How to Rebalance


it’s the weekend and you have financial
questions that need answering that can only mean one thing
it’s time for Jill on money the show that takes the mystery out of your
finances here’s your host Jill Schlesinger welcome welcome
it’s January I can’t get away from it it is January welcome to your January 2020
new year new decade hope you had a good holiday season hope all as well as you
start off the brandy new year hope your team did just fine in the NFL playoffs
or the team that you hate lost early enough that it makes you feel good
that’s just a little side note for me and Mark you we’re not saying which team
we’re not alienating you not happening but I bet you can guess this is the
program that takes a mystery out of your financial life and we are broadcasting
live from the Capital One studios Capital One what’s in your wallet that’s
a question for you okay so let’s see we got a lot going on here so much happened
I got a whole slew of emails from all of you about the secure Act relax calm down
we are going to do a whole episode that will be really geared towards what you
need to know about the secure Act which is really big change and overhaul to
retirement plans in the meantime if in fact you cannot wait until we do that
here’s what you’re gonna do you’re gonna go to Jill on money.com okay underneath
you get you click you you call it up and what’s there me and Mohamed el-erian
it’s an old it’s an old haircut everyone relax I know my mother wants me and to
get me a new one okay now scroll down and there is a blog post that is at
which asks will the secure act rescue retirement so again this is really
important these are big changes biggest changes in more than a decade
for retirement people and so it’s not just important for people who are
already retired there are a lot of features of this that are going to
impact all retirement savers so until we do the full-on broadcast that is devoted
to the secure act you can go to the website Jalan money.com and just go to
the blog post will the secure act rescue retirement and guess what I’ll answer
that question okay so that’s number one check that out number two if you’ve got
a financial question and there could be a lot of things that have come up
towards the beginning of the year I know that this is a great time for people to
consider what they’re doing with their financial lives you just send us an
email it’s asked Jill at Jill on money.com ask Jill at Jill on money.com
or maybe you’re on the website and you’re reading that article about the
secure act in that case just hit the contact button it’s in the upper right
hand corner alright we like to start the program off with a real live caller
today it is Eric in Texas hello Eric welcome to the program who do you root
for which NFL team my friend oh that’s a good one I have not watched football in
years actually Oh Eric I just said to mark that I had not either but for some
reason I got sucked into this year I think I got a new TV and the the picture
is so beautiful so anyway I am sucked in so I just want you to I would encourage
you to at least try it out usually with a sound down a little bit anyway hello
Eric what can I do for you sir good morning Jill such a pleasure to talk to
you as well no I have a kind of a mash-up of some different questions
begin to financial planning listen to every show you’ve put out read your book
this one is kind of an overlap on a few things
so I’m 31 years old active-duty Air Force officer been been
in the sea for almost about eight years now so I have a very predictable salary
I know when I’ll get raises know about when I’ll get promotions
bonuses things of that nature so the financial planning outlook is actually
fairly simple mm-hmm because I can see the next 12 years of my life pension
after that healthcare with that all that kind of stuff so I my wife works as well
no kids and so we’ve kind of got this on autopilot for right now we’re a little
late to the investing game but I can kind of you know have a have a bright
future with all those things included so you think that that did you just make a
little autopilot pun because you’re in the Air Force not intentionally I was
well I think I do it on accident now I like that it’s very good so you have a
predictable financial life not a predictable real life obviously right
now and that’s thank you for serving do you get do you feel about when people
say thank you for serving because some military people say they find it
pandering do you think what do you how do you feel about it um I I’m not sure I
love what I do I’m like there’s kind of a running joke that’s like happy to be
here proud to serve which is sometimes said and jest but like I really love
what I do I wouldn’t be here if I didn’t and so it’s not really so much that I’m
like I’m happy I’m glad that I get the opportunity to do this mm-hmm so it’s
it’s not something to be thanked for okay no I’ve definitely you know
deployed a couple times missed more than my fair share of holidays birthdays
anniversaries all that kind of stuff so I’m familiar with like that side of the
sacrifice but again like I just love it I’m proud to do it so well I don’t need
to thank all right you I do appreciate it all
right well we appreciate what you do how about that all right I would do that no
I’m not thanking you thank you for being so happy okay so now let’s talk a little
bit about what’s going on um you said that you got into investing a little bit
late so tell me a little bit about both of you first of all how much money do
you earn together just above 150 okay and that cash flow is good for you do
you you know you’re there’s no outstanding debt I bought a new car a
couple years ago and we bought her one last year part of the dual income no
kids thing and then she’s still sitting on about
$50,000 of student loans from her bachelor’s and her master’s degree okay
outside of that we don’t have anything we’re talking we’ve got about twenty one
thousand in cash savings we’re adding a thousand dollars every month to that or
additionally paying way way way extra on her student loans so making good
progress there how much is how much is the interest
rate on the student loans I it’s somewhere in the 6s yeah okay
and the car debt what’s the interest rate and what’s the outstanding balance
on the two cars together together it’s sixty eight thousand the
mind that I think mines it about I think they’re both somewhere right around
three percent dude 70 grand almost in car loans
yes kind of car did you buy so I bought a Subaru sports car a couple years ago
and then we bought her a Chevy Tahoe isn’t it fair to say that you since you
fly planes for a living that you should be a very boring driver I’m just kidding
you all right hang on Eric we’re gonna come back we’re gonna talk more about
what’s going on in your I got now the big picture we’re gonna talk about your
investments we’re gonna get all of your questions answered I promise I don’t
love the car loan thing mark it’s a lot of money exactly I mean I appreciate
that listen you’re right double income no kids but I hate you know what I’m not
a car person as has been you know repeatedly proven on this program so
maybe I don’t get that okay its Jill on money when we return Eric
are active-duty military man and his wife have more questions and we’re gonna
answer those questions so stay tuned Jill on money if you have a financial
question shoot us an email ask Jill at Jill on money.com we’ll be right back 401ks IRAs refinancing she covers it all
back to Jill on money with Jill Schlesinger your back it’s Jill on money
if you’ve got a financial question we’d love to hear from you our email address
is ask Jill at Jill on money comm mark are you sensing that my break did did
wonders for me aren’t I in a good mood I was a little fried at the end of last
year and so I took a little time off a lot of time off it was fantastic did not
prevent us from putting shows out I’m just saying that to get those shows out
took a big Herculean effort by yours truly and her number one man Marc T all
right let us get back to our issue at hand and that is Eric from Texas who
with his wife getting their financial start and Eric you said how old you 31
how old your wife 31 and she is 30 okay and no kids and you’re not gonna have
kids right it’s a discussion but um really no further than that right now
you have to go beyond a discussion I have to tell you all right just saying
I’m not an expert in that but okay so you’ve got some money in cash 21 grand
