Listen Money Matters - Free your inner financial badass. All the stuff you should know about personal finance.

At LMM we bang the drum loudly in favor of investing over saving. But are there times when it’s better to just save? We’ll find out today. We’ve gotten a lot of questions about when to invest and when to just save so we thought we would dedicate a whole show to the subject for you. One of the good things about Betterment, and why we encourage you to keep your emergency fund there is that there is no penalty for taking money out and you can have it quickly, within a few days. But an emergency fund is for emergencies. If you’re constantly pulling money out, that’s a problem. If your time frame of needing to access money is less than a year, that money should be kept in a savings or checking account. The Rule of 72 is a way to determine how long it will take to double your investment. With a 7% return rate, it will take about ten years to double your money. What do you need to buy soon? A car in two months, a house in two years? If you need the money in that time frame, you’re better off just saving it. Unless, you have some flexibility in that time line. The more fixed your time line, the greater the risk. Your hard date could be the day the market crashes. If you have a big, non-monthly expense coming up, like paying for your semester, it’s not a good time to invest or even to pay down existing debt. Outside of this scenario, paying debt almost always comes first. If you’re in a grey area, something low risk like Treasury Bonds are an option. There is no one answer. The decision to invest or save is based on your risk tolerance, your time frame, and a host of other factors. Show Notes Penn Dark: A European style dark lager. Betterment: The easy way to invest. College Info Geek: How to save on textbooks. Learn more about your ad choices. Visit megaphone.fm/adchoices

If you’re sick of renting, you might be considering a home purchase. After all, mortgages tend to be cheaper than paying rent — so why doesn’t everyone just stop renting and buy a home? The truth is that buying a house isn’t just a matter of paying the mortgage every month. There are all kinds of hidden costs of buying a home. Today we’ll help you sort them all out. One of the top draws to homeownership, among many, is the fact that mortgage payments are often much less expensive than rent. However, just because a mortgage payment is less than your current rent does not necessarily mean that buying a home would be cheaper. There are numerous costs to consider when deciding to buy a new home. Loan origination fee To start, there will be a loan origination fee whenever you take out a mortgage. This is what you pay the lender for doing the work involved with making the loan. Because this fee can be a large one and it is required to be paid upfront to your lender, it’s important that you figure this origination fee into your total cost calculations. Although the exact amount you pay can vary based on the amount of your mortgage loan and the specific lender with which you work, you can expect to pay between .5 percent and 1 percent of the total value of your mortgage to cover this fee. Working with a real estate agent If you choose to consult a real estate agent, you’ll have to pay that person’s fee, as well. Not all agents have your best interests at heart — the more you pay for your home, the bigger their fee. Hiring a real estate agent is not the right choice for everyone, and you should consider your specific circumstances before moving forward. If you want to minimize your home buying costs as much as possible, and you feel confident in your ability to navigate the real estate market in which you’d like to buy, you may be just fine without an agent. On the other hand, if you are not well versed in buying real estate and you are feeling a little overwhelmed by the process, it can be well worth it to work with an agent. The amount you will have to pay toward a real estate agent’s fee can be tough to calculate. In most cases, the home’s seller is on the hook to pay the fee of both his or her agent and the agent of the buyer. You will still see this fee, although it will likely be absorbed into the listing price of the home. While you won’t be able to avoid the ultimate cost, you can make sure that you get your money’s worth by working with a reputable agent. Be sure to ask for references, read reviews online and check any relevant credentials of an agent before you hire someone. Insurance fees Another one of the commonly overlooked costs associated with homeownership comes in the form of insurance fees. Renters insurance is a relatively inexpensive form of coverage that you might not even need to cover, depending on where you live. When you purchase a home, however, you sign up for several new insurance requirements. You will be buying lots of different kinds of insurance, including title insurance, homeowners’ insurance and (possibly) additional flood insurance. None of them are break-the-bank expensive, but they can add up in the long run. Homeowners’ insurance may cost you upwards of $1,000 annually, although this amount can be much more depending on the extent of your coverage and where you purchase your home. As we mentioned above, you may have to spring for additional insurance coverage if you live in a flood or natural disast... Learn more about your ad choices. Visit megaphone.fm/adchoices

Deciding whether or not to have a baby is probably the biggest decision you will ever make. Today we’ll discuss how to prepare financially for baby. Stephany Kirkpatrick from LearnVest is our guest to discuss the financial aspects of having a baby. Having a baby doesn’t have to derail your financial goals. It does change your financial priorities. Good bye to five star resorts and hello to camping! To raise a child to age 18, it will cost nearly $250,000. Retirement needs to stay front and center. There are more ways to fund a college education than there are to fund retirement. Ask around about child related expenses. What are people paying for child care, for school, for after school activities. The numbers won’t be firm but you can at least have a sense of what you’re in for. Check into your maternity/paternity benefits. If you are lucky enough to have paid leave, and many people are not, it may not be as long as you want or need to stay out of work. You need to have money set aside to get you through a period without two incomes. Babies need stuff, but not as much stuff as you think. And they don’t really read labels so the stuff they need doesn’t have to be top of the line. Before the baby comes, work out what would happen if one parent decides to stay home. How can you make that work? In the long run, it may be cheaper but then one parent (usually mom) has their career track derailed. Short term savings could have long term consequences. Can you transfer your office skills into something you can do at home? A teacher could tutor for example. Just don’t forget the tax implications for working for yourself. Working part time can be an option too. Even if you only break even financially, there are benefits to keeping one foot in the work force. Having a baby is a big change but it doesn’t have to wreck your financial goals, just go in with both eyes open. Show Notes LearnVest: Get a personalized financial plan. Learn more about your ad choices. Visit megaphone.fm/adchoices

We’re talking all things treasury today on Listen, Money Matters. Treasury bills, notes, and bonds. Which, if any should you invest in? Were you given bonds as gifts when you were a kid? It may have seemed like a lame gift at the time but there probably aren’t many other gifts you still have decades later. A Treasury Bill has a maturity date from 91-364 days. A Treasury Note, from 2, 3, 5, or 10 years. And a Treasury Bond, 30 years. Buying a bond is buying debt. Buying bonds is less risky than buying stock because bond holders are among the first to get paid even if a company goes bankrupt. The yield is low though, less risk equals less gain. Because it is unlikely that the US government will go bankrupt, these are among the safest investments you can make. A bill doesn’t pay interest but is bought at a discount and when mature, pays at the full value. A note does pay interest. When it matures, you get back what you paid for it but you are getting interest payments in the meantime. All of these investments are very liquid so if you need it, you can have cash in hand very quickly. You also don’t have to pay state or local taxes on gains made through Treasury buys, still pay federal taxes though. The younger you are, the less heavily weighted you should be in bonds as opposed to stocks. You can afford to be more risky when you’re younger. Hold off on going deep into bonds until you are nearing retirement age. We want some ideas from you all. LMM needs to start making money so Andrew can work on it full time. E-mail us at [email protected] and give us your suggestions. Show Notes Treasury Direct: Where you can buy the things discussed in today’s episode. Betterment: Start investing today. Learn more about your ad choices. Visit megaphone.fm/adchoices

Are you guilty of one of the seven debtly sins? Find out how sinful you are and prepare to repent your sins in the church of Listen, Money Matters. There are seven deadly sins if you subscribe to ancient fairy tales. You can commit those sins in the realm of personal finance too. Come forward and be bathed in the blood of personal finance, all you sinners out there. Let’s start with lust, possibly the most fun of the sins! Lust is when you long for something to perhaps an unnatural degree. A new car when you have a perfectly good one. I’ll disagree with Thomas on high thread count sheets. They are totally worth it and there is no going back. Buy those. Gluttony is over-consumption to the point of waste. Wasting food is probably the best example. If you plan your meals, you’ll waste less. Don’t buy a bag of carrots, roast two and let the rest rot. Learn what else you can do to use the other carrots. Greed is wanting more, more more. You have ten million and you want eleven. If you have enough and your pursuit of more harms others, that’s greed. Also, you’re a dick. Sloth is being lazy. It’s easy to get lazy with finances and also easy for that to allow things to get away from you. If you build your systems, so many of your finances can be automated, allowing for a little sloth. Wrath can mean making snap decisions in terms of personal finance. When we’re angry, we don’t always make the best choices. Envy can make you buy a flat screen because your friend has one. Keeping up with the Joneses is a big problem for some people. You don’t know how deep in hock someone might be for all the accouterments of their flashy lifestyle. Pride can make you think you’re a special snowflake who deserves only the best. But a Honda Civic gets you from Point A to Point B just as well as a BMW. So which are you, a personal fiance saint or sinner? Show Notes Keegan Ales Mother’s Milk: A dark, creamy, milk stout. Buffalo Sweat Sweat Oatmeal Stout: A sweet, smooth stout. Mint: The easy way to track spending. Learn more about your ad choices. Visit megaphone.fm/adchoices

