Money Rehab with Nicole Lapin - Is Homeownership Overrated? Smart Girl Dumb Questions with Nayeema Raza

Episode Date: June 9, 2026

Nicole is joined by journalist and podcast host Nayeema Raza, host of Smart Girl Dumb Questions, for a crossover episode! This is a shame-free conversation about the money questions we’re all holding in, starting with perhaps the most loaded one of all: should you buy a home? Nicole breaks down the 5% rule for renting vs. buying, why she personally chose not to buy, and how to strip the emotion out of a decision that's usually anything but. She also answers common questions about debt, HSAs, growing generational wealth and more. Plus, Nayeema and Nicole talk about which expenses are worth going into debt for, and what Mark Cuban told Nayeema about how money can make you feel poorer the wealthier you become. Listen to Nayeema's podcast Smart Girl, Dumb Questions Check out Nicole's financial literacy course The Money School Find a Financial Advisor or Financial Coach from Nicole's company Private Wealth Collective Watch video clips from the pod on Money Rehab's Instagram and Nicole Lapin's Instagram Here's what Nicole covers with Nayeema:  00:00 Are You Ready for Some Money Rehab?  01:17 Nicole's Controversial Take on Homeownership  04:44 The 5% Rule: Rent vs. Buy Math  08:37 Why Nicole Chose to Rent (And Invest the Difference)  12:30 How the LA Fires Changed Nicole's Relationship to Home  17:00 Not All Debt Is Created Equal: Good Debt vs. Bad Debt  20:02 What Rich People Know About Leverage  24:03 How Nicole Got Into (and Out of) Credit Card Debt  25:51 Avalanche vs. Snowball: Which Debt Payoff Method Wins?  28:09 The Shame Cycle Keeping People Stuck in Debt  29:18 The Debt Game: What’s Worth It?  34:35 Investing in Your 20s: Nicole's Biggest Regret  36:27 Nicole's Daughter's Investment Portfolio  37:15 HSAs, 401(k)s, and Where to Put Your Money First  38:39 How Do You Know If You're Rich?  41:26 Mark Cuban on How Money Can Make You Feel Poorer  42:34 Nicole's "Dumb" Question  All investing involves the risk of loss, including loss of principal. This podcast is for informational purposes only and does not constitute financial, investment, or legal advice. Always do your own research and consult a licensed financial advisor before making any financial decisions or investments.

I'm traveling to Orlando soon for a conference, and I'm really looking forward to it. We travel to Florida pretty often to visit my in-laws. And those trips are always such a nice reset for us. I'm definitely a sunshine girl, so any chance to spend time by the water, whether it's at the beach or just sitting by the pool, makes me so happy. Lately, I've been thinking about what it would be like to have a place closer to family, so we'd always have our own space when we visit. And when we're back home, we could list the place in Florida on Airbnb instead of letting it say. empty. What makes that idea feel much more manageable now is the co-host network. You can connect with a local co-host who has hosting experience and can help take care of the important details. A co-host can

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questions and help you execute. So I did. I just launched a boutique fiduciary wealth management firm, private wealth collective, that offers two powerful pathways, financial planning to build your financial foundation with education and accountability, and full wealth management with personalized, transparent investment guidance. I created it to fix what I believe is broken in traditional wealth management, high minimums, hidden fees, and gatekeeping, bringing the same caliber of advice historically reserved for the ultra wealthy, but without attitude or barriers. So everyday high achievers can finally gain clear, actionable control over their money. To see how we can help you, sign up for a free introductory call at privatewealthcollective.com

or check out the link in the show notes of this episode. That's privatewealthcollective.com. It sounds like I'm not going to buy a home anytime soon, although I do have to have a very naked fluorescent lunch with myself and figure out how much money I should be putting in the market because I'm not buying a home. We can do that together. Yeah. It would help me too. I'll have I'll naked lunch with you. If you think money talk has to be boring, this episode will change your mind. Today is all about financial moves that will make you grow wealth and it gets spicy. Today I'm talking to Naima Raza, journalist and host of the podcast Smart Girl, dumb questions. She asked me

about some of my financial hot takes. I think this idea that home ownership is propaganda is not true, but the idea that it's the only way to build wealth is completely outdated. Smart strategies to grow wealth. If you're borrowing at 3%, but you can make 10% then you're pocketing that spread. And she shares what she's learned from interviewing billionaires. I had this conversation with Mark Cuban, too, is like, how much money is enough money? And he said, how much money is too much money? You can just get caught in a trap of wanting more and more and more and only make yourself feel poorer as you get richer, which I've certainly seen in some of the billionaires I've covered too.

I'm Nicole Lapton, the only financial expert you don't need a dictionary to understand. It's time for some money. Should I rent or buy a home, spend or splurge on a wedding? And how late is too late to learn about money? This is Smart Girl Dom Questions. I'm Neh Maraza. And today I'm joined by the money expert, Nicole Lapin. And you have the Money News Network.

You have an amazing podcast called Money Rehab. And you're, I guess, is it self-taught? Self-taught. Autodidact. You were one of the youngest reporters at CNBC at CNN. And I just have so many questions for you. So I'm so grateful that you're making the time. Thank you.

