Today we are talking about payday loans or what some new fin-tech companies are now calling “early wage access”. These companies seem to be disguising predatory lending with shiny new apps geared towards millennials making it even easier to get a payday loan. Learn more about your ad choices. Visit megaphone.fm/adchoices

Today is we are talking about the Rule of 55. We’ve gotten quite a few listeners who have asked us to cover this so today we wanted to explain exactly what it is and how it works.  The Rule of 55 isn’t the only way to access your 401k early so, were also talking about other ways to tap into your 401k and what would be the right reasons to take advantage of these early distributions Learn more about your ad choices. Visit megaphone.fm/adchoices

Ray Dalio recently published an essay called “The World Has Gone Mad and the System is Broken”. When looking at the current state of the global economy he said: “This set of circumstances is unsustainable and certainly can no longer be pushed as it has been pushed since 2008. That is why I believe the world is approaching a big paradigm shift.” Besides being a huge fan of Ray’s, we think his essay does a great job of explaining the major forces at play in the global economy and we found it fascinating so I wanted to discuss and share with everyone. Here are the four reasons Ray believes “The World has Gone Mad and the System is Broken” Show Notes The World has Gone Mad and the System is Broken The Golden Butterfly Betterment Everyday Learn more about your ad choices. Visit megaphone.fm/adchoices

Mr Money Mustache didn't retire because he was making so much money from his blog. He had actually been retired for six years before he started writing. The blog was born when he looked around at his friends who had good jobs but were still living paycheck to paycheck. They bought into what has long been sold as the American Dream; go to college, get a job, buy a house, fill that house with as much stuff as it can hold (and when it can't hold anymore, rent a storage unit), have some kids, and get stuck in an unfulfilling job, dreaming of freedom that will always be out of reach. Retire, maybe at 65 if you're lucky, and live out your days, just kind of existing, hoping your money will outlast you. The best years of your life long past. But what if you could be retired by thirty? MMM started the blog out of frustration, he wanted to show them, and now us, that they could do what he did. And an empire started. Original Broadcast Date September 8, 2014  Full Article Here Show Notes Mr Money Mustache: Everything you need to know to retire early. The 4 Pillars of Investing: A book that helped MMM get his start. Betterment:  Start investing your 50% today. Learn more about your ad choices. Visit megaphone.fm/adchoices

The biggest expenses in life are taxes and interest. If we can minimize those two things, we will put much more money in our own pockets and add many more years to our retirements. Our guest, the Mad Fientist delves deep into advanced IRA strategies. Find out why you should have one and which one will best fit your needs. Original Broadcast July 22, 2014  Full Article Here Show Notes The Mad Fientist: Brandon's website and podcast. Betterment: Our favorite investing tool. Use this link and get six months with no fees! Learn more about your ad choices. Visit megaphone.fm/adchoices

Laurel Staples joins us to teach us how to forget the American dream and talk about her journey becoming an entrepreneur. Start living our own dreams on our own terms. In 2007 Laurel quit her job as a mechanical engineer to launch her popular blog, Go Fire Yourself. In January she will publish her book about how to quit your day job and run your own business. Original Broadcast Date August 18, 2014 Full Article Here Show Notes Smuttynose Bouncy House IPA: an all-occasion American ale. Martini: made with Blue Coat gin and vermouth. Learn more about your ad choices. Visit megaphone.fm/adchoices

It’s almost Halloween and nothing is more frightening than money horror stories. Close the blinds, turn off the lights, light a candle and prepare to be scared. Matt and Andrew haven’t always been smart with money, well Andrew mostly has. But even they have finance horror stories and will share them with us. This episode was first published on October 31 2014 Show Notes Hopfish IPA: An English style IPA. The Bowery Boys Haunted Brooklyn: Here’s a special Halloween treat. One of my favorite podcasts. If you like history or just scary stories, check out the Bowery Boys annual Halloween podcast devoted to ghost stories of Brooklyn. Learn more about your ad choices. Visit megaphone.fm/adchoices

For most people, their home is their most significant investment. As such, you not only want to protect your investment but increasing a property's value is important too. The right home improvements can do it.  Doubling your property’s value might be a little too ambitious for anyone who isn’t a professional real estate flipper or property developer, but some money spent in the right places will improve your property’s value. Full Article Here Show Notes Oak and Orchard :A sour from Epic Brewing. Hammertime Porter: A name Andrew and Matt made up in the absence of the actual name! Simple Wealth:A tool Andrew built to help compare rental properties.  Learn more about your ad choices. Visit megaphone.fm/adchoices

It's time for 5 questions about debt forgiveness, credit scores, and more Golden Butterfly. We got a ton of great questions lately, and the Golden Butterfly episode generated a lot of interest, so we wanted to dive a little deeper. We've been doing 5 questions episodes more regularly because we get so many great questions so keep sending them in! Full Article Here Show Notes Imperial Doughnut Break: Evil Twin Brewing. Canvas:Outer Range Brewing Company Learn more about your ad choices. Visit megaphone.fm/adchoices

Today we have guest David Burkus on the show. He is a best-selling author, a sought-after speaker, and business school professor. His newest book, Friend of a Friend, offers readers a new perspective on how to grow their networks and build key connections—one based on the science of human behavior, not rote networking advice. We talk to him about salary transparency and using a network to grow your career and make more money. Show Notes: Friend of a Friend David's Website Philoso-Rapper Beer Learn more about your ad choices. Visit megaphone.fm/adchoices

Unfortunately, there are quite a bit of predatory financial schemes out there including pyramid schemes, sold debt, predatory lending, eve your financial advisor. In this episode, we’re going to try and shine a lite on them so in the very least you can approach them “eyes wide open”. Show Notes: Heaven Hell or Hoboken from 902 Brewing Co - IPA Beer Avery Promiscuous - Barrel aged Sour Beer The Financial Gym- Put your assets to work Learn more about your ad choices. Visit megaphone.fm/adchoices

There are dozens and dozens of figures and formulas around anything related to investing but some of us (me) are math deficient and even if we are math savants. Sitting around calculating things before making any investment decisions is the total opposite our LMM’s Set It And Forget It philosophy. So if you have these few back pocket rules in mind, the mathematics of investing will be less mysterious. We know math is hard, but the mathematics of money are really straightforward and can help you make better financial decisions. Full Article Here Show Notes River Horse Tripel Horse:A Belgian Style Tripel Ale. WeldWerks Brambleberry Sour:A wheat ale. Join the Listen Money Matters Community on Facebook by visiting listenmoneymatters.com/community to send in new catchphrases for the show. And if you have any questions or topics you’d like us to talk about, email us at [email protected]. All the tools and resources we usually mention on the show are available at listenmoneymatters.com/toolbox. Ahrefs is the secret to LMM’s success. They cover every aspect of SEO. If you want to start a blog or improve traffic to an existing one, this is the tool. You can win a free Lite annual subscription by tweeting @ahrefs and @MoneyMattersMan and telling us why you should be our winner. Learn more about your ad choices. Visit megaphone.fm/adchoices

If you’re interested in personal finance, you know who Suze Orman is. She has written nine best-selling books, is a financial advisor, a speaker, and a television and podcast host. Suze’s book Women & Money addresses some of the financial issues that are unique to women. Full Article Here Show Notes Schlafly India Pale Lager: A clean, malty lager. Brunch: Matt’s homebrew Be Good or Be Gone:Suze sold out the legendary Appollo theater. The event was filmed. You can catch Suze Orman: Women & Money October 1 on the OWN Network. Ahrefs is the secret to LMM’s success. They cover every aspect of SEO. If you want to start a blog or improve traffic to an existing one, this is the tool. You can win a free Lite annual subscription by tweeting @ahrefs and @MoneyMattersMan and telling us why you should be our winner. Join the Listen Money Matters Community on Facebook by visiting listenmoneymatters.com/community to send in new catchphrases for the show. Learn more about your ad choices. Visit megaphone.fm/adchoices

In fact, 2018 has been a record year for stock buybacks. By the end of the year, companies are predicted to have spent $1 trillion on buybacks. So why are so many buybacks happening now? The GOP tax cuts. The economy is doing well, and a lot of companies have a surplus of cash and don’t want to sit on it because it puts them at risk of being bought and it pisses off shareholders who want that money returned to them in either dividends or an increase in stock value. So what the f**k are stock buybacks exactly and what do they mean for you? Full Article Here Show Notes Schlafly Proper Cider: A raspberry hard cider. WeldWerks Conflict Resolution:An 8.2 ABC sour IPA. Thank you to our sponsor: Ahrefs Ahrefs is the secret to LMM’s success. They cover every aspect of SEO. If you want to start a blog or improve traffic to an existing one, this is the tool. You can win a free Lite annual subscription by tweeting @ahrefs and @MoneyMattersMan and telling us why you should be our winner. Learn more about your ad choices. Visit megaphone.fm/adchoices

Traveling is one of life's great pleasures, and it can be done for less money than you think. Especially if you have the right travel rewards cards and know how to use them. You can certainly go down a rabbit hole of ways to earn and maximize points. But realistically most of us don't have the time or patience for that. These are travel hacking tips that anyone can do. Anyone who pays off their credit cards in full every month. Full Article Here Show Notes Schlafly Local Oak:An ale aged in Missouri white oak tanks. Schlafly India Pale Lager:Tangerine and citrus flavors combined with a malty profile. Ahrefs is the secret to LMM's success. They cover every aspect of SEO. If you want to start a blog or improve traffic to an existing one, this is the tool. You can win a free Lite annual subscription by tweeting @ahrefs and @MoneyMattersMan and telling us why you should be our win. Learn more about your ad choices. Visit megaphone.fm/adchoices

What if we were to value other things in our lives in the same way or even more than we value money? Imagine if it weren’t about money? What if we viewed money for its actual intent, survival?Money is essential, but it shouldn’t consume your thoughts or your life. We should live with money, not for money. This is a podcast about money, but we also believe that money shouldn’t be the most important thing in your life. We have to live with money, but there is more to life than accumulating as much money as you can. Full Article Here Show Notes Bitches Brew: An American Double/Imperial Stout by Dogfish Head. Fat Lama: Borrow almost anything. Learn more about your ad choices. Visit megaphone.fm/adchoices

We’re Listen Money Matters, but we’ve never discussed money. Get ready to holla. Dolla dolla bills y’all: The history and evolution of cash. Societies haven’t always used cash to transact business. The evolution of cash is pretty fascinating. Money is around 3,000 years old. Before that, societies bartered. I make candles. You make shoes. I need shoes, and you need candles. I give you some candles, and you give me some shoes. This isn’t a great system though. How many candles are the shoes worth? What if I need shoes, but you don’t need candles? There needed to be a better system. Full Article Here Show Notes Stillwater Artisinal Recess: Dry hopped sour ale. Pod Recommendation:50 Things That Made the Modern Economy LMM Community: Join your fellow money nerds!   Learn more about your ad choices. Visit megaphone.fm/adchoices

We all make mistakes, but financial mistakes can be especially costly. These are the biggest financial mistakes people make and how to fix them. There are some mistakes you can’t fix, but financial mistakes usually don’t fall into that category. It’s not always easy, but most financial mistakes can be rectified. Joy Liu from The Financial Gym is here to tell us about the biggest financial mistakes she helps her clients fix. Full Article Here Show Notes Tool Box: All the best stuff we use to manage our money. The Financial Gym:A personal trainer for your money! Learn more about your ad choices. Visit megaphone.fm/adchoices

You’ve probably heard the term but might not know what it means. What is an IPO? IPO stands for initial public offering and sometimes called “going public”. It’s the first time a company sells stock to the public. Before an IPO, a company is private with a few shareholders, typically the founders and sometimes professional investors. There have been so big IPOs in the last decade. Some killed it, and some landed with a thud. We’ll explain what an IPO is and whether or not you should invest in one. We’ll explain how they work and whether you should invest in one. Full Article Here Show Notes Siracha Hot Stout:  A chile beer brewed by Rogue Ales. Learn more about your ad choices. Visit megaphone.fm/adchoices

The worst has happened. Whether their fault, your fault or nobodies fault, you lost your job. We don’t want to make a bad situation even worse by making big financial mistakes. This is what to do after a job loss so you can stay or get back on your feet quickly. We have all probably suffered a job loss at some point so we know how scary it can be. But there are lots of things you can do to mitigate the damage.   Full Article Here Show Notes Blunderbuss Barleywine Ale: Aged in oak barrels. Toolbox: All the best stuff to manage your money. Learn more about your ad choices. Visit megaphone.fm/adchoices

There is nothing more nerve-wracking than a job interview. All those questions and always the dreaded, “Where do you see yourself in five years?” Today we’ll have you navigate the minefield that is a job interview. As we have discussed in our future of work episode, the face of employment is changing. More than ever we need to be able to stand apart from the competition. One important way to do that is to improve your interview skills. Full Article Here Show Notes Export Stout Tool Box: All the best stuff to manage your money. Learn more about your ad choices. Visit megaphone.fm/adchoices

Data breaches have been in the news recently, and the headlines are scary. Today Farnoosh Torabi joins us to discuss protecting yourself from credit card fraud and identity theft. Farnoosh Torabi of the So Money podcast is the Chase Slate Financial Ambassador. She can give us the insider’s scoop on how to protect our data and our credit scores from fraudsters and even ourselves. Full Article Here Show Notes Grimm Artisanal Ales: A dry hopped sour ale. Tool Box: All the best stuff to manage your money. Simple Wealth: Research and evaluate rental properties. Learn more about your ad choices. Visit megaphone.fm/adchoices

Money has been around for thousands of years and now there is a new form of money on the scene. A cryptocurrency is a form of digital money. It uses cryptography to create secure, digital transactions that are in theory, anonymous. That’s why it’s the preferred medium of payment when buying illegal things like drugs on the dark web. BitCoin was the first cryptocurrency, created in 2009 and is the most well-known. But, what even is cryptocurrency? This episode is the newbie’s guide to the cryptocurrency market. Full Article Here Show Notes Tool Box: All the best stuff to manage your money. Simple Wealth: Research and evaluate rental properties.  Learn more about your ad choices. Visit megaphone.fm/adchoices

Allison Karrels has been investing in rental properties for several years. She currently owns nine properties so she has a lot of experience. With all the things That could go wrong with rental properties, Allison has only had two major repairs over the years, neither of which were surprises which is pretty amazing. She does a lot of research on exactly what she wants. It wasn't always that way. Today she shares her lessons learned investing in rental properties.   Full Article Here Show Notes Ghost Pepper: An imperial stout. Tool Box: All the best stuff to manage your money. Simple Wealth: Research and evaluate rental properties. Learn more about your ad choices. Visit megaphone.fm/adchoices

For many Americans, their 401k’s are their primary or maybe only, retirement account so we need to get the most value we can from them. We’re joined by a previous guest. Chris Costello joins us to talk about how to retire happy when you optimize your 401K account with Blooom. Blooom helps people manage their 401k’s. Once upon a time, only people with serious money had access to financial advice but technology has made investing and financial services more democratic and available to a much larger pool of people. Full Article Here Show Notes Voodoo Ranger Atomic Pumpkin:A seasonal beer packed with pumpkin, Saigon Cinnamon, and Habanero peppers. Blooom: See how healthy your 401k is today. Linkedin: Get in touch with Chris Learn more about your ad choices. Visit megaphone.fm/adchoices

The Oracle of Omaha is a font of wisdom. He is perhaps the most successful investor in history. So he knows a lot of lessons we can all benefit from. Here are 22 life-changing lessons from Warren Buffett. Whether you want some words of wisdom on investing or how not to be a better person, there are Warren Buffett quotes to guide you. Learn more about your ad choices. Visit megaphone.fm/adchoices

Sometimes we get awesome questions from our listeners and we like to do an episode around them. Today we have five awesome questions from you about 401k loans, side hustles, student loan interest rates, buying a home and early retirement. Full Article Here Learn more about your ad choices. Visit megaphone.fm/adchoices

Money is almost as taboo a subject as sex and arguably, just as important in a relationship. But too few people bring it up. Today we are getting financially naked with the Broke Millennial.  How to talk about money, with yourself, your partner, your friends, and your parents. Full Article Here Show Notes Elliott Ness Lager: An amber lager from Great Lakes Brewing Company. Broke Millennial:Get your financial life together. Broke Millennial: Stop Scraping By and Get Your Financial Life Together: Erin's new book. Learn more about your ad choices. Visit megaphone.fm/adchoices

Do you hate making a decision? Sometimes the fear of making a decision means we miss out on a good opportunity.  We make dozens of decisions every day. Some of them are minor like what to wear to work, and some are major like deciding between buying a rental property or a house to live in. When you learn to master the decision-making process you can improve every aspect of your life, your job, your health, your relationships and not least of all, your finances. Today we will get you off the fence and show you how to master the decision making process with Matt Bodnar. Full Article Here Show Notes Riverhorse Tripel Horse: A Belgian style ale brewed with spices. The Science of Success: Get the guide to making better decisions. The Science of Success Podcast: Unleash your human potential. Mindset: The book that changed Matt's life by Carol Dweck. Seeking Wisdom:Peter Bevelin Poor Charlie's Almanack: Peter D. Kaufman and Ed Wexler Predictably Irrational: Dan Ariely Influence: Robert Cialdini Thinking Fast and Slow: Daniel Kahneman   Learn more about your ad choices. Visit megaphone.fm/adchoices

A business plan can be a scary term conjuring images of thirty-page documents. But it doesn't have to be that involved. It's just writing down what you have to get done and a simple one page business plan is a great place to start.A simple one page business plan is nothing more than a map for your business that gives an outline of your goals and the steps you will take to achieve those goals. It’s not that different from having a plan to accomplish any goal. We'll discuss creating a simple one-page business plan. Full Article Here Show Notes LMM Tool Box: All the things we use to manage money.   Learn more about your ad choices. Visit megaphone.fm/adchoices

If you want to start a business what kind do you want it to be? There are two competing business philosophies: lifestyle business vs. growth-minded business. A lifestyle business isn’t intended to make the owner tons of money. The goal of a lifestyle business is to make enough money to be comfortable while having freedom and a good work-life balance while doing work that you enjoy. Many lifestyle businesses were started based on the owner’s particular hobby or passion and represent their personal values. When you think of the startup world, you typically think of founders who are working like mad to grow their companies as fast as possible. Often, the founder or founders will get their company to the point where there’s enough promise to attract funding. And at that point, you’ve got investors who now want to see an ROI – and in the startup game, they’re not looking for a modest ROI, they’re looking for “to-the-moon” businesses. This is the growth-minded business model. Whichever type of business appeals to you, starting and building one puts you on a different plane than the great majority of people. Most people spend their entire lives working for someone else, making someone else money. Starting your own business can give you more choice, freedom, and independence than your average 9-5'er can ever dream of. And we think that makes it all worth the effort. Full Article Here Show Notes Apex Predator: A farmhouse ale from Off Color Brewing. LMM Financial Toolbox: The tools we use to manage our money. LMM Pro: Research, evaluate, and track rental properties. Learn more about your ad choices. Visit megaphone.fm/adchoices

On This Financial Life episode, the guys chat with Brian, a long time fan of the show. They talk about his finances, mortgage, and debt over a cold one.   Here’s the scoop. He and his wife are new first-time home buyers and live in the Philly area. They didn’t have the best living situation, so it pushed them to aggressively to save for a home and drastically cut spending. They didn’t have the easiest time of finding a home.   The first house they put a bid on majorly failed the inspection and they were looking at 10-20k worth of repairs. No bueno. They finally ended up finding a place they loved, but the price was a lot higher. After doing the math, they decided they could afford the house and used an FHA loan to pay for it. Full Article Here Show Notes: Andrews Beer: Mac Fanny Baw Bourbon Barrel Aged Smoked Ale from Against the Grain Brewery.   Learn more about your ad choices. Visit megaphone.fm/adchoices

Finding the perfect job is a daunting task. You send out tons of resumes, create custom cover letters, go on interviews, anxiously wait for a call and then end up not getting an offer. Rinse and repeat. It can be incredibly frustrating when you send out application after application and don’t hear back anyone. If you have been searching for a new job for some time, it might be time to step up your game. Today the guys talk to Mark Fiebert (Andrews dad) and pick his brain on how to land a job. After years of experience being on both ends of the hiring process, Mark has some great incites on how to get your foot in the door, nailing your interview and making connections. Learn more about your ad choices. Visit megaphone.fm/adchoices

Holiday spending hangovers make January a debt month for some of us so we are bringing you five questions on how to deal with debt. Learn more about your ad choices. Visit megaphone.fm/adchoices

If you currently have debt there are ways to make it less expensive. Today we will discuss why you should refinance your debt.   Learn more about your ad choices. Visit megaphone.fm/adchoices

There are a lot of things that deserve your energy but paying off debt isn’t one of them. If you have debt, it can feel hopeless. But you can get out of debt, and it’s easier than you think. We can show you how to be lazy and pay off your debt.  An All-Time Record  If you have debt, you’re not alone. Total household debt—a category that includes mortgages, student loans, and car loans along with credit card and other debt—dipped in the wake of the Great Recession, but it has since steadily rebounded in the years since. Overall, Americans’ debt hit a new high of $13 trillion last year, surpassing the previous record set in 2008 by $280 billion, according to the New York Fed.” Not all debt is the same. Mortgage debt, for instance, is typically low-interest debt and a home can be an investment. It’s the other kinds of debt, credit cards, student loans, that can hinder all of your long-term financial goals. So let’s tackle that kind of debt once and for all, and be lazy while we do it. Paying off debt is a process Paying off debt is a process, and there are several steps. These steps can take a while to accomplish. You didn’t accumulate this debt overnight, and you’re not going to pay it overnight. Face the Music It’s terrifying to sit down and total up just how much debt you’re in, but that is the first step if you want to pay off your debt. Make a list of all of your outstanding debts and the interest rate on each. The best way to see all of your debt is in your Credit Karma account. Not only will you see all of the debts but you’ll be able to see your credit report and credit score too. It’s free to make an account so do that now if you don’t already have one. Go through your credit report and make sure all of the listed debts are legitimate. There are a variety of reasons debts that aren’t your’s can end up on a report. If you find debts that are not your’s, you can dispute them. Consult Your Budget What’s that? Don’t you have a budget? Well, go to Personal Captial and get a good overall picture of your finances and your spending. How much money do you have coming in compared to how much is going out? Do you have any money that isn’t going out? Your budget is going to identify the cash you can use to pay off your debt. You should be dedicating at least 20% of your income to paying off your debt. Once you have a month’s worth of budget data, go through it with a fine-toothed comb. Where are your spending leaks? Saving money is easier than making more money, so if you want to be lazy and pay off your debt, this is the best place to do it, by cutting your budget. Let Trim find and cancel expenses like gym memberships you don’t use and subscription services you can’t afford when you have debt to pay off. Let Billshark negotiate better rates for things like your cable and internet service. Every dollar you save is an extra dollar you have to pay off your debt more quickly. Triage the Damage Are you behind on any payments but not so far behind that... Learn more about your ad choices. Visit megaphone.fm/adchoices

We use credit cards to buy everything these days- groceries, drinks with co-workers, cat beds, gum, sweater vests and all the other things that make us happy.  Then the end of the month rolls around. Your bill comes, and you come to the dreaded realization that you blew your budget once again and your credit card bill is more than you can handle.  It’s happened to the best of us, but it doesn’t have to happen to you anymore. Introducing Debitize, a new way to pay off credit cards on time and responsibly. Today the guys talk to Liran Amrany, the CEO Debitize about how it works and the story behind it’s creation.   You can listen to the episode here: What is Debitize? Liran founded Debitize to help simplify, optimize, and automate personal finances, especially around credit card spending where he witnessed a significant need. Two-thirds of Millennials avoid using credit cards mostly because they have seen debt negatively affect friends and family. However, building credit is important, and Liran wanted to create a tool to help people use credit responsibly. Before founding the company, he was an Executive Director at JPMorgan, where he spent nine years as a derivatives marketer, focusing on structured credit, exotics, and cross-asset hybrids. After working on the institutional side of finance, he wanted to build something to make a real impact in the financial world and help people avoid credit card debt and better manage their money. How does it work? In a nutshell, Debitize automatically debits your checking account every day to cover your credit card purchases. The funds are temporarily held in your Debitize Reserve Account, and then they automatically pay your balance for you every week. Yes, finally someone who will pay your bills on time for you and in full. Using Debitize is very simple. First, you’ll need to activate your account and link your checking and credit card accounts on the Debitize site. You will do this by logging in with your bank credentials like you would with Mint. Once you’re all set up, you will only use your credit card to make purchases, not your debit card. With Debitize, you get the best of both worlds. You can use your credit card as a debit card while still earning rewards and points credit card companies off. It will help you avoid spending money you don’t have and will keep your finances on track. Debitize will send you a weekly spending summary and confirmations of scheduled payments to keep you in the loop. They will notify you when you have a low balance or if there was a large transaction on one of your cards. Although they encourage you to pay your bills in full to avoid paying interest, if you are making a large purchase that you would like to pay off over time, Debitize will give you the flexibility to do so.     The Benefits Automated Withdrawals If you’re on the fence about using credit and fear getting into debt, Debitize is an excellent way to start building your credit. It acts as a safeguard against overspending. They make automatic withdrawals from your checking every day you make a purchase and set the funds aside to pay off your credit card bill. Don’t worry about Debitize overdrawing your account. You can set up a minimum balance in your checking, so they won’t overdraw your account to make payments. Even if you don’t set up a minimum, they still will not overdraw. Learn more about your ad choices. Visit megaphone.fm/adchoices

For the month of January, Listen Money Matters is getting back to the basics with a month focused on the debt and the importance of credit.  Over the course of the month, the guys will cover the fundamentals of credit, debt reduction plans and talk to an awesome guest about a tool he created to help keep you out of debt.  What is affected by your credit?  Well, everything really. Your credit score is a number that reflects your credit risk level. If you are looking to borrow money for any reason – to purchase a car, get a mortgage or to take out a student loan, your credit score will determine how much that loan will cost you.  If you have a low credit score, you will have a harder time getting a loan, and when you do qualify for a loan, the interest rates will be very high. Compared to people with good credit scores, your monthly payments will be more per month to pay off a loan of the same value. Bottomline, having bad credit will cost you. Having good credit history is not just about being able to buy things. Sometimes your credit history is considered by potential employers. According to the New York Times, 47% of employers check your credit score. Landlords absolutely look at your credit score, and it plays a big part in approving you to rent a home. The cost of insurance rates can be higher if the insurer pulls your credit data to calculate your insurance risk score. Even some utility providers may be required to provide a down payment for service for people with bad credit history. What does good credit get you? A cheaper life. The better your credit history, the cheaper it is to borrow money. When you have large loans like a mortgage or student debt that you will be paying off for years, those interest rate savings could add up to thousands of dollars in the long run. Let’s say your mortgage rate is 4.5%. An increase of only 1% will increase your living costs by 12% per month. On the other hand, a decrease of 1% will decrease your living costs by 12.8% per month. Having an excellent credit score will give you access to better credit cards with awesome rewards and no fees. Sometimes you can even get perks with your bank by upgrading to better accounts without ATM fees or minimum balances. Most importantly, using credit cards protects your cash. If your debit card gets lost, stolen or there is fraud, you can kiss your money goodbye in most cases. When your credit card gets stolen, the credit card companies money is gone, not yours. If you report it immediately, the bank will nine times out of 10 resolves it in your favor pretty quickly. When it comes to protecting your money, it is definitely using credit cards compared with cash, checks or money orders are numerous. Action List * Sign up for CreditKarm.com, Credit.com or both. Find out your credit score and see why your score is what it is. * Get a list of all of your credit card accounts on file and request that each one increase your limit. Call them, do it automatically online, get it done. Don’t be greedy; small incremental increases make a difference. *  Take inventory of all of your debt, their amount and their interest rates. This month we’re creating you a debt reduction plan. * Listen to next week’s episode where a simple, free automation will increase your credit score by over 5%. There can be a lot of emotion around credit and debt but having credit is important. These days, everything in life is tied to it and if used correctly life will be cheaper and easy for you if you have good credit. Understanding the how the credit process works will help you manage it and make it work for you. Learn more about your ad choices. Visit megaphone.fm/adchoices

No one ever said being an entrepreneur was easy, but what a many people don’t know are the psychological struggles like depression and anxiety that also come with it.  Every day, even sometimes every hour, there are ups and downs causing a constant battle of emotions in their mind. Entrepreneurs tend to struggle silently not to show their vulnerability.  Not until lately have entrepreneurs come forward to talk about these struggles, including today’s guest, Sheryl O’Loughlin. She is the former CEO of Clif Bar, CEO of Plum Organics and she is currently CEO of REBBL super herb beverages.  The guys talk to her about her new book Killing It: An Entrepreneur’s Guide to Keeping Your Head Without Losing Your Heart. Entrepreneurs juggle so many roles when building their business. Sheryl knows firsthand how difficult it can be to balance business, family and mental health without one or more pieces falling by the wayside. When she began to struggle with an eating disorder she realized something needed to change. In Killing It, she shares her experiences being an entrepreneur running two fast-growing companies. When in start-up mode, some business owners severely neglect their health which makes them much less resilient. Not eating properly, not getting enough sleep and not exercising will just make the daily stressor harder to deal with. Sheryl wants to mentor and inspire others to invest in their wellbeing. She says without that “Your business will not succeed, nor will you”. Growing a new business can become an obsession for entrepreneurs. Although maintaining meaningful, supportive relationships are crucial, family and friends who are trying to support them ofter times get pushed away. This comes at a huge cost. Many relationships end in a divorce, friendships break down and all that’s left is a feeling of isolation and abandonment. Entrepreneurship can be one of the most rewarding career paths but it isn’t an easy road. In Killing It, Sheryl shares her journey and provides her readers with guiding principles for anyone looking to balance their career, family, and life. Learn more about your ad choices. Visit megaphone.fm/adchoices

Yep, it’s time of the year again for New Years Resolutions to kick-in and for many of us, that means getting your finances in order. Are you financially ready for the new year?  As we slowly approach the new year, it’s a great time to financially prepared for what’s to come. Whether you want to save for a home, get a new job or start a side hustle, you need to financially prepare you and your family. Today the guys review their last year in business and finance and talk about how they are going to prepare for next year.  A Financial Yearly Review  Even though 2016 has come and gone, it is still important to reflection and review of the past year. Start by giving yourself a high five and think about all the things you did accomplish. What areas did you improve and what goals did you achieve? Now that you reached those goals, are there any things you need to do in the next year to maintain those goals?  Next is the not so fun part. Look at what got pushed to the wayside bur don’t beat yourself up for going off track. Move into the new year with a renewed commitment. If your stay focused on what you want you will make progress going forward.  Set Goals For Next Year  It’s always a good time to write your goals down on paper. Once you know where you’re going, you can map out how you are going to get there. This holds true for any area of your life. Every year Andrew and I write down our resolutions on a post it and keep it in our wallets all year. It’s a good reminder of what you want to achieve and make sure you are on track. What do you want to happen in the coming year?  Think about what do you want to happen in the coming year. Is there anything big you need to save for – a move, a baby, a home, a car? Is there anything missing in your financial plans such as retirement savings or life insurance? Setting financial goals for your future self (and family) will help lower stress and set your finances back on track.  Planning it Out  Although the new year is a perfect time to set financial goals, the challenge is sticking to them as the year goes on. It’s easy to write stuff down on a piece of paper but you need to plan out how you will you reach these goals. Carve out time for yourself and or partner to review your goals and financial progress regularly. Monthly check in’s will help you manage your budget and goals. Learn more about your ad choices. Visit megaphone.fm/adchoices

This week the guys tackle five questions from the audience on debt, real estate investing and freelancing.  Question one:  Hi, Andrew, Tom, and Laura,  I think an important, and sorely needed topic is finance for freelancers. And not even those who use invoicing systems. I’ve been freelancing for more years than I care to admit, and there are so many like me who copyedit, proofread or design book jackets. We’re one-person shows, with  little-to-no cushion, where times are feast or famine. I would love to talk about this more or hear you guys talk about it in more  depth.  Putting together a financial system when you have variable income is uses the same fundamentals as someone who is a salaried employee. However, you’ll have to build a bigger cushion if your income isn’t consistent.  You need to keep more in a reserve account than someone who has steady pay. Keep track of your income month to month and use that data to plan for the upcoming year. If you have a pool business and make most of your money from April to September, budget accordingly. Make sure you aren’t overspending that income has to last you.  Six months worth of expenses should be a big enough war chest to get you through a hard time if need be. If you are a freelancer and haven’t earned in 6 months, maybe it’s time to look into another career or pivot your business.  Question Two:  Hey guys,  Is it possible to rollover my Roth IRA to a traditional? Would I get a tax refund for the income tax that I would have saved had I been using a traditional IRA all along? Are there any limitations or conditions to performing this rollover? I have only had a Roth IRA for two years.  There are some advantages of rolling over your Roth into a Traditional. If you’re broke and need cash or you are retiring soon and aren’t planning on earning in the future could be a reason to make this play. When you move money from a Roth retirement account to a traditional IRA, you can get back the taxes you paid on that contribution, but there are rules and deadlines. Be aware of the calendar deadlines that the IRS imposes. Question Three: Hey guys, I am trying to refinance my credit card debt. I asked Lending Club for a $3,000 loan, and they are only giving me the option to take out a $6,025 loan. Do you know why this is? If this is my only option, I plan on taking it out and then giving back $3,025 right away since I only need 3k. What would you guys do? Is that even possible for me to give back $3,025 right away? Lending Club is a peer to peer lending service. That means, instead of going to a bank for a loan, you can get a loan from a group of random people. On the flip side of things, you can also contribute to funding a loan for other people allowing you to get in on the bank’s profit engine. Lending Club because they get better rates than they would with a bank loan and loans are issued much faster through the power of the crowd. The crowd will also approve loans that normally banks may not.Lending Club offers better rates than a bank would, and loans are issued much faster. Lending Club and Prosper charge a 5% origination fee. The origination fee you pay for your loan will depend on your loan rate. The safest borrowers with the best credit pay the lowest origination fees, while mostly everybody else pays a 5% fee. Lending Club because they get better rates than they would with a bank loan and loans are issued much faster through the power of the crowd. The crowd will also approve loans that normally banks may... Learn more about your ad choices. Visit megaphone.fm/adchoices

Budgeting sucks. No one really wants to do it. It’s hard to stick with, it’s a chore to review it every month and it makes you feel like crap when you spend way too much on lattes. But, you’re an adult so you need to do it. There are a few types of budgets, which one is right for you?  We’re getting back to basics of budgeting. Both Thomas and Andrew have been off the rails with their own budgets so get ready for some confessions. They will discuss different types of budgets, how they work and which ones are the least painful. Reverse Budgeting This budgeting method focuses on savings goals. Instead of setting up budget categories to look at your spending, create savings goals and whatever is left you have to spend. Start allocating money at the top of your priority list and work your way down. Pay yourself first. Retirement, savings, and emergency fund are put aside first. Next are fixed expenses such as mortgage/rent, utilities, car payment, etc. Third are non-fixed expenses. Anything that can fluctuate from month to month, such as groceries and gas. After that comes debt payments. Anything that is left over can be used for fun stuff like eating out, travel, fancy coffee or whatever else you like to treat yourself with. Balanced Money Formula You may have heard the balanced money formula also called the 50-30-20 rule. It’s a budget framework outlined by Elizabeth Warren and Amelia Warren in their book All Your Worth: The Ultimate Lifetime Money Plan. It is a very simple type of budgets. Fifty percent of your take-home pay goes towards fixed expenses and necessities like food, housing, utilities and ideally all this should be should be kept at 35%. Thirty percent of your take-home can be spent on wants like eating out, treating yourself to a new dress, electronics, etc. The last twenty percent goes right into retirement accounts, savings and emergency funds. The Envelope System Ah, the good old envelope system. This was a great way to keep your budget and savings goals in check before budget management tools were created, This method may seem is old-fashioned, but it’s great for those who are you are just starting out on their financial journey. Also for people who need to whip their financial ass back into shape. This is a cash budget method so you won’t need to check credit card balances to see how much you spend. Start by looking at what your monthly cash flow is and what you have been spending in different categories. Once you know those numbers, get our your envelopes allocated your expenses. Every dollar has a name and a job. $200 for groceries, $75 for gas, $150 phone, etc. By giving yourself a set amount of money in your envelope to use towards a specific category, it will help you control your spending. When there is no more money in the envelope, you can not spend any more in that category. If you absolutely need more money, cut from another category to cover the access. Budget Management Tools Personal Capital – This is the Mint.com for investors. They will track your investments, analyze your investments and suggest ways to improve things like your 401k allocation. I use this as a tool to monitor my diversification and risk levels. This is for more advanced investors. Mint – Create budgets that make sense today and set you up for success tomorrow. Receive alerts for unusual account charges, and get custom tips for reducing fees and saving money. We also wrote a book to help you get started called  Learn more about your ad choices. Visit megaphone.fm/adchoices

Today on the show the guys talk with Shannon McLay, a financial planner, author, blogger, and podcaster.  She left her traditional financial services job to start her own company, The Financial Gym in NYC – a fun, judgment-free space where you can talk freely about your finances, get the help you need and have a glass of wine while doing it. Shannon left her corporate job because she felt that the financial firms only provided the tools and resources to help those who had high net worth. She started doing a lot of pro bono work on the side for people who were earning a lower salary and soon realized that helping those people was much more fulfilling. That’s when she decided to start her own business doing just that. She understands that the road to financial fitness is different for everyone, so she offers multiple solutions to help people get and stay financially fit. Shannon is committed to making financial fitness fun, easy and accessible for others. She’s like the Jillian Michaels of personal finance. If you want to hear more from Shannon, check out her podcast, Martinis and Your Money, where she share’s a martini with friends and experts while discussing money and career topics. She has interviewed many influential people in the personal finance space. She also has a monthly group Happy Hour Ladies, where they chat about the financial challenges and some other fun topics. Learn more about your ad choices. Visit megaphone.fm/adchoices

Want to make a little money on the side? You can use that old chestnut of ‘buy low sell high’ to your advantage. There are a ton of people making money selling on Amazon and eBay using retail arbitrage.  If you want to learn how to make money selling on Amazon we’ll teach you how to get started with retail arbitrage.  Forty percent of Amazon sales come from third-party sellers.  Their merchandise stored in Amazon’s warehouses. So clearly, there is money to be made. We talk to a master at selling on Amazon, Jordan Malik is not only an award-winning Amazon seller, he’s written a best-selling book on how to make eBay and Amazon selling work for you.  Buying & Selling? No, It’s Retail Arbitrage  Arbitrage is defined as, “The simultaneous purchase and sale of an asset in order to profit from a difference in the price.” Which is a fancy way of saying, buy low and sell high?  The general idea is simply of finding products for a good price, maybe something on clearance which you are able to sell for profit. Most people seel through Amazon, because well, they are you can find anything online at a great price.  For example, maybe you see a hair product on clearance at Walmart for $1.75 which is regularly selling on Amazon for $18.99. Clearly, you can make a huge profit here. So you buy it, send it to an Amazon warehouse using FBA and they ship it to you when it sells.  Yes, it does entail a little more work than that but you get the idea. Let’s go a little deeper, shall we?  What Are You Selling?  If this sounds good to you so far, give Amazon selling a try. Start small, though. Go through your own things and sell a few on eBay and a few on Amazon.  This will enable you to familiarize yourself with the way both sites work before you decide to jump in. It has the added bonuses of getting rid of some of your clutter, freeing up storage space and making you a few bucks with no outlay.  Just checking what’s already selling on Amazon will show you what types of products are doing well. Choose a category and then Best Sellers. Monitor best sellers for a few days or even a few weeks to help make your decision. Within those items, choose some things you have some familiarity with.    Video game consoles might be trending well but if you don’t know anything about them, you won’t know what you’re buying and won’t be able to answer seller questions.  Jordan sold books for a time and was making $2000 a week at it! Books are a good category for a few reasons; they’re small, light, and fairly sturdy which makes them easy and inexpensive to pack and mail. Books are also readily available and cheap. Some libraries even give them away for free. Thrift shops are another good place to buy books, some are even selling them by the pound.  Jordan recommends not falling in love with selling in just one category, though. You love books but so do a lot of other people. Be diversified in what items you sell.  Sell on eBay or Sell on Amazon?  If you have a “one of a kind” item, your Magnum PI lunch box, for example, eBay will be better. They also take some things that Amazon doesn’t sell, like used clothes and some used baby items.  eBay is also better for large items, like cars and furniture. It’s more work to list things on eBay and more time consuming than to sell on Amazon.  Amazon does a lot of the work for you because they have so many items, if they have something you want to sell already listed, you can skip things like uploading photos and writing detailed descriptions.  Where To Buy Your Inventory  Jordan doesn’t use wholesalers. It can tie up a lot of your money and unless you find a relatively unknown one or negotiate an exclusive contract with them, there is too much competition to make it worth his while. Learn more about your ad choices. Visit megaphone.fm/adchoices

The wage pay gap between men and women has been a major focus of attention. In 2015, full-time female workers made only 80 cents for every dollar earned by men.  We have all heard the stats, many times, yet still, the gap has barely moved in last decade. Although women obtain undergraduate and graduate degrees at higher rates than men education hasn’t been enough to move the needle. Today we have Allegra Brantly on the show, a negotiation expert who coaches women on getting fair pay and the raises they deserve. She believes that complaining about the wage gap will not close it, the only way women are going to get paid what they are worth is to ask for it. It’s time we stop undervaluing ourselves and get paid what we’re worth. Not just women, men too. According to Allegra, the wage gap can cost a full-time working woman a ton of money over the course of her lifetime. She will need to work an average of ten plus more years to get equality. And her savings need to stretch longer because of women on average live longer. Allegra wasn’t always the ask for what you want kind of gal. She has accepted job offers with salaries much less than she deserved. Her personal need to make more money pushed her to ask for what she wanted because it was the only way she was going to get it. Now that she has navigated this terrain successfully she wants to pass her knowledge on to women in her life. Inspire them to see their full value as an employee. So, how do you do this? Know your numbers To able to negotiate your salary, you first must know what an employee like you is worth. Research your fair market value. See what other people make in your field in your city. Glassdoor and Linked Salary are great for this. See what the range is and ask for the top of the range if you can prove that you deserve it.  Never accept an offer without negotiation. Never accept an offer below market range. Also, it’s ok to talk about your salary. Discussing your salary with your co-workers is your right as an employee. Although it is taboo, it is allowing employers to keep your wages down. Know who you are negotiating with And what motivates them. Try to get to know your co-workers and boss the best you can. Be in the know with what’s going on within the company. Figure out what your negotiation partner values, needs, and what their priorities are. You want more money but how will it help them. The more knowledge you have on their interests and how they operate, the more negotiation power you have. It’s important to have a sense of how they like to be approached. Stating rather than asking Obviously, don’t go in there demanding they pay you more but you still need to be strong and confident. As uncomfortable as it might feel, you’ll need to be self-promoting. Lead with your research and be upfront with your worth and what people in this role are making. Let them know you want to get the raise you deserve so you can feel confident that it’s a mutually beneficial relationship. Allegra suggests asking for a raise once a year. Think about it, in a year you would have learned a year’s worth of skill sets, became more efficient in your role, became more familiarized with the company and more in tu... Learn more about your ad choices. Visit megaphone.fm/adchoices

Today the guys talk to Eric Bowlin, a successful multi-unit real estate investor from Texas about how he created his real estate empire by the age of 30. He accidentally got into real estate back in college when he and his wife decided to buy a house near the University. They purchased a 3 unit building, living in one unit and renting the rest. One night while watching a movie with his wife, he heard a knock on the door. It was one of their tenants there to pay rent. At that moment he realized that I would become a real estate investor. That was the easiest money he had ever earned in his entire life. At that moment he realized that I would become a real estate investor. That was the easiest money he had ever earned in his entire life. Eric now owns 26 units making him about 130K per year and he and his family have achieved financial freedom. He sacrificed a lot to get to where he is today, and never stopped planning, preparing, and learning. Eric talks to a many people who have said “I’ve always wanted to invest in real estate, but…”  and he wants to help educate others on what real estate investing actually is and move past the misconceptions. You don’t need a ton of money to buy property. Of course, you need some capital to get started in real estate investing, but not as much as you think. There are many turn-key companies like Roofstock that have affordable properties with excellent returns. Investing is not land lording. Investing is actually buying and holding the property for rent and (hopefully) appreciation. You do not have to be a property manager, you will hire one so don’t get all wrapped up in the “I don’t want to fix leaky toilets” mentality. And, real estate investing isn’t flipping. Flipping homes for profit is a completely different business. Real estate isn’t really that risky. Yes, it is an illiquid asset but otherwise, it is a quite stable market. If you take the time to learn the ins and outs of the real estate market you will make good decisions and investments with great returns. Spend a lot of time finding a good market to invest in. It probably won’t be in your own neighborhood so you’ll need to do your market research on demographics, crime, schools, vacancy rates, and percentage of renters in a neighborhood. If you looking to invest in real estate but looking for something a little more hands-off checkout Fundrise or RealtyShares where you can invest in crowdfunded real estate projects.   Learn more about your ad choices. Visit megaphone.fm/adchoices

Veterans financial challenges are different from those faced by civilians.  Too many come home from service with a lack of knowledge on how to handle their personal finances. Many also struggle to find jobs and need some guidance on how to navigate their new life in the civilian world.  Financial literacy is desperately needed for veterans, and today our guest works to help service families secure economic future they feel good about. In honor of Veterans Day, the guys talk to Douglas McCormick about economic empowerment of veterans. Learn more about your ad choices. Visit megaphone.fm/adchoices

Emotions impact every financial decision we face and sometimes it causes us to make choices out of fear or greed.  Today on the show the guys talk to Dr. Daniel Crosby, a psychologist, behavioral finance expert and asset manager.  He is the co-author of the New York Times bestseller Personal Benchmark: Integrating Behavioral Finance and Founder of Nocturne Capital. In Daniels’ latest book, The Laws of Wealth, he talks about principles for managing your behavior and how emotion and psychology influence our financial decisions. What is behavioral finance? The concept of behavioral finance is a fairly new idea that looks at behavioral, psychological theory together with economic explanations for why people make irrational financial decisions. Why do so many smart people making the wrong choices with their money? Daniel wants to find out what causes some people to behave illogically when it comes to finance and how to build investment portfolios based on unvalued investments created by investor’s emotional behavior. Daniel works as a sort of a financial therapist and asset manager centering his work on helping his clients stay away from making irrational emotion-driven mistakes. Investors can often be their own worst enemy and are to blame for poor investment returns. Volatility in the market can cause investors to act unpredictably at times – not in their best interest. You control what matters most You can’t control the stock market but what you can control is human behavior. Over the last 30 years, the market has returned about 11% a year while the average investor has only held about 4% because of emotional decision making when markets are going up and down. “Be Fearful When Others Are Greedy and Greedy When Others Are Fearful” – Warren Buffett Investing needs discipline and rationality. Being in control of that takes planning and executing. Take your power back and gain control of your situation no matter is going on in the markets. Set up systems for yourself and follow simple rules of thumb so you mitigate potential harm to your financial lives. Daniel believes you cannot do it alone. People who work a financial professional tend to do 3% better than people who don’t. Advisors don’t have all the answers, but they can help you not to make emotionally driven mistakes. Do you want to be average? Two of the well-known investment styles are growth investing and value investing. Growth investing is investing in stocks that have shown higher than average growth over the previous years, compared to the market average, and show promise to continually grow into the future. They are riskier than average stocks but have the possibility to multiply in value. The other is value investing strategy. Value investors like Daniel actively seek stocks they believe the market has undervalued. He believes many of these stocks get overlooked due to human behavior and fear. He finds pockets of disproportionate value which are created by human behavior. The strategy has been used by Warren Buffet for many years. Daniel takes a quantitative approach to choosing his investments basing his choices on the The 5 P’s – Price (valuation), properties (quality), pitfalls (risks), people (what are the insiders doing), push (momentum/potential growth). Risk is not a squiggly line Risk is different for everyone when it comes to investing, and that’s why Daniel believes in personal benchmarking. He helps his clients create a personalized definition of risk and using their top motivations to make better decis... Learn more about your ad choices. Visit megaphone.fm/adchoices

This week the guys tackle five questions from the audience on windfalls, real estate, and building credit.  Question One  First off, let me start by saying I’m loving the Investment Property series you guys are doing. I totally want to get into this, just need to figure out how to save for that first down payment…  My question is this…you guys talked about saving 15% a month for the reserve account to cover vacancy and break fixes…Let’s say you own a great property, and you don’t have to dip into the reserve account much for a long time. Is there a point where you cap it and stop contributing to the reserve account?  Aaron via Email  You won’t want to keep all of the property earnings in your reserve account because in the unlikely case you do get sued – say goodbye to that money. Part of our strategy is to choose insurance policies with high deductibles so for fixes and updates that are not major will pay out of pocket. By not making small claims, our monthly premium low.e are keeping the reserve account up to our deductible. We don’t want to use the insurance unless we have to to keep our monthly payments low going forward.  What we are keeping in our reserve account is the amount of our deductible. So, if let’s say our deductible is $10,000, we want to be able to cover anything below that therefore we keep $10,000 in our reserve account. There will be big fixes eventually if you hold the property for many years so plan for significant expenses. If you know, you have to replace the AC unit or roof in the next year, plan for that by putting extra money aside in the reserve account the months leading up to it.  Question Two  Could you walk me through your decision to go with Roofstock as opposed to Memphis Invest or some other traditional turn-key company? My wife and I have spoken with Memphis Invest, and it seems like they run a tight ship and have an excellent reputation in the REI community. Were you simply looking for higher returns than their markets offered? I’m drawn to the fact that the properties are completely rehabbed before being rented, and they seemingly do an excellent job of reducing risk within their property management (minimum of 2-year leases, very in-depth vetting, etc.)  Joseph via Email  Memphis Invest is an extremely high-quality operation and great company. For us, the properties Roofstock offered were more what were-were looking for as a beginner investor. The homes were cheaper with Roofstock so we were able to try it out without investing a significant amount of money.  As new investors, homes with Memphis Invest were just more than we wanted to spend on a property. We also wanted to spread around the risk by investing in multiple properties rather than putting all our eggs in one basket. This strategy has worked well for us making our average returns are higher with the less expensive properties.  Question Three  Is there anything I can do credit-wise/savings-wise/career-wise to increase my likelihood of getting approved for a mortgage loan?  Nyequita Smith via Email  Getting approved for a mortgage is all about your attractiveness to creditors. To improve that you’ll need to increase your credit worthiness. Try for more on time payments. If you only have one credit card and then you only have one on time payment a month regardless if it $3,000 or $30. Get more credit cards and put really small things on them like Netflix, Hulu, coffee, etc. Pay each of them off every month. This is a simple way to increase your number of time payments and credit score.  Increase credit utilization. Call your card companies and request to increase your limit. When you have more available, your percentage utilize is lower. If you are maxing out your cards everything it doesn’t look good to creditors. If you increase your limit and only using a small amount ... Learn more about your ad choices. Visit megaphone.fm/adchoices

How would you feel if you made $3.75 million in bonuses a year? It hard to imagine but our guest has done it. And he wrote a book about it! Today we have a chat with Sam Polk, author of For the Love of Money.  For most people, that amount of money would be enough to live a more than a comfortable lifestyle for many years. I can’t even begin to imagine what that would feel like, but if I had to guess, I would say it would probably feel pretty damn good.  For today’s guest, 3.75 million just wasn’t enough. Today we have Sam Polk on the show to talk to us about his book For the Love of Money. The guys go deep on what life on Wall Street was like, money addiction and redefining success. Meet Sam Polk At only 30 years old Sam Polk was doing very well in his career working as a senior trader on Wall Street. He was offered an annual bonus of $3.75 million and was not happy with it because it wasn’t enough. At that moment he knew he had lost himself in his obsessive pursuit of money. He was addicted to it, and no matter what the amount was, it would never be enough. He knew he had to make a change and decided to walk away from it all – the power, the money, and may other self-destructing behaviors. For the Love of Money For the Love of Money is about Sams’ journey to find out what he really wanted and where he fits into the world. He still wanted success but wanted to do something that contributed to humanity. Sam came to the realization that fulfillment comes from doing work he cares about. Sam wants to help others truly find out what they believe is important. Figure out where your puzzle piece fits in the world, not just where it makes money. After leaving Wall Street behind, Sam moved to Los Angeles where he lives with his wife and daughter, and soon son. He is now the co-founder and CEO of Everytable, a company that sells fresh, delicious meals at prices everyone can afford. If that wasn’t enough, he is also the founder of Groceryships, a nonprofit that helps low-income families struggling with food-related illnesses like obesity and diabetes. His mission is to create businesses are for solving problems but not by funneling profits to those at the top. Through his companies, he wants to “be part of creating a new economy that harnesses the dynamism of capitalism and also fosters the connectedness of a true democracy in which every vote and every voice count the same.” If you want to read more about Sam Polk, you can find him at http://sampolk.me/ Learn more about your ad choices. Visit megaphone.fm/adchoices

We like to check in with our listeners and see how their financial life is going. Today we will take a look at This Financial Life with Corey. We will show him how to make more money by starting a music teaching business.  Corey lives in the Boston Area, and he sure is a hustler. He currently, works six different jobs throughout the year and has been saving as much as he can to improve his financial life. One of his gigs is teaching private lessons on trombone, and he wants to expand that to make it a full-time business. Right now he has two students but doesn’t know how to grow his side gig. On this episode, Andrew and Thomas will go through the steps of legitimizing and marketing a side project like Corey’s. Corey’s Financial Life Corey neglected his finances for many years, ignoring his debt, forgetting payments and spending money recklessly. After spending the good part of his four years at college majoring in video games, parties, and girls, he left with student loan debt, no degree and depression. At 22, his financial situation was pretty bleak. He spent a summer without a job making the debt and depression even worse. Corey ended up in a mental hospital over Thanksgiving weekend where he experienced a sort of a financial epiphany.  When he was released, he knew he could never let himself get that low again. Corey is taking the first steps to improving this financial life. He is getting his spending under control with a  30-day money crunch so he can save a meaningful amount of money. What he is still struggling with is being too emotional about finances and getting too close-minded when it comes to ways to improve his situation. Learn more about your ad choices. Visit megaphone.fm/adchoices

You have a budget, great! But what about your budget categories? Setting them up without losing your sanity can be a tall order.  Having a budget is only the first step. You need to set up budget categories that are detailed enough to show you where your money is going but not so detailed that you go nuts trying to keep track of them all.  Budgets are Personal Finance 101  No matter how little or how much money you have, everyone needs a budget. Every other aspect of successfully managing your finances are built on knowing how much money you have coming in, how much is going out and where it’s going. But there are so many ways to budget that it can be confusing. How many budget categories is too many? How many is too few? If a budget is too complicated, you’re unlikely to stick to it. You want a system that is simple and straightforward. The 50/30/20 method fits the bill. 50/30/20 This budgeting method is simple. You allocate your total budget at these percentages. We’re going to break down what expenses fall under each. And to be clear, the numbers you’ll be using are post-tax, so the amount of money you get in your paycheck each month, not how much you earn. And we recommend Mint for budgeting. It’s free and easy to use, and once you get your account and budget categories set up, Mint does most of the budgeting work for you. You can certainly just use 50/30/20 as your categories for the most straightforward system ever, but unless you have your finances on 100% lockdown, you probably need to expand out a bit. 50%: The Essentials The 50% represents the essentials in your budget, expenses like housing, hoa fees, utilities, transportation, parking fees, insurance premiums, and groceries among them. This also includes things like child care and child support. That these expenses are essential doesn’t mean we can’t reduce them though. We’ll cover that. Housing is the most significant expense for most of us so how much of the 50% should be devoted that and what exactly does “housing” encompass? “Housing should comprise 35 percent of your take-home income. That includes the mortgage or rent, all home repairs and maintenance, property taxes, utilities such as electricity, gas, water, and sewer, and homeowners or renters insurance. In short, it includes every housing-related expense.” That is one take on it, but it’s pretty unrealistic. I think it’s more realistic to budget that 35% just for your rent or mortgage payment. It might mean you have to tighten up in other areas of the 50% but housing isn’t cheap, and unless you take on a roommate, live really far from your place of work in the case of city dwellers or can live with your parents rent free, there aren’t a lot of ways around the high cost of housing. 30%: The Fun Stuff The 30% is to be budgeted on nonessentials, things that you spend money on but could live without (although the living might be pretty miserable). This percentage includes things like meals out, leisure activities, clothes (clothes are a necessity, yes, but presumably you haven’t been running around nekkid to this point, so you already have some), hobbies, and grooming. 20%: The Important Stuff This budgeting category too many people overlook, but it’s the most important. The 20% is for debt repayment, (if you have any) saving and investing. It’s easy to leave this category out and just tell yourself whatever is left over at the end of each month is the money you’ll put towards these things. But the problem is, when you don’t dedicate money to these areas up front, Learn more about your ad choices. Visit megaphone.fm/adchoices

As technology advances, it enables people to become more connected and informed. One of the biggest effects of new technology is on the financial world. Now, investments are incredibly accessible to all people searching to live a more flexible financial life. People can invest their money more easily than ever before  Online financial planning and management services allow people to invest money and manage their portfolios from their computers or phones.    Online management takes the guesswork out of investing. It gives users the opportunity to establish and develop a portfolio of investments with ease. Because let’s face it, we aren’t Warren Buffett. Picking the right stocks, at the right time, and holding on through the ups and downs, can be impossible.  Enter Personal Capital  One such online investment platform, Personal Capital, has made a name for itself as a comprehensive investment checkup tool that offers a range of services at a low cost. But does this platform live up to the hype? Below you will find a comprehensive Personal Capital review—the pros, cons, and whether or not it can help you improve your financial situation. Let’s get started. About the Personal Capital app Personal Capital has been around since 2009, and the platform has since developed a user base of more than 165 million investors. These investors have a combined account holding of $7 billion. There are two basic services offered through a Personal Capital account: free finance aggregation, and paid advisory service. Most advisors use the free aggregation tools, but higher net worth investors tend to opt for the paid service. To be eligible to use their paid services, investors must have at least $100,000 to start their accounts. Personal Capital targets these higher net worth investors with its paid service.  This helps bolster its free service for other users. Therefore, the platform truly offers something for everyone. There are several different features that investors using Personal Capital have access to. And, the platform is frequently expanding to increase its offerings. Personal Capital budgeting Having a budget—and sticking to it—is one of the best things you can do for your short and long-term financial health. Unfortunately, budgeting can be a struggle for many people. The Personal Capital budgeting tool draws information from your various bank accounts to help keep track of how much you’re spending and what you are paying for. This allows you to get a better grasp on your spending habits. And, ultimately, make changes to help support your saving and investment goals. Personal Capital retirement planning When people start investing, they often do so in an attempt to prepare for retirement. The retirement planning tool offered by Personal Capital. It gives users an overview of their retirement savings to help them stay on the right track. You can use this tool to help you determine whether you are saving aggressively enough. It will tell you then are you meeting your retirement goals on time. Personal Capital users can access this feature from the online dashboard or on the iPad, iPhone or mobile app. Account integration options Personal Capital enables you to plug in cre... Learn more about your ad choices. Visit megaphone.fm/adchoices

Thinking about a 401k loan? A 401k is meant to fund retirement, but you can withdraw money from it earlier. There can be negative consequences if you borrow from your 401k but they are not as dire as we have been led to believe. Using the money to make or save money or to pay off high-interest debt can pay off.  It goes against personal finance philosophy to take money out of a retirement account before retirement, but under the right circumstances, it is something to consider. 401k Recap By now most of you know what a 401k is but for those new to the site, this will get you up to speed. A 401k is an employer-sponsored retirement account. Employee contributions are deducted directly from your paycheck before they are taxed. The money is invested into one of the funds offered by the employer. If you’re lucky, your employer matches your contribution. This is free money. For the year 2017, you can contribute up to $18,000. Because that money is meant for retirement, withdraws are discouraged before you reach age 59 ½. If you withdraw money before that age, you will be hit with a 10% penalty. There are some exceptions.   If you are no longer working at age 55, if you are using the money to pay medical expenses, or if you have become disabled for example, you can withdraw the money penalty-free. Another way to access that money without the penalty is the subject of this podcast. You can borrow money against your 401k without being penalized. FYI: If picking funds in your 401k, 403b or TSP gives you anxiety, or you fear you’ve made terrible choices than you need Blooom. You’re welcome. Why a take a 401k loan? There are lots of good reasons to invest in a 401k. Not many people get a pension anymore so a 401k may be their only retirement plan. There is also a low bar to invest in a 401k. Your employer does the work; you just have to opt-in. You don’t have to know anything about investing to get started. Contributions are taken directly from your paycheck, so you never have a chance to spend the money. For some people, this is the only way they will save for retirement. The money goes in and grows tax-free. This can help reduce your taxable income and bump you down to a lower tax bracket. When you retire and need the money, most of us will be in a lower tax bracket than we were during our working years, so that is a tax saving. A 401k can also be a great place to borrow money from. How it works Borrowing against your 401K means, you are borrowing from yourself. Unlike borrowing from a bank, the interest you pay, you pay to yourself. The amount you borrowed is no longer invested so rather than getting investment gains; your “gain” is the interest you pay back. You can borrow up to $50,000 if you have a vested balance of at least $100,000 or 50% of the value, whichever is less. You indicate the account you want to borrow money from. Those investments will be liquidated. You will lose any gains those investments might make during for the duration of the loan. Depending on the plan rules, you may or may not be allowed to continue making pre-tax contributions. You have five years to pay back a 401k loan, then if the loan was used to buy a home that will be used as your primary residence. There is no early repayment penalty. Most plans allow you to repay the loan through payroll deductions, the same way you invested the money.   Good Reasons to Borrow Against a 401k If you need money fast and for a short period, a year or less, borrowing from your 401k can be a good solution. You’ll have the money quickly sometimes within a few... Learn more about your ad choices. Visit megaphone.fm/adchoices

Buying a rental property is fun, but it certainly needs to be done with care and a ton of research. Since a rental property is a long-term investment, you want to make sure you review all considerations.  You are putting a lot of money into a property for a down payment, so you need to arm yourself with all the information you need to make a profitable investment. This is week four of our real estate investments series.    The guys talk in depth about buying a rental property, assembling your team and reducing risk. Are the local laws in your favor? EVICTION LAWS! Find out what the eviction laws are before committing yourself (and money) to a particular area. Of course, you don’t want to have to evict a tenant, but if someone is living in your place and not paying you to rent for months, you got to do what you got to do. How long does it take to evict someone? In places like NJ, it can take months to have someone legally evicted while you wait around losing money. How easy is it to raise the rent? There could be rent stabilization laws in place to don’t allow you to raise rents as you see fit. How likely is it that you can use their security deposit for damages? Getting answers to all these questions is super important. Start by looking for a place that are “landlord friendly states.” The top 8 states – Texas, Indiana, Colorado, Georgia, Kentucky, Mississippi, Arizona, Florida General Property Grade Location, location, location. The location is critical in buying a rental property. Each rental property you look at will have a grade, A through D. This will help you determine if the property is investment grade. It’s In summary, buying an “investment grade” property is about focusing on the key criteria that will keep your property occupied and stress-free. Here is the breakdown of the ratings. A Property: Newly built properties in the nicest areas. High-quality buildings that are newer (built within the last 15 years) They may include premium with top amenities attracting high-income families. You will also see much higher and much less maintenance, but it comes with a much greater down payment and lower returns. B Property: The slightly older property, but still nice. Might be not quite as nice of an area. Tend to have middle-class tenants. Rental income is typically lower than Class A and may have some small maintenance issues. For the most part, they are in good condition, live in ready and will some upgrades can be moved to a Class A C Property: Older properties, more than 20 years old and located in fewer desirable areas. Likely, they also really could use some work. However, for investors, these rentals have high returns D Property: Run down properties in bad areas. The area and the property can be described separately. It’s possible to have a run-down property in a great area. Harder to have a great property in a bad area, though. It’s important for an investor to understand that each class of property come with varying levels of risk and reward. Crime rates and school quality also need to be taken into consideration. We will soon have these ratings pulled into our Rental Property Tool, but the info is readily accessible. Understanding Vacancy Rates and Potential Tenants When buying a rental property vacancy is inevitable. The vacancy rate is the percentage of all available units in a particular area that is unoccupied at a given time. Look at the US Census data on vacancy rates in the area you’re seeking to purchase in. With 2 minutes of research, Learn more about your ad choices. Visit megaphone.fm/adchoices

Does Roofstock live up to their promises? In our Roofstock review, we dig into their selection of turnkey rental properties and put our money on the line to find out.  I’ll admit, I’ve been obsessed with rental properties for a few months now. It took me about that long to wrap my brain around it all. There is so much to think about and consider – the topic of turn-key real estate investing is littered with “rabbit holes.” Now, before we jump in you may be wondering, “why would I ever want to get into rental properties?” If so you should probably start here: The Case for Real Estate Investment Properties. Eventually, after much research, Laura and I decided that we were going to get rental properties far away from the NYC area. In starting our search for turn-key rentals, here were some of the biggest sticking points for us: * How could you possibly purchase a property sight unseen? Is the internet full of crazies? * How do I find properties in my price range that aren’t in a war zone and produce a respectable cash flow? I’m not exactly a well-connected real estate professional. * How can I be sure that I’m not being sold hot garbage by an “expert”? Is there any way to undo it all if I wake up the next morning in a cold sweat regretting my decision? * How do I evaluate and track the profitability of these properties? There are a lot of moving pieces in turn-key real estate investing. * How do I make sure I don’t get stuck with “the worst property management company ever” and wind up with more work/stress than I bargained for? Few people say they love their management company, and that scares me. * How can I set it up such that I do the least amount of work possible, today and in the future? Simply put, I ain’t got time for that shit. * Does my ass need to be the only one on the line? Is there anyone that will stake their reputation on my continued success? In this review, we’re going to cover the above questions and go into extraordinary detail of our experience with Roofstock. After speaking with their CEO and many others on the team, we decided to go ahead and make a turnkey real estate investment with them. Twice. What is Roofstock and what do they bring to the table? Roofstock is a turnkey rental property online marketplace. A core requirement for properties to be listed on their marketplace is that a property needs to be occupied by tenants who meet Roofstock’s strict screening guidelines. Since we’re investors and not real estate professionals, we only look at turnkey solutions. This is the target market for Roofstock, busy professionals who want high yielding successful rental properties without the time commitment or the need to put work in themselves. Unlike most places you’d go to find turnkey rental properties, Roofstock does not own any of the properties listed in their marketplace. Instead, their expertise is in evaluating, negotiating and closing property transactions. So they aren’t trying to sell you anything but instead are looking to add value to an existing and usually convoluted process. What originally got me excited about Roofstock was their inventory. It’s probably what gets everyone excited.   Currently, there are over 100 Roofstock properties available for sale, 20 awaiting listing and 75 with a sale pending. This dwarfs the size of any other turnkey seller Laura and... Learn more about your ad choices. Visit megaphone.fm/adchoices

This week the guys get nerdy about the numbers and chat about how to calculate cash on cash return to see if a property will be a smart investment.  Is This a Good Investment?  If you’ve been talking about buying a rental property with friends and family, there was probably someone who told you some horror story about owning rental property. Before letting them scare you out of it, do the math. It’s important not to make an emotional decision when buying a rental property. Instead look at the numbers and have systems in place to protect you. Some of us are just not numbers people (including myself). Although real estate investment math isn’t calculus, there are a lot of calculations involved. Don’t worry; we’re here to help. Cash On Cash Return The cash on cash return is a simple way of measuring the performance of a potential investment property that is quick and easy. It can be a good starting point for quickly filtering potential investment properties. Cash-on-cash return = annual pretax cash flow / total cash invested. For example, if you put $100,000 cash into the purchase of property and the annual pretax cash flow is $10,000, then your cash-on-cash return is 10%. Cash-on-cash return is the actual return you will get at the end of the year your rental property after all property specific expenses are paid out like mortgage, taxes, insurance, HOA, etc. It’s a great metric to determine if a property will be a good investment right off the bat and a quick, easy way to compare different properties. Although cash on cash return is a useful back of the napkin evaluation, there are many other essential calculations to take into consideration. Yup, more math. We’ll Do The Math For You Unless you enjoy getting elbow deep in nerdy spreadsheets, we have something that will do all the math for you. Simple Wealth is a platform that will help you research, evaluate and track rental properties. It not only will it calculate your cash on cash return, it will also help you understand your properties income, appreciation, and equity using our sexy graphs. Simple Wealth will help you calculate cap rate, NOI, gross yield, rent estimates, and vacancy rate. What does all that mean? Let us get into it. Key Numbers Here are some of the key metrics we use to evaluate rental properties so you can get a better understanding of how all the math works. Annual NOI (Net Operating Income) is income after property expenses. NOI is simply the annual revenue generated by an income-producing property after taking into account all income collected from operations and deducting all costs incurred from operations. NOI excludes any financing or tax expenses incurred by the owner/investor. In other words, the NOI is unique to the property, rather than the investor. Cap Rate is the annual return on investment without financing. Return if you bought the property in full, in cash. Gross yield shows the rate of return on investment. It is a good rule of thumb number you can use to compare properties quickly.  It is an easy calculation which is the monthly rent times 12 then divided by purchase price. Not the amount you would invest but the full cost of the home.   Key Costs The purchase price is the biggest lever you can pull to make a property a better investment. Even negotiating 1k lower can significantly improve your cash-on-cash return. Learn more about your ad choices. Visit megaphone.fm/adchoices

Owning a rental property can be a great player in your overall investment strategy and an excellent way to build wealth. It typically isn't affected in the same way as the stock market so that it can provide diversification in your portfolio. However, it's important to understand the risks of the real estate market. Andrew just started investing in rental properties earlier this year soon today's episodes he will give us a broad overview of why real estate can be a great investment and what he has learned from his experience. We understand investing in real estate isn't for everyone, but it is an awesome way to build wealth. We are going to tell you why. View Episode Show Notes Learn more about your ad choices. Visit megaphone.fm/adchoices

Whether you are looking to move to Denver or Denmark, there are a lot of things you need to take into consideration before moving to a new city.  When you are moving to a new city, everything is new and exciting, but it can also be a little scary. Preparing will help you get past that insecurity the unfamiliarity of a new city can bring. And overspending is almost always a result of under planning.  One of our awesome listeners has been thinking of making a move to a new city and asked us for some tips on how he can prepare. Thomas has been planning a move to Denver and will share some tips and resources he in today’s episode.  Financial Prerequisites  Before you move to a new city, you want to have your finances in order. Get your debt situation under control and work on your credit score. If you are planning on renting, landlords look at that very seriously when considering a tenant.  Make sure you have a job when you get there. If you’re moving because of a job, get a relocation bonus. ASK FOR IT! You’d be surprised what you can get if you ask.  Creating a moving budget. This will show you how much money you will need to save up for all expenses including broker fees, security deposits, moving companies, possible storage, furniture and at least the first month’s rent.  Step 1: Choosing the new location  If you’re relocating because of a job or school, either for yourself or a spouse, apparently you’re skipping this step. For Thomas, he just wants to leave Iowa so he can have a new place to call home. Start by researching locations you might be interested in. Figure out what you want out of a new location and make a priority list with value scores.  Don’t get caught up in what you might do when you get there. Make a list of real priorities and things you truly value. Maybe you don’t have a car, so you want a city to be walkable. You love hiking and the outdoors, so you need to find a place with the nice weather most of the year.  Since it is more likely than not that you’ll need a job when you move, some of your top priorities should be:    * What’s my industry like in this city?  * What’s the probability that I can get a good job?  * What’s the cost of living index, and will my likely salary be able to manage it?  * Will I have to downgrade my current lifestyle because the new city won’t let my dollars stretch as far?    Compare your cost of living now to what it will be on the move along with your new salary. Thomas has been using Numbeo to compare the cost if living between Des Moines to Denver. He figured out he will need $4,837 each month to get the same standard of living I’d get on $4,000 in Des Moines. Also, check out tax rate differences. If you have children or plan to have kids, then you need to consider schools and daycare costs in the area. Once you have all the info you need, start scoring cities you’re interested in based on your priorities.Check out city-data websites, forums, and Reddit to get the low-down from locals. Thomas has found this pretty helpful except for those few people who don’t want any newcomers in town. Once you have your shortlist, visit a city or two if you can. It’s probably not feasible for most people to visit every potential city, but if you can try to Air BnB it up for a few days in your top pick. You can tour some apartments and get a feel for the place. Thomas did this in Denver, and that was fantastic. It solidified the decision for him. Step 2: Start preparing Moving sucks, so make a plan for everything that needs to be done way ahead of time and work on it in little chunks. Pare down your life and get rid of stuff you don’t need or use. You are starting a new life so leave some of the old behinds. Learn more about your ad choices. Visit megaphone.fm/adchoices

