← The Money with Katie Show
The Money with Katie Show
On Worthwhile Side Hustles, Financial Tradeoffs, & Frustration with American Politicians
01:36:52
Plus, calculating tax savings, our favorite travel cards, and more.
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- [00:02]
Henna
This message is brought to you by Apple Card. Did you know Apple Card is designed to help you pay off your balance faster with smart payment suggestions? And because fees don't help you, Apple Card doesn't have any. So if your credit card isn't Apple Card, maybe it should be subject to credit approval. Apple Card issued by Goldman Sachs Bank USA, Salt Lake City Branch. Variable APRs range from 18.24% to 28.49% based on creditworthiness rates as of July 1, 2025 Terms and more at applecard.com we all have our strengths, like pronouncing Uruguay.
- [00:37]
Katie Gatti Tassan
You just. That's. You just said it wrong. No, it's Uruguay or Uruguay.
- [00:43]
Henna
Is that. Is that true? Wait. Yes.
- [00:47]
Katie Gatti Tassan
Uruguay. And you better not cut this. You better not cut this or you're dunking on me for saying wrong. Rich Girl Roundup welcome back to another Rich Girl Roundup. Yee haw. On the Money with Katie show, I am, of course, Katie Gotti. Toss in. And every few episodes, my executive producer Henna and I sit down, we discuss your feedback, your questions, any new considerations that come up. And Henna, I'm curious where you want to take us today. First, where are we starting today?
- [01:25]
Henna
Well, first, I wanted to read this review that came because it really made my day and I loved it. So I want to say thank you to Ms. Sarcasm, which, whoever you are, that is a great username. They said. I'm a personal finance junkie and I've listened to podcasts for years and even have my own. They tend to all talk about the same thing in different ways now, and it has gotten boring. But Katie's podcast goes to the next level. She shows us how our money not only impacts us, but impacts an entire global economy and society. This is advanced level personal finance, and I'm so here for it. Also, I'm not the only one who wants to be BFFs with Katie, Ms. Sarcasm. Unfortunately for you, she already has a BFF me. But if it's my time to go early, then I'll. I'll let you swoop in.
- [02:09]
Katie Gatti Tassan
That truly means a lot. Thank you so much. Advanced level personal finance is definitely how I like to think about what we're trying to do here. Or money as an extreme sport. Either one. Take your pick. On that note, let's kick off with our personal finance episode, and then I actually want to answer a couple specific money questions that have come in over the last couple weeks, just because it feels like thematically we're in that spirit of Our friend, Data Daddy Nick Magi, he texted me other day. He's like, data Daddy's hilarious, by the way. I was like, good. I'm glad that you weren't perceiving that as like low grade sexual harassment. All in good fun, Nick, but it's all about climbing the wealth ladder. So we actually weirdly saw a spike in downloads that week. I wasn't really sure why. I think we're kind of under the impression that that might mean y' all want some more of the math goods. So we're bringing that to you today for sure.
- [03:04]
Henna
Y' all have got a hankering. So I definitely want to start with a note of clarification. So the episode title was the powerful 01% spending rule making career shifts and when to adjust your asset allocation. And I think the.01% really threw some folks off. So one Listener wrote in, 0.01% seems tight. That's $50 for someone with a net worth of 500k. And then someone else responded, I think it's 1%, not 0.01%. The headline is confusingly punctuated. And so I want to go comment to clarify that actually it is correctly punctuated.
- [03:40]
Katie Gatti Tassan
Hannah's eye is twitching. She's like, no, it's right. The headline is right.
- [03:45]
Henna
Listen, we triple checked our numbers, so Rachy did us a solid and they came in to say it is 0.01%. But I think this is most useful for someone living off their. If you have $500,000 invested, you could spend about $1,500 per month with this rule without ever dropping below 500,000. So you would likely need more income in this case and are not ready to retire yet. It's basically a more conservative approach than the 4% per year rule. I like it.
- [04:11]
Katie Gatti Tassan
So first of all, Rain, you should be on payroll. Thank you. And yes, it is meant to be 0.01% or 1:10,000. And so as Rain mentioned, it is supposed to serve as shorthand for essentially translating how much progress you've already made to what sorts of financial decisions should not stress you out anymore when you are making like a one time decision. So to be clear in that example of like $50 for someone with a net worth of 500k, that seems really low. It's not $50 a month, it's $50 per day. So it's like if you are going to the grocery store. And I think Nick's example was eggs. Right? So let's say your net worth is 20k. You've got $20,000. And you are really on the fence at the grocery store about whether or not you should buy the caged free organic eggs. And they are $2 more. This is a little heuristic that you can tap. That's like, okay, $2. That is 1/10,000th of 20K. This decision to buy eggs for $2 more is not going to make a lick of difference to my net worth. My money that's invested is going to grow faster than this today. And so it's really just about being able to right size, what sorts of financial dilemmas you are actually paying attention to and where you're going. It's fine. I'm, I'm going to get the eggs.
- [05:33]
Henna
And I want to clarify here, people. So if you are multiplying, let's say in this case $20,000 net worth by this one 10,000th rule, it is point 0001. So that's a decimal point three zeros and a one. Because I think when you hear the.01% rule, your instinct would be to multiply it times 0.01. But that's just 1%. So it's actually you have to add two more zeros and that is how you would accurately do it.
- [05:59]
Katie Gatti Tassan
Yes.
- [06:00]
Henna
I think another, bigger example of this and something to remember like you said, Katie, is this is per day. And so, for example, I was debating where to stay on vacation and the price difference between a nice hotel and a nicer one per night was actually about 0.01% of our net worth. And so we made the decision to stay at a nicer location. And honestly, it ended up being one of the nicest places I've ever stayed at. And at first when I was in the little checkout thing and I saw it was a few hundred dollars difference, I was like, oh God, I don't know, is this a bad idea? But then I remembered that that point.01% is per night added up. And so your girl bawled out. I felt less guilty about it.
- [06:36]
Katie Gatti Tassan
I feel like there is something in the tax code that would suggest that you should be able to write that off now as business expense because you're using it as this example.
- [06:45]
Henna
That is true. It's a write off.
- [06:46]
Katie Gatti Tassan
It's a write off. So I think this is just a helpful reminder that was echoed in that episode. Sometimes spending slightly more money a la lifestyle creep can let you actually enjoy the life that you have worked toward and are continuing to work toward. Obviously you want to make those decisions intentionally about work and spending. You're increasing your net worth. You don't want to totally slide back down the ladder like Nick said. But we heard that echoed in Jani's comment as well. Jani is a popular listener of the show.
- [07:17]
Henna
Hey Jani, he said.
- [07:18]
Katie Gatti Tassan
I love his POV on the 1% when making job financial decisions. I want to definitely dive deeper and understand how to make that calculation, but it was incredibly insightful to hear the reasoning for this framework. I think learning how to use your assets to live meaningfully is such an important skill that has been neglected in the pursuit of more is more. So yes, there's the 0.01% spending the 1%. I understand this is kind of confusing. Less confusing in the book because it's padded in a bunch of other stuff. But these were just two things from the book that I lifted out because I found them useful and so they were in closer proximity in the episode. But but we're going to talk shortly about that 1% income and side hustle slash work guidance because I think we heard some questions about side hustles specifically and like when something is worth it and when it's not.
- [08:13]
Henna
Yeah, so we'll come back to that in a minute. But I wanted to address the biggest point of feedback that we received first. It was around the lack of planning for life's curveballs. So Amanda SK wrote, would love to hear more discussion about being prepared for terrible twists life can throw illness or needing 24. 7 care as an older person, the 4% rule in this kind of thinking is appealing, but definitely assumes few curveballs. And then LB chimed in to add agree. Katie already did an episode on long term disability insurance and Sidebar for me, this episode was so important I think everybody would benefit from listening to it. So we'll drop it in the show notes. But LB continues to say I found Nick stat about the number of retirees who die with four times more interesting. More data please. What level of saving for a rainy day is appropriate? When does practicality veer into anxiety? What amount of assets is truly, quote, enough to weather that chance of catastrophe? When should you fear the toll of staying in that shit whole apartment or that stressful job more than the fear of draining your ample savings?
- [09:07]
Katie Gatti Tassan
I definitely understand that anxiety around planning so far out and just not knowing what might happen in life. Interestingly, I was on NPR's Life Kit yesterday and one of the questions that came in was about a woman who had been diagnosed with cancer at 35 and it was stage four. She didn't have health insurance and so her friend was writing in to be like, I want to give her money to help with this. How do I decide how much to give her? And the other guest and I, Wendy de la Rosa, we basically had the same perspective, which is like, well, at that point a stage four cancer diagnosis is not something that you're going to be able to like float someone 5k to handle. I mean that can be hundreds of thousands of dollars if you're uninsured. So we ended up spending a lot of time talking about getting on Medicaid through the disability criteria rather than the low income criteria, depending on where she lives and whatnot. But all that to say, I actually think that a lot of these conversations about curveballs and catastrophes really comes down to the role that insurance is meant to play. That is what insurance is there for, to give you a defined sense of for your downside. Obviously not every curveball that's going to come at you in life carries a form of insurance that you can buy ahead of time. But I think it can really help to get specific about what you are afraid is going to happen long term. If it truly is some sort of disability or illness. Disability insurance makes a lot of sense if it is about, well, how am I going to afford care when I'm older. I do think long term care insurance could be worth looking into. Although those policies have been degraded over time, they're a little bit harder to find economically now. Not saying they don't exist, but they're like less easy to just go out and get a good one. They're a little bit harder to come by. But I think that it can be akin to purchasing peace of mind. Maybe this would be something where if you actually looked at the numbers and mapped out the premiums over time, you would be quote unquote farther ahead by just investing that money and self insuring. But if this is something where it is preventing you from living your life because you feel so scared of about the chances that something might happen, I really think that looking into the appropriate types of insurance might be worth the money.
- [11:29]
Henna
Something I think about a lot is that anxiety because of the health care system. Like I think about the fact that how much less would you have to hoard if you didn't have to worry about paying out of pocket for end of life health care a lot. And in other countries with universal health care, governments usually actually subsidize the costs. You're left with just a small portion to pay. And so it's not nothing, but it's far less than what you'd be on the hook for. And so maybe you wouldn't have to worry about keeping $3 million in your bank account when you're 75 years old because you're not worried about, well, what happens if at this age. And so in turn, maybe that lets you give to causes you care about, live your life a little bit more now, give to your heirs earlier in life so they can enjoy it, whatever that is. And then you envisioned, Katie, you already kind of called this out. There was some pushback light on the wealth ladder levels that he had laid out. So as a reminder, Nick had used levels of 10 to determine what level you're on. So it's not the most factually accurate. He called that out, but he kind of said it's the easiest way to remember things. So level one would be you have a net worth of zero to 10, 000. Level two is ten to a hundred thousand dollars. Level three is a hundred thousand to a million and so on. And so one listener wrote in and said, I'm sorry, he lost me right from the beginning when he said he wasn't trying for accurate. I feel he's extremely out of touch in life if he thinks someone living off of 50k a year has the same life as someone with 200,000 doll. And I just want to clarify, I don't think he was saying everyone within levels one to three, for example, live the same life. Just that when you reach a certain level, some of those marginal net worths, like between 300,000 and $400,000 in net worth or 4 million to 6 million in net worth, it means that your lives generally look the same, which is. I see the case for that. What do you think?
