Ask HTM - Alt Investment Considerations, Making the Most of Profit Sharing, & National Debt’s Impact on Your Portfolio #811 - How to Money

Episode Transcript
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Speaker 1 (00:00):
Welcome to had the Money. I'm Joel and I am Matt.
Today we're answering your listener questions.

Speaker 2 (00:24):
Yeah, buddy, it's Monday, which means we've got a docket
of listener questions lined up a courtroom today.

Speaker 1 (00:32):
You're on deck, sir. Is that baseball or is that baseball?
It's also the court right now.

Speaker 2 (00:36):
You're making matter, Joel on deck. I think you take
the witness stand in a courtroom. Take the stand, sir.
That We've got some great ones today. A listener is
wondering if it's worth it to consider alternative investments. Another
listener is looking to make the most of profit sharing
that his company has been generously granting. And somebody else
is wanting to know what the impact of our national

(01:00):
debt levels, the impact that that has on how it
is that we invest. So we'll kind of yeah, we'll
touch on that plus more during today's episode. Yeah. Look,
we got a nice, nice variety for folks today. Yeah.

Speaker 1 (01:10):
I think that last question, Matt will pair nicely with
your back tattoo of a bald eagle ripping through an
American flag.

Speaker 2 (01:15):
If we only had the sound effect for the red
tailed hawk, which is the hawk sound at the beginning
of the Colbert Report. Oh yeah, yeah, one of the best.
It's not a bald eagle, it's actually bald eagles, And
don't sound like that.

Speaker 1 (01:26):
That was a great show while it lasted. But first, Matt, okay,
real quick, we have to announce big news today. Big
news a new campaign that we're launching that with our
friends over at Daffy. A nice partnership with our friends
over at Daffy. We've talked about Daffy before on the
show because it's the lowest cost platform for being able
to invest dollars that you want to give away and
grow your giving. And we're doing a little friendly competition here.

(01:50):
You and I are giving away some of our own money.
We're matching funds that how to money listeners are able
to give away to each of our favorite charities.

Speaker 2 (01:58):
Yeah, that's right. So basically we're competing to get more
listeners to essentially give to MAT's charities as opposed to
generously giving to Joel's charities.

Speaker 1 (02:07):
That's what we don't want. Didn't it sound bad to
not root It does? Trying to sounds good here, but
we're also all in all this is a good thing.

Speaker 2 (02:16):
But we Also, I do want folks to be giving
specifically to the charities I selected. So the three, I'll
go ahead share the ones that I went with, The
Against Malaria Foundations, so they provide nets to prevent malaria.
Next is Helen Keller International, and they work to provide
supplements to prevent vitamin AID deficiency. And then New Incentives
and I love this one as well because they're looking

(02:37):
to not surprisingly provide cash incentives for families to bring
in their children to prevent some very avoidable diseases through
childhood vaccines. But yeah, all of these are listed over.
Actually I give well, they were highly rated on the
effect of altruism scale essentially as far as the dollars
that are going to the good that they're able to provide.

(02:58):
But you've got some great ones picked out as well.

Speaker 1 (02:59):
Yeah, So the three charities I picked out that I'm
giving three thousand dollars of my own money away towards
matching a dollar for dollar whatever you are willing to
donate is rip medical debt. Essentially, we know how big
of a stay in medical debt is on this country,
how it negatively impacts people's finances and their relationships. This
is an effort, a nonprofit effort to help people eradicate

(03:20):
that debt from their lives. There's also a great organization
called the Hope Effect. Actually, Matt one of our former guests,
Joshua Becker, started this one. This is an effort to
change the way orphans are cared for. I love what
they're up to. And then the third nonprofit I want
to bring to your attention is one called FIRE, the
Foundation for Individual Rights and Expression. They are all about
defending free speech in this here country, the United States

(03:43):
of America. So yeah, I've.

Speaker 2 (03:45):
Also given to you. So again, it's hard to against
you and your organizations, the ones that you've chosen as well,
because they're all also wonderful. But we have made this
a friendly competition, and here is the wager. The stakes
are that whoever loses actually has to drink a six
pack of crappy beer over the course of three weeks

(04:07):
while the person across from them in this drink, in
this case me, is enjoying something amazing all while you're
drinking something that you don't like.

Speaker 1 (04:16):
So instead of craft beer, we'll be drinking crap beer,
or the loser will be So please do go support
my charities beer, Joel, that's kind of a fun wager
to have. The loser definitely loses. But we're not like
having to shave our heads or anything like that. So
we will put links though to both my campaign and
your campaign right in the show notes. There will also
be a link going out in tomorrow's how to Money newsletter,

(04:39):
so please do join us in being generous. Daffy is
one of the best platforms for doing that, and so
this is kind of a fun thing to launch.

Speaker 2 (04:45):
Yep, that's a great way to give strategically. So speaking
of beer, let's introduce the beer that you and I
are going to enjoy during this episode. This is called
I Choose You Zu. This is another one by Pure Project,
donated to the show by Christy, So Christy think you
Zu so much?

Speaker 1 (05:02):
Adorable name for sure. All Right, Matt, let's get to
our listener questions. And if you're out there listening and
you're like, I've got a money question and I would
love love for Matt and Joel to tackle it on
an upcoming ask A show, or even if you just ka,
like am Mike kind of want them.

Speaker 2 (05:14):
To talk about it, you can send it into even if.

Speaker 1 (05:16):
You don't have a burning desire, We'll still take it,
and you can submit a voice memo our away with
your money question. The simple directions you can be found
out how to money dot com, slash ask, or just
record your voice memo, send it to us via email
and hopefully we'll take it next week, maybe the week after.
We'd love to hear from you. But Matt, let's get
to the first question for this episode. This one is
about a new fund offering from a fintech company.

Speaker 3 (05:39):
Hey, guys, this is Michael from Cleveland. A few months
ago so Far had released their new alternative investments. It's
been marketed as investments that were originally only available to
or accessible to the ultra rich, that they are now
making accessible to everyone. It includes investments such as money

(06:02):
market funds, alternative funds across a broad range of categories
including commodities, currency alternatives, venture capital, and private credit. There's
a lot of different things in there that they offer.
And I'm curious if you guys have heard of this,
if you guys know anything about it, and what your
thoughts are on if it's something that's worth adding to

(06:24):
anyone's portfolio. And yeah, thank you guys for all that
you do and for any answers you can provide. Love
the pod.

Speaker 2 (06:31):
All right, Michael, thank you so much for reaching out
to How to Money. Like Joel was talking about, we
love getting listener questions, and.

Speaker 1 (06:37):
I can't tell if that was a burning desire question
or just a mad question, but either way, it's a
good one.

Speaker 2 (06:41):
I think he's got deep down it's a brain desire.
But he so he's talking about so Fi, So let's
talk about them for a minute, because so Far is
this fintech app. It's trying to be this like one
stop shop. They're trying to do it all. They started
out as a private student loan refinance operation and then
they decided to try and be this all encompassing ultimate

(07:02):
financial app.

