recommended for its simplicity and affordability, providing coverage during the most financially vulnerable periods.
  • Permanent Life Insurance (e.g., Index Universal Life) often comes with higher premiums and complexities that may not offer proportional benefits for most individuals.
• Coverage Amount: Suggested starting with a coverage amount that aligns with current income and foreseeable financial obligations, such as a mortgage and child-related expenses.
• Life Insurance Laddering: Implementing multiple life insurance policies over time can provide flexibility and cost-effectiveness as financial needs evolve.

Notable Quotes:

• Matt (26:09): “Almost every other type of insurance you buy is overly complicated, costs way too much money.”
• Joel (27:00): “It's worth the much higher premium amount. Right?”

Conclusion:
For most listeners, especially those in the early stages of building their financial foundation, Joel and Matt advocate for term life insurance due to its affordability and straightforward nature. They caution against the complexities and higher costs associated with permanent life insurance products unless there are specific, substantial financial needs.

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3. Making Easy Money with Securities Lending

Listener Question:
Wayne from Philadelphia asked about the implications of securities lending programs offered by brokerage firms like M1 Finance and Fidelity, questioning whether he should participate to earn additional income.

Key Discussion Points:

• Understanding Securities Lending: It's similar to leasing out assets; while it offers a way to earn extra income, it comes with increased risks.
• Brokerage Profit Margins: Typically, brokerage firms take a significant portion of the profits from securities lending, leaving investors with minimal returns.
• Risks Involved: Potential for loss if the borrower defaults, lack of SIPC insurance on lent securities, and possible tax complications.
• Low Returns vs. Increased Risk: The marginal gains from securities lending often do not justify the associated risks and complexities.

Notable Quotes:

• Joel (18:02): “Most of the time, Matt, when we're agreeing to terms of service, we're not looking at that stuff.”
• Matt (16:31): “We don't have personal experience. So, Wayne, that should tell you again, this reinforces our opinion that this is not something that we recommend.”

Conclusion:
Joel and Matt express skepticism towards securities lending programs, highlighting that the returns are typically low while the risks and complexities are considerable. They advise listeners to approach such programs with caution and generally do not recommend participation unless fully aware of the associated dangers.

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4. Car Repair vs. Replacement

Listener Question:
Sharisa sought advice on whether to repair her 2011 Cadillac SRX, which has multiple issues including a timing belt leak and failed catalytic converters, or replace it with a newer vehicle.

Key Discussion Points:

• Cost vs. Value: The cumulative repair costs ($7,700) approach or exceed the vehicle’s current market value ($7,000-$8,000), making replacement a more financially sound option.
• Vehicle Reliability: Judged based on brand reputation, with Cadillac being less favorable compared to brands like Toyota or Honda known for longevity.
• Second Opinions: Recommended obtaining multiple repair estimates to ensure fair pricing and explore all options.
• Long-term Costs: Considering the age and mileage of the vehicle, the likelihood of future repairs may not justify further investment.

Notable Quotes:

• Joel (51:14): “So I think in this case, getting rid of this car and opting for another used car that's in better condition, that makes the most sense to me.”
• Matt (52:15): “I would definitely want you to do your… perform your due diligence.”

Conclusion:
Given the high repair costs relative to the car’s value and age, Joel and Matt recommend that Sharisa consider replacing her Cadillac SRX with a newer, more reliable vehicle to avoid ongoing and potentially escalating repair expenses.

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5. Simplifying Investment Strategies

Listener Question:
Trevor expressed concern over maintaining a customized investment portfolio through a now-defunct robo-advisor (Bloom) and wondered whether to switch to lower-fee index funds like VOO through Fidelity.

Key Discussion Points:

• DIY Investing vs. Robo-Advisors: Emphasized that for many investors, simple, low-cost index funds are sufficient and more cost-effective compared to personalized robo-advisor services.
• Diversification and Cost Efficiency: Index funds such as VOO offer broad market exposure with minimal fees, making them ideal for straightforward investment strategies.
• Sustainability of Investment Platforms: Highlighted the instability and high failure rate among fintech startups compared to established investment options.

Notable Quotes:

• Matt (56:04): “But investment portfolios, in my opinion, are more like tables than suits or T-shirts.”
• Joel (57:10): “Head over to Fidelity, get those low cost index funds. And yeah, your investing life is going to be simpler and more of your money is going to be working for you in the future.”

Conclusion:
Joel and Matt advocate for simplifying investment strategies by utilizing low-cost index funds through reputable platforms like Fidelity. They suggest that this approach offers sufficient diversification and cost savings, making it preferable to maintaining complicated, personalized portfolios through volatile robo-advisor services.

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Final Thoughts

Throughout the episode, Joel and Matt reinforce the importance of making informed, strategic financial decisions that align with individual goals and risk tolerance. Whether it's managing credit for future homeownership, selecting appropriate life insurance, avoiding risky investment schemes, or choosing between repairing or replacing a vehicle, their advice centers on practicality, cost-effectiveness, and long-term financial well-being.

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Note: All timestamps referenced correspond to the provided transcript and are accurate representations of when specific topics and quotes were discussed during the podcast episode.

Transcript

[Joel]

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[Matt]

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[Joel]

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[Matt]

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[Joel]

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[Matt]

I am Matt and today we're going.

[Joel]

To answer some of your listener questions.

[Matt]

Joel it's always a great Monday when we can hear directly from some of our listeners, some of our favorite listeners, actually. We'll get to how. That's the how. That's the case during this episode, but we're gonna take a credit card question from a teen and this is A teenager who doesn't want to ruin his chances to purchase a home.

[Joel]

A teenager that's more mature than most teenagers.

[Matt]

I'd say too, 100% more mature than I was at his age. We'll get to that one. We're gonna talk about term life insurance. It's kind of like a. Like a life insurance primer of sorts. We're gonna talk about when you don't need it. When you do need it. We're gonna talk about securities lending and whether or not that's something that we're fans of. That's a. And plenty more. During our episode today, buddy.

[Joel]

A lot of fun ones. Real quick, I wanted to mention something. We've talked about the buy once, cry once movement and the fact that, hey, buying something that's going to last longer.

[Matt]

Darn tough socks. Yeah, Buy for life.

[Joel]

That's kind of the staple thing that we reference is darn tough socks. But there are a lot of other brands and companies that you might kind of put in this vein as well. Whether it's just a retailer with a good return policy or a specific brand that says, hey, we're going to stand behind this with like a superior warranty. We're just going to create stuff that lasts a whole lot longer. There's this like European cell phone maker. Do you remember, what are they called? Do you remember that?

[Matt]

I don't know.

[Joel]

It's easier to repair, to replace the screen.

[Matt]

Oh, the gosh, what's that called?

[Joel]

You should know. I should.

[Matt]

Well, I really should.

[Joel]

Yeah, we'll look it up, we'll put it in the show.

[Matt]

It's like a LEGO phone.

[Joel]

Yeah.

[Matt]

Like, that's less about the quality and more about resisting planned obsolescence. The fact that you can go in there, tinker with it, remove. Oh, I'm going to upgrade the camera now. It's like that. It's like. Like the monster truck racing game on Nintendo back in the 90s.

