Latest / The Personal Finance Club Show / High Yield Savings Accounts, Finances for Couples, and Investing for Your Kids | Ep 16

Transcript

High Yield Savings Accounts, Finances for Couples, and Investing for Your Kids | Ep 16 · The Personal Finance Club Show

0:14
Welcome back to the Personal Finance Club show.
0:17
Happy new year, Jen. It's new.
0:19
Year's Day, It's 2026. Are you hungover from your big
0:24
New Year's Eve party last night? Oh, this?
0:26
This would be New Year's Day. Meanwhile, it's no, I won't tell
0:29
them what day it actually is. Probably not.
0:32
Probably not future Jen, I'm sure you're feeling bright and
0:38
spry on New Year's morning. 26 And what if they bring?
0:42
We pre record these by, you know, somewhere between a few
0:45
days and a couple of weeks. So it's not actually New Year's
0:48
Day for us, but for you it is. Well, Jared, I want to talk
0:52
about poop again. Oh yeah, you had the poop story.
0:55
We our, our last poop story got a lot of comments.
0:57
We got three comments on YouTube.
0:59
So we really got to dive into it.
1:00
We might we might become a poop focused podcast if this one does
1:03
well. Yeah, we're trying to hone in on
1:05
that. And yesterday, excitingly, I had
1:09
a colonoscopy and I want to talk about even though Jeremy's
1:11
fighting me on this. Doesn't everyone love hearing
1:15
about people's medical problems? But I I actually am curious what
1:18
happened. Yeah, well, because Jeremy
1:20
turned 45, you're very open about your age.
1:22
And I heard because of all this debacle that 45 is the new,
1:26
whatever it was. I think it might have been like
1:28
60 before. It might have been.
1:30
It's a lot older that you are recommended to get a
1:33
colonoscopy. So essentially, I went to my
1:36
doctor, I got some blood work. She was like, what the helly?
1:39
Now we're on a wild goose chase. OK, I found out that I was
1:42
anemic. I kind of knew that I always had
1:44
like super low iron. But like Jeremy doesn't know.
1:47
But like I always have like a heated blanket on me.
1:50
I'm always like a space heater. Shout out to my like low iron
1:54
girlies. Stand up.
1:56
And then I turn off when we're recording 'cause obviously no
1:59
one in the audio. And so she was, she kind of was
2:02
like, yo girl, you all the way fully anemic.
2:04
Now let's figure out why. So like, I was just like, I'm
2:06
going to send you the gastro to the hemo, whatever.
2:09
I go to the gastro. I don't really know what the
2:10
gastro does. So I was like, not at all
2:13
expecting a recommendation for a colonoscopy.
2:16
And he's like, all right, well, let's get a colonoscopy.
2:18
I'm open for next week. And I was like, what?
2:21
Meanwhile, we were supposed to record the podcast.
2:23
So I text Jeremy and I'm like, hey, Long story short, got to
2:27
get an endoscopy and a colonoscopy.
2:28
And I'm sure I freaked you out and I just want to you're about
2:33
to get one this year, hopefully. Are you going to do it?
2:36
Well, I know we love talking about poop.
2:38
When I went to my doctor's for him last year, he's like, you
2:41
know, you're turning 45 next year.
2:42
And that means you either get a finger in the butt or you poop
2:45
in a bag. And he's like, and he's like,
2:48
and he's kind of was like breaking down.
2:49
He's like pooping a bag is less accurate, but it's less
2:51
invasive. So you can do it every single
2:53
year. And then it it's roughly as as
2:57
informative as the finger in the butt, finger in the.
3:01
Butt meaning colonoscopy. Well, I don't know.
3:06
It's a camera, it's not a finger.
3:09
I think there's a. Finger I want to talk about this
3:12
because. People don't want to pause it.
3:14
No, there's a finger involved. I haven't gotten 1.
3:16
That's like a middle ground between pooping in the bag and
3:19
colonoscopy. Could be both, and also it turns
3:21
out you don't poop in the bag, you just collect a sample off of
3:24
your toilet paper. We got to stop this.
3:27
This is. A Oh, it's too much.
