Ask HTM Special Edition: Tariffs, Market Volatility, & How It All Impacts You #973

Episode Transcript
Available transcripts are automatically generated. Complete accuracy is not guaranteed.
Speaker 1 (00:00):
Welcome to Out of Money. I'm Joel, I'm Matt.

Speaker 2 (00:03):
Today we got a special ask kind of money episode
for you. We're addressing tariff's volatility and their impact on you, you.

Speaker 1 (00:28):
Know, a buddy. This is the Tariff's special edition. How
it's going to impact investing, How it's going to impact
your job, your income, what you're spending, whether or not
you should buy or sell a house. Perhaps these are
all topics that we're going to be getting to during
today's episode. Yeah, a lot to cover, and it's therefore
we don't have any short quick stories to share with

(00:50):
them this week. We've got a lot to get to
during today's episode.

Speaker 2 (00:53):
As you and I have discussed multiple times to the
constantly changing policy, that's got a factor to this discussion. Two,
it's not like there's some set in stone let's plan
on this. There are still like tariffs that are supposed
to come into being in you know, less than three months.
Will those are won't those happen? That's also part of
the discussion here.

Speaker 1 (01:11):
Yeah, that's so true, because so we're literally recording this
episode just like a few days before, you are hearing
this out there and even and certainly between us recording
and you hearing this episode, things could have changed. But literally,
like while we're talking, like things are so dynamic, and
I don't know if there's ever been a time where
we've seen so much change in such a short amount

(01:32):
of time. I heard specifically the terriffs I heard referred
to recently as like the wax on wax off tariffs.
It's the mister that Trump is the mister Miyagi of
of international trade some truth for that which totally cracked
me up. But the beer that you and I are
going to enjoy during this episode is called a yellow Rose.
This is a smash IPA. I did not know that

(01:53):
was a category of Iba smash Burger's, but not smashed
ipa smash I pa. I don't know Loane Pint Brewery.
They are the of this particular drink, but never called
it a drink before, but as a beer that we're
gonna enjoy, and we'll share our thoughts at the end
of the episode. True story.

Speaker 2 (02:08):
And by the way, if you have a money question,
just go to how to money dot com slash ask
for the simple directions on how to submit yours. If
you've got one about the macroeconomy, how it impacts your
personal finances. Please do send your questions our way, or
you can just record your question on the voicemad Mo
app of your phone email it over to us.

Speaker 1 (02:24):
Matt.

Speaker 2 (02:24):
Let's get to a question specifically about international investing in
the age of tariffs.

Speaker 3 (02:30):
Hey, guys, this is Bryant and I'm calling in from Cutzer.
My wife and I are both originally from the United States,
but we are currently living and working in Cutzer as professors,
and we are worried about the kind of state of
the US economy, and we recently decided to keep living here,

(02:57):
so we just turned down job offers extra c m
M in order to kind of stay here and work here.
Sellers are higher cost or lower. There's there's some perks involved,
and we are kind of wondering where to go from

(03:19):
here with our investments. We currently have most most of
our investments are currently in the US stock market, mostly
in the Vanguard et F v o O. But given
kind of the decline of the dollar and the kind

(03:44):
of fluctuation in the in the stock market currently and
with everything else going on, we are considering investing internationally.
So we've been looking at some European ETFs like the
VGK and some other ones, And we were kind of

(04:06):
just wondering if you have advice about that, what you
think about if there's any picks that you would suggest. Yeah, thanks, Yes.

Speaker 1 (04:17):
Do you like how Bryant said, if we had any picks,
We're here to dish out the stock tips.

Speaker 2 (04:23):
He's not, at least he's not asking about individual stocks.
He's talking about, Hey, should I diversify internationally? Which is
and it's honestly, that's a question as old as time,
since the beginning of stock market investing.

Speaker 1 (04:33):
Yeah, Brian, he's a part of the VU family. He
feels like a brother to me, Joel, because that's pretty
much fully invested in VU.

Speaker 2 (04:40):
Yeah, I'd be curious to know, by the way, what
it feels like to be living internationally right now, reading
about all this American news from overseas. It's it's like, right,
we feel inundated by it. I wonder if, because he's
in the Middle East, if it feels more or less impactful.
Maybe it feels even a little less unclear because the
coverage is a little more sparse. I I don't no,

(05:00):
but it is. It would be interesting to have that
kind of Bird's eye view in What is it actually
like living in what? How do you pronounce it Cutter?
I've always had a tough time pronouncing that one.

Speaker 1 (05:08):
But that's I think that's how you pronounce it if
you are a local, like if you live are That's
how I always said. Yeah, I mean that's as I think.
As English speakers, I've always heard it referred to as Qatar.
But folks who say cutter, you have to be a
professor living in Cutter to be able to say it
that way. Joe, Yeah, so you're not allowed to say
it like that, Okay, I won't just so you know. Good, good,
Thanks for clarifying that ahead of the time. A whole

(05:29):
lot of other words you're also not allowed to say either, right,
because of who you are. But that's true, okay. But
I also I get to worry that Bryant is experiencing here, right.
I think.

Speaker 2 (05:38):
I think a lot of the norms that we've grown
accustomed to, they're being shaken up right now. You and
I were always talking about how politics shouldn't impact how
you invest. That's particularly true right when we're getting to
election season and people like, oh, if the Democrat or
the Republican gets selected that maybe I should shake things
up because I don't know if they're going to handle
the economy as well. And that has always been based
on the reality that both the R and the d's

(05:59):
they kind of tend to hold a belief in the
benefits of global free trade. And for the first time
in a long time, Matt, the free trade bias that's
essentially been held for generations, it's being upended. And so yeah,
I do think the discussion of changing your investing strategy
takes on a bit more weight in this environment. Like
the question is different than what if an R or

(06:19):
D gets elected. It's like, well, what if the way
we think of the global economy is shifting dramatically?

Speaker 1 (06:24):
Yeah, and it does. I will say it appears like
that sort of free trade approach to global trade is
being upended. There's also a chance, of course, that it
could just sort of be a blip on the radar
in terms of stock market and investments. It could be
just some of that short term volatility that has yet
to be seen. And honestly, that kind of that's the
filter I'm viewing all the questions we're going to kind

(06:47):
of get to today. We're gonna address and try to
answer the questions as best we can given what we
know at the moment. So Bryant's question should he be
investing internationally? There are gonna be valid arguments on both
sides whether or not you should continue to invest solely
in the in US companies or if you should expand
that to international indexes as well, because many believe that

(07:11):
US centric ETFs like VU offers enough overseas exposure that
it just minimizes or it even completely eliminates the need
to own funds that own foreign companies specifically, So basically
you're getting enough diversification by owning a single index like
VU because McDonald's, Apple, Amazon, these are all companies who

(07:33):
are doing a lot of business in countries around the world,
which achieves a just like a good enough kind of result.

Speaker 2 (07:39):
If you travel to Asia, man, you know how many
kfs as you see a lot are there.

Speaker 1 (07:42):
I don't know. It's been a long time I've been
in Asia. So we have always felt this way, and honestly,
despite the tariff induced market volatility, we still feel that
most folks will do just fine investing in low cost
total stock market index funds or s and P five
hundred ETFs over the years.