If someone told you they were starting a franchise, what would be the first thing that came to mind – Mc Donalds, Chick-Fil-A, 7 Eleven? When you start to look into the world of franchises, you’ll be surprised at what you’ll find. These days they come in all different shapes, sizes and niches.  Today the guys chat with Laura Novak, owner of Little Nest Portraits Franchise, about starting a franchise. She talks to us about how her franchisees work, why she decided to go franchise and what systems she has put in place to make them successful. Why Franchise Laura started out as a photographer when she was only 23 years old and grew her passion into a successful small business of her own. As the years went on, she wanted to spend more time with her family and was ready to build a business that was bigger than her. For most entrepreneurs, it’s hard to let go control of their business. After being approached by someone about opening another Little Nest location, Laura started to think about starting a franchise. Doing this would allow her to still be in the business, but its success wouldn’t be tied to her hours. There is a significant difference between working in the business and working in the business. It was well said by Michael E. Gerber from the book The E-Myth Revisited about The Franchise Model. “It is a proprietary way of doing business that successfully and preferentially differentiates every extraordinary business from every one of its competitors. In this light, every great business in the world is a franchise.” Laura began to see fasting growing franchises in the women’s services sector such as workout studios and blow out salons. These companies were giving women the chance to have successful careers while being in control of their schedules and lives. She wanted to help people do what they love while balancing their families and home. With Little Nest Portraits she wanted to empower others and offer them a chance to be a successful and profitable entrepreneur. She has opened three locations, and there are a few more in works. How It Works With a franchise, you are for the most part trusting your brand in other people’s hands, so it’s super important to find the right people. The Little Nest vetting process is pretty extensive. It starts with 3- hour long webinars to get to know a little more about the candidates and give them the opportunity to learn about the company. Next, Laura will spend a day together with the candidate in person to learn even more about each other’s values. During these meetings, she looks for qualifiers such as level of management experience. There is already a lot to learn about the business itself, so she needs someone who already knows how to manage people successfully. They also need a decent amount of business experience and understand the basics. Most importantly, personal values need to match. All these things help Laura determine if an individual can capitalize the business. She has found the best owners do not have much experience with photography but instead have excellent sales skills, and of course, a passion for running their own business. Laura and her team provide weekly reports to all branches to show how everyone is performing. Franchises are all about partnership. The location owners success is also her success. Laura and her team provide owners with proven systems to support the growth of the business from marketing to customer service to decor. They want to give franchisees all they need to run a Little Nest successfully. Costs Some franchises require you to have a certain amount of assets as well as liquid funds to purchase a branch. For Laura and her team, all they are concerned with is if the franchise can get the appropriate fu... Learn more about your ad choices. Visit megaphone.fm/adchoices

It’s hard to know how to prioritize your financial goals. Personal finance is personal, so there isn’t one answer for everyone. It’s important to understand how to prioritize your financial goals and help you figure out what to focus on first.  Should you start an emergency fund or save for retirement? Pay off debt or start investing? Everyone will give you different advice, and it can get confusing.  Know What You Want  You can’t do anything meaningful until you decide on some goals for the short term (this month), medium term (next 3-6 months) and long-term (1-2 years). What stage are you at in life and where do you want to be?  Your financial goals can be buying a new home, saving for college, starting a family or creating an emergency fund.  When you take this step, it’s important to think about both your short-term and long-term goals.  Perhaps you want to plan a family vacation to Europe within the next five years. Or, you may wish to have enough of a buffer in your finances so that you and your significant other can afford to go out for a nice dinner every couple weeks.  No matter your vision, be sure to create SMART goals.    For example, how much should you have budgeted before you begin planning your trip? Or, how much money would you like to spend each time you go out to dinner?  To that end, it is critical to tie real numbers to your goals. You should also have a feasible timeline for when you would like to accomplish each goal. It’s OK to be ambitious, but you should also avoid setting yourself up for failure by giving yourself far too little time to reach your goal.  No matter what they are, it’s time to get ideas out of your head and make a list. Writing down your goals is critical. However, you should also make a habit of revisiting your goals and making sure you are on the right track. If so, remain consistent and do not let yourself get complacent.  If you’re not currently on track, remember why you set your goals in the first place and find ways to get to where you want to be. Don’t be too hard on yourself — change is hard, and many people fail several times before they find the right formula for success. If you get off track, the best thing you can do is make some adjustments right away.  Prioritize Your Important List  Once you have figured out your goals, give priority to each of your personal goals in order of importance, and then determine how long you have to save for each of them.   Remember to put your oxygen mask on first. Debt destruction is probably more important than kids college fund. Putting your retirement on track is more important than buying a new car. Debt is costing you money and will move you figure away from your goals. If it’s more than you can handle debt consolidation or refinancing could help you out of the hole. Having an emergency fund is so important. Unfortunately almost half of Americans couldn’t come up with $400 if an emergency came up. A good rule of thumb is having 3-4 months of your salary in a savings account and then contribute to an investment account like Betterment. Making more money can help you get to your goals faster. Not everyone has the time for side hustles so if you are looking to make some extra cash, every month then asks for a raise. Salary negotiation can be scary, but studies show that people who ask for a raise make more money than those who don’t. Know What You’re Worth Asking for a raise can be difficult, Learn more about your ad choices. Visit megaphone.fm/adchoices

Becoming an entrepreneur is not for the faint of heart. Running and growing a business can be challenging – that’s why about 90 percent of all new businesses fail.  Since the odds are stacked against you, it takes hard work and perseverance to achieve success.  Whether you have a business or looking to start a one, it’s important to listen to your peers and mentors. Some lessons you will have to learn on your own but some small business tips you can learn from others.  Collectively, Thomas and Andrew have ten years of experience under their belt running small businesses. Today they will share their most valuable lessons and small business tips.  Don’t quit your day job.  When you are just starting out, bringing in a consistent profit month after month can be challenging and stressful. You don’t want to be the position where you’ll do anything for a quick buck.  You want to focus on building something that will make you $2000 passively everything month down the road and not worry about making $100 to survive the week. “A successful business is a marathon, not a sprint.” Keeping your day job until your business is financially stable will reduce pressure so you can focus on what matters. Remember – it’s not how you start the race, it’s how you finish it. For Andrew, constraint breeds creativity. Having limited hours to get work done forces him to do the things that matter and make the most out of his hours. Study the pros. You can read all the books on what you need to do to grow a successful business but what will push the needle is to study what the pros do. Find people inside and outside of your industry that you admire and dig into what they are doing with their businesses. For example, let us say you are super inspired by Pat Flynn and looking to run a successful online business. He has some great content online outlining what to do but go beyond that. Study what the pros do more than what they teach. Analyze their code, writing styles, videos, etc. Of course, don’t blatantly rip people off but take influence and make it your own. You will eventually develop your own style. First, get inspired. Improve 1% every month. Give yourself realistic growth goals. Growing 1% every month doesn’t sound like much, however, after a year you will have increased 12.68% and 26.97% in the second year. Just a little bit of growth consistently will start an exponential growth cycle. Just because you are improving 1% every month doesn’t me that every single thing you make will grow that one percent. That’s why you need to follow The Equal-Odds Rule. Thomas has an excellent video on it. Watch it. He believes if you want to make things that are amazing, things that become fruitful and well-known then you have to make a lot of things. The more you do, the more you will fail, and the more you succeed. Throw things at the wall. You never know. Don’t put yourself in the box. Many people limit themselves to what they think they can do or what people expect you to do. Don’t ever feel you need to fit into a box. Put your weirdness into your work” that weirdness sets you apart. There are not a limited amount of opportunities. There are an unlimited number, but if you chase every opportunity, you will never make meaningful progress on the ones that matter. Only pursue opportunities that help you achieve your key goals. Say no to everything else. Also, stop thinking all the good ideas are taken. It will just paralyze your creativity. Your idea most likely has already been done. There are very few “new” ideas out there but who cares! Learn more about your ad choices. Visit megaphone.fm/adchoices

Your paycheck gets deposited, groceries purchased, bills paid, and then you’re broke again until the next payday.  That is the story for almost half of American households, and the vicious cycle is hard to break. It won’t be easy, but you can stop living paycheck to paycheck.  An NYU study found that about 70 million Americans live in “wealthy hand-to-mouth” households. These are families that own assets like homes, retirement accounts, college funds and cars but yet still live paycheck to paycheck. They spend almost every dollar of their annual income to keep up their lifestyle and pay all the bills.  Why is it happening?  If you want to stop living paycheck to paycheck, you need to find the root of the problem. It is probably very simple – you are spending more than you earn. You may not throw your money away on extravagant things, but you are still living above your means.  It’s time to consider making some lifestyle changes. Start by making a list of necessary and optional expenses see where you can save.  If your spending is already very low, ask yourself what you need to survive and reframe your lifestyle choices. That can mean moving to a cheaper apartment, stop eating out,  taking the bus to work, making lunch at home, getting rid of the gym membership or get your bills lowered. There are many people who people survive on very little – look at Mr. Money Mustache. Take a hard look at the choices you have been making and create a budget that will give you the flexibility to save, even if it’s just $50 a month. You can build wealth one dollar at a time. Prosperity Mindset The mind is a powerful thing. To make real changes in our lives, we need to create a positive shift in our thinking. I’m not talking about The Secret “think it and it shall happen” bullshit. Well, maybe a little. Having a bigger vision for what you believe is possible for yourself is the first step to getting there. There is truth in the law of attraction. If you feel that you will never be financially stable or you’ll never get out of debt you most likely won’t. That negativity is reinforcing your limitations. Take full responsibility for your financial circumstances. Your willingness to change it is a key factor in your ability to make better financial decisions. Remember, prosperity is not about having a big house or ton of money. It is about being happy and living comfortably, and the way to get there is with a positive attitude and motivation. Breaking the Cycle Think for a moment on what you’ll gain from breaking the cycle. How will it feel to have extra money at the end of the month? Once you start having money left at the end of every pay cycle, you’ll begin to feel a little freer. Having financial breathing room will significantly reduce your stress.  Give yourself a pay cut. Living slightly below your means will help you stashing away some savings every month to grown an emergency fund. Try to pretend you earn less than you do. Start a crash savings program and do it in a short period like one to two months. Try saving 5-10% of your paycheck. Set up an automatic transfer to your account so it is easier to stick with it. Roughing it for a short period is all you need to get out of the cycle. Once you see that it is doable, it will be much easier to stay on course. If cutting expenses aren’t enough, then you need to build more income. Having an additional stream will make a huge difference even if it’s only $100 extra a month.  It doesn’t necessarily have to be another job. If you have a few extra hours a week, Learn more about your ad choices. Visit megaphone.fm/adchoices

This episode was inspired by a tweet we received from one of our listeners Alexa who asked, How many side hustles are too many? She has been working on a few things that she loves and was questioning if she should just focus on one and ditch the rest for now.  Both Andrew and Thomas have struggled with focusing on one project from time to time. When trying to build a business you have a lot on your plate. Staying focused can be tough with a constant stream tasks and new ideas demanding your attention.  In this episode, the guys talk about why focus is so important. They share how they get focused and deal with working on too many projects at once.  To answer Alexas’ question, it really depends on what the goals are for these side hustles. If they are just fun activities that make you happy and keep you busy, then you can have as many as you want.  However, if you are trying to grow something that you would like to eventually turn into a money generating business you need to focus on one thing. That is only you’ll be able to get the momentum you need for it to grow. Determine which ones are hobbies and which ones are actual business ventures. Once you figure out “the one”, run with it.  WWAD (What Would Andrew Do)  If you have a few ideas for side businesses and not quite sure which one you want to pursue further, experiment with a few things until you get some results.Use the skills you have to narrow down possible fields and match your interests to something you are good at.  After a couple of months if your lemonade stand is flopping but your computer repair business is profiting then you know where to focus your attention. Giving it the time it needs will help you reach your goal of growing it into a full-time job.  Andrew as dabbled in my projects, side hustles, and business ideas sometimes many at once. What he has learned through his successes and failures is not to spread yourself too thin.  Giving your time and attention to many things will either result in failure, burnout or a much longer path to your ultimate goal. Getting focused on one thing and sticking with it has been the main factor in the success of LMM.  Get Focused  So no that you’ve figured out what you want to do, how will you stay focused on whats important? We all battle distraction and it can overwhelm us sometimes but there are plenty of ways to fight it. Whatever you are doing throughout the day should have clear value towards building your craft.  Build a system to help you achieve things every day. Choose a few tasks to complete each day and write them down. Before moving on to anything else, these must be done. Create a schedule and plan time for each task and make sure you give yourself enough time. If you schedule 60 minutes for something and it takes you longer the time crunch will stress you out.  If you haven’t created a system for getting things done, you’re likely losing a lot of productive time to inefficiency. There are many tools out there to help you out. Thomas is all about building habits so he uses Habitica, a free habit building and productivity app that treats your real life like a game. OmniFocus and Evernote are also great for organizing tasks and making lists of actionable items. You can also a try a “Not-To-Do List. The idea is to list all the things you are not going to go through the day to support your productivity. Avoid putting effort into things that will have little or no impact on the task at hand. Spend time on work that will show results. Self Reflect Diving headfirst into a new project can completely consume you. It is so easy to get lost in all the work, and our thoughts. Keep a journal to reflect on what you accomplished and how it measured up to your goals. This way you can see what is working for you and what ... Learn more about your ad choices. Visit megaphone.fm/adchoices

We love to answer questions from our listeners, and sometimes we make a whole episode around it. Today we answer five questions about drinking on the job, Lending Club, borrowing from family, green mutual funds, having fun, buying a first home,  Bonus Question:  I have noticed that you tend to be drinking beer on each of the podcasts, let me just first say, fuck I’m jealous.I would like to know what kind of job I can get that will let me drink beer in the morning (without the whole judgey this guy is probably an alcoholic vibe). If you do respond to this email, please don’t use my name as my current job frowns on asking questions like these.  This question is great. You have to work for yourself or work for some hipster-ass startup that has beer on tap all the time. But even then they’ll probably give you the stink eye if you’re drinking it at 8 a.m.  Question One:  Do you feel Lending Club is still a prudent investment given the recent scandal issues they’ve run into? Will it have long-term impacts on the business and the quality of loans? I’m considering a 50/50 split of my available investment funds between Betterment and Lending Club (in addition to my 401k where I’m already contributing 12%). – Matt  So, a little background in case you didn’t hear. LendingClub CEO Renaud Laplanche resigned after it was found that the company had altered application dates on some large loans. It was also found that Laplanche “failed to fully disclose to the company’s risk committee a personal interest he held in a third party fund while the company was considering an investment in the same fund, which purchased LendingClub loans.”  Tisk-tisk  That said, after a full internal analysis of company reporting, it was found that 99.9 percent of loans were above board. Since the companies stock has plummeted but their loans were not effected.  Many people were fired, so the few bad eggs are gone. Although Andrew lost money with his stock, he still has some money invested in loans. Thomas thinks he will wait this one out and see if and when the company gets back on its feet.  Question Two:  Need advice on relative claiming we owe them money. Last year my wife & I became debt free and were on our way to saving a down payment for an investment property.   Now my mother-in-law is demanding a large sum of money from my wife.  She kept every receipt from when my wife was 18 onward (she’s 36) and now wants to be paid back. The list includes things like brakes on my wife’s first car and new basketball shoes from her senior year.   My wife never signed anything but apparently verbally agreed at the time to pay back some of this money. I realize that from a legal standpoint we probably owe nothing, but I feel as though morally we are responsible for whatever my wife agreed upon. Just where should the line be drawn?  We can probably all agree that this is a pretty terrible parent. At first glance, the situation can make you cringe, but you have to ask yourself, what is really going on here? Is her mom desperate for money or is she just crazy? Keeping receipts for 18 years shows intent like she has been waiting deviously to cash out.  Staying out of it would be the easiest thing but because they are married paying back this loan will be affecting both of them. The guys think that the most important aspect is to try and salvage the relationship. Sit down and have a talk with the mom and try to come to some middle ground. If she needs financial help, she should just ask, and they can figure it out together. Don’t lead with anger and find her intent before making any moves.  Question Three:  My name is Matthew, I’m 25 and just recently married and am on my way to having my first child. I have been looking at buying a house but after recently finding your podcast I’m not sure if I&#... Learn more about your ad choices. Visit megaphone.fm/adchoices

Becoming a new parent is a wonderful life experience, but it also comes with a ton of work, sleepless nights and some financial stress.  Today the guys talk to Kim Palmer, mother of two and author of Smart Mom, Rich Mom about how to build wealth while raising a family and preparing financially for parenthood. New Expenses There are many new expenses that come along with a new family member. According to Kim, on average a new child will cost $11,000 in their first year which doesn’t even include childcare but well get to that. It just goes up after that costing you about $250,000 by the time they are 18 years old. Besides the basics like diapers and baby food which can cost upwards of $75 per week, you’ll want your new bundle of joy to have the best and most safe baby gear. Some of those big-ticket items like cribs and strollers and cost hundreds. You can buy gently used clothing, but car seats and crib are being recalled all the time so avoid buying those second hand. Most families have to make the decision whether or not to pay for childcare. Cutting one parents salary out of the equation and it’s a tough call. With all these new expenses the thought of removing a salary even for a few months can be a scary thought. On the other hand, childcare costs are pretty high. Depending on where you live, it can cost $2,000 a month for daycare and $4,000 a month for a nanny. Child care will likely be more than your mortgage payment. Kim loves using Amazon Family which gives Prime members save 20% on diapers subscriptions plus additional family-centric discounts and recommendations. She buys a lot online so she can compare prices and maximize her family savings. Start saving sooner than later. She and her husband saved for fives years before having their first child. It will get much harder after you have children. As a parent, you also need to start to think about saving for college tuition or buying a larger home for your growing family. Maternity Leave Unfortunately, most women do not get paid maternity leave. If you are planning a family in the future, this is critical to take into consideration when looking for a job. Unless you are planning on giving birth at your desk, then you will need some time off before and after the baby is born. If you want to know more about the company culture and policies of a potential employer, check out Fairy God Boss. They offer a platform for women to get the scoop about companies, and their policies from other women. Before asking about taking your time off, talk to other co-workers about their experiences with maternity leave. See how they navigated it and came up with a plan – how long will you need (providing exact dates) and who will be taking over what duties in your absence. This will give your boss a clear picture of what the next few months will look like without you. The Future Saving for your children future and education should start as soon as possible but not before you pay yourself. Contributing to your retirement is a priority then you can begin saving for your children’s’ future. College costs are rising and if you want to help your kids pay for college, opening a 529 savings plan is the way to go. You can set up automated monthly payments so you can make steady progress over eighteen years. How much should you be saving? Kim says Fidelity suggests $5,000 per child per year if you can swing it. Eventually, your kids will leave the nest, and you want them to go with as much financial knowledge as possible. Talk to your kids about sacrificing now for future goals. When they ask questions, try to give an answer that will introduce them to new concepts. Learn more about your ad choices. Visit megaphone.fm/adchoices

Happy 4th of July! While you are watching fireworks, remember how much hard work and dedication it took the founders of the United States to declare independence. It takes the same effort and dedication when it comes to financial independence. These are the best habits for independence.  Finding financial independence takes a lot of hard work too. Today the guys talk about building habits for independence and what mindset you need to become more freedom financially.  What Retirement Should Be  Andrew was recently having a conversation with his father about retirement. He said even when he has enough money to retire, the thought of having a finite amount of money and slowly burning it down its a pretty scary.  The Concept of retirement is changing. Thomas read a book called The Happiness Equation, which talks about where the idea of retirement came from. In the 1880’s the German started making it mandatory for people over 65 to retirement to free up jobs for younger people. Back then the average lifespan was 67, so they only needed to have enough money to survive a few more years. Fast forward to today. The retirement age is still 65, but people are living well into their 90’s. They need a lot more money to live out the rest of their lives comfortably. Because retirement is a time of leisure, and travel, you will need to save more than just the cost of living.  After reading this book, Thomas believes the idea of retirement is broken. Retirement for Thomas is having enough money so he can work on not for profit projects and still be able to support himself. Independence is not retiring; it’s the ability for you to put your time where you want to put your time. Getting Out of the Rat Race Many of us feel trapped in the cycle of going to work every day so we can pay the bills every month. This never-ending cycle is called the rat race. It is a period where you are required to put in a certain amount of time to get a certain sum of money. Always trying to get those TPS Reports to your boss. The ability to step off of the wheel and claim your time back is true independence. Although it isn’t going to happen overnight and it indeed takes some work but it cane is done. If you have your mind set on financial independence, creating habits for success will help you get there faster. Do three things every day Take an hour in the morning plus an hour when you get home and dedicate them to accomplishing daily tasks that will help you reach your goals. A bunch of those small steps will lead to bigger things. Keep your expenses low Recently, Andrew and I played Cashflow with some friends. It’s a board game where the goal is to get out of the rat race. You have a job, investments, balance sheets – it’s pretty intense but super fun. Get out of the rat race by increasing your passive income to twice that of their expenses. Keeping your costs low is just as important as making more money. Budgeting aside, once every few months go over your reoccurring costs and make sure all those things you’re paying for are still important in your life and making you happy. Beware of lifestyle creep. Don’t let your expenses increase your income. Invest In Your Labor-Asset By 2020, 40% of the US workforce will not be full-time workers. Being your own boss will be the new norm. Labor is your biggest asset. It is crucial to building the value of your work by actively trying to learn new things. Learn more about your ad choices. Visit megaphone.fm/adchoices

Season two of Listen Money Matters has officially reached 100 episodes. Thomas and Andrew have learned so much from each other and from the excellent guests we’ve had on the show. Today the guys discuss the top 10 things they have learned in 100 episodes this season. Andrew’s Lessons Having routine changes everything. Andrew learned the power of habit and made better use of his time. Having a routine has done wonders for his productivity and has actively and consciously built himself a daily routine so he can achieve more throughout that day. #gettingshitdone. Allison’s real estate investment strategy rocks. This episode caused a significant mindset shift for Andrew on how he approached wealth building. Allison inspired and opened his eyes to how easy it is to get into real estate investing. She was an excellent example of a typical family creating passive income through hard work and time. Real estate investing isn’t that hard. On a similar vain, this episode further educated Andrew on how the whole process works. He learned how hands off real estate investing could be making it a great passive income stream. Take the emotion out of money. Joan Sotkin was one of our favorite guests on the show, and her interview came just in time. Andrew was so caught up with work and was being driven by anxiety. He as approaching a burnout again and Joan was able to help him find balance. She taught him to stop worrying so much about money and focus more on healthy relationships and being in good physical health. Turn your family into a business. Great episode! Natali Morris was very inspiring and had some great advice on how to grow your family’s wealth. Since that episode, Andrew has taken the business more seriously and reduced our families costs by utilizing business write-offs. She also introduced us to the self-directed IRAs. Thomas’ Lessons The importance of Delegating Work. This was not part of an episode, but since working with Andrew, Thomas has learned to offload some work and hire some help. He was overloading himself but still resistant to the idea of having a team, but after a few of Andrews lectures, Thomas was convinced. He now has a small team, and his business is growing as a result. Investing in yourself is important. Before he started the LMM podcast, Thomas was a set it and forget it mutual funds kind of guy. This season has opened his eyes to different types of investments. One of our latest episodes was with Doug McCormick, author of Family Inc. He talked a lot about labor as one of your most valuable assets. Thomas learned it is super important to invest in yourself and your business. In the end, it could be a much better return on investment. The borrowing against your 401k battle. So, we got our asses handed to us on this one. After the borrowing against your 401k episode aired, Thomas began doing some hardcore research on the subject and learned a ton, but the real lesson for him here was understanding his responsibility as a podcaster. Everyone listening to the show has a different financial situation, so when discussing personal finance topics like this, Learn more about your ad choices. Visit megaphone.fm/adchoices

Growing your wealth is not just about keeping up with your budget and investing some money in the stock market. To achieve financial independence, you need to have a solid plan, and that starts with better decision making.  Today on the show the guys talk to Douglas McCormick- Army veteran, entrepreneur, and author of Family Inc. He teaches us about managing your family finances like a business and how to use business principles to maximize your wealth.  Many Americans of all ages struggle with finances. Douglas wrote Family Inc to provide everyone a straightforward and holistic way to manage their money and build wealth for their future. He wants to empower people to strive for financial independence and give them the education to make the right decisions.  Appoint a CFO:  Like any business, someone needs to be in charge of what is going on financially. Although the whole family will make decisions together, there should be one person who will be in charge of making sure all the money is managed correctly. This person is going to be the family’s Chief Financial Officer, and every family should have one.  They will handle cash flow, risk management, small business investments, education investments, tax planning and most importantly be a teacher. The CFO will use the tools of the business world to customize a family financial plan and actively manage it.  The CFO will use income reports and balance sheets instead of a traditional budget. Budgeting is a useful tool but can sometimes be short sited and distract us from what is paramount. Marking off every penny you spend month after month is pretty tedious and can easily get neglected after a few months.  Douglas believes with budgeting; less is more. You want to focus more high-level expenses like rent and electric and less on tracking packs of gum and coffee shops. If you are ready to ditch budgeting for balance sheets, you can create your own on his site. Value of Labor In Family Inc., Douglas talks about the value of labor and how it is factored into the families net worth. Although we never really think about our labor as a financial asset, the family’s labor (selling skills for money) is a huge asset and it needs to be managed like one. You carry this labor asset with you throughout your life, and you’ll need to maximize it from your first job into retirement. With this value of labor mindset, you can make better choices when it comes to education and career. Higher education is certainly important, but you don’t want to pay for “excess” schooling. Let’s say you want to get your MBA. As chief financial officer, you will need to figure if the skills you’ll acquire can push your career to the next level while still being beneficial to your overall financial goals. Don’t just jump in head first without a clear goal. The value of labor also factors in when deciding on a job offer. We typically focus on the compensation, but you should also consider what about this job can drive more long-term value like developing new skills that can help you earn more in the future. Entrepreneurship “The surest way to financial freedom is entrepreneurship.” Douglas believes that it is unlikely you will create real wealth through traditional employment because of the competition in both the labor and capital markets. Starting your own business does come with some financial risk because there are no guaranteed minimum earnings, but there is no ceiling as well. The nature of employment has changed in the last decade and every year more and more people are moving out of the rat race and taking the leap into entrepreneurship. Besides the tax benefits and being your boss, when you own a small business, Learn more about your ad choices. Visit megaphone.fm/adchoices

Ever wonder how to people make money selling wholesale on Amazon? Andrew trawled Quora and found someone to teach us how to do it.  Eddie Lichstein has been in the e-commerce business for 13 years selling wholesale on Amazon. He has always been a car nut and runs a site, TH Motorsports, which is the Amazon of car parts. He also runs Rejoiner, a site to help e-commerce business owners improve sales. Eddie has been very generous answering questions on Quora and he came here today to answer our questions. America Was Built On Small Business Small business makes up 99.7% of US employer firms. America has always been a country that fosters small business. And right now, certain sectors like e-commerce, are like the Wild West. In 20 or 30 years, people will look back with amazement at how easy it is to make money right now. So why aren’t more of us starting small businesses? Because we get caught up in the details; how do I incorporate? I’ll need an accountant, a lawyer. I’m just a regular person, I can’t deal with all that. Stop thinking that way. You can jump into e-commerce like we’re going to describe with no capital. All you need is a credit card (that you pay off in full every month!) and enough time (but it doesn’t take too much) to do some research and leg work. If You Have An Awesome Dildo, It Will Sell Eddie said that I had couldn’t resist using it as a headline. It’s not quite that simple. You have to love dildos, but really, who doesn’t? The barrier to selling through e-commerce is very low but you will be more successful if you sell something you love because the things you love, you know a lot about. Look around you right now. There are probably half a dozen small things in site that are not terribly expensive that you know a lot about. Choose three or four things and we’ll move on to the next part of the plan. Jungle Scout Jungle Scout is a site that allows you to do research into what sells on Amazon which is what every e-commerce seller wants to know. We used carrot/potato peelers in our example. You research the peelers and you want something that sells somewhere in the middle. If you choose top sellers, you won’t be able to compete with the sellers already peddling those. If you choose those at the bottom, there aren’t enough people buying them. Eddie figures that you will spend about 48 in total researching the product you want to sell. Ali Baba Ali Baba is China’s version of Amazon. But you can get a lot of items there very cheaply because it costs less to manufacture in China than in other places. So you buy 100 peelers. Remember, you are still not really spending money. You’re financing this on net 30 terms because you’re charging it and at least for your first foray into this, you should choose an item that is inexpensive so that if it doesn’t work out, you’re not out much money. You also aren’t taking much risk because you know what will sell after your research on Jungle Scout. Become A Detective You know how to make this whole thing cheaper and more profitable? Cutting out the middleman, Ali Baba in this example. Ali Baba isn’t making those peelers. They’re are getting them from a supplier. You want to see if you can track down the supplier. Learn more about your ad choices. Visit megaphone.fm/adchoices

When it comes to real estate, breakaway success is found at scale, and Fundrise’s goal is to scratch that itch. Does the Fundrise platform stand up to the hype? That’s what I was determined to find out.  I’ve always been a do-it-yourself investor – especially when it comes to real estate.  My wife and I own three rental properties, and the condo that we live in is the result of a successful fix and flip over two years.  It goes without saying that real estate is both an essential part of our wealth building strategy and something that we’re particularly interested in. It’s a strategy that is, above all, focused on long-term growth.  Over the past one and a half years we’ve interviewed Ben Miller the CEO, twice. First, when Fundrise just started and was only available to accredited investors and a second time after they opened up their platform to normal people – we invested soon after. They’ve since scaled massively, paid me a ton of dividends and relaunched their entire platform as “Fundrise 2.0“. So, I thought it was long overdue that I broke down what they are, why you should care and what they do well (passive income). Let’s get nerdy! What is Fundrise and why should you care? Fundrise is a crowdfunded platform that allows average investors access to real estate returns they could not access on their own or through a traditional REIT. Their bread and butter are real estate deals that are overlooked by large institutional investors and out of reach for most individuals. Investing with Fundrise is available to non-accredited investors. Simply put, that means that anyone can invest with them, you no longer need to be insanely wealthy. And what is a REIT? A REIT, or Real Estate Investment Trust, is a company that owns or finances income-producing real estate. Most REITs are similar to Fidelity’s FRESX in that they manage many billions of dollars in assets and thus have to invest a significant amount of money. So, to be able to invest in new deals and manage the fund’s existing investments they typically need to make larger bets. They simply don’t have time to chase smaller properties. Often large REIT investments aren’t even directly in real estate assets but companies like Public Storage. Because what’s even easier than going out and finding real estate deals worthy of investing in? Investing in companies that do that already. Such is the case with FRESX whose largest holding is just the Public Storage company. Sounds like a shitty deal as there is Such is the case with FRESX whose largest holding is the Public Storage company. Seems like a shitty deal as there is little value added here considering a REIT is so much more expensive than just buying some of Public Storage yourself – for less. The problem is that this is pretty common and there just aren’t many REITs that are strong picks if you’re looking to buy into the rental market. Individuals, on the other hand, are mostly investing in smaller properties ($100k – $200k in value) that are in higher demand making it harder to generate a reasonable profit. It’s also more difficult, and expensive, to manage 100 properties as opposed to 10. That’s why the vast majority don’t go down this road. Learn more about your ad choices. Visit megaphone.fm/adchoices

Emotions have no place in investing. You rely on cold, hard data to make investing decisions. Today we’ll talk about ways to take the emotion out of buying stocks with the founder of Simply Wall Street.  We interview Al Bentley, wind-surfer, CEO and co-founder of Simply Wall Street, an Australian startup that helps people make better investing decisions by turning complex data into easily understood infographics. Buy and Hold Wins Again Confirming yet again the advice that LMM has been giving you from the start, Simply Wall Street does not advocate picking individual stocks but rather the buy and hold strategy. But because there are people who buy individual stocks, Simply Wall Street wants to give them the best information available in a way that is easy to understand so that they can take the emotion out of buying stocks and make right decisions. The site does get incredibly detailed on individual stocks even looking at things like CEO compensation, but when you visit, you’ll notice that one piece of information they don’t include shares price. It is part of the analysis, but they don’t want people to rely too much on that one bit of data. People get too hung up on price when deciding what stocks to buy. DIY Fund Simply Wall Street wants to allow people to pick individual stocks not so they can sell them off quickly, but so they can essentially build their own fund. Individual stocks shouldn’t make up your entire portfolio but using the information that SWS provides makes it easy to have direct shares as a part of your portfolio. Investing for the In-Betweeners There is certainly no shortage of information available to help you pick stocks, but a lot of it is not easily understood by normal people. And what can be easily understood, previous share price, for example, is not a good indicator. You can’t always predict the future by looking at the past. It’s important to look at certain ratios like P/E and P/S, but you need context to understand what those numbers are indicating. Some investors rely on things like Google Finance for information, but that was built by finance people for finance people. SWS wanted to create something for the rest of us, the layperson that doesn’t have all the technical knowledge that some finance people assume everyone has. The founders are not finance guys, so they don’t have those ingrained biases. They were investors though so understood the problems of investors. There are a lot of resources for brand new investors, things like Betterment and Robin Hood, and things for high-end investors but investors that fall between those two categories are under-served. Special Snow Flakes   SWS uses a system that is meant to analyze stocks that will be held long term. If you really want to nerd out, they open sourced their analysis model on Git Hub so you can have a look for yourself. There are five main components; Value: Value is based on future cash flow and its price relative to the stock market. Future: The expected performance in the next 1-3 years, based on estimates from up to 50 analysts. Past: The earnings performance over the previous five years. Health: A company’s financial health and their level of debt. This marker is critical to long-term investing. Income: The current dividend yield, its volatility, and sustainability. There is another factor that SWS looks at that many investors and advisors overlooks; management. How long has the board been serving, is the CEO grossly overcompensated, Learn more about your ad choices. Visit megaphone.fm/adchoices

We get a lot of listener questions, and sometimes we get the same question several times. When that happens, we know a five questions episode is in order! Today we bring you give questions on profit sharing, tradelines, 403Bs, 401ks, and paying off debt.  Question One:  Can you guys explain the difference between a regular 401k vs. profit sharing 401k? What’s the difference between the two and can you withdraw from both early?  Profit Sharing is solely employer-funded. You’re not putting money from your paycheck into it like you would a 401k. It is your employer making contributions towards your retirement.  Contributions are usually based on the percentage of salary – higher salary = higher profit sharing. As for withdrawal, the plan administrator has a lot of decision making power in determining pre-withdrawal requirements.  For a 401k, the employee is the primary contributor to account. Some employers will match contributions, but not a requirement. Even if they match in given year, an employer can suspend matching in future years. Your contributions are wholly vested right away, but employer contributions can have vesting requirements such as having to work a minimum amount of years.  There are certain circumstances where there are penalty-free withdrawals like for hardship, but most early withdrawals will cost you.  Question Two:  Are trade lines even a legit way to build credit? Or is it just a scheme? Im a late bloomer with my credit and I’m looking for a way to build it up. And where should I put money?  I am saving for a vacation. In a capital one 360 savings account, mix in with my betterment build wealth account, Acorns, or some other strategy?  Tradeline is an industry term for an account or line of credit. If you Google tradelines all the top result are marketplaces for trade lines or credit accounts. So why would you buy a line of credit?  Let’s say Andrew has a Capital One credit line that he has been paying on time for five years which puts the account in good standing. Thomas, on the other hand, has only one line of credit for a year with some late payments and now he wants to build his credit.  In this case, Thomas can go to one of these tradeline marketplaces where Andrew is selling his good tradeline. This allows Thomas to purchase his credit line to help build his credit. Andrew would add Thomas as an authorized user. Then, Thomas would remove Andrew as an authorized user and viola, Thomas now has a five-year credit line in good standing and credit score increases.  Yes, this is some shady shit, and we do not recommend this. There are many other ways to increase your credit.  Try applying for a secure credit card or use a third-party rent reporting service, so your on-time rent payments count towards your credit.  As for the second question, if you are planning on traveling soon, there isn’t a need to put your vacation savings into an investing account. Any short-term savings are better off in a checking or savings account.  Question Three:  So I stopped my contribution to my 403b today (teacher) because the returns on it sucked a bag of dicks. I was getting guaranteed 3% and paying fees, which I’m confident I can improve upon by managing my investments myself. The money I’ve contributed thus far is less than $3,000, and I’ve been putting into it for a while. I’d like to roll it over into something else, but the company I have the 403b with, Great American) hits me with MASSIVE fees if I move the money before the contract with them is up, and I can’t move that money to anything other than another 403b according to the IRS. All that to say, I am willing to just cut my ties with that money for now, still have it in my tiny portfolio but just stop funding it.  Now, I can spare about $150 to throw towards investments. Learn more about your ad choices. Visit megaphone.fm/adchoices

There are many ways to make money on Amazon, and retail arbitrage is one of them. I know, it sounds pretty badass. We’ll teach you how it’s done.  We have Jessica and Cliff from The Selling Family on the show to talk about their experience using FBA to create a successful lifestyle business. They started in 2010 and now make 300K in sales a year bringing in 100K in profits. What is FBA? FBA or Fulfillment by Amazon allows anyone to sell goods on the Amazon platform and store inventory in their fulfillment centers. Simply put, you buy items you want to sell, and Amazon will list them, store them and ship them to your customers. They also handle most customer service inquires, refunds and returns. Interestingly, more than 40% of Amazon’s total sales come from third-party sellers. Amazon is the go-to place to buy anything from vitamins to dog tu-tus. It’s trusted name with a highly trafficked marketplace (understatement) which makes it a perfect place for your products to gain visibility to millions of buyers. FBA gives everyone the tools they need to start a small online business. They now have warehouses all over the U.S. making same day and next day shipping available to many people across the country. Based on what you are selling, Amazon will have you ship your items to whichever fulfillment center would sell the most of your product. If you use FBA, your products are eligible for free shipping which will increase your chances of getting into the “Buy Box.” What Can You Sell? There’s a surprisingly short list of items you can’t sell on Amazon. Unless you are trying to push imitation weapons, baby crib bumpers or foie gras, you can sell just about anything you want. However, you need to be smart when choosing your items. If Amazon itself is listing the same item that you are listing, they obviously are going to take the sale. Jessica and Cliff sell mostly health and beauty products as well as some grocery. They look for items that Amazon no longer carries or that have run out of stock. You have to do your research and test the waters before finding what works best for you. Also keep in mind that to list certain types of items, you may need a Professional Seller account. A Pro Sellers account will run you $39 a month but is entirely worth it if you are selling forty plus items a month. Finding Your Items The Amazon Sellers App offers mobile tools that help sellers search and scan barcodes of items, check prices, sales ranking, and reviews, list items, as well as communicate with customers. You might find the best deal ever on passion fruit candles, but it won’t necessarily bring in the profits your are looking for. Amazon does a 30% cut so you’ll need to find products with high-profit margins. Jessica and Cliff set a minimum of five dollars profit on any one item they sell. It’s important to make sure there is a healthy gap between my purchase price and profit after Amazon’s cut. Make sure the item has good reviews. The profit margin might be 300%, but if it has terrible reviews, you will have less chance of selling it. The size and weight of the items is also something to consider. You do have to pay for shipping to the Amazon warehouse. Although it is heavily discounted, the price still depends on weight. Know the best time to shop.  Learn when the stores around you have sales or push things to clearance. Learn more about your ad choices. Visit megaphone.fm/adchoices

Tax-loss harvesting is a term you’ve probably heard but don’t know what it means. It may seem obscure, but it’s a good weapon to have in your investing arsenal. So just what the f**k is tax-loss harvesting?  Dan Egan, the Director of Behavioral Finance at Betterment is joining us to talk about Tax Loss Harvesting. We discuss what it is, how it works and what sort of benefits it provides you as a long-term investor. Tax-loss harvesting is the selling of securities at a loss to offset a capital gains tax liability. What is Tax-Loss Harvesting? Losing money on an investment stinks but there is a way to soften the blow a little; tax-loss harvesting. TLH means you sell an investment that has lost money. By harvesting investment losses, you can offset taxes on short-term gains and income. You replace the investment that was sold with a similar one to keep your asset allocation the same. Okay, that’s a little confusing for us lay people. Keep reading. Here’s an example of how it works. You bought $100 worth of Apple stock. After six months, it’s only worth $70, so you sell it at a loss of $30 and buy a similar stock, like Microsoft. At tax time, you let the IRS know that you had that $30 loss, and they will reduce your taxable income by that $30. TLH used to be something only very high worth investors could take advantage of because it’s such a labor-intensive process. It takes a lot of tax planning.  If you use a personal financial advisor or tax advisor they should offer this benefit to you. Now computer algorithms can do it in seconds. If you invest through Betterment, this is done for you behind the scenes automatically and for free. Benefits of Tax-loss Harvesting TLH is a form of tax deferment. You will have to pay taxes on that $30 you lost in Apple eventually because you embedded a future gain when you bought a similar stock, Microsoft. But you won’t sell that for a year or more so you’ll be charged the long-term gains rate, which is lower than the short-term rate. For tax purposes, inflation works in your favor here because that $30 is worth more now than it will be in the future when you pay your tax bill. Because of inflation, paying taxes later is better than paying them sooner because it erodes the actual value of the taxes you will eventually pay. You know how people tell you that getting money back on your taxes (thrilling as it is) is a bad thing because of that money, your money, has been loaned to the government tax-free? Well, you can use TLH to turn the tables. TLH is like getting a loan from the IRS on which you’re earning money on over time. Realized losses on investments can offset gains and reduce ordinary taxable income by as much as $3,000 per year. Taxes Everywhere! You pay income tax of course, and there are various types of taxes you pay on your investments too. Capital Gains A capital gain is a difference between the price you paid for an asset and the higher price you sold it for. The IRS wants a cut off that profit, and they take it in the form of a capital gains tax. There are realized and unrealized capital gains. Gains are not realized until the asset is sold. The government wants their cut, but they also want you to be a long-term investor. If you hold an investment for less than one year, it’s considered a short-term investment, and you will pay a higher tax rate, the same rate that your income is taxed at. Selling investments in the short term are considered a job in a way, and you’ve taxed accordingly. If you wait more than a year to sell, you will be taxed at a much lower rate, no more than 15%. That’s a substantial difference so be sure you take that into account capital loss when you’re deciding whether or not to sell. Learn more about your ad choices. Visit megaphone.fm/adchoices

While weddings are a wonderful way to celebrate the love between two people, it can come with a hefty price tag. But it doesn’t have to. You can have the wedding you want without going broke. I did. Here’s how beautiful party without blowing your wedding budget.  It is important to bear in mind during the whole process that a wedding and marriage are two separate things. What is crucial on your wedding day is you, the one you love, a marriage officiant and your wedding license – everything else is extra.  Your wedding will last a few hours, but your marriage is for a lifetime.  With that said, who doesn’t want to have a party and share that special day with all the people they care about? There is a lot of planning and money that comes along with it, and it can quickly become out of control.  Who is Paying?  Your wedding is probably the priciest party you’ll ever throw in your life. As of 2015, the average wedding in the U.S. ran about $32,000. Of course, it depends on where you live and what kind of wedding you want to have.  Last year in NYC, the average wedding cost $86,000. Yup, that’s a down payment for a home. Who is dishing out that kind of money?  In the past, it was traditional for the bride’s parents to pay for the wedding, but lately, more couples are paying for their wedding giving them control over how and where the money is spent.  Couples paying for everything themselves have maximum flexibility.  Just like you have dreamed of what your big day will look like, so do your parents. If they are paying, they can have a say in planning as well. If mom wants to invite 45 of her closest friends, then she can.  Many couples make concessions to make their family happy but it’s so important to remember, this day is about the two of you, not the whole family.  Paying your way is much easier because you can make all the decisions. If the family is paying, make sure there is clear communication and expectations are set.  What To Spend On  Day Of Coordinator  You want to enjoy the day as much as possible and having a day of coordinator will help you do that. I had one, and it was the best thing I ever did. Everything happened seamlessly while I danced, drank and had a great time.  A coordinator is a cheaper alternative to a wedding planner.  Although they are not with you for months planning the whole event, the day of they act as a liaison between the DJ, caterer, florist, and coordinate the logistics of your wedding day to make sure that everything goes as planned, so you don’t have to.  They can also act as a “Brides Guard” to help fend off anyone trying to steal your attention when you need a minute to yourself. You don’t necessarily have to hire someone to do this; it could just be a friend who likes to take control.  Photographer  After all the food is eaten, drinks drank and favors given out, the only thing you two walk away with are photos of the day (and a whole lot of envelopes filled with money). Those the memories you’ll have forever so don’t skip on a photographer.  You can find one for a great price, just make sure to look at their portfolio. Check that they have experience taking photos of people moving. If you only see still life pictures in their portfolio, they probably won’t be the best fit for your wedding.  We ended up getting a friend of the family who was a wedding photographer on the side and spent next to nothing. We have wonderful memories and even saw things we missed! Also, check out an app called Wed Pics where guests can join your party and take their pictures and videos that are shared with you and all of your guests. Food & Booze (but mostly booze) Don’t skimp on the bar! People are coming to a party and expect to have a drink…. Learn more about your ad choices. Visit megaphone.fm/adchoices

The process of buying or selling real estate can be intimidating and overwhelming to both the first-time and experienced buyers.  Today we talk to our agents, Dean and Gerard from GD Group Moves Real Estate in Hoboken, NJ about the anatomy of a real estate deal. Every market is a little different, so if your looking to buy or sell a home in your area, you should talk to a real estate agent in your community. In this episode we will cover some of the important things to know before going into one of the largest financial transaction of your life. Choose Your Agent Wisely Buying or selling a home has a lot of steps, mountains of paperwork and a ton super important decisions so, you want to make sure you choose an agent who will be on your side and able to guide you through the process. Don’t fall into the ” I know a guy” trap. Just because you’re best friend’s Uncle is an agent in the neighborhood doesn’t mean he will be the best at marketing your property or negotiating a great deal. You need to do your own research. Start by looking at agents in your neighborhood with good reviews. Zillow is a great place to start. There you can check out the premiere agents in your area. Once you find an agent you are interested in working with, you’ll need to learn out a little more about them. Ask them questions about their professional experience and track record. Think of it almost as a job interview, you want to hire the right person for the job.  It is also an excellent way to get to know them and gauge compatibility. It’s a long process so you don’t want to work with someone you don’t get along with. Here are some important questions to ask before choosing an agent.   * How many properties have you sold last year/this year? Many real estate agents work part time to make extra cash but you really want someone who is doing this full time for many years with a lot of experience. If you are a buyer, you’ll want someone who can show you new listings ASAP. If you are a seller, you’ll want an agent who is always ready to show your home to buyers. So if you had a choice between someone who sold 5 homes last year compared to 50 homes you know what the clear choice is. * How long have you worked in this market?  You’ll want an agent who knows the area inside and out and may even be part of local networks. For buyer and seller agents, neighborhood expertise is a must. Also, the real estate market is always changing so it is important to find someone who is up on the current trends. * Do you have a team? There are many people involved in one real estate deal – lawyers, inspectors, agents, appraiser, etc. With all of these moving parts you need to make sure no one drops the ball. If your agent has a team behind them all the transactions will move smoothly. * What kind of marketing do you do? If you’re selling a home, marketing is a key. By increasing exposure of your property through online marketing, you can grow your buying pool dramatically. Asking your agent on how they plan on getting the word out about your property is a must. Running Facebook, Google or Zillow ads can really help reach your potential buyers.   What Sells a Home? There are two important things when selling a home, marketing, and pricing. Doing both of these rights will open the market to 100% of your potential buyers which will get you the best price as quickly as possible. Also, taking professional photos of your property is super important. If your place doesn’t look great online, it’s going to get overlooked. Dean and Gerard got their photographer in to take photos of our listing and the place looked A-MAZING on Zillow. We couldn’t even believe it was our apartment. Learn more about your ad choices. Visit megaphone.fm/adchoices

The guys tackle five great listener questions today. For full answers listen to the episode below.  Question One  Longtime listener, quick question. I currently put about 25% of my income toward my betterment retirement fund. I rent now but eventually would like to buy a house within the next 10 years. Should I go 15% retirement and 10% home? I would create a new betterment account rather than keeping all in one. Let me know what you’d do.  If you are able to save 25% of your income then you are definitely on the right track! The split of the savings really depends on your situation, the percent is arbitrary. What is really important is if x% is enough to reach your retirement and other goals.  Taking into consideration how much you make, what kind of raises you can expect in the future and how much of a down payment you’ll need to purchase a home, will help you figure out if 10% over 10 years will be enough for the kind of home you would like to buy. You also need to figure out if saving 15% a year is enough for the retirement your looking for.  Question Two  Hi Guys- I’m 26, in sales (salary plus bonuses) and also work at a restaurant every Saturday. My salary is $42,000, and my bonuses usually total $5,000 per year. Serving money obviously fluctuates, but let’s say its $130.00 a week on average. (520/mo ~ $6/yr) = total $53k  I have $3,300 in credit card debt and paying that off is my immediate financial goal. I’ve tightened my budget and am using the money i’m saving there plus my serving money to pay that off. Basically, i’m throwing every extra dollar I have at that debt.  My question is what should I do when I pay that off. I have 19k in federal student loan debt, but I have friends and co-workers who say thats “not bad debt” and I should start saving for a house/investing my money instead of putting all my resources into paying that off as quick as possible.  Any thoughts or suggestions will be greatly appreciated. Thanks again guys.  We get this question a lot and most of the the time the answer is pay off your student loan debts after you you have suitable emergency fund in savings. You can’t wipe out your bank all accounts to pay off your debt. Leave yourself some breathing room and make sure you have some money saved up for any unaccepted bills or situations.  Also depending on your debt interest rate, it might be ok to start investing. If you have a low rate (3.8%) putting a little into the market is ok. If you have a high interest rate (7%+) the 19k in loans will become 21, 22, 23k if not paid down quickly. The market average is 7% so if your loans are 7% or higher mathematically it’s a better choice to pay off debt first and fast. The freedom you feel when it’s all gone will be worth it.  Question Three  I am 31 years old and married. My wife and I make about 80k per year combined and live in Colorado. I contribute to my employers 401k up to match each year. I have an online high yield emergency fund account with about 10k saved. We only keep about 5k in our checking account to pay off the credit cards and mortgage payments each month.  Here’s where it gets interesting: When I was a child I inherited a large amount of money, around 250k which was set aside until I was 18. Since then it has been in a portfolio of mutual funds actively managed by a financial advisor. The returns have been a meager 4% since 2004. This is where I’m concerned after hearing about the awesome returns you guys have been getting through betterment and vanguard.  My financial advisor seems to be making a lot of money off me in quarterly fees (about 2500 per year) with very minimal returns compared to what I could be doing with betterment and vanguard.  So my question is, what you would you guys do with the 250k? I always thought I wasn’t financially capable of actively... Learn more about your ad choices. Visit megaphone.fm/adchoices

Small businesses are a big part of our country’s economic growth, so you would think the government would make starting a business as easy as possible. Of course, this is not the case. If you need a business tax strategy- listen up.  You might think coming up with a great idea and creating a solid business plan would be the most difficult part- that is until tax season comes along. Today we talk to expert business tax planner Diane Gardner about the importance of having a well thought out business tax strategy.  After filing mountains of tax returns, Diane works as a coach the rest of the year using pro-active tax planning to help her clients keep more of their hard-earned cash. She loves creating business tax strategies to help successful entrepreneurs across the United States pay the least amount of income tax they can legally pay.  Don’t Half-Ass Your Taxes  If you are planning to start a small business, it is critical you research all of the federal, state and local requirements. If you don’t cross all your T’s and dot all your I’s it will cost you. There are many regulations and the rules that can vary between locations and business structures.  Find out what your state requires and how often you need to file. Business taxes need to be filed throughout the year, not just during tax season. This can be challenging, so if you don’t feel comfortable submitting them on your own, there are companies out there that can take care of this for you (of course at a cost).  Not filing your taxes properly can cost you and your business a lot of money. Believe me; Listen Money Matters has had their fair share of fines. Like us, many business owners starting out choose to file their taxes using products like Turbo Tax and that’s a huge no-no.  Although products like Turbo Tax work ideal for simple personal taxes, using it for business is not a good idea if you don’t know what you are doing.  If you have done your taxes before and fear you may not have done the best job, no fear! You can revise your returns for up to three years. Anything before that you can kiss well. Consider it a donation to your country.  A good rule of thumb is to save all your tax paperwork for at least seven years in case of an audit.  Structuring Your Business    When starting a business, you’ll need to figure out how you will structure your company (partnership, LLC, S-corp, C-corp, etc.awesome). Choosing a company type can be a great tax planning tool and can come with impressive tax advantages. It will also protect you from any liabilities such as a lawsuit. This part can definitely be confusing so consult your attorney to figure out what would work best for your business. Most likely you will want to go with an LLC because it can act as a Sole Proprietor, S Corp, C Corp -basically anything. However some states are not LLC friendly, like California, so do all your research before filing. The image below links to a great infographic that will help you understand the difference between each structure.         Moving From Hobby To Business   Most people are not making millions when they first start out. Actually, most are making nothing or close to it and that’s ok. When you are still working on growing your business it can be referred to as the hobby stage. So when does it go from hobby to business? You may have heard that after three years if your company has not made any profit it will be considered it a hobby and not a legitimate business. This is a myth. After a few years with no profit, the government will look at each business case by case to see if you have a well-conceived business plan they show intention to make a profit... Learn more about your ad choices. Visit megaphone.fm/adchoices

It’s been a while but we are back with our Better Know a Millionaire segment and today the guys talk to an entrepreneur, speaker and house painter Matt Shoup.  Matt has an incredible story from being six figures in debt to becoming a millionaire. There were many ups and downs on his journey of success. Listen to hear how he started his business with a hundred dollars and how a customer’s baby ended up completely covered in paint. Yup, true story. From early on in his life, Matt had that entrepreneurial spirit. At the age of 10, he was shoveling snow for extra cash and started his first business selling candy out of his locker. He started to hustle in college when he joined College Works Painting where he received training on how to run a successful painting business. After training, it was up to him to grow his business and began simply by knocking on doors around the neighborhood selling his services. Before he knew it, Matt as making a six figure salary at 22 years old. The problem was he was also spending a six figure salary and then some. Two times his salary to be exact. He spent a lot of going out with friends and partied – but it didn’t stop there. After graduation, Matt got married and bought more house than he could afford to put himself in even more debt. Around the same time, he also left the painting business to find a “sexier” job and became an employee of a mortgage company- real sexy ;). He soon realized he hated it and didn’t like the practices that were going on. It was too corporate. The bank culture wasn’t for him, and the morals were too sketchy. On a March afternoon in 2005, his life came to a crashing halt after getting fired from the bank, and he stood in a parking lot with all he owned in a bankers box. Now a jobless 23 year old with $172,000 in debt he realized he had to get his shit together. Matt made a decision that changed his life forever. With the last $100 to his name Matt started M&E Painting Company. He made thirty bucks worth of business cards and just like he did in college, began knocking on doors and hanging out in the Home Depot paint aisle looking for work. After working his ass off and living as minimally as possible for three years, Matt was able to get himself out debt. He was able to breathe again and start saving for the future. He decided to grow M&E Painting into a multimillion dollar business and become financially free as fast as possible. Now in 2016, it has become one of the fastest growing companies in Northern Colorado and the United States. Show Notes Become an Award Winning Company -Matt’s Book Matt Shoup -Matt’s website Founders Brewing Company Porter Learn more about your ad choices. Visit megaphone.fm/adchoices

You often hear “overnight” success stories when it comes to people who have quit their jobs to start a business, but it doesn’t happen that way. It takes a lot of work and planning to get there. If you’re fed up with the 9-5 grind, you may have considered starting your own business. We did it and you can too. We’ll show you how to quit your job and actually start a business.  Know what you’re getting into before leaping from your cushy paycheck to starting your own business.  The Bar Has Never Been Lower  If you want to start your own business, it has never been easier or less expensive to do so. The internet and all of the tools it has opened the possibility of starting a business to almost anyone.  Funding can be raised on Kickstarter. An online store and drop shipping website can be created with Shopify. You can target local customers with Facebook ads; you can take credit card payments on your cell phone with Square, you can outsource payroll and other HR stuff to Paychex Flex. What is Your Passion? I don’t believe that you have to be crazy passionate about something to create a successful business around it, but you do have to enjoy to some extent what you do when you start your own business. Why? Because you are going to spend a lot of time doing it and if it’s something you hate, you won’t be able to stick with it long term. You can stick with a 9-5 you hate if you’re making enough money or can go home and not have to think about work until the next day. But starting your own business is so all-consuming that there is no getting away from it, at least in the beginning so while your business doesn’t have to be your one true love, you can’t hate it either. Before You Bail Quitting your 9-5 job to start your own business is not just taking a plunge, it’s more like submerging yourself into a whole new world. It takes a ton of planning, and there are many considerations. Is it Realistic? Take your product or service for a test drive to see if people will pay for it, don’t go all in cold turkey. Test, test, and test again. Don’t sink $50,000 into making cat sweaters only to find out cats don’t get cold. Do small trials, see what works and what doesn’t and make corrections based on those findings. Make it Official If you haven’t already done it, make your business legitimate by setting up an LLC or S Corp. Legal Zoom makes this process easy. Becoming legit also lets you take advantage of the many tax deductions that are available for small business owners. Not a Unilateral Decision If you have a spouse, you can’t decide to quit your job and start your own business without their approval and support. Presumably, your spouse knows that you have been working on your own business for some time. Before you tell them you are ready to quit your job to work on your business full time, make sure all of your ducks are in a row and show them. You have a runway; your business is already making enough to support you without your 9-5, you have health care lined up, quitting means you will have more time to spend together. Whatever qualms your spouse has, you need to have an answer for. If they are not on board, you may not be able to quit yet. If that is the case, ask them what they need to feel comfortable with your decision to quit. And then start working toward that. Set Some Benchmarks Set a series of goals for yourself and don’t quit your job before you reach them. You need to be free of credit card debt; you need to make enough money each month to pay your rent or mortgage for six months in a row, Learn more about your ad choices. Visit megaphone.fm/adchoices

Our listeners send in some great questions, and today we are going to tackle five of them. We answer five questions about down payments, debts, IRAs, 401k fees, and investing during a chaotic period in the stock market. You asked, and we answered your five questions!  Question One  Hey Guys- My fiance and I are getting married next month, and we are trying to get our finances in order as we plan to buy a house. We are looking for something in the $300K range in about two years and will have minimal savings following the wedding. However, we also have about $100K in student loans, with varying interest rates from 4.5% up to 7.6%.  With proper budgeting, we think we can save about $70K over those two years. Would it be better for us to save all of it for a 20% down payment and closing costs? Or should we use the first $30K to pay down the highest rate student loans and use the other $40K for a 10% down payment and closing costs, knowing that we will have a higher interest rate, PMI, etc.?  The first thing you need to do is consolidate your debt and refinance any student loans you might have. Lowering your rates and monthly payments will help you make ground quicker. If you go with a variable loan that extra percent off your interest rate will help you gain 2-3 years of progress. Don’t overextend yourself. Rent until your loans are paid off before you even start thinking about buying a home. Your debt will factor into getting your mortgage loan. As for a smaller down payment, without 20% down you will basically throw money away with PMI. Question Two Hey guys- I’m currently trying to save for a house with my partner, and while she has a substantial amount for a deposit, I have near to nothing. We really want to buy something in the next year and a half. I might mention too that I have a bit of credit card debt….($8000)  I earn abut 1400 a fortnight. I know it might be a broad question but what do you suggest I do to be able to get on top of everything? Do you think it is smart to take out a loan to consolidate the credit card debt? The short answer is yes. Take out a loan to consolidate your debt. The interest rate will be so much better than the credit card interest you are paying. There are many companies that can make the process painless like Sofi, Lending Club and Prosper just to name a few. If you plan on taking out a loan remember that there is a loan origination fee that will be a percentage of the loan amount. It will be different between companies. Do the math and be sure the fee is worth the amount you will be saving in the long run. Question Three Hi- A little background on myself… I am 25 years old with my career being in Chicago, IL. I am working to get to the point where I am saving 15% regularly through 401K, the match, and Betterment IRA. However, you all talk a lot about retiring earlier than the old school 60 years old and such, which sounds amazing. Ha. My question is: With the goal of continuing to add more money into my accounts as my salary increases and retiring as early as possible, is it better to invest my money into a Betterment Roth IRA or Betterment General Investment Account? Pros? Cons? Thoughts? Suggestions? If you are planning to retire early, Learn more about your ad choices. Visit megaphone.fm/adchoices

What features do novice and experienced investors get from Wealthfront? How does Wealthfront stack up against the other Robo-Advisors and what sets them apart? We’ll be answering these questions and more in our Wealthfront Review.  Luckily (or skillfully) we got an interview with the Wealthfront CEO Adam Nash. After doing our research, chatting with him for nearly two hours and then doing a metric ton more research we’ve got a pretty good idea of where they stand in the Robo-Advisor space. Wealthfront has more than earned their spot at the table. Remember the epic rap battles with the East Side vs the West Side? Sharks vs Jets? In the Robo-Advisor space that’s Wealthfront vs Betterment. Wealthfront is a San Francisco startup with a boatload of funding and Betterment is an NYC startup with an equally large boat filled will funding. If you’re on the east cost you probably know more about Betterment, if you’re on the west cost, the same is probably true for Wealthfront. We’re based out of NYC (ok, fine, Hoboken) so you’ve heard us talk more about Betterment. Now it’s time for you to learn about what’s been happening on the other side of the country. Robo-Advisor’s are competing for my money? If you’re as excited as I am that there is another serious competitor on the scene, this review is for you. In this review we’re going to break down the good and the bad sides of Wealthfront as well as suggest where it might be able to fit into your portfolio. Hint: It might have something to do with the free part. A Quick Look Wealthfront’s pricing and feature set is very straight forward. * Everything below $15,000 (for LMM fans) is managed for free. Ideal for the beginning investor. * Minimum balance is $500. Instead of charging a rather high percentage fee for beginning investors, they set the low bar at $500 and once you’re in it’s free as per point #1. * Tax Loss Harvesting for everyone. Not only will they capture your losses to offset taxes on your gains, everyone has the potential to benefit here. Even the $500 investor. * Advanced features for accounts above $100,000. With features like Direct Indexing you stand to make quite a lot more through economies of scale than you would below that price threshold. * Portfolio Review is the optimization tool you’ve been dreaming of. Want to avoid some capital gains on your existing investments while slickly transferring that money over to Wealthfront for better management/diversification? That’s what Portfolio Review is – more on that later. * Path – Financial Planning Experience. Path connects to all of your outside bank and brokerage accounts to give you an accurate and real-time view of your finances. Their PhDs handled complex calculations on the backend to show you how saving and spending impacts what you will have in retirement. * Wealthfront’s Portfolio Line of Credit. Portfolio Line of Credit is available for any Wealthfront client with an Individual or Joint Wealthfront account valued at $100,000 or more. You can request cash up to 30% of the current value of your Wealthfront account and they you’ll receive it as quickly as 1 business day.       Learn more about your ad choices. Visit megaphone.fm/adchoices

We all need and use money nearly every day of our lives but do you know where it comes from? Today the guys cover payment history, the creation of money and how it affects our economy.  The IOU Economy  You can’t talk about the creation of money without first talking debt. As most of us might think, money was created to make paying for things easier, but that is not the case according to the book Debt by David Graber. The exchanging of goods was always based on debts from the beginning. Let’s say a caveman needed some berries. He wouldn’t go to his neighbor with two goats and try and trade for five bags of berries. Instead, they would give two goats expecting the other person to repay them at a later time. Their economy was not quantified by money but debts to each other. Think about it as using ious like a currency. The use of money came about during war, and new empires were being created. There needed to be a way for soldiers to buy the things they needed in other lands without owing a debt. A Brief History Of  The U.S. Monetary System In the United States, dollars used to be backed by some amount of silver or gold, but now money is not supported by anything except faith. Let’s start with the Panic of 1907, a financial crisis that took place when the New York Stock Exchange fell almost 50%. In the course of the three-week period market collapsed, stock prices tanked, and there was a massive run on the banks. The Treasury provided over $30 million in aid to the situation, and with the help of J.P. Morgan and others worked to channel money from healthy banks to weaker ones bring confidence back to the financial market. The aftermath of the Panic prompted the created of the Owen-Glass Federal Reserve Act in 1913. You guessed it; the Federal Reserve System was created. The Fed is NOT government owned but a federally sponsored banking cartel. It’s stock is held by member banks, and it’s licensed to lend money into existence. At this point, we were still backing out money with gold, but one disadvantage of a gold standard is that the size and health of a country’s economy are dependent upon its supply of gold, not the resourcefulness of its people and businesses. So, in 1933 Roosevelt takes US citizens off the gold supply. The Fed seizes all the gold, and exchanges are for 11 billion dollars in currency out of thin air. Yes, it’s like magic. After the wars, U.S. keeps increasing dollars to gold ounce ratio until Nixon closes the gold window in 1971, which removes the monetary system’s last physical limit. All global money is unbacked. Now nothing requires U.S. Dollar to remain the reserve currency, and anything does not back it. How Money Is Created It is pretty simple. The Fed creates money out of thin air in exchanged for government debt (bonds and notes). Let’s say Company X is asking the Fed for ten million dollars. All the Fed has to do is add a booking entry and POOF! A check is written out to the company, and the Fed get a bond. Only 3% of our currency is paper money and coins. The rest is all just bookkeeping. The U.S uses this debt-based money system so when money (debt) is created interest needs to be paid. To pay this interest, the money supply has to keep being expanding to perpetuate the modern banking system. At a minimum, each year, enough new money must be loaned into existence to cover the interest payments on the previous years. Each and every year, it must grow by some percentage. By design, it’s exponential, Learn more about your ad choices. Visit megaphone.fm/adchoices

Everyone wants to make money, it’s usually what turns people on to personal finance. Today we’re going to teach you how to make more money in the sharing economy – on your own terms.  Uber brought this concept mainstream and as a result, it’s sometimes called the Uber Economy.  The idea at its core is that there is slack in our economy – resources that are not being utilized. Your car parked in the garage. Your brother’s carpentry skills. The free time of a math honors student.  The goal of the sharing economy is to monetize this slack and provide income to those who would have otherwise been beholden to a 9-5 schedule and boss. Now, you can get paid for work and pick some people up during you drive home to make a few extra bucks.  The best part about these sharing economy jobs is that often money doesn’t directly change hands. It’s all handled digitally which allows for you to focus on your task at hand and for your clients to focus on the work you’ve completed.  Uber is just the most discussed service in this new economy. With it, you can get in your car, turn on the app and wait for taxi requests to come in. If you’re ready, you accept someone’s request and you’re off. It’s also important to know the difference between Uber, and its biggest competitor, Lyft. Laura and I have used AirBNB very often when we go on vacation. We’d rather stay in a local neighborhood and get the feel of where we’re visiting than the impersonal feel of a hotel. It’s pretty awesome because you can get a big place with keys to enter and leave as you please for a fraction of the cost of a hotel. The only thing you have to give up is having a stranger enter your room while you’re not there to fluff your pillows. I always found that a bit creepy so we’re happy to pay less for that not to happen. There is also a lot of money to be made renting your home out on AirBNB. If you’re going to be away on vacation or a business trip you should absolutely make some money on your place while you’re gone. AirBNB is an awesome service for that and they automatically insure your place for up to $1mil in damages so there’s nothing to worry about. With Handy you can signup for handy-man type work around your neighborhood. Have free time on a Saturday? Install someone’s ceiling fan. Learned plumbing from your Dad? Install a bathroom sink for someone close by. Since you set your prices and compete against other people’s quotes it’s recommended that you start low, get a few successful jobs under your belt and then increase your price. Complete odd-jobs via TaskRabbit like picking up groceries, waiting in line for a new iPhone, cleaning someone’s home or helping them run a party. According to peers.org, the average TaskRabbit hourly wage is $48 an hour. Perhaps the most interesting job was that of a professional “looker”. There’s a need for people who are buying things across the country and can’t be there physically to have an impartial 3rd party verify its condition. With WeGoLook you can either hire someone or be hired to do just that. Take pictures of a car someone is looking to buy for them, or, hire someone to go check out a rental home you’re looking t... Learn more about your ad choices. Visit megaphone.fm/adchoices

We have all asked ourselves at some point, do I need life insurance? You’re young and healthy, nothing is going to happen to you, right?  Sorry to be a debbie downer, but the reality is anything can happen to you at anytime. Will someone suffer financially once you’re gone?  Will your family be able to afford mortgage payments and other living expenses? Funerals are really expensive, will they be able cover the cost?  If the answer is yes to any of those questions, then it’s probably a good idea to look into an insurance policy. Life insurance will help replace your income so your family can meet important financial needs if you are no longer around.  This week we have Francois de Lame from PolicyGenius on the show to answer our questions about life insurance. Who Needs It? You’re Married Most people start to think about life insurance when they get married because they are starting a life another person and building a future together. If something happens to you, will your spouse’s income be enough to pay off debts and cover living expenses? If you are the breadwinner, your partner could find themselves in a really bad financial position if they are left with good amount of debt- like a mortgage or students loans, for example. You Have Kids For most families two incomes are necessary to make ends meet. If you died suddenly, could your family continue their standard of living on one spouse’s income? Would the plans for your children’s future, like going college, be affected? Even if you’re planning to have children soon, you’ll want to buy life insurance now before the pregnancy. Prices can go up. Getting a policy will insure they can still have the future you saved for even if you are not around. You’re a Single Parent If you are a single parent and don’t have life insurance stop reading this and look into getting some right away. With so much responsibility resting on your shoulders, you need to make sure you have insurance to protect your children’s future. Although it is super important, only about 4 out of 10 single parents have life insurance. The ones that do usually need more. As the sole breadwinner and caregiver, your children depend on you and only you. What would happen if you were no longer around? You’re a Stay-At-Home Parent Just because you don’t get a paycheck every week doesn’t mean you don’t make an important financial contribution to the family. Besides taking care of children, there are so many other important tasks and the value is often underestimated. Average cost of daycare in NYC tops $16G. It’s the largest annual household expense for many families leaving them struggling to find affordable care. Without the stay at home parent around, the cost of living significantly increases for the other parent,  Life insurance can help your family preserve their quality of life. You’re Single Most single people don’t need life insurance because no one depends on them financially. However, don’t wait too long to get a policy. It’s much cheaper to get a policy when you’re young and healthy. In the insurance world, the older and less healthy you are, the more you pay for insurance. If you are providing financial support for another family member like a aging parents or a sibling you may want to consider life insurance when you’re single. How Much Do I Need? Figuring out how much life insurance you need is different for everyone. It depends on your personal and financial situation. There are three main drivers that affect the amount of coverage you need. Family Size– How many kids you have and thei... Learn more about your ad choices. Visit megaphone.fm/adchoices

