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The Personal Finance Podcast
This One Move Could Save You Thousands on an 11% Loan (Money Q&A)
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Arlington, Virginia on this episode of the Personal Finance Podcast this one move could save you thousands on an 11% loan on this episode of Money Q and A what's up everybody and welcome to the Personal Finance Podcast. I'm your host Andrew, founder of MasterMoney Co and today on the Personal Finance Podcast, we're going to be diving into your questions on this episode of Money Q&A. If you guys have any questions, make sure you join the Master Money newsletter by going to MasterMoney Co newsletter. And don't forget to follow us on Spotify, Apple Podcasts, YouTube or whatever your favorite podcast player is. And if you want to help out the show, consider leaving a five star rating and review on Apple Podcasts, Spotify or your favorite podcast player. Now today we're going to be diving into a bunch of your questions and I am really pumped to go through these on Money Q&A. The first one is should I stop overpaying my 11% loan and invest the difference? The second one is how can I turn a $1200 a month truck stipend into a free vehicle every three years? Third is should college students invest in a Roth IRA or focus on paying for school? Fourth is how do you rebuild your finances at 38 with five kids and a $60,000 per year income? Then we're going to talk about a big scam that is happening in the world of Google. So Gmail users. There's a scam going that you definitely want to hear about. And then the last question is should I avoid the pro rata rule when converting non deductible IRA funds to a Roth ira? So this is an action packed episode. So without further ado, let's get into It. All right, so the first question is, I am a new listener and love the podcast. Well, thank you so much for listening. I have a current balance of 24,000 on a home equity loan I took out last year for $50,000 at 11%. At the moment, I'm paying an extra $1300 a month on top of the $516 regular payment. I've run the amortization numbers, and with paying $1,816 per month, the total interest of the loan will be $6179. However, if I back the extra payments down to $800 a month, $1316 total, the total interest on the loan will only be $6,864. So roughly only a $700 difference. My question is there a given point when extra payments don't impact the you back the extra payments down to $800 a month and invest the $500 difference every month. Since the difference in total interest will only be around $700, I know the overall time to pay will increase, but wasn't sure if putting the extra money as an investment account earlier would help me gain more. For context, I net about $100,000 per year. So this is a great question and awesome that you are running the numbers. That is one of the most important things to do up front, and that helps a lot when you start to try to make a decision. So your current balance is $24,060 o interest rate, which is extremely high. That is what we would say is something. And it's actually very standard for HELOCs. It's not like out of the ordinary for most people, because HELOCs are variable. They're going to move, they're in a range. And so typically for a lot of folks, they're going to have that higher interest rate. And you're making these high payments because you know that interest rate is high. And so you have two options here. Is there a point where making the extra payments doesn't matter as much? Yes, and you're hitting that point right now. And what I mean by that is HELOCs are very different from, like, credit card loans or they're very different from mortgages because HELOCs reset every single day. So each time you make that extra payment, the HELOC is going to reset on a daily basis, and the amount of interest that you pay is based on a daily rate instead of, you know, resetting every single month. And so because of this, as you start to pay that loan down the Amount that you're saving in interest also gets reduced over that time frame. And so in your case, you've already paid down over half of the original $50,000. And the interest savings curve is flattening because you're getting a lower balance every single day. So this means you've probably taken at least a good chunk of what you would be sa saving up in those early months, which is very good that you paid this down aggressively. I really, really like that you did that because it is very important to make sure that you continuously do that for a lot of folks out there. But let's look at what would happen if you scaled back. Let's run the numbers on this to see what would happen if you scaled back the $500 difference. So option one is if you kept paying $1,816 a month, the loan will be gone in 15 months and your total interest would be $6,179 and you'd be completely debt free. Now, one thing I want to note is that by doing this, you are getting a sure fire 11% rate of return on your money. By making sure you pay this down. Very important to note is that it is a sure thing that when you pay this down upfront, you are getting a sure thing. And over the course of the next couple of months to 15 months, it could be really important. Now, if you drop to 13, 16 months and invest the difference, the loan would take 22 months to pay off and your total interest would be $685 more or $6,864. But you're going to get seven extra months to invest that $500. What do I mean by that? I mean before you would have it paid off in 15 months, but now you would have these seven extra months. Now, if you invested in an index fund returning 8 to 10%, that $500 per month could grow faster than the $685 interest that you are currently paying. But here's the key difference again. Option one gives you certainty and eliminates the 11% debt fast. Option two gives you more flexibility and get your money working way sooner. So