Speaker 2 (07:59):
Yeah, And I think that's for multiple reasons, right, because
despite this growing anti free trade sentiment, the US economy,
it's still the most vibrant in existence, right, and our
business environment is the envy of the world. Like when
you think about the biggest companies in the world, it's
not even close like the United States, especially when you're
talking about the mag seven or whatever. Companies in other

(08:21):
countries just can't hold a candle to the largest companies
that we have in the United States here. True, and
also when it comes to the breath and the diversity
of companies and industries that the United States participates in.
It's all our belief too that there's no real stomach
for significant tariffs to remain over the long term. Right.
We've already seen tariffs paused, reduced, rolled back, and then

(08:45):
exceptions created for specific companies and sectors specifically like computers, smartphones.
Right when you think of a company like Apple, they're
lobbying hard to have tariffs reduced on smartphones in particular.
And I think the administration is starting to understand how
negative of an impact lasting tariffs could have. And it's
obviously it's hard to predict when trade policy is kind

(09:06):
of at the mercy of one man's whims right now.
But the willingness to minimize tariffs and to shift when
tide's turn, I think that's at least somewhat positive. So
one we can see that the US economy is incredibly resilient,
and two, it looks like tariff policy can and will
change right as the American economy reacts negatively yes to
the imposition of those tariffs. I think those are two

(09:28):
at least positive signs that being a US centric investor
still seems like.

Speaker 1 (09:33):
A reasonable idea, right But Bryant might feel differently. He
might come down, you know, given the same information, he
might make a totally different decision. And I think that's okay.
There are a lot of really smart people out there
who believe that international exposure is crucial for investors. And
this is even before tariffs came on the scene. Even
if international stocks have performed poorly versus US stocks over

(09:54):
the past decade, that still doesn't mean that they will
over the next decade. You know, like things could turn around,
particularly if US policy continues to march down this road. Brian,
if you do feel that you need to change things, up.
I would say, don't change things up like immediately, Like
you don't need to slam on the e break and
pull ui. I would just consider buying other low few

(10:16):
funds that offer non US talk exposures with new investment
dollars over time. This isn't like a call to say
just sell everything and you completely upend your financial or
at least your investing life. Yeah.

Speaker 2 (10:29):
I think if you're going to change your investing strategy, like,
make sure you write it down, be thoughtful about it,
and say no no, because of this, It's changed my
happening in the world. It's changed my belief in this way,
and put pen to paper so that you have an
informed view of why you're making those changes, so you're
not just making them emotionally and half past exactly. That's
a bad idea and it.

Speaker 1 (10:50):
Makes me think too. So at the beginning or in
his question, he was talking about how they chose to
stay there in Katar based on a couple of things,
based on higher pay as well as lower lower cost
of living. I think is what he said there that's
great as opposed to thinking that, oh, it seems like
the US economies and shambles. I'm not totally sure. I mean,

(11:10):
he did mention like the weekend US dollar, but hopefully
he primarily made the decision based on some of these hard,
tangible number crunching that he was able to do, as
opposed to projecting into the future what might be happening
in a similar way. That's how I would want Bryant
to approach his investing, like, yes, total, it's totally fine
to say I want to maybe diversify a little bit

(11:31):
more internationally, but make sure you're doing that with a
plan while looking out the numbers as opposed to that
sort of knee jerk emotional reaction.

Speaker 2 (11:38):
In a proactive, not reactive way. And the proactive, I
think is exactly what you mentioned, Matt, just kind of
buying into other index funds internationally over time to increase
your exposure there, instead of making some sort of whiplash
sell by sort of thing in one of your tax
advantage retirement accounts. Right, and Bryant, he mentioned VGK that's

(11:59):
a good one for your specific investing. It's a Vanguard fund,
and then there's there are funds like VXUS it's a
it's a broader international fund. They could do the trick
as well.

Speaker 1 (12:08):
Also low cost. Also cost also starts with the V
so I'm pretty sure Brian's going to be into it,
and I think ultimately what it comes down to, Matt,
part of what makes a good portfolio for anybody out
there listening is if it allows you to sleep at night,
If you are a nervous nelly, right, if you believe
that ramping up to let's say, twenty percent international stock

(12:28):
exposure over the coming years, if that would help you
rest a little more.

Speaker 2 (12:31):
Easily, do it. If you have gone if you saw
those those jaw dropping multiple five percent drops back to
back and you were like, I can't handle this. I'm
looking at my four one k and I'm freaking well,
then it probably means you are too stock heavy and
you need to have a more balanced investment approach, Like
you don't do something, don't have so much exposure to

(12:51):
stocks that if we do have a correction, like it's
too emotionally difficult for you to stomach. I would also
just note don't sleep on target date fund either. There's
still US centric, but part of the appeal is the
inclusion of some foreign stocks and bonds, So target date
funds could be another reasonable choice for Briant and for
other people out there, And it's something that we mentioned
kind of frequently, especially because it is one of those

(13:14):
set it and forget it things where you invest in
the target date fund and it changes as you get
closer to your retirement date.

Speaker 1 (13:19):
Yeah, but in a similar way, I feel like even
VU is a set it and forget it kind of thing.
You know, It's like, this isn't something that you really
need to look at. It's it's a NIC and PFUF fund,
an index fund. It automatically rebounces and take into account
the different companies that are included in the troops.

Speaker 2 (13:31):
But it's getting closer to tapping those retirements. Certain percent
stock oriented, certainly if you are approaching retirement. But I
mean it seems like Brian is just looking at how
am I going to be able to maximize my returns
moving forward. So I do think that there's a way
to sort of steal man the international exposure case, and
like this is an aspect of not terrorists, but just

(13:51):
our current form, current White.

Speaker 1 (13:52):
House's foreign policy. And hopefully this isn't venture too much
in the politics. But like one of the things that
we've heard recently is that the US isn't going to
be like the world's police right like that, it's not
going to be like the global cop on the beat,
as evidenced by the Vice President's statement that got the
signal gate whatever the thing this is a few weeks ago,
it's just like, Oh, I hate that we're bailing out

(14:14):
Europe again. And there seems to be this distancing from
other countries. I mean not only in funding that we're
cutting to other countries from a soft diplomacy standpoint, but
also literally from a defense backing standpoint as well. So
from a Steelman best case scenario for investing internationally, it
almost seems like that there is an opportunity for all
these countries who have previously been reliant specifically on US

(14:37):
defense to have to get their books in order for
companies to be like, oh, this is something that we're
going to have to start doing, and I see potentially
an opportunity for a lot of foreign countries to ramp
I mean they're talking about ramping up like Germany, right,
I mean they're like, oh, we've already seen defense stocks
in Europe going and as companies get more efficient, that's
going to lead to higher profits and potentially higher returns

(14:59):
of well, so I could see that being sort of
a not a best case scenario argument, but like a
Steelman case for international investing, specifically because of the US's
stance towards other countries. But who knows.