Whether you believe it or not, we have all heard the age old saying money can’t buy happiness, but there certainly is a relationship between your personal finances and your happiness. Maybe it’s time to change your mindset.  People who earn a more are often happier than people who live in poverty, but it’s not just about the money itself. It is about providing insurance that you and your family can live a comfortable life no matter what life throws at you.  Many of us think we only need so much to be happy, but you have no way of knowing how much you’ll need at some point in the future.  Today the guys talk about how to change your mindset from “how much I need” to “how much is possible”. It doesn’t mean you have to constantly think about money or compromise your other values and interests, but you can simply think differently about your money. It’ll start to shift your choices.  Unless you can predict the future, you do not know what you will need or want beyond today. Building your financial resources will help you deal with life’s uncertainties. Money takes time to grow, so you need to start now.  Even if you have a job that pays well, the chances are it doesn’t pay quite enough to create financial independence. Your job is your job but building financial wealth is something else.  Show Notes  LMM Community: Join the conversation! The Millionaire Real Estate Investor: Thomas’ latest read Lapsang Souchong: The whiskey of teas   Learn more about your ad choices. Visit megaphone.fm/adchoices

   It’s been too long since we’ve done a five questions episode. Today we talk about lotto, stock games, APR, diversification, and student loans.  Five questions are back! We answer questions we get through e-mail and the LMM Community.  1. What would you do if you won the lottery?  Thomas doesn’t want money he didn’t earn so if he somehow won the lottery, he would hand it over to various charities. Andrew actually did buy tickets, $20 worth. He thinks winning the lottery would ruin his life because it would take away his drive and his purpose.  He would keep his job and just stick the money in US Treasury bonds which are one of the safest investments you can make. Even with the low-interest rate on bonds of about 2%, taking the lump sum of the recent Power Ball would still earn $1.2 million per month.  2. Do you recommend any on-line stock simulator games for those new to investing?  Motley Fool has a good one. Most games focus on the dollar value but Caps, the Motley Fool game, removes that and base wins on percentage gain instead. The community is very active too, and it’s a good place to research stocks. People do reports and even blog about their picks. Investopedia has a simulator, and you can track stocks in Google Finance where you can create folders for your picks and track them over time. 3. I have $9,000 in credit card debt and a 15 month 0% APR. Should I take out a loan through Lending Club to pay this off? If you roll a balance over to a 0% APR card, there is a fee. Even with zero interest, you have to make the payment each month, or it triggers the interest. Pay off that $9,000 as fast as possible, ideally, before the 0% runs out because no loan is going to give you 0% interest. For more on APR check out this guide. If you can’t pay it back within the 15 months, then Lending Club is a good option. 4. I have an IRA with Fidelity. What should I do to diversify my investments? The Fidelity account you have has a high expense ratio. Even a 1% fee over thirty years of investing means a loss of more than a quarter of your investments. Fees are a killer. A 1% fee doesn’t sound like much, but over time, it is. A better Life Cycle Fund would be with Vanguard because no one beats their fees. If you don’t want to do a ton of research and compare funds, Betterment is the way to go. 5. I know it’s important to pay off debt before investing but is that still true if my student loan debt will be forgiven in twenty years? The interest is high at 6%, and while you’re on the income-based repayment plan, your income will (hopefully) increase over that time. Because interest is one of life’s biggest expenses, pay it off. Build your emergency fund up to six to twelve months worth of expenses and then start killing the loans. Thanks for the questions everyone! Show Notes LMM Community: If you want personal answers to more money questions, join us in the Community.   Learn more about your ad choices. Visit megaphone.fm/adchoices

It’s the time of year to reflect on the past twelve months and set goals for the new year. What does figure skating have to do with it? Tune in to find out. At LMM we prefer the word “goals” to “resolution.” Resolution has almost come to mean failure in three weeks time. We think framing our resolutions as goals will help us reach them. Sometimes you just have to trick your brain! Why January 1? You can see the appeal. Everyone likes a clean slate and the slate is never cleaner than it is on January 1. But what if you woke up with a hangover and despite resolving to eat more healthfully, you order breakfast from McDonald’s? Are you going to wait 364 days to try again? Of course not. You don’t have to wait for a certain day to change a habit. Year End Review Rather than making the same old tired resolutions, which at a certain point become traditions, look back at the year that just passed. What would you have liked to do better? What did you not manage to get to at all that you still want to pursue? If you did achieve some goals, what helped you to do so? By looking back at this things, we can better craft goals for the new year and put systems in place to help us reach them. Day, Week, Month If the goals are too vague, “save money,” lose weight,” they are hard to track and hard to work towards. Each day, week, and month should have things to do in order to reach the end goal. If you want to save money, how much money? If you want to save $1000 to start an emergency fund, you can have a daily goal of not buying coffee on your way to work. You can have a weekly goal of bringing lunch from home just three of five days a week (because you want some wiggle room or you’ll get sick of it and give up). You can have a monthly goal of cutting your grocery bill by 20%. Any goal you set for yourself should have a timeline and a deadline. Marking off time in smaller chunks like day, week, and month helps you to move forward and track your progress. If you get to the end of the day, week, or month, and haven’t achieved what you set out to, you can reassess before much larger chunks of time have passed so you’re not content with giving up and waiting for that clean slate of January 1 to come around again. Priority(ies) Priority: “Something that is more important than other things and that needs to be done or dealt with first.” That definition makes perfect sense. A priority is the most important thing. So how can you have more than one? You can’t but somehow, we all do. And that’s why so many of us fail to achieve our priority because we spread our focus across multiple priorities. This year make it a goal to do almost nothing. But do a small number of things that matter. Those two statements might seem contradictory, but not as contradictory as having more than one priority. Some Goals Can Be Fun! Not all of your goals have to be a slog. Saving money and losing weight, while wonderful things to do that will reward you in many ways for many years, are not really very fun things to do. So pick at least one goal that is fun to do. For Thomas, it was to have more fun after work. A lot of us can probably relate to this. You come home from work and make dinner, tidy up, pay bills, watch TV. Except for making dinner, for some of us at least, none of those things are fun. So Thomas signed up and paid for, an ice skating class. A goal like this can kill a few birds; the original of doing more fun stuff after work, because another friend has signed up, Thomas gets to spend more time socializing, and skating is good exercise, although I know he was already doing pretty well in that area. If you can find a way to wrap up a few goals into one, you’ll get more done in less time. No Is A Complete Sentence Learn more about your ad choices. Visit megaphone.fm/adchoices

Want to level up your life? Steve Kamb from Nerd Fitness joins us to discuss turning your life into a game.  We’ve discussed the ways being physically fit and financially fit are similar. Steve Kamb learned that when he started Nerd Fitness. His health improved alongside his finances. He turned his life into a video game with himself as the protagonist. Now he’s written a book on how we can do that too, Level Up Your Life. Nerd Fitness Steve was working a sales job he hated and wasn’t very good at when he saw Tim Ferris’s book, The Four Hour Work Week. In the book, Ferris details how to start a very small company that solves a problem that a lot of people have. Steve was becoming increasingly interested in fitness and if there is a problem a lot of people have, (aside from money problems. LMM will handle those) it’s being unfit and unhealthy. As with any good side hustle, you need to find a niche. There are a lot of fitness sites out there. There aren’t a lot of fitness sites geared toward people who love video games. Steve bought his domain at Hostgator and sat on it for a year. He didn’t know the first thing about building a website. After a new job, Steve decided to make the leap and start really working on Nerd Fitness. He quit his job with about eight weeks of runway money and 3,000 subscribers. He wrote an e-book that sold enough copies to keep the lights on and he worked a series of odd jobs to fill in the gaps. He was right to make the leap. Within six months, the site was generating $2-3 a month. Motivation Is Not Enough The problem with motivation and willpower is that they’re fleeting. We’re all motivated in the new year to save money, lose weight, quit smoking. We all have the willpower to resist the cookies in the beginning. How motivated are you in February? How many cookies did you eat in March? Steve advocates putting systems in place that will help you succeed. He wanted to spend less time watching television and more time working on the site, so he got rid of cable. He would eat the entire bag of chips in one sitting so he stopped buying chips. People are lazy, we really are! Of course, you can leave the house at 9:00 pm to procure the chips, but you probably won’t. No motivation or discipline needed for this strategy. You have a system in place that supports your goals. Anti-Fragile Antifragile by Nassim Taleb teaches that not all chaos is bad. There are three types of things; fragile things that break when you drop them, sturdy things that survive the fall intact, and antigragile things that get stronger from the impact. Steve applied this to fitness. Throwing the unexpected, the chaos, at your body strengthens it and makes it grow. The same theory can help improve your life too. Pushing yourself beyond your comfort zone makes you a stronger, better person. Steve drew up a list of things he wanted to accomplish, a bucket list and published it so his readers would help keep him accountable. He made conquering the list a game. Every time he crossed something off, he awarded himself points and moved to the next thing on the list. Success Through Habits Thomas is a big believer in the power of habit too. Learn more about your ad choices. Visit megaphone.fm/adchoices

Look at your family, just sitting there costing you money. Slackers should be making you money, pulling their weight! We found a way to do it. We will show you how to turn your family into a profitable business with Natali Morris.  Incorporate Your Family  The tax system is not set up to benefit the individual; it’s set up to benefit businesses because businesses drive the economy. That’s why eleven companies on the S&P 500 who made profits last year paid less in income tax than you. How much less? Well, they paid nothing. If you want to get in on that, incorporate. Set up an LLC, S-Corp, whatever is the most appropriate for your situation. What if you don’t have a business? Well, you might and not realize it. Do you babysit, clean houses, mow lawns? Because if you do, you set up and LLC or S-Corp. No? Well, start! And incorporate your hobby, side hustle. However, you term it, as a business. Remember what Adam Carroll told us in last week’s episode? The two most significant expenses in life are taxes and interest. Incorporating your family is one way to maximize those tax savings. Teach Kids About Money Children have established their ideas and habits about money by the age of seven! So the earlier you start teaching them about money, the better. For the most part, many of us can afford to give our kids almost anything they want, at least when their they’re little. We can afford the stuffed animals and the action figures. That’s why it’s important to put a system in place to help them understand what money is and how it works. Natali gives her children an allowance but not in the traditional sense. Each kid has responsibilities that come with being part of a family; keeping communal areas and their own rooms clean. Taking care of their possessions. If she wants them to do work for her, washing her car, for example, they are paid for those kinds of things. The kids also have real jobs, things like helping Mom scan and then shred documents, that pay them from the family’s LLC, and they pay taxes on those earnings. Because the money is taxed, it’s eligible for an IRA, and that’s where it goes. The IRA’s are Roth which means they only pay taxes on them during the years they contribute. The children are given three, clear glass jars. The clear part is important; it lets kids see the money accumulating, something they won’t get using a traditional “piggy bank. “The jars are “give,” “save,” and “spend.” The kids can buy whatever they want with the spend jar money, even if Mom knows they’ll lose interest in five minutes. It teaches that once the money is spent, it’s gone, so make it count. Self Directed IRA A self-directed IRA is a retirement account that gives you control over your investment choices. You’re not limited to stocks, bonds, or mutual funds. This allows you to invest in alternative assets like real estate, limited partnerships, and gold through your self-directed retirement account. These IRA’s are more work than the average IRA, but the advantages can outweigh that for some. Natali buys rental property through her IRA, the proceeds come back into it and all expenses, property management fees, repairs, utilities, are paid out of it. Learn more about your ad choices. Visit megaphone.fm/adchoices

Adam Carroll joins us to discuss how to actually save thousands on your mortgage with home equity lines of credit.  When we interviewed Adam for our new Rich Tips series, he mentioned how he is paying off his mortgage years ahead of schedule and saving thousands of dollars in interest. We were intrigued and asked him to join us to explain his strategy in greater detail.  What Is A Home Equity Line Of Credit?  A home equity line of credit, HELOC, is “An open ended line of credit extended to a homeowner that uses the borrower’s home as collateral. Once a maximum loan balance is established, the homeowner may draw on the line of credit at his or her discretion. Interest is charged on a predetermined variable rate, which is usually based on prevailing prime rates.” Most institutions will lend up to about 90% of loan to value. Strategy Adam has an ingenious use for his HELOC and you can use his strategy too. The HELOC is used as a checking account. All of your income is deposited into it and all of your expenses are paid out of it. Depositing your paycheck into the HELOC acts like a payment so you aren’t adding a monthly payment. The money left over at the end of the month gets sent to the mortgage. What this does is send a massive payment to your mortgage each month. The trick to make this work though is that you have to make more than you spend. Let’s look at an example: You bought a home for $100,000 with a $20,000 down payment. You can immediately take out a HELOC for $10,000. You then put that toward your mortgage. In order for this to work though, you must make more than you spend. You make $5,000, spend $4,000 and have $1,000 left. That $1,000 goes into the HELOC until it’s paid off, so for ten months. Let’s say your interest rate is 5%. So that’s $500 over 12 months, $41.33 the first month in interest but when the income goes in, you’re paying a little less each month because you’re slowly paying the loan down with that $1,000 a month. Rather than taking ten months to pay off, it takes around 7. And because your mortgage went from $80,000 to $70,000, you will pay less interest not just over ten months but over the entire life of the loan. What If You Don’t Own A Home? You can still use a similar strategy if you don’t own a home. You can get a personal line of credit, PLOC. A PLOC is “A loan that you use like a credit card account that you access without using a card. Instead, you write special checks or request a transfer to your checking account by phone or online. You have a credit limit, receive a monthly bill, make at least a minimum payment, pay interest based on your outstanding balance, and possibly pay a fee each time you use the account.  PLOC are unsecured, unlike HELOCs, which are backed by a mortgage on your home. PLOCs are offered by banks and credit unions and usually require that you also have a checking account with the same institution.” PLOCs have their drawbacks. The interest rate is higher than a HELOC and the interest is not tax deductible. But if you have high-interest debt and don’t own a home, they can be beneficial. What Keeps Us In Debt It’s the way we bank and borrow. Taking out a 30 year mortgage is just SOP in the United States. Amortization is the process of paying off a debt, like a mortgage over time with regular payments. An amortization schedule is a table detailing each periodic payment on an that loan. We borrowed $80,000 to buy our home above. With a 30 year mortgage at 3.5%, you will pay $50,000 in interest when it’s all over! Your first mortgage payment will be $359, Learn more about your ad choices. Visit megaphone.fm/adchoices

Ace Chapman joins us to explain how to buy a business. Something he’s been doing for sixteen years and it’s made him a millionaire.  Ace was on the usual college path when the opportunity to buy a business fell into his lap. He was playing with an online stock simulator that crashed a lot and found the company unresponsive. He reached out with an offer to help, merely hoping for an internship.  Instead, he was offered the chance to buy the business for $70,000. Ace had just $3,000. What he also had was no idea how such transactions usually work so he asked if the sellers would finance half of the deal. They agreed!  Ace got some money from a similarly entrepreneurial minded friend and financed the rest of credit cards.  Ace grew the product from 10,000 members to 250,000. He turned down seven-figure offers to sell but lost it all in the first dot-com bust. But he had a school of hard knocks bestowed MBA and decided to buy businesses was what he wanted to do.  Due Diligence  Ace had a big advantage when he bought that first business; he had been a long time user of the product so he knew it well. He had spoken to many of its other customers to find out what they did and did not like about the product. It’s not a requirement but it will certainly give you a leg up when it comes time to take over running the business.  Why Are They Selling?  If this business is so great, why are the owners looking to get out? It could be one of a million reasons; a divorce, failing health, boredom and the desire to move onto the next thing. As the Boomers start thinking of retirement, there will be a lot of established businesses on the market.  Don’t Start From Scratch  Many people don’t really give much thought to buying an already existing business. Starting your own business is something that is woven into the American Dream and we all think we could be the next Bill Gates.  But the stark truth is that about half of new businesses fail within five years. So why not let someone else do the hard work and pour in the capital that the early years of a new business require? Where To Find An Opportunity You aren’t very likely to walk into a business and see a for sale sign in the window. There are some sites that have listings like bizbuysell, but the large majority of businesses for sale don’t advertise that way. You can advertise though, that you’re looking for a business to buy. Let them come to you.   So you have to hunt around for something to buy. Because some businesses are sold due to things like death and divorce, attorneys who handle divorces and estates are a good resource to find an opportunity. The sellers in these situations may be highly motivated which can net you a bargain. Attend events related to the industry you’re interested in, meetups, conferences, seminars and use them as an opportunity to network. The pay off may not be immediate; Ace once bought a business that he had sent a letter to the owners of four years after he sent it. But the owners kept the letter and when they were ready to sell, Ace is the person they called. The lesson is to have a long-term view. The Valuation The formula Ace uses when deciding what a business is worth is to multiply the net monthly earnings by two. He likes to employee opportunistic due diligence to find a way to buy at two times but within a few months, increases the revenue by four times. There are a few things to look for that can make this possible, the business has a hidden asset, a unique opportunity or can be part of a joint venture with someone else in his network of clients.   Face Of Business Learn more about your ad choices. Visit megaphone.fm/adchoices

Our listener Eric has made an appearance in the past to school us on bonds. Today he’s back to teach us about inflation.  What Is Inflation?  Economic concepts can be broken down into the micro and the macro. Micro looks at the smaller picture concerning the behaviors of individual consumers and businesses. Macro is the study of the economy as a whole and where inflation falls.  Inflation is one economic concept that most of us see on a regular basis. It’s the purchasing power of your money, the general increase of the cost of goods and services over a specified period of time. Your dollar that is worth X today will not be worth X five years from now. Consumer Price Index One of the best measures of inflation is consumer price index. CPI measures changes in price of a set of consumer goods and services purchased by households. There are eight major groups that include the costs of things like cereal, rent, dresses, gas, prescription drugs, televisions, college tuition and funeral expenses. The Big Mac index was founded as an informal way to compare purchasing power between different currencies but has been expanded to include the amount of time someone has to work in order to buy a Big Mac. Demand Pull Inflation In most cases, we want inflation to increase, but not too steeply. Controlled inflation can erode the cost of debt. Good inflation is known as demand pull inflation and happens during periods of economic growth and increased income. Consumer demand increases. Wartime is a good example. Who buys a lot during wartime? The government and it buys from the private sector. When a big order comes in to Lockheed Martin, the company hires more workers. More people have money and they too, spend money in the private sector buying cars and homes and electronics. Cost Push Inflation Cost push inflation is the “bad” kind of inflation. A good example would be when there is a drought. There is less food available which causes price increases. The producer has to make money but they have less product to sell. So what do they do? They raise the price. The ongoing drought in California and the water restrictions being imposed because of it, are going to make rice more expensive. California is the country’s second biggest rice producer(who knew!) and will grow 25% less than last year. So your sushi is going to get more expensive. Federal Funds Target Rate The federal funds target rate is “the interest rate at which a depository institution lends funds maintained at the Federal Reserve to another depository institution overnight.” The higher the federal funds rate, the more expensive it is to borrow money. The Federal Open Market Committee meets eight times per year to set key interest rates. Stagnant Wages Inflation has been low, but our wages have been stagnant for decades. After adjusting for inflation, today’s average hourly wage has just about the same purchasing power as it did in 1979. Productivity and Gross Domestic Product have increased, but wages for the average worker have not. This stagnation is one of the reasons the Fed has been reluctant to raise rates. Deflation Deflation is a drop in consumer prices and measured using the CPI. This sounds like a good thing for consumers but is a sign of a long term decrease in demand and signals that a recession is probably already happening. Manufacturers and sellers of goods start cutting prices and if this goes on long enough, it also means they will cut employee wages or even go out of business entirely. Disinflation Disinflation is the slow down in the rate of inflation. Learn more about your ad choices. Visit megaphone.fm/adchoices

Today we interview Bobby Monks and Justin Jaffy about their book, Uninvested and understanding the pitfalls of Wall Street.  Bobby Monks calls himself a “chronic entrepreneur” and as such, understands the dirty dealings happening on Wall Street and how they effect the average investor. Justin was new to the subject of finance but a journalist who wanted to know more.  Together with a third author, Bree LaCasse, they wrote Uninvested: How Wall Street Hijacks Your Money and How to Fight Back.  The Book  To the average person, investing seems like this complicated thing that no lay person can possibly understand. So they hand their money over to a “financial advisor.” The authors wanted to demystify investing for the average investor using simple language. They spent four years interviewing people like Barney Frank, Jack Bogle, Carl Icahn, mutual and hedge fund managers.  Financial Advisors  There are 450,000 people providing financial services in the United States and 90% of them are sales people. Just 10% are registered investment advisors. What’s wrong with that? When you go to a car dealership, 100% of the people are sales people.  The difference is that you know the person trying to sell you a car is a sales person. The standards for most of these advisers is low. They are under no obligation to put the best interests of their clients first and many of them don’t. Their priority is making money for the company they work for.  There is a lot of confusion among consumers about who is and who is not a sales person in the realm of financial advisors. Financial advice that is skewed by a conflict of interest costs investors $17 billion a year. If you were a paranoid person it might be enough to make you think the industry has been deliberately set up this way.  The Fiduciary Standard  The fiduciary standard was established as part of the Investment Advisors Act of 1940. Investment advisors are regulated and required to put client interests above their own. Investment brokers are only held to a standard of “suitability.”  Under this standard, a broker can look at two funds which are similar but still recommend the more costly one that will also give him or her a higher commission.  Brokers are paid based on the dollar amount of assets they manage so there isn’t necessarily any incentive to recommend the best investments, just to get the highest amount of assets under management. They often still get paid even if they lose you money.  Isn’t More Expensive Better?  If one financial advisor is more expensive than the others, doesn’t that mean he or she is better, smarter, more educated? Not in this case but it’s a common fallacy. None of these people can predict the future and past experience does not indicate future experience. The more fees you pay, the less money you have. Generally, the lower the fee, the better the performance of your portfolio.  The Retirement System  Many workers used to have a defined benefit system, a pension basically, that paid a certain amount of income for life after retirement. The system went bankrupt and had to be bailed out by the government.  That system has largely been replaced by the one we have now, which relies heavily on 401k’s and IRA’s. But it’s expensive to manage a 401k and you’re paying for that. The average fee is over 2%.  That doesn’t sound like much does it, a 2% fee? Consider this; if you have $25,000 invested over 35 years with an average yield of 7% and a fee of just 1%, that will cost you $65,000. The fees are often obscured because people tend to focus on the employer match and the tax advantages.  Index Funds And Individual Stocks  The best way to increase the chances of a good return over time is to pay the lowest fees possible. The lowest fee way to invest is to buy individua... Learn more about your ad choices. Visit megaphone.fm/adchoices

Today we interview Joan Sotkin of Prosperity Place, who approaches money in a holistic way. Because listen, emotion matters when it comes to money. Joan’s Story Joan comes from a family of compulsive debtors. She was born in 1940, a time when women’s roles were pretty prescribed. Joan got married and started on the prescribed path. She became a teacher but didn’t like teaching any more than she liked being married. She felt out of place. Looking for something else, she started studying what she terms, “woo woo stuff,” like astrology and healing crystals. In the 1980’s she began selling crystals and minerals for healing and meditation and was making great money. In 2015 money, she was bringing in $50,000 a month! And then she went bankrupt. Joan didn’t know how to manage cash flow. Her father died and she has since learned that people often deal with a big trauma by overspending. Her field started to grow and she didn’t know how to compete. Eventually, the business closed. Early Adopter In 1995 Joan discovered online business and taught herself how to build websites. A year later she moved to Santa Fe with $200 and whatever possessions fit in her car. In 1997 she started Prosperity Place. It’s a place for her to teach people what she learned from her mistakes and successes. Joan was an early podcaster too. She started podcasting in 2005. When Word Press came out she started building websites for other people. Insanity Defined Joan found that old saying, “Insanity is doing the same thing over and over and expecting a different result” to be true. She sees people acting out emotions through business and financial decisions over and over. You have to get in touch with your emotions in order to sustain success. We can know intellectually what to do but it still has to be done by a person (us) and a person can get in the way of doing it. Money And Emotion Our thoughts, beliefs, and emotions are what form our decisions. If you’ve had emotional issues in childhood, they sometimes manifest themselves in the decisions we make. If certain needs aren’t met, we feel deprived. If there is abuse or neglect, there is a feeling of being trapped in a situation. These emotions have to be expressed one way or another. That way can be healthy or it can be unhealthy. If your “story” is always ending the same way and you don’t like the ending, you can change it. Worrying about the future doesn’t help the future. Life doesn’t happen to you, it happens to you. Stress As A Motivator Does stressing over a situation motivate you to work harder? In that case, stress can seem like a beneficial thing. If you weren’t stressing so much, you would sit around playing video games instead of working toward a goal that will allow the stress to be alleviated. Being chronically stressed can cause adrenal fatigue which can lead to chronic disease. Making decisions based on fear can lead to poor decisions. You Are Not Required To Worry Do you feel as though if you don’t worry, you’ll fail? Some people who are very afraid to fly feel this way. Through the entire flight, they concentrate on the plane not crashing. When it doesn’t, they’re convinced that it was their worry that kept that plane aloft. They believe worry makes things happen or can prevent things from happening. Worrying is a waste of time. It’s creating a future that does not exist. You’re making it up! This doesn’t mean you stumble blithely along through life with no plan. But there is a difference between anxiety and concern. Whenever Joan starts worrying about money, she says to herself, “A large sum of money from an unexpected source.” Because that is as likely to happen as any doomsday scenario she could come up with thro... Learn more about your ad choices. Visit megaphone.fm/adchoices

You may have a budget but what if you have a big life change? Move cities, have a baby, buy a home. Budgeting for a lifestyle change can make or break you.  You got the new job in a new place, your family grows, you need to care for a parent. Your old budget won’t do.  A New Place  What if your new job involves a big change of location? Moving from the suburbs to a city for example. Will you still need a car? Will there be a place to park your car? Maybe, but it might not be free and if it is free, you’ll likely be competing for lots of other people for the spot. Not many attached garages in the big city.  What is the cost of living like compared to your current location? You might be getting a $20,000 jump in income but in the right (or wrong) city, that can be gone just paying deposits and broker fees. City-Data is a great resource to help compare the cost of living between cities. The Best Laid Plans Hopefully you’ve planned when to start your family but accidents happen. What if that happened to you? Would you be financially prepared? One of the biggest considerations before having a kid is day care costs. Prices fluctuate widely and sometimes the cost is so expensive, it actually makes more financial sense for one parent to stay home. A family situation that is harder to predict is that of your parents. None of us want to think about our parents aging and getting ill but it happens and you might have to step in. How much money do they have set aside? Would they want to live with you, stay in their own home, move to an assisted living facility? Who will make medical decisions if they cannot? Have these discussion with your parents before any of this happens. Buying A Home You found a $100,000 home and you have $20,000 to put down, great 20%! No, not great to the bank. They don’t want you to be cleaned out making the down payment. You won’t be able to pay the mortgage or the taxes. You might want to do some renovations so you can put your own stamp on the place. You moved from a studio to a house. Your futon and bean bag chair will look pretty lonely in a 2,000 square foot place. Twenty percent is not enough. Start A Business You have a killer idea and you long to quit slaving away for the man and want to start your own thing. Great! How much run way money do you have? What are the start up costs? Is your spouse on board or will they freak out if there isn’t a regular pay check coming in? How will you pay for insurance now that you no longer have it through your employer? Get A Baseline Where is your money going now? Before you make any big changes or decisions, you need to know this. If you had to cut to make room for something else, what could you sacrifice? Some things become such an ingrained habit, that you don’t notice anymore just how expensive they are (booze). Not everything has to be completely axed, some things could just be reduced (booze). Think back to your past. There was probably, hopefully, a time, when you spent less money than you do now but were still happy. Now think how much more you’re spending currently. Does the level of happiness correlate to the greater amount of money you’re spending? Probably not. It certainly costs more to be an adult than it does to be a college student but if your costs have sky rocketed, it’s unlikely that all of that money is going to fixed costs. A lot of it may be going to lifestyle upgrades, a bigger place, better car, nice clothes. The longer you can live like a student while earning like an adult, the further ahead you will be for the rest of your life.  How Much Do You Cut? Let’s say you make $50,000. Use a base of 60%, so $30,000 after taxes and savings. Divide the $30,000 by twelve months to get $2,500. Learn more about your ad choices. Visit megaphone.fm/adchoices

Learning how to negotiate is not just a nice to have skill – it’s critical. Everything from your salary to your purchases to even your relationship requires it. Here we break it down for you and give you the knowledge you need to hit the ground running.  Perhaps the most important thing you need to understand is that most successful negotiations come with skill and practice, not force. We’re not going to show you how to strong arm your opponent or debate them into submission.  Instead we’ve created an epic resource with everything you need to know to get what you want and walk away from the table with everyone happy.  Podcast Episode  Want to learn but would rather do it during your morning drive or while you’re working? Give this episode a listen, it’s pretty awesome.  (show note links are at the very bottom of the article)  Negotiation Vs Bartering  Before we jump into it we think it’s important to discuss the difference between negotiation and bartering. There tends to be a lot of confusion around the two. It comes down to knowing your goal and having the right approach.  Negotiation: This is not about winning. It’s about achieving your goal or objective. It’s not an argument but a constructive discussion. Since success is measured by achieving your goal or objective it’s then easy to eliminate certain approaches immediately. We’ll get into them later in the article.  Bartering: This is also not about winning. It’s about exchanging your commodity or service for something of comparable value with a minimum effort or time commitment.  Right off the bat we’ve taken two big departures from negotiation. You don’t want to work too hard or spend too much time here. If you have a fruit stand at a fair you may barter with potential buyers. However, if you’re selling (or buying) a car you’re negotiating. Bartering is about value where as negotiation is about something much larger.  The 7 Core Negotiation Tactics  There are a few key things you need to keep in mind for a successful negotiation. While some may seem immediately obvious we really encourage you to read deeper. Because negotiation is about achieving a win-win situation and not a win-lose situation it’s really important to keep these core principles in mind – and refine them over time.  If you ignore following a strong approach you’re at best opening yourself up to a less than optimal deal and at worse looking at no deal at all.  Come Prepared  You might have heard the saying “Don’t bring a knife to a gun fight.” Well, the same idea applies here. You’re not going to go to a car dealership and purchase a car originally having no idea how much it costs or what its positives/negative attributes are. The same applies to all negotiations.  If you’re looking to get a raise, do you know how much other people with your skill set and background get paid? We talk about price anchors in the episode and this is a great place to use them.  Head over to sites like Glassdoor or Payscale and do your research. Site’s like Indeed.com will also show you a data-driven aggregate of what they’ve seen people make for the position you have (or want). Use resources like these to ground yourself in reality, improve the chances of your success and logic for how you’ve approached your position. Remember, you’re looking for a win-win outcome. For a negotiation that’s a bit more nuanced like a big purchase you need to understand the value you’re getting, the main features as well as the weaknesses. Learn more about your ad choices. Visit megaphone.fm/adchoices

Have you ever thought about starting a Kickstarter campaign? We interview Chez Brungraber about how she did it for her travel bag.  It takes some doing to get people to give you money for something that doesn’t yet exist. Chez tells us how she did it.  Kickstarter is a place to get funding for a product that is still a prototype or a project that hasn’t been completed. The first rule is to have a product that you believe in. Once you have that, you have to get the word out, friends, family, bloggers, media.  You have to keep your backers updated with how the project is progressing and when they can expect it to be complete. Chez’s company makes money but not enough to make large capital investments in things like new products. And it doesn’t make enough for a bank loan. That’s why she chose to fund this way.  You have to hit your funding goal in order to receive the money towards your project. That sense of urgency helps to reach the goal. Most campaigns over $10,000 fail on Kickstarter so don’t ask for an insane amount of money. Keep in mind too that Kickstarter will take a percentage of your earnings, so factor that in.  Once the goal is reached, you can set a “stretch goal.” Extra features that will be added to the existing product as higher funding goals are met. Chez recommends making sure you know what your stretches will be before starting the campaign. She had three days to come up with her first.  Kickstarter isn’t a place for free money. Chez took four months to craft her initial campaign and more time to change it for her stretch goals. Make sure you have your basics set up, you’re incorporated, have a business bank account, you can’t deposit that money into your checking account! There are tax implications too.  Kickstarter can be a great place for small businesses to get funding but do your research before starting a campaign.  Show Notes  Pumpking: A pumpkin beer from Southern Tier. Kickstarter: Chez’s new campaign for her travel bag. Gobigear.com: Here you can find more of Chez’s awesome gear LMM Community: Join the money revolution!   Learn more about your ad choices. Visit megaphone.fm/adchoices

   We haven’t done a Five Questions for awhile! We’re back to answer your questions about minimum wage, lending money and debt.  We get a lot of questions and if one of you is wondering, more of you are wondering.  How can you get by on minimum wage? Well, first of all, you have to live in a place like Iowa where the cost of living is very low. You also need to take advantage of any social programs you might be eligible for, low income housing, food assistance, reduced cost utilities.  Work as many extra hours as you can to save up enough for a $1000 emergency fund. Next, try to build a marketable skill using all the free resources you can find, the library, the internet, Coursera, Khan Academy. A minimum wage job should be something you have while you build additional skills toward getting a better paying job. Apply to jobs you’re not qualified for. It may not always work but it only has to work once. At the very least you may get some interview experience. How do you know what tax bracket you’ll be in when you retire so you can choose the best IRA? When you retire, you won’t be earning money, or earning less, so the money withdrawn will be taxed at a lower rate. Unless, you have a separate revenue stream, like rental income. In that case, you might be earning more than when you worked. So it depends on your idea of retirement. Golfing all day or running a small property empire. If you’re going to relax, go traditional. If you’re going to earn, go Roth. Should we wipe out our savings to pay off student loans and then focus on retirement savings? Take the money in the savings account that isn’t earning interest, except for 3-6 months of expenses, and put that towards the loans. As for your investment money, the interest rate on your loans is low so leave that money where it is. What should we do with retirement plans from old jobs? Roll them over to avoid administration fees. How can you help manage parent and sibling debt? Just handing over a chunk of money is usually not a good idea. Agree to help with the caveat that the family member shows you how they plan to get out of debt and the steps they’ll take not to get into debt again. Thanks everyone. If you want to get an answer to your questions fast, come join us in the Community. Show Notes Allagash Dubbel Reserve: A malty, Belgian ale. LMM Community: Come join the money revolution! Learn more about your ad choices. Visit megaphone.fm/adchoices

Early retirement sounds ideal but is it always? Retire or not to retire with Roger Whitney, the retirement answer man.  Roger believes rather than setting retirement goals, we should set retirement priorities.  Not that you shouldn’t have goals. But when retirement is decades away, priorities are more flexible. The closer you get to retirement, the more you can concentrate on making concrete goals.  Roger believes you should decide what your ideal retirement would be, not what you think you can afford. This allows you to see what your priorities really are and you can work harder towards those and spend less energy on the things that are not as important to you.  Even if you retire at 65, you may still have twenty or more years of life ahead. You don’t want to get bored! Roger suggests crafting a life you don’t want to retire from. You don’t have to stay at your 9-5 but you don’t have to give up working for money forever either.  But try out the life you don’t want to retire from before you retire! It’s a romantic notion to start your own farm and may help you make it through the crappy times at your job, but what if you don’t know anything about farming? Dip your toe into the life you think you want before you just dive right in.  We don’t think you need a financial advisor. You can figure all this stuff out on your own with some educating and research. But if you must, make sure you use a fiduciary. They are held to certain standards that those advising under the blanket term “financial planner” are not. It’s never too early to start planning for retirement. Show Notes River Horse Hipp-O-Lantern: A carbonated pumpkin beer. Roger Whitney: The retirement answer man. Learn more about your ad choices. Visit megaphone.fm/adchoices

We receive a lot of questions on these topics so we brought in an expert. Today we discuss wills, trusts, and estate planning with Tyler.  This is a big topic so we brought in a member of the LMM Community Forums who deals with this for a living. Tyler and is estate planner and a lawyer in the military.  Put simply, estate planning is deciding where you want your stuff to go when you die or are incapacitated.  Do you need a will? Probably. Do you need a will if you have a kid? Absolutely. You can’t count on the state or sometimes even family, to carry out your wishes.  An asset that doesn’t have a next owner listed, some checking accounts for example, has to be assigned by a probate judge. A non-probate asset, like a life insurance policy or some brokerage accounts, bypass the process and are paid out pretty quickly.  If you die in debt, creditor’s get first crack at your estate. But your family will not be held responsible for that debt unless they have co-signed for the debt.  A living trust can help to take some of the burden off your family when you die. It takes some of the work and hassle out of the probate process.  Power of attorney gives someone else the power to make financial decisions for you. They can handle things like paying your bills. Health care power of attorney allows someone to make medical decisions for you.  You can leave money in a trust and set the parameters under which it will be distributed. Tyler recommends age, the age of 30 as the parameter.  Having a big life event is a good time to check in with your estate planner to find out if you should update your will.  You can have a will drafted for between $400-1500. A trust is more expensive because they’re more complex.  This topic brings up things that none of us like to think about but making sure that your family is taken care of is worth it.  Show Notes  Estate Planning: A Primer: Tyler’s in depth article on the subject. Featured Image Photo Credit: “Fountain pen nib” by Ben FrantzDale Learn more about your ad choices. Visit megaphone.fm/adchoices

Today we welcome Forum member Chloe to discuss her finances. We’ll tell her what she’s doing well and where she needs some improvement. Chloe is a 28 year old nurse who recently got her masters and has been looking for a full time job with benefits. Even working part time, Chloe is doing pretty well. She went to small, inexpensive colleges on scholarships, federal aid, and one small loan. Most of her loan was forgiven due to her public sector work. Chloe made an incredibly detailed pro/con list of the two job offers she received in our Forums. She got some great advice and that helped her make her decision. In the end, she chose the lower paying job with better quality of life and better future prospects. It’s not always about the money! Chloe uses Mint to budget. Like most of us, food is her biggest budget problem. She maxes her 401k and Roth IRA but doesn’t have a lot of room to save for things like a wedding or a home. Chloe has a net worth of $140,000! She attributes this to having priorities. Saving and travel. And always living below her means. Chloe’s dad started an investment account for her to use for college but because of scholarships, she didn’t have to use it. It wasn’t a large initial investment but because the account is so old, the money grew. As we advise all of you, Chloe has an emergency fund. She invests in a few individual stocks. Lucky for Chloe, her dad introduced her to investing early. One of Chloe’s investments has a high fee. She needs to sort this out, you can lose a big chunk of your money to fees. One of Chloe’s problems is dealing with parental finances. Her mother’s situation is not ideal and it may be something Chloe will have to deal with in the future. Chloe is doing well for someone of her age. She may have some challenges with her parents but she’s on the proper track. Show Notes Yuengling Black and Tan: A rich, malty beer. Shipyard Pumpkinhead: Pumpkin beer season is here! Two Roads Roadsmary’s Baby: A pumpkin ale. Learn more about your ad choices. Visit megaphone.fm/adchoices

We interview Chris Clothier from Memphis Invest to explain real estate investments without the mess. Collect the rent check while someone else does the dirty work!  Passive Income  If you’ve listened to LMM for any length of time, you know how much we emphasize the importance of passive income. One of the keys to building wealth and achieving financial independence is to have more than one source of income and because there are only so many hours in a day, some of that income should be passive. Passive income is income generated with minimal effort on your part. Good sources of passive income can include your investments and retirement accounts, making money from things you already do like driving, shopping, or going out to dinner and our favorite, rental property income. Becoming a landlord can generate significant passive income. But how can owning rental property be considered passive income if you’re searching for homes to buy, tenets to live in them, and handling any repairs that have to be done and the whole list of other things a landlord has to do? The secret to making rental property a source of truly passive income is hiring a management company to deal with the day to day hassles of being a landlord. Turn Key Turn key rental property means that the home is ready to be rented out as is. Any needed repairs or upgrades have been completed and it’s ready for occupancy. This is the best kind of property to buy if you’re going to be an out of state landlord. It’s hard enough to deal with renovations when you’re local, almost impossible if you’re trying to do everything from a distance. There are turnkey management companies too. The right turnkey management company can do nearly everything for you from finding the property and renovating it, to putting a tenant in place and dealing with any repairs and maintenance that might need to be done. They collect the rent and send you a check. They also handle the sometimes protracted process involved when a tenant has to be evicted. You pay a management fee which is typically 8-12% of the monthly rent, some charge additional fees to cover expenses, and some charge a flat monthly fee. You can’t just blindly turn such a big investment over to anyone. You need to do your research when looking for a management company. Are there any real estate centered Meet Ups you could attend either in your local area or the area you want to buy in? It might be worth a trip to talk to some local investors and get recommendations for a management company. If you can’t travel, the internet has plenty of reviews for management companies so you at least have a starting point.   Once you have a few recommendations you can start interviewing companies. The preliminary round can be over the phone but once you have your list further narrowed down, you probably want to make a trip down in person. Some key questions are:   * How long has the company been in business in the local area? * What services do you offer? * How many properties do you manage? * Can the renter and I reach someone 24 hours a day? * What are the fees? * Under what circumstances can I cancel my contract? * Do the fees change when there is no tenet in the property? * How do you screen tenets? Learn more about your ad choices. Visit megaphone.fm/adchoices

   Fights over money are a leading cause of divorce. Andrew’s wife Laura joins us to talk about getting a reluctant spouse on board financially.  Laura does a lot behind the scenes for LMM but this is her first time on the show! She was the spender to Andrew’s saver when they met. But after a few years, he whipped her into shape.  Laura’s parents aren’t bad with money but they didn’t teach her enough growing up to be good with money. By the time she met Andrew, her wages were being garnished.  When the couple moved in together, Andrew said one thing he never wanted to fight about was money so they needed to communicate openly and often about it.  Strong arming any topic, especially money, is a fast way to fail. A crash course in what someone should have learned over a few years isn’t helpful either. Addressing money issues as they come up is less contentious and less intimidating.  If one partner has a business the other is not involved in, large business expenses can cause problems. You’ll need to “open your books” and help your partner understand things like return on investment for those big expenses.  Money inequality can cause resentment on both sides and poison a relationship. This is why communicating often about money is important, to talk these things out before that resentment starts to build.  Money isn’t the only way to value things. If one partner takes care of things like cleaning, laundry, cooking, home repairs, the other spouse is getting those things for free. Things like those have value too.  Sometimes the problem is one partner thinks about the future much more than the other. If this is the case, show your partner what the future could be like if you’re on the same page with money: early retirement, exotic vacations, starting a business.  No relationship should end over something like money. Communicate with your partner, show them why you manage finances the way you do. To help you to both have a better future.  Show Notes  Betterment: The easy way to invest. Jabbercast: A new way to listen to LMM!   Learn more about your ad choices. Visit megaphone.fm/adchoices

If you are tired of your time and your income being tied together, you might have considered a career as a freelance writer. But can anyone actually make money writing? You can, and I do. I finally quit my full-time gig and now work for myself. I’ll show you how to become a freelance writer and quit your full-time job.  Many people dismiss freelance writing, considering it not a real career. But a career is something you get paid to do. And if you can crack how to become a freelance writer and get paid a decent amount for it, guess what? You can have a career as a writer.  How to Become a Freelance Writer  You can begin to make money writing by starting your own blog and monetizing it. The problem is, this takes some time. You often hear about “overnight successes” in blogging or lots of other careers, but that is rare, very rare.  It’s much much faster to get someone else to pay you to blog. That’s how I get paid to blog. You still need to start a blog though. Your blog is your personal portfolio. It’s a way to show potential clients what you can do.  What’s Your Passion?    It doesn’t matter. I enjoy writing about money because it helps people, but I wouldn’t call it my passion.  If you want to make money freelance writing, find out what people are paying for. If one of those things happens to be something you’re passionate about, great!  But telling people, they will automatically make money by following their passion is bullshit. So spend some time on freelancing sites and see what topic people are hiring bloggers to write about and start a blog about that. The more niche your topic, the better. If you want to blog about vegetarian cooking, guess what? A million other people already did it, and there are a handful of big, well-known sites gobbling up all the traffic. A Google search for those words brings up 15,900,000 results. You can still write about vegetarian cooking but how about vegetarian cooking for children or for menopause? Those bring up 2,800,000 and 802,000 respectively. The more niche you are, the faster you can make an impact. You don’t need to be an expert on a topic though. Here’s a secret. I didn’t know hardly anything about personal finance when I started writing for LMM. I listened to tons of podcasts, read tons of articles and books on the subject and learned as I went. You’re Not a Techy Great, you have your topic all picked out, and you’ve been educating yourself about it. Now you need to design your site and get it up on the web. But you don’t know how to do either of those things. You don’t have to be a web designer or developer to start a blog. Your grandmother could make a blog using WordPress. A staggering 30% of all websites were made with WordPress. WordPress offers hundreds of templates to choose from, and you can customize them with your branding. And WordPress is free to use. If you want to use some of the premium plugins, there is a cost but to build your site is free. You need to host your site too. You can do that at HostGator starting for just $2.75 a month, and HostGator is compatible with WordPress. Engage Your Audience   Let’s be honest. Personal finance is not the most scintillating subject. It’s a vital one, but it can be pretty dry. But if I do say so myself, LMM takes a dry subject and makes it funny and interesting while providing easy to follow, actionable advice that will improve your finances. That’s what you want to strive for no matter what subject you choose to blog about. Use your own voice. I write as I speak (that’s why there are so many swear words in my articles) and it makes my posts more c... Learn more about your ad choices. Visit megaphone.fm/adchoices

We haven’t done one of these in awhile! Better Know a Millionaire is back to see if the other 1% really live that differently to the rest of us. Today we interview millionaire Adam Dicker. Adam made his millions by selling domain names, some for as much as eight figures! Adam has been in the business for about twenty years and was a VP at Go Daddy for a few years. Adam buys and sells domains that have expired and tries to stay two to three years ahead of trends, particularly in the medical and tech sectors. You can’t just go and buy a domain name with a trade mark in it. So no, five years ago you would not have been able to purchase Applewatch.com. No need to beat yourself up about that one. This business takes a lot of research. You have to buy a name that in the future, a business would want to buy. Like a lot of millionaires, Adam wanted a business that would make passive income. He once went to dinner before replying to an offer and in the space of that dinner, made an additional $50,000 from an anxious buyer. Doesn’t get much more passive than that. Adam looks at every day like he has to make enough money to pay for food for his family. He may have made $10,000 the previous day, but he forgets that and looks at the current day as an emergency that he needs money for. According to Adam, you always have to budget, all of us. It doesn’t matter if you make $10,000 a year or $100,000 a month. If you have no idea what is coming in and what is going out, you might find yourself going broke. Like nearly all of the millionaires we’ve interviewed, Adam doesn’t live a crazy life of luxury. He would rather watch football on a Sunday afternoon or go to dinner than stay in Five Star hotels across Europe. So again, we see that your average millionaire is not some jack off you see on TMZ, but just a normal person who knows the importance of living within your means. Show Notes Morimoto Imperial Pilsner: The Iron Chef beer! Adam Dicker: Learn to buy and sell domain names. LMM Community: Come join us in the Forums to discuss all things PF! Featured Image Photo Credit: “Proudly made in America. Printing 24/7 in USA.” by Miran Rijavec on Flickr Learn more about your ad choices. Visit megaphone.fm/adchoices

Do you have kids? What are you doing to teach your kids about money? Adam Carroll joins us to talk about teaching your kids the value of a dollar.  Adam is one of our favorite guests here at LMM. We first met him to discuss student loan debt. Today he’s back to talk about teaching kids about money.  Under-Educated  More than anything, aside from health, money can make or break your life. Not in the sense that money buys happiness but that lack of money, or knowing how to handle the money you have, is a major source of stress. In 2014, 64% of American adults sited money worries as “a significant source of stress” making it number one on the list ahead of work, family, and health. You would think that something so fundamental would be well covered in schools, from kindergarten all the way through high school. Well, it isn’t. Maybe because there are “legacy” subjects taught that leave little room for new ones. Maybe because so much hinges on standardized testing and those tests don’t include a personal finance sections. For us tin-foil hat wearers, maybe because the powers that be like the system just as it is. It makes for good consumers. Whatever the reasons, kids aren’t learning even the basics of how to handle money. So it’s up to their families to instill the personal finance lessons that will carry them through life. What Age To Start Early, even earlier than you might think. By the time children are seven, their money habits are already formed. Age three is a good age to start money lessons. You’re not going to explain what a Roth IRA is to a toddler but even at this age kids can understand basic concepts. Explain that you need money to buy things and you earn money by working. Teach them delayed gratification. You can’t have everything you want now. The Stanford Marshmallow Experiment showed the importance of delaying gratification. Children were given one marshmallow and told if they waited to eat it, a short wait of about 15 minutes, they could have a second marshmallow. The study found that the children who waited had better life outcomes which were measured by things like SAT scores, educational attainment, and BMI’s. The children studied were between the ages of 7 and 9 so it seems to be true that your money habits are set by age 7. Money Isn’t Real How often do you use cash? Almost never for some of us. How often do your kids see you use cash? Maybe never. If your kid never sees cash, it’s hard to understand that you can’t just buy whatever you want because physical money is finite and a credit card is not. Adam devised a clever way to teach his kids about real money. He gave his kids $10,000 in real money to see if it would change the way they played the board game Monopoly. It did. The kids were more careful with the real money. By showing kids that money is a physical thing, you can teach them that once they spend it, it’s gone. Money is no different to cookies. If you have three cookies and you eat three cookies, the cookies are gone. Don’t Raise “Wanting” Kids Having kids is expensive. It costs $245,340 to raise a child to the age of 18. It costs more to raise “wanting” kids. You’ve seen them, the ones having a melt down in Target because they were told no when they asked for a toy. But the reason for the melt down isn’t just th... Learn more about your ad choices. Visit megaphone.fm/adchoices

  Today we dissect listener Andrew’s finances. What is he doing right, what is he doing wrong, and what can he do better. This financial life. Andrew is a long time listener and today he shares his financial situation with us to get some advice. Before Andrew found LMM he had student loan debt, credit card debt, high fees on what investments he had, no budget AND he bought a new car. Andrew recently married and brought about $75,000 of debt into the marriage while his wife had about $22,000 from student loans. They have paid off about $20,000 in a short amount of time. He moved his investments over to Vanguard to save on fees, and set up a budget. Andrew lives in Minnesota and the couple make about $100,000 a year. They pay just $600 a month in rent on a two bedroom apartment. The monthly living expenses are about $2,000. They want to buy a house but are first working to build their emergency fund and pay off debt. The student loans have a high interest rate, over 6%. He is paying $2,300 a month in loan payments. Andrew should speak to CommonBond about getting a lower interest rate. He is currently using the snow ball method to pay his debt but we recommend the stack method. Andrew has a Roth IRA and is working toward maxing that out by the end of the year. Once the debt is paid off, in about four years, Andrew would like to travel before buying a home. Buying a home should not be a given. A lot of people just do it because it’s the next thing you do but it’s not for everyone. Because he likes his job, Andrew is not in a big hurry to retire early. But it’s not if you don’t have to work no matter how great your job. We’re glad that we were able to help Andrew take control of his finances. Show Notes Sebago Bump: A rich, black ale. Mint: The easy way to budget. Betterment: The smart way to invest.   Learn more about your ad choices. Visit megaphone.fm/adchoices

   With so much of our personal fiance information floating around the internet, how can you secure your accounts? We’ll give you a few ways to stay safe.  Many of us have had some aspect of our life hacked, bank account, credit card, naked photos. You have to protect your on-line information.  Some sites are more secure than others. You are pretty safe at Betterment, maybe not so safe at your local carry out restaurant. So don’t use the same password over and over! Use a site like LastPass to manage your passwords. Use tiered passwords, a complicated one for things like bank accounts but a simple one for your Disqus account. Two-factor authentication means you provide two forms of identification, something physical like a key fob and a security code. Prey will use your web cam to periodically take pictures so if someone steals your device, say “cheese” mother fucker. You don’t have to be rich to be ripped off. Hackers don’t want to steal $10,000 from one person, they want to steal $100 from 100 people. Adding numbers and characters to your password helps but not much. Using a nonsensical  string of words is more secure and easier for the human brain to remember than a string of numbers and characters. A user name is almost as important as a password. If you don’t have to use your e-mail address, use something harder to uncover than your own name. When answering security questions, lie or answer accurately but add a code word onto the end of your answer. What happens when you die? Well, you see a white light…No, put a list of your passwords in a secure place like a safety deposit box and give the key to a trusted person. This could be useful not just for death but in case you are ever locked up unjustly in a South American prison. Plan ahead. There is only so much you can do. Ever how clever we are and how sophisticated on-line security is, the hackers are more clever and more sophisticated. But you don’t have to make it easy for them. Show Notes Keymaster Farmhouse Smash Ale: A small brew with a smooth finish. Exile Ruthie: A smooth, gold lager. Betterment: A safe place for your emergency fund. Patreon: Help support LMM. Learn more about your ad choices. Visit megaphone.fm/adchoices

Most of us are not going to get rich simply from our jobs – we have a limited amount of time for actively working. To reach financial independence, we have to create sources of passive income. Smart real estate investing can bring in big returns and grow your net worth.  Like investing in the stock market, real estate investing can seem intimidating. It’s really not though. There are just some key fundamentals you need to know before you get started.  Everyone wants to be the Donald Trump of their neighborhood. But with less turnover. Fewer walls. Better inter-neighbor relations.  OK, maybe that was a bad example. But, maybe not.  “It’s tangible, it’s solid, it’s beautiful. It’s artistic from my standpoint, and I just love real estate.” – Donald Trump  Maybe this human candy corn topped with cheese whiz is on to something. Real estate is a physical asset you can touch and is not going out of business any time soon. Unless people all of sudden choose to live off the land again…    Nah!  No matter how you slice it, real property is here to stay, which is why many choose to put their money into it. Investing in real estate has crossed all of our minds at one point or another. But if this is an investment option you’re considering, you may have no idea where to start. To successfully pursue investment opportunities in the real estate market, you must first do your due diligence to ensure that you understand the intricacies of your local market and the factors that dictate the profitability of what you’re investing in. In this article, I will offer you a broad overview of just about everything you need to know about beginning with investing in property; the very basics. And I promise, no more bear attacks or Trump references. An overview of real estate investments At a basic level, real estate investing is a method of making money by renting, flipping or owning residential, industrial, commercial properties, or parcels of land. Some investors may find these properties on their own, or through the use of an online real estate marketplace like Roofstock, the Multiple Listing Services, or Zillow. Residential real estate investments are the most common forms of real estate investing. These include single-family homes, condos, and townhomes that can be re-sold or rented out to turn a profit. For example, you buy a condo in Beach City 5 miles from you for $100,000, you rent it out on Airbnb for $100 a night, you make a lotta tuna. Simple as that. Well, maybe there’s a bit more to it. But more on that later. Larger residential properties and those that are intended for use by businesses fall under the category of commercial real estate. Owners can make money from commercial properties by leasing out office space or multifamily residential units. The rule of thumb is anything that’s rented out to a business and any residential building with more than 4 units inside it, is classified as commercial. These types of properties have different lending criteria when applying for a mortgage. Regardless of the type of property you own, you can benefit monetarily profit from an investment property in four key ways: rent, appreciation, tax benefits, and interest. Rent The owner of a single-family home, condo, townhome, multifamily property, commercial building, crowdfunded real estate or industrial real estate may generate rental income by leasing out all or ... Learn more about your ad choices. Visit megaphone.fm/adchoices

  Today we have a This Financial Life episode with listener Lindsay. We break down her finances to see what she’s doing right and where she can use some help. Lindsay is a second grade teacher living in Seattle. We’ll help her get her financial life in order. Lindsay’s salary is a little over $58,000 a year, it’s spread over twelve months and she makes a few extra thousand teaching summer school. Lindsay decided that 2015 would be the year she stopped ignoring her finances, partly thanks to LMM! Lindsay divorced in 2013 and it caused some tax problems. Your marital status matters on the last day of the year. So even though the Lindsay was married for almost all of 2013, for tax purposes, she was considered divorced. She ended up owing $2,400. She had about $20,000 in credit card debt after the divorce. Lindsay got a loan from Prosper to help conquer the debt. She also used Ready For Zero to help pay things back. Within three years she will have killed all that credit card debt! Lindsay also has $56,000 in student loans. Once she has paid off her credit cards she will focus more on the student loans. Lindsay has investments too. She has about $15,000 in a Traditional IRA but she is focused on debt for the time being rather than investing. Her rent is not unreasonable, her car is paid off although she has a bit of a long commute. What can Lindsay do better? Her Prosper loan interest rate is high. She should try Lending Club to see if she can get a better rate through them.  She can contribute more to her IRA to reduce her taxable income. Lindsay has a lot of debt but she also made a plan that she is sticking to. We’re happy that we were able to play a small part in her success! Show Notes Lindsayliving.com: Lindsay’s lifestyle blog. Mint: Find out where your money is going. Patreon: If you appreciate LMM, donate here. Learn more about your ad choices. Visit megaphone.fm/adchoices

It’s important to get the most out of your day. But you can take the quest for productivity too far resulting in burn out. Find the productivity sweet spot.  During Andrew’s recent burnout, he realized he was taking the need for productivity too far. Sometimes you just need a night vegging out in front of a video game.  We’re all motivated by different things, the key is to find out what motivates you so your productivity isn’t scattered and ineffectual. External forces, internal? Are you a morning person or a night owl? Knowing what moves you is important to get moving.  If you have a month to do a project does it take you a month or three days? If it takes you a month, is the whole thing done the last day of that month? Do you like a stark space or one full of clutter and color?  Are you a list maker? Especially for your long term list, go through it once in awhile and make sure you still need to do all the things you wrote down. Crossing things off is satisfying but things change and still doing something just because it’s on the list is anti-productive.  Make sure you focus your productivity. Every minute doesn’t have to be accounted for, that’s how your get burn out.  Show Notes  Better Than Before: Mastering Habits of Our Everyday Lives Patreon: Donate here to keep LMM ad free. LMM Tool Box: All the tools you need to be more productive. Featured Image Photo Credit: “Xbox One Controller” by mastermaq on Flickr Learn more about your ad choices. Visit megaphone.fm/adchoices

   Larry Ludwig from Investor Junkie is our guest today to explain what the Federal Reserve is, does, and why you need to know.  Put simply, the Fed sets monetary policy and either adds or removes money from the system. There are twelve regional Feds across the country to help manage local banks. It was created in 1913 as a way to prevent feature economic disasters. Bit of a fail I think. The chairperson is appointed by the president but is supposed to operate independently of the government. Prior to 1971, we operated on the gold standard so the Fed made sure the amount of money matched the amount of gold. Now we operate on a “faith based” system where we rely on the government to determine the value of money. In order to help stimulate the economy after the crash, the Fed allowed banks to borrow money at 0% interest. The rate has been that low for seven years. Lowering the interest rates is meant to stimulate the economy. When rates are low, people can borrow money to buy things they couldn’t afford before. When interest rates are raised, that means that the economy is doing well and is at nearly full employment. The Fed is also tasked with keeping inflation/deflation in check. They have not always been successful but the average rate of inflation has been about 3% since the Fed’s creation. The Fed also determines how much cash banks must have in reserve. Ultimately it’s productivity that grows an economy and not slight of hand by the Fed. And a lot of economists consider all this smoke and mirrors to be merely kicking the can down the road, just delaying the next 2008 style melt down. Is the Fed good or bad? That’s up for debate. The Fed has helped pull us out of crisis but did they create the crisis in the first place? Are they creating artificial cycles? What can you do to protect yourself against the whim of the Fed? Make sure to have a good asset allocation strategy. Aside from that and repatriating, there isn’t much else you can do. It’s good to understand the Fed but ultimately, invest your money in the LMM set it and forget it style and don’t worry too much about what they are doing. Show Notes White Beer: A crisp, summer beer. Investor Junkie: Larry’s site dedicated to helping you become a better investor. The Creature from Jekyll Island: A look at the Federal Reserve. Betterment: Don’t worry about the Fed and invest your money. Patreon: Want to keep LMM ad free? Donate now! Learn more about your ad choices. Visit megaphone.fm/adchoices

Today we interview Benjamin Miller from Fundrise. Fundrise is a crowdsourcing site that allows anyone to invest in real estate.  Real estate can be a great investment but you need some serious money to do it. Not anymore. Fundrise allows you to invest small or large amounts of money in various properties. We even wrote a full review of Fundrise – you should check it out! The commercial real estate market has outperformed other investment vehicles for the last thirty years. It would be great if we could all become commercial land lords but most of us probably don’t have hundreds of thousands of dollars sitting around. With Fundrise, you need $1,000 to open an account. They have dozens of people looking at hundreds of possible investments. Finding a good commercial real estate investment isn’t easy. Fundrise negotiates the deal and writes then check and then offers the opportunity to investors. The investment management fee ranges from .33-.50% per year. How fast can you pull your money out of Fundrise? Not as quickly as you can with something like Betterment. Their notes have an average age of two years. You don’t have to be an accredited investor to invest through Fundrise. They have worked with the SEC to open certain investments to anyone who has the $1,000 minimum. You don’t want this to be a huge part of your portfolio but as the average returns are around 13%, this type of crowd sourced investing is something to seriously consider. There isn’t a deal for investors who aren’t accredited right now but Benjamin suggests setting up an account so you can see when there is a deal that you can get in on. Show Notes Fundrise: Crowd sourced real estate investing. Fundrise Extinction: Cool subway ad! Fundrise Internet: Next to be extinct. Fundrise Jobs: Welcoming all out of work bankers. River Horse Baltic Porter: Aged in Peruvian rum barrels. Molson Canadian: It’s the NHL play offs,what else would you drink? Learn more about your ad choices. Visit megaphone.fm/adchoices

Yeah, backdoor Roth IRA sounds pretty badass – badass but complicated.  Many of us have tossed around the idea of having a traditions IRA or a Roth but what if you can have the best of both worlds? There are not many times in life that allow us to have our cake and also to eat it, but this is one of those times.  Quick IRA Re-Cap  We could do a year of shows devoted to all things IRA and there would still be questions. They are confusing so here is a bit of a refresher on the basics.  IRA stands for an individual retirement account. It’s a tax-advantaged investment vehicle to save for retirement. There are several kinds, including SIMPLE, SEP, Traditional, and Roth. The last two are the ones we will be talking about today and the two that are most commonly used. Traditional IRA A traditional IRA lets you invest pre-tax income into an account that will grow tax-deferred. The money is not taxed until you withdraw it. You can withdraw funds after age 59.5. Putting money into a Traditional IRA lowers the amount of taxable income for the year you made the contribution. Not only does it lower you adjusted gross income, doing so can help you qualify for other tax breaks like student loan interest deductions or child tax credits. Roth IRA A Roth IRA is similar to a Traditional, but the money is taxed up front and not upon withdrawal after age 59.5. Roth contributions (but not earnings) can be withdrawn without penalty and tax-free at any time. After five years have elapsed after the first contribution, you are allowed to withdrawal up as much as $10,000 of the earnings penalty-free to pay for certain qualified expenses. Contribution Limits Both Traditional and Roth’s have the same contribution limits, $5,500 per year for 2016 ($6,500 if you’re aged 50 or older.) But there are income limits for high earners. If you’re single and earn over $129,000 or file jointly as a married couple and earn over than $191,000 you are forbidden to contribute to a Roth IRA entirely! Penalties Withdrawals from a Traditional are considered regular income, and if you are younger than 59.5 when you make the withdrawal, the amount you take out will be hit with an early withdrawal penalty of 10%. You can pull contributions to a Roth anytime without tax or penalty. The rules for earnings are different. If it has been less than five years since your first contribution, you may be taxed on earnings even if the funds are used for one of the exceptions described below. Exceptions The thought of locking up your money for so long puts many people off the idea of an IRA, but there are exceptions: You can use up to $10,000 from your Traditional or Roth IRA toward the purchase of your first home. You can use IRA money to pay for higher education expenses not only for yourself but also for immediate family members (your spouse, children, and grandchildren). There is no dollar limit. You can make withdrawals to pay for unreimbursed medical expenses if those expenses are more than 10% of your adjusted gross income, or to pay for health insurance premiums for you, your spouse or children during a period of unemployment. Which is Right for You? If you expect your tax rate to be the same in retirement or higher than it is now, the Roth IRA is a stronger choice. A traditional IRA makes more sense if you expect your tax rate to be lower in retirement. But what if you could have the best of both worlds? There are not many scenarios in life that allow us to have our cake and also to eat it, but the MF has figured one out when it comes to IRA’s. Why rollover 401K? The best reason to roll an old 401K into an IRA is that there are a lot of hidden fees in some 401k’s and the investment options a... Learn more about your ad choices. Visit megaphone.fm/adchoices

What is a robo advisor and should you use one? Larry Ludwig from Investor Junkie joins us to tell us what we need to know.  A robo advisor is an on-line money management service that uses automated algorithms to give investment advice. It takes humans out of the equation.  These are companies like Betterment, which was the first robo advisor, Wealthfront, and Personal Capital. They are geared towards younger people who are comfortable with transacting business on-line and are less expensive than traditional investment advisors. Robo advisors use a lot of complicated math but basically they look at past returns to determine future returns. A problem with some robo advisors is that while they’re tax efficient within their portfolio, they don’t all have an over all picture of your investments so are not tax efficient overall. A robo advisor should be easy to use and inexpensive. Larry recommends Betterment above the others. Robo advisors aren’t perfect but it’s better than just throwing your money into an account and hoping for the best. And if you are the set it and forget it type, they’re the easiest way to do that. Show Notes Son of a Peach: An American wheat ale. Investor Junkie: Larry’s site about all things investing. Betterment: The easy way to invest. Personal Capital: Invest with confidence. WiseBanyan: Free financial advisors.   Learn more about your ad choices. Visit megaphone.fm/adchoices

A few months ago we did an introduction to bonds episode. We wanted to get a little deeper into the topic and a listener, Eric, agreed to help us out.  As you heard in the disclaimer, this is a complex topic. Stick with it though, it will all make sense by the end of the episode.  There are many types of bonds but the most basic description would be, a bond is an IOU. A coupon is the interest payment and you get that on a semi-annual basis until the bond matures. At maturity, you get the face value back.  A government bond is a treasury bond. These are often the benchmark that other bond rates are based on.  Agency bonds are issued by government-sponsored agencies like Fannie May. Mortgage-backed securities are mortgages sold off by the mortgage lender. Corporate bonds are what many of us are familiar with. These are sold when a company needs to raise money.  A municipal bond is issued by a city, town, state, or even a water company to fund expenses. Even Yankee Stadium has bonds! The yields are lower but from a tax stand point, they are a good investment.  Bonds are affected by interest rates and their credit ratings. Triple A is the highest rating. Anything rated below Triple B- is considered a junk bond.  Since most of our audience are buy and hold investors, we don’t need to be concerned with bond pricing on a day to day basis. You just need to be happy with the coupon payments you will receive and the credit rating of the bond. This is why Treasury bonds are a good investment for buy and holders.  Phew, get all that?  Show Notes  Backpocket Brewing Penny Whistle: A Bavarian wheat with spice notes. Betterment: The easy way to invest. Learn more about your ad choices. Visit megaphone.fm/adchoices

Being completely burnt out can happen to the best of us and it is not uncommon. Especially for vacation deprived Americans. But we can’t all quit and go live on the beach. So we have to recover somehow. You can bounce back. A break and a few deep breaths and back on track.  We did an episode on burnout which generated a ton of emails and still does. Many of you have suffered or are suffering burnout yourselves. What can we do about it and what can we do to prevent it in the future?  What Is Burnout?  “Burnout is a psychological term that refers to long-term exhaustion and diminished interest in work.”  That’s the technical definition. In real speak, “fed up with this shit!”  The Symptoms  Do you know the difference between being physically tired versus mentally tired? I’m a big fan of physically tired. Being tired from a long hike, a good run, helping your best friend move out of their fifth-floor walk up. That kind of tired quiets the mind and lets you sleep like a baby.  Mentally tired sucks and it’s the kind of tired that being burnt out produces. When you’re mentally tired, your brain won’t shut up. It’s the kind of tired that won’t allow your thoughts to stop long enough to let you rest. Being burnt out can also result in cynicism and detachment. “This job sucks. Things will never get better.” “Nothing I do makes any difference.” “This job creates nothing of value in the world. I sit at a desk eight-plus hours a day and don’t engage my brain at all.” Hard to find motivation with those kinds of thoughts ringing in your head. Being burnt out sucks the meaning and engagement out of work life. The Causes When the economy tanked in 2007-8, many employers began laying off workers. Those lucky enough not to lose their jobs now were expected to do the work of two, sometimes more, people. And they did it and did it without complaint lest they be next. By mid-2014, all 8.7 million jobs lost were replaced. But in the interim, a lot of people got burnt out. During that time, people felt a lack of control. They felt they had no control over things like scheduling, what assignments they got, the amount of work they were now expected to make up in the face of layoffs. Because people were now expected to take on work once handled by someone else, expectations were unclear. And if you had a question about how to do something, there was no one to ask. The person that used to do it was long gone.   Workplace dynamics weren’t exactly pleasant either. If it was you or the guy next to you, you would be looking for any reason to throw him under the bus and he was doing the same to you. Not exactly a healthy, supportive environment in which to spend eight or more hours a day. Where Does It Happen? Well, work is the most likely spot but not the only place it can happen. Even stuff you normally enjoy can burn you out if you do too much of it. I had a friend who liked playing soccer in the organized leagues in the city. He was a keeper and a pretty good one. Eventually, people he played with who also played on other teams, started calling him when they needed a ringer for a playoff game or when the regular keeper couldn’t make it. Eventually, he got sick of playing soccer, something that had once been an enjoyable pass time. Or those parents, usually mothers, who get sick of doing everything around the house and go on strike. They refuse to cook, clean, or do laundry until they get some help. Usually, they fold because a house full of kids can stand dirt, smelly clothes, Learn more about your ad choices. Visit megaphone.fm/adchoices

 Today we’re answering listener questions. Student loans, home equity loans, over paying your mortgage and a day in the life of a data engineer.  We love to answer your questions on the podcast. If you are wondering, odds are someone else in the audience would like to know too.  1. I miscalculated and took out too much in student loans. Should I pay it back right away? Yes, pay it back if you don’t need it. Pay off the higher interest rate loan first.  2. Should I take out a home equity loan to pay for roof repairs? Yes, a home equity loan will have a lower interest rate than a personal loan or heaven forbid, putting it on a credit card.  3. Should we use Betterment as a savings account for a down payment, to bulk pay student or car loans, and as a place to keep a 3-6 month emergency fund? If you’re going buy a house in less than five years, no. Yes to the loans again applying the five year rule. Yes to keeping your emergency fund there.  4. How to allocate extra money to mortgage payments versus to a retirement fund or emergency fund? It’s almost never best to over pay the mortgage. It’s better to throw extra at the retirement account. If you do want to pay extra to the mortgage, pay more than once a month to cut down on the interest you pay.  5. What’s a typical day for a data engineer? Data engineer is a niche job so it commands good money. Andrew has an undergrad in info technology. He pulls data from various sources, builds warehouses to store it, and gathers insight from the culled data. He goes to lots of meetings. Show Notes: Betterment: The easy way to invest. Patreon: Help support LMM.   Learn more about your ad choices. Visit megaphone.fm/adchoices

