The Personal Finance Podcast - How to Save for Short Term and Long Term Savings Goals (Money Q&A)

Episode Date: September 13, 2023

In this episode of the Personal Finance Podcast, we are going to talk about how to save for short term and a long term expenses on this Money Q&A. How Andrew Can Help You:  Join The Master Money Newsletter where you will become smarter with your money in 5 minutes or less per week Here! Learn to invest by joining  Index Fund Pro! This is Andrew’s course teaching you how to invest!  Watch The Master Money Youtube Channel!  Ask Andrew a question on Instagram or TikTok.  Learn how to get out of Debt by joining our Free Course  Leave Feedback or Episode Requests here.  Thanks to Our Amazing Sponsors for supporting The Personal Finance Podcast. Shopify: Shopify makes it so easy to sell. Sign up for a one-dollar-per-month trial period at  shopify.com/pfp Factor 75: Head to factormeals.com/pfp50 and use code pfp50 to get 50% off your first box. These are amazingly easy and nutritious meals. Delete Me: Go to joindeleteme.com/PFP and use promo code PFP you’ll be able to save 20% off your DeleteMe subscription! Protect yourself online! Indeed: Start hiring NOW with a SEVENTY-FIVE DOLLAR SPONSORED JOB CREDIT to upgrade your job post at Indeed.com/personalfinance  Links Mentioned in This Episode:  10 Ways to Prevent Identity Theft (and What to Do if it Happens to YOU!) How to Save for Multiple Savings Goals (And Reach Them Faster!)  How to Save for Multiple Savings Goals (And Reach Them Faster!) 10 Incredible Benefits of a Taxable Brokerage Account! Connect With Andrew on Social Media:  Instagram  TikTok Twitter  Master Money Website  Master Money Youtube Channel   Free Guides:   The Stairway to Wealth: The Order of Operations for your Money  How to Negotiate Your Salary  The 75 Day Money Challenge  Get out Of Debt Fast  Take the Money Personality Quiz Learn more about your ad choices. Visit megaphone.fm/adchoices

On this episode of the personal finance podcast, how to save for short term and a long term expenses on this money Q&A. What's up everybody and welcome to the personal finance podcast. I'm your host, Andrew founder of mastermoney.com and today on the personal finance podcast, we're going to be going through a money Q&A on how to save for short term and long term savings goals. If you guys have any questions, make sure to hit us up on Instagram, TikTok, Twitter, or newsletter at Master Money Co and follow us on Spotify, Apple Podcasts, or whatever podcast player

you love listening to this podcast on. And if you want to help out the show, consider leaving a five-star rating and review. Cannot thank you guys enough for leaving those five-star ratings and reviews. They truly mean the world to me. And then lastly, if you want to watch this, you can watch this on the Anderjankola YouTube channel. You can either search my name, Andrew Jen Kohler, or you can search Master Money and it will pop up as well. Now, today, we are going to be talking through a bunch of different questions, and all of these questions were actually sent in through people who subscribed to the Master Money newsletter. So when you subscribe to the Master Money newsletter, what happens is I send an email instantly that comes out to you and says, hey, at the end

of it, it will say, hey, do you have any questions that you want me to address? And when you send over those questions, we prioritize those questions, and we make sure we have them in a list, and we are going to be answering those questions on this podcast. And in addition, we'll also have some of those questions on the Master Money newsletter. And the newsletter, it will take you five minutes or less every single week to read. And we just give you additional personal finance tips and things that you can use. Some of the best news that are out there. We have a book club. I get the question all the time. What is my favorite books? I'm literally showing you every single week on the Master Money newsletter what I'm reading. So make sure you check that out as well.