how much would an emergency reserve of say six months be for you guys who I
probably thirty okay so you’re putting in a thousand bucks a month so as that
that will get you know obviously that will go up to a thirty pretty quickly
okay so that’ll be you know this year thing you’ll have your emergency reserve
beefed up to your six months which probably is not the worst you know you
don’t need to do 12 months you are as you said you’ve got a pretty predictable
income as a military person what is your wife do for a living right
now her backgrounds in education but we’re in a real small town so as a
college educator so there’s not a lot of places for her to teach because she’s
pretty specialized so right now she is she also works on base she is a civilian
government contractor okay all right so tell me
so you guys of great income 150 grand you got the
debt on the cars you heard me give you a little bit of chiding for that okay fine
I’m gonna let it go she’s got 50 grand in student loans so you’re working on
paying that debt down faster right and and so what’s going into retirement
right now so right now she does 10% to a I believe it’s Roth to a 401k and then
she gets a three and a half percent match great and then I’m doing five
percent to a Roth TSP and getting a five percent match as well fantastic that’s
great so you’re doing the five percent she’s doing the ten percent you’re
saving the thousand dollars a month you’re paying making extra payments on
your student loan on her student loans yours together whatever I’m and so
that’s about all you can do right now is that right yeah okay I got it that
sounds like a good game plan I like that I mean making the extra payments on the
obviously a 6% student loan makes a ton of sense really good now is there any
reason why you would see any change to her income in the future or at least
like near-term at least no okay got it how about any housing would you live in
military housing do you own a home what’s up so we own a home on a 15 year
VA loan so making really good progress on there we’ve been here for about a
year and a half and I’ll still be here for about another two two and a half
years yeah so estimated equity when we sell it somewhere around 40 so hoping to
maybe use that to kill off the student loans when we leave here and that’s a
definite in other words like are you making extra payments on that VA loan no
3.875 on a 15 years no I’m I’m making killer progress just by making the
minimum perfect I just don’t want you to make don’t make any extra payments which
is great okay so this sounds great now what’s your question so basically
because I can see the rest of my my at least my military future with pay and
raises and bonuses and that kind of stuff we have where we want to be for
retirement and so if we do everything kind of on plan and then get just a 6%
year over year return will easily hit our target so I
kind of just have like the gates that I want to hit every year okay and so the
the target for the end of this year was right at like fifty thousand yeah but
good market year and putting some extra money there the actual is over fifty
eight I know we have I don’t want to say an extra but like an extra like eight
thousand dollars over where I would want to be yes but since she’s only in one
account and I’m only in one account there’s not really a way to rebalance I
don’t think I gotcha so all of all of mine in the Roth TSP is all in a
lifecycle fund mm-hmm target date fund or whatever you want to call it and so I
sure that there’s any way that that rebalance is itself other than changing
the risk based on the time horizon okay you’re in what year lifecycle 2050 okay
and what is she in I need to check I’m actually not sure okay
because I mean one thing you could do if you I mean again as you you could
potentially take the money out of the lifecycle fund as you gather more assets
like you have how much in your own Roth TSP right so the split is forty is mine
eighteen is hers I mean you could potentially say at you know with this
much money with forty grand now you’ve got a nice cushion there you can now
move into say like I’m gonna put some money into G fund that I’m going to put
some money in the C fund and call it a day and then you can change you can
reallocate a little bit if you’re just gonna stay in the TSP and you you know
you’re not gonna worry and just want to let it be till you get a little bit more
money in there that’s fine let it go then what we could do potentially is if
your wife is in a 401 K with a target date fund I’d love to know what her
choices are in her 401 K maybe we’ve got some different choices that we could
allocate and that would be a kind of like a little rebalancing you’re not
gonna get her true rebalance in that 2050 fun so you know essentially I think
you know this but the extra seven thousand like your target that you know
I wanted fifty I’ve got fifty-seven fifty-eight it’s not really extra it’s
just money that you’ll need because again like the
prior year the markets were down so you had it rotten year so it all will kind
of smooth out but if you want a little more control and be able to rebalance a
little more actively then we’ve got to find which assets in each of your
accounts make sense for you sure so would you mentioned the G fund the C
fund would you recommend it maybe like a target date fund like a 2030 yeah I mean
you what you can do is you can kind of make yourself wimpier right yeah that’s
how you do it we’re both in that category right right there with you
already so then yes the way the other way is if you just want to hang want to
make it easy yes use a date that’s closer to right
now which would mean you know instead of having more if you look at the you drill
down into the funds and you’ll see that I think in the 2050 fund you probably
have a lot more in the equities and a lot less in the bonds but if you choose
more of like a 70/30 split that’s probably gonna get you exactly where you
want to go with a smoother ride okay and that’s it how about that – easy come on
what’s with you in the car though I mean really you have the need for speed I
know it’s such an annoying thing yeah I I definitely have since I was a little
kid I’ve had a bunch of just like stupid fast motorcycles I got rid of the last
one a few years ago I think it’s because I have to fly safe
so I’m a I teach pilot training and hi nice mobility pilot when I’m not
teaching pilot training so almost like Airlines big heavy slow so in order to
get that fix I kind of have to have the fast sporty car I have two words for you
virtual reality put some of those glasses on get with your buddies who are
like the drone guys and just like play and you know whatever anyway give us a
call back if you have any questions you are a delight and I wish you all the
best you’re doing great job right now if for some reason there is extra money
that is dumped in your lap if your wife were to get a different job if you know
your great great great aunt Sara dies and left you money your number-one
priority would be to put down extra money on the student loans again that
six percentage interest rate should be the
the real focus don’t do anything different keep putting money into your
retirement account but think about this once that emergency reserve fund is
built up to about 30 grand the extra money that you have that
thousand dollars a month that’s going into that emergency reserve can now be
used to accelerate the student loan debt pay down that’s where it should go and
then once that is paid off you Eric will be able to increase your Roth TSP
allocation up to that same ten percent that your wife is doing and I think you
guys are in great shape if things change and you decide to advance your
conversation about kids we’ll weave that into the game plan but so far so good
you are doing terrifically well so thanks for calling Eric if you have a
financial question like Eric and his wife just give us a shout you can email
us ask Jill at Jill on money.com we’ll be right back welcome back to jail on money where Jill
Schlesinger takes the mystery out of your finances yes indeed it is very
exciting to be here with you it’s January hope it’s January mark it’s
still January right all right good and you are listening to the Jill on money
show if you’ve got a financial question we’d love to hear from you our email
address ask Jill at Jill on money.com ask Jill at Jill on money.com okay mark
says it’s time to do some emails so here’s what I’m gonna do drop in the