[Joel]

And you could upgrade your tires.

[Matt]

Oh, I'm gonna get a bigger engine, better suspension. You know the game I'm talking about, what was that called?

[Joel]

I don't remember.

[Matt]

That's called Cognitive Decline, my friend. The fact that we can't remember anything anymore.

[Joel]

Okay. But what I wanted to highlight was a brand in particular that I hadn't really thought about much, but Speed Queen washers and dryers. Yeah, you've heard about Speed Queen, right?

[Matt]

I don't have personal experience with them. I've just seen pictures of them. They're like. They are these very boxy, industrial looking Tough mofo washer and dryer.

[Joel]

They do not look sexy in any way, form or fashion. And the only reason that it came to my mind was I was staying at. My friend owns an Airbnb and I stayed at his house.

[Matt]

Have a speed queen.

[Joel]

He has speed queens. Oh, he got speed queens.

[Matt]

What a great way to experiment as well, to see how they are.

[Joel]

So he got speed queens for two reasons. One, they apparently do the laundry a lot faster. And so he has to pay the cleaning crew less money because thus speed Queen, they're finished quicker. Right. So it's faster. Then secondarily, the warranty is, is insane on those things. I think it's like seven years for a speed queen, washer and dryer, pretty solid. And then that includes the service technician coming out to your house to parts and labor. Yep. The whole kid and caboodle. So it's one of those things. But I looked up the price. I was like, oh my gosh, it's like 2,500 bucks for the pair.

[Matt]

Oh my gosh.

[Joel]

So it's expensive.

[Matt]

Oh, for the pair. Okay, that's better.

[Joel]

But this is the kind of thing where and maybe you could, I don't know, get some used on Facebook Marketplace. And you're like, great. These things are going to stand the test of time. My guess is if there's a seven, if these things come with a seven year warranty, and from everything I've been able to read, they're going to last something like three times longer than the average washer and dryer. So that's just one more place where you can look, I think, to, especially if you're in the market for a washer and dryer right now, buying the right thing, spending more up front, and then saying, this is something I won't have to deal with for hopefully decades to come.

[Matt]

Yeah, I like that. And are you also drawn to the fact that it's made in the US I was actually surprised to see. I did a quick search because I was wondering how many other brands are made in the US And I was surprised to see that George, they've got a big factory up in Kentucky.

[Joel]

Okay.

[Matt]

So Speed Queen, they're made up in Wisconsin. So it's kind of got that American exceptionalism baked into it.

[Joel]

Salt of the earth, Midwesterners creating those speed queens.

[Matt]

That's not what we have at our house. I've got an LG or something. I've got one of the ones that play the music. That's what I have.

[Joel]

It plays music. Yeah, dude, that Seems unnecessary.

[Matt]

It's very. You're Speed Queen Japanese.

[Joel]

It ain't gonna play music.

[Matt]

Like it's either Samsung or lg, but you turn it on and it does the dun, dun, dun, dun.

[Joel]

Okay.

[Matt]

And anyone who has my washer dryer knows exactly the song that I'm singing right now. That's when you change the setting.

[Joel]

I mean, mine's got like little. But it doesn't play like music or anything. But. But it's got little ring tone. Tony sort of things like at the end.

[Matt]

Yeah. At the end of the cycle as well. Plays a little ditty for you.

[Joel]

Yeah. You do a little dance and annoying if it's going off when you're trying to fall asleep. But the. I think that this is just a good reminder, folks. Check out. Check out Speed Queen.

[Matt]

It's not always about going for the absolute cheapest.

[Joel]

I don't own one, but if mine go dead, that might be the next thing I purchase.

[Matt]

I totally consider it. Yeah. The ones we have is just because we inherited it when we purchased the house. It's what was already in there. Same question. You've got a front loader, right? So one of the.

[Joel]

Which typically those don't last as long. Well. And they don't do a good job.

[Matt]

Cleaning because it's funny you mentioned the Speed Queen and how you got to try this out like an Airbnb. Anytime I've used a front load washer at an Airbnb, I swear they never.

[Joel]

The top loaders are better.

[Matt]

Yeah. It's like they don't rinse as well. It just smells like detergent. Have you found that to be the case or you're kind of like, yeah, mine's.

[Joel]

Mine's good. It's fine. But like I will say they break down a whole lot more because of the. I think you know, the way the drum is and stuff. This is coming from a guy who really doesn't know what he's talking about right now. But from what I.

[Matt]

It opens sideways. I mean.

[Joel]

Yeah, exactly.

[Matt]

You got to keep the water.

[Joel]

Top loaders just do. Do a better job naturally. It's like we got these, these, these improved appliances that use less water and then what happens is they break down five years sooner. So yeah, the trade off wasn't worth it.

[Matt]

The design principle behind putting a door that side facing isn't James and the Giant Peach. They didn't go up the side door. What. What door do they go out when they suspected that they were bobbing out in the ocean? That's right up the top they climbed up the top is virtually or almost.

[Joel]

You guys just read that book Vertical?

[Matt]

Yeah, we're going through all the.

[Joel]

We just as. And I just read that. Yeah.

[Matt]

So good.

[Joel]

It's so classic. I'm like the biggest Roald Dahl fan of all time. All right, we should probably take listener questions first. Let's mention the beer we're having today. This one's called Doom Volume. It's by the Vale. Awesome brewery out of Virginia, I believe. And we'll give our thoughts on this one at the end of the episode. If you have a money question we'd love to hear from you, just go to howtomoney.com ask or do the simple task of recording that question and emailing it over to us. We would love to take your question, hopefully next week on the pod, but let's kick it off. Let's get to a question now about maybe a prompt you've received inside of your investing app and whether or not you should follow through and make it happen.

[Wayne]

Hey there, Matt and Joel. This is honorary best friend Wayne from Philadelphia contacting you with yet another question. So I have a Roth IRA account open with M1 and recently I noticed that I had a interest payment. I did a little digging and found out that M1 Finance has a fully paid security lending program which they automatically sign everyone up for and that you can opt out of. I should also note that you are not always lending out your assets and it seems to be some kind of lottery system that decides whose assets are lent out and when. So onto my question. How do you guys feel about the lending of retirement securities? Would you opt out or would you stay involved? Apparently you get 10% of any of the profits they get from the lending, which seems really on the low side, especially since it sounds like we as the customers are taking the majority of the risk. Also, while making this recording, I found out that Fidelity has its own lending program. How does that compare to M1? Are there other lending programs out there? Am I leaving money on the table by not participating in these types of programs? Thanks again for taking my question and I look forward to your answer. Best Wayne out.

[Matt]

Best Wayne out. You know, Joel, I'm go out on a limb and say Wayne this Wayne is my favorite Wayne friend that I.

[Joel]

Have you met Wayne irl?

[Matt]

No.

[Joel]

Okay.

[Matt]

But I don't know any other Wayne. Like he automatically gets the number one spot. Sorry Wayne, this is the competition wasn't super super stuff. But I feel like I would also be friends with Wayne. Wayne irl.

