Ask HTM - When to Ditch an Old Car, Dropping Escrow, & Investing via an ESOP #928

Summary

How to Money: Ask HTM - When to Ditch an Old Car, Dropping Escrow, & Investing via an ESOP #928

Release Date: January 6, 2025
Host: Joel Larsgaard and Matt Preston
Produced by: iHeartPodcasts

---

Introduction

In episode #928 of How to Money, co-hosts Joel Larsgaard and Matt Preston delve into three pressing financial questions submitted by their listeners. Joel and Matt provide insightful discussions on when it makes sense to replace an old vehicle, the pros and cons of managing escrow accounts independently, and the viability of investing through an Employee Stock Ownership Plan (ESOP). Their conversational and jargon-free approach ensures that listeners gain practical knowledge to make informed financial decisions.

---

1. When to Ditch an Old Car

Listener: Tyler from Utah
Timestamp: 09:19 - 15:43

Background:
Tyler shares his experience with a 2001 Chevy S10 truck purchased in 2016 for $4,300, which accumulated 67,000 miles. Over the years, Tyler invested approximately $5,100 into maintenance, culminating in a costly repair for a blown head gasket estimated at $2,300. Faced with this repair cost relative to the truck's value, Tyler opted to sell the vehicle and purchase a new one outright with cash.

Discussion Highlights:

• Cost vs. Value Assessment:
  Joel emphasizes evaluating the cost of repairs against the vehicle's current value. If the repair costs approach or exceed the car's worth, it may be financially prudent to consider replacement.
  Joel (14:08): “If the cost of the repair is half the value of the car, then it's worth looking into selling it.”

• Financial Preparedness:
  Matt underscores the importance of being prepared financially before deciding to upgrade, advising against taking on new car debt.
  Matt (12:35): “Are you financially prepared to get another vehicle? Because financing that next car like that is the real problem.”

• Reliability and Make Considerations:
  Joel and Matt discuss the reliability of different car makes, noting that investing in a dependable vehicle like a Toyota Tacoma might justify repair costs more than a less reliable model.
  Joel (16:03): “I think we have a like a Toyota Tacoma. I would feel differently about it.”

• Long-Term Ownership:
  They highlight that long-term ownership can recoup initial higher costs through reduced maintenance and insurance.
  Joel (05:45): “Energy efficient upgrades are underrated and spending a little more on the front end makes more sense... especially if you're planning on being in that house long term.”

Conclusion:
Joel and Matt agree that Tyler's decision to sell the truck and purchase a new vehicle was reasonable, especially given the high cost of repairs relative to the truck’s value. They advise listeners to carefully weigh repair costs against the vehicle's current worth and consider the long-term benefits of maintaining reliable transportation without incurring additional debt.

---

2. Dropping Escrow Accounts

Listener: Mike from Kansas City
Timestamp: 35:17 - 43:18

Background:
Mike and his wife are contemplating removing their escrow account to manage their property taxes and insurance payments independently. This consideration arises from recent property tax increases in their area, which have doubled their previous bills.

Discussion Highlights:

• Pros of Managing Escrow Independently:
  Joel and Matt discuss the potential financial benefits of holding escrow funds in a high-yield savings account instead of letting the mortgage provider manage them.
  Joel (37:09): “If you have that money in your own high yield savings account, you would be able to earn a decent return.”

• Increased Control and Sensitivity to Expenses:
  By managing escrow payments themselves, homeowners may become more aware of their actual tax and insurance costs, encouraging them to challenge unjust increases and shop for better rates.
  Joel (38:02): “When you physically pay these bills yourself, you feel the pain a little bit more.”

• Potential Drawbacks:
  They caution that not all loans permit the removal of escrow accounts and highlight the increased responsibility to stay organized and ensure timely payments to avoid penalties.
  Joel (43:01): “But this is something that doesn’t need to be a high priority, but it always is a pain in the butt.”

• Operational Challenges:
  Matt shares his personal frustrations with escrow accounts not disbursing funds properly, reinforcing the desire for greater control over their finances.
  Matt (40:27): “It’s a customer service nightmare too.”

Conclusion:
Joel and Matt conclude that while dropping an escrow account can offer more control and potential financial benefits, it requires disciplined budgeting and organization. They recommend that homeowners like Mike assess their ability to manage large, lump-sum payments independently and consider the potential for savings through higher interest earnings versus the convenience of automated payments.

---

3. Investing via an ESOP (Employee Stock Ownership Plan)

Listener: Alex
Timestamp: 51:20 - 54:37

Background:
Alex inquires about the merits of investing in his employer’s ESOP, specifically questioning whether it is a sound investment or merely a strategy for the company to inflate its stock value.

Discussion Highlights:

• Benefits of ESOPs:
  Joel points out that ESOPs can be advantageous, especially when employees receive discounts on stock purchases. Investing through an ESOP can be likened to a beneficial deal similar to purchasing discounted gift cards.
  Joel (53:09): “If you’re getting a sweet discount on the front end. So if you’re getting a hundred dollars worth of credit to a store for 75 or 80 bucks, yeah, go for it.”

• Diversification Concerns:
  Matt warns against over-investing in a single company's stock to avoid concentration risk, advising employees to limit ESOP investments to a manageable portion of their overall portfolio.
  Matt (54:22): “We don’t love folks investing in the company they work for... you’re putting too many eggs into one basket.”

• Balancing ESOP Investments:
  They recommend participating in ESOPs up to the offered match or discount but advocate for broader diversification through index funds and other low-cost, diversified investment vehicles for the majority of one’s portfolio.
  Joel (54:37): “But if you’re handling your investments, your finances well, then I think certainly taking advantage of this perk, it makes a lot of sense.”

Conclusion:
Joel and Matt support the idea of investing in an ESOP, particularly when it includes employee benefits like discounted stock prices. However, they emphasize the importance of limiting such investments to prevent excessive exposure to one's employer's stock. For most investors, incorporating ESOPs as a small, strategic part of a diversified portfolio aligns with prudent financial management.

---

Final Thoughts and Recommendations

Throughout the episode, Joel and Matt reinforce the importance of thoughtful, evidence-based financial decisions. Whether managing car repairs, escrow accounts, or investment opportunities, their guidance consistently advocates for balancing immediate costs with long-term benefits, maintaining financial flexibility, and avoiding unnecessary debt.

Notable Quotes:

• Joel (14:08): “If the cost of the repair is half the value of the car, then it's worth looking into selling it.”
• Matt (12:35): “Are you financially prepared to get another vehicle? Because financing that next car like that is the real problem.”
• Joel (37:09): “If you have that money in your own high yield savings account, you would be able to earn a decent return.”
• Matt (54:22): “We don’t love folks investing in the company they work for... you’re putting too many eggs into one basket.”
• Joel (54:37): “But if you’re handling your investments, your finances well, then I think certainly taking advantage of this perk, it makes a lot of sense.”

Resources Mentioned:

• OwnWell.com: For challenging property tax bills.
• Roth IRAs: Recommended for diversified long-term investing.
• Consumer Reports: Cited for reliability ratings on older cars.
• Navy Federal Credit Union Offers: Discussed in advertisements (skipped in summary).

Conclusion

In this episode of How to Money, Joel and Matt effectively address listener concerns with practical advice and relatable anecdotes. Their balanced approach encourages listeners to make informed decisions that align with their financial goals and lifestyles, reinforcing the podcast’s mission to provide unbiased, jargon-free personal finance guidance.

---

Stay Connected

For more personalized financial advice and to submit your own questions, visit howtomoney.com. Subscribe to How to Money on your preferred podcast platform to never miss an episode packed with valuable financial insights.

Transcript

[A]

This episode is brought to you by Navy Federal Credit Union. They can help you dominate Debt with a 0% intro APR on credit card balance transfers for 12 months and $250 when you spend $2,500 on a cash rewards or cash rewards plus card.