Bring it. All the questions. All the questions. But do I get to be the smart girl? This is like a promotion. You're the Eileen goo and I'm the person whose name we don't know because she was silver. That's what's happening on this episode. So here's the thing.

I have an MBA. Yeah, you're the smarter girl. You're the smartest girl. I'm not saying that to show off. I'm saying that to... How much is your brain, Aima? How much is my brain? What does that mean?

How much does you spend on your brain? Oh. Have you calculated? No, because see, this is my problem. I don't like to think about money, but I would like to have more money. It's easier for me to talk about tariffs than it is to talk about my own bank account or taxes or whatever. Is this a common problem? It is.

And there's often a disconnect. And actually, people who are in financial services or have their MBA have some of the most shame around money. Because they think they should know, right? You spent, I'm guessing. Yeah, I'm going to do the math. 200,000 on room, board, tuition. 200,000 as an opportunity cost for those two years, I'm assuming. More than.

So like 440-ish thousand is... On that, I actually have an MBA, an MPA, so it was a three-year degree. Then I have four years in my undergrad. So you asked me how much is my brain question. And I'm trying to now do the math of if the present value of my brain for the dollars spent on it is more than my present net worth. It's a great question. Smart girl.

Dumb questions. Typically, if you think about the ROI of an MBA, I like people to think about the opportunity cost of what that would be doing in the market. So if you took that $440,000 and put it at regular market returns of 7 to 10% year over year, after 30 years, you'd have $7.6 million. After 30 years? 30 years. Okay, so we're not there, obviously, yet. But I also went to business school and then made the decision to become a documentary filmmaker after during three years of grad school. And my Pakistani parents were so excited. Not at all

excited about this decision. They're like, oh, you'd like to make films about a band called Sublime. Great. Great. This is why we invested in your education. Killing it. I think because I grew up with an older father and I know we've both lost our dads, like, I grew up with a sense of urgency and like scarcity of time. So as a result, I haven't thought a lot about money. And I think there's a luxury in that, right? Like, I've been fine and I know I can get a job and all the things, but I've been able to take creative risks. And I've prioritized for that value versus the financial value. And yet, I just think like many millennial women of my age, I'm like, wow, should I have a house by now? I already have those things when it comes to like getting married or having a kid,

but I definitely have that anxiety around home ownership in general. Why? Because every time you go to a wedding, it's like some aunt will tell you that like paying rent is a waste of money. And they're like how Pakistani people are nosy. They love talking about money. They're like, how much do you spend on rent? And they're like, oh, that is a waste of money. Well, I think this idea that home ownership is propaganda is not true. But the idea that it's the only way to build wealth is completely outdated. And there's a lot of emotion wrapped up into home ownership and stability and safety. You know, I saw my house foreclosed on when I was the kids. And I think about that a lot. That's invaluable. But I like to go back to the numbers. Listen, I was a poetry major. I did not get my MBA. So I am not a numbers girl in the traditional sense, but when you stick to the numbers in these types of conversations, it actually strips out a lot of the emotion. So there are a few things to think about that quantify this subject of renting versus buying. One of them is the 5% rule. So the 5% rule says take 5% of what that purchase price is. And what goes into that would be everything you can't earn back. So everything you waste. So 1% to maintenance, 1% to property taxes,

3% to the opportunity cost. Because if you look at apples to apples, you're actually needing to look at the full housing cost, not just rent versus mortgage, because you're not taking into account the stuff that you don't get back. The equity, you will get back later. Everything else, like you're not getting your property taxes back. You're not getting the maintenance back. And you're not getting the opportunity cost of investing in the market. The investment opportunity cost. So it's like putting that same money into the stock market into like a whatever ETF. And SMP 500 index fund will get you seven to 10% year over year. Housing historically has yielded three to five percent. Isn't it negative in some markets? Like I was reading about how in Las Vegas the price of a home has like fallen over time. In New York,

I know so many people who bought homes, you know, when we're graduating like a decade ago and now their homes are worth anymore. Well, the thing that you want to look at to equalize this is the price to income ratio. So this will tell you over time how much a house costs compared to your income. So in 1970, it was 2.2 times. Now it's about five times. And in coastal cities, like in Los Angeles, it's 12 and half times. In New York, it's 10 times in San Jose. It's 10 times. So the issue with home ownership right now is that prices are much higher than wages are growing. And so the opportunity cost is a much bigger factor in this whole equation. So if you look at the 5% rule, so 5% of, let's say, a $500,000 home is $25,000. You divide that by 12. So you get your monthly cost. That's $2,100.

Okay. I'm following the math, kind of. This is dumb girl, smart math. Keep going. So $2,100 is your threshold. If rent is below that number, then it's better to rent. If it's above that number, then it's more advantageous to buy. If you're looking at the cost only, again, this is stripping out what the Pakistani lady is saying at the wedding. This is stripping out all the voices inside your head. Totally. Watching a foreclosure. Exactly. So even you, growing up with that fear and seeing that foreclosure, you have not made the decision to buy a home. Is that correct? Yeah, for me right now, it's more advantageous for my husband and my family and I to be very disciplined in taking what we would have put on the down payment and the difference between the cost of renting versus the overall cost of buying. Including that 5%. Yeah, so taking all of that and being really disciplined about investing it.