[Joel]

That also means that this Wayne is easily going to get bumped if you do meet someone irl.

[Matt]

No, no, this Wayne. This Wayne's way cooler.

[Joel]

You're top notch, Wayne.

[Matt]

So no joke. I actually, I just looked on my phone and I do have a Wayne in there, but I don't know who that is. It says, it says like Wayne, like Wayne Lania or something like that. I'm like, I don't. Who the heck is this?

[Joel]

I don't know. Maybe that time you met Wayne Gretzky.

[Matt]

You guys are pals. No, was not him, but Wayne. Thank you for this question. It's one that we're going to hear more and more as brokerage firms make their customers aware of securities stock lending, also known as stock lending. Folks are going to be enticed by the language they use, right? Who doesn't want to earn more money on their investments? Why not earn a little bit, a little vig, some side money, Let my.

[Joel]

Securities have a little side hustle, bringing me more money in, right?

[Matt]

Not only are they just earning me the regular sort of dividends, maybe I can also do some of this on the side. What's not to like?

[Joel]

What's not to like? There are some pitfalls that we do need to cover before we send Wayne all in on this direction and say, yeah, lend your stocks out. No worries. Well, stock lending is available to a whole bunch of people now. And there are so many fewer hurdles to lending out your stocks. Unlike some of the riskier types of investing you can do, you don't need to be an accredited investor. Usually there's this hurdle you have to overcome, which involves a net worth that you have to have or you have to have a super high income. That's how you're able to make more risky types of investments. But when it comes to stock lending, that's not the case. You just have to make more than 25,000 bucks. I think with an accredited investor, it's usually 250,000. Or you have to check a box on the back end of your account saying, hey, I know the risks with most of these brokerage firms who are offering this. Getting into stock lending is easy peasy. Anybody can do it. But that's not necessarily a good thing, stock lending. It's. It's kind of in some ways like owning a rental property, right? The property is yours, but you lease that property to someone for a specified, specified period of time. Most of the time over a year basis, right? So you make a little money while you rent to that person, but you retain ownership of the property. And so at the end of that year, you can say, you're out of here or I'm upping rent, or please stick around. But there are reasons that stock lending is unlike investing in real real estate. And if we're gonna give the short answer, I'm gonna say, I just don't know that I would participate. I don't know that it's the best idea for most folks.

[Matt]

Agreed. I don't think it's worth the squeeze. And the reason being is cause oftentimes folks want to borrow your stocks, typically because they wanna short the stock that you own. They're basically betting that the price of that stock's gonna go down. And if it does, as they hope they make some money, so do you. So everyone wins. But if the short seller is substantially wrong, there is a chance that you could actually lose money. Even when lending your stocks out, you again, you still retain the stock in your account while you're lending it out. But you know, this is an actual legit way to make some money. That being said, the safety is a bit questionable. And I think we will see this becoming a bit more normalized with the different brokerages out there, especially ones who are counting on. I don't know that I feel like you tend to see it more. He mentioned Fidelity specifically. They do this, but also with Robinhood folks who are leaning into. Because the other side of this, you got securities lending, but then you also have margin investing. That's the other. That is what is made available because of stock lending. And the part. I just don't like the aspect of it that it's all. It feels like it's built on a house of cards, that sort of approach. I want you to be careful.

[Joel]

It's not all about the passive investing approach that you and I are typically fans of, Matt. And most of the time, you'd be fine lending out your securities ultimately under M1 or Robinhood's program or Fidelity's, really whoever's. But when you look at the disclosures, it can also raise eyebrows. So you typically encounter a clause about risk of default. I would. I would read that clause carefully. Most of the time, Matt, when we're agreeing to terms of service, we're not looking at that stuff. We just like scroll down to the bottom and we click okay. But Robinhood and M1, they've got, by the way, their own cash collateral in the case of an event where there's some sort of abnormal market behavior. But even that may not be enough to cover your losses. Robinhood in particular, almost didn't have enough cash during some of the massive meme stock trading days where there was just incredible volatility in specific stocks. So if you were lending out, let's say your Gamestop stock, well, there was a chance that you were going to get screwed and that Robinhood wasn't going to have the collateral to cover your losses. And so in addition, you know, your stock portfolio, it's typically insured by the sipc, but securities you've lent out, they're not covered, which adds more risk to this whole endeavor. So there are risks here that are meaningful. And when you look at some of the terms, it frightens me. It makes me want to not participate well in this process, especially because we're.

[Matt]

Not talking about making a ton of money if the reward was sky high. Like you mentioned real estate, you know, there is some decent money to be made in real estate when you invest in rental properties or just different types of real estate investing. If that was the case here when it came to securities lending, it might be worth the risk, but the rewards are actually pretty paltry. We don't have personal experience. So, Wayne, that should tell you again, this reinforces our opinion that this is not something that we recommend. But if you dig around and you look at like for instance over on Reddit, some folks have shared that with a $250,000 investment balance, they're making somewhere in the neighborhood of one to two dollars a month. And so that's the kind of conversation we're having here.

[Joel]

They make it sound so much better when the pop up happens. And it's like, do you want to turn on securities lending? Like you could make money on your stocks that you own.

[Matt]

Part of that is because it's not like your entire portfolio is going to be lent out at the same time, because it's often the riskiest stocks that are likely to be borrowed by basically folks that want to borrow bland ol boring vu the S&P 500 ETF you mentioned it being a lottery as to who it is that gets chosen, who gets the honor of being chosen to participate in securities lending. Oftentimes it is those riskiest stocks because there is not stock available when it comes to the clearing of those stocks. So they're trying to facilitate in the purchasing and the selling of these different securities, which means most how to money listeners, they're not going to receive much benefit from participating. The brokerage firms, as you alluded to, they are the ones who stay in the profit the most here. And of course they charge Fees, they take the bulk of the profit while you get a small, small, small little slice.

[Joel]

Something like 85 to 90% of the profit I think from securities lending is taken by the brokerage firms. From what I've been able to glean from M1 Robinhood, it's like, hey, do this and earn some money. But really we want you to do it because we make money, it helps us. And there are some idiosyncratic tax possibilities for lending stocks that have to do with what rate your dividends are taxed out. So be careful of that. There's actually a possibility of losing money even if it looks like you're making money lending stocks out because it creates some sort of tax nightmare on the back end.

[Matt]

All in all, it's not as favorable as receiving qualified ordinary dividends.

[Joel]

Yeah, I think when it comes down to it, lending out your securities to make money, it sounds really cool. But there are so many downsides, you're not going to make much. Potential tax consequences along with increased risks. It just makes. It makes us hesitant to recommend it. I've turned the feature off. I'm not planning on participating. Didn't Wayne say that his broker it was automatically.

[Matt]

Yeah, that's actually pretty crazy. I don't know. That's a huge red flag in my book. So I don't know if maybe that's something he auto. I mean, that being said, I'm not over there playing in the M1 sandbox.

[Joel]

So I would go back in there and I would make sure that that was turned completely off. I wouldn't want to participate in this because of all the reasons that we mentioned. But one of the primary ones, again, the risk might be worth the reward. Matt, if we were talking about making real money from lending your securities out, we're talking about making almost next to nothing. From everything I've seen, even people with massive stock portfolios are saying, yeah, it didn't really net me much. In that case, why would you even try?