Speaker 1 (07:03):
Essentially a lot of those fintech apps, Matt had to
kind of pivot because of the student on payment pause, right, and.

Speaker 2 (07:10):
Rates going up doing that anymore, there was just a
dearth of people refinancing their student loans, and so Sofi
and some of the others had to either like close
up shop or kind of change their gagets. And some
of them got into well, look so Fi, they got
into personal loans, they opened up bank accounts that you
can do mortgage loans with them, insurance quotes and more.
And so part of that more is also investing with
so FI. And we you know, we don't talk about

(07:32):
them much, but it's not necessarily because they are a
bad actor. I think it's more because there are just
more specialized companies out there that we typically refer to
when we're talking about investing. We've you've heard us talk
about van Guard Fidelity and Charles Schwap a Ton they've
been around a lot longer too. Yeah, they've got a
longer track record. But that being said, I think if
you choose the right products, SOFI can likely be of

(07:55):
help in your financial life. I noticed, actually they've got
an S and P. It's not it's an ETF but
and it loosely tracks the S and P five hundred
but SFY and it currently has a zero expense ratio,
so not unlike FC Rocks Fidelity.

Speaker 1 (08:11):
Yeah, I mean those are the only two that I'm
personally aware of at this moment. There might be others
that have a zero expense ratio, And obviously for so FI,
that's a lost leader. They're trying to get you to
come in invest in that fund and then do other
things where hopefully you can be.

Speaker 2 (08:24):
A profitable customer to them. But I like how you
termed it because I think there is a good chance
that that is exactly how it is, because this is
literally on sofi's website, But if you dig into the details,
their gross expense ratio is actually point one to nine,
So there is an expense ratio there, but the current
nets expense ratio, so what folks are actually paying is
zero and it's offset by like reimbursements, fee waivers, things

(08:49):
like that, and so literally they're trying to attract a
customer base. How long until they but it ceases to
be that thing that could totally change as opposed to
having just oh, this fund was literally created to be
zero cost. It seems like that's the spy I don't
know how you say it, Yeah, the spy EDA for fund.
It does seem like that at some point that they're

(09:09):
gonna switch it in. It's almost like the introductory period
of like with cable, where it's like, hey, for the
first year, it's only going to be twenty bucks, thirty bucks,
but then if and when they actually raise the price
on that, I guess we know what they'll raise it too,
most likely zer point one to nine, which is gonna
be like five x higher than some of our other favorites. Yeah,
it's not egregious, but it's still a lot more than

(09:30):
what it is that you can get elsewhere.

Speaker 1 (09:31):
I think it's just a really important point and that
those are the kinds of things that some of these
fintech companies do to try to gain market share, to
try to gain and acquire customers, and then later on
down the road a year or two from now, you're
in the door, you're feeling really comfortable. That's when they
jack up the feet and you're like, oh man, okay, well,
am I gonna really really go through the annoyance of

(09:52):
moving to a different investment company?

Speaker 2 (09:54):
Again? Probably, No, it's not that there's there can't be
advantage of that's gaining there because again the three bigs
I mentioned earlier, they're not doing a whole lot of innovating.
I'll say that right. And so if you are interested
in something a little bit different or maybe a better
user interphase, like just the different features that are available
to you, let's say via an app, you're most likely
going to get that with a company like SOFI as

(10:16):
opposed to Vanguard. That's true. Yeah, they're like the opposite. No, yeah, opposite.

Speaker 1 (10:20):
But we've said that in some ways that's actually not
a bad thing, right because maybe it prevents you from
going in there too often. It's true, being more inclined
to trade. I actually kind of like.

Speaker 2 (10:28):
This innovation needed.

Speaker 1 (10:30):
Yeah probably not, yeah, exactly, Like innovation on fees has
been great, but you know when it comes to innovation
on user design, maybe that would incentive out the wrong thing.
But Michael is specifically asking about some new funds that
so FI is offering. He's not asking about the SFY fund,
which if you were like, you've got the answer on that,
not too Michael, But you want to know about the
alternative investment funds that so FI is offering. These are

(10:51):
brand new, and so IF I starting to push them
hard and so yeah, essentially, what these funds are doing,
they're offering you access to actively managed funds like the
one from ARC. Matt, We've talked about that fund, the
Kathy Wood He's in a minute. It's kind of one
of those superstar in investor people, especially during the pandemic
when the ARC fund was soaring like Icarus and truly
like Icarus because he kind of fell flat again. But

(11:14):
so that's a high profile fund at this point, and
that fund invests in asset classes that go beyond the
stock market, right, just like Michael mentioned. But the total
expense ratio on that fund is over four percent. So
you have to be really careful about these products and
you have to know the fine prints. There's been a
steep rise in general in alternative investment products in recent years.

(11:37):
We've talked about that way back in episode four forty six,
just kind of the wine, the whiskey, the farmland, the arts,
like all these different ways that you can invest your money.
Our belief is that a lot of these offerings just
needlessly complicate things for most investors.

Speaker 2 (11:52):
What about wine? Did you say wine? I did say, yeah, wine,
whiskey found the Veno vest, Yeah, I like that one
because they always sound cool. You're like, oh, yeah, who
would want to invest in that as opposed to maybe
just spend a couple extra dollars on a nice model
it is.

Speaker 1 (12:06):
I get the appeal because it does sound really interesting.
And I will say, like index funds, there's a reason
we call it boring because.

Speaker 2 (12:12):
It true sper boring. It is a.

Speaker 1 (12:14):
Boring thing to do, and you want to spice it up,
but spicing it up oftentimes means higher fees and worse returns.

Speaker 2 (12:20):
Yeah, well, so you're kind of mentioning the boring stuff.
I think, like the biggest question you need to ask
yourself is you need to make sure that you are
thoroughly doing the boring stuff right, Like that you are,
for the most part investing all your money in the
S and P or a total stock market or even
a target date fund inside of your tax advantage accounts first,
like that is the top priority. And then on top

(12:42):
of that, like, are you funneling a healthy percentage of
your pay in that direction? And I think if the
answer is yes to that, well, then dabbling in some
of these alternative investments it's not an awful idea. There
are certainly worse things you could do with your money,
but if you're thinking about it from fire yours'd be worse.
But another question to ask is like, do you actually

(13:02):
need this additional exposure to some of these exotic alternatives,
to these commodities, to these pre ipo companies. That's another
one too, right, Yeah, yeah, if so, well, why is
it because it just owns sexy because it was marketed well.
Or keep in mind that I'm guessing there are very
few SOFI investors who are actually going to beat angel
investors like the Mark and Reasons out there, who are

(13:26):
basically beating investors to the punch when it comes to
the startup investing.