So what I think is the strongest argument to home ownership is the force. savings vehicle component of it. It forces you to earn equity at the end of it. It also gives you a place to stay. I totally get it. Like, people come from me so hard on the internet for this. It's a very controversial take. Totally.

But I want to be really clear. Buyers everywhere are scandalized by your take. I'm so scandalous. And here I am, just giving you the math. It's great. I love it. But there's a real opportunity cost to that down payment. So, again, easy math.

$100,000 as a down payment is not $100,000. It's in the stock market. your money will double after 10 years. So that $100,000 after 10 years becomes $200,000. After 20 years, that becomes $400,000. That's not a guarantee, right? Historically, if we look at 50 years of the stock market, that's historically what it's going to yield.

And so I want to look at that opportunity cost and truly understand that this math only maths if you actually stay disciplined to investing. It doesn't work if you're just like, cool, cool. So I'm just going to use that delta or that extra money and spend it somewhere else. Or I know myself. Like you have to have true self-awareness to know if your habits are going to stay true to what makes this math math. So what makes that actual down payment earn more money than if it was stuck in housing.

If you just look at the historic numbers, it's by putting that extra money to work for you in the stock market. If you're going to do that, it's a better overall investment to rent and then take. that extra money of the down payment and the extra that you're spending on all of the things with housing and invested in the stock market. You've just made it seem more complicated to not own a house than to own a house for me. I'm like, I feel like I need more Excel sheets to not own a house because the discipline that it would require. But it was so validating until that point. No, it really does require discipline. And if you know you're not going to do that, then home ownership is great forced savings vehicle over time at the end. You're going to make three to five

percent. You're not going to make seven to ten percent. Typically speaking, do not come from me. There are markets. There are things. I know. Yes. But I'm just looking at the data. Yeah, you're taking aggregate data. This is so interesting. So this is like the third episode in the Smart Girl Dom Question Smart Money series that I'm doing, which is sponsored by time. The first episode, I talked to the divorce attorney. And he talked about this idea of you have to have a naked lunch with yourself and really know your own finances and your own approach to money before you kind of pair up with someone. I would say something you should do individually. is have what I would call a naked lunch,

like where you really look at what's at the end of your fork. Like the most dangerous lies in relationship with the lives. The image in my head is so fucked up right now. I'm just imagining a naked person looking at a fore. Looking at the end of their fort. Okay. I mean, listen, whatever the metaphor does for you, it's fine. You know, it tells more about you than me.

It's like a roars shark test. It's a roars shark test of sorts. I think what happens economically is the most dangerous lies or the lies we tell ourselves. Yeah. Totally. And I would even say, because I talk about, about the idea of looking at your finances is like sitting in front of the mirror naked eating,

but also putting fluorescent lights on yourself. Oh gosh. To be really, really honest. Nobody wants to have this meal with anybody maybe, although sounds a little bit like Vegas. Okay. The second episode was with Raj Chetty, who's done a lot of work around the American Dream. So it's a lot of debate nowadays about people renting versus buying. Yeah.

One way you can actually get to the American Dream is to rent a home in a neighborhood. that offers better opportunities for kids, better schools, better pathways to jobs, etc. From the perspective of homeownership, I guess that's not achieving the American dream. From the broader perspective of achieving prosperity, that might actually be a smart thing to do. Your zip code matters more than your deed. Literally, exactly, whether you own a house or not. And we talked about what is the best path to progress and what is not propaganda, but is a lore or a myth around progress and homeownership being part of the thing.

second category of like it's been this version, this temple of the American dream, a home you own, a white picket fence, two and a half kids, whatever it is. And that's just, that's not getting people to the amount of progress that they hope to feel. And I think that's definitely true in our generations. There are emotional factors to it. And if it makes you sleep better at night, then that's amazing. But just be really, really honest that that's the reason. Yeah. How did you emotionally get over it? Money. Money. You did the math. The math got you over it. Yeah. I think when you have a lot of these hard conversations and. and emotions swell up.

And if you're working with a partner who also has emotions around it, I think if you go back to the numbers, for us, it was most important to optimize for net worth after 30 years. Not right now. How do you look at homes that have renovations? Because I feel like a lot of people are buying like fixer uppers nowadays. And then they're getting a couple of things. They're getting a roof over their heads.

They're getting some project that is either going to make or break their marriage together. They might be getting content. Like they create channels where they're just like renovating these homes. but there's so much of like a renovation culture. Yeah, that's not my life. That scares the hell out of me. Well, you know, that's been popularized, obviously, by HGTV and you think you can flip.

And that's not what we're talking about here. We're talking about typically what you're going to be spending on those property taxes is around, again, 1%. Every area is going to be different. And then, you know, whatever typical maintenance you're going to have, the roof needs fixing. the HVAC system goes out. I mean, you just need to remember that at that point when you become a homeowner, nobody is coming to fix that stuff. And that stuff is very, very expensive.

