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Spring Cleaning Your Finances (plus Ally & Dr. Ted Klontz)

Spring Cleaning Your Finances (plus Ally & Dr. Ted Klontz)

Well, he stockers in a, just like the gym,
the bar down the street, and the Sizzler. We’re going to have to cancel Dipod cost
because, let me take my, what’s that, Joel? Okay, fine. I’ll take the mask off. What’s that? Oh, you’re saying it’s less than 10
people, and since we have two, that’s right. Two listeners, so we’re okay. We can do anything we want. We just keep doing what we’re doing. Just entertain people. We could totally do this. People who, this is a go,
let’s light this candle. Live from Joe’s mom’s basement
at the stacking Benjamin, I, Joe’s mom’s neighbor, Dugan. Happy second day of spring stackers. Hi, I love it when we can finally open up
a basement window and share with the world the smell of old pizza and take out. Today we’ll jump into not just spring
cleaning the basement, but spring cleaning your money. What should you do here to help us? We welcome from the paychecks and balances
podcast, Marcus Garrett plus from afford anything Paula pant and from
Len dot com it’s Marie Kondo. Nah. Even she’d give up on this
mess is just lamb peds out. Plus, speaking of cleaning, is it
time to think about cleaning up? How you save? Joining us on a special Friday segment,
we welcome dr Ted clots and from ally. Emily chalal. Of course, that’s not all. We’ll also magnify someone’s money
situation and save time for my incredible trivia, and now a guy who probably needs
to air out some shoes show saw, see, hi It is usually a great day to
air out some running shoes. Hey everybody. I’ll come to it doesn’t
smell here anymore. I’m Joe Selsey high average Joe
money on Twitter and Oh gee. Taking a well deserved break, which means
today in the first chair, deep under Los Angeles, it’s our good
friend Lynn Pennzoil. Wow. I’m honored. The first chair. I mean, I don’t that, can’t remember the
last time I’ve been first chair, Joe. Thanks. No pressure, man. You’ve got to bring it. Speaking of a smelly state, you know, it’s
a been a long winter and it’s been getting smelly here in the bunker, so I’m looking
forward to some springtime freshness. Isn’t it great? Finally time to get rid of
that gold boullion smell. Yes. I love how, by the way, in
the market starts dropping. All I have on my Twitter feed is Len Penn. Zoe’s finally winning
over and over and over. That’s all people told me. Well, that’s very nice. I appreciate everybody’s,
uh, enthusiasm for me. I’ve got a long ways to go, Joe. I’ve been, I’ve been hurt so bad my years. I wasn’t ever in in high school band. Were you in high school band? Lynn. Uh, no. I, well, unless you count third grade. Yes, I will not. That’s not high school. It wasn’t abandoned. That’s some killer maths. He got there in third grade, but
no, I was not in high school band. No, but you know, they
challenged for the chairs. I knew I was a junior high trombone
player, and there’s a challenge and possibly challenging you halfway through
this podcast for that first chair from Las Vegas. It’s our friend Paula pant. It is me. I am here and a Las Vegas springtime
starts at the beginning of February. I just gotta say it’s been spraying
for, for ages for, that’s great. Paula. That’s fantastic. So as a guide, Detroit take every
opportunity to brag about the weather before the temperature is
turned to like 115 degrees. I was just thinking that. I was thinking in July, I’m
going to turn that table odd. Yeah, exactly. Exactly. Oh, I’m milking it while I can. Another guy who’s in deep in the heart
of Texas from the paychecks and balances podcast here to save the show. Marcus Garrett, how are you, man? I’m doing well. I’m doing well. I’m in Houston, Texas now. I think I was in Austin
last time we spoke. Yeah, you see you, they
finally kick you out of town. Yeah, man, they ran me out. Well, only stay in a city that you wear
out your welcome and well, luckily Houston is huge. It’s easy to disappear in Houston. That’s the theory. Yeah. So tell everybody about, there might be
three people listening that don’t know paychecks and balances. Tell them what you and our good
friend, rich do out in the show. Yeah, my culprit and Cohoes Fritz Jones
works for an unnamed but large search engine and the Silicon Valley area, and I
am in Houston, Texas, and we both cohost paychecks and balances where we help
millennials make money, save money, and get out of debt on the spoon. Sounds with BNB Paula,
that drives me crazy. What a perfect radio voice. He’s going to talk like
that the whole damn show. And then love to Mike in the set up just
for this lead is Len is driving to Houston right now while he’s driving. By the way, if the honeybees with him, she
could be reading the stacker he should and he’s got to keep his eyes on the road. The stacker is our
Stacie Benjamin’s email. You will get not only lessons from all the
ways that I messed up my money over the years and the lessons I learned
from it, but then you’ll also get. Anything related to stacking Benjamins on
tour, where we’re going to be meetups that we’ll have Stacie Benjamin’s
dot com forward slash. Stacker. We get a great show cause we’ve got Marcus
Garrett from paychecks and balances with us. We got Paula, we got Len. So let’s get this party started. Hello Dobbins. And now it’s time for your
favorite part of the show. I was stacking Benjamin’s headlines. Our piece today comes from the balance. It’s written by Miriam Caldwell,
how to spring clean your finances. Paula, I think I’ll start with you because
I looked down through all of these things much like we’re cleaning out the basement
this week, cleaning out your spring finances is a pretty good idea. You know, this list
honestly, is kind of generic. Dust off your budget and make
sure you get out of debt. Like it’s all really basic personal
finance one Oh one but don’t pay off your debt. Yeah, yeah, yeah. But not all personal finance has to
be niche and go a hundred miles deep. I think there’s a huge number of
people here that need to learn these. Very basic lessons about money. Well, I don’t know. I mean, so one of the tips in this article
is pay off your debt, but like, let’s be a little bit more thoughtful about this. First of all, when we say
debt, what are we referring to? Are we talking about your mortgage? If so, is it a good idea to pay that off? Or should you hold onto your mortgage so
that you can invest that money into index funds instead and arbitrage the relative
difference in the interest rates? There’s a lot of. Well, there is a lot of nuance and
thought that needs to go on around. Sure. So let’s dive into that one
since you brought it up. The second paragraph says, and I think
this is, I think they went with a generic title, but it says that’s why you
should set up a debt payment plan today. A lot of people have debt. Very few people actually have a debt
strategy, a debt payoff strategy. Oh yeah. I certainly agree. Having having a thoughtful
strategy, even if that strategy. Means that you are intentionally going to
hold onto certain debts like your mortgage while paying aggressively paying off
other debts like your credit card. Certainly having a thoughtful strategy is
necessary, but a blanket statement like pay off your debt, I don’t
think does very much good. Lemme Paula says, pay off your debt. First thing you think is
paying off the mafia, don’t ya? Your mafia debt. Well if you value your legs, yeah,
I think that’s a great ideas. A as pay off the mafia debt. First interest rate or
highest payment first. Which one do you go with? Their highest balance? Lowest balance. Do you ascribe one way or over another? Well, the Dave Ramsey fans are going to
hate me, but I say do the highest interest first. It’s just a. Pure math thing. Uh, I’ve always ascribed to that. It makes the most sense from a monetary
perspective, but I guess people will argue that. There are some who want the psychological,
uh, satisfaction of retiring individual debts, getting rid of those small
balances regardless of interest rate. How do you, if you do it your way, you
know, the thing about the Ramsey way is you get those little wins, right? If you pay off the high interest rate debt
and do it better mathematically, how do you stay mentally engaged in that game
when maybe it’s one of the biggest debts you have. Well to me, I think the first thing you
have to do is you have to understand the bad parts of interest and why interest is
so insidious in trying to maintain your good personal finance, your personal
finances in good standing and good shape. So if you understand that interest
is something that’s really terrible. You would want to get rid of as much of
that interest and stop paying as much of it as fast as you can. And the way to do that is to stop
paying the higher interest debt first. But if you’re looking at the big picture
and you’re just looking at the balance that you own debt, then get rid of those
little, those little wins, as you say, get, get as many little
wins under your belt. Make yourself feel good. If that’s works, then do it. But like I said, if you’re looking at
this from . Purely a monetary perspective. It is a no brainer to get rid of
the higher interest loans first. Marcus, when you paid off
debt, how did you do it? I did what felt good, which is
probably the same way I got into debt. So I like to do with, um, I have a whole
four step plan and then it’s pretty much all the other plans, whether it’s seven
baby steps or four step plan, which I use. But when I first started getting
out of debt, and I literally just. Sorry, I’d had a whatever plan. So anytime I had more money, I just
put something towards the minimum and I finally saw something at a zero balance
and it felt good to see a balance at zero after seven years of not really making