[B]

Visit navy federal.org Navy Federal Credit Union members are the mission. Navy Federal is insured by NCUA. After the intra rate expires. Variable APRs are 15.15% to 18% based on creditworthiness. Rates are subject to change. ATM fees for cash advances are up to $1 at non Navy Federal ATMs.

[A]

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.

[B]

Track, block or cancel recurring charges right.

[A]

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.

[B]

If you love your phone but not your carrier, just switch to T Mobile. You can keep your phone, keep your number and we'll help pay it off up to $800 per line. You can also use our savings calculator to compare our plans and streaming benefits against Verizon and AT&T. So switch and keep your phone, keep your number and keep more of your moolah. @t mobile.com up to four lines via.

[A]

Virtual prepaid card allow 15 days qualifying unlock device credit service port in 90 plus days with device and eligible carrier and timely redemption required.

[B]

Card has no cash access and expires in six months.

[A]

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

[B]

That's right. I'm joined by my colleague Joel Larsgaard today on the how to Money podcast.

[A]

We're not friends anymore. Now we're colleagues.

[B]

We're colleagues and friends. That is true. No we are going to hear from multiple How To Money listeners today. Listeners wanting to know when he should ditch an old ride. We're going to talk about escrow accounts, the good, the bad, when we think they're ugly. And another listener is wondering if he should take advantage of an employee stock ownership plan. To what extent should he be going all in on that? We will snap share our thoughts on those questions and more during today's episode.

[A]

Sounds good. Yeah, I look forward to it.

[B]

But Joel, I've got a question for you. As we've talked about on the show we are adding onto our house. We're doing a little bit of reconfiguring of certain rooms to turn them into bedrooms for all the kids that, you know, all that kind of thing.

[A]

Yeah.

[B]

And as you.

[A]

The west wing of the house, as I call it.

[B]

No, no, you actually, it's funny because last year, at some point you correctly called it the east wing.

[A]

Okay, is it the east wing?

[B]

And I was going to, like, you're right. And I was going to criticize you for making it sound like I'm like, building sort of like McMansion or something like that, but I couldn't. I had to catch myself. Because you were actually accurate when it came to the cardinal direction. And so I chose not to correct you that time.

[A]

Now you can correct me.

[B]

I was able to get you this time. It's not the west wing. Did you ever watch that show, by the way?

[A]

No, I didn't.

[B]

Yeah, people loved it. But as you know, when you renovate a home, there are so many decisions that you have to make.

[A]

Oh, yeah.

[B]

Oftentimes it's like the opposite of an Aldi. Oh, my gosh. Yes, absolutely. And a lot of times it's about fun things, like what kind of tile you want to pick out. But recently I've seen the toilets and.

[A]

You'Re like, just let it.

[B]

No. There are so many toilets out there in the world.

[A]

Please stop this.

[B]

I want to get the kind that allows you to flush. It's got a little infomercial and there's 25 hot dogs in there at once.

[A]

Which is something I do regularly.

[B]

Seems like it might be valuable actually with younger kids, depending on what they end up throwing down there. But not only can there be decision fatigue when it comes to fun things like that, but when it comes to energy efficient options as well. Specifically, I have found myself going down this rabbit hole of insulation. And how much should I spend on insulation, how energy efficient, how green of a home am I seeking to make a home that's LEED certified or something like that?

[A]

I have to start from scratch for that.

[B]

But specifically, I'm trying to weigh the pros and cons between, like, open cell spray foam insulation versus like, more of the premium Lexus closed cell spray foam insulation. And I just don't know where to draw the line.

[A]

Well, okay, what would you.

[B]

What advice do you.

[A]

So I guess the question comes down to what's the cost? And then what are the likely savings going to be? And I guess there's the other thought process of does it increase the comfort level that you're able to enjoy your home more.

[B]

I would say yes to all of the above. Okay.

[A]

So people will.

[B]

It does cost more, roughly twice as much in this specific instance. That's a lot more the insulation factor though. It's literally two times the R value. And as far as how comfortable. Yeah. It will be a more comfortable space if it's better insulated.

[A]

Will you get the tax credit on the full amount either way you go?

[B]

That's a good question. I will say I have been keeping up with the receipts from the contractors in order to take advantage of the green tax credits. Actually we did an entire episode when these green tax credits first came out. We did make sure to link to those or where it is that you can find those in the show notes. But maybe so that maybe this is a quick tip for everyone. Hopefully you have your receipts if you made any improvements, let's say to insulation, new windows, maybe more energy efficient H vac last year in 2024. But if you're planning to make some upgrades or expenses that you might incur to your this year. Well certainly, yeah. Make sure to hang on to those receipts in case you need to document any of that for the IRS when you are filing your 2025 taxes.

[A]

I tend to think that energy efficient upgrades are underrated and that spending a little more on the front end makes more sense because it will make your life more comfortable and it will reduce the overall amount of money you spend over the long term. And especially if you're planning on being in that house long term.

[B]

Well, that's another consideration. Right. How long do you plan to be in home?

[A]

You don't put a fancy installation if you're planning selling it next year.

[B]

But if you're not going to recoup those costs, man.

[A]

Right.

[B]

Like you might get some of it back if you tell them hey, by the way a little. But yeah, not nearly, not nearly the amount. But I think about that home when we moved in and the owners they dropped a ton of money on encapsulating the crawl space and they put like the nicest dehumidifier down there. And I took all that into account when. When they're like you know what we're not homeowners don't though willing to budge on the cost.

[A]

I think you and me were like real estate investors and we've been buying homes for a long time now. And because of that I take those things into consideration too. But I think most people going through a house, especially a first time homebuyer encapsulation, crawl space.

[B]

That's not as much. Yeah. So like you said, if there are years, decades worth of being able to recoup the costs.

[A]

That's right.

[B]

In this instance, I mean, I do think it makes more sense, but at some point you still have to draw the line because, like, man, I've come across these different resources online, especially on YouTube, where these guys are like, they make these amazing homes and there pretty much isn't a line that they haven't crossed. Like they just keep going and going and going and how energy efficient they're making these homes.

[A]

And you get those Tesla roof tiles too, while you're at it.

[B]

Well, dude, this one guy I follow, he literally created a regular roof like you would expect on a house. But then he put like a roof on top of that roof. Essentially it was like an umbrella for the house. And the R value essentially was like over 70 when it came. And he's. I think he lives in Texas. And so for him, I'm guessing his AC kicks on for like 15 minutes in the morning and then it's fine for the rest of the day.

[A]

That's amazing.

[B]

Well, in his case, that's what he does for his living.

[A]

And this gets to. I think just when we're talking about new builds in this country, it would be nice to see builders take that more into consideration on the front end because it's so much cheaper to build the energy efficient house. Maybe it costs 3 or 4% more to build it originally, but then it's going to save the person who lives in it tons of money every single year for decades to come.

[B]

Oh, yeah.

[A]

I would love to see kind of just more value placed on that and more marketing put behind that that builders do prioritize that as opposed to the.

[B]

Builder saying, well, no, man, that's my 3, 4% margin. Right. You're talking about the costs here. The margins aren't super thick because I'm.

[A]

Willing to pay 3% more if it means I'm gonna save a ton over the long.

[B]

Absolutely. I think that's a much better way of thinking about homeownership.

[A]

But good luck in your. In your installation decision.

[B]

Thanks, man.

[A]

And hopefully you don't overdo it. But I hope you hope you also, like, take the right tack. That's gonna save you the most money over the long haul.

[B]

The Goldilocks approach.

[A]

Yeah. All right, let's mention the beer we're having on this episode. It's called Super Volcano Sauce. It's by Aslan Beer Company. We'll give our thoughts on this one at the end of the episode. And if you have a money question, we'd love to hear from you. It's the beginning of a new year, Matt. First listener question, episode of 2025. And maybe we can take your question next week on the show. Just go to howtomoney.com ask for simple instructions for how to record that voice memo. Email it over to us. Now let's get to a question specifically about upgrading a car. When does it make sense? Hi, Joel and Matt Tyler from Utah here. How do you know when it's time to give up your old vehicle? My wife and I bought a 2001 Chevy S10 back in 2016 from her grandparents. It only had about 30,000 miles on it, and we paid them about 4,300 for it.