Speaker 2 (15:12):
All right, Matt, let's get some more questions we've got. Specifically,
we're gonna get to a lot of questions that people
pose in our Facebook group about tariffs and markets and
how they should be reacting right now. This question comes
from Justin. He says, in explaining tariffs, can you discuss
if a tariff is a form of a regressive tax policy?
For simplicity's sake, if tariff's raise the cost of groceries
by one hundred bucks equally for all consumers, that one

(15:34):
hundred dollars is a much larger percentage for a person
making two grand a month than for the person making
ten grand a month.

Speaker 1 (15:39):
Yep, yep. I mean, that's basically true. Terrafs are regressive
in this way. And it's super fascinating because at least
one of the major reasons offered for implementing teriffs was
to help lower income Americans, so bringing back the manufacturing
jobs that were lost to other countries, is one of
the main goals, and I of course understand the thought

(16:00):
process here. I just don't think that recreating a world
where the US is a manufacturing powerhouse is likely or
even makes the most sense for our economy. It makes
A few days ago or last week, we were talking
about we were looking at the digital rendering or the
flyover of the BID factory in China, which it's like
larger than Manhattan, It's like almost as big as San

(16:21):
Francisco or something like that. Mind blowing dorms for their workers,
and I'm wanting it. It's crazy impressive and you're just like,
this is amazing that the singular private company. But then
to think, wait, are we going to compete with that?
Not from a do we have the ability to? But
do we have the do we want to do that? Right? Like?
Is that the kind of manufacturing powerhouse that we're looking

(16:44):
for the US to become? Is that the kind of job?
Do you want to be confined to whatever corporate dorm
you know, because that's closest to the factory that you're
now working in and you don't have a life outside
of that. Do you want that for your kids? You know? Like,
and that's where I have a really tough time grappling
with the fact that this is something that's an actual

(17:05):
goal or aim of the current administration. It's one of
those things to work at a Silicon Valley company where
they have like professional chefs and massuses and stuff like that,
and so you're kind of coerced into staying, but you're
not forced to be there. And I see that as yeah,
person of the job, as opposed to be like, oh no, no,
you have to live in It's like a modern day Hooverville, Right,
That's what it looks like. It could turn into agreed,

(17:25):
agreed where we did in that path.

Speaker 2 (17:26):
Yeah, when it comes down to back to Justin's question,
tariff policies are going to hurt the bottom half of
income earners much harder than folks who have a lot
more financial resources at their disposal. So, for example, avocados
have been much talked about. Matt loves most of our
avocados come from Mexico. And if avocado goes from a
buck twenty five apiece to two bucks apiece, well, the
person with the higher salary and the greater savings they

(17:48):
can more easily afford their avocado toast or their QUACAMOLEI
habit because better than the person who's living paycheck to paycheck. Sure,
that extra seventy five cents per avocado, it really does add.
And that's just like literally one example of potentially hundreds
of items that we buy regularly that could go up
in price, and people who have less money coming in

(18:09):
are just going to feel the upticking prices more. The
same thing happened with inflation over the past few years, right,
it was lower income households who felt more pain because
of inflation. So yeah, on average, richer households will pay
more overall thanks to tariffs, but less as a percentage
of their income. And we haven't really seen massive price
bumps yet, but as those come rolling in, I think

(18:30):
the rock solid belief that tariffs are going to benefit
economically disadvantaged folks in our society could dissipate quickly as
public perception turns even more sour. And I think that's
part of what's going to lead to the inability for
substantial tariffs to remain in place over the long term.

Speaker 1 (18:46):
Yeah, going back to manufacturing, guess what, It's hard to
manufacture avocados or coffee.

Speaker 2 (18:51):
For instance, Like you can't do that in the US.
I guess you could try. There's like three countries that
produce the vast majority of the world's coffee. Buteah, if
we made a coffee in the US, it probably like
the worst coffee in the world.

Speaker 1 (19:02):
And that's not because like that is out the stuff.

Speaker 2 (19:03):
I want an American stuck at making coffee, but I
want to drink it because we don't have the climate
to grow the bets, so we need to grow.

Speaker 3 (19:08):
Right.

Speaker 1 (19:08):
If we did have the climate, it'd be the best
coffee in the world, right exactly, That's what Joel's saying.

Speaker 2 (19:14):
All Right, we've got more of your questions to get
to about tariffs and the markets. We'll get to a
bunch of those right after this.

Speaker 1 (19:28):
All right, man, we are back from the break. We're
gonna take some more questions that listeners posted over there
in the Facebook group. If you are not a member
of the how to Money Facebook group, be sure to
look it up. But let's see Becca, she asked about retaliation.
She was talking asking about gold and crypto as well. Joel,
one of your thoughts there, do you get any thoughts
specifically about the trade war? That's that's the part that

(19:51):
seems the most ominous.

Speaker 2 (19:53):
Yeah, I feel like that's kind of freaking people off
the host I agree, And I think I'm glad she
asked about this, because retaliation is is real, right, you
can you can punch somebody in the nose, but then
I don't know if they punch you in the ear back,
like you're both hurting, So you have to take that
into account. You might say, great, we got the upper
hand here in the beginning, but do you ultimately get
kicked in the pants, right? Do you ultimately have the

(20:14):
upper hand, That's the question. And I think tariffs are
a kind of a too complay at this game scenario.
And we're already seeing other countries, a lot of our
Canadian neighbors to the north canceling trips to the US,
other countries too, just saying I'm not vacationing there because
I'm so mad about the US trade policy. And that
impacts the airlines, that impacts hotels, that impacts other travel

(20:37):
leisure industries. And so if the US continues to have
an antagonistic approach to trading partners, particularly friendly ones are
ones we've been friendly with over many, many decades, it
could hurt the bottom line of US companies who sell
some of their goods and services abroad. I'm just thinking
of a company like McDonald's. I could see consumers in
other countries saying, like boycotting, Yeah, yeah, I'm not evening,

(21:00):
I'm switching to my local fair instead. So not only
will their cost rize US companies cost rizes, but demand
could go down to internationally. And so I do think
that erosion of faith in the US as a mutually
beneficial training partner, it could potentially create some of the
most harm.

Speaker 1 (21:18):
Totally, And that's the part that doesn't make the like
any sense at all. Like China, Okay, I totally understand that,
Like if you start doing some research or reading reading
about the amount of intellectual property theft that has taken
place from China and like the billions of dollars annually
that you could assign a dollar amount to. Okay, I
kind of understand the argument there, But the argument is
more of an adversarial relationship there. Yes, absolutely as the

(21:41):
other predominant world power. But when it comes to like
Canada and even Mexico, I understood at the very beginning
when border crossings were still a thing, and that's something
that the Trump camp that they campaigned on like shutting
the border, but that's like all but completely gone away,
and so the and what gives with Canada. There's like
no hardly any illegal crossings. Oh my gosh. Like the

(22:02):
fentanyl stats about the number of pounds that were crossing
the Mexican border as opposed to the Canadian border was
like laughable, Like, I don't these aren't real numbers. But
it was something like every thirty days, like three thousand
pounds of fentanyl from Mexico and it was something like
seven from Canada, I believe. And so the adversarial relationship

(22:22):
in particular to Canada makes very little sense to me.
But becos also asking about gold and crypto, how that
would be impacted, And so we'll start with gold because
it's done quite well for investors as they've turned there
during uncertain times. It's actually outperformed the SMP by a
lot over this past year, given the volatility that we've seen.

