Afford Anything - Tools We Use to Kick Ass and Grow Wealth

Episode Date: February 8, 2016

#9: Checking, savings, investment accounts, car insurance, credit cards, even umbrella insurance - it's all covered in this episode. These are the financial tools Jay Money and Paula Pant use. For a complete list of resources, visit https://affordanything.com/episode9 Learn more about your ad choices. Visit podcastchoices.com/adchoices

Hey, this is Steve Stewart. I'm the producer of The Money Show with Paula Pant and Jay Money. I want to let you know that I've been working with Paula and Jay for a little while now on this, and they've been really wanting to do this right. And one thing that's really bothered them is when Jay dropped his bike. He physically dropped his mic. It rolled across the floor. He thought it was working again, and it wasn't. So while the audio quality really isn't as pristine as many people want, and Paula and Jay are really concerned about that, I thought the content was really good

and we didn't need to have them go back and re-record it. So we decided to go ahead, pull this one out, release it to you, because it's really good content. So without further ado, let me put on my DJ voice and start the music. You're listening to the Paula and Jay Money show. We'd rather be at a bar with you right now, but this is the next best thing. It's Financial Freedom Time with Paula Pant and Jay Money. What up, Jay Money? Hi, Paula and family.

How's it going? It's doing good. I'm drinking some nice coffee and excited to talk about money. All right. Tell me about it. I know we talked about before a lot of the habits that we do to manage our money. Let's talk about all of our favorite products or services that we use. So it's more tangible and people can see if it's something they want to try or not.

But it might be just a cool thing to run down all the different areas of finance in general. Yeah. So like today, like we'll talk about stuff that we use for. banking, credit cards, insurance, investing, savings, productivity, blah, blah, blah, blah, all that good stuff. Oh, it's so fun to talk about. Sure. Hey, should we throw out a disclaimer like right up front because that's how I roll?

Oh, sure. What are you disclaiming? Oh, okay. So there's this thing in the world called an affiliate relationship. And what that means is that if we link to a product on either of our blog, or on our web or on any website or anywhere, if we link to a product and a person clicks that link and then buys that product or service,

then we would get some sort of a commission on it. Now, my rule personally, and actually tell me about yours, Jay, but my personal rule is twofold. Number one, it's that I don't link to anything unless I personally use it myself. Or if it's something that I wouldn't have use for myself, like if it's something that involves, say, paying off a business. student loan, which I would have no use for, then it's got to be something that, like,

a shitload of my friends all use themselves. Yeah. So that's rule number one, like 99% of anything that I link to, I myself use it. And also, rule number two is I always disclaim it right up front. Because I feel like there are a lot of bloggers who will, like, bury it and like teeny, tiny little size two font at the bottom of their poe. And I'm like, that's just shady, dude. So I always just disclose it right up front and be like, yeah, this is an affiliate link, this is, this is, this is, this is, this is, this is, and that's not, you know?

That's a lot of disclaiming. I would say I'd do the same thing with you as far as your number one rule, 100%. Like I only talk about products that I love or use or my friends love and use. Yeah. The second one is tricky. So as soon as you mentioned linking or affiliates and all that kind of stuff, people get a little weird. So my personal thing is, like, if I don't, like, I'm going to talk, I always, if I'm going to talk about a product regardless of the money, I talk about it normally, do my thing or do my review or whatever. And then I am one of those people that at the end will say, hey, by the way, if you sign up this is affiliate, I get paid, yada, yada, yada.

But that way it's like an organic natural thing anyways and it doesn't mess with weirdness. Yeah. And then if you happen to read the end and you see that, you know, you know, so I guess like, yeah, technically it could help be more. more helpful upfront and every time you link. But like, there's just, for me, anytime I say, oh, this isn't a fit. This one's not. This one is. I'm like, ah, just tell me what the thing's about. But I know it's a different. So it's a tricky one. Well, yeah, you know, I mean, and that's a good point because what I write, I'm like trying to figure out how to say it in a way that doesn't interrupt the, like, the narrative flow of the article. And I feel like that's something I'm still kind of like

trying to figure out. Like, I'm like, do I just put like parentheses affiliate link? Or do I do like parentheses and then like several sentences that explain what that means. Like that's the part that I haven't quite figured out yet. How do I, how do I maximize transparency while also like not interrupt the reader experience and the narrative flow? And that part, that part I still haven't quite gotten. I feel like I'm still trying to figure that one out. Right. Well, well, so in it with this podcast, it's different because we're talking about things. So I think where you're going with this, I could be wrong is that some of the products we're going to talk about, I mean, I guess if we talk about a product and you sign up, there's no way for it to be an affiliate anyways

because we don't have any links in this podcast. Yeah, because you can do whatever you want. But yeah, a lot of the products I guess we talk about because we're trying to be, you know, business savvy, if we blog about them and their links and odds are we get their affiliates. Not every company has affiliates. But yeah, but the stuff that we're talking about today are all products that we love and use ourselves and we'll probably talk about why that is. And then it's up to you, obviously, as a listener, to determine if you like it or don't or care about it or whatever.

Yeah. And that's the other thing. If you hate us and want us to not get any money ever, you don't have to click on our links. You can just open up a new Google tab and go to that product directly. Yeah. Knock yourself out. You know? Man, I'll tell you, there's been years. I'm just lazy. I'll just talk about a product. And then I'm like, oh, I should probably go and get an affiliate, but I'm like, screw it. That's going take like another hour so I just like don't. The point is though like there are times where especially in the financial world, if you see blogs are like, hey, these are the top best credit cards or this is the best

this and it's all like product product, product, odds are they're getting paid for, which is fine because obviously we're doing it. Just be cognizant of, you know, are they being totally true? Is it seeing more business? You know, like there are people that blog just for money. It's just the business. It's not necessarily for the best interest. Yeah, there's no heart.

Yeah, there's no heart. That's right. It's all hustle, but to a degree where, you know, like, I don't know, you just have to be careful. And if you trust a person, great. And if not, just be careful. That's pretty much at the end. And the one other thing that I'll say is that I often recommend products that don't have affiliate programs. Like, you and I both love Vanguard. Oh, hell yes. And Vanguard doesn't have an affiliate program. But you know what? We both use it ourselves. And I think it's awesome. So I'll talk about it to everybody, even though, like, I get. nothing in return for that.

You know what's funny about that, too, is I asked them if they can have an affiliate program because I only been with them for like a year or two years. And they said, why do you think everything's so cheap there? Because we don't pay people to talk about us. Oh, nice. I was like, damn, that's good. And she's like, plus you're talking about us anyways. I'm like, damn.

And I was at a wedding recently where I met someone that works at Vanguard. And I was like, oh, my God, this is awesome. tell me all about it. Like, oh, like, obviously, like, my nerve brain got super excited. Uh-huh. And she was like, yeah, it sucks. And I was like, what are you talking about? Like, they're like best investments.

I have like hundreds of thousands with them. She's like, yeah, it's good for investors, sucky for people that work there. Because like, I guess apparently, I mean, again, this is all like hearsay. So, and I love them regardless. Yeah. But they say, like, they pay lower than like what an average company does. Like, they're so focused on low costs that I guess it, they think that it translates down into the employees and how they treat their employees and all that stuff,

which I don't know, like obviously just one person who is obviously disgruntled. But you just never think about that stuff. Like, why is this stuff so cheap and so good for investors, right? Like, they've made decisions along the line elsewhere. But anyways, that's a whole other topic for a different day. Huh, I never knew that about him. Or I guess that's one person's opinion. But yeah, I never heard that.