We mentioned margin and a previous episode and only touched on it. A lot of you wrote in with questions so we’re doing a whole show to explain what it is. Simply put, margin is borrowing against your investments without selling your investments. You can pull money out of your brokerage account on margin by setting a toggle on the account. You’ll pay interest and if you don’t pay back the loan, the brokerage firm takes your investment. It’s like borrowing money against your house. If you don’t repay it, the bank takes the house. There isn’t a monthly payment, the interest gets added to the total margin you have out. The trick is to grow your investments faster than the rate of the interest. Playing with margin can be really good or really bad. Margin is the reason people like Warren Buffett gets huge returns and the rest of us don’t. You can use margin to do whatever you want, go to Vegas, buy a house, or invest in more stocks. We are doing this episode for informational purposes. Margin is a risky thing and not something novices should be fooling with. So why not use your low risk investment to margin? You can expect about 7% returns, the interest on margin would be so close to or above that, it wouldn’t be worth it. A margin call happens when the value of your account falls to value calculated by the broker’s formula. You would then be required to either deposit more money into the account or sell off some assets. Again, LMM is not recommending this strategy. Just putting it out there for everyone to understand. Show Notes Shipyard Black IPA: A rich, malty beer. Betterment: The easy way to invest. Learn more about your ad choices. Visit megaphone.fm/adchoices

Living with roommates can be a minefield. Particularly when it comes to splitting shared expenses. Here are a few tips to navigate the situation. One of the best things about roommates is splitting the expenses. But it can also be one of the most fraught aspects. Learn how to do it so everyone feels they’re being treated fairly. Thomas is currently living with three roommates even though they are all done with school. So he knows something about how to make this situation work. They have individualized leases which not everyone may be able to get but is worth asking about. The utilities are shared and you’ll have to decide in who’s name to open the accounts. That person should automate the payments to ensure that nothing is ever paid late. Thomas uses Stripe to breakdown the amounts everyone owes and they pay him through it. Some stuff is just not worth fighting over. Breaking down who takes longer showers or works from home using the most electricity is petty and probably doesn’t make a huge difference money wise anyway. This is easier when all of you get along well and none of you are on a starvation budget. Using a whiteboard to list who was the last one to buy shared things like paper towels and trash bags is an easy, fair way to track things. Having evidence will cut down on arguments. When a problem does come up, don’t approach it as, “Hey, you should pay more.” That will make the other person defensive. Approach it as a shared problem that you will solve together. Sometimes it’s just better to overpay a little if it avoids a lot of stress. Saving a few bucks is not always worth the head ache. This attitude can relax the dynamic in the home for everyone. If you’re moving into a place where the roommates have already been living, you have a right to ask to see the rent and utility bills before negotiating how much you will be paying. Otherwise you may get into a situation where you are subsidizing everyone because you just paid what they asked. Living with roommates can be a great way to share expenses but go into a situation carefully. Show Notes Shipyard IPA: A single hopped IPA. Kronenbourg 1664: The premiere beer of France. Stripe: Automated bill pay. SplitWise: Perhaps the best utilities sharing app for roommates. Found out about it after the fact and wish it existed years ago! Learn more about your ad choices. Visit megaphone.fm/adchoices

How much real fun do you have compared to not that fun distractions? Those distractions are the reason for your lack of fun. Learn how to get rid of them. Do you wish you had more time to see friends devote to your hobbies, knock a thing or two off your bucket list? Well, you would if you stayed the hell off Facebook when you should be working. That kind of stuff is low-density fun. It’s a little fun and it’s spread out through the day. But it’s not the same kind of fun as hanging out with friends or playing your favorite video game. That is high-density fun, fun that is really fun and takes a few hours. This kind of fun is so important that you should schedule it. You have to work when you should be working of course but you should have fun when you should be having fun too. And if you are getting rid of the dumb, low-density fun activities during your work time, you will get more done. Then when it’s fun time, you won’t have unmet obligations in the back of your mind haunting your good time. So close the social media tabs, close your office door, put your cell phone in your desk drawer with the notifications muted. America has that puritanical worth ethic beat into us. But we work hard enough. Even if you love your work and work for yourself, a balance is important. Few people look back at their life and think they should have spent more time working. While Netflix or gaming time are perfectly legitimate types of high density fun, aim to spend part of your fun time with actual 3D people. And don’t check your phone every five minutes while you’re with them. So have more fun! Work hard play hard is a trite phrase but you should be doing both. Show Notes Rescue Time: Helps you understand your habits so you can focus. Stay Focusd: If you have no will power, this will lock you out of your favorite time waster sites. Learn more about your ad choices. Visit megaphone.fm/adchoices

The life success triangle has three parts, learning, value creation, and relationship building. We’ll see how they fit together to help you make money. Thomas came up with this concept for college students and it was the Student Success Triangle. But it can be applied to your post-college life as well. All three points of the triangle are equally important and support each other. Full Article Here Show Notes CIG: Thomas’s original post. Betterment: The smart way to invest. Learn more about your ad choices. Visit megaphone.fm/adchoices

If you want to start buying individual stocks and make your money work for you, Google Finance is a great place to conduct thorough research and learn more about stock investment strategies that will help you reach your financial goals. This article gives you key information about Google Finance, and how you can maximize its data. Full Article Here Show Notes Betterment: Investing made better. Google Finance: Research at your fingertips. Learn more about your ad choices. Visit megaphone.fm/adchoices

Knowing and understanding your personality type can help in lots of areas of life. Everything from choosing a job to saving money. What type are you? The MBTI, or Myers-Briggs Type Indicator is not one of those Buzzfeed quizzes that tells you which Disney Princess you are. This test is science-based and has been in use since the 1940’s. There are no right or wrong answers. There are sixteen personality types on the MBTI scale. The answers just indicate your preferences, how you perceive the world around you, and how you make decisions. There is some bleed over between types. Maybe you’re an extrovert in one on one situations but more introverted when faced with large groups. Show Notes Influence: The Science and Practice: The book Andrew referenced. Mint: The easy way to track your spending. 16 Personalities: Take the test! Learn more about your ad choices. Visit megaphone.fm/adchoices

Ever failed hard? Not stumbled, but lost everything level of failure. How can you begin to recover when you are at rock bottom? Most of us probably won’t hit homeless on the street levels of rock bottom but some of us will have to start over. A new city, a new job, an entirely new career. Where do you begin when you’re back at square one? Full Article Show Notes Old Dominion Brewing Company Dominion Lager: A crisp, light lager. Tallgrass Brewing Company Buffalo Sweat Vanilla Bean: A creamy oatmeal stout. Learn more about your ad choices. Visit megaphone.fm/adchoices

College costs have skyrocketed over the last several years. So unless you want to graduate with crippling debt, you’ll need a college job. Ideally you would spend four years with no obligation other than to study (and party) but not working while in college is not possible for many of us. Thomas is our resident college expert and his first suggestion is to carefully consider the cost of your chosen college. It’s not longer realistic to attend the best college you can get into. Not if that college is tens of thousands of dollars more expensive than a second tier choice. Full Article Here Show Notes College Info Geek: Thomas's site to help you get the most from your college experience. Debt Free College Grad: Our episode on paying for college with grants and scholarships. Shanice Miller: Thomas's interview with the debt-free college grad. Earnest: If you already have student debt, Earnest can help you refinance. Learn more about your ad choices. Visit megaphone.fm/adchoices

Used properly, a credit card can have all sorts of benefits. Used improperly, it can drag you into bankruptcy. A credit card can be a blessing or a curse. Some people refuse even to touch one. But if you know how to use one, it is a tool like anything else. Full Article Here Show Notes Tallgrass Brewing Buffalo Sweat: A sweet, oatmeal cream stout. Credit Karma: Get your credit score for free. Extra Pack of Peanuts: Learn how to churn airline miles. LMM How to Improve Your Credit Score: Hacks to boost your score fast. LMM Best Travel Cards: If you want free flights and hotels, these are the best cards. Learn more about your ad choices. Visit megaphone.fm/adchoices

We talk a lot about side hustles on the show. Today we’ll discuss if you should start your own side business. A side business can be lucrative and the creative outlet that your 9-5 job isn’t. But it can be a lot of work and time. We’ll break it down so you can decide if it’s the right decision for you. Both Andrew and Thomas have had various side hustles. In fact, Thomas’s site College Info Geek, which is now his full time job, started as a side hustle. That won’t be the case for all of us, but you can still make some extra cash doing your own thing. Client work side hustles can be lucrative but frustrating. You have to create someone else’s vision no matter how crappy or ridiculous you think it might be. Sensitive artist types might want to stay away from client based hustles. A side business shouldn’t be solely about the money. It should enable you to do something you love doing. Making money on that is a bonus. It takes about a year and a half to start making money on a side business. Do you love doing whatever it is enough to do it for free for that long? How much time do you have? If you’re watching TV for a few hours a night, you could use that time to start building something. If you work, are in school, and have a family, your side business may have to wait. We want to know what kind of side business you have in mind and what you want to know about starting one. Leave questions in the comments or send an email to [email protected]. Show Notes Hitachino Nest Beer: A white ale. Backpocket Brewing Penny Whistle: A Bavarian ale. College Info Geek: Thomas’s info on starting a website. Earnest: Refinance your student loans and save some money. Learn more about your ad choices. Visit megaphone.fm/adchoices