microphone down sitting in my chair cuz I I like to stand up you know and so I
think I’m gonna go back down because the knees a little tight right now here we
go this is from Ray who listens to us on
KYW radio in Philadelphia and poor ray says I’m terrified I’m about to be 62
I’ve got $140,000 in a savings account I made some money on CD CDs back when they
were paying 8% and Ray receives Social Security disability income of $1,000 a
month he does have to pull some money out of savings to help with the bills so
this is the worry I have a 91 year old father that is in Hospice
I will inherit what once was 1.3 million dollars in stocks that are in a
self-managed account with Ally investments so what once was so there is
1.3 million dollars now there’s a million dollars in an account mm brother
last year we lost $100,000 on GE stock but also took money to paid for pay for
skilled nursing care and then Adam he says I
$200,000 in cash into a joint checking in almost three years in a nursing home
it’s drained over a quarter of a million dollars all right but meanwhile he said
this does say my dad picked out some stocks many years ago um but he says I
am worried he will outlive what’s left in cash I keep here the market is going
to tank in 2020 I’m gonna lose everything the nursing home is wiping us
out oh boy so he says I don’t trust local financial advisors I’m scared I’m
concerned I’m going to lose my house and his house you’re not gonna lose your
house all right so first of all you’ve got a million dollars in cash okay so
the best thing that you can do right now is to take some of the money that’s in
stocks and essentially move that into cash see if you can take I mean you said
you lost money on GE I bet long-term you still have a gain but I would go through
the account and start to free up some cash okay so if you think about it if
you know it sounds to me that the three years there’s a $9,000 a month I mean I
don’t mean to be crude about it but if your dad is already in Hospice it would
seem to me that this is not going to go that much longer so if you’re really
worried then what I would say is put more money in cash and keep a little
extra money there you you’re not gonna the thing that you could lose
essentially is you could plow through the money’s for some reason this you
know you start plowing through tons and tons and tons of cash which I just don’t
think is gonna happen that would be as if he were gonna live you know ten more
years it doesn’t sound like that’s gonna happen you’ll get you’ll get some money
and whatever it is it is I sort of feel like at this point it’s crazy for you to
make yourself nuts ray I think you’re okay if you need more money then make
sure that money is in cash don’t fret too much all right mark what
can I do to make this guy feel better you still got a million bucks I know
don’t say that though people who are in distress hate when you say it could be
worse it’s like a very susan Schlessinger comment well you know you
could be dying well you know yeah but that’s not making me feel better in the
moment Suzanne writes I need to help on my
health insurance plan I retired this past May and lost our health insurance
plan for me and my husband and I’d read the principle of health insurance and
just hate how the prices are high anyway late 40s very healthy don’t go to the
doctor except for annual physical and so she’s thinking about a high deductible
plan that’s good with HSA eligibility HSA is the part I’m confused about it’s
not just putting money on an account every month free of tax and you can only
use the money for a medical expenses yeah and it does roll over because it’s
actually available for ever so it even can help you in your retirement um so
the question is do you think it’s a better idea to use a high deductible
plan and with the paired with the HSA or just by standard insurance you know what
it’s it’s a crapshoot if you guys are really healthy then it can work great so
I would try it and the thing that is important of course is if you think
you’re gonna have some big procedure like you need a knee replacement or
something then it’s not good to do an HSA and and really you got to be
thinking about traditional insurance but for now yeah we’d go for it and make
sure that that works I think I think it should don’t sweat too much it’ll be
good why do people hate the health insurance so much I mean I get that
you’ve hate it because it’s expensive but it’s like the idea of the health
insurance the idea of insurance is so awesome that you pool everything
together all of us and we get into the pool together it’s great
and you hope you never need it as mark says Lawrence or Larry writes my wife is
getting ready to retire from the government there’s an option to take a
survivor benefit for me if she were to pass away before me it would reduce her
monthly benefits by 325 bucks a month we’re both in average health we’ve got
three and a half million dollars in retirement accounts hold on a second
whoo okay I’m 65 I got my own business I like working so I don’t plan on retiring
soon do we elect survivor benefits or take the additional money
ah I know I know I would like survivor benefits also it’s just not a ton of
money and it’s not a big difference I’m taking the survivor benefits also mark
and I both sort of went there you know what we’re wimps there’s probably a case
to be made for doing the other but I like the survivor benefits I think you
do it I think so okay when we return we’re gonna get back to more of your
questions if you have something on your mind just shoot us an email ask Jill at
Jill on money.com and if you’re poking around our website Jill on money.com we
also have a contact button it’s in the upper right hand corner okay we’ll be
right back follow Jill on Twitter and Instagram for
more personal finance content just use the handle at Jill on money now back to
the show you’re back it’s Jill on money if you’ve got a financial question we’d
love to hear from you send us an email ask Jill at Jill on money.com
or when you’re on the website Jill on money comm is our website upper
right-hand corner little contact button right there okay this is from Robert who
says I need advice on what company is safe to contact to obtain debt relief
from a credit card company health issues in our family we’re not covered by our
health insurance company and it created a large medical debt do you know this is
so common that prior probably in in the early 90s or so I started reading that
the number one cause of bankruptcies in the United States was medical debt and
this is so man it’s it’s pernicious anyway let’s go back to Robert who says
I hear radio ads that promote companies that say I can obtain some debt
forgiveness and lower the interest rate and but he says he’s got a couple
organizations National Foundation for credit counseling and another one and he
says I’m 75 years old I’ve had a major reduction in real estate commissions not
a great place to be helped I mean look there are some legit organizations right
but I think that what you really want to be considering is making the
conversation come directly from you I think when I hear about the most
successful debt negotiations with card companies they come when the person him
or herself makes the call so especially for you if you’re a real estate person
you’re probably good at talking you’re probably good at sales I would just call
the company yourself make the pitch and if you want to tell us a little bit more
about yourself and what’s going on then indeed I would say that the most
thing that you could do is just get on the phone and do it okay do it do it do
it do it okay Becky writes that I have a safety account that has $100,000 it’s
earning 2% my child has outstanding student loan debt of around $100,000 hey
Mark imagine that just the exact same amount one hundred and a hundred of
course now think about this the student loan debt has got interest rate of over
five percent Becky’s earning two percent she says my
goal is to help her pay down her student loan debt ASAP your thoughts on how to
best manage this I have no debt I own my own car home and car I don’t know
anything else about you Becky I mean if you’ve got ten million dollars in the
bank Shore and you know and in other assets or you’re completely set for your
retirement I mean I’m very concerned that people take their savings and pay
down their kids debt and then they regret that ten years from now when they