And insurance don't even get me started. And there's also home warranties and home insurance. It's like a home warranty worth it? It's worth it for the companies that sell it. Yeah. I mean, that's very telling. If you look at insurance, you want to insure stuff that you cannot afford to lose your life, your health,

your home. The other stuff, like a warranty on a toaster, you know, the extended cell phone coverage. All that stuff is being sold because it's very lucrative to the company. It's insane. It's like the idea of like when you buy an Amtrak ticket, they're like, do you want insurance for this ticket? It's like, no.

Like that's insane. Buy a refundable ticket. Historically, it doesn't work out well for the consumer. So you've obviously gone through a big shakeup in your life. And 18 months ago or so, the fire is in L.A. And you lost your home. Did that change your philosophy on all of this and on the idea of ownership in general? Yeah, it reminded me that, you know, systems, huge city systems, state systems can fail in a way that felt very uncomfortable for me at the time.

I was also two weeks postpartum, so I was extremely emotional. You know, we built out a nursery. We built out a home that I'm mostly more in the future of, not necessarily even the past. of. And so I think that when that happened so quickly and so obviously unexpectedly, it made me less attached to a physical home and that idea of stability that I glorified for so many years. And I thought, okay, well, when I become this, then I'll be happy, right? We always play this game and we never get our brains to the other side of it because there's always another there there. So when I get a home, when I get married, when I have a kid, then I'll be happy. And, you know,

The truth is, wherever you go, there you are. And there's always going to be, maybe not to that extent, there's always going to be something that happens that's going to get in the way of what you imagined that time to be. It was not the plan, but it also made me less attached to this idea of homeownership. I can't imagine. And I don't want to make you relive that very difficult experience. One of my closest friends lived in L.A., had a home in the Palisades. Her son is my godson, and they lost their home. And I'd seen her like really, you know, spent a lot of time and picking that lot, designing that home.

Like it was a special place. It was like, felt like my home in L.A. And so seeing that, I totally understand what you're saying about losing confidence in the idea of stuff and the physical world, but also in some of the institutions that were still finding out like why this happened and where like where the accountability lies and how to pursue that. I'm certainly seeing that in my friend's experience. I remember leaving that day and just thinking we would come back.

I just left with the clothes on our back. We put the dog in the car and the baby and we're like, it's cool. We'll be back later. We were going to go to a friend's house and then, you know, how could they let this burn down? And also my husband was like, yeah, and I just paid so much in taxes. Like, we're good. The trucks are on their way. Like, I paid for the fire hydrant stuff.

No, none of it was there. And so that's really unnerving on so many levels that the systems that you expect to be there when you need them the most aren't. But yes, Rick Crusoe was our first guest here. Yeah. Which was felt very poetic and fitting to, yeah, rebuild the office and the studio. And, I mean, I'm sitting here in Nicole's beautiful studio. And it's stunning. Thank you for letting us to be here. And it's just, I mean, you've rebuilt a lot. Thank you. The idea of renting, like, feels good to me on a financial and an emotional level because of that.

Yeah. I cannot compare with that experience. But I will just say, like, one of the reasons, I've always been a renter as because, one, I've grew up in multiple continents. Like, I've always moved a lot. I've lived in a dozen cities in, like, as many years or in 15 years, I've lived in a dozen cities. And I like the idea that when the washing machine breaks, I call somebody and I don't spend hours in my life on it. And there's a huge value of that to me that I cannot put in an, I could probably like figure out the marginal utility calculation on it, but for me, it's just, it's liberating to not have to deal with those things. Yeah, if you're moving around like Gen Zian millennials are, it is more advantageous to rent.

I think the idea that there's so much shame, once you tease through some of these issues and you get to a point where this is an intentional decision, I Naima move around a lot. I Naima am being disciplined that I'm investing in the market, you know, and I'm consciously choosing to rent so that I can free up more. of my capital to grow faster for me. You know, that's a different mindset than saying like, oh, I'm such a loser. I'm renting. I'm stuck at life. Like, what am I going to tell the Pakistani ladies at the next? The aunties. You don't know what these aunties. Nicole, I'm telling you. It's about you getting good with that conversation with yourself. We're going to take a quick break

and we'll be back with more with Nicole Lapin. I think of you as someone who's like extremely resilient, not just because we're sitting in this beautiful office that you've rebuilt, but also because of the story that you have told around having been in debt and getting out of debt. And so before we move on totally from this home chapter, it's like one of the daunting things to me about homeownership is the idea of debt. And even if you have a fixed interest mortgage, which I don't think they exist anymore, kind of, or they do, but they're at much higher interest rates than they were years ago, right? No?

You can correct me. No, that's the whole idea. I am allowed to be dumb on my show. Yeah. Nicole's giving me a sad thing. Do you mean adjusted, adjustable rate mortgage? There are adjustable rate mortgages. But they used to be much lower percentages.

Yeah, the interest rate. Yes, exactly. Totally. When interest rates were lower. Yes. And now we're about six and a quarter percent. You know, obviously we were at rock bottom interest rates around the pandemic. And when we saw financial Armageddon in 2008, but that was an emergency measures.

So those rock bottom interest rates were what people got used to, but they're not typical. We're at more of a typical interest rate level right now. So given the choice, I know that you're not going to buy a home anytime soon. It sounds like I'm not going to buy a home anytime soon, although I do have to have a very naked fluorescent lunch with myself and figure out how much money I should be putting in the market because I'm not buying a home. That's my kind of homework. Yeah, we can do that. Yeah, we can do that together. Yeah.