(22:43):
If you zoom out a little bit more, you see
that it's essentially matched the SMP over the past five years.
But then beyond that it doesn't do so well, and
especially if you look at the last even the last
five to ten years, and you eliminate the past most
recent four months, things start looking the whole lot more normal.
It's the volatility that we've most recently experienced that's really

(23:04):
throwing the average returns off.

Speaker 2 (23:06):
Which is on average when people turn to goal, it's
like a flight to safety exact. And so I think
that's why beck is asked about this, well, should I
be flying to safety? And part of that depends, I guess,
on your view of where the world is headed.

Speaker 1 (23:17):
Yees. But so still, if you have time on your
side as an investor, look into the stock market, that's
going to be a better choice from a long term
historical perspective. As far as crypto goes, we still dislike
crypto generally speaking, and we've got to carve out though
for bitcoin. Bitcoin is not unlike the other cryptocurrencies, but inflation, tariffs,

(23:38):
currency fluctuations as well currency inflation. This could lead to
more investors moving into the bitcoin direction. Still highly volatile
and basically it's still acting like a security. It's acting
like socks. You got to be aware of that, and
we want you Becca as well as all how too
many listeners out there to stay invested in the market,
but I certainly think having some bitcoin might be wise,

(24:02):
certainly dabbling a little bit, no more than five percent.
I get that A thumbs up.

Speaker 2 (24:06):
Yeah again, going back to kind of something we mentioned earlier, though,
making huge shifts in how you're invested makes very little sense.
But if you're making smart, calculated moves in different directions
because you are being thoughtful about the future of Bitcoin,
of money, of companies, of US based companies specifically, I
get that. But you still you don't want to make

(24:28):
knee jerk responses.

Speaker 1 (24:30):
Yeah, in large part because I think we are optimistic
and we're hopeful that things are going to go back
to normal, like not too far future. Yeah, yeah, I
did say that. Well, but you know what I mean.

Speaker 2 (24:40):
Let's get to a question from listener Sarah. She says,
I have a current college student. We used five twenty
nine funds for freshman year, but it's now depleted. Student's
father wants to keep adding to five two nine. I
want to save in a HIGL savings account. What are
your thoughts with the current volatility in investments right now.

Speaker 1 (24:58):
I think Sarah and the student's father are both right
to a certain extent. I'm not sure where Sarah lives,
but much of the answer comes down to the state
that she lives in, because if she gets a tax
break for funneling those dollars through a five twenty nine, well,
of course do that. If not, well, then the high
yield savings account is the right answer we're gonna get.

(25:19):
So why I said that, I think you're both right here.
Let's say you do live in a state that gives
you a tax break. That still doesn't mean we want
you to invest those dollars once you put those dollars
into the five twenty nine. Notice I said to funnel
those dollars through the five twenty nine as opposed to
like parking it there in like a long term like
airport parking. No, no, no, Like we're talking about like

(25:40):
you doing the drop off, like at the at the
gate or at the you know what, they got the
numbers there at the airport. We're not talking about like
the long term parking where you're having a height.

Speaker 2 (25:48):
It's almost like a legal form of money laundering, right
where you're literally funneling it through this account passenger just
to get a tax break, but you don't have to
take much action with those that money beyond that it's
totally and then you can, yeah, spend it at your
discretion for college needs. Yeah, In most five twenty nine plans,
they offer fixed income choices that do resemble the returns
that you're going to see with a high heeled savings account,

(26:08):
albeit with slightly lower returns.

Speaker 1 (26:11):
But put the money in the account. You get the
tax break, but then keep the money in the most
conservative choice, which is probably going to be like a
money market equivalent kind of fun. So you're not actually
investing those dollars it is. You are treating it a
bit more like cash.

Speaker 2 (26:25):
And that's essentially the advice we would give you tariffs
or not, right, a market volatility or not. It is
one of those things where if the money needs to
be spent immediately or in the very near term, you
don't want to invest those dollars, even if it's twenty
twenty three, right and you're like, the market's roaring, this
is great. Should I be investing? No, you shouldn't if
you need the money soon. Would We've always said, you know,
for people with young kids, we're all about investing inside

(26:47):
of those five twenty nine funds. If you're doing the
other investments you need to make as an individual in
your tax advantage retirement accounts first. But yes, we do
want you putting money then in the five twenty nine
fund and investing those dollars for their future. You want
that tax advantage money to grow. But when you're getting
closer to needing to spend that money down, you got
a d risk, right. You want to make sure your

(27:08):
five twenty nine planned money is not invested in something
that could cause you to see significant drops in the
balance in a short period of time. And so at
this point you're investing in like a heavy stock based
portfolio inside of the five twenty nine plan would be
the furthest thing from smart Like it would be a
terrible idea that the risks of losing a chunk of
this money so close to needing it, it's just not

(27:30):
worth the potential rewards. So exactly, you might say, oh, man,
the fixed income fund is paying like two and a
half three percent, and that seems like average return to DSP.
The guys cite that all the time on the show Man.
That's like an average aal return of something like ten percent.
This I should be invested in the stock market. Well, no,
you don't want to take that risk when you need

(27:51):
the money soon.

Speaker 1 (27:52):
Yeah. Yeah. If it was me, if I if I
had a freshman in high school, I would be willing
to still be one hundred percent invested in security or
in stocks. If I had a sophomore, I'm going to
start taking some chips off the table. Is that a
sophomore I think I would reduce that down by a
third to like sixty six percent in stocks maybe the
other third, you know, and more of a cash equivalent

(28:14):
junior year. I'm like, I'm pulling even more off. But
by senior year, I would want to be you want
to have a money liquid pretty much ready to go
in cash where you are not going to experience the
ups and downs of the market.

Speaker 2 (28:24):
It'd be different too, right. I think if she had
a freshman and she had plenty of money, some of
it was actually even going to be for senior year
or even beyond for college cost. But we're talking about
the money going essentially directly to funding.

Speaker 1 (28:39):
The college exactly. She said she's got a current college student. Yeah,
let's keep moving though. Jessica asks, if I'm worried about
a layoff, my husband works for the VA. Is there
a way to look into what unemployment benefits we would
qualify for. I'm a planner, and yes, I like to
plan for the what ifs before they happen? Is unemployment
state by state? We have emergency savings? Does that fact

(29:00):
into how much unemployment you qualify for? Also, I'd love
an example copy of a bare bones budget for a
family of four, for instance, how can you realistically go
I'm sorry, how low can you realistically go on food? Oh? Yeah,
that's good.

Speaker 2 (29:15):
I want you specifically to address the food question in
a second map because I feel like that's something you
d have been attentive to.

Speaker 1 (29:21):
That's the TLDR.

Speaker 2 (29:22):
But even the challenge that you guys instituted for yourself
a few years back, which you've talked about on the show.
We'll give that in just a second, but.

Speaker 1 (29:29):
You might have to remind me.

Speaker 2 (29:30):
But move on, okay or keep moving So let's specifically
talk about the layoff fears first. That was Jessica's first question.
I get that insecurity, you know, government workers, they used
to have some of the most secure positions around. That's
no longer the case. If I were in your shoes, Jessica,
I'd be hoping for the best. But I'd at least
be planning for the worst, planning for a potential job loss. Yeah,

(29:52):
that means some things for your finances, but it also
means networking right and looking for other work just in case,
because you want to be prepared and you want to
have kind of irons in the fire going because you're
not sure kind of where things are headed.