wish they had their money in that account so what I would say is that you
really should make make sure that you’re secure and without more information I
can’t tell you whether or not that’s the case all right all right let’s get more
info we’ll rights after twenty years worth of contributions into my 401k my
wife and I planned on earning less last year that’s because I put it took
temporary leave I put about six thousand dollars in our Roth 401k instead of the
regular 401k I didn’t realize the Roth would go into the same account and the
funds oh brother all right so this would happen the money
went into the this to one big master account instead of having two separate
accounts what a pain in the ass brother anyway plant administrator told me the
gains on our company’s Roth will be taxable I’m withdrawal is this true in
my case is there any way what you need to get
someone else on the planet administrators and to help you that’s
what I’m tell you right now i’m what i would say
is maybe you can work with a plan administrator to recharacterize that and
say i’m not i want that money back i don’t know if you can it sounds to me
like well how is this possible that through your employer they commingled
the funds I never heard of that and it’s not it doesn’t seem right to me I feel
like we need more information we’ll and I think that you’re gonna have to
escalate this and keep calling till you get someone who can really help you out
really truly if it’s terrible alex is a disabled veteran lives near VA
facility they cover me for everything I’ve asked many people I can’t get a
legit answer can I drop Part B of Medicare I’m financially okay I’m
retired what do you think I don’t think you can I mean you got to talk to
someone at the VA but I wouldn’t do it before I talk to somebody at the VA
that’s for sure okay JC is retired wants a diversified
portfolio of income-producing investments I have enough invested I’d
like to start taking income from my portfolio how do i restructure my
portfolio into an income stream I’d only be taking dividends and interest from
the account and letting the balance ride I don’t like or want annuities any more
info JC’s got to get on the phone I want to know how much money you have I need
to know what you have invested in currently and then we need to have a
game plan this is too big just for you know a one paragraph or easy description
from me you need I need more info how much time do I got under a minute Sam
took early retirement years ago package included pension and I believe the
company’s about to be sold if that happens or my monthly pension payments
safe or could the new owners in an effort to cut costs decide to no longer
pay pensions to retired employees that would be highly unlikely that that
happens it’s more likely that the old the new people will not be eligible to a
pension so I think if you’re already earning a pension you’re probably okay
you can talk to the benefits people at the new company
when it that actually happens but I think you should be okay you are
listening to Jill on money if you’ve got a financial question give us a holler
send us an email ask Jill at Jill on money comm we’ll be right back you’re back it’s Jill on money we are
broadcasting live from the Capital One Studios here in New York City Capital
One what’s in your wallet this is a question that comes from LC who wants to
know is it are you ever too old to invest in stocks or stock mutual funds I
have a senior relative in her early 90s modest portfolio about a half a million
dollars it’s all in money markets and interest-bearing savings accounts I mean
early 90s you can understand that flipside is very little return in the
current market so she’s a widow she still lives independently in a house
that’s paid for she lives comfortably on Social Security and her pension there’s
no long-term care policy so if there were a future need for skilled nursing
facility these funds would be the prime source to pay those bills my research
indicates a good ballpark figure to stay in one of those places about a hundred
grand a year her nest egg could be depleted pretty quickly if this were to
occur okay but I just would point out to you that you’d also have yes the nest
egg would be depleted but you also would still have your Social Security and the
pension which I don’t know is how much but I mean that would if it’s a so let’s
just say that Social Security and pension right now was 50 grand and the
facility cost a hundred grand you need 50 grand a year to help her out okay did
that said I’m wondering is it worth the risk to put some of the money and more
aggressive investments to create a bigger cushion for the future or should
be left alone with zero list litt risk this is funny I would say this I think
putting 10 15 even 20% into the stock market wouldn’t be the worst idea in the
world just to give you a little juice of
course I’m saying this after we’ve had a year when the S&P 500 was up almost
there percent so it feels horrible to say that
but you know even if it’s just 10% in a an SP 500 fund I think that you know
that might give you a decent shot at getting a little bit extra return for
her obviously she has to feel comfortable with this so let’s see if
you have a conversation that that works all right I think we’re done mark says
that’s it we’re done with this hour so I got to do a nice little outro for you
all when we return it’s the interview part of the program and special guest
star coming up you’ll have to wait and see who that guest is but it is Jill on
money during this break why don’t you go over to Jill on money.com and you can
subscribe and sign up for our free weekly newsletter and you can subscribe
to our podcast it’s called Jill on money so check it out it’s all at Jill on
money comm we’ll be right back it’s the weekend and that can only mean one thing
you’re listening to Jill on money the show that takes the mystery out of your
finances here’s your host Jill Schlesinger welcome welcome it’s our
number two it’s jill on money and yes we are competing with the National Football
League this weekend I don’t want you to worry if you decide you must be watching
football maybe you’re in transit going to somewhere somewhere important maybe
you’re doing something fabulous in your life don’t worry you can always go to
our website after the fact and you can listen to the show and I’m gonna tell
you you’re gonna want to listen for this guest or these guests I should say
because there’s two of them a married couple who have decided to oh I should
mention that we are broadcasting live from the policy genius Studios policy
genius is the easy way to compare and buy insurance just go to policy genius
comm okay there we go now here are our guests they are part of the fire
movement financial independence retire early now we’ve talked about this before
in the program I’ve talked about this in variety of different outlets
I think this movement is amazing I’m much more interested in the FI the
financial independence than the retire early but that said I’d love you to meet
this really interesting couple Christie Shen Bryce Lou Wong they’re married
they’ve written a book called quit like a millionaire and that book does outline
a lot of how they got to this place where they were focusing on how to be
financially independent and how they hoped to retire early so much of it has
to do with their backgrounds and that’s where we start our interview with
Christy Shen and Bryce Lou Wong first let’s talk about your journey you have a
first generation mindset which is really instructive for how you were able to
kind of go through this process in a lot of ways and how you’ve managed it so can
you talk a little bit about take us to your roots your life and your journey
sure so I wrote this book and it kind of follows my journey from living in rural
China and then later on immigrating to the west and it’s split into three parts
where I talk about poverty and then middle class and then finally becoming
rich and the reason why I did that is because I want to show people that you
don’t have to be privileged to become financially independent which is
actually one of the criticisms that you’ve encountered from the firemen oh
it’s a bunch of bro II do two exact area yeah you’re all like rich people and
that’s how you became if I the thing is for me growing up in China with my
family at one point we were actually living on 44 cents a day you know people
talk about how the scarcity mindset is harmful and if you grew up pop like poor