any dense and any payments, and it really showed me that a plan could work. Then I went out and looked at the
calculators in a debt calculator and then put like a timeframe and a timeline to it. But I, I mean, honestly, I don’t think it
would have ever worked for me to just go out and tackle it and be responsible. You had to be interested first. Yes, yeah, and motivated. And so the motivator for me was
seeing a debt payment paid off. I think the first one I’d tackled, I want
to say was my, it was a used car with rims. I have my taste that I had gotten a few
years earlier and I paid that off and I, it was just, okay, this works. Just seeing something that works. Let’s go over. We started with the one that
Paula thought was stupid. Let’s talk about, let’s talk
about the rest of these. Sweep out old spending habits. Marcus, how about, how about for you
spending habit that is been a big win for you curtailing. So we should have began that. A, I’m an auditor, so, uh, I tend to go
negative cause I’m going to go negative right here. That’s why I’m disclaiming accordingly. I was trying to save like 50 bucks, uh,
the other month and I’m like so close to the bone right now. There’s no more fat to cut. Like, actually I did not discover it. I might add, like I spent the whole month
like, okay, I just want to, you know, save somewhere in my budget like
50, but I couldn’t find it. Like I, there’s. There’s no more fat to cut. And I only share that story because I
think some people, like once you get really lean, it gets like
you have to make bore. You have to kind of find a way. So sweeping out old spending habits, like
I guess my, all the skeletons are out of the closet. Like I don’t got anything left to sweep. And so I don’t know, I’m just, I’m sure
the listening audience does, but I don’t have one for this one. I’m living at the margins, man. Yours is all swept out. Exactly. So now for you then it’s all, and I think
you mentioned this, but I want to draw attention to it for you,
it’s just make more money. Yeah. I mean, I could go, I mean,
there’s probably people like. If they saw where I live on a Google map,
they’d be like, yeah, he can definitely downgrade from there. But like I also feel like that’s something
that I’ve earned over time as well. There’s definitely things that I could
cut, but they’re not things that I want to, I can’t do the traditional things
that I did like during the book, like cut. Cable cable has been cut
off for like 12 years now. I cut back on rent. I had a roommate, I don’t
want a roommate anymore. So some of these are like lifestyle
choices and changes, but like they’re not things I can just easily opt into. Like I could, when I was 2223 going
through that journal, there was a, there was actually a lot more
fat to cut at that time. A lot of these big expenses. Paula, did a lot of people talk about
cutting that you read about a lot, you know, and boring pieces like this. The uh, sorry. I thought it was pretty funny there. You never had a lot of those habits. Did you ever have cable? No. As an adult, I have never had cable. My parents had it when I was a child, but
I as a, from the age of 18 onward, have never had cable, big
overspending at restaurants. Ever have that one for a little while. I did. That was probably one of my bigger
weaknesses, particularly I would say in my early thirties. That one has dropped down pretty
significantly lately over the past two years. But you know what’s interesting is
sometimes when you cut spending in a certain category, it’s possible to replace
it with spending in a different category, which means that overall, you
haven’t actually saved any money. You have changed your spending habits, but
you’ve simply just transferred spending in one category to another. So for example, restaurants
in my early thirties. Yeah, I think I spent quite a bit more
on restaurants for the last two years. That’s dropped quite a bit, but in the
last two years I’ve spent a great deal more money at Sephora, getting hair
conditioning treatments and things like that. So for all of the money that I’ve saved at
restaurants, I’ve just transferred it over to like skincare lens,
nodding aggressively. Lynn, you’re getting here. Treatment as a regeneration
treatments as well. Yeah, that’s, that’s
pretty expensive stuff. Uh, but this one is interesting though,
Len, because I think about Paula who never developed a lot of those habits and
started early and Mark is talking about, you know, there’s some expenses
that he doesn’t want to change. I think that the older you are. The harder it is to change some
of those big expensive habits. Like I think it’s easier for young people
listening to this to never move into a big house. That industry, people already live in a
big house and they love their big house, or they love their neighborhood
or wherever they live. That downgrading for them is much more
difficult than never having it at all. Well, yeah, I mean, that’s a big thing. Yeah. Can’t just pack up and move. It takes a lot of the efforts. So yeah, that would,
that would definitely. Get you set in your ways. There’s things you can’t do. I think the people who drink
coffee have a hard time. It’s so easy to say, Oh,
to stop the Starbucks. There are people that are
just totally addicted. I mean, they will not stop because they
are convinced that that’s the only way they’re going to drink their coffee. So that too. I mean, I have my issues though too. I mean, I’ve caught myself
with my model trains. There was a point there where I was
spending $100 a week on my model train stuff. Honest to God, you know? So I had this, I had to way. Kick back and say, Hey, a back off dude. You know, I know. Did you afford it? But you got it. You got to back off. I think it would’ve been funny. Or if you had had like a family
model training intervention, like everybody sat you down and went, Len,
this is the caboose of this whole thing. And you’re, the irony is the somebody,
somebody had wrote me actually this week talking about my model train stuff and I
was telling him all that stuff is still in my closet of the thousands and thousands
of dollars I have invested in it. I don’t even have the dumb thing. My, my sister in law has several purses
in her closet that she’s never used. Len has Bachman models in his way. How about, how about this? Now you brought women in shoes. My grandmother, God rest her soul. She must’ve had 400 pairs of shoes. You know, I was having, she had collected
over the years, but I was, that was amazing. I was having a talk yesterday with a,
it was a guy in shoes, I mean, collected really, really nice fashionable shoes. And somebody, like six months ago that
we had on the show was talking about, you know, I mean, how expensive some of the,
you know, the cool new athletic shoe endorsed by the latest superstar has. I remember driving down
the road when we were in. We were in new Orleans and there was a
huge line outside of Adidas the day that a new new brand of Adidas shoe was coming
out, and I looked at the price of that shoe and it was not going to be cheap
like that was going to be a huge amount of money. Dusting off your budget. Was number two on this list. I want to ask you guys
about how you budget. Do you use like I, you know, talk about
how you use tiller money all the time for my budget, I use that to track it and
then we have a weekly family meeting. Cheryl and I either over wine or pancakes,
depending on what time of day it is. Len, how do you keep a budget? Yeah. I really, I don’t have an
official budget anymore. I mean, those, those days are gone, but I
do track my spending religiously and I, we do review it. Uh, the honeybee and I,
we do that once a month. Do you use an app? Do you use an app to do that? Well, I know it’s not
very efficient, really. I mean, but it works remarkably well. It’s, we just use an Excel spreadsheet
and the honeybee takes all the payment information. Most of it, you know, we pay most of the
bills online, so if you look it up and then she transfers it to the Excel. A worksheet that we’ve been doing. I mean, I started that back in
1997 I, that’s that spreadsheet. My spreadsheet is 23 years old,
so a, and it’s extremely complex. So, um, you know, I’m not,
I’m not going to change. Yeah. That works for us. Sure. No, Marcus, do you use an app. Yes, I have mint on my phone. I say that hesitantly because
it’s like a paperweight. I check in like quarterly
or something to that effect. I did set up a budget in there and I
wasn’t going to say it’s going to sound very, um, Oh, other word
that I can’t think of. But if you Googled Marcus Garrett and 50
30 20 there is a article about the 50 30 20 and I use that article because it had a
free budgeting tool in there that you can use it. So it’s right there in the article. It’s for NerdWallet. And so, I mean, I think something
to what we’re speaking to is. I use an 80 20 budget now, like I saved 20
and I don’t think about the rest of the 80 so it’s very simple for me, but I
had to earn the privilege to do that. So the problem that I was having with
the $50 it was like a self-made problem. I actually just thought it would be cool
to, I forget what I was even trying to find that $50 for. But then I went and pulled out my budget
and I was like, I can’t even find $50 to cut. It’s not that I didn’t have it $2 but I
couldn’t find it somewhere easily to cut. There was no like, like I said, the cable
bill to cut off or I’ll just cut back on electricity cause I’ve done all those
things and they’re so instilled in my habits now. Like when we were talking about
the 400 shoes, I think I had six. Yeah. Probably had two of those
were about three years. Yeah. Um, you know, my girlfriend’s probably not
proud of that, but I’m like, that’s just not my thing. And so like, maybe this is just a long
summation of maybe I’m too boring and I need to find ways to spend money again. Yeah. Yeah. I like a 80 20 budget now. I started with the 50 30 20 when I was