[B]

Aside from regular maintenance and oil changes.

[A]

Over the years, we've had to put about $5,100 into it. And then finally in March of this year, the head gasket blew, and I was told it would cost around $2,300 to fix it. I considered it to be driven into.

[B]

The ground at that point and decided to put it up for sale.

[A]

It had about 67,000 miles on it.

[B]

And I was able to sell it.

[A]

Within a couple hours for about 2,100. I then bought a new car for about 10 times that price.

[B]

But I digress.

[A]

I paid cash for it.

[B]

But what do you think?

[A]

Would you have considered it driven into the ground or would you have paid that $2,300?

[B]

Being that it had so little mileage.

[A]

On it for the age, I often wonder how long it could have lasted me if I did those repairs and kept it around. Thanks for the show and all you do.

[B]

Oh, man. Tyler had the best vehicle out there, the grandparent vehicle.

[A]

That's like what everyone wants when they're searching for a new used vehicle today.

[B]

That was coddled. It was taken care like, you know. You know, like how many miles are they putting on it every. Maybe they're only driving it like once or twice a week. Maybe they have to put it on the calendar on Sundays. Let's get. Get the car out there to make sure it's not. I don't know what happens to the fuel when it sits too long. It starts to separate or something. I don't know. It's like when the gasoline starts going bad.

[A]

Gas is not good. I was talking to someone the other day. I think they have like a 2008 or nine, and I think. I think she said she had 55,000 miles on or something. I was like, you don't drive almost at all. That's incredible.

[B]

So can have your car when you're done with it. Oh, seriously. This makes me think of, like, literally Kate's. Let's see some old friends of ours who you also know. But they were in the market for a new vehicle when Kate's grandparents at the time were getting rid of their Toyota Prius. And, oh, my gosh, I remember thinking, I wish I was in a position to need a second vehicle because they got a. I made a fair deal on it. But this vehicle, I mean, it was in such great condition, low miles. And the reason it's on my mind is because over the recent holidays, I was talking to him and a tree fell and crushed the thing. And they're like, you know, it's totaled.

[A]

Of course it's the toughest thing is. Cause, like, when it's an older car, even when it's got low miles, like, you're not going to get your. It's more. You value it more than the insurance company values it.

[B]

Indeed. Yeah. We'll see if that has an impact on what answer you give to Tyler as to whether or not you should have held onto it or not.

[A]

Joel. All right, so let's talk about this. I mean, when do you get rid of an older vehicle? That is a question. I think some folks do it prematurely, often because of, like, a minor repair, right. Something comes along and they're like, oh, well, I don't really want to drop 200 bucks into this. Into this car. They kind of get tired of their old crusty ride. And that is why they make a decision to plow a bunch of money into a new vehicle. But that car often has a lot of life left in it. And I think, too, it's important to mention there's nothing wrong with upgrading if you want something newer and you've got the cash to do so. It's just that a lot of folks tend to do this out of boredom. Their car is not as shiny as it used to be. Maybe it's got a few dings and dents, and they just. They don't have the cash on hand to make that upgrade. So I just want to prevent or help people avoid taking on car debt that sinks a lot of financial ships out there. And I don't want. Oh, yeah, don't want that to happen.

[B]

Are you financially prepared to get another vehicle? Because financing that next car like that is the real problem. Because that repair sounds expensive when you're hit with something like that, but they haven't compared it to what all their payments are going to be for the next six or seven years. And oftentimes that fix costs the same amount. It's just like one or maybe two of those monthly payments.

[A]

Yeah.

[B]

And then if the car is in solid shape after that, I think it makes sense to keep it on the road, at least from a, from a financial perspective. Actually, we had an email the other day from a listener and he chalked a good bit of how he was able to hit his money gear number seven by not having a car payment since 2016. That's almost. Almost. I mean, a full decade of no car payments and then funneling those dollars into retirement accounts, investing those dollars. I mean, oh my gosh. I think people compounding there is.

[A]

They don't give that enough credit. They don't give that one thing enough credit. And it's one of the biggest line items in our budget. The longer we can go without having any sort of car payment in our lives, paying cash for the less expensive car, holding onto it means we're going to save on insurance, means we're going to save on taxes. All the above. And yeah, you might pay a little more in car repairs, but you're right, Matt, compared to the, the monthly payment you're going to take on by upgrading, it's paltry. Typically in comparison, that's true.

[B]

But in Tyler's case, it wasn't probably just a one month worth of payment. It was a little bit more.

[A]

Exactly. Yeah. I'm going to say I think Tyler made a reasonable decision here. It's one thing to ditch a 25 year old car because it needs an oil change or a brake job, something that's just kind of standard. And yeah, a brake job is kind of expensive these days. Like what, 400 bucks? I think last time I had to get new brakes and rotors turned.

[B]

It's all relative. Joel, you sound like the old man talking about how expensive everything is these days. I mean, an oil change, $60 for an oil change is too much.

[A]

But I'm not wrong, am I? But I think it's another thing to ditch the car because of a busted head gasket, which is an expensive fix. And so when the fix costs just as much as the value of the car, that's where the rubber meets the road car. Pun intended, Matt. And that becomes, I think, a really reasonable decision, even if it means jumping into a newer car. I think some folks would even say that if the cost of the repair is half the value of the car, then it's worth looking into selling it. And I think you are entering this gray territory where you kind of have to weigh your options there, and you can kind of go either way. I do think in Tyler's case, he got a lot of use out of that cheap, reliable car. And it sounds like moving on was likely the right decision in this case.

[B]

Yeah. And I'll talk about the alternative.

[A]

Get the regrets, though, by the way.

[B]

Oh, yeah, totally. Yeah. Well, especially in his question, he said it was gone within a couple of hours. That would have been a, oh, maybe I priced this thing either too low or maybe I should have held onto it. But going back to the alternative, which is what it is that he got instead, like, he saved up and paid cash for that new car. And even though it wasn't cheap, you know, he still spent less than the average price of a used car and far less what a brand new car cost. And so I think his. The car that he got to replace it was reasonable. And, you know, he might have saved more money over the next couple years had he repaired the old truck, but it is impossible to say, especially given the fact that it was a Chevy pickup truck. I think the make and the model should come into play a little bit.

[A]

Too, because a Toyota Tacoma.

[B]

Yeah. Or like a Toyota Sienna or like a Honda Civic or Honda Accord. I would feel differently about it because we've got an old Odyssey, like your family does. Joel and I looked it up, and actually, it seems like for our. The condition our Odyssey is in, we could get something around $8,000 for it. And so I was trying to put myself in Tyler's shoes.

[A]

I got six right now.

[B]

No, it's only worth eight. That's what I'm willing to. Actually, I'm not willing to give it up because I know the work that I've done on it. And so, going back, putting myself in Tyler's position, it's worth eight. If I had been faced with a situation where I was being asked to put four into it, I think I would have done it because of the fact that the Odyssey, like, it serves us really well for what we need out of a single vehicle, but then also knowing that this is a really dependable make and model. Right. Like, the ability. Had I done that, I would have known that, okay, this car is going to be good for another hundred, maybe 200,000 miles, because a blown head gasket isn't like a normal thing that wears out. Like, that's. It sounds like maybe he had issues already with the radiator, which, again, going back to this specific, like a Chevy S10, I don't know if I would have sucked that kind of money into that vehicle. But when it comes to something that you might truly drive for years and years and years down the road, I think I would have been willing to spend half of the cost of the vehicle to keep it on the road. Because I know for us, the alternative is what. What would I want to get? I'd want to get like a newer Toyota Sienna hybrid or something. I'm gonna drop like $35,000. And so I'm thinking four grand seems like 4,000 versus cheap by convention, 35. I'm like, okay, no, I need to do what I can to keep this ride on the road. And so I think it does depend on the particular circumstances as well.