[Matt]

Exactly. We've got more to get to. It's been a minute since we've heard from a teenage listener, so I'm looking forward to that one. Plus more right after this.

[Joel]

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[Matt]

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[Joel]

That's guardianbikes.com built in the USA made specifically for kids.

[Matt]

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[Joel]

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[Matt]

Nice.

[Joel]

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[Matt]

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[Joel]

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[Matt]

That's right. Make your plan with Navy Federal and TrueCar today. To qualify for the $250 bonus, car purchase and financing must be completed by September 2, 2025. Terms and conditions apply and are available at navyfederal.org TrueCar Credit and Collateral subject to approval. Navy Federal is insured by ncua.

[Joel]

All right, just a second. We're going to take a question about the Apple credit card. Should we sign up for that? Is that. I like it.

[Matt]

Yeah, I gave it away. Keep listening, folks.

[Joel]

Yeah, there's a lot more actually.

[Matt]

I like it, but I don't have it.

[Joel]

Oh, why not? Matt Mystery. We'll get there. But first let's get to a question.

[Matt]

That'S what they call a cliffhanger.

[Joel]

I'm hanging off the edge a la Sylvester Stallone. All right, let's get to a question from listener Colin, specifically about life insurance, when to buy and how much.

[Wayne]

I'm at. And Joel, this is Colin from Lancaster, Pennsylvania. I just wanted to get your guys input on life insurance. My wife and I currently are renting and do not have any children, so we don't have any life insurance apart from a small group life plan that I have through my employer. And in the next year or two, we're probably going to start looking to buy a home and start having children. So I wanted to make sure we got everything squared away as far as life insurance goes. So I just wanted to get your guys input on what you guys recommend. I've heard from most experts that they recommend term life insurance. We also have friends that are in an index universal life plan called Kaizen. Would love to hear your input on on that kind of idea. Right now my plan is to just do term life insurance and keep it simple. But I just wanted to hear what your guys thoughts were on that. I also wanted to get your guys input on what kind of level of coverage we should get. Currently our household income is $90,000 a year. I make about 60% of that. So I wanted to just hear your thoughts on, you know, what kind of strategy we should have for the coverage and what kind of coverage we should get on whom. So yeah, I Would just appreciate your guys's advice, as always. I appreciate everything you guys do for us and just, yeah, the way you guys make finances sound simple and enjoyable, we just. I just really appreciate that. So, yeah, I would love to hear from you guys and thanks again. Bye.

[Matt]

Joel, did you notice how Colin just slipped it in casually there that he's got this group life insurance plan that's provided by his employer for free? I'm not bitter. Yeah, no. Okay.

[Joel]

That's not abnormal. I will say, when I worked for the man, I had life insurance.

[Matt]

Never worked for the man. Oh, actually, I did work for the man for a small stint.

[Joel]

It was a long time ago.

[Matt]

He was a smaller man, though. He wasn't like the big, big man, which means I didn't get some of these sweet benefits. And so I. I like the fact that Colin's got this available to him, but, like, he's realizing that's not enough to, you know.

[Joel]

That's a good point.

[Matt]

It's not enough mustard to cut it. Is that the term mustard? Yeah.

[Joel]

Let's talk about workplace plans for just a second. Because some people think, oh, maybe that's the best place to buy life insurance. And the truth is, most of the time it's not. Take the free amount that you're allotted, which is often half or 1x your. Your current salary, which is nice. That's a nice perk. But then if you want to buy more, it's typically going to cost you more, Especially for somebody like Colin, who's so young, probably so healthy. I can tell, Colin, you listen to Andrew Huberman's podcast and that you're just in incredible shape, which means that you're probably going to pay a whole lot less on the open market than you would to get additional insurance through your employer. So be glad that you have a little bit. But the truth is, in the near future, you're probably going to want to have more insurance because as you take on more financial obligations, as your family continues to grow, it's going to be important to increase the amount of insurance that you have to protect that growing family and your growing assets.

[Matt]

But specifically, what kind of insurance should he have? Joel, let's sing the praises of term life.

[Joel]

Don't make me sing. I really will.

[Matt]

I'm glad that that's what Colin's considering. It easily makes the most sense for the overwhelming majority of folks out there. And almost every other type of insurance you buy is overly complicated, costs way too much money. You might get a pushy salesperson who tries to sell you on the benefits of something like index universal life like your friends have or make it sound.

[Joel]

So good just like the timeshare salesperson does.

[Matt]

Exactly. It's very similar or even some I've heard of even funkier life insurance products out there. They're going to talk about the tax advantages, how you can borrow from it, but the monthly premium is often more than 10 times what your simple term life premium is going to be.

[Joel]

But it's okay because you're going to be able to borrow from yourself down the road. And man, the tax benefits are incredible.

[Matt]

So don't do it.

[Joel]

It's worth the much higher premium amount. Right?

[Matt]

I don't think this is the right product for you, Colin. It can possibly make sense for some folks who are incredibly wealthy who have very high incomes like Matt, but like not like for 99% of folks. I think it comes down to term life and instead what you do, Instead of paying 10 times more, you save that money and those extra dollars would just then be better put to use investing in tax advantaged accounts like Roth IRAs like your HSA, even workplace, workplace sponsored retirement account like a 401k. And so in this case the bare minimum product term life insurance. It should provide you all that you need and more which is a simple death benefit during your most vulnerable financial years.

[Joel]

No more bells and whistles needed. I love, by the way, when I make comments about how absolutely loaded you are, Matt, you just ignore me now. You just, you just chalk it up to Joel being an idiot.

[Matt]

I just try to keep on chalking.

[Joel]

We should, we should probably just answer the question.

[Matt]

I'm over here watching the clock.

[Joel]

All right. Yeah, they probably, we can talk about how long can we talk about life insurance before people turn us off? Well, the goal is to, like you said, cover yourself and your family during those most vulnerable financial years. The other problem, Matt, when people sign up for the more expensive policies, one, they're typically unnecessary bells and whistles and they're paying more than they need to. And because of that, many people end up ditching that policy before they end up using it because they realize, oh, it's eating up too much of my budget.

[Matt]

They're like, they can't sustain it.

[Joel]

This life insurance is too expensive. I've got, if I have to cut something, this is what I'm going to. They forked over a lot of money over the years and then it turns out they don't have coverage when they need it. We don't want you in that position. That's Just another check mark in the hey, go for term life insurance instead category. And it's just important for us to mention also that you don't have to get all the coverage you might ever need in one fell swoop, partly because that can be hard to predict ahead of time. You don't know what your insurable need is going to be. You don't know where your income is going to go. You don't know what sort of assets you're going to have. And so life insurance laddering can be a great way to allow you to have some coverage now, but not feel like you have to go all the way and just get a multimillion dollar term life insurance policy forking over more than you want to. Because you can always add on more during years when you have a higher insurance need. And then later on in your life, you can essentially kind of reduce coverage as, let's say, kids are leaving the house and your insurance needs decline because your net worth has increased and you have just, you have a higher net worth, you have more cash at your disposal. And so that becomes, that becomes less necessary. So we have a whole article about life insurance laddering that we'll link to in the show notes. But I think that's such an important thing for people to consider and it's often, it's often not thought through enough because it can help not only reduce premiums, but ensure that you have the coverage you need during the times when you need it most.