if you invest that $500 per month for 22 months at an 8% rate of return, you're going to have about $12,170 in your investment account by the time the load is paid off in 22 months versus just saving that $685. And so because this is a HELOC, it's a very different debt instrument than other debt instruments. And because the amount that you're paying is high, it is not a huge difference. You're still making extra payments towards that HELOC to make sure you get it paid down. You're in a special scenario that most people listening do not think to yourself, oh, I need to stop paying down debt on my credit card debt in order to go start investing. No, this is a very unique scenario. But I do see where you're coming from, this scenario where you can make that choice if you want to. If you want to start investing that $500 per month and start to get that money working, I don't have a problem with this. Because you're already making those extra payments. I don't have a problem with you doing it. Now. Another thing I would think through, though, is how secure is my job? Let's say, for example, job loss gets in the way. Well, you need to make sure you have that emergency fund in place too, before you start investing those dollars. Because this HELOC is going to be a liability. No matter what happens in life. If you lose a job or if something happens, you got to make sure that you can still make those payments. And so it is really, really important that if you do make that choice, you have some backup cash in place to take care of this if times got tough. So really, overall, there is nothing wrong with you investing those extra dollars if you want to, but there is added risk. Whereas paying off the HELOC is a sure thing. Investing the extra 500 can get you some investments starting to compound over time where you'd have an extra possibly $12,170 if you got that 8% rate of return now, returns could be much lower in the next given year or two, and you would have been much better just paying off the heloc. But for most situations, historically, the market has returned, you know, 8 to 10% if you invest in something like an index fund or etf. So my take, and here's what I would do in your shoes, is if you want peace of mind in a quick win, then staying aggressive and killing the debt in 15 months, and then throw the extra money, the $1,816 a month, into investing with a clean slate. Number two, though, is if you're financially disciplined and can handle the longer timeline, then you can drop it down to the 13, 16amonth, and it sounds like you are financially disciplined just based on the way that you've operated thus far. And then invest the $500 a month and let time and do the work for you either one works and you're making fantastic progress. Cannot say congratulations enough for you making this smart decision to make sure that you get this paid down and making sure you kind of operate this properly. So I think it is really, really powerful what you're doing here. Either option can work in this specific scenario and can't wait to see what you decide. All right, so question two is from Ben. So I love your show and I started listening to it in 2020 when I was in college and you helped me to start a Roth IRA and invest in an index fund. I've been trying to max it out every year. Thank you so much for your help and knowledge. I hope to get to my first 100k in the next three years. Well, first of all, congratulations on opening that Roth IRA and trying to max it out. That is absolutely amazing. And being here in 2020, you're one of the OGs, because that's when we started this podcast. So thank you so much. I truly, truly appreciate those kind words. That's exactly why we do this is we want to teach people to build wealth and you took action. So I absolutely love it. Recently I got a big boy job and the company I am working for is wanting me to do their stipend deal for my vehicle. I am in the ag world and travel lots for work, 45 to 50,000 miles a year. I need to get a half ton truck. That is basically the only requirement. What is the best way to not buy more truck than I need and how long should I keep it for? The stipend is $1,200 a month and they cover all gas too. I am thinking about getting a two to three year old vehicle like you talk about with very low mileage, less than 15,000 and run it till about 95,000 miles before I trade it in and use the equity for the next vehicle. But this will happen, I think every two to two and a half years. How long of a loan should I do and still keep enough for repairs and oil and tires or should I just let it run until it dies at 200,000 mile plus? All right, so this is a great question. And now the big thing about this question is there are a lot of unknowns that we don't really know what would happen. So for example, we don't really know what the maintenance is going to be for a vehicle beyond that 100,000 miles because that maintenance could be very different depending on what truck or vehicle you decide to choose. So for example, I drive a 7 year old F150. It was about 1 year used with about 12,000 miles on it when I initially bought it and it already took enough depreciation hit that it was an absolutely fantastic deal. And so when I purchased it in 2019 I went ahead and bought it and have never looked back. I've hardly had any maintenance issues or anything with that thing. And so we'll use F just because it's what I have. It's not, I'm not saying it's what I recommend, but it's just what I currently drive. We'll use an F150 as an example as we go through this exercise. But you have a couple of options here. Number one is you can decide to buy a two to three year old truck and then trade it in every two to three years. Yes, 100% you should buy a two to three year old Truck. I went and looked online just now at a 2 to 3 year old F150 with under 15,000 miles and you can get one for $39,000. That was on admins.com that's