Speaker 1 (13:30):
I think this is probably going to be the classic
example of sloppy seconds. It's going to be the companies
that market Intreasons and then like five other companies behind
his passed on, and then you're going to get to
pre IPO. Look at those companies. My guess is in
that hyper competitive investment landscape, the funds that SOFI is offering,

(13:50):
you're not competing with the big boys, and I think
you could make the case right that it would be
worth it to invest in some of these alternative investments
if you were truly going to get higher turns net
of fees. So even at the feest three percent, but hey,
the returns that year or on an average year eighteen percent,
whereas the returns in the stock market are ten percent,
even though you're paying a very little fee. Hey, no,

(14:11):
that makes sense. I think I will go for some
of those alternative investments, and so you have to maybe
run the numbers two and see what the average return
is of some of these alternative investments. And also is
past performance going to be indicative of future returns. You've
got to make that calculation too. But as I was
looking into this, Matt, I was just doing a little
research and Acre Trader is they're not a bad company,
but they're one of these companies that specializes in allowing

(14:33):
people to invest in farmland.

Speaker 2 (14:35):
And that another great name, it is Acre Traders, and
that's to throw their money their way.

Speaker 1 (14:41):
Yeah, I'll invest in apple orchards please, Right, it kind
of sounds kind of quite agrarian.

Speaker 2 (14:45):
I like that wholesome, right.

Speaker 1 (14:47):
Classic Americana. Well, the typical returns of investing in farmland
have been touted as being higher than what you're going
to get in the S and P. That is kind
of their claim to fame is saying we're going to
outpace the S and P. Maybe not out of fees,
but at least we think we can do better than
the stock market. But I just went to the homepage
of their site. They have a graph going back to
nineteen ninety one, what's generated the second highest returns on

(15:09):
the graph that's on their homepage, the just straight up
S and P five hundred, right, and number one number
one is actually not farmland the first place. The only
asset class that has performed better than just the broad
market is rets real estate investment trust, so basically investing
in real estate. I think that graph says a lot.

Speaker 2 (15:29):
Maybe they got the wrong graph on their homepage.

Speaker 1 (15:31):
Right right about to get fired, right, I'm like, why
would you put this here? Because it just makes me
think that I should really sell the guys.

Speaker 2 (15:37):
No, we should be considering these other options.

Speaker 1 (15:39):
So I don't care how boring investing in the S
and P five hundred is, as long as it produces
more wealth from me over the alternative choices, right, and so,
especially when you factor in the fees that alternative investment
funds and some of these companies typically charge, those net
returns are inferior to the basic suggestion that we make
regularly on the show. I don't see the need and
I say need stress need. I don't see the need

(16:02):
for anyone to own anything other than a broad mix
of stocks if they're in the wealth building phase of
their life.

Speaker 2 (16:07):
Yeah, you definitely don't need to you can if you
want to, but before that, we'd recommend for you to
check out the fees section within the FAQs on the
different alternative investing platforms, because not only will the expense
ratio be higher on these funds like you're talking about,
I'm like, okay, maybe four percent, that's pretty steep, but
you could be subject to a front end load fee.
So this is where they take a cut of your

(16:29):
investment and they pocket it when you buy right.

Speaker 1 (16:31):
So you're like, I got one hundred K to invest
and they're like, cool, now you only have ninety eight
from the right moment out.

Speaker 2 (16:36):
Of the cage. But then you've got back end load
fees as well, and that's where they do the same
thing when you sell it. And so even if you
do you go out, the higher returns, your net return
after fees are going to be lower. Plus can I
just say that this is like an age old marketing
strategy strategy, like where they're telling folks, hey, you now
have access is previously only available to the to the

(16:56):
ultra witched, ultra rich, to the wealthy. It makes me
think of like some different investing newsletters out there where
there are these publications that are tone, folks. Oh no,
these are the secrets. These are the specific stocks that
are going to allow you to grow your net worth
like crazy. It's so appealing that now the pores can partake.
It's where the elite investment circles, except that it's just marketing.

(17:17):
There are dozens of sites that have been touting similar
things in recent years. And do you need to Joel
Like you're saying no, But if you want to, I
think that's totally fine. I see no harm in doing that.
And actually I almost see there being a benefit again
if you keep that in check to no more than
five percent of your overall portfolio. Because if you are
asking yourself the question of like, oh yeah, alternative investments,

(17:39):
like is that something? If you find yourself drawn to
this question, generally speaking, it means you are interested in it,
which means that if you dedicate some of your dollars
towards investing in alternatives or single stock or crypto things
like that, and that allows you to stay on track
with the other ninety five percent without fail and you're
able to continue to dollar cost average without even thinking
about it. Okay, go for it. Like that is the

(18:01):
pressure release valve at one hundred percent and said the
ability to temper your emotions depending on what the news is,
what the market's doing, what folks are talking about in media.
I think that that can be a helpful outlook.

Speaker 1 (18:13):
I just think, Matt, so much of the reason people
are often attracted to these things is either because the
number is going up or because the marketing is good.
And that was the case with the ARC Fund. Most
of the money that went into that fund, that a
lot of the inflows were essentially right near the top
because that's when it was getting all the press. Everyone
was like, oh my gosh, this thing's going to the
rear and yeah, and it was the igorous moments and

(18:36):
then the crash the subsequent underperformance of that fund for
many months to come. And the people who run those
funds are gonna be happy because they make a pretty
penny when you invest in those funds. But you might
not be as happy. You might be over complicating things
and diminishing your returns over time.

Speaker 2 (18:51):
That's right, man, But we've got more to get to.
We're going to hear from a listener who is interested
in hanging his own shingle. He's going to go down
the path of entrepreneurship. We've got that and more right
after this. All right, Matt, we're back.

Speaker 1 (19:10):
We've got more questions to get to, including this next
one about optimizing your HSA.

Speaker 4 (19:15):
Hey, guys, this is Derek Miller from Nashville, Tennessee, and
I had a question today regarding HSA accounts. Is it
better to pay for your medical expenses directly with your
HSA account or pay for it with a credit card
to earn the two percent cash back when you reimburse
yourself with the HSA account money. Thank you guys.

Speaker 2 (19:38):
All right, Joel sounds like Derek. He wants to know
if he should be using his HSA specific debit card
or if that's a bad idea. And the reason he
didn't mention that but most HSA, most FSA it flexible
spending accounts, they now will send you a debit card
allowing you to pay for your different expenses. We don't
like debit cards in general, Mattlet's be honest. That's true.

(19:58):
That's true, but they're tied directly to the accounts and
so it makes it easier, of course. But what Derek
is asking here is should you use that debit card
that they give you and quick answer. If you like
rewards and optimizing your finances, probably.

Speaker 1 (20:12):
Not TLDR no, right, because I guess if there were
like an extra you know, a dozen hoops you have
to jump through in order to get additional benefits, well,
then it's probably not worth it, and just use the
debit card. I guess that they provide you. But the
better move to make is to not use the debit
card they send you, but to use your own credit
card instead. Right, Yeah, And especially when we're talking about

(20:32):
health expenses, Matt, depending on what you're having done, if
that can be expensive. I had to at the very
beginning of this year, Matt, You remember this, I had
walking pneumonia and I had to go to.

Speaker 2 (20:43):
The urgent care. Is that really what it was? Is
that what they called? It was? What it was? Yeah,
I had to get a well I'm not going to
go into the description, but it was like word, they
give you a shot, yeah, right in the bump.