- [13:07]
Katie Gatti Tassan
Totally. His point was that it is about wealth and how much wealth is meaningfully going to change the, the type of life that you are able to live. So I agree. I understand that that comment maybe was not phrased in the best way about like, oh, I'm going for like easy to remember, not like specific accuracy. But I do think if you know Nick, if you read his stuff, he is incredibly evidence based. He spends a lot of time building narrative value around data. So to me his perspectives are actually a lot more trustworthy or more on the trustworthy side of the spectrum than most people who are out there pushing hot takes on personal finance stuff on the Internet. So regarding level four and higher, anyone with 10 million or more, we heard from two listeners. Jesse, 29, said, I agreed with his stratification of US economic classes, which Makes a lot of sense to me as someone living in a high cost of living area. One point I would add to the discussion about how the upper class or those with 10 million plus is distinguishable from the rest of us plus plebeians is not only the things they consume like private drivers, but also the way in which they use money as a means of accessing influence and power. They stop caring about the cost of things, but they care about the cost of power.
- [14:27]
Henna
Then hard agree. I also love being called a plebeian.
- [14:31]
Katie Gatti Tassan
Us pros down here toiling away, toiling away in the content coal mine.
- [14:36]
Henna
The the other note came from. Mmm. 756. I'm going to go say like Mm, noodle soup. If you know, you know they said. I'm glad you asked him about values. I still can't fathom when so many people, slash geography, slash issues, need financial support, why it's ethical for anyone to have more than 10 million. I think his presumption that more money is better, which equals more power deserves questioning.
- [15:01]
Katie Gatti Tassan
This just reminded me of that Hamilton Nolan piece that's like confiscate their wealth. Like it's. It's so straightforward. He's like the marginal tax rate. I think he uses 100 million. He's like a marginal tax rate. Over $100 million of wealth should be one. He's like, I don't want to hear it. This is like embarrassing that we have to be having this conversation right now. Okay. I don't think Nick's perspective is that more money equals better. And maybe that was on me as the interviewer for not drawing out his true point of view clearly enough. Obviously he works in wealth management in New York City. Okay, so he deals with super rich people all the time. I definitely think he traffics in circles that are approaching asset allocation like it is a sport. He's not like a Marxist dirtbag like me who's concerned about like, well, who owns the means of production, you know. But speaking of dirt bags, speaking of money as power, I'm actually super happy someone gave me this opening. I have been digging into Jason Hickles work a little bit this week. I just kind of stumbled onto this. So depending on scheduling, I actually think it'd be really fun to have him on the show. He was explaining how the point of taxing the rich is not because we actually need their money to pay for stuff. And this is where we get into the crazy monetary abstractions of it all.
- [16:17]
Henna
Is that like a Stephanie Kelton MMT type thing?
- [16:20]
Katie Gatti Tassan
Yeah. Like, he's basically like, no, no, you create demand for currency. That's how we pay for things. It's not like you're paying taxes and those taxes are being turned around and spent on something, but we tax them because it is bad for an economy and a democracy for anyone to possess that much power over labor, that instead of labor being allocated to stuff that everyone needs, like bridges and agriculture and shit, it's getting allocated to building somebody's third yacht and like custom frescoes in guest bathrooms and other stuff that ultimately doesn't do jack all for a population. And so essentially Hickel was making the point on this podcast I was watching that extreme wealth just represents an inefficiently disproportionate power over labor, power over which is bad for an economy. So more to come, I suppose.
- [17:15]
Henna
I don't know about you, Katie, but Trump's gold plated toilets have really improved my life. So did you see the Oval Office recently?
- [17:22]
Katie Gatti Tassan
Oh my God, is it like him and Vladimir like kissing with tongue in a.
- [17:27]
Henna
In just a gold plated room? Yeah, it is. Hideous. Then we got a question that we've gotten quite a bit over the years and it was related to Katie, as you mentioned, the 1% rule that Nick mentioned. So again, this is not the.001% rule for spending, but the 1% rule for earning. So basically, as your net worth increases, you want to take on projects that improve your net worth by 1% or more. And if it's less than that, it may not be worth it financially. Now, if you love it and want to do it, I think that's a different story. But when he was saying kind of how to allocate your time, that's the heuristic that he had offered. So Alina T. Wrote in quote, hi, Katie and Hannah, please disregard if I haven't gotten to this episode yet, but I'm curious if you have opinions or resources for realistic side hustles using the 1%. I struggled to find a side hustle worth my time when researching it. Seems like all the suggestions are sell AI slop, use my referral code to fill out surveys, monetize the only hobby that brings you joy in this chaotic world or opportunities that are saturated, like selling stock photos. The last six years I focused on cutting spending, increasing my salary, and investing well. But I'm at the point where I don't see where to go next on my wealth building journey. Katie, you said that almost everyone you know nowadays has a side hustle outside their 9 to 5. So what kind of hustles are you hearing about these days?
- [18:42]
Katie Gatti Tassan
A lot of my friends, side hustles are things that they do because they are trying to pave a different path. They'll work full time, but they also play three musical gigs a week in town and they'll make 50 bucks doing that. It's stuff where like, money is coming in, but the end goal is not just, hey, this is an efficient use of my time. It's like, well, I want to be a musician. So I'm trying to make that happen and it's going to make me a little money on the way. In one of my first episodes ever, I interviewed my friend Ben Miller. We literally sat in my attic, my attic that was made of wood and concrete.
- [19:21]
Henna
Nick's eye starts twitching, which, like, if.
- [19:24]
Katie Gatti Tassan
You know anything about audio production, is the worst place to film anything. And we just passed the mic back and forth. It was so heinous, do not listen to it. But we talked about something very similar and he said something I will never forget. He said the value that you are generating in a side hustle should be accretive. So in other words, rather than a straight up time for money swap, your side hustle ideally is going to be something that can compound. I think Nick's story is really illustrative of this. He wrote that blog for three years for no money because he liked doing it and it ended up opening new career paths to him. He got a different, higher paying job in a different industry. He has now sold hundreds of thousands of copies of his first book. He's a New York Times bestseller. But it didn't happen fast. I would still categorize what he was doing as a side hustle, even though for years it was making no money. But I think I have gotten to the point where I feel very, very skeptical of side hustles that do not feel as though they are additive to your life in some other way. If the energy around doing that thing is, oh man, I'm a slop selling stock photos just like freaking nose to the grindstone. I have to find something. I think it's probably going to be more misery than it's worth to you energetically. Unless we're talking about foot picks for $150 a pop and then go off. But it also sounds to me like she is increasing her salary, she is keeping her spending in line and she's investing. So there's the other piece of this, the flip side, which is if it is that difficult to find something where another opportunity is going to add 1% to your net worth per year, then your net worth might actually just be really high. Like, that could also be the situation here. So to me, it almost sounds like she's more of a candidate for flipping on autopilot mode and just keeping your brain space open in the event that you are sometimes struck with an idea for a side hustle that feels so obvious and so naturally alluring to you that you can't help yourself but go and try to do it.
- [21:35]
Henna
Do you remember that reel we made where your foot was in it and I was like, katie, we have to move the caption over this. You're not giving this away for free.
- [21:44]
Katie Gatti Tassan
No free feet on the Internet in this economy? Hell no.
- [21:46]
Henna
So what you just said is also exactly what you said to me when I was debating keeping an older side hustle. And you said, like, maybe you can keep your brain space open for work that you're truly energized by, versus this work that I'd been doing as a side hustle for several years. It was kind of monotonous. It wasn't going to scale. And so I actually did step away from doing that side hustle, and a couple months later, I ended up launching my substack. And as of today, actually, I just launched my first paid sponsorship. I mean, we're not talking thousands of doll, but, like, it's something that I'm able to monetize very slowly. I am excited to write about travel. I'm excited to do these things that, like, I wake up with ideas in the morning, and I think if you're not feeling that level of passion about it, it may not be worth it. And I've been thinking about that a lot, actually. When you shared Nick's story that he wrote for three years without a single dollar, I'm like, you have to be so energized.
- [22:38]
Katie Gatti Tassan
Yeah, you gotta be into it.
- [22:40]
Henna
Writing into the void that, yeah, I think that that's something to weigh a little bit. And then funny enough, kind of my immediate thought was similar, because my underlying question was, do you actually need a side hustle? If you're six years in, you're doing all the right things. If a side hustle is just going to supercharge your worth 1% and you're not really interested in it, or if it zaps you of your energy to earn actually more income in your 9 to 5, then maybe it's not worth really pursuing. I understand that wasn't necessarily the answer you probably wanted, but I hope that that lends Some like perspective to it. We had a question from a listener we'll call H about whether it's better to take out a loan or withdraw from a brokerage account to finance a home project. So I think this is like one of those things about opportunity costs that pops up with net worth conversations. So they said. My husband and I have about a million dollars invested for retirement already between the both of us. I'm 40, he's 45. We also have a brokerage account for big purchases with about $110,000 in it currently. In the past, we took $30,000 out on two different occasions. We make 220,000 before taxes and investments. But we need 30,000 for two different home projects we're doing soon. And my husband wants to take it out of the brokerage again and I want to take out a loan. Between the loss of gains in the brokerage account and the tax implications, I'm worried about making the wrong choice. But when I talk to my husband about it, he wants numbers and facts and I'm just not that math savvy. So my question is, is it better to take out a loan for 30,000 or take it out of a brokerage account? He's worried about loan payments and I'm worried about losing money.