Yeah. But it is definitely cheap for investors. Well, you wait until we get to the investment part. All right, all right. I'll hold it. Okay. All right, let's start with the basic banking. Cool.

So, which includes, let's just say, savings and checking accounts. Okay. So who do you use for your saving and your checking account? And do you have a whole bunch or do you just use one, like your style? So I have way too many and I'm trying to whittle them down. When I was in college, I opened up an account with just my local credit union. And that was, they're awesome. And if I, that happens to be a Colorado-based credit union.

And so that's the only reason that I'm closing it down because I don't live in Colorado and I haven't for many years. Okay. Go to your local credit union. Like most of them are pretty good and have low fees and are awesome. But since I moved out of Colorado, now I have a personal account with Charles Schwab, which I absolutely love. They do not have an affiliate program, but they're another company that I just talk about all the time because they'll send you free chat. They'll send you all these free postage paid envelopes. So if you ever want to mail something to them, you don't have to put a stamp on it.

Just like a little, like they don't nickel and dime you. Anything you could possibly want from them, it's all free. So it's just really awesome. Can you use them if you don't invest through them or anything? Yeah, you can just totally open up a bank account with them. The one thing that they don't offer is business banking. If they did, I would be all over that in a heartbeat. Yeah.

So I just have a personal account with them. Okay. And you have a checking and a savings? or just checking? Actually, I just have a checking account with them. So that's like your main, your main checking account is through char-swob. Yeah, my main personal checking account. And then I also have a savings account. There's this a website called Smarty Pig. Oh, yeah. And it's, it's really cool. It's got this, like, fun user interface. Like, basically the idea is that you can form separate sub-accounts and give each one the name of a goal. So, for example, I could have one one, one

account with a goal that is a trip to California. And one account with a goal that's like, max out your Roth IRA next year, you know, and if it's like the year prior, I start saving money in advance for that. You know, one account with a goal of like, I don't know, crazy weekend party. Whatever your goals are, you just name each one and then you can watch these piggy banks fill up and watch like your progress towards each goal. And what I like about it is that when you, if you're just stashing money into an account, even if mentally you know why you're saving. Yes, totally different. If you can't visualize it, like it just feels like a big pile of money in an account. Whereas if every dollar is put towards a goal, it just makes it so much more motivating. And it makes you

less likely to withdraw that money because you know that you're pulling it away from a given goal. Yeah. Like, if you pull money from the crazy weekend party for, I don't know. I don't know what's stupid because I don't shop. Like a $200 iPad the first generation or something. Yeah. Like you're like is this iPad better than a crazy dance party? And the answer is no. And so you don't pull it out. So say you pull it out and you're like car fund, which is boring, right? But no, that's good. There's very much like ING back in the day when you had the sub accounts. And they were at the same bank, but they weren't like separate bank accounts. But it kind of seemed like that. But it was all separate buckets. all attached to your same account. Yeah, exactly. And Smarty Pig pays at the time of this recording, they pay a 0.75% interest rate on those savings, which I realize that doesn't sound great.

Like, ooh, three quarters of a percent. Wow. But unfortunately, that's much better than what most savings accounts are paying. It is one of the best in the market right now. Yeah. So, okay, so you use tar swab for checking and then Smarty Pig for saving. And those are like your two main accounts. accounts. Yeah, my main personal accounts. Okay. All right, that's good. So I use USAA, which is mainly for like

military families or people that are in the military. My dad was in the Marine Corps. And so like year, man, decades ago, I got my first account with them for car insurance. I used to chase the rates and used to chase like, oh, the best savings. I'm going to go there. The best credit card. I'm going to go there. And then after a while, I was just like sick of it. And so I said, I'm going to get rid of every single thing I have and condense all to one spot. as most as possible. And with USAA, thankfully, like, they have banking, checking, credit card, even investments. Like, at one point, I had 20-something accounts all with USAA, but it was all under one roof. And so now there's maybe like 10 or 15 in there. But it's all under one roof. So I have

every, I could see everything. I don't have to worry and I trust them. You know, whether it's smart to have it all in one spot is a, you know, a whole other thing. But, you know, I love it and I trust them. So for my, for my checking and my savings are both with. USAA. And I don't even have honestly like my wife and I have one main checking account we call like our house account. And we used to before we merge like I'd have my own personal checking, my own personal savings and then a house checking and a house savings. And then she'd have her own stuff and then we both have access to the house stuff. But once we merged over the years, like man, there's so many accounts to keep track of. Yeah. So like I'm actually just going to cancel.

I don't even have a personal checking anymore. We just have the house checking. And I'm about this month I'm going to get rid of my savings because I never use it. It's just sitting there doing nothing, you know. So we're literally going to have one main house checking and then a house savings account just to keep it easy. And you know what? I do totally advocate that because I have the same problem that you did. Like I used to chase interest rates and open up all these accounts and blah, blah, blah, blah, blah, blah, blah, blah. And now it's like I just have way too much scattered like the four corners of the earth. And so I actually, this is like the nerdiest thing you're ever going to hear. I actually got my, on my whiteboard, I actually drew a flow chart of like where all

of my money is and where it's, where how money goes into the account and what bills get paid out of what. And I sat back and I looked at it and it looked like the world's worst like spaghetti monster project. It was like the most like unnecessarily complicated flow chart. But that actually helped drawing it out because then I could like visualize like, all right, this is what I have to do in order to close down a bunch of accounts and like, yeah, refundal money and just consolidate. So for anyone, everyone listening, if you want to streamline or figure out where the hell everything is, hopefully you know where it is in your head, but like odds are there's probably one or two accounts you probably forgot about, at least if you're starting out in the game and managing your money.

So that's a really good idea to put it on a whiteboard or draw it out and just have it all that you're looking at all in one spot so you know what the deal is and then you can merge and cancel and close out and all that good stuff. So that's an excellent, excellent tip. Yeah, simplify your life. That's a thing that I learned the hard way. It's like there's that balance, right, between optimizing and simplifying. Because if you're always trying to optimize, you're like, ooh, the interest rate is half a percent better over there, you know, but years of doing that will just overcomplicate your life. Yeah. And I'll say if you are, like, there are, The only exception that I can understand are the people that are like chasing the credit cards to get the free rewards and points and math.

And I don't do that just because again, it's against like simplifying. But like those people that are good at, they open up like one new account every month. But they have like a spreadsheet and they know what days it's closing and they have like their whole system down. Right. So it's a lot, but it's also all in one spot. Right. At least from what I hear. So like if you're going to go that route whether credit card or savings or checkings or whatever, just make sure you know where everything is and you can.

have control over it. Yeah. All right, so that's banking, checking and staining. Let's talk about credit cards then on that note. Yes, and I'll start because mine's boring. I use USAA. Surprise, surprise. And honestly, like, so the reason I use them in general is they have good customer service.

I've been with them for a long time. I trust them and I just made my life a lot easier. And so I personally don't go for cards or accounts that have the highest interest or that pay the best credit card points or whatever, again, for the chasing stuff. And so USA's card, I don't think it's like the best. Like, in a range from one in ten is probably like a seven or an eight. You know, like it's not like a nine. There's nothing special about it.