Balance is important in all aspects of life, including your financial portfolio. Find out what well-balanced means when it comes to your portfolio.  What makes up a well-balanced portfolio? Andrew breaks it down for us.  Part of it depends on your age. The younger you are, the more risk you can afford. Diversity is important too. Many Americans have the majority of their wealth locked up in their home. Owning stocks and having retirement accounts is important too.  If your employer offers any matching, take it. Even if you have debt, it’s free money! Have some money invested internationally. Vanguard’s International Developed Market ETF can get you there. US investments only account for one-third of the world’s market so by only investing in US companies, you’re missing out on the rest of the world. Never spend more than one-third of your take-home pay on rent. The same percentage goes for owning a home. The home you live in should not account for more than one-third of your wealth. If you like to buy individual stocks, one company should never make up more than 10% of your investments. Make sure you have an emergency fund. Six months of expenses is the gold standard but get something together if you can’t manage that just yet. Keep 6-8 weeks expenses in a checking account. Any start into investing is a good start. Once you have a handle on what you’re doing, make sure you follow these tips to help perfect your portfolio. Show Notes Personal Capital: The investing version of Mint. LMM Ultimate Investment Strategy: Andrew lays out a blueprint for you. Learn more about your ad choices. Visit megaphone.fm/adchoices

  Today we break down listener Sylvain’s financial life. What is he doing right, what is he doing wrong, and what could he be doing better? Our This Financial Life series is back. One of our listeners lays out his financial picture for us and we critique it. Sylvain immigrated to the US from France in 2009. He does not have student loan debt because education is heavily subsidized in France. He’s now a permanent resident working for a private company. He currently lives in the Berkeley area which is expensive. Sylvain and his wife bring in about $7,000 a month and spend between $4-5,000. They share a credit card, split the bills, have $10,000 each in an emergency fund and are saving for a home. They expect to spend about $500,000 to buy a place. The money they are saving toward a home is invested currently. They discuss finances once a month. Sylvain was leery of getting a credit card but wanted to build credit in the US. He only uses it when he has the cash to pay it off immediately which is how we should all use our cards. He has a 401K which he plans to use to fund his retirement. Sylvain is doing well. His family has an emergency fund, they pay off their credit cards every month, have their savings invested and have a retirement account. And now if you’ll excuse me, I’m going to start packing for France. A few of you probably had the thought too. Show Notes Patreon: Help support LMM Betterment: The easy way to invest. Mint: Start tracking your spending today. Learn more about your ad choices. Visit megaphone.fm/adchoices

  We haven’t done a five questions for awhile. Today it’s back! Andrew and Thomas answer five questions submitted by our listeners. Today we answer questions about bonds, interest rates, and one of our favorite subjects, retirement. 1.  If you’re young and looking to grow wealth, why bother have 10 or even 5% invested in bonds? If you’re in your early 20’s, go ahead and go 100% stocks. As you get closer to retirement, you move more to bonds. This is what a life cycle fund does for you. 2.  Am I going to incur a lot of fees if I take money in and out of my Betterment account frequently?  When you pull money out, Betterment will let you know the tax implications of doing so. That’s one of the reasons we tell you to buy and hold. But even with the taxes, you will almost always make more in Betterment than making dick interest in a savings account. The bigger question is why Joe is not leaving that money alone. 3.  Wouldn’t it be beneficial to have a traditional IRA for your working life, retire, wait a year, and then withdraw the money?  Yes, your tax rate will be lower after retirement. You can even start slowing converting to a Roth. 4.  How does the Fed lowering or raising interest rates affect me?  Banks offer us loans with interest rates that are based on the Fed rate. The higher the Fed sets it, the higher the interest rate the banks will charge us to borrow money. 5.  I have unvested stock options. What are the implications of exercising them before the IPO?  It depends on the price. You could clean up or you could end up under water. The most important thing to consider is the taxes. Thanks everyone for sending in your questions! Show Notes Patreon: Help support LMM Keegan Ales Hurricane Kitty: An India pale ale. Betterment: The smart way to invest. PS:  Gawd, PF nerds don’t know who Vince Lombardi is! Embarrasing. Learn more about your ad choices. Visit megaphone.fm/adchoices

We are anti-fee at LMM whether they be bank fees, credit card fees, or investing fees. Uri Levine from FeeX joins us to discuss avoiding investing fees.  You probably go out of your way to avoid having to pay a $3 ATM fee but you might be losing much, much more than a few dollars through investing fees. Americans pay $600 billion in investing fees every year. That is 4% of the Gross Domestic Product! On an individual basis, you lose about one third of your retirement money to these fees over time.  Types Of Fees  Expense Ratio: This fee is charged for mutual funds, ETF’s and no-load funds.  Expense ratio is what it costs an investment company to operate a mutual fund. Expense ratio is determined by a yearly calculation. The fund’s operating expenses are divided by the average dollar value of its assets under management. Operating expenses are taken out of a fund’s assets and lower the return to a fund’s investors.  Plan Fee: If you have a 401(k), the provider may be charging you a plan fee for the privilege of holding your money. Your bank is already doing that!  Advisory Fee: If you use a financial advisor, you’ll be charged a percentage fee. This is often negotiable.  Real Dollars  You might know what percentage you are paying but how much is that in real dollars? The average actively managed fund charges 1.25%. That doesn’t sound like much but over time, it adds up. It adds up to a lot. If you invest $100,000 in a fund with a 1% annual fee, which is less than average, it will cost you nearly $28,000 over twenty years, according to Securities and Exchange Commission calculations. If you had that $28,000 to invest, you would have earned another $12,000. How To Pay Fewer Fees Tailored investing advice is expensive. It might seem like paying a “highly trained expert” would guarantee higher returns than all those slobs who can’t afford an advisor are getting but a big chunk of those returns will be eaten up by fees and commissions. Under 1% is a good percentage to look for and you’ll find fees that low and lower with Index Funds and ETF’s. The average traditional index fund has a fee of 0.74% and the average ETF fee is 0.44%. Vanguard’s lowest fee fund is the Vanguard 500. The fee is 0.17%. Betterment charges a fee of 0.35% on the first $10,000 invested. If you’re choosing funds through your employer, it’s likely that no one in your HR department is an expert investment advisor so don’t count on them to explain the fees to you or even know what you’re talking about. Read the prospectus of each choice. That’s where you’ll find information about the fees charged. If you don’t like what you see, do some research on your own to find a fund with better fees and suggest it be included in the choices. FeeX As the saying goes, if you want something done right, or in the case, fairly, you’ll have to do it yourself. Uri was once charged thousands of dollars in fees on a retirement account. After lots of phone calls and time wasted on hold, he got the fees waived. But it made him wonder how many other people were being charged fees and if they were even aware of it. So he did the only logical thing; started a company to help root out those hidden fees and find alternatives. That’s when FeeX was born. FeeX will analyze your investments to uncover where you are paying fees and how much you’re paying. They will then find you cheaper alternatives with the same asset allocation. Learn more about your ad choices. Visit megaphone.fm/adchoices

What is a penny stock?  Can they make you rich?  Well, it worked for our guest Timothy Sykes who turned $12,000 into $4.2 million by trading them.  Timothy took his bar mitzvah money and started trading penny stocks against his parent’s wishes. What they warned him would be a hard lesson in the value of a dollar, turned into a small fortune.  What Is A Penny Stock?  Penny stocks are stocks sold by speculative companies for under $5 per share. Penny stocks are usually growing companies that have limited cash and resources or companies in dire financial trouble, often already in bankruptcy. As such, they are much riskier than traditional stocks. You don’t trade penny stocks with the intention of finding the next big thing, rather, you’re trading momentum. If you’re wrong about a pick, get out fast. This is not a buy and hold discipline.  When a “conventional” stock is down, over time, it’s likely to bounce back. That’s not the case with penny stocks. The companies often go out of business before a bounce back can happen.  Short Selling  You can make money betting against a company too. You take a negative position and sell first, then buy. If you see a stock that you think is over valued at $10 a share, you sell it and buy it back later at $2 a share. How do you sell a stock you don’t own? You borrow from your broker. You’re betting on failure.  What Makes A Penny Stock Risky?  This all sounds good, take a small amount of money and turn it into millions through penny stocks. But nothing is that easy and the vast majority of penny stock traders lose money.  There isn’t much publicly available information on these companies and some of what you can find is from dodgy sources. Never risk disaster, don’t be sure of anything. Some of the companies are very young so there isn’t much information to be had. Many are in bankruptcy making it hard to find a fair valuation. The exchanges that these stocks are sold on do not have any minimum requirements to remain on the exchange. Because these stocks don’t have a lot of liquidity, you might not be able to sell them.  More Is Not Always Better  If you have $1000 to buy Apple stock with, that won’t get you much, currently less than ten shares. But if something is selling for .50 a share, you can snap up 2000. It seems more likely that your .50 cent stock will rise to $1 a share and you’ll double your money. But you have to consider the value, not just the price. The value is what someone else is willing to pay for something. In this case, part of the value of the stock is the value of the company. And a company selling shares so cheaply, is not doing well. It’s better to own part of a company that is making money than losing it.  Do Your Research  This kind of trading takes a lot of research. Timothy spends about 17 hours a day doing this. And as mentioned above, it isn’t easy because there sometimes isn’t much information to be had and what you find might not be accurate. Look for momentum, look for warning signs. Yahoo Finance is a good resource. The SEC website also contains a search engine where you can find all official filings made by a penny stock or any notices about an enforcement action from the SEC directed at any particular penny stock. You can use the lack of coverage for penny stocks to your advantage. CNBC and the Wall Street Journal aren’t following them. But you are and if you see some momentum, the company just got a big order for example, there is a lag between the time you see it and the time more casual observers see it. General Rules Look for big movers based on a big earnings win or a big contract win. Look for signs of economic value gains. Learn more about your ad choices. Visit megaphone.fm/adchoices

College costs are rising.  If you have kids and want to help them pay for college, the earlier you start a 529 Savings Plan, the more it will grow.  Kathryn Flynn from Saving For College will explain the fine points.  A 529 Plan is like a retirement account for college. You contribute with after tax dollars and are not taxed when the money is withdrawn as long as it is spent on educational expenses. You do have to name a beneficiary but can change it once a year.  There are two types. Pre-paid which is more restrictive. You are locking in current prices. The more common type is the college savings plan. You can invest in any state’s plan.  If your kid forgoes college for the starving artist route, you can change the beneficiary, use the money to fund your own education or make a non-qualified withdraw. You will pay income tax and a 10% penalty on earnings.  You can control the level of risk of the investment with an aged based investment option. The closer your kid is to college, the less risk you want to take and can weight the investment appropriately.  Kathryn’s site has a cool planner.  You input some information and it will generate how much you need to save for college.  You can buy 529 Plans direct or through an adviser. You can use 529 money to pay for lots of different types of education, community college, a four year college, trade schools and some study abroad plans.  If you want to start even before you have a kid, you can designate yourself as beneficiary and then change it to the child once they have a social security number.  While funding your kid’s education is important, it is not more important than your retirement. Always fund retirement first.  College isn’t getting any cheaper so start saving now.  Show Notes  Saving For College:  Kathryn’s guide to 529 plans. Betterment:  The easy way to invest. Learn more about your ad choices. Visit megaphone.fm/adchoices

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

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

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

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

Here’s the best tip for surviving a bear attack: play dead. It will be good practice for when you’re actually dead a few seconds later. OK, maybe we aren’t talking about this kind of bear attack, but seriously…get some mace! We mean the kind of attack that happens when the stock market is down. The important thing when it comes to anything bear-related…do not panic. So, what is a bear market? A bear market is simply a period in time in which stock market prices are falling. Simple as that. A bear market is a time when most investors panic and run for dear lives like the cunning wolf above. But bear markets aren’t for panicking. In fact, there is a lot of opportunity in bear markets. As the famous investor Peter Lynch once said, You get recessions, you have stock market declines. If you don’t understand that’s going to happen, then you’re not ready, you won’t do well in the markets. So, if you’re unsure of what is a bull vs. bear market, this article will help clear up the difference. Are we currently in a bear market? Maybe, maybe not—but we’re certainly not in a bull market. I know many of you are logging into Betterment and freaking out, even if just a little. And, I’ll include myself in that list. My first foray into investing and the number is negative. But we’re all in the same boat so don’t panic, this isn’t the Titanic. The ship will right itself. But not overnight. This is why we preach buy and hold. Even if that number is down, it’s still better than having that money sitting in a savings account collecting zero interest. And remember, investing is only one piece of your overall financial picture. You can’t single-handedly cure Ebola or defeat ISIS. Unless, of course, you’re John Rambo. Those biceps can conquer anything! What you can do is focus on the other areas of your spending. Throw a little extra money at your debt, tighten up your spending leaks, take on a side hustle. If you just have to do something, then buy now! Remember, be greedy when others are fearful. If you are just overwhelmed by it all, ignore it. Tune it out, don’t watch the news, don’t read the financial section of the paper. Just turn a deaf ear and let it happen. Still not convinced? Okay, if you act of out fear or irrational optimism, you are handing over your money to the investment banks and sophisticated investors. This is when the professionals make mad bank. Don’t give those greedy jerks any more of your money! Similarly, selling has tax implications and the government shouldn’t be getting any more of your money either. So the takeaway is, do anything constructive. Go for a run, read a book, refinance your student loan. But leave that investment account alone! Bull vs bear market First, what is a bear market and how does it work? At its core, a bear market is fueled by pessimism. While there tends to be some kind of economic event, such as falling securities prices, to kick off bear market conditions, the issue is perpetuated by a pessimistic outlook from investors. Because of this pessimism, selling increases and there is a lower rate of investment in the market overall. A bear market is not a technical definition as much as it is an Learn more about your ad choices. Visit megaphone.fm/adchoices

It’s Halloween and nothing is more frightening than money horror stories. Close the blinds, turn off the lights, light a candle and prepare to be scared. Matt and Andrew haven’t always been smart with money, well Andrew mostly has. But even they have finance horror stories and will share them with us. In 2007 everything Andrew touched turned to gold. He read in that secret magazine for high rollers, Forbes, that a housing company was basically printing money. In 2007. A housing company. He lost between $2-3000. Matt’s first foray into the market was Sirius. Tanked, even Howard Stern couldn’t right the ship. He also incurred over $200 in overdraft fees through various drunken misadventures. Matt got the lifetime ban hammer from ING because he may or may not have called a phone rep’s mother a very nasty word. In a McDonald’s parking lot adding to the horror. Andrew lost $450 because he forgot to sign a complicated form that was otherwise perfectly filled out. Matt cashed out a 401K incurring all the penalties that entails. Matt gave a cab driver carte blanche to charge his ATM card when his drunk friend puked outside the window. He got lucky and the bank refunded the overcharge. Matt lost a day’s take from his job. His working theory is that he left the envelope on the roof of his car. Since it’s Halloween, my theory is that it was a ghost. Or aliens. Probably aliens. It’s a scary world out there. Stay safe and have a great Halloween! Show Notes Hopfish IPA: An English style IPA. The Bowery Boys Haunted Brooklyn: Here’s a special Halloween treat. One of my favorite podcasts. If you like history or just scary stories, check out the Bowery Boys annual Halloween podcast devoted to ghost stories of Brooklyn. Learn more about your ad choices. Visit megaphone.fm/adchoices

Do you have lots of loose change hanging around?  Or ever find a tenner in a coat pocket?  Find out how to turn small change into big money. If you live in a building with coin operated laundry, you can skip this episode.  We know where your change is going.  But for those of us with the cool chipped laundry cards, we need something more constructive than keeping it in big coffee tins. We at LMM advocate using credit cards whenever possible so long as they are fully paid off each month but sometimes you have to use cash.  Where can you find money?  Always look down.  Things rarely fall up.  I found $12 in the street a few weeks ago.  And don’t turn your nose up at pennies.  Money is money.  Check your car, always seems to be some change there.  When you go to someone’s house, check their couch cushions!  (No don’t really do that). It takes awhile for found money to add up so where can you keep it in the mean time.  Coffee tin isn’t a good place long term but it’s the classic solution when you’re saving it up.  Zip lock bags work too and are easier to carry to the Coinstar machine than coffee tins. Now you have a little stash.  Don’t blow it at the strip club.  Use the change machine at your bank if they have one.  Then take the receipt to the teller, deposit it and transfer it to your investment account.  If you have to use Coinstar, which takes a percentage, they have a feature that allows you to deposit the balance into your Pay Pal account. Maybe you don’t treat yourself often.  Then by all means, use that change and get yourself something pretty.  Or donate the money to a cause you care about. Found money and change spends just the same as paper money so make sure you spend it as wisely.  Show Notes Ommegang BPA:  A Belgian style pale ale. Flying Fish Oktoberfish:  Pumpkin beer. Betterment:  Where to stash your small change and big money. Acorns:  Seamlessly invest your small change. Learn more about your ad choices. Visit megaphone.fm/adchoices

Author Farnoosh Torabi joins us to discuss how to navigate a relationship in which the woman earns more than her male partner. Farnoosh Torabi is a personal finance writer, best selling author and television personality.  We were blown away by her presentation at FinCon and are very excited to have her on the podcast. We know that it shouldn’t matter who makes more in a relationship but it often does.  It can be especially tricky for men to accept when their female partner out earns them.  And it’s hard for women too.  Not only are they the bread winner, but many still feel responsible for the more traditional female responsibilities as well. It can cause resentment on both sides.  Men may feel like the woman is usurping their role and the women may wonder, “What do I even need you for?  I make the money and run the house.”  This mind set is dangerous to the relationship.  There is a higher rate of divorce and infidelity on both sides of this dynamic.  If this sounds familiar, the two of you need to sit down and discuss ways the man can contribute that are meaningful and helpful to the woman. One of Farnoosh’s rules is to give the man’s money meaning.  Just because you make all the money doesn’t mean you get to make all the decisions.  His income should be deliberately allocated too and not just spent willy-nilly.  Farnoosh’s husband is the one putting aside money for their child’s education.  That isn’t a frivolous thing. Yours, mine, and our accounts are another recommendation.  No one should be expected to account for every cent they spend.  That’s what the “mine” account is for.  That money can be spent anyway each partner chooses. As younger people move into the period of their lives when they are entering relationships, this kind of tension will be less of a big deal.  Many of them were raised by working mothers some of whom were the higher earnings so they aren’t charting completely foreign territory. If you’re in this type of relationship, pick up Farnoosh’s book to help you and your partner work through this issue together. Show Notes Farnooshtv:  Farnoosh’s blog. When She Makes More:  Farnoosh’s latest book. Learn more about your ad choices. Visit megaphone.fm/adchoices

We love getting questions from our listeners. Today we take five questions about HSAs, timing the market, college savings accounts, compounding, and Betterment woes. We get a lot of questions at LMM, and if you’re asking, someone else is probably wondering too, so we like to answer questions for everyone. 1.  Is an HSA a good idea for a family that’s pregnant or has young children?  An HSA is a good idea for anyone with a high deductible plan, it reduces your taxable income, and you don’t necessarily have to use it for medical expenses.  Check out Episode 171 for a deep dive into HSA’s.  The Mad Fientist also talked about HSA’s in Episode 120. 2.  What is your advice for someone looking to start investing this year?  I don’t want to attempt to time the market but want to be aware of the market climate before making my decision.   The best time to invest is always now.  Even if interest rates go up soon, it’s still always better to be in the market than to not be invested.  Remember, buy and hold; you’re in it for the long haul. 3.  What is the best college savings account?   529 Plan is the one you’ll hear most about, but they come with a lot of stipulations, like having to attend in the state.  If you want a tax-advantaged account, put the money into an IRA.  You can take out the principal without penalty. 4.  If I invest in a Roth IRA or index funds, how does it get compounded?  What rate do they use?  Why not invest annually?  Investments don’t have set rates or terms because no one can predict how they will do.  It’s better to have your money invested now rather than once a year; you could miss a huge upswing.  You would also miss out on dividend payments.  As far as compounding, you can describe investing like that.  That’s for things like loans. 5.  Is your Betterment tanking?  What are some strategies to ride this out?   Lots of investors are losing money, Ebola, ISIS, Ukraine, Hong Kong.  Big, traumatic world events cause downturns in the market.  This is a natural ebb and flow of the stock market.  If you’re in it for the long haul, as you must be, it doesn’t matter. Thanks, everyone, keep the questions coming in. Show Notes Betterment:  Get your money in today. Want to learn more about Betterment? We put our money where our mouth is with The Betterment Experiment. LMM Tool Box:  Everything you need to manage your money. Learn more about your ad choices. Visit megaphone.fm/adchoices

On a list of  biggest fears, public speaking is #2, death is #6.  So we’d rather be dead than give the eulogy.  Michael Port will help us overcome our fear. And Michael doesn’t drink so his tips don’t involve liquid courage.  We allowed him to finish the interview anyway even after that disturbing revelation. Matt and Andrew lost their fear of public speaking through “exposure therapy.”  This is Episode 217 so they’re comfortable now.  But most of us don’t have the chance to practice that much.  We need a short cut.  Michael suggests the “act as if” technique.  Act as though you’re already comfortable.  This has a powerful effect on your brain, fake it until you make it sort of a thing. The old “pretend the audience is naked” advice is terrible.  The only thing worse than talking to a room full of people would be talking to a room full of naked people.  I don’t see a lot of naked people when I’m in public so would find it distracting.  Instead, remember that you’re doing something good for the people in that room, your speech will impart knowledge to them, always something important and to be valued. Michael also suggests raising the stakes.  Commit to the speaking engagement and have a lot riding on it.  Make a deal with your boss that if you pull off the speech, you get a raise or a promotion.  That way, you cannot allow yourself to fail. We were very pleased to have Michael on the show.  He’s a New York Times best selling author and a very sought after public speaker.  Michael usually charges $25,000 per speech and we were lucky enough to get an hour of his time. Show Notes Ommegang BPA:  A Belgian style pale ale. Flying Fish Red Fish:  a hoppy red ale. Book Yourself Solid:  Michael’s site about small business coaching. Heroic Public Speaking: Over come your fear. Think Big Revolution:  Michael’s key note address on raising the stakes. Learn more about your ad choices. Visit megaphone.fm/adchoices

Do you feel like you always have to one-up your friends, colleagues, and neighbors when it comes to having nice things?  Stop that, you’re digging a hole. Many people are competitive and that can take many forms, including always having to one-up those around you with something bigger and better (and more expensive). Marketing has a lot to do with this.  There aren’t ugly people in commercials for a reason.  If you use Product X, you’ll be smarter, sexier, richer etc.  But most of us are bigger than our more base instincts.  We all know how marketing works and why it works. What can be harder to combat is jealousy.  Your neighbor brings home a brand new BMW.  Why should he have one and not you?  Guy’s a douche.  So now you want a new BMW.  But you are not five years old.  Just because someone has a shiny toy doesn’t mean you have to have a shiny toy too.  And all you know about the guy is that he’s a douche with a BMW.  He might be mortgaged to the hilt and working a job he hates to pay for it all. There can be a flip side too.  Maybe you have a friend who is smart with their money and isn’t afraid to discuss it, to let you know what they do and what they may have done wrong in the past.  You can be influenced by this kind of peer pressure too.  I know this works because I’ve done it with a few of my friends. Sometimes you have to say no when you’d rather say yes.  If a group wants to go to a restaurant you really can’t afford, no one will remember that you begged off.  They won’t discuss the reason you said no while they’re all at dinner.  You said no, maybe didn’t even give a reason and it’s fine.  Your friends won’t be mad at you and you won’t be mad at yourself for spending money you shouldn’t have. Ok, colleagues, friends and neighbors are one thing, but what about your partner?  You have to always be communicating about money and the issues surrounding it.  You should know what the other person values and what matters less. It’s not easy to block out all of the things that signal us to spend money but if you’re aware of their affect on you, it’s easier to ignore. Show Notes Ommegang BPA:  Belgian style pale ale. Flying Fish Oktoberfish:  A savory malt with a nice hop flavor. Mint:  Manage your money. Betterment:  Start investing today. Texas 4000:  Donate to a good cause and help our audience beat Joe’s audience at Stacking Benjamins. Learn more about your ad choices. Visit megaphone.fm/adchoices

We’re big fans of Vanguard, but admittedly, investing in Vanguard funds is a bit more complicated than using a Robo Advisor.  In this article, we break down what we think of Vanguard’s 8 best funds while balancing both performance and cost. If you’re looking for a deeper dive into our logic as well as some colorful commentary than check out the podcast episode we did on this: Before we jump in, it’s important to mention why we are focusing so heavily on fees here. Due to their exponential nature, fees of just 1% can cause you to lose up to 25% of your earnings. That’s pretty horrendous and often what turns investors on to Vanguard in the first place. I also highly suggest you check the fees on your accounts via the free Personal Capital fee analyzer. In addition to running simulations, the analyzer pinpoints all of the overly fee-hungry funds across your accounts – retirement or otherwise. The difference between an Index Fund (ETF) and a Mutual Fund First, let’s quickly discuss what an Index Fund (ETF) and a Mutual Fund are. Who better to ask then Vanguard themselves? An ETF is a collection (or “basket”) of tens, hundreds, or sometimes thousands of stocks or bonds in a single fund. If you’ve ever owned a mutual fund—particularly an index fund—then owning an ETF will feel familiar because it has the same built-in diversification and low costs. Source: Vanguard A Mutual Fund is very similar to an ETF with one crucial difference: You can set up automatic investments and withdrawals into and out of mutual funds based on your preferences. Source: Vanguard on ETF vs. Mutual Fund In other words, if you want to automate your investing, then you use a Mutual Fund. If you want cheaper fees over time and don’t mind making contributions every month, then you should choose an ETF. I use ETFs because I don’t mind making investments manually and fees are the worst. We often get asked how much you need to invest in Vanguard. If you’re investing in an ETF, then all you need is $1. If you’re investing in a Vanguard Mutual Fund, then the minimum initial investment is between $1,000 and $3,000. Total Stock Market (ETF) – VTI NYSEARCA:VTI | Vanguard | MorningStar | Fee: 0.04% | 5yr Avg: 14.24% This ETF is Vanguard’s flagship fund and in our opinion, Learn more about your ad choices. Visit megaphone.fm/adchoices

Wish you could get more done in your day?  Mike Vardy from Productivityist joins us to share tips on how to optimize your time and get shit done. We all have the same twenty four hours in a day but some of us are better are maximizing those hours to get more done.  How do you go from being a master procrastinator to a productivityist? Stop checking your e-mail first thing!  It’s our natural inclination but those e-mails are telling you what others need you to do rather than what you know you need to get done.  You can’t not check it at all, but get done what you know you need to go before diving in. Or at least sort by sender.  Then you’ll get the messages from your boss before the ones from your colleagues asking where you want to order from on Seamless. Try the two minute rule for e-mails and tasks.  If you can do it in two minutes or less, just do it and get it out of the way. Make sure you have the right tools but not too many tools.  The tool doesn’t make you more productive, it’s the approach that makes you more productive. Make sure your work space is conducive to productivity.  Don’t have too many distractions around you.  Don’t have lots of clutter everywhere, it drains your energy.  Your work space should encourage work. Sound is important too.  White noise can help block out the cacophony around you.  Rainy Mood is awesome for that. Surrounded by annoying co-workers who want to tell you the latest crap pansted antics of their demon spawn?  Wear head phones, big ones.  Write Bose on them with a marker if you can’t afford the real thing.  It’s like a do not disturb sign for your head. Come on, get of Reddit, ignore the e-mails for a few hours and get your stuff done! Show Notes Productivityist:   October Fish:  An Octoberfest style beer. Parallel 49 Lost Souls:  A chocolate pumpkin porter. AwayFind:  Let’s you set parameters letting people know when you check e-mails. Learn more about your ad choices. Visit megaphone.fm/adchoices

If you’re not an investor they can seem like a different species. But they’re human too, we’ll discuss how the investor money mindset is different. Nerd culture is having its moment.  No one is afraid to admit they love Doctor Who or Lord of the Rings.  But no one really goes around bragging that they’re an investor, not even Andrew. We would describe an investor as someone looking for long term benefit.  And we don’t mean buying and holding Beanie Babies.  If you love Beanie Babies, great.  Buy all you can afford.  But don’t expect to sell them one day to fund your retirement.  We mean stuff like the stock market or rental property. An investor also doesn’t check the numbers every day and panic at the smallest hiccup.  Buy and hold.  This extends to areas other than money.  A person with an investor’s mind is always looking to the long term and not strictly what feels good at the moment.  It’s like the old marshmallow experiment. Small children were given one marshmallow.  They were told if they waited to eat it until the tester returned to the room, a wait of about fifteen minutes, they could have a second marshmallow.  The children who waited were found to have better results later in life in terms of things like BMI, SAT scores, and educational attainment.  Wait for the second marshmallow! Not all of us were born with the ability to wait for the second marshmallow but we can all train ourselves to be patient to reap the long term benefits.  What happens in the next year to the money you invest now doesn’t matter.  It’s what happens to that money years in the future. Show Notes Schneider Weisse Aventinus:  A wheat dopplebock. Betterment:  Start getting into the investor mind set today. Learn more about your ad choices. Visit megaphone.fm/adchoices

We first met Adam Carroll when he came on to talk about his movie about college loan debt.  He’s back to discuss loving our kids too much. What a weird concept.  Loving your kids too much.  But it can be true.  By giving them too much, by coddling them from every possible disappointment, we turn them into ineffectual adults. From ensuring that everyone gets a trophy to always giving them money when they ask, kids today can’t handle normal disappointment and have never had to work or struggle for anything.  Mom and Dad are always waiting, poised to smooth whatever path their children are on.  But in the name of loving them, we’re taking away character building opportunities. There are good reasons parents do this.  They feel guilty for working so much and not spending enough time with their kids.  They’re divorced and feel guilty for breaking up the two parent home.  But the four most important words to say to your children are “I love you” and “no.”  But no with a reason.  When you say yes, it means so much more. You can see how this relates to money.  It’s not the amount of money you give them, it’s whether or not you teach them how to handle money.  No one values what they haven’t earned.  Even very young children can understand some simple money concepts. There is a balance between saying yes to everything and saying no to everything.  If you give your kids an allowance, split it into percentages.  Certain percentages are for spending, saving, and giving.  We spoke to the founder of Zela Wela about a similar concept in Episode 176.  There are teachable moments every day if you’re looking for them. Everyone loves their kids but that means doing what is best for them, not what is easiest for you. Show Notes Succeed Faster:  Adam’s site to help you build a bigger life. Broke, Busted and Disgusted:  Adam’s upcoming documentary about student loan debt. Learn more about your ad choices. Visit megaphone.fm/adchoices

You ask, and we answer! Today we answer five listener questions about refinancing a loan, cashing out a retirement account early, how often to pay student loans, HSAs, and getting a first mortgage. This format has become so popular that it’s now a regular feature on LMM.  We answer questions sent in by listeners. 1.  Why is refinancing a loan so important?  If you can refinance, it will lower your interest rate, thereby lowering your monthly payment and interest payments.  Refinancing works the same no matter the type of loan, student, mortgage, car, etc. 2.  If I invest in the Retirement Target fund 2055 will I invite penalties if I need to cash out early?  Can I pocket dividends or so I have to reinvest them?   You won’t get a penalty for cashing out early on that fund. It’s okay pocket the dividends; you just have to set your account to send them to you rather than to reinvest them. 3.  Is there a benefit to paying 25% of my student loan payment a week rather than 100% once a month?   Check the terms with your lender.  Some will hold the payments until the full balance is reached thereby removing any benefit you might have accrued.  If your lender isn’t a super dick, there is a benefit.  You are cutting down on the interest you will owe. 4.  What is the advantage of saving health-related receipts to turn in after cashing out your HSA for non-health related expenses?  Why not just use it for health-related expenses?   It’s really a matter of flexibility.  If you have the money in your account and plan to save it for retirement, you could pull it out to pay for an emergency if you had one. 5.  Should you pay cash for a house if you can or are you losing out on some tax benefits if you do? If parting with that much cash at once isn’t a burden, do it.  The interest you save vastly outweighs any tax benefit. Thanks, everyone, keep sending them in!  Show Notes Ommegang Valar Morghulis:  A Game of Thrones inspired beer. LMM Financial Rant Hotline:  Call 856-818-3737 and let fly with your money rant. LMM Episode 171:  Our HSA deep dive. Learn more about your ad choices. Visit megaphone.fm/adchoices

Wish you could travel more but think it’s too expensive?  Nathaniel Boyle has devoted his life to travel and will school us on finding cheap flights. There are so many air travel booking sites now, Expedia, Travelocity, Hipmunk however the prices are all about the same.  Nathaniel recommends booking directly through the airlines.  It’s often cheaper and can offer more protection than booking through a third party. It’s much easier if you need to make a change to your itinerary and some low cost carriers like Southwest only offer direct sale. The most important thing when buying a cheap ticket is time.  When you buy your ticket, the time of year you’re planning to travel, and the days of the week you choose to fly on.  The best time to buy is on a Tuesday or Wednesday.  Those are also the best days to fly. Off season will always be cheaper. Orlando over a holiday will always be expensive. Flying to Europe in March is cheaper than flying in July. Nathaniel uses Kayak as a baseline to see what they’re selling it for and then play around to see what you can do to get a lower prices than that.  But don’t over think it.  If you see what looks to you like a great deal, jump on it. Rome2Rio is another great resource.  It tells you how to get from point A to point B for the least amount of money via air or ground travel.  SkyScanner and Google Flights with give good over views of pricing.  The travel time may be longer but if you don’t mind connections, they can save lots of money. If the thought of pulling the trigger on the ticket makes you sweat, check out Flyr.  It tells you the likelihood that your flight price will go up and down.  Data nerds like Andrew love this site. I’ve actually listened to Nathaniel’s show from day one and it’s great.  He has excellent tips and terrific guests. Check him out. If you are looking for some more great tips on the best time to book your next vacation check this out! Show Notes Ommegang Valar Morghulis:  A Game of Thrones inspired beer. LMM Financial Rant Hotline:  Call 856-818-3738 and leave us your money rant. The Daily Travel Podcast: Nathaniel’s daily podcast devoted to all things travel. Airfare Watchdog Alerts:  See when your preferred flight changes price. The Flight Deal:  A site that posts crazy low airfares daily.       Learn more about your ad choices. Visit megaphone.fm/adchoices

  Do you have financial friends?  If you don’t, you should get some.  Being around liked minded people will help to smooth your personal finance path. You are an amalgamation of the five people you spend the most time with.  Think of those people.  Are any of them financially responsible?  Are any of them materialistic?  Adults though most of us are, we can still be influenced by peer pressure. Peer pressure can help you to make good decisions.  If you have frugal friends, they understand when you can’t afford to go out to dinner and are happy to split a pizza at your place. It can also cause you to make bad decisions.  If you have baller friends, they choose the expensive restaurant and you agree then spend way more than you can afford. Your friends don’t have to be financial ninjas to qualify.  Not everyone has a Warren Buffet in their life to go to for money advice.  You can both be starting from zero but as long as you’re learning together and keeping each other accountable, it is still a bolstering relationship. Immersion is the best and fastest method for learning nearly anything, including personal finance.  Listen to this podcast, read the Wall Street Journal, talk with your friends, family, and co-workers about money.  By giving it a prominent place in your life, it is easier to stay on track. If you find yourself with no financial friends, you can convert your existing friends.  I start by showing people Mint.  Then I introduce them to the podcast and Betterment.  It hasn’t worked on everyone but it has worked.  And converts always make the best zealots. You and your financial friends don’t have to discuss money the entire time you’re together.  It’s not the most exciting topic even if it is one of the most important.  But all this money stuff gets easier when you surround yourself with a support team. Show Notes Schneider Weisse Aventius:  A deep and complex wheat dopplebock. Leinenkugel Octoberfest:  A fall beer with toasted caramel malts. Mint:  An easy first step to managing your money. Betterment:  The easy way to invest. Learn more about your ad choices. Visit megaphone.fm/adchoices

  Does champagne taste hurt your wealth building?  Unless you’re a Russian oligarch, the answer may be yes.  We like nice things even if we can’t  afford them. There comes a time when we have to live within our means.  Easier said than done when you have expensive tastes.  Even harder to do in a big urban area like New York City.  The reason we are so revolted by mediocrity is because we are surrounded by excellence.  But when it comes to wealth building, this is a dangerous mindset. Dinners, cars, clothes.  We all have our weak spots.  So what to do about it?  Does everything have to be top shelf for your special self?  It’s not like you’re the Pope or anything.  So instead of the $50 bottle of Bordeaux, how about the $25 bottle?  You’re probably no wine expert either so likely won’t notice the difference.  That’s not too say you can’t ever have the really good stuff.  But save it for special occasions.  It’s part of what makes them special. Quality is sometimes largely perception.  Quality doesn’t always mean the most expensive.  It’s better meaning would be the most durable.  Many people who buy only the most expensive things often don’t recognize quality anyway.  They just follow the herd in buying what they’ve been told is the best via advertising.  People interested in quality have done enough research to discern quality from cost. We’re not condoning PBR consumption but after beer number four, what difference does it make really?  I type this as I’m listening to Matt describe Andrew rubbing his new I-Phone on his face.  So what is the point of this episode?  Do as we say not as we do?  No, that doesn’t seem like the correct message to send.  How about this?  Buy the best that you need, not the best you can afford. Show Notes Mint:  Track how many I-phones you buy! Betterment:  Invest so you have money for more I-phones!   Learn more about your ad choices. Visit megaphone.fm/adchoices

Rob Greenfield is an adventurer and environmentalist who’s mission is to teach people to be happier with less and to make yourself and the earth happier. Rob recently biked from Madison, Wisconsin to New York City with no money.  His journey really started three years ago when he started to notice the impact his actions had on the world around him.  He started educating himself and learned he was unknowingly creating a lot of destruction.  But it didn’t have to be that way. Money can be used for good or evil.  But it takes more time to do good than to throw money at a problem and that’s what many of us do.  America has 2% of the world’s population and consumes 25% of it’s resources. You can’t change this overnight but you can take small steps every day.  Rob made a list of things he wanted to change.  Only shopping with reusable bags, buying locally rather than at a big box store.  Rob started easy but as he progressed, the bigger changes didn’t seem that hard. Yes, Rob is a dumpster diver. He set two rules for himself, he could only eat locally grown food or food that was going to go to waste.  And the waste food goes into dumpsters.  Two thirds of his diet came from dumpsters during the trip.  He never went hungry.  One day he drank $100 worth of unopened, not expired juice from Whole Foods. Because such a large portion of our tax dollars goes to war, Rob advocates living a more “moneyless life.”  Enjoy the things in life that are free, nature (for now), friends, family.  Ride a bike rather than drive a car. Rob indeed walks the walk.  His next project is building an tiny house from trash.  We’ll have to introduce him to Ethan Waldman!  Show Notes Rob Greenfield:  Rob’s blog about making yourself and the earth a happier through minimalism and sustainability. Tethered:  Rob’s upcoming show on Discovery.   Learn more about your ad choices. Visit megaphone.fm/adchoices

Fellow Best New Blog winner Stephanie Halligan talks to us about student loan debt, negotiating and Matt’s favorite, the side hustle. Like a lot of teenagers, Stephanie took out a lot of college loans without realizing what that meant.   She graduated with $30,000 in debt.  She was asked through an internship if she wanted to teach personal finance to newly migrated refuges. The more she learned, the more she wanted to help her students and herself manage money and get out of debt.  Prioritizing not only debt, but what mattered to her most was the first  lesson.  Spending money on the things that really matter to you and scrimping on things that matter less is key. Negotiating is lesson two.  Negotiating salary, with debtors, when buying big ticket items, are things everyone should do but few of us attempt.  We talked about negotiating in Episode 191 but that was from a male perspective. Things are a little different for women.  Stephanie recommends Get Raised to help you learn how to get more money from your employer.  Women are generally more concerned with preserving relationships at work so it’s important to come into the conversation about a raise from that angle.  Particularly if you’re negotiating with a female boss. Side hustles have been a big topic on this show and Stephanie is in agreement.  If you can bring in even a few hundred extra bucks a month, it helps.  Particularly if you don’t know what you want to do with your life. Stephanie reached out to companies she was interested in and offered a few weeks of free work.  It led to some freelance work and helped to build relationships. Stephanie found that she liked writing about finance and that’s what inspired her to start her blog.  Had she never had that debt, she wouldn’t be where she is today but she’d like to smooth the path for those coming after.  $30,000 is a lot of money. Stephanie started The Empowered Dollar while she was still working.  It started as a “mommy blog” (I hate those words the same way Matt hates side hustle) to help moms teach teens about finance. But evolved to an audience Stephanie was more comfortable with, Millennials.  She does the drawings on her site to bring a little lightheartedness to a sometimes dry subject. Stephanie took $30,000 in debt and turned it into a career she loves. Show Notes Rogue Farms Pumpkin Ale:  A great fall beer. Empowered Dollar:  Stephanie’s blog that explains PF through comics! Learn more about your ad choices. Visit megaphone.fm/adchoices

  We get a lot of questions about bankruptcy at LMM but it’s a complicated subject so we brought expert Steve Rhode to help explain the fine details. Some people consider bankruptcy the easy way out but it’s more complicated that.  Any time money is concerned, there is no quick fix.  But in some cases it’s also not as dire as some of us believe and may be the best option. It takes seven years for bad marks to fall off your credit report but you don’t have to wait seven years to start rebuilding your credit.  According to Steve that is just not as big a deal as people make it out to be.  Missing payments stays on your record just as long but you’re still paying that bill.  About twelve months after declaration, you can get secured credit cards, get better rates on loans and even qualify for a mortgage and car loan.  It might not be a great idea to do that, but it is possible. Bankruptcy doesn’t have to be a last resort.  If the amount of debt you have is going to really hamper your ability to retire, screw it.  Declare bankruptcy.  It’s no moral failing.  Do you think the banks and student loan creditors have any morals?  Well why in the hell should you take the high road? Student loans are a different story.  Some can be discharged in bankruptcy.  Federal loans almost never can but private loans can be under these three criteria: 1.  The statute of limitations for repayment have expired in your state. 2.  If your loans were for more than the cost of tuition, the amount over the tuition expense can be discharged. 3.  If the school you attended was not accredited. If you are struggling with college debt, look into these three criteria and see if you qualify. What is the fallout if you declare?  You likely won’t lose your home.  Bankruptcy may save your house because in some states it removes the second mortgage.  You will still be able to get a job, even a job that requires security clearance.   Bankruptcy doesn’t solve an over spending problem though.  If you’re filing because you have an out of control shopping habit, this won’t solve the root of the problem. Declaring bankruptcy does not make you a bad person.  Do you really think you’re worse than the bankers who immolated the economy in 2008 and then took massive bailouts and bonuses?  Bankruptcy is the only tool that allows you to take some of the power back from creditors. Show Notes Rogue Farms Pumpkin Patch Ale:  Pumpkin beer for October. Village Idiot Punk O’Lantern:  Pennsylvania brewed pumpkin beer. Get Out of Debt:  Steve’s site about getting out of debt. Learn more about your ad choices. Visit megaphone.fm/adchoices

  Why do so few succeed in the stock market and so many fail?  We interview the man who literally wrote the book on the subject, author Steve Sears. One of our favorite quotes in from Warren Buffet, “Be fearful when others are greedy and greedy when others are fearful.”  But that takes balls and his willingness to buy fear is one of the reasons he has amassed a fortune. We advocate long term investing and that strategy is better and more successful than jumping in and out of the market.  So why do so many people do that?  They’re driven by what they hear and read in the news and follow the “market mob.”  They hear about a fast rising stock and jump on it without doing even the most rudimentary research.  A successful investor stays away from this like the plague.  Until the stock bottoms out, that’s when they buy. Fifty percent of your gains will come from doing nothing.  Buy stocks that pay steady dividends and make them the foundation of your portfolio. Bad investors think of ways to make money and good investors think of ways not to lose money.  You have to learn to tune out the noise that is just information without value.  It’s not easy when we are subjected to it constantly.  I even wrote an article on it.  Focus only on what has value. The most basic step is to pay yourself first.  At least ten percent.  Make sure some of that percentage is in non-taxable accounts like an IRA.  You have to live a little less today to live a little better tomorrow.  Empathize with your future self.  The future is not some vague, foggy thing, it’s creeping up on you every day. Sorry guys.  Steve did not provide us with the magic bullet.  He confirms the cold hard truth.  Put your money in the market and leave it.  You are unlikely to strike it rich an an IPO or whatever the latest stock the media is shouting about.  Slow and steady to win the raise. Show Notes The Indomitable Investor:  Steve’s book on success and failure in the market. Betterment:  The easy way to invest. Learn more about your ad choices. Visit megaphone.fm/adchoices

  By now as a long time LMM listener, you have a financial plan.  But do you know how to prioritize it?  We’ll explain how best to get your ducks in a row. Matt and Andrew got into a pillow fight the last time they tried to do a show on this topic this takes two.  The good folks over at LearnVest set out a list of three financial priorities.  Retirement, emergency savings and debt. 1.  Retirement comes first.  Because of inflation, the dollars you have now will be worth less than when you retire so you need to accumulate those dollars now.  Most of us will also not be able to rely on social security or pensions once we stop working.  Pay yourself first whatever that means for you, 401K, Ira, Roth IRA etc. 2.  Emergency Savings.  Have a rainy day fund otherwise, you have to rely on a credit card which may mean racking up lots of interest charges or you’ll draw from your retirement account which means robbing the future you. 3.  Debt.  Debt is an emergency, this is a no-brainer. We have some issues with this list.  If you have debt, that should be higher on the list.  We would put retirement first only so far as you are getting matching funds from your employer. Mortgage and student loan debt with low-interest rates get a bit of a pass on the “debt is an emergency” category.  If your student loan interest rate is high, refinance with a company like Earnest to get the rate reduced. Credit card debt and in some cases, car loan debt, are emergencies and should be dealt with first.  Once you have money going into your matched 401K and your credit cards are paid off, save one and a half to six month’s expenses in a checking account.  Once you reach that you start investing in something like Betterment or Vanguard up to $25,000. Now you can start playing around a bit.  Maybe buy individual stocks you are interested in, emerging markets, Lending Club.  You can also start going after your low interest student loans and mortgage. There was some contentiousness in this episode because some of these rules are so dependent on each person’s situation and various interest rates.  The interest rate drives the urgency. Show Notes Rogue Farms Pumpkin Patch Ale:  The perfect October beer. Village Idiot Punk O’ Lantern:  A local Jersey brew. Betterment: The easy way to invest. Vanguard:  Next level investing. Learn more about your ad choices. Visit megaphone.fm/adchoices

Two hundred episodes!  To mark this special milestone we look back at five of the best episodes as voted by our listeners.  Here’s to two hundred more! It’s not even been a year and we have two hundred episodes in the books.  We’ll look at some of the highlights from the past one hundred episodes. 1.  Mr Money Mustache.  MMM is a legend in the world of personal finance and you were as excited to hear the interview as we were to conduct it.  If you want the road map to retire early, very early, MMM is the go to resource.  Hint, live on half your money. 2.  The Mad Fientist: A genius when it comes to figuring out tax shelters through various investments.  This guy has it on lock down. We redeemed ourselves with some of you who were unhappy with the previous IRA episode and we were grateful for the second chance. 3. Our Twelve Financial Philosophies:  This was just Matt and Andrew discussing their twelve financial rules for success.  I like guest episodes but there is nothing like a good Matt and Andrew rant. 4.  Breaking Bad Habits with James Clear:  James laid out some simple ways to break bad habits and replace them with positive behaviors.  When you hear someone break it down to such a degree as James did, it makes breaking those habits seem so much less daunting and I think that’s why this episode really resonated. 5. How to Stop Being a Spendaholic: This hit home for a lot of you.  It’s so hard to stop spending even when you know you’re putting yourself into a hole.  Listening to how Matt was able to overcome his addiction was inspiring for many of us. We owe every one of these two hundred episodes to our listeners, readers, and all the corespondents via e-mail, Twitter, Facebook, reviews, and comments.  It’s been an honor to reach this point of the journey along with all of you. Show Notes Rogue Farms Pumpkin Patch Ale:  A perfect October beer. The Mad Fientist:  Take your investing to the next level. James Clear:  James’ site devoted to helping you build good habits. Learn more about your ad choices. Visit megaphone.fm/adchoices

  Couples fighting over money issues is one of the leading causes of divorce.  Learn how to divorce-proof your marriage with Derek and Carrie Olsen. There are so many questions when it comes to marital finances.  Do you combine money or keep it separate, three accounts, his, her’s, and our’s?  How do you handle it if one spouse greatly out earns another?  Can a spender and a saver ever learn to co-exist?  We brought on a married couple who are experts in navigating this mine field. Derek and Carrie advocate combining finances.  It teaches you to work together and forces conversations you might otherwise not have about values, your past, your ultimate future goals.  It can help you know your spouse in a way you might otherwise not. Being the higher earner may make one spouse feel more entitled to dictate how the money is spent.  But who brings home more bacon can change.  If you wouldn’t like having your spending scrutinized, your spouse won’t like it either and when the tables turn, they might get back at you.  Not a good recipe for a happy marriage.  That’s why all financial decisions must be shared and agreed to jointly. Whether or not to sign a pre-nuptial agreement can be a big bone of contention.  It certainly isn’t romantic and almost feels like you’re predicting the failure of the marriage.  If this is important to you, be ready to encounter some push back.  A pre-nup can also make it easier not to put the work in when problems arise.  If things end, you can walk away relatively unscathed and that can take away incentive to work out the problems. Communicating about money is the key.  The earlier in the relationship you start talking about money, the easier it is to avoid problems and anger later.  Waiting until you find out your spouse has been hiding thousands of dollars in credit card debt is a bad first financial conversation to have. What can you do when you both have the same blind spot?  You both love going to concerts so neither of you are going to wield the ban hammer even if it’s not in the budget.  One of you will have to stand up and say no or take money from another area to cover the expense.  So you went to the concert and had a great time but you’re going to have to survive on ramen for the rest of the month. Getting divorced because of money problems is a tragedy and depressingly common. Start communicating about money as soon as things start to get serious so your family won’t end up a statistic.  Show Notes Yards IPA:  An India pale ale. DerekandCarrie.com:  How to have better conversations about money and marriage. LMM Tool Box:  Everything you need to manage your money.     Learn more about your ad choices. Visit megaphone.fm/adchoices

  It’s time for five questions.  We answer questions about liquidity, building credit, paying yourself first, vacations and credit card rewards. 1.  When do you take the time and money to go on vacation?  Whenever you can!  Segment an area of your checking account that is your vacation fund and contribute weekly or monthly, just like your investment account.  Check out my article on ways to travel on the cheap.   You kind of know when you’re getting to the point of needing a vacation.  It’s the point at which everyone you encounter is your potential murder victim.  Try to feel when this is becoming an everyday feeling and plan your trip a few weeks before that.  Bail is expensive. 2.  I’ve recently taken out my first, small student loan.  I want to build credit.  To do so, is it better to pay if off according to the plan the lender set up or should I pay it faster?  If you want to build credit, don’t pay it off faster.  It will give you less on-time payments which are reported to the credit bureaus.  But debt is an emergency, it would be better to pay the loan off and open a secured credit card in order to build your credit score.  Being debt free is more important than a credit score. 3.  How do credit card companies sustain all the rewards offers they make like cash back and airline miles?  Every time you use a credit card, the merchant pays a transaction fee.  For big spenders who use their card for everything, this means big bucks for the credit card companies. For those of us who pay our balances in full, we are also subsidized by those who don’t and are paying all that interest. 4.  I know that you should pay yourself first but is that true even when you’re trying to pay down debt?  Yes, if you have debt, you probably haven’t been paying yourself first for a long time.  The best way to do it is to have a certain percentage of your pay routed to an investment account, that way you don’t miss it.  This would be after you have $1000 in a checking account as a beginner emergency fund. 5.  Is there high liquidity in the stock market?  Yes, it’s just a matter of a day or two to pull money out of the market.  Much more quickly accessed than having to sell a house for instance. Thanks for the questions everyone, keep them coming!  Show Notes Blue Moon:  A Belgian white. Richest Man in Babylon:  Money lessons taught through parables. Learn more about your ad choices. Visit megaphone.fm/adchoices

John Corcoran from Smart Business Revolution is a networking expert.  He tells us why networking is important and how he paid off $600,000 in debt. Between 2006-2010 John racked up over half a million dollars in debt mostly through equity lines of credit. He was working during that period which is why he was able to get so much credit but he went back to law school and incurred $129,000 in student loan debt. He graduated law school at the worst time to find work as an attorney and worked a series of jobs for small firms.  During this time he wasn’t making enough to tackle the debt mountain.  It wasn’t until he started his own firm that he could start to make some progress. In 2010 he sold his rental property and a year and a half later sold his condo, it wasn’t a great time to sell but it enabled him to clear most of the debt.  Not everyone has property to see in order to pay off debt but not everyone accumulated that debt by taking out huge lines of credit. John has always enjoyed writing and has always been good at developing relationships.  He married these things together and started Smart Business Revolution to teach others how to build relationships that will help further your career.  Sadly, he confirms that it’s more whom you know than what you know.  It’s not fair but you know it so growing your network is important. What you have to offer others doesn’t always have to be related to your industry.  You probably aren’t going to give Mark Cuban business advice but you might be able to tell him about a great new restaurant.  Find commonality with the person you are trying to build a relationship with.  Try just having a normal human conversation. Check out John’s article on how he paid off his debt and his website and podcast to help you build your business relationships.  Show Notes Blue Moon:  A Belgian white that a party guest left a lot of at Andrew’s house. Yards Extra Special Ale:  An English style ale. Anchor Steam Beer:  Finally, a West Coast beer on the show! Smart Business Revolution/moneymatters:  As a special gift to our listeners, follow this link to download John’s book about how to network in order to make more money.  Thanks John! Smart Business Revolution Podcast:  We already know you like podcast so check out John’s. Learn more about your ad choices. Visit megaphone.fm/adchoices

In a battle of hourly vs salary, which prevails? We take a look at the advantages and disadvantages of each. It can seem more prestigious to be in a salaried position, maybe more because of what it used to mean that because of what it means now. It used to mean white collar, benefits, an office. Some salaried positions still offer those things but they’re not automatic. How Many Hours? This is the big question when you’re considering hourly vs salary. In some cases, employees are exempt from overtime laws, including commissioned salespeople, drivers, farm workers, and administrative, executive, and professional employees. This is the sticking point because many of you reading this would be classified as one of those last three. Currently, even salaried employees who make less than $23,660 per year are eligible for overtime. The Department of Labor is considering changing that to make anyone, even those once considered exempt, earning less than $50,440, eligible. If you’re a non-exempt hourly employee, you are paid time and a half, your hourly rate multiplied by 1.5 for every hour you work over forty in a week. Sometimes employees are paid double time, your hourly rate multiplied by 2 for holidays and weekends. Some unscrupulous employers will dangle the offer of a salaried position to hourly employees, counting on the employee believing a salaried position is beneficial for all those perks we talked about above. But it might be a trap. It might be the exact same job for the same pay only know with additional duties and hours that they don’t have to compensate for. Some employers will forbid hourly workers to work more than forty hours per week, expecting exempt employees to pick up the slack, essentially uncompensated for the additional work and hours. Hourly workers will have more restrictions on their time, you may have to clock in and out at the start and end of each shift as well as during breaks. Understandable certainly but having to clock out when you need to do a ten-minute errand or grab a cup a coffee, or go to the bathroom can start to feel like being micro-managed. It’s not actually legal to not pay you for those kinds of breaks. A break 5-20 minutes long has to be paid but some employers don’t know that or do know but hope that you don’t. Benefits Some hourly employees will have access to benefits but you’re more likely to have them if you’re salaried. Currently, if you’re employer has more than fifty full time employees and you work 30 or more hours per week or 130 a month, you are eligible for employer sponsored health insurance. Given how stingy most companies with time off since, in America the only people with any legally mandated, paid vacation is Congress, paid vacation is a big “perk” to consider when choosing between jobs. A salaried job is more likely to include paid time off and paid sick leave than hourly. Where Are You In Life? Hourly might be better for younger people just starting their career. You have more time to work and probably need the extra income that time and a half will offer.  When you have a family, working long hours and weekends will be less appealing. Scheduling Salaried employees tend to have more regular schedules than hourly employees. If you’ve ever had an hourly job where you didn’t know your schedule week to week, you know what a draw back this is. Trying to schedule things like doctor’s appointments, child care, and going back to school while you work is almost impossible withou... Learn more about your ad choices. Visit megaphone.fm/adchoices

One of the most confusing aspects of starting a small business are the taxes involved.  We get some expert help from Jamaal Solomon. Small business taxes are one of those things best left to professionals, like surgery or dentistry.  Sometimes the money you would save trying to DIY it is not worth the aggravation and resulting mess. So many acronyms, LLC, S Corp, C Corp.  We just want to do things legally while paying the least amount of taxes possible.  Small business taxes are not one size fits all.  Each case has to be handled on an individual basis. One piece of advice Jamaal has for everyone is not to wait until April 15th to see a tax consultant.  That is a bad time to find out that you should have been setting aside money quarterly to pay the tax bill.  And do everything like you’re going to be audited tomorrow.  Sitting in front of an IRS agent is no time to realize that you played too fast and loose with the legalities.  But remember, the difference between creative and legal is a fine distinction.  And the more money your business makes, the more creative you can get. Put all of your business expenses on a company credit card, never pay cash.  Cash transactions are almost impossible to back up during an audit and will set off all kinds of alarm bells with the auditor. Small businesses are like snowflakes, no two are alike.  That’s why it’s important to seek out a reliable tax professional to help walk you through the mine field.  Show Notes The Tax Factor:  Jamaal’s blog to help readers with small business taxes. JS Tax Corp:  Jamaal’s company to help small business owners prepare their taxes. LMM Tool Box:  Everything you need to manage your money. Learn more about your ad choices. Visit megaphone.fm/adchoices

Do you love buying all the things?  You might have a problem.  We all love buying stuff but it can become a real problem.  Let’s tackle it together. “It’s ok, I deserve it.”  Is that something you find yourself saying a lot?  Whether or not you deserve it is not the question.  I’m sure you do, you work hard, take care of a family.  Of course you deserve it!  But can you afford it?  That’s the question that needs to be answered. Shopping becomes a habit.  It’s a way to entertain yourself, to reward yourself, to blow off stress.  If spending money has become these things to you, it’s time to break the habit before you are crushed under a pile of your own debt (and detritus). The first step is to set up a budget.  Use a spread sheet, use YNAB, use Mint, use the back of an envelope, anything.  Just start tracking where your money is going.  Even if this doesn’t make you stop what you’re doing, at least at first, this gives you vital information.  Where is your money going? If this behavior is sinking you, you need to make a shift.  Now that you know where you’re spending, examine it.  Does what you’re spending on make you happy, improve your life?  Or is it keeping you up at night, trapping you in a job you hate? Matt had a bad breakup and got layed off.  He took the opportunity to go all in on starting his own business.  In order to survive, he had to cut all spending to only the essentials.  No more filling the voids with cars and houses, and stuff.  If he was going to make this work, there could be no more of that kind of gap filling spending.  His only priority now was making this business work. So how can you tackle this without getting dumped and fired?  Make a list of all the things that make you happy that cannot be purchased.  A run in the park, a walk on the beach, time with friends, walking your puppy (I’d like a puppy please).  Next time you want to blow off steam or you’re bored, do one of the things on your list instead.  Eventually you will begin to associate these behaviors rather than shopping, with entertainment or stress relief, or whatever feeling you were trying to achieve by shopping. It’s easier to replace a habit than to break a habit.  By replacing the destructive habit with a positive behavior, your life with improve and so will your fiances. Show Notes Tank 7 Farmhouse Ale:  A Belgian style farmhouse ale. Mint:  Budgeting software. YNAB:  We talked to the founder of this budgeting software in Episdode 154. Learn more about your ad choices. Visit megaphone.fm/adchoices

Competition is heating up among the Robo-Advisors. We get a lot of emails asking which is better: Acorns vs. Betterment vs. Wealthfront so we broke down each of the services to see who deserves your investment.  The whole point of going with a Robo-Advisor is the ease of use. Based on the research, it’s highly unlikely you’ll outperform the market on your own. Better yet, if you tried to do it on your own, it would be much more expensive. For someone just looking to invest with the right service, it’s getting harder and harder to tell where you should put your money. Before we get started, I also wrote an incredibly in-depth Betterment Review, an equally detailed Wealthfront Review as well as interviewed the Acorns founders so if you’re looking to go even deeper check those out. In this article, I’ll be focusing more on the nuances of each service than the nitty-gritty features and how they work. Let the Robo-Advisor battle begin!     A Birds Eye View Every good investment comparison needs a sexy chart breaking down the differences. I’m not one to leave you wanting so bask in its glory:                     Promotions Students Invest For Free Up to 6 Months Free Invest $15,000 Free     Management Fees 0.25% a year 0.25% – 0.5% a year 0% – 0.25% a year     Minimum Deposit None None None     Automatic Rebalancing Yes Yes Yes     Tax Loss Harvesting No Yes Yes     Assets Under Management $73.6 Million $5 Billion $3.5 Billion     iOS App Yes Yes Yes     Android App Yes Yes Yes     Taxable Accounts Yes Yes Yes     IRAs Yes Yes Yes                     On paper they’re very comparable but as you know, the magic is in the details. In order to objectively compare Acorns vs Betterment vs Wealthfront I’ve come up with three main rounds the services will battle in to win your investment.   Round 1: Ease of Use and Sex Appeal Acorns has a beautiful app and a beautiful website. It’s one of the best-designed apps on my phone by a long shot. I’m of course not the only one to notice this – they’ve won some design award every year since they opened their doors.   That’s sexy investing, am I right or am I right? This Round was just going to be called Ease of Use, but Acorns elevated it to Sex Appeal. I’m willing to bet this is the biggest way they get people to try them out. Sexy screenshots. That can also be a downside though. We’re about investing for the long-term here so if you need to keep opening your app just to see the pretty colors; you’ll also see daily fluctuations and go slowly insane. Learn more about your ad choices. Visit megaphone.fm/adchoices

Negotiating is a vital skill.  For a job, a raise, to get to watch the game instead of The Real Housewives.  Dan Green will teach us what we need to know. Not many of us are taught how to negotiate.  We might parrot what we hear other people say but how successful were they?  We need to learn from an expert how to really get what we want. The most common reasons people give when asking for a raise are:  I’ve produced X since my last raise.  I’ve been here X number of years.  I have a family, student loans, etc.”  These reasons focus too much on yourself and too much on the past.  Neither of those things are things your boss cares about. What the boss does care about it himself, the company and the future.  Be very direct with your boss about what you want to be making.  Don’t just ask for more money, say how much more.  Then ask what you need to be doing going forward to make that happen.  Dan does not advise giving an ultimatum.  You want to come across as someone who is excited to do more for the company because that kind of person is deserving of more money. Don’t hedge everything on one conversation, the end of the year or the yearly review.  This makes a single conversation too fraught.  A general conversation when hired, when getting a raise, when earnings reports come out, are better times to find out what you have to do to grow.  Because you aren’t asking for anything, only asking what you can be doing in the future.  In fact, during your review is a terrible time to ask for a raise.  You don’t want to find out how you’re doing and then ask for a raise. Have the review, find out how you can improve, make those changes and then ask.  Because now they have no reason not to offer you more money. A good question to ask is, “What would make you happy to pay me $150,000 (or whatever number you’re seeking) a year?”  And remember, whomever puts down the first number, has more control over the final number.  You found out what making $150,000 required when you asked that months ago.  Now you can slap that number down on the table. There is a difference between haggling and negotiating.  Haggling is more contentious and there are more extreme demands.  Like when you’re trying to buy a car.  Negotiating is better.  It builds more trust and both parties come out at the end feeling as though they’ve both made a good deal rather than both feeling like they got screwed. Or just ask.  So many people are afraid to ask for something but it doesn’t hurt.  It’s like talking to the cute boy at the bar.  Sure, you get shot down sometimes but not always.  Be bold, be brave! So try it tomorrow.  You don’t have to go all in and ask your boss for a 20% raise.  But find one thing that you think may be negotiable and ask for a discount.  Report back here with your findings. Show Notes Oerbier:  A strong, dark Belgian ale. The Negotiation Blog:  Dan’s blog to teach you the art of negotiating. Bridge Consulting International:  Dan’s consulting company Betterment:  This is not negotiable.  Start investing today. Learn more about your ad choices. Visit megaphone.fm/adchoices

Afraid you’ll never get a foot on the property ladder?  Why not build your own tiny house?  Ethan Waldman did just that and tells us how we can too. In 2012, fed up with his job, Ethan quit, bought $1000 worth of lumber and began constructing his own two hundred square foot tiny house on wheels.  He has been living in it for a year and it has everything you would find in a regular sized house, just smaller. Tiny houses are becoming quite the phenomenon due to a perfect storm of events.  The financial crisis scared a lot of people away from the housing market, those not dissuaded couldn’t get a loan.  Kids coming out of college with tens of thousands of dollars worth of debt, saw that home ownership would be forever out of reach and weren’t sure they wanted that part of the American dream anyway. Ethan learned as he went along.  The only experience he had was from a tiny house workshop, he hadn’t built anything prior to the tiny house.  He did hire some help when construction was taking longer than he had planned for.  By the end of the project, the tiny house cost about $45,000, $33,000 for materials and $12,000 for labor.  Ethan had about $30,000 saved before quitting his job and still did some consulting work after leaving. To build a tiny house takes about eight hundred people hours, Ethan finished his in about fifteen months, working on it about half time.  There are some legal issues regarding this type of housing and the laws vary by state so be sure to check them out before starting your own tiny house. Ethan has unexpectedly become the poster boy for tiny houses.  He recently published a book, Tiny House Decisions to help people design their own tiny house. Not everyone has to take out a mortgage and buy a big ugly McMansion, you could build your own tiny house and tell the banks to shove it! Show Notes Cloud Coach:  The story of Ethan’s tiny house from start to finish. Tumbleweed Tiny House Company:  A California based company that designs and builds tiny houses. Betterment:  Start your tiny house fund today. Learn more about your ad choices. Visit megaphone.fm/adchoices

In our ongoing series, Better Know a Millionaire, we interview Nellie Akalp to discuss the legalities involved in incorporating your own business. Nellie and her husband started My Corporation in 1997 to help small businesses handle the paperwork involved in incorporating.  After eight years of hard work they sold the business to Intuit for millions of dollars.  But like all of our millionaires to date, Nellie didn’t stop working once she had that money in the bank. Not satisfied with ultra early retirement, Nellie and her husband started a new venture, CorpNet, a one stop shop for small businesses to help with legal filings, compliance, and the paper work required to set up a business. Nellie and her husband were living paycheck to paycheck when they started the first company.  It started making money pretty quickly and they were able to pay off their student loans.  When the company was sold they found themselves with twenty million dollars.  Now they started living a little more luxuriously, a house bought with cash, a Mercedes, and lots of travel. Another thread running through our millionaire interviews is that they manage their own money.  It’s the only way to really know what’s happening with your money. They invest money back into the business and own commercial real estate.  And they do not day trade. Nellie has four children and they know not to expect to become trust fund babies.  They do chores for their allowance, mom and dad will pay for their education but then they will be on their own to make their own life. All of our millionaires agree that the money did not bring additional happiness.  Nellie advises that if you have a business plan whose end goal is to get rich, throw that out and come up with a business that you feel passionate about.  That is what brings happiness. It’s so interesting to hear each millionaire’s story and how much they all have in common.  I’m actually starting to believe them when they say that money does not buy happiness. Show Notes Corp Net:  A one stop shop to get your small business set up. Mint:  Start tracking your spending today. Betterment:  The easy way to invest. Learn more about your ad choices. Visit megaphone.fm/adchoices

  Matt started LMM knowing very little about personal finance but almost 200 hundred episodes in, he’s learned a lot.  We’ll see how he’s doing now. We all should have financial goals.  It helps keep us on track and helps us see, in real numbers, that our dedication is paying off.  If you use Mint, make sure you put all your numbers in there.  It makes you feel good to see a positive net worth but if you left out your mortgage, the picture is not accurate. Matt’s goal is to get to a zero net worth.  Which sounds bad but isn’t.  It means that his net worth is no longer negative and that’s a big accomplishment.  He still has a car payment and is still about $10,000 underwater on his house.  He has four credit cards with no overdue balance on any of them and his credit score is a whopping 788! He has $4000 easily accessible in a checking account and $1000 in a business account and about $700 in “miscellaneous” money.  In this Betterment account there is $10,652.  Six months ago he had $0 invested, a great improvement!  All total, he has a positive net worth of about $2900, surpassing his goal of a $0 net worth. Now that he has met and passed the net worth goal, his next is to pay off his car.  He could do it right now by taking money out of the Betterment account.  He plans to keep contributing $500 a month to Betterment and throw any extra money to the car which has a $300 a month payment.  Once the car is paid off, he’ll contribute that $300 to Betterment. Once Matt has a $25,000 emergency fund in Betterment, he’ll use all his extra money to pay off his house and then continue to rent it out for the extra income.  And he plans to start an IRA and invest in Vanguard as well. Remember, this podcast is not even a year old.  In one year, Matt has made huge strides.  He listened, read, and learned about personal finance.  He did it and we can all do it too. Show Notes Mint:  See where your money is going. Best Travel Awards Cards:  Start collecting miles today. Betterment:  Start investing now. Learn more about your ad choices. Visit megaphone.fm/adchoices

There is no question Dave Ramsey has helped people take control of their money. We wanted to see for ourselves how useful his financial advice is so we review his best selling book Total Money Makeover. The book easily breaks down a no-BS approach to money matters. He teaches how to lay the groundwork for a healthy financial fitness. From getting out of crushing debt to easy ways to invest in your retirement.  Introduction In the intro to TMM, Ramsey talks about the success stories, how changing your behavior is key, and how this sure fire plan can work for anyone if they follow it closely. He also tells you what the book is not; complicated, anything new, politically correct, the same as his other books (so he thinks you should buy those too), or wrong. Pros Dave believes that personal finance and most other things in life, is 80% behavior and 20% knowledge. Agreed, the vast majority of America knows what we should be doing with our money, actually doing it is another story. The book explains that what it’s teaching you is nothing new, secret, or revolutionary. Also true, saving money is like losing weight. The principles are very similar, we all know to have more money you must make more than you spend. To lose weight, you must eat fewer calories than you burn. The money/weight loss analogy is touched on throughout the book and it’s a good one. But just because those things are simple, that doesn’t mean they’re easy and the book acknowledges that. The Total Money Makeover system is designed to work in good times and bad weather those good and bad times are personal for you or happening to the economy as a whole. We agree with this too, a good plan shouldn’t need to change due to external factors. Ramsey does a nice job of explaining the 2008 economic collapse in a way that is easy to understand. Cons This book does not contain a ton of the heavy-handed Christian bible dogma that Ramsey is famous for. But it is in there, so depending on your personal tolerance for that sort of thing, it might bother you or it might not. Ramsey does warn you that it’s in the book and acknowledges that not everyone will like it. There are some pretty corny analogies in the intro, stuff about flying turkeys and skinny dipping. They went on at some length. Chapter One: The TMM Challenge Chapter One tells a little about Ramsey’s personal financial problems. He challenges the reader to acknowledge they are the problem and introduces the TMM Motto. It’s a proven plan as long as you if you follow the guidelines. Pros We are the problem with our money and that is true. It’s rare that people are ruined financially through no fault of their own, it happens but it doesn’t happen a lot. If you’re in financial trouble, you most likely put yourself there. The Total Money Makeover Motto is, “If you can live like no one else, later you can live like no one else.” Huh? I get what he’s trying to say but Adam Carroll said it better on one of our past member’s only podcasts “If you are willing to do for two years what won’t most people won’t do, you can do for the rest of your life what most people can’t do.” It means if you sacrifice and suffer for a relatively small amount of time, you can be set for the rest of your life. Live with your parents for two years after college while working full time and saving 80% of your income and you will be ahead for life. Take everything step by step. Cons Ramsey started his whole empire because of his own financial disasters. He doesn’t give a lot of details about what they were. He tells how he felt and how his family has affected but not m... Learn more about your ad choices. Visit megaphone.fm/adchoices