3:28
Anyway, the point of this? Yeah.
3:30
So how are you doing though? What's the?
3:31
Yeah. Great, I'm fine.
3:32
I just wanted to let people know if you are approaching 45 or if
3:36
you are have been avoiding getting a colonoscopy, you
3:38
should just do it. The worst part is the prep.
3:40
You have like a you have like a few days before where you can
3:42
only eat. It's funny actually the things
3:45
you can eat, you think are like you had to be healthy, but
3:48
really it's just like low residue food.
3:50
So like all the things that I would normally like I couldn't
3:52
do like kale like I do a kale smoothie.
3:54
You can't do like leafy greens. You can't like every.
3:57
Basically just trying to clear you out.
3:59
Right. Did you have to drink like a
4:00
gallon of clear syrup or something?
4:03
Yeah, it was this. Like it actually tasted like a
4:07
bad Jolly Rancher, kind of. So even like that, it's like
4:10
really not that bad. So I just wanted to make people
4:13
feel at ease. I did it like you have a liquid
4:16
day that kind of stunk, but you can still have jello because
4:18
anything that melts down to clear you can have.
4:20
And I got these popsicles from Whole Foods that you could have.
4:24
So I was like, I was honestly kind of jamming like things I
4:26
would never I would, I haven't eaten jello in like years.
4:30
So like jello popsicles, apple juice, like all these things
4:33
that are super unhealthy for you.
4:34
I was like eating just to like make sure that I didn't fail
4:38
because the last thing I wanted was to have to go back.
4:40
And I passed my colonoscopy of flying colors.
4:43
And actually, I don't know about you, but I haven't been under
4:45
anesthesia since since I was like 5.
4:47
I had like tubes in my ears to like fix my hearing.
4:50
So I was like, oh, shit. Like, I don't actually know what
4:53
it's like to go under anesthesia.
4:54
Even that part was super easy there.
4:55
Like you're gonna feel like you took a nap and the guy was like,
4:58
you're gonna feel like aching and you're where the IV is.
5:00
And I was actually scared about that.
5:01
Didn't, don't remember that, didn't feel it.
5:03
It really just felt like it took a nap.
5:05
So I feel like it's important to talk about medical things
5:07
because people be scared and you shouldn't be scared.
5:10
It was super easy. They usually say they find like
5:13
polyps and they didn't find nothing.
5:14
And we're like, you are clean as a whistle girl.
5:17
Clean as a whistle. Good SO.
5:19
I guess you need to get one. Go get one.
5:21
Are you still in this goose hunt though?
5:23
Or I mean, I don't know how much the.
5:24
Hematologist next week, which I feel like is where they're
5:26
really gonna be. Like probably what's probably
5:28
going to happen is they're going to give me an iron infusion
5:30
because I think I told you I had like up until like 3 months ago,
5:33
I didn't eat meat for five years.
5:36
So I think what's happening is my iron, which is already like,
5:39
iffy over the last five years, has just been slowly declining.
5:42
And now my body can't catch up. So they're probably just going
5:46
to give me iron infusion because I feel like I'm a relatively
5:48
healthy person. And like, my doctor was like,
5:50
girl, are you tired? I'm like, ma'am, it's 2025 in
5:54
America. Like who is not?
5:56
Like, what's the baseline? Like who is not tired?
6:00
Yeah, I hopefully. I don't have to like, give bad
6:04
news ever here. I'm all about that plant forward
6:06
life, but I I have heard from vegetarians that that the iron
6:10
could be a challenge, but you do not get your.
6:13
I don't know if you should be taking financial advice from a
6:15
podcast, but you should absolutely not be getting
6:17
medical advice. Not for me at least.
6:19
Maybe Jen's a better source. Go listen to it.
6:21
I. Definitely don't think I'm just
6:22
as a I'm just a human living a life that maybe you want to take
6:26
like, you know, just hear my experience, not even take
6:28
advice. Yeah, First Amendment, baby.
6:30
Freedom of speech. Period.
6:31
OK. So, all right, can we get into
6:34
it? I'm so uncomfortable talking
6:35
about medical stuff. I need to talk about financial
6:38
for your background. So much worse.