Speaker 1 (30:06):
Yeah.

Speaker 2 (30:07):
And then when it comes to unemployment benefits, yes, it
is a state by state thing. And no, your emergency
fund has no impact on how much money you receive
from those unemployment benefits.

Speaker 1 (30:17):
Yes, not like family assets and FASTA and applying for color.
Not like wait a second, she's you've got plenty of
moneys is loaded. We're not going to give you any
of those unemployment benefits. That's not how it works exactly.
That's something that you are paying into. You will receive
those benefits, and each state has its own for the
employer pays into it. Yeah, yeah, exactly. The formula is
based usually on a percentage of your recent wages, with

(30:38):
a fairly low cap. In our state, I believe the
weekly max is something like three hundred and sixty five dollars,
and it goes a lot lower than that. If you
make less too. Yeah, my guess is that your husband
actually makes more than that at the VA. So, but
also know how long those benefits might last. And so
we're typically talking anywhere between three and six months. So
your liquid savings, your emergency fund is going to be crucial,

(31:01):
even though unemployment benefits are certainly going to be helpful.
And then when we're talking about the bare bones budget, Joey,
you're saying, what challenge are you talking about?

Speaker 2 (31:09):
As far as you were trying to do two dollars
per person per meal for many years. Oh and you
were able to achieve that. Well back in the day,
we're doing one dollar per meal per person. Yeah that's one.

Speaker 1 (31:21):
Dollar, dude.

Speaker 2 (31:21):
You're making me think of the commercials to support families
in countries that are economically challenged.

Speaker 1 (31:27):
Man. Granted, this is when the kids were really little,
so it's not like they're eating a ton. Things are
different now as they've gotten bigger. I mean literally, man,
it's crazy how I don't want to get all sentimental,
but because they grow fast, they eat a lot of food.
And when it comes to your grocery budget specifically, it
comes down to how dialed in your current grocery spending

(31:48):
is because let's say you're a baller like Joel, and
you get your groceries delivered from Whole food and then
everything else lies. Well, you don't do Whole Foods, but
you've done that.

Speaker 2 (31:58):
I've been getting the liver room. I've talked about why
the discount is to card gift cards.

Speaker 1 (32:03):
But and then let's say all the rest of your
groceries you buy at the local farmers market on Saturday mornings,
and it's super fresh and organic, and you can't get
any groceries that are any more extensive than that because
that's kind of like as expensive as they get there. Well,
you're gonna be able to I mean, oh my gosh,
you just by going to limit. Yes, I mean, you
could cut back in such a significant way if that's

(32:25):
what you're used to. However, if you already got your
groceries dialed in, let's say you are you've been an
Aldi shopper, you are very intentional about your spending there, man,
it's really difficult to cut back on your spending, specifically
on groceries. So that's what I mean. I think that's
one that can vary pretty wildly. But I will say

(32:46):
the way our family is implemented. A bear bones budget
is all other discretionary spending I've essentially slashed by two thirds,
and so it's literally hit with a multiplier jowl of
zero point three to three. Because what I know is
that even if things aren't doing, like aren't so great
for our family, we're still gonna want to celebrate Christmas, Like,
We're still gonna go on vacation, Kate and I are

(33:07):
still going to want to go on date nights. They're
just not going to be as nice. Yeah, the presents
are going to be quite as big, the case is
not going to be quite as long or exotic, perhaps,
but there are still certain aspects the kids' activities. They
may not be doing quite as many of them, but
there are still certain things that like, the reason they're
on our budget currently is because we've prioritized them. But
we're just gonna have to find a way to prioritize

(33:29):
them to a lesser extent, not necessarily eliminate them completely,
though I know if a push comes to shove that
that's something that we can do. So that's how we
approach the bare bones budget. It's tougher when it comes
to groceries because there's sort of a floor as to
what it is that you can get by on. But true,
all other dis same thing with your housing, like housing, transportation,
and food. Man, those are really tough to make adjustments on,

(33:52):
hard to turn on a time. Yeah, like you can
plan to change those, but it's really hard to be
like I'm gonna sell a car tomorrow because of a
lot of life job life upheopal.

Speaker 2 (34:01):
Yeah, you might be able to do, but you might not. Also,
I would say one of the biggest food line items
in people's budget is and sometimes they don't think about
it like this, but it's.

Speaker 1 (34:11):
Eating out craft Okay, yeah, you keep the craft beer
budget and then you cut eating it. You can't elimit.

Speaker 2 (34:16):
Take that that's your craft beer equivalent, of course, But
it's eating out, and people under assume how much they
spend eating out at restaurants and when you lately, man,
when you look at the data over the past five
plus years, we the amount of money we spend eating
out versust grocery stores, it's increased significantly as a culture.
And so that's the biggest thing I think to combat

(34:37):
is some of the eating out. Yeah, you might be
able to save a little bit more by switching. If
you don't shop at all, to yet going there, you
could probably you know, cut some of the more expensive
items from your grocery list. The same things are going
to be smaller there than they're going to be.

Speaker 1 (34:49):
Once you underestimate all, even going from Kroger, which is
like an affordable grocery store, even going from Cross I
mean this, I've got the records, I got the receipts
man literally going back, you know, decade and decades, but
years and years and years. Switch it from Kroger to
all these straight up getting item for item, we cut
our grocery budget by thirty percent. I totally three percent overnight.
I totally believe.

Speaker 2 (35:09):
I couldn't believe it. So I do think that's an
important tip. But I also just want to highlight that
there are other ways that people are not really thinking
that they're spending money, or they're spending thoughtlessly, especially eating out.
It's just something that and the average meal eating out
costs four times with the meal at home costs.

Speaker 1 (35:23):
So remember that.

Speaker 2 (35:24):
And if you want to get I think inspired to
make cheaper meals that are still tasty at home, check
out our friend Frankie Celenza. He used to struggle meals.

Speaker 1 (35:35):
He came on.

Speaker 2 (35:36):
Episode eight forty six to talk about that, and he's like,
all about making good food that's good for you for
not much money at all, which I love. So yeah,
definitely check out that episode and hopefully that'll be inspirational.