  We answer your questions about mortgages, how to prioritize your finances, and college savings accounts. 1.  Why shouldn’t I pay off my mortgage as soon as possible?  Unless you get a huge windfall, chances are you can’t cut out years worth of payments.  So you might not be investing for twenty years because you’re paying every penny to the mortgage.  You also lose out on the tax break, you can write off mortgage interest.  If you’re investing and still have some leftover money, go ahead and put that towards the mortgage. 2.  What is a good way to set up a retirement account for my young nieces and nephews?  A trust is the best way to give money to children.  You can set the terms such as, the money can’t be accessed until age 25 or the money can only be used to pay for college.  This also removes any threat from greedy parents stealing the money. 3.  If I’m doing everything right, can I play with Loyal Three?  Loyal Three is a fee free investing tool to buy individual stock.  Invest in what you love but if you think you’re going to get rich off an IPO, you won’t.  So if you have some extra money to play with, why not? 4.  I have an extra $150.  Should I pay down my $3000 credit card bill or re-pay money I borrowed from my roommate?  You can dodge a credit card company but you can’t dodge your roommate.  Pay that money back. 5.  I’m a college student investing a small amount of money into Betterment and there is a $3 a month fee.  Would I be better off putting it into a savings account?  If it’s short term, a savings account would be better.  If it’s long term, check out Acorns, their fees for the lowest tier of investing are cheaper than Betterment.  Whatever you decide, well done for investing so early! Thanks for the questions guys, keep them coming! Show Notes LMM Tool Box:  Everything you need to manage your money. Learn more about your ad choices. Visit megaphone.fm/adchoices

  Ever had someone try to sell you Amway, or worse, try to recruit you to sell Amway?  Today we discuss pyramid schemes and how to protect yourself from them. Robert Fitzpatrick joins us to discuss money making schemes.  They pre-date the internet but have exploded in number since the advent of the net.  Find out how to spot and avoid them. There are two main types of these schemes.  One that is presented as a money making opportunity, as a career.  These are multi-level marketing schemes.  The other type is sold as a social opportunity and commonly known as a gifting circle. The three biggest MLM schemes are Amway, Herbal Life and Nu Skin.  Someone recruits you to sell products and get a portion of your sales and you recruit others and get a portion of their sales and the “endless chain” grows.  In a regular sales job there is none of this cultish recruiting.  It’s cut and dry.  You sell product X for $X and make a portion of that price.  In these MLM schemes, you are told the amount you can make is nearly limitless because you get a portion of the money those you recruited make and a portion of the money those they recruited make into infinity. Well, hell.  Making money into infinity sounds great.  What’s the problem?  Well, if you follow the model of you get five people, they get five and so on, you’ll reach a number that is bigger than the world’s population thirteen levels in.  So that’s a problem.  There is a limited number of people available but these scams don’t tell you that. Ask yourself if you could make a living just selling the product, not recruiting.  Have you ever seen anyone selling Herbal Life?  The money comes from enrolling people who then buy the products, they have to buy the products.  The bottom group will always lose out and represent the biggest portion of the entire group. Still not dissuaded?  Herbal Life is currently being investigated by the FTC, FBI, and SEC, all the acronyms!  Companies like this have not been taken down for so long because they have a lot of lawyers, lobbyists, and PR people working for them.  Many people who have been taken in by the scam are too ashamed to report it and so these companies have been unchecked for a long time. A gifting circle works much the same way.  It’s often disguised as a women’s networking group.  It costs $5000 to join and that money goes to the top recruiter.  There aren’t even any products in these stupid things.  You just laid down five grand to sit and the mean girls table, good job dummy. These things have broken up families and ruined marriages.  The person buying in has so much on the line that when someone close to them calls them out, they double down, making the problem worse and sometimes destroying the relationship with the person who pointed out this was a scam.  People have lost their homes because of their complete lack of incredulity. Come on guys.  If you are smart enough not to send your bank details to a Nigerian prince, you’re smart enough to avoid this stuff too. Show Notes Pyramid Scheme Alert:  Robert’s site to protect consumers from money schemes. Betterment:  Make money the legitimate way. Learn more about your ad choices. Visit megaphone.fm/adchoices

When you first get interested in managing your money the newness keeps you motivated but staying motivated is once the newness wears off is the hard part. We’ll help you with that. It can be hard to find motivation towards your money when you’ve been at it for awhile but staying on top of things is important. 1.  Clearly Define Your Goals.  You have to know where you’re going in order to get there.  If you want to pay off a $500 credit card balance, what you need to do to achieve that is very different from what you need to do to save for a 20% down payment on a house. 2.  Focus on Today.  This means having the positive things you did toward your goal every day outweigh the negative things you did. You transferred $100 into your Betterment account and bought a $3 coffee.  You can still consider that a positive day for reaching your goal. 3.  Have  a Buddy.  Have someone in your life that shares your goals.  This keeps you motivated and accountable. 4.  Utilize Smaller Sub Goals.  Sometimes if you’re slogging away towards a big number, it can be disheartening.  Maybe you have $10,000 in credit card debt spread over four cards.  You can’t pay that off in a month but if you can kill off one of the smaller balances, it gives you a psychological boost. 5.  Minimize Distractions and Small Obstacles.  Be on the look out for things that pull you off track.  Stay away from things that tempt you to sabotage you goals. 6.  Use Visual Reminders.  It’s like when you want to lose weight so you stick a photo of someone with your desired body type to the fridge.  Makes you think twice about opening the door.  Tape a picture of your goal to your credit card.  Every time you pull out the card, you will be reminded of what you are trying to achieve. 7.  Have Some Breathing Room.  If you live in a state of constant deprivation, soon the only thing you can think of is what you’re being deprived of.  Build a little room in your budget for money that you have permission to blow.  Otherwise, the deprivation can lead to a binge which will hurt much more than a few small indulgences. 8.  Restructure Your Social Circle.  If all of your friends are into baller nights out, you may need to move away from them in order to stay on track. Or you can try to organize activities that aren’t so expensive, host a movie night or pot luck at your place. 9.  Focus on Your Own Actions.  There are things you cannot control.  Do what is within your control to improve your situation. 10.  Watch the Numbers.  You know we don’t recommend obsessing over your Mint or Betterment accounts but you do need to check in from time to time to make sure things are where they should be. Financial independence is not about instant gratification.  It’s a journey, do what you need to do to stay on the high road. Show Notes Abbaye De Saint Martin :  A blonde ale. LMM Tool Box:  Everything you need to manage your money. The Simple Dollar:  Stay motivated towards your financial goals. Learn more about your ad choices. Visit megaphone.fm/adchoices

Do you have bad habits?  Are they costing you money?  We learn ways of breaking those bad habits and replace them with healthy ones with James Clear. James Clear’s first site, Passive Panda, is dedicated to helping people earn more money through freelancing, employment, and entrepreneurship. He started studying the psychology of why people clicked on certain links, read certain articles and bought certain things. The more he learned, the more interested he became in how habits shape our lives and his new project was born. How Habit Shapes Our Life We repeat about 40% of our behavior almost every day. Think about it. Do you brush your teeth every day, wipe down your countertops, take your vitamins? Yep, those are habits. Over time, certain habits can become part of our identity. I’m a runner and when I broke my foot (not running) several years ago, I had to give it up for weeks. It felt strange like I was not myself anymore. This applies to bad habits too. Do you always drink a soda with your lunch, have a cigarette with your first cup of coffee? You probably don’t even think about these things anymore, they’re just automatic, a habit. Creating A Habit There are three steps to creating a habit:  reminder, routine, and reward. Even bad habits have rewards, that’s why they become habits. James uses the example of your phone ringing. The sound is the reminder, the routine is to answer the sound, and the reward is finding out who is calling. If the reward is a positive one, even if the habit is negative, you will start to repeat the behavior, or routine, each time you receive the reminder. If this happens enough, you’ve developed a habit. Take The Emotion Out Of It Do you wait until you “feel like” doing something to do it? What if you never feel like doing it? Or by the time you feel like doing it, you haven’t left enough time to actually get it done. If you have things that need to get done, set a schedule and do them. Don’t wait until it’s easy to start. James sticks to a specific publishing schedule and that is what has  made the biggest difference to his work. Habit Stacking Habit stacking is a method that can build a new habit into an existing one. Look at something you do regularly, laundry for example. You can stack a new habit into this routine. Every week when you do your laundry, you also set up your budget for the week. Doing the laundry is the reminder, including budgeting with the laundry makes it a routine, and the reward is better managed finances. Now you’ve attached a new habit to an existing one, making it more likely to stick. Tiny Gains James wanted to build a habit of gratitude. He chose a time of day and started thinking of one thing to be grateful for. This on its own, one thing, doesn’t seem like a lot but over a week or a month or a year, that’s a lot of gratitude stacking up. Even if the behavior is small, the gains are cumulative. Breaking Bad Habits How do you break a bad habit? It’s easier to replace a bad habit than to eliminate it. Figure out what reward the bad habit is giving you. Do you eat when you’re bored? Eating alleviates the boredom because it gives you something to do. In order to break this habit, find something healthy to do that isn’t eating. Write an e-mail, call someone, go for a walk, clean one drawer in your dresser. Because habits identify us to some degree, associating a negative identity to the habit you want to break can help. When you think of a smoker, what do you think of? Dirty, smelly, weak, unhealthy? Those are things none of us want to identify as. But if you smoke, Learn more about your ad choices. Visit megaphone.fm/adchoices

When you become an expert at something, it stops the learning process and stunts your growth.  But knowledge is infinite and we should always be learning. Charles Holland Duell was the commissioner of the US Patent and Trademark office between 1898 and 1901.  He once famously said, “Everything that can be invented has already been invented.”  Ok, that was debunked, he never actually said that but think about the ridiculousness of that statement. If that were true, air travel, space travel, the internet would never have been invented.  That’s the point of the expert paradox.  You can never know everything about anything because there are new things to learn all the time. For some people, the “expert” label becomes such an integral part of their ego, that they can’t bear to come down from their ivory tower to get back in the trenches to learn something new.  Soon enough the label no longer applies because they haven’t kept up with the movement in their field. Learning should be an on-going process for everyone in every area of life.  There can never be a certainty that everything is known about anything.  I am a (very) amateur expert on Percy Shelley. Everything he is ever going to write has been written.  But everything he has written has not necessarily been found. Right now his magnum opus could be lurking in a trunk in someone’s attic, one day to be discovered.  The thought thrills me and if there is a topic you love, you should be thrilled that there is always the possibility of more to learn. How does this relate to personal finance? If you want to move up in your job, you had better always be learning.  Because if you aren’t you can bet there is someone younger than you who is savvier about the new developments in your industry who will happily take your place. The same goes when it comes to your money.  HSA’s weren’t really a thing a few years ago but if you listened to Episode 171, you know they are a great place to park your money. Read, talk to knowledgeable people, keep up with the changes around you. Show Notes Abbaye De St Martin:  A blonde ale. LMM Tool Box:  Everything you need to manage your money in one place.   Learn more about your ad choices. Visit megaphone.fm/adchoices

Can you get a top notch education for free?  Scott Young shows you how to DIY your own top shelf education.  Also find out what autodidact means! Scott wanted to go back to school for computer science without all the hassle of enrolling in classes.   He discovered that MIT and lots of other universities put their classes, projects, and final exams on-line.  He went through the process and passed the classes.  And he did it in twelve months rather than four years.  He spent about $2000 and that was mostly on text books.  Nine months tuition and room and board at MIT is about $56,000. Keep in mind, you’re getting an education this way but not a degree.  So can you get a job?  Apparently you can.  Recruiters have contacted Scott to let him know that people with this kind of drive are exactly what they are looking for.  You will have to be a little more creative with your resume to get an interview but if you can get in the door, you have as a good a shot as someone who spent tens of thousands of dollars for that piece of paper. To get the most out of this kind of educational experience, you need to practice all the time, much the way you learn a new language.  It’s shown that sitting through a lecture is one of the least effective methods of learning.  Scott spent a lot of his time during this project working on problem sets. If you’re still skeptical, Scott recommends the Do It Yourself Degree, it’s a hybrid where you take some classes in person, some at distance, and test out of what you can.  You can also transfer credits between universities to lower the cost of education. Scott isn’t trying to over throw the university system.  Employers will have to be the ones leading that charge.  He just wants to show people there are alternatives to crippling student loan debt and show people who just want to learn a new skill that they don’t have to go back to college. Show Notes Scott H. Young:  How to get more from life. Scott’s Ted Talk:  Can you get an MIT education for $2000? MOOCS:  Massive open on-line courses.   Learn more about your ad choices. Visit megaphone.fm/adchoices

Today we get to know millionaire Jordan Harbinger of Art of Charm where ordinary guys become extraordinary gentlemen. In our on-going effort to break the social taboo of talking about money, we continue our Better Know a Millionaire series.  If you didn’t know how to cook, you would ask a chef.  If you don’t know hot to get rich, you ask a millionaire. Jordan was a Wall St attorney and saw how people made money and how companies wasted it.  He knew if he ever started his own business, he would not be wasteful.  He founded The Art of Charm podcast with a friend in a basement, learned how to sell it and now it’s a multi-million dollar business. Jordan drives a Ford Fusion not an Escalade.  He spends his money on self improvement, he invests in himself.  Speaking classes, broadcasting training, high end networking conferences.  He invests a few thousand dollars a month in mutual funds and has an IRA but doesn’t day trade. Something our young millionaires have in common is caring more about their business than their wealth.  Jordan reinvests most of his money back into the business and would gladly take a 50% pay cut if it would help his company. So what is The Art of Charm?  It’s a live academy that trains people to win friends, earn respect, and get girls. It’s not just information, we all have access to more information than we could ever possibly digest.  The academy provides real world training to improve social interactions.  And it’s not just some smarmy attempt to get skeezers laid, it’s training that can impact all areas of your life. If you could do with a little more confidence in any area of you life, check out The Art of Charm website and podcast. Show Notes Brew Dog Cocoa Psycho:  a stout with flavors of chocolate, vanilla and coffee. Southern Tier Imperial Pumpkin:  Pumpkin flavored ale.   Learn more about your ad choices. Visit megaphone.fm/adchoices

It’s time for your questions.  We’ll cover brokerage accounts, car payments, and credit card fraud.  You know where to come for the answers. 1.  Why us Betterment over Vanguard S&P 500 for index funds? Betterment has a much lower minimum for investing.  To get into that Vanguard fund, the minimum is $10,000. 2.  Is it worthwhile to have more than one brokerage account?  It depends on your goals and how involved you want to be.  Betterment is the hands off option.  A good reason to have multiple accounts is SIPC protection.  Each account is guaranteed up to $500,000.  If you have more than that in an account, you could lose that amount.  Spreading the money out in $500,000 increments is safer. 3.  Why is Matt investing when he has a car loan he’s paying interest on?  Matt’s interest rate is 2% so he’s making more in investments.  As long as your interest rate is very low, keep the money invested. 4.  If I have fraud on my credit card and have to receive a new account number, does that negatively impact my credit score?  It doesn’t impact open or closed accounts or age of accounts.  It’s not the account being closed, just a number change.  If someone has fraudulently opened a card in your name, this will impact your score and takes forever to sort out.  Most cards are chipped now and are more secure.  Just call the credit card company and request the chipped version of your current card.  Chip and pin is still a distant dream for Americans but you can get a chip and signature card. 5.  What was the name of the fund that allows you to choose your proportion of stocks to bonds depending on your age and how much risk you want to take?  This is a Life Cycle Fund.  The fee is higher than other funds because it is much more actively managed.  Andrew wrote an article on investing and there is information about Vanguard’s Target Retirement 2050 Fund. Thanks for the questions guys, keep e-mailing them in. Show Notes St Martin Brune:  A medium bodied Belgium beer Betterment:  The hands off way to invest.   Learn more about your ad choices. Visit megaphone.fm/adchoices

Teaching personal finance is badly neglected in America.  Zela Wela is changing that. Nancy Phillips joins us to discuss teaching kids about money. Kids develop their beliefs about money at the same time as they develop them about everything else, during the formative years.  By age seven, their ideas are in place.  A good age to start is between two and three. Because the learning needs to start so early, parents are the ideal teachers.  Kids will observe and model the behavior of their parents.  A two year old won’t understand what a 401K is but they can understand choice and are capable of making them.  They also understand accumulation.  A big pile of strawberries is better than one strawberry.  It’s strawberries when you’re two but that lays the ground work for understanding a big pile of money is better than a little pile and how to grow the pile. Giving young children an allowance is a powerful teaching tool.  Zela Wela recommends the GISS method, give, invest, save, spend.  Part of the allowance is to give, part is invested, part is saved, and part is their’s to spend as they wish.  Zela Wela has a book that shows how to build four little banks for each portion of the money.  It’s fun for the kids and reinforces the behavior of saving in four distinct areas. Do you just give the kids an allowance or do they have to earn it?  Zela Wela advocates “mini allowances.”  Giving a small amount regularly and if they want more, that money can be earned through larger chores or creating income another way.  The regular amount means that kids are consistently managing money even if they don’t have a lot of time that week to earn money through chores or entrepreneurial activities. You don’t need to be a financial genius to teach your children about money.  Just make sure it’s something that is in the foreground of day to day life and your children will be well ahead of their peers. Show Notes Brew Dog Cocoa Psycho:  A stout brewed with coffee, chocolate and vanilla. Zela Wela Kids:  Personal finance for kids. Enter the promo code LMM and you’ll get 10% of your purchase! FamZoo: A money tracking system geared towards children. Betterment:  Set an example by investing. Learn more about your ad choices. Visit megaphone.fm/adchoices

Mary Lynn Schroeder is an entrepreneur with the #1 leather shop on Etsy. Learn how she turned her love of leather into a successful business selling on etsy. Today we go hell for leather with the founder of In Blue Handmade, an Etsy shop with eight employees and over 300 wholesalers.  If you’re unfamiliar, Etsy is a global online marketplace for handmade goods. Mary Lynn was failing at fabrics when her dad sent her a piece of leather and told her to give that a try.  She crafted some phone cases and journals, put them on her Etsy site, and they started flying out the door. But it didn’t come easy.  Mary Lynn was working on her own stuff during the day and working in a restaurant over night.  She can pinpoint the exact moment things took off, December 2, 2009.  She got a mention on Martha Stewart’s blog and woke up to eighty orders. Part of Mary Lynn’s success is down to not knowing.  Late 2008 was a terrible time to start a business but she didn’t realize that.  If she had, she probably wouldn’t have done it.  Sometimes being naive is an advantage, it means less fear and second-guessing. We know a lot of our listeners are DIYers and crafters.  Mary Lynn has advice for you.  Sign up for Etsy.  It’s a great platform with low start-up costs.  Also take your stuff to local craft fairs.  There is bound to be one near you and it gives you a lot of information on price points, what people like and don’t like, and if there is a market for what you have to offer. Remember last episode how we talked about finding your passion?  Mary Lynn is the living embodiment of that.  She tried, she failed, she kept trying and she succeeded in a big way at something she loved to do.  That’s what we want for all of you. Show Notes In Blue Handmade:  Mary Lynn’s Etsy shop. Betterment:  Start investing today.   Learn more about your ad choices. Visit megaphone.fm/adchoices

Finding your passion has become a hackneyed cliche but there is some merit in doing so, we just have to think of a less Oprah way of phrasing it. People say it as if it’s something easy to do.  What if you’re passionate about sitting around smoking weed all day?  How do you parlay that into income?  You don’t.  What it really means is to figure out what you like to do that can also generate income and do that to make money. It doesn’t have to make you a lot of money, not in the beginning, maybe not ever.  But being able to spend a part of your time doing something you really love to do is a big part of being happy in your life. Matt loves music and has even toured with his band.  But music super stardom wasn’t meant to be for him.  It doesn’t mean he can’t incorporate that love into other areas of his life.  For example, he created a music video for LMM and recently created one for a podcasting conference.   Maybe your passion won’t ever make you money. Or maybe you’re afraid that by turning it into a career, you might come to hate it.  Cooking a big meal for friends and family is fun.  Cooking in a Michelin starred restaurant is pressure. So you won’t be cashing the Jean Georges paycheck with the bountiful amount of zeros but seeing people you love enjoy your food is a reward too.  It doesn’t always have to be about the money. If you can’t name a passion, write down a few things you’re interested in.  And try them out.  Maybe you won’t like them all but you’re bound to find something that makes the time fly by.  The important thing is to keep searching when finding your passion.  A lot can happen in a life, especially nothing. Show Notes Betterment:  Start investing today. Mint:  Manage your money in a single glance. Learn more about your ad choices. Visit megaphone.fm/adchoices

Want to start investing but a little nervous to get started?  We totally get it. Investing should be simple and easy and with Acorns you can get started with just some pocket change. Acorns is a great way to start investing and building wealth. We’re here to show how you how to get started investing without a lot of money, and then forget about it until you retire. What is Acorns? Each time you spend, Acorns rounds up to the nearest dollar and invests that amount for you.  So, if you spend $2.50 on a cup of coffee, Acorns will automatically invest $.50 for you. The pizza you just ordered that cost $15.05,  $.95 gets invested. All you need to do is download the Acorns app, connect it to your credit cards to get started. A lot of users are new to investing so the app provides a lot of guidance. There are also cool tools, that help you set and reach goals. By just entering your savings goals and what age you want to achieve them by and the app tells you how much you need to invest each month to get there. They also have found money partners program that rewards app users for shopping through certain retailers. When you making a purchase with one of their partners through the app or web portal, the retailer will send the rebate, cash back rewards, and loyalty programs cash into your account. What’s better than cash back? Cashback that is automatically invested. So, is pretty simple but let’s go a bit deeper. Advantages of Using the Acorns App They offer ETF’s, stock funds, and bond funds. The funds are chosen by a team of mathematicians and engineers who work in conjunction with Nobel Prize-winning economist Harry Markowitz. There are no commissions, the cost is $1 per month and a maximum of .5% a year on managed assets.  Once you reach $5000, the percentage drops to .25%.  There is no fee to add money or withdraw it from the account. Using Acorns is safe, your data is encrypted and they are working with “white hackers” to make sure that everything is private. You can maintain a high degree of control in Acorns but if you want to set it and forget it, you can choose auto roundups where each transaction will be rounded up. You can also have money auto deposited into the account via automatic transfer. Her are the top benefits of using the Acorns app: Fee exemptions The Acorns platform appeals to young people and those who do not have investment experience. It allows college students to register for Acorns for free for up to four years, so long as they sign up with a .edu email address. This makes it easy for students to focus on investing and building up wealth without worrying about account fees when they first start with Acorns. Cashback Investing your money little by little can really make a difference over time, especially when you have Acorns’ cash-back features to help you along. The app has more than 100 partner companies offering cash back on purchases you make with one of the payment methods associated with your Acorns account. These cash-back rewards will go into your investment account to help you move closer to your goals. Minimal upfront investment Some financial institutions require individuals to invest thousands of dollars just to open an account. With Acorns, you can start investing with just $5—and there’s no minimum amount required to open an account. This opens up investment opportunities to people who may not have otherwise had access to them. Learn more about your ad choices. Visit megaphone.fm/adchoices

Health insurance is so complicated.  We deep dive into HSA plans so you can get the most out of your health care dollars. What is an HSA?  Simply put, it’s a health savings account that usually has an investment option and is tied to a high deductible plan.  The money goes in tax free, it grows, and when you withdraw it to spend on out of pocket health care, it remains tax free!  And it’s flexible. If you take it out to spend on non-health care purchases, it is taxed and there is a penalty but you do have that option.  And once you reach age 65, you can use it without penalty and at the prevailing tax rate which should be lower than it was during your prime earning years.  Not to be confused with an FSA (flexible spending account) which must be emptied by the end of the year or you lose the money. The numbers change year to year but currently, a single person can put $3300 into an HSA and a family can contribute $6550.  Our guests advise first funding the matching portion of your 401K, then fully funding the HSA, and finally going back to the 401K.  Your HSA is portable too, you can take it with you when you leave your job. If you’re self employed you can set up an HSA for yourself.  Just buy a plan that is HSA qualified and you can reap the rewards available to the rest of us wage slaves.  About 20% of the offerings on the HCE are HSA qualified so you’ll have several to choose from. Once you put money into the HSA, you can spend it on medical expenses for yourself, a spouse, or any tax dependents, for the rest of your life tax free.  You’ll generally receive a debit type card to spend the money with. Should you leave your job, get fired or laid off, you can use your HSA to pay for Cobra premiums and once you reach 65 you can use it to pay Medicare premiums. There are some unexpected benefits to this system aside from just the financial.  When your insurance covered everything but your $10 co-pay, you didn’t ask to many questions.  Now that it’s your money, you suddenly want to know the justification behind your doctor ordering you and MRI. You want the generic prescription at a fraction of the price rather than the name brand.  You might even start looking after your health a bit more carefully.  Insulin is expensive, maybe I should cut down on the carbs.  This has forced transparency is what has traditionally been a very murky world and sunlight benefits us all. Speak to your HR department and see if a high deductible plan with an attached HSA is available to you.  Take control of your health and your money. Show Notes Allagash Tripel:  an ale with a long, smooth finish. Ask MR HSA:  Todd’s site to answer all your HSA questions. Consumer Driven:  John helps break down the barriers for health care consumers. HSA Administrators: Awesome HSA side recommended by a listener that allows you to put your HSA contributions into Vanguard funds. Learn more about your ad choices. Visit megaphone.fm/adchoices

  Jim Wang became a millionaire through his finance blog Bargaineering.  He sold the site and started Microblogger.  Let’s hang with an internet millionaire. Jim could easily have quit working when he sold his site but that’s not what millionaires do.  His life also didn’t change much when he became a millionaire, something that all of our millionaires have had in common, they avoided lifestyle inflation. Whether Jim had $10,000 or $1,000,000, he treated his money the same.  Invest it in the stock market and know that over forty years, it will grow.  Looking at your numbers day to day can lead to poor decisions.  Set it and forget it.  He slow dripped his money in and bought when others were selling in a panic.  Jim monitors the number about once a month just to make sure things are where they should be. Jim keeps up the Joneses but not in the way you would expect.  He found success at a young age so when he reads other success stories, it helps to keep the fire alive.  Comparing yourself to others can hurt you but it can help you to continue to achieve too. Thirty four is too young to give up any kind of work for life on the golf course. Success didn’t land in Jim’s lap.  He was working a forty or fifty hour week job when he started Bargaineering in 2004 and would work an additional thirty hours a week on the site.  He did this for four years.  Four years of eighty hour weeks is not the definition of success being handed to you. A lot of people who have side businesses continue their day job even after the side gig starts to pay well or even better than the day job.  Because they think the job is more stable.  But that’s such a misconception and it’s holding a lot of talented people back.  The fact is, you aren’t privy to your day jobs finances.  Things could seem to you to be going along great and one day you’re fired because the company filed for bankruptcy.  When it’s your own thing, you know exactly where things are financially. If you’re thinking of taking the leap from your day job to your own thing, check out Jim’s site.  The man has lived the journey. Show Notes Microblogger:  Jim’s guide to starting your own blogging business. $5 Meal Plan:  Simplify food planning with a weekly plan and shopping list e-mailed to you. Betterment:  So we can interview you for Better Know a Millionaire. Learn more about your ad choices. Visit megaphone.fm/adchoices

Best selling author, world traveler, entrepreneur, Chris Guillebeau joins us to discuss his latest book The Happiness of Pursuit. Chris became an entrepreneur when he realized he was a terrible employee and never wanted to work for someone else.  He started his blog, The Art of Non-Conformity in 2008 and it grew into an empire.  He now travels the world speaking and teaching people how to start living their own unconventional lives. Chris attended community college before transferring to a four year school.  He graduated with no debt by financing his education through selling items on e-Bay.  Once he ran out of things to sell, he tried other small businesses, creating several small things rather than one large thing. It gave him enough money to avoid debt and do what he wanted to do and allowed him to sample a variety of things, seeing what worked and what didn’t along the way. Chris wrote an e-book on discount airfare in less than a week and it started selling.  This led to more books about travel and self employment.  The e-books led to his first published book, The $100 Startup which became a New York Times best seller. Chris now holds the annual World Domination Summit, a gathering of devotees to his living an unconventional lifestyle philosophy.  There are lectures, workshops, and vast opportunities for networking. Chris is about to embark on the tour for his latest which will be published September 9th.  You can find out if he is visiting your city here.  Go say hi and tell him LMM sent you! Show Notes Chris Guillebeau:  Chris’s website on the art of non-conformity. The Happiness of Pursuit:  Chris’s newest book documenting his travels to every country in the world and the art of the quest. Betterment:  Start investing today for your best tomorrow.   Learn more about your ad choices. Visit megaphone.fm/adchoices

Do you dream of retiring early? We interview the expert in early retirement, Mr Money Mustache. We must learn his ways. Learn more about your ad choices. Visit megaphone.fm/adchoices

Most people are more willing to talk about sex, politics, and religion than about money.  Why is personal finance such a taboo subject? Your parents probably gave you the “birds and the bees” talk but did they ever talk to you about money?  A lot of parents don’t and that seems to carry over into our adult lives.  That personal finance is so taboo is handicapping a lot of us when it comes to knowing how to manage our money. It’s not polite to flash money around and to brag about how much you make or spend but it shouldn’t be shameful to discuss the opposite problem, how little money you have or, more importantly, how little you know about money.  Imagine being illiterate and not asking for help learning to read.  What a disadvantage you would be at in every area of life.  Being financially illiterate is no less devastating and if no one knows, no one can help you. There’s more openess now because of the internet and the anonymity it affords us but for a lot of people, money matters can be such a shameful thing.  It’s hard to admit that you’re drowning in debt or that you can’t fully take care of your family.  It’s also hard not to feel judged.  Everyone wants to compare themselves and if you tell someone who is a banker that you’re a janitor, it takes a superhuman sense of self worth not to feel looked down on. It can work the other way too.  Maybe you’re rolling in it.  But you don’t tell people because you’re afraid they’ll hit you up for money or that they will feel judged and lacking.  Or maybe you think people will resent you. But not talking about money can mean you lose money.  Especially in the workplace.  If you don’t know what others in your industry and especially, what your colleagues are making, how do you know if you’re being fairly compensated?  You don’t and that’s what employers want. Some even go so far as to tell employees they are forbidden to disclose their salaries. This is not true, in fact it is illegal.  Now I don’t suggest you post a spread sheet of what everyone makes on the bathroom wall because they’ll find another reason to fire you.  But it’s important information that you have a right to know. Next time you’re out with friends or colleagues, gently bring the subject around to money.  If you’re honest about where you are and your short comings, others might be willing to share their stories too.  If you have something to teach, teach it.  If you have something to learn, be willing to learn it.  You can talk about your sex life at the next outing. Show Notes Maine Root Blueberry Soda:  A summer beverage for all you teetotalers out there. Betterment:  The fast way to start investing. LMM Toolbox:  Everything you need to manage your money in one place. Learn more about your ad choices. Visit megaphone.fm/adchoices

“Never a borrower nor a lender be.”  We’ll discuss the pitfalls of loaning or borrowing from family and friends. You know the old saying, only loan someone money if you can afford to lose it.  It’s easier said than done.  Money is already a fraught issue, throw family ties into the mix and it can become down right volatile. Sometimes you lend money to someone out of sheer awkwardness.  It’s so surprising to be asked and so uncomfortable that sometimes we just agree to alleviate the tension. Then kick our selves immediately after. It doesn’t even necessarily matter if you’re mad about losing the money.  Maybe it was negligible  amount or maybe it was a lot but you had it to lose.  The borrower who doesn’t pay it back might feel so awkward or so guilty that they avoid you.  You aren’t mad and don’t want the money back, but the relationship is lost anyway. A loan doesn’t always mean money.  Has someone ever asked you to co-sign something with them?  It’s a slyer way of getting a loan from you than out right asking for money.  If the borrower is not responsible, it’s your credit that gets tanked. Sometimes this works out.  Usually it doesn’t.  There is almost always a solution through a third party that does not involve you.  Help them sell their stuff on eBay, steer them towards Lending Club.  Is there a job you could hire them to do, mow your grass, watch your kids (well, maybe don’t offer your junkie friends the babysitting opportunity)?  Coming to a friend or family member for a loan should be the last resort. Do you have any loan horror stories?  Share in the comments. Show Notes Long Trail Imperial Pumpkin:  September is here and that means pumpkin beer. Betterment:  Start investing the easy way. LMM’s Tool Box:  All the resources you need to manage your money. Learn more about your ad choices. Visit megaphone.fm/adchoices

Active trading is buying securities and holding them for a short time before selling.  We put the practice on trial and make a case against it. Remember, at LMM we advise you to stay in the market for the long con.  Active trading, or day trading is the exact opposite of that and a bad practice to get into. Jim Kramer, the big mouthed yelling “financial guru” advocates active trading.  Should you listen to him?  He’s on TV after all.  Let’s look at his record.  Between 2005-2007 he underperformed the NASDAQ by 2%, the S&P by 4% and the Dow by 10%. But what if you hire the best money manager out there?  Surely he or she can do it better than you.  No, they can’t.  Over a twenty year period, 80% of them underperformed the market.  And remember, no one cares more about your money than you. What if you pick a MorningStar Five Star rated fund?  It’s like Michelin stars, right?  The more stars the better?  In theory yes, in practice, the inverse is true.  Vanguard tracked funds for the first thirty six months after they received the Five Star rating and they all performed worse than the One Star rated funds. There are an unlimited amount of variables that drive the market.  More than anyone could ever account for.  Even if you had the best data at your fingertips, the vast majority of the time, you still won’t beat the market.  And unless it’s your hobby and passion, who wants to analyze all that data?  The most, maybe the only important thing is that you put your money into the market. Show Notes Arabier:  A pure malt beer. The 5 Mistakes Every Investor Makes and How to Avoid Them:  Learn what not to do in order to grow your wealth. Betterment:  The easiest way to invest. Learn more about your ad choices. Visit megaphone.fm/adchoices

Five listener questions answered, establishing credit, monetary gifts, Betterment security, IRA migration, and the pros and cons of renting out a room. 1.  What is the best way to establish credit?  A secured credit card is a good start.  You give the bank a set amount of money and that amount is the card limit.  So it’s a bit like a debit card but it helps build credit.  It’s no risk to the bank because they have your money. Getting a store credit card is usually pretty easy and will build credit.  If your landlord uses something like Cozy.com to collect rent, you can build your credit by paying rent this way. 2. What is the best way to give my children financial gifts?  You can still buy savings bonds but no one knows what the hell to do with them.  A better idea might be to set up a trust account in something like Betterment.  You can set parameters, like the beneficiary can’t withdraw the money until they reach a certain age or the money can only be used to pay for college. 3.  How secure is your money in a Betterment account and how difficult is it to access the money in the account?  As a broker dealer, Betterment is required to keep their money separate from yours.  If they went under, the money would just move to another brokerage company.  If they were doing something illegal and lost your money, the money is insured up to $500,000 per customer through SIPC.  The money in the account is easily accessible.  You could have it back within a few days with no transaction fee. 4.  If I own securities in an on-line Roth IRA brokerage account and want to transfer them to Betterment is there a transfer fee?  And because Betterment has less flexibility with securities would I pay a fee for each security transferred?   If you move to Betterment, the securities don’t come with you. You’re buying into their strategy.  You would sell the securities with the original holder, the transfer itself to Betterment does not have a fee.  Betterment is recommended for those who want to be more hands off with their IRA’s. 5.  Pros and cons of renting out a room in your big house?  Extra money is a big pro.  The con is that you have a stranger in your house.  Just make sure to be safeguards in place if the situation goes south so you can get rid of the renter quickly.  Maybe give Air B&B a try to see if you don’t mind having someone living with you or if you just hate it.  This way you aren’t locked into anything. Keep sending in your questions and we’ll answer them during the show! Show Notes Build Credit without a Credit Card:  Andrew’s article for those new to credit. What Happens to My Money if Betterment Closes:  If you’re worried, read this and set your mind at ease. Tool Box:  Everything you need to manage your money.   Learn more about your ad choices. Visit megaphone.fm/adchoices

Got too much stuff?  Want to do a big purge before the cold weather sets in, maybe make a few bucks?  Take the LMMs’ Sell Everything Challenge! Are you a hoarder?  Not like the demented ones on those gross shows, but just a little bit of a hoarder.  We challenge you to clean out your life, toss, sell, or donate all that stuff and see how much better you feel. First of all, round up all your stuff from where ever it has been banished to.  Your parents attic, the back of your closet, the storage unit full of stuff you are paying to home. What you do with it next depends on a few things.  Do you have sacks full of ripped, stained clothes that are not nice enough to donate?  Recycle it!  The Council for Textile Recycling site lets you enter your zip code and find a facility that recycles things like old clothes and bedding.  Much better than filling up landfills. If your clothes are of a higher quality and still in good shape, maybe they just don’t fit anymore, donate them to an organization like Dress for Success.  They accept women’s business clothing for women who need a nice outfit for interviews or a new job. If you want to make some extra cash, there are a few options, depending on how much time or inclination you have to go this route.  A consignment shop is the least effort, you drop it off and get a percentage if it sells.  Some cities have eBay consignors.  The same principle, drop it off and they sell it on eBay which might bring in higher prices than a conventional consignment shop.  Craigslist is good if you like dealing with weirdos and tons of people who will flake but I wouldn’t recommend it.  If you want to keep all the money for yourself, you can DIY eBay.  This will probably make you the most money but it’s the most labor intensive.  Particularly if it’s a big item that has to be shipped.  It might be yard sale time for things like that. If you just want the stuff the hell out of your house, you can use a service like 1-800-GOT-JUNK.  You have to pay to have the stuff hauled off but it will be gone, gone gone.   So are you up for the challenge?  Sell as much as you can during the month of September, let us know how many items you should, how much money you made and what you plan to do with that money. Show Notes Mint:  The easy to use budgeting tool. Betterment:  Start investing your e-Bay gains today. LMM Tool Box:  Everything you need to manage your money, recently updated. Learn more about your ad choices. Visit megaphone.fm/adchoices

It’s Labor Day and most of us are not working.  We’ll tell you the reason you have the day off and the story of those who sacrificed so you could sleep in. Labor Day celebrates the American Labor movement.  It became an official holiday in 1887.  If you think you’re job is oppressive now, imagine what it was like before the concept of organized labor.  At least we get paid in money.  At some points, workers were paid with “company chit” that could only be spent at places that were conveniently owned by their employer. Once upon a time, workers labored as apprentices under master workers.  You then became a journeyman and eventually, a master yourself.  By 1815, journeymen began to outnumber masters due to migration patterns.  As a result, investors began building labor intensive businesses on a big scale. When the workers began to collude to raise wages, the practice was made illegal by the government.  Commonwealth vs Hunt made collusion to raise wages a legal activity.  That was the beginning of the modern labor movement. The 20th Century is when labor really gained ground as far as wages and hours were concerned.  Between 1890-1914, unionized manufacturing wages rose from $17.63 a week to $21.37 and hours fell from 54.4 a week to 48.8. In 1933 as a response to the Great Depression, FDR instituted the National Recovery Act to protect collective bargaining rights. It created the minimum wage and regulated working hours. Unions are increasingly under fire today.  Which company is notorious for it’s poor treatment of employees?  If your answer was Walmart, good answer.  Walmart employees are not unionized, in fact, it is actively discouraged and people have been fired for scurrilous reasons that were really to do with trying to organize fellow workers.  Would a union fix everything?  No, but it would go a long way to improving worker conditions in that shit hole.  Does your job offer a pension?  Probably not.  If you were a union member, you would have one.  You would probably have health insurance superior to what you have now as well. Fourth of July is honored as the holiday that exemplifies American sacrifice but as a Detroit girl, I think those who fought and died for the forty hour work week and a living wage are just as deserving of celebration, respect and gratitude. Remember  that when you toast at your back yard barbecue. Show Notes Imperial Pumpkin Ale:  It’s September and that means pumpkin beer! Facebook Beer Season: That magical time when the fall beers are in season. Learn more about your ad choices. Visit megaphone.fm/adchoices

Money is the currency of living but gratitude is the currency of life.  WTF does that mean?  We’ll let Andrew explain it because we don’t know either. Practicing gratitude sounds like some trite thing Deepak Oprah tells her legion of house wife minions to do but there is something to it for those non-Kool Aid drinkers among us.  Particularly when you tell someone you’re grateful for something they’ve contributed to your life, it makes you both feel good. Most of us don’t get enough gratitude in our lives.  When was the last time some expressed gratitude for something you did at work?  Maybe that’s never happened.  When was the last time you told your significant other you were grateful for some small thing they did, emptying the dishwasher without being asked or picking up the dry cleaning?  If you aren’t getting enough kudos, most people around you probably aren’t either.  So instead of waiting for the gratitude to be bestowed, be the bestower.  That sounds like something a wizard would say doesn’t it.  You know what I mean though? Fake gratitude is not very, well, gratifying.  Make sure that any expression of your appreciation is genuinely meant.  Telling someone who demonstrably sucks at their job   that they’re doing top notch work makes you feel like a liar and makes them think you’re a liar. Here is a little exercise, write a letter to someone you are grateful for, tell them why.  And then send the letter.  Imagine if you were on the receiving end of a letter like that.  Wouldn’t you like to make someone feel like that?  You can, just write the letter.  Or if that is too corny for you, use the Lift App to make gratitude a habit. What or whom are you grateful for?  Let us know in the comments.  Show Notes DuClaw XX IPA:  A double IPA with a big hop flavor. LMM Tool Box:  What we use to get things done. Ted Talk:  The happy secret to better work. The Happiness Project:  Tear up as people show their gratitude. Learn more about your ad choices. Visit megaphone.fm/adchoices

Despite the dire warnings, it is possible to graduate college free of debt.  Shanice Miller will tell us how to do it. Most people go the route of taking out massive student loans to pay for college but it’s possible to get all or at least some of your expenses covered through scholarships and grants.  You don’t need a perfect GPA either.  There is money available for everyone if you know where to look. The best time to start looking around is your junior year of high school and the best place to look is with your guidance and career counselor.  Start early, the beginning of the school year is ideal because it allows you to make a strong application before the deadlines which are usually in late winter or early spring. The application process can be ponderous but you can use the same application or essay for multiple opportunities, just customizing each as you would with a job resume.  The average award for a scholarship is $2000.  So if you take three hours to apply, that is great value for time. Big, national scholarships that are open to everyone are harder to get and require a lot more work.  The smaller ones local to your area will put you up against less competition.  Your high school’s website may provide information for the smaller, less competitive scholarships. Graduating high school doesn’t mean the end of the road for scholarships.  You can continue to apply in college, grad school, and professional school.  You can also re-new some scholarships that were previously rewarded.  They already know your worth and the process will be easier. Shanice’s biggest piece of advice is not to get hooked on your dream school.  The bucolic, tree lined campus on the front of the brochure will be a distant memory if you’re living with your parents after graduating because you’re mired in debt. Remember, college is a business decision.  Part of that decision should be how much free money you can get to pay for it all. Show Notes Space Walker American Belgo:  A bold beer with spicy, fruity flavors. Debt Free College Graduate:  Shanice helps you how to graduate debt free. Betterment:  Start investing today. Learn more about your ad choices. Visit megaphone.fm/adchoices

So, what is an expat? Want to live and work abroad and reduce your tax burden? We talk to David McKeegan, an ex-pat tax expert to learn the tricks. Many people dream of leaving the US and it’s taxes behind to start a life and a business in a new, exotic place.  It can give you a brand new life and reduce your taxes to near zero if you know how to play the game.  Seven and a half million of your fellow Americans have done it so why not you? If you move abroad to live and work, you don’t have to renounce your US citizenship although increasingly some people are doing so for financial or political reasons. But to qualify to pay zero US taxes, you will have to reside outside the country for 330 days per year.  If you meet this threshold, your first $99,200 in income, is US tax free! You may still have to pay taxes in your new home.  Or maybe you don’t.  In Dubai for example, there is no personal income tax.  So the lesson is, investigate the tax codes as part of choosing your new country. If you are able to work from anywhere you can get a Wifi connection, consider becoming a digital nomad.  Many countries will not subject you to local taxes until you’ve been there for 180 days or more, so just pack your bags every few months and move to greener pastures. Imagine the pictures you can post on Facebook if you went this route, yourself lounging with your laptop in exotic locales, on a big pile of tax free money! Remember, if you choose to move abroad, the first consideration should be quality of life and if you can reduce your tax burden, that’s the icing on the cake. Show Notes Greenback Expat Tax Services:  David’s company that will help you unravel ex-pat tax filing. Space Walker American Belgo:  An American beer with spicy, fruity flavors. Betterment:  Start investing today to fund your ex-pat dreams. Learn more about your ad choices. Visit megaphone.fm/adchoices

The importance of budgeting can’t be overstated. Today we talk to the king of budgeting tools, Jesse Mecham the CEO of You Need a Budget and give you an honest YNAB review. We talk about budgeting with Mint a lot and it’s a great tool. But there is always talk of You Need A Budget within the personal finance community so we wanted to check it out. And because we provide only the best for you, we brought on the founder to discuss the tools so we can provide an in depth YNAB review. YNAB was originally a spreadsheet that Jesse and his wife used to budget their money when they were newly married and expecting a baby. He had just intended to sell it to make a little extra income on top of his accounting job, but it soon proved so successful that it become his career. Zero-Based Budgeting Zero-based budgeting forces you to “spend” every dollar. At the end of the month, the goal, as it is with any budget, is to have brought in more money than you spent. And that’s where most traditional methods of budgeting end. Great! You paid all of your bills and have an extra $600 left over. For a lot of people, that leftover money is “fun” money, to be spent on things like clothes, dinners out, movies. Zero-based budgeting gives those dollars a job, rule one of YNAB. It’s like the difference between your unemployed friends and your friends who have a job. The unemployed dollars are sitting around all day smoking weed while the dollars with a job are contributing. In this case, contributing to your financial goals. And that’s what YNAB is, zero-based budgeting. If you’ve tried budgeting before and not had success, it’s probably not you! It’s like dieting. Sometimes you just need to find a different method that will work for you. Four Principles There are four principles behind YNAB: Give Every Dollar A Job Not one dollar just gets to sit on its dead ass, not pulling its weight. Every dollar is working, working for you. Some jobs are more fun than others. Some jobs are paying your bills but some jobs are buying you drinks! Just because a dollar has a job, doesn’t mean it’s job is to be spent. Your holiday money might sit dormant for ten months of the year, but when the shopping season arrives, it leaps into action. Save For A Rainy Day If you’re living paycheck to paycheck, you don’t have anything left over for a rainy day.This rule is for large but not regular expenses like holidays, vacations, school tuition. Look ahead to these large, less frequent expenses and break them down per month. That monthly amount is added into each month’s budget. Rule two makes sure that you are planning for these expenses well before they come due and budgeting for them each month. Roll With The Punches You’re going to make mistakes, the unexpected will happen. That’s okay. If you overspend in one area, you’ll find money from another and move it over to the category you came up short in. Live On Last Month’s Income When you use YNAB, you will save enough of last month’s income to pay for this month’s expenses. What you earn in January, you spend in February. Depending on your current bank balance, this might take a few months to achieve. That’s okay, you’ll get there. This rule is especially helpful for those who have variable incomes, freelancers, and realtors for instance. This system puts an end to living on money you don’t yet have. Getting Started Step One There is a free 34 day trial for YNAB. You download and install the program which runs on both Windows and Mac.  Step Two You can choose to use Cloud Sync so your information is updated across your multiple devices and is backed up. To back the data up, you’ll need Learn more about your ad choices. Visit megaphone.fm/adchoices

We should strive to be the best we can in all areas of life. One of the key areas to be the best is at work, the work you do for a boss or for yourself. If you feel like you aren’t doing the best you can at a job, it might be time to reevaluate what you’re doing for a living.  Most people aren’t bad at things they like to do (singing maybe for some of us) so maybe you don’t like what you’re doing.  If you don’t like it, you have no motivation to improve so it’s best to move on. Being good at your job gives you more job security, a rare thing these days for a lot of people.  The company can’t fire the indispensable ones.  You don’t have to be the CEO to make yourself invaluable.  No job is unimportant or the company would have cut it by now. Ever been to a restaurant with so-so food but a great waiter?  Or a restaurant with great food and a bad waiter?  Which experience would you prefer?  I can cook tasty food at home myself and I consider eating out to be a total experience so I prefer the place with the great waiter.  Any person in a business can give you a great experience or a bad experience.  They can make you come back or keep you away forever. Being really good at what you do can also help combat a lack of experience.  If you’ve spent ten years designing pretty crummy websites and the new hire is doing great ones straight out of college, who do you think will advance more quickly? You don’t have to be a genius to be the best at work.  You just have to have a good work ethic, be willing to learn new things, and to take on additional responsibilities.  Spending some of your down time educating yourself about your industry goes a long way towards out-achieving your co-workers. We hope you found some inspiration in this episode and it made you think.  You can even get something out of a job you hate so you can take that with you to the job you love. Show Notes LMM Tool Box:  Everything you need to manage your money like a bad ass. Learn more about your ad choices. Visit megaphone.fm/adchoices

Financial issues are a leading cause of divorce.  Before you take the plunge, find out what you need to know so you don’t become a statistic. Our guest Jeff will share some things he learned about preparing your finances for marriage.  Because once the honey moon is over and life starts, having systems in place to deal with finances will be important to your life as a married couple. Some partners will bring an equal amount of financial knowledge into the marriage.  For many, one will know a lot more than the other.  For many people, this means managing money defaults to the more knowledgeable spouse.  This is not a good recipe for a happy marriage.  The partner dealing with the finances can feel resentful that such a big job isn’t being shared and the partner with less experience might feel left out of important decisions. Jeff was more knowledgeable about finance so he and his fiance took Dave Ramsey’s Peace University together to help get her up to speed. One of the most important things to discuss before marriage is how much debt each of you have.  And how will the debt be handled?  Does it become a joint effort to pay off or is it still the responsibility of the individual partner? Sometimes love doesn’t conquer all.  If the person you want to build a life with has what seems to you to be an insurmountable pile of debt, you may need to make some hard decisions.  They didn’t get to that point because they make good choices and while anyone can change, mostly they don’t. Make sure each partner has some “fun money” that each can spend without justifying it to the other.  No one likes to feel every penny is being scrutinized.  Schedule regular meetings to reassess where you are and make any necessary tweeks.  Being open with each other about finances is really the key to managing them successfully. That money causes so many families to break up is a travesty.  Don’t let it come between you and your spouse, talk about it, plan it, and manage it so you can live happily ever after.  Show Notes Unita Brewing MonkShine:  Belgian style blonde ale. Ommegang Hop House:  Belgian style pale ale. LMM Tool Box:  All the resources you need to manage your finances in one place. Learn more about your ad choices. Visit megaphone.fm/adchoices

Perfect is the enemy of good when it comes to  trying to improve.  Dwelling too much on minutia hurts the overall result. Are you waiting for the perfect time to start investing?  Right job, $1000 to start with, after the holidays.  You know what would be better than that?  Investing. There is no more perfect time than right now.   We have too many choices and too many sources of information.  This can be paralyzing.  Should you invest with Betterment, ShareBuilder, E-Trade, Van Guard?  What do my co-workers think, my family, Reddit?  How can I decide anything before consulting /r/personalfinance? You can spend weeks researching all this and you know how much money that will make you, none.  If you just made the leap, you might already be up a few bucks.  We don’t advocate doing no research but there comes a point when too much is well, too much.  JUST PICK SOMETHING!  Ugh, like Krusty would say it. How do you overcome this quest for perfection when it comes to money and anything else in your life, really?  Just start.  Don’t go out and buy any supplies, you don’t need fancy graph paper to make a budget, you can do it on the bank of an envelope. You don’t need to research and hire a “financial adviser” to start investing.  Open a Betterment account.  You don’t need to be kitted out in Lululemon to start running.  A good pair of shoes is all it takes. The perfect moment will never come and even if it does, it will come later than now. Show Notes Maine Root Blueberry Soda:  If you’re a hipster, this is the soda for you, unless you prefer RC Cola in an ironic fashion. Superfuzz Blood Orange Pale:  A fruity, summer beer. The Lean Startup:  A book about getting the bare bones product out, listen to feedback and improve.     Learn more about your ad choices. Visit megaphone.fm/adchoices

You ask and we answer!  Today we’ll discuss joint finances, joint credit cards, stock options, credit card debt, and money allocation. 1.  How do you update your fiscal strategy when combining finances with a partner?  Each person should be contributing but if one makes much more than the other, the contributions should be a percentage rather than split evenly.  Opening a joint checking account where each person contributes the agreed on percentage and use this  account to pay shared expenses. 2.  Should I add my partner who has no credit card to my account or should she get a separate card? If you open a joint card, you each take 50% of the risk.  If you add someone to your card, you take 100% of the risk.  A joint account also builds the credit score for each of you, important when it comes to one day taking out a mortgage together.  That said, unless you are 100% certain not only of staying together but also of the other person’s financial responsibility, keep it separate. 3.  My company is giving out mid-year bonuses.  Do I take stock options with three years vesting or the cash?  Alice’s company is a small start up so it’s not possible to research it.  A bird in the hand is worth two in the bush but what if the company is the next Google?  What if it’s not? The cash can be invested so in this scenario we say, take the cash. 4.  I have credit card debt that I am managing aggressively at 0% interest but I have the cash to pay it off.  Should I pay it off or use the cash to invest?   As long as the debt is 0% APR, keep your cash in investments.  Once the 0% runs out, pull out the cash and pay the debt. 5.  My family owns several rental properties.  I need help allocating an extra $2000 a month.  Invest, put if toward a mortgage on one of the properties, a down payment on the next property, or safely invest in bonds?  We suggest investing in bonds and then using that money for the next down payment. Thanks for the questions guys, keep them coming. Show Notes Unita Brewing Monkshine:  A Belgian blonde ale. Ommegang Hop House:  A Belgian style pale ale. Betterment:  Start investing today. LMM Tool Box:  Everything you need to manage your money like a bad ass. Learn more about your ad choices. Visit megaphone.fm/adchoices

We check in with Andrew’s Lending Club strategy to find out if he’s making any money and if it might be a good investment for the rest of us. Lending Club is a peer-to-peer lending company.  If you need a loan, rather than going through a bank, you make a pitch and a pool of hundreds of people will lend you the money.  Kind of like crowdsourcing for a loan.  The interest rate you’re charged will be lower than what most banks would offer. And the return for the lenders can be high. On Lending Club, your interest rate will range depending on the letter grade you are assigned which denotes how risky you are.  If you apply and are honest on your application, you are almost certain to get a loan.  For the lender, you can allow Lending Club to loan out your money based on your set criteria or you can hand pick the loans you want to make.  If you hand pick, you will be privy to a lot of information about the borrower, job, where they live, if they rent or own a home, etc. Andrew has $2700 invested and to date his returns are 18.5%!  He hand picks his borrowers and spends a lot of time choosing them.  He considers it his high risk, high return investment.  He mostly invests in small business loans and refinancing.  In order to choose whom to lend to, he sorts it by people with the highest credit scores and highest interest rates. The key to succeeding in Lending Club is knowing how to sort, spending time researching the borrower and making as many investments as you can and being diversified so if one person defaults, you won’t feel it.  To this point, Andrew has not lost a cent through Lending Club. Lending Club can be a great way to make money, but remember, there are no tricks.  Andrew has done so well because he spends so much time analyzing the best people to borrow to.  If you decide to try it yourself, let us know how you do. Show Notes Smuttynose Bouncy House:  The all occasion ale. Lending Club:  A crowd sourcing site for peer-to-peer loans. LMM Tool Box:  Everything you need to get money savvy. Featured Image Photo Credit: “Black & White Handshake – Still from the film Colour Blind (2009)” by Pui Shan Chan on Wikipedia Learn more about your ad choices. Visit megaphone.fm/adchoices

When should you put your money into the market? When should you pull it out? Is there a best and worst time? Are you timing the market? If you are timing the market according to headlines, you’re doing it wrong. We’ll show you the correct way to time the market. Put simply, timing the market is trying to figure out the best times to put your money into and pull it out of the stock market.  We’ve all heard, “buy low, sell high,” but when do you know the optimal time to do that?  You don’t, and neither do the talking heads trying to convince you that they do. Being conservative doesn’t sell newspapers or television advertising.  Jim Kramer ranting like a lunatic sells those things.  But screaming lunatics are seldom right.  Do you take advice from the “dirty ass unemployed gentleman” (call back!) screaming about end times outside the subway station?  Well, if he had a TV show, he could be Jim Kramer. The stock market offers a wonderful gift of an average of 7% returns.  There will be highs and lows, but in the long term, the market goes up.  It’s the short term that the prognosticators are trying to predict and they are usually wrong. There are just too many variables, and no one can predict the future.  The prognosticators are just loud and get a lot of attention, and they make really bold predictions all the time.  Once in a while they get it right and suddenly they look like Nostradamus. The correct way to time the market is through dollar cost averaging, which we explained it Episode 99.  This just means slow dripping your investing money into the market rather than throwing it in all at once.  This is a good philosophy for new people who are nervous about investing.  But you will make more, over the long term, if you lump sum it. Market corrections happen often.  All kinds of things can effect this, domestic political events, world political events, natural disasters even.  This doesn’t affect us long-term; you shouldn’t be checking your investment accounts daily and freaking out over the fluctuations. A bear market is when all the investors are “hibernating” and not putting money into the market.  This is bad.  But a bear market is always followed by a bull market when investors come “charging” into the market. If the knowledge that these gurus have, which they will generously bestow upon you in their newsletter for the low low price of $19.99 was so great, why aren’t they richer than Warren Buffett?  Something to ponder. The takeaway is to get your money in the market.  There is no one tip that will make Wall Street hate you.  It’s not sexy, but it will get the job done. Show Notes Blue Coat Gin:  A local Philly gin. The Five Mistakes Every Investor Makes:  If you’re nervous about getting into the market, read this and learn to avoid mistakes. Betterment:  Set it and forget it. LMM Tool Box:  Everything you need to get good with your money in one place. Learn more about your ad choices. Visit megaphone.fm/adchoices

Laurel Staples joins us to teach us how to forget the American dream and talk about her journey becoming an entrepreneur. Start living our own dreams on our own terms. In 2007 Laurel quit her job as a mechanical engineer to launch her popular blog, Go Fire Yourself.  In January she will publish her book about how to quit your day job and run your own business.  She is also a business coach and a photographer. Like many of us, Laurel followed the prescribed path, leave high school, go to college, get a job.  She worked for Lex Mark designing laser printers.  And she hated it.  She knew she would hate it buy hey, that’s what you do in America.  Fork out a fortune for college and slave away in a job you hate. She has always been interested in things like health and the environment and planned to open an eco-friendly clothing store. After spending about a year planning it, she quit her job and opened the store in December 2007. Unfortunately around the same time the economy crashed. After all the blood, sweat and tears, Laurel soon found herself in the same 9-5 grind she had been trying to leave. She closed the shop and started working as first a health coach and then a business coach.  That change is what finally put Laurel where she wanted to be. When coaching clients Laurel emphasized planning and doing things the right way.  But there comes a point when you just have to make the leap, otherwise you’ll be stuck forever.  There is no set amount of money you should have before quitting your job. Laurel has seen people make it work with very little saved and people fail with thousands saved.  In fact, the people with less may succeed more often because they don’t have the option of failing.  Don’t have a Plan B because if you do, you won’t work as hard on Plan A. It’s a scary thing but Laurel advises us to trust our instincts and to remember, you don’t have to make “forever decisions.”  She didn’t like the retail world so she moved on to something different.  Working with a coach or mentor can help keep you on track or show you new ways of doing things. It is important to get your side business set up while still working.  There is a learning curve to being and entrepreneur and it’s easier to learn while a paycheck is still coming in.  This is especially important if you have a family. You need to discuss your decision with them. Perhaps you can cut back enough to survive on one salary while the business is getting off the ground.  If not, you will need to really ramp your side business up before jumping and show your partner that you are bringing some money in. When deciding to jump, put things into three columns, “must have,” “nice to have,” and “don’t need.”  This will show where you can trim expenses before money starts coming in.  Try want Andres is going to do, before you decide anything, try a thirty day challenge to live as minimally as possible.  Chances are, it won’t be as hard as you imagine.  When you make it through the month, you’ll see what life will be like until your venture starts succeeding. We all hear and read about people who quit a job they hated and created their own life and wonder what they have that we don’t.  The biggest difference between them and us, is that they took the leap. Show Notes Smuttynose Bouncy House IPA:  an all occasion American ale. Martini:  made with Blue Coat gin and vermouth. Go Fire Yourself:  Laurel’s blog dedicated to teaching small business owners to quit there day jobs and start living life on their terms.   Learn more about your ad choices. Visit megaphone.fm/adchoices

Do you sometimes get into a slump, just a malaise that you can’t really pinpoint a reason for?  It happens to us all.  Together we’ll stay motivated! Sustained motivation can be tough, whether it’s motivation to stick to a budget, an eating plan, or an exercise routine.  There are ways to create a positive feed back loop that will help keep you motivated. Get back into your routine.  If you are a largely healthy person and you slip on the food and exercise, you will start to feel pretty crappy, you might even feel depressed.  Eating and exercising well are good for your physical and mental health.  Once you get back to normal, the feelings should clear up. Getting bad feedback can sap motivation, whether it’s bad I-tunes reviews :( or the Dow is down, it can make you feel helpless.  But those things are not in your control.  Don’t obsess over things you can do nothing about. Make a list of everything you need to do that day, even if it’s  really small things.  As you do them, check them off.  Even if you can’t finish everything, looking back at the list shows just how much you were able to do. Read something that you find inspirational for a few minutes in the morning and before bed.  Listen to a podcast that is geared toward the goals you want to reach.  I listen to health based pods when I run and it motivates me because the pod reinforces what I’m doing. Try a few things out, what works for one might now work for everyone.  Let us know in the comments how you get out of a rut. Here are a few more tips on how to stay motivated. Show Notes Daily Rituals:  The habits of creative people. Nerdist:  The podcast Matt uses to get motivated. LMM Tool Box:  All the things that will help you to succeed with your financial goals.   Learn more about your ad choices. Visit megaphone.fm/adchoices

Are you broke? Can you pinpoint why?  We’re going to give you twenty one reasons for your brokeness.  Listen hard and shape up! 1.  You think “budget’ is a bad word.  A budget doesn’t have to be a complicated spread sheet, just using Mint is a start. 2.  You try to keep up with the Jones’s.  All that stuff that you envy may be built of a house of cards made of credit card debt.  The feeling of having no debt is a better feeling than having a boat. 3.  You can’t say “no.”  You don’t have to accept every invitation that comes your way.  If your finances would be better served by saying no sometimes, that should decide it for you. 4.  You think the government will fix your problems.  Lol!  Whose government, ours?  Jeez, have you not be paying attention?  The cavalry is not coming.  They’re too busy over in the Middle East bombing stuff to give a shit about you. 5.  Finding someone to blame is more important than finding a solution.  This is an insidious practice and it will poison all aspects of your life.  Stop this immediately. 6.  You love money too much.  This was kind of unclear.  We think it means, you love the jolt you get from spending money. 7.  You think all rich people are evil.  A lot of them are but there are some good ones out there, Warren Buffett and Bill Gates have given billions of dollars to worthy causes.  But for every one of them there are ten Koch brothers running around hatching diabolical plans so I see why you think this. 8.  Holidays revolve around gifts.  I like presents so I’m guilty of this.  We all know it’s really about family etc etc, but come on, gifts! 9.  You quit learning.  You dear listener, have not because you’re reading and listening to LMM!  You can skip to the next one. 10.  You have bad habits.  We all do, some are more expensive than others.  You know what your’s are and you know you should stop.  We aren’t going to belabor the point. 11.  You impulse buy.  You can fix this with the thirty day list.  If what you want costs over X amount of dollars, you have to wait thirty days.  If you still want it, you can have it.  Usually what happens is that you forget or decide you can do without it. 12.  You pay the minimum payments on your debts.  Want to never pay off your credit cards?  This is how you do that. 13.  You play the lottery.  Guys, we went through this in Episode 130.  Come on! 14.  You have no goals.  You need to know what you’re working for and a plan to get there.  Saying, “I want one million dollars!” is not a goal. 15.  You hang out with the wrong crowd.  This can mean negative people, people who don’t share your goals, people who pressure you to spend.  Bad influences in other words. 16.  You’re lazy.  The occasional weekend spent on the couch watching a Nexflix marathon is one thing, but if this is how you spend every weekend, you are probably lazy in other areas of your life too and it’s hurting you. 17.  You don’t value yourself enough.  You don’t ask for a raise, you let people low bid you for jobs.  You’re better than that.  Demand what you’re worth. 18.  You don’t invest or pay yourself first.  Investing is how the rich get that way quickly.  If you don’t pay yourself first, you won’t have anything to invest. 19.  Your house is a mess.  Clutter and disorder are distracting and a sign that you are disordered in other areas of your life, not least of which are finances. 20. Learn more about your ad choices. Visit megaphone.fm/adchoices

Andrew has  $12,000 of debt!  And yes, I did mean Andrew and not Matt.  Has he forsaken his Listen Money Matters principles?  Find out the shocking details. It’s not as scandalous as it sounds. Half of this is on a zero APR Home Depot credit card and those were expenses to remodel the kitchen.  The other half is a series of things that all hit at once, conference tickets, a vacation, mortgage tax.  Life got in the way and he did end up with finance charges. This episode is one of the reasons I was a fan of LMM long before I started working here.  Andrew owns up to his mistake and talks about it so he can help other people avoid the same.  Because if it happens to someone like him, it can happen to any of us, no matter how together our shit. This is how Andrew plans to redeem himself, and as penance, he’s going to document it in an article for us all to judge, (getting a little Dave Ramsey up in here.) The first thing he did was to set up an account with our friends at Ready for Zero to make payments to kill the debt fast.  He’s going to automate the payments and use the stack method.   The next step is to take out a loan from Lending Club and refinance for less than 10% which will be less than half of the rate of the credit cards. Matt asks a good question, why not just pull money from investments to pay the debt? A few reasons, firstly, Andrew isn’t in dire straights.  This is a temporary set back.  The other reason is altruistic, for the love of his listeners, he’s going to take the hit because he doesn’t want to disrupt the Betterment Experiment. This is a learning experience for us all, Andrew included.  He wants to show that one mistake doesn’t have to completely derail your personal financial plans and to show how using Ready for Zero and the stack method work. This can happen to anyone and Andrew is angry with himself like anyone would be.  But he has a plan to right the ship.  If it can happen to him, it can happen to anyone.  But by seeing him fix it, we see how we can fix our own situations. Feel free to use the comments to berate Andrew or to cheer him on! Show Notes Art of Flight:  A cool snow boarding video. Betterment:  Start today so when disaster hits, you can weather it. Learn more about your ad choices. Visit megaphone.fm/adchoices

Are you still getting and paying bills by snail mail?  Grab a whip and a chair and we’ll teach you how to tame them.  Also learn about duck genitals! Do you open your mail box to a flood of bills?  I hate that, not so much because I mind bills but because it’s more paper to keep track of and they cram so much crap in the envelopes. Before I started paying bills on-line I would send all the extra paper they sent me back to them with the check, ha! There is no reason you have to be bothered with all those pieces of paper.  Most bills now allow you to opt out of getting a paper statement and will e-mail you a digital one.  You can pay these on-line.  It’s so much easier to keep track of digital “paper” than actual paper.  You probably don’t even need to make a folder for it, you can just log into your account and look at the back statements if you need to. You can automate some payments too so you don’t have to do anything.  Just set up auto pay and your bank will send the payment.  You sometimes can’t do this with variable bills but for something like rent that doesn’t change often, you can automate it. If you can pay a bill on a credit card, do it.  You will earn whatever reward your card offers, the credit card company will fight on your behalf if you dispute a charge, and it gives you fewer bills to pay.  To make it even easier, call up your credit card companies and ask them all to change your billing date to the same day.  That way when you sit down to pay it, you can do it all at once. At LMM we always advocate simplifying your financial life.  Set up a system to automate your bill paying and spend the time saved doing something more fun than paying bills. Show Notes Stranger Pale Ale Left Hand Brewing:  A pale ale with citrus, hop notes. Betterment:  Start investing today. Mint:  Set up your budget. Learn more about your ad choices. Visit megaphone.fm/adchoices

The start of a new series!  We teach you about finance, but we want to teach you some economics too so you can apply what you learn to decisions you make. We first met David Stein on our Better Know a Millionaire series.  You loved him so much we brought him back! He joins us today answer the question what is sunk cost. Do you know what a sunk cost is? Even if you don’t, you’ve probably fallen victim to sunk cost fallacy at some point. Today we’ll explain what sunk costs are so you can avoid them. Abandon A Sinking Ship A sunk cost is a past cost that you can’t recover. The sunk cost fallacy is convincing you that you can’t give up because of all the time and money you’ve already spent. Here’s an example; you’ve spent $10,000 repairing your car over three years. That $10,000 is the sunk cost. Then the engine blows. What do you do? If you replace the engine, that’s, even more, money spent on a car that is unreliable and needs to be replaced. Good money after bad. But if you junk the car, you’ve wasted thousands of dollars. That’s the sunk cost fallacy. What should you do? There are two answers; one is the correct one. What kind of answer you get depends on the type of economist you ask. Old School Economists Traditional economists theorize in a bubble. They believe that people only allow future costs, not past ones, to affect decisions. To say nothing of experience, emotion, or psychology. A traditional economist uses hard numbers to create the ideal model of what a human should consider and decide when making an economic decision. They expect that human beings will always act rationally. Ha! I don’t know what kind of human being these economists are meeting, but I’ve never met a similar one. If you ask this kind of economist what you should do with the car, they’ll tell you to get rid of it. You lost the money; it’s over, and you have to focus on the future. The lost money should not influence your decision. The economist would tell you to sell the car and buy a new one. Your Caveman Brain But human beings are not rational, and we don’t make decisions in a vacuum. We also have something known as loss aversion. Loss aversion means that people would much rather avoid a loss than acquiring a gain. Imagine if your boss said you were going to get a $500 a week raise. You would be psyched. Now imagine that your boss said you had to take a $250 a week pay cut. People are typically more upset at the thought of that pay cut than they are excited about the pay raise, even though the amount of the cut is smaller than the amount of the raise. Our lizard brain is not inclined to rationally evaluate sunk costs. Many people are likely to think, “I’ve put $10,000 into this car. If I walk away, I’ve wasted that money.” If you were operating in a vacuum, you would not spend any more money on this car and buy another. The money is gone and should not factor into what you do next. Behavioral Economists Behavioral economists interject human emotion into their study of economics. They study the effects of psychology, social, and emotional factors that on economic decisions, why people make seemingly irrational decisions and why their behavior doesn’t follow the predictions made by traditional economists. They realize that we do cry over spilled milk, and it influences our decision making. They understand why we would have a hard time walking away from that car. It’s hard to make a decision without thinking of the past and being influenced by it. You Can’t Have Your Cake And Eat it Too Some people confuse sunk costs with opportunity costs, but they aren’t the same. An opportunity cost is the cost incurred when you choose one thing over another. Learn more about your ad choices. Visit megaphone.fm/adchoices