[Matt]

Totally. I prefer personally the term layering as opposed to laddering because I envision you stepping out into a rainstorm or something and you're like, oh, let me get the umbrella. But then you're out there with the umbrella, walking around, you're like, holy, oh man, I'm getting soaked. I actually need to put the rain jacket on. So you put the rain jacket on and you've got the umbrella. Maybe you're like, I don't want my legs to get wet. My, you know, my pants are getting wet. And then you put on like the, the full on. I don't even know what you call it, rain suit or something like that.

[Joel]

But do you have one of those rain suits?

[Matt]

I've got a rain jacket. I don't, I don't have any rain pants. I thought about getting them though, commuting to, you know, riding the bike to work. You want to be protected from the rain.

[Joel]

If you're a bike commuter, you got to have a pair. But for most people who are just walking in the rain, you probably don't yeah.

[Matt]

Or you just get wet. I mean, that's what I do. I'm like, I bring a change of.

[Joel]

Shorts and just don't whine about it.

[Matt]

Yeah, I'm tough, buddy. I'm a tough guy. I'm a tough boy. But so I want to give an example. Imagine you want to have $500,000 of coverage now and you're like, great, that's what I can afford. That kind of aligns with our needs. Right now we're one of us to croak. And then maybe you're saying, I'm going to add another $500,000 or maybe even a million dollars of coverage five, ten years from now as your net worth grows, as maybe you take on more responsibilities with, let's say a house. Right. You've got a fat mortgage, kids, you got a bunch of kids on hand. Yeah. Depending on your needs. And you were specifically asking too, how much should you have on you as opposed to your wife or your partner? Well, it's not just about income. It's certainly a factor because he mentioned, did he say he brings in like 60% of their overall income? You do want to take that into account. But even non working spouses, they should also be insured because of the valuable services that they provide for the household, for the, for the family, and the increased costs that you're likely going to be faced with if they were to pass away early. It also comes down to your life circumstances and your family situation. I know for us, early on that's something we talked through and we kind of came to the realization that like, okay, I think one of us would likely get the parents involved and they're young enough and would want to be involved. They were retired and I think would gladly step up into that role to say, help out with the kids. But then subsequent conversations led us to say, you know what, things are changing a little bit. Let's make sure that we are set in a more independent way. When it came, when it came to the kids, like you just had different needs and that. And even those needs change. Right. Like we're dynamic over time and so.

[Joel]

It'S something willing to adjust.

[Matt]

Yeah. Makes me think something worth reevaluating every time.

[Joel]

Mother's Day was about a month ago. I remember seeing this cartoon. It was like, hey, we gave you the day off today, mom. And we hired everyone else to do all these tasks for you. And think about all the people you would have to hire to replace the tasks that a stay at home spouse does. I mean, it's incredible. There's chef, there's taxi service. There's all of these things that would. Not to mention just the time that you might want to spend grieving or working less yourself because your spouse has passed away. Those are big things that also have a financial angle to them.

[Matt]

Totally. But the typical suggestion, there is a good rule of thumb out there, and that's to get 10 times your income in life insurance, which is a helpful starting point. But policygenius, they actually have a solid calculator that takes your savings into account. It takes into account how much debt you have. And then again, ultimately some of this kind of comes down to you and what it is that you want to have. Right. Like let's say you've got a non working spouse and you're just like, okay, let's say 250. But then you're thinking, all right, I want more than that, let's do 500,000. It kind of comes down to what it is that you're comfortable taking on. Obviously you would receive a bigger benefit, which means you're going to be paying more for that luxury. But that's something else to take into account too. It's not just a math equation.

[Joel]

Yeah. And part of it also comes down to finding the sweet spot in length of term and the amount of coverage. Because you might say, well, 250,000 bucks for 20 years is going to cost me $11 a month, but $500,000 a year for 20 months is going to cost me $16 a month. You're like, well, it's probably worth an extra five bucks a month to get the additional coverage. So then you can like decide as you run the numbers, well, is it worth that extra little bit of premium for me to get the superior coverage? That's part of doing the shopping too. And so I would, I would plug those in. Well, then maybe look at a 30 year policy. Then maybe look at a 10 year policy. Typically I would say a 20 year policy is probably going to be best, at least to start out with. And you can get another policy. Kind of like Matt was talking about with layering. Like there you go, five or 10 years hence.

[Matt]

And I get the laddering analogy. Right. It's as if you have ladders in your backpack or something and you're kind of scaling a mountain. But who actually has ladders in their backpack? Which is why the layering always makes sense.

[Joel]

And we talk about this just even in the ads surrounding the show. I'll just be honest, policygenius, they're a great Place to shop.

[Matt]

Yeah. Other shows do. Like the disclosure.

[Joel]

Yeah. And so policy genius.

[Matt]

Just so you know, policygenius is a. As a paying advertiser for the show.

[Joel]

And they are, they are. But they're also.

[Matt]

We'd be talking about them regardless.

[Joel]

They're a great company. Place to shop. Another place you could consider shopping is if you're a Costco customer, they partner with a company that offers term life insurance. And I do believe that you get a discount on the first five years of premium. So I would shop in both places and see, okay, where am I getting the best rate for the coverage we need. But.

[Matt]

And they give you a 64 ounce cup to fill up with coke.

[Joel]

If only this isn't a quick trip, Matt. This is Costco we're talking about.

[Matt]

You know, it's funny, I'm picturing the food court there at Costco and I still have not purchased and eaten a hot dog at the food court.

[Joel]

Okay. I'm making it my mission to take you there on a how the money hang.

[Matt]

I hope that we are together when you get to see the look on my face when I get to enjoy this all beef Frank, which I think that's what you tried to convince me one time that they're a high quality dog.

[Joel]

They are.

[Matt]

I don't know if that's true though.

[Joel]

I'm gonna make you go. I have to. We have to bring our boys too. Because my son, he's like a big fan of the Costco.

[Matt]

Westy does like a good hot dog, so he taren as well.

[Joel]

All right, let's get to another question. This one's about adding another credit card to the mix. If you've already got three, do you need a fourth?

[Wayne]

Hi, Joel and Matt. My name is Caden Hiers and I am from Council Bluffs, Iowa. My question was regarding credit cards. I currently have three credit cards at the age of 19 with a total credit limit of $3,300. I was wondering if you guys think it would be a good decision to get an Apple card with 3% cash back on everyday purchases with a limit of $6,500. The only gist is my fiance and I plan on trying to buy a house within the next around two years. So I don't know if that would be a bad thing or if it'd be a good thing and show that I'm more responsible with more money by keeping my usage below 10% and paying them off every month in full. Thank you for listening to my question and I hope you guys have A great day and enjoy the beer.

