May 3, 2024 • 35 mins
Time for a Friday Flight- our little sampling of the week’s financial news and what it means for your personal finances. There are a lot of headlines out there, but we boil them down to specific takeaways that will allow you to kick off the weekend informed and help you to get ahead with your money. In this episode we explain some relevant and helpful stories like: free ADU drawings, noncompete bans, forced fiduciaries, accessible financial literacy, automatic airline refunds, bad budgeting, Facebook marketplace fraudsters, affordable car maintenance, hospital facility fees, & ‘one more year’ syndrome.
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Transcript
Episode Transcript
Available transcripts are automatically generated. Complete accuracy is not guaranteed.
Speaker 1 (00:00):
Welcome to Had of Money. I'm Joel and I am Matt,
and today we're talking about forced fiduciaries, bad budgeting, and
the one more year syndrome.
Speaker 2 (00:27):
You know, a buddy, this is our Friday flight and
we're going to cover the top stories from this past
week and how it pertains to your personal finances. And
I was gonna mention real quick, you and I we
always like to take walks around the neighborhood. After a week,
we're turning into old men. But I guess we pay
more attention to our health. We like to go for
a walks after we eat our lunch. It's like it's
a part of our lunch break. And that's a mental
(00:48):
health break just as much it is a physical points.
It's the fresh air, sunshine, it's keeping your blood sugar
from completely spiking, the ability to move around take some steps.
But have you noticed there's been a lot of construction
on our like just around the corner so much. Did
you notice the ADU over there that literally which one, Matt,
good question. I'm talking about the one that went up
(01:09):
like virtually overnight. Yeah, it makes me think of like
this year's Roebuck house kits. We were talking about that.
Oh yeah again recently too.
Speaker 1 (01:16):
But it used to be able to buy super cool
bungalows literally out of the catalog it for thousands of dollars. Literally,
It's what it looked like happened over there, because I
swear there was nothing there and then all of a sudden, yeah,
like there are guys bringing in pre constructed roof beams
and like, all of a sudden, there is like a
carriage house or ADU back, which I think is amazing.
(01:37):
Some of the prefab action kind of helps cut down on,
hopefully some of the costs and also makes a little
bit quicker to build. And ADUs are just kind of
boomtown right now in the places where they've been legalized
and where the rules to create those ADUs have been diminished.
When it's just easier to get it approved, then you
start building. And the cool thing about eighty US is
they're they're allowing a lot of people to dip their
(01:57):
toes into the real estate investing market without feeling like
you got to save up a ridiculous amount of money
and go out there and buy a duplex or triplex
or something like that. Right, So, yeah, and it just
makes it easier to manage. It's your backyard. You can
choose whether you want to do short term a long term.
ADUs are just such a great way to add more
housing supply. We're seeing it in California, like a huge
percentage of the units that are being built or ADUs
(02:19):
in people's backyards. They're creating more supply. They're really helping
with that problem that we face.
Speaker 2 (02:24):
And why because of less red tape as opposed to
other forms of housing construction that they're attempting. That's right.
Speaker 1 (02:30):
Yeah, So there was in Chad Carson's email chat Carson.
We love him, one of our favorite real estate investors.
Speaker 2 (02:36):
Coach Carson Cool. You have to refer to him as
coach cars. I can call him chat. He forces you
to see. He makes me call him mister coach. Actually,
So one of the things he mentioned, and I didn't
realize this existed until his newsletter this week, he said.
Speaker 1 (02:49):
You refer to a guy called that ADU guy. Maybe
we should have that EIGHTYU guy on the show at
some point. This is not his Christian birth name, but
he offers free EIGHTYU templates on his website. So if
you're kind of thinking about getting in the ADU game,
and it can.
Speaker 2 (03:06):
Be expensive to get the plans drawn out of the
floor plans, yeah, construction documents.
Speaker 1 (03:10):
So if you are like go over there and look,
and you're like, I like the look of that, well
that's one expense reduced at least, which I think is
so cool that guy makes it available for free.
Speaker 2 (03:19):
And we'd mentioned atl Adua and one of the benefits
that they had was that as well, the fact that
they had the plans included into the cost of them
actually building it though, and so in that case you
can get it for free. You kind of had to
go with the whole package. But in this case, yeah,
you can get the plans and if you can, you know,
arrange something with another local contractor well, that's one least step,
(03:39):
one less hurdle before you have the ability to not
even yeah, possibly rent out the space. But I'm even
thinking to folks who are building a carriage house for
like their in laws or their parents or something exactly,
would you.
Speaker 1 (03:50):
Ever consider something like that? Sure in your backyard, most definitely.
And the great thing is it's easier to get quotes too. Right,
when you have the plans, you can send them out
to a few builders instead of going through that process
paying money officially.
Speaker 2 (04:00):
Get it.
Speaker 1 (04:01):
It slid out, man, It slows things down. And so
if you're like, listen, I'm ready to pounce.
Speaker 2 (04:05):
I don't know.
Speaker 1 (04:05):
I just love that eighty of you guys doing that,
and so maybe one of these days we'll talk to
them on the show. But yeah, definitely go check that out.
We'll put a link to those free templates in the
show notes up on our website, howdamoney dot com, of course.
But Matt, let's move on. Let's get to the Friday Flight.
It's a quick sampling of stories we found interesting this week.
Let's start off by talking about non competes. You and
I disagree on this a little bit. We did last
(04:27):
time we talked. I don't know if we're on the
same page now we'll find.
Speaker 2 (04:30):
Out, I guess. But the question is, are no comment?
Speaker 1 (04:35):
Mom and Dad are fighting again? Are non competes going away?
It looks like they might be. One in five Americans
are currently affected by non compete many who don't have
access to IP or trade secrets that are highly specific
that they can't take that the employer's trying to prevent
them from taking elsewhere, which is really the impetus for
(04:55):
non competes in the beginning, it was to protect proprietary
information and to prevent someone from going down the road
and giving that to their new employer, harming that business
in the process. Right, I mostly like this FTC attempted
ban on non competes because they harm so many workers.
They hold down wages, limiting personal economic freedom. But I
(05:16):
will also say, Matt and we had this discussion about
the blanket ban versus kind of what's happening. Different states
have different rules around non competes right now, and the
blanket ban that the FTC is attempting, it doesn't allow
for some of the nuance in at least a few
of the professions where non competes do make at least
some sense. And so yeah, it's true that the FTC's
authority to do this is questionable. Also kind of like
(05:37):
the president's attempt at for giving student loans. That is
going to be part of the discussion moving forward, and
part of we'll see how this plays out from the
legal aspect. From legal side of things, but for now,
non competes are massively overused. They particularly harm low wage workers.
And we would just say to you whether or not.
This goes through all the way. Be careful signing a
(05:57):
noncompete because it can cause real harm to your career
into your personal finances.
Speaker 2 (06:01):
Sure yeah, okay, so another government action that's going to
impact your personal fight argue on this one for a while,
I said, no comment. Okay, I mean I still disagree.
I still think it should be something that is negotiated,
that's on the bargaining table between employers and employees, even
sandwich makers. And but that's well, that's the thing I
do see a potential discussion around. I don't know if
(06:23):
I see a need yet for it, but for individuals
who may not be informed, like I guess bottle mind,
there's like a collective action problem. And so you might
have like a single person who's saying, well, that's not
something I'm going to be a part of, but collectively
I see where that could provide some help. But so
we're kind of we're going to continue a government theme
because financial advisors they're going to be held to a
(06:46):
fiduciary standard starting in late September of this year. Many
advisors do this of their own accord already, but certainly
not all of them. And finding an advisor. It can
still it can still feel like swimming through like confessed waters.
And if you take the wrong route, if you are
swimming in the wrong ocean, you get your leg bitting off.
(07:06):
You've got an open wound. And that's basically because of
all of the phase that you're going to incur and
the fiduciary standards. It's one that puts advisors on the
same footing basically as doctors, right where the first rule
is essentially to do no harm. And up until now,
advisors they've been able to put their own interests above
yours as the client, where they're you know, they have
(07:27):
the ability to sell you products and maybe they might
be able to invest your dollars in ways that aren't
necessarily best for you. And that's not going to be
the case anymore.
Speaker 1 (07:35):
Yeah, yeah, Instead of saying, oh, yeah, you should totally
be in vou like Matt and Joel talk about, because
the low costs and the high diversification that you're going
to have, it's like, well, why don't you go in
actually some of these other funds because they don't cost
a lot more money, and that pads my bottom line
and that it's a problem because we're talking about the
advisor wants one thing, you want another thing. And if
(07:57):
they're not held to a standard that requires them to
do what's in your best interest, at least some of them,
a decent majority of them, in fact, are doing the opposite.
They're doing what's in their best interests, not yours. And
this rule, Matt, what I found interesting, applies to insurance
agents too, which has long been a segment of advice
in sales where I'm gonna say murky advice was part
(08:20):
for the course, think about high cost annuities, right. This
rule is I think maybe single handedly going to wipe
out at least the worst kinds of annuities that people
are often sold. They're approached, they're approached by insurance salespeople with.