struggling to get out of the budget and I, I guess, get out of debt and I guess
to hit on that, I’m going through that. Like people know 50% is for needs, 30% for
once and 20% is either paying down debt or doing something responsible. So now my 20% typically just goes towards
paying for retirement or something towards retirement. I do something to responsible with 20%
of the money I have fun with 80% years. Paula, I think is safe first also. Right. Yes, exactly. My strategy is figure out what percentage
of your income or what raw dollar amount of your income you want to save. Pull that off the top first and
then just go wild with the rest. So, and I do that. You know, in the past I’ve
used mint or personal capital. I’ve kind of flirted in and out of those
off and on for years, but I found it to be difficult to stick to longterm. I’m with mint a lot of times they. Mislabel a certain expense. And so I have to go in and
make all of these corrections. And so it becomes very manual and
very tedious and very time consuming. And what I finally came to realize is that
at the end of the day, it really doesn’t matter if I’m spending this money. On food versus entertainment versus,
you know, pets or whichever category. I’m spending it in spending a spending and
savings, a savings, and if the point of budgeting is to make sure that you’re
saving enough, then let’s cut to the chase. Just figure out how much you want to save. Yank that off the top. And spend the rest, you’re done. But for people that are just starting out
though, Paula, I hear a lot of people, a lot of people in our community
love things like why NAB? Like if you have debt and you’re not good
at knowing how to not get into debt and save enough, and you’re not really sure
where your money’s going, going to a zero based program. I think for those people
that’s a, that’s a great thing. Oh yeah. I think certainly if your budget is super
tight or you’re trying to pay off debt, or you’re just new to this, or you want a
periodic check in, you know, for all of those times, strict line
itemized budgeting makes sense. And I’ve done that myself, you know, like
I said, off and on for many, many years. I just found it to be very hard
to stick with consistently. And week after week, month after
month, over the span of a decade. That’s a way Len years used
to be too, I think, wasn’t it? Very zero zero based budget. Yes, it was. Oh yes, it was very much so. And then, you know, just one of the
advantages of getting old and seeing your income rise over time and your. That becomes less and less important. But yeah, it’s very
important in the beginning. But Mark is the last one on
here is a plan for your future. And I really liked that one. I mean, not because spring cleaning is a
great time to plan for your future, but I think if you don’t have a plan,
the best time to get one is now. Yeah, I agree. And I think what I’m hearing as a theme
here is if you’re gonna use these apps, if you’re going to use these tools. For me, it was using them
until I instilled these habits. So a lot of things that I do
now, they’re just second nature. Like for example, when I’m walking through
target and all these temptations that people talk about in the target
discounts, I joke about that. But if it’s not on my little list, so
I maintain, I, we can go crazy here. So I do have meant, I’m also looking at
this calendar in the background, which is a whiteboard that I use, and I just. Updated because it’s near
the beginning of the month. I do that every month, and then
I have a notepad in my phone of. Things I have wants and needs. And so if it’s not on my needs list,
like that habit has been instilled over a decade now. It’s really easy for me just to look at
the list are I typically already haven’t memorized and I just know that that thing
that I’m seeing in target is a one I just keep on walking. And I think again, that’s come from 10
years of practice of instilling that habits. I don’t need to pull out, man. I don’t really need to know what my budget
is doing cause I’ve got it memorized. I’ve got 10 years of practice. But the other thing I like about
that is you’ve got surround sound. I mean, it sounds like wherever you look,
you’ve surrounded yourself with these good, these good reminders, right? And it did not by any stretch of
the imagination occur overnight. So I’m the guy for those who don’t know,
and there’s an article out there as well. I spent $26,000 in 72 hours. That’s like what the book is about,
the culmination of that story, both the lessons learned and how when you think
you’re going to ball out, coming out of college and it doesn’t quite go that way. And now. I’m still not quite at ballers status, but
with significantly more income than the 22 year old self that I have. Like it’s bought a level of freedom. I mean, that’s, I feel like that’s
something that sometimes people are hesitant to own and like I’m leaning in
like it’s, it’s gotten me to a point where clearly I don’t even have to think
about those types of things anymore. But that is a. Privilege, um, steps
that you have to take. And I think, um, how that come over time. So for those people who are starting off
at the beginning, and I think we’re going to hit a little bit later with the
listener question is, you know, it. Least you can speak to the art
light at the end of the tunnel. A responsible near baller, almost baller. Paula, you pick this article. So what’s the big takeaway? Oh, I picked this article. I’m throwing you under the bus
before you throw me under the bus. I would say the big takeaway is to check
in with yourself about how you’re doing with the basics. What are your spending habits, how on
track is your budget relative to where you want it to be, and if you have debts that
you want to pay off, you know, do you have a strategy or a plan for that? She’s dropping the mic. Every comment. I really am two more months of this. Len. I think, uh, the takeaways, you know, it’s
what comes down to personal finance, which means this is all on you. You have to go back
and do things yourself. You’d have to go back and
look at your finances. They ain’t gonna take care of themselves. You have to do it for yourself. Mr. Garrett is the guest. You got the last word, man. Um, for me, it’s automate the process. So I make very few promises, but
the time will pass on its own. So you can be 10 years
old or 10 years further. Hopefully you’ll be both. I love it when we can not only
talk about FinTech, but also. About behavior. Cause as you know, it isn’t fees. It’s not the market. It’s not any of these things
that will ensure your success. It’s what you do. And so ally was working on
some behavioral economic ideas. How do they. Make products that people
are more likely to use it. At the same time, dr Ted clients they
found has been working on many of the same things. Of course, dr Klontz is a noted money
psychologist, and his goal has been to help people think
differently about savings. In fact, his big message has always been
that we’re not wired to save, so we have to kind of trick ourselves into it. Maybe we’ll talk to him about that today. So today. We’re going to talk to dr Ted Klontz and
Emily chalal from ally about better money behaviors and some of the things that
allies done to put that into practice. Emily chalal, dr Ted Klontz on my dad. Shortwave. And joining us. It’s Emily shul and dr Ted Klontz. How are you guys? Great. It’s a beautiful day here
in Detroit, Michigan. Let’s talk about saving dr Kahn’s. I’d like to start with you here because
a lot of the work that ally is doing, the Emily and I will talk about here in
just a moment, is based on your work. I want to ask you this. People, you say that people
aren’t wired for saving. That’s not the way our head works. Explain that. Why not? Well, it comes from our historical
background, our ancestors, and it’s all about pleasure. We are all here today because. The natural selection process resulted in,
and it was almost a necessity in giving. So there, when we give or we don’t
keep, we actually feel better. It’s better to give than
receive that, that whole thing. It’s actually a genetic wiring and that
part of our brain has not received an update and a hundred thousand years. So it’s so operating like that. And historically it was essential for the
survival of the clan or of the community or of the tribe. And in the really poor areas of our
nation today, very par, small communities. That’s still what happens. There’s a huge giveaway thing. If somebody is in distress, they have a
what in where I live, it’s called, uh, bring a dish and they bring, the whole
community comes together, everybody gets fed. And that’s literally how they keep fed. So there’s still elements of that, uh,
and it caused, and back in those days. That’s how the community survive. The people who kept or were inclined to
save or hoard or hide or considered to be threats to the existence of the tribe, and
they were sanctioned up to the point of death. So those of us whose ancestors lived
tended to be giving things away or not keeping things we caught saving today. Back then they were called hoarders and
they were actually used as examples of how not to be. Is this why dr Klontz? We see people, we often see these people
that give a lot in society and they also seem to be often very wealthy people and
people continually say on this show, the more I give, the more I receive. That’s true for us today. Then. Yes, there’s more pleasure
in getting rid of the money. Now, of course, what we’ve shaped that
in our culture is give it to myself. So I’ll buy a new car, right? And there is that pleasure thing. It’s the same pleasure piece. And quite often we aren’t
doing it for ourself. We’re doing it for our family or
for the good of our community. Nine 11 occurred and the solution that our
government solution was, we’ll give you $500 to spend, not $500 to save. But $500 to spend, and so our, our