you’re never going to be able to get out of that and you need to have the
abundance mindset in order to become rich but for me it was actually quite
the opposite I actually credit the scarcity mindset which I talked about in
the book quit like a millionaire in terms of how it helped me get here what
how old were you when you moved here so I was eight years old did not speak a
word of English do not speak a word of English I was amazed by everything I was
amazed by a toilet I was actually scared of it because I don’t know
how to use it I was like do I am I gonna get sucked into it I don’t know how it
works how it works I was amazed by just the fact that there’s supermarkets that
you can just go in and there’s food everywhere I was amazed by a can of coke
because my dad gave me a can of coke for the first time that this is this is
considered like rich people drink in rural China because it’s it’s considered
something that you know it would cost you like a whole day’s wages to buy a
can of coke so when my dad gave me a can of coke and I opened it up and I took a
sip like my mind was blown like I had a massive nosebleed because it was
seriously the best thing I’ve ever tasted in my life
this book brought to you by coca-cola so when when you came here did you come as
a family or what did you come were there different was there different timing
yeah so there’s a bit of background with how he actually immigrated so originally
my dad actually came first so when we were living in China at one point
because of the Cultural Revolution like my dad had been sent to like before I
was born he was sent to it like a labour camp
for ten years right and the only reason he was able to get out of it like he
worked in a factory and the only reason he was able to get out of it was because
Chairman Mao died and they reinstated University exams so my dad was able to
get out being able to be educated and finally get a university education and
be able to like go to the west in order to get his family out and initially it
was just the plan was just for my dad to go train for like two years take the
knowledge from the West back to China and then me and my mom would have to
stay almost as like de-facto hostages so that he would come back right he’s not
allowed so okay so you come here you drink your can of coke what’s your dad
doing and he’s your mom working also so my dad at the time is working on getting
his PhD so he’s a student my mom couldn’t speak English she doesn’t have
a high school education which is another result of the Cultural Revolution so she
worked mostly in restaurants washing dishes so initially the first couple
years was very hard because we were trying to send money back home as well
like try to support our family so let’s go to you Bryce what’s your upbringing
how do you come to this world not nearly as intense as a
now you got no street cred dude my parents are from Hong Kong and because
they were Hong Kong and at the time was under British rule we were British
subjects I guess my dad has showed me one of his old like you know British
subject passports and I remember at the time Hong Kong was quite annoyed with
the British for doing all that colonialization thing and then we saw
what was going on in communist China and were like you know what this is okay alright so your parents come over here
and they settle also in Canada yeah yeah we were we settled in Toronto and the
you know I grew up in a middle-class background she grew up in from a poverty
kind of thing and what’s interesting is that this combination is actually quite
common the fire space really a lot of people because the scarcity mindset that
she alluded to that’s the thing that causes Christie to be hyper-vigilant how
much you spend right so she’s the one that is constantly like okay this is too
much this like how much are we spending and costly tracking it all because in a
scarcity mindset money becomes the most important thing to you and as a result
of that you become very hyper vigilant about spending it’s also because you
don’t think that anyone’s gonna come save you if anything goes wrong right
it’s like you have to take care of yourself because you know I’ve always
been brought up thinking that the government is not gonna help me and that
bad things can always happen and there’s nothing you can do about it so how did
you guys meet in in college we’ve been married for nine years and together for
16 years Wow yeah every day he’s just better than that
oh my god I’ve trained him so well alright so you get out of college what
is the job that you get when you come out the one I got initially in in the
beginning nobody has any experience so it’s very difficult to get a job and
then everything is on your resume is like oh I’ve worked at McDonald’s or I
like I waited tables and there’s nothing related to what you actually want to do
so my first internship was testing because that they wouldn’t trust me with
anything important so it really is like here’s code that somebody else wrote you
just need to like click through the page and make sure everything is okay okay so
you’re expected to kind of go from testing eventually become a software
engineer and it takes a while to get there no I didn’t have any experience
coding and I really wanted to actually code but nobody would let me because
they wouldn’t trust me with it it was actually one interview I think it
was during my third internship that I had been applying for a job coding and
they actually thought I wanted the testing job because there was they had
mixed up the actual job description and then during the interview they were
asking me all these testing questions I was like oh no am i interviewing for the
wrong job but then at the end of it I was really enthusiastic I was like I’m
so happy you gave me this opportunity like I can work overtime I can do I
anything you need me to do I’m there like just bring it on and then because
of my enthusiasm they actually decided to give me the the coding job yeah yeah
so it was completely mind blowing okay we will get back to the authors of quit
like a millionaire Christy Chen and Brice Luang in just a minute during the
break why don’t you go to our website Jill on money.com you can sign up for
our free weekly newsletter you can buy my book and you can subscribe to our
sister broadcast it’s called the Jill on Money podcast so easy so check it out
all of that at Jill on money.com we’ll be right back back to Jalan money where Jill
Schlesinger helps you take the mystery out of your finances your back it’s Jill
on money thanks so much for joining us ah beginning of the year and high time
for you to be focusing on your finances it’s always a good time
I should also note that you know we’re about to butt up against our tax
planning season so we’ll be talking a lot about your taxes the second year of
the new tax code should be a lot less confusing than the first year but in the
middle of that we also have the secured act passing through Congress which may
confuse you ginormous ly so we’re gonna be able to
talk about that don’t worry we’re gonna have a special guests come in and we’ll
be sure to have the secure act ins-and-outs the biggest retirement
change and I think the decade okay let us get back to our interview with
Christie Shen and Bryce Luang they’ve written a book called quit like a
millionaire they are among the many young folks who are involved in the fire
movement financial independence retire early hey Marc maybe we’ll put a link up
to the article I wrote about the fire movement on the show notes so people can
read more okay here’s more of our interview with Christy and Bryce how did
you come to learn about the fire movement or even I don’t even know if
you found it as a movement or if you just sort of adopted this yourselves at
the time it was not him yeah it wasn’t right that’s it’s a little before that
yeah it was like I think around 2011 2012 reading blogs we mostly found it
through it like it started with Pete mister money mustache and then we found
JL Colin yeah and that scientist you know write usual suspects right and so I
think it was actually a big relief for me because I thought that buying a house
was the only way out and that was the only way to build your equity and like
my parents were pressuring me to buy house see that’s the thing that really
surprised me because I’m like my mom who used to like
hit me for losing keys that cost $30 was like you need to spend a million dollars
buying a house that’s totally normal because it’s always gonna go up and I’m