It also applies to anyone giving one time advice, right,
such as rolling over your four oh one k to
an IRA. And this shift has been tried before the
(08:43):
can was kicked down the road. It blew up under
the last administration. Not everyone needs an advisor, of course,
I think it bears mentioning, especially folks in the wealth
building phase of their lives who need to focus on
socking away as much money as possible. Maybe those thousands
of dollars a year you could could or might spend
on that advisor will be better off going into your
own retirement accounts instead. But this is good news for
(09:04):
if or when you do decide to hire someone. It
doesn't negate your own need for financial education, but working
with an advisor who is a fiduciary, who is obligated
to put your interest first is crucial and making that
the standard, I think is the right thing to do.
Speaker 2 (09:19):
Yeah. I love fiduciaries, right, and we talk about fiduciaries
all the time here on the show, But I just
don't like the fact that it's being forced. I still
think that folks should have the option to crappy ones.
Yeah literally, I mean, well, it's not that it's crappy.
What do we quantify or qualify as crappy something that's
more expensive. But just because something is more expensive and
it doesn't it's not the leanest, most efficient vehicle, doesn't
(09:39):
mean that it can't be in the benefit of somebody
who's paying for it, and the benefit obviously of somebody
who's selling it. I think optionality is good. It makes
me think of one of my college roommates, has a
more traditional financial advisor, and he does things like go
and play golf at exclusive golf courses with this guy,
and so there's more of a relationship there, Like there
are these additional perks that are tough to put your
(10:01):
finger on. I'll have our relationship with a fee only finuciaria.
So he he has that because he pays more to
that guy, to that guy, and so like he's an.
Speaker 1 (10:09):
Extra thousands of dollars he's paying, he pays off in
an extra one hundred.
Speaker 2 (10:12):
Of dollars in golf course outings. Yes, I mean, I
mean it doesn't make a bad deal. Doesn't make sense
to me. I wouldn't do that. I'm not spending my
dollars that way. I if I wanted to pay for
a financial advisor, would go see a fiduciary. But like,
just because I wouldn't want to do that doesn't mean
that I think other folks shouldn't have that option.
Speaker 1 (10:27):
Like it makes me think most people don't know that
their advisor isn't they think that their advisor is supposed
to do what's best for them.
Speaker 2 (10:33):
Most people underestimating no. I feel like a lot of
folks who have the money to pay for an advisor.
They're kind of like, well, I know, but like all
my buddies from my fraternity back in school from twenty
they use this guy.
Speaker 1 (10:44):
He takes care of us exactly. That's the kind of
thing that he takes care of us. But they don't
realize the hidden vies that they're paying and how much
it might be costing them. And maybe there's a better
route out there.
Speaker 2 (10:52):
Yeah, possibly, but like it makes me think of like
even like airlines, Like it makes me think of like
flying first class or business class we're talking about here,
and just so like I don't fly first class, don't.
I don't pay for softer seats or whatever they get
up there. It's not the most affordable way to fly,
but I'd like that that's an option for some folks
if they want to pay that that's because we know
how much it costs. And like I said, I think
the problem with non fiduciary advisors is most people don't
(11:14):
realize if you were to ask one hundred people out
on the street, what does fiduciary mean, I guarantee you
maybe three could tell you. And then they would say,
if you would ask a hundred people who have an advisor,
how many is your advisor or financial advisor or fiduciary.
Speaker 1 (11:26):
I bet it's a lot more than three. I bet
like for folks who are actually maybe fifteen out of
the hundred could tell you whether or not they are.
And that's just a problem. It's the opaqueness, and I
think that's part of the issue. It's not as straightforward
as maybe you're thinking it is. I think there are
a lot of people who are kind of duped by
the products and the thing. They think that their advisor's
doing much best for them, even when they're actually not.
Speaker 2 (11:47):
So you mentioned a second ago that there is still
a need for us to take responsibility. There's still a
need for financial education. Aaron Lowry she wrote about retirement
anxiety over at Bloomberg this week, and she touched something
that we have before as well, which is a reliance
on social media for investing advice, and depending on who
you follow, that could be awful, but she actually broadens
(12:10):
that out. She broadens her disdain into YouTube and to podcasts,
which we see as specializing in more like long form
content that allows for a more thorough discussion, allows for
some of that necessary nuance.
Speaker 1 (12:23):
Yeah, YouTube and podcasts are not the equivalent of TikTok
and instagram rails, right, I mean, they're just they're completely
different things. There's a different amount of time, different ability
to relay and then absorb information totally.
Speaker 2 (12:33):
Yeah, And so we're just pointing out that she specifically
says that designing a retirement strategy based on free advice
is a dangerous plan. But we think that you can
get a killer free personal finance education. I think the
best of some of the different podcasts and YouTube creators
out there, some of the different publishers, like those more consumptive,
more maybe entertaining forms of media, plus free books from
(12:55):
the library is likely enough for a lot of folks
to put together a solid investing plan. So there are
options out there, and we just don't want a few
bad apples to necessarily ruin the entire bunch of all
the folks out there, Like, I mean, who we you know,
obviously we consider ourselves in that category of providing solid
financial advice. Yeah.
Speaker 1 (13:12):
And when you lump in all of these different platforms
together and you make them sound like they're the exact same,
I think you do a disservice to the great creators
on some of those platforms. Are there bad crummy people
giving really awful advice on YouTube? Of course, but like,
think about the amount of minutes of viewing potential there
is there exists on YouTube. It's astronomical, so of course
they are going to be bad people. But then it
(13:32):
makes me think of Marco from Whiteboard Finance, who we
had on recently. His YouTube channel has been around for many,
many years now and he's been doing great work, and
we mostly talked about bigcoin with him, But go back
and look at like the number of money topics he's covered.
It's wide rare or just breat sing from minority mindset.
We've featured so many creators in these more long form
(13:53):
spaces on this podcast. I love folks on YouTube who
are doing awesome stuff, so to lump all those in
together seems really silly. And yes, you can do great
with free advice if you're picking the right people to
listen to. All right, let's do one more government related
story for today, Matt, because.
Speaker 2 (14:10):
This is a thing for this episode. Big government.
Speaker 1 (14:12):
Yeah, but there's so much that impact your money with
what's happening with some of these government rulings, and a
lot came down really just in the past week. So
if you've got the travel bug after listening to Wednesday's episode, which.
Speaker 2 (14:20):
How could you not? After that?
Speaker 1 (14:22):
The DOT, the Department of Transportation is implementing new rules
for airlines that are going to look a little bit
more like what's going on over in Europe. Europe has
long had traveler friendly rules that the airlines have had
to abide by, Like, for instance, if your flight is
delayed over a certain amount of hours, I want to
say it's four, you get a full refund. And I've
known a lot of US friends and family who have
(14:43):
been able to snag those significant dollars back in their
lives because of this European rule protecting passengers. So what
are the changes here in the United States. Well, the
word delay has been redefined. It used to be this unspecified,
vague definition and so oh, if it's delayed, then you
owe passengers something. Well, delay is now to fined US
(15:04):
three hours for a domestic trip and six hours for
an international one.
Speaker 2 (15:08):
And when you.
Speaker 1 (15:09):
Encounter a delay now or a change flight or delayed baggage,
you don't have to fight for compensation. You'll get an
automatic refund within twenty days. And there are also more
requirements for transparency of fees before you book your flight,
which transparency is great, and then not to have to
you know, claw back and call the customer no service
from the airlines in order to get the refund you
(15:32):
deserve it. I don't know, sounds helpful, sounds nice for yeah,
flyers everywhere, totally.
Speaker 2 (15:37):
Yeah. And here's the thing. We don't want the airlines
to do away with a fees. So, like we're talking
about earlier about the fiduciaries, it's okay that they are there,
but let's make sure that they are a bit more transparent,
they're little bit more clear.
Speaker 1 (15:47):
You and I were about to fly on Frontier and
we picked them because the cost of the ticket was
was lower. But I was literally checking in for the
flight this morning and I looked at all the fees
they charged for all sorts of silly things and how
expensive it is.
Speaker 2 (15:59):
And one you talking about all the optional stuff. Yeah, yeah,
all the optional stuff. So like most people are sure
you don't want to bring a carry on back, right
for sixty million dollars, Sure, I will maintain that personal item,
that's right, that I have shoved all of my clothes into,
that's right.
Speaker 1 (16:12):
But we knew that eyes wide open going into it.
We're like, oh, we could book the seven hundred fifty
dollars Delta flight, or we can book the four hundred
dollars Frontier flight. Yeah, and then jump through the hoops
and you know what, still pay four hundred.
Speaker 2 (16:22):
Bucks, which is why, again, kind of going back to
the h I love the optionality that all of these
different providers or in this case, different airlines, that they're
able to offer folks because you can score the best
overall deal by being proly sensitive jumping through some of
the different hoops that they require of you. And but
I think some of the sneaky fees are also the
problem as well, and just kind of the way they are,
(16:43):
the way the terms are laid out in the language
I guess that they use, and so I think making
the airlines list them out from the center in an
age where you could be charged for just a slew
of random things, that's certainly more consumer friendly. And I'm
very happy to see that they have clearly defined what
a delay is as well, because that's one of the
and the fact too that the refunds are they're gonna
they're gonna be cash refunds. As well as opposed to
(17:05):
credits that go towards maybe an airline that you rarely
fly with that ultimately never get taken advantage or yeah,
you get.