I'll have naked lunch with you. Wow, I love it. Naked Lunger right. Yeah. That's great. That would be amazing. It is so scary. And I even find myself punting meetings with my wealth manager to like, because I'm just

afraid to confront numbers. And they're not bad. I'm pretty good at saving and I'm pretty good investing. But I just don't want to think about it. Yeah. We make up a lot of stories in our head that end up taking over. And the best antidote for shame is truth and looking at it and realizing actually I suffered more in imagination than in reality.

That's like kastochism vibe for you. Okay. All right. I love that we're now on Ryan Holiday's podcast. We're doing the Daily Stelag. If you were considering, even though neither of us are buying this home, we're just having naked lunch, would you be like less likely to take a fixed interest rate loan for a mortgage right now? Or what would you advise people?

Like, is there a hope that interest rates are going to come down? Like, do you have a theory on that? I know you're not giving financial advice, all the disclosures, but is there a way to think about that? Yeah. Well, we also do have these conversations. at our wealth management, firm, private wealth collective. And this is truly a holistic approach.

So you can't really look at homeownership in a vacuum. You have to look at your entire financial picture. You know, people often say, like, can I buy a home? It's like, hold on a second. I have a thousand other questions for you. Like, what other kinds of debt are you holding? Do you have student loans? Do you have credit card interest rate?

You know, what are your goals? And all of those questions should be looked at together in a holistic picture. And so not all debt is created equal. So I used to be so scared of any kind of debt. I'm first generation American. You know, grew up in immigrant household. Like you buy something if you have the literal cash to pay for it. And that was the end. Like period, end of story. And so I used to keeping people poor. So rich people have debt, but they call it leverage. It's the same concept. But they use it to make more money or lower their cost of capital, which is essentially taking the difference between the, percentage that you're borrowing money at and the percentage that you would make money at. So if you're borrowing at 3%, but you can make 10% then you're you're pocketing that spread. There's 7% for instance. And so, you know, good debt and bad debt, two different things. So good debt for your

beautiful, beautiful brain, you know, in theory, that asset is going to earn more than the interest rate, right? Yes. So that's good day. Or you're using that debt to buy assets. that will appreciate. So a home. It's sort of, you know, we're six and a quarter percent. Again, that calculation that we did around the 5 percent is more like 6 percent, maybe 7 percent in today's interest rate environments. And credit card debt, bad debt, right?

Credit card debt that I got into was 24 percent. So right now, new credit issues are coming in at, 22% 24% you miss payments you're up to 30%. And did you know that? Like had you read these like

because I feel like there's all these asterisk in the star and then they have these other like insignia for the footnotes and they come up with every character under the sun. And if you don't know, you don't have perspective.

24% amazing compared to what? You don't know. You don't know. And it's all these like hidden, is it hidden fees or it's like lightly fine printed fees? I don't know. Yeah.

So APR is the interest rate that you pay APY is what you get at the bank. What you get at the bank typically is much lower than what you're paying a credit card. And that type of debt is what can snowball out of control. The biggest issue with that type of debt is the minimum payment. It's not even necessarily the rate. If you can understand what that rate is or pay it off on time, but the minimum payment thing is what's keeping a lot of people stuck. It kept me stuck. I thought, okay, I'm paying the minimum payment. This is an option on the credit card portal. I got into credit card debt when I finally got a credit card and I was rebelling against,

you know, not ever having one or stashing cash under the sink behind the maxi pads just in case. That's just how I grew up. But using that type of, I think, predatory lending can get you really, really stuck. So $5,000 at 20%, which is not even the highest. By paying just the minimum will take you to $20,000. 23 years to pay it off and almost double what you're spending in interest. Wow. So when you're thinking about debt, like you have to think about two different kinds of debt

and what the percentages. Right. And what you're doing with that, are you buying things? Are you buying a depreciating asset with it? And you're using high interest credit card debt versus your brain. Yeah. Hopefully, outperforming inflation unless you decide to become a documentary filmmaker, in which case, probably not.

But that's fine. It's psychic income. How much debt did you get into? I got into $5,000 of credit card debt originally. I broke that down by the day to get out of it. I didn't know at the time that I was doing the avalanche method. Yes, there's two ways you talk about to get out of debt. Yep.

Avalanche method and snowball method. So it doesn't really matter which one you choose as long as you choose one and stick to it. So avalanche, you know. No, no, I want you to tell them. I don't know. I'm like, I don't want to be in snow at all. I'm like, this sounds terrible. Let's get inside.

Let's get inside. Yes. So Avalanche method is ranking your highest interest rate credit card debt first and paying that off the first. Okay. So if you have, you know, a bill that comes in for $100 and that's at 5%, let's say, and you have a bill that's for $50 and it's at $24. And you're like, I have a magical $100 bill. I'll just pay the $100 one off, right? Because I'll rip it up.

