January 5, 2025 • 32 mins
IRL hangs might be the key to saving money in 2025.
Decision fatigue is real! Matt and Joel discuss how to make a wise choice when presented with too many options.
Financial advice is more accessible than ever - and less expensive too. Matt and Joel document the best places to turn if you're in need of professional advice.
Ask HTM: Jeff is retiring early. Woo hoo! He has a question about reducing the cost of his kid's college.
Decision fatigue is real! Matt and Joel discuss how to make a wise choice when presented with too many options.
Financial advice is more accessible than ever - and less expensive too. Matt and Joel document the best places to turn if you're in need of professional advice.
Ask HTM: Jeff is retiring early. Woo hoo! He has a question about reducing the cost of his kid's college.
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Transcript
Episode Transcript
Available transcripts are automatically generated. Complete accuracy is not guaranteed.
Speaker 1 (00:01):
I Am six forty. You're listening to How to Money
on demand on the iHeartRadio app.
Speaker 2 (00:07):
Do you want to live well without drowning in debt?
Joel and Matt have you covered? This is how to
Money with Joel Larsgard and Matt altmes.
Speaker 3 (00:21):
Kfi AM six forty live everywhere on the iHeartRadio app.
Speaker 4 (00:25):
This is how to Money. I am Matt Altmeis.
Speaker 1 (00:27):
And I'm Joel Larsgard. Don't forget to sign up for
the how to Money newsletter. You can find that up
at how tomoney dot com slash newsletter.
Speaker 3 (00:34):
If you want to save more money in twenty twenty five,
we would suggest to make a resolution to do more
of your life offline. Participate more in actual real life activities.
And these are things that don't have to be necessarily expensive.
They can help foster relationships in community as well, which
is something that I think we're missing as a society.
(00:54):
Is something that we talk about a decent bit here
on the show that isn't necessarily financially related, but one
of our our favorite ways of doing this, and it
appears to be a little bit more in vogue these days,
is playing board games.
Speaker 4 (01:07):
Yes, yeah, the new York Times.
Speaker 3 (01:09):
They documented the rise of board game clubs, specifically amongst
Gen Z and millennials, and this makes me so happy
because I feel like we were ahead of the curve. Buddy,
we did a whole episode on board games many many
years ago.
Speaker 4 (01:21):
Was it in fact the first episode?
Speaker 3 (01:23):
No, the first episode was biking, yeah, but a board
games was like episode two or three early exactly like that.
But I mean, the reason there's such a good option
for frugal folks out there is because they can just
provide an incredible return on investment with what you're getting,
just the joy and satisfaction that you're getting out of that.
Just think about all the hours that you can derive
from like a thirty forty fifty dollars board game like
(01:46):
that is mind boggling. And granted, some of the fancier
board games or even they can be more expensive than that,
but you don't have to start there, right, Like, you
can just start with chess super affordable before advancing to
something that's got more game pieces like Settlers Catan. But
I think buying a game or two and finding some
friends over finding a maybe a local board game club
that you can join that can be a brilliant.
Speaker 4 (02:07):
Use of just a few dollars this year.
Speaker 3 (02:10):
Did you see in that in that story some of
the they they profiled a bunch of folks that are
into this Rummy Cube.
Speaker 4 (02:15):
Oh yeah, that club. Yeah, and they had the wild
Card Joker tile tattooed. Have you played that before? Rummy Cube?
Is that a tile with the members? Oh yeah.
Speaker 3 (02:25):
I would never have thought to get that as a tattoo,
but after seeing it on someone's arm, it looks so
it looks so good. I would not personally do this,
but the fact that, like those tiles, it's stamped on
there in such a way that it really lends itself
to a tattoo. And while I couldn't see myself doing that,
I'm one hundred percent behind folks that are getting board
game like tattoos.
Speaker 4 (02:46):
Therefore I'm totally for it.
Speaker 1 (02:47):
Well, I think this is yeah, just a good reminder,
like there are so many freeways to have that time
together with people, and think about all the time that
a lot of people have had with family and friends
over these last couple of weeks, like working a little
bit less hopefully, and it's just a reminder that the
simple joys are the best blondes and in board games
are one of those ways to I don't have an
(03:09):
activity to do together cost so little money. Hiking is
another one. I was baking bread with a friend last night,
like just such an easy, inexpensive thing to do, and like, man,
it facilitated great conversation. We also had kind of something
that we were doing at the same time.
Speaker 4 (03:21):
Even old school puzzles.
Speaker 1 (03:23):
Yeah, we're going out for cocktails. Way more expensive, okay,
way more expensive. Especially cocktail prices these days.
Speaker 4 (03:28):
Were not good for you.
Speaker 1 (03:29):
Let's just let's be honest. Yeah, so I r l
cheap stuff with friends. That's a good thing to prioritize.
We also have talked about matt the rise of physical
activities that people are doing in person together that don't
cost much money either. F three is if you if
you look that up, that's clubs are around the country
where people are getting together to do physical fitness stuff
(03:50):
early in the morning, running clubs on the cheap, on
the cheap, the way instead of buying weights an money,
they get a cinder block, right, Like that's the way.
Speaker 3 (03:58):
They go what they called tokens or take It's like
that's in the lingo.
Speaker 4 (04:02):
I think that's called a ticket.
Speaker 1 (04:03):
Okay, okay, so kind of cool, right that you get
fit and kind of make friends for essentially no money.
Running clubs that's another thing that they're kind of like
springing up across the country. I run by myself, sometimes
run with other people. Sometimes it's really fun. I'm still
waiting for you to create your own mountain running club
running Yeah, hey, well actually I got running with you.
Maybe I'll put this out there. But a couple of
(04:23):
listeners reached out and they were like, hey, we hear
you run. We live close by.
Speaker 4 (04:26):
Do you want to run together? And I was like,
oh sure, all right, anybody.
Speaker 1 (04:29):
Else who lives locally and wants to run with us
later this month, just send an email over I'll get
you included on that. But if fitness is like, let's say,
one of your main goals for twenty twenty five, which
matt for a lot of people it typically is, I
think it's important to mention that you don't necessarily have
to buy an expensive gym membership, and that the free
options might actually be more enjoyable, and they could ensure
(04:50):
that you're actually going to stick with the fitness regimen
that you're trying to achieve. I think there's something really
powerful about the accountability and the enjoyment that peers can provide,
even more powerful maybe than the money you might otherwise
be sinking into a gym membership and you say, great,
now that I've bought this gym membership, it's going to
force me to go. But even still you don't go
(05:12):
if you know you're gonna let your friends down because
you're supposed to meet Tuesday morning at six o'clock to
go for that run, that's I think that's more powerful
because if you don't show up there, like, why do
you bail on us?
Speaker 4 (05:22):
Sarah? Why did you bail on us? Tim? Like whatever
your name is? And that getting pretty specific there, Joel.
Speaker 1 (05:29):
Yeah, Sarah really let me down the other day, So
you're yeah, I think trying to do that with other
people and finding those those groups where you're gonna find
that sort of accountability, I guess maybe, especially as fitness
is something that's on the mind of a lot of people.
Sure at the very beginning of the beginning of the year,
it's just a reminder you don't have to spend lots
of money that you get there.
Speaker 3 (05:45):
Joe, let's talk about gigwork because it seems to be
changing pretty quickly these days. Now you can side hustle
for one business today and then you can side hustle
for another business tomorrow, where essentially you have the ability
to bounce around for the highest pay. So the Financial
Times they wrote about these new apps that are currently
operating over in Europe, like young Ones. So this is
(06:07):
an app over there, but it allows you to post
your availability, your desired pay and know companies who are
also on the app. When they have a need for
workers to fill shifts, well they can sign you up,
they slot you in.
Speaker 1 (06:20):
By the way, it's called young Ones, I would have
called it Youngsters if I was created app.
Speaker 4 (06:23):
But that's just the way I can see.
Speaker 3 (06:25):
There's like a difference between British English and American English.
But of course, because this is an app and we're
talking about the appification and the rating system of everything,
you get to rad each other after the fact. I
think it sounds promising, particularly for seasonal jobs, but I
think it can also come with some real pitfalls. We've
always talked about gigwork, how that can be great for
(06:47):
making money in a pinch, but it is far inferior
to trying to level up your pay at your current job,
or even working to start your own business, finding a
way to take something that could technically be considered gigwork,
but actually, let's make this like a side gig that
you are doing on the side individually, as opposed to
participating within this sort of ecosystem where you are a
(07:07):
little bit more locked in. New apps, you know, they
make it easier to get gigs. I don't think they're
much of a solution for most folks out there, And honestly,
it kind of feels like like temp agencies. You know, yes,
Ryan from the office, right, it kind of feels like
temp agency two point zero. Essentially, it's just like an
easier way to access some of those jobs that are
out there.