And then we also give you a ton of, ton of deep dives on some different subjects. So really, really excited for you guys to check that out. And these questions are from the master money newsletter. So the first one we are going to be talking about is how to say for short term and long term savings goals. Then we're going to be talking about, can I contribute to an old HSA that have had for a long time and what are the beneficial factors by doing so? And then we are going to talk about what are the major three things that you need to focus on in order to protect yourself against identity theft? Because we had the big identity theft episode with a ton of information. And so this listener wanted me to narrow it down to the three big things that could help 80, 20,

their progress on that. And then lastly, we're going to be talking about how taxes work in a taxable brokerage account and how you can utilize that taxable brokerage account. to bridge the gap in financial independence. So we're going to go through that process as well. We have an action-packed episode today for you guys. I cannot thank you guys enough for being here and listening to this podcast. And if you're getting value out of this podcast, share it with a family member, share it with a friend who is looking to build wealth as well.

So if those questions are something that you're into, let's get into it. All right. So the first question comes in and it says, my husband and I are working on paying off all of our debt and hope to have the majority paid off by February. After that, we just have his student loans and then our mortgage. I would love to know more about the logistical side of saving, and we have an emergency fund in a high-yield savings account,

but what about short-term and long-term goals? So this is an incredibly important question for most people to ask when they are on their personal finance and their financial independence journey. So I am so incredibly glad that she is asking this question here. So the first thing we need to kind of go through is we need to figure out what type of savings goals that we actually have. So you need to really think through what your savings goals are. But first, as a baseline, what you need to make sure that you are doing is taking care of retirement. If you have not started to take care of retirement yet,

that is priority number one. That will always be priority number one, even before investing for your kids, even for saving for your kids college. You need to take care of your own retirement first because there are no loans for retirement. So you need to pursue your financial freedom first, then your kids. And as a parent, that is a very difficult thing to actually think through, because a lot of times what most parents want to do is they want to put their kids first. But in this financial situation, you need to put yourself first, then your kids come next. And that is very backwards for a lot of parents. So retirement always comes first. So you need to prioritize the accounts that will actually work for your lifestyle. Now, if you're

a really, really high earner, these accounts may differ, which we'll talk about in a second. or if you are an average wage earner, then these accounts will probably work in the exact way that you want to. So we're going to reference what the stairway to wealth calls for. The stairway to wealth is our step-by-step guide showing you these steps to take. That's why it's called the stairway to wealth. It's the steps to take on your financial journey. And once you get to the saving and investing portion,

it becomes very, very important to kind of look at these steps and make sure that they work for your situation. So if you are saving for retirement, for example, the order to save a retirement would be number one is to, get your employer match. And the reason for that to get your employer match is because it is a 100% rate of return on your money. It's an incredibly powerful way to make sure that you are getting a 100% rate of return. I want you to get your employer match before you're paying off debt. I want you to get your employer match before you have an emergency fund because it is a 100% rate of return.

You cannot get that anywhere else. Then after you get your employer match, when it comes to savings goals, if you already have your emergency fund in place like she stated here, then you could move on to some of the investment goals. So these are things like your Roth IRA and your HSA. That would be the next two combo that I would consider looking at. Now with an HSA, you have to have a high deductible health plan. So not everybody can get an HSA, but everybody can invest in a Roth IRA, even if you're a high earner because you can do what is called a backdoor Roth IRA. And a Roth IRA, money goes in that's already been taxed. It grows tax free. You can pull the money out tax free. That's why I love the Roth IRA. Now, if you're a really, really high earner, you may want to consider doing

some pre-tax accounts first. You want to talk to your CPA and see which one is better. But for most people, I like the Roth first. Then I like to go to pre-tax, which is your 401k, your 457, your 403B, your TSP, depending on where you work, it's going to be different for each and every single person. Or pre-tax can also be your traditional IRA that you open at a brokerage account, your solo 401k, your SEP IRA. All of these are pre-tax accounts. Then you go back to your tax with brokerage to diversify some of your tax situation and have that flexibility. in that taxable brokerage. So this is how we look at our investment accounts

and our savings goals. So you got to think about, hey, how much do I need for retirement is the first part? And if you have that portion set up, then you can set up the order of operations for some of these accounts so that you can start saving for retirement.