government is sort of organized around the spending thing. If everybody were of that percentage of
people who hoarded our entire economy would collapse if we actually were in that
13% that, uh, were the ancestors that were hoarders that actually were, yeah. That’s so interesting. It makes me think of. You know, we talk a lot about keeping up
with the Joneses, but on the other side, it sounds like, based on what you’re
talking about, to some degree, we don’t want the neighborhood to be embarrassed
because we’re behind, so we’re kind of giving to everybody else by keeping up. Yeah. And that taps into another
basic need, which is to belong. That’s the most threatening thing to human
beings is to have a sense that they’re not a part of the tribe or
they’re don’t belong. Historically, if you looked around and the
tribe was ignoring you, that was not good news because you would be gone in a week. Right. And so, so we’re very
sensitive to that too. So those two things co-mingle and we
end up with the behaviors we have. Now. The thing that’s important to understand
is until the last couple hundred years, it hasn’t been important to save. Number one, the average person back a
hundred thousand years ago lived to be about 20 or in the mid twenties in 1900 in
America, the average person lived to be 50 and we had intact families,
intact communities. So the old lived with the young and
they all sort of lived and survived and everybody supported each other. And of course that’s all gone. Now. And so that’s why it’s so important to
save now, is we have to take care of ourselves. And that’s really a relatively
recently in terms of human history. That’s a new need and our brains are going
like, okay, this is not, you know, it’s, it’s having that problem. Right? Well, so the now and to make it work. Yeah. Right. So then I’m thinking, of course then the
next domino, dr Klontz is to some degree, then we have to trick ourselves. Absolutely. They’re called brain hacks in today’s
culture, which means we are not going to change that basic program in
your lifetime, in my lifetime. We’re just not going to do it. It’s hardwired. It’s also hardwired to do other things. For example, if I don’t know it’s
there, then I don’t pay attention to it. So one of the things that ally has done
essentially is we’re going to take the money. You’re going to know about it ahead of
time, but you won’t notice it in that moment. Uh, the federal government does this too. It’s like it keeps your savings for you. Now the money goes back to them. So they’re really
interested in your saving. Right. And social security, the same thing. It’s an enforced savings. We have no access to it. And so we tend to do better with that. It’s like we can’t get to it and
they’re sort of doing it on our behalf. Well, and then we feel good later because
we’ve saved a bunch of money and now we’re keeping up with the Joneses again. So we feel like we’ve done our part
there as well, and we’re not a burden to somebody else. Yeah, absolutely. And the way another brain hack is, I’m
saving it for something that really matters to me. So I will have a picture of my son walking
across the graduation stage in college. So every time I look at that, it’s like,
Oh, that’s, that’s the vision, because that part of our brain
is really interested. And the only way it really changes
things is if we can see it smell it. Touch it, taste it. It’s a very sensory organ. That’s what it means. And so just the fact that we should save
it doesn’t have much impact, if any, on that part of the brain. We totally agree at ally. I mean, that’s what we’ve seen in a lot of
our research do, was that when you talk to people about their dreams and
their aspirations from life, and. They have a deep rooted emotional
connection to those things. But then when they log on and just see
a savings account with a balance, that emotional connection
was completely missing. And so that’s one of the reasons why we
started down the path of creating these tools is how do we create that emotional
connection to their savings account? Well, and that’s what I was
going to ask you about Emily. I think sitting here talking to dr Klotz,
myself, you guys getting together with him at ally. This must have been fun. I mean, I mean, regardless of the fact
that you’re helping people save, just having these discussions must have been a
really good time trying to figure out how do we make this all work together. Yeah. The part that was very cool
was they did their research. I have mine, and it’s like, Oh, we both
came up with the same conclusions, which to me adds validity. Sure. Yeah. And the whole idea is the more personal
we can make it, the more emotional we can make it. So when I had talked to people about
retirement, it’s like, where will you be? What will you be doing? Who you’ll be with, won’t you have to
do, and what will you be able to do? And they’ll go, wow. You know, that’s like, no,
where would you be actually. Yeah, so that the more they can dream it,
it’s sort of like showing everybody your slides from Italy, the pictures after you
get done showing them you want to go back again, you’ve re motivated yourself. And that’s exactly the tool. That’s one of the hacks. We can see it, we can taste it, we can
smell it, and then then we’re willing to delay our gratification. Well, Emily, let’s bring you
back into the discussion. So you’re, you’re working with dr Klontz. I can’t imagine the test tubes at ally. You guys are, are creating some tools
about what are we going to do with this? Tell me what you guys came up with. We found two pervasive themes in all of
this conversations and even talking to dr about what we found, and
it was really simple. We knew people needed to help organize and
then they needed to help to automate and so on. The organization aspect, we knew, and
going back to that emotional connection and the doctor conscious walkthrough,
we knew we needed to create some. Visual and highly personal ways for people
to tell us what their priorities were. That kind of morphed this basic savings
account and how we traditionally communicate that into this highly
emotional and personal experience for them. So we have developed a tool that allows
people to actually tell us what their priorities are. And if you think about kind of the old
envelope method where people kind of wrote on an envelope what they were saving,
we’ve created the digital version of that so they can. Go in and take their savings account, and
instead of just seeing savings account, they can see it. Susie’s college fund, or visiting
mom this summer or early retirement. And so on that front, we think just
creating that highly visual and personalized experience will really
help them feel more organized and on the automation journey. We know there’s two
different kinds of savers. The people who kind of know that they have
a regular amount that they can save on a regular basis, which unfortunately
is not majority of Americans. And we try to really put front and center
how they can create an automated and recurring transfer. Either by doing that directly from their
payroll or direct deposit right into a savings account or just through a
recurring transfer from their savings to checking. And if they don’t have the
willpower to do that, we. Developed a tool that kind of does it
on their behalf, and we call it surprise savings. But what it does is look at somebody’s
income, their expenses, their upcoming bills, and, and really tries to identify
those right moments to save where it’s safe to save and move that money
automatically from their checking account into their savings account. And what they get out of that is it takes
the sense of stress of having to do it. Off of them and puts that burden on us,
and it gives them the comfort of knowing that that money is just in their savings. So if they did have a need, it’s
there and they can always get it back. Boy, I’ve got questions about all of all
of that, but let’s start off with what you said about recurring savings, Emily,
because it surprises me that somebody would say, I don’t have the willpower
to set up recurring savings. I mean, I was a financial planner for
16 years, and I found that once we. Once we said it and it went away between
my client and I, it seemed like 99.9% of the time. Once that money started flowing into
savings, automatically, nobody ever called me to say, Joe, I have an emergency. I need to turn that back off again. That’s right. And that’s why automation is so key. And if you think about even, you know the
marketing that employers do around 401k, they know if you could just get somebody
to enroll, they’re never going to turn that enrollment off. And so it is, it’s, and I’m sure dr
Klontz, you have something to add on this too, but it’s just that
initial step of turning it on. But once it’s on, it stays on
in perpetuity for most people. So it is really critical just
to get them to take that step. The more automatic we can make it, the
more frictionless we can make it on the front end. The other thing that you talked about, the
development of this concept, the way I see it is this is the beginning
of a longer range plan. How do we. Allow them or how do we encourage
them to not take it out prematurely? There are methods and means that we can
use to do that and make it a little more difficult, maybe a little stickier, where
they have to take two or three steps so they’re less likely to do it. One of the things that we’ve learned
about the 401k automatic saving, it worked really good and so they looked down and
two years from now they got $18,000 in their 401k and they go, boats. Yeah. Now, yes. Yeah. And so each of these things presents
wonderful opportunities, like, well, how do we help them to the next step? Allies moving ahead already with
phase two, phase three I’m guessing. We haven’t really talked much about that,