[Matt]

So I just realized that Caden said he's 19, which means he's not partaking in the finer things in life when it comes to the fancier craft beer.

[Joel]

Two years from now, Kaden, you can start to enjoy some of the beers that Matt and I have enjoyed over.

[Matt]

And if you head our way, we'll take you.

[Joel]

Buy your first one.

[Matt]

I would love to do that. No joke, Kaden, if you want to reach out, and we will totally 100% honor this offer right here on the podcast.

[Joel]

Buy you the best hazy IPA and also a nice fruited sour.

[Matt]

Ooh. Well, it also depends on the time of year. There's a whole lot of thought that goes into craft beer in our world, Caden, but I love that you were doing so many positive things with your money. Already at the age of 19, he's already got three cards. I feel like when I was his age, I was pretty smart about the credit cards because this is back when you could get credit cards when you're, like, 14 or 15.

[Joel]

They were just, like, trying to give them out like candy on college campuses.

[Matt]

Yeah. Well, and I wasn't in college at that age, and I wasn't that smart. But even still, I mean, I guess the rules were much lax, and I remember my dad saying, yeah, go ahead and get a card and you can start learning how to handle this properly.

[Joel]

But before the card act, I believe.

[Matt]

The card act, which sense that they would call it that.

[Joel]

Yeah. Which prevented credit card companies from offering, like, free pizzas to grab a credit card on campus, which I get that probably doomed a lot of people right from the game.

[Matt]

I also did that, too, because I wanted the free pizza, so. But I.

[Joel]

But if you were intelligent and you just scored a free pizza and you. And I don't mean to cast Aspergens on people's intelligence. It was more like it was a rigged system in a lot of ways, pushing people towards credit card debt who didn't really know better. But. Yep. Yeah. Let's talk about the Apple credit card.

[Matt]

I like how Kaden's thinking about it, though. Yeah. Like, him and his fiance, like, they are going to be like, they're on this awesome path that I'm really excited for them.

[Joel]

Agreed. I think he should get this Apple credit card.

[Matt]

When did you become an Apple fanboy?

[Joel]

I wouldn't say I'm a fanboy. I'm fine with Apple, but I have no really super emotional feelings towards that. I don't love them or hate them. They just exist. And I utilize our products sometimes, but this card in particular, I think does a couple of nice things for Caden here. One, it adds a credit card that doesn't have an annual fee. I think that's a good thing. Right. It allows you to have another card in your arsenal. Not that I'm against annual fees. Right. If you're getting enough bang for your buck with the annual fee, but it's just kind of a. We don't know that. We don't know what your spending is like. And Kaden, at the age of 19, I don't know if you're, if you're spending enough or traveling enough. Right. To get kind of the bang for your buck from signing up for one of those more expensive credit cards. But I think this could help essentially with optimization of cash back on some of the purchases you make by having this credit card in your digital wallet. And I will explain why we say digital wallet in a second. Right.

[Matt]

That's the best part about the Apple wallet.

[Joel]

I know.

[Matt]

Double click to pay, baby. Yeah, I love it.

[Joel]

It makes things simple. But the bigger reason this could be helpful to you, though, I think is the larger credit limit that you're going to have available. The goal, as we've discussed many times before on the show, is to have a large credit limit, but to not use much of that available credit. That is what helps make your credit score look awesome. It's what makes you look like a super credit worthy person. And so this new card alone would essentially double your credit limit, which makes it easier to increase your credit score because hey, now that Instead of having $3,000 worth of available credit, you've got something closer to $7,000 of available credit if you're spending the same amount. Although you have an extra card, you're still spending the same amount every month. It just makes you look better to the credit bureaus, which is awesome. And that in particular is going to be helpful for you as you work towards buying this house a couple years from now.

[Matt]

That's right. Your credit utilization rate has gone down. Let's talk about timing here as well, because we would tell you to not get this card if you were planning on making offers and if you're planning to apply for a mortgage over the next couple of months. But you said you're looking to buy a house in a couple of years, which means that small credit ding that you're going to receive applying for this card, it's not going to negatively impact you at that point in time. Yeah, it's going to. Yeah, it's going to be in the rear view mirror for sure.

[Joel]

It's a short, it's a short lived thing that might hit for a couple, three months maybe.

[Matt]

Yeah, I was gonna say 60 to 90 days if I, if I had a guess. But then the smart usage of that new card is gonna help on multiple fronts because the base level goal is to use less than 30% of your available credit. And given the fact that he's at like 30. Did he say 3300 is something like that overall? Like I don't. It wouldn't be that difficult to see your spending start creeping above that. And so yeah like you said Kaden, for you to be able to keep that to 10% or less is even better then you're aiming for that score, that credit score in the 740 plus range that will help you to qualify for the best rates possible when you are ready to buy. And of course like you said, make sure that you are paying your card off on time in full every single month.

[Joel]

Otherwise that's the crucial part. That's the.

[Matt]

Otherwise you're not allowed to have the credit card. No more credit cards for you. If you're not paying it off, it's not worth it.

[Joel]

Yeah, agreed. But it sounds like he's already got three. Hopefully he's handling those well. He's got this, this, this minimal line of credit. Hopefully he's like developed the right habits over the past year or whatever length of time he's had those credit cards available. And now adding this next one into the mix isn't some sort of added temptation, it's just gaming the system. Right. To increase his credit score and to increase the benefits that he gets from spending the way he's spending. One of our favorite things too about the Apple card is the user interface. I think it's worth mentioning that Matt, because anybody who has this, from everything I've read like love, I don't have the Apple card personally, although I'm not against it. I would totally consider it. But people who are like Apple fanboys and fan girls, they absolutely love this card and for good reason. Right. Because Apple's doing it differently than most of the other credit card companies and in fact they seem to be helping you visualize how much interest that you would owe.

[Matt]

Yeah, there's like a lot of charts, a lot of graphs.

[Joel]

Yes.

[Matt]

Interactive graphs as well. Which, what's more fun than a graph and interactive that you can put your finger on and move around.

[Joel]

Right. I mean you love stuff like this. I'm Surprised you don't have this card.

[Matt]

But all right, I'll apply right now.

[Joel]

But they're suggesting payment amounts, right, to help you pay off your balance faster, which most credit card companies, they're not actually wanting you to do that. Their favorite customers are the ones who don't pay off their balance. And so any sort of added interactive graph to help incentivize you or get you excited about paying off your balance faster, well, they want to hide that from you. So I love that Apple is doing the easy the exact opposite. The card lives inside your Apple wallet, which is also where you can sign up for Apple's cash account, which pays a competitive interest rate. So Apple kind of created this semi banking system that I think a lot of Apple customers are tending to like. They also don't charge bogus fees like some of the credit card companies charge. So if you use it well, it really is a good card for a lot of folks to have. And I think for a lot of people, Matt, it probably will be their first credit card or it will be one of their go to credit cards. Just because of the nature of the way Apple people use their devices and the way Apple caters to its customers and gives them kind of what they're looking for.