Now, when it comes to having multiple savings goals, now we're going to be talking about actually saving cash within a high yield savings account. Now, if you have multiple savings goals, it can be very difficult to figure out which one do I need to price. prioritize or which one should I actually be going forward or should I be saving for all of these different savings goals. And let's get real here. As we talk about this, there is only so much

money to go around for each and every single one of us. Every person in the world only has so much extra additional dollars that they can allocate towards different things. So we have to make priorities when it comes to our savings goals. Maybe you have a wedding fund. Maybe you want to save up for a new car. You have a vacation coming up. Maybe you have the holidays coming up. You're saving up for down payment on a house. There's so many different savings goals that you're trying to hit, and it is so incredibly difficult to hit these savings goals. So what we need to do is come up with an order of importance for these savings goals and attack the ones that we can attack. So we're going to automate this process is the other thing. So you want to make sure that you are automating

your savings goals. Now, a way you can automate your savings goals is to use a bank out there that actually allows you to budget inside of your account. There's a bunch of them out there. There's ally. There's Millie. There's a bunch of different ones out there. But look for a tool that you can actually budget inside that savings account because it makes the automation system so much easier. And then what you can do inside of these accounts is you can start to automate and send money every single month to that actual savings category to your category. So you can make a category called your wedding fund. You can make a category called your car down payment fund, your house down payment fund, your emergency fund, your rainy day fund, your travel fund, all of these things.

And you can allocate, hey, I only have an extra $50 per month to allocate towards travel. And then once that account gets large enough, I'm going to pair that up with my credit card points, and I'm going to go on the vacation of my dreams. But I know it's going to take time. I'm not going to stop chipping away at that goal. And so that's one thing that you can do if it's in your order of importance. So say, for example, you want to buy a new house, and that is the number one thing you want to do.

You'd put that at the top as the most important thing, and you'd allocate as much dollars as you think you need in order to have that down payment on a house. Then the next item on the list, maybe it is making sure that you have enough money in your travel funds and then you put money in your travel fund then the next item on the list do you have enough money to filter into that third item or does that item need to sit on the back burner until you take care of one and two these are the questions that you have to ask yourself and even if it's a small amount of money i promise you even small amounts of money over time will build up jesse meacham the founder of why now he talked about this on a podcast one time a long time ago where i remember this

he was talking about one of his really really big dreams that he had and he wanted to save up for something really really big and i can't remember exactly what you're going to what the item was. But he started to just chip away, even when he was really broke, $10 away every single month towards that item. And eventually he got that item way faster than he ever thought he could. But part of it was because he started to chip away and start to save money for that thing. And it doesn't seem like much at the beginning. You may get six months down the line. You're saving 10 bucks a month. You're like, I got $60 in here and I'm trying to save up for a brand new boat. Well, that's going to be something where over time, as you start to earn more, you can start

to allocate more dollars towards that. But you're already a few steps ahead. because you started to put dollars towards that savings goal. So I would encourage you, if you could, even on the savings goals that are low, maybe put $5, $10, $15, $20, $25, $30, whatever you can fit into there, even if they're low priorities, if they really matter to you, if they truly matter to you and your family and what your financial goals are, then just put a small amount of money towards those and then make sure you're tackling the big ticket items, the things that matter.

If you have no emergency fund, that thing needs to be attacked first. If you have no investments, those need to be attacked first, then everything else can trickle down after that. So that is exactly how I would kind of think about short-term, long-term savings. And you can break these down by how long it would take you to achieve these goals. So say, for example, you're working towards saving for a down payment on a car and you know you're going to need a car within the next year, and you're working towards saving on a down payment in a house,

and you're going to wait five years for interest rates to maybe go down some. So you can start to allocate this by years and have those goals in place. You always want to set those goals, always have those available. My goals change every single year. And the reason for that is because life happens, life changes. And so you want to make sure that you are allocating your dollars based on what you need right now. And it's amazing how fast you can accomplish some of these savings goals if you just start saving. So really excited to see what you guys do with some of this.