It'll be cathartic. But that's not the most advantageous way. I would put half of that toward paying off the higher interest rate. Credit card debt likely first because that's going to snowball fastest, even though the snowball method is paying for the smallest bill first so you can have momentum to keep going. So it's like snowball method is psychological and avalanche method is like more efficient. Yeah. And again, I give it.

these choices because not every financial choice is a true numbers choice. It's often an emotional choice. So whatever you're going to stick to you, you're going to spend more over time. Right. But as long as you stick to that and it works for you, then I like that method for you. I like that too. But the one that's cheaper is the avalanche. Yeah, the efficient one is the avalanche one. And I, and I so agree with you on the emotionality of it. Like Jim Saxon and I were talking about this the divorce attorney and I. Like when you date somebody, you're not dating their approach to money. You're dating like their parents and grandparents approach to money. And all of the stuff is so hard-coded in us that it's really hard to separate the emotionality and the finance. And I love

what you do because it's partly extremely practical and partly psychological. And thank you so much. But when I was in debt and I continued to, you know, be in debt and feel a lot of shame around that debt, especially when I was also a business reporter and I was covering these macroeconomic things, but personally in my own micro economy, I couldn't get my own financial shit together. You know, I felt so much shame around that. I felt so much shame about the lineage, too, because I was like, well, I clearly deserve this. I suck. I'm not a numbers person. I'm bad with money. Of course, this is going to happen to me. And then these stories that continue to proliferate And shame is not a good money management system because it keeps you avoidant.

It keeps you out of these conversations that really could be helping you. And so I think it's a mistake to remove the idea that shame has a huge part in what's keeping people in a cycle of debt. So well put. I am now going to completely lowbrow your conversation about shame and pull out paddles. Something else to be saying that. I brought these paddles into Nicole studio and she's terrified and confused as to why. I have brought this.

She thought we're going to be up to something sexier than we are going to be. So, okay. Am I going to get spanking here? What's happening? No, no spanking. There's nothing to be ashamed of. But I want to run through kind of big outlays that people have in their finances. And I want your kind of red or green.

Okay. These paddles have two sides. One is red and one is green. And you're going to tell me, is it worth going into debt for green? Or is it not worth going into debt for red? Number one, you have a very nice one, an engagement ring. To go into debt for it? Yes, red.

Hell no. Hell no. Hell no. Don't go into debt. Get a lab diamond. Get a lab diamond. Green on lab diamond. Red on debt.

Invest the difference. Yeah. Okay. A two-carat engagement ring. A natural diamond is 20 grand. A lab-grown diamond is $2,500. Invest the difference. $2,500.

We're all in. After, you know, 30 years or whatever, will probably be $300,000. Better than a natural. Really? A natural diamond. Yeah. The lab grown will be?

No, if you invest the difference. Oh, yeah. Sorry. If you invest like the 17,000. I thought lab grown diamonds were like a wild appreciating asset. My God. I got to rename the podcast. Dumb girls.

Smart questions. Okay. What about your wedding? Going into debt? Yeah. No, same situation. Like the average wedding cost is 35 grand. Yeah.

Spend half of that. Invest the difference. Again, you'll have 300 grand after 30 years. We had a micro wedding. What's a micro wedding? A baby wedding. A baby wedding. I like the idea of...

I was also pregnant. Oh, a shotgun wedding, Nicole? Shotgun wedding. Oh, I tried wedding. That is what the aunties would say at the wedding. Oh, it is a shotgun wedding. Anyway, it was the best wedding, small. You know, we invested the rest that we didn't blow out.

Yeah. I think one of the greatest things that the pandemic has done is like made more weddings micro and like people are doing the city hall wedding or like a smaller wedding. And I'm like, I'm so down for that. Okay. Home ownership. Going into debt. But just through a regular mortgage?

Yeah. I think it depends. It depends. I'm going to say green. Sure. If it works for you. Yeah. If it works for you, I'm into it.

But you have to answer all the questions and like check the boxes that we talked about. Okay. Homeowner. Just not going in blindly. Yeah. And thinking that that's the way to grow well. It's one way to grow well. Home renovation.

Are you on HGTV? Like I have questions. If you're on HGTV, it's great. Yes. If you're just a regular person. And if you're going to stay there forever and ever and, you know, you can afford it in your overall financial picture, great. Or you think you're going to recoup it somehow. You're going to drive up.

You're doubling the value of the home by doing this new kitchen. Splash. Totally. Some of that is speculative. Okay. It sounds like you're all right and you're just giving a green to be generous. What about fertility care? IVF, the journey.

Oh, going into debt for it? Yeah. Probably right. Yeah, I did. I did IVF. It's no fun. But I know how deeply personal that is. So if it's something that you feel like you need to do, then, you know, there are a lot of ways to get out of debt.

And you can, it's a problem you can deal with later. And I count in that like egg freezing or fertility or adoption or surrogacy, all the things that people might be considering to be able to have a family, it seems like the kind of thing that, okay, feels like there's only so many choices and it's a priority in a certain window of your life. Yeah. Because I think when you think about there's two ways that you spend money, right, on impressing other people, consumption, and experiences. And there's no greater experience, obviously, than having a family. And if that's deeply, deeply personal to you, like, who the hell am I to put a bad paddle?

I was going to show you, like, we're going to get to some paddles where you actually want to do the green. Not your resistant green for homeownership. Your education. I would say, I would say, right. It really, it depends if you do the math, if you know the opportunity cost, if you really think that it's going to yield a higher return over time. But likely not. I think that 10 years ago, my answer on this might have been different, but I just feel like where we are with the precipice of AI. And, like, I see so many people who have dropped out of college.