for the XLT model. And so when we look at that we're saying okay, $39,000 is what we would be paying for two to three years use. We can use that as a benchmark and or we can, you know, can add a little bit more if you want to there but we can use that as a benchmark. Well, your stipend is coming in and you are going to get $14,400 per year plus you get gas covered, which is absolutely amazing. And it's a huge opportunity because you're getting your depreciating asset paid for. So number one, we just want this depreciating asset to be fully paid for. We're not pay out of pocket. That's the biggest goal that we want to have up front. And so ideally we want to set you up where every truck ends up paid off and you keep any of the leftover cash. That's kind of the ideal scenario that we would like. And so if we bought the truck, two to three year old truck and trade it in every two to three years and then use the equity from the trade in for the down payment on the next truck, you can basically create a self sustaining upgrade cycle meaning that the 1200amonth pays for the loan and the maintenance of the repairs. You don't take any money out of your own budget and the vehicle is always under 100,000 miles minimizing those repairs. So there is opportunity for you to be able to Possibly pocket some of that money if the repairs are minimized. And that is the key overall. Now, this is going to assume that truck prices are staying strong, that you always have positive equity. But typically, I'm assuming when it comes to trucks, those prices typically will stay strong long term. We never know, though. The second option is, and I like this, if you have the opportunity. So if you currently have a truck right now that you can utilize, this plan offers a buffer. So if you do have a truck currently, then save the first year of stipend. So have the stipend come in, the first $14,400 of the stipend and save it into a separate truck fund. Then after one year, you can use that money as a down payment, or you can just utilize and buy a truck outright and just finance it with 0% down and then resume normal payments and avoid tapping personal funds at all, which creates a rolling cushion. So you have this extra year, this rolling cushion that you can utilize. Now, this also gives you time to assess the job, the miles and truck needs for driving this much. Because one big unknown we don't know is if you drive this much every single year, maybe you could talk to people who are working within your industry right now, how much do they actually spend on maintenance on their truck? Like, how much does this actually cost if you're driving that frequently? That's a big question that we need to know. Option three is you can buy a reliable used work truck and bank the stipend. So option three is if you can find a older truck, maybe five to seven years old, but it's under a hundred thousand miles, you can buy that work truck for, you know, 10, 15, $17,000. And if you could bankroll an entire year, you could pay cash for that truck and only use part of the stipend for loan to maintenance and then keep the rest of it. That is another option that I see. And then just drive that thing into the ground with that option. There are inherent risks of you taking on an older vehicle and driving it that much. But in addition, you don't know what the maintenance is really gonna be. But if you could save most of that stipend or a good portion of that stipend, you could have anywhere from 36 to $72,000 saved. If you got all of it over the course of five years, that's a huge, huge difference maker for some people. And so finding ways to keep some of that stipend can be helpful. So I would talk to people in your industry, ask them how much they're paying in maintenance. And then what I would do is look at initially probably the used trade in cycle for those first two to three years, because I know the maintenance is upticking. But you could also go the used work truck route and drive it into the ground and see how long it could take. So if you really want to go that route, I would probably take that risk personally, is I would probably drive it until it dies and see what happens. Kind of calculate the maintenance, keep logs of how much it would cost to maintain past a hundred thousand miles and then past 200,000 miles and see what would happen there. And again, I would buy the vehicle just like you're saying one to three years used, make sure it takes that depreciation hit. And then I would not go overboard on the bells and whistles inside the vehicle, because you really don't need them. And so overall, that's the way I would look at this. And then it keeps your own money untouched. That's the key with this whole situation. You want your own money untouched and you want to be able to drive a car completely for free and hopefully you have some extra cash left over and then let that stipend build and track your wealth. So that's the two options there. I would continue to monitor maintenance, maybe go through the first two years when you buy that truck and say to yourself, okay, this truck's been running all the way up to 100,000 miles. If it still seems like it is doing well, you could take it to a mechanic and say, how much further can this truck go? How much longer can it go? And say to them, I want to know what it would cost for me to continue to move on with this pass for another 100,000 miles. They can give you some estimates. And then beyond that, that's how I would look at it. So I would take it for the first two years and then make your decision at that point in time. But both those two options gives you that flexibility, and it also gives you the optionality to make sure you like the job too. So having that flexibility, I think is really important. And so going into it, buying it two to three years used, drive it for the first two years, and then say to yourself, do I think I can get this another