Looking for a job can be a full time job itself. Today we interview Adrian Larssen to learn how to take control of the job hunt process. Searching for a job sucks but there are ways to make it easier and to feel like you have some control of the process. Adrian works for The Muse which can help you in your quest. Full Article Here Show Notes The Muse: Let them help with your job hunt. 31 Most Common Interview Questions: And how to answer them! Betterment: The smart way to invest. Learn more about your ad choices. Visit megaphone.fm/adchoices

We love answering the questions you all send in. Today we have five questions about IPO stock price, a morning routine, what we wish we knew earlier, where to save a downpayment, and early retirement. Show Notes Boulder Beer Winter IPA: A full-bodied red ale. Buffalo Sweat Oatmeal Cream Stout: A smooth, dark beer. Mint: The easy way to manage your money. Betterment: The smart way to invest. Learn more about your ad choices. Visit megaphone.fm/adchoices

There is nothing wrong with starting small. If you can't quite make the big change, make a little change. You'll get there eventually. Building habits is important but big changes can be daunting. Our guest, Stephen Guise will tell us how mini habits can be just as good as big habits. Show Notes Boulder Beer Hazed and Infused: A dry hopped ale. Mini Habits: Smaller habits, bigger results. Mini Habits Video Course: Stephen's video series. Deep Existence: Stephen's blog dedicated to personal growth. Learn more about your ad choices. Visit megaphone.fm/adchoices

Today is Part 2 of our delve into Thomas’s financial life. There wasn’t much to critique in Part 1. Will Part 2 also make the rest of us feel like losers? At just 23 Thomas is doing better than many of us a decade or more older. Let’s see if he’s make any mistakes Andrew can help correct. (I like Thomas so I’m slightly ashamed of this but I hope he’s made at least one, tiny mistake.) While it’s impressive that Thomas makes about $69,000 a year, he pays more in taxes because he’s self employed than he would if he made the same salary as an employee. If you want some advice on small business taxes, check out our recent episode with Johnny Horta. Thomas still lives in Ames, Iowa where he attended college. He has three roommates and pays $320 a month in rent. He spends a lot on food, both groceries and eating out. Part of that is just wanting to get out of the house since he works from home. Last year Thomas saved $500 a month into Vanguard and $500 a month into Simple IRA. His goal is to “retire” by age 40. He wants to save $900,000 and live off 4% or $36,000 a year. He needs to save $25,000 a year with 5% growth to reach that number by age 40. So double what he did last year. Aha! Investing is where Thomas needs some guidance. Thomas started with the Vanguard Star fund which has returned about 15% over the last five years. If he moved to the Total Stock Market Fund, that number would be closer to 20%. There is the 5% growth he was looking for without doing anything other than switching funds! If Andrew were 23 again, he would put 50% into the Total Stock Market Fund, 10% into REIT’s, 10% into emerging markets, and leave 30% in Betterment with an eye toward using that for “opportunity buys” like when a Tesla caught fire and the stock was cheap. Most of Thomas’s bills are paid automatically. Rent and Simple are the only things that he has to remember to pay and Simple could be automated once he figures out how to allocate it. Thomas is going really well, especially for one so young. But he’s proof that we all can use a little help in various areas of our life. That’s what LMM is here for! Show Notes Mint: The easy way to track your spending. Betterment: The smart way to invest. Learn more about your ad choices. Visit megaphone.fm/adchoices

We are advocates of automating your finances and that includes automating saving money. But we don’t want saving to crimp your style. That’s why we love Digit. You can automate saving using Digit. We interview Ethan Bloch the CEO of Digit to learn how to automate saving without feeling it in your wallet. Full Article Here Learn more about your ad choices. Visit megaphone.fm/adchoices

Running a small business has many tax benefits, but it has many tax pitfalls too. To make sure none of us get on the wrong side of the IRS, we will discuss small business tax questions with Johnny Horta. LMM’s resident tax expert schools us on small business taxes for all our side hustlers out there. If you run a small business, you’ll have more write-offs than if you are an employee. The downside is, you have to pay all 15.3% of your FICA and social security taxes rather than paying 7.65% while your employer picks up the other half. If you’re self-employed, it’s a good idea to set up a Simple or SEP IRA. A Simple allows you to defer up to $12,500 and a SEP, up to $53,000. This can help lower your tax burden while helping you save for retirement. If you’re just starting out, it’s a good idea to schedule a consultation with an accountant or a tax attorney. Just ask for a certain amount of time, an hour maybe and ask what they charge for that. Be sure to have a list of questions to make the most of the time. According to the IRS, you are a business if you make money for three of five years. Otherwise, it’s classified as a hobby. Lots of people want to use a home office deduction. But to do so, the office has to be “regularly and exclusively used as a home office for the business.” So if you work on your computer by day and watch Netflix on it by night, sorry, you’re out of luck. When you decide how to set your business up, sole proprietorship, LLC, etc., the most important thing to consider is the likelihood that you’ll be sued. If it’s small, a sole proprietorship will probably be suitable. Remember, Johnny will answer your questions live via our webinar February 2. Show Notes Horta Tax and Financial Services: Connect with Johnny on Facebook. IRS: Get some answers here before spending money on an accountant. LMM Get Involved: Find out the details for our upcoming tax webinar with Johnny February 2 at 8:30 pm Easter. Learn more about your ad choices. Visit megaphone.fm/adchoices

Charles Wheelan is a lecturer in economics at Dartmouth and has authored five books. He joins us to discuss statistics, politics, and the economy. Economics is the study of how we allocate scarce resources. Poverty, health, education, are all affected by how we allocate resources so understanding that can help us to do a better, more fair job at that allocating. To make money, you have to produce value. Part of the reason for stagnant middle-class wages is because the value it used to produce is now being produced more cheaply, either through technology or outsourcing to countries where wages are very low. Money is not the only factor in economics. Sometimes money can stop people from doing something. Organ donation for example. Tying it to money makes people less likely to do it. Sometimes altruism is a greater driver than monetary gain. Most people will stay where you put them. Many people don’t save for retirement. Some companies now automatically enroll new employees in 401K plans. The employee is free to exit the plan or change it but most people will just default to what the company chose. Sometimes a small guaranteed incentive is less effective than a larger, but not guaranteed one. Getting $5 each time you go to the gym is less attractive to people than going to the gym and being entered into a raffle to win a car. This is why people play the lottery. Statistics are useful because they can be used to infer patterns. Recognizing and using the patterns can make you more money, or just help you to do things better. Which will probably earn you more money! Most people are pretty poor at appreciating probability. So we worry about Ebola but cross against the light. But the odds of getting Ebola are much smaller than the odds of getting hit by a car. Charles is a passive investor, an Index Fund guy. So the Dartmouth professor shares the LMM philosophy of buy and hold! The longer your horizon, the smoother the booms and busts level out for you. Charles is very politically active. He advocates for a Centrist Party, where people who feel alienated by the Republicans and Democrats can join together. We need something better in the middle, where most of us dwell. It was great to interview a guest who understands economics and is actively trying to improve the short comings of our current two party system. Show Notes Amazon: Charles Wheelan’s books. Mint: The easy way to track your spending. Betterment: The smart way to invest. Learn more about your ad choices. Visit megaphone.fm/adchoices

Are you looking for a way to invest in real estate without all of the hassles of becoming a landlord? Then REIT investing might be just what you’re looking for. But what the f**k is REIT investing? Real estate can be an important addition to your investment portfolio, but it seems out of reach for many of us. We don’t even live in our own house, we rent. So how are we going to ever own real estate? There is a way! What is are REIT Investments? A REIT or Real Estate Investment Trust is a company that owns, manages or bankrolls income-producing real estate. The rent generated from the properties is distributed to shareholders in the form of dividends. REIT is similar to a mutual fund and trade on the major market exchanges. It allows individual investors to pool their money and own real estate that they wouldn’t be able to afford on their own. When you own stock in a REIT, you own a small sliver of the apartment or office buildings they own just like when you own stock in a company you own a tiny piece of that company. Due to the nature of real estate investing, REITs typically do better in low-interest rate environments and when there are higher rates it is usually a bumpy ride for the REIT market. To qualify as a REIT, a company has to adhere to specific guidelines put in place by Congress. These guidelines include: * Is considered a corporation according to the IRS revenue code * Is managed by a board of directors * Has at least 100 shareholders * Have no more than 50% of its shares held by five or fewer individuals * Has at least 75% of its assets in real estate, US Treasurys, or cash * Generates at least 75% of its net income from real estate * 95% of its income must be passive like rent * At least 90% of its taxable income is paid to shareholders via dividends There are two kinds of REITs. Equity REITs About 90% of REITs are equity REITs. Equity REITs buy, manage, build, remodel, and sell real estate. The revenues from these REITs come mainly from rental income. The types of real estate properties include residential, retail, office, industrial, and hotels. Equity REITs often specialize in a specific property types. Residential REIT’s invest in single-family homes or apartment buildings and retail REITs invest in shopping and strip malls. Mortgage REITs Mortgage REITs only make up about 10% of REITs. A mortgage REIT lends money to real estate buyers or buys existing mortgages or mortgage-backed securities. The revenue from these REITs come from the interest paid on the mortgage loans. Mortgage REITs often specialize too, either in residential or commercial mortgages. How to start investing in REITs The ultimate goal of any investment is to make money so how do you make money on a REIT? REIT stocks let investors invest in real estate the same way they invest in any other industry, by purchasing stocks through a mutual fund or ETF on the stock market. When you are a shareholder in a REIT, you earn a portion of the money generated by that investment. REITs are exempt from corporate taxes as long as they adhere to the Congressional guidelines we outlined above. Because a REIT’s income is not taxed, there is more money for shareholders. Shareholders though do have to pay capital gains taxes on the dividends at their ordinary income tax rate. Investors can deduct 20% of REIT dividends though lowering the maximum tax rate from 39.6% to 29.6%. REITs often provide high dividends, and those dividends can increase over time as the REIT’s properties appreciate in asset value. eREIT If a $3,000 minimum, the initial investment is too rich for your blood, there is a company in the REIT arena called Learn more about your ad choices. Visit megaphone.fm/adchoices