Speaker 1 (35:49):
If you really do want to cut that grocery budget totally.
And he was into mountain biking, which is something of
that I remember staying that's right, I feel like I
like it even more. All right, let's geme. Even Pascal asks,
is this the ridiculous time to put my house up
for sale and move? Oh? What do you think, y'all?
I'm reading into the question, and what I'm going to
say is that if if you're looking to move to

(36:09):
like a different country again, going to like m I'm
kind of going back to the whole emotional response, the
guitar answer that we gave earlier. If you feel like
that the worst, like that the future of the US
isn't bright, I don't know that Like that feels more
like a like a knee jerk sort of reactionary response
as opposed to maybe you're moving for another job, opportunity
to get be closer to family. Maybe you're moving because

(36:31):
you need you're downsizing, or you're upsizing. Maybe your family's
growing and you need a bigger house. See, that was
my These are all good reasons yes to move. That
was my assumption in the question, was that Pascal was
asking based on, Hey, is it just a terrible time
to list my house because of what's going on with
the market. And my answer to that is actually, no,
not really. I think if you're right, though, Matt, if
you're like, I'm thinking about moving to a completely different

(36:54):
country because I'm worried about the future of the United States,
I would say that's that's probably overblown. Like yet, there's
a lot of folks out there who who feel though
I don't harbor the same fears. But I will say,
it's not that the housing market is immune from trade
policy changes. It's just that other factors influence your decision
whether or not to move a whole lot more like,
I'd love to know how long you've owned the home,

(37:15):
why you're moving, Are you moving to a lower cost
of living location. Are you hoping to rent for a
while after you sell this house? That would be helpful
information to have. Ultimately, No, it's not a ridiculous time
to sell your home. Home prices are high, even though
mortgage rates remain steep, and so you got to make
sure you price the home right and you market it
well because homes are staying on the market longer these days.

(37:38):
But you can still do quite well as a seller
in this market, especially when you think about where home
prices were a few years ago. Matt, think about Pascal,
if even if he's only on the home for four
or five years, just the appreciation on the home in
that amount of time could be significant. Yep. But the
question is what are you going to do after you
sell them? Yeah, exactly. You got to take factors into account,
like financing, because if you've got three percent mortgage and

(38:01):
you're looking at something, you know rates are closer to
seven percent now, So financing is a huge factor as well,
if it so much of it I think comes down
to flexibility and how much flexibility you have to move
or to not move right now, because if you got
to move, you gotta move right. Like, if it's for
a job, can maybe consider be becoming a first time
landlord if that's something that you've never thought of it

(38:22):
you're like wait a minute, Oh, that sounds totally awesome.
This this is a three too, This would make a
killer rental. Plus I got that.

Speaker 2 (38:29):
You know, my mortgage is a thousand and this will
run for two grand. Sure, it's a great time to
start being landlord. That's a consideration. But for a lot
of folks who are thinking, uh, okay, I just I
got to sell this house. We need the equity from
the zune to buy the new family home because we're
moving for jobs. It's not a dumb move. That being said,
if you have flexibility though as to when you might
list this house. If it was me personally. Because of

(38:51):
the uncertainty in the market, I think a lot I
mean countries. There are entire countries that are hitting the
pause button on certain things. There are certain industries that
are like, yep, we're we're just gonna we're gonna ride
this thing out and see where things land. Because of that,
we're seeing employers and it's all trickling down to consumers.

Speaker 1 (39:06):
There. The level of uncertainty is leading folks to not
want to take risks, which means that you I think
that you may not be able to get the most
for your house where you to sell it like right now,
as opposed to letting things shake out and see where
things land in thirty to ninety days. Perhaps if it
was me that that's that's what I would do.

Speaker 2 (39:26):
Yeah, but you just still have to remember, like where
what was the home valued at a few years ago?
And are you going to do pretty good? And if
it's time to go, is it time to go? If
you have flexibility though, Matt, Yeah, Pascal might be able
to do better by waiting to sell, but also it's
brings selling time and as well, you could do a
whole lot worse than selling right now. Yeah, what if

(39:47):
tears lead to sky high prices, inflation starts going up,
and the Feds like, oh, guess what we're not gonna
do at all this year?

Speaker 1 (39:53):
Yeah, you know we talked about those two rate cuts. Yeah,
not happening. That's not going to be great for the
market and mortgage and finance costs. Yeah, But then again,
if the costs of building those homes goes up. Yeah,
there's like so many nothing on effects that are any
different effects that it's truly hard to take them all
into account. So you got to do it for personal reasons.

(40:13):
Then people buying some homes all the time because they
were at the stage of life where they needed to
do that, no doubt. All right, man, we've got more
listener questions. We'll get to some more good ones, including
how you can benefit from a market downturn. We'll do
that right after this. I know y'all watch the Super

(40:36):
Mario Brothers. Moody. I always decided to bring this back
with terrorists, terrorists, terrors, Terris har Riffs. See I haven't
seen it. You haven't. Now my son's watched Spitches Peach.
It's a it's a good jack vaccine. Now I'll have
to you'll have to. Let's keep moving. We've got listener
questions to answer. This one is from Alex who wrote

(40:58):
how to Determine whether it's worthwhile to take any early
retirement offer. I know folks who are working for the
federal government and are like five to nine years away
from retirement, but some of them have been receiving offers
to retire early and still get their pension benefits. Still,
it kind of sounds like a scenario where folks are
getting to have their cake and eat it too.

Speaker 2 (41:18):
Potentially, right, Potentially depends on the individual, for sure. I
mean I like this, especially for people who are financially
independence minded, like they've been working towards that. It's kind
of like arranging your own layoff. It's one of those
things that doesn't it doesn't come around for everybody, some
sort of.

Speaker 1 (41:35):
Early retirement offer.

Speaker 2 (41:37):
And we talked about something akin to that, like with
Sam Dogan back in the day, the dude who runs
the website Financial Samurai, And it can be a brilliant
move if calculated correctly. And he was just talking about
when layoffs are happening at the workplace, if you kind
of volunteer and you get a sweet severance package to
walk away. I think he got like two years worth
of pay or something like that.

Speaker 1 (41:55):
Something insane.

Speaker 2 (41:56):
Most people don't give that much. Nope, it's like six
months at the max. But that can be if you
are in a good financial position, like something that only
increases and benefits your financial standing while allowing you more flexibility.
But so much depends right on your likely job stability,
your overall financial situation. Because if you've got a big
chunk of savings you've been investing for years, well, you

(42:17):
can totally use an early retirement offer to allow you
to vacate your position earlier than you thought you might
be able to. But if not, like, if you're in
more tenuous financial circumstances, you have to be really careful
before taking an early retirement offer because you might find
that you don't have gainful employment lined up sure, and
you're in a much worse financial position.

Speaker 1 (42:37):
Yeah, but taking alex as he or she wrote this
early retirement, So like, if we're taking a retirement in
the traditional sense of the word, and you are going
to be totally set, this totally changes this conversation from
a financial conversation to a life fulfillment conversation, right, Like
this is on Maslow's hierarchy of needs, where you've just

(42:58):
graduated to the next level talking about you know, these
are more like self actualization needs as opposed to do
I have enough money to pay the bills? Do I
have enough money to be able to afford some of
the more you know, some of the luxuries in life,
some of the things that I want to do, And
so much of that comes down to how it is
that you want to spend your time. And so I
think that's if you are closer, closer to retirement, I

(43:18):
think you might be more in that camp, which leads
to less number crunching and more uh self searching, Yeah,
soul searching and writing and you know, like journaling and
trying to figure out, like what do I want my
days to look like? And if that's the case, Alex,
I would highly recommend for you to literally do something
like that, like go on a silent retreat, spend some
time just completely away from what it is that you

(43:41):
are doing in the day to day to shake things up,
to help you to maybe almost stumble upon whatever it
is that you might want to spend the next.