hundred to 150,000 miles? If you can, that's going to be three years of stipend coming in where probably half of it gets wiped out with maintenance, but the other half you might be able to keep. And so I think that is really, really important. And that's probably the order of operations that I would go. So hope this helps answer your question. There's a lot of unknowns with maintenance and so that's why it's not a black and white answer. So I would take it year by year and see how the truck is run. Hey there Mr. Giancola. I hope this email finds you well. I have recently been listening to your personal finance podcast on Spotify and would like to reach out to get your opinion on what I should do in my situation. My name is Blaine and soon I will be entering college and I will have a lot of expenses such as housing, meal plans, textbooks, etc. What would you suggest I do as far as investments go? I recently turned 18 and I have recently just opened a Roth IRA in preparation for my future retirement and I would like a form of gradual income that I know will not go wrong depending on my investments. What would you suggest I do with the money that I earn in college? Should I put it towards investments or should I use it for college expenses? First of all, you're in a fantastic position and congratulations on opening that Roth ira. That is super powerful, Blaine, and I think that is a really, really awesome thing that you're making that decision at such a young age. So priority number one is I would cover your core college expenses first. That's always going to be the priority. Housing, food, books, transportations, all of these are needs. And making sure you don't go into high interest debt like credit car to cover them is priority number one. And then avoid student loans if you can. Obviously a lot of people out there are going to have to take student loans, but by using income from part time jobs or summer work for these essentials, it's going to help you avoid student loans going forward. And then if you already have money saved or income coming in, funding your living expenses is the most important investment right now because staying debt free long term sets your future self up for massive, massive success. And so I would try to stay debt free as much as possible when it comes to college. Obviously you may have to take out some student loans. If you do, that's okay, but I would try to avoid it as much as possible. Then if you have extra money left over, then investing in a Roth IRA could be perfect because you already have that Roth IRA opened. That is the right move at your age. You have a really long time horizon. Then if you have extra income after covering those expenses, you can contribute to your Roth IRA up to your earned income amount and the limit is $7,000 right now and you can invest in low cost index funds. Things that you could research more would be like vtsax or it's ETF alternative, which is vt, Fzerox or the S and P which is VOO or fx. AIX is other ones that you can look at, do your own research on those, but they are some that I absolutely love. And then at your age, you've got decades of compounding and these Roth IRA contributions could turn into six or even seven figures by retirement. Because you have so much time for that money to compound and because it's most likely so much time, that means you're going to get that tax free growth in the Roth IRA as well. Which is the most powerful thing you've heard us talk about. Maybe on the podcast before that, if someone has a million dollar Roth IRA over the course of 30 years, that Roth IRA, about $850,000 of that Roth IRA is going to be completely tax free. And so there's some really, really powerful stuff when you run the numbers on the Roth ira. Now, what about passive income or safe investments? There's no truly guaranteed return beyond things like US savings bonds or high yield savings CDs. But for long term growth, I like index funds the best. I don't recommend hunting for passive income sources during your college years unless you have spare time or capital to focus on kind of building your skills or networking and internships or staying debt free or investing slowly and consistently. Those are the big things that I think through. And when you're in college, a lot of times you need to just kind of focus on the main things that you're working on. But earning income in college I think is important and it's helpful. And I always had a job in college and it was very, very important, I think overall. So if your college job covers your bills and you have extra cash, then I would funnel it into the Roth IR way and you can invest in, you know, a bunch of different options. But if you're tight on cash, then prioritizing school costs to avoid debt is going to be the most important because you have plenty of time to invest after college. And you know, if you get things for your birthday or if you get extra cash here and there, then you can throw those extra dollars into something like a Roth ira. That's another great way because each and every single one of those dollars is so incredibly valuable moving forward. So really, really powerful stuff. And congratulations on getting started in college. I think that is absolutely amazing.