[Matt]

Yeah, Kade, one thing you mentioned though, was getting 3% cash back. But I don't want folks to hear too rosy of a picture that we're painting here because the Apple card, it really only offers 2% cash back for every purchase that you make when you use Apple Pay, which is accepted at most places, which is good. You know, it still rivals one of our, you know, like our favorite cards out there, like the Citi Double Cash and the fidelity card. That 3% cashback rate, it's limited to purchases that you make specifically at Apple with a few other selected retailers that they highlight. And that list of selected retailers has actually been shrinking over the past year or two. So I wouldn't go into it thinking, I don't want folks out there to hear us talking about 3% cash back with the Apple credit card. That certainly beats the Double Cash. Well, not really.

[Joel]

It's very, very limited in scope. But 2% cash back on every purchase with Apple Pay 2 is great. That's pretty darn good. And it's not hard to use Apple Pay almost everywhere you go now online too?

[Matt]

Oh, sure, yeah. I mean, you just load the cards there onto your digital wallet. Double click to pay. Like I mentioned before, but Cadence sounds like he's starting to get into the optimization game and if so, I would recommend not just looking at 3% but something like 6% cash back. If you get the Amex Blue cash preferred card at grocery stores. The combination of getting 6% there looking at a specific category of spending. So for us specifically, that's restaurants. That's where we use our Citi Custom Cash card. We are earning 5%. And then what's another universal expense that everyone has gas. So if you have a Costco warehouse anywhere near where you are, the ability to get the Costco anywhere Visa and getting that 5% cash back, man, like 6, 5, 5. On like the large, large percentage of your monthly spending. It is hard to beat that, that.

[Joel]

Cash back and then the Apple Card.

[Matt]

2% out of the water.

[Joel]

Then the Apple card with Apple Pay becomes kind of your go to for every other category which is same with like Citi Double Cash or Fidelity. That's kind of how I think about it.

[Matt]

I can get on board with that.

[Joel]

And how I use mine. And that's the, that's the most basic way to get the best cash back returns on normal spending you're doing every day without feeling like you got to get into the travel hacking game if.

[Matt]

You'Re not so inclined or keeping up with revolving categories of spending. That's just not something I'm interested in.

[Joel]

That's annoying to me.

[Matt]

Yeah.

[Joel]

And it also feels like it's like incentivizing more consumption than otherwise would be partaking. And it's like oh, 5% off at home Depot this quarter. Let me go there and load up on stuff when you might not otherwise do it. All right, we've got more to get to, including a repair or replace your automobile. Question. What do you need to think through before you make that decision? We'll talk about that and more right after this. Looking for a smarter way to teach your child to ride a bike and support American jobs at the same time? Most kids bikes are just cheap imports. They're heavy, clunky, hard for kids to control. Guardian Bikes is changing that. They're assembling bikes right here in the USA with plans for full US manufacturing in the next few months. It's a commitment to higher quality and American craftsmanship you can trust. Each bike is lightweight, low to the ground, and built to help kids learn to ride faster, many in just one day. No training wheels needed.

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[Matt]

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[Joel]

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[Matt]

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[Joel]

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[Matt]

Yeah, when you're young and life is simple, getting a trust or will in place is not a high priority. But life gets more complicated when you start throwing kids into the mix. Once you add an investment property or two, once that's a part of the equation, I know I've got the peace of mind knowing that I've got this checked off my to do list. And you can too. Because trust and will's website is easy to use. It's simple to navigate. Plus, all your information and documents are securely stored with bank level encryption. Each will or trust is state specific. It's legally valid and is customized to your needs.

[Joel]

Yeah, we can't control everything, but trust and will can help you take control of protecting your family's future. Trustandwill.com howtomoney and get 20% off. That's 20% [e-mail] howtomoney.

[Matt]

All right buddy, we are back from the break and it is now time for the Facebook question of the week, which is from Sharisa. She wrote repair versus Replace. I know usually it's better to repair your car rather than get a different used car, but I'm second guessing myself. Could you give me your opinion? I have a 2011 Cadillac SRX that has a small timing belt leak. $3,700 to fix. Doesn't sound all that small to me. Two of the catalytic converters have failed. $4,000 to fix and required to pass emissions and other standard wear and tear stuff. Torn ball joints, cracking control arm bushings, engine transmission mounts. There's also a small evaporation leak. I don't even know what that is. Joel which might be as simple as changing the gas cap. Okay. She's chugging horribly due to the needed repairs and has 167,000 miles without issues. The car is worth around seven or eight thousand dollars. Would you dump money into repairing all of this or get something newer with fewer miles? What would you do in her shoes?

[Joel]

Okay, I feel like typically this is a tough question, right? Because my bent is almost always to say keep your car on the road. And I think most of the time when this debate happens, there's a whole lot of emotion involved. It's like you're just kind of tired of the thing. And that makes it so much easier to get rid of it and opt into something new. Because you're just assuming that this new thing isn't going to have nearly as many headaches going along with it. And you're tired of the headaches, which I get. But you know, that makes it more likely that someone's going to take the expedient route of trading in that automobile. That's like, what did she say? Is chugging along.

[Matt]

Horribly though? Is what she said.

[Joel]

Yeah. Which I get, I believe. But that makes it more likely you're going to trade that puppy in for a new a new car, even if the costs are steep. Even if you're like, let's Say rolling negative equity into a loan. It's just that sort of emotional release that you're looking for, but that comes at a massive financial cost. The cost of repairing your car, though, Sharissa, are getting intense. Right. Equaling the current value of the automobile.

[Matt]

That's the problem.

[Joel]

So I think in this case, getting rid of this car and opting for another used car that's in better condition, that makes the most sense to me.

[Matt]

Yeah. Multiple big repairs like this at the same time, it can be seriously tough. But I would say one thing before you go and do that before you make the repairs or before in this, like Joel mentioned, because you are getting close to the total cost of that vehicle before you go and replace it, get a second opinion from another mechanic. These are some. I wish I would have actually checked the Kelley Blue Book repair prices or whatever because some of these prices sound pretty dang high. I would certainly want you to do your. Perform your due diligence. I do not want you to be hasty.

[Joel]

Well, yeah, I don't even know what a timing belt leak is. Does the timing belt leak? I thought, I know it needs to be changed. There's a water pump.

[Matt]

There's a pump that's involved. So maybe it's.

[Joel]

But that sounds like high for a timing belt water pump fix. Like I would think maybe you could get that done for, for half as much.

[Matt]

And some of these other things aren't. I mean, she mentioned like engine mounts. It just depends, I guess, on the specific vehicle. Some engine mounts can be fancy. They're like electronic and they automatically bounce. Some are just rubber.

[Joel]

Yeah.

[Matt]

So it just. That varies as well. But I just want you to make sure that you've talked to at least a couple other mechanics to see what it's going to cost. If it is going to cost that much, I would be reluctant to toss that much money into it.

[Joel]

Sure.

[Matt]

And instead, if it is still running, even if it's running horribly or chugging horribly, the fact that it's running at all is a good thing.

[Joel]

And I think it stops running, then the value decreases a lot more.

[Matt]

Somebody could come along and be like, okay, I know, I know what to do here. But if it's not running, it's just like, well, how long has it not been running? How long has it been sitting here, you know, pulled off on the side of your driveway?