Speaker 1 (07:26):
And I think for people listening, they might say, oh,
one of my goals for twenty twenty five is to
make more money, and you might instinctively reach to the
gig apps or see something like this and say, well, great,
I should I should totally sign up for this thing
and do and make money on the side, whether it's
driving for Uber. I mean, there are so many many
(07:49):
more ways that you can gig and freelance. But I
think You're right, Matt Like. You might be a way
to instantly turn on the faucet of a little extra income,
but when it comes to sustainability of being able to
make more money, it works in a pinch, but it's
not necessarily the best long term strategy. Speaking of work,
more working adults expect to rely mainly on Social Security
(08:12):
in retirements. Fifty three percent of people is a new study,
who are still working. They basically are saying that social
Security is a vital lifeline for them in retirement. And
so the reality is that social Security is this implicit
and explicit promise from the US government for all of
us who work and pay into the system, and folks
(08:33):
who get a monthly check they rightly expect to get
that check because they've been paying into the system for decades.
So even somebody like myself, Matt Like, we know we
talk about how the Social Security system has to be
fixed because it's not necessarily set up to succeed over
the long term. But you and I we've been paying.
I mean, I've been paying into Social Security since I
was fifteen and I'm forty, says the first job, and
(08:56):
I will not be happy. Although my expectations are not
necessarily to the moon for how much I'm going to
receive in SoC Security, but I'm not going to be
happy if the system changes significantly reducing my payout. And
so because of these medium and long term hurdles that
social Security faces, which could and likely will result in
smaller payouts for gen Z, for millennials, for future generations.
(09:17):
It's not that younger workers shouldn't expect that they're going
to get back some of what they put in, but
the truth is the reality situation, we might not get
the sweet deal that our parents got. And I think
it's important for all young investors to realize that an
over reliance or having too high of an expectation of
what Social Security is going to provide for them, it
(09:38):
could equate to not saving enough to have those comfortable
retirement years later on down the road. I think it's
important to hope for the best, but to plan for
the worst, which means increasing what you're investing. And hey,
if social Security pays out in the current form, the
current projections that you find when you go to when
you go to Social Security's website, the doc ofv website,
(10:01):
that's amazing, Be thankful for that, But the truth is
we're likely to see something like, you know, seventy seventy
five percent, at least the younger folks of what those
projections state.
Speaker 4 (10:11):
That's right, man.
Speaker 2 (10:12):
You're listening to how to Money with Joel Larsgard on
demand from KFI AM six forty.
Speaker 3 (10:19):
By the way, you can always find more money saving
information over at howtomoney dot com. Joel, I've got a
question for you. As we've talked about on the show,
we are adding onto our house. We're doing a little
bit of reconfiguring of certain rooms to turn them into
bedrooms for all the kids that you know, all that
kind of thing.
Speaker 4 (10:36):
Yeah, And as the west wing of the house, does
I call it?
Speaker 3 (10:39):
No, no, you Actually it's funny because last year, at
some point you correctly called it.
Speaker 4 (10:43):
The east wing. Okay, is it the east wing? And
I was gonna like, you're right, and.
Speaker 3 (10:46):
I was going to criticize you for making it sound
like I'm like building some sort of like mc mansion
or something like that.
Speaker 4 (10:51):
Uh huh, But I couldn't.
Speaker 3 (10:53):
I had to catch myself because you were actually accurate
when it came to the cardinal direction, and so I
chose not to correct you that time. Now you can
was able to get you this time. It's not The
West Wing. Did you ever watch that show, by the way, No,
I didn't. Yeah, people loved it. But as you know,
when you renovate a home, there are so many decision
decisions that you have to make.
Speaker 4 (11:11):
Yea. Oftentimes it's like the opposite of an Aldi. Oh
my gosh.
Speaker 3 (11:14):
Yes, absolutely, And a lot of times it's about fun
things like what kind of tile you want to pick out.
But recently I've found the toilets and you're like, just
let me. I didn't know there's so many toilets out
there in the world.
Speaker 4 (11:23):
Please stop this. I want to get the kind that
allows you to flush.
Speaker 3 (11:26):
It's got a little infomercial and there's twenty five hot
bogs in there on one, which is something.
Speaker 4 (11:31):
I do regularly.
Speaker 3 (11:32):
Seems like it might be valuable actually with younger kids,
depending on what they end up throwing down there. But
not only can there be decision fatigue when it comes
to fun things like that, but when it comes to
energy efficient options as well. Specifically, I have found myself
going down this rabbit hole of insulation and how much
should I spend on insulation, how energy efficient, How green
(11:55):
of a home? Am I seeking to make a home
that's lead certified or something like?
Speaker 4 (12:00):
I don't have to start from scratch for that.
Speaker 3 (12:01):
But specifically, I'm trying to weigh the pros and cons
between like open cell spray phone insulation versus like more
the premium lexus closed cell spray poam insulation.
Speaker 4 (12:14):
And I just don't know where to draw the line. Well, okay,
what would you What advice do you have for me?
Speaker 1 (12:19):
So I guess question comes down to what's the cost,
and then what are the likely savings going to be?
And I guess there's the other thought process of does
it increase the comfort level that you're able to enjoy
your home more?
Speaker 3 (12:31):
So people will say yes to all of the above. Okay,
So people will it does cost more, roughly twice as
much in the specific instance, that's a lot more. The
insulation factor though it's literally two times the r value, okay.
And as far as comfort, like how comfortable? Yeah, it
will be a more comfortable space if it's better insulated. Well,
you get the tax credit on the full amount either way.
Speaker 4 (12:50):
You go, Oh, that's a good question. I will say.
Speaker 3 (12:52):
I have been keeping up with the receipts from the
contractors in order to take advantage of the green tax credits.
Actually an entire episode when these green tax credits first
came out, you didn't make sure to link to those
or where it is that you can find those in
the show notes.
Speaker 4 (13:07):
But maybe so that maybe this is a quick tip
for everyone.
Speaker 3 (13:09):
Hopefully you have your receipts if you made any improvements,
let's say, to insulation, new windows, maybe more energy efficient
HVAC last year in twenty twenty four. But if you're
planning to make some upgrades or expenses that you might
incur to your home this year, we'll certainly, yeah, make
sure to hang on to those receipts in case you
need to document any of that for the irs when
(13:29):
you are filing your twenty twenty five taxes.
Speaker 1 (13:32):
I tend to think that energy efficient upgrades are underrated
and that spending a little more on the front end
makes more sense because it will make your life more
comfortable and it will reduce the overall amount of money
you spend over the long term, especially if you're planning
on being in that house long term.
Speaker 4 (13:50):
Well that's another consideration. Yeah, how long do you.
Speaker 1 (13:52):
Plan to be in fancy in stilation if you're planning
on selling it next year.
Speaker 3 (13:56):
But if you're going to recoup those costs, man, right,
Like you might get some of it back if you
tell them, hey, by the way, a little well, but yeah,
not nearly, not nearly the email. But I think about
that home when we moved in and the owners they
dropped a ton of money on encapsulating the cross space
and they put like the nicest dehumidifire down there, And
I took all that into account when when they're like,
you know what, we're not homeowners, don't willing to budge
(14:18):
on the cost.
Speaker 4 (14:18):
I think you and me we're like.
Speaker 1 (14:20):
Real estate investors and we've been buying homes for a
long time now, and because of that, I take those
things into consideration too. But I think most people going
through a house, especially a first time home buyer, encapsulation
and cross space that's care as much.
Speaker 3 (14:33):
Yeah, So like you said, if there are years decades
worth of being able to recoup the costs in this instance,
I mean I do think it makes more sense, But
at some point you still have to draw the line because, like, man,
I've come across these different resources online, especially on YouTube,
where these guys are like, they make these amazing homes
and there pretty much isn't aligne that they haven't crossed,
(14:54):
Like they just keep going and going and going. And
how energy efficient they're making these owns that you're gonna
get those Tesla roof.
Speaker 4 (15:00):
Tiles too while you're at it.
Speaker 3 (15:01):
Well, dude, this one guy I follow, he literally created
a regular roof like you would expect on a house,
but then he put it like a roof on top
of that roof.
Speaker 4 (15:08):
Essentially, it was like an umbrella for the house.
Speaker 3 (15:10):
And the r value essentially was like over seventy when
it came to and he's I think he lives in
Texas and so for him, I'm guessing his AC kicks
on for like fifteen minutes in the morning and then
it's fine.
Speaker 1 (15:20):
For the rest of the day. That's amazing well, and
in his case, that's what he does for his living.
And this gets to I think, just when we're talking
about new builds in this country, it would be nice
to see builders take that more into consideration on the
front end, because it's so much cheaper to build the
energy of ficion house. Maybe it cost three or four
percent more to build it originally, but then it's going
(15:41):
to save the person who lives in it tons of
money every single year for decades to come.
Speaker 4 (15:45):
Yeah.
Speaker 1 (15:46):
I would love to see kind of just more value
placed on that and more marketing behind that builders do prioritize.
Speaker 3 (15:51):
Yeah, because as opposed to the builder saying, well, no, man,
that's my three four percent margin, right, you're talking about
the costs here.
Speaker 4 (15:57):
The margins aren't super thick, and I'm.
Speaker 3 (15:59):
Willing to pay three percent more if it means I'm
going to save a ton over the long Absolutely. I
think that's a much better way of thinking about home ownership. Yeah,
but good luck in your your installation decision. Thanks man,
And uh, I hope you don't overdo it, but I
hope you. I hope you also like take the right
tack that's going to save you the most money over
the long home the Goldilocks approach. Yeah, all right, We've
got actually more to get to on today's show.