And if this is helpful, please let me know. But if you have any other questions on this, let me know. I think it is a really cool system. We also have an episode called How to Save for Multiple Savings Goals. And that one goes even deeper than we win. into this right now. I remember when I needed to hire someone fast, but finding the right person quickly felt impossible. And if you've ever been there, you know how stressful this can be. That's where Indeed comes in. When it comes to hiring, Indeed is all you need. Instead of struggling to get

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Find your advisor at IGPrivatewealth.com. All right, the second one, I have an old HSA at Fidelity from my prior job that has no money in it. Can I just add money for my checking account into the HSA? And what are the benefits or penalties of adding money this way? My current employer does not have an HSA. So if you don't know what an HSA is before I dive into this, an HSA is stands for a health savings account, but an HSA is also a really cool way to save a retirement. I call it the super retirement account, and it may be my favorite account because it has triple tax advantages.

So the way that the HSA works is that you contribute money, and that money is tax-free when you contribute money into the HSA. It can grow tax-free. You can invest those dollars inside of the HSA if you have the right plan and you can pull the money out tax free for a qualified medical expense. But the IRS has no guidelines on the historic timeline of when those qualified medical expenses need to happen. So say, for example, you had a doctor's appointment at the age of 25 and you had an HSA open. You can reimburse yourself for that doctor's appointment at the age of 65. It does not matter how long it has been since you actually had that qualified medical reimbursement. So the way that you use the HSA is that you save all your medical.

receipts and then you just keep a log to make sure that you have that HSA up to date and up to par. We are working on actually just giving you guys the log that I use. We're just trying to perfect it on a spreadsheet. So we'll give you that log that I use on a spreadsheet and have that available for you here in the near future. But this is exactly how we are looking at this and making this work is making sure that turns is keeping organized, but the HSA gives you those triple tax benefits. So you are saving so much money in taxes by using that HSA. Now, if you already have an HSA open, your employer does not offer an HSA.

which is what this question is asking, then you have to figure out, okay, am I even eligible to contribute to this? So to contribute to an HSA, you must be enrolled in what is called a high deductible health plan. If you're not currently enrolled in a high deductible health plan, you are not eligible to contribute to an HSA. So you can check with either your employer sponsor plan, if that's where you are, or your insurance agent, if you're self-employed or something along those lines. And you can ask them, hey, am I in a high deductible health plan? I would like to start to contribute to my HSA. Now, currently, at the time I'm recording this, the HSA contribution limits for 2023 and 2024 at the time I'm recording this, the maximum contribution for self-only coverage,

if you're not on a family plan, just self-only coverage, is $4,155. And the coverage for family coverage, if you have a family plan, is $8,300 is the max that you can put in there. Those age 55 and older can actually make an additional $1,000 catch-up contribution as well. And the beauty, The wonderful thing about the HSA is once you have these contributions in there, you may be thinking, well, what if I don't have enough qualified medical expenses? Because that's a good chunk of change. That thing is going to compound over time. What do I do? Well, this thing, by the time you turned to age 65, just turns into a traditional IRA. It operates the same exact way, essentially. So that is you're out for this, is you still have just another retirement account, basically, available to you at that point in time. So that's what you want to check is your eligibility. Can you actually contribute if you haven't contributed yet? this listener has not contributed yet, so they are wide open for that part, but you've got to have that high deductible health plan. Now, the benefits to this, that was the second part of the question, or there are tremendous tax benefits. Obviously, you get that triple tax advantage. So if you contribute to an HSA, that is a tax deductible event. So either you, when you do your

taxes, which I advise having a CPA doing your taxes, if your CPA is doing your taxes, then they can make sure that they take that tax deduction. So if you put $8,300 into your HSA, that means you are going to reduce your tax liability by $8,300. So that is a fantastic thing that you have available to you. And because it grows tax-free, that money is going to compound. And the growth over time is going to be completely tax-free money, and you can pull that money out tax-free. Now, are there penalties to this?