Speaker 1 (17:11):
To benefit expire within a year or something like that,
and you're like, well, crap, I'm I'm not planning on
going on another trip in the next year, because not
everybody travels on an airplane every single year. So no,
I agree with that, And I think transparency is key here.
It's it's not requiring them not to charge certain fees.
It's saying, listen, you have to be transparent about this.
And maybe going back to the fiduciary discussion, maybe that
was the right thing to do, to say, hey, actually
you don't have to do this, but you've got to
(17:33):
disclose this, this, and this on the front end if
because that's the problem is most people don't realize, and
I think if you had to tell people that, they
might run away screaming before they engage in a relationship
with you. Sure, we've got more to get to on
this episode, including a budgeting method that scares the pants
off me. We'll get to that and more right after this.
Speaker 2 (17:59):
All right, we are back. We've got more to get
to we're to talk about hospital bills, we're going to
talk about cars. But first, Joel, we got our ludicrous
headline of the week, and like you alluded to before
the break, it has to do with budgeting. This one
is from Kiplinger and the headline reads the new sixty
to thirty ten budgeting method. It is not good. And
(18:20):
it might sound somewhat familiar, right because in the past
we've talked about the fifty thirty twenty budgets, which we
don't mind. Yeah, this is an iteration on that, but
it is far worse because in this method you allocate
sixty percent of your pay towards necessities, thirty percent towards
once still just like our the old one, but then
only ten percent towards saving and debt paydown. And so
(18:43):
essentially they're in my mind, they're almost allocating or allowing
for us like, oh man, some of the some of
the necessities of life are costing more. But what do
you define as a necessity, Because for most folks they're saying, oh, well, housing,
that's something that's that you've definitely got to pay for.
But like, man, you've more control over that than you realize.
And if you've been listening with your ride, I mean it, yes, yeah,
(19:04):
some gone up. But food, like all of the things
that people see as non negotiable, it's like, well, you
have to spend at least this much. I would push
back and say, you've got more control over that than
you think.
Speaker 1 (19:14):
There's an article in the Wall Street Journal about all
the people choosing ALLDI these days.
Speaker 2 (19:18):
Makes me so happy. I love just hearing random conversations,
just like throughout my life, and I hear someone mentioning
ALDI and it just makes my heart smile. But if
you've been listening for any length of time to the
podcast here, you know that fifteen percent, not ten percent.
Fifteen percent is the minimum amount that we want you
to allocate towards saving and towards debt eradication. But honestly,
(19:39):
even more than that would be ideal. As you are
trying to achieve your different financial goals, and you know
everyone's got their own different budgeting methods. Some folks are
going to prefer apps, or you know, some folks are
going to prefer diving into Excel, getting into getting messy
with the spreadsheets. No worries either way as far as
the method that you are taking. But if you're savings
floor is too low, I mean, that's just going to
(20:01):
solw your progress to achieve those financial goals. And you know,
this might be a necessary starting point if maybe you're
just getting your finances together for the very first time,
but it's just not a great long term budgeting approach,
and we just don't like seeing folks under saving for
their futures.
Speaker 1 (20:17):
Yeah, the author of this article in Kiplinger was kind
of like, yeah, this might, this isn't, This isn't a
bad approach for a whole lot of people, and might
takes the opposite, like, no, if Americans have poor savings
habits and we need to challenge, we need the challenge
to do better. And the fact is that's what this
show is all about. It's helping you find the ways
to save invest wisely so that you can increase your
(20:40):
savings rates so that you can develop more and more
greater levels of financial security along the way, not having
to worry about money as much. And yeah, if you
are if you bring that down that savings rate and
the debt payoff rate to ten percent, if that's kind
of your goal, you're just not going to get where
you're trying to go as quickly as we'd like to
see you get there, and I'm sure as likely as
much as you'd like to get there as well.
Speaker 2 (21:00):
Matt.
Speaker 1 (21:01):
Let's talk about Facebook for a second. We talked about
Facebook Marketplace and how the kids are hopping on Facebook marketplaces.
They're one and only thing they like about Facebook these days.
And I like Facebook Marketplace too. Trying to sell a
few things on there right now. Well, no, like what
a swivel chair right now? Yeah, we're trying to get
rid of some furniture maybe in the sunroom, which kind
(21:22):
of downsize a.
Speaker 2 (21:23):
Little bit or outsize just a clear clear some clear out,
some clutter sprin cleaning time. Baby. I like it, you know, will.
Speaker 1 (21:28):
New statistics reveal that a huge chunk of listings are
complete scams, which is particularly true in a few product categories.
So thirty four percent of listings overall were found to
be fraudulent, which is kind of shocking. You're like, holy crap,
one in three things listed on Facebook.
Speaker 2 (21:41):
I feel like I have noticed that over like back
in the day, like five six years ago, it wasn't
that bad, It really wasn't, But lately it seems a little.
Speaker 1 (21:49):
Now there's more ads, a little scam here, and more scams,
and so Facebook marketplace is becoming a tougher place to turn.
Maybe we're all going to go back to Craigslist.
Speaker 2 (21:56):
At some point. I don't know.
Speaker 1 (21:57):
But the top fake listings, by the way, you should
be aware of this are four products in the phone
category shoes, clothing, games, consoles, and small electronics, which does
not surprise me. Those are that makes sense, like you're
gonna get scam phone sellers or if you're looking for
not like somebody's like old pair sneakers for like ten bucks,
but if you're looking for the cool nikes that are
(22:19):
that are hard to find, you're going to get scammed
more often in those categories than anything else. And so
this comes from a legit study where researchers they reached
out to different posters on Facebook and what they found
was that these fraudulent sellers were using tactics that criminals
use like directing, directing you to fake websites, refusing to
(22:39):
allow you to view the item in person, and wanting
payment up front. So I think if they're if you're
talking to someone on Facebook about an item that you're
interested in buying after seeing it on marketplace. Those are
all red flags you want to be aware of when
you're kind of looking around, if you're being directed elsewhere,
or yeah, they don't want to let you see the
item in person. Those are all red flags, and you're like, listen,
(23:00):
I'm done with you. This is totally a scam.
Speaker 2 (23:01):
That's right, man. Let's talk about cars. Because Consumer Reports
they released their list of the cheapest cars to maintain,
and the least expensive is drum roll please, Tesla Boom,
followed closely by Lincoln and Buick. And first of all,
I think it's no surprise that an EVY only car
manufacturer wins this one, because I think that's one of
(23:23):
the perks of an ev right, the fact that they
require so little maintenance basically like glorified golf carts and
no belts or hoses or censors and all that. Exactly,
you just got like tires, I mean truly, like they say, right,
And so if you buy a Tesla, you can expect
to shell out just five hundred and eighty dollars and
maintenance costs in the first five years of ownership, which
(23:43):
is kind of mind blowing, and then.
Speaker 1 (23:45):
Only probably literally just one new set of times.
Speaker 2 (23:48):
Yeah, uh, and then it's only something like four thousand
dollars in the first decade of ownership overall, and you
compare that to buying a new land Rover. They're the
by the way, the worst ones on the list, which
is going to cost you nearly twenty thousand dollars over
a decade to maintain. Not like this. These aren't car
payments or anything else, like literally just to maintain that sinking, just.
Speaker 1 (24:11):
Taking it into the shop. And by the way, that
also means you're going to be at the mechanic shop
a whole lot more often insane. So it's the money
and at the time, like how frustrating.
Speaker 2 (24:19):
Yeah, And so we just want to remind folks to
think about the overall cost of car ownership, not just
the sticker price, but the average repair and remember the
insurance costs as well. And going to go back to
the manufacturers mentioned like Buick and Lincoln, I think Ford
was up there as well. But what I want to
say is make sure that you aren't being cheap in
(24:39):
an attempt to be frugal as well, because what you also, like,
you can't just think about the sticker price of the vehicle.
You can't just think about maintenance costs, but like think
about how long that vehicle is going to last on
the road, because not too far down the list, like
literally only a couple hundred dollars more on maintenance costs
were manufacturers like Toyota and Honda, And these are vehicles
that are going to get you well past that two
(25:01):
hundred thousand mile mark if you so choose to continue
to drive that old ride our Honda. I think we're
at like one hundred and sixty five thousand miles now,
and I'm starting to realize, oh man, we're it's not
going to be too long before we hit that two
hundred thousand mile How about you drive well, yeah, that's true,
but we just want folks to again keep that in mind.
Don't hear some of these other manufacturers and think, well, shoot,
(25:21):
that's the kind of car I need to get as well.
But what they're not taking into account is what the
cost of your next vehicle might be because that one
crapped out on you and you have to buy another vehicle,
maybe sooner than you would have had you been driving
a more dependable Honda or Toyleta.