Speaker 2 (16:20):
You're listening to How To Money with Joel Larsgard on
demand from KFI AM six forty.
Speaker 1 (16:26):
If you're on Facebook, by the way, you want to
join a group of like minded folks who have money questions,
who have money insights. Please go join the how to
Money Facebook group.
Speaker 3 (16:35):
Hey, we've got a money story here from Yeahoo. Did
you have a Yahoo email address? Joel back in the day.
I feel like that was like the gateway email address
provider back in until Gmail came along, and that was
like the cool one for the Gmail.
Speaker 1 (16:48):
When Gmail first came about, didn't they limit the amount
of people that could sign up? I was like, I
felt like I was waiting for them for the invice,
like Facebook back in the day.
Speaker 4 (16:56):
Yeah, only for folks who are actually in college. But
it only made you want it more. The forbidden fruit.
Uh huh.
Speaker 3 (17:02):
No. This is from Yahoo Finance. They recently highlighted how
new fee structures how they're making financial advice more attainable
for the masses. So not only has you know, technology,
not only have new business models out there made it
easier and cheaper to invest, but it's also had the
same result in the financial advice space. The traditional assets
under management fee structure that's out there, it's still the
(17:24):
most popular, but new startups have come along in the
last few years that make financial advice far more accessible
to again the masses, to normal folks out there. Hello
Nectarine is one that we've mentioned where they've got like
a flat fee structure you pay on hundred fifty bucks
for one hour with a certified financial planner a CFP,
which is super solid. And if you want not just
(17:44):
an hour advice, but let's say you want a whole
financial plan, but maybe you don't want to sign up
for a dramatic annual fee, well we would recommend Domain Money.
They can help for a whole lot less than that
one percent of assets under management.
Speaker 4 (17:57):
We should mention they sponsored the show right now. Disclaimer
full disclaim they are in advertising, but.
Speaker 3 (18:01):
We also we like their service, and we like what
they're doing, and we like the price point through offering
exactly that being said, And everybody who's listening right here
right now, they do not need a financial advisor. But
I think for those out there who who might want
one in the future, or maybe they do want one
right now, especially if you're getting closer to retirement you
want somebody to crut your numbers, they are more accessible
than ever now without paying that again, that one percent
(18:22):
anal fee. Yeah.
Speaker 1 (18:23):
I like how technology is changing the financial advice space
and it's making it more accessible to people who want
even just like a second opinion. Right, You're like, I
think I know what I'm doing, but I would love
to have somebody a second set of eyes. It's amazing
how how much less expensive it's become to hire that
person to do the thing, instead of feeling like you
(18:43):
gotta link arms and you got to walk down the
next thirty years of your life together with one specific
financial advisor who's charging you a boatload every single year,
dramatically reducing the amount of money that you're accruing for
yourself for your future retirement.
Speaker 4 (18:56):
Totally a lot of ways.
Speaker 3 (18:57):
Where you can just get the advice when you need
it along the way. I think that old mom, it
almost felt like you were marrying somebody, and this is like,
I don't know if I'm ready for this kind of
the relationship, with this kind of commitment, as opposed to
just being like, let me just get a quick, quick,
little check in.
Speaker 1 (19:09):
I think our generation and the next general or we're
just less committal in general. So maybe it feels a
little more appropriate for our vibe.
Speaker 4 (19:18):
Sure.
Speaker 1 (19:19):
Speaking of financial advice, Matt Robinhood is launching a new
AI advice feature. This is according to Baron's Magazine, and
so instead of paying a dime to anybody, Should you
maybe just trust the amalgamation of information put together by
large language learning models and pay Robinhood a nominal fee
(19:39):
for it. Well, details haven't been released yet, so we
don't know how good this AI service is or how
much it's gonna cost. But I will say I'm at
least a little bit wary because maybe it's gonna be great,
but what AI spits.
Speaker 4 (19:54):
Out it can also be terrible though. Yeah, what AI.
Speaker 1 (19:56):
Spits out is often based on what gets put in,
like what what it's learning from, and then also what
the people in charge of creating the AI their beliefs. Right, sure,
is the bias going to be towards long term smart
money moves or towards more active trading strategies. I will
be watching this for sure, but I'm not. I'm not
(20:17):
in trusted hopeful my AI, my future to AI generated information.
Speaker 3 (20:22):
Yet I think if it was completely boring advice basically
like what we talk about here on how to money, like.
Speaker 4 (20:27):
If it all in a sexy, scintillating way.
Speaker 3 (20:29):
But if like no matter what you typed in, it
always said, remember there is no such thing as a
guarantee return on investment, and you need to be investing
for at least five years. And if you are going
to invest, make sure it's some low cost, diverse fied
widely diversified index fenes. If that's like what it said,
no matter what you typed in, I could be like,
oh yeah, I could get behind that.
Speaker 4 (20:46):
Then you don't really need AI, but then it's not
really called AI.
Speaker 3 (20:49):
So yeah, I'm a little I'm a little suspicious as
to what this might end up looking.
Speaker 1 (20:53):
Like we're all leaning on AI more of these days,
like I find myself even now. Yeah, just and it's
it's kind of sad because there's some great resources out
there that just get missed because it's the synthesis of
information via AI resources.
Speaker 4 (21:06):
Like even when you starch on Google.
Speaker 3 (21:07):
Now it's a love hate relationship. Yeah it is. I
feel both ways. I feel conflicted. I was going to
say a compliment to robin Hood though. A couple months
ago we talked about there is a partnership between Daffy,
the donor advised fund platform that were big fans of
as well as robin Hood, and how you could be essentially.
Speaker 4 (21:24):
Used robin Hood's like what is it?
Speaker 3 (21:26):
The API, It's called robin hood connect where you can
link your daffy account with robin Hood, and prior to
the end of the year, I did that because I
was I wanted to donate some crypto so specifically that
they were making it super easy for you to donate
crypto to your donor advised fund.
Speaker 4 (21:43):
And it was great.
Speaker 3 (21:44):
I did the same, did you, Yeah, it was awesome.
Like like I will say, I did have to did
you have to take the selfie? Yes, And they're like,
look to the left, look to the right.
Speaker 1 (21:53):
But I was told it's amazing too that that technology
exists so that they can identify who you are.
Speaker 4 (21:56):
I was totally impressed with how well it worked.
Speaker 3 (21:59):
But did you Okay, well, I'm curious what the did
you calculate what the gas fees were? Because in the
fine print it says it's subject to fees And I
thought to myself, Oh, here we go, this is where
they're going to get you. It wasn't much, So it
wasn't much, but I calculate I reverse calculated it, and
it came out to point zero zero three eight percent
in gas fees.
Speaker 4 (22:17):
Okay, which is hard.
Speaker 3 (22:18):
I mean that's basically free because like you compare that
to a wire like Robinhood charges twenty five bucks for
an outgoing wire. There's a massive difference between getting twenty
five dollars versus you know, point zero zero three eight. Yeah,
that's right.
Speaker 2 (22:32):
You're listening to How To Money with Joel Larsgard on
demand from KFI AM six forty.
Speaker 3 (22:38):
Don't forget to sign up for the how to Money
newsletter over at how tomoney dot com slash newsletter.
Speaker 1 (22:43):
We've got more listener questions to get to. I'm excited
about all the listener questions coming down the pike in
twenty twenty five. This one comes from a listener who
has a frugal cheap conondrum for us.
Speaker 5 (22:54):
Hi, Jylan Matt. This is jeffrom Wisconsin. I'm reshiring next
week at the age of fifty five. First, let me
say to thank you for all the advice you've given
over the years that have helped me reach my goal.
I have a son going to an expensive private college
where the cost of attendance is need based, meaning the
lower are income, the lower the cost of attendance. Is
(23:16):
it frugal or cheap to live off only my wife's
teaching income while my son is in college? To make
the cost of college less expensive. I look forward to
your discussion.
Speaker 3 (23:27):
How cool is it that he said he's retiring next week.
He's like, I got it on the calendar for me
to retire. I got this important appointment to get to.
It's when I say peace out, it's all my coworkers.
That's amazing, so cool. When thank you for the kind words.
He reminded me of one of the listener wins that
we covered at the end of last year, where somebody
credited us, But Jeff, he's been doing the right thing.
Speaker 1 (23:50):
Yeah, for a long time. I'm sure we weren't the
ones putting money into his four O one K and
I right, I think maybe we were able to help
explain what it was that he had been doing. But
I got a feel and he was doing a lot
of the right stuff for years, if not decades, before
this show even started too. Right, Oh, yeah, we haven't
been around. We've been around a while, seven years now,
we've been around that long. And yeah, I'm curious too
(24:12):
to know what Jeff's going to be doing with his days,
retiring at such a young age. You know, we talk
often about the research that our friend Wes Moss has
done when it comes to the secrets of the happiest
retirees and just how having essentially hobbies on steroids, having
a wide variety of that, having relational connection. I don't know,
are all Jeff's friends going to be working still and
he's the only one kind of at the golf course
(24:32):
or something like that. I hope that you have a
bunch of things to pour your life into, Jeff when
it come. The older I get, mat the more hobbies
I find, and I'm like, I can see this retirement
thing like I've got enough things that could take up
my time that I would find a lot of joy in.