It's just it helps me keep everything in one spot. And so that's the reason I do it rather than have another account out there that I have to manage that's going to change the rules or whatever. Right. You know, and I'll put all my expenses on the credit card and then I'll pay it off every month. But like, it's not to the point where I'm, like, missing out on, like, hundreds of thousands of dollars. Right. I mean, and the USA card does have, it's like the World MasterCard, I think it's called.

It does have cashbacks. So I think I get, like, $350 a year using them. So I think maybe if I were, like, optimizing and went with a better card, maybe I'd get, like, 700 or 800, you know? So, which is more. But, but, yeah, so when you're doing this stuff, I guess the point is, like, ask yourself, is it what's, is it the convenience or is it the money, like, what are you going for? Or is it the customer service? Like, these are all variables that go into like choosing, you know, who you use. Yeah, think carefully about what's worth your time and what's not. Because, I mean, if you're a

college student and you're making $8 an hour, then making some kind of optimization that would result in an extra $300 a year. Like, that is worth your time. That's a month's rent, you know? Yes. And if you're, yeah, if your answer for all financial decisions is what's the most financially smart, like factually, then you want that in that case, you chase all that stuff because you're getting more money because you're not, you're just doing it for the numbers. But if you're, like, I do things on emotion for the better or the worst. So if I like something or something makes me feel good or I'm going to be able to be lazier, you know, then I choose answers based on that as long as it's not detrimental to my stuff.

Like, as long as I'm like 80% good, then I'm fine. Well, and I think you're hitting on something important. Like, for me, that was a lesson. I kind of had to learn the hard way because I used to always try to over-optimize and chase all of the little things. And what I eventually learned was that I have a limited amount of mental energy. And the more time that I spend scrutinizing spreadsheets and trying to optimize around the fringes, the less time that I could spend doing the one big thing that might actually move the needle. Yeah, exactly. Like there's this concept, the 80-20, right? Where like 80% of your results are going to come from like 20% of your efforts, which is basically another way of saying there are one or two things that you could do in any given day that are the most important things that will really help move you forward in life. And everything else is kind of details. So if you have a limited amount of time and energy, focus on those.

that one thing. I don't know if it's the same, like, if there's 10 million credit cards out there and there's one that's decent, so I call it like 80%, I'll pick it rather than spending whatever to get the extra 20% yield, even like it with investing, right? Like if you're like, oh, this is a hot stock versus like an index fund and that hot stock might like if I do things right, earn 20% more, I'll take the one at 80% I'm happy at getting good and then like not touching it again. So in my mind, that's like the 80, 20 for me. I don't know. know if it's based on that or if it's just a different way to reward it. And even with like spending, right, like I have no problem. In fact, I love it and I encourage people to spend money at Starbucks.

Like Starbucks makes you happy. It's a few bucks. Yeah, I know if you add it up every day equals like hundreds of thousands of dollars, right, all that stuff. If you like spent more time like on buying a house or property where it saved you like $500 a month, you know. Right. And spend your time that. And then every month you're saving $500, you know, versus trying to like cut out the little tiny things that make you happy, you know, that's like another, for me, like an 80-20. Like, yes, you can save 500 being better with homeownership and also not, never drink Starbucks and then have your 100% savings. But to me, I'd rather have the good ownership part, which I suck at, but I'd rather have that and have my Starbucks, you know. Right, exactly. Yeah, Rameet refers to this.

Ramit Seathy, he writes, I will teach you to be rich.com. He refers, I learned this from him years ago, and he refers to this as the big win. Yes. What he says, which I am very much a believer in, is if you chase the big wins, like housing, for example, you can let go of the little stuff and it's okay. And, you know, it's tempting to think, well, I can have the big wins and sweat the small stuff as an optimizer. But, you know, we are limited in just the amount of willpower and strength and energy that we have. Yes. And it goes again, too, to your point, Paula, that we're into. different phases. So if you're starting out with no money or in debt and you're like, look,

I need to like blow this shit up and, you know, get going, then it's okay to go like hardcore and save on everything or whatever, right? But odds are, it's not sustainable for the long term. You know, so you go in pockets. I mean, there's times where I don't want to spend anything. And then there's years where I'm like, I don't, I'm okay. I'm not going to watch every penny. You know, like you go through phases of your life and money. Yeah. But no, but yeah, I guess the point is know that it's okay, whichever like strategy you go with, and there's obviously a ton of different strategies. But yeah, but going back to your thing, Paul, the 80-20 is a good thing just to keep in mind when you're deciding on stuff.

Yeah, exactly. So I guess back to credit cards. I know. We suck it going off track. You know what? I kind of do the 80-20 with my credit card. So I am sort of a travel hacker. I would say that I'm like a mild, modified version of a travel hacker. Like, there are some people who are super into the travel hacking world and you talk to them, They're just this wealth of knowledge and information about which credit cards have what kind of sign-up bonuses and they give you this many points and this many miles and blah, blah, blah, blah, blah. Dude, I don't really have time or the interest to track all of that. I want to put in the minimum amount of time and research and energy to get good enough airline miles for what I spend and then call it a day and move on with my life. Okay.

And so what I do, my like modified, very, very modified travel hacking is I'll open up usually like one or two credit cards per year rather than like travel hackers will do like one or two a month. Okay. So how many cards do you have right now at this given time? So I have at the moment I've got one. I've got the United Mileage Plus card. Is that your main one? I don't really have a main one because when you open up a new card, you have a new card. you have to spend X amount, depending on the card, you'll have to spend X amount on it within Y amount of time in order to qualify for like the sign up bonus. Whatever card I need to put all of my spending on is the one that I'm putting all of my spending on. And so I've got like a United Mileage Plus card, which goes, gives me points on the United Airlines, Continental Airlines family.

And then I've got the American Airlines A Advantage card. And at the moment, I also have a U.S. Airways branded card, although U.S. Airways recently merged with American Airlines. So now that card is redundant, so I'll probably just cancel it. Those are my personal ones. And then, of course, I've got a business credit card as well. Okay. Who do you use for the business credit card? So I used to have a Delta Sky Miles card until I realized, so people refer to Sky Miles, the SkyPasos, because they're so, like, the redemption value is just so deflated.

That's funny. So I used to have a Delta Sky Miles card until I figured out that those are just Sky pesos. And so then the card membership date, the card member anniversary was going to come up. And when that comes up, then you get charged the annual fee again. So I just called them and said, hey, I want to cancel the card before my member anniversary so I can not pay the annual fee because it's not worth it on this card. And they said, you know what, we've got a free version of this card. Of course. Yeah.

And they were like, well, if we cycle you into that, you're not going to get as many miles or points, but it's free. And you're not going to have to bother changing all of your, like, numbers on all of your auto pays. And I was like, sweet. And here's the 80-20 kicking in. I was like, let's just do that. Okay. So in the future, I might upgrade to a different business credit card that gives me different, like, miles and whatever. Right.

But for the moment, just being a, you know, playing to the 80-20, I'm just sticking with that. Delta Paces. I'm sticking with what's good enough. Okay. Yeah. All right. Well, mine's simpler. I just have American Express Blue, I think it's called.

I don't know. I have like five or six years. It gives me points and stuff, but I don't, I mean, running a blog, there's like hardly any expenses you put on credit card, or at least my blog. So I don't, I think it's like $100 a month. I pay on that thing, like for like Aweber emails. And then like if I go to like the post office, it's like mail or something. There's like nothing.