Speaker 1 (25:34):
We talked about some of the great ev lease deals
last week for a little bit too. But it's just
a reminder that if you want to commit to a
certain electric vehicle for eight, ten plus years, the buying
a Tesla kind of makes a lot of sense these
days in a lot of in a lot of the country,
if it works for your lifestyle and if you like
the car because of the low maintenance costing, because they've
(25:55):
lowered the prices on many of those models, the Model
three and the Model X in particular, So it's just
crazy to think about how much how many price cuts
Tesla has enacted on some of those rides, and it
just makes it so much easier for normal folks to
buy a new car and then over ten twelve years
for it to actually be a reasonable decision. If you
(26:15):
buy the right new car and you hold it for
a longer period of time, it can actually make financial sense.
But let's talk about medical fees, Matt. There are new
fees coming to people's hospital bills when they go in
for a procedure, and they're being called facility fees. It's
kind of like when you go to and you buy
a car, think about all the fees that are attached
to it and you're like, wait a second, I thought
the price was this, but then these fees mean it's
(26:37):
like four thousand dollars more, like I was not expecting this. Well,
this sort of sticker shock is also happening to people
after they go into the hospital or to a medical facility,
and The Wall Street Journal wrote about the pernicious escalation
of these charges and how they're plaguing consumers to the
tune enough hundreds of dollars extra on normally run of
the mill medical invoices. So what should you do, Well,
(26:59):
don't it lying down. If you get an invoice for
a procedure and it there's a facility fee listed, challenge it.
Reach you back out to the place where you had
the procedure done and say, excuse me, you've never heard
of this before. It wasn't told about this. Can you
take this off the bill? And honestly, you probably want
to challenge some of the other vague charges on your
bill too. There are probably things there that shouldn't be there.
(27:20):
And if you need more information on how to do that,
check out two episodes that we've released in the past
six point eighty seven with Marshall Allen. He wrote about
never paying the first bill that comes your way Episode
seven sixteen with Doctor Burgie about pushing back against some
of these extreme, ridiculous medical costs that we incur. There
are all sorts of ways to have that medical debt
(27:41):
either completely eradicated or to have the bill shrunk down
in a meaningful way. But you don't get it if
you don't know, and you don't and you don't know
how to actually attack it, and the questions to ask
and the people to talk to.
Speaker 2 (27:52):
That's right, Just by asking that question and pushing back,
that can reduce how much you're you're going to have
to pay. And part of the reason for these higher
fees is the consolidation that's happening within the healthcare industry.
Less competition, bigger companies. That's going to mean dumber fees
and more frustration for the masses. Basically, like some of
these smaller clinics are getting absorbed into these larger hospital
(28:12):
networks in these systems, and because of that, Formally, this
was a clinic that you went to all the time,
but now because it's part of the whatever the larger
just think of whatever the big hospital network is in
your area, they can slap that hospital facility fee on there.
Speaker 1 (28:27):
It feels like that's happening in tropes. Oh, we live
like We've seen the main two hospital providers their names
logos to expand they're going up all over the place.
Private practice is being sucked up by it.
Speaker 2 (28:37):
Yeah, well, the same thing's happening in the animal healthcare
space as well as like vet bills, they're climbing due
to consolidation private equity firms. They've actually been snapping up
smaller vet practices, spending tens of billions of dollars over
the past few years to do so. It makes them
a whole lot of money. The vet owners are certainly
thrilled as the small business owner, but that decreases competition
(28:58):
and it increases what you're gonna pay the next time
you visit your vet. Under the new ownership, vet costs
are up almost ten percent year over year, and so
what you can do is shop around and plan ahead
as much as possible. We would also recommend for folks
to try to self ensure by having more in savings.
The human and pet healthcare systems are pretty messed up,
(29:22):
and we are all spending more on our pets than
ever before. As well. We're paying for surgeries. We're paying
for treatments that were unthinkable years before. Nothing we're gonna
say is going to fix this problem, but we want
you to do your best within this space as it's
fraught with peril, and I think there are just more
opportunities for you to be parted with your dollars and
(29:42):
you got to ask those questions again. Pushing back it
just generally puts you in a better posture of not
just paying any every single bill that comes your way
without you know, without thinking about it, Like, we don't
want for you to receive the bill and for the
default action just to be like click to pay. And
certainly we want you to pay your bills, but maybe
not with pushing back a little bit. Yeah.
Speaker 1 (30:01):
Man, I have a friend who was a vet and
he ended up selling his practice because.
Speaker 2 (30:05):
Do you offer was too good to refuse?
Speaker 1 (30:07):
I mean, it was just it was crazy the amount
of money being thrown his way to buy this practice,
and so for him as an individual, I totally get
the decision. But then this is again happening all across
the country. This is impacting people who love their bets
and don't want to spend ten percent more year over year.
They would rather be like two percent increases or three
percent increases in line with regular inflation. But because of
(30:28):
the dynamics, it's just that's not the way of shaking out.
Speaker 2 (30:31):
So you have to.
Speaker 1 (30:32):
Watch your own back in this space. Last story, what's
the impact of working longer on your ability to retire?
This is something that gets talked about sometimes, and if
you're in your twenties or thirties, you're probably not even
thinking about this yet, but working one more year can
make a massive difference in your ability to be financially
secure for a long period of time. There was an
(30:53):
article again we actually mentioned one earlier in Kipling or
this one was in Kipling or two. It outlined just
how big of a difference a year makes, and that's
because it moves the needle on so many levels. First,
you end up saving more. You got another year to
sock away more money, right, another year of contributions to
those retirement accounts. Second, you'll need to save less for retirement,
one less year to fund so you say, you know,
(31:14):
instead of retiring to sixty nine and retire at seventy, well,
that does both right. It means you don't have to
save as much for retirement, because it's when where you're
that you're working. Third, you've got more time for your
investments to compound, another year for the money to work
on your behalf, and then you can delay social Security
a little bit longer as well, netting a bigger check
each month. Basically, an extra year of work can dramatically
(31:36):
alter your nest egg and your ability to thrive for
decades to come. Not saying like work forever, die at
your desk, but it is interesting, it's worth thinking through
the trade offs because it can make a big difference.
Speaker 2 (31:48):
Yeah, I think well. I mean this is why within
the fire community especially, this is often presented as the
one more year syndrome, and it causes people to keep
working when they have plenty saved up already, they don't
necessarily need to continue to work, and that syndrome can
continue year after year, right where it just keeps folks
at their jobs a whole lot longer than they'd plan for. Yeah,
you say one more year, and then the next year
(32:09):
you say it again, like maybe one more year. It's
just yeah, moving the goalposts. And I think it is
worth knowing all the positive benefits of working longer. But
it's also possible to be too conservative, where you continue
to work when you don't necessarily need to in order
to gain higher levels of financial security. And I know
we're a couple of dudes who are solidly, you know,
still within their wealth accumulation phase. So it's easier said
(32:32):
than done. I know that, And I'm curious to see when,
as we continue to age up, Joel, whether like how
easy will it be even for us to not continue
to save and invest, but to actually start drawing down
on all that we have worked towards. And I think
even small little things along the way can help you
to do that. Like, I feel like there's a part
we've talked about how Kate and I we're not we're
(32:54):
not saving or we're not investing any money this year
at all, and that's in part because we're working on
funding of renovation that are home. But even that, it's
like it's almost like trying out retirement because it's not retiring.
I'm not drawing funds out of retirement accounts, but it's
a step in that direction, and it's psychologically plays on
the same centers. And because we talk about this all
(33:16):
the time, I still don't think I don't think I'll
personally have too difficult of a time drawing down on retirement.
But I do think it's gonna take maybe a little
bit of practice, whether that's going on a sabbatical like
we talked about with Jillian a couple of weeks ago,
or maybe it's just being a little more introspective and
figuring out what it is that shapes and defines how
does that you think about about your money. Maybe it
(33:38):
even takes you talking to a financial therapist, who, by
the way, we're going to talk to one next Wednesday,
so you can you can look forward to that one
as we are thinking about our feelings and how they
apply it to money.
Speaker 1 (33:49):
So popped about that conversation makes me think that we
just recently published, and we'll link to this in the
show notes as well, an article about tapping your retirement
funds early, and we try to couch it in that
article like you might not want to, but there are ways.
And we posted something on Instagram recently about that, and
the first knee jerk response from someone was like, don't
ever touch your retirement accounts ever, And I get where
(34:09):
they're coming from. And yeah, we talk about the detriment
of tapping your retirement accounts early too, because there are
real things to watch out for and be careful of,
but that don't touch them ever. Sort of mindset I
think that pervades people who are hyper frugal too, And
at some point, the whole goal of accumulating wealth is
to be able to enjoy it, and so you have
to play that both in. You have to kind of
(34:30):
find that center, and most people are bent hard one
way or the other, and that's hard to do. We're
trying to do the same thing in our own lives
and it's Yeah, you don't come by it easily. Matt.