Speaker 3 (24:46):
Well, I'm glad you said that because I was going
to push back on your approach to Jeff when you said,
we're retiring at such a young age, because I don't
want fifty five to be the you know, as young as.
Speaker 4 (24:58):
Maybe we used to think.
Speaker 1 (24:58):
It was just according to his what his peers are
doing the traditional retirements, most of them are going to sure,
but like man, it's by doing the right thing, like
and not even like in a crazy way, but by
setting money aside.
Speaker 4 (25:09):
I think there are a whole lot.
Speaker 3 (25:11):
Of folks who can who could likely retire at at
a younger age life fifty five more so than they
than they think.
Speaker 4 (25:16):
But uh, let's get to this question.
Speaker 3 (25:17):
And I know some listeners might disagree with my take here,
but whether or not Jeff is being frugal or cheap
here is pretty clear.
Speaker 4 (25:24):
I think this is totally frugal, Okay, not cheap.
Speaker 3 (25:28):
And to explain this, let's just talk about how systems
are designed and created, how they're set up to incentivize
certain behaviors, and by jumping through the right hoops, it's
going to allow us to financially benefit. So something similar
to this might be taking a year off work, let's
say to do.
Speaker 4 (25:45):
Some wroth conversions.
Speaker 3 (25:46):
Well, okay, not many folks are gonna be able to
do that or could afford to do that, But by
doing this, they can offer a massive tax break for
folks who are able to pull it off. Even let's
say if you're your net worth is like, say five
million dollars. Yeah, I just don't see any reason to
not pull levers that are one hundred percent legal and
readily available to you. It's just it's like taking a
tax credit or something like. Like we we kind of
(26:07):
talked about that recently taken green tax credit right like
energy efficients.
Speaker 4 (26:10):
It's like, well, no, just because.
Speaker 3 (26:12):
You can afford to pay those taxes and not receive
that tax credit, that doesn't mean you shouldn't receive that
if you follow the rules.
Speaker 1 (26:19):
So those incentives exist for a reason, and the tax
code is rife with incentives for people to do a
myriad of different things. And so like, why do we
put money into a four to one K instead of
a taxable broker's account and lock it away for decades? Well,
it's because of the tax incentives that are offered. And
there's shaming that game. I don't see any reason not
to jump through those hoops, the hoops that are essentially.
Speaker 4 (26:39):
Laid out in front of you.
Speaker 1 (26:40):
It's not like Jeff is saying, hey, what if I
moved some money to the Cayman Islands and I like
tried to shout some things in secrecy to the IRIS,
didn't know my actual networth or something.
Speaker 3 (26:48):
I came straight up lying, yeah, that's a different thing,
or not the your net worth, but your your income.
Like it, it's one thing if you're gonna say, okay,
we're just gonna live off of my wife's.
Speaker 4 (26:58):
Income, truly and that's what we're gonna do. It's another
thing to say, but.
Speaker 3 (27:01):
Really, I'm going to be working on the side and
I'm going to be selling investments and I'm not going
to tell the irs that I've made yeah, have got
capital gains here. No, No, that's straight up against the laws.
Deception and illegal dissentive.
Speaker 1 (27:13):
That's not what we're talking about here, though, right, And
so Matt, some people might say, well, I'm trying to
lower my income on purpose by contributing more to pre
tax accounts to reduce my student loan payment. That to us,
or maybe take get like an increased health care subsidy
changing those are those to me are also that's the
way the incentives work, So why not take advantage of it.
I don't see anything wrong with what Jeff is willing
(27:34):
to do. And I think also a lot of folks
maybe couldn't reduce their income to the extent that Jeff
is willing to in order to qualify for these higher
levels of financial aid. They just wouldn't be able to
live on that much less. But Jeff is saying we
can do it. We're frugal, we know we know how
to make it work. On just my wife's salary, and
if you can live the life you want, Jeff on
your wife's income alone for the next few years, and
(27:56):
it's going to allow your son to qualify for more
aid from the college. I think it's a reasonable route
to take.
Speaker 4 (28:01):
Absolutely.
Speaker 3 (28:02):
Yeah, I think that's important highlight here too. It's not
like he's cheating. He's truly feeling the impact of living
on less of an income, like it is going to
impact his lifestyle, like in a more if it was going.
Speaker 1 (28:12):
To make him incredibly uncomfortable, I would say, dude, that
might be a little cheap. But if if you can
be comfortable a living on just your salary alone, I
don't see why not. Yeah, if they had to take
extreme measures, then you've you've kind of got the tail
wagon the dog.
Speaker 4 (28:24):
Yeah.
Speaker 3 (28:24):
Right, Like so it almost makes me think of like
a more consumption based scenario where like, let's say you
have the money to buy a fancy sports car, like
you're going to get a Corvette or a Mustang mock
E or whatever, right, like the electric Hustany or whatever.
It costs a lot of money. Sports cars high risk. Well,
what's what typically happens to your insurance costs? When you
get something like that, well, your insurance goes up due
(28:45):
to the increased risk and likelihood of you getting in
a wreck. Well, should you not get the sports car
just to be able to bring down your insurance costs?
Speaker 4 (28:53):
Like would you say to yourself, well, I'm not.
Speaker 3 (28:54):
Going to choose this this vehicle because I don't want
to pay that much.
Speaker 4 (28:58):
Well, probably not.
Speaker 3 (28:59):
There are considerations there, There are bigger considerations in mine.
But if you are in a position to where you
don't necessarily want or need that vehicle, well, by all means,
don't get the fancy car if that's going to allow
you to save the money. And in this way, you're
constraining your lifestyle in such a way that's going to
allow you to reap another financial benefit in the form
of financial assistance.
Speaker 1 (29:19):
Yeah, and in the example you're pointing out here, map
makes a lot of sense. But I think it's also
important to mention that sometimes the financial system doesn't make
perfect sense. Like when you're trying to get a mortgage,
your net worth isn't nearly as important. They don't factor
that in as much as your debt to income ratio.
So you might say I don't make much money, I
make eighty thousand dollars a year, but I've got five
million dollars in my investment accounts. They might say, sorry,
(29:40):
you don't qualify for the mortgage on the two million
dollar home.
Speaker 4 (29:42):
So it's going to feel a little bit backwards.
Speaker 3 (29:44):
Right, Wait a minute, you're not going to allow me
to get a mortgage on this property when I.
Speaker 4 (29:48):
Could pay cash for it.
Speaker 1 (29:49):
Or when you talk about the credit score, like the
way the credit scoring system is. We talk about it
regularly because it's important to how people handle their finances,
but it doesn't make perfect sense, and there are elements
of the credits or that are flawed and we wish
we're changed, But still like the system is what it is,
and kind of using the system to your advantage I
think makes sense. The incentives to get put in place
(30:10):
understandably drive our behavior.
Speaker 3 (30:12):
Yeah, that is a specific instance where you do want
to take into account how will making less income impact
our ability to live the life we want to live,
because most likely maybe they're looking to downsize. Well, shoot,
I guess either way, if you're looking at downsize and
by a different home, you still might be wanting to
take out a mortgage on that property and even though
you might be in a scenario where you could pay cash,
(30:32):
you don't always want to do that, especially if you're
having to draw more money out of your retirement, and
so in that case, manual underwriting is actually the solution
to doing that, as opposed to uploading your tax returns
and having the algorithm and the computer say yes or no.
You're actually working with a human being. This is something
that Kate and I had to do when we purchased
(30:53):
our first home and we just started our photography company
and we had only been in business for one year.
The banks don't like that, so they wouldn't like this
self employed one year income many years of income.
Speaker 4 (31:04):
Yeah, well, and even then, it's not like we were
super profitable, like we didn't have a ton of money
on hands.
Speaker 3 (31:08):
So we had to provide every single shred of documentation
that had any numbers on it at all in order
for the A and we had to put down a
little extra and that was a way for them to
mitigate some of the risks that they were incurring. But Jeff,
the last thing to mention her though, is that it's
not just your income that impacts the financial aid for college.
Speaker 4 (31:26):
When you fill out the.
Speaker 3 (31:27):
FAFSA because they take into consideration your assets as well,
and it would obviously be cheap in this case not
frugal to say, spend down all.
Speaker 4 (31:36):
Of your retirement money.
Speaker 3 (31:38):
On stuff, on boats, on trips and clothing whatever, in
order to snag more grants or assistance for your your
son's education. So I just wanted to mention that it's
not just about income, and we would encourage you to
know all of the details before you try to start
jumping through these hoops that might end up cramping your
lifestyle that ultimately ends up not netting you the.
Speaker 4 (31:59):
Results that you were hoping to achieve.
Speaker 3 (32:02):
I would I would hate for you to find yourself
in that situation, especially it sounds like this is more
Jeff's idea, maybe less his wife's idea, especially if his
wife's like, she's like, wait a second, what do we wait?
Speaker 4 (32:12):
What are we doing? What you sign me up for?
Speaker 3 (32:13):
All of a sudden, you're retiring and you're like, turn
into the coupon lady, Now.
Speaker 4 (32:17):
We have to live like poppers.
Speaker 3 (32:18):
Come on, come on, no hate against coupons, Yeah, but
it's often equated with a certain lifestyle that people are
trying to avoid that's all I'm saying.