6:41
Wow, discrimination. OK, let's get into our first
6:46
segment of the episode. Explain it like I'm 5.
6:54
Let's do it. Let's please for the love of God
6:57
save me and can we talk about money it.
7:00
Wasn't that bad, OK. That wasn't that bad all.
7:03
Right, let's talk banking. Where should I put my money?
7:06
High yield savings account? Regular savings?
7:08
Jeremy, tell me everything you know.
7:10
OK, so I promise an analogy and every explain like I'm 5 and
7:13
here is your analogy for baking. Let's say you are rice eaters at
7:18
home, as am I because I like rice and you want to make sure
7:23
you always have enough rice for dinner.
7:25
It's you kind of have three places to put your rice you've
7:28
got on your counter. You have like a little
7:31
Tupperware or something that's got the rice that you're going
7:33
to use for dinner that night and whenever you need a scoop of
7:36
rice for lunch or a meal or whatever you've got.
7:38
But then when that runs out, you go to your pantry.
7:42
And in your pantry, you might have sealed bags or, you know,
7:45
the bigger, the bigger amounts, right?
7:48
And then if you want to have rice, not only like today for
7:53
dinner on the counter or in the short term, like in a week in
7:56
the pantry in your backyard, as I'm sure you do, Jen, as we all
8:00
do, you have your rice paddies. Right, right, right, right in my
8:03
backyard in LA. Yeah, your LA backyard just the
8:06
massive amount of what what kind of acreage you dealing with over
8:10
in your place you got what a done acre or so. 000.
8:14
Zero. Yeah, we, we measured in square
8:15
inches. I got, I got about 12 square
8:20
inches in the backyard myself. But imagine for this analogy,
8:23
you have a rice pad in your backyard and that rice isn't
8:26
going to be good for a while. But that's like you guys are
8:29
like your long term plan and it will eventually grow and can be
8:31
harvested and can go to your pantry, then go to your
8:34
countertop, right. So those are kind of like the
8:36
three places you put rice short term, quick to access, easy, but
8:40
there might might be some spillage from the counter.
8:43
Medium term, pantry sealed, you're not going to spill
8:48
anything. You're not going to lose
8:49
anything long term grows, but takes more time.
8:51
So back to the money world, that's kind of like your banking
8:55
options short term, the things you're spending on a day-to-day
8:58
basis. That's like your checking
8:59
account. That's where you're where what's
9:02
it called? You get paid, your paycheck
9:04
goes. Wow, said the millionaire.
9:07
What's it? Called again, this is the
9:08
personal finance club guy who doesn't know what a what it's
9:11
called when you get paid. Talking about out of touch, It's
9:13
like when Taylor Swift said a burrito was like $25.
9:15
Come on man. I think she's right.
9:19
Isn't that what it cost in LA? OK.
9:21
Well, this is what back when it might have been 10?
9:23
OK, OK, fair enough. It's like Jack Donaghy from 30
9:28
Rock. Did you ever watch 30 Rock?
9:29
Yeah, he's like, what does a gallon of milk cost, $90.00?
9:33
I love. That show, it's not that I don't
9:38
know what a paycheck is, it's just that I don't get asleep
9:40
because I have a baby. All right, they say, you can
9:42
blame this. Baby, for this baby, it's going
9:43
to be. Until he can talk, he's the fall
9:46
guy. It's like the new guy.
9:48
That's what that's what you get. The new guy's the.
9:49
Fall guy can't wait till he can talk.
9:50
He can be a guest. Yeah, we're deleting all these
9:53
episodes. OK.
9:55
So bank account or checking account does like your
9:59
countertop, that's your day-to-day, your short term or
10:03
medium term stuff. This is things that you plan to
10:04
spend in a year or two or three years.
10:07
Talk about buying a new car, saving for a wedding, down
10:11
payment for a house. These aren't things you buy
10:13
every day, but they're also not things that are like 30 years
10:16
away. So that you're kind of like
10:17
saving for that's your savings account or a high yield savings
10:20
account and then your rice pad in the backyard.