How do you define success?  For many it’s making a certain amount of money, driving a certain car, living in a big house.  But that is changing. The actual definition of success is “the accomplishment of an aim or purpose.”  That gives us a little more leeway than defining it solely based on making a lot of money. If your aim was to get to work on time today and you did, you’re successful!  Success can be measured in small things too, not just a big bank balance or fancy vacations. For some of us, success could be defined as freedom.  We talked about this is in Episode 34.  Matt defines success this way, he wakes up when he wants, starts work when he wants, takes a vacation when he wants.  Those of us doing the 9-5 office grind can’t say the same. Happiness is a good indicator of success.  And as a study showed, the sweet spot of happiness is earning between $50-75,000 a year.  Those making more did not show increased rates of happiness.  So as the cliche goes, money doesn’t buy happiness. For millennials, the definition has already changed.  Much to the chagrin of marketers, real estate agents, and economists, they don’t care about things like home and car ownership the way their parents and grandparents did.  They care less about society’s expectations and more about happiness, building community and creating sustainability.  Not exactly music to the ears of the corporate overlords. The most important thing to remember about success is to not let anyone else define it for you.  Success is not judged by those looking in from the outside but by what makes you happy. Challenge to you all.  In one paragraph, tell us how you define success and e-mail it to [email protected].  We won’t use your last name. Show Notes Clown Shoes Clementine Beer:  A Belgian style white ale. Back in Black IPA:  An American IPA with rich, dark malts. Betterment:  Be successful at investing. LMM Toolbox:  Check out some of our recommendations! Learn more about your ad choices. Visit megaphone.fm/adchoices

Do YOU need a life insurance policy?  Liran Hirschkorn from Best Life Quote will give us the criteria to answer that question. There are two reasons you should have life insurance.  Personal reasons and professional reasons.  If you have family who depend on you for income, you need it.  If you own a business, you need it.  But there must be an “insurable interest” on the insured.  So sorry, but you can’t take out a policy on the neighborhood junkie hoping to cash in when they cash out. If you’re a single person and you don’t have any dependents, you don’t really need a policy.  But if you are pretty young and healthy and plan to have a family eventually, you can lock in a low rate by buying now. Life insurance is meant to replace future income.  So if you’re twenty five and making $100,000 a year, you would want a policy worth a couple of million dollars.  This allows your family to continue paying the mortgage, day to day expenses, college fees, all the things the deceased would have paid for. If you’re young, you can buy a cheap term policy. By the time you reach fifty five or sixty, you should have built up some assets.  When the policy expires the rates will increase but if you’re healthy you can renew the policy and you’ll need less coverage than you originally bought.  If you’re in poor health, it’s cheaper to convert the policy a few years before it expires to a permanent policy. Whole life insurance is much more expensive then term.  If you buy term, you should use the difference to invest and you will come out ahead.  A whole life policy is appropriate for people who have a lot of assets and whose family would be responsible for a lot of estate taxes.   Whole life can also provide some yearly income.  After about ten years, it breaks even so the money put in is equal to the value of the policy.  After twenty or thirty years, you can arrange for a yearly distribution and withdraw money.  The return isn’t huge, about 4-5%.  It should be considered protection and not a large source of income. Liran says that for 95% of us, an inexpensive twenty or thirty year term policy is sufficient. If you are the bread winner for your family, life insurance is a good investment. Show Notes Best Life Quote:  Compare quotes on life insurance. Betterment:  Start investing today. Learn more about your ad choices. Visit megaphone.fm/adchoices

Student loans are expensive but they aren’t the only thing that costs money when you go to college.  Learn how to save money while in school. Thomas Frank of College Info Geek and Martin Boehme of Powlygot will teach us how to save money while still attending college. Textbooks are one of the biggest rackets going.  Thomas has a flow chart on Pinterest that shows you the cheapest way to get access to the information you need without walking into the overpriced campus bookstore and being robbed blind. If you have the option and the patience to live at home while attending college that will be the cheapest option.  But part of the college experience is moving out.  Look into joining a fraternity or sorority for cheap housing. Becoming a resident adviser usually means free room and board.   Meal plans can be crazy expensive.  If you can make it on two meals a day you’ll save a ton.  If you live off campus and have a kitchen, cooking at home rather than going out is much cheaper and healthier. A lot of college towns have great public transit and sometimes it’s free for students to use.  Getting a bike will help you get around more quickly and cheaply too.  And it’s good exercise. When choosing a college, it’s cheaper to go in state.  But some states have reciprocity agreements.  You will pay in state tuition or a rate reduced from the regular out of state tuition fees. Use your student discount!  If you have a college ID, a lot of businesses or places like museums offer discounts.  Student Rate is an aggregater  for businesses offering discounts.  If you’re unsure, it never hurts to ask.  You can get access to a lot of free stuff too.  You can use the fitness center and some health services are free or low cost.  Some campuses offer free tax preparation. Graduating early is the best way to save money but it does require cutting through a lot of red tape.  Not only will you save on regular college expenses, you’ll start working and earning full time money sooner. College is a business decision.  Don’t let parents, teachers, or advisers pressure you into a decision you don’t feel ready to make.  College isn’t going anywhere if you take a gap year to travel or work. Show Notes Allagash Beer:  Belgian style beers. Jack Daniel’s Watermelon Punch: A summertime malt beverage. Curious Traveler Shandy:  A citrus accented beer. College Info Geek: Thomas Frank’s site devoted to getting the most from your college experience. College Info Geek:  Don’t buy into the text book scam! Powlygot:  Martin Boehme’s site that will teach you a new language. Thug Notes:  Cliff Notes for thugs! Nerd Fitness:  Thomas’s guide to eating cheap and healthy in college. Learn more about your ad choices. Visit megaphone.fm/adchoices

Living in a city doesn’t mean there aren’t tasty things to eat, you just have to know where to look.  Steve Brill tells us what’s edible in the big city. Urban foraging means finding wild foods.  Things like berries, herbs, seeds, mushrooms, and roots.  These are things humans have been eating for thousands of years.  They are delicious and filled with anti-oxidants.   And they’re free for the foraging.  Steve has been teaching urban foraging in New York City and the larger New York area for thirty years. Surprisingly, urban parks have more foragables than less dense areas.  In the city they only have to worry about lawn mowers which don’t reach everywhere.  In other areas, they have to contend with deer. Mushrooms are the thing people are most leery of eating.  Some mushrooms can be eaten safely but you have to be able to identify the safe ones.  Mushrooms that grow on wood and look like shelves are generally safe to eat but some are not very tasty.  Always consult a guide before eating anything you forage. Some of the things available right now in the North East are blackberries, carnelian cherries, lamb’s quarter, sorrel, and chicken mushrooms.  I’ve seen the berries and cherries in the park this week and I wasn’t even really looking.  I ate some too! If you wanted to get started on your own, begin with easily identifiable things like mulberries, dandelions, and cat tails.  You can eat cat tails!  You can’t buy mulberries because they are so perishable so the only way to get them is to find your own. There is a park full of free food just waiting for you to harvest it.  Free and healthy, food doesn’t get much better than that. Show Notes Wildman Steve Brill:  Steve’s site devoted to urban foraging, includes his tour schedule. Wild Edibles App:  Steve’s app to help you identify things in the field. ReAnimator Coffee: A locally roasted Philly coffee. Learn more about your ad choices. Visit megaphone.fm/adchoices

Ever wonder what goes on behind the scenes at Listen, Money Matters?  Trust me.  It’s as glamorous as you probably imagine it to be!  No, it’s really not. Andrew started the LMM website while he was displaced by Hurricane Sandy. He wanted to share what he had learned about personal finance with others and one day make some money through sharing that knowledge.  Matt and Andrew met in late 2013 on Fizzle, an online business training service and community. The two of them started out by advising each other on their respective projects, LMM and Swim University. It was a marriage made in heaven because each brought to the other, something that had been lacking.  Andrew is the business guy and Matt is the creative guy. The two of them spent a lot of time on Skype.  Andrew’s wife overheard all this discussion and said they should start a podcast.  That’s how this podcast was born in November 2013! In the beginning there was a podcast a week.  But you demanded more!  So in May, LMM launched Money May, a podcast every single day.  It was so successful that we decided to continue with a new episode daily. How do we manage to get out that many episodes when both your hosts have full time jobs?  They discuss the topics on Tuesday evenings and batch record on Wednesdays.  Andrew’s wife Laura or I contact and schedule guests that we find or that you all suggest. On Thursdays Matt edits each episode and creates the images that you see at the top of the posts.  Matt sends them to me.  I listen and write the show notes, what you’re reading now, insert relevant links and the Tweetables,  schedule them to go live and there you go! What does the future hold for LMM?  We would like to be your ultimate personal finance resource.  If you need to know it, we want you to be able to find it on the site or in the podcast. If you feel intimidated or left out of the conversation on other personal finance sites, podcasts, or books, we want you to find a home here. A lot of that stuff is geared to a much older, already pretty savvy audience and we want to fill the gap for younger people or people just starting their personal finance journey no matter what their age. How do you make money?  Well, we don’t really yet.  How we don’t want to make money is from you.  People who need help with their finances shouldn’t be put in a position to pay for that help.  We feel that help should be made available to you at no cost.  We want affiliates and sponsors to fund what we do for our listeners. A good example of an affiliate is Amazon.  On Swim University, when Matt recommends a product with a link and a reader uses that link to buy that product, he gets a cut.  That cut does not cost the buyer anything, Amazon pays that cut. A sponsorship is a company that pays to advertise on an episode.  So we would ask a company like Mint or Ready for Zero to buy advertising on the podcast. The hope is to get enough of these sponsors to fund the show and allow Matt and Andrew to do LMM full time.  What we can promise is that we won’t take the easy money.  If you hear an ad for something, it’s something that we believe in and something that will help you. So that’s what really goes on behind the scenes and what we hope to do going forward.  Thank you to all of you.  We wouldn’t be able to do any of this without you. Show Notes Boulevard Brewing The Sixth Glass:  A dark ale. Learn more about your ad choices. Visit megaphone.fm/adchoices

The job market is still pretty bad and wages are stagnant.  It might be time to create your own opportunity.  We’ll discuss ways to do just that. If you can’t find a job, just start your own business!  Well, it’s not as easy as that.  And that isn’t an option for everyone.  Creating an opportunity is also about being able to see an opportunity and being ready to take advantage of it. This podcast was created because Matt saw the website that Andrew started and reached out to him.  They talked and worked together and the podcast was born.  I got involved in a similar way.  I started out as a listener to the show.  They asked for topic ideas and I e-mailed with mine.  The three of us began a dialogue and within a few days, I was hired!  I didn’t send that e-mail with the intent of landing a job but, I was ready when the opportunity was made available to me. The opportunity might not always be apparent.  Practice saying “yes.”  Invited to a party you’d rather not attend?  Say yes.  Old college roommate in town and wants to get together?  Say yes.  The more people you meet, the more opportunities you will find.  Maybe the old roommate is in town interviewing for a job at a company you’d like to work for.  If they get the job, now you have a connection there.  You have to put yourself out there to make things happen. Opportunity can be found in your current job.  Offer to take on additional responsibilities.  Offer to do the things everyone else hates to do.  You may not get a promotion or a raise immediately, but being willing to do more gets you noticed and can pay off down the line. Just ask!  No one is going to offer you anything if they think you’ll work for less.  We gave some more specifics on getting a raise in Episode 52. You might be amazed at the results if you ask for a raise or a promotion. Take the initiative, put yourself out there, step out of your comfort zone and see what happens.  A lot can happen in a life, especially nothing. Show Notes Boulevard Brewing The Sixth Glass:  A strong, dark ale. Things a Little Bird Told Me:  Biz Stone, co-founder of Twitter, on the power of creativity. Learn more about your ad choices. Visit megaphone.fm/adchoices

We answer your questions about saving for a home, credit cards, multiple checking accounts, teacher’s pay, and college expenses. 1.  Should I use a Roth IRA account to save for a home down payment?  No, a Roth IRA is a long term investment geared toward retirement.  You can withdraw the principle without penalty but cannot access any gains until you reach fifty nine and a half.  Just opening a standard Betterment account will be more useful to earn money towards a down palyment. 2.  Is it bad to open a credit card, get the promotion on offer, pay if off and then close it right away?  It’s not bad to open the account and can be beneficial.  The more available credit you have, the higher your score.  The more creditors you have, the higher the score.  More people have judged you a good risk.  Opening a new account does lower the average age of accounts which is one of the components of a credit score.  Closing the account is a bad thing though.  It lowers your available credit.  All of this advice with the caveat that all cards should be paid in full each month. 3.  I have four checking accounts, all with different purposes.  None of them have fees.  Should I have less?  Having multiple accounts makes things more complicated.  If you were to need a large sum of money for something, you may have enough but you have to transfer money around so that it can be covered from a single account. 4.  I’m a teacher with the option to receive my salary over the nine months I work or over the entire year.  I currently spread it out over the year, is this the right decision?  This depends on your ability to do the right thing.  If you’ll take the extra money from getting paid for nine months and invest it, then that’s the right thing.  More time and money to grow the investment.  But if you tell yourself you’ll do it and don’t follow up, then you’re going to be mowing lawns over the summer. 5.  I have two years of high school before college.  What can I do now to cut down on college expenses?  Choosing whether or not to got to college is a business decision.  Will going cost you more money than you can ever pay back?  A state school will be more affordable than a private one.  Going to a community college for the first two years and then moving on to get your bachelor’s is also much less expensive.  Get a part time job now and while in college and use the money for expenses, not dinners out. Apply for scholarships before and during school.  See if you can test out of some classes to save time and money. We love to answer listener questions.  Keep sending them in! Show Notes Boulevard Brewing The Sixth Glass:  A dark, full bodied ale. Betterment:  An investing tool to help grow your money for anything from retirement to buying a home. College Info Geek: The real cost of student loans. College Info Geek:  Saving money on text books. College Info Geek:  Tips I learned my sophomore year. LMM Episode 32:  Our interview with Adam Carroll discussing the college loan debt crisis. LMM Episode 58:  Money mindfulness. Learn more about your ad choices. Visit megaphone.fm/adchoices

  With tuition costs rising, there is a new  debate over whether a degree is worth the expense.  We’ll discuss the pros and cons in a roundtable discussion. Thomas Frank of College Info Geek and Martin Boehme from Powlyglot join us to discuss who should go to college, how to skip pre-reqs, and why college vs not college is not the only question we should be asking. Thomas has been out of college for a little over a year.  While he believes the actual classes were not that helpful, college does give you a unique opportunity to make a lot of contacts that you can use for the rest of your life.  Contacts that can help you find things like a job, or a place to live in a new city.  While contacts can be made outside of college, you’ll likely never have access to so wide a variety again. Martin was  able to save some time and money by skipping  some prerequisites.  Speak to the professor and inquire if you can test out. A lot of these debates ignore that there are options that are not so black and white as going to college or not.  You don’t have to go to the most expensive or prestigious college that will have you.  According to CNN, nearly 30% of people with associate’s degrees are out earning those with bachelor’s degrees.  The associate’s can also be tens of thousands of dollars less expensive than a bachelor’s. College should not be the default immediately after high school.  There are many options out there so spend some time researching them before you take the plunge. Show Notes College Info Geek:  Thomas Frank’s site to help you get the most from your college experience. Powlyglot:  Martin Boehme’s website that will teach you a new language. Uncollege.org: An alternative to college. Learn more about your ad choices. Visit megaphone.fm/adchoices

Think you can make money flipping houses? We talked to Justin Williams of House Flipping HQ about the art of making money remodeling houses. If you’re a fan of HGTV, flipping houses looks like a fast way to make some money.  But as is true of all reality based shows, things aren’t what they seem.  Justin flips houses off camera and lets us in on how it really works. Justin started as a real estate wholesaler.  He found owners who wanted to sell quickly and not be bothered with things like repairs or evicting a non-paying tenant.  He put the homes under contract and then sold the contract to to another buyer who was responsible for the repairs or evicting the tenant.  Justin then collected a fee from the actual buyer. Justin is now the final buyer in the equation and flips houses like a business.  This isn’t a little weekend DIY hobby.  He looks to make a 40-45% return on each house, purchased with money borrowed at 12-18%.  This makes his net return between 28-30% per house.  His goal is to flip each house in three to four months. Justin doesn’t use a bank to purchase the homes.  He uses private investors and hard money investors.  The investors are not taking a great deal of risk because the house itself is collateral on the investment. You can make money in this game but for most people who become successful, it takes six months to a year.  The hardest and most important aspect of flipping is knowing what data to analyze and how to analyze it.  How much the property is worth, the closing and holding costs, how much of a return you want on the investment. If you decide flipping is something you’re interested in, be careful out there.  There are a lot of scam artists charging thousands of dollars to teach you this business.  Check out Justin’s site and podcast before jumping in. Show Notes House Flipping HQ:  Justin’s website and podcast that will teach you the business of house flipping. Betterment:  Start investing today.   Learn more about your ad choices. Visit megaphone.fm/adchoices

 Many of the reasons people are fearful of investing are myths.  Let us help you separate fact from fiction so you can feel confident investing. Investing Myths Don’t believe everything you hear. 1. It’s Overly Risky Too many people are not investing because they think it’s too risky. They’ll hand their money over to this thing they don’t understand and poof, X bad thing (they’re not really sure what a bad thing is, they’re just sure there are lots of them) happens and their money is wiped out. So instead, they leave it where it’s nice and safe, in a checking or savings account or stuffed under the proverbial mattress. What they don’t realize is that those things are even riskier than investing. When money is in a low yield account where it’s making less than 1% interest or under the mattress where it’s making no interest, inflation is eroding the value of that money slowly but surely. If your house burns down, the money under the mattress is ashes. Yes there are risks to investing but an investor can choose how much risk to take and there are ways to minimize risk There are places to invest money like dividend stocks or bonds that allow money to grow with limited risk. You can further reduce risk by having a properly diversified portfolio meaning your investments are spread out between different market sectors and different asset classes so if one area is doing poorly, you have other areas doing well to make up for it. And while the stock market can quickly plunge, historically it has always rebounded. In the nearly 100 years since the Great Depression, there have been fewer than two dozen losing years for the stock market. That means the best way to keep your investments safe is to be in it for the long haul, set it and forget it which is what LMM has long advocated and what investing in index funds accomplishes. You don’t put money in and pull it out based on screaming pundits or scary headlines, you don’t try to time the market. You put your money in and leave it alone. Stocks become less risky the longer you hold them. 2. Investing is Only for Rich People In the old days you needed a stock broker if you wanted to invest in the stock market and often they wouldn’t even take your call unless you had thousands of dollars you were ready to invest. But now that companies like Betterment are on the scene, investing has become democratized. Many investment platforms have no minimum to get started so if you have five bucks (or less) you can invest. You also need almost no knowledge of how the market works or even what it is to get started. You don’t have to be a rich person who pays another rich person to invest for you. The fees for companies like Betterment are very low and it’s passive investing. You aren’t paying a fund manager and there is no reason to as they almost never beat the market. If your employer offers a 401k you can get started there. It’s easy to start investing this way because almost everything is decided and done for you and the money is taken out of your check before you even see it; seamless investing. 3. You Need a Lot of Money to Make a Lot of Money I think this is the one that holds a lot of people back even more so than fear of risk or lack of knowledge about investing. People think, Learn more about your ad choices. Visit megaphone.fm/adchoices

Are you a materialist or a minimalist?  Let us help you find a happy middle ground so you can have nice things and still afford nice things. A materialist is defined as “someone who puts an unhealthy priority on things.”  A minimalist prioritizes living with less to achieve freedom.  Freedom can be defined in lots of ways, financial freedom, freedom from “stuff,” even freedom from a place. We all like stuff, shiny stuff, new stuff, pretty stuff, cool stuff.  Not all of us can see the connection between our love of stuff and our lack of money.  We all know people with closets full of new clothes or all the newest gadgets who constantly moan that they don’t have any money. And we know people who want to move across the country or pull up stakes and start travelling.  But they can’t because they have so much stuff.  How will they move all that stuff, where can they store all that stuff?  Stuff weighs you down, psychologically and geographically. If we can stop buying and stop holding onto all that stuff, what benefits are there to be had?  You’ll spend less, duh.  You’ll have less stuff to worry about cleaning, moving, finding a place for.  It’s better for the environment.  How much packaging is in the Amazon box that you have delivered to you a few times a month?  It doesn’t evaporate you know.  Getting rid of stuff can help you cut ties with the past.  Don’t keep a collection of t-shirts you “borrowed” from ex-boyfriends.  If he was worth remembering, you’d still be together! A study was done to find the dollar amount “sweet spot.”  How much money it took to provide day to day happiness and emotional well being.  Any guesses?  It was $75,000 a year.  More than that amount did not provide greater happiness. We don’t advocate living in a tent out of a back pack and dumpster diving for your food but we can all be happy with less and in fact, happier with less. Show Notes Boulevard The Sixth Glass:  A dark Belgian ale. The Obstacle is the Way:  An easy to understand philosophy book Matt recommends. Maxed Out:  A documentary about debt in America. The Happy Movie:  A documentary that finds the happiest people in the world. The Queen of Versailles:  If you want to see vomit inducing materialism, watch this. I’m Fine Thanks:  A documentary about people who decided to change their lives to find more happiness. Stumbling on Happiness:  What you think makes you happy, might not in reality. Books on Happiness:  A list of books on happiness from Brain Pickings. Learn more about your ad choices. Visit megaphone.fm/adchoices

Ever heard the lottery referred to as “the fool’s tax?”  Learn why the lottery is for idiots and why the odds are always in the house’s favor in a casino. The odds of winning the Powerball lottery are more than one in one hundred and seventy five million.  That’s a lot of zeros.  If lightening struck (you actually have much better odds of this happening, one in 700,000) and you did win, one in three lotto winners are in serious financial trouble or bankrupt within five years.  In fact, the odds of you being struck by lightening FIVE THOUSAND TIMES is higher than the odds of you winning the lottery once. One of the most annoying things about working in an office is being pressured to join the lottery pool.  That and to sponsor “charity walks.”  The argument that if you buy more tickets, as you would in a pool, you’re much more likely to win is crap too.  Your odds don’t go up much until you start buying thousands of tickets.  Then your co-workers tell you it’s just good fun and you’re missing out.  Take Matt’s advice and offer them the same five dollars to do a little dance for you.  That sounds more fun than getting nothing back for the lottery five bucks. If you spend twenty dollars a month on lotto from the ages of 25-65, you’ll likely earn nothing.  If you put the same amount into a mutual fund, you’ll earn $93,000 after taxes.  Want to waste your money and get nominated for a Darwin Award?  Go play with fireworks.  You’re 146 times more likely to die in a fireworks related accident than win the lottery.  No one ever said, “Here, hold my beer,” before buying a lottery ticket. The next time your redneck cousin is bitching about having to pay taxes while holding up the line at the gas station while he scratches off lottery tickets, remind him of this.  A very small portion of collected revenue is actually used for payouts.  Most of it goes back to the government.  Hence the term, “idiot’s tax.” Gambling doesn’t get a pass either.  If you spend $100 an hour playing roulette, you lose on average, $5.26 per hour.  Gambling brings in more revenue than movies, sporting events, theme parks, cruises, and recorded music combined.  The house always wins.  If you’re a really good black jack player, the house still has odds of .5% on you.  Like the slots?  The house does too.  They have the edge on you there to the tune of 35%. There are plenty of ways to grow your money but playing the lottery and hitting the casino are not among them. Going to Vegas or Atlantic City can be fun.  Gambling can be fun too but don’t go in expecting to walk away with some winnings.  If you have a handle on your finances, take a set amount of money and have a blast gambling that.  But you don’t want to be the sad case pawning your grandmother’s wedding ring in a last ditch effort to win back what you couldn’t afford it lose.  As for lotto pressuring co-workers, tell them to stay the hell away from you unless they have Girl Scout cookies. Show Notes Boulevard The Sixth Glass:  A dark Belgian ale. Business Insider:  Some stats about winning the lottery. Kiplingers:  Five better investments than the lottery. Betterment:  Take what you would have spent on lott... Learn more about your ad choices. Visit megaphone.fm/adchoices

Student loan refinancing can save you money but it’s a confusing process.  Today we get some guidance from Mike Cagney, co-founder of SoFi.com. SoFi started in 2011 by raising two million dollars from Stanford Graduate School of Business alums to loan to students.  One hundred students were loaned $20,000 each.  The idea being that the students would be more responsible with money borrowed from their own community and the lenders would have a vested interest in seeing students succeed from within that community. SoFi has evolved into a company that consolidates  and refinances loans.  They refinanced one hundred million dollars worth this June and save former students an average of $11,000 over the life of a loan.  SoFi also help graduates who are unemployed by freezing their loans and helping them to find new jobs and help former students to start their own businesses by freezing loans and helping to raise capital. SoFi can refinance loans with interest rates over 6% and can work with state, federal, and private loans.  A big benefit of consolidating is that rather than dealing with several servicers, you’re dealing with one.  If you have a job loss and need help, dealing with one servicer means things are much less likely to fall through the cracks.  You can lose some protections that you have with federal loans like loan forgiveness after public service but SoFi does offer unemployment protection.  State loans offer less protections more akin to private loans than federal. SoFi offers five, ten, and fifteen year terms.  If for instance you have six years left and opt for the five year term, your monthly payments will be higher but the interest rate will be lower. Student loans are so confusing but Mike gives us some information on how to make them less so.  First, before you borrow, understand the amount and why you’re borrowing.  Take a look at your major and choice of university and see what the earnings are for graduates.  If you take out $100,000 in loans for a field that pays $30,000, that’s not a good decision.  While in school take out federal loans so that you are afforded the protections they offer.  After graduating, consider consolidation so you are dealing with one entity rather than several.  After consolidation, you can consider refinancing to lower your interest rate. Mike’s final advice is that if you’re struggling, reach out to your servicer.  It’s in no one’s interest for the borrower to default. Show Notes SoFi.com:  SoFi has a great site that will help you decide if consolidation or refinancing are a smart choice for you. Betterment:  The easy way to start investing. Learn more about your ad choices. Visit megaphone.fm/adchoices

Just like produce, a lot of what you buy has a season.  If you know what’s “in season” you can save a lot of money.  We’ll find out when to buy what. Kitchen Appliances:  According to Money Crashers, September and October because that’s when new models come out.  Last year’s version will be reduced.  This point will be a recurring theme in the episode.  And it’s not like from year to year there are great innovations in refrigerators.  Getting last year’s model doesn’t mean you won’t have the new fridge that makes you toast or anything.  You aren’t missing much but overpaying. Automobiles:  From Auto Trader, the end of each year  and the end of every day.  Sales people are hustling to get that last sale in before the numbers come out so they’re more flexible.  Also late summer/early fall when the new models come out. Computers:  PC World suggests buying around the holidays and back to school time. Gaming Systems:  Since everyone wants these as holiday presents, lifehacker suggests January.  Your disappointed kid will hate you but you have more to add to his college fund! Airline Tickets:  There are a lot of theories about this, buy on Tuesdays, buy last minute, but CheapAir ran the numbers and found that buying fifty four days before the trip is optimal.  They monitored four million trips to cull this data! Concert or Event Tickets:  Thanks to lifehacker again, see movies during the day, for things like concerts or sporting events, the closer to the date the better to go on Craigslist to find people who really need to unload them. Televisions:  From Popular Mechanics, the usual suspects, holidays, January, but interestingly, March.  Know why?  Andrew and Matt hate sports but I’m a fan so  March Madness Baby!   July also because sales are typically slow. Furniture:  According to Go Simple Finance,  January and July.  New furniture is released in February and August.  No one knew that but LMM found out for you! Engagement Ring:  US News tells us when not to buy, between Thanksgiving and Valentine’s Day.  Unlike most of our other examples, rings are not cheaper when everyone is buying them. Gas:  According to Time Magazine, Wednesday morning.  Station owners price check each other between 8-10 am.  If competitors are increasing prices, owners will raise their own between 10-12.  Weird, but that’s Time’s take on it. House:  From Realtor.com, for more choices, April-July because that’s when a lot of homes are being listed.  If you want the lowest price, between Thanksgiving and the New Year.  No one wants to move in the winter so that makes sense. Learn more about your ad choices. Visit megaphone.fm/adchoices

    It’s time for listener questions.  We’ll discuss stock earnings, home renovations, side hustles, emergency funds, and money for freelancers.  1.  How does a company’s quarterly earnings report affect my stock?  Yes, but it’s not just about whether the company made or lost money.  The report also contains information about what is going on inside the company.  So just because the company made money doesn’t necessarily guarantee a positive report.  It’s more important to read the report and get a sense of what’s happening within the company than to just make decisions based strictly on numbers.  2.  How do you do home improvement and landscaping on a budget?  Plan and budget!  Before you go crazy at the plant store, how many will you  need, how much sun does your yard get?  Repurpose things, good for your wallet and the environment.  The most important thing is to do some of it yourself.  Potting plants isn’t something you need a professional for.  Re-wiring your home, you probably do.  See what you can borrow from friends or neighbors.  Don’t buy a tool that you’ll only use once.  And you can be proud of the work you did to make your home nicer.  3. Are podcasting and blogging actually good side hustles to make extra money?  They can be.  LMM’s makes some money through affiliate links on our blog.  So if you sign up for Zip Car through this link, we get a small cut of it. Making money via a podcast is possible too.  Marc Maron makes $14,000 per episode of his WTF podcast. Does LMM make money?  Not just yet.  We bring in some money but it doesn’t yet cover expenses like me, hosting the site, hosting the podcast, equipment. You can make money but it takes time.  Matt’s “day job” is Swim University.  He’s had the site for four years, has been working on it full time for two years and has made $40,000 so far this year, mainly through affiliate links.  The end goal for a podcast is to have companies sponsor you, to sell advertising on the podcast. If podcasting isn’t your thing, there are plenty of ways to make extra cash. 4.  A listener has recently had to put a $3300 air conditioner on her credit card.  Should she pay if off over time at 21% interest or use some cash in her Fidelity account to pay it off more quickly?  There are a few ways to do this.  Open a new credit card with limited time 0% interest and transfer the balance so you can pay it off over time without interest.  If the money in the Fidelity account is your emergency fund, no AC in Georgia constitutes and emergency.  If that would completely wipe out the emergency fund, look into Lending Tree to get a low interest rate loan. 5.  What advice do you have for a freelancer in a physical job that can’t be done forever, who’s income varies month to month and needs to kick investing into high gear?  Do what Matt calls the “freelance sprint.”  Take on as many jobs as possible in a short amount of time to earn a lot of money quickly.  The goal is to create a big cushion to see you through until the income is more steady.  One way would be to have someone film you doing your job and put it on Youtube as a tutorial.  A lot of people don’t know how to change the oil in their car or unclog their drain so there’s an audience out there and you make money from the ads on Youtube. Thanks for the questions everyone! Learn more about your ad choices. Visit megaphone.fm/adchoices

Betterment CEO Jon Stein gives us a  behind the scenes look at how the company operates and makes your money work for you.  Betterment is an automated way to invest your money based on your goals and time frame. Answer a few simple questions and Betterment will set up a diversified portfolio that is managed for you.  After studying economics and human behavior, Jon started his career consulting for banks.  He saw that they didn’t care about customers and their products were almost designed to help people fail.  He experimented with several brokerage companies and couldn’t find what he was looking for.  So like all good entrepreneurs, he decided to make what he couldn’t find elsewhere himself.  A company that made it easy to invest and served the client, not the bottom line.  That’s how Betterment was born.  A listener asked why Betterment is better than Vanguard given that Vanguard has better fees.  Betterment does some things that Vanguard does not.  Betterment invests in fractional shares, each time you deposit money into Betterment, your account is automatically rebalanced in order to lower taxes, and  Betterment does tax loss harvesting. We advocate keeping your emergency fund in an investment account.  In Betterment, short term money will be invested more conservatively.  If you leave an employer who provided a 401K, roll it over into a Betterment IRA.  Many times, once you leave an employer, you will be charged a higher fee for the management of the 401K.  It takes about seven days to do a roll over with Betterment, the industry average is thirty days. Jon sees Betterment moving into the same league as companies like Vanguard and Fidelity in the next ten years and managing over one trillion dollars.  And when that day comes, we’ll be able to say we knew him when. The Betterment Experiment Check out our experience using Betterment with our own money: Show Notes Betterment:  See for yourself what we discussed today.  Use this link and your first six month of investing are free. Boulevard Unfiltered Wheat Beer:  A lively, refreshing ale sent to LMM from listener Drew! Nudge:  Improving Decisions about Health, Wealth and Happiness: A new look at how we make decisions. The Winner’s Curse:  A look at the difference between how people should act economically and how the actually act. Thinking, Fast and Slow: The hidden things that influence the way we think and make decisons. Learn more about your ad choices. Visit megaphone.fm/adchoices

When it comes to storing your cash, you have three choices, under the mattress, a credit union, or a bank. Don’t do the first one. That leaves us with credit union vs. bank, which one is better for your money? If you’ve contemplated ditching your bank and joining a credit union, we’ll lay out the differences between the two so you can make the best decision for your money. Banks Suck Banks have almost always had bad press, and much of it they have earned. We all remember 2008 when they nearly collapsed the world economy or more recently, Wells Fargo underhanded little scheme that involved opening accounts without customer’s knowledge or permission. After all the recent bad press, it’s not surprising that people want an alternative to traditional banks. Credit unions provide that alternative. What is a Credit Union? A credit union is a non-profit money making cooperative where members can borrow from pooled deposits at lower interest rates. They exist to serve their members rather than maximize corporate profits. Credit unions range from small, volunteer-run organizations to quite large with thousands of members run by a professional board. Credit unions are started by corporations or organizations to serve their employees or members. Arkansas AM&N College Federal Credit Union is an example of a small credit union. It was started by and for the employees of the university in 1952 and serves fewer than 1,000 members made up of university employees, alumni, and their family members. The largest credit union in the U.S. is Navy Federal Credit Union with more than seven million members. It started in 1933 with just seven members! Members are made up of all Department of Defense and Coast Guard active duty, veterans, civilian and contractor employees and family members of all those groups. When you join a credit union, you become part owner just as you own part of a company when you buy its stock. Members vote to select the board of directors and for decisions that will affect the credit union. Each member has an equal vote without regard to how little or how much money he or she has in their account. Currently, about one-third of Americans belong to a credit union. But Do They Have Lollipops? Credit unions offer the same core products that banks offer; checking and savings accounts, home, auto, and personal loans, debit cards, online bill paying, paper checks, CDs, certified and cashier’s checks, money orders, and safety deposit boxes. How Credit Unions Differ From Banks Investors own banks and banks have a responsibility to make money for them.. That might be through legitimate means like loaning money and earning interest or illegitimate means like opening fraudulent accounts. It can also mean earning money by charging customers outrageous fees. That isn’t illegal, but something doesn’t have to be unlawful to be ethically questionable. Credit unions exist to serve their customers/owners. Looking after the bottom line for a credit union means operating in the best interests of their customers/owners. That means that credit unions often offer better interest rates both on checking and savings accounts and on loans than do traditional banks. Credit unions charge fewer Learn more about your ad choices. Visit megaphone.fm/adchoices

Moving is third on a list of  life stressors behind the death of a partner and divorce.  Learn how to save money during the process to help reduce the stress. 1.  Don’t pay for boxes.  There are lots of sources of free boxed, but Matt knows a tip to get extra sturdy boxes for free.  Ask at a hospital, lab, or pool store.  The reason is that all of those places are shipped chemicals so the boxes are thicker and more durable. 2.  Move less stuff.  We don’t recommend Andrew’s method of having all of your belongings swept away by a hurricane but there are ways to reduce how much you take to the new place.  We discussed several in Episode 96.  Sell some stuff to get some extra cash and that will save you money because there is less stuff to move.  Less to pack and unpack too so you can’t go wrong with this one. 3.  Screw bubble wrap.  Fun for the cat but expensive for moving and unnecessary.  Use clothes, towels, sheets, newspaper to wrap and cushion your breakables. 4.  Keep track of all your moving expenses.  Moving expenses can sometimes be deducted on your taxes.  Find out if you meet the criteria here. 5.  Pack your own stuff.  Now that you sold the stuff you don’t need, you don’t have enough to justify paying someone to pack it for you.  Order some pizzas, buy some beer and find out who your real friends are. 6.  Let the post office help you.  If you have a lot of books, the post office has special shipping rates for them that might be cheaper than moving them yourself. 7.  Use a pod.  If you don’t have a lot to move, you can use something like this.  It’s like a portable storage unit  the company drops off and picks up. 8.  Move at off times.  Move during the middle of the month, some companies have lower rates because the first and last of the month are busier for them.  Time of year can make a price different too.  Moving between October and May can be cheaper than warmer weather months. 9.  Get money for your move.  If your move is tied to your job, you may be able to get relocation expenses covered. 10.  Moving trucks.  If you are moving a long distance, make sure the company you rent the truck from allows you to drop it off at a different location from where you picked it up.  Make sure you use the smallest truck possible because larger ones are more expensive.  Booking in advance may get you a discount. 11.  Moving additional vehicles.  If you have something can be towed or hauled, check out the cheaper option. 12. Insurance.  A bit like trip insurance, do some research and decide if you can live without it.  If you’re moving across town, it’s less necessary than a cross country move. 13.  Do an inventory and figure out what moving accessories you need.  Things like dollies, ropes, blankets.  If they have to be rented, it can add up.  See what you have or can borrow to make do. If you know someone moving soon, share this with them and maybe you can consider that your contribution and won’t have to help with the actual move! Show Notes Unita Brewing Sum’r Ale:  A refreshing, summer golden ale. MSN Real Estate:  Where we found some of the tips. About.com:  More moving tips.   Learn more about your ad choices. Visit megaphone.fm/adchoices

We all want to be successful and college used to be a route to success. But with college costs so high, it’s out of reach for some so we’ll explore alternatives to college. The cost of college tuition has risen 1,120% since 1978. There is $1.3 trillion in outstanding student loan debt in the US. Even if you do go to college, a degree is no longer the almost guaranteed ticket to the upper middle class it once was. But not going to college, or not going via traditional routes, doesn’t mean you are destined for a life of low wage jobs and poverty. There are many paths to success and they don’t all require higher education. Invest Most of us are not going to get rich simply from our 9-5 jobs and even if we do, it’s still important to have at least one form of passive income, something that makes us money with very little effort on our part. The best form of passive income is investing and the most important way to make a lot of money through investing is to start early. The more time your money has to grow, the better and there is no substitute for time when it comes to investing. If at 18 years of age, you started with $1,000 and invested an additional $100 every week for 30 years at 7%, at the end of the 30 years, when you are 48, you would have more than half a million dollars, $539,643. You would have contributed just $156,000, the other $382,643 you made just from interest, from doing literally nothing. If you don’t start until you’re 28 but start with double the amount, $2,000 and invest double the amount, $200 a week at the same 7% for 20 years, at the end of the 20 years when you are 48, you would have $461,451. You contributed $208,000 and the other $251,451 you made just from interest. You can see what a difference time makes. We started with and contributed twice the amount but we still ended up with nearly $80,000 less because of the additional ten years our money had to grow in the first example. I’ll say it again, there is no substitute for time when it comes to investing.  Our favorite gateway drug to investing is Betterment. The fees are low, there is no minimum, and you don’t have to know anything about investing to get started. Rental property is another great form of passive income. You might not think it’s passive if you think you have to be a hand’s on landlord and you would be right. And if you’re a hand’s on landlord, you’re restricted to buying property in an area close enough to where you live to attend to the property which is limiting if their isn’t a lot of stock or the area is very expensive. But, when you partner with Roofstock, all of those problems are gone! They are a turnkey real estate investment property and do everything from find you a home to collecting the rent and taking care of repairs and maintenance. Not only do they do the work for you, but they greatly expand the areas where you can own property since they do the day to day stuff for you. We did a full review of Roofstock. If you can’t afford to buy a rental property, you can still invest in real estate. Fundrise is crowd funded real estate. It allows individuals to invest in commercial property through an eREIT. We did a full Learn more about your ad choices. Visit megaphone.fm/adchoices

What exactly are dividends and how do they work? When you invest in a company you get paid a portion of a company’s profits as a way to compensate you for your investment. These payments are called dividends and they are a form of passive income. What are Dividends? When you own stock in a company directly or through a fund you may receive dividends. A dividend is a distribution of a portion of a company’s profits. They are decided by the board of directors and can be issued as cash payments, as shares of stock or other property. It’s an opportunity for a company to reward shareholder loyalty. The amount you receive depends on how much stock you own and how much profit there was to divide. Why Buy Dividend Stocks? Investors, particularly retired investors, like the steady income that dividend stocks provide and also like the option of reinvesting dividends to buy more shares of stock. Not All Companies Offer Dividends Most companies don’t offer dividends, and if they do, they can cancel them if it’s a bad time to make a payout. Companies can increase dividends if times are good. Startups and some high-growth companies in certain sectors like tech and biotech usually don’t pay dividends because all of the profits are plowed back into the company so they can maintain higher than average expansion and growth. If a company wants to increase it value (which increases the share price) it may opt to reinvest earnings rather than pay out dividends. Some companies choose to use that money to fund new projects, buy new assets, buy back some of its shares or acquire another company. What Kind of Companies Pay Dividends? Bigger well-established companies are more likely to pay out dividends regularly. Companies in certain sectors including oil and gas, financial, healthcare and pharmaceuticals, historically have had some of the highest dividend yields. Why Pay Them? A bird in the hand is worth two in the bush. Investors are less sure that they’ll receive capital gains at a later date when earnings are reinvested as retained earnings than they are of receiving current dividend payments. In other words, better the sure thing now. There are tax reasons too. In some countries income derived from dividends is taxed at a lower rate than regular income. This is particularly an incentive for investors in high tax brackets. We’ll cover taxes below. If a company has a long track record of paying dividends, eliminating them or reducing the amount might be taken as a sign by investors that the company is in trouble. The reliable income that dividends can provide is appealing to many investors, so they’ll be more tempted to buy stock in a company that pays them. Paying dividends is also typically a sign that a company is healthy and that management expects future earnings. When Should You Buy? Should you buy before or after the dividend payment goes out? Bird in hand theory means you buy before the payment goes out while the stock is more expensive because you can expect a payment soon. Once the payment goes out, the stock will, in the short term, be worthless. For a bigger yield, buy after the payment has gone out. Cum Dividend And for your daily dose of the sophomoric, a share is said to be “cum dividend” when it is offered for sale with an entitlement to the next dividend payment attached. See also, “jizz dividend.” Don’t google that, Matt just made that up. When are Dividends Paid? If a company is going to pay dividends, shareholders are notified by a press release sent to the big stock quoting services. A record date is set. All investors who own stock as of that date will receive dividends. Learn more about your ad choices. Visit megaphone.fm/adchoices

Our guest, the Mad Fientist delves deep into advanced IRA strategies. Find out why you should have one and which one will best fit your needs. Brandon shares the same goal as many of us, to retire at a young age and avoid paying as much tax as is legal! How you handle your IRA’s can be a big part of achieving both goals. Traditional IRA A Traditional IRA is not taxed upfront but at the point of withdrawal. The money grows tax-deferred. Upon withdrawal after age 59 1/2, the money is taxed as income. For 2016, you can contribute up to $5,500, $6,500 if you are aged 50 or older. Roth IRA A Roth IRA is taxed upfront and not upon withdrawal after age 59 1/2. For 2016, the contribution limits are the same as for a Traditional IRA. 401k Many people have a 401k through their employer. A 401k is similar to a Traditional IRA. The money goes in tax-free. When you leave your job, whether it’s to take a new one or to retire, roll that account into a Traditional IRA. This simplifies things so you aren’t trying to keep track of several accounts, and it gives you more control over fees. You may not even know how much you’re paying in fees for your 401k, and if you take the time to find out by reading the prospectus, there isn’t much you can do about it anyway because your options are selected by your employer. And investment account fees can cost you a lot of money. Americans pay over $6 billion dollars in investment fees per year. Vanguard makes rolling over your 401k easy, and they have very low fees. Why Traditional Over Roth? When you’re in the prime of your career, you’re being taxed at a higher than you are likely to be in the future. You want the tax advantage of the Traditional IRA during your highest earning years because once you give up those tax advantages, they’re gone forever. Will tax rates be raised in the coming years? Yes, probably. But new loopholes will be added too and as long as there are people like Brandon around, we will know ways to take advantage of them. Is it a risk? It is, but it’s a calculated one. Roth IRA Conversion Ladder Both types of IRA’s are used at different stages of life to reap the most tax benefits possible. Brandon has a method for this, the Roth IRA Conversion Ladder. You contribute to a Traditional IRA during your working life because it’s likely that your tax rate is higher now than it will be after retirement. After you leave your job, you will have less taxable income. During this time, you slowly roll the Traditional IRA to a Roth. This rollover counts as ordinary income so to do this tax-free, convert a dollar amount equal to your tax deductions and exemptions. During this time, you live off your capital gains and dividends because they are taxed at 0% so long as you’re in the 10 or 15% tax bracket. For 2016, anyone making less than $9,225 is in the 10% bracket, and anyone making between $9,226-$37,450 is in the 15% bracket. LLC As we learned in our Natali Morris episode, it’s the people who earn salaries from an employer who take the hardest tax hit. The reason a bunch of LMM listeners are rushing out to start LLC’s! Unsurprisingly, Brandon has a way to super hack your LLC to mine even more tax benefits. We did a little calculating during the episode, and if you paid yourself $80,000 a year via dividends from your LLC, you would only be liable for $5,000 in taxes! If you were making $80,000 from a salaried job, you would pay over $19,000 in taxes! What To do With $3, Learn more about your ad choices. Visit megaphone.fm/adchoices

Social security is a decisive topic but we’ll give you the facts while leaving the politics aside so you can draw your own conclusions. Social security was established by FDR in 1935 as part of The New Deal.  It was intended to alleviate poverty for the elderly, unemployed, and fatherless children.  Workers pay in during their working lives and draw from it once retired, each generation funding the previous one. Since 1983, the cash flow has been positive, more coming in than going out.  By 2021, just seven years from now, it’s forecast to be paying out money faster than it comes in.  Some experts think this is not apocalyptic and the money will be diverted from somewhere else to continue the program.  The surest way for a politician in America not to get elected or re-elected is to try to mess with Social Security so the government will always find a way to fund it. One way to save the program is to privatize it.  It would be less like a tax and more like a 401K.  This way the money could be left to family after death, the money could be invested in the market, and it would reduce the role of government as they would not longer manage this enormous pool of money.  The problem with this plan is that during the transition, it would add one trillion dollars of debt to the economy.  There is also no way to know exactly how much you will receive as there is with the program as it stands. Two more realistic plans are to raise payroll tax by 2%.  This would ensure solvency for the next seventy five years.  Another option is to decrease the benefit by 13.3%.  This would ensure solvency indefinitely. The takeaway is that people of working age now will probably collect social security but it is not something that should be depended on for the entirety of your retirement income.  Keep investing, continue maxing your 401K, those are things you can control unlike the future of social security. Show Notes Betterment:  Our favorite investing tool.  Use this link to get six months without fees. SSA Calculations:  See an estimate of what you will collect from Social Security in the future. Learn more about your ad choices. Visit megaphone.fm/adchoices

We’re breaking down Listen Money Matter’s Twelve Financial Philosophies.  Think and meditate on them and then live by them. 1.  You are responsible for your own wealth.  Don’t expect to marry rich, inherit a fortune or win the lottery. Don’t blame your back ground, the economy, or any other excuse you can come up with.  If you want to build wealth, the onus is on you. 2.  Getting out of debt is an emergency.  If you have debt, use the stack method to pay it off. 3.  Always take free money.  If your employer offers matching 401K, take it.  Even if you have debt, contribute to the 401K. 4.  Super frugality is a waste of time and money.  We’re all for frugal but if it takes two hours to make your own laundry soap, that’s perhaps not the best use of your time.  You would save more batch cooking for two hours so you don’t have to buy lunch at work for the week. 5.  Credit cards make spending cheaper when correctly used.  A good cash back card will save you a small percent on your purchases. 6.  Avoid bank fees and find low investing fees.  Seek out a bank that doesn’t charge crazy fees for things like checks, automatic payments, and minimum balances.  Choose an investment tool that has low transaction fees.  We discussed bank fees in Episode 9 and Vanguard, a low fee investment company in Episode 109. 7.  Automate your finances.  Set it and forget it.  Use auto pay, use Mint, use auto transfers.  Andrew explained how in this article. 8.  Savings accounts are stupid.   In episode 107 we explained where your emergency fund should be kept and it’s not in a savings account. 9.  Materialism inhibits wealth building and leads to debt.  A house full of stuff you don’t use costs you money when you buy it and money in the future because you didn’t invest it. 10.  Budgeting makes smart people smart with money.  You’ve got to know what you have to work with and where it’s going otherwise you’re navigating blind. 11.  Health is always more important than wealth.  The money you spend on your health whether it’s good food, a gym membership, or regular check-ups, will more than come back to you in the future.  Being sick is expensive, especially in America. 12.  Investing is a long-term strategy.  Once you start investing, remember you’re in it for the long haul.  Be fearful when others are greedy and greedy when others are fearful. That’s it, LMM’s raison d’etre in twelve simple ideas.  Let us know in the comments what your philosophies are. Check out this fun little money-saving tip video I did over the weekend: Show Notes The Obstacle is the Way:  A modern philosophy book. Betterment:  An investing tool that let’s you set it and forget it.  Use this link and get six months of fees waived. Mastering Mint:  Our book on how to get the most from Mint.  Listen to the episode and find out how to get it for free. Learn more about your ad choices. Visit megaphone.fm/adchoices

Debt affects your credit score and makes life more expensive. We’ll show you the cost of debt and reasons you need a kick ass credit score. A good credit score saves you money in many ways. You don’t have to achieve the “perfect” score but having a score above 760 will go a long way towards making life cheaper. What is a Credit Score? A credit score is a number calculated using a number of factors to show how creditworthy you are. Lenders use this number to decide whether or not to lend you money, what rate of interest you will pay on that loan and in the case of credit card companies, whether or not to issue you a card and what your limit will be. Card interest rates are pre-set so your score doesn’t affect that. What Makes Up a Credit Score? There are six major components that make up your credit score. We did an in-depth article on it but to quickly re-cap, these are the factors; * Payment History: If you pay your bills on time. * Credit Utilization: How much of your available credit is being used. * Derogatory Marks: Do you have delinquent accounts, past bankruptcies, judgments against you etc * Length of Credit History: How long you have had a credit file. * Total Accounts: How many credit accounts you have open and how many types (credit card, mortgage, student loan, personal loan, auto loan, etc) * Credit Inquiries: How many times has your credit been checked because you’ve applied for a new card or loan. What is a Good Score? There is a credit score range you will can into. Each credit bureau has their own credit scoring models but in general, the Fico score ranges are as follows: * 300-630 is bad. * 630-689 is fair. * 690-719 is good. * 720-850 is excellent. Either end of those is pretty hard to achieve and some people obsess over their credit score way more than necessary. There are lots of reasons you need a score but kick ass can be achieved at 760. So if you are there, you’re set. The most well-known types of credit score are FICO Scores, created by the Fair Isaac Corporation. The 3 major credit bureaus that run your FICO score are Experian, Equifax, and TransUnion and it should be done once a year. Remember, with the Fair Credit Reporting Act (FCRA) you are entitled to get a free credit report once a year. You can get your free credit score on the Government website www.annualcreditreport.com.  If you use a different service lookout for any extra charges. sometimes they will charge you extra for monthly credit monitoring services, or fraud alert plans. You need to know what your score is before you improve it so, go on, take the band-aid off. Reasons You Need a Kick-Ass Credit Score If you don’t have a good score, here are some reasons to get one. Interest Rates This is the big one. The two most expensive things in life are taxes and interest and if you can avoid them, you will reach financial independence much faster. If you want to buy a home, a new car, or borrow money for anything from starting a business to renovating your house, a good credit score will determine the rate of interest the lender sets for the loan. What’s a point here and a point there? A lot when we’re talking about interest rates. If you buy a $300,000 house with 20% ($60,000) down payment with a 30 year fixed rate mortgage at 4.5% rather than 5.5%, over the life of that loan, you will save $52,794. Learn more about your ad choices. Visit megaphone.fm/adchoices

As demonstrated in Vimes’ theory of boots, sometimes it saves money long term to spend more up front.  What items are worth the splurge and which are not? Quality versus cost is not about being fancy and always buying the most expensive version of everything or being cheap and always buying the least expensive version of things.  It’s about making sure what you buy lasts as long as possible so you don’t have to spend more money constantly replacing the same item. Technology is a great example.  Apple products are less vulnerable to viruses than pcs.  A virus will cost you money either having to pay for repairs or replace the computer entirely. A good rule of thumb on where to spend the extra money is “anything that comes between you and the ground.”  So shoes, mattresses, and tires.  You spend a third of your life in bed so mattresses are not the place to save some money. Anything that needs to last a long time is worth the extra money.  Things like cushioned furniture and appliances.  What you put into your body.  You don’t have to buy only the most pure, organic vegetables harvested at the light of the full moon by Buddhist monks, but thinking you’re getting a deal by eating from the dollar menu everyday is a costly mistake in the future. Where can you choose the less expensive option?  Matt says clothes.  I would say you can spend less on casual, around the house clothes but a little more in dress and office clothes.  Wood furniture will last a long time without spending a fortune.  The only caveat would be weight bearing furniture like book cases which can bow if they’re the ultra cheap press board ones. Let’s hear from you in the comments.  What do you spend more on and where do you save? Show Notes Terrapin Mosaic Red Rye India Pale Ale: “A liquid art form.” Sierra Nevada Blindfold Black IPA:  Bright hops and roasty darkness. Betterment:  Our favorite investing tool.  Use this link and get six months free. Learn more about your ad choices. Visit megaphone.fm/adchoices

A shopping sniper knows what they want, gets it, and gets out.  We’ll teach you a few tricks to become the shopping sniper with the most confirmed kills. Welcome to your training. I hope you enjoyed the video. But now it’s time to begin. It’s time to know all the secrets on how to spend less money. This is a 2,000-word training manual that will walk you through becoming a Shopping Sniper, and in turn, teach you how to spend less, save more money and allow you to focus on what’s really important. Why Are Americans Addicted to Shopping? You’d think because of the economic crash in 2008 that Americans would be a lot more conscious of their spending. You’d also think Americans would have toned down their shopping just a little bit, but instead, shopping totals have increased. In April of 2013, retail shopping sales increased by 0.1%. Not a huge increase, but an increase nonetheless. We are a culture of consumerism. It’s been ingrained in our DNA to want stuff, to keep up with the Joneses, to “shop till you drop.” It’s no wonder why American’s have trouble saving their money — they’re spending it while they shop. Shopping is so popular that we have TV shows based on it, including: * My Shopping Addiction * Supermarket Sweep * HSN & QVC * Million Dollar Shoppers * Extreme Couponing * The Entire Style Network * Guy’s Grocery Games We are being brainwashed into shopping. Shopping has become a skill and a sport in our country. In fact, the only way to avoid being sold to is to go to sleep. That is until dream TV is invented. Exposing 5 Retail Store Marketing Secrets I’ve been working in retail stores since I was 13 years old. I’ve also spent time as the head of marketing for a chain of retail stores. My job was to make people buy more stuff, and I learned these secrets from the best and the biggest stores in the country. As a former marketing director, I know what goes into making people buy more and buy often. My job was to create colorful circulars (newspaper ads), packed to the brim with coupons. I filmed funny TV commercials, created ads for magazines and spots for radio. I did whatever it took to get my brand in front of your face, over and over again. I’ve learned a lot during my time, and I think it’s time I expose myself…I mean my secrets to retail marketing. Having this knowledge will give you power and make you a better Shopping Sniper Secret #1: No Clocks, No Windows The simple reason for the this is because the stores don’t want you to pay attention to the time. They also don’t want you to realize how nice it is outside. By denying you insights to the outside world, they hope to keep you in the store and shopping longer. They also play very easy-to-listen music throughout the store. This music is meant to put you in a good mood to increase your shopping time. Oh, and they always crank the AC in the summer. Feels so good to shop in the mall during the summer, doesn’t it? Secret #2: Loss Leaders Walmart is well known for this marketing tactic, especially during the holiday season. Loss Leaders are products that are very popular and desirable, so the stores will sell these items at the lowest possible price without losing any money — however, Walmart is known for actually losing money on these items. The trick is to get you into the store by pricing these desirable items so low that you can’t pass up that kind of deal. Learn more about your ad choices. Visit megaphone.fm/adchoices

What does the ideal financially responsible person look like?  Is it you? We’ll discuss achieving financial perfection.  See how you stack up. The ideal person will have no student loan, credit card, or car debt.  Their housing expenses will be no more than 30% of their income, total expenses no more than 50%. They will devote 20% of their salary to investing.  The other 30% is discretionary income. Andrew wrote a detailed post about how you should be investing that 20%.  You get $25,000 in an investment account as your emergency fund first and then can branch out to riskier options.  Age is important too.  In our book, Mastering Mint there is a graph on page 92 showing what percentage of your income you need to save to retire in X number of years. Credit cards can be a tool for the financially responsible.  As long as you pay the entire balance each month.  You can leverage credit cards for travel discounts, cash back, and purchase protection. The ideal person has a budget.  No matter how few expenses you have, they are hard to keep track of unless you have a system in place.  Use Mint, use You Need A Budget, the envelope method, whatever works for you but you have to use a budget. Financially responsible people spend money on experiences rather than things.  A great vacation, a nice dinner, a concert.  These are things worth spending money on and will make you happier than a closet full of new shoes or a giant TV.  Less stuff takes up less space in your home and in your head.  If you have too much stuff, find out how to get rid of it and make some extra money in Episode 96. The ideal financial person starts young.  Your money is so much more powerful when it has thirty years to marinate in investments rather than ten years.  Putting a lot of work in the front end means less work when you’re older. How did you do?  Don’t worry if you fell short.  This is the perfect person and you don’t see them much in the wild.  But practice makes perfect.  You know what to do so keep at it. Show Notes 1792 Ridgemont Reserve:  Small batch Kentucky Bourbon. Betterment:  Get 20% in here.  Use this link and get six months free. Learn more about your ad choices. Visit megaphone.fm/adchoices

   We’re answering listener questions about gold, stock options, coupons, investing, and how to avoid student loan debt. 1.  Should I invest in gold and silver?  The short answer is no.  It’s risky and speculative.  Gold and silver prices fluctuate wildly from ridiculous highs to tremendous lows.  To make money this way you would have to time the market and we’ve discussed before that it is inadvisable to do so. 2.  Should I buy company stock at a 15% discount or continue with Betterment?  This question was detailed but at the end of the day, the company was getting a year long loan and the money was not accessible.  It’s also the problem of too many eggs in one basket.  Having your income and investments coming from the same place is risky.  Continue putting the money into Betterment. 3.  Are coupons worth your time? Coupons are to get you into the store knowing that once you’re there, you’ll buy more than what you came in for.  If you have a lot of self control and are using the coupon to buy something you normally buy, than they can be a good thing. 4.  I have an $8000 loan with 3.45% interest.  Should I pay it off before investing or invest and make a lower monthly loan payment?  Andrew calculated this out.  If you put $1000 into investing every year for eight years and got a return of 7%, you would make $410.90 more than if you did the same with the $1000 by buying off the loan.  But that was on paper and actual life is variable so you can’t count on 7%. Also, the interest rate on this loan is very low.  So in a vacuum, you would invest the money rather than pay down the loan but in the real world, pay off the loan before investing. 5. How do I avoid going deep into debt during my two year graduate program?  If you have to take out loans, take out federal loans over private when possible.  The interest rate is lower and there are programs for debt forgiveness for federal loans.  Put any savings into an investment account.  The day you graduate, pull it out and pay on your loans.  They don’t accrue interest while in school.  Even if your program is full time, find a few hours a week for a side hustle.  An Uber driver sets their own hours and has clients seek them out.  Take everything you just learned in class and create a blog or a Youtube video.  It’s tutoring but to a potentially huge audience.  I’ve added our student loan episodes to the show notes. Thanks guys, we love these episodes so keep sending in your questions. Show Notes LMM Episode 32:  Adam Carrol educates us about student loans. LMM Episode 70:  Student loan expert Heather Jarvis talks about student loan repayment and forgiveness programs. Smart Passive Income:  Pat Flynn’s site that teaches ways to make passive income. Betterment:  The easy to use investment tool.  Use this link and get six months free. Learn more about your ad choices. Visit megaphone.fm/adchoices

We all have the same 24 hours to work with.  But there are lots of ways to get more out of those hours.  We’ll give you some tips to make the job easier. Whether you work from home, work in an office, work for yourself, or for someone else, there is a tip out there that will organize, streamline, or enhance your process. 1.  Stay away from social media.  Don’t get sucked into a Twitter hole when you’re supposed to be working.  Stay off Twitter, Facebook, Pinterest, all of those while you’re supposed to be working. 2.  Figure out  when you best work.  Some of us are larks and some are owls.  Forcing yourself to get up an hour earlier to get things done is useless if you’re nodding off.  Structure your day so the most important tasks get tackled when you’re at your peek. 3.  Learn how to say no.  Whether it’s an invitation, a phone call, or taking on a project when you already have too much on your plate, say no. Once you’ve finished, then you’re free to accept those things. 4.  Exercise, eat and sleep properly.  You’re brain and body can’t function if you’re poorly nourished, tired, and immobile. 5.  Get organized.  Clutter and mess are distracting.  Tidy your work area. Our personal tips: 1.  Drink coffee.  Or your stimulant of choice. 2.  Wear headphones.  Especially if you work in a loud office, get some noise cancelling headphones to block out the distracting noise.  Music or podcast optional. 3.  Mailbox.  Manage your e-mail faster and more effectively. 4.  To do list.  It should be short but detailed with everything you need to accomplish each task to hand. 5.  Set time constraints.  Set a timer and when it goes off, you’re done.  The limited window will force you to get things done.  30/30 is an app designed for this. 6.  Rescue Time.  The Mint for your time.  See how much time you’re wasting on Reddit. We’ll put a lot more ideas into the show notes for you.  Even using one of our tips or tools will make your day easier. Show Notes Wise Bread:  A great resource for personal finance information and frugal tips. College Info Geek:  Our buddy Thomas’s guide to getting the most from your college experience. Four Hour Work Week:  Productivity Tricks for the Neurotic, Manic Depressive, and Crazy Like Me. Trello:  Organization for groups. Getting Things Done:  Learn the concept of “brain dumping.” Understanding the Value of Time:  LMM’s episode 76. Evernote:  Lose the sticky notes with this digital app. Lift:  The habit building app.  Learn more at Episode 66 where we interview founder Tony Stubblebine. Learn more about your ad choices. Visit megaphone.fm/adchoices

We break down Dave Ramsey’s investing strategy.  Can we all retire millionaires as he promises?  Today we find out. Dave Ramsey is a well respected financial guru. He has helped many people begin their personal finance journey. While we disagree with the math behind Dave’s snowball method of debt reduction, you will pay off debt if you follow it. We reviewed Total Money Make Over and came away pretty (but not entirely) impressed. Today we take a look at his investment strategy. Guide Dave Ramsey’s Guide to Investing is a free PDF available on-line. It’s not exactly a weighty tome, just 17 pages, two of which are the cover page and table of contents. Dave’s investing strategy consists of just three steps: * Ask yourself specific questions. Things like at what age you want to retire, what kind of lifestyle you want to live, etc. * Diversify. This section is just four sentences long, and two of them speak of eggs and baskets. * Stay focused. This is basically the sum total of Dave Ramsey’s investing strategy. It is heavy on cliches (I counted four) and light on advice or even basic information like explaining different types of investments. If you don’t know anything about investing, Dave’s advice won’t tell you much. At LMM, we want our listeners and readers to be fully informed. That’s why we produce things like Investing 101: An Introduction to Simple Investing. Once you understand the basics, we’ll explain the various types of investments available. The Rule of 72 The rule of 72 is a method Dave recommends as part of building your investment strategy; it identifies your investing timeline. You divide 72 by the rate of return you get on an investment. That number is about how many years it will take for your investments to double in value. There are a few problems with this. Numbers and averages aren’t the same things. The bigger problem is that Dave uses 12% as the average return you can expect to earn. This number is exaggerated. At LMM, we use 7% which is a little lower than the average rate of return you can expect in the market over the long term. He posits that if you invest $100 a month from age 25-35 with a return of 12%, you will retire with just over one million dollars. The backlash was immediate. Dave’s defense was that his advice was “inspirational and instructional.” He continued, “…if you save money over time, you’ll have some.” Well, no shit Dave. I get the inspirational part. One hundred dollars a month doesn’t sound unreasonable, and a million dollars sounds like a lot. But I think most of us could do with a bit more of the instructional bit. But you don’t need instructions because Dave will hand you off to one of his ELP’s! More on that to come. Buy and Hold Dave encourages long-term investing. In order to play the long con, you have to tune out a lot of the coverage about the stock market and the economy. Good news doesn’t sell as well as doom and gloom, and if you jump every time you hear scary economic news, you will never be a successful investor. We show you how to take the emotion out of investing so that your decisions are based on data and not the lates... Learn more about your ad choices. Visit megaphone.fm/adchoices

We hope LMM  is your go-to place for all things personal finance but there are other resources available. We share some of our favorites. Podcasts APM Marketplace:  News on business, money, and economics. Stacking Benjamins:  Our buddy Joe!  If you like LMM, you’ll love this podcast.  Joe was a recent guest on Episode 81. Books The Simple Dollar:  Trent Ham’s guide to wiping out debt. I Will Teach You to Be Rich:  Ramit Sethi’s book for young people at the start of their personal finance journeys. The Richest Man in Babylon:  Personal finance taught through fables by George Clason. Wildcat Currency:  Recent guest Professor Edward Castronova’s new book on digital currencies. The Intelligent Investor:  Written by Benjamin Graham, Warren Buffett’s mentor.  Can’t get much better PF bona fides than that. The Four Hour Work Week:  Tim Ferriss’ first book which has evolved into a wildly successful series. Blogs Get Rich Slowly:  We’ve interviewed founder JD Roth and writer Kristen Wong.  One of the first successful PF blogs and still a major player. Jim Collins:  The inspirational proponent of “eff you money.”  His blog is hidden but we found it for you! Ready for Zero:  Great friends of LMM’s.  If you’re in debt, they’ll get you out.  We spoke to Claire in Episode 42 about this invaluable service. Financial Samurai:  Reach financial independence sooner. Mr Money Mustache:  Early retirement through extreme frugality. Tools Mint:  Our favorite budgeting tool.  If you’re a beginner to PF, this is the place to start. Betterment:  LMM’s favorite investing tool for beginners. Movies Maxed Out:  A documentary about predatory lending practices. How the Economic Machine Works:... Learn more about your ad choices. Visit megaphone.fm/adchoices

If you read or listen to anything related to personal finance, you have heard of Vanguard Funds. But WTF are Vanguard Funds and why are they so popular? Vanguard and its founder, John Bogle, are investing legends and for a good reason. Bogle founded the first index fund, beloved of hands-off investors everywhere, in 1975. That Vanguard Fund, the Vanguard 500 Index Fund now has more than $500 billion under management. What is Vanguard? Vanguard is an investment advisor with more than $5.1 trillion under management. Vanguard is also the leading provider of mutual funds and second largest provider of ETFs. The founder, John Bogle, has long been a champion of offering low cost, low effort investing to the average person. Why are Vanguard fund fees so low? Because Vanguard is not owned by outside stockholders as most investment management companies are. Outside investors want returns, and those returns come in the form of fees charged to customers. Vanguard has no outside investors. The company is owned by its funds, and the funds are owned by their shareholders, which is everyone who invests with Vanguard. This structure is why Vanguard funds have low fees. Those low fees mean more money in the pockets of Vanguard’s investors/owners. Why Fees Matter When you see a fee of 2% (if you pay attention to investing fees at all), you think that sounds pretty good! Two percent is nothing. And that’s true. A 2% interest rate on your savings account is nothing. Getting 2% off when you buy a dress is nothing. But a 2% investing fee isn’t nothing. It’s something; it’s a lot of something. And that something is the money you have to live on in retirement. If you had $100,000 invested earning 6% for 25 years and paid no fees, your $100,000 would become $430,000. If you paid a 2% fee in that same scenario, your $100,000 would become a mere $260,000. That seemingly small 2% just obliterated nearly 40% of your retirement savings! Why We Love Vanguard Funds We love Vanguard, and we aren’t alone. “According to a recent Harris Poll, which identifies and ranks the strongest brands in nearly 100 categories, Vanguard is the only financial services company in the “Top 13 Brands of the Year with the Largest Equity Increases.” They are also ranked as the top financial services brand in the investment category.” Vanguard opened up investing to the masses. You no longer had to have a million dollars and a personal financial advisor to grow your money in the stock market. Investors also love the Vanguard philosophy that a mutual fund company should be managed with the interests of the fund shareholders at the forefront. And low fees are in the interest of the shareholders. Vanguard funds average expense ratio is 0.19% compared to the industry average of 1.08%. And putting paid to the myth that paying more means better performance, 86% of Vanguard funds have outperformed similar funds for the last five years and had an outperformance rate of 94% over a ten year period. VG Mutal Funds When you invest in a mutual fund, you are invested in hundreds of individual securities at the same time. This protects your investment by lowering your risk. All of your eggs are not in the same basket. If one basket does poorly, the other baskets can offset it. Mutual funds are an inexpensive way to invest. You pay one expense ratio rather than paying a commission each time you buy or sell individual securities. Learn more about your ad choices. Visit megaphone.fm/adchoices

Want to earn some extra cash?  Have some credit card or student loan debt you would like to pay off? Maybe you want to finally take your dream vacation or have some extra money to crank up your investing. We’ll teach you how to make money on the side to put toward whatever your goals are. How to Make Money With a Side Hustle? A side hustle is a way to make some extra money that is outside of your normal day job. For many people, the hustle will be something that they’re passionate about, a hobby. The idea is to find a way to monetize that hobby. Your hustle doesn’t have to be a hobby, nor does it have to be something done online although a lot of the information you find on the web will be about online hustles. If you’re into real estate, then getting to rental property investments could be great side hustle and a great way to to make some passive income. If you baby sits on the weekends, that’s a side hustle too. Choosing A Hustle Choose your hustle carefully. It’s ideal if can monetize something you enjoy, cooking for instance. Is your cooking good enough that other people would be willing to pay for it? Can you find enough clients to make it worth your time? Just because you enjoy something doesn’t mean it’s something people will pay you for or that there is a big enough market for that thing. Maybe you don’t exactly feel passionate about babysitting the way you do about cooking but you live in a neighborhood with lots of families and they would pay you to mind their children. The hustle really shouldn’t be something you hate doing though. Great, people will pay you to mow their lawns and you found enough clients to make some good money. But if you hate mowing lawns, it’s hard to stay motivated. Money isn’t enough motivation for everyone. Try to find that sweet spot where you’re being paid and maybe not loving what you’re doing, but not loathing it either. Try to think of a niche within your chosen hustle. You love taking photos and who needs photos? People getting married! There are lots of wedding photographers though and many of them are full-time professionals which you are not. Not yet at least. You know who else needs photos? Competitive Bodybuilders. And there are a lot fewer photographers specializing in this so there will be less competition for clients. I know this is a weird example but I have a friend who did this, so it’s a real-life one! When Do You Hustle? Even though we all have the same 24 hours in a day, some people have more time than others. If you have a lot of responsibility, you will need to deliberately carve out time to work on your hustle. Getting up an hour earlier than normal is a good time to work because you are less likely to have interruptions. If you don’t have a family, you might have a fair amount of free times on weekends to work. You might also need to re-prioritize your time. If you’re spending an hour or two watching television, that is a poor use of time. Take that time and set it aside to work on your project. How To Monetize Spread the word. Let’s go back to the babysitting example. You can always tell who has kids because people with kids never shut up about them! And people who have kids are friends with other kid having people. It just takes one happy client to get word of mouth recommendations rolling. Find online forums and parent meet up groups in your area. Post your services in the forums, post signs where the meetups are happening. Attend any gatherings related to your hustle, meetups, conferences. The connections you make might not pay off immediately but the more people you meet, the more potential clients you meet. If your hustle is online, the same rule applies, Learn more about your ad choices. Visit megaphone.fm/adchoices