like mom this is the exact opposite of everything you’ve ever taught me
shameless plug for my own book the dumb thing smart people do with their money
chapter four is you buy a house when you should rent and I say that the problem
really does occur because there’s a generation of people that did benefit
from buying a house but that’s just dopey good luck timing right and they
have no way to really assess what it means today to make that decision but
you guys came to it yourselves now talk about like what were the things you did
to actually quit like a million or did you have a game plan or how did it start
around 2011 2012 we had saved up about half a million dollars and so you’re
taking home 120 so whatever you’re making like 160 pre-tax
right okay so how did you save a half a million dollars so fast part of it was
by that time we had been working almost seven years and then we had gotten about
two promotions since then right got it there’s like salary increases as we went
and we weren’t really increasing our lifestyle because we were still living
basically like the college grads right out of school because we were like we
didn’t have a car we were right we were just renting like Oh like the top floor
of a townhouse but it wasn’t like a piece of crap you didn’t feel like oh
I’m living you’re not like oh wow we avoided basements because we I did that
as a student and I got really bad allergies as a result of that so I
didn’t want to do that it was the top floor of a townhouse and then the
landlord lived in the bottom floor it was like 25 minutes subway ride from
downtown whereas all my friends were renting like the fancy condos downtown
so their rent was at least 1,500 right our rent was 850 alright so I just want
to go back so here we are you’re like thinking I got a half a million dollars
I’m ready to buy a house you basically come up with this kind of I think
interesting form it’s your formula this rule of 150 you write as no one else has
this you explain your rule of 150 yeah so one of the things that happens when
you try to buy a house is like when you go to the bank to get a mortgage they
push you on these mortgage calculators right just put it into the mortgage
calculator look wallah it’s your mortgage is the
same as your rent of course that makes sense to buy a house otherwise you’re
gonna lose money to rent but the thing is they fail to tell you that there’s
all these extra costs that come with home and ownership right yes there are
yeah you gotta pay for them you got to pay for the property taxes you got to
pay for insurance Commission’s real estate commissions Taylor yeah and
that’s why like when we do the math within in the book we actually break
everything down and when you add it up at the end of the day it adds 50 percent
on top of the mortgage to your costs right if you were running a business and
you just ignored 50 percent of your expenses you’re in big trouble but
that’s what happens a lot of the times when real estate agents or banks try to
sell you a house because once you sign on the dotted line they get their
commission they get interest and you’re stuck with the house that’s not their
problem so you have this half a million dollars and now do you actually put like
down on paper a plan like okay wait we could do this or does it happen more
organically I was aware of the fire movement and I was trying to figure out
how ways to invest as well when I broke down the math and I kind of and I kind
of presented her with the choice here was like okay we could go ahead and buy
the house and get into enough debt to last us for 25 years and then maybe get
back to zero and when we’re old and gray or whatever or based on our current
savings rate which was at the time it was ah we were saving almost like I
think slightly over 100 grand a year I could project I was like okay we could
do that or we become a millionaire and retire in three years so 25 years of
debt or three years to freedom and then she kind of went okay so now you check
the math and you’re like okay million dollars right but I see we kind of go
right I still don’t really believe it because part of me was like okay we have
to invest and you have to like put all this money in instead of putting in into
the house then my scarcity mindset kicks in this is when it’s a good idea to
actually learn from middle-class and wealthy as well right at this point the
scarcity mindset ends up turning into like this the hoarding mindset and it’s
not helpful right so at this time I had a lot of fear and I was worried about
the math I’m glad that I actually got over that fear and part of that was
because we already learned from investing back in 2008 that we got out
of it without losing money that kind of gave me the
assurance that okay this is going to be okay everything’s going to be fine let’s
do this and then we actually became financially
independent a lot faster than I thought it was gonna take so it took us three
years from that point so after nine years of career of working we ended up
being financially independent at 31 and 32 okay so you’re 31 32 you got a
million bucks in retirement and NAM retirement fund mostly a little bit oh
man okay so a million bucks when I think when I do that quick back of the
envelope math in the geeky way that I do I’m I I say oh well you know it can
generate X amount of dollars you’re not gonna pull money out of the retirement
account right you’re gonna let that go are you pulling money out of your non
retirement assets right now to live yeah yeah yeah I mean like there’s this
misnomer of like don’t touch the retirement part and then and then only
pull off with it you can treat the entire thing as like one giant portfolio
right because after you after you retire and your income drops you can then melt
down your 401ks gradually and then in a tax-free way right so we’re so it
doesn’t actually matter which account that the amount is from but yes we are
living off of that initial portfolio and by combining it with other things like
you know world travel we’re actually able to keep our expenses even lower
than that what we found is that after we retired there’s like a three-prong
strategy that we put together because we’re engineers we like to have a lot of
that so the first plan is that a lot of people say like what if you have to sell
your assets during a downturn the thing is they don’t realize that there’s also
yield coming from the portfolio we don’t have to actually sell any of the
underlying assets right so if our portfolio which is currently yielding
about 3.5% $35,000 if we were in Thailand which we actually were just
like three weeks ago in Bangkok I found out that inflation is hardly present at
all and we were able to live really well getting massages almost every day for
25,000 US dollars a year for the two of us so if you take that and you’re taking
the yield and then subtracting your living expenses you’re actually making
$10,000 even if the market is crashing so the corpus of the money you’ve saved
continues to grow exactly right yeah when we left three years ago we we left
with a million dollar and then now like right now it’s like
sitting out like 1.3 so we’re actually making money thank you yeah and you
wrote a book you sold it you made a few shekels right yes sir we’re actually not
using the money that we’ve earned in passion projects outside so we have been
doing with it we’re just putting it in a separate
portfolio so that’ll be like four we’ve given some money to family as gifts
we’ve done some donations so as you guys are so good we because like I feel like
I don’t actually need to inflate my lifestyle because I’m extremely happy
the way I am right now yeah so it’s like what like what am I gonna go buy a car
no what am I gonna do with it okay we will return in just a minute hey
during the break why don’t you think about a great financial question that’s
been bugging you maybe it was during the holidays maybe some other time send us
an email ask Jill at Jill on money.com that’s ask Jill at Jill on money.com
we’ll be right back do I invest here should I put my money
there Jill Schlesinger can help you back to Jill on money your back it’s Jill on
money and we are delighted that you’re with us I just want to remind you you
know early in the year just to make sure that you you have some of your resources
we have a great resource section on the website on Jill and money comm mark
keeps it beefed up but if you’ve encountered or run across some really