- [24:10]
Katie Gatti Tassan
I'm obsessed with. He wants numbers and facts. I have concepts of a plan. Okay, I want to pencil this one out because I think it can be really helpful to illustrate how to think about the trade offs. And so this is how I would think about this. I think the short answer here is going to lie mathematically in the interest rate you can get for this loan. First of all, you want to just calculate. You noted this already, right? The tax implications of a $30,000 withdrawal from this account. So you're going to calculate the capital gains taxes on that 30k that you would be withdrawing, assuming that it is all gains, Right. If it's principal, you're not paying taxes on it, but assuming it's all gains, given your income, you're going to pay 15% on that. So call it $4,500 in capital gains taxes, then you're going to just quickly eyeball the opportunity cost of that 30k. So if we're talking over the next couple of years, something that's commensurate with a loan term, let's say you are averaging a 7% return, real return annually in that account. That means this year the 30,000 would have earned you about $2,000. Next year you'll have $32,000 and that $32,000 will earn you 2240. The following year you would have 34 to 40 and that's going to earn another 2400. So you get the point. It is compounding, but we're talking about an average for the next couple years of at least around, I don't know, $2,000 to $2,600 per year in investment gains. Again, that's not literally how this will happen because the market's going to go up and it's going to go down.
- [25:52]
Henna
But we are not licensed professionals. Please do your own due diligence.
- [25:56]
Katie Gatti Tassan
You can think about it like a $4,500 hit up front at tax season and then a couple thousand dollars each year that would have continued to compound. Now we can compare that to taking out a loan. The challenge with the loan is that the money that you are paying back every month for those loan repayment payments is probably money that you would have invested. I assume that this is extra money that you would have just saved if you can afford to do this. But let's say that you get a 6% interest rate and a three year term. So you have 36 months to pay back 30K. At 6%, you're going to pay about $913 per month. So it's a pretty substantial loan payment. $900 a month for three years and you will have paid a total of $2,855 in interest. I just did a little debt payoff calculator to quickly get that number.
- [26:46]
Henna
Do you have those in your bookmarks like that and the compounding calculator from the Fed?
- [26:50]
Katie Gatti Tassan
No, I just Google debt repayment calculator and then click whatever one, whatever one's paying the most for. Google Ad and Spawn Con. I'm like, all right, you win, you get my business. So you could go deeper and you probably should if you're like if, especially if these numbers are really big and consequential to you, you could go deeper now and figure out the opportunity cost of that $913 per month if you would have been investing that money that you're going to be repaying the loan with. So say you plug that in at 7%. If you do that for three years, if you would have invested that money instead of we're talking about $36,340 had you invested it. So the reality is that just keeping the $30,000 intact and keeping it invested now to just continue growing is going to have you coming out slightly ahead in this example. But all that said, it really does come down to the interest rate. The capital gains taxes matter for sure, but the debt in this case is just simply growing slower than the invested money. Again, I usually use 7% as my comparison standard of investments. I don't like to get too presumptuous about how fast that money's going to grow. So debt above that. I'm like, I'd rather just not have the debt. But I think there is an argument to be made that. And now I'm going to argue against everything I just told you. I think there's an argument to be made that the market is probably pretty overvalued right now. We just hit an all time high. I'm not one for like quote unquote timing the market, but if you're really going back and forth on which one, this would not be the worst time in the world to sell and realize some gains if you need to get that money somehow, some way. But this is a case where it's close, right?
- [28:38]
Henna
Because I also think in any case you're going to pay the tax regardless at some point in your life when you take it out. So in this case it's like you could take it out for something you need and it's is so close that it may not even make a huge difference.
- [28:49]
Katie Gatti Tassan
Yeah. Unless you're using some super duper. Like if you're planning on using that taxable account as a bridge account in early retirement and you're going to live on what, less than 130k per year and do the fancy schmancy, I'm going to keep everything below the 0% capital gains rate. There is a way to get that money out tax free later when you don't have any other earned income. But I don't think most people are planning with that level of intensity or really care that much. So I don't know.
- [29:23]
Henna
I mean, you could also add in like, okay, will the value of your home grow by more than 30,000 or whatever the cost basis is that you take out?
- [29:30]
Katie Gatti Tassan
Yeah. Depending on like what the project is that you're talking about, when you want.
- [29:34]
Henna
To move and all of that. So lots of things to consider, but I think that that's a helpful way to walk through it.
- [29:40]
Katie Gatti Tassan
Yeah. The other thing, I guess, like just to throw this out here, you know, you mentioned that your husband is afraid of the loan payments every month. You have the money to pay it off at any time. So if six months from now one of you loses your job and you're like, oh crap, how Are we going to keep paying off this loan? We don't have the extra 900 anymore. At any point you could just go to the brokerage account and pay that loan off. So the money is there, right? You're not stuck in that decision if you decide to go ahead and go the loan route. But, but like I said, it does feel because we are at all time highs that it's not a bad time to take out a chunk of money if you are in the position where you need a chunk of money. Okay, we will dive right back into more episode specific feedback right after a quick break. One of the best money moves I made stopped trying to figure everything out alone. As I made progress and got closer to my overall goal, I started to second guess whether I was missing anything. Like was I as on track as I thought? Were my investment allocations appropriate? For me, this is the plague of the self taught personal finance nerd. Does it sound familiar? Then I worked with Domain Money's certified financial planners and I got the peace of mind that I needed. They led me through a strategic restructuring of my asset allocation, my cash cushion, and they even helped me pinpoint the perfect timing for an eventual home purchase. And it turned out it was actually later than I thought. What I love is that they don't give cookie cutter advice. They actually look at what you're trying to achieve. Then they optimize everything around that. Plus they use a flat fee structure. You know exactly what you're paying right out of the gate. You can hear from Domain Money's head of financial planning, Adriana Adams in my episode with her from September 3rd called a CFP on outdated advice, Jumping Social Classes and why Money Mindset Matters. Ready to stop guessing and start winning with your money? See what the experience is like for yourself by booking a free strategy session. To see if Domain Money is a good fit, head to moneywithkatie.com domainmoney to book your session. That's moneywithkatie.com/domain money. I'm a real client of Domain Money via Money with Katie. I receive compensation and have an incentive to promote Domain Money. See important disclosures@dmnmny co x welcome back. Okay, so we are gonna move to our episode with Natasha Hakimi Zapata titled How Other Countries Used Their Darkest Hours to Radically Reform Their Economies. And I know I said I would avoid Norway. I still am. But I chuckled at this comment from Remoter Charm who said Finland is not Scandinavian. And then Big Red Dog wrote Scandinavian Norden Meh with like the little. The little shrug.
- [32:50]
Henna
The shrug emoji.
- [32:51]
Katie Gatti Tassan
Okay, guys, I talk on the Internet for hours every single week. I don't think we can all really fairly expect everything I say to be correct, especially if we're talking about geography. So I'm keeping you on your toes. I think my issue is that I use Nordic and Scandinavian interchangeably a lot to just, like, gesture at that region of the world where they think people should have rights. But anyway, I've learned my lesson, I guess.
- [33:13]
Henna
Yes. And to be clear, Scandinavia is Sweden, Norway, and Denmark, so hopefully that clarifies. But, Katie, let's remember that you also thought Spain was in the Americas. And you told me the other day that you were confused about North, Central, and South America, so.
- [33:27]
Katie Gatti Tassan
Okay, first of all, I was 13, and second of all, I thought Spain was in South America, and I don't think that that's that bad.
- [33:37]
Henna
But you weren't 13 when you learned about North, Central, and South America, correct?
- [33:42]
Katie Gatti Tassan
No, that was last week. Okay, guys, I'm an idiot. We know this. If you listen. If you continue to choose to listen to me, that is on you. I am just talking into my mic in my house, okay?
- [33:54]
Henna
We all have our strengths. Like pronouncing Uruguay.
- [33:57]
Katie Gatti Tassan
You just. You just said it wrong. No, it's Uruguay or Uruguay.
- [34:03]
Henna
Is that. Is that true? Wait.
- [34:06]
Katie Gatti Tassan
Yes.
- [34:06]
Henna
You're Uruguay.
- [34:07]
Katie Gatti Tassan
Uruguay. And you better not cut this. You better not cut this where you're dunking on me for saying shit wrong.
- [34:14]
Henna
Well, I was gonna say it was funny because we had you retake a few mentions of saying this, this country because you're pronouncing it both incorrectly and correctly at the same time, which I guess I just did.
- [34:26]
Katie Gatti Tassan
So I'm pretty positive. Okay, hold on.
- [34:29]
Henna
Uruguay.
- [34:30]
Katie Gatti Tassan
I'm pretty sure in Spanish class, I learned that Americans say Uruguay like a at the end. And in Spanish, it's Uruguay.
- [34:41]
Henna
Uruguay. Yeah, you are correct.
- [34:43]
Katie Gatti Tassan
Uruguay.
- [34:44]
Henna
All right. At bottom, we are two morons.
- [34:49]
Katie Gatti Tassan
It worked out well.
- [34:52]
Henna
Apparently, people liked hearing about Uruguay. Nevertheless, we persisted. So we. Before we dive into the longer feedback, I had to share my favorite comment from this go around, which came from Hollis Adele, who said, perfect timing on the release of this one just ruined my boyfriend's birthday by getting in a screaming match with my mom's boyfriend at a bar about how and why a country as wealthy as ours must and can do better. Someone's gonna sit down and have a listen.
- [35:17]
Katie Gatti Tassan
Let's fucking go. I love. I love when we make people more unbearable at family gatherings. And you know what the Reason that we can't have nice things is because drone strikes are expensive. Okay? Someone's gotta pay. Someone has got to pay for the US Military to have helicopters that can fly upside down. And that's why you don't get to go to a hospital when you need help.
- [35:40]
Henna
You know what, Hollis? I'll just say I appreciate you taking one for the team. Okay. And happy birthday to your boyfriend. I guess we are Leo twins. I think we all. We all want to feel helpful and see that it's actually possible to improve things and that a wide range of countries are actually doing stuff, many with lower incomes than our gdp, and that sometimes focusing on what's wrong all the time can make the options feel really narrow. And so what I really liked was something that Tina M. Wrote in. She said, thank you for bringing hope and information to disprove the notion that the US Is, quote, too special or, quote, too complicated a country to enact sweeping social reforms that would keep people housed and healthy. Which also reminded me of Big Dog's comment, hey, Big Dog. Which did numbers on Spotify. It said, there's a stupid irony from the right when they say we can't fix education, health care, clean energy, et cetera, with more money. But then at the exact same time, think we can solve the immigration problem by Fort Xing the ICE budget.
- [36:31]
Katie Gatti Tassan
You know what's funny is the only group that stands on business about that is the Cato Institute. They are the one group.
- [36:39]
Henna
Remember your shock when you saw that?
- [36:41]
Katie Gatti Tassan
Yeah. They were like, guys, this is a bad idea. Do you know how much. Do you know how excited expensive it is going to be to do all of this?
- [36:48]
Henna
And for what?
- [36:49]
Katie Gatti Tassan
And for what?