It's like nothing. $3,000 a month on my business credit card. Well, maybe you're a hustling word. I never said I was the best businessman. I'm just trying to be a good blogger. Okay, cool. So that's credit card. And actually, let me backtrack just so I could be a little more helpful for the banking stuff. Like, I just found out about

Simple Bank. I don't know. It's like kind of like a, they feel like they're like a hipster bank. Like they're people no bound, but they're new and like only like early adopters are using them or something. But Simple Bank is just like a checking. And then like with the debit card. but like it has a lot of built-in, like, budgeting features, and there's, like, no fees for anything. So if I wasn't with USAA, I would personally go to simple, just for people that, like, obviously, not everyone can use USAA.

So anyways, all right, let's go to, what do you want to do? You want to do some insurance action? Yeah, dude. Let's do it. Let's fly through this, man. We've got, because I want to cover some ground. All right. Well, let's start with car insurance.

So me, no surprise. I use USAA. Mine's really boring. Sorry, guys. All right. Who do you use for car? Do you even have a car policy? I do.

I have a car. I use State Farm, although honestly, like, I'm not in love with them. So I would really recommend that you just shop around and get multiple quotes from multiple agencies. Yes. And just see, because I happen to use State Farm, but it's not because they're the best. It's just because. You're not loyal to them. Yeah, exactly.

I would switch in a heartbeat if I got a better offer from somebody else. Okay. And I will say, too, for people that even if you're happy with your insurance, like, I've been with USA literally for like 20 years or something crazy. Like every year, like I always call sometimes six months, if I remember, like I always call and try and see if I can lower it, whether it's like changing deductibles or updating the mileage. Like, stuff changes in the year. Right. So always call even if you're happy with your agency just to see if you're getting the best deal based on your situation for that given point of time. And like I put it like now, like that I'm trying to be better and do every single. months. I have a Google Gmail alert. So it'll alert and say, hey, dummy, don't forget to call USAA. Yeah, so it forces me, it reminds me to like do these stupid little tricks that usually you forget about after a while. Nice. All right, so that's, yeah, cool. Oh, so health insurance, I have no idea when this episode is going to air, but at the time that we're recording this, we happen to be in that like very narrow window of time where you can, the open enrollment period where you can switch your health insurances. Oh, you're going through the health, like, oh,

Obamacare, health, health insurance.gov or whatever? So I actually, I searched on two different sites. I searched health care.gov, which is the Obamacare website. And then I also searched ehealthinsurance.com. Okay. Which I do have an article about on my blog, and it is an affiliate article. But I actually personally used it, and I found a cheaper, not just a cheaper policy, but better value policy. So like lower premium relative to the deductible and the co-insurance and all of that.

So, yeah, so I've applied for. a health insurance program, a health insurance plan through e-health insurance. And I just did that like last week, actually. So the specific one that I applied for is it's a United Healthcare Company. It's Nevada specific. But what I liked about it was just like, you know, go through this portal and you can see all of the different plans and compare. And they have these charts so you can see, you can do like a line by line comparison of like, this is the premium, this is the deductible, this is the co-insurance, this is the annual out-of-pocket

maximum, basically here are all of the stats about it, and you can just like look at them in a glance and see, all right, that one's the one I want. It's funny, you said that. So I used to use e-health interns when I went self-employed. I guess in my mind or if someone told me they said you can't use them, you have to use the healthcare.gov or whatever. Oh, no, that's not true at all. Okay, so last year I went through healthcare.gov.

But I'm a, yeah, I love e-health insurance just because it's easy and simple. Again, like, it's just streamlining it all on letting you be faster with your duty being. And so, yeah, so we're in the process of figuring out what plan to use to here in Virginia. But man, shit, like having kids and then, man, it's like ours is like 900 something a month, which is like a house payment or whatever, a Lamborghini payment. It's crazy. And honestly, in the beginning of the year, because it's based on, at least like the subsidies you can get through the healthcare thing, like is based on like income stuff, you know.

So last year, like my business was making like 70,000 a year. Like it was like the lowest point I've been since like starting, you know. And so I had all these credits. So like if like everyone was on the same plan back then in my family, they weren't. But if they were, it would have been like, I don't know, like $400 a month or something. Now because I've, which is a good thing, I guess, like obviously like I've gone past that threshold. I think I'm on pace for like 150,000 or something. Yeah.

Like there's no way in hell that I'm getting any subsidy. Right. So like the exact same insurance I was paid. now like double. You know, which, yes, I can afford it more because I'm making more, but it's definitely one of those hot political topics, which I'm not smart enough to debate, so I never will. But yeah, so, yeah. And, you know, it's funny.

You read, like, all those early retirement people. Like, we love, you know, Obamacare because they make so little, like, they're, they're, like, so wealthy, but because they figured out the system to pay, like, no taxes and live off very less, like, that live off, like, 20, 30,000 a year. They're quote considered, like, kind of, you know, not poor, but like on the lower end of whatever. So they get, like, all the subsidies. They pay no taxes, right? Even though, like, they're more wealthier than, like, all of us.

Or at least me. For the sake of any listeners who are, like, wondering how that works. So basically, the subsidies are determined not based on your net worth, but based on your income. So you could have a million dollars in investments, but only, you. if you're retired and you're not making any other income, you could have a million bucks in your investment portfolio, but only withdraw 30,000 a year as taxable income. And so then the subsidies and everything else gets based on your income, which is $30,000 a year. You know, it's, and it doesn't care what your net worth is. And your tax, and when you pay taxes, it's more complicated, but yeah,

if you're only, quote, getting 30,000 income, even if you're just like working a normal job and you're not and touching investments, whatever the cases. Yeah, that's what everything is based on. Yeah. And so if you're really good, A, you can live off of 20 or 30,000 a year, which I would applaud you because I can't now with kids, unfortunately, or at least with the lifestyle I want. That's trick number one, living off a less. Trick number two is then investing like crazy and bonkers, you know, and so you can take advantage of all these loopholes. Yeah. We for health insurance, we just bought like a super, super high deductible policy. ridiculously high deductible. So I don't even think of it as health insurance. I think of it as like,

it's really bankruptcy insurance is what it is. It prevents us from losing all of our assets in the event that we get a cancer diagnosis. But in terms of actually covering any health costs, it's not going to do that because the deductible is just insane. Yeah. Yeah. And we're, I think, yeah, because if it was just me by myself, I would do that. But with kids and that, man, those kids always go into doctors. And they freak me out. So we're always in like the good or medium to good, not the best, but not the worst category. And then we pay more because of it. Yeah, health insurance has broken up as gold, silver, bronze. And then there's one other type of metal.

It's like platinum. Is it platinum? I think so. So yeah, we have like, we always have the lowest. So I guess we've got the bronze policy. Yeah. That's life. Insurance.

Oh, no, no. That wasn't life insurance. That was health insurance. Oh, let's talk about life insurance. Yeah. So do you have life insurance, Jay? I do. And you want to guess who I use?

Let me guess. Is it USBB? It flows. Yeah. So I use USAA. And I have 30. Man, I guess I signed up for 30 year term. Uh-huh.

But that was, man, like seven or eight. Jay's like that was 30 years ago. Shit. Yeah. And so I know I only research a little. At least like I weigh my. my opinion my basis on stuff heavily on what like smart financial bloggers are doing like I trust them more than other stuff yeah um and it seemed like nine out of every 10 blogger or early

like whoever was like talking about this stuff that are my friends like they all were like term term term yeah and so I just said screw it I'm going with term I totally agree term life all the way do not get whole life my I mean I haven't thought about this in years but my um impression of how it all works is It's pretty straightforward if you die within the 30 years, you pay out whatever your thing is. Yeah. And so the trick with that thing is if you can get it early when you're young and super viable and healthy and you pay less and lock it in at a low right early, not in like 30 years from now. Right.