helpful websites that you think we should add to our resource list just let
us know shoot us a note so go to jail on money.com you can click on the resource
tab see what’s there if you think you’ve got something great to add just click
the contact button in the top right corner of the website and let us know
because mark may add it but you know it’s got to get through his filter which
is you know it’s real ok let’s get back to our interview with Christi Shen and
Bryce Lou Wong they’ve written a book called quit like a millionaire their
adherents of the fire movement and I’m always wondering you know what it must
feel like to just quit because even if you hate your workplace it is your
workplace it’s sort of your second family and a lot of people love the
space where they find colleagues and intellectual curiosity maybe kind of or
just almost like a second family so I wanted to finish up this interview
thinking about what it means to just walk away from these communities that we
build at work the two parts of this that were fascinated to mean you mentioned
them loss of community and loss of identity that’s the part I think that
people can’t imagine like but if you’re not working then who are you
that’s hard so you mentioned these things as this is part of your fear that
you needed to conquer absolutely and I didn’t love my job so I thought that
when I quit I would be like you know dancing around the office like banging
my my boss’s head like a bungle it didn’t really happen right and what
happened was like I gave my notice and I had a panic attack like a minor one
really yeah cuz I was like dude yes a lot No
but it wasn’t just um the work thing like my parents were also like what are
you doing like this is a horrible idea right and so the entire time I’m
thinking like I’ve developed this identity for ten years and all said I’m
gonna give it up Who am I now right and that is definitely a fear that a lot of
people have which keeps them from you know like the golden handcuffs and
canoeing going back to the job but the surprising thing I found is that my
network of friends and my my group my support group has grown exponentially
since we left one of the things that ends up happening when you’re working is
that your brain is in lizard mode like it can’t tap into the creative part of
your brain and then you can’t get out of your bubble to like meet other people
right so one of the things that ended up happening when we traveled is we met
friends all over the world and being part of this fire community just adds
additional support as well it is definitely very very hard to walk away
from that status quo path right you don’t have enough support like now that
we’re coming out from the other side I absolutely do not regret it and I don’t
know what I was so afraid of it’s just that ingrained thinking you
know you’ve been doing this for so long it’s the devil that you know if you
leave then it’s gonna be much worse but it’s actually much much better you end
up meeting so many friends that you wouldn’t have met otherwise and I would
suspect that a lot of people who are adhering or at least adopting the fire
movement I think a lot of people that I speak to it’s financial independence
it’s not about retire early it’s a financial independence and opportunity
and optionality like I don’t want to get stuck in that job for X amount of years
it’s too much so but if I do all this stuff today in this you know from the
time I’m 28 to 38 I will have the entire world open to me and I could do whatever
I want and I don’t think that that’s what most people understand and it’s
hard to like for someone like me you know like I’m trained like a certified
financial planner and it’s very difficult to get human beings whose
brains are not long-term right we’re we’re very short-term creatures it’s
very difficult to convince somebody if you do this now you’re gonna be so much
happier in ten years but you guys are and your proof of that tell me a little
bit about that community where do you see the growth coming from is it is it
Millennials is are there older people coming in or there are there old farts
correct me coming in like what do you think is happening in it
everybody’s welcome millennial thing but I think it’s really appealing to
Millennials in particular because for for the boomer generation jobs were
stable job you know I mean like if you got laid off you did something horribly
wrong and it was it was your fault but you did something bad right yeah but for
us we can get laid off at any point I mean like we are endlessly pilloried in
the media for being disloyal and flaky and oh these Millennials just jump from
job to job I don’t know the value of hard work is like we’re not doing that
on purpose we’re doing that because our jobs
disappear after every three or four years and we have to constantly keep
moving otherwise we’re gonna get outsourced or that our company’s gonna
go under or something like that we don’t show any loyalty to our company because
we know that there’s no loyalty coming back the other way and this whole fire
movement is kind of it was a response to the fact that there is no real job
stability in our world anymore so fire is our way of creating income stability
now before I let you go chapter four don’t follow your passion yet can you
talk a little bit about why you wrote this chapter and what’s so important
about like this idea of like Oh follow your passion what is the downside of
doing that right okay so the whole idea of just follow your passion blindly I
think that kind of came from the Steve Jobs
you know his Stanford commencement speech that’s like if you follow your
passion then everything will just work out right anything can go wrong at any
point you have to take care of yourself the parents can’t be there for you I
learned very early on to choose my career based on something I called the
pot score which is pay over tuition which is the idea that instead of just
going into something because you love it you actually evaluate whether the amount
of money you would get paid over the minimum wage would be worth the amount
of money or spending in tuition and it’s not just about like just take the job
that earns the most amount of money like be a doctor when we actually do the
analysis in the book you’ll find out that doctors it’s actually not that
great in terms of becoming fi because they have to be in school for ten years
right and rack up a lot of debt and then it takes a long time for that to pay
back originally I wanted to be a you know novelist right and then later I
found out that novelist make on average like five thousand dollars a year and
nine three percent of books sell less than a
thousand copies right so for me it was really more of a practical decision to
make the decision that you shouldn’t just blindly follow your passion figure
out whether the degree is actually worth it not all degrees are equal right and
at the end of the day you will not be a starving artist you will have money and
you’ll have what you love what do you think is Chapter two for you guys what I
mean I feel like well let’s say Chapter three because like you have this ten
years now you’re in like high travel book promotion all this what can we
expect next from you I think we’re quite passionate about you know financial
education after the book came out some of my readers have written to me like
can you you know speak at university lecture halls try to get the book out to
as many people as possible to save them from like the financial mistakes right
because I feel like if you know about financial independence retire early as
early as possible in university then you’ll be able to understand how
investing works you’ll have that long runway in the market and you won’t be
able to get into a lot of student debt without realizing that that degree is
not worth it thanks so much to Christy Shen and brace
long the book is called quit like a millionaire when we return we’re getting
back to you the focus is on you how are you going to gain your financial
independence we can help you out just send us an email ask Jill at Jill on
money.com we’ll be right back back to Jalan money where Jill
Schlesinger helps you take the mystery out of your finances your back it’s Jill
on money and we are delighted that you’re with us as always do a financial
question that’s burning do you have something that came up around the
holidays or the year-end or are you already looking forward to tax season
that’s really the most wonderful time of the year isn’t it