[A]

Yeah, I think, man, it is. It's always a tough decision. And what about you?

[B]

Like, okay, let's say that you were hit with a massive expense, like on your Acura. Well, not so.

[A]

I think on the Acura.

[B]

I gave the Honda example.

[A]

Yeah, the Acura would be different for me because that's an 05. Right. And it' a whole lot less our Odyssey. We have done some repairs to it over time since we've owned it, and it's been worth every dime we've put into it. And we would probably continue to put money into it. With the Acura, if I was faced with the big bill, just because it is so old and fully depreciated, I probably wouldn't want to stick a big chunk of money into it. I wouldn't go for something crazy expensive, a $35,000 car to replace it, unless by then I've saved up the cash for the Rivian R2, and that's out at that point in time, which maybe we'll see. But yeah, I think that would be then just lifestyle upgrade that I'm making intentionally, which I think I would be ready for. So you have to weigh kind of the pros and cons of what other money goals do you have?

[B]

That's true.

[A]

How much is it going to set you back by buying the nicer, fancier car? Hopefully it's going to keep Tyler out of the mechanic shop as much as he would have been with the. With the S10. That was maybe starting to experience more issues for me. Yeah, the Acura wouldn't get a massive chunk of change for repairs. I would sell it off and I would. I would try to buy something that I thought was Maybe a little bit nicer and more aligned, but I would still, I hate spending money on cars. So it would still be probably like a four digit price, not a five digit price.

[B]

Yeah, well, so you said something about Tyler staying out of the repair shop. I think an important consideration is the fact that I think we tend to overestimate what we spend on our cars, largely because it's mostly like an emotionally frustrating time in our life. Right. And speaking of time, it's like literally a time suck to have to take it in, to have to either find a rental or maybe it's a more posh shop and they give you a loaner car.

[A]

But either way I think my check engine lights on right now and I'm like less worried about the cost and more worried about the frustration and the.

[B]

Hassle to have to take it in. Yeah, but I think like this is an argument for tracking your spending because if you can keep up with what you're spending on repairs, you're going to find that you probably spend a lot less than you feel like you are. And Consumer reports finds that 10 year old cars for most car brands are going to cost you less than $1,000 in repairs and maintenance. And that's not an annual basis, right? On an annual basis. Yeah. And that's not a ton of money. And so especially when it comes to some of the more reliable Japanese cars.

[A]

That are out there, or Tesla is included in that too. So the make and model matters on that front. And you might look at this one car that gets like a 68 rating and this other one that gets an 83 rating. And I'm going to go with the car that has an 83 rating, all else being equal. So look for the cars with higher reliability ratings. They're going to cost you less over time when it comes to maintenance and they're going to provide less frustration in your life too. So.

[B]

And that's what we're thinking about. We're thinking about financially optimizing because. But some folks, they're going to want to get the Jeep. We were just talking to Buddy recently and he was just like, yeah, but I'd really want to splurge and get that Jeep Wagoneer.

[A]

And I'm just like, don't do it, man.

[B]

I've owned so many Jeeps over the years and it costs a lot of money. They're not super reliable. It costs a lot to maintain this.

[A]

Episode brought to you by Jeep.

[B]

Jeep hates us. But Tyler, we hope that gets you pointed in the right direction. Joel. We've got more to get to including we're going to hear from a listener who is questioning an account that most homeowners knee jerks say yes to. We'll get to that and more right after this Debt payoff is the number one financial goal that Americans have for 2025. I love seeing that because debt, especially consumer debt, it can be such a bummer. It not only puts you in a precarious financial situation, the stress that it creates, it can be overwhelming. It impacts every other aspect of your life. That's why Navy Federal Credit Union is here to help you. They have all the financial tools and resources you need to dominate debt right now. They offer a 0% intro APR on credit card balance transfers for 12 months.

[A]

That's a pretty sweet offer. You can also get $250 when you spend $2,500 in your first 90 days on a cash rewards or cash rewards plus credit card. Visit Navy federal.org to start dominating debt. Navy Federal Credit Union members are the mission. Navy Federal is insured by NCUA. After the insure rate expires, variable APRs are 15.15% to 18% based on creditworthiness. Rates are subject to change. ATM fees for cash advances are up to $1 at non Navy Federal ATMs.

[B]

A good suit. It can make you feel like a million bucks, but it doesn't have to cost you an arm and a leg. From tying the knot to leading meetings at the office. Look and feel your best this year with a suit made just for you at an unbeatable price. With Indochino, you can customize every detail. I'm talking about the lining of your jacket, the lapel shape, buttons. Put together your best look [e-mail] and use code howtomoney for 20% off orders of $499 or more.

[A]

Matt we were able to get customized Indochino suits and we love them. Getting to customize everything, it kind of endears you to the final product in a different way, including the best friends out embroidering on the inside of the jacket. Takes a couple of weeks for your custom suit to arrive. The fit and the fabric though, they're second to none. I feel like a total stud when I hit up a wedding in my Indochino suit. My next one though, it's going to be tweed.

[B]

Matt Ooh, I like it man. Yeah. You can even set up your measurement profile on Indochino's website and you can choose customizations without even leaving the house. Or sign up for a premium in person experience just by booking an appointment at a showroom near you and let an Indochino style guide walk you through every step. For your 2025 plans. Look your best in Indochino. Visit Indochino.com and use code howtomoney to get 20% off any purchase of $499 or more. That's 20% off at ind o C-H-I-N o.com promo code how2money a new year often feels like it offers a chance to spark real change. But resolutions can feel daunting, especially when they're important. Joel like creating a will or a trust. It may feel overwhelming, but you know it's about time you did it well. Trust and Will. They make creating your will easy, like lounging on the couch easy. And you can get 10% off [e-mail] howtomind that's right, I created my will.

[A]

With trust and will. A task that sounds painstaking was actually quite pain free thanks to Trust and Will. The website is intuitive, it's easy to use, plus the peace of mind from getting this done, it's invaluable. The other cool thing is that Trust and Will is designed by attorneys, but it's customized by you. Each will or trust is state specific, legally valid and customized to your needs. Ensure your family and loved ones avoid lengthy, expensive legal proceedings or the state deciding what happens to your assets. Their simple step by step process guides you from start to finish, one question at a time. You can save your loved ones time and stress by having all your documents in one place with bank level encryption.

[B]

Check one of your goals off early this year 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.

[A]

All right Matt, we're back. We've got more listener questions to get to. I'm excited about all the listener questions coming down the pike in 2025. This one comes from a listener who has a frugal or cheap conundrum for us.

[B]

Hi Joel and Matt. This is Jeff from Wisconsin. I'm retiring next week at the age of 55. First, let me say thank you for all the advice you've given over the years that have helped me reach my goal. I have a son going to an expensive private college where the cost of attendance is need based, meaning the lower our income, the lower the cost of attendance. Is it frugal or cheap to live off only my wife's teaching income while my son is in college to make the cost of college less expensive. I look forward to your discussion. How cool is it that he said he's retiring next week? He's like, oh, I got it on the calendar for me to retire. I got this important appointment to get to. It's when I say peace out to all my co workers. That's amazing.

[A]

So cool.

[B]

Thank you for the kind words. He's. He reminded me of one of the listener wins that we covered at the end of last year where somebody credited us. But Jeff, he's been doing the right thing for a long time.

[A]

I'm sure we weren't the ones putting money into his 401 and Ira, I.

[B]

Think maybe we were able to help explain what it was that he had been doing, but I got a feeling he was doing a lot of the right stuff for years, if not decades.

[A]

Before this show even started. Too, right? Oh, yeah, we haven't been around. We've been around a while.