Speaker 1 (32:24):
Just make sure your wife is on board with this too,
and make sure you've got your I dotted and your
teas crossed. That's right, We've got a lot more to
get to on today's show. You've been listening to How
To Money with Joel Larsgard. You can always hear us
live on KFI AM six forty twelve pm to two
pm on Sunday, and anytime on demand on the iHeartRadio app.
I Am six forty. You're listening to How to Money
on demand on the iHeartRadio app.
Speaker 2 (00:07):
Do you want to live well without drowning in debt?
Joel and Matt have you covered? This is how to
Money with Joel Larsgard and Matt altmes.
Speaker 3 (00:21):
Kfi AM six forty live everywhere on the iHeartRadio app.
Speaker 4 (00:25):
This is how to Money. I am Matt Altmeis.
Speaker 1 (00:27):
And I'm Joel Larsgard. Don't forget to sign up for
the how to Money newsletter. You can find that up
at how tomoney dot com slash newsletter.
Speaker 3 (00:34):
If you want to save more money in twenty twenty five,
we would suggest to make a resolution to do more
of your life offline. Participate more in actual real life activities.
And these are things that don't have to be necessarily expensive.
They can help foster relationships in community as well, which
is something that I think we're missing as a society.
(00:54):
Is something that we talk about a decent bit here
on the show that isn't necessarily financially related, but one
of our our favorite ways of doing this, and it
appears to be a little bit more in vogue these days,
is playing board games.
Speaker 4 (01:07):
Yes, yeah, the new York Times.
Speaker 3 (01:09):
They documented the rise of board game clubs, specifically amongst
Gen Z and millennials, and this makes me so happy
because I feel like we were ahead of the curve. Buddy,
we did a whole episode on board games many many
years ago.
Speaker 4 (01:21):
Was it in fact the first episode?
Speaker 3 (01:23):
No, the first episode was biking, yeah, but a board
games was like episode two or three early exactly like that.
But I mean, the reason there's such a good option
for frugal folks out there is because they can just
provide an incredible return on investment with what you're getting,
just the joy and satisfaction that you're getting out of that.
Just think about all the hours that you can derive
from like a thirty forty fifty dollars board game like
(01:46):
that is mind boggling. And granted, some of the fancier
board games or even they can be more expensive than that,
but you don't have to start there, right, Like, you
can just start with chess super affordable before advancing to
something that's got more game pieces like Settlers Catan. But
I think buying a game or two and finding some
friends over finding a maybe a local board game club
that you can join that can be a brilliant.
Speaker 4 (02:07):
Use of just a few dollars this year.
Speaker 3 (02:10):
Did you see in that in that story some of
the they they profiled a bunch of folks that are
into this Rummy Cube.
Speaker 4 (02:15):
Oh yeah, that club. Yeah, and they had the wild
Card Joker tile tattooed. Have you played that before? Rummy Cube?
Is that a tile with the members? Oh yeah.
Speaker 3 (02:25):
I would never have thought to get that as a tattoo,
but after seeing it on someone's arm, it looks so
it looks so good. I would not personally do this,
but the fact that, like those tiles, it's stamped on
there in such a way that it really lends itself
to a tattoo. And while I couldn't see myself doing that,
I'm one hundred percent behind folks that are getting board
game like tattoos.
Speaker 4 (02:46):
Therefore I'm totally for it.
Speaker 1 (02:47):
Well, I think this is yeah, just a good reminder,
like there are so many freeways to have that time
together with people, and think about all the time that
a lot of people have had with family and friends
over these last couple of weeks, like working a little
bit less hopefully, and it's just a reminder that the
simple joys are the best blondes and in board games
are one of those ways to I don't have an
(03:09):
activity to do together cost so little money. Hiking is
another one. I was baking bread with a friend last night,
like just such an easy, inexpensive thing to do, and like, man,
it facilitated great conversation. We also had kind of something
that we were doing at the same time.
Speaker 4 (03:21):
Even old school puzzles.
Speaker 1 (03:23):
Yeah, we're going out for cocktails. Way more expensive, okay,
way more expensive. Especially cocktail prices these days.
Speaker 4 (03:28):
Were not good for you.
Speaker 1 (03:29):
Let's just let's be honest. Yeah, so I r l
cheap stuff with friends. That's a good thing to prioritize.
We also have talked about matt the rise of physical
activities that people are doing in person together that don't
cost much money either. F three is if you if
you look that up, that's clubs are around the country
where people are getting together to do physical fitness stuff
(03:50):
early in the morning, running clubs on the cheap, on
the cheap, the way instead of buying weights an money,
they get a cinder block, right, Like that's the way.
Speaker 3 (03:58):
They go what they called tokens or take It's like
that's in the lingo.
Speaker 4 (04:02):
I think that's called a ticket.
Speaker 1 (04:03):
Okay, okay, so kind of cool, right that you get
fit and kind of make friends for essentially no money.
Running clubs that's another thing that they're kind of like
springing up across the country. I run by myself, sometimes
run with other people. Sometimes it's really fun. I'm still
waiting for you to create your own mountain running club
running Yeah, hey, well actually I got running with you.
Maybe I'll put this out there. But a couple of
(04:23):
listeners reached out and they were like, hey, we hear
you run. We live close by.
Speaker 4 (04:26):
Do you want to run together? And I was like,
oh sure, all right, anybody.
Speaker 1 (04:29):
Else who lives locally and wants to run with us
later this month, just send an email over I'll get
you included on that. But if fitness is like, let's say,
one of your main goals for twenty twenty five, which
matt for a lot of people it typically is, I
think it's important to mention that you don't necessarily have
to buy an expensive gym membership, and that the free
options might actually be more enjoyable, and they could ensure
(04:50):
that you're actually going to stick with the fitness regimen
that you're trying to achieve. I think there's something really
powerful about the accountability and the enjoyment that peers can provide,
even more powerful maybe than the money you might otherwise
be sinking into a gym membership and you say, great,
now that I've bought this gym membership, it's going to
force me to go. But even still you don't go
(05:12):
if you know you're gonna let your friends down because
you're supposed to meet Tuesday morning at six o'clock to
go for that run, that's I think that's more powerful
because if you don't show up there, like, why do
you bail on us?
Speaker 4 (05:22):
Sarah? Why did you bail on us? Tim? Like whatever
your name is? And that getting pretty specific there, Joel.
Speaker 1 (05:29):
Yeah, Sarah really let me down the other day, So
you're yeah, I think trying to do that with other
people and finding those those groups where you're gonna find
that sort of accountability, I guess maybe, especially as fitness
is something that's on the mind of a lot of people.
Sure at the very beginning of the beginning of the year,
it's just a reminder you don't have to spend lots
of money that you get there.
Speaker 3 (05:45):
Joe, let's talk about gigwork because it seems to be
changing pretty quickly these days. Now you can side hustle
for one business today and then you can side hustle
for another business tomorrow, where essentially you have the ability
to bounce around for the highest pay. So the Financial
Times they wrote about these new apps that are currently
operating over in Europe, like young Ones. So this is
(06:07):
an app over there, but it allows you to post
your availability, your desired pay and know companies who are
also on the app. When they have a need for
workers to fill shifts, well they can sign you up,
they slot you in.
Speaker 1 (06:20):
By the way, it's called young Ones, I would have
called it Youngsters if I was created app.
Speaker 4 (06:23):
But that's just the way I can see.
Speaker 3 (06:25):
There's like a difference between British English and American English.
But of course, because this is an app and we're
talking about the appification and the rating system of everything,
you get to rad each other after the fact. I
think it sounds promising, particularly for seasonal jobs, but I
think it can also come with some real pitfalls. We've
always talked about gigwork, how that can be great for
(06:47):
making money in a pinch, but it is far inferior
to trying to level up your pay at your current job,
or even working to start your own business, finding a
way to take something that could technically be considered gigwork,
but actually, let's make this like a side gig that
you are doing on the side individually, as opposed to
participating within this sort of ecosystem where you are a
(07:07):
little bit more locked in. New apps, you know, they
make it easier to get gigs. I don't think they're
much of a solution for most folks out there, And honestly,
it kind of feels like like temp agencies. You know, yes,
Ryan from the office, right, it kind of feels like
temp agency two point zero. Essentially, it's just like an
easier way to access some of those jobs that are
out there.
Speaker 1 (07:26):
And I think for people listening, they might say, oh,
one of my goals for twenty twenty five is to
make more money, and you might instinctively reach to the
gig apps or see something like this and say, well, great,
I should I should totally sign up for this thing
and do and make money on the side, whether it's
driving for Uber. I mean, there are so many many
(07:49):
more ways that you can gig and freelance. But I
think You're right, Matt Like. You might be a way
to instantly turn on the faucet of a little extra income,
but when it comes to sustainability of being able to
make more money, it works in a pinch, but it's
not necessarily the best long term strategy. Speaking of work,
more working adults expect to rely mainly on Social Security
(08:12):
in retirements. Fifty three percent of people is a new study,
who are still working. They basically are saying that social
Security is a vital lifeline for them in retirement. And
so the reality is that social Security is this implicit
and explicit promise from the US government for all of
us who work and pay into the system, and folks
(08:33):
who get a monthly check they rightly expect to get
that check because they've been paying into the system for decades.