[Joel]

Exactly.

[Matt]

Flat looking tires and the weeds are all crud up around it. I'm not sure how much, you know, you've saved up for this, but I would love to see you pay cash assuming you either get some better quotes back or if you do decide to get something different. But of course, don't forget Consumer Reports, head over there for reliability ratings because, you know, I would also feel a little bit differently if this was some type of Toyota or Honda. But the fact that it's a Cadillac that also steers me in the direction of like, I'm not sure if I were in her shoes that I wouldn't make all those repairs.

[Joel]

And Consumer Reports lately has been pumping the old school. Honda fits as like essentially the best economical choice for people trying to buy a vehicle.

[Matt]

It ain't got that Cadillac kind of luxury, but I don't know, I think Chorissa might be past that. Regardless of what type of vehicle it is though, make sure to get it inspected because, you know, the ability to snag a car that is less likely to have major repair issues moving forward, that's going to be a massive win, no doubt.

[Joel]

Alright, let's get to a question from Trevor here, Matt. He says, a few years ago I signed up for a Robo Advisor. It's called Bloom. It's now defunct. Not sure if it was worth the cost, but that's not the question. I have maintained the asset allocation that it had me in in my 401A. I'm wondering though if I should just switch it to a lower fee fund like voo. I'm with Fidelity. What do they have that's equivalent to boom? I like this question. I remember Bloom, another one of those fintech startups, basically analyzing people's retirement accounts for them in an effort to make sure that they weren't paying egregious fees and they were well diversified. I think the heart, the mission behind Bloom was, was great. They did this of course for a fee. It was, it was much lower fee than what they were hoping to save people. So it was an attempt to kind of merge altruism and money savings for. For you then also net them a profit. It didn't work out though ultimately for Blooom, I didn't have a problem with Bloom per se. Also, Matt, you and I talk about DIY investing and how for most people it's not overly complicated. Obviously there just weren't enough paying customers to sustain Blooom. This is just one of those things too about fintech companies in general. There are some cool ones that stand the test of time. There's Acorns, Venmo Thinking, ynab, something we talk about regularly that has stood the test of time. People still benefit from that Robinhood is another fintech that's been around a long time, but a whole lot of them, over time you might say, that's cool, I love what they're doing, but they just don't make a big enough dent in the market and they go bust or they sell to a mainstream company. Blooom, sadly, is in the fintech graveyard.

[Matt]

Totally. I think the heart of what Trevor's asking is whether or not he should just simplify things essentially. And the way I like to. I was thinking about it, I was just like, what is this like in our life? He's asking, do I need to maintain this super customized, super bespoke investing portfolio to suit my personal needs? Because I'm an individual, I am unique, Joel. That's what Trevor's saying.

[Joel]

That's how I think. Every time I do a personality test, I'm like, I'm not like all the other people in these categories. Like these folks, I'm unique.

[Matt]

But here's the thing. If, like when we're talking about something like a suit or a dress, do we need bespoke? Do we need our arms measured and our waist and our insane. All that. Absolutely. Because you need to take all those things into account. But investment portfolios, in my opinion, are. They are more like tables than suits or T shirts. Do you need to take your hair color into account or your eye color.

[Joel]

Or the width of your.

[Matt]

The circumference of your waist or your shoe size or any like, any of these things when you are buying a table? No. Like you basically, it's gonna be 30 inches off the ground. You want it to be solid. And beyond that, you can like find the type of table that. Yeah. That you're attracted to. You don't need to think through all the different scenarios and just all the different ways that you could customize this and make it unique and different and have all these different slices of your pie. I think in this way that switching things up, taking the more simple path to wealth, going with something like an index fund, an S and P index fund, or total stock market fund is absolutely what Trevor should be doing as opposed to the customized bespoke portfolio.

[Joel]

So basically you're overthinking it. If, if you're opting for that, yeah, maybe it'll have some positive benefits, maybe, maybe not. But the negative realities over time of then having to rebalance and pay attention to all the particulars of your custom made portfolio might be unnecessary. By the way, he mentioned voo, it could be too costly as well to have that custom portfolio for yourself when you're talking about higher expense ratios. But Voo, you can buy that from Fidelity as a customer and you're not charged extra for buying VU there. So you could buy it from Vanguard, you could buy it on Robinhood. You can buy VU almost anywhere. Right?

[Matt]

He doesn't have to get something like vu. You can buy vu, Right. This is one of the reasons that Vanguard is so awesome. They're not like, no, this is our walled, private, personal garden. You guys can't play over here. No, they're there.

[Joel]

It's like a public park.

[Matt]

They let everyone partake, which is beautiful.

[Joel]

But the other thing is, yeah, Fidelity does have similar funds. They have a mutual fund that's almost an exact replica. It's fxaix, which is also great. Which is also great.

[Matt]

I also own a ton of that in our 401s.

[Joel]

That's right, our solo 401s that we have with Fidelity. If you want more diversification, I think a low cost target date fund is a reasonable choice. Although we have talked about some of the downsides of target date funds too. We think they solve a meaningful problem, but they're also not necessarily the greatest choice for everyone, especially for young investors. But, you know, while Bloom, I think, was of course, making an effort to make more complex diversification efforts. Simple. That's cool. It's just. It's just unnecessary for a whole lot of folks. Kind of with your table example, Matt, it's like, yeah, don't overcomplicate it.

[Matt]

You want a solid table that's affordable, that maybe it's like, you know, you don't want a table that's like rickety. Like, make sure it's got solid legs. But then there's nothing else really that you need to take into account.

[Joel]

Agreed. So, Trevor, hope that helps, man. Head over to Fidelity, get those low cost index funds. And yeah, your investing life is going to be simpler and more of your money is going to be working for you in the future.

[Matt]

Joel, our beer, Doom Volume. And we're going to make this review short because I got a call to catch.

[Joel]

Yeah, I got to hop out of here.

[Matt]

This is the beer by the Veil. This is a hazy ipa.

[Joel]

I'll give three words.

[Matt]

What do you think?

[Joel]

Thick, rich, velvety. This the veil, man. We don't get enough of their beers down here where we live. This was awesome. I would drink the veil any day of the week that I was able to.

[Matt]

So that's so funny because I wrote down dry and crisp. Oh, really? Like It's a hazy, but to me, it drank like a West coast ipa. It kind of had like this sharp crispness to it, as hazy IPAs go. To me, this was more on the crispier side. It almost drank like a, like a lager, not like, like a burial. Beer tends to be, I don't know, it tastes like dirt. Kind of very vegetarian in the best way, in the best way possible. Whereas this very much had the hot flavors going on. But yeah, it finished nice and clean, like in that way. It reminded me a lot of West Coast IPAs. This is the most west coast hazy IPA that I feel like I've had in a minute.

[Joel]

Well, the veil didn't screw it up. They don't screw up anything.

[Matt]

Very tasty.

[Joel]

Not that I've experienced. All right, that's gonna do it, Matt. Go make that call. Until next time, best friends out.

[Matt]

Best.

[Joel]

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[Matt]

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[Joel]

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[Matt]

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