[B]

Seven years now.

[A]

We've been around that long. And yeah, I'm curious, too, to know what Jeff's going to be doing with his days, retiring at such a young age. We talk often about the research that our friend Wes Moss has done when it comes to the secrets of the happiest retirees and just how having essentially hobbies on steroids, having a wide variety of that having relational connection. I don't know, are all Jeff's friends going to be working still? And he's the only one kind of at the golf course or something like that. I hope that you have a bunch of things to pour your life into, Jeff, when it comes. The older I get, Matt, the more hobbies I find. And I'm like, I can see this retirement thing. Like, I've got enough things that could take up my time that I would find a lot of joy in.

[B]

Well, I'm glad you said that because I was gonna push back on your approach to Jeff when you said retiring at such a young age, because I don't want 55 to be the, you know, as young as maybe we used to think.

[A]

It was just according to what his peers are doing.

[B]

The traditional retirement.

[A]

Most of them are going to, sure.

[B]

But like, man, it's by doing the right thing, like, and not even, like in a crazy way, but by setting money aside. I think there are, there are a whole lot of folks who can. Who could likely retire at a younger age, like 55. More so than they. Than they Think. But let's get to this question. And I know some listeners might disagree with my take here, but whether or not Jeff is being frugal or cheap here is pretty clear. I think this is totally frugal.

[A]

Okay.

[B]

Not cheap. And to explain this, let's just talk about how systems are designed and created, how they're set up to incentivize certain behaviors. And by jumping through the right hoops, it's going to allow us to financially benefit. So something similar to this might be taking a year off work, let's say, to do some Roth conversions. Well, okay, not many folks are going to be able to do that or could afford to do that. But by doing this, it can offer a massive tax break for folks who are able to pull it off. Even, let's say, if your net worth is like, say, $5 million, I just don't see any reason to not pull levers that are 100% legal. Legal and readily available to you. It's just. It's like taking a tax credit or something. Like, we kind of talked about that recently. Taking green tax credit, right? Like energy efficiency. It's like, well, no, just because you can afford to pay those taxes and not receive that tax credit, that doesn't mean you shouldn't receive that. If you follow the rules.

[A]

Those incentives exist for a reason. And the tax code is rife with incentives for people to do a myriad of different things. And so, like, why do we. We put money into a 401k instead of a taxable brokerage account and lock it away for decades? Well, it's because of the tax incentives that are offered. And there's no shame in that game. I don't see any reason not to jump through those hoops, the hoops that are essentially laid out in front of you. It's not like Jeff is saying, hey, what if I move some money to the Cayman Islands and I, like, tried to shroud some things in secrecy, that the IRS didn't know my actual net worth or something like that.

[B]

Straight up lying. That's a different thing. Or not your net worth, but your income. It's one thing if you're going to say, okay, okay, we're just gonna live off of my wife's income, truly. And that's what we're gonna do. It's another thing to say, but really, I'm gonna be working on the side and I'm gonna be selling investments, and I'm not going to tell the IRS that I've made. I've got capital gains here. No no, that's straight up against the law.

[A]

Like that's deception and illegal deception.

[B]

That's not what we're talking about here though. Right.

[A]

And so Matt, some people might say, well, I'm trying to lower my income on purpose by contributing more to pre tax accounts to reduce my student loan payment that to us or maybe to get like an increased healthcare subsidy. That's similar also. That's the way the incentives work, so why not take advantage of it? I don't see anything wrong with what Jeff is willing to do. And I think also a lot of folks maybe couldn't reduce their income to the extent that Jeff is willing to in order to qualify for these higher levels of financial aid. They just wouldn't be able to live on that much less. But Jeff is saying, we can do it, we're frugal, we know, we know how to make it work on just my wife's salary. And if you can live the life you want, Jeff, on your wife's income alone for the next few years and it's going to allow your son to qualify for more aid from the college, I think it's a reasonable route to take.

[B]

Absolutely. Yeah. I think that's important to highlight here too. It's not like he's cheating. He's truly feeling the impact of living on less of an income. Like it is going to impact his lifestyle like in a more.

[A]

If it was gonna make him incredibly uncomfortable, I would say, dude, that might be a little cheap, but if you could be comfortable living on just her salary alone, I don't see why not.

[B]

Yeah, if they had to take extreme measures, then you've kind of got the tail wagging the dog. Right. So it almost makes me think of like a more consumption based scenario where like let's say you have the money to buy a fancy sports car. Like you're going to get a Corvette or a Mustang Mach E or whatever. Right. Like the electric Mustang or whatever. It costs a lot of money. Sports cars, high risk. Well, what's, what typically happens to your insurance costs when you get something like that? Well, your insurance goes up due to the increased risk and likelihood of you getting in a wreck.

[A]

Yeah.

[B]

Well, should you not get the sports car just to be able to bring down your insurance costs? Like would you say to yourself, well I'm not going to choose this car, this vehicle, because I don't want to pay that much? Well, probably not. There are other considerations. There are bigger considerations in mind. But if you are in a position to, where you don't necessarily want or need that vehicle? Well, by all means, don't get the fancy car if that's going to allow you to save the money. And in this way, you're constraining your lifestyle in such a way that's going to allow you to reap another financial benefit in the form of financial assistance.

[A]

Yeah. And the example you're pointing out here, Matt, makes a lot of sense, but I think it's also important to mention that sometimes the financial system doesn't make perfect sense.

[B]

Like.

[A]

Like when you're trying to get a mortgage, your net worth isn't nearly as important. They don't factor that in as much as your debt to income ratio. So you might say, I don't make much money. I make $80,000 a year, but I've got $5 million in my investment accounts. They might say, sorry, you don't qualify for the mortgage on the $2 million home.

[B]

That's where it's going to feel a little bit backwards. Wait a minute, you're not going to allow me to get a mortgage on this property when I could pay cash for it?

[A]

Or when you talk about the credit score, like the way the credit scoring system is, we talk about it regularly because it's important to how people handle their finances, but it doesn't make perfect sense. And there are elements of the credit score that are flawed and we wish were changed, but still like the system is what it is and kind of using the system to your advantage, I think makes sense. Right. The incentives that get put in place understandably drive our behavior.

[B]

Yeah. That is a specific instance where you do want to take into account how well making less income impact our ability to live the life we want to live. Because most likely, maybe they're looking to downsize. Well, shoot, I guess either way, if you're looking to downsize and buy a different home, you still might be wanting to take out a mortgage on that property. And even though you might be in a scenario where you could pay cash, you don't always want to do that, especially if you're having to draw more money out of your retirement. And so in that case, manual underwriting is actually the solution to doing that, as opposed to uploading your tax returns and having the algorithm and the computer say yes or no, you're actually working with a human being. This is something that Kate and I had to do when we purchased our first home and we just started our photography company and we had only been in business for one year. The banks don't like that. No, they don't.

[A]

Like the self employed, one year income, full years of income.

[B]

Well, and even then, it's not like we were super profitable. Like, we didn't have a ton of money on hand. So we had to provide every single shred of documentation that had any numbers on it at all in order for them, and we had to put down a little extra. And that was a way for them to mitigate some of that risk that they were incurring. But, Jeff, the last thing to mention here, though, is that it's not just your income that impacts the financial aid for college when you fill out the fafsa, because they take into consideration your assets as well. And it would obviously be cheap in this case, not frugal to, say, spend down all of your retirement money on stuff, on boats, on trips and clothing, whatever, in order to snag more grants or assistance for your son's education. So I just wanted to mention that it's not just about income, and we would encourage you to know all of the details before you try to start jumping through these hoops that might end up cramping your lifestyle that ultimately ends up not netting you the results that you were hoping to achieve. I would hate to. I would hate for you to find yourself in that situation, especially. It sounds like this is more Jeff's idea, maybe less his wife's idea, especially if his wife's like.

[A]

She's like, wait a second, what are we.

[B]

Wait, what are we doing?