- [36:50]
Henna
For what?
- [36:50]
Katie Gatti Tassan
I know. I was like, okay, kato, stand on business. 1. One unit of respect allotted for this.
- [36:58]
Henna
But then we got two questions that are essentially the inverses of each other. So the first came from Bill S. And they said. I enjoyed the discussion with Natasha and found myself wondering if there is a place in the world where all or most of the policies discussed on the show are available to the lucky public of that country. While I suspect not, it would be interesting to see which countries do check the most boxes. And then on the opposite side of the spectrum, Shawna G. Asked. I love this most recent episode, which definitely fills me with a little hope and inspiration. It got me thinking about how on the left, we often point to countries like Norway. I'm allowed to say it. Katie, Sorry. When talking about policies we want to or should have here in the US as examples of Them working and wanting to know if the right does anything similar. Are there countries they point to that are showing the policies they want to enact here? Oh, yeah.
- [37:41]
Katie Gatti Tassan
You know, I think Donald is really. He's. He's really tracking closely what Daddy Vladdy is doing. Not Daddy Vladdy, you know. You all know my answer to this question. It is the country that I'm not allowed to say, so I'm gonna punt to Henna. What do you think?
- [37:58]
Henna
I have a different end country I'll throw out there. It's Namibia. They are a leader in renewable energy and they're offering for university tuition as of next year. They're working towards universal healthcare. They do struggle with affordable housing. But, you know, I think it's important that we're looking at a broad scope of countries, not just Scandinavia and the Nordic, the Norden countries, Norden. And as far as countries that the right looks to, I mean, it's probably no surprise. There's been a far right movement surging around the world from India to Brazil to across Europe. So I'm not entirely sure that they're like sitting in a lair with one shared playbook, since all of these countries have vastly different circumstances. Circumstances well. But they all seem to be moving towards authoritarianism, xenophobia, a consolidation of power. I do think it's important to remember, as Tracy pointed out, that the US was founded by imperialists built by enslaved people, and we continue to be imperialists who exploit smaller countries to retain our dominance. So in some ways, I'm not really surprised that we're at this moment. But what I really loved about Natasha's work is looking at those worst moments and kind of saying, like, okay, if we're parallel pathing this and we're kind of in the same moment, there are ways that people can go for better policies or systems.
- [39:04]
Katie Gatti Tassan
Yeah. Natalie emailed us with a good point about government trust. That sort of came up in this episode, but I think it's relevant. I want to spend a little time talking about that, and I hope nobody takes me out of context here.
- [39:18]
Henna
She added, we need the cold open.
- [39:20]
Katie Gatti Tassan
Yeah. I'm like, don't clip me, guys. You'll see why that matters in, like, 20 seconds.
- [39:25]
Henna
Oh, good.
- [39:26]
Katie Gatti Tassan
She write, we need trust in order for any of these programs to work. I wonder if there have been examples in U.S. history or other nations of efforts to build trust, trust in the government, and if so, how it was accomplished in Nordic Theory of Everything. Thanks for the rec. The author mentions almost offhandedly that of course the Finnish Government is making choices that would support the well being of its citizens. In the past few years, policy decisions have only enforced to me that the good of the people is not the US Government's priority. And if we can't trust the government to ignore corporate lobbying to provide basic online services that would benefit everyone looking at Uterbo Tech, then how can anyone believe that new progressive policy won't just crumble when a higher bidder comes along? I promise I'm not trying to be cynical about one of the more positive episodes in recent months, but something about hearing about how other nations have solved basic issues that the quote, unquote, greatest country on the planet can't seem to outsmart has me discouraged and definitely envious. Okay, like I said, hear me out before you react. Have you ever heard the phrase, if you go far enough left, you get your guns back?
- [40:34]
Henna
I have. Okay, I'm a little scared.
- [40:39]
Katie Gatti Tassan
It is in reference to some statements that are attributed to Marx because basically revolutionary left writers believed that armed struggle against the state is inevitable. So if you, like, look at the political spectrum, it's like the far left, not, not everybody. I'm painting with a broad brush. But like, in theory, in political theory, like, the far left would like, thinks guns are good. The center left liberals thinks guns are bad. The center right conservatives thinks guns are good. But the far right conservatives think guns are bad. Because if you have a fascist dictator, you don't want your populace to have the means to rise up against you. So it kind of complicates the narrative of like, the right likes guns and the left left doesn't. Okay, so I bring that up to borrow that sentiment here, which I think actually describes how I have been feeling about the US Government lately, especially over the last six months. Not the armed uprising part yet, but the idea that liberals love the idea of a big government and conservatives allegedly hate it. I mean, obviously it's funny that Trump is like nationalizing steel companies and deploying the National Guard domestically, so. Lol. Small government. Love it. But I feel like I am in that. You go far enough left and you start to question how much power you want to give the state and how much control you want to give the state phase of my journey. And I think witnessing how easily, and this is going to be a beautiful segue for our final topic, our final episode with Representative Clark. How easily our government has been totally taken over and how little power the population has had to do anything about it, where they're doing like, incredibly unpopular, popular things. People are protest it doesn't fix anything. And so I am feeling, I will say a little more ambivalent about the idea of imbuing the American state with even more power than it already has, which I think is where this feeling of trust comes in and where I come down to, okay, this actually raises new questions for me. It's what does true democracy look like? What does it mean for power structures to be genuinely decentralized? Because again, not to go all dos capital, but Natalie is right. As long as we are relying on, like, the good faith intentions of individual people within a system where money is legally speech and the United States is essentially a corporation with a military, I am hesitant.
- [43:08]
Henna
Oh, the US Is essentially a corporation with a military. Bars. I see what you mean. But going down that line of thinking scares me because I feel like we're in a catch 22 and I can't really see the way out.
- [43:20]
Katie Gatti Tassan
Well, I think it's about keeping that consideration in mind of how do we provide public services, how do we expand public goods, but without consolidating and centralizing the power around who controls them. Like truer checks and balances. I think the last six months especially have really shown that the checks and balances are not there. And so within that current context, I would be wary of giving that state more power that is kind of actively proving right now that it is not democratically controlled. So I don't think it's that we don't do these things, but it's that as you move toward building them, keeping that in mind of, like, this is possible in our current system and we don't want this to be able to happen again.
- [44:08]
Henna
Yeah, I think, I think about how every day I get a notification that's like, trump moves to ban mail in voting. And I'm like, well, somebody will fight back. And then nothing happens and it goes through.
- [44:20]
Katie Gatti Tassan
So I'm like, well, the court's like, no, stop.
- [44:23]
Henna
Don't, baby, please. So I feel as helpless as our audience did. But we could talk about that episode in a little bit. I wanted to add a few notes that came up in this episode regarding the education system. So first, Sumo Dumozi. I'm going to hope that I said that Right. They wrote, FYI, charter schools are public schools. And that's related to a point in the episode where Natasha said, quote, I didn't realize that a lot of the GDP on education was going to private education where a lot of people are getting school vouchers to send their kids to private schools. That's public money. Some of it is also due to the fact that we're having a lot of charter schools instead of public schools. That comes back to how underperforming schools are treated in certain areas.
- [45:07]
Katie Gatti Tassan
So.
- [45:08]
Henna
So yes, charter schools are a type of public school, but I think what Natasha was getting at there is that charter schools don't really follow the same curriculum or have the same accountability practices as public schools do. Public schools have district wide guidelines. They have school boards, things like that. Whereas charter schools come with more autonomy and less accountability around performance schools. And I think that's the underperforming that she was referring to.
- [45:30]
Katie Gatti Tassan
Interesting. Yeah, thank you for that. I actually this is an area of policy in our economy that I have not spent much time reading about. I do know it's generally part of this wave of privatization and the divestment from public goods that I do find alarming writ large, but I didn't know many specifics about how the mechanisms there work.
- [45:53]
Henna
Yeah, I think Phil C. Actually he wanted us to do kind of an unpacking between Finland's private school abolition against the Thesis of the Night Nice White Parents podcast from the Times, which kind of piggybacks off of this privatization note that you had said. So for those unfamiliar Nice White parents essentially dives into the choices that white parents will make for their children and the education system. So, like taking them out of a public school that might be struggling and putting them in a private school and how it inadvertently contributes to the socioeconomic and racial segregations already present in public schools. But because Finnish schools all adhere to the same curriculum and standards, and private schools in Finland cannot actually turn a profit, there's actually less incentives for parents to look elsewhere to like, take their kid out of one school and put them in another. And because of that, the resources are all distributed more fairly. So I thought that was a really nice thing that Phil pointed out. And Phil, like, your brain is an encyclopedia, and I feel like it's always just bridging topics together that we wouldn't even think about. So thank you for that.
- [46:48]
Katie Gatti Tassan
Truly, PC is like my pen pal at this point. I have never liked someone who disagrees with me so frequently. So much.
- [46:57]
Henna
To close us out here, Katie, you actually recently wrote an essay on the US housing crisis and you quoted Jerusalem Demsas on how housing cannot be both a human right needed for survival and a constantly appreciating asset for building wealth. And that came to mind for me when Remy shared this clarifying note on Singapore's public housing system. They said, yes, it's Ownership, but with some nuance. Apartments are sold on a 99 year lease at the end of 99 years. In theory, the apartment is returned to the state with a value of zero. In practice, so far the government has at their discretion, taken back older apartment blocks before 99 years and provided new apartments in exchange. So if you were in Singapore and you're trying to build generational wealth, I don't think you would look to real estate the way that Americans do.
- [47:40]
Katie Gatti Tassan
Yeah, I was thinking about Singapore a lot when I was working on that essay because it is to my knowledge one of the only places that has taken a really unique and heavy handed approach to housing that appears to really be working for them. I'm not sure how to resolve that paradox. By the way, as I made clear in the piece, I think I do think we're really kicking the can down the road with continuing to try to poke and prod the private markets and be like, please do something. I almost didn't even write about housing because it is legitimately so complex. I know I'm not an expert on it, but there was just this broader underlying tension that feels like it goes unacknowledged in a lot of the popular conversations that are happening about housing right now and what we do about it and beyond that kind of this bizarre brushing aside of the clear income disparity problem that is fueling this. So like, I think the very last paragraph in the essay, the first sentence is like. And the fact that houses cost five times median wages is as much about wages as it is about houses. Like these problems are so intimately connected and we can't really talk about one without talking about the other. And I mean, absent intervention, wealth will flow upward. That's how capitalism works. And if housing is wealth, that is.
- [48:59]
Henna
Sorry Katie, haven't you heard of trickle down economics?