Like, George Lucas built, you know, everything that he's built from having gone to community college. And I think there's a lot of routes and we kind of over-emphasize prestige education in the country. Yeah. Yeah. So I'm probably going to be a right on that. I don't know where people that have hired went to college. I don't think anyone knows where I went to college or cares.

Yeah. Yeah. I mean, obviously where I went didn't help me know anything about money. So it was so bad. But your kids education. No, going into debt yourself. Always put your oxygen mask on first. They can get student loans. You can't get a loan for your retirement. So when parents will say, well, I'm, you know, saving for my kids education. And that's so lovely. And I get that as a parent. But only after you've taken care of yourself first. So if you're

prioritizing their college and not your retirement and you are desolate when you're older and you're like, I have no place to live. I'm coming over to your house and I'm sleeping on the couch. I have no food. Like, that's not helping your kid. No. So you have to take care of your retirement first. Do not go into debt for their education. I'm curious, like, what's the best thing you invested in in your 20s and the worst thing you, quote, invested in in your 20s? Oh, man. I was not investing in my 20s. That's the problem. I think, you know, no one has ever in the history of the world said, I'm so glad I didn't invest earlier. Like, oh my God. The reason that I do what I do every single day is because I'm like, please do not make the same mistakes I did. Like I wish. And I was covering, by the way,

on the floor of the stock exchange, like, I have a video of me saying like, Google just announced Gmail. You'll never have to delete a single email again. Like, why was I not buying Google stock? That was crazy. Or like, I have a video that shows me reporting on the launch of the iPod. Yeah. What was I doing? Like, what was I doing? Why was I buying clothes and shoes and whatever? And why was I not buying stocks? I was buying too much stuff and not enough stocks. Totally agree. And I feel like I've constantly been in that situation where I remember my college boyfriend was like buying noodles of Google and like all these stocks. And he was telling me about them. And I'm like, I don't know, it seems risky. Now I look at the fact that like Google has like gone up, I don't know, hundreds of X. Amazon has gone up thousands of X, like 3,000 X. It would have been smart to be buying that earlier in life. What about the worst thing? you quote invested in, even in your 30s, like something you thought was going to be an investment that paid off and didn't. Yeah. I, uh, yeah, any like designer or anything.

I know this is cliche, but yes, I think we normalize giving gifts of stock. Yeah. Not stuff to ourselves and to others. Yeah. Okay. So you're going to give your daughter stock? Yeah, of course. She already has stock.

Yeah. She has more money. We were just looking at her portfolio. My daughter is richer than my husband and I were in our 20s and probably in our early 30s. Because what are three things that people can do if they have a baby that they want to... She has a 529, which is traditionally thought of as a college savings account, but it is much more flexible. She has a custodial Roth IRA and she has a custodial brokerage. Got it.

Oh, wow. She has a whole... Your daughter is rich. My daughter is rich. Because your daughter are going to buy a sludge after this? Honestly. We can't. Yeah.

It's a jail break that money. You're going to pay a lot of penalties. Right? Okay, Naima. Don't you? That is the, Nicole is finally impressed by one piece of knowledge in like our last five minutes of the interview.

I love it. Right? There's a lot of penalties. No? There's some penalties. Yeah. But sometimes you can do it. Okay.

What about health savings accounts? Are they, are those worth it? For debt? No, no. The pedals are done with the paddles over. We're done with the paddles. Yeah.

I mean, there are a lot of tax advantage accounts that I would put my money in first. and then go to taxable accounts. So, like, if you look at HSAs, if you look at 401K's IRAs or Roth or a backdoor Roth, you know, a year, a person who's making $100,000, can put about $35 grand into those tax-advantaged vehicles. And so once you get those, and by the way, any match is like, obviously free money. Half of people say no to a 401k match, which is like saying no to a raise. Yeah, that's done.

Yeah. But so do that at first and then like a taxable brokerage account, which is where you can get low cost S&B 500 index funds and the rest of it. And if you want passive income from that, then I like to think of like $50,000 a year for every million-ish that you have. So without touching the principle, what you can get as income to live on. It's a good rule of thumb as you're trying to think about passive income. Don't fall into the. rabbit holes of the internet that's like, you can do this passive thing. It's so simple and easy. It's not. One piece of data, by the way, when I was like looking through this that broke my mind is there's a recent survey of 2,000 people who are either like recently engaged, married or in relationships. And 78% of people surveyed would rather start married life debt free than spend on an engagement ring. And I was like, what's up with the other 22% of people? But it sounds like most people wouldn't. But that's greatest. But the number goes down by generation, and 70% of millennials said they wouldn't,

and 64% of Gen Z said they wouldn't go into debt. But it's still the majority, but that's 40% of Gen Z, who might be far away from making that decision, thinking that they would go into debt for a ring? Labgrown. Invest the rest. Invest the rest.

I feel like I put it on a t-shirt. It's a bumper sticker. Let's go. The last thing I want to ask you about is when you sit down and you do this naked lunch and you sit with yourself. How do you know if you're rich or poor? Like what are the milestones that you should have in your mind to really measure that?