[A]

What'd you sign me up?

[B]

All of a sudden you're retiring and you're like, turn into the coupon lady.

[A]

Now we have to live like poppers. Come on, Come on.

[B]

No hate against coupons, but it's often equated with a certain lifestyle that people are trying to avoid. That's all I'm saying.

[A]

Just make sure your wife is on board with this, too. And make sure you've got your I's dotted and your t's crossed.

[B]

That's right.

[A]

All right, Matt, let's get to a question about how we pay for our mortgage. Is there a more efficient way that can help us save money? Hi, Matt and Joel. This is Mike from Kansas City, longtime listener, second time caller. Really appreciate the advice you gave regarding my wife's pension and how we could plan ahead for retirement with her pension in consideration. I'm calling this time to ask more specifically about escrow accounts. My wife and I are considering being removed or dropping the escrow and managing it on our own. And this thought was primarily driven from the recent property tax increases in our Area where our neighborhood and our county for most houses, essentially the property tax is doubled. And we're not saying that there's anything being mismanaged in the escrow, but we just started thinking, would it be more efficient for us to manage it ourselves? Our taxes are due December of each year. We could put that money aside in a high yield savings and feel like we had a little bit more control over things. So very interested to hear your thoughts on this. Thank you so much.

[B]

Man. Kansas City taxes not being due till the end of the year. December, that's. I love it, being on the calendar year like that.

[A]

Yeah. That's if summer it seems like.

[B]

Well, or fall, it's the fall for. I know, for a couple of my properties. But that kind of impacts how I view Mike's question here because it does simplify it. It helps to streamline the problem a little bit as opposed to it falling somewhere awkwardly in the year where you might forget about it.

[A]

Yeah. Save up all year long for that thing.

[B]

It feels like a nice end of year thing that you can kind of check off. But I love that just generally speaking, that Mike's asking this question because it's not one that many folks ask. They just assume that yes, the escrow, it does make the most sense for them.

[A]

It's the default option.

[B]

And it is especially. I remember that first loan that we got, it was either our realtor or somebody. They were talking, they're like, oh yeah, yeah, yeah, yeah. You totally. You want to go with the escrow. And I think it could certainly make it easier to budget because you've got everything kind of rolled into that one payment. But it's also not the right decision for everyone out there.

[A]

Yeah. And you lose a certain. A little bit of control if you opt for escrow instead of DIY paying those bills yourself. And I think the main reason to consider paying all those bills individually is kind of the ability to budget, not screw it up. Instead of relying on your mortgage provider to pay everything when it's due, you kind of put that onus on yourself. You take that on your own shoulders. And if you're a type A personality who doesn't let things fall through the cracks, I get the desire to take this into your own hands. I mean, basically you're going to have a lower payment each and every month because you'll only be paying the principal and interest to the bank, but you'll be saving and bankrolling for those other big expenses yourself. But Matt, it's important to mention, and I think this is essentially why the escrow system exists and why most people opt to do it. Partly because it's just the default, but also because even for well intentioned folks, this could and can end up, you know, biting them in the butt.

[B]

Yeah, I get that. Yeah. Like, I think there might be some folks who would say, like, why bother? Even if you, like, control and you want to optimize stuff, the escrow system works pretty well. If it's not broken, why mess with it? Why fix it? The truth is you might have thousands of dollars hanging out in an escrow account that's not doing, you know, a darn thing for you most of the year.

[A]

And you and I, we own rental properties, we have thousands of dollars in multiple accounts doing this.

[B]

Yes. If you instead have that money in your own high yield savings account, you would be able to earn a decent return. Like that is a legit reason. And I think honestly, that alone is worth considering making this move. Because if you had even just an average of $5,000 sitting there, you might miss out on a few hundred bucks in interest. It depends on where savings rates continue to go. But this isn't a life changing amount of money. But it does matter. We like to leave no stone unturned.

[A]

Yeah. I think, especially if you're keen on it anyway and you're saying, well, I kind of like the idea of paying these things myself and not letting the bank handle every single transaction, then I don't know. I think for Mike it can make sense. I think another pro for ditching escrow is that it highlights the insurance and property tax bill in a way that gets shrouded. It's kind of like budget billing for your electricity. And we don't like budget billing because it makes you less sensitive to the fact of overuse. And if you get a massive bill in the summer, sorry, I hate that for you, but it probably is going to make you turn the thermostat higher up. Right. It's like you're not going to run the AC as much because you just got smacked in the face with a really high bill. With budget bill, it doesn't smack you in the face in the same way. And so you just kind of let it linger. When you're physically paying these bills yourself, you feel the pain a little bit more. And Mike's already aware because he mentioned that his taxes doubled, which is awful. And while that massive increase isn't good, feeling the pain of it is good to a certain extent because it means you're more likely to challenge that property tax bill on the insurance front, it means you're more likely to shop around, and that's exactly what you should be doing if there's a massive increase that just overvalued your property. It makes me just really quickly want to bring up a site called ownwell.com where instead of hiring a lawyer or diying it, it's this perfect in between thing where you can essentially challenge your property tax bill using a company who does everything behind the scenes. Takes you almost no time. They do take a cut, but only if they succeed. But yeah, seeing those bills firsthand is going to make you more price sensitive and more likely to. To kind of challenge those increased costs instead of just taking them on the chin.

[B]

Totally, yeah. What you're pointing to here is the fact that escrow accounts, they essentially insulate us from some of the movements when it, like some of the price increases, when it comes to our taxes, when it comes to our, to our insurance.

[A]

Does the insulation open, sell or close sell.

[B]

It numbs you out. And we want you to be more in tune with going with what's going on with your money. And going back to. I was kind of making the, you know, the devil's advocate argument of like, if it's not, if it ain't broke, don't fix it. But the fact is, and I feel like we're kind of. We've been talking around this. It kind of is broke because I've got multiple properties where the escrow, the. The loan servicer where they didn't pay my taxes. And so because of that, I had to pay out of pocket. And I'm like, what's going on here? And. But you know, and so now, like.

[A]

Literally, it's a customer service nightmare too.

[B]

Yeah, it's a. It's a massive pain in the butt. It's. And I've had this happen with county taxes. I've had this happen with city taxes with one property. I've had it happen with the city waste the trash. You know, it's like sanitation. Sanitation. That's it. It's like 600 bucks a year, you know, to pay for trash. And so because of that, I've got a document set up that whenever I like, you get the notification for your tax bill or your insurance payment that's due. And I write it on there because I want to have a singular source for all my things. And then I look at the date of when it's due, and then I hop over my calendar and I put a reminder on there and I say, hey, make sure.

[A]

So you're doing all the work anyway.

[B]

I'm already doing the stupid works. Like, I literally write on there. And this is one of the loan servicers that now services a couple of my properties, Mr. Cooper. So stupid. I don't. Where did Mr. Cooper come from? I don't know.

[A]

Came from TGIF back in the day. Mr. Cooper, Mr. Coop. Same thing like. And that's the other problem.

[B]

If I'm already doing that, why not be rewarded by being able to hang on to that money myself if I'm already going to make those payments?

[A]

Well, that's the other problem with escrow, is that if your loan gets sold now you're with another mortgage provider and you've got to, like, make sure now you got somebody else to look over their shoulder.

[B]

You gotta make sure the wires are all hooked back up after somebody has, like, taken this thing and moved it over to their system. Yeah. So that's the part of it that really annoys me. And so, like, in some regards that, like, I don't know, even just talking about this gets me fired up. And it makes me.

[A]

I was gonna say, I feel like Mike lit a fire under your butt here.

[B]

I'm really close to. Yeah, I'm gonna look into this, man. Because, I mean, it's important to point out that not all loans allow you to drop escrow. And so I know. Is it with FHA loans, this likely isn't even possible. But I think it sounds like. Well, I don't know, in Mike's situation, it might be possible. And I've got non FHA loans in my case, and so I think it's definitely possible. It's just one of those things that's further down on the list.