The finer points of my personal investment strategy including emergency funds, checking and savings accounts, and investing beyond Betterment. An emergency fund is vital as we discussed in Episode 64. But we define that a bit differently than a lot of people.   You should not have a savings account.  You need a checking account that contains one month’s expenses plus 150%. So if you spend $2000 a month, your checking account should contain $5000.  In lieu of a savings account which makes less than 1% interest, you should use a tool like Betterment to stash your emergency fund.  The money here will grow at an average of 7% a year and is liquid within a few days.  This is controversial to some but it is not risky.  This account should be funded up to $25,000. Should you participate in your company’s 401K?  Never turn down free money. If your company matches, you should contribute the same amount into a 401K even if you have credit card debt. Now things are a bit more comfortable.  Between your checking account and investment account, you have about $30,000.  This is your working capital.  We’re comfy now but it’s no time to get complacent.  We’re going to take a little risk by investing in something like individual stocks or a fund with a company like Vanguard or Fidelity. The next step is for advanced investors with $100,000 or more invested.  You can afford a little more risk.  Andrew has had very good returns with Lending Club.  Not for the faint of heart but the rewards can be enormous. Don’t forget, we’ve also put together a list of the top vanguard funds we know about – you should check them out! Now go out and be the best investor you can be! Show Notes The Ultimate Investment Strategy Blueprint:  Andrew’s recent blog article. Vanguard: A low fee investment management company. Betterment:  Where your emergency fund should be stored.  Use this link and get six months free investing! Nominate our Podcast for a FinCon Spotlight Award: We all know someone in the FinCon Community or beyond that is doing interesting, far-reaching work to help people with their money. Learn more about your ad choices. Visit megaphone.fm/adchoices

  You ask and we answer.  Five listener questions on everything from Dave Ramsey to credit cards to how to stay disciplined with spending.  1.  What is Lending Club and how is it classified?  Lending Club is a market place for crowd sourced loans.  It should be a tiny portion of your portfolio because it’s very risky.  It would be more akin to something like a penny stock than a bond. 2.  Why do we rag on Dave Ramsey so much?  Oh, you noticed.  A couple of reasons.  LMM’s doesn’t like the religious overtone to everything he says and writes.  We also disagree with his snow ball method of debt reduction.  It doesn’t make sense mathematically.  We go into this in great detail in Episode 95.  We also give Dave a lot of credit for making people think about personal finance.  Anyone doing that is doing a good thing even if we disagree with the tone or approach. 3.  How do you develop the discipline to not spend money?  In the beginning at least, surround yourself with personal finance.  Read books, listen to podcast, discuss your goals with your friends and family.  Put it in the front of your mind until it’s just a habit.  Also use our friend Tony Stubblebine’s Lift app to help you build good habits. 4.  Is it crazy to value time and freedom over money when it comes to the hours you work?  Definitely not crazy!  LMM’s delved into this in Episode 41 and it’s an important issue for us.  The five day work week is largely a result of our Puritan work ethic here in the states.  There are plenty of examples of other countries and increasingly, companies here at home that are moving to four day work weeks.  There are many benefits to both employer and employee.  Try to foster this way of thinking in your own company.  The government isn’t going to help us out here.  It has to be a grass roots effort one company at a time. 5.  I grew up being told credit cards are evil, you seem to disagree, why? And do credit scores really matter? If someone steals your cash, the cash is gone.  If your credit card is stolen, you’re out nothing.  With cash back rewards, your life can be a small percentage cheaper than if you had paid with cash.  Spending via a credit card is easier to track than cash spending.  Credit scores do matter.  When you take out a loan for a home or car, the higher your score, the better your loan terms.  They are increasingly mattering for things like renting an apartment and getting a job too.  Having a good credit score is never a bad thing.  The best way to do that is to pay your balance in full every month, no exceptions. We love these episodes.  Keep sending in your questions! Show Notes The Lost Art of Negotiation:  Andrews’ article on how to get a raise, more time off, maybe even a four day work week! Betterment:  LMM’s favorite investing tool. Use our link and get six months free! Learn more about your ad choices. Visit megaphone.fm/adchoices

Your resume can make all the difference in a tough job market.  We’ll find out what you need to build the perfect resume so you land that job. If you haven’t done a new resume for a while, some things have changed.  Since most resumes are sent electronically, you don’t have to buy the fancy paper.  It’s a good idea to have a few copies to bring to interviews but plain printer paper will do. Keywords are important.  Some companies have a program that will scan through them.  Use the words that are in the job post in your resume so those keywords get a hit. A cover letter is still important if the interview will be the first time you are meeting the interviewer.  Include your skills, why you are applying and why you want to work for that company.  Again, using keywords are important. Some things you want to leave off your resume:  any job you worked for less than six months unless it’s covering a gap in employment.  Don’t use action words like, “achieved” or “adapted.”  Don’t do a “cutesy” resume, just a standard one.  Don’t use an unprofessional e-mail address like [email protected].  Get a g-mail address using your name or initials.  You can leave hobbies and interests off entirely unless you’ve just graduated and need something on your resume. These are some things you should include in your resume:  Use a standard font like New Times Roman or Arial and a font size between 10-12 point.  If you have more than five years experience, you can spill over to a second page, if it’s less than five years, it should be a single page. The bullet points under each job should number ten or fewer with the greatest amount under the most recent job and tiered down from there.  Jobs that you held while going to school should be included even if they aren’t related to your field.  It shows that you were ambitious and any job will develop certain skills, like dealing with customers or learning new software. If you’ve never done a resume or yours’ is out of date, there are lots of resources available to help you and I’ll include them in the show notes.  There are even services that will create a resume for you so if you aren’t comfortable with Word, that is an option but they do charge a fee. Now that we’ve helped you create a killer resume, what next?  Build a good Linkedin profile.  This is the first place a lot of recruiters and companies go when looking to hire.  Get in touch with a recruiter to let them know you’re looking and the same with your network.  Get the word out to as many people as possible. The most important thing to remember is to make certain that there are no grammar or spelling errors on your resume.  Not proofreading is sloppy and will turn any potential employer off. Getting a resume together isn’t hard but it does take some finesse to get it right.   Use our tips and Mark’s website to get the job you really want. Show Notes Career Alley:  Mark’s site featuring job search lessons. Resume Templates:  Pages of resume templates for every type of job. Betterment:  Get started investing the easy way.  Use this link to get 6 months free! Featured Image Photo Credit: “Pen and Paper” by Guudmorning! on Flickr Learn more about your ad choices. Visit megaphone.fm/adchoices

If you haven’t noticed, everyone has been hysterical lately about Bitcoin (to say the least). We talked to Professor Edward Castronova, an expert on investing in cryptocurrency to talk about how the market works. What is the definition of money? According to economists, anything used as a medium of exchange, as a unit of accounting, and as a store of value.  This is why anything from the dollars in our wallets to cigarettes in  POW camp, to Bitcoins can be considered money. What makes it money? Social expectation.  If you have a stone and someone is willing to trade your stone for a cup of coffee, then your stone is money and has value. The difference in forms of currency is how well they perform.  Stones are bulky and heavy, dollars are small and lightweight.  A dollar also has security.  Legally dollars must be accepted as a form of payment.  There is no such law governing stones.  If a vendor won’t accept your stone for a coffee, your stone is worthless. Cryptocurrencies are not regulated And also not taxed. Crypto transactions happen at a microscale and are not easily traced by the government.  When Bank of America, Visa, MasterCard, PayPal, and Western Union blocked donations to WikiLeaks in 2010, WikiLeaks set up a page to accept Bitcoin donations. Invest in cryptocurrency? One day we may all have multiple bank accounts each holding different types of currencies that we use for different things. The danger of these currencies would be if one major sector of the economy, the housing market, for example, was dominated by one type. If that currency plummeted, it could cause a panic. Of course, dollars have caused panics so that is not unique to cryptos. They will also need to become as easy to use as dollars and currently they are a bit complicated. Show Notes Wildcat Currency:  How the Virtual Money Revolution is Transforming the Economy. Professor Castronova’s book on cryptocurrencies. Learn more about your ad choices. Visit megaphone.fm/adchoices

Whether it’s a holiday, a birthday or an anniversary, we all have special days to celebrate.  Find out how to do it up without spending too much. It’s easy to budget for the expected holidays but what about the random co-worker birthday, the niece’s confirmation?  Rather than budgeting “X” for each event, set a dollar amount on how much you spend on each gift.  If you’re giving a check as a gift, make sure to log it somewhere in case the recipient doesn’t cash it right away. Be more selective about what holidays you give gifts for.  Come home without an anniversary gift and you might be in some trouble.  But do you and your significant other really need to buy each other Sweetest Day gifts?  That is a made up holiday.  Focus on the big ones. Have a frank discussion with your extended family.  Once you have a significant other, the number of people you are expected to buy gifts for can increase exponentially.  It’s unfair to be expected to buy a gift for your seven nieces and nephews when you don’t have children.  If your family doesn’t suck I’m sure they would rather have you at the family event without a present than dodging the get-togethers because you don’t have the budget to buy endless gifts. If you want to give a gift but can’t spend a ton of money, there are some great alternatives.  You can get together with other family members and buy one more expensive gift that everyone has chipped in on rather than a dozen smaller gifts.  Or you can buy one gift for the entire family, like a board game they can all play together.  Making a gift is thoughtful and more meaningful than some chotchke from Target. Or my dream, get together with your family and all agree to not buy anyone a gift.  Everyone goes out to a nice dinner together.  More fun, less money, and no crappy bread maker collecting dust in the back of your closet. Keep the spirit of the holidays and special occasions.  They are meant to be a happy time spent with family and friends, not getting trampled in Walmart on Black Friday.  You’ll save money and avoid finding yourself on People of Walmart. Show Notes Mint:  Budget your special occasion expenses. Learn more about your ad choices. Visit megaphone.fm/adchoices

There are lots of ways to save money on food. Here are a lot of ideas for budget meals and what to eat when you’re strapped for cash. That Can’t Be Right Americans spend a lot of money on food as a recent poll found out. The GOBankingRates survey was one of five polls asking Americans about their monthly household expenses. Groceries came in as the second most expensive monthly budget item, followed by rent or mortgage. Respondents spent more on groceries at $302 per month than the combined cost of their car payment ($166), household necessities ($61) and clothing ($50). And a lot of that food goes to waste. We waste about $40 worth of food each month which is about 33 pounds. No wonder food makes up so much of our budget. But you can create budget meals that will not only cut down on the amount you spend on food but the amount of food you waste too. First Thing’s First If you want to know how to save money on groceries, the first step is to plan your meals. This is easier than it sounds. Most people are happy eating the same handful of breakfasts and lunches every day and to rotate through a dozen or so dinners. Make a list of three breakfast and lunch ideas and a dozen dinner ideas. Next list out all of the ingredients you need to make these meals. This list will make up the majority of your shopping list. When you don’t know what you’re going to eat you go to the grocery store and start grabbing stuff at random which is an expensive way to shop. Of course, you will need to add extra things to your list sometimes, you’re out of olive oil, or it’s your anniversary, and you’re cooking a special meal. But most of the time, you will stick to the list of the things required to make your go-to meals. Choosing the Meals Because we want to save money on groceries, our rotation of budget meals needs to be things that are inexpensive and reasonably healthy. Healthy is subjective in that for some of us that means Paleo, and for others it means Vegan. But we all know what kinds of things are not healthy, soda, sugary juices, breakfast cereals with cartoons on the front, Ramen noodles, cheap microwave dinners. Leave that stuff alone. It’s not good for you, and it’s often more expensive than real food. Things like eggs cooked with vegetables, yogurt (full fat, non-flavored) with fresh or frozen fruit, wholemeal toast with natural peanut butter (peanut butter with nothing but peanuts and salt) make excellent, cheap breakfasts. Soups and stews made from root vegetables and beans, lettuce salads with meat left over from the previous night’s dinner, and grain-based salads are good lunch choices. One pot dishes, rotisserie chicken and frozen vegetables, and pretty much anything made in a slow cooker (more on this coming up) can make up your dinner rotation. How to Save Money on Groceries There are a lot of ways to cut down your food budget from where you shop to what you buy. Shop Around Most big grocery stores and even many smaller ones have circulars that show what is on sale for the week and most of them are available online. When you’re making your meal plan for the week, take a look at those circulars and see who has the best bargains. If you live in a big city with farmer’s markets, the food can be expensive but smaller town farmer’s markets often have lower prices than grocery stores and the food is fresher and better. If you live in a rural area, look for farm stands, they’re often cheaper than supermarkets too. A pick your own farm offers good prices and a fun outing. Learn more about your ad choices. Visit megaphone.fm/adchoices

 Listen, Money Matters celebrates our milestone 100th episode by reminiscing over listener voted best episodes.  Enjoy these classics! Some of the favorite episodes surprised us.  The first one?   Others, like Adam Carrol’s interview are favorites of our’s too.  Here they are, in no particular order. Episode 1:  Introducing the Listen, Money Matters Podcast.  Our debut!  We learn that Andrew is the money guy and Matt is the listener, there to learn with the audience.  We also learn Andrew’s first foray into entrepreneurship was selling porn to the other kids in the sandbox. Episode 14:  Our New Year’s Resolutions for 2014. We shared our resolutions both monetary and personal, and introduced you to some tools to help you meet your goals. Episode 32: An Interview with Adam Carroll of Broke Busted and Disgusted.  This resonated with a lot of you.  Student debt increased ONE TRILLION DOLLARS between 2004 and 2014.  The government decided student loans could no longer be forgiven in bankruptcy which caused lenders to throw open the vault because they would never lose money.  Higher education followed suite and raised their prices knowing that the lenders would dole out money like Halloween candy and they wanted a piece.  This is not sustainable. Episode 34:  Money for the Love of Freedom.  This one is my favorite.  By the end of it Matt was sweating and I was cheering.  This is why we do the show and why you listen.  The dream for us all. Episode 30:  The Average Investor’s Commandments.   We learned the ten keys to investing whether you’re a beginner or Warren Buffett. Episode 92:  Travel Hacking Tips with Travis Sherry Travel episodes are always a big hit.  Travis Sherry taught us how to travel like a baller on a frugal budget.  We’ll have him back in a future episode to teach us how to fly for free with miles. Thank you to each and every listener.  Thank you for your e-mails, reviews, show topics, questions, and just your encouragement.  We do this because we want to help and it means so much to hear from you. Show Notes Broke, Busted, and Disgusted:  Adam’s eye opening documentary about the state of student loan debt. Extra Pack of Peanuts:  Travis’s excellent travel hacking blog.  Learn from the master. Learn more about your ad choices. Visit megaphone.fm/adchoices

Dollar cost averaging is a simple yet effective strategy that will help you grow real wealth. The best part is, you can put your money on autopilot.  Dollar cost averaging takes the fear out of investing. Do you have a lump sum of money that you want to invest, but you’re waiting until the exact right time to invest it? You don’t just want to dump a pile, especially a big pile of money into the market at the wrong time and watch it evaporate. There are two ways you can avoid that happening; one is the wrong way, and one is the right way. All investors have two major concerns when they invest, making money and limiting risk. We all want big profits fast with no risk. But that’s not the reality of investing. To make money while limiting risk, we have to employ a good investing strategy. Dollar cost averaging is just such a strategy; it’s good for all investors but especially for those new to investing. Some Good Days and Some Bad Days On September 29, 2008, the Dow Jones Industrial Average suffered one of the worst losses in Wall Street history. Upon the news that the House had rejected the $700 billion bank bailout plan, the Dow plunged 778 points. In an instant, $1.2 trillion dollars in market value evaporated. If you had been a wary investor but finally decided to take the plunge on that day, you would have had a very bad day indeed. Just two weeks later, Wall Street saw its biggest one-day gain in history. The Dow added 936 points, and a record $1.2 trillion dollars surged back into the market. If you had invested that morning, you would have had a very good day indeed. Timing the Market If you had known to pull your money out before that big crash and known to put it back in the day of the big gain, you would have timed the market perfectly. But how would you know the crash and the rebound were coming? Some people think they can predict such things by timing the market. Market timing means trying to predict the direction of the financial market by analyzing the stock market and economic data. It’s a good idea in theory because like we explained above, you would hate to invest your money right before a big drop in the market and love to invest it before a big gain. Do you have a Magic Eight Ball? Because if you do, give it a shake and ask it when you should invest. That will give you about as good a result as trying to time the market will. Professional fund managers can’t time the market with much success and not only do they have reams more data than you have, but they also have the time to pour over all of it and to understand what that data is telling them. And they still do worse than the market more than 80% of the time! Even if you did have the time and understanding to go over all that data, why would you want to? It’s boring! This is the wrong way to go about dumping money into the market if you want to protect yourself from unnecessary market risk. But there is a way to do that.  The key component if dollar cost averaging is NOT timing the market. What is Dollar Cost Averaging? The term dollar cost averaging sounds more complicated than it is. It simply means that you determine a set dollar amount that you want to invest. Then you invest that fixed dollar amount on a set schedule without regard to the share price instead of putting one lump sum investment in all at once. Here’s an example of a dollar-cost average strategy. You have $1000 you want to invest. You invest $100 a month over the course of ten months. Using this method, you will average out the cost per share so that you don’t have to worry about timing t... Learn more about your ad choices. Visit megaphone.fm/adchoices

Little tips can save you big at home.  Get some money savings tips and find out if anything you’re doing now would cause Matt to punch you in the face. People love numbered lists and we found a good one giving tips on ways to save money on energy costs around the house.  Most of the savings are small but can add up over time and many of the tips are pretty simple to accomplish.  We picked out a few good ones for you. Your house doesn’t need to fill like the tropics in the winter or the Arctic in the summer.  In the winter, set your thermostat at 68 during the day and 60 at night.  For every degree it’s set below 70, you will save 3% of your heating bill.  Put on an extra sweater, or if you have no pride or no shame, a Snuggy.  In the summer, keep the temperature between 75-78.  For every degree you raise the temperature, it will result in a 5% savings.  Invest in a Nest, it’s a programmable thermostat that you can control via your phone. Turn your water heater down to 120 degrees.  You don’t need to take a scalding hot shower.  And it should be a shower, not a bath.  A bath uses more water.   Unless you like to indulge at the end of a long work day by soaking in a candle lit bath while catching up on the latest episode of Listen, Money Matters.  Then you get a pass. This one is my favorite.  Use a slow cooker.  They are 75% more energy efficient than the oven or stove top.  Don’t be put off by those nasty slow cooker dishes people used to bring to pot luck dinners in the 80’s.  Slow cooking has come a long way.  I use mine once a week and a can of cream of mushroom soup has never been involved.  They also don’t heat up the kitchen in summer the way the oven does. As they burn out, replace your old light bulbs with compact fluorescent lights.  The CFL’s cost more, but are more energy efficient and last up to ten times longer than old fashioned bulbs. If you have a swimming pool, it doesn’t have to be a money pit.  Check out Matt’s site Swim University for ways to save money on your pool costs this summer including using a solar cover, running your pump after 9:00 pm, and using a robot pool cleaner. Spend a few hours around your home to improve it’s energy efficiency and you’ll save the environment and yourself a few dollars. Show Notes Nest: A programmable smart thermostat that can be controlled remotely via your smart phone. Betterment:  Open your account with this link and get a free $25 to start investing. Learn more about your ad choices. Visit megaphone.fm/adchoices

Despite being promised a “paperless society” we’re still drowning in reams of paperwork.  Find out what you need to keep and what you can toss. Do you all have a “junk drawer” in your kitchen?  Is it filled with appliance manuals to appliances you maybe don’t even own anymore?  Like the juicer, you bought for a long discarded New Year’s Resolution?  Well, you can chuck it.  That goes for electronics manuals too.  You can google any of those.  This searing revelation changed my life, or at least neatened up my junk drawer. Don’t keep bank statements, use Mint.  Many financial statements are paperless now including credit cards, rent or mortgage, and utility statements.  You just have to opt out of paper and select paperless on the company’s websites. This is good for the environment as well.  You know those annoying slick paper ads that are sometimes included in things like cable or internet service statements?  Now they don’t have to send those.  Before I went paperless I use to put them in the envelope with my check and send them back.  Time Warner can deal with their own hard copy spam! Educational records like transcripts should be kept for one to two years after you begin working.  No one will care that you took Calc 1 after your first grown up job, maybe not even before.  But better safe than sorry. Medical records for yourself and pets are important and should be kept long term.  There are certain places oversees where you may need, particularly vaccination records, for yourself or your pet before being allowed to travel. Personal records such as birth certificates, marriage license, divorce papers, and citizenship documents should be kept in hard copy form in a water and fire proof safe or perhaps a safe deposit box at a bank.  These forms can be replaced but if you need them quickly, it’s better to have them accessible. If you would like to keep more documents than your home can accommodate or that you can effectively organize and keep safe, there are some digital services that you can use.  Shoeboxed is a company that allows you to e-mail or even mail receipts to be digitized and placed into a file that you can access. You can also buy a scanner although they can be expensive and not practical for documents that are double sided and dozens of pages long like mortgage documents. There is a balance between obsessively hoarding every Duane Reade receipt and throwing out your social security card in a depressive cleaning spree.  Digitize what you can, lock up the really important stuff and let the rest go. Show Notes Ommegang Abbey Ale: The beer that heralds summer. Learn more about your ad choices. Visit megaphone.fm/adchoices

Most of us have homes full of stuff we never use.  It’s taking up space both mental and physical and chances are, it is how you got into debt in the first place.  We’ll show you how to reduce that debt and your clutter by selling your stuff. Take an inventory of what you plan to sell before deciding how to sell it.  Small household goods, children’s items, books, furniture.  These things will do well at a yard sale.  Very expensive items are better suited to eBay.  Not many people are going to bring $800 cash to buy a giant mixing board.  Items that are too big to be carted away in a car but too heavy to drag to the post office to ship for eBay, will do better on Craig’s List. If you have mostly yard sale goods, check with your neighbors.  Perhaps you can all do your sale at the same time which will bring more people to all the sales.  Also check with your local town.  Some have a town wide sale that you can join for free, while the town takes care of the advertising. Craig’s List can be frustrating.  There is a lot of back and forth with would-be buyers, some people tell you they want to buy your item, arrange a time to collect it, and then flake out.  Craig’s List is a good option for certain items but you will need a bit of patience. If the last time you listed something on eBay was ten years ago, things have changed.  The process has been streamlined and is much simpler for sellers to post items.  You do have the hassle of shipping but the buyer’s are more reliable than Craig’s List buyers and you can coordinate your sales so you can just ship everything in one trip to the post office.  [tweet this”You dug your debt ditch with all this crappy stuff.’} Free your self of all that stuff weighing you down.  You’ll feel better and be able to put the money you made toward paying off some debt or adding to your investments. Show Notes Ommegang Abbey Ale:  A rich, fruity beer. One Village Coffee:  Matt’s favorite coffee. Learn more about your ad choices. Visit megaphone.fm/adchoices

 If you have debt, it’s time to tackle it. When it comes to methods of debt reduction, there are many options to consider. Everyone has debt, it’s how we reduce and manage it that sets us apart. But which should you use to get out of debt snowballing or stacking? Some of the more popular debt reduction strategies include debt snowballing and stacking. But, which is better? I’m going to tell you right away; monetarily speaking, stacking wins. But nothing is ever that simple. Both methods have their merits and their drawbacks. We’ll take a detailed look at each so you can decide what method will work best for you. Forty million of us have student loan debt to the tune of $1.2 trillion dollars. Seven million of us are in default on those loans. Credit card debt isn’t much better. We have $712 billion in credit card debt outstanding, an average of $15,355 per household. Your debt is an emergency, but you can pay it off. There are two ways to do it. Snowballing Method Snowballing means listing all of your debts in order of smallest to highest dollar amount and then using any extra money to pay off the smallest balance while only paying the minimums on the others. If you have a $5,000 student loan at 4% interest, a credit card balance of $6,000 with 17% interest, and a $10,000 car loan with 9% interest, you pay off the student loan first, followed by the credit card and finally the car. Once the smallest debt is paid, you move to the next smallest using the same strategy and include the amount you were paying on the first debt into your monthly payment on the next. You continue to do this until all of the debts are paid, the largest being last one to go. Snowballing Pros A big pro for this method is the psychological win it provides you. It’s so satisfying to cross a debt off your list. That boost can also give you momentum; you killed that one, you can kill all of these debts! This kind of boost is no small thing. Snowballing also makes your life just a little bit easier. Each debt paid off is one less payment you have to remember to make, one less check to mail or electronic payment to schedule. This method is also likely to be faster. Paying off the smallest debt first might mean you can get rid of it in just a couple of months. Snowballing Cons It’s a big one; it costs more money, in the end, using the snowballing method. Interest is powerful, and when it’s working against you, it’s working hard. It also takes discipline to use this method. You free up money more quickly because you’re killing off those smaller debts faster than with the stacking method. What you’re supposed to do with that money is put it towards the next debt on the list. But you didn’t get into debt because you have steel clad discipline. You might see those extra dollars in your checking account and think it’s more money to spend. No! Bad! Put it towards the next debt. Avalanche Method To use the avalanche method, you list your debts in order of highest to lowest interest rate, regardless of the dollar amount of the debt. You throw as much money as you can at the debt with the highest rate of interest. If you have the same debts we listed above, they would be ordered this way; the $6,000 credit card, the $10,000 car loan, and finally the $5,000 student loan. Once each debt is paid, you move down to the next highest interest rate one, again, Learn more about your ad choices. Visit megaphone.fm/adchoices

In our on-going millionaire series we interview Brenton Hayden to learn how he retired at 27, how he manages his money now, and what he does now that he’s not in an office everyday. Brenton started his career working in grocery stores where he met people who worked for the Kellogg company.  He went from making $14 an hour to $100,000 a year.  After a lay off he wanted to keep making the same money and found that real estate was the way to do that for a young person. Brenton started out as a real estate agent.  He was making great numbers when one day his mentor called him into his office and fired him.  But not for the usual reasons but because his boss felt he should use his entrepreneurial drive to start his own business.  While working in real estate Brenton found a gap in the market.  His clients were desperate for someone to help them rent and manage their properties.  At age 21 Brenton started Renter’s Warehouse which is now the second largest professional landlord in the country. Brenton didn’t take the traditional college path.  As his company grew, it was outpacing his experience.  He took some classes at MIT and Harvard which taught him what he felt he was missing.  He didn’t spend years in school, but dipped in and out so he could fill in the gaps in his knowledge and experience, a very interesting approach that could benefit a lot of people, particularly entrepreneurs. Brenton promised himself he would retire at 27.  Like a lot of people though he got caught up in running his business.  Until he went on vacation.  While away for two weeks with his wife, he was sneaking around checking e-mails and got busted by his wife.  She reminded him of his promise and he retired soon after. How does Brenton manage his money?  He spends some time day trading and largely manages his money himself.  He reinforces some things we’ve discussed on LMM.  Brenton doesn’t use a financial adviser and doesn’t feel they’re necessary.  He also monitors the news always looking  for a good opportunity to “be greedy when others are fearful and fearful when others are greedy. What does he do with his time now that he’s not working 15 hour days?  Prepare to be jealous and inspired.  Brenton had just built a race car and is going to start amateur racing.  He and his wife also travel extensively, about every seven weeks.  He recently parachuted from Machu Picchu.  I didn’t even know that was possible.  Sure beats retiring at 65 and spending your days on the golf course. Show Notes Mint:  LMM’s preferred budgeting tool. Betterment:  LMM’s favorite investing tool. Learn more about your ad choices. Visit megaphone.fm/adchoices

If there are two things we love at Listen, Money Matters, they are saving money and having a few drinks. Let us teach you how to best combine these two loves into a great night out. We owe thanks to our friends  Thomas Frank from College Info Geek Kristen Wong from Brokepedia for their great articles teaching us how to have fun at the bar without blowing our budgets. These are Thomas’s tips. 1.  Know your number before leaving home.  Once you start drinking, your inhibitions will be lowered.  That might mean a regrettable decision to bring home a double bagger or spending your rent money on rounds for the whole bar.  Before you leave home, decide how much you will spend that night.  Even better, take out that amount of cash and leave your credit and debit cards at home. 2.  Pay attention to drink specials.  Find happy hours in your area or drink at a local brewery.  Sometimes the special will be on drinks, sometimes you’ll get snacks with your drinks.  Since drinking makes us hungry, this can be a savings. 3.  Pregame.  This means having a few drinks before going out for the evening.  This tip can help if you suffer from social anxiety too. 4.  Tip your bartender well.  If you’re generous to your bartender, they may hook you up with free drinks or more generous pours. 5.  Planned logistics.  This is important if you’re doing a pub crawl.  Plot the bars out so you aren’t spending money criss crossing town. Now Kristen weighs in. 1.  Use sites and apps.  Save on Brew searches the best beer deals in your area.  Find my Tap will help track down which bars serve your favorite beer. 2.  Second label wines are a cheaper but still quality version of more expensive ones.  There is a site, cunningly called Second Label Wine to help find a cheaper version of your preferred vin. 3.  Drink Owl will show you a list of great drinks specials in your area. 4.  Buy in bulk.  Buying a case of wine will usually net you a 20% discount.  My local wine store does a 30% a few times a year so look out for those specials. 5.  Look at unit price.  This is a nasty trick deployed in a lot of sports stadiums.  A bigger beer may be double the price of a small but it’s not double the ounces.  Do your math! 6.  Drink shit beer.  LMM’s cannot promote this tip.  Yes it’s cheaper and cheaper doesn’t always mean worse, but in the matter of beer, it does.  Please don’t so this to yourself. Finally, beware of adulterated beer.  Beer is not made with cheap subsidy crops like corn.  Watch Beer Wars to make sure you are getting the real deal. We love our listeners so have a good time, go out, but don’t do anything stupid.  Drinking is not a hobby nor a vocation.  Drink responsibly! Show Notes College Info Geek:  Thomas Frank’s excellent site to help you upgrade your college experience. Brokepedia:  Our friend Kristen’s money saving site. Ommegang Abbey Ale: A rich, fruity ale, great for summer. Learn more about your ad choices. Visit megaphone.fm/adchoices

Travis Sherry from Extra Pack of Peanuts teaches us how to see the world without spending a lot by seeking out cheaper destinations, scoring the best flight prices, and alternatives to hotels that will save you a fortune. Traveling is on top of nearly everyone’s list of goals but many people don’t because they believe they can’t afford it.  Traveling doesn’t have to be expensive and there are options for almost any budget that will allow you to see the world. If you want to drink on the plane without paying ridiculous airline prices you have a few options.  If you’re flying international, choose an international carrier rather than a domestic one.  The drinks are usually free.  You can also bring those little bottles of alcohol in the quart bag you’re allowed through TSA checkpoints as long as each bottle is 3 ounces or less.  Buy them at your local liquor store, not the airport to save even more. Chat up flight attendants during their downtime.  If you’re charming you can score free drinks from them, maybe free snacks too. For a long flight, first of business class will be a lot more bearable than cattle class.  The difference in ticket price can be as much as fifteen times higher though.  This is where frequent flyer miles come in handy.  A coach round trip ticket bought with miles will be around 35,000 miles,  business just double that.  You can obtain miles through credit card sign up bonuses and by flying the same airline as much as possible.  Check to see what airline has a hub at your local airport and sign up for their free frequent flyer program. Price flights through ITA Matrix.  You can’t book via this site but the price you find can be booked through a site like Kayak or Hipmunk.  ITA Matrix will provide you with lots of comparative data such as the best date to book the flight and the cheapest airport to fly out from. The other big expense when traveling aside from the flight is accommodations.  There are so many better alternatives to hotels, especially for long term stays. Airbnb  rents apartments or homes for way less than a hotel.  You’ll also have more amenities like a full kitchen which allows you to save money by cooking some meals at home. Hostels are cheaper than a hotel and a great way to meet fellow travelers.  You can even house sit and stay for free.  Travis’s friend runs Trusted House Sitters which can show you opportunities all over the world for free accommodations. You can stretch your travel dollars by choosing less expensive regions.  In Western Europe, Spain and Portugal offer greater value than places like Paris or London.  Eastern or Central Europe are about half the price of Western Europe.  South  East Asia will allow you to have a five star experience for a fraction of the price of a lot of places in the world. Packing is always a travel bugaboo.  Travis recommends the Tortuga Travel Back Pack.  Pack what you would need for a week no matter how long your trip.  You can do laundry anywhere. Traveling is something everyone of us deserves to experience.  It changes your life in ways that nothing else can.  Stop thinking it’s an impossible dream.  Travis is flying to Brasil for the World Cup for $5.  Anyone can do it. Show Notes Extra Pack of Peanuts:  Travis’s site where h... Learn more about your ad choices. Visit megaphone.fm/adchoices

Matt and Andrew bicker like two five-year-olds fighting over a toy about what is the better choice, buying a car or leasing one.  Andrew gets sweary and Matt gets hangry.  Who will prevail? Unlike some of our topics, there is no clear answer to this question.  Should you invest? That one is easy.  Yes you should.  Should you go to college?  That question does not have a black or white answer.  The decision to buy or lease a car is one that will depend on the stability of your current situation and your priorities.  We’ll list some pros and cons of each. Leasing Advantages:  A lower down payment and monthly payment.  Maintenance and repairs will be covered.  You can drive a brand new car every two or three years.  When it comes time for a new car, there is no trade in hassle. Leasing Disadvantages:  You will never own the car.  You have limited mileage, typically 12-15,000 a year.  The contract can be confusing.  If your circumstances change, ie. you get a new job further away or move to a city where having a car is expensive and a hassle, you’re stuck with the lease. Buying Advantages: You can make modifications like a new stereo system.  You can drive as many miles as you like.  Eventually you will have no car payment.  You can sell the car anytime you like. Buying Disadvantages:  Your down payment and monthly payments are higher.  You have to pay for maintenance and repairs outside the life of the warranty.  The trade in process can be a hassle.  A big chunk of your cash is tied up in something that depreciates. These are all things that you will want to consider when deciding to buy or lease.  Or maybe just take Andrew’s advice and buy a bike.  In order to end an argument with no clear answer, I sent Matt and Andrew both to time out.  Andrew had to wash his mouth out with soap and we gave Matt a snack so his hanger would subside. Show Notes Edmunds.com:  A list of pros and cons for buying versus leasing. Allagash Tripel Reserve:  A strong, golden ale. Motherfucking Bike:  You just have to watch. Learn more about your ad choices. Visit megaphone.fm/adchoices

With the cost of college growing ever more expensive, more and more people are choosing to forego a degree and all of the debt that comes with it. I’ll explain why I didn’t go to college and if I have any regrets over my decision. For a lot of people, college is the natural next step after high school.  Our parents tell us to go; our teachers encourage us to go, all of our friends are going.  Once upon a time, there was no question that college was the path to riches.  But things have changed so does college still make sense? From an economic standpoint, the numbers are still in favor of obtaining a college degree.  People with a bachelor’s degree will earn 84% more over a lifetime than a high school graduate.  A degree will also open more doors.  Some companies will not even look at the resume of someone without a degree, no matter how much experience they may have.  It’s not fair, but it’s what a lot of companies use to screen the huge volume of resumes they receive.  Which college and the grades you got are less important. There are questions to be asked before making the decision though: * What kind of job do you want? * If you want to be a doctor, then the decision is already made. * Do you need to go to the most expensive, prestigious school that accepted you? Maybe you don’t.  The first few semesters will be pre-requisites, so maybe the best choice is to go to a local college part-time, work part-time, and live at home.  If more people took this route, there would be a lot less crushing student debt. College is not for everyone.  For some people, the past thirteen years of school are enough for a while.  There is no rule that you must start college at eighteen.  Maybe work for a bit, save some money and do some traveling.  Just living life can teach you not only what kind of job you want, but perhaps more importantly, what type of job you don’t want. There is plenty of time to decide on college so don’t let anyone rush you.  It’s you who will be on the hook for those loans so make sure the decision is your own. Show Notes iTunes U:  Complete courses from leading universities available for free download. Khan Academy:  A free online educational resource. Learn more about your ad choices. Visit megaphone.fm/adchoices

What is inflation, what is deflation and what benefits to knowing? We’ll explain the basics and what you need to know to make sure your money keeps pace. Inflation and deflation are terms you hear thrown around a lot but what do they mean and what impact do they have on us? What is Inflation? The value of a dollar is determined by its purchasing power, the number of things or services which that money can buy. When inflation increases, the purchasing power or our dollar decreases. In the US, our rate of inflation is 3% a year on average. That means the newspaper that costs $1 now will cost $1.03 the following year. Inflation means your dollar doesn’t go as far as it once did. Types of Inflation Demand-Pull Inflation: This is caused when there is an increased demand for something which drives up the price. When demand grows faster than supply, the price goes up. Cost-Push Inflation:If the cost to produce a good increase, a company increases the price to maintain their profit margin. Monetary Inflation: This happens when there is too much money in an economy. Too much of anything makes the value or price go down. The Impact of Inflation Inflation is not always a bad thing across the board. There are winners and losers when inflation happens. If you owe money to a creditor, you win! The cost of your debt is reduced. You really make out if the rate of inflation is higher than the interest rate on your debt. Inflation hurts your savings. A dollar saved now is worth less in the future when you need to spend it. If your raise at work is not more than 3%, it’s not really a raise because it doesn’t preserve the buying power of your dollars. If you are someone who lives on a fixed income that is not adjusted for inflation, your dollar is worth less too. If inflation in one country is higher than that of trading partner countries, the goods of that country are more expensive than imported goods. That can impact domestic producers and in turn, their employees How Inflation is Measured Inflation is measured by a market basket. It’s an imaginary basket of goods whose prices are totaled up. The number is called a price index and the cost of the basket is compared over time. This number is the price index, the cost of the basket today as a percentage of the cost of the same basket in the starting year. There are two price indexes used to measure inflation, consumer price index and producer price index. Consumer price index measures the change in price for consumer goods and services from the consumer’s perspective. Producer price index measures the average change of selling prices over time for companies that make goods and services, so changes in price from the seller’s perspective. The Federal Reserve is tasked with controlling inflation. Uncontrolled inflation can cause a recession. If the growth rate of the GDP exceeds 2-3%, demand can drive up prices leading to demand-pull inflation. The Fed slows growth by tightening the money supply, they allow less credit into the market. This makes it more expensive to borrow money which slows growth and demand and brings prices back down. What You Need to Know Year after year, inflation eats into the power of your dollar. You can buy less with that dollar. You have to protect your dollars by investing your money where it earns more than the average rate of inflation, 3%. The average return of the stock market over time is 7% so you’re beating inflation. The average interest rate on a savings or checking account is less than 1%, less than inflation so you are losing money when you have it parked in one of those low yield accounts. When inflation is high, interest rates go up so if you want to buy a house or a car or borrow money to start a business, Learn more about your ad choices. Visit megaphone.fm/adchoices

We all fail and we’re all afraid to fail.  Today we’ll discuss why failure is not always the end of the road and may even be the beginning of a new path. No one likes to fail but if that fear is stopping you from trying, it can hold you back in every walk-off life from investing to dating.  Every failure should be mined for lessons.  What could you do differently the next time you try?  Maybe the endeavor you failed it should be scrapped entirely.  There is a difference between quitting and failing. If you start a babysitting business and your town is mostly comprised of retired people, quitting as soon as you realize that is not so much a failure but a reassessment of your situation.  Maybe you decide to start an in-home companion business and now you’re making money. When it comes to investing a lot of people are fearful and not well informed.  Because of this you listen to an “expert” when deciding what to buy without doing any research yourself.  Well, experts get it wrong too and if you lose money, you’ll blame them and decide the stock market is stupid and you’ll just keep your money under the mattress. You can learn from this.  Doing your own research will always be more tailored because you have your own specific circumstances an expert doesn’t have knowledge of. There is more than one way to do nearly anything.  If you need to budget you can use Mint, you can use a spreadsheet, you can use the envelope method.  Just because you failed at one option doesn’t mean nothing will work.  If you burned dinner would you never make dinner again?  No, you would learn that you should not put dinner in the oven and then take a nap. Once you succeed, no one will remember your failures.  Every time you fail, learn a lesson and try again. If it makes you fell any better Einstein probably failed more times then you ever will. Show Notes Betterment:  No hassle investing site. Think Like a Freak:  The new book from the authors of Freakonomics Learn more about your ad choices. Visit megaphone.fm/adchoices

How do you stop yourself from burning through all your hard earned money like a drunken sailor on shore leave?  Today we discuss a few mind hacks that can help curb your baser monetary urges. The easiest way to not spend money is to stay home.  No siren song of the bar, no annoying co-workers forcing Girl Scout cookies on you against your will or asking you to sponsor their self-congratulatory charity walk.  Staying inside like Howard Hughes is not really an option for most of us but you probably encounter at least one invitation a week you could say no to. You spend forty hours a week or more with co-workers.  Do you really want to spend more time and your money with them at happy hour?  Turn down those invites that you really aren’t that interested in. It’s hard to say no to spending money unless you have a reason.  Maybe it’s “eff you”  money.  The money that allows you to tell your idiot boss to go to hell when he or she asks you to work the weekend one too many times. Maybe it’s a vacation or the ability to send your kid to college unburdened by student loans.  Put a picture of your goal in your wallet so you are confronted by it before you pull out that credit card. Maybe you discover a new hobby and go nuts buying every accessory for it under the sun.  You don’t need enough gear to outfit a pack of Sherpas because you’ve suddenly discovered camping.  Borrow or even rent the gear to test out the new hobby.  Hundreds of dollars of camping equipment stuffed in the back of the closet with your home brewing accessories and do it yourself taxidermy kit is not a good investment. Our favorite tip is the “Thirty Day List.”  Every time you see something you think you can’t live without, it goes on the list.  If at the end of thirty days, you still want it, then maybe you can honestly justify the expense.  This is even easier if you’re an online shopper.  Put the items in your virtual basket and leave them there for thirty days.  Some online retailers will even send you promo codes for discounts if you don’t check out right away. Taking away decisions will also decrease your spending.  Not spending takes willpower and willpower is finite.  If you are something of a creature of habit, take away some decisions.  Eat the same breakfast every day, develop a “uniform” that takes the decision-making process out of what to wear. When you have to replenish those things, food or clothes, etc, you can find what you need and get in and get out.  This cuts down on temptation. The longer you spend in Whole Foods, the more your will power will be sapped. The final tip is to budget.  If you have $100 to spend on lunches for the month and you reach the limit, you’ll be brown bagging it until the budget re-sets. Show Notes Mint:  LMM’s budgeting for dummies. Magic Hat Elder Betty: A great summer beer. Learn more about your ad choices. Visit megaphone.fm/adchoices

Travis Pizel from Enemy of Debt tells us how he and his wife accumulated $109,000 of credit card debt through lack of communication and how they paid off the debt and strengthened their relationship in the process. HOW does a couple accumulate that much debt?  Buying Faberge Eggs, eating panda steaks marinated in unicorn tears?  The answer is pretty mundane.  Never budgeting, never tracking spending, vacations, dinners out, and perhaps the biggest problem, never discussing money. Travis and his wife both had good jobs and always figured the next pay raise would put them in a position of eventually having enough money that they couldn’t possibly spend it all.  But that never happened and eventually Travis began to insulate his wife from how bad it had become.  Opening the bills after everyone had gone to bed, shifting balances to newly opened cards, asking for limit increases on existing cards. The watershed moment came when Travis got five identical letters from a company that he had five different cards with.  The minimum payment amount was going to be raised from 1% to 2.5% and there was no way he could meet that.  Together Travis and his wife contacted this debt management company and were put on a plan. The couple sent a monthly payment to the management company who had negotiated lower interest rates with each credit card company.  The monthly payment, including the company’s fee was $2489.  As part of the agreement the family had to close each credit card account and not open any more.  Over 55 months, the entire debt was completely paid off.  The total fee paid to the company was about $2700 but it saved Travis $50,000 in interest.   The debt was being paid but Travis and his wife had to fix the underlying problem that caused the situation.  They now meet twice a week to discuss what needs to be done that week and how they did.  It also required a lot of sacrifice.  No more fancy dinners out, no more vacations, a meal plan so they weren’t just throwing things into the grocery buggy. Now that the debt has been paid and the family is communicating openly, they have never been happier.  Travis and his family realize that if they could make it through this, they can make it through anything. And Travis found a great source of side income.  He is now a freelance writer in addition to his regular job as a software engineer. UPDATE: This is Matt! I mentioned on the show that my brother used a debt consolidation company — that is not true. He corrected me and instead he used a credit score fixing company to improve his credit score. Here’s the link if you’re interested. Show Notes My Personal Finance Journey: One of the blogs Travis writes for. Learn more about your ad choices. Visit megaphone.fm/adchoices

We’re doing personal finance potpourri today, answering listener’s questions about investing with Betterment, unpaid internships, 401K’s, passive income, and credit scores. 1.  What is Betterment and what’s so great about it?  Betterment is an investment tool that charges a low fee, no transaction charges, and abstracts investing.  LMM’s loves Betterment because it is a great first step to investing.  It’s easy to use and allows you to choose your level of risk with a simple sliding scale. 2.  Are unpaid internships worth it?  Jackie from Personal Finance with Jackie Walters sent this one in.  An internship is valuable even when unpaid.  You gain experience, have something to add to your resume, can cultivate good contacts for the future and sometimes an internship turns into a full time job. 3.  If an employer does not offer matching 401K funds, should you contribute the minimum to participate and the rest into a Roth IRA?  We’ve done a few Roth 401K episodes and Matt paid attention!  Unless you are getting matching, the only reason to invest in a 401K is if it would drop you down a tax bracket.  This will show you the federal brackets for 2014. 4.  Is passive income possible?  Absolutely!  There are lots of ways to earn passive income.  Being a landlord, website affiliates, investing. 5.  If you want to buy a house, should you close credit cards that you don’t use?  There is almost never a circumstance where it’s a good idea to close a credit card.  Part of your credit score is made up of the average age of accounts. The longer the age, the higher the score.  Closing an account will lower the average age.  If you have a card you don’t use often, put a small recurring automatic charge on it like a Netflix or gym membership.  This will keep your account active as some companies will close an account that has been dormant. Keep the questions coming guys! Show Notes Betterment:  Use our affiliate link to help support the site and get a few free months of fee-less investing! Mint:  LMM’s chosen budgeting tool. Learn more about your ad choices. Visit megaphone.fm/adchoices

In this special Father’s Day episode Matt and Andrew interview their dads to find out what mistakes and victories they had with money and what lessons they have for their sons and us listeners. The apples don’t fall far from the trees.  Andrew’s dad has been good with money for a long time.  Andrew’s father didn’t grow up with money and learned important lessons watching his own parent’s struggle.  He wanted to be a musician but soon realized that life was not a secure one.  He got a full time job and went to school at night and his job covered 80% of his tuition expenses.  He eventually received an MBA. When Andrew’s dad was coming up, it was unusual to job hop.  A lot of people of that age would work for the same company for thirty years and retire with a pension.  But his father was never afraid to chase more money and even when not actively seeking a new job, he would still go on interviews to see what might be out there.  He was able to increase his salary much quicker this way than by waiting for a small yearly raise. Andrew’s dad faced a few job losses in his career when the companies he worked for went under.  Faced with unemployment, he treated getting a job as a job, spending 8-10 hours a day on it.  He would contact a few recruiters, look at a few job boards and company websites and mine his contacts.  Even at the height of the crash, following these guidelines, he had a new job in less than four months while a lot of people around him went a year or more before finding employment. Dad’s parting advice is to never give up and live within your means while still enjoying a good quality of life. Continuing the theme of the apple and the tree, Matt’s dad is a musician as well.  And like Matt, he has only become educated about personal finance recently.  Also like Matt, Matt’s dad worked from a very young age.  He worked in a laundry for the same family from the age of ten through high school.  He did attend college and wisely decided to go locally and live at home to cut expenses.  He did graduate with student loans but paid them off within twelve years.  Sadly, twelve years sounds really quick to those graduating today. Matt’s father was a professional musician for six years.  As his family grew, he knew he needed to make more money and music became a hobby rather than a vocation.  Matt’s father lived paycheck to paycheck for many years, juggling payments for everything but the mortgage. Two things convinced Matt’s dad to take charge of his finances.  He saw Matt following the same paycheck to paycheck path and knew he had to lead by example.  And a friend recommended a book, The Richest Man in Babylon, which changed his views on money and finances.  The main lesson of the book being, “pay yourself first.” Today Matt and his dad are on the same path toward financial stability and teaching each other. Thanks to all the dads out there, whether you are good with money or not, you’ll always be our dads. Show Notes Ommegang Abbey Ale:  Andrew’s Father’s Day drink. Macallan 12-Year Single Malt Scotch: The drink Matt and dad shared. Career Alley:  Andrew’s dad’s blog.  This runs in the family too! The Richest Man in Babylon:  The book that helped Matt’s dad with his finances. Custom Rooms By Design: Even though Matt’s dad didn’t mention it, here is his website. Learn more about your ad choices. Visit megaphone.fm/adchoices

This financial life episodes give us a chance to delve into a listener’s personal finance life and to give them some advice to improve it. Today we have This Financial Life with Connor. Connor is 23, lives in Manhattan, has been working in finance as a commercial underwriter for about a year and is making $70,000 annually before bonus.  He has no debt,  credit card debt or student loan. Connor has some money invested in individual stocks.  He bought GM after the recall fiasco because the price was low.  A smart move as GM might have dipped, but it’s “too big to fail” so not going anywhere anytime soon.  At least until Elon Musk decides otherwise.  He also bought stock in an e-cigarette company because it’s a fast-growing trend.  And WWE (disclaimer:  Connor is not a pro-wrestling fan) after it dropped 43% on news that it did not get enough monthly subscribers to offset lost pay-per-view orders.  So Connor does his research and makes a move when other’s fear to tread.  A favorite LMM trait. Once again proving he is an attentive LMM’s fan, Connor has maxed out his 401K and Roth IRA accounts.  At present, Connor has about $54,000 invested, and the majority of that money is saved from part-time jobs he held while in high school and college.  If only us older folks had been as savvy as Connor. So what is there to improve upon?  Well, Connor might be living a little too baller.  Not because of his salary but because of where he lives.  Manhattan is expensive people.  Even though Connor has roommates, he’s spending 43% of his income on rent.  A good rule of thumb for rent expense is about 30%. Connor also makes the mistake that a lot of us make by keeping too much in a savings account.  That money is better utilized for something like Betterment.  A Betterment account can be liquidated in two days.  Unless you need bail money or something, there aren’t too many emergencies that will require faster access. We all wish we could be as smart as Connor was with his money so early on.  He has some room for improvement, but he is nearly a textbook case of smart money management.  As long as Connor continues to listen to our podcast, he’ll do well. Show Notes Mint: LMM’s budgeting weapon of choice. Betterment:  The source of your emergency fund for everything other than bail money. Learn more about your ad choices. Visit megaphone.fm/adchoices

When did tipping become such a minefield? Who do you tip, how much, how often? We are going to sort it all out for you. We are giving you just the tips and will tell you how much to tip pizza delivery and everyone else. It seems that everywhere you go, no matter what you do, there is someone you need to tip. And tip well. A decade ago for instance, 10 percent was an acceptable tip — 15 percent if the service was impeccable. Now, anything less than 15 percent is considered inappropriate. For good service, 20 percent is the norm. In more expensive restaurants, patrons are sometimes expected to tip up to 25 percent on the total amount of their bill (taxes included). Sometimes you expect it. If you are out to dinner, you know you are expected to tip the server. But there are a lot of other situations where you might not be so sure. We will explain what you should tip in both kinds of situations. Food Tipping around food probably causes the most consternation for people simply because there are so many scenarios. Unless you shop for your own groceries and cook all of your meals at home, these are some of the situations you will run into that require a tip. Restaurants Standard practice is to tip 15-20% on your restaurant check, and yes, that includes drinks. Sometimes there is a workaround for this. If the restaurant allows BYOB, do that. Sometimes BYOB places require a corking fee, a charge incurred for the server opening and pouring the wine. See if the corking fee is less than it would cost to buy wine in the restaurant. If you have a wait for a table, grab a drink at the bar and drink it slooooow then cash out before moving to your table. It’s customary to tip the bartender a dollar or two for drinks purchased at the bar so doing this may save you some money on the tip. Even if you do order more drinks with dinner, at least you won’t have to factor that first one into the tip when you get the bill. If you want to earn a little money when you go out to eat, book your reservation through Seated. You’ll get a $10-50 credit for Lyft, Starbucks, or Amazon. It will basically cover your tip! What if you had poor service? Unless the service was really egregious, it’s not cool to leave no tip at all. Servers generally tip out support members of staff so when you stiff a server, you stiff people like runners and bussers too who did nothing to deserve it. If you had poor service, consider who exactly is at fault. Was the food cold? That’s likely the server’s fault. They didn’t get the meal out to you in a timely way, so it sat in the window getting cold. Was the food of poor quality? That’s the restaurant’s fault, not the server’s. Tip them the standard 15-20% and just don’t return. Pizza and Food Delivery Well, you could have taken your lazy ass to the restaurant and eat in or brought the food home, but you couldn’t be bothered for whatever reason. So the person carrying food right to your door deserves something for doing so. But they aren’t refilling your drinks or checking to make sure everything was to your liking once you began eating. A fair tip for delivery is 10%. However, if the weather is terrible, tip at least 20% and preferably in cash. Delivery workers have a hard, dangerous job on a nice day; it’s ten times worse in searing heat, pouring rain, or driving snow. Pickup Orders You were too lazy to cook but not too lazy to go out and pick up your food. Do you have to tip on a pickup order? If it’s a small, simple order and there is a tip jar on the counter, throw a dollar or two in there. You don’t have to, but it’s a nice gesture. Learn more about your ad choices. Visit megaphone.fm/adchoices

We’re talking Roth and traditional IRA’s today with Darin Hayes, author of Beer Money: A Beer Drinker’s Guide to Personal Finance and Investing. Let’s put this in drinking terms.  Taxes are a hangover.  A Roth IRA gets the hangover out of the way before the drinking even commences because the money contributed is taxed before the contribution.  A Traditional IRA let’s you drink first and the hangover comes later because the money is taxed once it’s withdrawn. How should you decide when you want to suffer your hangover?  A very simple way to determine is whether or not you receive a tax refund.  If you get money back, do a Roth.  You likely are in a lower income bracket and don’t need the tax deduction.  A lot of young people with years ahead to work and invest will fall into this category.  If you’re older, making more and in a higher tax bracket, a Traditional IRA will give you that deduction that may drop you into a lower bracket. A Roth IRA also has the advantage of having no penalties for early withdraw on the principal.  This makes a Roth a good place to invest your emergency fund.  If you pull out any gains, there will be penalties but not on the initial investment. What is the difference between an IRA and a 401K?  A 401K is an employer sponsored program.  For those whose employer does not offer a 401K or are self-employed, an IRA can be set up by an individual and serve as your retirement account. A SEP-IRA is something for self-employed individuals to consider as well.  You can contribute up to $52,000 a year depending on income.  A SEP-IRA can be opened with a brokerage firm or an on-line investment account. How’s that for a simple break down?  Putting things in drinking terms makes everything easier to understand! Show Notes Beer Money: A Beer Drinker’s Guide to Personal Finance and Investing:  Darin’s easy to understand book on managing your money. Get Beer Money:  Darin’s website. Ommegang Hennepin: A rustic golden ale. Blindfold Black IPA: A light bodied IPA with a bold, hoppy character. Learn more about your ad choices. Visit megaphone.fm/adchoices

For many working Americans, a 401(k) is often the single largest asset they have. Unfortunately, managing a 401(k) can be extremely complicated, resulting in the poor management or complete negligence of this very important savings account. Fortunately for most Americans thought, they have some time to plan. As one of my favorite retirement quotes says, “Hang in there, retirement is only about 30 years away” – My jerk Uncle Dave. This is why Blooom was created. The robo-advisor-based service helps Americans of all income brackets with managing their investments through their employer-sponsored retirement funds, including 401(k), 403(b), 401(a), TSP, and 457 accounts. Blooom aims to make managing a 401(k) simple, easy and accessible — no matter how much money is in your account. In this Blooom review, we’ll cover the ins and outs of the service, along with areas where Blooom stands out and falls short, so you have a better idea of if the service is right for you. What is Blooom? Blooom is an automated online tool that manages your workplace retirement plan for a flat fee each month. As a Registered Investment Advisor with the U.S. Securities and Exchange Commission, Blooom is a fiduciary, meaning the company is required by law to act in your best interest and does not invest your funds based on conflicts of interest or additional revenue for the firm. For only $10 per month, Blooom applies its proprietary algorithm to allocate funds for you to help you achieve a greater return by the time you retire. Its direct management approach makes it, unlike other robo-advisors that merely analyze your 401(k) and send advice on how to manage your investments on your own. Once Blooom allocates funds to bonds and stocks on your behalf, your account will be rebalanced every 90 days to ensure appropriate investment. A considerable benefit of the Blooom service is that it works with virtually every retirement savings account that can be accessed online. All you need is to provide some personal information and the login information you use to access your online 401(k) account — and Blooom does the rest. Users can receive a free portfolio overview that shows the strengths and weaknesses of the account before choosing to enroll in Blooom’s services. Founded in 2013, Blooom currently manages more than $2 million in assets, with customers ranging from 18 to 76 years of age. One of the founding principles of the company was to provide day-to-day management of retirement funds to the overlooked Americans who may not qualify for additional investment assistance. Blooom is also currently the only robo-advisor that focuses specifically on 401(k)s. While this tool is great for individuals who need more assistance managing their 401(k), it may not be the best option for those who have multiple types of investments, such as IRAs. It is also designed to execute more high-risk investments, although this feature can be altered by the user. If you are interested in Blooom but are not quite sure if it is right for you, the rest of this article will provide a deeper dive into how the service works, including its strengths and weaknesses. Blooom quick view: Pros and cons How Blooom works Users start with Blooom by creating an online account and providing basic personal information like a... Learn more about your ad choices. Visit megaphone.fm/adchoices

  We answer your questions about emergency funds, whether should you prioritize debt or investing, and is being frugal the latest hipster trend?  Find out! I have $30,000 in a savings account and am moving it into Betterment as LMM recommends.  How much should I move over monthly until it’s all relocated? The answer will be different for everyone.  Andrew followed up with Dillon and found he was saving $1100 a month.  Andrew advised 2.5 times that amount be put into Betterment.  Once Dillon has $20-30,000 in Betterment, he should stop contributing and consider that his emergency fund.  Then start diversifying into something like Van Guard. I have a Capital One Quicksilver card with 0% APR until January 1, 2015.  Will I be charged interest if I don’t use this card after December 30 if the bill is due on January 12th? Even with a 0% APR card, you have to pay at least the minimum every month, otherwise you get an interest charge on the entire balance. Automate the monthly payment so it won’t slip your mind. I disagree with your stance of paying off debt over investing.  Even if the market has a down year, the money should be invested with a time horizon of at least five years.  This isn’t really a question but a statement.  We’ll allow it anyway.  When we make our argument, we are referring to high interest debt like credit card debt.  For something like  student loans or a mortgage with a low interest rate, you can invest your money before throwing huge amounts at those debts. In Australia banks allow you to open a trading account linked to your checking account.  I can buy and sell shares through my account.  Should I use Vanguard or stick with my bank? You can invest that way through Fidelity too here in the States.  If it’s like a 401K and you only have access to a limited amount of funds, the fees will likely be high. Vanguard has very low fees and as Betterment isn’t available in Oz yet, Vanguard is the best option – these are our favorite Vanguard funds. Do you think frugality is a trend right now? Absolutely, having really picked up steam after the 2008 crash.  There are even shows about couponing!  It seems to trend during crashes and then fade away a bit when things are better. We love doing 5 questions shows.  Keep sending your questions in.  If you want to know you can bet others are wondering too. Show Notes Betterment: The place to stash your emergency fund. Vanguard: For the more sophisticated investor. “All My Money” Personal Finance Rap Video: If you’re new to the show, you might not be aware that in February of 2014, we self-produced a rap video about personal finance. I’ll include the video below, but you can click the link to see a behind-the-scenes videos, lyrics, and more. Ommegang Hennepin Farmhouse Saison: This is the beer that Andrew enjoys on the show in a big-ass bomber bottle. See photo below. Learn more about your ad choices. Visit megaphone.fm/adchoices

Do you know how much your time is really worth? Today we discuss when to trade money for time and vice versa. There are things we all hate to do, mowing the lawn, painting, cleaning, food shopping.  Or maybe you’re a weirdo who loves those things.  That’s okay. Takes all kinds.  How do you decide if you should do these kinds of things yourself or pay someone to do them for you? Math, that’s how.  The simplest way to get a yes or no answer is to work out how much you make an hour, even if you’re not paid hourly.  You’re worth $20 an hour, it costs $5 a week to have Fresh Direct deliver your groceries.  It would take you two hours to drive to the store, shop for your items, pay, drive them home and bring them inside. Unless you’ve turned food shopping into a speed sport like Matt has and can bang the whole process out in fifteen minutes.  If you hate food shopping, then it makes sense for you to pay for Fresh Direct. But it’s not always just a matter of dollars and cents and time.  Maybe you work from home you lucky duck.  And you have plenty of time to clean your house.  You’ve done the math and financially it doesn’t make sense to pay someone to do it for you.  But you really hate cleaning your house.  So maybe from a quality of life stand point, it does make sense for you to outsource a hated but necessary task.  That’s okay too. Or on the flip side.  You loooove cleaning the house.  But you make thousands of dollars an hour.  While you’re happily mopping the floor, you could be making bank by spending those two hours working.  By all means, clean that house you freak!  Come do mine too if it will make you happy.  I want the best for you. So while you can easily answer this question with math, life is a bit more complicated than that.  As long as you’re not putting yourself in a hole, outsource what you don’t like to do and spend your time doing something you enjoy. Show Notes Red Hook Audible Ale:  Today’s tipple of choice. Rescue Time: A resource to help you eliminate time drains. Learn more about your ad choices. Visit megaphone.fm/adchoices

Relationships are hard enough as it is without talking about finances. So we’re gonna lay it down about how to handle money in a relationship. You have a better chance of staying married than winning the lottery so that’s good news!  But how can we increase the chances that you’ll stay married when money issues arise? To prenup or not prenup?  Oooh, sticky.  If there is a chance that the man or woman of your dreams is marrying you for your vast wealth or celebrity, a prenup might be the life choice for you.  But if you’re just a regular guy or gal, a prenup is probably not that important. A good solution to avoid money arguments is a joint checking account where each partner contributes a percentage of their income for household expenses. Each partner can also have a private account that they can spend on whatever they like. Open, on-going communication is better than the occasional fight.  This is especially important before moving in together or getting married.  Imagine finding out on your honeymoon that your beloved has brought $80,000 in credit card debt to the marriage. Money issues are an uncomfortable conversation to have and they should not begin with you asking but by you telling.  By putting your cards on the table first, the other party will feel more comfortable and less ashamed about disclosing their own financial situation. Once a week or once a month, go over expenses together and see where one of you might be a bit over the top and need to cut back. Discuss large purchases before making them.  If your spouse comes home with a new outfit that’s probably not the end of the world.  If one of you comes home with a new car, that’s probably going back. Or driving you to the divorce lawyer’s office. In some situations a domestic partnership can be more beneficial than marriage.  Many employers offer health benefits to domestic partners and you can avoid the “marriage tax,” because joint filers are sometimes taxed at higher rates. Money is one of the biggest stressors in a relationship but it doesn’t have to be.  Follow our advice and live happily ever after. Show Notes Mint: LMM’s preferred budgeting tool. Learn more about your ad choices. Visit megaphone.fm/adchoices

 Listener Daniel Murrell to analyze his financial situation.  He shares a great strategy for making college affordable. Daniel is twenty three, lives in Southern California, works and goes to school.  And he has a smooooth voice.  Daniel works in overnight freight for Home Depot.  Daniel shares an apartment with his brother.  His portion of the rent is $475 a month and the utilities are $65 a month.  Daniel makes about $1300 a month, paid bi-weekly.  He’s able to use one check for living expenses. He drives a motor cycle to work rain or shine.  Daniel’s transportation situation is one of the things working for him and working against him. He rides his motorcycle to work rain or shine.  Daniel bought the bike used, spends $13 for gas a week and pays $140 a year for insurance.  However, Daniel bought a car with a personal loan a few years ago.  The car is long gone, traded in for the awesome bike but he’s stuck with the payment.  The balance on the loan is about $3500. Daniel is investing monthly in Betterment.  He has a few credit cards with $0 balances one with a small limit that usually carries a balance.  Daniel keeps about $800 in an emergency fund. What can Daniel do better?  The biggest problem is the personal loan used to buy the car.  Daniel is no stranger to hard work.  In the past he has worked multiple jobs and doesn’t mind doing so again.  By picking up another job for a few months, Daniel can get that loan paid off and use that money to invest more in Betterment.  Daniel should keep his unused credit cards open.  Closing those cards will lower his credit rating by shortening the length of his credit history and lowering his available line of credit. What did Daniel teach us?  He goes to school for two semesters, takes a semester off to work and pay off the previous semesters.  Genius!  This is something all students should consider. We also steered Daniel to Jim Wang’s site Microblogger so he can monetize some of his hobbies.  But I think he should do voice over work or record audio books.  People would pay to listen to Daniel read from the phone book! Show Notes Shiner White Wing Belgian White: Andrew’s tipple. Betterment:  LMM’s and Daniel’s favorite investing tool. Learn more about your ad choices. Visit megaphone.fm/adchoices

There is no doubt about it, being broke sucks. But that isn’t to say you can’t learn valuable lessons from being broke. These are the most important lessons I learned from being broke. * Credit cards are a good thing when used correctly.  You can earn cash back, free flights, and free hotel stays, win! * Debt is the devil.  It is the devil waiting to poke you with its pointy pitchfork.  No one likes that. * Banks are the devil too.  Fees, fines, charges, crap interest.  The banks are the devil with two pointy pitchforks. * Mint is mint.  We have a lot of love for Mint at LMM.  For a lot of us, it was our first step in taking control of our finances. * Investing is what makes people rich. Starting your own business is one path to riches, but  not everyone can or wants to start their own business.  But all of us can and should be investing.  Always be investing. * I don’t need everything.  Neither do you.  Stop buying shit! * Staying home is ok.  Invite friends over to cook a meal, watch the game, play cards.  Not only will you spend less than if you go out, but unless you have crappy friends, they’ll bring some booze! * Education is critical (books, not college).  This one is controversial, but for the same eleventy billion dollars you spent on college you could buy a lot of books.  College is one path to education, but it’s not the only one. * Don’t be afraid to ask for money.  Whether this means not getting low balled on freelance work or asking your boss for a raise, no one is going to give you money unless you ask. * Job security is a myth (except for teachers).  The days of being a “company man” and retiring after thirty years with a pension and gold watch are over folks.  You have to be flexible and always looking for the next opportunity even if you feel secure in your current situation. * Owning a home is not for everyone.  This ties into #10.  If you lose your job and can’t find work in your area, you can’t pack up and go if you are tied down with a house.  There are a lot of hidden costs both regarding money and time when you own a home. * Build an emergency fund for peace of mind.  Having that cushion allows you to sleep easier at night.  You could survive a job loss or a pay cut or an expensive car repair. * Junk mail.  The clue is in the name.  Credit card offers, coupons for stuff you don’t need and won’t use.  Don’t even open it, straight into the shredder. * Bad habits are killing you.  Overeating, smoking, drinking to excess.  You are wasting money, harming yourself, and costing the future you tens of thousands of dollars in medical expenses and missed work. * Choose Your Friends Wisely.  Don’t spend time with toxic people.  Surround yourself with people who support your goals and chuck anyone who makes you feel bad about yourself. * Do what makes you happy.  Just the simple things, a good cup of coffee, a walk in the park, spending times with your now detoxed list of friends. * Hobbies are important.  Choose a hobby that you enjoy, that teaches you something, that enriches your life.  Maybe you can even make a little extra money at it! * You are your own worst enemy.  We are the choices we make.  You don’t need to be told that a credit card is not free money.  You don’t need to be told that letting your student loans default is a terrible choice.  Whatever you tell yourself that allows you to continue that kind of behavior, stop.  Just stop, it’s that simple. Here is the original article. Show Notes Learn more about your ad choices. Visit megaphone.fm/adchoices

Andrew and Matt calculate the absolute minimum they could each live on.  We hope it will inspire you to cut some of the frills out of your spending. If you cut your expenses to the bone, how much could you live on?  And what does “live on” mean?  Would you be willing to eat ramen for every meal or would you still need a weekly Whole Foods run?  Is it realistic to get rid of your car? We pad our expenses with a lot of unnecessary fluff.  If you lost your job or if you decided to quit your job, you would get by on a lot less than you are spending now.  As a hypothetical, list out your expenses, or check your Mint account and decide what you could cut but still maintain a good quality of life and be happy. Now see what you could cut to live like a recluse, never going out, eating only two meals a day, no alcohol, no public transport. Of course you could try one of these approaches for a month and see how you do but it’s really just an exercise.  It can be reassuring to know that if you had to live on $1500 a month you could. Imagine if you did it though.  For just one month.  How much money you would accumulate and the things you might discover you could live without for longer than a month.  Maybe some of those changes will become a permanent part of your life. Our mental attachment to things is strong but once that attachment is broken, we usually see that not having cable does not really change day to day life in a negative way.  It may even have a positive impact.  Now you have to fill those hours spent in front of the TV with something else.  Maybe you read more, cook more, start exercising, spend more time with your family.  Take the one month challenge and let us know how you do! Show Notes Shiner White Wing Belgian White: With hints of coriander and orange peel. Mint:  The easy way to budget. Betterment:  The smart way to invest. Learn more about your ad choices. Visit megaphone.fm/adchoices

We get lots of questions about student loans so we decided to bring on an expert to help.  Heather Jarvis joins us to answer of your pressing questions. Heather graduated from Duke Law School with $125,000 in student loans.  She wanted to use her degree to help poor people so it wasn’t going to be a big salary helping her pay that back. Heather has worked on the government’s student debt relief programs but admits they are complicated and tricky to access. Heather’s site is designed to make things easier for those who already have student loan debt. We asked Heather to explain some of the programs to help deal with student loan debt. 1. Income-Based Repayment Plans This is an income-based repayment for federal student loans. You do need to show financial hardship in order to get it. Which shouldn’t be too hard as student loans are a financial hardship. Your monthly payment will be based on the income reported on your tax return and compared to the national poverty rate. 2. Public Service Loan Forgiveness Program Public servants can apply to have their loans forgiven after ten years. Heather says, “It’s all about making the right kind of payments, on the right kind of loan while working the right kind of job.” 3. Deferment or Forbearance If you’re having trouble paying your loan no matter how much the monthly amount is lowered to, you can apply for a forbearance, which allows you to defer your loan payments for a certain period of time.  The interest still accrues during this period though so keep that in mind. Basic Student Loan Tips from Heather * Everyone should be filling out the FAFSA forms, even if you think you won’t get it. * Try to get federal loans over private loans because they tend to have lower interest rates. * Use StudentLoans.gov and check out some of the tools and services there. * State loans are the worst of both federal and private loans. * Be careful about what you borrow. Understand what kind of loans you have and what your options are. * Think more carefully about the cost of the colleges you plan to attend. * Consider community college for a few years to do your prerequisite courses. College debt can be crippling but there is help out there.  If you are struggling, consult Heather’s site and get some help. Show Notes Ask Heather Jarvis:  Take control of your debt. Mint:  The easy way to invest. Learn more about your ad choices. Visit megaphone.fm/adchoices