- [49:02]
Katie Gatti Tassan
Milton, where'd you come from? But if housing is wealth, that's also going to flow upward. There's like no way around that. On that note, Hannah, we do have one more housing related reader question. I don't want to open a huge can of worms, but it's basically about how weird it feels to choose something different for your life and how culturally embedded the pro homeowner culture is. I've really shortened and summarized this email. It was quite long, but I do think it's an interesting predicament. I want to quickly talk about it. They write. I loved your recent roundup and especially the threads on homeownership. In light of Henna's home purchase, I've Been thinking about the social pressures around buying versus renting. How they can feel a lot like beauty standards shaping what we think adulthood should look like. Here's my situation. I own a home I don't really love. It's pretty, but too far from everything. The neighborhood doesn't feel like me. I spend a lot of time caring for my aging parents. I would love to live closer to them. The idea I'm exploring is selling my house and building a small apartment above their garage. It would be simple, lower cost and would free up a lot of money for savings. But when I mention this, people freak out. Friends, colleagues, even my financial advisor react like it's outrageous. They say things like how will you feel at 50 living in your parents garage? I honestly don't care. To me it seems smart, practical, and I'm really excited about the simplicity of living smaller again. Yet the pushback has me wondering, am I missing something or is the real issue that my choice just doesn't fit the social script for what a woman in her 40s quote, should want? Am I missing something here or do I need a new council of experts? The pushback against this non normative idea has astonished and dismayed me. Is it financial bananas?
- [50:50]
Henna
I think that's actually one of the most beautiful emails I've read in a long time. And I say that because I think first they're excited. Like you could feel that they're excited.
- [51:00]
Katie Gatti Tassan
Oh, I picked up on that too. I was like, oh, they seem so pumped about this.
- [51:04]
Henna
And to me that's the most important thing. I against any advice Katie has given me, I decided to do the thing that didn't financially make sense. It probably still doesn't make sense, but I am excited and happy to be here. If that is the thing that brings you joy and you are this excited about it, who cares what anyone else thinks when you're 50 and you're living with your above your parents garage, but you also have enough money to retire early to go travel and do what you want because you have lower housing costs. The world is your oyster. Whereas these people that you know follow more like standard societal pressures might not have that flexibility because they have these other things that they have to spend all their money on. So I don't know about you, but hell yeah to whoever this person is.
- [51:47]
Katie Gatti Tassan
I know. All right, we're on the same page in the full email they kind of laid out more specifics about like home value and interest rates and how much it would cost to build the thing. And I mean I actually don't even think a lot of that really matters because the numbers made sense. But I had the same reaction of when I was reading the email. I was like, oh, they just sound excited about this. And it's interesting sometimes to read someone else's question asking you for advice where like your initial response is, well, it already, it sounds like you already know what you're going to do. Like, it sounds like you already know what you want to do. You have made up your mind that you're going to do this. And so I was really, really touched by their, their attraction to simplicity and like downsizing. I was like, look, I get it. I completely get it. So okay, we will discuss our final episode that all of you hated and your other open ended questions right after this break break this message is brought to you by Apple Card did you know Apple Card is designed to help you pay off your balance faster with smart payment suggestions? And because fees don't help you, Apple Card doesn't have any. So if your credit card is an Apple Card, maybe it should be subject to credit approval. Apple Card issued by Goldman Sachs Bank USA Salt Lake City Branch Variable APRs range from 18.24% to 28.49% based on creditworthiness rates as of July 1, 2025. Terms and more@applecard.com As a small business owner, you don't always have the luxury of clocking out early. When your workday is finally done, LinkedIn clocks in. LinkedIn makes finding and hiring the right people simple. You can post your job for free, share it with your network, and manage qualified candidates all in one place. In fact, LinkedIn jobs is what we use to supplement our Rich Gigs job board every single week in the weekly Money with Katie newsletter. Need some help getting started? LinkedIn's new feature can help you write job descriptions so you can attract qualified candidates. Once you're looking, listing is ready to go. You can post the job for free or pay to promote it. Post your job for free@LinkedIn.commwk that's LinkedIn.commwk to post your job for free. Terms and conditions apply. So our final episode from this batch was our conversation with Representative Kathryn Clark, clerk on the big beautiful Bill Axe repercussions. The general consensus from the audience kind of seemed to be split between like, hey, I'm glad we're talking openly about how this is going to impact people and I am frustrated because I feel really helpless hearing this, which was basically.
- [54:44]
Henna
What I said 12 minutes ago. So I will rapid fire some of the comments that we heard that kind of echoed these sentiments just so we can get a sense for what we're talking about before we dive into specifics. So so Robin F said, thank you for voicing our frustration and getting at least someone in government to admit to reality. Which I think speaks to the fact that we're all very nihilistic about all of this, But Gaslit Nation K Clark198 who said please keep up the good fight. I'm feeling so pessimistic about our ability to get out of this mess without hitting rock bottom first. Michael S Said, Great episode. You should do Bernie or AOC if possible. Which hey, if they ever call us, let me know. Clara L Wrote, it's always so important to hear how legislation which most people won't read, even some reps voted for it without reading it. How it has real effects with day to day examples. Thank you. K Jen said, this was so illuminating. Thank you. I'll be following your podcast. And then Mr. C28 said, Another great episode. Katie upset with what I've been seeing from our elected officials lately. Learned quite a bit from this episode and pissed after hearing about the work requirements and cuts to our social network.
- [55:45]
Katie Gatti Tassan
Yeah our like our social safety net. That's like three pieces of yarn tied together. They're like we don't need this one. This one can go actually. Yeah. So regarding that work requirement piece, Spike said, I honestly hate the bullshit work requirements for any sort of assistance. The thing is the people who do need that help live in areas where jobs are stagnant or non existent. On top of that, we don't have public infrastructure to enable people to work outside of their communities. In many rural communities like my own, you are SOL if you don't have a car, but in order to get a car you need money. It's a cycle to keep those in poverty even more stuck while also punishing disabled and elderly people. Yup. I have talked about this before in Rich Girl Roundup how my dad does volunteer work in rural communities and just he has talked to me about the reliance on the vehicle and how it ends up costing a staggering amount of people's monthly incomes because they often don't have good credit or credit at all. So they can't get approved for loans, their income is very unstable and so they high risk of default. They have no other choice is the point. Like if they want to be able to navigate where they live that is their only option. Then Hannah M added this public transit is one of my focus interests and Passions. I see the lack of funding for transit especially prevalent recently as a further extension of a system that is designed to keep people in poverty and worsen economic inequity.
- [57:11]
Henna
Did you see that post recently that showed that there's a flight every six minutes between Los Angeles and San Francisco for 18 hours a day? And they're like, this is the case for public transit. Think about that. But, you know, we've just got money for ice, so common goal.
- [57:29]
Katie Gatti Tassan
I am really resisting the urge to say something just like horrifyingly misogynistic about Kristi Noem right now. Are you allowed? Okay. Question for the feminist PhDs in the audience. Can we be mean to women who put humans in cages?
- [57:43]
Henna
Yes.
- [57:43]
Katie Gatti Tassan
Is that okay? Cool.
- [57:45]
Henna
Kosher.
- [57:45]
Katie Gatti Tassan
All right. On a brighter note, I loved this comment from Marie D. It nicely illustrates, I think, at least at the local level, what you can do to meet this moment. She says the only good thing this recent president has done is activate me politically. I updated all my voter registrations. I put on my calendar, my local school board meetings. I've joined the pta. I have my city's meetings on my calendar. I signed up for our city's newsletter. I signed up for the five calls website, and I have joined two organizations to volunteer with. I am still a little lost on what else to do from here, but I know it's a start. Okay. To me, this is like, best case scenario. Right. And I agree, I think frequently about what Chelsea Fagan said in our January roundtable with Berna Anat, that, yes, Trump is a monster, but there are a lot of people in this country and around the world who did not have it good under Biden and probably would not have had it good under Kamala. And no matter what, the status quo really did need to change. This is not my preferred method of changing it, but on my sunnier days, I think I can make an argument that a continuation of Biden style policy also would have just continued to delay the inevitable. And I think we are all.
- [58:58]
Henna
Do you think we're at the inevitable right now?
- [59:01]
Katie Gatti Tassan
I think we're being forced to confront it. Yeah. I think we are all feeling frustration with our elected officials writ large right now. Understandably so. So now we are going to have a section called airing your grievances.
- [59:15]
Henna
Sorry, I'm laughing because I'm thinking of, like, when you watch a show and they have a, like a game show and they have a section with its own, like, jivey music and it's. And it's going to be us yeah.
- [59:24]
Katie Gatti Tassan
Nick, hit the soundboard on airing your grievances theme music.
- [59:27]
Henna
Okay.
- [59:28]
Katie Gatti Tassan
Hopefully it'll have some cathartic value for some of you listening. Some of this is going to be a little brutal, which I ordinarily would not read on air for a non politician guest, but I think politicians are fairly subjected to a higher degree of scrutiny and I think that there is some value in recognizing that nobody is coming to save us. So so here we go. Brittany S said, if a bill said income earners below $500,000 had to pour spiders in their eyes for three hours a day, we should not have to make it known that we don't want the spiders in our eyes. Our reps should just be motivated enough to block that bill. That is how I feel whenever I hear our elected officials say that we need to make our voice heard about obviously harmful proposals like this bill which lol. The spiders in my I think that is actually a Provision on page 900 of the okay, someone else added. Clark is my rep and the advice on calling your reps is especially laughable since I call her office constantly and I yet fail to see much leadership in fighting back against the speed run to the end of our democracy. And then finally Claire emailed in. She said this to me. This episode showcased the astounding lack of accountability and action that our elected officials have been pushing since the inauguration. It felt like a lot of tired talking points of blame them, not us mentality and demonstrated fully why younger left leaning folks are so fed up with the way things are being handled. But is it really Trump and the Republicans that have our congresspeople on the verge of a leave the gun, take the cannoli scenario? Or is it the corporate PACs and super PACs that fund everyone's campaigns? Please tell us more about how voting makes a difference when y' all's collective resistance to the administration amounts to little more than wine. And this conversation did not make me feel any better. It just left me looking at literally any elected official going do something.
- [61:20]
Henna
It was actually that meme with the stick figure guy poking a rock that was like do something that they sent in so y' all aren't wrong. Hopefully the outro of this segment musically will close us out there. There was also another thread of criticism that we've heard before and I want to bring it up because I think it's important to clarify. So Tony B wrote, well that was uplifting. Would it be possible to get someone from the quote, other side on your show? And then Doughboy wrote this episode sounds a lot like bashing the current party in office. This is the same stuff that all parties have done in office year in and year out, both Democratic and Republican. I was disappointed there wasn't more discussion on the actual implications of the bill's parts. And so to be fair to you Katie, we had a last minute, very limited open window with right, Rep. Clark. So I think that we covered as much ground as we could have. But as for the this is the same stuff all parties have done. I think you can make the argument that one party is worse than the other, etc. Whatever. But even the founding fathers warned about this hyper partisanship within a two party system 250 years ago and well, I don't know. Bulldozing your way through is kind of how things seem to get done nowadays. And maybe that's exactly why. Wait for it. Wait for it, Katie. A better world is possible. It's if we work towards it.