[A]

Yeah.

[B]

And it's not.

[A]

It doesn't need to be a high priority.

[B]

It's not a high priority, but it always is a pain in the butt. And I'm already doing all the work, so why not pay the bills myself? Not to even mention it. Oh, man. Have you ever had this happen, too? If you're shopping around for insurance and you get moved over to another insurer for a property, well, what happens? Well, the previous insurance company, they cut you a check and you have to pay for the new. Pay the new premium out of pocket yourself. It's not coming out of escrow. So again, you are oftentimes already doing that when you see insurance rates go up and you're shopping around for a different insurance provider anyway.

[A]

Yeah.

[B]

And so. Yeah, but this is a case. All of these are checks in the column of drop the escrow.

[A]

Agreed. Agreed. I just say this and this doesn't mean it makes sense for everyone. And you have to be diligent.

[B]

That is true.

[A]

You have to kind of of have the Excel brain that Matt has to really pull this off. I think that's probably part of the.

[B]

Reason, Matt, not everybody is like me.

[A]

And even this is something I've even considered is dropping escrow. But I will have to get a little more organized in order to make that a reality.

[B]

Yeah, but in Mike's case, the fact that he's even asking the question, I think that that right there makes him a good candidate for at least considering dropping escrow.

[A]

But again, put it on your Google Calendar. Put those reminders on. Make sure you're not missing a payment. Because there can often be penalties and or additional costs associated with that. So plan accordingly. But go for it, Mike. That's. That's our vote. All right, we've got more questions to get to Matt, including one about buying stocks at a discount. We'll talk about that right after this.

[B]

Debt payoff is the number one financial goal that Americans have for 2025. I love seeing that because debt, especially consumer debt, it can be such a bummer. It not only puts you in a precarious financial situation, the stress that it creates, it can be overwhelming. It impacts every other aspect of your life. That's why Navy Federal Credit Union is here to help you. They have all the financial tools and resources you need to dominate debt right now. They offer a 0% intro APR on credit card balance transfers for 12 months.

[A]

That's a pretty sweet offer. You can also get $250 when you spend $2,500 in your first 90 days on a cash rewards or cash rewards plus credit card. Visit Navy federal.org to start dominating debt. Navy Federal Credit Union members are the mission. Navy Federal is insured by NCUA. After the insure rate expires, variable APRs are 15.15% to 18% based on creditworthiness. Rates are subject to change. ATM fees for cash advances are up to $1 at non Navy Federal atmospheric.

[B]

So here on the podcast I know listeners have heard me talk about how I like to always have a big annual finance meeting with Kate right As we've wrapped up a great year as we are kicking off a new one. We are nerdy like that. And each year is an opportunity to reflect and to plan for the future. Like setting career goals or making financial moves and most importantly, ensuring your family is always taken care of no matter what happens. Make this the year that you check life insurance off your list and protect your family's future. 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.

[A]

Matt I just double checked our life insurance policies to make sure we're adequately covered. We are thankful for that. It's a good idea for everyone out there to do that, particularly if your family needs have changed recently.

[B]

Right?

[A]

You want to ensure that you have life insurance to cover loved ones expenses if something happens to you. And policygenius makes a potentially onerous task. Easy as pie.

[B]

Secure your family's tomorrow so you can have peace of mind today. Head to policygenius.com to get your free life insurance quotes. See how much you could save. That's policygenius.com do you want to understand an invisible force that's shaping your life? I'm Osvaloshin, one of the new hosts of the long running podcast Tech Stuff. I'm slightly skeptical but obsessively intrigued.

[A]

And I'm Cara Price, the other new host and I'm ready to adopt early.

[B]

And often on tech Stuff. We travel all the way from the mines of Congo to the surface of Mars to the dark corners of TikTok to ask and attempt to answer burning questions about technology. One of the kind of tricks for.

[A]

Surviving Mars is to live there long enough so that people evolve into Martians.

[B]

Like data is a very rough proxy for a complex reality. How is it possible that the world's new energy revolution can be based in this place where there's no electricity at night?

[A]

Oz and I will cut through the noise to bring you the best conversations and deep dives that will help you understand how tech is changing our world and what you need to know to survive the singularity.

[B]

So join us, listen to tech stuff on the iHeartRadio app, Apple Podcasts or wherever you get your podcast costs. All right, Joel, we are back from the break. It is now time for the Facebook question of the week, which is from Becca. She wrote they were selling blocks of silver today at the Costco checkout. Is there something I should know which I just realized that she said at the Costco checkout.

[A]

I didn't realize they had them there. Like with the candy bars.

[B]

Exactly, yeah. Is it like literally they don't actually have a Costco? Is it next to like the Cokes? It's just like There's a fridge full of gold and silver and platinum, whatever other precious metals Joel, do you have, You're a, you're. You go for the platinum. That's your first metal choice. You don't, you don't like the traditional.

[A]

I don't slum it with the silver.

[B]

Forget platinum. I'm going with plutonium.

[A]

There you go.

[B]

I'm one of precious metal that's going to do something for me, something that allows me to run my off the grid cabin in the woods that I don't actually have.

[A]

There you go.

[B]

Off of nuclear energy.

[A]

It does sound nice, though.

[B]

Well, okay, that should be the precious metal that, that all the preppers are looking into, right?

[A]

It has been really interesting to see Costco wade into the precious metal territory and it's garnered a lot of headlines. I feel like Costco's gotten a lot of press because of selling blocks of gold and silver, which is kind of insane. And if you are the kind of person who's into owning gold or silver bars, that's probably the place to buy them, to be honest, because specifically of Costco's loyalty to the consumer, they don't mark anything in the store up more than 15%. You'd be hard pressed to find a better deal on gold or silver anywhere. So the fact that Costco has entered this space means that anybody who is into owning physical bricks of gold and silver, like this is the place to go to get them.

[B]

But that still doesn't mean that you should actually go and buy some silver or gold. Because I'll say selling your precious metals won't be easy. And when it does come time to sell, if you win, and if you are looking to do that, the costs are pretty dang high. So if you're looking to buy precious metals, then buying them within an ETF that holds on to the physical gold for you, we think that that is the better choice. It's kind of cool that you can, you know, you can buy a gold bar while getting like a $5 rotisserie chicken.

[A]

Oh, what a combo.

[B]

But that doesn't mean that it's a brilliant move. Like, where are you even going to keep it? Are you also going to keep it in the fridge there next to the chicken? Once you take it, once you take.

[A]

It home, definitely don't put it under your mattress. That sounds uncomfortable.

[B]

But then like, so we're talking about, I guess, the physical aspect and how that's terrible, but even it as an investment, it's a pretty terrible investment as well. And if you look back over the like the past 100 years of gold and you look at what it's earned, you're looking at about 14,000%. 14,000.

[A]

That sounds like a lot.

[B]

Which is there might be a lot of folks who are thinking like their eyes got big, they're like, wait a minute, I thought you said gold was a pat investment. Well, you look at the stock market, specifically the Dow Jones Jones and it's around 80,000%. 80,000 versus 14,000. I didn't even look up the S and P, but I'm sure I've got a feeling the S and P is actually probably going to be a little bit higher than the Dow Jones industrial average. So all that to be said, not only is it just a pain in the butt, I guess as an investment, it's not even all that good of an investment to begin with.

[A]

I'm also just kind of an optimist and I think to be a heavy gold buyer typically you have to be a pessimist and you have to think that our worst days are ahead of us. And even then that's true. Even if that's the case, like why, if that's the reason that you're buying gold is because you're trying to hedge against some sort of downside. Well, in the event of some sort of apocalypse, I think food beats gold. So I just, you'd be better served.

[B]

By buying the five buckets of exactly like three months worth of food which they also sell at Costco.