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Question four is good morning Andrew. I just started to try to become financially free. I'm 38 and been told all my working life that a 401k is not worth starting. Well, somebody lied to you. I have a couple of credit cards combined, $6,000 in debt, $33,000 in student debt, and a car loan at $20,000. I'm just a dad trying to figure it all out. I have a wife and five kids and my wife does reselling on ebay and it helps while she tends to the kids. I make around $60,000 per year gross. I've listened to your podcast for three weeks straight back to back for 10 hours a day while at Work. Wow, that's absolutely incredible. Thank you so much. And just started my 401k and my employer does a 6 to 3 match and started a Roth contributing $20 a week. I also started putting back $20 a week from my emergency fund and I have about $1,800 in the bank. What advice would you share with me? So first off, Daniel, I just want to say you're doing something incredible. You've got a wife, you have five kids, you have a full time job and you're still showing up to make financial progress and that deserves a ton of respect. That is absolutely incredible. And so let's break this down step by step and get you some serious momentum going so that we can help you step by step here. Number one is you've already started winning. So you open the 401k and you're taking advantage of that match. So it's a 6% match for a 3% contribution, which is free money in the right step. That is a huge, huge step that you definitely need to make sure that you're taking if you're not already, but it looks like you are taking advantage of that is getting that match. Number two is you've also opened the Roth IRA and are contributing weekly, which is fantastic. Plus you're saving for an emergency fund and you have some cash in the bank and progress is actually happening. So let's see where you stand financially. That's the next thing we want to do is if we want to get ahead, we need clarity. So how much do you spend monthly? We need to know how much you actually are spending each and every single month. So I recommend going three to six months back and figuring out exactly how much you spend every single month. And this is going to be something that, you know, you're going to take the average of those last three to six months and really figure out your total burn rate. You want to know how much cash am I burning every single month? Because we want to see if we can find money that you can put towards some of these things. Also we also want to know where we stand on this debt. So what are the interest rates on your various debt vehicles, credit cards? Most likely that is going to be very high interest debt almost in every scenario. And so your credit card, I want you to be attacking first. That is going to be the first thing we need to get rid of, especially if it's an 18, 20, 25% rate. Usually credit cards are really, really high. Number two, you have those student loans in place and I would look at Seeing what the interest rate is on those. And then you have the car loan in Place at $20,000, which we got to get from point A. So I get it. So we're going to help prioritize what to pay off first. Most likely it's going to be the credit card debt and then we can look at the other two debts. If they are below a 6% interest rate on the other two debts, we wouldn't have to worry about them as much. If they are above a 6% interest rate, then we want to make sure that we are targeting those as well. Now, number three is I want you to focus on your emergency fund here. And I want you to at least get to that one month emergency fund, meaning I want you to build up enough cash because once you figure out how much you spend every month, want to get at least one month of expenses saved in that emergency fund fund. This is really, really important. So you have that $20 a week that's going in there. I want that number to go up because it's going to take you a little longer to get to that point in time. And I want you to keep that up, but I want you to raise that number if you can. So we need to figure out where we're spending and then we can raise that number based on that. And once you get one month of expenses in there as cushion, then it'll help you against unexpected stuff. So you already got the 1800 bucks, which is fantastic. Let's just get that up to one month of expenses. If you spend 5,000amonth, if you spend 4,000, if you spend 8,000, I don't know. With five kids it's probably a little more. So just look at what you spend and figure out what one month is. Once that's done, we'll move to three months and six months following the 1, 3, 6 method. But first we want to make sure we at least have one month of expenses saved in our emergency fund. Then we want to make sure that we're attacking that high interest debt. So credit cards definitely have to have that highest interest rate. And then what we'll do is making sure we pay those down first. That is an emergency. I think the credit card debt should get paid off as fast as you possibly can. If your wife can do some ebay reselling, get some extra cash going, that will help pay down that credit card debt. But that is financially one of the biggest emergencies that you have. And then after the credit cards, then you can focus on the other two, whichever has the next Highest rate, depending on what's going on there. And then keep contributing to the 401k up to the match because that's free money and you cannot get a 100% rate of return on your money. That is absolutely amazing that you get that 401k match and then after that you can prioritize everything else. So that always needs to continue is getting that free money and then you can prioritize everything else and then I would continue in your situation to keep listening, keep learning. I think it's going to be really powerful for you and see if there are ways that you can acquire skills in your free time that are going to allow you to increase your income. Because I think it is going to be really helpful for you if you can find ways to increase that income so that you can get some relief in some of these other areas so that you can get some relief in your month to month bills so that you can contribute even more every single month so that you can take these extra dollars and put them towards your financial freedom. And I commend you and I really congratulate you for starting and I think it's going to be really powerful, which you can do over the next couple of years. But that's the order I would look at. This