10:23
Those are your investments. And so the investments you're
10:25
not going to every day, those are kind of like that's like
10:27
your 10/20/30 year plan, medium term savings account, short term
10:32
checking account. And so a question I, you know,
10:36
checking account, I think pretty much everyone understands, no, I
10:38
never get asked like which checking account should I use?
10:40
No one, no one asks me because I think everyone already has an
10:43
answer to that, at least in our audience, they kind of know.
10:46
But a question I get a lot is what is the best high yield
10:49
savings account? And high yield savings account
10:52
is one of these terms that has this very compelling sounding
10:57
name. It has the words high yield
11:00
baked right into it. And so when people think there's
11:03
some advanced strategy that should be going on here to get
11:07
some great return. And, and my answer is it doesn't
11:10
matter. It does not matter what heights
11:12
savings kind of use. And I'll give you some math.
11:13
And this is this is the portion of the show where I shout math
11:16
into a microphone that everyone loves.
11:18
And so buck up. I know Jen's leaving to go.
11:22
I like this almost as much as when you ask me questions.
11:25
Yeah. I know the the Gen. trivia
11:27
question, that's my favorite part of the show.
11:29
OK, I think I might have a Gen. trivia questions keep up later,
11:32
but not right now. All right, here we go.
11:34
So if you are like, let's say you have a short term savings
11:36
bill. When I say short term, I mean
11:37
like one to five years, not long term, like 10 plus years.
11:41
And and let's call it three years in the middle.
11:44
And you say $500 a month, $500 a month times 12 months times
11:50
three years is 18,000 bucks. And right now, a few years ago
11:56
in like the teens in the early twenty 20s, high yield savings
11:59
account paid like 0. But now it's paying like 3 to
12:02
4%, let's call it 3.5%. OK, if you instead of just
12:06
saving that 500 bucks a month under your mattress or bearing
12:09
in a coffee can in your rice Paddy in your backyard, you
12:13
save, you save it in a high yield savings account.
12:18
And I'm saying high yield in all the caps because what an amazing
12:21
opportunity instead of $18,000. Should I make you guess?
12:26
Oh God, I'm going to say, I'm going to say like 20,000 because
12:31
you're not making it sound like you're making it.
12:32
You're making a big deal of it. So it can't be much.
12:35
What's the sarcastic big deal? Instead of having 18,000, you'll
12:38
have 18,637. Oh my.
12:41
God, peanuts. Right.
12:43
And so, you know, I mean, it's $637, like, you know, I don't
12:46
mean to poo poo that, but that's not, that's not moving the
12:49
needle really. And so is it worth it?
12:51
Yeah, sure. But if you're getting 3.4% or
12:53
three, six percent, 6%, like it's just, it's not worth the
12:57
mental energy to spend a lot of time on this because it's not
13:00
moving the needle in your life. I'd rather you go put more money
13:03
to your investments, right? But now you're saying, OK, well,
13:06
3.5%, what if you just invest that money instead of instead
13:09
of, you know, instead of putting in the pantry for the three
13:12
years, go put in the rice Paddy and just roll the dice and hope
13:15
that you have a good yield in three years, right?
13:18
So now you're doing $500 a month times 12 months, times three
13:22
years. You invest $18,000 over that
13:24
three years, but now you're getting 10% instead of 3 1/2%.
13:28
Now, how much do you think you'll end up with, Jen
13:31
guessing? Oh, stop listening.
13:32
No, I'm scared. OK, wait, so 18,010?
13:36
Percent, 10%, so 3 1/2 percent, you got 18,637, now you're
13:41
getting 10%. What do you think you'll end up
13:43
with? It's been three years.
13:45
Three years. Same.
13:45
Three years. So now are we at the 2020
13:47
25,000? The good guess, you should have
13:50
stopped when you said 20 because it was 19,860.
13:53
And so the point is for these short terms, like 3 years, one
13:57
year, five years, these short terms, whether you're getting 3%
14:01
or 10% or 3.5% or whatever, it doesn't really move the needle
14:04
much. And I always say don't invest
14:06
that money because the difference between 19,860 and
14:09
18,600 is about 1000 bucks, right?