anyway give us a shot we’d love to help you out
now that mark is a CFP professional whoo did our friend at CFP board know about
that mark by the way yeah I’m gonna to tell that person okay anyway we’ve got
two cf fees here ready to help you out just send us an email ask Jill at Jill
on money.com ask Jill at Jill on money.com that’s
what Theresa did and she writes greetings from Alaska it is exceedingly
helpful I’m 57 my husband is 59 we’re thinking that we’re going to work for
another seven or eight years we’ve been very cautious with our money so cautious
and we probably screwed up our retirement anyway let’s see fifty-five
thousand dollars in cash twenty thousand dollars in something what is our a IRA
that’s what I’m thinking it’s an IRA twenty thousand dollars in an IRA like
that 401 K 40 grand in CDs she’s a teacher she’s got a teacher’s retirement
and her husband excuse me is in the federal government and it’s got a Thrift
Savings Plan worth four hundred and sixty thousand dollars
we’ve never invested in the stock market we didn’t have the money to lose what
should we do we brought you bought your book we’ve made it through half way and
did did no dumb things yet because we haven’t done anything with our money how
to proceed you’re the best thanks in advance well okay here’s my question to
you when you retire in your mid-sixties and you have that retirement
income the pension you’ll have two pensions and maybe one of you I don’t
know if both of you will get it but maybe one of you will get Social
Security will that be enough for you to live on because if it is then maybe
don’t fret too much it doesn’t sound like you’re you didn’t did anything
stupid um it would be nice for you to have some of your money in the stock
market just to keep pace for future inflationary trends I mean right now
inflation is low but you never know so what I would say is that if you you know
the best way first point place to start is to say how much money do we spend
today and then project how much money will you be spending in your retirement
that’s your annual income needs then you go back and you say okay when we retire
how much income will we have if the income that you have is larger than the
income that you need you’re in fine shape and then the only reason you’d be
adding to the creating a stock market position in your retirement accounts is
to just give you a little extra boost in case we have an inflationary period over
the next thirty years now I think that it’s hard to do this on in terms of like
well how am I gonna put money in the stock market I’d really like to talk to
you guys so I’m gonna say this that’s your first step get to that part read
the retirement chapter of my book and go through that like really easy section
which is like here’s your quick back of the envelope how you try to create a
retirement plan and after you’ve read that send us another email and let me
know where we stand how about that all right next up Beth your excellent
podcast is my absolute favorite in the personal finance space she’s probably
listening to like a lot of other fun things but I’m thank you very much and I
appreciate your respectful approach to your callers and your ability to do
thoughtful planning with lots of different income levels debt
circumstances and life situations okay here’s my question we have two daughters
ages three and five we contribute to their
529 plans up to the deductible threshold in our state but we’d like to sock away
more for future education I’ve read a bit about using IRAs as a college
savings vehicle and I’d like your take on the strategy a little more about my
situation I’m thirty-three husbands thirty-eight daughters three and five
combined income about 200 grand current Roth balance 85,000 traditional balance
39,000 emergency fund 20 thousand which is about four months of our living
expenses we both max out our IRAs my husband’s 403b
maxing my husband’s 403b she puts money in her 401k contribute another 8 grand
to a SEP mortgages outstanding a little auto loan at 3% 529s of 25 grand beyond
what we put towards their 529s we’ve got another $200 month to save for college
girls are in elementary school should be putting act should we be putting extra
funds we have available for college savings into the 529s or into my SEP IRA
or do I need to convince another one of my employers to open a 401k another
thought is whether it makes sense to refi into a 15-year mortgage I can tell
you that right now no don’t do that do not do that um I
think you should just put the money into the 529 plans I don’t think you need to
worry about the retirement stuff the side question I want to open I raised
for my daughters when they’re young before 18 with the hope by the time
they’re in their 20s they’re already seeing the power of compound the
interest what is a good strategy for opening an IRA as young as possible okay
so first things first the extra money each month for I want to do one like
right now you’ve got $200 a month to save you only have four months of living
expenses at the bank so do me a favor use that $200 a month so you get six
months in the bank then when your that’s done use the $200 a month to fund the
529 accounts and you know IRAs you could open them anywhere you just want to do
it at a place where it’s cheap to do it and there’s no minimum so the good
strategy is to I would wait obviously till they’re sort of teenagers and use
it as a teaching tool that’s what I would do that’s what my friend Beth
kobliner we tell you to do and she’s super smart
all right that’s the segment we’re gonna come back we’re gonna do more of your
questions if you’ve got a financial concern question query send us an email
ask Jill at Jill on money.com we’ll be right back you’re back it’s Jill on
money and before we finish the program we want to remind you that we are
broadcasting live from the policy genius studios policy genius is the easy way to
compare and buy insurance just go to policy genius.com alright before we
finish up we’re going to address a question from Jerry who asks what is the
best way to fund a new home construction we have $500,000 equity in our primary
residence we have eight hundred thousand dollars in a 401k our home has under has
a more outstanding so their primary residence has an outstanding mortgage of
just under a hundred thousand dollars at three and a quarter percent I keep it
because we can use the deduction and the money’s cheap the lake home will be
about three hundred fifty thousand dollars I know you don’t talk about any
money that’s actually in non retirement assets
I guess one way to do this there’s a number of ways of all there are new
construction loans which usually require you to put some money down and then you
can borrow money against it one way to think about this would be to refinance
your current loan I know it’s three and a quarter percent but rates dropped
again so maybe it you’d get a three and a half percent loan and take some money
out and essentially instead of tap I would rather you not tap the retirement
account because then there’s a taxable event I started too soon
so okay so probably a refi is what’s gonna work but are you sure you should
be building this Lake home let’s start to that we I really should have started
there have you run the numbers to determine whether you can afford this
have you figured out whether or not this makes sense for your own retirement plan
you didn’t give me a lot of information and tell me how old you are I’m thinking
that I need some more info but for anyone else listening if you’re
doing that second home you got to be very careful and the numbers that you
need to understand are how the money pulled out of your whole financial life
would impact your retirement that’s important so give me some more info and
then we can hopefully help you out all right this has been a great show
thank you so much for listening our email address is ask Jill at Jill on
money.com our website is conveniently called Jill on money comm and our sister
podcast is also called Jill on money and you know what you can get it anywhere
you get podcasts like Apple stitcher radio comm Google Play so exciting so
check it out slightly different thanks always as lipfird listening thanks
always to mark for producing and being the best ever whatever you are to me
husband work husband I like that not real husband I don’t need one of those
all right we’ll talk to you next week thanks for listening

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