but I think what they’ll run into is the same thing that caused them to
say, we need to do something. It’s like, okay, so we’ve done this. It’s been really successful. How do we sustain this? How do we help them grow? And that kind of thing. And that’s really what I like about ally
is it’s like they get the big picture and in the long run. Everybody comes out a winner. It’s a good thing. We’re literally changing
the cultural expectations. I’m wondering, doctor clients, it seems to
me that based on what you said, when Emily talks about setting up recurring savings
and your point about making sure you get that set up, that every time that you cut. An expense, like let’s say that you cut
out the cable bill or you switch your cell phone so it’s less expensive, like it
seems like to me, based on everything you said, it’s super important in
that moment to capture that money. Right. Then otherwise your brain gets a hold
of it and who knows where it goes. Well, from what I understand,
that’s exactly what ally does. Like when the checkbook or the whatever
it gets to a certain level, they automatically move it. Yeah. With the consent of the client. And that’s the surprise savings
piece of it right there. That’s right. And I do believe that we see in our
research over and over that if we didn’t have the ability to move
that money on their behalf. People see that balance and they
want to go out and spend it. It’s like, you know when you walk down the
street and you see a sale and you never intended to spend money on that, but
in your mind you’re saving money and so you’re going to walk in and you end up
spending a bunch that you never would have spent otherwise. And so we think that there is a
lot of power in grabbing money. When we recognize that, you know, there
is an opportunity to do that because most people will save it if you don’t. The thing that dr Klontz said about
putting some barriers between you and your money, I know that worked for me
when I was a financial planner. I would set up accounts, you know, this
is, this is back when it was a little bit harder and we didn’t have all the online
access we would set up in Detroit accounts in Minneapolis specifically
because it was a long ways away. Right, exactly. And if you needed your money, you could,
you could get it by check, or you could wait for, for an ACH, which
would take a couple of days. But if you had it wired, it was going
to be the wire fee, which was roughly 15 bucks. And I’ll tell you, dr Klein’s, to your
point, if there was 15 bucks between you and your money, your brain
came up with a different way. It always did. But Emily. I would imagine it’s difficult for you
guys to implement something like that without people thinking
you’re the bad guy. Like I could do it cause I was a
middleman and my client was in on it. But, but, but how are you guys
thinking about creating those barriers. Yeah, I think it’s an important question,
and I will tell you that we’ve heard in a lot of our research, a lot of people have
their checking accounts that branches all over the United States, but they’re
still using us as a savings platform. And in a lot of that feedback, when
we ask, well, why did you pick ally? And a lot of people is, is, well, it’s one
step removed from where I spend most of my money. And so I do think that
people have inevitably. In their mind created a moment of friction
with us because we are a digital bank that’s not necessarily hooked to a lot of
their other, you know, spending accounts. And so I think that people
create their own hacks. I do think from a brand standpoint, we try
to make it as easy as possible for people to get to their money. You know, we don’t ever want people to
think that we’ve locked it up and evolve because we do make it very accessible. But I do think that we are trying to
create moments of truth for people to really evaluate that decision and be
mindful of whether it’s the right thing to do for them. Yeah. And I would say also that when the buckets
have names or pictures on them, it reminds them of why were the savings. It’s like, Oh, so it reduces
the impulse to spend. You pull money out of going
to visit your mom this summer. It’s a personal front to your mother. You say you’d rather have it, but sometimes, sometimes
that’s a good thing. It just, you know, you need some distance. I mean, maybe you really need that to me. That’s right. Or the emotional mom stuff. I don’t know. Yeah, but this idea of of setting up a
bucket’s dr Kahn’s, whether to ally or somewhere else is it can’t be overstated. I think that putting names on everything
instead of just, I own this mutual fund, I own this savings account. Like those are nothing. If you put attach them to your goals,
I think it makes it much more tangible. Yeah. Names are great. Pictures serve even better. Because the part of the brain that is the
saver spender part is the sensory thing. So it responds, you know, like, um,
my grandchildren want to go to Mexico. So mom drew upon tree and it’s on the
refrigerator and it’s like every time they don’t order out a pizza, 20 bucks
goes into that and they can see it. No. It’s sort of like a, everybody who’s
saving money, they show you where they want to be and where you are. And I know it shouldn’t be that way
cause we’re really intelligent people. But basically we are sensory people. When you go buy a car, they don’t give you
a list of cars for see all they say, come with me. And they sit you down in the
car right in the driver’s seat. Yes. This part goes, it’s mine. It’s mine. That part is about six or seven years old,
emotionally sophisticatedly and keeping solid saying no, no, that,
well, you get the new car smell. You’re, you imagine
yourself driving in it. Emily, I want to ask you, did you know
that a used car has that same smell. No. Yeah, no used car I’ve been in has, so they know that it’s sort of like the
smell of baking cookies when you walk into a house. Oh yeah, fine. You’re talking about on the lot. They spray it with that smell. Yeah, yeah, yeah. I was going to say my kids use cars,
smelled like old pizza and stuff that shouldn’t be in there. Emily, I want to ask you one more
question about you guys call it buckets. I want to ask about how
you do this at ally. Is it actually separate accounts? Are they, or do I have one account and
it’s subdivided among a different, you know, different buckets. It is one account sub divided among
different buckets so that we try to make it as easy on the user so they can look
at their holistic savings balance and then see, you know, at an individual priority
level how much they’ve saved for each of those things is really cool. Emily, how do we find out more about it? If people want to look into the boosters
and buckets and surprise savings and getting some recurring savings started. Yep. There is a lot of really good information
on and they can use that as their sort of. And they want to learn about it. Awesome. Emily Schillo. Dr Ted Klontz. Thanks for hanging out with us for a few
minutes and talking about saving more money. Yeah. Thanks for being interested. Thanks so much. Hey there. Spring lovers. I’m Joe’s mom’s neighbor, Doug and Holy
cow, I forgot that yesterday was the first day of spring, and I had planned this huge
production down at the Sizzler of meat balancing eggs. You know the drill on the Equinox. Eggs balanced perfectly right now. Dolla. go watch YouTube. It’s all over the place. I mean, there’s, there’s all kinds of
videos about it, but I’m, I’m sure it’s not quite too late. So let’s try it out right here. I’ll just, you know, it’s like a day
later, so I’ll just give it a whoops. Whoa. Oh, um, alright. That, that didn’t work. One egg down. Okay. We’re gonna do this again and check it. Wow. I thought I had that one. All right. It’s no good. Uh, I, anyway, we can probably turn this
disaster into a trivia question somehow. Let me think about this
for, Oh, how about this? How many eggs? We’re the world’s biggest omelet. I’ll be back with an answer
and hopefully a better trick. It’s just a motor all right. Marcus is not. New to this game. He’s played this one before. But uh, for those of you new to this, we
played the closest person to the answer. And the score at this
juncture is Paula has one. There’s no, that’s a typo, Paula. That’s gotta be a typo. Just one. I am one just once so far this year, she’s
holding back on purpose, guys for that dramatic. Last second. Three-pointer everybody
loves the underdog. They totally do. So she’s got one Len, you weren’t here
last week, so docG played on your behalf. I think he owes you something because, uh,
he, he came in second, he got close, but not it, uh, O G actually one Mark
as you’re playing on behalf of O G. So O G has six. Len has five. Paula’s got one. That means Paula, you get to decide. Do you want to guess first
in the middle or last? I will give last. All right, and Len, do you want
to go in the middle or first? I’ll go in the middle. There we go. That’s very strange. So Marcus, Marcus, the
world’s largest omelet. How many eggs can I go with? 400 solid. I thought you were gonna say four. I was sure you were going to say four. I’m going to go with four cause the
biggest omelet that I’ve had on the thing all, I had three Len. Wow. How big of an omelet? Let’s see. Well, I guess to do this, I’d have to
think what’s the biggest pan that’s out there, right? What’s the biggest omelet pan available? There’s, there’s gotta be some limit. Uh, I wish you would asked. What’s the biggest Snickers bar? Did you see that they made
the somebody out there? I think it was in Texas. As a matter of fact, morally, the world’s
biggest Snickers bar just recently. Uh, let’s see. Ah, gosh. For PACA safe, 400, 400, 400,
what would they use for a pan. I mean, cause it’s a fine line
between an omelet and scrambled eggs. Right? You gotta be careful. That’s right. You gotta ah, 400 what