You're dipping your toes in right now, which I think
is laudable. It's admirable, and for everyone else out there, yeah, no,
the benefits of working longer, but also know the downsides,
the ways in which it could maybe not allow you
(34:52):
to achieve other goals that you might have. And wrap
things up, Matt, let's mention quickly. The folks who won
the newsletter shout out this week, picks Peak, Rastro, Camby,
and Hayden, thank you for referring other people to the
Hoda Money newsletter. We just hit our two year newsletter bursary,
and we're gonna send you a free pair of how
to Money socks so you can look forward to getting
those in the mail. And by the way, if you
(35:14):
are not yet subscribed to the how to Money newsletter,
we'd love to have you join us. You can subscribe
at how to money dot com slash newsletter.
Speaker 2 (35:21):
But that's gonna be it for today, buddy. Until next time,
best friends out, Best Friends Out.
Welcome to Had of Money. I'm Joel and I am Matt,
and today we're talking about forced fiduciaries, bad budgeting, and
the one more year syndrome.
Speaker 2 (00:27):
You know, a buddy, this is our Friday flight and
we're going to cover the top stories from this past
week and how it pertains to your personal finances. And
I was gonna mention real quick, you and I we
always like to take walks around the neighborhood. After a week,
we're turning into old men. But I guess we pay
more attention to our health. We like to go for
a walks after we eat our lunch. It's like it's
a part of our lunch break. And that's a mental
(00:48):
health break just as much it is a physical points.
It's the fresh air, sunshine, it's keeping your blood sugar
from completely spiking, the ability to move around take some steps.
But have you noticed there's been a lot of construction
on our like just around the corner so much. Did
you notice the ADU over there that literally which one, Matt,
good question. I'm talking about the one that went up
(01:09):
like virtually overnight. Yeah, it makes me think of like
this year's Roebuck house kits. We were talking about that.
Oh yeah again recently too.
Speaker 1 (01:16):
But it used to be able to buy super cool
bungalows literally out of the catalog it for thousands of dollars. Literally,
It's what it looked like happened over there, because I
swear there was nothing there and then all of a sudden, yeah,
like there are guys bringing in pre constructed roof beams
and like, all of a sudden, there is like a
carriage house or ADU back, which I think is amazing.
(01:37):
Some of the prefab action kind of helps cut down on,
hopefully some of the costs and also makes a little
bit quicker to build. And ADUs are just kind of
boomtown right now in the places where they've been legalized
and where the rules to create those ADUs have been diminished.
When it's just easier to get it approved, then you
start building. And the cool thing about eighty US is
they're they're allowing a lot of people to dip their
(01:57):
toes into the real estate investing market without feeling like
you got to save up a ridiculous amount of money
and go out there and buy a duplex or triplex
or something like that. Right, So, yeah, and it just
makes it easier to manage. It's your backyard. You can
choose whether you want to do short term a long term.
ADUs are just such a great way to add more
housing supply. We're seeing it in California, like a huge
percentage of the units that are being built or ADUs
(02:19):
in people's backyards. They're creating more supply. They're really helping
with that problem that we face.
Speaker 2 (02:24):
And why because of less red tape as opposed to
other forms of housing construction that they're attempting. That's right.
Speaker 1 (02:30):
Yeah, So there was in Chad Carson's email chat Carson.
We love him, one of our favorite real estate investors.
Speaker 2 (02:36):
Coach Carson Cool. You have to refer to him as
coach cars. I can call him chat. He forces you
to see. He makes me call him mister coach. Actually,
So one of the things he mentioned, and I didn't
realize this existed until his newsletter this week, he said.
Speaker 1 (02:49):
You refer to a guy called that ADU guy. Maybe
we should have that EIGHTYU guy on the show at
some point. This is not his Christian birth name, but
he offers free EIGHTYU templates on his website. So if
you're kind of thinking about getting in the ADU game,
and it can.
Speaker 2 (03:06):
Be expensive to get the plans drawn out of the
floor plans, yeah, construction documents.
Speaker 1 (03:10):
So if you are like go over there and look,
and you're like, I like the look of that, well
that's one expense reduced at least, which I think is
so cool that guy makes it available for free.
Speaker 2 (03:19):
And we'd mentioned atl Adua and one of the benefits
that they had was that as well, the fact that
they had the plans included into the cost of them
actually building it though, and so in that case you
can get it for free. You kind of had to
go with the whole package. But in this case, yeah,
you can get the plans and if you can, you know,
arrange something with another local contractor well, that's one least step,
(03:39):
one less hurdle before you have the ability to not
even yeah, possibly rent out the space. But I'm even
thinking to folks who are building a carriage house for
like their in laws or their parents or something exactly,
would you.
Speaker 1 (03:50):
Ever consider something like that? Sure in your backyard, most definitely.
And the great thing is it's easier to get quotes too. Right,
when you have the plans, you can send them out
to a few builders instead of going through that process
paying money officially.
Speaker 2 (04:00):
Get it.
Speaker 1 (04:01):
It slid out, man, It slows things down. And so
if you're like, listen, I'm ready to pounce.
Speaker 2 (04:05):
I don't know.
Speaker 1 (04:05):
I just love that eighty of you guys doing that,
and so maybe one of these days we'll talk to
them on the show. But yeah, definitely go check that out.
We'll put a link to those free templates in the
show notes up on our website, howdamoney dot com, of course.
But Matt, let's move on. Let's get to the Friday Flight.
It's a quick sampling of stories we found interesting this week.
Let's start off by talking about non competes. You and
I disagree on this a little bit. We did last
(04:27):
time we talked. I don't know if we're on the
same page now we'll find.
Speaker 2 (04:30):
Out, I guess. But the question is, are no comment?
Speaker 1 (04:35):
Mom and Dad are fighting again? Are non competes going away?
It looks like they might be. One in five Americans
are currently affected by non compete many who don't have
access to IP or trade secrets that are highly specific
that they can't take that the employer's trying to prevent
them from taking elsewhere, which is really the impetus for
(04:55):
non competes in the beginning, it was to protect proprietary
information and to prevent someone from going down the road
and giving that to their new employer, harming that business
in the process. Right, I mostly like this FTC attempted
ban on non competes because they harm so many workers.
They hold down wages, limiting personal economic freedom. But I
(05:16):
will also say, Matt and we had this discussion about
the blanket ban versus kind of what's happening. Different states
have different rules around non competes right now, and the
blanket ban that the FTC is attempting, it doesn't allow
for some of the nuance in at least a few
of the professions where non competes do make at least
some sense. And so yeah, it's true that the FTC's
authority to do this is questionable. Also kind of like
(05:37):
the president's attempt at for giving student loans. That is
going to be part of the discussion moving forward, and
part of we'll see how this plays out from the
legal aspect. From legal side of things, but for now,
non competes are massively overused. They particularly harm low wage workers.
And we would just say to you whether or not.
This goes through all the way. Be careful signing a
(05:57):
noncompete because it can cause real harm to your career
into your personal finances.
Speaker 2 (06:01):
Sure yeah, okay, so another government action that's going to
impact your personal fight argue on this one for a while,
I said, no comment. Okay, I mean I still disagree.
I still think it should be something that is negotiated,
that's on the bargaining table between employers and employees, even
sandwich makers. And but that's well, that's the thing I
do see a potential discussion around. I don't know if
(06:23):
I see a need yet for it, but for individuals
who may not be informed, like I guess bottle mind,
there's like a collective action problem. And so you might
have like a single person who's saying, well, that's not
something I'm going to be a part of, but collectively
I see where that could provide some help. But so
we're kind of we're going to continue a government theme
because financial advisors they're going to be held to a
(06:46):
fiduciary standard starting in late September of this year. Many
advisors do this of their own accord already, but certainly
not all of them. And finding an advisor. It can
still it can still feel like swimming through like confessed waters.
And if you take the wrong route, if you are
swimming in the wrong ocean, you get your leg bitting off.
(07:06):
You've got an open wound. And that's basically because of
all of the phase that you're going to incur and
the fiduciary standards. It's one that puts advisors on the
same footing basically as doctors, right where the first rule
is essentially to do no harm. And up until now,
advisors they've been able to put their own interests above
yours as the client, where they're you know, they have
(07:27):
the ability to sell you products and maybe they might
be able to invest your dollars in ways that aren't
necessarily best for you. And that's not going to be
the case anymore.
Speaker 1 (07:35):
Yeah, yeah, Instead of saying, oh, yeah, you should totally
be in vou like Matt and Joel talk about, because
the low costs and the high diversification that you're going
to have, it's like, well, why don't you go in
actually some of these other funds because they don't cost
a lot more money, and that pads my bottom line
and that it's a problem because we're talking about the
advisor wants one thing, you want another thing. And if
(07:57):
they're not held to a standard that requires them to
do what's in your best interest, at least some of them,
a decent majority of them, in fact, are doing the opposite.
They're doing what's in their best interests, not yours. And
this rule, Matt, what I found interesting, applies to insurance
agents too, which has long been a segment of advice
in sales where I'm gonna say murky advice was part
(08:20):
for the course, think about high cost annuities, right. This
rule is I think maybe single handedly going to wipe
out at least the worst kinds of annuities that people
are often sold. They're approached, they're approached by insurance salespeople with.