So even somebody like myself, Matt Like, we know we
talk about how the Social Security system has to be
fixed because it's not necessarily set up to succeed over
the long term. But you and I we've been paying.
I mean, I've been paying into Social Security since I
was fifteen and I'm forty, says the first job, and
(08:56):
I will not be happy. Although my expectations are not
necessarily to the moon for how much I'm going to
receive in SoC Security, but I'm not going to be
happy if the system changes significantly reducing my payout. And
so because of these medium and long term hurdles that
social Security faces, which could and likely will result in
smaller payouts for gen Z, for millennials, for future generations.
(09:17):
It's not that younger workers shouldn't expect that they're going
to get back some of what they put in, but
the truth is the reality situation, we might not get
the sweet deal that our parents got. And I think
it's important for all young investors to realize that an
over reliance or having too high of an expectation of
what Social Security is going to provide for them, it
(09:38):
could equate to not saving enough to have those comfortable
retirement years later on down the road. I think it's
important to hope for the best, but to plan for
the worst, which means increasing what you're investing. And hey,
if social Security pays out in the current form, the
current projections that you find when you go to when
you go to Social Security's website, the doc ofv website,
(10:01):
that's amazing, Be thankful for that, But the truth is
we're likely to see something like, you know, seventy seventy
five percent, at least the younger folks of what those
projections state.
Speaker 4 (10:11):
That's right, man.
Speaker 2 (10:12):
You're listening to how to Money with Joel Larsgard on
demand from KFI AM six forty.
Speaker 3 (10:19):
By the way, you can always find more money saving
information over at howtomoney dot com. Joel, I've got a
question for you. As we've talked about on the show,
we are adding onto our house. We're doing a little
bit of reconfiguring of certain rooms to turn them into
bedrooms for all the kids that you know, all that
kind of thing.
Speaker 4 (10:36):
Yeah, And as the west wing of the house, does
I call it?
Speaker 3 (10:39):
No, no, you Actually it's funny because last year, at
some point you correctly called it.
Speaker 4 (10:43):
The east wing. Okay, is it the east wing? And
I was gonna like, you're right, and.
Speaker 3 (10:46):
I was going to criticize you for making it sound
like I'm like building some sort of like mc mansion
or something like that.
Speaker 4 (10:51):
Uh huh, But I couldn't.
Speaker 3 (10:53):
I had to catch myself because you were actually accurate
when it came to the cardinal direction, and so I
chose not to correct you that time. Now you can
was able to get you this time. It's not The
West Wing. Did you ever watch that show, by the way, No,
I didn't. Yeah, people loved it. But as you know,
when you renovate a home, there are so many decision
decisions that you have to make.
Speaker 4 (11:11):
Yea. Oftentimes it's like the opposite of an Aldi. Oh
my gosh.
Speaker 3 (11:14):
Yes, absolutely, And a lot of times it's about fun
things like what kind of tile you want to pick out.
But recently I've found the toilets and you're like, just
let me. I didn't know there's so many toilets out
there in the world.
Speaker 4 (11:23):
Please stop this. I want to get the kind that
allows you to flush.
Speaker 3 (11:26):
It's got a little infomercial and there's twenty five hot
bogs in there on one, which is something.
Speaker 4 (11:31):
I do regularly.
Speaker 3 (11:32):
Seems like it might be valuable actually with younger kids,
depending on what they end up throwing down there. But
not only can there be decision fatigue when it comes
to fun things like that, but when it comes to
energy efficient options as well. Specifically, I have found myself
going down this rabbit hole of insulation and how much
should I spend on insulation, how energy efficient, How green
(11:55):
of a home? Am I seeking to make a home
that's lead certified or something like?
Speaker 4 (12:00):
I don't have to start from scratch for that.
Speaker 3 (12:01):
But specifically, I'm trying to weigh the pros and cons
between like open cell spray phone insulation versus like more
the premium lexus closed cell spray poam insulation.
Speaker 4 (12:14):
And I just don't know where to draw the line. Well, okay,
what would you What advice do you have for me?
Speaker 1 (12:19):
So I guess question comes down to what's the cost,
and then what are the likely savings going to be?
And I guess there's the other thought process of does
it increase the comfort level that you're able to enjoy
your home more?
Speaker 3 (12:31):
So people will say yes to all of the above. Okay,
So people will it does cost more, roughly twice as
much in the specific instance, that's a lot more. The
insulation factor though it's literally two times the r value, okay.
And as far as comfort, like how comfortable? Yeah, it
will be a more comfortable space if it's better insulated. Well,
you get the tax credit on the full amount either way.
Speaker 4 (12:50):
You go, Oh, that's a good question. I will say.
Speaker 3 (12:52):
I have been keeping up with the receipts from the
contractors in order to take advantage of the green tax credits.
Actually an entire episode when these green tax credits first
came out, you didn't make sure to link to those
or where it is that you can find those in
the show notes.
Speaker 4 (13:07):
But maybe so that maybe this is a quick tip
for everyone.
Speaker 3 (13:09):
Hopefully you have your receipts if you made any improvements,
let's say, to insulation, new windows, maybe more energy efficient
HVAC last year in twenty twenty four. But if you're
planning to make some upgrades or expenses that you might
incur to your home this year, we'll certainly, yeah, make
sure to hang on to those receipts in case you
need to document any of that for the irs when
(13:29):
you are filing your twenty twenty five taxes.
Speaker 1 (13:32):
I tend to think that energy efficient upgrades are underrated
and that spending a little more on the front end
makes more sense because it will make your life more
comfortable and it will reduce the overall amount of money
you spend over the long term, especially if you're planning
on being in that house long term.
Speaker 4 (13:50):
Well that's another consideration. Yeah, how long do you.
Speaker 1 (13:52):
Plan to be in fancy in stilation if you're planning
on selling it next year.
Speaker 3 (13:56):
But if you're going to recoup those costs, man, right,
Like you might get some of it back if you
tell them, hey, by the way, a little well, but yeah,
not nearly, not nearly the email. But I think about
that home when we moved in and the owners they
dropped a ton of money on encapsulating the cross space
and they put like the nicest dehumidifire down there, And
I took all that into account when when they're like,
you know what, we're not homeowners, don't willing to budge
(14:18):
on the cost.
Speaker 4 (14:18):
I think you and me we're like.
Speaker 1 (14:20):
Real estate investors and we've been buying homes for a
long time now, and because of that, I take those
things into consideration too. But I think most people going
through a house, especially a first time home buyer, encapsulation
and cross space that's care as much.
Speaker 3 (14:33):
Yeah, So like you said, if there are years decades
worth of being able to recoup the costs in this instance,
I mean I do think it makes more sense, But
at some point you still have to draw the line because, like, man,
I've come across these different resources online, especially on YouTube,
where these guys are like, they make these amazing homes
and there pretty much isn't aligne that they haven't crossed,
(14:54):
Like they just keep going and going and going. And
how energy efficient they're making these owns that you're gonna
get those Tesla roof.
Speaker 4 (15:00):
Tiles too while you're at it.
Speaker 3 (15:01):
Well, dude, this one guy I follow, he literally created
a regular roof like you would expect on a house,
but then he put it like a roof on top
of that roof.
Speaker 4 (15:08):
Essentially, it was like an umbrella for the house.
Speaker 3 (15:10):
And the r value essentially was like over seventy when
it came to and he's I think he lives in
Texas and so for him, I'm guessing his AC kicks
on for like fifteen minutes in the morning and then
it's fine.
Speaker 1 (15:20):
For the rest of the day. That's amazing well, and
in his case, that's what he does for his living.
And this gets to I think, just when we're talking
about new builds in this country, it would be nice
to see builders take that more into consideration on the
front end, because it's so much cheaper to build the
energy of ficion house. Maybe it cost three or four
percent more to build it originally, but then it's going
(15:41):
to save the person who lives in it tons of
money every single year for decades to come.
Speaker 4 (15:45):
Yeah.
Speaker 1 (15:46):
I would love to see kind of just more value
placed on that and more marketing behind that builders do prioritize.
Speaker 3 (15:51):
Yeah, because as opposed to the builder saying, well, no, man,
that's my three four percent margin, right, you're talking about
the costs here.
Speaker 4 (15:57):
The margins aren't super thick, and I'm.
Speaker 3 (15:59):
Willing to pay three percent more if it means I'm
going to save a ton over the long Absolutely. I
think that's a much better way of thinking about home ownership. Yeah,
but good luck in your your installation decision. Thanks man,
And uh, I hope you don't overdo it, but I
hope you. I hope you also like take the right
tack that's going to save you the most money over
the long home the Goldilocks approach. Yeah, all right, We've
got actually more to get to on today's show.
Speaker 2 (16:20):
You're listening to How To Money with Joel Larsgard on
demand from KFI AM six forty.
Speaker 1 (16:26):
If you're on Facebook, by the way, you want to
join a group of like minded folks who have money questions,
who have money insights. Please go join the how to
Money Facebook group.
Speaker 3 (16:35):
Hey, we've got a money story here from Yeahoo. Did
you have a Yahoo email address? Joel back in the day.