Right. Then you're covered cheaply and you're healthier in theory more than you will be later. Right. I actually have super strong opinions about this. Okay. So yeah, I completely agree. So, okay, so for the listeners who aren't familiar with this, term life insurance is like any other insurance in that similar to car insurance or health insurance, if you're paying your premiums and the event happens, which in this case is your death, then your beneficiaries, your spouse, your kids, your whoever, your favorite charity, whoever it is that you want to leave it to, your beneficiaries get the payout that comes from the fact that you're insured. And that's what insurance is.

That's like that's exactly how health insurance work. That's exactly how car insurance works. That's how that's what insurance is supposed to be. Whole life insurance is in my opinion a complete, do I want to go so far as to use the word scam? I think I might. Wow. Yeah. I think I think I'm going to I'm going to go that far.

I'm going to go there. Why is it a scam? So it is marketed by people who. say, well, you don't want to pay all of these premiums and then have nothing to show for it at the end, which is insane because that's what insurance is. Insurance is you paying a whole bunch of premiums to cover your car or to cover your home and then have nothing to show for it at the end. Because in the best case scenario, nothing. Yeah, you're alive. Yeah. Nothing. Your car is not damaged and your home is not damaged and you're still alive. That's what, that's the outcome that you want, you know.

It's the only thing you pay for that you don't want anything in like returns. Yeah, exactly. Oh, man. It's the best least of money. So, you know, insurance is there to like keep, to protect you in case the catastrophic happens. But the people who sell whole life, their whole marketing schick is, you don't want to pay all these premiums and then never get anything for it, ignoring the fact that what you're

getting, quote, for term, is protection, you know, in the same way. So they've designed this policy called a Whole Life Policy where you pay these super high premiums relative to a really pretty small amount of coverage. As long as you pay those premiums for your entire life, then when you eventually die, your beneficiaries will get the pay out. So basically it is not term limited. So in, you know, a term policy, you'll have these fixed premiums for the span of, you know, of 10 years, 20 years, 30 years, 40 years, however long of a policy that you purchase. With whole life, you pay these premiums your entire life. So when you die, your beneficiaries will definitely get something.

Did the premiums go up over time? Are they all the same, like, the term? I would need to look into that, but I think it depends on what kind of policy you get and blah, blah, blah, blah, blah. Because there's got to be some sort of inflationary adjustment. Yeah, if you're like 80 or 90, I would imagine the premiums would be higher. I don't know. I would need to look into it. But the, like, the reason I've never even gotten that far is because the amount of premium that you're paying relative to the coverage is just a complete joke.

You know, you're paying ridiculously high premiums for a very small payout. And they market it to you. They justify that by saying, well, it's really a hybrid insurance policy slash savings and investment plan. Dude, don't hybridize your insurance with your investments. Yeah, because I always thought Hall had something. then do with investing, at least whenever I saw it, was like, hey, part of your premium is going to be invested, and then at the end, you get all the money in your investment account or something. Yeah, that's exactly how they try to market it. It's the worst investment plan. You would be

so much better off paying the premium for a term policy and then taking that difference and investing it yourself. And investing it yourself. Yeah. You would be way better off doing that. Based on that, like worst case with term, you get term for 30 years. Then on like 30 years, in one day, like if you didn't renew it because you're lazy or whatever, you like, die, then you get nothing. You know, or when I get stuck at worst case is if you wait until that day, you're alive, and then you go and you set it for another 30 years because your health is different and now you're going to pay a lot more.

I don't know how it works if, like, I try to up mine when I had kids because everyone's like, oh, make sure you up your policy because now you have kids. But term, you have to like go through the whole process again and create like a brand new one again. Like it's like it rides over your old one or something. I don't know. Like I realize I think like we're, I'm insured. I think it was like 300 or 350,000. Yeah. Which isn't a lot of money. Like my family would be more than fine if I died and we got that. Right. So like to me that's okay. Maybe like it's going to have to change and I know a lot of people like, well, you should be insured for like half a million or a million. I mean, people throw out numbers all the time.

Yeah. You know, as long as you look at your own situation is like if I die and my family got this is as good or do we want them to be set for life. Like if I wanted my family be set for life and not worry if I die, then I'd get like a $2 million policy or $3 million. Right. Right. Then they'd be rich if I die. Then they would have an incentive for murder. For me, like, I don't like want to pay like whatever amount that would be every month to ensure they become millionaires when they die.

You know, so you, you know, you do whatever you need to do. The rule of thumb is that the policy should represent between seven to 10 years of your income. Oh, wow. Yeah, which is a lot, you know? Like, that is a lot. But see, that's like, that's like, that's like the thing with these rules, though, it's just like retirement. Like, right. You have to wait till you're 65 and then retire and put five, you know, but like, you know, your lifestyle can be completely drastically different. Exactly. Yeah. So I mean, it's just a rule of thumb and take it with a huge grain of salt. You know, I didn't do that either. Like when I bought my term policy, when, you know, Will and I both have term, we have 20 year term policies. Okay. Instead of looking at our income, what we did was we looked at all of the. mortgages that we have on all of our rental properties. And we said, you know what, if either one of us dies, we want to leave behind enough money such that the other person could just pay off every single mortgage. Yes, I love it. That's what we did. Yep, perfect. We just didn't want the other person to

like have to deal with all of those mortgages by alone. Right. That's great. That's actually what our, yeah, our house was around 350 a little more. So that's what we, while we did it too. Yeah. That's good. That's a good way to do it, I think. Yeah, exactly. Because that's my feeling about it, both me and Willber, like, you know what, if we could just leave you with fully paid off houses, I trust that you could figure out the rest on your own. Right. I think you'd be fine with a paid off house, or in our case, a bunch of paid-off houses. Or like, you know what, if Paula, Paula, I'd use that million dollars of whatever and go buy 30 more homes. But that's his decision and a gift that you left them. Right. Exactly. Well, and we should say like insurance, just like with other insurance,

it's per person. So like my wife and has her own policy. I have my own policy. The rates are different because girls and guys are different and health is different. Right. And if you smoke, if you go skydiving, like all these things that you do in your life that you don't think about, once you sit down to do term insurance or any insurance, they ask you about all these things and that drastically can affect. Yeah. You smoke four packs a day or you're an alcoholic or whatever, right? Like, obviously, like, these are going to affect your death rate in theory, and so everything gets jacked up. Yeah, I'm a certified open water scuba diver, so that affected my premiums. That does affect, that's right. Yeah, your risk of dying is higher because of that.

Man, that sounds like a terrible way to go with scuba accident. Oh, God, that's horrible. Yes. All right, so that's life insurance. I think Paula wants a whole episode one day on her hate for All right. So there's car. There's life. Oh, I have an umbrella insurance. Oh, I do too. Yeah, I've got an umbrella liability policy. Okay. Do you want to tell people what that is? Yeah. So, yeah, just really quickly, in a nutshell, this is basically a policy. It's the last case resort policy. And if you get sued or if somebody tries to come after your assets, this is the policy that kicks in. And there are limits, of course. If you are grossly negligent, you know, then nobody's going to save your ass, dude. You're grossly negligent. But, you know, if there's some kind of frivolous lawsuit against you or anything like that, this is where the umbrella policy kicks in. And I'll give you an example, actually. This happened to Will's mom. She has a rental property, her tenants, and she installed a carbon monoxide detector in there.