It also applies to anyone giving one time advice, right,
such as rolling over your four oh one k to
an IRA. And this shift has been tried before the
(08:43):
can was kicked down the road. It blew up under
the last administration. Not everyone needs an advisor, of course,
I think it bears mentioning, especially folks in the wealth
building phase of their lives who need to focus on
socking away as much money as possible. Maybe those thousands
of dollars a year you could could or might spend
on that advisor will be better off going into your
own retirement accounts instead. But this is good news for
(09:04):
if or when you do decide to hire someone. It
doesn't negate your own need for financial education, but working
with an advisor who is a fiduciary, who is obligated
to put your interest first is crucial and making that
the standard, I think is the right thing to do.
Speaker 2 (09:19):
Yeah. I love fiduciaries, right, and we talk about fiduciaries
all the time here on the show, But I just
don't like the fact that it's being forced. I still
think that folks should have the option to crappy ones.
Yeah literally, I mean, well, it's not that it's crappy.
What do we quantify or qualify as crappy something that's
more expensive. But just because something is more expensive and
it doesn't it's not the leanest, most efficient vehicle, doesn't
(09:39):
mean that it can't be in the benefit of somebody
who's paying for it, and the benefit obviously of somebody
who's selling it. I think optionality is good. It makes
me think of one of my college roommates, has a
more traditional financial advisor, and he does things like go
and play golf at exclusive golf courses with this guy,
and so there's more of a relationship there, Like there
are these additional perks that are tough to put your
(10:01):
finger on. I'll have our relationship with a fee only finuciaria.
So he he has that because he pays more to
that guy, to that guy, and so like he's an.
Speaker 1 (10:09):
Extra thousands of dollars he's paying, he pays off in
an extra one hundred.
Speaker 2 (10:12):
Of dollars in golf course outings. Yes, I mean, I
mean it doesn't make a bad deal. Doesn't make sense
to me. I wouldn't do that. I'm not spending my
dollars that way. I if I wanted to pay for
a financial advisor, would go see a fiduciary. But like,
just because I wouldn't want to do that doesn't mean
that I think other folks shouldn't have that option.
Speaker 1 (10:27):
Like it makes me think most people don't know that
their advisor isn't they think that their advisor is supposed
to do what's best for them.
Speaker 2 (10:33):
Most people underestimating no. I feel like a lot of
folks who have the money to pay for an advisor.
They're kind of like, well, I know, but like all
my buddies from my fraternity back in school from twenty
they use this guy.
Speaker 1 (10:44):
He takes care of us exactly. That's the kind of
thing that he takes care of us. But they don't
realize the hidden vies that they're paying and how much
it might be costing them. And maybe there's a better
route out there.
Speaker 2 (10:52):
Yeah, possibly, but like it makes me think of like
even like airlines, Like it makes me think of like
flying first class or business class we're talking about here,
and just so like I don't fly first class, don't.
I don't pay for softer seats or whatever they get
up there. It's not the most affordable way to fly,
but I'd like that that's an option for some folks
if they want to pay that that's because we know
how much it costs. And like I said, I think
the problem with non fiduciary advisors is most people don't
(11:14):
realize if you were to ask one hundred people out
on the street, what does fiduciary mean, I guarantee you
maybe three could tell you. And then they would say,
if you would ask a hundred people who have an advisor,
how many is your advisor or financial advisor or fiduciary.
Speaker 1 (11:26):
I bet it's a lot more than three. I bet
like for folks who are actually maybe fifteen out of
the hundred could tell you whether or not they are.
And that's just a problem. It's the opaqueness, and I
think that's part of the issue. It's not as straightforward
as maybe you're thinking it is. I think there are
a lot of people who are kind of duped by
the products and the thing. They think that their advisor's
doing much best for them, even when they're actually not.
Speaker 2 (11:47):
So you mentioned a second ago that there is still
a need for us to take responsibility. There's still a
need for financial education. Aaron Lowry she wrote about retirement
anxiety over at Bloomberg this week, and she touched something
that we have before as well, which is a reliance
on social media for investing advice, and depending on who
you follow, that could be awful, but she actually broadens
(12:10):
that out. She broadens her disdain into YouTube and to podcasts,
which we see as specializing in more like long form
content that allows for a more thorough discussion, allows for
some of that necessary nuance.
Speaker 1 (12:23):
Yeah, YouTube and podcasts are not the equivalent of TikTok
and instagram rails, right, I mean, they're just they're completely
different things. There's a different amount of time, different ability
to relay and then absorb information totally.
Speaker 2 (12:33):
Yeah, And so we're just pointing out that she specifically
says that designing a retirement strategy based on free advice
is a dangerous plan. But we think that you can
get a killer free personal finance education. I think the
best of some of the different podcasts and YouTube creators
out there, some of the different publishers, like those more consumptive,
more maybe entertaining forms of media, plus free books from
(12:55):
the library is likely enough for a lot of folks
to put together a solid investing plan. So there are
options out there, and we just don't want a few
bad apples to necessarily ruin the entire bunch of all
the folks out there, Like, I mean, who we you know,
obviously we consider ourselves in that category of providing solid
financial advice. Yeah.
Speaker 1 (13:12):
And when you lump in all of these different platforms
together and you make them sound like they're the exact same,
I think you do a disservice to the great creators
on some of those platforms. Are there bad crummy people
giving really awful advice on YouTube? Of course, but like,
think about the amount of minutes of viewing potential there
is there exists on YouTube. It's astronomical, so of course
they are going to be bad people. But then it
(13:32):
makes me think of Marco from Whiteboard Finance, who we
had on recently. His YouTube channel has been around for many,
many years now and he's been doing great work, and
we mostly talked about bigcoin with him, But go back
and look at like the number of money topics he's covered.
It's wide rare or just breat sing from minority mindset.
We've featured so many creators in these more long form
(13:53):
spaces on this podcast. I love folks on YouTube who
are doing awesome stuff, so to lump all those in
together seems really silly. And yes, you can do great
with free advice if you're picking the right people to
listen to. All right, let's do one more government related
story for today, Matt, because.
Speaker 2 (14:10):
This is a thing for this episode. Big government.
Speaker 1 (14:12):
Yeah, but there's so much that impact your money with
what's happening with some of these government rulings, and a
lot came down really just in the past week. So
if you've got the travel bug after listening to Wednesday's episode, which.
Speaker 2 (14:20):
How could you not? After that?
Speaker 1 (14:22):
The DOT, the Department of Transportation is implementing new rules
for airlines that are going to look a little bit
more like what's going on over in Europe. Europe has
long had traveler friendly rules that the airlines have had
to abide by, Like, for instance, if your flight is
delayed over a certain amount of hours, I want to
say it's four, you get a full refund. And I've
known a lot of US friends and family who have
(14:43):
been able to snag those significant dollars back in their
lives because of this European rule protecting passengers. So what
are the changes here in the United States. Well, the
word delay has been redefined. It used to be this unspecified,
vague definition and so oh, if it's delayed, then you
owe passengers something. Well, delay is now to fined US
(15:04):
three hours for a domestic trip and six hours for
an international one.
Speaker 2 (15:08):
And when you.
Speaker 1 (15:09):
Encounter a delay now or a change flight or delayed baggage,
you don't have to fight for compensation. You'll get an
automatic refund within twenty days. And there are also more
requirements for transparency of fees before you book your flight,
which transparency is great, and then not to have to
you know, claw back and call the customer no service
from the airlines in order to get the refund you
(15:32):
deserve it. I don't know, sounds helpful, sounds nice for yeah,
flyers everywhere, totally.
Speaker 2 (15:37):
Yeah. And here's the thing. We don't want the airlines
to do away with a fees. So, like we're talking
about earlier about the fiduciaries, it's okay that they are there,
but let's make sure that they are a bit more transparent,
they're little bit more clear.
Speaker 1 (15:47):
You and I were about to fly on Frontier and
we picked them because the cost of the ticket was
was lower. But I was literally checking in for the
flight this morning and I looked at all the fees
they charged for all sorts of silly things and how
expensive it is.
Speaker 2 (15:59):
And one you talking about all the optional stuff. Yeah, yeah,
all the optional stuff. So like most people are sure
you don't want to bring a carry on back, right
for sixty million dollars, Sure, I will maintain that personal item,
that's right, that I have shoved all of my clothes into,
that's right.
Speaker 1 (16:12):
But we knew that eyes wide open going into it.
We're like, oh, we could book the seven hundred fifty
dollars Delta flight, or we can book the four hundred
dollars Frontier flight. Yeah, and then jump through the hoops
and you know what, still pay four hundred.
Speaker 2 (16:22):
Bucks, which is why, again, kind of going back to
the h I love the optionality that all of these
different providers or in this case, different airlines, that they're
able to offer folks because you can score the best
overall deal by being proly sensitive jumping through some of
the different hoops that they require of you. And but
I think some of the sneaky fees are also the
problem as well, and just kind of the way they are,
(16:43):
the way the terms are laid out in the language
I guess that they use, and so I think making
the airlines list them out from the center in an
age where you could be charged for just a slew
of random things, that's certainly more consumer friendly. And I'm
very happy to see that they have clearly defined what
a delay is as well, because that's one of the
and the fact too that the refunds are they're gonna
they're gonna be cash refunds. As well as opposed to
(17:05):
credits that go towards maybe an airline that you rarely
fly with that ultimately never get taken advantage or yeah,
you get.