- [62:38]
Katie Gatti Tassan
On the like both sidesism thing, let me like make it abundantly clear to everybody listening that I dislike both major parties. I don't say that to be like, ooh, cop out, edgy, contrarian, Internet grill doesn't like anyone. Not that. But to me they are more similar than they are different. I think the Democrats were proposing a more intense border bill than the Republicans were last year. It was like we had just like given up on reforming the immigration system entirely. It was just like who is going to be crueler at the border and vote for me? So is it fair to say they are less flagrantly evil on some social issues? Yes, but the bar is in hell at this point. For example, last election cycle I think trans people got thrown under the bus the freaking second that it became obvious that the country had moved. Right. And so I think just, just at a high level, I don't find the positions even on the center left to be principled on a lot of these things. So all that said though, I don't feel the need to like both sides my podcast, I think my perspectives are reasonable and well founded. Representative Clark was the politician who was willing to talk to me about this. But you're going to be waiting a long time for the JD Vance interview to drop if that's what you want. And I will say a final note. In my interview I did point out that the studies that said immigrant crime rates are lower than those of native born citizens and how those studies had been scrubbed from government websites. And Sam L. Came through and said I work in immigration and civil rights law and I first came across this report in November, right after it was published. As you note, it was deleted by the Trump administration, but I found a copy in a public web archive. I saved the attached PDF of the original NIJ report, plus the underlying research. Let me know if you have any questions and keep fighting the good fight. So, in the PDFs that Sam sent us, the study was funded by the National Institute of Justice and it studied Texas criminal records from 2012 to 2018. And Hannah, why don't you come on down and tell the people what they've won. Tell them what they found.
- [64:53]
Henna
In news that will surprise no one. The study found that, quote, undocumented immigrants have substantially lower crime rates than native bor citizens and legal immigrants across a range of felony cases relative to undocumented immigrants, US Born citizens over two times more likely to be arrested for violent crimes, two and a half times more likely to be arrested for drug crimes, and over four times as likely to be arrested for property crimes, end quote. So, I mean, we could sit here all day and pick apart the study or at sample size or if we believe it, but to me, this is just another example of Trump's distorted revisionist history. So I'm really glad that Sam could help us find the original data points. So thank you for that, Sam.
- [65:31]
Katie Gatti Tassan
Sometimes I see videos that are like, I don't care if people are undocumented. I don't care. And I get the point of like, oh, it doesn't bother me if people come to this country, but I do think we should care about people not being able to get documentation because being undocumented is a major problem for why migrant workers are so easily exploited and there's like no punishment. But I do think that it is a huge driver of exploitation. And so it just kills me that we're funneling all this money into this program to just like violently crack down instead of just reforming the freaking immigration system and making it easier to get documentation. So anyway, to be honest, I do think the fact that Democratic politicians, and this is free consulting for the Democratic Party, take it or leave it. I think the fact that they're even discussing immigration in the context of crime is a loss. You are accepting the right wing framing that these two things go together. The framing matters. The framing matters. And if all conversations that we're having were debating them on the terms of, well, you know, but we gotta get the criminals out. It's like, okay, good, they're all on 4chan waiting for you, like, go get them. We know that the biggest threat of domestic Terrorism are white supremacists. Here is a little diabolicalized crossover moment for you. Hannah. Will you please read this reporting from the New York Times in the summer 2020.
- [66:57]
Henna
Sure, okay. It said. As the racial justice demonstrations intensified, Justice Department officials began shifting federal prosecutors and FBI agents from investigations into violent white supremacists to focus on cases involving rioters or anarchists, including those who might be associated with the antifa movement. One Justice Department prosecutor was sufficiently concerned about an excessive focus on antifa that the official went to the department's independent inspector general, Michael E. Horowitz, telling his office that politics might have played a of part.
- [67:25]
Katie Gatti Tassan
Part.
- [67:26]
Henna
Federal prosecutors and agents felt pressured to uncover a left wing extremist criminal conspiracy that never materialized, according to two people who worked on Justice Department efforts to counter domestic terrorism. They were told to do so even though the FBI in particular had increasingly expressed concern about the threat from white supremacists, long the top domestic terrorism threat. And well organized far right extremist groups that had allied themselves with the president. White House and Justice Department officials stifled internal efforts to publicly promote concerns about the far right threat with aids to Mr. Trump, seeking to suppress the phrase domestic domestic terrorism and internal discussions, according to a formal official at the Department of Homeland Security.
- [68:03]
Katie Gatti Tassan
Yeah, sir, Sir, I think that there's nuance in the conversation when we talk about like, even if you read the Cato Institute thing, it's like it's bad for the economy to deport all these people because they form the underpaid low wage workforce. Those people deserve better. And so it's interesting when you know the economic angle of the immigration question or like, will things get cheaper? Will more jobs appear for native born people? It's like, anyway, remember when the show was about Roth iras?
- [68:35]
Henna
Finally, I will close this part of the episode with a V. Nice comment from Phil for you, Katie. And he said, katie, I don't know if there was an invisible barrier to cross moving from talk show host to journalists, but in your truth to power approach here, I'm pretty sure you crossed it. Hell of a job.
- [68:49]
Katie Gatti Tassan
Oh, thanks. I wonder what he's even referring to. Maybe when I was like, so, yeah, I don't feel like the elected officials are doing anything. What say you? He is never afraid to hold my feet to the fire though. So I'm gonna take it. I'm gonna take the compliment and run.
- [69:01]
Henna
Take the win where you can get it.
- [69:02]
Katie Gatti Tassan
Okay, so let's address some episode agnostic questions that came in. We'll start with a fun One. This one came from Renee. Hi, Hannah and Katie, Would you mind doing an updated deep dive into your favorite travel cards? I'm sure you've seen the Chase Reserve is getting updated with these new benefits. They're upping the annual fee to match that of the Platinum, the Amex Platinum, that is. It'd be great to hear whether your recommendations have changed. Changed based on these recent updates.
- [69:27]
Henna
Renee, A girl after my own heart. So if you are newer here and past ritual roundups, I think maybe it was like two years ago now. Katie, we had shared our favorite premium cards and Travel Rewards Strategy and Fun Fact are actually our new website that launches, I think in like 10 days. By the time this episode comes out, we'll actually have a travel section for this. But at the time, Katie was very Pro MX Platinum. I was very Pro Chase Reserve, and I have both good and bad news.
- [69:52]
Katie Gatti Tassan
Oh, have the tables turned? Tell me more.
- [69:54]
Henna
The turntables a little, I think so. I talk about both cards pretty frequently on my sub stack, which we'll link in the show notes if you want to dive deeper. But I still have both the Chase Reserve and my husband has the MX Platinum. But we've actually definitely used more of the MX offers in recent years. However, given the new Chase travel features that they've been rolling out to kind of go with the higher annual fee, I'm interested to see how we use them because I still think that Chase points are exceptionally valuable. But the last thing I'll say here is that Chase has been offering more generous signup bonuses again to kind of offset that higher fee. And I tried to see what Amex would offer me. So, like, for example, if I were to downgrade to a preferred, Giovanni would get the Chase Reserve in that place and then I would get the Platinum. It was only 80,000 points, which didn't really impress me. I saw offers for like 105,000, 115,000 points. So I think it also depends on what signup bonus you're seeing to figure out if that's worth it for you and where you're going to be redeeming the points and kind of offsetting how much you're paying for the card in that sense. But what about you, Katie? I. I think you wrote recently about the Centurion Lounge and feeling kind of less than enthused about the MX nowadays. Yeah.
- [71:03]
Katie Gatti Tassan
For one thing, on the Chase note, before I dive into my strategy, did you see that they got rid of the 48 month churn rule?
- [71:13]
Henna
I did, yeah.
- [71:14]
Katie Gatti Tassan
Yeah. It used to be that like you could get a new Sapphire product every four years and get a new sign up bonus. They have now done away with that. So now their rules match the Platinum or they now match Amex sign up bonus rules where it's like once in a lifetime. So it does kind of raise the stakes a little bit of like when you get the card, the signup bonus that you get is the one you're going to get. So if you take it when it's low, you don't really have the chance to re up at a later time.
- [71:39]
Henna
Yeah, that's a good point.
- [71:40]
Katie Gatti Tassan
I still feel like I get enough value from my gold card especially for food because it's 4x points on food and I spend a lot of money on food food. I use Platinum for most everything else still. And Sapphire preferred kind of intermittently to keep the Chase portal and rack up some points there. I also have a Chase Inc. Business preferred card. So I guess theoretically, I mean the, the Sapphire preferred annual fee is not high enough that I would be like going to cancel this. But I do have a Chase business card. I like Chase. Like I bank with Chase as well. So I feel like there is a little bit of ongoing loyalty there. But I did recently lose my sunglasses actually at the Rich Girl Nation launch party. It is the third time that I've lost this pair of sunglasses and so I always keep the receipt when I repurchase them. And again I submitted the receipt to Amex and just selected like on the, the purchase protection, you know, reason for submitting lost or stolen as a category. And within two days they had credited my account for the cost of the sunglasses. So that peace of mind to me will pro. I will probably always have platinum for that reason because it just means that if you buy something and something happens to it like they're just, they're really good about that. There was also this other time I got ripped off where long story. Anyway, I thought something that was going to be like $100 was closer to $500 and it was kind of a shifty situation where then I. I don't know. So because of that, that and I was in the moment scared to like push back on the person. They allowed me to do a basically a chargeback on that because I could prove like no, that was not what I was told this was going to cost. Like I actually was told this and without asking any questions they basically just reimburse you. So I don't use the chargeback feature. I think that was the only time I've ever used it, but it was like such an egregious situation. They've been so lenient about when and how they let you use those benefits. Or like, my experience has been so good that I think I'll probably continue to use that them.
- [73:37]
Henna
Yeah, I think it's funny because I had that same kind of experience, but with Chase, which I think is probably the loyalty that I had for them is I. We dinged my car a little bit to rental on a vacation and it was going to be like $1,200 to Hertz or something. And I just submitted the paperwork and they covered all of it. I never saw a bill, so.