Well, if you withdraw money from the HSA for non-medical expenses before the age of 65, you'll pay a 20% penalty plus taxes on the amount withdrawn. Now, most of you will not do that because you can just use those qualified medical expenses. if you need them. But after the age of 65, you can withdraw money for any reason without the 20% penalty. So you can withdraw it at any point in time. And if it's not for medical expenses, you'll just owe taxes on that withdrawal, just like an IRA or a 401k would work. So same exact thing there. Now, if you wanted to add money from your checking account, you can just transfer money from your checking account into your HSA. And then once it's in that HSA, you want to make sure that

you are investing those dollars so they can compound over time, unless you're planning on using that money from the HSA for medical expenses. If that's the way that you want to go with this, which is not the way I use it at all, I use it to compound as in a retirement account, but if you wanted to go that route, then you can do that because at least the money will carry over year over year,

whereas it's something like a flexible spending account, an FSA, you may have seen those in the past. You have to use the money. It's a use or lose it situation. So the HSA is still better for a lot of things when you are going to spend the money, although I do not spend the money because I'm looking to compound that money over time.

Now, if your employer doesn't offer an HSA or they won't match or contribute to your HSA, this still doesn't prevent you from contributing on your own if you meet the eligible criteria. So that is exactly how I would think about the HSA. Yes, you can contribute from your checking account. You can move that money over as long as you have that high deductible health plan. And the benefits are the tremendous tax benefits that you have available to you if you are using the HSA.

All right. The next question is, I heard your identity theft episode. and you gave a ton of great tips. But if you were to narrow that down to the three most important, what would it be for preventative measures? Okay, so if I was going to narrow down the three biggest things that would help protect you against identity theft, these are going to be the three things.

And this would give you something closer to an 80, 20 protection plan and be able to kind of help you through that process. So the first thing I would do is look at freezing your credit. Freezing your credit is going to help you with so many different scenarios when it comes to protecting yourself online. and a lot of people don't want to do it because it's just a tedious task that they have to go out and do. But the way that this works is that when you freeze your credit, all you need is like 10, 15 minutes to be able to do this. And you call the three major credit bureaus and you say, hey, I just want to freeze my credit until it's time to open up a card again.

They'll walk you through the steps on exactly how to do that. We walk through the steps on that episode. And so freezing your credit, what this does is that anytime somebody steals your identity or tries to steal your identity and they try to open up, say something like a student loan or maybe a car loan in your name. or a brand new credit card in your name. All of these things cannot happen because you've freeze your credit. You're the only one who has the power to unfreeze your credit. So the way that you unfreeze your credit is you call those credit bureaus and say, hey, I want to unfreeze my credit.

And then you can apply for whatever credit card loan or loan or mortgage or whatever else you want to do, you can go back and do that. So each time this process takes five, 10, 15 minutes, the more you do it, the easier it's going to be. And really, you don't need your credit very often. I mean, are you opening more than one credit card per year? and or are you getting more than one loan every single year? So it ends up being maybe a once a year thing. And even if you open up a lot of different credit cards, like someone new travel hacks, for example, it's still not that big of a deal. So making sure that you are protected for 15 minutes of your time, once, twice, three times a year is not truly a big deal. So freezing your credit is number one. That's going to be a big difference. Number two is looking at identity theft insurance. And there's a bunch of different providers out there. I don't think you need anything major. But having identity theft insurance is going to help protect you from a lot of things when it's going to comes to identity theft. So the way that you go find that is you can look at providers online

and or a lot of insurance agents now. If you have an insurance agent that you trust locally, they can help you find identity theft insurance also. And a lot of businesses are even taking this on because they want to protect themselves, they want to protect their employees, and they want to protect their customers. So identity theft insurance is probably imperative if you have a business. But if you don't have a business, you can look into it and see if it works for you. There are tons of different types of plans when it comes to identity theft insurance. So make sure you are looking at that. And in addition, to identity theft insurance, you can have identity theft monitoring as well, which goes along the