first is, hey, I got to get that one month emergency fund saved up. I'm going to continue to make sure that I am putting money into my 401k match and I am going to pay off these credit cards. That's the first step to build your base and foundation. Then from there we can take the very next steps to get that ball rolling. So really, really good stuff here. Can I say thank you enough for being such an avid listener? I mean 10 hours a day is incredible and, and truly, truly appreciate you and let me know if you have any other questions. All right, so the next one is we're going to talk about a scam that's happening right now and it is an AI powered scam with Google impersonations. So if you have not heard about this yet, this is something that needs to stay on your radar. There's a lot of folks out there who we have been getting emails sent in who have said that they have actually had this scam come across. So we wanted to talk about it on here. So there are first AI voice robocall. So scammers are deploying highly realistic AI generated voice to impersonate Google support agents. And so what they do is they will call users who have Gmail accounts which probably Most of you listening right now have Gmail accounts. It's affecting 2.2 billion people right now. And they are saying that their account has been compromised or that a password reset is urgently needed. Now these calls are designed to play on the user's sense of urgency and trust. So as you know, whenever someone is calling with a sense of urgency, most likely your red flags need to go up immediately because we talk about these a lot and when we talk about these, you need to make sure that you are alert. Now, the scam often includes a follow up email. So once they call you, they can also send a follow up email because they have your information. They've probably gotten your information from a data broker online. And so the email actually will look genuine, complete with branding, correct formatting and even legitimate seeming sender addresses. And what they do is with these emails, they prompt users to share verification codes or click a link to secure their account, which instead hands over control to the scammer. And so this link to secure your account, this is where a lot of people are getting tripped up because it looks legit. And so they're clicking on secure your account and then when they click that, it actually gives the access to someone else. And here's the crazy thing is that one notable phishing method exploited Google's own infrastructure and scammers sent emails via Google sites and even passed dkim or email authentication, making them appear legitimate within your inbox. And so they actually got this through Google servers to make this look real. Now here's the thing is Google figured this out and they've alerted everybody. But this is something that really, really is important. Now Google emphatically came back and states they will never call you. They do not place unsolicited phone calls. And they secondly said you need to verify the sender addresses. A legitimate Google security alert will come from the address noreplycounts.google.com but if the sender differs, it is not from Google. Then three, they said to check the security tab in your account. Any actual security alerts are logged inside your Google account, specifically under and recent security activity. And so they have a spot for this kind of stuff that you need to note and then also use two factor authentication or pass keys. So Google encourages users to use two factor authentication or even pass keys to reduce the risk of unauthorized access. I have been using passkeys a lot more. I don't know if you guys have, but I actually use Google Authenticator. Microsoft Authenticator is another one that I use. But there's a Bunch of great ones out there. It just helps encrypt and make sure that things are safe. And so, so that is going to be something for sure that we definitely want to talk through and look at as time goes on here. Now, there are people on Reddit who have gotten nailed by this scam. And they even said, hey, I'm someone who is technically sound, but it just looks so legitimate that it got me. And so I just want to make sure that everybody understands this is how you can kind of help protect yourself. Now let's talk about how to protect yourself step by step and some safeguards. So first off and sponsoring this segment is Delete Me. But if you want to make sure scammers can't get your information in the first place, place then listen up, because your personal data, like your name, your phone number, your address, or even your family members is probably available online right now. And it's collected by data brokers and sold to anyone willing to pay for it. This is the biggest problem with this, is that anyone willing to pay for it can actually get your personal information. And that's how scammers get your info to call you and pretend to be Google or pretend to be Amazon or even your bank. They don't hack you, they just buy your data. And so there's something you can do about it. You can use a service called Delete Me, which finds and removes your personal information from data broker websites automatically. There's no forms, no hours spent googling opt outs. You just get real humans doing the hard work for you. Now I've seen this firsthand and how important this is and I recommend this to everyone and making sure that they take this seriously. So if you head to joindeleteme.compfp20, you can get 20% off of your plan. That's joindeleteme.com for 20% off. Because you gotta stop letting data brokers profit off your personal life and you gotta get protected. With Delete Me today, that is the place that you can get your data removed. So that's the first thing you need to do is making sure you get your personal information removed from online. Number two is instantly hang up on unsolicited Google calls. So if, if you