would that look like? Ah, I don’t know. I have no freaking clue. I’m going to say I’m going to
go up an order of magnitude. I’m going to say four thousand four
thousand there’s a little Delta between the two of those. Paula, just a slight one. Geez, well, if I get this wrong,
I’ll have a egg on my face. She’s still got it. Oh, I’m here all weekend. So my options realistically are either to
guess 399 in which case I claim all of the answers that are less than
400 or to guess four Oh one. In which case, I guess the answers that
are in that Delta between 400 to 4,000 where you get half of those, half of that. So functionally, the question is, do I
think that it was greater than or less than 400 well or 4,001 right? You’ve got that one, and I really don’t
think there’s any possibility of that right. Well. See, that was part of my strategy. I mean, right. I’ve got to go high enough then. You’re not going to
Chelsea Brennan me, right? That’s right. You have to do that. Well, I think she’s going to
Chelsea, Brendan, somebody. Anyway. Well, she certainly isn’t. Ain’t going to be me. Uh, you know, I don’t put
all my eggs in one basket. Oh. Oh. That’s such an extreme and
must be yoking right now. Oh, this is punishment. These jokes are so cracked. Marcus is like, what the
hell have I do in here? No, I know people are
waiting for me to join. You can vote. Why don’t you poach one
from, from my Polish, my brain is scrambled. Oh. Hey, uh, uh, Marcus,
nine years of podcasting. This is where you end
up right here, right? You crack me up, Joe? Ninja status? Yes. All right. Paula, what’s it going to be? Enough. Stalling. Oh, okay. Well, my brain is fried. You’re just afraid of being beaten. Oh, geez. More or less than 400 well, this is a no brainer. You know the answer I’m getting. I’m going to guess four Oh one yeah, I’m
going to guess four Oh one Mark is, no offense. I think she’s trying
to take out OJI there. Stay in the game. I’m feeling confident enough. I’ve got a good, nice range. We will tell you the answer,
but in just a minute. What if YouTube could be balding and
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the making of this recording. All right, Marcus, you’ve
got pretty much 400 below. That’s a lot of eggs. Yeah. I’m confident with this. I’m happy. Paulo. What these results? Paula’s got four Oh one to a math
and print a P in front of people. Not my strong suit. 3,600 so 1800 so up to about
2200 you go to a wide range. 2200 eggs. You’ve got everything
North of 2201 mr Pennzoil. Yup and I am ecstatic. Of course you are. All right, Doug, what’s our answer? Hey there cracked eggs. I’m Joe’s mom’s neighbor, Doug, and
I’m back because I solved the issue. I’m going to use these cracked
eggs to make omelets for everyone. You know how that politician way back
when, probably like so far back, like before Joe’s mom was even born. And then they talked about
a chicken in every pot. Well, this is going to be, wait for it. An egg on every plate. Totally different. Brilliant. I’ll get working on tee shirts for that. But for you, how about this trivia answer? Here was a question. How many eggs were the
world’s largest omelet? The answer back in 2012 in
Portugal, it’s a 55 people. Six hours to make the
world’s biggest toddler. Pedro Mendez was the head chef overseeing
the work and it’s all great and everything, but how many eggs were in it? Well, how about this? 145,000 hundred 45,000 fat is
a lot of cracking going on. Speaking of cracking. Time for me to go hacks
this plan with Joe’s mom. I’m going to need some kitchen
space and lots of butter. Oh yeah. Come on a couple of recount. Recount gotta be kidding me. What is the pan they use? Can you imagine a big that Pam must
and trying to flip that exactly. Yes. 145,000 you guys are fighting over 400 maybe, maybe not quite there. So, uh, mr pencils back into a tie and
Paula makes the dramatic comeback even more dramatic. Wow, it’s a long season. It’s going to be fun. Hey, let’s take out the magnifying glass
guys and help somebody do better with their money. Today’s hotline call comes to us courtesy
of magnify you know what happens, Mark, is when you go to
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magnified money for Morris, whether you’re doing the refinance game like we
talked about, trying to find the right. High interest savings account,
whatever it is, magnified. Money’s got you covered today, by
the way, we’re going to help Joe. What a great name. We’re going to help Joe magnify his money. Say hi, Joe. Hey, Joe and G. my name is Joe. I’m 25 I’m getting married in five weeks
and I’m in my first year of law school. My fiance works full time and supports us. My question has to do with taxes. Because I’m a student, I can take
advantage of the lifetime learning tax credit, which really decreases my tax
liability, I hope was to bring my tax liability down to zero for 2019 but right
now it’s sitting at $145 I first thought was to make it a $1,200 traditional IRA
contribution to bring my tax liability to zero. I then thought, well, if I’m making an IRA
contribution, shouldn’t it be a wrongful one? I was contributing to my RA, but stopped
about a year ago to save up money to live off of while in law school. The wrinkle on this is that my fiance and
I plan to buy a house a little after I graduate back two and
a half years from now. I estimate we’ll have about
$48,000 in savings at that time. This would be the perfect amount to buy a
house in the $200,000 range, but we might want to buy a house in the $250,000 range,
and I know this is bad, but tip into my Roth to cover the rest of the
expenses for buying a house. So I’m torn on what to do the
$1,200 in a traditional IRA. Save $150 in taxes right now,
but $1,200 in a Roth IRA. Pay some taxes, but get a much larger tax
savings down the road or an invest more in my rock and take advantage of the
big sale at the market right now. But the more we invest, the less cash
we’ll have for a down payment on a house. Can’t wait for my shirt. Sometimes I wonder if it’s actually about
the question or if it’s about a tee shirt. Uh, Marcus, what’s your first thought
when you hear Joe’s question there. First thought is,
congratulations on the marriage. Second thought is there’s no wrong answer. I think we’ve all seen HDTV where they
walk in with the $50,000 budget and walk out with a one point $5 million house. So. I’m actually going to go
with go with the house. It’s two years, a two year
sacrifice, $48,000 in savings. He said he might have, I think
it’s an emotional benefit. Newlywed couple. Final answer. I’m saying go with the house, but if
he gets into the house, that’s the big expensive house. You know, we talked about that earlier
though, Marcus, that that that immediately is a lot of outflow. Every month. I was banking on the lawyer money. So, uh, I’m, I’m optimistically thinking
that they’ll have a two income household at that time. Plus he’s putting a significant down
payment, unlike most people who either don’t have the 20% down or, I mean,
that’s actually a little bit more, that’s actually 40% down if they
can save up to that amount. So. I’m banking on, I guess three things here. One, happy newlywed couple buying
something and establishing a life for themselves with that
emotional down payment. Although it is a physical downpayment
in the form of a house, $48,000 that he estimated they could save. I’m estimating that they hit that
he had quite the range there. He had an HGTV range of 200 to 250,000. So the only thing that I would say there
is, I’m, I read this from the millionaire next door. They said, if you are not wealthy yet and
want to be wealthy in the future, not to buy a home more than two
times your annual income. So whatever that is, or whatever their
annualized income is, they’re making sure that it’s, I think a
lot of these questions. Um, make sure that you buy
something you can actually afford. And I think that’s where people fail. And it sounds like they’re
on the right path here. So I’m gonna stick with the home answer. Um, I’m rooting for this couple. Glen, what do you think. Well, I’m, I’m confused. I mean, does he have, is the 48,000 that
he’s got he will have saved, is that, was that in the Roth or was that
outside of the Roth savings account? Money. That’s savings account money. Right. So and that, and he said that’s
going to be as down payment. My goodness. That’s, that’s great. You know, if he puts money in his Roth,
Joe can withdraw, he can withdraw that $1,200 with no penalties. Right, you can, you can
withdraw your contributions. Plus you can withdraw another $10,000
worth of earnings that I believe are exempt from penalties and taxes, right? So, you know, I don’t, I don’t think it’s
a big deal to go ahead and put the 1200 in the Roth and, and a pull if you
need that extra 1200 bucks later. Pull it out cause you ain’t
going to be penalized for it. Right. He puts it, if he puts it in the
Roth, they’ll still have the tax. Uh, he’ll still have the same tax issue
that he’s talking about, but he’ll still owe us one 45 tax liability. That’s still the one 45. Yeah, that’s, I don’t know. Maybe it’s just the point of life
I’m in, or I’m like $145 tax. I mean. It’s $145 I was like, Oh, I don’t know. That’s, I don’t know that just to me,
it’s not worth worrying about 145 bucks. Did you think that Marcus, when you heard
it, were you worried about the 145 bucks? I was not especially stretched out over
two years, so I do a little under 300 and that’s kind of what I’m looking at
here in either one of these scenarios. He. What he described. Anyway, he’s talking about two
years and I think that’s both. Plenty of time to self. Correct. When you’re talking about a 40 year
potentially retirement or 47 years to save, he’s 25 now, or if he puts in their
offer two years, I just feel like two years, he’s got a lot of flexibility
and a lot of cash to work with here. He’s, he’s, he’s flush with options with a