Speaker 1 (17:11):
To benefit expire within a year or something like that,
and you're like, well, crap, I'm I'm not planning on
going on another trip in the next year, because not
everybody travels on an airplane every single year. So no,
I agree with that, And I think transparency is key here.
It's it's not requiring them not to charge certain fees.
It's saying, listen, you have to be transparent about this.
And maybe going back to the fiduciary discussion, maybe that
was the right thing to do, to say, hey, actually
you don't have to do this, but you've got to
(17:33):
disclose this, this, and this on the front end if
because that's the problem is most people don't realize, and
I think if you had to tell people that, they
might run away screaming before they engage in a relationship
with you. Sure, we've got more to get to on
this episode, including a budgeting method that scares the pants
off me. We'll get to that and more right after this.
Speaker 2 (17:59):
All right, we are back. We've got more to get
to we're to talk about hospital bills, we're going to
talk about cars. But first, Joel, we got our ludicrous
headline of the week, and like you alluded to before
the break, it has to do with budgeting. This one
is from Kiplinger and the headline reads the new sixty
to thirty ten budgeting method. It is not good. And
(18:20):
it might sound somewhat familiar, right because in the past
we've talked about the fifty thirty twenty budgets, which we
don't mind. Yeah, this is an iteration on that, but
it is far worse because in this method you allocate
sixty percent of your pay towards necessities, thirty percent towards
once still just like our the old one, but then
only ten percent towards saving and debt paydown. And so
(18:43):
essentially they're in my mind, they're almost allocating or allowing
for us like, oh man, some of the some of
the necessities of life are costing more. But what do
you define as a necessity, Because for most folks they're saying, oh, well, housing,
that's something that's that you've definitely got to pay for.
But like, man, you've more control over that than you realize.
And if you've been listening with your ride, I mean it, yes, yeah,
(19:04):
some gone up. But food, like all of the things
that people see as non negotiable, it's like, well, you
have to spend at least this much. I would push
back and say, you've got more control over that than
you think.
Speaker 1 (19:14):
There's an article in the Wall Street Journal about all
the people choosing ALLDI these days.
Speaker 2 (19:18):
Makes me so happy. I love just hearing random conversations,
just like throughout my life, and I hear someone mentioning
ALDI and it just makes my heart smile. But if
you've been listening for any length of time to the
podcast here, you know that fifteen percent, not ten percent.
Fifteen percent is the minimum amount that we want you
to allocate towards saving and towards debt eradication. But honestly,
(19:39):
even more than that would be ideal. As you are
trying to achieve your different financial goals, and you know
everyone's got their own different budgeting methods. Some folks are
going to prefer apps, or you know, some folks are
going to prefer diving into Excel, getting into getting messy
with the spreadsheets. No worries either way as far as
the method that you are taking. But if you're savings
floor is too low, I mean, that's just going to
(20:01):
solw your progress to achieve those financial goals. And you know,
this might be a necessary starting point if maybe you're
just getting your finances together for the very first time,
but it's just not a great long term budgeting approach,
and we just don't like seeing folks under saving for
their futures.
Speaker 1 (20:17):
Yeah, the author of this article in Kiplinger was kind
of like, yeah, this might, this isn't, This isn't a
bad approach for a whole lot of people, and might
takes the opposite, like, no, if Americans have poor savings
habits and we need to challenge, we need the challenge
to do better. And the fact is that's what this
show is all about. It's helping you find the ways
to save invest wisely so that you can increase your
(20:40):
savings rates so that you can develop more and more
greater levels of financial security along the way, not having
to worry about money as much. And yeah, if you
are if you bring that down that savings rate and
the debt payoff rate to ten percent, if that's kind
of your goal, you're just not going to get where
you're trying to go as quickly as we'd like to
see you get there, and I'm sure as likely as
much as you'd like to get there as well.
Speaker 2 (21:00):
Matt.
Speaker 1 (21:01):
Let's talk about Facebook for a second. We talked about
Facebook Marketplace and how the kids are hopping on Facebook marketplaces.
They're one and only thing they like about Facebook these days.
And I like Facebook Marketplace too. Trying to sell a
few things on there right now. Well, no, like what
a swivel chair right now? Yeah, we're trying to get
rid of some furniture maybe in the sunroom, which kind
(21:22):
of downsize a.
Speaker 2 (21:23):
Little bit or outsize just a clear clear some clear out,
some clutter sprin cleaning time. Baby. I like it, you know, will.
Speaker 1 (21:28):
New statistics reveal that a huge chunk of listings are
complete scams, which is particularly true in a few product categories.
So thirty four percent of listings overall were found to
be fraudulent, which is kind of shocking. You're like, holy crap,
one in three things listed on Facebook.
Speaker 2 (21:41):
I feel like I have noticed that over like back
in the day, like five six years ago, it wasn't
that bad, It really wasn't, But lately it seems a little.
Speaker 1 (21:49):
Now there's more ads, a little scam here, and more scams,
and so Facebook marketplace is becoming a tougher place to turn.
Maybe we're all going to go back to Craigslist.
Speaker 2 (21:56):
At some point. I don't know.
Speaker 1 (21:57):
But the top fake listings, by the way, you should
be aware of this are four products in the phone
category shoes, clothing, games, consoles, and small electronics, which does
not surprise me. Those are that makes sense, like you're
gonna get scam phone sellers or if you're looking for
not like somebody's like old pair sneakers for like ten bucks,
but if you're looking for the cool nikes that are
(22:19):
that are hard to find, you're going to get scammed
more often in those categories than anything else. And so
this comes from a legit study where researchers they reached
out to different posters on Facebook and what they found
was that these fraudulent sellers were using tactics that criminals
use like directing, directing you to fake websites, refusing to
(22:39):
allow you to view the item in person, and wanting
payment up front. So I think if they're if you're
talking to someone on Facebook about an item that you're
interested in buying after seeing it on marketplace. Those are
all red flags you want to be aware of when
you're kind of looking around, if you're being directed elsewhere,
or yeah, they don't want to let you see the
item in person. Those are all red flags, and you're like, listen,
(23:00):
I'm done with you. This is totally a scam.
Speaker 2 (23:01):
That's right, man. Let's talk about cars. Because Consumer Reports
they released their list of the cheapest cars to maintain,
and the least expensive is drum roll please, Tesla Boom,
followed closely by Lincoln and Buick. And first of all,
I think it's no surprise that an EVY only car
manufacturer wins this one, because I think that's one of
(23:23):
the perks of an ev right, the fact that they
require so little maintenance basically like glorified golf carts and
no belts or hoses or censors and all that. Exactly,
you just got like tires, I mean truly, like they say, right,
And so if you buy a Tesla, you can expect
to shell out just five hundred and eighty dollars and
maintenance costs in the first five years of ownership, which
(23:43):
is kind of mind blowing, and then.
Speaker 1 (23:45):
Only probably literally just one new set of times.
Speaker 2 (23:48):
Yeah, uh, and then it's only something like four thousand
dollars in the first decade of ownership overall, and you
compare that to buying a new land Rover. They're the
by the way, the worst ones on the list, which
is going to cost you nearly twenty thousand dollars over
a decade to maintain. Not like this. These aren't car
payments or anything else, like literally just to maintain that sinking, just.
Speaker 1 (24:11):
Taking it into the shop. And by the way, that
also means you're going to be at the mechanic shop
a whole lot more often insane. So it's the money
and at the time, like how frustrating.
Speaker 2 (24:19):
Yeah, And so we just want to remind folks to
think about the overall cost of car ownership, not just
the sticker price, but the average repair and remember the
insurance costs as well. And going to go back to
the manufacturers mentioned like Buick and Lincoln, I think Ford
was up there as well. But what I want to
say is make sure that you aren't being cheap in
(24:39):
an attempt to be frugal as well, because what you also, like,
you can't just think about the sticker price of the vehicle.
You can't just think about maintenance costs, but like think
about how long that vehicle is going to last on
the road, because not too far down the list, like
literally only a couple hundred dollars more on maintenance costs
were manufacturers like Toyota and Honda, And these are vehicles
that are going to get you well past that two
(25:01):
hundred thousand mile mark if you so choose to continue
to drive that old ride our Honda. I think we're
at like one hundred and sixty five thousand miles now,
and I'm starting to realize, oh man, we're it's not
going to be too long before we hit that two
hundred thousand mile How about you drive well, yeah, that's true,
but we just want folks to again keep that in mind.
Don't hear some of these other manufacturers and think, well, shoot,
(25:21):
that's the kind of car I need to get as well.
But what they're not taking into account is what the
cost of your next vehicle might be because that one
crapped out on you and you have to buy another vehicle,
maybe sooner than you would have had you been driving
a more dependable Honda or Toyleta.