same lines. The third thing, though, is to remove your personal information online. You've heard me talk about the Satan, which I tried to do that manually originally because I had my identity stolen. So when I originally did this, I tried to remove my personal information online manually. Because if you go out there and you Google yourself, what you're going to see is a bunch of information about yourself. So I tried to figure out how to do this. And once I started doing this, it was a very time consuming process. But then a friend told me about a service called Delete Me. Delete Me is a service that has saved me a significant amount of time. And what they do is they go out to all the data brokers online that have your information

and they are portraying your information online. And they have them remove your information online. And getting your data removed from data brokers is one of the best things that you can do to protect yourself online. Because if somebody gets a piece of your information, then they cannot go out there and Google your information and find the rest of your information to piece together to try to open up a car loan or a credit card in your name or whatever else can happen. So Delete Me helps you take your personal information online, which significantly helps you protect yourself online from identity theft or from fraud or anything else along those lines.

So I loved this service so much when I started to use them because it saved me so much time that I decided to partner with them and get you guys a discount on Delete Me. So if you go to join DeleteMe.com slash PFP and use promo code PFP, you'll be able to save 20% sent off of your DeleteMe subscription. So if you go check that out, it's join Deleteme.com slash PFP and you can use promo code PFP. It is a very reasonable price that you pay every single year for them to continually remove your personal information off of these websites. So it's really, really important to do this. I think it is one of the best services that I found last year and I will always be using them because the amount of time that they save me. And it's going to help me be protected from fraud, online scams, all those different things.

it just significantly decreases the chances that some of those things will happen to you. So it's a great service. Go ahead and check it out. We've got that 20% promo code to help you guys out because I love the service so much. One financial concept that I wish I knew more about was taxes and how taxes are determined for individual non-retirement accounts. So this is a great question because a lot of people are trying to pursue financial independence. So they are using taxable brokerages or non-retirement accounts as stated in this question to actually have some flexibility when it comes to retiring early. So there are a couple of different things that you need to note when it comes to the types of income that are in

taxable account. So if you don't know what I mean by taxable account, this just means if you go to Fidelity or you go to Vanguard, Charles Schwab, you go to M1 Finance, you just open an account that's not a Roth IRA or an IRA or anything else. You just open a standard brokerage account. You can even think of these accounts that you open up Robin Hood or E. Toro or any of these other brokerages. This is just a standard taxable brokerage account. There's no. tax advantages to it whatsoever outside of it being taxed at a less rate of return for long-term capital gains than your income would be talked about that in a second. So there are three different types of income in these taxable accounts. So the first one is dividends and dividends are either

qualified or non-qualified. And the tax rate for qualified dividends is generally lower than your ordinary income tax rate while non-qualified dividends are taxed at your regular income tax rate. So obviously qualified dividends are going to be better to have in a taxable brokerage account than non-qualified dividends would be non-qualified dividend investments, things like REITs like and other things like that would be much better in a Roth IRA or some sort of IRA. Then there's interest and this is the money you earn from bonds or cash holdings inside of some of these accounts. If you earn interest in these accounts, that is typically tax at your ordinary income tax rate.

And then there's capital gains and there's two different types of capital gains. There is short-term capital gains. and there is long-term capital gains. Short-term capital gains, you are taxed at a much higher rate, and it is if you hold an investment for less than a year. So if you hold these investments for short-term, if you're a day trader, or you're just buying a company, for example, that you read an article about a company,

you bought it on a whim, and then you decided, oh, this is probably not the best idea to just buy a stock based on one single article, and then you go and sell that stock, well, you're going to be taxed at short-term capital gains, which is going to be a much higher rate that is actually going to be taxed at your regular income. income tax rate. Whereas with long-term capital gains, these gains are on assets that you've held for more than one year. And so this is a very important distinction. And you can be taxed at a 0%

rate, a 15% rate, or a 20% rate, depending on your taxable income. But the majority of people out there are going to be taxed at that 15% rate right smack in the middle. If you want to be taxed at that zero percent rate, then you need to make less than like $42, $43,000 a year, something like that. So that is one thing on taxation of capital gains. Now, inside of these accounts, you can do things like tax loss harvesting, for example, because they are tax. So you can do tax loss harvesting inside of taxable brokerage accounts. We're going to have an entire episode on that, which we will dive deep into it. So you'll have a lot of things there.