got a Google phone call coming in, hang up immediately. For me if there's a phone number coming in that I don't recognize, I don't even answer it anymore. And that just removes the probability of this happening. Number three is don't click links or reply to suspicious emails. Instead manually open your browser and go to my account.google.com now listen, you may be saying to yourself I would never do this. You most likely if you're moving quickly through emails and if you're reading through emails, you can very well just click something like that where you think you're supposed to revalidate your email. Okay. Number four is to verify email senders careful so only trust messages from again, no reply@accounts.google.com Number five is to use enhanced security. So make sure you use pass keys and authenticators. And then number six is consider enrolling in Google's advanced protection program. So it limits what third party apps can access and what requires a physical key or pass key to sign in. And so that is something I would definitely consider. And then you can report phishing attempts to phishing@google.com so that is the next thing I think that I would do is making sure that you report support all those attempts. But enrolling in Google's advanced protection program can be very helpful, especially with if Google is your operating workforce, meaning it is the place that you keep all your information. Definitely, definitely, definitely worth the time. Making sure you protect yourself there. So making sure you protect yourself against scams like this is going to be important. We will continue to report on these types of scams because they are very important for you and your wallet and I think most people need to know about them. Now let's get into the next question. All right, so the next question is from Matt. Love the show. And I have a small balance in a traditional IRA. Only this one IRA, no simples or other IRAs, which is a very important point that holds both deductible and non deductible contributions. I am looking to convert the non deductible contributions to my Roth without triggering the pro rata rule. My plan is to do a conversion and then roll the deductible balance over into my 401k before year end. Would this avoid triggering the pro rata rule? Anything I am missing? So Matt, awesome question. And this one trips a lot of people up trying to do a clean backdoor Roth conversion. So let me give you kind of the quick breakdown the way I would think about it. So the IRS views all of your traditional IRAs as one big pot. So if you have both deductible which is pre tax contributions and non deductible after tax contributions in the pot, the IRS requires you to calculate the taxable portion of any Roth conversion using the pro rata rule form formula. Unless your pre tax dollars are out of the way by December 31st. So December 31st is the big key deadline on this. So if you're planning to convert the non deductible portion to your Roth IRA now and then roll the pre tax portion into your 401k before December 31st, there is a problem with that because it doesn't work in that order. So the IRS applies the pro rata rule based on your IRA balances as of December 31st of the year you do the Roth conversion. So what that means is that even if you convert today and roll over the deductible portion to your 401k in November, the IRS looks at your year end IRA balance and says you had deductible money in an IRA at some point during the year. We're prorating it. And so that is something where they will still look at that because it was in your account. Now how do you avoid the pro rata rule? Okay, so to keep the Roth conversion 100 tax free on your non deductible basis, first, first roll over the pre tax or deductible portion of your traditional ira into your 401k. Now your 401k must accept roll ins from IRAs. Most do, but I would double check with HR or double check with your provider to make sure that they do. Second, wait until your traditional IRA only holds non deductible money and then three then convert the remainder to your Roth ira. And since it's all after tax, you won't owe anything and you have avoided the pro rata rule cleanly now. So there are some other things to check first. I would make sure it's worth the time and energy to have a CPA in your corner for things like this. Especially if you are doing a backdoor that means you have a high income. And so because of that I would definitely make sure that you have a CPA. Look at this for your specific situation. But number two is form 8606. Make sure you file this for any non deductible contributions in past years. This form keeps track of your basis and so your CPA can look at that too. And then make sure that you have no other ira. So the IRS looks like looks at all traditional SAP and simple ira. So make sure you have no pre tax balance hanging out in other accounts. You said you don't, so that's why it was important to note that. So thank you for noting that. And then do it all in the same calendar year if possible to keep it clean for tax reporting. It just makes it easier for a lot of different situations. So your instincts are almost there. Just reverse the order in your golden is the way that I would look at this. So roll it into the 401k first, then convert. That's the order that I would go in to make sure that you do this cleanly and so that'll make it a lot easier overall. So I hope that answers your question. If it doesn't, please shoot me another email, let me know and we can go from there. Listen, thank you everyone so much for sending in your questions. We truly appreciate each and every single one of you. Really excited for some of the upcoming stuff that we have going on and really excited to be able to help each and every single one of you. If you have a question, make sure you send them. You can email me at andrewastermoney co. Thanks again. Have a great rest of your week. Sa.