I feel like that was like the gateway email address
provider back in until Gmail came along, and that was
like the cool one for the Gmail.
Speaker 1 (16:48):
When Gmail first came about, didn't they limit the amount
of people that could sign up? I was like, I
felt like I was waiting for them for the invice,
like Facebook back in the day.
Speaker 4 (16:56):
Yeah, only for folks who are actually in college. But
it only made you want it more. The forbidden fruit.
Uh huh.
Speaker 3 (17:02):
No. This is from Yahoo Finance. They recently highlighted how
new fee structures how they're making financial advice more attainable
for the masses. So not only has you know, technology,
not only have new business models out there made it
easier and cheaper to invest, but it's also had the
same result in the financial advice space. The traditional assets
under management fee structure that's out there, it's still the
(17:24):
most popular, but new startups have come along in the
last few years that make financial advice far more accessible
to again the masses, to normal folks out there. Hello
Nectarine is one that we've mentioned where they've got like
a flat fee structure you pay on hundred fifty bucks
for one hour with a certified financial planner a CFP,
which is super solid. And if you want not just
(17:44):
an hour advice, but let's say you want a whole
financial plan, but maybe you don't want to sign up
for a dramatic annual fee, well we would recommend Domain Money.
They can help for a whole lot less than that
one percent of assets under management.
Speaker 4 (17:57):
We should mention they sponsored the show right now. Disclaimer
full disclaim they are in advertising, but.
Speaker 3 (18:01):
We also we like their service, and we like what
they're doing, and we like the price point through offering
exactly that being said, And everybody who's listening right here
right now, they do not need a financial advisor. But
I think for those out there who who might want
one in the future, or maybe they do want one
right now, especially if you're getting closer to retirement you
want somebody to crut your numbers, they are more accessible
than ever now without paying that again, that one percent
(18:22):
anal fee. Yeah.
Speaker 1 (18:23):
I like how technology is changing the financial advice space
and it's making it more accessible to people who want
even just like a second opinion. Right, You're like, I
think I know what I'm doing, but I would love
to have somebody a second set of eyes. It's amazing
how how much less expensive it's become to hire that
person to do the thing, instead of feeling like you
(18:43):
gotta link arms and you got to walk down the
next thirty years of your life together with one specific
financial advisor who's charging you a boatload every single year,
dramatically reducing the amount of money that you're accruing for
yourself for your future retirement.
Speaker 4 (18:56):
Totally a lot of ways.
Speaker 3 (18:57):
Where you can just get the advice when you need
it along the way. I think that old mom, it
almost felt like you were marrying somebody, and this is like,
I don't know if I'm ready for this kind of
the relationship, with this kind of commitment, as opposed to
just being like, let me just get a quick, quick,
little check in.
Speaker 1 (19:09):
I think our generation and the next general or we're
just less committal in general. So maybe it feels a
little more appropriate for our vibe.
Speaker 4 (19:18):
Sure.
Speaker 1 (19:19):
Speaking of financial advice, Matt Robinhood is launching a new
AI advice feature. This is according to Baron's Magazine, and
so instead of paying a dime to anybody, Should you
maybe just trust the amalgamation of information put together by
large language learning models and pay Robinhood a nominal fee
(19:39):
for it. Well, details haven't been released yet, so we
don't know how good this AI service is or how
much it's gonna cost. But I will say I'm at
least a little bit wary because maybe it's gonna be great,
but what AI spits.
Speaker 4 (19:54):
Out it can also be terrible though. Yeah, what AI.
Speaker 1 (19:56):
Spits out is often based on what gets put in,
like what what it's learning from, and then also what
the people in charge of creating the AI their beliefs. Right, sure,
is the bias going to be towards long term smart
money moves or towards more active trading strategies. I will
be watching this for sure, but I'm not. I'm not
(20:17):
in trusted hopeful my AI, my future to AI generated information.
Speaker 3 (20:22):
Yet I think if it was completely boring advice basically
like what we talk about here on how to money, like.
Speaker 4 (20:27):
If it all in a sexy, scintillating way.
Speaker 3 (20:29):
But if like no matter what you typed in, it
always said, remember there is no such thing as a
guarantee return on investment, and you need to be investing
for at least five years. And if you are going
to invest, make sure it's some low cost, diverse fied
widely diversified index fenes. If that's like what it said,
no matter what you typed in, I could be like,
oh yeah, I could get behind that.
Speaker 4 (20:46):
Then you don't really need AI, but then it's not
really called AI.
Speaker 3 (20:49):
So yeah, I'm a little I'm a little suspicious as
to what this might end up looking.
Speaker 1 (20:53):
Like we're all leaning on AI more of these days,
like I find myself even now. Yeah, just and it's
it's kind of sad because there's some great resources out
there that just get missed because it's the synthesis of
information via AI resources.
Speaker 4 (21:06):
Like even when you starch on Google.
Speaker 3 (21:07):
Now it's a love hate relationship. Yeah it is. I
feel both ways. I feel conflicted. I was going to
say a compliment to robin Hood though. A couple months
ago we talked about there is a partnership between Daffy,
the donor advised fund platform that were big fans of
as well as robin Hood, and how you could be essentially.
Speaker 4 (21:24):
Used robin Hood's like what is it?
Speaker 3 (21:26):
The API, It's called robin hood connect where you can
link your daffy account with robin Hood, and prior to
the end of the year, I did that because I
was I wanted to donate some crypto so specifically that
they were making it super easy for you to donate
crypto to your donor advised fund.
Speaker 4 (21:43):
And it was great.
Speaker 3 (21:44):
I did the same, did you, Yeah, it was awesome.
Like like I will say, I did have to did
you have to take the selfie? Yes, And they're like,
look to the left, look to the right.
Speaker 1 (21:53):
But I was told it's amazing too that that technology
exists so that they can identify who you are.
Speaker 4 (21:56):
I was totally impressed with how well it worked.
Speaker 3 (21:59):
But did you Okay, well, I'm curious what the did
you calculate what the gas fees were? Because in the
fine print it says it's subject to fees And I
thought to myself, Oh, here we go, this is where
they're going to get you. It wasn't much, So it
wasn't much, but I calculate I reverse calculated it, and
it came out to point zero zero three eight percent
in gas fees.
Speaker 4 (22:17):
Okay, which is hard.
Speaker 3 (22:18):
I mean that's basically free because like you compare that
to a wire like Robinhood charges twenty five bucks for
an outgoing wire. There's a massive difference between getting twenty
five dollars versus you know, point zero zero three eight. Yeah,
that's right.
Speaker 2 (22:32):
You're listening to How To Money with Joel Larsgard on
demand from KFI AM six forty.
Speaker 3 (22:38):
Don't forget to sign up for the how to Money
newsletter over at how tomoney dot com slash newsletter.
Speaker 1 (22:43):
We've got more listener questions to get to. I'm excited
about all the listener questions coming down the pike in
twenty twenty five. This one comes from a listener who
has a frugal cheap conondrum for us.
Speaker 5 (22:54):
Hi, Jylan Matt. This is jeffrom Wisconsin. I'm reshiring next
week at the age of fifty five. First, let me
say to thank you for all the advice you've given
over the years that have helped me reach my goal.
I have a son going to an expensive private college
where the cost of attendance is need based, meaning the
lower are income, the lower the cost of attendance. Is
(23:16):
it frugal or cheap to live off only my wife's
teaching income while my son is in college? To make
the cost of college less expensive. I look forward to
your discussion.
Speaker 3 (23:27):
How cool is it that he said he's retiring next week.
He's like, I got it on the calendar for me
to retire. I got this important appointment to get to.
It's when I say peace out, it's all my coworkers.
That's amazing, so cool. When thank you for the kind words.
He reminded me of one of the listener wins that
we covered at the end of last year, where somebody
credited us, But Jeff, he's been doing the right thing.
Speaker 1 (23:50):
Yeah, for a long time. I'm sure we weren't the
ones putting money into his four O one K and
I right, I think maybe we were able to help
explain what it was that he had been doing. But
I got a feel and he was doing a lot
of the right stuff for years, if not decades, before
this show even started too. Right, Oh, yeah, we haven't
been around. We've been around a while, seven years now,
we've been around that long. And yeah, I'm curious too
(24:12):
to know what Jeff's going to be doing with his days,
retiring at such a young age. You know, we talk
often about the research that our friend Wes Moss has
done when it comes to the secrets of the happiest
retirees and just how having essentially hobbies on steroids, having
a wide variety of that, having relational connection. I don't know,
are all Jeff's friends going to be working still and
he's the only one kind of at the golf course
(24:32):
or something like that. I hope that you have a
bunch of things to pour your life into, Jeff when
it come. The older I get, mat the more hobbies
I find, and I'm like, I can see this retirement
thing like I've got enough things that could take up
my time that I would find a lot of joy in.
Speaker 3 (24:46):
Well, I'm glad you said that because I was going
to push back on your approach to Jeff when you said,
we're retiring at such a young age, because I don't
want fifty five to be the you know, as young as.
Speaker 4 (24:58):
Maybe we used to think.
Speaker 1 (24:58):
It was just according to his what his peers are
doing the traditional retirements, most of them are going to sure,
but like man, it's by doing the right thing, like
and not even like in a crazy way, but by
setting money aside.