- [73:55]
Katie Gatti Tassan
Dude, that's amazing.
- [73:56]
Henna
I do think Chase is a little bit more complicated with trying to get those claims through. I mean, probably because it's a $1,200 claim I was trying to do. But I think the loyalty of either of our experiences says a lot about which cards we've preferred over the years. But in any case, I don't think you could go wrong with either one of them. But I definitely should leverage that, like, lost purchase thing more. I've never done or used the chargeback feature either, so it's a good reminder. Next up, we have a philosophical follow up from Tanya after the last rich girl roundup. So you and I were kind of going back and forth and we discovered that your need to externally seem smart. So she had said. She said, said, quote, such an interesting personal revelation on affirmation coming from intellectualism or the performance of it. The juxtaposition of that versus the affirmation that comes from being perceived as, quote, beautiful via participation in the hot girl hamster wheel is intriguing, especially when considering how much of that performance is for public consumption. Is one any more or less acceptable than the other? Particularly considering that there's a financial cost associated with intellectualism as well.
- [74:56]
Katie Gatti Tassan
Okay, why are you laughing? Why are you laughing?
- [75:00]
Henna
Because it clocked you. This makes me feel uncomfortable.
- [75:10]
Katie Gatti Tassan
Yeah, I mean, there's probably something in there about some fucked up system that I have internalized or there's some woke explanation for this. Okay, I realize that. I recognize that. But I also think some of it is just a defense mechanism from years of being told by strangers on the Internet that Finland is not in Scandinavia. So you know what? I don't know. What I'm trying to say is it's your fault. It's all your fault. Next question.
- [75:37]
Henna
Deflect. Fine, I will move on. But we have Lauren P. Who wanted to know. It's another toughie I have a genuine question after following you for a long time. How do you stay sane? Delving deep into Top.
- [75:50]
Katie Gatti Tassan
Flattered.
- [75:53]
Henna
Okay. How do you stay sane? Delving deep into topics that, for me, cause nausea and existential crises from even the most cursory glands? I've been in such a state of avoidance. I'm truly in awe of people who are still able to look reality dead in the eyes. Do you feel optimistic that will turn things around, or is understanding the chaos a way of coping with it? Katie, I think you had said in your interview with Tressy that you have to deconstruct things in order to understand them. And so I think maybe that's partially what's happening here.
- [76:18]
Katie Gatti Tassan
But.
- [76:19]
Henna
But I do think you and I are in a bit of a different position than most people because it is our jobs to stay up to date, to ask questions, to bring this to the show. And I also think it's a privilege to just kind of avoid it when so many others don't have the luxury of just, like, continuing on with their lives. But what's happening right now does keep me up at night, and I genuinely have a much higher base level of anxiety than I've ever had before. I don't know if you feel the same.
- [76:44]
Katie Gatti Tassan
I do think that. That the way that I metabolize things is by, like, trying to get really close to them and break them down and feel like I can tease them apart and make sense of them. So I think some of that is just personal. I think that's what drew me to this job. Like, I enjoy learning about things even when they're messed up. I like making sense of systems and seeing how they're connected and tying what's happening now to stuff that's happened in history. And, like, I. I do get a lot of fulfillment out of that process. We did do an episode recently on Diabolical Lies, and it kind of reminds me of this question. It came out last Sunday, and it's about celebrities who have not spoken up about the things that are happening in the world. In particular, Taylor Swift. And something that we came to at the end of the episode. This is a paid episode, so y' all are getting a free sneak peek. Here was about how people react to experiencing or witnessing injustice in the world world. And, like, how there is a range of human ability or just, like, your nature to whether you, like, compartmentalize it really easily and you can kind of just move on from it to, like, how much it fucks with your head. And it just, to me it just feels like a scab I can't stop picking at. I can't look away. I do feel tremendously fortunate to be in the situation that I am in and relatively an intense guilt that everyone someone's life is not as easy as my life is. And so there feels almost like a spiritual atonement or spiritual obligation to try to use that good fortune for something that is even a little bit positive. And I think talking about these things online, the amount that I'm like, actually spending offline reading about them. I looked at my laptop screen time the other day, Hannah, you know, I don't, like, tell you how much time you've spent on your laptop. I spend an average of 60 hours per week looking at my laptop, and I was like, that is bad. That is not good. But sometimes I wish I could, like, disappear for six months and just read a hundred books and then reemerge more enlightened. And I guess that comes back to the intelligence thing. Earlier, did you see the meme that.
- [78:51]
Henna
Was like, your honor, I need three weeks of PTO to catch up on all my books? Yeah, that is me.
- [78:57]
Katie Gatti Tassan
Exactly. So I don't know that that directly answers the question, but that's what comes up for me. Me with that opening.
- [79:05]
Henna
When you say there are people who are good at compartmentalizing and then how much it kind of messes with your head. Which party are you in?
- [79:11]
Katie Gatti Tassan
Oh, I mean, like, it messes with my head. Like, I. I am not good at compartmentalizing it.
- [79:16]
Henna
I think I'm really, really good at compartmentalizing. But I think the thing that's really hard here is that it seeps into every part of your life. Whatever the headline is, it is going to affect me in some way. And so it's really hard to just like, unplug and be like, like, whatever. This is too hard to pay attention to. Oh, California House Democrats pushed through redistricting plan. Me talking about how great I am at compartmentalizing. Pulling up immediately the headline. Here we are. We have two questions that are in the same vein, so I'm going to pair them together for you, Katie. The first one is from Holly H. They said, I have a genuine connection and response to this week's In Katie's Words article. If fire is so dependent. So they're referring to financial independence. Retire early. If fire is so dependent on making passive income off of the stock market, is that not reliant on a capitalist structure? Are those publicly traded companies not increasing their profits and therefore the shareholders by relying on a Labor force. This seems contradictory to me, but perhaps I'm missing something along the connection. I'm also reminded of a podcast you did discussing Bernie Sanders and his making money off of the stock market market. It's a system we currently have. So what does the future non capitalistic fire system, country or societal structure look like?
- [80:29]
Katie Gatti Tassan
I love, first of all. Well, I'm going to answer that too. I know you have another one to read, but I, I love that the like nut in the center of this question is like, what is comes after capitalism? How do we replace it?
- [80:42]
Henna
I love that they gave you the benefit of the doubt, which was you're also doing this. But like, maybe I missed something and you're doing it better than everyone else. And then Brittany O emailed in to say I love read your weekly emails, your perspectives on finance and capitalism. Vibe hard with me. I was a financial advisor for six years and ultimately left for many reasons. Which leads to my question. As someone who seems to be disenchanted, Katie, with our current capitalist society, how do you grapple with your interest and ultimately your career in finance? I can absolutely understand having an appreciation for the mechanics of the economy and finance without endorsing or even disavowing capitalism. Anything you have to offer would help me greatly as I'm driving myself crazy. I want to get back into finance, even learn more and go deeper thinking about my mba. But it makes me sick to feel like another cog in the crushing machine of late stage rampant capitalism.
- [81:29]
Katie Gatti Tassan
Yeah. So the essay in question was called Panic at the Airport Lounge. We'll put it in the show notes. And it was basically my attempt at like linking the experience of being in an AMEX lounge to a class analysis. So to answer the first question, yes, 100%, you're right, you're not missing anything. It is entirely reliant fire that is on a capitalist structure of separating owners and laborers into two classes. So you're not missing anything there. My point was not that reaching financial independence and then living off your assets was some socialist utopia. It was that the philosophy which underpins fire, that you are not free if someone else controls your time and labor, that that is deeply Marxist in my opinion. That understanding of power and that understanding of labor's relationship with things like coercion and time and how much autonomy you have over your life. Now, clearly the fire solution is okay. Yeah. So that's how that is. That's what work means. And you can become an owner too. Like you can go from being a laborer to an owner by buying this little thing called the S&P 500. And so your understanding here is correct. I don't think that answer is satisfactory as far as like, and what does it look like if we get rid of that? I don't know yet. I don't know how to resolve that cognitive dissonance. But it was just something that I noticed about the similarities in the rhetoric between the fire movement and like deep cut political theory. That's aside on the note of like, how do you grapple with your interest in these things into career and finance? I guess I don't really consider myself having a career in finance. I think of myself as a writer who writes about finance, but I don't know that we get super far by purity testing a lot of those things. Like, I do think that there is a balance to be struck of in different ways that you can use that knowledge in a career in finance. Like, I think there is a wide difference between I'm going to go be a CFP who works on a fee only basis to help people figure out how they can send their kids to college and, and I'm going to go work for a private equity firm that buys nursing homes. There is a wide range of careers in finance and so I think if it is something you're interested in, there might be a way. And what my entire career has like kind of culminated to and what I'm still really feeling like I'm in a liminal space with and what I'm trying to figure out is how do I pair this trait or this skill that feels like I'm good at this practical thing that has value with this evolving perspective and like theory about how the world works. So I don't think it necessarily has to be this binary of like, oh, but I'm an evil capitalist if I study finance, right?
- [84:24]
Henna
Like finance bad, finance bad, right. On a related note, I guess I'll say and on the Sydney Sweeney of it all. Oh goody, Blake M posed this question. They said, great newsletter. The segment about Sydney Sweeney's dedication to royalties via advertising made me think about ads I've been seeing lately. I've seen ads lately, especially from phone companies, Mint Mobile, Verizon, et cetera, that are advertising their services by identifying how affordable it is compared to everything else in today's economy. They are literally leveraging the chaos of the economy and the inability for people to live properly, to sell their product. It just makes it feel so dystopian, like 10Ks that have the sections identifying potential impacts to profit and Revenue. It feels like these companies likely have a healthy and affordable economy. As an item, as long as companies can take advantage of economic downturns like this, do they care to be a part of a solution to reverse it? I'd like to think that Ryan Reynolds is sincere when he offers that they actively work to shrink the price for Mint Mobile because they care about people. But when I hear it through an advertisement for his product, all sincerity is a facade.
- [85:22]
Katie Gatti Tassan
Yeah, well, I mean Ryan, he has a lot of lawsuits to pay for right now, so I don't know how much they're concerned about that. Listen, I feel torn because I love my $30 per month mint Mobile plant. I'm like loyal customer, do not want to mess with a major professional fighter. But I do like pointing out this contradiction of like handing the solutions for affordability to the people who profit from things being unaffordable. I do think that that is an interesting call out for sure.
- [85:49]
Henna
And I think it's kind of to go off of what Britney was saying. Like I think there's a difference in the work you choose if it chooses to go down this route of like exploiting other higher cost goods versus like trying to make, I don't know, more public goods available to people.
- [86:07]
Katie Gatti Tassan
Like you're going into like Labubu black market sales, the Labubu derivatives market.