Speaker 1 (20:54):
And so two hundred and five bucks later, which is
like not inconsequential when we're talking about credit card rules words,
And that's even on the low end. Let's be honest,
for what you're gonna pay for medical stuff. So much
the time, and when you use your own credit card,
you're you're gonna get to earn rewards on those medical expenses. Typically,
all you have to do, by the way, is submit
your receipt to your HSA provider in order to get

(21:16):
those funds then deposited directly into your accounts, not like
you gotta go through the hassle of baking a phone call,
getting a check written now to you or something like that. Right,
it's one extra tiny step. And so for specifically we're
talking about like four figure expenses, I think it's likely
worth that tiny bit of extra legwork to pull it off.

Speaker 2 (21:33):
And you're talking about just getting the shot that like
a broken arm or a bigger dental procedure, if that's
something that can I break my arm on purpose, Matt,
just to get more credit card rewards. Right, what did
I see? I saw something about somebody following for a
scam where they got their leg This is in some
other country where they got their legs amputatedfully in order
to take a dark real quick bro. Yeah, yeah, well

(21:54):
you said you talk about breaking your arm on purpose.
I mean it's like, what is it ninety six hours
or whatever? Oh? Yeah, the James Franco movie. Never saw that. Yeah, anyway,
I don't want to get off track here, but somebody
was trying to take advantage of it as an insurance
scam that they were trying to pull on the insurance company.
But then the insurance company found out and so they
actually ended up like going to jail and having to

(22:14):
pay money on top of the irreversible harm that the
person inflicted upon themselves. Well that's crazy, that is awful. Yeah, yeah,
so never do that, folks.

Speaker 1 (22:24):
I'm not sure what new sites you're reading, but that
would be cheap, not fruital. It makes me question what
you're into, Okay, And I think on top of that, Matt,
if we're talking about a really elevated expense in the
medical space, and granted this is this is to like
because you have the money in the FSA or the HSA,
it's not like you're putting it on the credit card

(22:44):
and then you're not gonna be able to pay it off.
So well, when we talk about putting stuff on credit cards,
we always say that you have to be able to
pay it off on time, and in false that's that's crucial.
But you've got the money backing you up, So it's
not like that you're really at risk of that. And
if you're trying to maximize a welcome offer, trying to
hit a spending threshold, right then it makes an even
bigger difference in your ability to clear that hurdle.

Speaker 2 (23:04):
Yeah, all of those small purchases add up, it makes Okay,
here's a little plug for another credit card, the what's
the Visa Executive Membership Costco card? Oh? The Chase is it? No?
City is the City City card? Yeah? I recently finally
used my reward certificate. Have you got in yours? When
did y'all become a member?

Speaker 3 (23:23):
Oh?

Speaker 2 (23:23):
Always get it? A few member we get into November. Yeah,
so okay, we got ours? Yeah, boy, you better believe
I use that goes almost three hundred bucks to completely
white like take care of a massive costco run for us.
But like all, I'm just pointing out that all, like,
it doesn't have to be some massive expense, like some
big medical expense that you have coming out. It can
be all these small things and over time that it

(23:45):
really does add up and at least a significant benefit.

Speaker 1 (23:47):
It's just like, oh, if you're trying to meet a
three thousand dollars spend and you have a twelve hundred
dollars medical bill that you're gonna use FSA funds for anyway,
we'll funnel it through the as well.

Speaker 2 (23:54):
Yeah yeah, but so, Derek, I think it's worth mentioning
that the best way though, to score the biggest benefits
of your HSA. Like we're kind of talking about using
credit cards to maximize the benefits, but let's talk about
how you can maximize HSA benefits, and that's to leave
those funds be for years, if not decades. And what
we mean by this is to invest that money instead
of just siphoning or funneling that money through your HSA.

(24:17):
And I know not everyone can do this. A lot
of some folks out there, they don't have the financial
wigga room yet at least to allow those funds to
linger and for you to invest that money. But if
you can just think of your health saving these account
as another long term account to help you to invest
for your future, well, man, I'll tell you what future
you is going to be very very happy down the line.
It's the The HSA is the most underrated retirement account

(24:41):
in existence. A few folks know about how many people
treat it that way as this long term retirement retirement account,
and that's how we want you to start thinking about it.

Speaker 1 (24:49):
Yeah, and we've got an article that will link to
in the show notes that just details exactly how to
you use an HSA to maximum effects. I was literally
texting with my brother in law about that this warning Matt.
He's like, Hey, so, which fund should I invest in
inside of my HSA?

Speaker 2 (25:04):
And I'm like, do you.

Speaker 1 (25:05):
Have like Vanguard funds, Fidelity funds, like what you got
access to? He's like, well, I got this gut VTI
how about that one. I'm like, yeah, that's a killer,
low cost fund to guess it. And I'm like, just
to make sure you're gonna leave those funds invested for
like a lot of years, right, you don't need the
money right away. He's gonna do the right thing. He's
gonna start paying for he's gonna be paying for medical
expenses out of pocket and gonna leave that money invested

(25:27):
for future withdrawals because of the extreme tax benefits that
the HSA provides. So he's brilliant. Appreciate what he's up to.
And what we're talking about here is the triple tax
advantage nature. No other retirement account that we know of
at least has this ability. You're taxed at some point
in the process on any account that you might invest

(25:48):
inside of. Right, So for ROTH accounts you pay tax upfront.
For traditional four oh one K or IRA accounts, you
pay tax when you withdraw those funds, typically in retirement.

Speaker 2 (25:57):
Right.

Speaker 1 (25:57):
But the HSA is incredible because if you use it correctly,
you avoid taxes when you contribute. You invest that money
so it can grow tax free over the years. So
whatever you put in the beginning becomes a whole lot
bigger later on down the road, and then you take
money out of that fund potentially decades further into the
future without paying any tax either. You just avoid tax
the whole way around. And even with some of those

(26:19):
payroll contribution taxes, if you know the ah says through
your employer, it's a quadruple yeah, tax advantage. It's like
that one sweet additional benefit. It matters a lot. It's
it's almost matt like sheltering your money in the Cayman
Islands or something. I don't really know how that works.
I know it gets referred to in movies and stuff
like that, but It's just it's this tax benefit that's
accessible to everyday folks, not just the ultra rich, ultra wealthy.

Speaker 2 (26:42):
You and I we've been running a lot lately, and
as I was thinking, it makes me think about if
you were to run downhill on a moving sidewalk with
the wind blowing at your back. Yeah, like all of
those things are going to lead to you running faster
and then a I don't know, somewhat similar Oh, plus
the fourth so pleasure I actually might need for people
to assume that I'm actually running instead of walking with

(27:04):
your family on the sidelines cheering you. That's the potential
payroll tax aboidance as well. But like, all of these
things are leading to your ability to sock away more money,
to invest that money, and to not have to pay
tax on it. And I think for how to money listeners,
if you have the financial margin to contribute meaningful amounts
of money to your HSA, and you can afford not

(27:25):
to touch it for quite some time, this account it
can just be one of the absolute best ones you
have access to. It's unfortunately one that I've not had
access to because I've never had a high deductible well,
I have had a high deductible plan, but that was
literally decades ago before I knew about the stupid HSA. Yeah,
I never had access either. It's kind of a bummer.
And now now that I know about HSA, yeah I
haven't so said I had a high deductile have money
stocked away in one. But it's just a great account

(27:47):
for early retirees as well, because you can just withdraw
those funds at any point in the future as long
as you stay organized to keep up with those receipts.
And if you want low fees to boot well, we
would recommend you check out Lively or Fidelity. They are
the top two HSA providers out there.