Speaker 2 (43:48):
Decade or two do it. Yeah, I mean I love
the idea for lots of people. If this means, hey,
I wasn't. I was still planning on working to get
that pension because that was a huge part of kind
of my retirement income plan. But because that comes along
with this early retirement offer, why don't I just ride
off into the sunset now I.

Speaker 1 (44:07):
Am fully financially prepared.

Speaker 2 (44:08):
If that's the case and you have other things you'd
rather be doing with your life, kind of like you're
talking about, Matt, I think it's great. I think this
can be the perfect accelerator to get going in retirement
earlier than you had planned, maybe enjoy some more of
those early retirement years that you were going to be
working instead. So yeah, I think that's I think that's
great advice. All right, let's get to a question from Pam.

(44:30):
She says, I'm a middle aged investor in forty six.
I'm looking for advice on how to help protect what
I've already saved while still remaining.

Speaker 1 (44:36):
Agile and aggressive.

Speaker 2 (44:38):
I recently increased my income after years of struggling to
save money, so I will be actively trying to catch
up on my retirement over the next ten plus years.
I'd love to hear how this market will help or
hinder my ability to catch up on saving.

Speaker 1 (44:50):
Yeah. Wait to go, Pam on increasing your income, it totally.
I'm sure it feels good. She said that she was
struggling when it came to being able to save and invest,
which means she's actually able to do it now because
she's got more money flowing in. It's going to allow
her to ramp up these contributions. And in her words,
she's looking to protect what she's saved while being aggressive

(45:10):
as well. And I think there's only one way to
do that, and that is to invest like an optimist
and then save like a pessimist. So keeping your savings
such Morgan House Yeah, yeah, yeah, I did not coin
that phrase. Those savings, those dollars, the money that you've
got there in the emergency fund needs to be secure
and liquid in a highield savings where you have enough
on hand to give you that peace of mind, you know,

(45:33):
given to meaningful financial downturn. And then just keep investing
in low cost index funds as well, like clockwork. And
the goal is to have enough cash so that you
don't have to ever touch those investments at an inopportune time,
like right now. That's something you want to avoid at
all costs. And right now specifically, given the fact that

(45:54):
you're talking about having not made a whole lot of
progress perhaps up until now, just realize that some of
the volatility that you're seeing it doesn't really impact you
nearly as much. This is something that when you've been
saving and investing for decades and decades and you've built
up a fat, you know, nice sized nest egg, that's
when this volatility can really take a bite out of

(46:15):
your overall network. The number can change quite a bit. Yeah,
and obviously, let's say you've been investing for a few years,
it still sucks to see your investments go down by
a three grand. It's different though, when it's thirty grand
or one hundred grand or one fifty And that's the
kind of swing that some folks out there who have
been investing for twenty thirty years, that's what they're experiencing

(46:36):
right now. I will say, I do think, no matter
to the size of the drop, the people who have
more cash on hand, who feel comfortable that they can
cover bills if something unexpected does happen to their job
or to whatever like, if they feel more financially prepared
from a liquid cash standpoint, my guess is they don't
feel the loop de loop in their stomach when they

(46:57):
look at their retirement account balance nearly as much your
weather the storm. Exactly, it's much easier to weather the storm.
That's why that.

Speaker 2 (47:03):
Hey, if I've got the cash on hand in savings
to back me up, and I'm still doing the investing
thing like clockwork, well then you don't have to. That
should reduce worries significantly. And as we said before, right
dollar costs averaging into those tax advantage accounts, that's where
it's at. Do that through thick and through thin, and
then you know, once you reach the age of fifty, PAM,
you're a few years away you'll have the ability to

(47:23):
contribute even more to those accounts as those contributions limits rise.
You say you're making trying to catch up on retirement
account contributions. Well, guess what at fifty you get to
contribute more, which is pretty cool.

Speaker 1 (47:35):
Another one thousand bucks. Yeah, so into the iras and
then even more into like four to one case four
h three b's. And so if you're getting to the
point where you're maxing any of these accounts, just note
that in a few short years you're gonna be able
to funnel even more into those accounts, which is which
is awesome, super sweet and yeah, and that kind of
goes to the volatility sort of point I was making
thus her save your savings rate PAM. The amount that

(47:56):
you're able to set aside right now into those accounts
actively as opposed to seeing the returns on that money,
that is going to have the biggest, uh impact on
your retirement.

Speaker 2 (48:05):
That's that's so underrated. Is there a super savings rate?
People don't talk about it enough. The more the higher
your savings rate. The more, the less you have to worry,
essentially about the machinations of the market.

Speaker 1 (48:14):
An he asks, during times of market volatility, is having
your money in something like betterment that does automatic tax
loss harvesting better than having all your investments in VU,
which I love that so many folks are going back
to the voo joel. But uh, yeah, I think some
of this, some of the answer here depends on what
your definition of better yes is, And.

Speaker 2 (48:34):
They're not mutually exclusive, like you can do tax loss
harvesting into WU. Right, So but I get what Annie
is getting at, and the short answer is yes, Like,
you know, we're always hoping that our investments go up,
but tax loss harvesting is a tool that you're able
to utilize. You're able to sell investments when they're down.

(48:55):
The thing is, you don't want to sell them permanently,
like we don't want you locking in those losses moving
into cash because you're fearful. But you can sell those
investments and then rebuy a very similar fund, let's say,
going from VU, let's say into VTI, like Vanguard's S
and P five hundred fund into the Vanguard Total Stock
Market Index fund. Right, And when you do when you

(49:16):
sell and then rebuy an incredibly similar fund immediately. This
allows you to show a paper loss. We'll changing your
holdings minimally. And this is an awesome move for people
to make for tax purposes. When it comes down to it,
brass tax you can only claim three grand a year
and investing losses. And if you experienced more losses than that,
Let's say you have a ten thousand dollars crop, right,

(49:38):
and you sell and then you buy another very similar
fund that's not the exact same, Well, you can roll
those losses into future tax years. That's kind of cool.
So tax loss harvesting, Yes, in market volatility, it's a
way too. It's a silver lining I guess of sorts
to the downturn in your portfolio that you're seeing.

Speaker 1 (49:56):
Yeah, so Joe said, yes that it is better, But
it just depends on what you're willing to pay for.
That's like. So that's that's why I feel like it
kind of depends on what your definition is because someone
would say, well, is whole food's better than all d
and it's like, well, depends on what you like to
pay for, because if you don't want to pay for
tax loss harvesting. You want the organic chicken or just whatever.

(50:18):
If you don't want to pay for it, then if
you don't want to pay it, it's like, so it's
point two five percent, Like that's the fee that you're
going to pay. If you're fine paying that fee, then yeah,
it is better because they do it automatically. But if
you don't want to pay that fee, that's something that
one would say is not better. Uh, because you can
dihy that tax loss harvesting yourself, do your research, know
how it works. But it's certainly possible to manually do

(50:40):
this on your own. If you're not wanting to do that,
then betterment is totally the way to go, especially there
within your brokerage account. Jennifer asks, I have a first
time college student heading off to school in the fall.
I'm wondering what if any federal student aid or loans
will still be available. Also wondering with all the federal
cuts to universities, impunitive cuts for diversity, will you universities

(51:01):
have to raise tuition?