But in addition, you also have to understand cost basis when it comes to these accounts. Now, when we had our taxable brokerage account episode, we talked a lot about cost basis because it's very important to note when you are thinking about these counts. So the cost basis is the original value of an asset adjusted for stocks. splits, dividends, and capital distributions, and is used to determine the actual profit or loss when you sell an asset. And there's a lot of efficient ways to figure out this cost basis, especially when you are inheriting some of these accounts. You've got to understand how some of this stuff works and the original value of some of this stuff. So some investments are also more

tax efficient than others like we just talked about. So things like REITs, you really don't want a taxable account because of how those dividends are taxed or tax at your ordinary income rate. So you got to make sure that you think about this and make sure that you have more tax efficient investments. I love index funds and ETS because they're extremely tax efficient. What you want to do is if you want to see the tax efficiency of index funds or ETFs, you look at what is called the turnover ratio is one way to look at this, but there's a bunch of other factors. But the turnover ratio is my favorite quick way to look at this. A good turnover ratio is going to be less than 30%, which most good index funds and ETFs have that.

Whereas like mutual funds, for example, will have a very high turnover ratio of 50%. That means they're buying and selling a lot of securities, which is, triggering a lot of taxable events. So keeping that lower is going to be something that's going to help you tremendously over time. And then also, that's the main consideration that you really want to think about. And honestly, it's the investment that you have in the account are the things you want to note. And then long-term capital gains tax, short-term capital gains tax, you can think about and consider tax loss harvesting depending on what your investment plan is. And then understanding cost basis. Those are the big pieces that I would understand as you go through this process with

this taxable brokerage account. But if you can keep you, your income low. If you can figure out ways to keep that income low, you can pay zero percent tax on capital gains if you can figure out how to keep that income lower. And there are ways that some people figure out how to do that. You could do things like when you do Roth conversion ladders, you make sure you use the standard deduction and all those other things that we've talked about in the past. So this is something where when you are looking at this taxable brokerage account, I love them for the flexibility. I think they are a big part of having a diversified tax planning plan. So you want to have your Roth IRAs or your post-tax accounts.

You want to have your pre-tax accounts like your 401Ks, 403Bs, 457s, all of those. And then you want to have your taxable for that flexibility. And that's going to bridge you, especially if your fire strategy is to use something like the Roth conversion ladder. You're going to have to wait five years when you convert that money over. And so having that taxable brokerage account will give you that bridge in financial independence. So listen, I hope you guys learn a ton in this episode. If you guys have any questions, make sure to hit me up.

All of these questions today came from being a part of our newsletter. When you join our newsletter, we send down an email that says, hey, if you have any questions, send them to me here. And I read through all of those questions. And if I haven't responded to you, trust me, I've read your email. And what I do is I compile these into a list and make sure that we are answering these questions in one way or the other, either on the master money newsletter and or on the podcast. So these are two different ways where you can really make sure if you have a big question,

make sure you are on the master money newsletter and then all of a sudden once you're on the newsletter you're going to get an email once you get that email respond to it it'll say you can respond right here to it you respond to that email ask me your question and those questions will be prioritized always so you guys are giving me some great questions from the master money newsletter we will be answering a lot more going forward in the future so really really excited for that thank you so much for sending those in and thank you for listening this episode and investing in yourself because that's exactly what you're doing you are investing in yourself when you listen to this podcast and that is the greatest investment you can ever, ever make.

I truly appreciate each and every single one of you. If you got value out of this episode, consider leaving a five-star rating and review on your favorite podcast player. Can I thank you guys enough for listening? Share this with a friend or family member who may be able to benefit, who is looking to build wealth as well.

Thank you guys so much again. I will quit rambling. We will see you on the next episode. Rosen lasagna, medium power, 15 minutes. Sounds like Ojo time. Let's play. Feel the fun with Playojo. The online casino with all the latest slides.

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