Tax time is nearly upon us. Past guest, contributing writing, and tax expert Johnny Horta joins us to explain the vagaries of the US tax system. Until we get a flat tax (which will never happen) taxes will continue to be a monumental pain in the ass. So we brought on a guest to give us some expert advice. Show Notes Keegan Ales Mother’s Milk: A dark, creamy milk stout. Left Hand Brewing Milk Stout: A creamy, sweet stout. Horta Tax & Financial Services: Contact Johnny for expert advice. W4 Calculator: Plug in your numbers to see what your withholdings will be. Learn more about your ad choices. Visit megaphone.fm/adchoices

Jen McDonough paid off $212,000 in four years. She works now as a motivational speaker and has authored three books. Meet The Iron Jen. Jen’s world changed when one of her children developed a chronic medical condition. As the medical bills piled up, other bills fell behind. Jen found herself unable to afford $20 worth of groceries. That’s the low point that caused Jen and her husband to really tackle their debt and change their relationship with money. Show Notes The Iron Jen: Leveraging adversity to reach your potential. You can also find Jen’s books here. Mint: The easy way to budget. Betterment: The smart way to invest. Learn more about your ad choices. Visit megaphone.fm/adchoices

Making and failing to fulfill the same old New Year’s resolutions? LMM will teach you new ways to make sure this time they actually stick. Once the hangover subsides, we are all gung ho to really stick to our resolutions. But by February (at the latest), we’re back in the same old habits. Despair no more! Meet the Impossible List! The impossible list is not so much a bucket list as an evolving, active guide for what you want to do with your life. You need to have goals, but you need to track them too. And improve upon them. So you ran a 5K, congrats! Maybe now that evolves into doing a triathlon. Show Notes Wild Devil: An India pale ale. Hitachino Nest Beer: A fermented ale. The Power of Habit: How to harness the power of habits. Learn more about your ad choices. Visit megaphone.fm/adchoices

Starting a new thing is exciting. But some of us quickly lose our initial enthusiasm. We’ll discuss how to see things through to the end. What does make you stick with something? Sometimes it’s the time and money you invested in it. Sometimes it’s because there are already so many tombstones in your idea graveyard and you can’t stand the thought of adding another. Show Notes Garun Icelandic Stout: Intensely rich with notes of chocolate and licorice. I Don’t Feel Like It: Thomas’s video about getting over that mindset. Betterment: The easy way to invest. Learn more about your ad choices. Visit megaphone.fm/adchoices

Your morning routine can make or break your day. It can set you up for a good mood and good productivity or send you screaming back under the covers. Not all of us are morning people. But you don’t have to be one in order to organize a routine that will set you up for a productive day. Thomas is a freak who starts his day at 5:50 and finishes thirteen habits practically before the sun comes up. He wasn’t born that way which means any of us could do the same. It’s a routine that has evolved over time. How does Thomas get up so early? He has monetized sleeping in. If he doesn’t get up, he stands to lose $30. Not worth it. These don’t all have to be monumental habits. It can be something as simple as taking your vitamins every morning. Or just getting up fifteen minutes earlier so you can relax into your day rather than rushing around all flustered. They don’t have to number into the teens either. Start small. Wake up early and drink a cup of warm water with the juice of half a lemon in it. Lemon water is crazy good for you and is a small, easy thing that will make a big difference. We have a series of podcasts and articles that list some great productivity apps. There is nothing wrong with having a little help and prompting until the things you want to get done become habits. Remember, start small but keep at it. Once you become a morning person with good habits, you will notice lots of positive changes in your life. Show Notes Buffer: A social media scheduling tool. Dogfish Head World Wide Stout: A dark, roasty ale. HabitRPG: A super geeky way to help you build habits. Photo Credit: https://www.flickr.com/photos/redheadeb/2861685318 Learn more about your ad choices. Visit megaphone.fm/adchoices

Listen, Money Matters is back! We have a new host, former guest Thomas Frank of College Info Geek. We’re excited to kick of Season Two. We missed you! There have been some changes to LMM since our last episode but we are more committed than ever to being your one stop, go to resource for all things finance. If you’ve been a listener to the show for awhile, you’ll remember Thomas Frank from episodes about money mindfulness, how to choose the best cell phone plan, and our round table discussion dedicated to saving money on college. Thomas is a recent college graduate and has run the site College Info Geek, a blog, podcast, and youtube channel that teaches you to get the most out of college life. Thomas has run the site for a little more than four years. For the past two, it has been his full time job and he makes a good living from it. Thomas is just 23 years old and will bring a bit of a younger perspective to our show. He is also ruthlessly efficient with his time and crazy productive which is something we think will bring value to our audience. Getting over “I don’t feel like it” has been what pushed Thomas forward. The work doesn’t have to be perfect in the beginning, you just have to get it out there. That is the hardest part, fine tuning can come later. Building the habit is what matters. A goal for LMM in Season Two is to make this a community project. We reached out to some listeners who will be contributing to the show and site in various ways. If you would like to be involved, e-mail us at [email protected]. We will be using Slack, a team chat site where we can all communicate in one place. We appealed to you for donations and we were overwhelmed and grateful. Along with the donations were many e-mails encouraging us to continue with the show. Once Andrew broke even, he gave the remaining donations to Donor’s Choose. It’s a site that helps teachers fund materials for their classes that the schools don’t have the money to provide. Some things we’ll be doing going forward include an investing book, animated videos, courses organized from our existing material, and what we really look forward to is matching members of our audience in a mentor/mentee relationship. If you are interested in that, please e-mail us. Also let us know what you want out of Season Two. This is your show too. We’re so glad to be back. Here’s to a new season and a new year. Show Notes Mint: The easy way to budget. Betterment: The smart way to invest. Slack: An open communication system that brings your team together in one place. Learn more about your ad choices. Visit megaphone.fm/adchoices

Insurance can be confusing so we interview two experts, Todd Berkley and John Young to help us navigate Obamacare and HSA’s. The affordable care act is a good thing for a lot of previously uninsured Americans but knowing which plan to choose can be tricky. HSA’s can be a great place to park tax free money but can also be confusing. We get some expert help from our two guests. If you meet the income requirements to receive a subsidy, you must purchase your insurance through Healthcare.gov. If you are not eligible for a subsidy, you are free to purchase insurance on the open market. A web based entity can help if you are wading into the open market. Todd and John highly recommend plans with an HSA. We discussed HSA’s in depth with Todd and John in Episode 171. They are a great tax shelter. Right now, the penalties for not having health insurance range from $95 to 1% of your income. The penalties are levied against your tax return. Next year the penalties are going to go up substantially. There are so many acronyms and strange terms in health insurance! EPO, HSA, deductible, out of pocket, what do they all mean? This site has a handy list that defines some common terms normal people aren’t familiar with. A catastrophic plan is available for people thirty and under. It’s not great insurance but if you get hit by a bus, having it can keep you from going bankrupt. Most of these plans are not HSA qualified though. Todd and John are hopeful that Millenials will change the way health insurance works. There is too much double speak and obfuscation the way things stand. This stuff doesn’t have to be so confusing and Millenials will stand up and demand that things are simplified. I know this stuff is confusing but medical expenses are the number one cause of bankruptcy in this country which is just shameful. Make no mistake, you can go bankrupt even if you are insured but having insurance does decrease the odds of it happening to you. Show Notes Ask Mr HSA: Todd’s site to help answer all your HSA questions. Betterment: The simple way to invest. Learn more about your ad choices. Visit megaphone.fm/adchoices