Speaker 1 (25:34):
We talked about some of the great ev lease deals
last week for a little bit too. But it's just
a reminder that if you want to commit to a
certain electric vehicle for eight, ten plus years, the buying
a Tesla kind of makes a lot of sense these
days in a lot of in a lot of the country,
if it works for your lifestyle and if you like
the car because of the low maintenance costing, because they've
(25:55):
lowered the prices on many of those models, the Model
three and the Model X in particular, So it's just
crazy to think about how much how many price cuts
Tesla has enacted on some of those rides, and it
just makes it so much easier for normal folks to
buy a new car and then over ten twelve years
for it to actually be a reasonable decision. If you
(26:15):
buy the right new car and you hold it for
a longer period of time, it can actually make financial sense.
But let's talk about medical fees, Matt. There are new
fees coming to people's hospital bills when they go in
for a procedure, and they're being called facility fees. It's
kind of like when you go to and you buy
a car, think about all the fees that are attached
to it and you're like, wait a second, I thought
the price was this, but then these fees mean it's
(26:37):
like four thousand dollars more, like I was not expecting this. Well,
this sort of sticker shock is also happening to people
after they go into the hospital or to a medical facility,
and The Wall Street Journal wrote about the pernicious escalation
of these charges and how they're plaguing consumers to the
tune enough hundreds of dollars extra on normally run of
the mill medical invoices. So what should you do, Well,
(26:59):
don't it lying down. If you get an invoice for
a procedure and it there's a facility fee listed, challenge it.
Reach you back out to the place where you had
the procedure done and say, excuse me, you've never heard
of this before. It wasn't told about this. Can you
take this off the bill? And honestly, you probably want
to challenge some of the other vague charges on your
bill too. There are probably things there that shouldn't be there.
(27:20):
And if you need more information on how to do that,
check out two episodes that we've released in the past
six point eighty seven with Marshall Allen. He wrote about
never paying the first bill that comes your way Episode
seven sixteen with Doctor Burgie about pushing back against some
of these extreme, ridiculous medical costs that we incur. There
are all sorts of ways to have that medical debt
(27:41):
either completely eradicated or to have the bill shrunk down
in a meaningful way. But you don't get it if
you don't know, and you don't and you don't know
how to actually attack it, and the questions to ask
and the people to talk to.
Speaker 2 (27:52):
That's right, Just by asking that question and pushing back,
that can reduce how much you're you're going to have
to pay. And part of the reason for these higher
fees is the consolidation that's happening within the healthcare industry.
Less competition, bigger companies. That's going to mean dumber fees
and more frustration for the masses. Basically, like some of
these smaller clinics are getting absorbed into these larger hospital
(28:12):
networks in these systems, and because of that, Formally, this
was a clinic that you went to all the time,
but now because it's part of the whatever the larger
just think of whatever the big hospital network is in
your area, they can slap that hospital facility fee on there.
Speaker 1 (28:27):
It feels like that's happening in tropes. Oh, we live
like We've seen the main two hospital providers their names
logos to expand they're going up all over the place.
Private practice is being sucked up by it.
Speaker 2 (28:37):
Yeah, well, the same thing's happening in the animal healthcare
space as well as like vet bills, they're climbing due
to consolidation private equity firms. They've actually been snapping up
smaller vet practices, spending tens of billions of dollars over
the past few years to do so. It makes them
a whole lot of money. The vet owners are certainly
thrilled as the small business owner, but that decreases competition
(28:58):
and it increases what you're gonna pay the next time
you visit your vet. Under the new ownership, vet costs
are up almost ten percent year over year, and so
what you can do is shop around and plan ahead
as much as possible. We would also recommend for folks
to try to self ensure by having more in savings.
The human and pet healthcare systems are pretty messed up,
(29:22):
and we are all spending more on our pets than
ever before. As well. We're paying for surgeries. We're paying
for treatments that were unthinkable years before. Nothing we're gonna
say is going to fix this problem, but we want
you to do your best within this space as it's
fraught with peril, and I think there are just more
opportunities for you to be parted with your dollars and
(29:42):
you got to ask those questions again. Pushing back it
just generally puts you in a better posture of not
just paying any every single bill that comes your way
without you know, without thinking about it, Like, we don't
want for you to receive the bill and for the
default action just to be like click to pay. And
certainly we want you to pay your bills, but maybe
not with pushing back a little bit. Yeah.
Speaker 1 (30:01):
Man, I have a friend who was a vet and
he ended up selling his practice because.
Speaker 2 (30:05):
Do you offer was too good to refuse?
Speaker 1 (30:07):
I mean, it was just it was crazy the amount
of money being thrown his way to buy this practice,
and so for him as an individual, I totally get
the decision. But then this is again happening all across
the country. This is impacting people who love their bets
and don't want to spend ten percent more year over year.
They would rather be like two percent increases or three
percent increases in line with regular inflation. But because of
(30:28):
the dynamics, it's just that's not the way of shaking out.
Speaker 2 (30:31):
So you have to.
Speaker 1 (30:32):
Watch your own back in this space. Last story, what's
the impact of working longer on your ability to retire?
This is something that gets talked about sometimes, and if
you're in your twenties or thirties, you're probably not even
thinking about this yet, but working one more year can
make a massive difference in your ability to be financially
secure for a long period of time. There was an
(30:53):
article again we actually mentioned one earlier in Kipling or
this one was in Kipling or two. It outlined just
how big of a difference a year makes, and that's
because it moves the needle on so many levels. First,
you end up saving more. You got another year to
sock away more money, right, another year of contributions to
those retirement accounts. Second, you'll need to save less for retirement,
one less year to fund so you say, you know,
(31:14):
instead of retiring to sixty nine and retire at seventy, well,
that does both right. It means you don't have to
save as much for retirement, because it's when where you're
that you're working. Third, you've got more time for your
investments to compound, another year for the money to work
on your behalf, and then you can delay social Security
a little bit longer as well, netting a bigger check
each month. Basically, an extra year of work can dramatically
(31:36):
alter your nest egg and your ability to thrive for
decades to come. Not saying like work forever, die at
your desk, but it is interesting, it's worth thinking through
the trade offs because it can make a big difference.
Speaker 2 (31:48):
Yeah, I think well. I mean this is why within
the fire community especially, this is often presented as the
one more year syndrome, and it causes people to keep
working when they have plenty saved up already, they don't
necessarily need to continue to work, and that syndrome can
continue year after year, right where it just keeps folks
at their jobs a whole lot longer than they'd plan for. Yeah,
you say one more year, and then the next year
(32:09):
you say it again, like maybe one more year. It's
just yeah, moving the goalposts. And I think it is
worth knowing all the positive benefits of working longer. But
it's also possible to be too conservative, where you continue
to work when you don't necessarily need to in order
to gain higher levels of financial security. And I know
we're a couple of dudes who are solidly, you know,
still within their wealth accumulation phase. So it's easier said
(32:32):
than done. I know that, And I'm curious to see when,
as we continue to age up, Joel, whether like how
easy will it be even for us to not continue
to save and invest, but to actually start drawing down
on all that we have worked towards. And I think
even small little things along the way can help you
to do that. Like, I feel like there's a part
we've talked about how Kate and I we're not we're
(32:54):
not saving or we're not investing any money this year
at all, and that's in part because we're working on
funding of renovation that are home. But even that, it's
like it's almost like trying out retirement because it's not retiring.
I'm not drawing funds out of retirement accounts, but it's
a step in that direction, and it's psychologically plays on
the same centers. And because we talk about this all
(33:16):
the time, I still don't think I don't think I'll
personally have too difficult of a time drawing down on retirement.
But I do think it's gonna take maybe a little
bit of practice, whether that's going on a sabbatical like
we talked about with Jillian a couple of weeks ago,
or maybe it's just being a little more introspective and
figuring out what it is that shapes and defines how
does that you think about about your money. Maybe it
(33:38):
even takes you talking to a financial therapist, who, by
the way, we're going to talk to one next Wednesday,
so you can you can look forward to that one
as we are thinking about our feelings and how they
apply it to money.
Speaker 1 (33:49):
So popped about that conversation makes me think that we
just recently published, and we'll link to this in the
show notes as well, an article about tapping your retirement
funds early, and we try to couch it in that
article like you might not want to, but there are ways.
And we posted something on Instagram recently about that, and
the first knee jerk response from someone was like, don't
ever touch your retirement accounts ever, And I get where
(34:09):
they're coming from. And yeah, we talk about the detriment
of tapping your retirement accounts early too, because there are
real things to watch out for and be careful of,
but that don't touch them ever. Sort of mindset I
think that pervades people who are hyper frugal too, And
at some point, the whole goal of accumulating wealth is
to be able to enjoy it, and so you have
to play that both in. You have to kind of
(34:30):
find that center, and most people are bent hard one
way or the other, and that's hard to do. We're
trying to do the same thing in our own lives
and it's Yeah, you don't come by it easily. Matt.
You're dipping your toes in right now, which I think
is laudable. It's admirable, and for everyone else out there, yeah, no,
the benefits of working longer, but also know the downsides,
the ways in which it could maybe not allow you
(34:52):
to achieve other goals that you might have. And wrap
things up, Matt, let's mention quickly. The folks who won
the newsletter shout out this week, picks Peak, Rastro, Camby,
and Hayden, thank you for referring other people to the
Hoda Money newsletter. We just hit our two year newsletter bursary,
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But that's gonna be it for today, buddy. Until next time,
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