Speaker 2 (51:03):
All right, that's a good question. So federal student loan availability, Matt,
from what I've seen, it has not changed at this point,
and so Jennifer, your student should still have access to
federal student loans per normal. What's been in flux is
student loan repayment plans and so like the Safe Plan
that was launched by the Biden administration, that has been

(51:23):
axed by the courts. So like those more generous repayment plans,
they're not as generous and there's still a lot of flux.
We're going to actually tackle that on the show with
an expert soon, so stay tuned for that episode. But
make sure, Jennifer that you fell out the FASA by
the end of June, and ideally sooner rather than later,
because that can help your student qualify for need based aid.
On top of that, don't forget to apply for scholarships

(51:45):
and to look for other ways to minimize debt, like
getting a campus job. That was something I did when
I was at school mat I became a resident assistant
and that reduced my room and board fees dramatically, and
so I was able to go to a private school
out of state and take on very little student loans
because of those moves. Those are the kind of things, Jennifer,
I would just tell you to at least consider and
if you're looking for more tips about scholarship hunting and

(52:07):
the like, go back and listen to episode eight sixty
that we did with Joscelyn Pearson, who that's all she does.
She eats, breathes, and sleeps scholarships. So there are a
lot of ways to get free money to pay for
that education in hopes to avoid those student loans, or
at least just minimize them.

Speaker 1 (52:24):
Yeah, and your other question about federal cuts and the
potential raising of tuition, that only applies to a couple
of elite universities, and then those tend to have pretty
large endowments. Harvard, for instance, if I think they got
like over fifty billion dollars in their endowment, is that right? Yeah,
that's pretty crazy billion with a B. So while it's
not benign, I wouldn't worry about it actually increasing the
cost of tuition across the board. And interestingly enough, while

(52:48):
the sticker price of college continues to go up, the
MSRP the advertised price, the actual net price that students
pay has been going down. Particularly in recent years. There
are fewer high school grads who are opting to go
to college post COVID, which has also led to price
reductions so that I wouldn't worry too much about that.

Speaker 2 (53:09):
There's a supply and demand element here, and when fewer
kids are choosing to go get a higher education, it
makes shopping around even more important because colleges they can't.
I think people just assumed they can just raise the
price to whatever they want and people are gonna have
to pay, and that is not the case. Students have choice,
and that's where kind of the dream school thing comes in.
We talk about how don't settle on one school and

(53:29):
assume that's where I have to go, no matter the cost.

Speaker 1 (53:31):
No, no, no. Cast your net wide and find schools
that will offer more significant financial aid to you and
your family so that you can reduce the cost because
ultimately the institution that's on the diploma isn't as important,
I don't think, as the education that you receive. So
keep those student loans to a minimum, please, all right, Matt,

(53:52):
Let's leave everyone in this episode with some advice that
a listener left on the how to Money Facebook post.
That's the opposite of a question, is it is?

Speaker 2 (54:00):
And listener Pamela said, I think the best way to
deal with with all this is to stop buying stuff
frivolously time for the minimalist life.

Speaker 3 (54:08):
Oh for it.

Speaker 1 (54:09):
Yeah, this is something that we've been preaching for a
long time, and it's true, like terrists are like essentially
terrists are like a sales tax, and uh, it depends
on where you want to go with this, because like
our is sales tax badtel. It depends on what the
alternatives are, you know, like because it makes me, you
know what, it makes me think of our states that

(54:30):
don't have income tax and they only have sales tax,
and those are states that we have seen a whole
lot of people flocking to, Like I'm thinking of specifically
Texas and Florida, though I see Tennessee as well, uh
and and even some of the other states that have that.
They do actually have uh an income tax, but it's
actually a lot lower those like they take the other

(54:51):
top slots.

Speaker 2 (54:52):
And some of those states have been reducing their income
tax because they have to compete with states they don't have.

Speaker 1 (54:56):
They're competing and so some of it, so much of
it comes down to what the alternatives are. And so
this isn't like some sort of universal defense of international terrorists,
but it is interesting to see that when given the
choice between states with income tax versus taxes that are
more associated with spending. That Hey, here's something that I
am willing to give a little on when it comes

(55:18):
to what I'm willing you know, the number of dollars
I'm spending, so I don't know.

Speaker 3 (55:22):
I like that.

Speaker 1 (55:23):
It puts a lot more control. It gives you the
power to almost dictate the amount that this is going
to impact you, and for a lot of folks out
there to decide, hey, I'm going to really pair back
my spending. This is something I've been wanting to do anyway.
It's almost like a kick in the pants push up,
you know. Not I say kick on the pants because
I said getting kicked in the pants earlier when we're
talking about fighting, and that's not the kind of kick
in the pants I'm talking about here, A little a nice,

(55:45):
pleasant breeze at your back as you are encouraged perhaps
to spend less, I'm not. Yeah, well, okay makes I
don't want to make the argument though, that like, you
don't need to have a new iPhone, right, Hey, if
you want a new iPhone, get you a new iPhone.
That's right. But there's just that those arguments, especially from
officials in power, so stupid, those are degrading exactly, want
to hear that exactly. It's not okay.

Speaker 2 (56:05):
But from us, it's different because we're trying to incentivize
you to have more financial flexibility and power in your life.
We're not trying to tell you you don't need that thing.
We're just trying to say, hey, there's better opportunities than
the best things that money can give you is freedom
and flexibility, not more new stuff. And I will say,
when prices go up, buying less and buying secondhand is

(56:26):
going to save you more money. It always has, but
the stakes could be going up if tariffs remain, so
you know, we're all likely going to face increased prices
in more form or another. But I think more minimalism
is almost always good advice.

Speaker 1 (56:39):
So totally all right, we've gone long. This is the
Yellow Rose smash IPA. What did you think? I dug
it taste super tasting, dude.

Speaker 2 (56:46):
Texas beer seems to be somewhere Texas ipa seem to
be somewhere in between West coast and East coast. It's
like they found this middle ground and I'm here for it.

Speaker 1 (56:54):
I like this one totally, like when you pour it,
it's got the haziness going on, but it Yeah, I
kind of had some of those West Coasts greape fruit bitterness,
like bitter edge bitter notes to it. Yeah, that's what
I'm trying to say. With kind of old school looking
label to boot, Doesn't it kind of just like look
like it's been sitting on the shelf fading like a decade.

(57:15):
It does. There's some canes that you see and it
looks like it came straight out of some AI generated
computer with vivid colors and whatnot. And this looks like,
I don't know, it looks like it's been sitting on
the shelf since the eighties. But it did not taste
that way. No, it's just it's the vibe that they're
going for. But that's gonna be it for this episode.
Leave us a review if you haven't, and of course
you can head over to the website for more personal

(57:38):
finance goodies. That's howimoney dot com buddy. That's going to
be it for this one until next time. Best Friends Out,
Best Friends Out, Yah,

All Episodes

Episode Transcript

Hosts And Creators

Joel Larsgaard

Matthew Altmix

Popular Podcasts

40s and Free Agents: NFL Draft Season

Dateline NBC

The Bobby Bones Show

.css-15opob5{left:0;position:absolute;top:0.8rem;} All Episodes

.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 Special Edition: Tariffs, Market Volatility, & How It All Impacts You #973