lot of people don’t have Paula is, my mom says, what do you think in Lincoln? Oh, definitely put money in
the Roth for a few reasons. Number one, he’s in a lower tax bracket
right now than he will be in the future once he graduates from law school. Hopefully if, if everything goes according
to plan, he will have a job that will bring in a good income and that means
he will be in a much higher tax bracket. So don’t worry about the taxes that you’re
going to pay right now because you’re going to be in a look. Hopefully. The time in which you are in law school. These next few years will be the lowest
tax bracket time of your life until you reach retirement. So put your money in a Roth. Now, plus not only are you in a lower
tax bracket now, but also you’ll get a lifetime of benefit from all
of the compounding gains. The dividends, the appreciation,
everything that accrues inside of that Roth. Now, I also don’t think it’s necessarily
a good idea to buy a house right after law school because right out of law school,
you don’t know what job you’re going to accept. Where are you going to work? You might accept a job and end up hating
it, and after three months at that job or after six months at that job, you
can’t stand your boss anymore. You can’t stand your supervisors and you
want to quit that toxic office environment and switch to a different place. I don’t know how. Location specific your fiance’s work
is maybe you’ll stay in the same city. Maybe you’ll end up moving to a different
city for either one of your jobs. Like there’s so much that that happens so
much that’s up in the air after graduating that I think there’s some wisdom to
maintaining flexibility for a least a year or two after you graduate with your
terminal degree so that you can. Figure out where are you going to work. And so the, if you do end up accepting a
job with a toxic work environment and you want to quit, you have the freedom to quit
and not be worried about the fact that you have a mortgage. Did you own your place
in, in Austin, Marcus? I do not. I rent and, um, I guess one thing I’m
looking at here is, uh, even if you did put that, it was an estimate, if you put
that 48,000 down, it would be in cash. So, um, two lanes born. It might just make sense
to earn interest on that. I guess that’s one thing I wasn’t thinking
about here that they interested me is going to put that in a savings account. I think I saw one for high
yield of 1.85 interest. I think they asked a male the
other day, so he can definitely. Most likely that I’m saying that slowly
because the market is down right now. Everything’s in red. It’s interesting. It’s interesting, Len, what Paul is
talking about, because you see people move all over now. I mean, you didn’t have
that experience, right? You’ve, you’ve been able to stay in
the same place for a fairly long time. Yeah. And I’m lucky, but you know what? When I started, usually had to transfer. So it’s like the, you know, there’s a
lot of, even if you stay with the same company, a lot of times you’d have
to transfer to a different place. But you know, what’s really nice
now is the internet and all that. There’s so much more flexibility. And if a company really wants you, they
will, and you can do your work from home. Yeah. You’ve got so much more
flexibility now, so you’re kind of. Um, that risk of being stuck in a house
when you have to move, maybe you’re upside down or something and or
whatever, and you can’t sell it. You know, that that’s kind of less
lessened now, just because of the times have changed. So I totally agree. I mean, I remember Diana Miriam being on
from the economy conference and that she had a, you know, was able to move to
Cincinnati, able to move to Paula’s own town. So still, I, I love the idea of keeping
flexibility and I thought that was also the right question to ask. I thought the tax question myself was
not the question I would have been. I would have been asking, especially
since, and just to frame my answer, it’s, I never want the tax
situation to wag the dog. I don’t want to worry about taxes
so much that I don’t do the thing. That’s my real goal. You know? I remember one guy here in Detroit used to
always say, I want to have bill Gates tax bill. That is my goal. My goal is not to pay less tax. My goal is to have more money of the two. I’m always going to go for a higher
tax bill because I have more cash. That said, you want to make a smart move. But I think that to some of the points
that I heard earlier with the lawyer salary coming, the changing financial
position coming, the house coming, all those things are gonna are going
to really change your situation. So I also was not that worried
about the, the text today. Yeah. Joe, Joe sounds like he’s in great. Him and his wife are in great, great shape
and I, you know, I think the $145 tax liabilities, the least of his problems. Yeah. Thanks for the question. Joe. You’ve got a question for us. Had to stack your forward
slash voicemail and, um, you can have the game pitch in to answer your question too. Well, that’s gonna do it for today. Let’s talk about what’s going on,
where all of you guys work in play. We’ll, uh, have the
guest of honor go last. So Len, what’s happening over at dot com. I have another $40,000 challenge person,
and this is somebody from , Boston, Massachusetts. Really, really interesting, uh,
living for $40,000 in the Boston area. So, uh, quite fascinating,
quite fascinating. 40,000 and Boston. What colors? They’re 10 Matt. Matt for Massachusetts. Huh? I said, I said living on 40,000 in Boston. What color is their tent? Oh, by the way, it’s
45,045 still some credit. Well, that makes all the difference. That extra 5,000 he’s,
he’s living the high life. Marcus talks about being a baller. There it is. Right? I love those. By the way, those how people make it work. I’m $45,000 Paulo, what’s
happening and afford anything. On the afford anything podcast. We had an interview with Chilean Johnsrud
who talks about how she reached financial independence on a very small salary, and
we have an interview with Chris Guillebeau who just wrote a fiction book about
side hustles, entrepreneurship and money management. So both Gillian and Chris. Appear on the afford anything podcast
available wherever finer podcasts are downloaded, not the places you’d find this
horrible podcast, but way better places. Actually, sadly, for Paula, she has to be
at the same place is where you get this one. Ah, tough. Actually, you know, there’s a guy by the
name of Joe saucy high who joins me about one hour, one out of every
four episodes episodes. The best quarter of our episodes ever. Everybody goes by those
people like Jillian and Chris. I mean, who cares about those
people in their Epic stories? When you can get more Joe
and his pedantic nonsense. It’s just filler in between the
episodes in which you’re on. I thought you were going to say mine is
just all filler all the time and it’s all you fades a filler. Yeah. Marcus, thanks for hanging
out with us again, man. Every time you’re on, I think we
don’t get to talk to you enough. Yeah. I appreciate you having me. Let’s talk first about what’s going on at
the podcast, cause you guys just talked to our mutual friend,
Cassandra at the podcast. We’ll actually, uh, rich did
a, he kicked you to the curb. Yeah, actually rich
will be holding it down. Um, like I told my employer, uh, I’m
traveling to one of these questionable countries where the Corona is currently,
um, I’m waiting to see if the plane is going to get canceled or not. So it’s going to be one of two things. Either you see me here next
week, and that’s not great news. Or you don’t see me here in two
weeks, and that’s not good news. Either way. It’s not good, but either way, and rich
will be holding it down at paychecks and balances. You can find everything you need, and I
pay checks and where we help millennials make money, save
money, and get out of debt ritual. Hold down the smooth sounds
of paychecks and balances. That drives me crazy. That is so awesome. If I had your voice, I’d burned mine. But let’s talk about your book,
about the awesome book book. Sales have been strong, I’m sure. Yeah, the book is debt free or die. Trying how I buried myself in $30,000 in
debt and dug my way out by age 30 I gave some ruminations on the show here. Thirties are getting further and further
behind, and so it gets harder and harder to remember the book. So I’m rewriting a second edition with
updates and calls to action and everything you need to know. I used to direct people all over the
internet and now it’s just the Marcus Garrett. Dot com everything you need to know. All my social media is
as well as the book. Second edition coming. Soon we will link to the book
and to paychecks of balances. If you’re on your computer, walking
the dog at our show notes page, Stacie Benjamin’s dot com actually will link to
everybody’s awesome stuff at that Stuckey, Benjamin’s dot com but Len Marcus was
talking about remembering 30 you remember 30 that was when you used to change the
wheels on the horse and buggy, wasn’t it? Hey, thanks Joe, and, and you know what? You had your horse and buggy too. We’re not that far apart. My friend, by the way, Mark, is, you’re not the
only one with the in front of your name. I have the persistent
so don’t take that Marcus. Take that. There’s, there’s actually another Marcus
who’s dominating the Google homepage and a basketball player that I
hope doesn’t go to the NBA. I’ll never make it to the homepage. The only guy, the only guy you watch
playing basketball where you’re like, break your leg. Come on, break your life. I’ve been rooting against
him for the last 15 years. It’s evil. All right, that’s going to do it. Doug, you’ve got it from here, man. What should we have learned today? So what should we have learned today? Take some advice from our team. Sure. Spring might be just another season, but