We all have them. Dinners out, the newest gadgets, clothes. Our financial weak spot, our Achilles’ heel. Find out what we can do to strengthen them. It might not be just a spending problem though. Maybe you’re afraid to invest because it seems so intimidating. Maybe you have the money to pay all of your bills but you aren’t organized and always pay late. Andrew is willing to take a leap that some people wouldn’t and it has gotten him in trouble in the past, failed business ventures, risky investments that didn’t pan out. He also spends too much on food and booze. Matt spends too much on food and booze as well. Books too but I share that addiction so I approve. He has fallen into a common trap. He didn’t have a lot of cash for a long time. Now that he does, he’s been a little undisciplined with his spending. It’s easy to justify over spending when you’re spending on experiences rather than things. We preach this philosophy a lot because experiences bring more happiness than things. But if you’re spending too much, it doesn’t matter philosophically what you’re spending on. You still have to stop. Maybe your weak spot is asking for money whether that means asking for a raise, charging what you’re worth to clients, or asking someone who owes you money to finally pay it back. You might suspect your weak spot but not know how bad it is. Check your Mint account. You’ll see how much you’re spending on Seamless writ large. Feels bad man. We want you to spend some time reflecting and identifying the weak spots. Once you’re done navel gazing over the situation, you need to start making a change. The formula is not complicated. Stop spending money. Maybe your lack of planning costs you. Booking a flight the week before a trip will almost always cost more than if it had been booked several weeks ahead. You know when and where you want to go. Just book the flight when you decide! Maybe lack of goals holds you back. If you don’t have a goal, you don’t know what steps to take to achieve that goal. Sometimes you think you’ve patched your weak spot only to keep falling back into the same trap. That’s ok, as long as the time it takes you to realize you’re doing it again gets shorter each time, you’re making progress. Show Notes War Horse Royal Kilt Inspector: A Scottish ale. Mint: The easy way to track your spending. Betterment: The easy way to invest. Learn more about your ad choices. Visit megaphone.fm/adchoices

Buying a home is uncharted territory for many of us. Both Matt and Andrew have done it and will tell us what to expect before, during, and after you buy a home. Before Your mortgage payment shouldn’t be more than 30% of your take home salary. Don’t buy a home with a person you are not married to. Property is hard enough to untangle when you have some legal protections, it’s much worse when you don’t. The bank wants to see more than your down payment liquid in your checking account. They want a buffer. If you’re putting 20% down, you need more than 20% in your account. You will be paying property tax. You will need home owner’s insurance. You will have closing costs unless you negotiate for the seller to pay that. You may need an appraisal and an inspection. During Being very optimistic, this process will take at least thirty days. You will fax a rain forest worth of paper. This will be the most paper work intensive under taking of your life. You will negotiate. Don’t let yourself fall so in love with a place that it clouds your ability to negotiate. When you’re spending hundreds of thousands of dollars, $5000 doesn’t seem like much, but it is. After You will have to pay moving costs. You will have to pay utilities you didn’t even know were a thing like water and sewage. You might need to renovate. You might find a nasty surprise once you start renovating, mold, foundation cracks. It all means more money than what you had planned on. Buying a house is a hassle and it may or may not be worth it. Consider it carefully. A home is not the guaranteed investment it once was. Show Notes Gunny Mac American Black Ale: A smooth, full bodied black ale. Betterment: The better way to invest. LMM Survey: We ask for some demographic information to help get sponsors for the show. Learn more about your ad choices. Visit megaphone.fm/adchoices

A listener joins us for a financial check up in our This Financial Life episode. Jeff Wilson finds out what he’s doing well and what he could do better. Jeff lives in the Midwest where he works for the Department of Natural Resources, it’s an outside job where he helps care for wild life sites. He burns down stuff for a living! Jeff is 26, he has $24,000 in student loans. He’s paid off about $12,000 so far. His rent is $300 a month. His loan payment is $400 a month. He’s making about $1600 a month with some fluctuation. He has avoided credit card debt, a big plus. But he’s paying the minimum on the loans. Even still, they could be paid off in about six years. His cost of living is very, very low and Jeff hopes to retire early. He has about $24,000 in cash saved, the same amount he has in loan debt. It’s daunting though, to wipe out your savings in one fell swoop. At the very least, Jeff has to get that money out of a crap interest savings account. This is the ideal time for Jeff to pay off those loans. He has a low cost of living, no credit card debt, a good line of credit if there were an emergency. Kill the loans! Jeff has an IRA with $10,000. He also has a Betterment account. The spanner in the works is that Jeff is laid off for three months of the year. During that time he’s receiving unemployment but it’s not a lot. Jeff is doing well and he knows what he needs to do. He just needs a little convincing. He could potentially be retired at 40. All of our This Financial Life guests are savvy and doing pretty well and Jeff is no exception. At just 26 years old, he’s already on the path to financial freedom. Show Notes Betterment: Investing made better. Mint: The better way to budget. Learn more about your ad choices. Visit megaphone.fm/adchoices

You know we at LMM want to help you any way we can to reduce your student loan debt. David Klein joins us to discuss refinancing to save you money. CommonBond is a student loan lending platform that provides lower cost financing to graduate students and graduates. They started out as a pilot program at one school and now they have expanded to over 109 programs. The federal government holds over 90% of student loans. They set the same rate which inflates them for credit worthy borrowers. When David went back to school in 2011, his rate was 8%. He saw an opportunity and with his two partners started CommonBond. CommonBond works a bit like Lending Club. Borrowers save money when they refinance, on average, $10,000 over the life of the loan and investors have access to a kind of investing that was largely closed to them in the past. What should you look at before deciding on grad school? First, the median salary for the field you’ll be studying. Then look at your loan options. You want a low interest rate but also calculate what your monthly payment would be. CommonBond offers a hybrid loan, the first of it’s kind on a national scale. It’s a fixed rate loan for the first five years and variable thereafter. There is a cap on the variable rate of 10.99%. CommonBond also offers forbearance for three months at a time, up to twelve months in cases of economic hardship. They will also help you find a job within their community. They also offer paid consulting work. There is no reason not to refinance other than the hassle. CommonBond has streamlined the process to make it as quick and easy as possible. CommonBond has partnered with Pencils of Promise to help fund education for students who would otherwise not be able to afford it. More Millenials doing good things in the world! What can you do if you’re having problems paying your loans? Call your lender directly and inform them of your situation. They should be able to help you out. If they won’t, refinance with CommonBond because they will. Show Notes CommonBond: Refinance your graduate school loans. Betterment: The easy way to invest. Learn more about your ad choices. Visit megaphone.fm/adchoices

It’s the episode devoted to your questions. Today we talk about the stack vs snowball methods of debt reduction, college wisdom, and Comcast ETF. 1. What is your advice for an 18 year old with a part time job about to start college? College Info Geek is a great resource for college kids. Make as many connections as you can, join clubs, get to know your professors, join a fraternity. Apply to every scholarship known to student kind. We did an episode about that. 2. If you have one student loan at 7.15% do you attack that first or pay across both loans? If you want the emotional win, pay the smaller one first and then use that payment towards the larger one. Mathematically though it makes more sense to attack the loan with the higher interest rate. 3. I have $50,000 in cash in a savings account earning .85% interest. Leave it, move it to Betterment, or pay loans? Oooh, I felt you all cringe. I cringed too. Someone jump him in. You’re paying 7.15% on your loans, pay that off first! Then invest. Then close the savings account. 4. I know the stack method is superior to snow ball but I have a small debt of $500. Should I continue to stack or just pay it off? For something that small, just pay it off and then throw the payment at the higher interest debt. Unless your interest rate is very high on the other loan. But since you just have two debts, getting rid of one would simplify things. 5. I want to dump Comcast but they want to charge me $300 for early termination. Should I just eat it? If you have more than two months left, eat the fee. If you can pay on a credit card, cancel the card and screw Comcast! They’re evil so fuck them. Show Notes Betterment: The easy way to invest. Sign up here and get up to six months free investing. War Horse Royal Kilt Inspector: A dark hued ale. Flying Fish Red Fish: A hoppy red ale. Betterment: Sign up here and get up to six months free investing. Featured Image Photo Credit: “Question Box” by Raymond Bryson on Flickr Learn more about your ad choices. Visit megaphone.fm/adchoices