- [86:13]
Henna
When I was in Colombia, I saw both the Sydney Sweeney ad on a bus stop in English where Devani and I just looked at each other and said, not here too. And then we were in this like communitrese market and there were all these people screaming labubu, Labubu. And I was like, I'm good, thank you. Thanks. We have two book emails and one more that we're going to save for next time from Sean and his wife. So we did clock it. I am tracking it. But in the meantime, here's a question that I actually answered via email but I think is worth sharing again because it's kind of a common question that we get. So reading Rich Girl Nation and in the chapter don't outlive your assets, you mentioned the approximate tax savings of $5,640 you can achieve through maxing out your 401k. My question is, where do you find this money? Where is it contributed to the Roth IRA from? I feel like the answer is obvious and I'm just missing it somehow. Please help. Wrote back. Probably an insufficiently helpful answer though they did say that it was clear, but I think Katie will do a better job now.
- [87:10]
Katie Gatti Tassan
I'M like, all right, you want to give this, you want to take a swing at this one? No, I love this question. So if your W4 withholding form is correct, the reality is that this is money that's either going to show up just on your monthly paychecks. So, for example, you might set your 401k contribution to be at or around that 1900 ish per month. That will max it out for the year. But rather than your paychecks being lowered by that $1,900, they're only going to go down by about $1,400, give or take. So another way to think about it, I guess, is that the extra $500 is landing in your 401k. If your W4 is not correct, it may come back to you in the form of a tax refund, and it has April. But the practical effect of this, if you sit down and you send your income through an income tax calculator and then you compare the before and after of putting $23,500 into the 401k, is that you will have net more investable income making its way to you in some capacity, whether on your paychecks or in the form of a tax refund. 23,500 of it is going to be going into that 401k before you even see it. So it should feel like a raise if you're currently contributing the maximum to a Roth 401K, or if you're just taking the money home and then putting that amount of money in a savings account or a brokerage account. But that is sort of how I think about it. Another way to put it, or the reverse, is that you can look at that income tax calculator before and after and see that your overall tax liability is, is just lowered by that amount. So your overall income stays the same, the tax liability comes down, and then more of that income will make its way to you.
- [88:59]
Henna
I do want to just add the clarification that it is by tax bracket. So it's not like if you're in, you know, a specific 12%, 20% tax bracket, that you're going to take home the same amount as someone in a 37% tax bracket, right?
- [89:11]
Katie Gatti Tassan
It is almost not exactly 23,500 times your marginal tax rate because. Because it depends on how much you earn. And whether you're splitting that top 23,000 is like splitting two different brackets. But assuming your entire 23,500 contribution is in your highest marginal tax bracket. The quick math is to just multiply it by that percentage and that will tell you roughly what you're going to save in taxes.
- [89:39]
Henna
Yeah, and your girl's been doing it for three and a half years despite her immense fear of not having enough money. So if you want to listen to.
- [89:46]
Katie Gatti Tassan
That episode, good little throwback Katie Pressures Hannah.
- [89:50]
Henna
I think it's called Katie Forces Hannah to Max out her Retirement. Okay, so finally I want to close with a story from Rachel. So as you all know, last Rich Rona when we've alluded to this before, we talked about my decision to buy a house and how it was kind of less of a financial decision for me. So Rachel emailed in with a money story about how having kids and dealing with her health radically changed her perspective on money and spending more at home. So it's a little long, but I think it's illustrative on spending on the things that make sense to you. So so she wrote I spent my 20s being frugal. I contributed to my 401k. Even when I was making 30k, I got married and in my late 20s I got a tech job. Money was fine, good, but not anything to write home about. My spouse and I bought a reasonable house for our current income. This was pre2020. After a few years at the company, I accepted a new job on a different team for a higher annual salary, more stock, etc due to a mix of things that can mostly be attributed to being in the right place at the right time, my salary increased a hundred thousand dollars within a few years. I pushed for for promotion. I ended up getting. My company was preparing to unveil gender pay equity and thus gave large pay increases to women like myself that weren't yet at equity with their male counterparts. And I had a great boss who advocated for all of this. Suddenly our household income had tripled and annual household income was above what we paid for our house. Our life didn't change much. We stayed the course, maxing out our 401K, HSA, BackDoor, Roth IRA and our brokerage account. We took overseas trips, had fun, spent time with our loved ones. Nothing extra. We also downsized to one car during this time to save money. My spouse's 20 year old car was too expensive to continue repairing. We just didn't need another car. Things looked similar to when we made one third of what we were currently making. This wasn't a bad thing. We didn't feel deprived by any means. At the same time, in my early 30s, I was unexpectedly diagnosed with cancer during a routine visit to My doctor, stage one. Fortunately caught early through routine medical care, I went through treatment and went into remission. It was really hard and made me realize that despite a healthy lifestyle, I exercise daily, eat healthy, I don't drink or smoke. Cancer doesn't discriminate. Tomorrow was not promised. My spouse and I had long talked about starting a family. Once my cancer surgeries were over, we decided now was the time. We were fortunate to get pregnant right away. Friends jokingly asked me when we'd move out of our quote, starter home despite losing my office. We both work from home, our guest room and living on a busy road not fit for a young child to run around. I was convinced we weren't moving, not with these interest rates. We repaired my child's nursery, brought our baby home to our house. Well, five months into my baby's life, something in me changed. A decade plus of frugality made me glitch and a flip switch switched. I was tired of optimizing my life for financial benefit. Why would we stay in this house without a room for me to work with, no guest room for family to come visit us and our child on a busy street? I felt like Scottish Scheffler saying what's the point of winning? For me it was what's the point of shoveling thousands into a brokerage account every month? Was I really going to retire that early? What is this money for exactly? I'm not sure if I'll feel comfortable retiring early given my medical history and high cost of healthcare in America. I have a flexible, remote job that affords me a great life even if the work isn't my absolute favorite favorite. I started looking around for a new house. After some time searching, we found a beautiful house on a tree lined street with multiple screened porches. A greenway through our backyard leading to a walking path around a lake, a guest suite for our friends and family to visit despite five offers in 24 hours, a significant offer over list price and dealing with our house not appraising. We got it and we love it so much. We talked to our fee only financial advisor shortly before purchasing and he looked at us matter of factly. Can I make an observation? You both seem guilty about that house. Don't be. You've been incredibly responsible with your money. You can afford it. Buy it and don't feel guilty. Now in the house, we play at the lake with our toddler, walk our dog around the greenways, Our neighbors walk on the greenway and pop over for happy hour while we're out on the porch or in our backyard. It's an incredible design that allows us to better get to know our neighbors versus being isolated in a typical backyard. We've hosted big parties, holidays and many loved ones for overnight stays and it's a dream come true. It isn't the perfect updated house. We'd need $200,000 more for that. But it has many incredible features and we're making it our own. In a not notoriously walkable area. We can walk to grocery stores, restaurants, coffee shops, workout studios, etc. We feel like we won the jackpot. I know we're incredibly fortunate to afford this home while also maxing out our 401k, HSA backed or Roth IRA, putting money into our brokerage every month and contributing what we anticipate our child will need for College for their 529. We also live in an area with family in the same city as our company's offices. If return to office were to ever occur with many other similar companies nearby, if we were living laid off, we expect to be in this home until we downsize one day. I'm always advocating for responsible home ownership. Make sure you can afford it. Are planning to stay in the area the longer the better. But sometimes I found it's okay to just care a little less about optimizing financially and more about living your best life. Your episode on Money Dysmorphia made me realize more people than I realized likely could be in a similar situation. The numbers work on paper, but struggling with something like this in their mindset and this was me for a long time. I haven't stopped caring about finances by any means, but I've accepted if I'm overpaying for somewhere that makes me and my family so happy. That's okay. Okay. Three years past my initial cancer diagnosis, I'm facing another surgery next week actually to find out if I have cancer. Yes, again, a different kind. And amongst my feelings of oh, this again, are you kidding me? I'm also thinking how grateful I am that I chose the bigger life for us, the lovely community for whatever amount of time I have here on earth with my family.
- [95:01]
Katie Gatti Tassan
Wow.
- [95:02]
Henna
Wow.
- [95:03]
Katie Gatti Tassan
That is beautiful.
- [95:04]
Henna
Yeah.
- [95:05]
Katie Gatti Tassan
Thank you. We are really rooting for you. You and I think that is the perfect note to end on. So that is all for this edition of Rich Girl Roundup. Thank you as always for listening, for sharing your thoughts. Penna spends many hours going through them all after every episode so that we can pull this together for you and to give you a heads up on our schedule in the upcoming weeks. We are sitting down with a CFP next week to answer some money questions, questions that we have not talked about on this show before. So even if you are someone that has listened to every. Every episode, we're really going to be talking about some things that I don't think we've actually covered. And then we're going to be diving into about two weeks worth of episodes that dig into how personal finance is broken and what we can do to fix it. And then a conversation with a top Harvard researcher about how black women and white women experience the economy differently. So that's going to be fun, I think.
- [95:59]
Henna
The famously light and happy Money with.
- [96:02]
Katie Gatti Tassan
Katie show the famously light and happy money topic of interesting intersectionality. Okay. Our show is a production of Morning Brew. It's produced by hennevalez and me, Katie Gatti Tassan, with audio engineering and sound design from Nick Torres. Devin Emery is president of Morning Brew content. And additional fact checking for this show comes from Scott Wilson. Hello, and welcome back to another episode episode of Money with Katie podcast. And honestly, I think today's episode might be my favorite yet.
- [96:39]
Henna
Dare I say.
- [96:40]
Katie Gatti Tassan
I'm like, champagne taste on craft beer budget. So this big pile of money that I'm gonna go out and get Scrooge McDuck swan dive.
- [96:49]
Henna
Exactly.
- [96:49]
Katie Gatti Tassan
Into my pile of breaking bad hundred dollar bills.
- [96:53]
Henna
Exactly.
- [96:55]
Katie Gatti Tassan
Financially woke up that was very demanding. And, like, that's where all my hair went. Learn how to play the game and not just, like, move the pieces around. Yes. Me, Kate, and say, you know, well, what is the. Like, I don't want to be asking what the horse does ever again. And that's. That's how I play chess. I'm like, does this one move this way? Like, I want to, like, hire a coach. My OCD is, like, salivating right now. And, like, you have a list of everything you over, like, ancient MacBook Air being like, please don't explode into smithereens before I can make sure this recording is locked in. And stop laughing because you just. I'm going have to cut this out. I'm. I'm dying because you. You just. You just told me that. All right, y', all, we will see you next time. Thank you for listening to this very wonderful conversation.