Speaker 4 (25:09):
I think there are a whole lot.
Speaker 3 (25:11):
Of folks who can who could likely retire at at
a younger age life fifty five more so than they
than they think.
Speaker 4 (25:16):
But uh, let's get to this question.
Speaker 3 (25:17):
And I know some listeners might disagree with my take here,
but whether or not Jeff is being frugal or cheap
here is pretty clear.
Speaker 4 (25:24):
I think this is totally frugal, Okay, not cheap.
Speaker 3 (25:28):
And to explain this, let's just talk about how systems
are designed and created, how they're set up to incentivize
certain behaviors, and by jumping through the right hoops, it's
going to allow us to financially benefit. So something similar
to this might be taking a year off work, let's
say to do.
Speaker 4 (25:45):
Some wroth conversions.
Speaker 3 (25:46):
Well, okay, not many folks are gonna be able to
do that or could afford to do that, But by
doing this, they can offer a massive tax break for
folks who are able to pull it off. Even let's
say if you're your net worth is like, say five
million dollars. Yeah, I just don't see any reason to
not pull levers that are one hundred percent legal and
readily available to you. It's just it's like taking a
tax credit or something like. Like we we kind of
(26:07):
talked about that recently taken green tax credit right like
energy efficients.
Speaker 4 (26:10):
It's like, well, no, just because.
Speaker 3 (26:12):
You can afford to pay those taxes and not receive
that tax credit, that doesn't mean you shouldn't receive that
if you follow the rules.
Speaker 1 (26:19):
So those incentives exist for a reason, and the tax
code is rife with incentives for people to do a
myriad of different things. And so like, why do we
put money into a four to one K instead of
a taxable broker's account and lock it away for decades? Well,
it's because of the tax incentives that are offered. And
there's shaming that game. I don't see any reason not
to jump through those hoops, the hoops that are essentially.
Speaker 4 (26:39):
Laid out in front of you.
Speaker 1 (26:40):
It's not like Jeff is saying, hey, what if I
moved some money to the Cayman Islands and I like
tried to shout some things in secrecy to the IRIS,
didn't know my actual networth or something.
Speaker 3 (26:48):
I came straight up lying, yeah, that's a different thing,
or not the your net worth, but your your income.
Like it, it's one thing if you're gonna say, okay,
we're just gonna live off of my wife's.
Speaker 4 (26:58):
Income, truly and that's what we're gonna do. It's another
thing to say, but.
Speaker 3 (27:01):
Really, I'm going to be working on the side and
I'm going to be selling investments and I'm not going
to tell the irs that I've made yeah, have got
capital gains here. No, No, that's straight up against the laws.
Deception and illegal dissentive.
Speaker 1 (27:13):
That's not what we're talking about here, though, right, And
so Matt, some people might say, well, I'm trying to
lower my income on purpose by contributing more to pre
tax accounts to reduce my student loan payment. That to us,
or maybe take get like an increased health care subsidy
changing those are those to me are also that's the
way the incentives work, So why not take advantage of it.
I don't see anything wrong with what Jeff is willing
(27:34):
to do. And I think also a lot of folks
maybe couldn't reduce their income to the extent that Jeff
is willing to in order to qualify for these higher
levels of financial aid. They just wouldn't be able to
live on that much less. But Jeff is saying we
can do it. We're frugal, we know we know how
to make it work. On just my wife's salary, and
if you can live the life you want, Jeff on
your wife's income alone for the next few years, and
(27:56):
it's going to allow your son to qualify for more
aid from the college. I think it's a reasonable route
to take.
Speaker 4 (28:01):
Absolutely.
Speaker 3 (28:02):
Yeah, I think that's important highlight here too. It's not
like he's cheating. He's truly feeling the impact of living
on less of an income, like it is going to
impact his lifestyle, like in a more if it was going.
Speaker 1 (28:12):
To make him incredibly uncomfortable, I would say, dude, that
might be a little cheap. But if if you can
be comfortable a living on just your salary alone, I
don't see why not. Yeah, if they had to take
extreme measures, then you've you've kind of got the tail
wagon the dog.
Speaker 4 (28:24):
Yeah.
Speaker 3 (28:24):
Right, Like so it almost makes me think of like
a more consumption based scenario where like, let's say you
have the money to buy a fancy sports car, like
you're going to get a Corvette or a Mustang mock
E or whatever, right, like the electric Hustany or whatever.
It costs a lot of money. Sports cars high risk. Well,
what's what typically happens to your insurance costs? When you
get something like that, well, your insurance goes up due
(28:45):
to the increased risk and likelihood of you getting in
a wreck. Well, should you not get the sports car
just to be able to bring down your insurance costs?
Speaker 4 (28:53):
Like would you say to yourself, well, I'm not.
Speaker 3 (28:54):
Going to choose this this vehicle because I don't want
to pay that much.
Speaker 4 (28:58):
Well, probably not.
Speaker 3 (28:59):
There are considerations there, There are bigger considerations in mine.
But if you are in a position to where you
don't necessarily want or need that vehicle, well, by all means,
don't get the fancy car if that's going to allow
you to save the money. And in this way, you're
constraining your lifestyle in such a way that's going to
allow you to reap another financial benefit in the form
of financial assistance.
Speaker 1 (29:19):
Yeah, and in the example you're pointing out here, map
makes a lot of sense. But I think it's also
important to mention that sometimes the financial system doesn't make
perfect sense. Like when you're trying to get a mortgage,
your net worth isn't nearly as important. They don't factor
that in as much as your debt to income ratio.
So you might say I don't make much money, I
make eighty thousand dollars a year, but I've got five
million dollars in my investment accounts. They might say, sorry,
(29:40):
you don't qualify for the mortgage on the two million
dollar home.
Speaker 4 (29:42):
So it's going to feel a little bit backwards.
Speaker 3 (29:44):
Right, Wait a minute, you're not going to allow me
to get a mortgage on this property when I.
Speaker 4 (29:48):
Could pay cash for it.
Speaker 1 (29:49):
Or when you talk about the credit score, like the
way the credit scoring system is. We talk about it
regularly because it's important to how people handle their finances,
but it doesn't make perfect sense, and there are elements
of the credits or that are flawed and we wish
we're changed, But still like the system is what it is,
and kind of using the system to your advantage I
think makes sense. The incentives to get put in place
(30:10):
understandably drive our behavior.
Speaker 3 (30:12):
Yeah, that is a specific instance where you do want
to take into account how will making less income impact
our ability to live the life we want to live,
because most likely maybe they're looking to downsize. Well, shoot,
I guess either way, if you're looking at downsize and
by a different home, you still might be wanting to
take out a mortgage on that property and even though
you might be in a scenario where you could pay cash,
(30:32):
you don't always want to do that, especially if you're
having to draw more money out of your retirement, and
so in that case, manual underwriting is actually the solution
to doing that, as opposed to uploading your tax returns
and having the algorithm and the computer say yes or no.
You're actually working with a human being. This is something
that Kate and I had to do when we purchased
(30:53):
our first home and we just started our photography company
and we had only been in business for one year.
The banks don't like that, so they wouldn't like this
self employed one year income many years of income.
Speaker 4 (31:04):
Yeah, well, and even then, it's not like we were
super profitable, like we didn't have a ton of money
on hands.
Speaker 3 (31:08):
So we had to provide every single shred of documentation
that had any numbers on it at all in order
for the A and we had to put down a
little extra and that was a way for them to
mitigate some of the risks that they were incurring. But Jeff,
the last thing to mention her though, is that it's
not just your income that impacts the financial aid for college.
Speaker 4 (31:26):
When you fill out the.
Speaker 3 (31:27):
FAFSA because they take into consideration your assets as well,
and it would obviously be cheap in this case not
frugal to say, spend down all.
Speaker 4 (31:36):
Of your retirement money.
Speaker 3 (31:38):
On stuff, on boats, on trips and clothing whatever, in
order to snag more grants or assistance for your your
son's education. So I just wanted to mention that it's
not just about income, and we would encourage you to
know all of the details before you try to start
jumping through these hoops that might end up cramping your
lifestyle that ultimately ends up not netting you the.
Speaker 4 (31:59):
Results that you were hoping to achieve.
Speaker 3 (32:02):
I would I would hate for you to find yourself
in that situation, especially it sounds like this is more
Jeff's idea, maybe less his wife's idea, especially if his
wife's like, she's like, wait a second, what do we wait?
Speaker 4 (32:12):
What are we doing? What you sign me up for?
Speaker 3 (32:13):
All of a sudden, you're retiring and you're like, turn
into the coupon lady, Now.
Speaker 4 (32:17):
We have to live like poppers.
Speaker 3 (32:18):
Come on, come on, no hate against coupons, Yeah, but
it's often equated with a certain lifestyle that people are
trying to avoid that's all I'm saying.
Speaker 1 (32:24):
Just make sure your wife is on board with this too,
and make sure you've got your I dotted and your
teas crossed. That's right, We've got a lot more to
get to on today's show. You've been listening to How
To Money with Joel Larsgard. You can always hear us
live on KFI AM six forty twelve pm to two
pm on Sunday, and anytime on demand on the iHeartRadio app.
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