It was Leonardo Da Vinci who said, simplicity is the ultimate sophistication. He is right! Minimalist living isn’t a new trend, it has been with us for centuries. So why is it making a comeback these days? In 2005, Tim Kasser, a psychology professor at Illinois’ Knox College conducted a study on minimalism and its impact on happiness and wellbeing. The study found that despite factors such as geographical location, gender, and age, those who simplified their lives reported significantly higher levels of positive emotions and life satisfaction. So what exactly is minimalism? No, not that kind of minimalism, more like this… Minimalist living is all about owning less, having fewer distractions, and most importantly for Listen Money Matters fans, spending less. Less is more, according to minimalism. A cluttered life leads to a cluttered brain, and ultimately an unhappy life. Minimalism is mental framework about how you go about your daily life, avoiding the trappings of modern consumer culture. Although there’s nothing wrong with owning things, minimalists would (rightly) argue that we have gone overboard with our materialistic lifestyles, to the detriment of our mental health and wellbeing. Enough said, moving on. Minimalists believe that we give way too much meaning to things, to the detriment of our financial, emotional, and physical health. Are things like homes, cars, and video games important to you? If they are, great. But, if being a good person, family relationships, and physical health are more important, why do so many people forsake these for material wants? This is the mantra of the minimalist, and there is some truth to it. So how does one begin to live a minimalist lifestyle? Leading a simple life through minimalism doesn’t have to happen in one leap. You can take small steps until you get to a place that is comfortable for you. Here’s how to get started. Becoming minimalist One of the most challenging aspects of adopting a minimalist lifestyle is figuring out where to start. If you are excited about all the benefits that minimalism has to offer, you may be tempted to make several big changes right away. However, if you are not careful, a rapid transition can make you feel burnt out and cause you to lose momentum. Before you take any concrete steps to minimize, it is essential that you adjust your mindset. Minimalism is all about reducing stress and clutter in your life, and it’s much easier to begin this outward transition after you have adjusted your mindset to be more organized. When you embark on your pursuit of minimalism, prepare to take your time with the transition. A slow and steady approach will reduce the adjustment you must make to your new minimalist lifestyle. How to be a minimalist As you start your journalist, here are a few steps on how to be a minimalist: Take stock of your possessions Before you can make changes in your home, you need to understand exactly how much you own. Walk through your house or apartment and take a look at the items you have in different rooms. Make sure to take note of areas that you want to pay special attention to, such as overflowing dressers or cluttered bookshelves. It’s also a good idea to identify repeat items that you could easily downsize, such as multiple copies of the same book. Work through your emotional connections to stuff If you feel some anxiety when you think about getting rid of some of your possessions, you’re not alone. Most people have emotional connections to their possessions that can make letting go difficult. Learn more about your ad choices. Visit megaphone.fm/adchoices

Hal Elrod is a keynote speaker and best selling author. He joins us to discuss his latest book, The Miracle Morning. This book may change your life! What is so miraculous about the morning? Plenty. If you want to improve your life, your morning is the place to start. Hal’s secret is that your level of personal development will match your level of success. He began devoting an hour a day to personal development. He researched the six most powerful methods of personal development and vowed to do all six each day. Why Morning? Mornings get such a bad rap. Everyone seems to want to stay in bed rather than get up and start the day. If this is you, you are giving up the best part of the day. Mornings are the most distraction free time you will get. If you get up early enough, you are probably the only one in the house who is stirring. No one is asking for breakfast or if you remembered to pay the car payment or where their other sock is. You have the whole house to yourself! If you go to the gym, it’s almost empty! You don’t have to wait around for the machine you want or get annoyed because some cretin didn’t re-rack their weights. If you drive or take public transit, there is less traffic and less people to crowd and annoy you on the bus or train. When you get to work, you can get things done without the phone ringing, e-mails coming in, co-workers bugging you. Unless you are staying in bed for sex, there is really no reason to keep laying there hitting the snooze button wasting your miracle morning. Morning is the best time to get things done because we are at our freshest. We’ve had at least some sleep, even if it was a bad night of sleep, it’s as rested as you are going to feel all day. The day also has a habit of getting away from us. You don’t work out in the morning and promise to do it after work. But then you remember you have a dentist appointment or agreed to meet a friend for dinner. The day is over and you never worked out. When we don’t do things in the morning, the rest of the day can get away from us and those things just never get done. In the morning, you don’t have the events of the day weighing you down. Sometimes we do have bad days and we just don’t have the energy or we are just in too bad a mood to care about doing things that will help our personal development. That is why morning. The Six Most Powerful Methods of Personal Development This are the things Hal starts his day with. All it takes is one hour. Silence Our world is loud. I lived for a time on 78th Street and Second Avenue. There were a row of bars across the street. Bars close late in New York City, not until 4:00 am. It wasn’t the bar patrons that was the problem, apart from the occasional “Whoooing” bro or drunk chick. It was when the bars when drag trash bags full of empty glass bottles to the curb. When you managed to fall back to sleep after that, the garbage trucks would pull up and toss them into the back, making another huge sleep destroying clatter. I used to lay in bed almost bawling from anger and frustration. There is something about certain noises or noise that is interrupting our sleep that triggers some kind of oddly disproportionate anger in us. The World Health Organization declared noise pollution a “modern plague” and there is overwhelming evidence that it is detrimental to physical and mental health. The antidote to the stress causes by the cacophony of life is to start your day with silence. This could be “formal” silence like meditation or just sitting quietly for a few minutes before turning on the radio or television. Silence reduces blood pressure. Silence can regenerate brain cells in the hippocampus, the part of the brain tasked with memory, learning and emotion. Learn more about your ad choices. Visit megaphone.fm/adchoices

We have a listener guest today! Zina Kumok joins us to share her financial life and find out what she is doing right and what she could be doing better. LMM met Zina at Fincon. She vowed to pay her student loan debt off in three years and started a blog to document her progress. She did it too. As of this month, she has paid off her entire loan balance. She put any extra money, free lance money, birthday money, towards the debt. Like many of us, Zina had very little finance education. Whatever she made, she spent. At one point, she ate out three meals a day! When she had to borrow money for a security deposit on an apartment, she realized she had nothing to show for the pretty good money she was making. Zina’s parents were fans of Dave Ramsey and that was her introduction to personal finance. Get Rich Slowly was another big influence as it was for a lot of us. Student loan debt was the only debt Zina had. No credit card or mortgage debt. She is engaged to be married and is planning on joining finances with her fiance soon. Now that she has some breathing room, she can be less strict on her budgeting. Her fiance is as money savvy as Zina and is also debt free. Both partners have an emergency fund but want to build it up to six months for of expenses. They have a dog that may need surgery in the future. Pet insurance may be something to consider for Zina. Zina started an IRA while in college. She now does matching in her 401K. The money that no longer needs to go towards the loan will go towards the emergency fund and retirement. The emergency fund is now stashed in the savings account but Zina realizes this needs to change. Zina uses Mint and an Excel spread sheet to budget. New tech and old school. The idea of buying a house is not really on her radar right now. Her parents had three offers in four years when they tried to sell their house. That would put anyone off. Good luck to Zina and her fiance on their wedding and combining their finances. Zina hopes to start a podcast soon so check her site for updates. Show Notes Abbey Ale: A golden, Belgian style ale. Flying Fish Hop Fish: An English style IPA. Debt Free After Three: Zina’s story of paying of her student loans in three years. Mint: The easy way to budget. Betterment: The easy way to invest. Learn more about your ad choices. Visit megaphone.fm/adchoices

Matt Rothstein of Get Final will discuss a new kind of credit card for the 21st Century designed to be a consumer ally rather than a consumer predator. The card will go Beta soon with a wait list of over 30,000 people. It’s a physical credit card that assigns a different number to each merchant, giving you more control over your account. And it’s chip and pin, at last! There is still a magnetic stripe because not all retailers are set up for chip and pin yet. You can assign a dollar amount limit to each merchant. So if your gym charges $100 a month, no more can be charged. This way if there is a data breech, not only can the charge not exceed your limit, but it can’t be used at any other merchant. The transaction would automatically decline. Because you are setting a dollar limit, this can also be a helpful budgeting tool. Final was founded due to data breaches the founders suffered. They realized credit cards haven’t changed for decades and wanted to design a credit card for the internet age. Banks and credit card companies are terrible at communicating vital information such as cutting off your card while you’re on vacation abroad. Final plans to start a rewards program soon, most likely a cash back system. So many of the really good rewards are only available with type tier cards and Final would like to make rewards more democratic. Final expects to go live around mid 2015 in Beta. Final want your feedback. E-mail at [email protected] and let them know what you want and don’t want in a credit card. Show Notes Betterment: The smart way to invest. Get up to six months free. Get Final: A credit card for the 21st Century. Learn more about your ad choices. Visit megaphone.fm/adchoices

When you learn something new, you can’t wait to share it. Money matters should be the same. Spread your knowledge to the less financially savvy among us. It doesn’t just have to be something good you’ve learned. Some bank or company screw you over? Let everyone know that too so they can avoid the same fate. We encourage you to surround yourself with financial friends but you don’t have to ditch the friends who are bad with money. You can be the financial friend that helps them improve their habits. Money is such a taboo subject though. How do you bring it up? Lead by bleeding first. Tell your friends all the dumb mistakes you made and how you fixed them. It will make them feel less judged when they share their mistakes. It doesn’t matter if you learn something by reading it from a bathroom wall or Stephen Hawking told it to you over cocktails. The important thing is that you know it. So if you learned from our podcast or another, a book, a blog, share your source of knowledge with those around you. And be sure to follow up. Ask if they listened or read the book. Then you will have a jumping off point and you can show them all kinds of cool stuff like Mint, Betterment, and Acorns. Once they’re a little savvier, you can introduce them to Vanguard if they haven’t already discovered it. Do you have a story on how you helped a friend or family member improve their finances? Share your story in the comments. Show Notes Mint: Mint will tell you when your bank screws you with bullshit fees. Betterment: Investing for beginners. Acorns: Invest your nickels and dimes. Learn more about your ad choices. Visit megaphone.fm/adchoices