Speaker 1 (28:01):
I love these set. It's great for early retireies because
I agree. I think it because of how flexible it
is in nature, because you're not prevented to withdrawing those
funds after the age of fifty nine and a half.
No no, no, Let's say you incurred the medical expense
when you're twenty five and you're like, you find yourself
at age forty five and you've been investing that money
for twenty years, Well, now you want to pull those
funds out. Sure, no harm, no foul, You can still

(28:24):
guess what because of the medical expense you incurred, it's
completely tax free. You've still avoided all the tax, but
you pulled it out way before traditional retirement age. So
I agree the HSA. It just adds extra flexibility. It's beautiful,
especially for those folks who don't want to work until
the sixty That's right.

Speaker 2 (28:39):
Man. Let's hear from our next listener though, and he
wants to know how he can make the most of
a profit sharing plan.

Speaker 5 (28:46):
Hello, Matt and Joel. This is Carl Higgins from Montana.
I had a question about profit sharing plans. I've been
at my job for twenty one years. I currently have
one hundred and they're thirty thousand in my plan. We
are not allowed to contribute to it. So my question

(29:09):
is I just wanted to see if you could go
in depth on profit sharing plans. And it is one
hundred and thirty a lot after twenty one years, and
I plan on going to quit here in the next
few months to pursue my business. So what would I

(29:30):
need to do with that one hundred and thirty thousand?
Thanks for all you guys, do appreciate it. Thanks for
the help.

Speaker 2 (29:38):
Oh Matt, carl starting his own thing. Love that, Yeah,
I love that.

Speaker 1 (29:42):
I'd love especially since COVID the uptick in the dramatic
uptick in the number of people who are starting their
own businesses. I just think that's such a good thing
for our country. Unfortunately, I don't think it's sustained. There's
like a massive spike.

Speaker 2 (29:54):
Oh really, I thought it was still going. I think
it's it's declined a little bit. Okay, well, I don't
know if it's back to pre pan business formation levels,
but it's definitely not where it was in twenty twenty one.
The toughest part of going that route typically is being
able then to afford health insurance on your own right.
That is one of the reasons that we need some
sort of health insurance perform in this country because that
prevents I think a lot of people who would feel

(30:15):
comfortable starting a business, which is great for the economy,
that maybe keeps them like a golden handcuff to their employers.
So I'd love to see something done on that front.
But I digress, And so big congrats to Carl on
starting his own thing, especially after a couple of decades,
like boom, You've got the skills you got to know
how you've been doing something for a while, you probably
now know a niche that you can inhabit to be

(30:38):
and make it lucrative. So we're pumped for you, Carl,
And we don't get many questions on profit sharing plans.
They're kind of cool though, because employers have the ability
to compensate you, Carl and your fellow employees when the
employer has a great year. So if the years particularly fantastic,
then boom, they're flush with cash. Hey, why don't we

(30:59):
Why don't we shove a good and maybe it's a
percentage of the profits or something like that, Why don't
we just funnel that straight to our employees? Hey, we
all share in the wealth. I love that because I
think it builds morale as well. I think it's just
people who work for companies who share the profits end
up being happier because they feel like it's a shared success. Yeah.

Speaker 1 (31:15):
And then if profits are non existent, well you're probably
not going to see any money in that account in
a given year, right, so hey, it was a tough year,
well the profit sharing account? Yeah, sorry, it's lean. You
don't get anything, and that makes it hard to predict
and bank on this being a significant source of revenue
in retirement. But it's going to be helpful, and like
I said, I think just the working culture. It's good

(31:36):
for the working culture of a company and for its
employees to I think if you have one of these,
you're likely to stick around longer. And Carl's probably been there,
what do you say for two decades? That makes sense?

Speaker 2 (31:44):
Twenty one years? Man, Yeah, And so he asked if
the amount that he has in there is good, and
the safe answer is, well, it depends because it depends
on how much you've been making maybe over the course
of twenty one years. You're like, actually, I would have
expected there to be a lot more in there. But
bottom line, that's I mean, you're you're talking over six
figures like this is not chump change. And most companies

(32:06):
that do offer a profit sharing plan like this, they
do this on top of offering a tax advantage account
like a four oh one K, Right, there are typically
additional dollars on top of a four to one K
match and so in all likelihood, this is for you
an additional way that you've been able to save money
for your future, except that you haven't been doing it.
Someone else has been doing it. You're a benevolent employer,

(32:28):
they're the ones doing it for you. And so basically
I think it's I think it's better than what most
folks have because many don't have access to a profit
sharing plan at all. And on top of that, if
you've been a diligent investor, if you've been investing those
dollars inside of that account, you've likely accumulated even more
than the typical person your age. One note is that
depending on so you and you mentioned this in your

(32:50):
question too, but you are not able to contribute to this.
This is an employer provided plan only, which means that
the investing period could vary greatly, like you can't like
with a four w K. It's's been there a long time,
so Mike exactly like he's been there for a long time.

Speaker 1 (33:05):
So unless this is a highly abnormal plan, I'm guessing
Carl that Sorry, Carl, it's a sixty years if you vested,
but do double check that.

Speaker 2 (33:13):
You never know. I don't know what kind of company
or industry you're in.

Speaker 1 (33:15):
So that would be the biggest rug pull it would
in the history of profit sharing plans.

Speaker 2 (33:21):
But that's one of the differences between like say a
four and K versus a profit sharing plan. Is with
a four and K, you're making your own contributions, and
so those are literally your own dollars that you've contributed whereat,
but the matching dollars have are subject to that investing
period too, exactly. Yeah, and so in this case, all
of the money that's in there has been put there
by the employer. So more the money more the percentage

(33:41):
of the money that's in there is subject to the
rules that you've got to play back.

Speaker 1 (33:44):
I don't know if I've ever heard of a vesting
period longer than five years. Yeah, Typically it's like three
to five. Yeah, well, sometimes it's even one year at
eighteen months, which I think is which I appreciate. But like, yeah,
if it's longer than five do let us know that
sounds be extreme, that'd be terrible for sure. All Right,
So what should you do with this money? Well, hopefully
you don't need access to those funds yet, right. Taking

(34:05):
the money out would trigger tax consequences because these accounts
are treated similarly to four one ks and iras. So
if you're not fifty nine and a half, which Carl
you son quite young, don't I don't. You don't want
to tap that fund and start taking money out, so
it's just best to let that money continue to grow
for your future. The absolute best thing to do in
all likelihood is to roll this money over to an

(34:26):
IRA after you leave employment. So you're going to want
to do a direct rollover so you don't trigger any
tax consequences by not doing this in a timely manner.
And Matt, we talk about this one company, Capitalized, who
will help you roll over a four to one K
to an IRA, but they'll also help you roll over
a profit sharing plan to an IRA. So if you're
like I just don't want to fill out all the

(34:47):
paperwork and you still have to do a little bit,
but Capitalize makes it super easy and they do it
for free. They don't charge you a dime. They get
paid by the company you're rolling it over to, by
the brokerage, but they're not even trying to steer you
towards a partic the broker Did you say, listen, I'm
moving into Fidelity, I'm moving into Vanguard, I'm moving into Schwab.
They'll say, cool, let's do it.