[A]

That's my point. That's my point. So instead of buying the gold, if that's what you're something you're keen on doing, if you're thinking like, hey, I'm trying to kind of hedge against worst case scenario scenarios. Buy the 3,000 meal bucket that Costco sells of ready meals that are going to last for decades, that would be I think a better purchase.

[B]

That would be a better quote unquote investment. And you'd probably return a similar, you'd probably see a similar return on that investment. It just goes to show that I think that they typically do this just to get like garner the buzz and the headlines. You know, it's like having the coffins where folks are, they're shocked when they see them or like the thousand dollar wheel of cheese, it's like who's actually going to walk in there thousand dollars wheelchair.

[A]

But some Costco shoppers are keen and they snatch them up when they come come about because I think there are a lot of people who are interested in buying heavy metals. We just think there are much better places to put your money.

[B]

That's true. Okay, listener Alex posted a screenshot of his esop, his employee stock ownership plan from his employer, Walmart. And he was wondering, quote, if it's a good investment or is this just a way for the Walmart empire to pump their stock? Joel, what do you think is this, Mr. Robot? E Corp. That's what they call it. The E stands for.

[A]

That was a good show back in the day.

[B]

Evil.

[A]

Yeah, well, I think this answer, I'm.

[B]

Not saying Walmart's evil. Actually, I've taken a liking to Walmart over the past few months.

[A]

Yeah. When I personally read, I think I mentioned this on the show. I read Sam Walton's biography and his mentality and what he was able to accomplish. Pretty incredible. And somebody, the kind of discount store movement was already in full swing and he just did it better than everyone else. And so I don't think Walmart killed mom and pop stores. I think the discount movement killed mom and pop stores. So if you want to blame Walmart, you can. I just don't know that Walmart is the ultimate villain in the story. And basically on this one, Matt, I think that the answer is almost yes to investing in an esop. But, and that's particularly because of the sweet discount that's offered to employees. Most of the time. Alex gets, according to the Screenshot, a sweet 15% discount on the Walmart stock that he can buy as an employee. And here's the rub, though. You know, you and I were typically hesitant to advise investing in single stocks, but to me, this is kind of like our advice on buying gift cards. It makes a heck of a lot more sense if you're getting a sweet discount. So if you're getting a hundred dollars worth of credit to a store for 75 or 80 bucks, yeah, go for it. Why not? But if you're trading in $100 for $100 to spend at a particular store, it makes far less sense. And I think same thing with buying individual stocks. It's like, oh, you're going to get a sweet discount on the front end. Great, go for it.

[B]

Yeah. Otherwise we're not huge fans because typically we don't love folks investing in the company they work for. What you're doing there is putting you're over indexing in this one company. You're putting too many eggs into one basket. But in this case, I think they're only matching on up to $270 in stock purchases a year. So I mean, that's not a ton of money. Right. Like invest up to that point, but then just don't invest beyond that. I think if it was a larger amount of money, I would be more concerned. But Alex, he still has the ability to fully fund a Roth IRA at $7,000 and like 270 bucks. What is like 2%, 3%, 4% of $7,000 small by comparison. And that totally fits within our bounds of how much you should be invested in crypto combined with single stocks. Any other more speculative investments. But for the bulk of your investment dollars, just make sure you are in low cost, widely diversified index funds with the bulk of those, those actual investing dollars. And bottom line, I think if you're handling your, your investments, your finances well, then I think certainly taking advantage of this perk, it makes a lot of sense. And again, I feel good about it too. The fact that it's limited. I would feel much differently about it if it was something that feels like.

[A]

Up to 20 grand a year.

[B]

Oh my gosh. Because it would be more tempting to think, oh my God, oh, that's a, that's a really, really sweet perk. But man, it's a double edged sword. It cuts both ways. And you would, oh, that would make me so nervous. And I would be looking into diversify in other ways, I guess.

[A]

Devil could be in the details on that one.

[B]

Totally.

[A]

But yeah, I think for Alex it's a limited amount. I agree, Matt. I think it makes sense. Take advantage of that discount. All right, let's get back to the beer that we had on this episode. This one's called Super Volcano Sauce. It's a sour ale by Aslan Beer Company. It's brewed with blackberries, blueberries, milk, sugar and vanilla. Matt, what were your thoughts on this beer?

[B]

So first of all, I thought we've had an Aslan beer on the show before, but I just checked and we haven't.

[A]

First one, huh? Okay.

[B]

Yeah, I'm pretty sure I've had it in person at our local burger and beer place. They often will have Aslan on, but I liked it. And you want to know what it made me think of?

[A]

The lion from lion and the Witch and the Wardrobe.

[B]

Isn't that Aslan? Not Aslan.

[A]

Close enough.

[B]

This reminded me of the energy drink Red Bull. Take another sip. This is 100% a sour beer version of Red Bull.

[A]

I don't know if I've ever had a Red Bull, so I don't know if I could tell you. Really? Yeah, maybe, maybe one, but.

[B]

Or a monster. Like any of those energy drinks.

[A]

I don't drink those.

[B]

Yeah, I don't anymore. I read all the stuff when I was younger, how bad they were with.

[A]

All the caffeine and stuff and I was like, I'm never gonna try those.

[B]

Well, you know, I think when you're young there's all sorts of crazy stuff you do and I'm pretty sure you've done crazier stuff than I have in order to stay awake at night. Heard you recount that story.

[A]

Yeah, recently.

[B]

I won't go into the details here, but okay, so if you've never had it, this is what it tastes like. If you like this beer, I think you would enjoy it. Right.

[A]

See I didn't love this beer. To me it had kind of off putting vibes and I think it was the blueberries. I think it was the blueberries coming in there combined with maybe you don't. Sugar.

[B]

Yeah. You didn't think it was kind of like that sort of vanilla, powdery vanilla like flavor? That's what it made me almost think of like a carnation, like instant, what's it called? Dehydrated milk or instant milk or evaporated milk. Yeah, evaporated milk.

[A]

Yeah, I can see why you'd say that.

[B]

It kind of had this chalky like flavor that made me think that.

[A]

But it wasn't my jam.

[B]

Yeah, it almost had like a powder like candy sweetness.

[A]

Yes. Too candy. Like and I love a good like berry infused sour. But this one for some reason just hitting the wrong notes for me.

[B]

Yeah, I can see it appealing to kids who shouldn't be drinking beer or when I say kids, I also mean.

[A]

Like it's like the vape.

[B]

Early, early 20 year olds who might be like, oh yeah, this tastes just like that drink that gives you wings. But I thought it was fine. Not my favorite. Totally with you though. When the sours that are aged in barrels that have a little bit of funkiness that tastes like rich leather and mahogany, you know, like.

[A]

Oh yeah, like the finer things in life.

[B]

Those old man sours. I can get behind those. But either way, still glad we got to enjoy this one. On the episode today. And you can find our show notes up on the [e-mail] we'll make sure to link to any resources that we may have mentioned. And is that gonna be it for this episode?

[A]

Well, I just wanna say, Matt, we might have some new listeners considering it's the beginning of the year and if you are a fresh face listening to how to Money, we really appreciate it. Thank you for listening.

[B]

In fact, a fresh set of ears that I've never heard the dulcet tones of Joel's sweet voice.

[A]

It's amazing, I'm not going to lie. But yeah, thank you so much for listening. We hope you stick around. Hit the subscribe button so that you don't miss an episode. And feel free to go to howtomoney.com, click start here. If you're brand new, that's a great place to kind of begin and figure out how to Money is all about.

[B]

That's right, man. So that's going to be it. Until next time.

[A]

Best friends out.

[B]

Best Friends out.

[A]

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. Steps to reach each one of your goals.

[B]

That's right. 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]

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.

[B]

New Year's here, which is the perfect time to refresh those household essentials and score cash back rewards with Colgate Palm Olive. 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.

[A]

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?

[B]

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 between. Join Us Listen to tech stuff on the iHeartRadio app, Apple Podcasts, or wherever you get your podcasts.