Okay. And the city inspector came out and saw it. So there's a, like a verified official third-party person saying, yes, I know there's a carbon monoxide detector in there. Well, the tenants were growing weed. Oh, my gosh. Which in Colorado is legal. Okay. So they were legally growing weed in there. But when you grow pot, you, I don't exactly know how it works, but you, for some reason, you mess with carbon monoxide or I don't, carbon CO2.

I don't know. I have no idea how weed is grown. Sure. I really don't. Well, I guess you must mess with carbon dioxide and not carbon mon. I don't know. I don't know chemistry either. Okay.

When you grow weed, I guess you have a CO2 tank and you do this and that and the other. And so for whatever reason, the tenants, disabled the carbon monoxide alarm. And then, lo and behold, they got carbon monoxide poisoning and they all went to the hospital. And they didn't have, I know, right? Wow. Yeah. And then they, of course, they didn't have health insurance. So then they all got these ridiculous health bills, health care bills.

And so then they were like, well, would you pay for our health insurance? And they were trying to claim that the source of the carbon monoxide was the furnace rather than their weed operation. And it became this whole like legal thing. And this was where the umbrella policy really came in handy. The people who ran the umbrella policy were able to like step in and handle it. That's awesome. And you don't have like a specific insurance for people growing weed in your apartment. You know, I'm sure maybe some other like thing kicks in.

I mean, that's like if you get like a crazy car accident, that's your fault. You have your car insurance, but that only goes so far. Right. So like umbrella would go once your car insurance is done, it'll kick up to the next one or however it works. Chey Money's like I never considered that my umbrella policy would cover me in case somebody was growing weed in my basement. Yeah. No surprises me anymore. People do all kinds of crazy stuff.

stuff. And then, and not even that's crazy, but then they, they like to place the blame, which is the crazy part. Yeah. So, if anybody is growing drugs on your property, your umbrella policy will kick in. Yeah, there you go. That's a tagline for it. So, so why, everyone knows, I use you a CA for all my insurance. So who do you use for umbrella and or your, um, life, your term? Or do you not, are you not really loyal to them? Yeah, I'm not super loyal. I would actually have to look it up because I don't even remember offhand. Okay. I know the umbrella policy. we're going to have to change that over pretty soon. Because if you have up to five properties,

it can be covered under a personal policy, but once you have six properties, you have to change it over to a commercial policy. And we have five, we have seven units, but we have five properties right now, seven units and five buildings. So right now we have a personal policy, but we're in the process of shopping around,

because we're eventually going to buy a sixth house. So at any rate, sorry, that's a bit of a tangent, But the key takeaway is I don't even know who I use and I'm not loyal to them anyway. All right. Don't do drugs, kids. Let's go to investing. So I'll start since it used to be boring. I used to be with USCIA.

And then I wised up and I said, you know what? Like Vanguard index funds. That's where my vision is now. So I had everything. I like, I don't know. I did like this thing where I. I've invested like 60,000 in one IRA, 60,000 another IRA and 16 another IRA, like when I moved over my 401K. And I wanted to like pin them against each other and some invested in these funds and these stocks and then see who wins.

And anyways, I had like all these IRAs and crazy investment accounts at USAA. And once I got convinced, actually on a podcast, I was on the Dole Roller podcast. And he asked me about investing and I was so like, I don't know. I felt like so dumb like because he thought I was obviously going to. say Vanguard because a lot of personal finance people love them. And I did it. And he's like, you even know what you're paying for fees? And I was like, no. Like I had no idea what I was paying. I just didn't pay attention. I didn't care. And once I realized fees were an important part of the process, I sold everything from USAA and moved it all to Vanguard. Actually, just one index fund at Vanguard,

which is a top. Is it VTSAX? Is VTSAX? Total market Vanguard for lazy people. It pretty much tracks the market instead of like individual stuff and the market's doing good, I'm doing good. If the market's down in the shit holes, I'm down in the shit holes. So for the listeners, VTSAX is the Vanguard Total Stock Market Index Fund. And they actually have two versions of investor shares and Admiral shares. And the only different, they're exactly the same fund. One has a lower fee than the other. But you need to invest more money.

You have a higher minimum amount that you need to invest in order to qualify. Yes. And so, so I sold like, when it came down to, I wrote a blog post on this, I literally wrote down every single stock I had. Like I had like 300,000 or something, like in like 70 different funds or stocks. Like they were a mixture between funds and single stocks. Man, some of the fees are a lot. I don't know.

I don't remember all the way, but like two or three percent. Like they were really huge fees. Yeah. Stocks weren't, but like I'd have like 10 random stocks because I like would like follow like Warren Buffett and whatever he did I would do thinking I was real smart. Yeah. And it was fine. It's just obviously like his terms and my terms are way different. Right. But I just got tired of thinking of where my money goes and trying to, like the credit

card chasing stuff. I was tired of chasing. And I have a friend that works in like investing and he's always like given us like hot stock tips based on his research that he does. He researches like 60 hours a week. So in theory he would know better than any normal person because that's all he does. But I just got tired of thinking and wondering and worrying. And so I finally realized like I am cool with again, the 80% whatever the market is doing. Like I believe even the market in general. So if they're going up, I'm going to go up. I'm not going to make the most, but I'm not going to make the least. I'm going to be like average, maybe above, but it's always like decent. You're going to do as well as the overall broad as well. Yes. And so, and then,

you know, and my same friend, like, there's years he'd like cash out everything, gold, like gold bars and it's safe. It was just crazy. Like I couldn't, it's just so much noise out there, right? That they're always saying this is the best. So this is. And then of course, when they say this is the best and it's not. And they're wrong. Yeah. It's not like they go back on and say, I formally apologize. I was wrong. No, it's like, well, a hundred other people got it wrong. This is now the best one. Right. It's just, oh, it drove me bonkers. So now, like, I don't think about anything at all. I don't care. You know, I put all my money in one spot. And I know, generally speaking, I'm going to be good if I don't pull out the money whenever I need it, you know, long term.

Right. So all that to say, I'm within for all my investing now. Nice. I'll take it back. I also, and with Acorns, I like to test apps and stuff. I'm trying to like learn more. And so Acorns, if you sign up your account, like, they round up every purchase you do on your credit card or checking or whatever. And they rounded up to a dollar.

And then they drop those pennies into a fund, like a portfolio. Some with Vanguard funds, actually. I have an Acorns account that has, I don't know, like 300 bucks in it from this year, just based on rounding up pennies over the year. But that's not real. Yeah, it's just for fun and to learn and to see how that, you know, for people that are that are new that just want to invest without doing anything, like that's one option they have. So, all right, your turn.

Cool. So I've got, I actually, now that I think, I thought that I was pretty consolidated, but now that I'm about to name every account that I have, I guess I have a lot. All right. Start with your main important account. Vanguard. Awesome. I have a, because I'm self-employed, so I have a solo Roth 401K.

And I keep that with the Vanguard. And I, you know, I made the mistake earlier of like, so I'm a big index funder, right? So everything I have is in index funds. But the thing is, there are all different kinds of index funds. So there is something like VTSAX, which tracks the overall total U.S. stock market. And then there's funds that track the entire global market. And then you've got what are known as sector-specific funds. So there's like an energy fund, a healthcare fund, an industrials fund, a like consumer discretionary fund, a consumer staples fund, like all these different little sectors.