Speaker 2 (35:04):
We'll help you.

Speaker 1 (35:05):
And that's what I did for one of Emily's accounts
with an old employer back in the day. That made
it super simple. So do it yourself. It's not terribly difficult,
but let Capitalize help you if you want. But we
get that money into I would say, your own proprietary IRA,
so you have more direct control over it.

Speaker 2 (35:22):
That's right, I will say. So the IRS allows you
to roll money over from a profit sharing plan to
something like a four to one K or an IRA,
but that doesn't necessarily mean that your plan administrator allows that.
And so that's again where the details matters. To just
make sure that you are checking with either your employer
or whoever it is that manages that to make sure
that that is allowed, because he didn't give a ton

(35:44):
of details, so we actually don't even know. We're assuming
that he's invested within that account, but it could be
there as a cash benefit as well, in which case,
these are all details that you need to dig into, Carl,
because if that's the case, like there might be and
they're not allowing you to roll it over, there could
be that massive tax consequence like Joel was talking about,
how you want to avoid, but it might be unavoidable.

(36:05):
And if that were to be the case, then obviously
you would want to make sure well, first of all,
I guess that you would have the money set aside
from that that you're able to pay that tax burden.
But I would also one hundred percent be reaching out
to a tax professional to find some unique creative way
to ensure that you can try to avoid avoid paying that. Yeah,
because I mean, if we're talking twenty five percent on

(36:26):
over on six figures here, that's a lot of money
that I would definitely be paying a flat fee to
a fiduciary advisor to provide me with some assistant.

Speaker 1 (36:34):
And the best place to play flat fee to a
fiduciary advisor is hellonectarine dot com. So if you need
if you need that, that's a great website to find
somebody one hundred fifty bucks an hour. Easy to understand.
Our friend Jeremy over a Personal Finance Club started that website.
It's helped a lot of people.

Speaker 2 (36:47):
I think Personal Finance Club is where I heard that ampte.
Oh really like story that's so random. It like is
on Instagram. Okay, it wasn't like something that they wrote
a story on, but yeah, they do the social media stuff.
That's true.

Speaker 1 (37:00):
Yeah, all right, We've got more to get to on
this episode, including a question about how our country's national
debt should impact how we think about investing.

Speaker 2 (37:09):
We'll get to that and more right after this, Hi Buddy,
to be back. We got more listener questions to get to,
specifically in the form of the Facebook Question of the
Week and your favorite listener. We can call it the
meta money question Anonymous. I was waiting for you to

(37:31):
make another anonymous joke, but they asked, has had the
Money ever done an episode on the national debt? Not
from a political perspective, which I know they avoid and
I went to as well. But if they advocate for
nearly on smp slash broad market index funds, what is
the exposure to a debt driven crash? Are there any
effective hedging strategies? I'm skeptical of crypto or precious metals,

(37:55):
but what's the right approach? What's the thing? Joel? Time
to get political?

Speaker 1 (38:00):
Yeah, No, we're gonna try to avoid the politics here,
because Joel's all RFK, not true, not true, that's the
third party. I'm all, is there like a d none
of the above kind of avoid the either aisle?

Speaker 2 (38:13):
Yeah?

Speaker 1 (38:13):
Yeah, well this is so we're talking to, and we
have avoided I think the topic in large large part
because it has a lot of political intonations. But this
is the perfect way to broach it, I think, and
it's something that should be on our collective radar and
in so many ways, Matt. Part of the reason I think,
actually we can talk about this in a non partisan
way is because this is a bipartisan screw up. We'll
post a link to a great interview with an expert

(38:35):
on national debt. It was done on the recent interview podcast.
It's a It is a political podcast, which is very political,
but it's a libertarian podcast, so it's awesome, and the
libertarians kind of hate everybody in the political space, and
so yeah, they basically think both parties suck, and so
that's kind of the approach that they take everything from.
And the truth is both parties are really bad at

(38:55):
spending and even the people who kind of make a
big fuss about not wanting to spend more money or
politicians who talk about the national debt, which almost nobody
does anymore.

Speaker 2 (39:03):
I know. That's that's what I was going to say,
Like who was actually making that argument anymore? Like that, Yeah,
like we're the tea parties. That's so fifteen years.

Speaker 1 (39:10):
Ago, nobody cares anymore, which is a crying shame. But
this interview with Brian Reedle, who is the guest, it
does a great job talking about how how both parties
have grown the deficit and the debt and how that's
becoming more of a problem for our financial future. There
was a also a great article from the Wharton School
of Business we'll link to in the show notes about
kind of the taking time momb and not everyone Matt

(39:30):
feels this way. There are some people who think that
the US can absorb an unlimited amount of debt as
a nation, but we're not in a camp. We don't
necessarily think that a country needs to handle finances like
a household. But still there.

Speaker 2 (39:42):
Are problems kind of with how we've been handling money
as a country. Do I think we've become completely completely
detached from reality here in our country. And I don't
know what the solution is because I'm all for low taxes,
but that also has to coincide with some wise spending choices.
And I would say that neither of us are policy experts.
Were not smart enough to name the specific agencies or

(40:03):
specific line items that should be cut, but a lack
of social Security funding for example, like this is clearly
an issue, and our elected officials they've just chosen to
sit on their hands. This is a can that they
continue to kick down the road and not address until
I think the problem is going to be imminent and
hanging over our heads. And what it seems like truly
like like you were saying that, folks used to care

(40:24):
about the deficit and spending and the national in debt,
but nowadays it seems like the party that's in power,
they're basically they're just looking to spend money in all
the different ways that supports their policy and their beliefs.
They start money.

Speaker 1 (40:36):
Instantly salivating because they're at the they're at the helmet,
the purse strings.

Speaker 2 (40:39):
Yeah, it just it seems like it's it's veering from one.
It's just like it makes me think of like when
a trailer on a car is improperly weighted and it
starts like not a speed wabb but you know what
I'm saying, Like, and if you continue to cruise down
the highway, it just continues to get more and more
extreme and it goes from one side to the other

(41:00):
before it just completely RECs and I think that that's
what this listener or this poster is essentially referring to,
because that's sort of what it feels like. But I
do think it's going to take some combination of austerity
plus raising taxes in a palatable way, right, like, in
a way that folks can kind of get behind, in
order to start to shrink the nasty deficit and debt

(41:20):
of the United States over time.