Time for listener questions. We’ll discuss refinancing, repairing damaged credit, and being a spendaholic. We love answering your questions. If you want to know, your fellow listeners are probably wondering too. 1. How do I turn my spendaholic friends into the budgeting, investing machine LMM has turned me into? First, tell them about the show! You have to let each person realize they need help. New Year’s resolutions are around the corner and money is a big one. If they resolve to improve their finances, suggest some learning materials. Podcasts, books, blogs that will help them learn. If they suggest going out, offer up a cheap night. A potluck, movie night at your place. Remember, the host always gets to keep the leftover booze! Inspire them, don’t lecture them. 2. I have a secured credit card as I’m trying to rebuild my credit. What’s another good card to help me repair the damage? When Matt had bad credit, in the low 600’s, Discover gave him a credit card. Set up an account on Credit Karma to check your credit score to see if things are improving. Getting more than one card and putting a small charge (Netflix, gym membership) on each one will boost your credit score because it will show a history of on-time payments. We wrote an article on credit scores with some additional information. 3. How do on-going payments work in an index fund? Inflation is usually 2-3% and no savings account offers anything close to that. Through investing, over time, you can expect returns around 7%. Make a deposit into your investment account every month and let it ride. 4. My wife and I are looking to enter the property market. After doing so, we’ll still have $20,000-$40,000 left over. How do we stay ahead of inflation? Betterment and Vanguard have great returns. If you don’t need your money to be liquid, Lending Club is a great investment. It’s not for everyone but it’s worth looking into. If you’re more conservative, stick with Betterment. 5. We are considering refinancing through SoFi. Our rate could fluctuate up but the term would be reduced. Is this the right move? It’s more than likely that interest rates will go up in 2015. By re-financing now, you’ll pay less and pay the loan off more quickly. Thanks for the questions everyone. Keep sending them in. Show Notes Betterment: The smart way to invest. Flying Fish Red Fish: A hoppy red ale. LMM Toolbox: Some credit cards we recommend. Learn more about your ad choices. Visit megaphone.fm/adchoices

Ever feel that you’re just kind of stuck, just total complacency? Grant Peelle made a documentary about people who felt that way and did something about it. Grant Peelle is a documentary filmmaker. His film I’m Fine, Thanks documented the lives of people who got fed up with being in a rut and what they did to change it. Grant found himself feeling complacent. Life wasn’t terrible, he didn’t hate his job. But something was missing. Life was routine, filled with consumption. He longed to do a film. The idea for the film was hashed out in a weekend. They raised private money before doing a Kick Starter campaign once some footage was filmed. The theme of the film is why do we trade our dreams for a scripted life? Grant interviewed people who broke free from that and people who were still immersed in that life but working on breaking out. It doesn’t explain how, it explains why. That’s the nature of the story Grant wanted to tell. The biggest lesson from the film is that you’re not alone in your fear. Many of us feel a vague dissatisfaction but we’re afraid to make the leap into the unknown. But there is a whole community of people who share your fear, did it anyway and can help smooth your path. Whatever you want to do, the internet has a community for you. If Bronies can find each other, people who want to quit their 9-5 can too. I’m Fine, Thanks is an extraordinary film. If you need a bit of uplifting or a bit of encouragement, this is the film for you. Show Notes I’m Fine, Thanks: Grant’s documentary about complacency and what to do about it. #Standwithme: Grant’s documentary about knowing where your products come from. LMM Financial Rant Hotline: Call 856-818-3738 and rant about anything finance related. Texas 4000: Help us beat Stacking Benjamins and help a good cause. Betterment: The easy way to invest. Learn more about your ad choices. Visit megaphone.fm/adchoices

In honor of Veteran’s Day we join other podcasts in giving voice to Veterans. Matt’s friend Ryan Carlson joins us to share his story. Ryan joined the Air Force immediately after high school. He was in college and then his entire base was activated after 9/11. The base had jets in the air nearly 24/7 for almost a year. Ryan graduated in 2005, the same year his enlistment was up. He entered the private sector and didn’t like it so re-enlisted for six more years. He worked as an avionics technician until 2012 and then was commissioned as an officer. He spent time in Qatar and Iraq. Ryan was considered a veteran even before going to Iraq because he served during 9/11 when the country was at war. Ryan is currently a component maintenance flight officer in charge. His job is to deliver ready to deploy jets to the pilots. He also sets up teams to work on disaster relief. They worked on Hurricane Sandy. He will also shortly begin training on preventing sexual assault in the military. Personal finance in the military is a little different than in the private sector which we discussed in Episode 63. Ryan was lucky. Unlike a lot of young people, his parents taught him about money from a young age. He’s the friend who tried unsuccessfully to convince Matt to use a spread sheet. Ryan has a side hustle (wrote that to annoy Matt) with Amazon. He ships product to Amazon warehouses and when the item is ordered, Amazon handles the shipping. It’s more expensive than selling direct but it’s less hassle. Ryan uses Betterment to invest the money he makes from Amazon. His allocation is conservative, 35% stocks and 65% bonds. Thank you to all of the military personnel, past and present, for their service. Show Notes River Horse Belgian Freeze: A Belgian style ale. Flying Fish Oktoberfish: An homage to German Octoberfest beers. Voices for Vets: A collection of podcasts giving voice to the stories of veterans on 11/11. Lancaster Brewing Baked Pumpkin Ale: Just like pumpkin pie. Betterment: Start investing today. Learn more about your ad choices. Visit megaphone.fm/adchoices

Identity theft can wreck your life and your credit. Security expert Robert Siciliano joins us to discuss how to protect sensitive information. There are two main types of financial identity theft: new account fraud and account take over. New account fraud is when someone gets your social security number and starts opening new lines of credit in your name, credit cards, even car loans. You start getting calls from collection agencies wanting their money. Account takeover is the most common form of ID theft. This is when someone hacks your bank account or gets your credit card number. New account fraud is easier to prevent. Making sure your devices are protected from spyware and being careful where you give out personal information will go a long way in preventing it. Account takeover is harder to avoid. Every time you hand over your credit card to pay for something, it can be stolen. The best thing to do is to monitor your bank and credit card statements for unauthorized transactions. There are new technologies coming that can help prevent ID theft. Chip and pin are long overdue in the States. It’s been standard in Europe for years. We will get it in October 2015. The magnetic strips will be replaced by the chip and pin which are harder to hack because the chipped data is encrypted. NFC technology is in the offing too. This is tap and pay or wave and pay technology. Apple Pay uses NFC. The best way to stay safe is to use multiple layers of protection. Use Mint, check your statements, some banks and credit card companies allow you to set your alerts to be notified of every transaction. Amex is the gold standard for this. You have sixty days to refute a charge on a credit card. You have two days to refute a fraudulent debit card charge. This is why we advocate always using a credit card rather than a debit card. If you use Cloud storage, Robert recommends mulit-factor authentication. Otherwise, all your naked pics will end up on Reddit, The Fappening II. Are you willing to risk it? Don’t use one password for more than one account. I know this is a pain in the ass but sorting out ID theft is worse. At least don’t do it for anything connected to your finances. Get a credit freeze. It locks down your credit report. In order to “thaw” your report, for legitimate applications for credit and loans you’ll receive a one time PIN. I’ve had both my checking account and a credit card hacked and it is annoying to have to sort out so get your security measures in place now. Show Notes ID Theft Security: Robert’s site that will teach you how to safeguard your private details. Mint: Alerts you to unusual activity on your account. Best ID Theft Companys: ID protection companies ranked. LMM Financial Rant Hotline: Call 856-818-3738 and rant about anything finance related. Learn more about your ad choices. Visit megaphone.fm/adchoices

Being charitable is important but when you’re minding your money it isn’t as simple as writing a big check. But you don’t have to give money to contribute. A lot of people start to think about the best way to give around the holidays. But with so many demands on your money this time of year, how can you best give back to your community and the world around you without going broke? When you’re a kid being charitable is set up for you. Through the Boy or Girl Scouts, through your school, through your church if your parents dragged you. And it didn’t cost you anything. You did good deeds, donated your time, or collected things like clothes or food for others. When you’re an adult, it can fall by the way side. Demands on your time and money mean that charity takes a back seat. But there are small ways to help. A lot of stores will give you the option to add some extra money onto your purchase for charity. Pet Smart does this and it gets me every time. Puppies and kitties! A lot of people get involved in a charity because of a tragedy or near tragedy close to them. Matt filmed a series of videos for Learn 2 Swim on pool safety for children after a child in his family nearly drowned. It didn’t cost him money. He donated his time and expertise which can be more valuable than money. Please be selective when choosing a charity to give your time and money to. Don’t just default to the big name charity. Do a bit of googling on Susan Komen and you’ll realize they don’t deserve a cent of your money or your time. Give Well is an excellent resource that vets charities. Sometimes the best reason to give to charity is because you are pissed off. When Tim Tebow’s mother did an anti-choice ad that aired during the Super Bowl, I made a nice, fat donation to Planned Parenthood in her name. Yes, donating time to charity is a great way to score! Someone who is generous with their time may be generous with their other talents too. Ulterior motives still help the charity and you get some. Win win. And please remember, charities are inundated around the holidays but people need help and money all year round. We know each of you have unique skills and talents that any charity would be thrilled to take advantage of. Show Notes Betterment: Invest now so you have more to give. Charity Navigator: Another site to vet charities. Donors Choose: A charity for school children. Texas 4000: Help us beat the Stacking Benjamins audience and help a good cause. Ted Talk Michael Norton: How to buys happiness through charity. Learn more about your ad choices. Visit megaphone.fm/adchoices