Yeah. And we should say too, so the difference. Like so there's a stock like Apple, right? And then in a total index mind, right, like let's say I don't know how many stocks. Let's say there's a thousand to make it easy because I don't know. Like I'm invested in a thousand stocks. I think the total market has like about roughly around 3,000. Okay, so my one fund of total market, like one share of it, is like I own a percentage of

3,000 stocks, Apple being one of them, versus just Apple owning one share of just Apple stock. So in theory, if Apple went down and bust, I'd lose all my money. In theory, I would only lose one sliver of 3,000 of the index fund in that case. On the other side, if Apple doubles its money, you make double your money. In an index fund, you probably make a penny or something because it's one fund. Right, yeah. So there's trade-off. And then, you know, a lot of people give me shit for having all my money in one fund.

Like, I literally have like 300-some thousand and one fund, you know, which may be a little drastic. But people say like, oh, like if something happens to that fun, if that fund goes down, like, if the stock market crashes and I lose all my money, which would happen, there's like big problems. Everyone's losing their money. Like, it's not like a fun choice at that point. It's like apocalypse. Yeah.

So, anyway. Basically, if you're in an index fund that tracks the overall broad market, you're going to do as well as the entire U.S. stock market. So whatever, whatever happens to the United States in general is going to be what happens to you. Yeah, when you're talking like energy specific or whatever, like energy, so that fund would track all the energy things. So let's say there's a hundred energy companies. Like that fund would, you would own one part of a hundred different companies versus picking one specific energy stock. Just to get. people an idea. Exactly. Oh, by the way, I just Googled it. So the total number of stocks in

Vanguard's total stock market index fund is 3,797. That's all the companies I own. I own all the companies. I own all of it. And so actually, and so another thing not to, I mean, I know we keep against side check, but these are important things to know. Like there's fees involved. So if you buy a stock of Apple, you pay the transaction fee, but there's no fees to own an Apple stock. Right? Because no one's managing it. When you have an index fund or a mutual fund that has lots of stocks that, like someone's, a person's managing or a company's managing it, you pay a fee to manage it. So the reason why Vanguard is so popular is that, I mean, there's probably a lot of reasons, but one of the main is their fees are so low. So I was paying like 2% on whatever I had back at USAA,

you know, like compare that to the Vanguard total index, which I don't know off my head, but it's like, I'm looking at it right now. point one seven or 07 or something? It's 0.05%. Good. So it's not even like a tenth of a percent or a hundred percent? Yeah, exactly. It's one half of one tenth of one percent.

Okay. So that is that compared to 1 percent or 2 percent. Like obviously, that's thousands of dollars, maybe hundreds over the lifetime depending on how much money you have. Exactly. And you need to buy VTSAX, you need a minimum investment. of $10,000. If you don't have that, you can buy, so VTSAX is what's known as the Admiral shares. That's the lower fee. If you don't have the minimum investment of $10,000, then you can

start by getting VTSMX, which is the investor shares of the total stock market fund. And that has a fee of 0.17%. So it's like, it's three times the fees, but they're really incremental compared to other. Yeah. Plus, you only have to be in that for a short amount of time just until you get that $10,000. Yes. And then once you get the $10,000, you can transition into the cheaper one.

Yeah. Unless, like, actually for, if you have a 401k with Vanguard, or at least for mine, my solo Roth 401K, they don't let me buy the cheap shares, the admiral shares. So I have to buy the more expensive ones in my

in my 401. Well, and that, and you bring up too. So a lot of the stuff Paul and I are invested in. We have our choice over what tools to use because we're self-employed. If you have a regular employer where you have like a 4-1K, like you're, unfortunately, you could only invest in whatever they offer as a plan, right? So maybe there's only 20 funds or stocks you can choose, mostly funds. Maybe there's an index fund. And there's also like, there's also stuff where it's like, you know what, I want to invest in 4-1K, but I don't want it in the market. I want to sit on cash. For example, Like those are like options you have. But whatever your employer has is what you're limited to

until you leave and you can transfer it out into your own thing, your own IRA or your own whatever or in your next employer's 401K, you can roll it over. But when you're there at a company, you're stuck to whatever they offer. Yeah. But it doesn't mean you shouldn't invest. You should, of course, because anything invested is better than nothing invested. Right. But you're talking about like IRAs, stuff that you can do on your own. Like you can open an IRA and at Vanguard, anywhere you want, you can open one up, right? And what you put in it is up to you too. You can put stocks or bonds or cash or CEs, right?

Like, it's just a vehicle, which I know gets really confusing and, you know, we don't have to get into it. But just so people know, like, we can invest stuff because we're still going to play more. You're a little bit limited with an employer, but you can do an IRA on the side. Yeah, yeah, exactly. And so if you do have an employer, like if you have a 401K through your employer and you can't invest in, and you're limited in what you can invest in, then, I mean, my, my recommendation, like what I would do in that situation would be first to look exclusively for index funds because

the fees on an index fund are going to be significantly lower than the fees on an actively managed mutual fund. So number one, look at index funds. Number two, look at an index fund, index funds that track an overall broad market don't make the mistake that I did of buying a bunch of sector-specific funds. Because I made that mistake a couple of years ago. And it wasn't a terrible mistake. It's just that I have all these sector-specific funds. And, like, I'm not going to rebalance them and blah, blah, blah, blah. Like, realistically, it just over-complicates my life. So what I'm doing now is selling out of all of those

sector-specific indexes and just going to the total market index. Ah, yeah. One last, one last point to make. And it's a lot. And it's That is, statistically speaking, people who try to beat the market. Statistically, what happens is they, what's known as revert to the mean. So, like, you'll read about all of these fund managers who are on this winning, this hot streak, and oh, my God, they've beat the market for the past, like, four years. And statistically speaking, over the long term, those people revert to the mean, which means that there's a same. there's this entire band of like people who are trying to beat the market and they all produce over the long term about average returns. So even the runaway winners are only runaway winners

for a short amount of time and then become runaway losers and over the long term end up basically performing on average. So if you like let's say you go into a mutual fund because back when I was younger and I didn't know about index funds, I was like looking at mutual funds and trying to figure out who's the best fund manager and blah, blah, blah. The thing is, those people over time do no better than the overall market. And they make millions of dollars off for producing average. Exactly, but they charge you these high fees. And so once you take the fees and the transaction costs into account, you end up actually

underperforming the market. So they're producing results that are the same that you would get in an index fund, but they're charging you higher fees for it. So you as an investor, you as Joe or Jane Smith, are actually doing worse by being in a mutual fund. And when I read those statistics, because I'm a fairly data-driven person, and so when I read those facts, that was when I converted into an index funder. Yeah. Well, I mean, even Warren Buffett, who reads all day long in picks, he recently said, right, like, go ahead. He says that when he passes away, he wants his wife and children to invest only in index funds.

There you go, boom. And that's Warren Buffett. He's awesome, right? But he knows that you can't, like, it's just, you can't win all the time. It's crazy to think that that's even possible. Yeah. You know, so, yeah, so Warren Buffett says that I agree. Yeah, that's what Warren Buffett tells his kids to do.