Speaker 1 (41:22):
Yeah, yeah, So I think it's a problem, right, And
I think anybody who's kind of paying attention can see that,
because you even look at the graph from where it
was even where our national debts in the eighties and
nineties and kind of where it stands where it is today,
it's shocking to see kind of not just the increase,
but the rate of increase and how it just continues

(41:42):
to accelerate in recent years. Part of that was kind
of the exorbitant COVID spending too, right, that was one
of the things that really juiced the debt and the
deficit in a couple of those years, and then the
overall level of debt, and so then how should that
impact how we invest? That is kind of the heart
of this question, and so in regards to the one
hundred percent s and P or total stock market fund
recommendations we typically give, we'd say this that a lot

(42:05):
of those companies in those funds have a lot of
international exposure, and the alternative is that you can go
out there and invest in ways that offer you even
more international exposure. I think this is really to each
their own sort of scenario. As the US goes, though,
I think so goes the world, we could very well.

(42:26):
I think we could see international outperforming the US in
the coming decade because of kind of overinflated asset prices
in our home country. But I'd also say that if
the US market experiences a crash or a prolonged time
of difficulty, markets around the world are going to feel
those tremors too, and it's not like they're going to
be thriving while we're taking on the chin. So I

(42:48):
think there are hedging strategies. Having cash is one of
those things.

Speaker 2 (42:51):
Cash is not.

Speaker 1 (42:53):
Trash, like a lot of people say. It feels like
trash until it isn't until you need it right And
then for end of the show, Matt he would say
that bitcoin is another way to kind of buoy yourself
against government and overwrought spending. Sure, and so it's hard
to know whether that's true or not. I think that
conversation is very was very enlightening for us and hopefully

(43:13):
for our listeners too. But you could make a good
case that if we don't make some fiscal policy changes
that bitcoin becomes an even more attractive holding.

Speaker 2 (43:20):
That's true, yeah, But at the same time, I think
there are there are going to be like a massive
subset of folks who will never invest in something like bitcoin,
Like they want to invest in the hard real companies
out there that are producing products and services, and where
are a lot of those companies based, Like there is
no other country in the in the entire world that
has as conducive of environment for business formation, like we

(43:43):
were just talking about business growth and innovation, like these
are all things that we find here in the United States.
And when the cut, when our country experiences higher levels
of debt, I could see And again we're not like
massive macro econ wonks here. And so that's my preface.
But what I like it makes me think of the
impact that high federal national debt can have on currency.

(44:05):
For instance, when it comes to currency trading versus what
businesses are doing and the ability that individual companies have
to be able to create products that folks will invest in.
And guess what the stock market is composed of a
bunch of those businesses all together. And so I think
what you said is so incredibly true about the world
is so interconnected. It's hard to imagine that anything that

(44:26):
we as a country would experience would have so negative
of an impact that it would make it unattractive to
invest here in the United States as opposed to going
abroad instead, Like if that were to be the case,
and I think we've got bigger problems on hand, because
that would likely mean, oh, maybe we should also be
moving to other countries as well, because if you're not
willing to invest your dollars in the United States, are

(44:47):
you even willing to live here? And that's when the
preppers come out of the wood work and you start
thinking like the doom and gloom and start building a
fortress on in Hawaii. Right.

Speaker 5 (44:55):
Oh.

Speaker 1 (44:55):
I think even the general incompetency of kind of our
Congress and stuff like that like that, just their inability
to get anything done, it's actually good news because oftentimes
when they when they get together like they can't screw
it up that month, they end up spending a lot
of money, and I think money that's spent, given where
we stand on it from a national debt perspective, it's
actually going to inhibit future US economic growth.

Speaker 2 (45:18):
Yeah, I mean, ultimately, I agree. It's just it's what's
sad is that we are getting used to that as individuals,
and I think other countries are getting used to that
as well, and perhaps they're getting more comfortable with their
debt levels. But I don't think at this point it's
it changes how I am investing. I guess this is
what I'm saying. I'm still one hundred Other than my
five percent invested in crypto, I'm still one percent. Maybe

(45:38):
the SMP all the way.

Speaker 1 (45:39):
No, I mean, I listened to that recent interview podcast
and I got to listen to that one for about
forty five minutes while listening to it, But then I
was like, what's.

Speaker 2 (45:47):
The better alternative? What are the alternatives? And there wasn't
a better alternative that I could think of, And so
I'm still the best case scenario. Right, It's not the
best case scenario, it's still the best case. It's the
best option that we have available to us. But all right,
let's get to that pest option could be better as
what we're saying. Yeah, yes, I totally agree. All right,
let's take one more. This is an email from listener John.
He said, good afternoon. My craft beer equivalent is professional

(46:09):
sporting events. My family and I go to several professional football, basketball,
and baseball games every year. No UFC, hojob, no, no UFC.
I want to pay off my house though, because I
hate debt. I was raised that all debt is a
bad thing. I know you can use it to your
advantage if you use it wisely, but the psychological aspect
dwells on me. I currently owe one hundred and twenty

(46:31):
five thousand on my home at two and a half percent,
and I have ten years left. I've been paying the
minimum each month, but I might want to pay it off.
Whenever I ask a CPA or anyone else, I just
get called dumb. I currently have a two hundred and
twenty five thousand in a brokerage account invested in an
SMP of five hundred ETF and with the market being
at an all time high, why not cash out one

(46:52):
hundred and twenty five thousand and pay off my house.
My wife and I have no credit card debt. We
max out our four one ks and roth IRA's. We
put seven fifty a month into a brokerage account, put
four thousand a year into each of our kids five
twenty nines, no other debt, and we have a year
of rainy day funds set aside. What other reasons should
I or shouldn't I pay off my house? Tax reasons?

(47:13):
What's you think, Joel?

Speaker 1 (47:14):
Well, there's a lot here, right, And first, I'm glad
to note that John's craft bear equivalent, right, that he's
figured it out, and that he's spending money accordingly. And
I hope ski jumping makes it into the mix because
that's a great sport too. That's what my Norwegians are
good at. He likes all the sports, that's right, So
enjoy those games. And we're not gonna call you dumb
because there's no help and that that's just rude. But

(47:34):
paying off a mortgage just for peace of mind is
a reasonable thing to do, sure, and you have earned
that right, like you are taking care of your finances
incredibly well, as evidence by the maxing of all those accounts,
tossing a lot of money into the taxable brokerage, even
funding your kid's educational future. You're doing all the right things,
So I guess when it boils down to it, it

(47:55):
doesn't matter if it's the most optimized route. You get
to do what you want to because you've done all
the right thing so far. So if this is what
you want on, I'm gonna say I'm gonna sign off
and say go for it.