it’s a great time to clean out all of those bad habits. Second, listen to what
dr Klontz had to say. Not saving enough might be
time to check your behaviors. What are you doing to sabotage yourself? But the big lesson. Total at Joe’s mom discouraged you against
making omelets for all your supporters an egg on every plate. I tell ya, even if I got to crack them all
myself, hashtag Doug 2020 just like every other candidate, I have no clue how I’m
going to get this done, but we’ll find a way if you vote me in, I promise. Special thanks to Marcus Garrett from
paychecks and balances for joining our round table discussion. You’ll find the paychecks and balances
podcast wherever you’re listening to us right now. Paula pant. If here’s courtesy of a Ford,
and the afford anything podcast, Len Penso, the captain of skepticism,
appears courtesy of dot com this show is created by Joe saucy hive,
produced by Karen rapine and engineered by the amazing Steve Stewart. Online, visit us on Twitter at S
Benjamin’s cast, or on our Facebook page. I’m Joe’s mom’s neighbor, Doug, and I
swear the worst part about coming over to Joe’s mom’s house has
happened to put on pants. SB podcast may receive payment on the show
from sponsors and guests in the form of books, giveaway items, discounts,
or other remunerations. That’s a big word. There’s no way you take
advice from these doors. But like Joe’s mom always says, don’t
take advice from people yet, don’t know. This show is for entertainment purposes
only, and before making any financial decisions, consult with
a real financial advisor. Hey, how come? I always have to say V amazing Steve
Stewart that Richie kid’s pretty cool and we don’t add any
adjectives before his name. What about me? How come I’m never the incomparable
neighbor Doug or the unimaginably cool neighbor Doug, or even the unfathomably
intelligent neighbor, Doug, this place sucks. All right. Doug talked about omelets. And I can’t make omelets without
making a huge mess in the kitchen. Just a monster mess. But everybody, I think, well, maybe not
everybody, but I kind of think most people have this complete mess in the kitchen. That’s just a delicious recipe. And I thought that we would have the
stacking Benjamins recipe time here or during the after show. So a big mess in the kitchen. And while you guys are thinking
about it, I’ll go first. I make this beef and broccoli
that is absolutely fantastic. It’s incredible. I make the beef separate from the
broccoli, like a lot of people put them together. I will make the beef first and it’s a
bunch of cornstarch, a lot of peanut oil, red, red pepper, red wine,
hoisin sauce, clam sauce, and. Soy sauce, but a bunch of corn starch. You sit it in cornstarch at room
temperature for about half an hour beforehand. And Oh my, it’s so, so, so, so good. But when I get finished with that, my
entire kitchen is just an absolute mess. Paula. Um, so I make my own pesto. Um, I grow the basil plants on my kitchen
counter and then I combine in a food processor. Basil leaves, pine nuts, Parmesan cheese,
or if I’m out of that all, I’ll use cheddar as a substitute, even
though that’s not as good. Olive oil, salt, lemon juice, garlic. I add red chili pepper flakes, which is
unusual, but I think it gives it a little kick. Makes it taste better. But the reason like it theoretically,
everything’s going into the food processor, which is then kept. So theoretically it shouldn’t make
a mess unless you are like me. And every few seconds you stop taste it
and then decide like needs a little more salt or it needs a
little more lemon juice. And if you do that enough times as I do,
you end up getting pesto all over the counter. So there’s, um, and, and it
really truly isn’t about tasted. They’re testing it. Is it, it’s not about test again. It’s about Paul having
pre-meal yeah, exactly. No, I always make minor adjustments, you
know, I’ve tasted and be like, Oh, I added too much Gar. Like better counteract that by putting
in more of all of the other ingredients. Len, this is making me hungry. We shouldn’t have done this. Well, I, you know what, I make lots of
messy meals, but I’ll tell you when I got just the other day, Oh my
God, it made such a mess. And I’ll tell you why after. But, but it was a, it’s a fettuccine
shrimp, mushroom creamy pasta. Oh, it was so freaking good. And it’s a, there’s shrimp, like
a pound and a half of shrimp. There’s minced garlic. Basil, paprika, red pepper flakes, Paula. Yeah. Uh, mush fresh mushrooms. Uh, then there’s the cream, right? You’ve got to get the half and half. Pour that in for the cream. Shredded Parmesan, shredded mozzarella. Uh, but what you first to get the food
of the whole thing started in the pan. You get, you put the olive oil in, and you
get that going, well, here’s what I did, and this took me by surprise. You put the olive oil in, you get it hot,
you put the mushrooms in, get those all cooked up, get the mushrooms out just for
a second, and then you put the shrimp in. Well, dummy me did not
Pat the shrimp down first. They were kind of wet. You know what I’m saying? They always tell you
that Pat them down first. Yeah, but, but I didn’t. So there’s water on the shrimp really
residual and I dumped it into the. Pan of olive oil. And you know what happens when you get,
yeah, when you get hot oil and water, it exploded. And the oil just went just
poofed and it went everywhere. Oh my God. What a mess it was. It was worth it. The food was good, but the mess
afterwards, that oil was just everywhere. So make sure you Pat your shrimp down. And that’s the lesson of
what happened at lens hair. Right, thank God I didn’t have
any or it would have been gone. He would have had tips, would have had
all kinds of fiery tips and the end of his hair. All right, Marcus, for the wind
man, best macaroni and cheese ever. Yeah, exactly. You save your worst for last, because I
was reflecting over my culinary, you know, delights, and I realized I couldn’t even
come up with a recipe and often will for me, and I guess my fellow millennials,
it’s a mean what they think is a, a I a delivery, but it’s actually a DiGiorno. So that’s about the only thing. It is repeatedly cooked in his house. There’s always a design on the freezer. There’s actually two in
the freezer right now. Falling into my 50, 30, 20 budget. Uh, so yeah, I don’t cook. I don’t know. I went last and I don’t have
a single recipe to refer to. Sometimes I put extra pepperoni if they
tried to gyp me on the digital or, no, but Marcus, you know, you’ve
got to do my friend. Hi, I’ve got all my own pizza. Almost every Friday night we have the
honeybee and I have our pizza night, and it’s homemade, and you know what? Invest in a bread machine and
it’ll make the dough for ya. And it’s just, it’s all downhill from
there and it’s tastes, it’s so much better than DiGiorno. Just, Oh, just, it’s awesome. I will say this, if I survived the
Corona, I’ll get the dude the breadmaker. Well, the other alternative, if you go to
trader Joe’s, they sell like little bags of dough that you can use in
order to make your own pizza. So if you want to make your own pizza, but
you don’t want to go through the step of making your own dough, you can get this
like 99 cent bag from trader Joe’s up dough. Roll it out, get a pizza stone. And then you roll it out on a pizza stone. What I like to do, put the pizza stone in
the oven first, get it hot, then put the dough on it, and then cover that
dough with all kinds of topics. I recommend pesto and, and it’s just a
very simple way to make your own pizza, um, without having to make the dough. And how long do you let that
pizza sewn soak in the oven? For at temperature Paula, before you
start, Oh, like maybe 10 15 minutes. I just want to get it hot. Try it an hour. You got, that’s to me the secret. If you want a nice crispy crust, you let
that pizza stone soak for like an hour at temperature and then, Oh my God, it’s so,
that’s the secret to a pizza stone using that pizza stone. Get it super hot. Does that just make it
crispy or on the bottom? Is that what it does? God so good. Oh yeah. Super crispy. If you like a crispy crust. Sure. Oh yeah, yeah, yeah. Whenever my mom would go out of town and
my dad cooked, I knew we were either going to have, and it didn’t matter
what time of day it was. We were going to have French toast or
goulash, like who the hell makes only two things in goulash is one of the two? No, I love goulash. I do love goulash, but I knew it was
either French toast and that French toast for dinner or goulash for dinner. It’s going to be one of the two. Yeah. My dad literally never cooked. Like I remember when I was a kid, when my
grandfather died, my mom had to fly back to Katmandu and during that
time there was just a dislike. Parade of family, friends that would come
drop off meals at the house because my dad was incapable of cooking and, and
literally, I’m not even joking. A few years ago, I flew back to Atlanta
where my parents live to go visit them. And my dad, who at this point is like
in his seventies and retired and has absolutely nothing better to do and
therefore has like no excuse for why he doesn’t cook. You know, my dad was
like, Oh, would you, uh. Would you like a a glass of water
or a cup of tea or something? And I’m like, yeah, sure, that’d be great. And then he like kind of looks around
the kitchen blankly and it turns out he doesn’t know where the
glasses or the mugs are. Like he’s lived in this house since
2007 and he doesn’t know where the water glasses or the coffee
mugs, tea mugs are tech. That’s the perfect existence right there. Easy. Now, Paula, you know when
you get older you just forget speaking from experience. I thought, Paula, when your mom was out
of town, your dad was going to look at you and go, want a want a DiGiorno,
and we bring it like full circle.

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