Because there's the dollar value, but then I think there's like, we're living in a world of vast comparison. I'm like, you're constantly comparing yourself to other people. You're comparing yourself to where your parents were in the generation. How do you know if you're doing well financially? If you answer the question really honestly with what do you want financially, what's going to make you happy? And for everyone that's different, if you are going to be stoked in retirement, living on a small piece of land with your lawn chair from Target, amazing.

Let's stick to that and not change the goal post on ourselves when we scroll on Instagram and we see like our friend's friend with a yacht and be like, oh, my God, I suck at life. Because I think you can have it all, but only if you truly define what it all means and stop changing the definition on yourself midgame because that's when it doesn't work. Yeah. Because as you get more, you expand your possibility set of what you need. And I think that's why it's really important to work with any, you know, trusted wealth advisor that you have. We have these conversations all the time. Like, it's nice to have an accountability partner and somebody who's going to keep you honest with what your goals are. You know, people will call and say, well, you know, I want to get this or that or whatever or why am I not

getting this. It's like, hold on. Like, we went through like your whole goals and all of the, you know, breakdown of timeline here, that's not what's on there. We can change that. You can always change that. But stay really true and honest to what that looks like for you in your most honest, quiet moment. Off social media. Yes, off social media. And just like kind of in your own room. Like, I think my dad, when I was growing up, had this rule, which is like, I'm never going to say no to you, but don't ask me for something I should say no to, which was a good self-regulation for me in asking for things. And, you know, It wasn't mostly financial things. It was like sometimes time things, help with something or whatever.

It's like just kind of being self-aware in what I was expecting out of life. And I think sometimes we let go of that. And I had this conversation with Mark Cuban too. It's like how much money is enough money? And he said, how much money is too much money? It's like you can just get caught in a trap of wanting more and more and more and and like only make yourself feel poorer as you get richer, which I've certainly seen in some of the billionaires I've covered too.

Yeah, I think having that framework. around the passive income that you can make off a portfolio without touching that is a good benchmark to think about like the 4% rule or the 5% rule. So that would basically mean for $3 million, that's kicking off $150,000 each year for you to live on it. If that's, is that enough? I don't know. Like, only you can answer those questions.

Yeah. You know, if it's not, is it more? Is it less? Do you want $50 grand? And then that's a million dollar portfolio that kicks off that income. A million dollars to get 50 grand a year. Ish. Like 800 to, you know, one and a half, depending on like the interest rate that you're getting.

Yeah. Okay. I'm going to keep working. I'm going to keep working. I'm going to get every episode of smart girl dumb questions asking my much smarter guess. What are they dumb about? What is a question that you have that you've been embarrassed to ask out loud or you've with some shame asked your phone recently? Oh.

What's in my, what's in my clawed log? Yeah. I have, I have so many. I have one that's more serious. and relevant to what we're talking about, which is why is it taboo to ask what a person's salary is when it's not taboo to ask within 30 seconds of meeting them what they actually do, because we're lying to ourselves that that question is not about what their salary is. Totally.

It's complete. So it's where you live. Where do you live? And, oh, do you know, people have all these questions for trying to understand how much money you make. So okay, I love it. So just ask that. So who made that Emily Post type rule? Yes.

Yeah. When did that happen? and I don't like it. And also just asking what you do in the first 30 seconds. I have this one anecdote in one of my books where I was at an event in New York and there was sort of a group at a financial services thing saying like, where are you from? And I said, Los Angeles. And everybody laughed at me.

And they were like, where are you from again? And they asked. And I kind of got that what they were asking for was what firm am I from? And I was just like, Los Angeles. because, you know, let's have another conversation about actually getting to know each other as humans. But anyway, I digress. The biggest question that I have right now is why do I viscerally, like, at my core, want to eat my baby's leg.

No, you do not. I want to eat her leg fat. Like, I just want to live in her thigh. This is not carnivorous. You just think it's so cute and chunky. I'm not. But there's a thing. Like, why do mothers want to eat their babies?

No, I don't know. to get out of this. I'm afraid for my own life. Some army hammer shit is going down. It's the smell of the baby. Really? Like, I want to just like gnaw on her fat leg. And it's like that. It's just that. It's not her arm? It's mostly her fat leg, her fat arm too. Like forever. I just like, I truly, why do mothers want to bite on their children? What's the number of her child protective services?

I know you love her so much. It is so, like, kids are so cute and they're like chubby, chubby, chubby, chute. Here's a question I have. Do chubby kids become skinny adults and skinny kids become chubbier adults? I have this theory, but I don't know if it's true. Well, I thought our daughter was getting too skinny because the leg fat rolls were disappearing much from my sugar. And so I was like, we need to fatten her up. Okay. She's already rich.

She can buy some food. We can get her some food. It sounds like she's a little life. I know. She takes her height after her father. thankfully. She's lengthening out. And the pediatrician was like, her parents are not, don't have fat rolls on their legs. It's like, fine. She's like, no, give me back the fat rolls. I must eat. I didn't take that roll. I love it. I want to meet your daughter. I am. I'm not going to eat her.

Thank you so much for doing this. Thank you so much.