Speaker 2 (48:04):
Absolutely, it's not what I would do. I would be
hanging on to that two and a half percent rate
as long as I would. I two would hang on.
I would be reaching out to the bank and be like, hey,
can I extend this for like another twenty years? Is
that possible? But it's not just the two and a
half percent rate that I wouldn't pay it off. It's
certainly a big part of it. But the other reasons

(48:24):
are the potential tax consequences. And what we're talking about
here is missing out on being able to deduct some
of that home interest on your taxes. It sounds like
you're not totally sure if that's something that you've been doing.
Look back at your previous year tax returns and do
you actually itemize because if so well, that's another reason
to keep this debt around. I wouldn't let that one
factor alone determine things, but it should be taken into consideration.

(48:49):
Given again, your crazy low interest rate, I'd be looking
for reasons to bolster the argument to keep that around.

Speaker 1 (48:56):
Yeah, yeah, I think you're right, Like, definitely look into that.
There is another tax once that you need to be
aware of though, that's selling appreciated security. So you mentioned, yeah,
markets are up. What if I sell some of that
in order to pay off the mortgage debt early. Well,
it's not the worst thing in the world because you're
going to pay the favorable long term capital gains tax
rate of fifteen percent. But it's still tax that needs
to be paid. And since we're talking about a really

(49:18):
low priority debt, we'd hate to see you incrd that
like twenty thousand dollars ish tax bill if you don't
need to. So maybe the best way to proceed maybe
taking a happy medium approachs That's the way I'm going
to suggest here. Instead of taking money out of the
taxbile brokerage account, why not just stop contributing to it
for the time being, So funnel that seven hundred and
fifty bucks a month towards your mortgage. You'll still be

(49:39):
investing significantly, but you'll be kind of taking the wise
old old Testament King route Solomon route. You're splitting the baby.
You're not going to pay it off in one fell swoop,
but you also get rid of it so much faster.
So this is a personal choice, John, and this is
really up to you. But just know this is a
tax consequence of making this move. And I do think
maybe taking this slower but still a more direct route

(50:02):
to pay off is going to be the happy medium
that makes sense for a tax optimization and a psychology standpoint.
You're not getting rid of the mortgage over night, but
you're getting rid of it a heck of.

Speaker 2 (50:11):
A lot quicker. Yeah. Well, I kind of like that
you're not getting rid of it overnight. Like I almost
see that as like a safety check, Like within this mechanism,
it's almost like a governor that keeps things from completely
going off the rail. Because I like you having options, John,
And if it was me, I think my biggest risk,
or my biggest potential regret, would be paying that thing
off and possibly regretting it and thinking, Okay, well that's

(50:34):
not something I can undo now, as opposed to what
Joel is saying, paying a little bit on it. Do
that for a year, but then monitor how you feel
about those payments that you're making to your mortgage. And
if you feel great about that, and you're like, man,
we're totally eliminating this mortgage. We're about to own our
home free and clear. It's going to feel so good, awesome,
keep it up. But let's say after a year you're like,

(50:58):
I don't know, maybe I want to do something else
with my money. Okay, Well, then you still have the
option to hit pause and guess what, You've got nine
more years of paying a two and a half interest
mortgage and there's an opportunity cost you give up. Yeah,
and instead you could fiddle those dollars either to a
different investment opportunity that might come along. Maybe you do
want to dabble a little bit in some alternative investments,

(51:19):
but more than anything to a pool in your backyard. Yes,
I think it's important to just hit pause and to
think through some of the different things that might move
the needle more than having it paid for house. Like
you mentioned the professional sports, I'm trying to think like
house can you step it up a notch. I don't
come to the World Company Atlanta twenty twenty. Yeah, or
I was thinking basketball, Like I don't watch basketball, but

(51:41):
have you ever sat court side? Because that seems like
the coolest thing ever, Like dot, I'm not into basketball,
but the ability, like it seems like such a unique
experience to be right there. Yeah, and they're playing what
feet from you, like they're falling into you, like drinks
are getting spilled. Plus you get to hang out with
Spike Ley. It does seems so cool. It's but maybe
you're like, no, I've got zero interest than doing that
and hanging with Spike Lee. Maybe it just means like

(52:02):
a vacation, getting away with your family, creating new memories.
I don't know what it is for you, John, but
I think the ability for you to funnel your dollars
to whatever it is that moves the needle the most
for you, And maybe in the end you're not looking
for anything fancy at all, and truly for you, it
would be the peace of mind that you would gain
from owning your home outright. Hey, if that's the case,
then go for it, man. Yeah, John's in the world

(52:24):
is your oyster territory. Yea, right, exactly.

Speaker 1 (52:26):
It's such a good problem to have and to make
a decision like this. It's again if for you, the
psychological implication is that severe and it's going to help
you sleep better at night, and boy, this will weight
off your chest and so bam, this is definitely the
best move for you mentally speaking. Go for it, but
also don't forget that they're especially given how great you're
doing in all those other areas, where like you don't

(52:47):
need to invest anymore if you don't want to, you can.
You can do a lot of things with these additional dollars,
and this is just one of those options.

Speaker 2 (52:55):
O yah man. All right, let's get back to our
beer again. You and I during this episode joined I
choose u Zu donated to the show by Christy. What
were your thoughts on this one?

Speaker 1 (53:04):
All right, buddy, this one was interesting. It was light,
it was a little bitter, and it had kind of
neutral beer vibes, like not like a pilsner, even where
if you that's what I typically associate with a light beer.
This is so different because it's made with rice, so
it's got a different vibe than kind of the traditional
real clean US pilsner vibes, you.

Speaker 2 (53:23):
Know, yeah, yeah, so like it was just in my
mind was bright. I guess the maybe some of the
citrus freshness from the yuzuo, but it drank really like
clean in my opinion. And by the way, this was
brewed by Pure Project, and I mentioned last time that
was gonna look up what the deal is with Pure Project.
They're not I guess not surprisingly, they're into the environment,
so that they donate one percent of all not profits

(53:46):
but of all sales to environmental nonprofits. That's something that
they that they value. So like we talked about at
the beginning of the episode, being intentional with your with
your giving, but then also their ingredients. They oftentimes try
to brew with seasonal ingredients, which means they're brewing with
stuff that's typically more local as opposed to sourcing stuff
from all over the world and organic ingredients as well.

(54:07):
So nice. All that leads to I think a very wholesome,
delicious beer. It was great, you know, I got to
enjoy it today. Big props to Kristen, thank you for
sending us on our way. We really appreciate it. Christy, Sorry, Christy,
she forgives you all right, that's going to do it.

Speaker 1 (54:20):
For this episode, Love links up in the show notes
up at how money dot com, including the link to
our daffy campaign, so you can help me crush Matt,
win the victory and also support great nonprofits in the process.

Speaker 2 (54:32):
All Right, Well, that's gonna be it for this one body.
Until next time. Best Friends Out, Best Friends Out.

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Ask HTM - Alt Investment Considerations, Making the Most of Profit Sharing, & National Debt’s Impact on Your Portfolio #811

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.css-14f5ked{margin:0;word-break:break-word;display:-webkit-box;-webkit-box-orient:vertical;box-orient:vertical;-webkit-line-clamp:2;overflow:hidden;}Ask HTM - Alt Investment Considerations, Making the Most of Profit Sharing, & National Debt’s Impact on Your Portfolio #811