We thought we would share all the things that teach us, help us, and make us more productive throughout the day. The best of the best curated for you. Not all of these are money related and they are all new ones that we’ve discovered since we covered this topic in the early days of LMM. Podcasts APM Market Place: A quick summary of the day’s financial markets and big stories. How To Start A Startup: From Stanford University. Hard Core History: Epic history podcast. Money for the Rest of Us: From our past guest J David Stein! Ted Radio Hour: Portable Ted Talks. Freakonomics: All the money topics you never thought to ask about. Fizzle: How to build your own side business. Smart Passive Income: Pat Flynn’s podcast. Nerdist: A podcast about things and stuff. Tim Ferris: From The Four Hour author. Extra Pack of Peanuts: Past guest Travis Sherry’s travel podcast. The College Info Geek Podcast: From our frequent contributor Thomas Frank. Blogs and Books Brain Pickings: Well curated articles for the creative and curious. QZ: Data driven news. Oliver Emberton: Oliver writes about life and how to better it. How To Win Any Argument: Great for married people but useful for anyone who deals with people. Which I guess is all of us except the hermits. Good To Great: How some companies make the leap while others don’t. The War of Art: How to fight your inner resistance to getting things done. Steal Like an Artist: About creativity. ... Learn more about your ad choices. Visit megaphone.fm/adchoices

Minimalism can be defined many ways. We’ll talk to Joel Zaslofsky about how to become a minimalist. He has embraced the lifestyle to learn why and how it has improved his life. What is a minimalist? Joel defines it as embracing what is important to you and stripping away the excess. He began down the path of minimalism five years ago when he and his wife were expecting their first child. Prior to that, he was following the prescribed American path, college, wife, house, dog, kid. Having a child was the kick in the ass he needed. Joel wanted to be a good father and knew some of the extraneous things in his life needed to go in order to do that. It’s not just stuff that needs to go. Toxic relationships need to be jettisoned too. Or just those that have become perfunctory. Joel started hard core and video games were the first thing to go. I’m not sure if I recommend this. I’ve seen you pasty video game players walk into the sunlight and it’s scary for you and us too. Tread carefully. Sugar was second and I do endorse this. Life improves 100% after this change based on the highly scientific study I just conducted. If you like that stat, look into Paleo which Matt and I both hardily endorse. Simplifies things to an incredible degree. He also recommends meditation and yoga. I’ve failed on both those fronts, I’m too wriggly. If you embrace minimalism even in just a few areas of your life, you will see an improvement in your finances. Less stuff equals more money. Joel’s advice is to not focus on what you’re giving up but what you will gain. Time, money, peace. All of which are more important and more fulfilling than stuff. Show Notes Ommegang BPA: A Belgian style pale ale. Flying Fish Hop Fish: A hoppy red ale. All My Money: The LMM rap video. Value of Simple: Liberate your time, money and talent. Smart and Simple Matters Podcast: Find freedom from stuff and live intentionally. SimpleRev: Workshops on simple living. Becoming Minimalist: Celebrating simplicity. Betterment: Stash the money you’re saving here. Learn more about your ad choices. Visit megaphone.fm/adchoices

Opportunity cost sounds ominous. Like you are really going to be missing out or possibly making a big mistake if you choose wrong. Without realizing it, we make minor decisions in our lifestyle choices that involve calculating opportunity cost. Opportunity cost is basically considering what you can’t do as the result of each possible decision you make. Don’t worry. We are here to teach you how to calculate opportunity cost and how it works so you always make the best decisions. Our professor on the show today is Dan Egan from Betterment and he’s drinking beer brewed at Betterment! What is Opportunity Cost? Opportunity cost is what you give up when you choose between options. No matter what we choose, there is a next best choice that we give up or an opportunity forgone, that is the opportunity cost. We want to minimize our opportunity cost by choosing the option that benefits the most. Considering that almost every decision you make has a potentially beneficial alternative, you will never be able to eliminate opportunity cost entirely. The important thing is not to brood over “what ifs” and “should haves”. Rather be pragmatic and responsible each time you are decision making. “One of the most important concepts of economics is ‘opportunity cost’ – the idea that once you spend your money on something, you can’t spend it again on something else.” Malcolm Turnbull Decision making typically involves constraints such as time, resources and rules – risk vs reward, cost vs quality, salary vs quality of life. Opportunity cost is considering what you can’t do as the result of each possible decision. Opportunity Cost = Return of Most Lucrative Option – Return of Chosen Option Scarcity We have to weigh opportunity costs because of scarcity. Scarcity means limited resources. All of our resources, time, money, effort, are not infinite and could be used in a variety of ways. You may be able to allocate the time you spend earning a new certification or degree into advancing within your current position, for example. In this situation, you would have to decide what the most valuable allotment of your time is and what would have the greatest potential for the greater return on your chosen investment. So we have to carefully consider our decisions to make sure what we are gaining by making one choice over another is more valuable than what we are foregoing. Simple Examples of Opportunity Cost Even simply deciding where you want to eat comes with unavoidable missed opportunities. You want to go out to dinner. You decide to go to the French place over the Italian place. The enjoyment of an Italian meal is the opportunity cost of that decision. Although you might thoroughly enjoy your meal at the French restaurant, even more so than you would have at the Italian place, you will still have missed out on the good food and enjoyable experience. And the baguettes. Oh, the baguettes! Opportunity cost can apply to your everyday purchases, as well. You want Netflix for the month and a new book. You don’t have money for both. You choose the book. Watching Netflix is the opportunity cost. Investing Examples Of course, there are situations where the opportunity cost of a decision is much higher than eating steak tartar instead of pasta. Choosing an investment vehicle is one area where opportunity costs must be more carefully considered. Any time you invest your money in the stock market, there are certain trade-offs that you must expect. Learn more about your ad choices. Visit megaphone.fm/adchoices

It’s time for five listener questions. Today we talk about life insurance, budgeting, and buying a home. 1. What do you guys know about life insurance? Not everyone needs it but if you have someone who depends on your financially, then you should have it. Term is the best option. If you can get it through your employer, take it. We did a deep dive on this subject in Episode 140. 2. When accounting for expenses like travel, do you mark it when you decide to spend the money or once it’s actually spent? Mark it when you spend the money, so it you buy the plane ticket now but the trip is in January, it counts for November’s budget. 3. You should buy when stocks are low. Are you still feeding money into Betterment while the market is down? Yes, absolutely. Buy fear, things are never as bad as they seem. As a new investor, stay the course. I know it’s hard to not keep checking the numbers but just let it ride. 4. What’s the smartest thing to do with a windfall? Because that money will push you into a higher tax bracket, start a solo 401k or a Roth IRA. We’ll look the other way if you still decide to spend a small portion on video games and flesh lights. 5. We are a couple in our mid twenties. Is there an ideal time to buy a home? If you’re going to buy a home, it should be bigger, better, and cheaper than the place you’re renting. But you’re young, go travel a little before you think about buying a home. Don’t rush buying a home. Ask Matt what happens when you rush it. We have been getting a lot of good feed back on the five questions episodes. Keep sending in questions and we’ll keep answering them. Show Notes Introverts Should Lay Off the Coffee: I would never but here’s the article. Betterment: Now is a great time to jump in. Featured Image Photo Credit: “Question Box” by Raymond Bryson on Flickr Learn more about your ad choices. Visit megaphone.fm/adchoices

You’re investing, great! Now we can take it a step further and learn how to optimize your taxes while investing. Larry Ludwig will explain the best tax efficient investing practices. The tax man gets enough of your hard earned bucks. Larry Ludwig from The Money Tree Investing Podcast will teach us how to optimize our investments for the biggest tax benefit. Larry recommends eight steps to maximize your tax savings: 1. 401k up to your employer’s match. 2. Traditional IRA 3. 401k post match. 4. Roth IRA 5. 529 Savings Account if you plan to send a child or yourself to college. 6. US I Savings Bonds, low yield but a good place to keep some emergency cash. 7. MLP and Muni Bonds for higher net worth, more sophisticated investors. 8. Taxable and Non Taxable Accounts, depending on your goal, buying a house, getting ready to retire, create a balance between taxable and tax deferred investments. If you’re looking for the most simple option, funnel money into a Roth IRA. If you are self employed, start a solo or SEP 401k. All the more reason to start your own business. It gives you so many more investing options than when you work for the man. Tax forms will be going out in a few months so you still have some time to get that money into an account that will give you the most tax shelter. Don’t overdo it though. You can have so much in tax deferred accounts that you don’t have anything liquid for an emergency. Show Notes Tax Efficient Investing: Here’s a link to Larry’s post that outlines all the concepts talked about on the episode. The Money Tree Investing Podcast: A weekly interview podcast devoted to personal finance. Betterment: Sign up today for six months free investing. HSA Accounts: Explanations about age restriction. Learn more about your ad choices. Visit megaphone.fm/adchoices