Yeah, I think that's a fair one. All right, so that's investing. And I think we've hit a lot of the main. Yeah. Do we want to like do maybe saving money and then just like, oh yeah, like where you save your money? Or go ahead. You start with what were you going with it. Well, I was thinking of the tool. Actually, Jay, you, you were the one who introduced this to me and I'm been loving it. Oh, good. It's a money saving tool called Digit. Oh, yeah. I'm obsessed with them. All right, Jay, tell me why you love them. So pretty much what you do is you attach your checking account to Digit. And what they do in a nutshell, they have this algorithm. It sounds. It's crazy, but it works. The algorithm analyzes your spending

an income and every couple days moves a couple dollars, maybe $5, maybe $15 over into a separate savings account under digit. And that's it. That's in a nutshell. So you sign up once, it analyzes your account and it physically saves money for you. It doesn't tell you, oh, you're saving this.

It doesn't tell you what to do. It physically saves the money for you. So to give you an idea, I started so the last, I don't know when this thing's going to lie. But in the last 11 months, I've been using Digit. And I think I'm fairly good at saving and putting money aside. And so, but it'll go in there and pull it out for me.

So I've saved over, I think, $2,300 in 11 months. So I save about like $200 a month in little tiny increments. And they move it. First, they're pretty concerned. They move it with enough padding so you're not going to like bounce stuff. Like they're getting really sophisticated. And so you can up it to save more or less, but it's a good. It pretty much removes money from your checking before you spend it if you have a habit of spending without paying attention.

So no matter how good or bad you are, especially if you're bad at saving money, this physically saves it for you. So on week one, you'll have money in a savings account that's separated out, which I think is a big change compared to what a lot of places are doing. And even like USAA recently included something that's like Digit where it'll save money for you. So a lot of big banking is starting to kind of catch onto this thing. And what I love with Digit, I guess I should say, is right now they're only savings. But they have to be, what's it, a disclaimer or whatever. Like, I'm actually an advisor for them now. I love them so much.

I join their team to advise on some stuff. Not a lot. I'm not that smart. But like, but their vision is to hit more than savings. Like they want to first get people to save. You can imagine what you can do after you have a pot of money, right? think of like invest in debt there's all these things you can do with that money once you have it saved that they're going to start going down the lines of um and so they're very

forward-thinking visionary the guy that created Ethan Block like he had companies he has money like he's not building this for the money he wants to do not like it's not a want to compare it to Facebook but we're like that dude Zuckerberg's trying to like change the world right like that's his mission it's not to make money that's what Ethan's mission is is to is to change the way we bank and to get people to save more in a different way than anyone's been doing it before in a nutshell. And that's why I'm obsessed with it. That's awesome. Yeah, I learned about them through you. And I freaking love them. I've been using them for a couple of months now. Okay. And yeah, they're just, they're cool. Like, so what I, like, my experience of it

is I don't notice any money leaving my checking account. But if I were to, like, log in, and look at my account history, there would be tiny, tiny, tiny little withdrawals, like $2 here, $4 there, $6 there, $2 again there, you know? So there's like all these tiny little amounts of money that slowly leaves my checking account over time. And so basically, like, digits just humming in the background, and I don't notice it, and I don't pay attention to it. And then every now and again, I'll, like, you know, you.

either text them, because you can just, like, get all the updates through text message. So I'll, like, text them or physically, like, log in. And I'll see, I think, like, a couple of months ago I logged in, and I had, like, $800 saved. Damn. And, like, I hadn't even, I literally hadn't noticed that money gone. Well, you know? Yeah. And so that's the power of using something like digit.

Yeah. And by the way, if you have, like, a minimum amount of money that you have to keep, in your account. Like, some accounts, they make you keep a minimum of X, and if you go below that minimum, you'll get charged a fee. Like, you can set up your digit account so that they'll recognize that minimum and they'll make sure that you don't go under it. And also, they have a no overdraft guarantee. So, like, their algorithm is smart enough that you should, over drafting shouldn't be a problem, but just in the event that it is, they'll, like, pay back for it. They'll guarantee against it. Yeah, and you can, and by the way, we should like make clear, you can take your

money out anytime, like, even though it's sitting in a digit account, like, you can literally text, like, withdraw five bucks, and it'll say, are you sure? And you say yes, and it'll transfer right back into your normal checking. So you have access to it anytime you want. The thing that's interesting is based on, like, what we're seeing over there is that once it's out of your account, the odds that you then go and waste the money is very, very low because it's already been done. And you have to physically go out of your way to get the money back to spend it, you know? So it's like a barrier in a good way that gets you to think like, I just saved X hundred isn't worth me transferring out to go spend on whatever. And you can like say like, oh, I'm going to go on a trip. Like you can

tag it things too. So it's interesting to see like how people are using it and what they're doing and how fast they're pulling it out and stuff. It's really stuff I can't say, but it's really fascinating. And they used to not pay any interest, which is the biggest thing. And now they do pay like they call it like a bonus or something like that. Oh, do they? I didn't even know that. Yeah. So now they'll pay like a couple cents for whatever. They'll just automatically give it to you. And so it's not like a high yield savings, but it's like any other like crappy bank, right? Right.

But the point is you're not you're not saving the money for like five cents. You're saving it because you have like 500 bucks that was siphoned away. Like that's what I'm saying. Like usually people say, oh, it's a good savings account. The first thing is interest rate. But this is not, we're not talking about pennies. We're talking about real dollars. And I told all my like when I was coaching for money, I told my people to sign up that suck with money, you know?

And they're like, oh, my gosh, I have $100 in this account, like, to do anything I want. Like, it's just a, it just helps your mind, right, you know. And you can cancel and you can say save more, save less. You can pause it. It's just, it's, I'm glad you brought it because it's something that you can try. Again, if you suck at savings or you want to try something new, just try it. If it sucks, cancel it, you know. Right.

Yeah, exactly. And you can always move money from there into a high yield account if you wanted to. Yeah, that's what we thought. you could just like move that money into a smarty pig account or whatever. Yes, yeah. I know some of my friends will save like 200 in there. Then they move it over to get like a couple more pennies or whatever. You can do anything you want, but it's just a good, I don't know, like I'm telling you

now, it's going to be, look in the years, it's going to be a game changer. It's like, I don't even like pay attention to technology all that much. And I was like blown away from the second like I talked to the student. A friend of my knew him and introduced me. That's how I got involved. And as soon as I started finding this stuff, I was like, holy shit, this is, it's so crazy, but it's so crazy in a good way. Yeah.

But anyways, like, I'm not trying to sell you on it, even though I'm affiliated, like, it's just pay attention, I guess. Yeah. Try that. All right, I think there's a lot of stuff. I know we wanted to go over some other things we can say for another podcast. Yeah. Cool.

Awesome. I think we've covered a lot of ground. Yeah. A lot of time. So, yeah, so in conclusion, though, that is what we personally use for banking, credit cards, car insurance, health insurance. life insurance, investing and saving more money. That's it.

Wow. That's a lot, dude. Oh, yes. We'll see you all soon. Thanks for listening. Hope it's helpful. Yeah, take care. Have a good time without us.

Have a good post-podcast life. See all there. Bye. We'd like to thank our sponsors. Nobody. We don't have any sponsors, but we would like to thank you for listening. Because if you weren't, we'd just be talking to ourselves, in, that would be weird.

If you liked us, please do the following three things. Number one, subscribe to this show on iTunes. Number two, download as many episodes as you'd like. And number three, leave us an iTunes review. If you'd like to know more about us, check out themoneyshow.com. That's themoneyshow.com.