We share stories about how we found awesome jobs in the past and new ways you can go about getting the job of your dreams on this episode. If you want to walk the path of financial success (following our Wealth Wheel, of course), then you need to begin with income. You can’t get out of debt, budget or invest without money. But money isn’t everything. You also want a job that you enjoy or at least don’t feels miserable going to every day. What Kind of Job? Before you start scouring the want ads (no one does that anymore),you should ask yourself a few questions to determine what kind of job you want. Do You Hate Dealing With People? Whether it’s because you are an introvert or you just have little patience for the stupidity of the average person, if you hate dealing with people, find a job that limits contact with them. Become an economist, a software developer, or an accountant and you will have a blissfully people-free career. How Much Do You Want to Work? Some careers provide more work-life balance than others. If you’re young and single or have a lot of debt to pay off, you might not mind working a lot of nights and weekends. But as you get older and have a family, it might not be ideal any longer. If you don’t want to spend all your time working, consider a career in corporate recruiting, data analysis or insurance sales. Be sure to research the culture of the particular company you are applying for though. Some companies may “encourage” working long hours even in jobs that don’t traditionally require it. How Much Schooling is Required? You may have enough education to get hired at entry or mid level but if you want to move up, will you need more? If the answer is yes, you shouldn’t automatically be deterred. There are many options to go to school part time and continue to work and your employer may pay for all or part of your education. How Much Do You Need to Live On? Many of us harbor dreams of doing something creative or working at a non-profit for a cause important to us, but we also need to pay our bills. Know the minimum you can earn to pay your bills, pay any debt, and save for the future. If you’re still determined to take a job for love over money, that’s okay. There are plenty of ways to be frugal and make money on the side. Getting the Interview Now that you have an idea of what you want to do, here are some ways to get an interview. Have a Killer Resume We did a whole episode on this. Unless you have an “in” at the company you are applying to, your resume is your only chance to get the attention of someone in a hiring position. Clean Up Your Social Media Anyone considering calling you in for an interview is going to Google your name first. What will they find? If you’re this piece of shit, you can expect never to get a job, ever. But you probably just have some embarrassing Facebook posts and Instagram pictures. Clean that stuff up and make every account you have private.  Set Up a Killer LinkedIn Profile Recruiters are using LinkedIn to find candidates and businesses are using Google to find new employees, so if you don’t have a profile set up yet... Learn more about your ad choices. Visit megaphone.fm/adchoices

Interested in purchasing individual stocks? Listener Patrick Kenneally teaches us how to research stocks. Patrick had his first taste of investing while in college where he was part of Huntington 360, the student-run group that invested a portion of the school’s endowment in mutual funds. There are some tools that Patrick recommends, the first is an SEC site that will give you any publicly traded company’s quarterly filings.  The next is from Business Week which provides financial statements as well as ratio calculations. Aside from hard numbers, it’s also important to consider emotions that could be inflating or deflating a stock price.  Several months ago a Tesla car caught fire and affected the stock price.  Conventional cars catch fire too but as Teslas are new, this was suddenly considered a safety issue specific to them. Another important consideration when buying single stocks is your familiarity with the company’s products.  If you are researching something you have no knowledge of, you won’t understand the data you are finding. If mutual funds are more your thing, Morningstar’s compare tool is a good starting point for your research. Loyal3 is a site geared towards beginners in the stock market that allows you to make small volume trades for no fee.  Robin Hood is a similar site that is not live yet but  poised to shake up the big investment banks. Thanks to Patrick for spending some time with us and teaching us all how to be more like him and Andrew! Show Notes Morningstar:  They’re mutual fund comparison page. Learn more about your ad choices. Visit megaphone.fm/adchoices

Travel expert Andy Steves teaches us how to travel abroad affordably while having an authentic experience. Andy grew up traveling to Europe with his father, the travel guru, Rick Steves.  He worked college summers as a tour guide for his dad’s company and saw a gap in the market while spending a semester studying abroad in Rome.  In 2010 Andy set up his own travel company, Weekend Student Adventures Europe to take study abroad students on affordable intra-Europe three day weekends. For a lot of students, their semester abroad is the first time they have had to budget their money.  Dealing with a new currency makes this even harder as does the “foreignness” of a new place.  Young people perhaps outside the US for the first time might be too timid to venture off the well trodden tourist path and end up spending more money for a less authentic experience. By doing some research, which is half the fun of a trip for some of us, you can avoid the tourist traps and really experience a new place.  When looking for a restaurant, don’t go to the place on the main strip with menus in every language.  Walk a few streets over and find the place the locals go.  The food will be better, cheaper, and the experience more memorable.  The same applies to bars and clubs.  Every city has an American ex-pat bar but why did you spend $1000 on airfare to spend the evening drinking with the same people you can drink with back home? We all have romantic dreams of Parisian cafes and Roman trattorias but we don’t all have the budget.  There are so many beautiful places in Central and Eastern Europe that are much more affordable.  You can have a three course dinner in Krakow for 5-6 Euros which is $8.  You can spend an afternoon in a thermal spa in Budapest for 4 900 forints which is about $22. As Andy’s dad taught me, “Travel is a force for peace.”  It makes you a better person and gives you  the ability to make the world a better place. Show Notes WSA Europe:  Andy’s site providing affordable weekend travel. Mint:   LMM’s favorite budgeting site. Learn more about your ad choices. Visit megaphone.fm/adchoices

Tony Stubblebine, CEO of Lift.do  discusses how his habit building app can help us build good habits be they financial or another realm of our lives. Tony has a long background in tech startups.  We was the head of engineering when the first version of Twitter was built and was involved in the site  Wesabe which was a precursor of Mint. Tony is now the CEO of Lift which is a habit building app and a support system for over 200,000 goals including saving money, improving diet, and meditation.  Tony likes to call it “a personal coach that lives on your phone.”  He was inspired by the level of support he saw as a guest at a Twelve Step meeting and thought if we could have that level of support for the smaller goals in life, we could make succeeding so much easier. Like a lot of apps, Lift is free so how will they eventually make money?  The plan is to charge a fee for higher levels of coaching involving one on one interaction with one of Lift’s experts. What are some of Tony’s success building habits?  Rather than looking at a to do list,he actually blocks out time to accomplish the list.  This adds a level of accountability to an easily ignored list.  Tony likes to keep it simple.  You don’t need an elaborate scheme cooked up by a bunch of un-touchables living in their parent’s basement to ask a girl out.  You need, a job, clean clothes, and the ability to look her in the eye.  That’s it, the old K.I.S.S. method works whether you are scoping chicks or saving money. What’s Tony up to next?  Lift is adding a Q&A function. The community is one of the friendliest and most helpful on the internet.  We encourage you to join Lift to find some support for your goals, ever how big or small they may be! Show Notes Lift:  The habit building app co-founded by Tony. How to Meditate with Lift: Start meditating everyday with Lift. The Quantified Diet Project: The diet project that Matt and Tony talk about at the beginning of the episode. Tony’s Twitter: Connect with Tony here! Learn more about your ad choices. Visit megaphone.fm/adchoices

Forbes Magazine published a list of common money mistakes many of us make.   Which ones are you making? 1.  Not having a budget.  Chances are you have more than Matt’s three monthly expenses and unless you’re budgeting, you can’t keep track of them.  No need to be old fashioned and create a spread sheet. There are plenty of online tools available to make this a painless process. 2.  Avoid bank fees.  Bank fees are for suckers.  There are plenty of banks that don’t charge you for the privilege of housing your money while paying you crap interest. 3.  You have no emergency fund.  There are different definitions of what an emergency fund is.  For some it’s $1000 in a checking or savings account.  For others it’s a year’s worth of expenses invested.  For most of us, it’s somewhere in between and having any emergency fund is better than none. 4.  5.  Not taking full advantage of matching 401K funds and not contributing from your first pay check.  What if your employer doesn’t match?  It’s still worthwhile to contribute because it takes money from your check before you can miss it and if you can contribute enough to drop you down a tax bracket. 6.  Not knowing how much you should save for retirement.  If you don’t know this, listen to our episode on the 4% rule. 7. Not choosing the best student loan repayment plan.  There are several options depending on the type of loans you have, your income, and the field and sector you work in. 8. 9. 10.  The next three address estate planning, disability and life insurance.  Perhaps not something a lot of you are thinking about just now, but become more important the older we get and if we start a family. 11.  Using an investment adviser as you financial planner.  LMM is going to make the editorial decision to tell you that you don’t need either of these.  No one will ever care more about your money than you and these guys rarely beat the average.  So save your money, listen to us and learn to do this yourself. 12. Only considering the upside when choosing investments and choosing those investments based on ratings or headlines.  Yes you could absolutely pick a stock, get a lucky hit and retire at 25.  You could also lose your ass.  Do your research, don’t choose based on media hype, that’s what the media does.  Today’s Tesla could be tomorrow’s Edsel. We know our listeners are savvy and getting savvier but take an overview of your situation and see if you are making any of these mistakes. Show Notes Betterment: On-line investment tool. Mint: On-line budgeting tool. Learn more about your ad choices. Visit megaphone.fm/adchoices

Your future self will you for establishing an emergency fund now. It’s important to set aside emergency savings can help you get in case your home needs an urgent repair or something more serious like unemployment. We will help you figure out how much you need and how to get an emergency fund started. Having an emergency fund is one of the most important things you can do. It’s part of adulting. Your savings should be able to cover your major expenses for three to six months. What is an Emergency Fund? An emergency fund is a pool of liquid money set aside for unforeseen expenses like a medical expense or a car repair. Having an emergency fund can be the difference between a small bump in your financial life and complete disaster in your entire life. Having a robust emergency fund gives you peace of mind. No one wants to live one paycheck away from not being able to pay the rent or one car breakdown away from not being able to get to work. It also gives you some freedom. If you decide to leave a relationship or your job becomes so unbearable that you have to leave before finding another or you want to go back to school or start your own business, having an emergency fund gives you the freedom to do those things. Keeping that money separate from the money you use to pay bills can help curb frivolous spending. Sometimes when you see a big number in your checking account you get a little cocky and a little more reckless. Keeping the money separate can help you avoid temptation. What is an Emergency? You should only dip into your emergency fund for a real emergency; to keep yourself afloat between jobs, for a car repair, a medical expense, or a home repair. You cannot use your emergency fund for things like a vacation, a shopping spree or to upgrade your perfectly good cell phone or laptop. An emergency is not an expected expense, like buying Christmas presents, that you didn’t budget for a few months ahead of time. That’s what a sinking fund is for. How Much Should You Save? Ideally, your emergency fund should be 3-6 months of expenses. That sounds like a lot and it is but keep in mind, that number can be your bare-bones expenses. If you were to lose your job your spending would be (at least it should be) different than it is when you have money consistently coming in. The number you use to calculate your three to six months would include expenses like rent, utilities, car payments, etc. It does not have to include dinners out, entertainment, and clothing expenses or saving for retirement. Even still, 3-6 months of basic expenses will still add up to thousands of dollars for most of us so it can be daunting to save up that much. But you don’t have to accumulate it all at once. Set a reasonable time frame to get to the six-month number. Don’t give yourself too much time though. Growing your emergency fund should be a priority. Let’s say your ultimate goal is $12,000. That means your bare-bones expenses are $2,000 a month. If you saved $400 a month, it would take 2.5 years to reach that number. That’s a reasonable timeline as long as you are saving that $400 every month. Remember though, this is a priority. If you can throw an extra $100 a month in there, do it. Or you can use any “extra” money you get, a bonus, a raise, monetary gifts, to help you reach your number faster. Feeding Your Emergency Fund Feel like you’re all tapped out and have no extra money to put towards your emergency fund right now? No fear. Learn more about your ad choices. Visit megaphone.fm/adchoices

In honor of Memorial Day, we interview our listener Johnny who is a member of the Air Force, working in the finance office. Members of the Armed Forces have their own set of challenges when it comes to their finances.  Many recruits are fresh out of high school and learning to manage their finances is just one of the new arenas they find themselves in. As a new recruit, most of the day to day living expenses are covered, housing, meals, and health care so a lot of their income is disposable and they make the same mistakes a lot of young people make when they suddenly find themselves with some money.  Buying expensive cars, fancy gadgets, nice (well earned) vacations dinner out when they tire of eating the same thing on a ten day rotation.  The military does provide some personal finance classes but they’re voluntary. The military does provide investment options.  There is the TSP which is similar to a 401K program and subject to the same caps as the civilian sector.  Military personnel are also given a pension.  After twenty years of active duty, they receive 50% of their base pay.  Some states don’t tax retirement income so this is something for members to consider when deciding where to live after  retiring. The GI Bill is another program available to members.  It helps to pay for college and provides a stipend to help cover living expenses. For deployed members there are some added financial benefits that are location driven including hostile fire pay, combat tax exclusion, and family separation pay. Johnny’s final advice to his fellow military members is to know your benefits and if you have a question, ask someone. Thank you to Johnny and the millions like him for serving our country. Show Notes TSP: The military’s Thrift Savings Plan GI Bill: The military’s college payment plan Learn more about your ad choices. Visit megaphone.fm/adchoices

 Meet Dan, Matt’s financially savvy brother to discuss what he’s doing right, wrong, and what he could do better. Are money smarts genetic? We learn early on the difference between Matt and Dan.  As children, Dan asked for stocks for Christmas while Matt asked for XBox games.  Their Mom told me they still do that actually.  Dan also took personal finance classes while in high school, again underscoring the importance of teaching PF in school. Dan started college majoring in finance but changed to management information systems after one semester.  He graduated with $45,000 in student debt and bought a house soon after. He did not take Matt’s advice to “live a little” but put 10% down while maintaining a cushion of about $10,000.  Half of that is in Betterment and the other half is slowly being moved from savings to Betterment.  Dan has a private  IRA and a pension through his job. Dan has no credit card debt and owes $4,000 on his car. Dan has some changes that are coming up to his situation.  When he bought his house he was given a five year tax abatement.  When the five years is up, the mortgage payments will increase.  He is also eligible for a program that will partially forgive his student loans after he has worked for a public institution for ten years, he’s five years in. How can Dan do better?  Turns out, Dan is doing pretty damn well.  His portfolio is diversified and he’s interested in his financial situation.  He should pay off the car loan within a few months to free up $300 a month that could be better spent in Betterment.  He may also start researching 3-4 individual companies that he’s interested in and can invest in.  He should also make better snack choices. Show Notes Betterment:  An on-line investing tool. Mint:  LMM’s favorite budgeting tool. Learn more about your ad choices. Visit megaphone.fm/adchoices

Why not turn doing what you love into a way to make a bit of money on the side?  We share ideas on how to make money with your hobbies. The difference between a hobby and a job is that a job has aspects you don’t enjoy. A hobby is doing only the things you like to do. Can you make money watching TV? Kind of sad if you consider TV a hobby but none the less, you can turn it into cash. You can use sites like Swagbucks or Bing Rewards to play videos while you’re doing something else, cooking or working. You may have to occasionally click on the screen but it’s not terribly distracting or time-consuming. You can even use something like Bing Rewards Bot to automate the system. Matt’s brother Dan makes anywhere from $40-70 a month this way. How Stuff Works lists ten hobbies that can pay off. Several of them like dog walking, organizing, and coaching a sport have little to no start up costs. If you love to take photos, upload them to a site like i-Stock. Someone looking for a photo of a beach for example, will pay to use your shot. Ask yourself what you’re good at and find a way to turn that into a job. Think carefully though. Cooking a big meal on a Sunday afternoon with a glass of wine is fun and relaxing. Slaving away in a restaurant kitchen for crap wages is less fun and could ruin the enjoyment of your hobby. Show Notes SwagBucks.com: An on-line rewards program. Bing: Earn credits toward gift certificates while on-line. PogoCheats.com: A bot to help automate earning Bing Rewards. Reddit Beer Money: A sub-reddit devoted to discussing ways to make money online. Learn more about your ad choices. Visit megaphone.fm/adchoices

It’s interesting to hear someone else’s personal finance story, and we are lucky enough to have listeners willing to share this financial life. Today we are joined by one such listener. Join us for this financial life with Robbie. Robbie is getting married in a few weeks. His fiancé is in graduate school. He has no debt aside from $44,000 in student loans. The student loan payment is $165 a month, but Robbie usually pays $250. The interest rate on the loan is about 6%. Robbie has no car payment, rent is $765, and groceries run $400-500 a month. Robbie puts some money each month into his Betterment account. Those are the facts. How is Robbie doing? Pretty well actually. He’s a long time listener and has learned a lot from LMM. Andrew suggests that he invest three months of living expenses into Betterment to serve as an emergency fund. The rest of the extra money will be better spent paying off the student loans. Once Robbie’s fiancé finishes graduate school and starts working, they plan to live on one salary and use the other to pay off the loans. If they can buckle down and do this for a year or two, they will put themselves ahead of the game. Robbie has low expenses, paid cash for his car, and has a plan to attack the student debt in a relatively short amount of time. Another thing he should consider is filing his taxes individually instead of as a couple once he’s married. Two incomes combined have a higher tax rate. Best of luck to Robbie on his new marriage! Keep us posted on the student loan progress. Show Notes The federal student loan repayment program. Betterment: On-line investment tool. Learn more about your ad choices. Visit megaphone.fm/adchoices

J David Stein of Money For the Rest of Us visits for our ongoing Better Know A Millionaire series. David went to work as an institutional investment advisor at the age of 30 after spending years in corporate finance. David retired at 40, already a millionaire. David tells us that most millionaires, as in The Millionaire Next Door, live a frugal lifestyle. And the best way to become a millionaire in the United States is to start and own your own business. David lives in Idaho and drives a used BMW with a cracked windshield. What does a retired millionaire do to bring money in? The bulk of David’s income now comes from investing. He is more cautious now than he was when he was still working. He reiterates some ideas we have discussed in the past. Keep your fees low and be greedy when others are fearful and fearful when others are greedy. David’s greatest pleasure now that he’s retired is travel. He travels as he lives, frugally. Taking advantage of sites like Airbnb for cheap and comfortable accommodations. David has found that travel has teaches us to “be amazed at how many ways there are in the world to live.” Another lesson that David reinforces for us is that the best mind’s best ideas did not out perform the market. The average person can match or beat the best money managers out there and without the fees. But I think David’s greatest wisdom is that living frugally and investing wisely so that we can retire at the young age he was able to are worth the trade off for complete freedom. We all want to be David when we grow up. Show Notes JDavidStein.com: David’s personal finance blog. SilenceLikeThunder.com: David’s site devoted to his personal writings. Learn more about your ad choices. Visit megaphone.fm/adchoices

It's easy to dismiss mindfulness as some kind of woo-woo new age nonsense, but it's not all navel-gazing and chakras. But when we are mindful of the things that are important to us, including money, we can greatly improve our lives. Full Article Here Show Notes Investable: Research and evaluate rental properties. Tool Box: All the best stuff to manage your money. Lift App: An easy way to make a good practice a habit. Calm.com: A guided meditation site. Learn more about your ad choices. Visit megaphone.fm/adchoices

No one should spend too much time thinking about or managing their finances.  Learn some tricks to make it easier. If you’ve been with us for any length of time, you know that we emphasize the importance of monitoring your finances. But there is such a thing as too much. We’ll teach you how to pay attention to your finances without becoming too obsessive. Full Article Here Show Notes MasteringMint.com: Our book that will allow you to manage your finances without driving yourself to distraction. Learn more about your ad choices. Visit megaphone.fm/adchoices

Michael Epstein became a millionaire by the age of thirty. Michael will tell us how he did it and how you can too. He started his first company, e-Dimensional, a software company that designed glasses to make off-the-shelf video games 3-D while still in college. Within the first year, the company reached one million dollars in sales.   Michael made a lot of sacrifices to ensure the success of his business. He ran the company while attending college and working full time. Michael sold the company in 2013 and didn’t retire to Cabo but started his consulting business, Get On Line With Me. Full Article Here Show Notes eDimensional.com: Michael’s first company devoted to realistic gaming experiences. GetOnlineWithMe.com: Michael’s current online consulting business. Learn more about your ad choices. Visit megaphone.fm/adchoices

Which of your financial obligations should you meet first, loans, investing, credit cards?  Learn where to best allocate your money.   Full Article Here Show Notes Betterment: Automated investing. Lending Club: A peer-to-peer lending company. Money Chimp: Tax brackets. Learn more about your ad choices. Visit megaphone.fm/adchoices

How can you find the extra money for the things you can’t live without? We’ll show you places to find a little something extra. In his book, I Will Teach You to be Rich Remit Sethi discusses that it’s not the $5 you spend daily at Starbucks that is keeping you broke. It’s not the small expenses you spend every day, it’s the big expenditures you make too often. But how do you separate the two? You have to prioritize your spending. You love coffee, can’t live without it. So buy the coffee. You work from home so don’t need a big wardrobe. Do don’t spend a lot on clothes. Boom! There’s your coffee money and then some. Make more money. Ok, you don’t love coffee. You love foreign travel to exotic locales. Saving $5 a day on coffee isn’t going to get you two weeks in Bali (it helps though). You have to make more money if your indulgences are more expensive. So you work longer hours, you work a second job. You can still travel but if your tastes are high end, it will be easier to make more money to pay for them than to save enough money to afford them. Finances are akin to diets. If you tell yourself, “I can never have cheese again,” you’re going to take down a block of cheddar by yourself within days. The same is true of spending money. This is a long term commitment. It can’t be constant deprivation. Set aside a percentage of your total income that is disposable. You can spend that money on anything you want. But once that money is gone, it’s gone. So get your priorities in order. Spend on the must haves and cut out the things you can live without. Show Notes I Will Teach You To Be Rich: Ramit Sethi’s best selling book. Learn more about your ad choices. Visit megaphone.fm/adchoices

Introducing the LMM’s Wealth Wheel.  Do we debate the age-old question, what matters more, size or the motion of the ocean?   Full Article Here   Show Notes The LMM Wealth Wheel: Learn about the four parts of the Wealth Wheel. LearnVest.com: The 50/20/30 rule. Learn more about your ad choices. Visit megaphone.fm/adchoices

We could all use more money, and one of the best ways to get more money is to ask for a raise. But it’s a little more complicated than marching into the boss’s office and demanding one. Asking for a raise is a strategic decision, and can be deployed in many different ways. You just need to pick the right one! Today we’ll show you how the best way to ask for a raise without getting yelled out of your boss’ office. about what you’re asking them. Full Article Here Learn more about your ad choices. Visit megaphone.fm/adchoices

Did you play Monopoly with your family when you were a kid? If you did, you probably learned some valuable financial lessons, even if you tipped the board when you lost. Personal finance isn’t a game, but there are lessons to be learned from the game of Monopoly. Full Article Here Show Notes DiceMaestro.com: A site dedicated to classic games. SmartPassiveIncome.com: A guide to generating passive income online. 8 Personal Finance Lessons I Learned From Monopoly: An article by a friend of the show, Jim Wang on his former website, Bargineering.com. Learn more about your ad choices. Visit megaphone.fm/adchoices

Learn lessons from millionaire Laurie Itkin in our “Better Know a Millionaire” show. Laurie explains how she became a millionaire before the age of 40.  This is the first episode of our ongoing series, “Better Know a Millionaire.” (Obviously, a total ripoff of Colbert’s Better Know a District…or homage — that’s better). Show Notes Omission Pale Ale Gluten Free Beer by Widmer Brothers: Andrew claims that it was pretty good, so I’ll take him at his word. Traditional Medicinals Organic Lemon Echinacea Throat Coat Herbal Tea: Wow! That’s a mouthful, but it’s the tea I started drinking when I feel a sore throat developing. Really tastes good without sugar, which is great. Learn more about your ad choices. Visit megaphone.fm/adchoices

It’s Mother’s Day.  Matt and Andrew interview their mom’s to find out what financial lessons they’ve learned. This is a very personal episode for us at Listen Money Matters. Both Andrew and I sat down, face to face, with our moms and talked to them about their past experiences with money. I know for me, it was a very endearing event as I’m sure it was for Andrew. We found out a lot about what made our moms so good with money. I want to keep this short because it’s Mother’s Day and you should be spending time with your mom or a mom that you know and respect, no matter who it is. Listen to the episode below and let us know what you thought of it. Learn more about your ad choices. Visit megaphone.fm/adchoices

Matters of personal finance are intimidating for many Americans and it’s no mystery why. There are so many aspects of personal finance. Emergency funds, mutual funds, estate planning, retirement accounts, life insurance, tax planning. And that’s just the beginning. Full Article Here Show Notes SeekingAlpha.com: A crowdsourced platform that focuses on sharing top investment ideas. Betterment: A DIY investing tool. Learn more about your ad choices. Visit megaphone.fm/adchoices

How many cars have you owned over the years? Is it more than seven? That’s how many Matt has owned. And he learned a thing or two. These are the lessons learned from owning seven cars. Some learned the hard way! Full Article Here Show Notes Edmunds: a site that lets you research prices for new and used vehicles and contains a database of dealer incentives and rebates. Cars.com: is a site that lets you search for information on new and used cars online. Autotrader: is an online marketplace for new and used cars. Learn more about your ad choices. Visit megaphone.fm/adchoices

Joel Larsgaard from Save Outside the Box shows us easy ways to save money without giving up the things you love. Joel used to be budget adverse. His theory was “bring in more than you spend and don’t buy nice things.” But now with a baby in the mix, Joel wanted to save more while not giving up the things he loves in life, good beer, folk art and travel. Full Article Here Show Notes SaveOutsideTheBox.com: Joel’s site devoted to finding extra money in places you haven’t considered. Megabus: A nearly nation-wide low-cost transportation option. Learn more about your ad choices. Visit megaphone.fm/adchoices

Get Rich Slowly recently posted an article titled, “The Ten Habits of Financially Successful People.”  See how many you share.   Full Article Here Show Notes 10 Habits of Financially Successful People: The blog post the episode is based on. Getting Things Done: David Allen’s book on productivity. MerlinMann.com: Merlin is a renaissance man who has a website and podcast dedicated to finding the time and attention to do your best creative work. Rescue Time: A website that does for your time what Mint.com does for your money. Four Hour Work Week: Tim Ferriss’ book on how to maximize your productivity in the least amount of time and from anywhere in the world. Seth Godin: Seth has authored 17 books on marketing in the digital age. Learn more about your ad choices. Visit megaphone.fm/adchoices

Everyone should have received or should soon receive your tax return. Today we discuss the best way to make that money work for you. Full Article Here Show Notes SavingForCollege.com: An explanation of the 529 college savings plan. Mint.com: an on-line money managing tool. Learn more about your ad choices. Visit megaphone.fm/adchoices

Many of us have debt. Claire Murdough tells us how to pay your debt as quickly and efficiently as possible. You can enter your debt account information and how much you are paying on each. RFZ will generate a graph showing how long it will take to pay the debt, what interest you will incur, and show you how much more quickly you can pay the debt off by adding money to your payments. The site is free but there is an upgrade that allows you to monitor your credit score and to make payments through RFZ. The site has recently added a feature that will allow you to manually enter debts for things like the $200 you borrowed from mom last month. Snowball vs stack method. The snowball method advocates paying off your smallest balance first. The benefit being psychological. You did it, you paid off that Target card! The stacking method requires paying off the highest interest rate debt first. Both methods employ the same tactics of paying only the minimums on the other debts while paying off the prioritized one and once one is paid off, you use the money you were paying towards it, on the next debt down the list. Each has their fans and like everything, finance is individual so use the method that makes the most sense for you. As long as you are paying off your debts, you’re good. Some of Claire’s best advice is to take your ego out of the debt repaying equation. The job you get might not be in the field you’re educated in, but it’s still bringing in money. A second job doesn’t mean you’ve failed. It means you’re doing what needs to be done so you can be debt free. And make some time and a budget for fun during your debt repayment. And when you reach a milestone, treat yourself to something small. A bouquet of flowers or a llama ride! Remember, there is life after debt. Show Notes ReadyForZero.com: A website that helps to manage your debts. Debt Snowball Vs. Debt Stacking: An explanation of snowball vs stacking for debt repayments with pros and cons for each. Learn more about your ad choices. Visit megaphone.fm/adchoices

Americans don’t get much vacation.  The average American gets ten days of paid vacation. And that is at the mercy of your employer. The United States is the only industrialized nation in the world that does not legally mandate paid vacation. It will make you a better person and a better employee. Learn why it’s important to take what you do get.   Full Article Here Show Notes RyanCarson.com: A blog post by Ryan Carson, the founder of Treehouse, about their change to the 4 day work week. TimeDay.org: Take Back Your Time. A movement to encourage people to fight for legally mandated paid vacation. Karoshi: A Wikipedia article detailing Karoshi, death from overwork. Happy: The Movie: An award-winning documentary that travels the world to find out what makes us happy. The Geography of Bliss: One Grump’s Search for the Happiest Places in the World: NPR correspondent Eric Weiner’s book on what constitutes happiness around the world. More: An Academy Award-nominated short animated film that depicts the colorless life of a factory worker who gets through h... Learn more about your ad choices. Visit megaphone.fm/adchoices

What is high-frequency trading?  Is it something you need to worry about?  Don’t let the unknown keep you out of the market.   Full Article Here   Show Notes The Divide: American Injustice in the Age of the Wealth Gap: Matt Taibbi’s book on the growing wealth gap in America. Flash Boys: A Wall Street Revolt:  Michael Lewis’ book about the creation of an exchange where high-frequency trading will garner no advantage. Learn more about your ad choices. Visit megaphone.fm/adchoices

We discuss pain-free ways to find extra money to invest. Whether it’s into a Betterment account, a Roth IRA, or a brokerage account. It’s easy to say, “go out and get a second job,” and use that money to invest, but that’s not realistic for everyone. Using these methods, you can grow your investing money faster and easier. Full Article Here Show Notes Gazelle: Sell your old electronics. Amazon Affiliate Program: Become an Amazon Affiliate and make money when your readers buy your recommendations. Learn more about your ad choices. Visit megaphone.fm/adchoices

On this episode we welcome Jim Wang, founder of Bargaineering.com, a personal finance blog, to discuss how you can turn your hobby into cash. Jim began Bargaineering in 2005 while working a full-time job. After a lot of trial and error, he was able to devote himself full-time to the site within 3 years. In January of 2010, he sold the site for seven figures. Full Article Here Show Notes Bargineering.com: A personal finance blog that has been featured in the New York Times and Business Week that discusses money, credit cards, investing, and mortgages. MicroBlogger.com: Jim’s website and podcast that teaches you how to build a successful online business. ScotchAddict.com: Jim’s blog dedicated to all things Scotch. GrillMaestro.com: Jim’s blog on that most beloved past time of America, barbecue grilling. Learn more about your ad choices. Visit megaphone.fm/adchoices

There is a new face of retirement and financial independence these days and it doesn’t include being over 65 and never working again. That kind of retirement kills, people! Don’t believe me? Take Freakonomics word for it. Let’s talk about what you need to do to achieve the early retirement you want. So maybe you start your own business when you aren’t required to show up at an office forty hours a week. Or you can volunteer. You can go back to school, maybe become a teacher and give back to your community. Social security can be a relic of the past by the time American Millennials reach the age of eligibility. We all need to take our retirement into our own hands. And you don’t have to spend the whole prime of your life slaving for the man. So you need to fund your own retirement through 401K’s, IRA’s and investing in the stock market. The earlier you start, the better. If you are getting a late start, hope is not lost. Full Article Here Show Notes Bulleit Bourbon: This is the whiskey that Andrew was drinking on the rocks. One of my favorite Bourbons for the price. The Bulleit Rye is excellent too. Social Security is worse than you think: The NY Times did an article about what we talked about in this episode. Don't count on social security being available to us. Learn more about your ad choices. Visit megaphone.fm/adchoices

On this episode, we welcome blogger Kristin Wong to discuss the psychology of money. Kristin grew up in a frugal household but like many of us, didn't have any guidance when it came to investing. Frugality seems less daunting and allows for instant gratification. You can cancel your cable service right now and save $100 a month or more. It doesn't take any research or special knowledge. Full Article Here Show Notes Get Rich Slowly: A blog that covers various aspects of personal finance. Two Cents Lifehacker: A sub-blog of Lifehacker dedicated to personal finance. Brokepedia: Kristin Wong’s personal blog that focuses on frugal living through practical, money saving tips. Personal Capital: A free software program to help track and manage your investments.   Learn more about your ad choices. Visit megaphone.fm/adchoices

0% APR offers can be a great thing.  But if you don’t understand how they work, it can cost you big time. In theory, this is a free loan.  But there are so many ways you can screw it up and the lender is counting on that.   Full Article Here Show Notes Cerveza Pacifico: A Mexican beer. Mint:  The easy way to track your spending.   Help Out By Leaving a Review on iTunes Learn more about your ad choices. Visit megaphone.fm/adchoices

Money isn’t about being rich. Money is about choice and the freedom that goes along with being able to make decisions when money is not the only deciding factor. Stop thinking about money in terms of being rich and instead think about ways it can grant you financial freedom.   Full Article Here Show Notes Betterment: Start investing to build the life you want. Mint: Take control of your money. Learn more about your ad choices. Visit megaphone.fm/adchoices

Frugal living is pretty trendy right now, but how frugal is too frugal?  Should you clip coupons, wash and reuse your tin foil?  Where do we draw the line? Being frugal is a good thing. But frugal living can be taken too far and sometimes even cost you more in the long run. Walk the fine line without crossing over.  Is there such a thing as being too frugal?   At its core, being frugal is a good thing. But lots of things that are fundamentally good can be harmful and destructive if taken to an extreme. Drinking water can even be deadly if you overdo it. We should all be encouraged to be frugal in certain areas but don’t go nuts!   And being frugal is only one side of the coin. There is only so much you can cut out of your spending, however, there is no cap on how much money you can make. If you’re down to minimum expenses than maybe it’s time to find ways to make some extra money on the side or create some passive income. Full Article Here Learn more about your ad choices. Visit megaphone.fm/adchoices

On this episode, we talk to Adam Carroll who created the documentary about the current student loan debt crisis called Broke, Busted and Disgusted.   We get a lot of questions about student loan debt but we didn’t understand just how dire the state of things was until we spoke to Adam.  It’s so much worse than you can imagine.  When BB&D is released it will be a wake-up call for a lot of people.   For many people starting college, they have no idea what it means to take out massive amounts of student loans.  This is especially true for first-generation college kids.  Some of them are leaving school with $70, $80, $120,000 of debt. So, why is college so expensive now?  Federal funding for education has been cut. Bankruptcy laws were changed in the early 2000s to exclude student loans from being discharged in nearly all circumstances.   That was carte blanche for the lenders.  There was nearly no way they would lose money and they opened their coffers accordingly.  There is now $1.2 trillion in outstanding student loan debt.  What can you do to avoid the crushing debt?  You don’t have to go to the most expensive college that will have you.  Take some classes at a local community college.  Not only are the classes cheaper but you can live at home to save on living expenses as well. Get as many grants and scholarships as you can.  Choose your major carefully.  Make sure that your degree is in a field that is in demand and that your salary will be enough to live on and pay back your loans.   A college education is still a good investment for most people but we have to redefine what college means.   Show Notes Broke, Busted and Disgusted (Documentary): A pro-education documentary exploring traditional and alternative higher education institutions, and the rising costs of getting a degree. Winning The Money Game: A Rule Book to Achieving Financial Success for Young People (Book): The book by Adam Carroll which is a guide to being debt free and gain financial freedom. Inequality For All (Documentary): One of the best ways to help people understand the challenges we face, is with a movie that can grab an audience and move them to action. And this movie will do exactly that. — Robert Reich Is College Worth It? (Book): A Former United States Secretary of Education and a Liberal Arts Graduate Expose the Broken Promise of Higher Education. Debt Reduction Snowball Calculator via Vertex42.com: A site for excel spreadsheet nerds. Debt elimination spreadsheet. Help Out By Leaving a Review on iTunes Learn more about your ad choices. Visit megaphone.fm/adchoices

We’ll discuss a boring subject, how stocks, bonds, and funds work but make it less boring by using Arrested Development to illustrate our points! Recently, we published a post called, An Illustrated Guide to Investment Types. Before writing, Matt asked Andrew to explain to him how stocks and bonds are born. Andrew knows that Matt’s favorite show is Arrested Development, so he put it in terms Matt could understand – The Banana Stand. He described the whole scenario using characters and businesses from Arrested Development. For those familiar with the show, this will make things clear and fun to learn. For non-fans, it’s still useful in its simplicity. Stocks:  You have a company that you own 100%.  But you want some money to expand.  So you sell some stock.  An investor gives you money and you give them some ownership of the company. Bonds: Bonds are another way to raise money.  It’s a debt investment.  Investors loan money for a set period of time at a fixed interest rate.  The bulk of the money comes at the end of the set time period. Bonds are a very safe investment. Funds: Funds are bundles of stocks. You get a variety which is important because you want to be diversified.  Mutual funds are chosen by a person or people and index funds are chosen by a computer.  Index funds are usually cheaper than mutual funds. CD:  A certificate of deposit works as a bond but you make even less money.  It’s the bank’s way of screwing you slightly less than if the money were in a savings account. Hope this explained things and you enjoyed the infographic! Show Notes Betterment:  The easy way to invest. Learn more about your ad choices. Visit megaphone.fm/adchoices

There are some rules, or commandments, that all investors should live by. We’ll discuss those ten commandments and explain the importance of each one.   1.  Think Long Term. You need to be in the market for the long con.  Put your money in and leave it alone.  You are not a day trader.   2.  Invest What You Can Afford. Don’t have so much money in the market that you have to pull it out to pay bills.  The constant in and out of the market is detrimental to long term gains.   3.  Buy What You Believe In.  If you have an interest, tech, music, you probably know a lot about brands within those interests.  That makes them good companies to invest in for you because you already have a lot of knowledge about the company.   4.  Do Your Own Research.  Matt bought Sirius stock because some guy told him to.  He didn’t do any research and lost money.  You have to put in some due diligence before buying stock.   5.  Set It And Forget It. Constantly checking your numbers does not make them go up.  Get your process in place and leave it alone.   6. Consistently Contribute.  If you are consistently putting money into the market, you are dollar cost averaging which means over time, you will mirror the market.  The market makes on average a 7% return.   7.  Be Fearful When Others Are Greedy.  When people are buying like mad, you should sit it out.   8.  Be Greedy When Others Are Fearful.  When everyone else is selling, buy, buy, buy!   9.  Find And Remove Frivolous Fees.  401K’s tend to have high fees, sometimes more than 1%.  Over thirty years that means 25% of the money you could have made goes to fees.  Do some research and find a fund with the lowest fee.   10.  Diversify.  If it can fail, it will fail so you need to spread out your risk.   Show Notes Vanguard:  A low fee fund. Mint:  The easy way to track your money. Embed this Infographic on Your Site Learn more about your ad choices. Visit megaphone.fm/adchoices

There are a million credit cards out there and some are better than others.  We’ll help you find the one that will best meet your needs. When used responsibly, a credit card can be a great tool.  You can earn all kinds of rewards from travel points to cash back.  They also offer much more protection than a debit card.   Full Article Here Show Notes The Andrew Sangria - Rum, wine, triple sec and sprite. Perhaps Andrew will delight us and share his actual recipe. I'll ask him. (edited by Andrew) For the record, who has time to measure ingredients? You'll know you've done it right if you still taste the rum ;) Podcast Correction: In case you're too lazy to scroll down much further I'd like to point out that we made a mistake in the episode. You can't use prepaid cards to build credit but you CAN use secured cards to. A similar idea only there's actual credit usage involved with secured cards. Thanks goes out to Kyle Russell for catching this one! Learn more about your ad choices. Visit megaphone.fm/adchoices

On this episode, we talk about Streamline Refinancing.  Specifically, how Matt used it to shave over $130 a month off his mortgage payment without being hit with more interest or increasing the term of his mortgage.   The refinance also bought him a month without payment and the closing costs were less than the monthly mortgage payment he saved.   Matt also doesn’t have a steady paycheck and the way he streamlines refinanced didn’t require a pay stub. We calculated that over the remaining term of his mortgage he will save over $13,000. Lower payment and lower cost overall – profit all around!   In addition to discussing the details of Matt’s refinance we go a bit into the difference between the various types of mortgages and their merits.  We may also make fun of financing a car but if you know me, that’s to be expected ;)   Show Notes Fixed Rate Mortgage – The 30-year mortgage and 15-year mortgage fall under this category. The majority of mortgages are fixed rate although that doesn’t mean it’s the best option. Just the most popular. Adjustable Rate Mortgage – Otherwise known as an ARM, these mortgages are front-loaded with a ton of savings (way low rates) for the risk that in a certain number of years the rate will be adjustable. Since you can always refinance into a fresh ARM with fresh savings some say this is a no brainer. Learn more about your ad choices. Visit megaphone.fm/adchoices

On this episode, we talk to Cat Alford of BudgetBlonde.com. She’s a personal finance blogger, writer, and a proud mother of twins. I met Cat when I first started Listen Money Matters and she’s been a huge help both in guiding me in the right direction with the site and being supportive of all the crazy things we try over here. She has a very interesting story on how she transitioned from a day job to blogging full time, life in Grenada and handling student loan debt. You won’t only find her on Budget Blonde as she somehow finds the time to also write for popular sites like the Huffington Post and Young Adult Money. Show Notes Budget Blonde – Cat’s awesome and very personal blog about being frugal, doing things DIY style and being smart with money.  It’s a great read! Be warned though, she’s not blonde anymore ;) FinCon – Financial bloggers conference. We’ll be there and so will Cat! Send us an email if you want to hang out! Million Mile Secrets – One of the bigger credit card churn websites that Cat mentioned in the interview. Smarty Pig – Where Cat stores her savings. She says it’s an interesting take on a high yield savings account. Ally Bank – Where Matt stores his savings. Learn more about your ad choices. Visit megaphone.fm/adchoices

Don’t manage your money like an old white dude.  Manage your money like a gansta!  Learn how via our rap video and new book, Mastering Mint.  1. The Personal Finance Rap Video - We are very excited! Tomorrow (February 18th 2014) we debut our first personal finance rap video called “All My Money.” We spent over two months working on this project. Matt wrote and recorded the song in December, and after another month of planning, drove up to New York for a weekend with Andrew to film the video.   We are very proud and hope that people really enjoy the video. If early feedback is any indication, we are banking on a real success.   Check out the “The Making of All My Money” video to see how we created it.    2. Mastering Mint - Andrew has been working hard for the past two months writing this epic guide to using Mint.com. When I first got to look at his final draft, I was blown away by the things that Mint can do. It was Matt’s job to take Andrew’s words and turn them into a pretty PDF that will be available to download tomorrow. Both projects were intense. Matt and Andrew have been neglecting their personal lives to complete these projects and we couldn’t be more excited to announce them. But don’t worry, this episode is chock full of good information on top of our announcements, and I hope everyone gets a chance to see what we’ve created :-) If you don’t currently budget, the Mastering Mint Book is for you.  It will teach you how to get the most from Mint and make things as automated as possible. Mint allows you to set up alerts, when a bill is due, when you are nearing the top of your budget, when you have been charged a fee. Mint is portable!  You can download it onto your phone and use the odds moments you have when you’re waiting on line, waiting for your chronically late friend to arrive to categorize your transactions.  Much more productive than Candy Crush. You don’t need graph paper and spreadsheets to manage your money in the 21st Century.  Mint can do it all. Show Notes Mastering Mint: The Quickest & Easiest Way to Get Started with Mint.com is our latest downloadable guide to using Mint.com. Mint:  Our favorite budgeting site. Learn more about your ad choices. Visit megaphone.fm/adchoices

We interview Mark Deal who founded a company that connects overseas investors with Americans who want to start businesses and create new jobs.   Marks is a former Navy nuke with an MBA.  He founded Foreign Investor Resource Group to facilitate relationships with international investors and American entrepreneurs.   Investing a certain amount of money in a US company will buy you American citizenship.  So like everything else in America, citizenship is up for sale too.  Investors must bring over $1 million and create ten US jobs.   Twenty-one months after the investment, Mark’s company has to show proof that ten US jobs have been created through foreign investment.  You could be an existing business looking for new investors as well, it doesn’t have to be a startup.   Mark went from a six figure salary with benefits to starting his own company which was a big leap.  From his clients, he has learned to look at money strategically, not tactically.  And he uses Mint!  He gave up Excel for Mint.  There is hope for the rest of you spread sheet nerds yet.   So if any of you have an idea for a business or an existing business and are looking for an infusion of cash, there are lots of rich foreign investors out there hungry for American citizenship so they can buy up condos in Manhattan.   Show Notes Foreign Investor Resource Group:  Mark’s company Mint: An unsolicited recommendation! Learn more about your ad choices. Visit megaphone.fm/adchoices

On this episode, we discuss our favorite money management and productivity tools, including Mint, Betterment, Lift, Evernote, and more.   We believe in making money management as easy as possible.  With all of the apps and software out there, it’s easier than ever.  No need for complicated spreadsheets.  Everything you need can be downloaded right to your phone. Boosting your productivity will enhance your life.  From your health to your money, using the right tools can help you get the most out of your day.   Mint is our favorite money managing app but it’s read-only so you can’t transfer between accounts or make payments through it.  Most major banks will have an app that allows you to make certain transactions.  My bank is three long cross town blocks away and it’s cold.  I can deposit checks right through my phone as long as they are under $1000.   Evernote is like a notebook that can be downloaded across all your devices.  Any information will be uploaded to all of your devices automatically.   In Box Zero unifies all your e-mail accounts.  It helps you categorize things, delete, archive, and actionable items for later.   Lift helps you build good habits.  Each time you perform the habit, flossing maybe, you “check in.”  After 21 days in a row, boom, you’ve developed a habit.  There are plenty of ways to make life easier, take advantage of them.   Show Notes Mint App (Free) – Online software and a smartphone app that we use to keep an eye on our finances. We highly recommend it. Fidelity App (Free) – This is the online bank where Andrew has his checking account. Level App (Free) – This app didn’t work for Matt, but it seemed pretty cool. They have a really great video you can check out too. Betterment App (Free) – The easy way to invest. 1Password App ($17.99) – Andrew uses this app to keep all his passwords in one place on his phone. Matt’s awesome Boconi physical leather wallet ($30) that I think every man should own. It’s low-profile and totally bad ass! Stop putting paper money in a tri-fold wallet. That’s gotta be annoying. Evernote Software (Free) – The app we can’t exist without. It’s the best note-taking software that works on all devices. If you use Evernote, or just getting started, we recommend reading Evernote Essentials. Mailbox App (Free) – An extremely simple email app that utilizes Inbox Zero. Highly recommended if you use email, and I’m pretty sure that you do. Watch the video! Lift App (Free) – This is one of Matt’s favorites. It allows you to “check-in” to a habit to help you to develop GOOD habits. You gotta try it! He also wrote a post about Lift. Learn more about your ad choices. Visit megaphone.fm/adchoices

We chat with Omar Zenhom, co-creator of $100 MBA, an online business training community for entrepreneurs, about quitting his job and starting a business.   We met Omar through the online community Fizzle.  He and his partner started Business Republic to help local businesses brand themselves more effectively. They have now started The $100 MBA, an online community and video training platform to teach people to run successfully on and offline businesses. Omar was teaching in Dubai, doing well, getting promoted but he always wanted to start his own thing.  He did side hustles while teaching but knew he would need to devote more time to them if he wanted to make one full time. He had about six months in savings when he made the leap but stretched that out to eighteen months by lowering his cost of living.  Although this is the first time I’ve ever heard of anyone lowering their expenses by moving to NYC. If you can work from home, you spend less money.  No lunch out, no dry cleaning, no commuting costs.  If you love the job you’re doing from home, you spend less money because you are fulfilled by the job and don’t have to shop to make yourself feel better. The flip side of all the freedom is the hours.  Chances are, if you start your own thing, you will have to spend more time at it.  But you can work the hours that suit you and not the arbitrary 9-5. Starting your own business isn’t for everyone.  If you have a family, they may not be on board.  If you aren’t really hungry, you likely won’t make it.  If you freak without the security of a regular paycheck, it’s probably not for you.  But for the intrepid among us, starting your own business is very rewarding. Show Notes $100 MBA:  Omar’s training site. Mint:  The easy way to manage money. Learn more about your ad choices. Visit megaphone.fm/adchoices

How does a currency just materialize, seemingly from thin air? Are they only for people who like buying drugs on the internet?  What is a Bitcoin? Want to know how to invest in Bitcoin? We'll break down the mystery for you. If you find the concept of cryptocurrency confusing and, well, cryptic - you are certainly not alone. In the last few months, people have been foaming at the mouth over Bitcoin raising its value to never seen before prices. I'm sure every day you hear someone talking about it, but many of us still don't really understand what it is exactly. Bitcoin is the first decentralized digital cryptocurrency. It's like a digital token that is made of a hash- a random string of numbers and characters. It has no physical backing and can be sent electronically from one user to another, anywhere in the world. Because there are a finite number of the coins, there is scarcity so the value constantly fluctuates. Bitcoin is not run by a single company or person- it's run by a decentralized network of computers around the world (owned by regular people) that verify all transactions. Similar to how Wikipedia is maintained by a decentralized network of writers. Full Article Here Show Notes Domino's Pizza Accepts Bitcoins Turns out that there are legitimate businesses that are starting to accept this form of digital currency. There are not many, but this is a big one. Bitcoin Exchange CEO Charged with Laundering $1 Million Through Silk Road Andrew pointed out that there's been some controversy around Bitcoin and the drug market. This is the article he was referring to. Nerd Alert: Bitcoin Mining This is how you create Bitcoins (seemingly out of thin air) — you "mine" for them. Learn more about your ad choices. Visit megaphone.fm/adchoices

We interview Rebecca from Stapler Confessions to find out how she is paying off $125,000 of student loan debt and learn how we can pay off our debt too.   Rebecca escaped her four-year college with zero debt but things changed when she graduated law school. She came out with $125,000 in student loan debt. She married her law school sweetheart and he had the same amount of debt so all total, they were a quarter of a million dollars in debt.  The couple used the snowball method and every month threw every extra dollar at the smallest loan payment.   Rebecca’s husband works for a non-profit and uses an income-based repayment plan.  If he works for the non-profit for 120 months and makes every payment, the rest of the loan will be forgiven.  This option is only available for federal loans, not private. Eventually, he stands to have about $50,000 in loans forgiven.   Income-Based Repayment is a good option for a lot of people.  Your monthly payment is based on your income.  It will generally extend the life of your loan but if you’re in a tight spot, it can help.   Rebecca has an IRA and will max that out and then start tackling the next loan.  Rebecca does a budget, as we all should.  She keeps it on an Excel spreadsheet and tracks the family spending in Mint.   When it comes to the question of whether you should pay off low-interest rates loans or invest in the market, Rebecca advises going with your gut.  Those loans, even the low-interest ones, can be a heavy psychological burden.   Student loans are burdensome but there are ways to pay them off faster and even have them partially forgiven.  Good luck to all us borrowers.   Show Notes Stapler Confessions:  Rebbeca’s blog about personal finance and her love of Staples office supply stores! Mint:  The easy way to track your spending. Learn more about your ad choices. Visit megaphone.fm/adchoices

Most of the scary stories you hear about people losing big in the market are from people who were trying to make a quick buck. We don’t recommend that. Investing is a long term proposition.   You don’t have to have a finance degree or even really understand the stock market in order to invest and make money. You also don’t need to hire someone to invest your money for you.  This is the 21st Century, we have the technology to do it ourselves. It’s time you get over the fear of investing.   Invest in market index funds that represent a broad swath of the market, like the S&P 500, which is a group of 500 companies which cover many aspects of the overall market.  Betterment is a great tool for this kind of investing.   Have a certain amount of money automatically invested every month.  The money goes in without you having to do anything.  Set it and forget it.  The market will give you an average return of about 7%.   Be greedy when others are fearful. When everyone else is panicking and selling low, that’s when you buy.  When everyone is going crazy buying high, be fearful in the face of their greed.  Works for Warren Buffett.  It’s not handing over money to the market that causes mass losses.  It’s handing money over to a person.  Bernie Madoff is the most recent and most grotesque example of this. It wasn’t the market that was doing shady stuff with that money, it was Madoff.   The point is, just do it already!  Did you learn how to fly a plane yourself before you took your first flight?  No, you didn’t.  The same with the market.  You don’t have to understand it, you only have to do it. Show Notes Betterment:  The easy way for beginners to invest. Mint:  The smart way to track your spending.     Learn more about your ad choices. Visit megaphone.fm/adchoices

Matt and Andrew were excited to talk to Caleb because they met through Fizzle.co. Fizzle is an online resource and forum for entrepreneurs looking to start an online business. Because of what Caleb helped to build, Listen, Money Matters exists. Caleb manages the finances for several small businesses including Fizzle, his website, CalebWojcik.com and his wife’s photography company JenWojcikPhotography.com. Caleb recommends paying small business taxes quarterly.  It saves you getting a big bill at the end of the year that you weren’t expecting.  Managing finances for your business doesn’t mean you have to do it alone.  A skilled accountant can make the process much easier. Xero is a web-based program that is a sexier version of QuickBooks.  You can track spending and even create invoices through the program.  For his personal finances, Caleb used a spreadsheet for two and a half years, hand entering every transaction. His wife understandably didn’t want to use the spreadsheet so they started using Mint. Eventually, they plan to use You Need A Budget. Caleb still misses his spreadsheet though. If you’re thinking about making the leap from working a 9-5 to working for yourself, having six to twelve months of expenses saved is a good rule of thumb. Managing money for your small business is one of the most important aspects of running it but it doesn’t have to be the most time consuming if you partner with a good accountant and use some of the great technology designed to make it easier. Show Notes Fizzle: An online resource for those looking to start a small business online and offline.  Check out their podcast too. Xero: Xero is a complete online application to run small business finances. Learn more about your ad choices. Visit megaphone.fm/adchoices

Having a good credit score makes life easier and cheaper. Even if you’ve tanked your credit, we’ll give you some ways to bring the number back up. You don’t have to wait seven years to start improving your credit score. There are a few tricks to get that number out of the red. Having a good credit score can save you thousands of dollars over a lifetime. It makes you eligible for lower interest rates for car loans and mortgages. Some jobs even require a credit check. Full Article Here Show Notes: Credit Karma: A free, ballpark credit score.  A soft check so it won't ding your score. Mint:  Track your spending. What Makes Up Your Credit Score:  Read more in-depth about what goes into a credit score. Learn more about your ad choices. Visit megaphone.fm/adchoices

Rich people are different than you and me. How are they different, though? This list of 21 rich habits will teach you how to become rich and put you on the path to wealth.  Dave Ramsey published a list of twenty things the rich do every day. Most of these things are habits. My take on this is that rich people have good habits. Habits that make them more successful, healthier, and smarter. And those things can help you accumulate wealth. Once you have achieved a certain level of wealth, you can focus on yourself rather than on money. Discipline seems to be the other thing all of these qualities have in common. It takes more discipline to cook a healthy meal than to order take out. It takes more discipline to save money than to spend it. Let’s take a look at each of the twenty-one habits. Full Article Here Show Notes Dave Ramsey: The list of twenty things. Betterment: Rich people invest. LMM Community: Join the money revolution.   Learn more about your ad choices. Visit megaphone.fm/adchoices

Peer to peer lending isn’t a new concept, but with the advent of the internet, it’s become much more mainstream than it was in the past. Just as robo investors like Betterment made investing more widely available, peer lenders made two things available to a broader audience. Banks make money, lots of it. What is their primary source of revenue? For most banks, loans are the primary use of their funds and the principal way in which they earn income. Consumer lending makes up the bulk of North American bank lending, and of this, residential mortgages make up by far the largest share. Peer to Peer lending lets us little people get in on this very lucrative business. The second thing peer to peer lending allows for consumers to have an alternate place to borrow money than a bank. This has been especially important for consumers whom banks won’t touch for one reason or another. Banks don’t make money by taking risks when it comes to loaning money, but a risky borrower is not necessarily a dead beat borrower. If you want to get in on this whole banking thing and start loaning money, or you want to borrow money but can’t or won’t deal with banks, we’ll detail everything you need to know to make peer loans and to become a peer borrower. Because peer to peer lending is an excellent way for individual investors to make money and borrowers to save money. So what exactly is peer to peer lending? P2P lending connects regular people who want to lend money to ordinary people who want to borrow money, neatly cutting banks out of the equation. The platform where these two groups connect is called peer lending platforms and are found online; they don’t have brick and mortar locations Full Article Here Learn more about your ad choices. Visit megaphone.fm/adchoices

It’s that time of year again, New Year’s Resolutions.  Matt and Andrew discuss their resolutions, all the biggies, money, health, and fitness. Are you making resolutions?  Have you made them for so many years running that they’re more like traditions now?  Yeah, us too.  Let’s see what we can do to get serious this year. The key to creating a good New Year’s Resolution list is to keep it actionable and measurable. For instance, just “getting healthy” or “make more money” isn’t really a good place to start — how will you know if you’re successful, and how do you get started? Be more specific.  Change getting healthy to eating three servings of veg a day.  (You need more but if you’re eating next to none, this is a good place to start.) Change make more money to devoting an hour a day to working on your side business. What you don’t need to accomplish resolutions is motivation.  What you need is discipline.  Discipline leaves no wiggle room when you don’t feel like doing something.  If you rely on motivation, you won’t do anything when it wanes.  Discipline is what carries you through when you don’t feel like it. Surround yourself with things that help you reach your goals.  Like minded friends, books, podcasts, Ted Talks.  It helps to keep your goal in the forefront during your day to day life. Even if you fall off the wagon, it’s not the end of your resolution.  You can re-set things anytime.  You messed up, that’s okay.  Figure out what caused you to get off track and what you can do to avoid it happening again when the same obstacle comes up. We can have this same discussion next year or you can finally resolve your resolution. Show Notes Black Flip Cocktail:  It’s like a frothy chocolate milkshake with alcohol!  Try this recipe. The Simple Dollar and I Will Teach You To Be Rich are two books Matt recommends on personal finance. Learn more about your ad choices. Visit megaphone.fm/adchoices

In this episode, we talk to one of our listeners, Hersh, about his personal financial profile and offer up some advice. Full credit to Hersh for this show idea. He found our podcast through an Android app on his phone and became a huge fan. He reached out to us via Facebook and wanted to come on the show to copy a segment from Suze Orman called “How Am I Doing?” We thought it would be cool to bring his own, find out what his financial situation is and do our best to help him improve it. Hersh is a successful air traffic controller with a wife and newborn son from upstate New York. He owns a home, two cars, has no credit card debt, and paid off his student loans by taking a loan from himself via his TSP fund. He’s now currently paying off that loan. Hersh has some rental income and gets some overtime at work.  He has a college fund for his baby son.  Hersh is making some good money but essentially living pay check to pay check because all his spare money goes to his loan. Hersh is not doing much investing and he doesn’t have an emergency fund.  He needs to take some of the money toward the loan and start a rainy day fund. At least one month of expenses, but three to six is the gold standard. Betterment is the perfect place to stash that emergency fund.  You are making crap interest if that money is sitting in your checking account so you might as well be getting those gains. Overall Hersh is doing well but he has an expensive lifestyle and no emergency fund and those are the things he can improve upon. Show Notes Betterment:  The smart way to invest. Mint:  Track your own expensive lifestyle.   Learn more about your ad choices. Visit megaphone.fm/adchoices

What is the 4% rule?  It is the magic formula for early retirement.  Make your money work for you while you no longer have to work. If you want to retire way before 65, listen up.  This is how you can do it.   The 4% rule is a benchmark that can be used to calculate how much money to withdraw from your retirement accounts every year for at least thirty years without depleting those accounts and outliving your money. In 1994 William Bengen, a financial planner published a study showing the results of testing a number of rates of withdrawal based on historical rates of return. Bengen concluded that 4% was the highest rate that could be withdrawn for at least 30 years without running out of money. Full Article Here Show Notes The Four Percent Rule:  Calculate how much you need to apply the rule. Betterment:  Start investing today. Learn more about your ad choices. Visit megaphone.fm/adchoices

Investing is a cornerstone of wealth building. No, we are not going to win the lottery, and most of us are not going to inherit a fortune from our parents. So we need to jump into the stock market and the earlier we start investing, the better because time is what really matters when it comes to building our nest eggs. But investing can be intimidating. Even the vocabulary around it sounds like a foreign language, mutual funds, market price, share price, robo-advisor. Don’t worry. Investing is not as complicated as it seems to the uninitiated. In fact, by the time you finish reading this, you will have all of the knowledge you need to start buying stocks, one way or another. So if you’re not sure how to buy stocks, our beginners guide to start investing is just for you. Full Article Here  Show Notes Betterment: If you don’t want to pick your own, let Betterment do it for you.   Learn more about your ad choices. Visit megaphone.fm/adchoices

We want you to be sensible with your purchases.  But sometimes you just need a big one!  (Don’t we all). When is a big purchase justifiable?   The topic for this episode came from a listener  Kristen. She wanted to know "How and when do you justify buying big ticket items like a laptop, high-tech camera, or new TV?" Sometimes you really do need a new computer, your current one is dead.  Or you need a car that isn’t in the shop every month costing you money.  Those are legit reasons for big cash outlays.  Wanting a big ass TV when you are in credit card debt has no justification.   Put anything expensive on a 30 day list.  If at the end of thirty days, you still want it, than it may be a justifiable purchase. If it’s not something you really need, chances are you will have forgotten all about it by the end of the thirty days.  If you’re making a large purchase, see if the seller has a 0% APR card you can open and put the purchase on.  You have to be on top of this though and make certain to pay the entire balance off before the 0% term ends or you will be in a world of shit.   Just having the cash for something is not enough justification.  You could invest that money.  Would the thing you want to buy or do make you happy (for more than a few hours) or improve your life?  A great experience counts.  In fact, paying for a great, memorable experience has been proven to provide much longer lasting happiness than buying a thing.   Once you have justified your purchase, do your research.  Check out But It For Life on Reddit.  There are threads dedicated to the best of anything you could possibly ever want to buy.  And by best, I don’t necessarily mean the most expensive.  Quality isn’t always linked solely to cost. Sometimes we need to buy things.  Just learn to distinguish between a want and a need.   Show Notes Motherf**king Bike: A hilarious YouTube video about riding bikes. Mint:  The easy way to track your spending.   Learn more about your ad choices. Visit megaphone.fm/adchoices

Is your bank nickel and diming you with their bullshit fees?  Learn how to avoid them and dispute the ones you may have already been charged.   Banks have enough of your money that they use to make more money for themselves.  Don’t let them steal more with tacked on fees.   Maintenance fee, minimum balance fee, foreign transaction fee, paper statement fee.  Those are just a sampling of the fees that some banks charge.   Banks rake in a ton of cash on these fees because they know a lot of people either won’t notice them at all or if they do notice them, can’t be bothered to dispute them because calling the bank is a hassle.   It just takes some research.  There are banks that don’t charge fees and various types of accounts that don’t come with fees.  There is usually some kind of catch, you need to have direct deposit, pay a bill via the bank’s auto-pay system, or maintain a certain balance.  Banks offer new accounts that are fee free but check the fine print.  The fee-free period may only last a certain length of time before fees kick in. If you do notice a fee, call the bank and complain.  Don’t be rude, remember, more flies with honey and all that.  But if you are persistent enough, they will usually waive whatever you are complaining about.   While you have them on the phone, be sure to ask what you can do to avoid being charged that fee in the future. There is no reason to pay a bank fee.  Shop around before opening an account.   Show Notes Mint.com:  Mint will alert you to any strange fees. Simple.com: A new online bank that promotes no bank fees. Fidelity: The bank account that  Andrew recommends. They reimburse ATM fees! We’d  like to give a shout out to Grayson at DebtRoundUp.com, for helping Matt out with my business bank fees. Learn more about your ad choices. Visit megaphone.fm/adchoices

You know you should be investing your money but where, how? Investing can be intimidating but it doesn’t have to be.  We’ll help you get started.   Anyone can invest and everyone should.  We’ll walk you through the process so you can start making your money work for you.   Money sitting in your checking or savings account is losing you money because the crummy interest the bank pays is less than inflation.  You have to put that money where it can earn you something.  That’s why investing is so important.  Betterment is very easy to use.  You slide the scale to the amount of risk you want, more stocks is riskier, more bonds is safer.  The fee is .35% which is pretty low.  There is no minimum investment but wait until you have $100 to start your account.   If you need the money in Betterment, you can pull it out and there is no fee. You can set an auto deposit so each month, the money will be invested.  You never have to think about it, Betterment handles everything for you.   If you’re a bit sophisticated and want to buy individual stocks that you’ve chosen, you can open a brokerage account.  Fidelity, E-Trade, and Sharebuilder are all examples of brokerage accounts. If you have $1000 to start with, open a Vanguard Target Fund.  This fund balances your risk based on your preferred year of retirement. The closer you get to that date, the lower the risk balance on your investment. For a lot of us, the real way to get rich is going to be through investing.  Most of us don’t have big inheritances to look forward to and are unlikely to win the lottery.  The earlier you start investing, the longer your money will have to grow. Get over your fear and open an investment account today. Show Notes Andrew’s Betterment Experiment:  See how he’s doing. Mint:  The easy way to track your spending. Learn more about your ad choices. Visit megaphone.fm/adchoices

In this episode, we answer another listener question about whether he should invest in a Traditional 401k, a Roth 401k, or both.   If you’re employed, chances are your employer offers a 401k. Normally, this would be a Traditional 401k, but check with HR to see if they offer both a Traditional and a Roth. 401ks allow you to invest your pre-taxed income, and sometimes employers will match up to a certain percent. If they do, take it — it’s free money. However, Traditional 401ks have a yearly limit as to what you can invest. Therefore, some employers will also offer a Roth 401k which allows you to invest after-taxed money from your check — there is also a limit too.   If you can afford to max out both, go for it. If not, go with a Traditional 401k, and anything over the limit to which you can invest, through that in the Roth — hopefully, your employer will do some matching there too.   Show Notes Health Savings Account (HSA) — This is a savings account you can open to use for health-related costs. Learn more about your ad choices. Visit megaphone.fm/adchoices

Are you stuck with a mortgage that is underwater?  We’ll craft an escape plan so you can save money and move on. An underwater mortgage means the balance remaining on the mortgage is higher than the fair market value of your home.  In other words, you owe the bank more money than your home is worth. A lot of people found themselves in this situation when the economy crashed in 2008.  Even at that time, interest rates were lower than you will generally average in the market.  And mortgage interest is tax deductible.  Money tied up in a house is inaccessible.  You can pull money out of the market and have cash in hand within a few days.   If you’re underwater, don’t overpay on your mortgage.  You’re only tying up more money.  Invest that money and get your average 7%.   Give some thought to doing what Matt did when he found himself underwater.  He moved in with his brother, paying a very low amount of rent and rented out his condo.  In some cases, you can get more in rent than what you are paying for your mortgage.  You just need a friend or relative willing to give you cheap rent.   A big housing bust like the one we had in 2008 doesn’t occur very often.  If you can afford your mortgage payments, hold onto the house.  Eventually, you will be above water and can sell the house if you decide to.  And maybe live in an apartment for a bit.  Owning a home is not all it’s cracked up to be and not necessarily still a part of the “American Dream.”   Show Notes Mint:  Track your spending. Betterment: The easy way to invest. Vanguard:  Among the lowest fees in the industry.   Learn more about your ad choices. Visit megaphone.fm/adchoices

You have no idea where all your money goes, huh? I’ve been there before. I know it’s frustrating when you can’t seem to get ahead. If you are in this boat, you probably don’t have a budget or at least one that is working for you.   In order to start to making smart conscious decisions about your money, you’ll first need to get an idea of your overall financial health. Creating a budget will help you do just that. Remember, a budget is not a magic wand. It is a tool that will help guide you but it takes some commitment as well.   Full Article Here Show Notes Mint: The easy way to budget. Learn more about your ad choices. Visit megaphone.fm/adchoices

We’ve all heard the cliché that if you’re renting, you’re wasting your money. But is that true? Is it better to rent or buy?  Home ownership used to be a hallmark of the American dream achieved. It showed that you were an adult and that you had “made it.” But that is no longer the case for many young people. Lots of them have decided it’s better to rent than buy.   Earlier this year, US homeownership rates fell to a 48 year low. For those under age 35, the rate of ownership is just 34.1%. That is about half the rate of overall homeownership in the US. Clearly, Millennials either didn’t get the memo outlining the American dream or they disagree for various reasons that renting means throwing your money away. Full Article Here Show Notes 5 Year Adjustable Rate Mortgage:  This is the mortgage that Andrew is leaning towards. I Will Teach You To Be Rich: A great personal finance book. The Simple Dollar Book:   Long considered a PF classic. Betterment: The easy way to invest. Learn more about your ad choices. Visit megaphone.fm/adchoices

Every time we make a purchase, we have to decide between using a credit card, a debit card, or cash. They all have their pros and cons. Will there be a clear winner? Credit vs. debit vs. cash: the ultimate showdown.   Those shiny credit card offers with their promises of free flights, and cash back can be seductive. We like our debit cards because they help keep spending under control. And some die-hards still like cash because it can make some purchases cheaper. What and when should you choose when it comes to credit vs. debit vs. cash? Full Article Here Show Notes Mint: You should be using this FREE online software to track your expenses and setting up your budget. American Express Credit Card: This is the credit card that Andrew uses to get cash back bonuses. Discover Credit Card: This is the credit card that Matt uses to get cash back. Learn more about your ad choices. Visit megaphone.fm/adchoices

Saving money can be hard and sometimes it feels like you’ll never get ahead. But saving money doesn’t have to be hard. We will show you how to save money fast and automate it to make the process easier and less painful. Most of us want to save money fast, and we know how to do it. But there are ways to make saving money faster and easier.   You can’t effectively save money fast without a budget. If you don’t know how much is going out each month, you don’t know where your spending leaks are. So if you want to know how to save money fast, setting up a budget is the first step. Full Article Here Show Notes ZipCar:  Don't have a car? Don't want a car? Join this awesome car-sharing service. Groupon & Living Social: Group buying coupon site. Get random stuff for at least half off, like restaurants. Netflix & Hulu: Online movies and TV shows for just $8 a month each. Ditch cable and get one or both these packages. Learn more about your ad choices. Visit megaphone.fm/adchoices

Welcome to Listen, Money Matters.  We are a personal finance podcast for people who love beer and swearing as much as they love money!  Andrew is the finance expert. He’s always been a guy predisposed to ranting about money. His parents taught him the value of a dollar as a little kid. He has managed to build up an impressive portfolio at 28 and plans to retire at 35.  On the other side of New Jersey, Matt, his co-host, is not very good with money. In fact, as he puts it, “I flat out suck with money and make things harder than they have to be.” But since early 2013, with Andrew’s help, he has managed to get his finances in order.  There is a lot of personal finance advice out there but none of it spoke to us.  It was either for old people or people who already had some financial savvy.  We wanted a show that would help everyone but would be geared toward issues facing those in their twenties and early thirties.  We plan to talk about every facet of personal finance, including getting out of debt, how to save money, and how to make more of it. We also want to talk about ways you can improve your life and make it easier.  Tools to help you automate your finances, tips to improve your productivity, great beers you should drink.  We want to take the intimidation factor out of investing.  It seems complicated and it can be, but it doesn’t have to be.  We also want to take away the taboos around money.  So many people feel ashamed because they think they’re alone.  Whatever money problem you are facing, there are others out there facing the same.  So welcome to the inaugural episode.  We hope you’ll enjoy what we do!  Show Notes  Mint: The easy way to budger. Betterment:  The smart way to invest.   Learn more about your ad choices. Visit megaphone.fm/adchoices