Podcast Summary: How to Money Episode: Friday Flight - Dumpster Diving, Insurance Dodging, & Pudgy Penguins #996 Release Date: June 13, 2025

Introduction

In this solo episode of "How to Money," host Joel takes the helm, engaging listeners with a variety of personal finance topics ranging from creative saving strategies to the pitfalls of modern investing.

State-Specific 529 Plans

Joel begins by highlighting an insightful email from a listener named Donnie from Maryland, discussing state-matched 529 plans for college savings.

Joel (04:15): "Donnie basically wrote and gave a lot of detail on this. So look it up for yourself on the Maryland529.com webpage for details."

Key Points:

• State Matching: Eligible contributors can receive state matches for 529 plans, enhancing savings for children's education.
• Cost Efficiency: Maryland's 529 plan boasts low investment costs, making it an attractive option for state residents.
• Tax Considerations: Contributions can either qualify for state tax deductions or state matches, but not both simultaneously. Joel advises listeners to perform the math to determine the best option for their situation.

Dumpster Diving: Turning Trash into Treasure

Joel delves into the concept of dumpster diving, inspired by an Indie Week article showcasing how salvaging abandoned items can yield significant value.

Joel (12:30): "One person's trash is another person's treasure. It's the most apt phrase here."

Key Points:

• Salvaging Valuable Items: Joel shares examples of high-end furniture and appliances left behind by college graduates.
• Entrepreneurial Opportunities: Reselling found items can become a profitable side hustle, turning discarded goods into income.
• Cultural Reflection: The disposable culture leads to valuable items being prematurely discarded, presenting opportunities for thrifty individuals.
• Personal Anecdotes: Joel mentions his own experience with flipping used dishwashers, illustrating the potential of this approach.

Insurance: The Hidden Costs of App Usage

The discussion shifts to how third-party apps might inadvertently increase car and homeowner insurance costs by sharing data with insurers.

Joel (21:00): "Apps like Life 360 can collect data that leads to unexpected premium hikes."

Key Points:

• Data Privacy: Third-party apps collect various user data, which can be sold to insurance companies, potentially raising premiums.
• Uninsured Rates: Rising insurance costs contribute to an increase in uninsured motorists and homeowners, making insurance more crucial.
• Cost-Saving Tips: Joel recommends opting out of data sharing where possible and shopping around for better insurance rates, including considering higher deductibles if financially feasible.

Cooking at Home: A Cost-Effective Strategy

Referencing a Campbell's Soup report, Joel emphasizes the financial benefits of cooking at home versus dining out.

Joel (24:10): "A meal at home costs the average $4 per person, while eating out averages $17 per person."

Key Points:

• Budget Impact: Reducing dining out can save approximately $7,000 annually on average.
• Practical Tips: Joel suggests meal planning, batch cooking, and stocking up on frozen foods to make home cooking more convenient.
• Market Trends: Despite a slight uptick in home cooking, the prevailing trend remains a preference for dining out, driven by convenience and lifestyle changes.

Costco Executive Membership: Worth the Investment?

Joel discusses the benefits of upgrading to a Costco Executive Membership, highlighting exclusive perks that can lead to significant savings.

Joel (27:00): "The executive membership is essentially paying for itself with the additional perks."

Key Points:

• Exclusive Access: Early warehouse access and extended Saturday hours for Executive Members.
• Financial Incentives: Monthly $10 credits for Costco Same Day orders, amounting to $120 yearly.
• Refund Guarantee: If the benefits don't offset the additional cost, members can receive a refund of the price difference.

Investing Insights: Active Management vs. Index Funds

Joel critiques an article from Alpha Architect titled "Even God Would Get Fired as an Active Investor," advocating for passive index investing over active management.

Joel (35:45): "Even with perfect foresight, active investors would face significant drawdowns that clients wouldn't tolerate."

Key Points:

• Drawdown Challenges: Active investors may suffer substantial losses during market downturns, leading to client distrust and account termination.
• Leveraged Funds Warning: Joel advises against leveraged funds due to their high risk and potential for significant losses, favoring traditional index funds instead.
• NFTs and Meme Stocks: The resurgence of NFTs, exemplified by the Pudgy Penguins project, is viewed skeptically as a high-risk investment with unclear value propositions.

Depreciating Assets: The Surprising Case of Used Cars

Transitioning to asset management, Joel explores the unconventional rise in used car values amidst supply chain constraints and tariffs.

Joel (40:20): "Holding onto your used car longer can mitigate some depreciation issues."

Key Points:

• Market Fluctuations: Tariffs and supply shortages have temporarily inflated used car prices, presenting opportunities for profitable transactions.
• Long-Term Holding: Maintaining ownership of a reliable used car can result in lower overall costs compared to frequent replacements.
• Personal Strategy: Joel shares his own decision to invest in maintaining his older vehicle, emphasizing the financial prudence of such choices.

Smartphone Plans: The New contenders

Joel mentions the Smartless podcast hosts launching their own cell phone service, adding to the competitive landscape of mobile virtual network operators (MVNOs).

Joel (43:50): "More competition in the MVNO space is always welcome for better pricing options."

Key Points:

• Cost Savings: MVNOs like Mint Mobile and US Mobile are highlighted as effective ways to reduce phone bills.
• Industry Trends: The entry of celebrities into the MVNO market suggests ongoing efforts to disrupt traditional carrier pricing structures.

Conclusion

Joel wraps up the episode by reiterating the importance of strategic financial decisions, whether it's leveraging state benefits, optimizing insurance costs, or choosing the right investment strategies. He expresses anticipation for returning co-host Matt and encourages listeners to apply the discussed insights to enhance their personal financial well-being.

Joel (46:30): "Thanks for joining today's Friday flight. Have a great weekend and see you next Monday!"

Notable Quotes Summary

• Joel on State 529 Plans: “Donnie basically wrote and gave a lot of detail on this. So look it up for yourself on the Maryland529.com webpage for details.” (04:15)

• Joel on Dumpster Diving: “One person's trash is another person's treasure. It's the most apt phrase here.” (12:30)

• Joel on Insurance Apps: “Apps like Life 360 can collect data that leads to unexpected premium hikes.” (21:00)

• Joel on Cooking at Home: “A meal at home costs the average $4 per person, while eating out averages $17 per person.” (24:10)

• Joel on Executive Membership: “The executive membership is essentially paying for itself with the additional perks.” (27:00)

• Joel on Active Investing: “Even with perfect foresight, active investors would face significant drawdowns that clients wouldn't tolerate.” (35:45)

• Joel on Used Cars: “Holding onto your used car longer can mitigate some depreciation issues.” (40:20)

• Joel on MVNOs: “More competition in the MVNO space is always welcome for better pricing options.” (43:50)

• Joel's Conclusion: “Thanks for joining today's Friday flight. Have a great weekend and see you next Monday!” (46:30)

Final Thoughts

This episode offers a blend of practical financial advice and critical analysis of current market trends. Joel's solo hosting provides a personal touch, making complex topics accessible and engaging for listeners seeking to optimize their financial strategies.