14:12
And that's like 2 months of savings.
14:14
And so by putting your money at risk, putting it into this very
14:17
volatile stock record, which has all these ups and downs in the
14:20
short term, you're exposing yourself to maybe not having the
14:24
19,860, but maybe having 8000 because the market crashed.
14:28
But if you invest for 40 years at 10%, you end up with $2.6
14:34
million. And so that's why these three
14:37
tiers counter pantry, rice Paddy, backyard checking, high
14:42
yield savings, investments are important and don't conflate
14:47
them, right? If you put your short term
14:49
savings in the rice Paddy and then you have like a, a drought
14:53
or now we're getting into rice farming mechanics, which I don't
14:58
know, I, I think water is good for rice.
15:00
And so either is a, is a, a flood worse or a drought worse?
15:03
I don't know. But the point is, if you know,
15:05
if you have a bad harvest, it could be ruined, right?
15:09
Then you won't have dinner, you won't have your, you won't have
15:11
dinner in a week or you won't have your wedding or your car in
15:14
a year or two, right? So for the, for the short term
15:17
stuff, one to one to five years, just do a high out savings
15:20
account. Doesn't matter which one because
15:22
like I said, even the difference between 3.5% and 10% doesn't
15:25
make a difference. So I just say go with whatever
15:27
is convenient. Personally I don't even have a
15:30
technical high yield savings account.
15:31
I guess maybe I do with my with my wife.
15:33
We have a joint one with Ally. Not sponsored.
15:37
Doesn't matter which one to use. I've traditionally used a money
15:40
market fund which is basically just a brokerage account where
15:43
the money sits in a fund that ends in XX and those generally
15:48
both pay the going rate. I feel like the money market
15:50
funds a little bit more consistent high yield savings
15:52
accounts sometimes play little games like intro rates and they
15:56
drop the rates and that annoy me.
15:57
So that's why I like the money market fund.
15:59
But none of it really matters. So the biggest take away is
16:03
short term stuff, just use your checking account, medium term
16:05
stuff, one to five years high out savings account, doesn't
16:08
matter which one. Long term, go with the
16:12
investments. That's where you that's where
16:14
you use your brokerage account, 4-O1K Roth IRA, go put it in the
16:18
rice Paddy, let it grow for years to come.
16:21
You ready for some? Are you hungry for some rice
16:23
now? Now I'm just laughing about the
16:26
fact that like of all the like analogies for this five year
16:28
old, it was like a rice Paddy. Like I don't does.
16:32
Does Mateo know what a rice Paddy is?
16:34
Well, we have him working in the fields, so he he knows.
16:38
Yeah, and he's only four, so it's going to get worse when
16:40
he's 5. Child laborer, yes.
16:44
Yeah, I think, you know, as long as as long as no one ever finds
16:48
out about it, we're not recording this, are we?
16:50
No, not at all, it's just for fun.
16:52
This is just me and you Chatting is our weekly meeting.
16:56
Sometimes I feel like that when I look at the analytics.
16:58
We got 2 downloads this month. I wonder who those were?
17:02
Damn, shots fired. Okay, well, let's keep it going.
17:06
I'm having a good time. Let's get into our next segment.
17:11
And I ask a dumb one. Are you asking a dumb person are
17:15
asking a dumb question? We never I really don't think
17:17
they're dumb. I actually like the dumb
17:18
questions. I think the smart questions are
17:20
annoying. The people who ask about
17:22
quantitative easing, they're trying to like make themselves
17:24
the people who ask like legitimate dumb questions, those
17:26
are the smart people and those are the smart questions.
17:28
So what's the what's the question today?
17:30
Okay, this question comes from Grace who asked so many
17:34
questions. It was probably like 6 or 7
17:36
questions. Then I told her I was like,
17:39
we'll try and get to it on the show.
17:40
Then she came back and asked other questions.
17:42
So Grace, thank you so much for listening and for writing in.
17:45
I took two of your questions and I think I haven't paired this
17:48
first question down. She asks how do you combine and
17:52
manage finances as a newly married couple?
17:54
Taxes, checks, checklist, doing a post nuptial which I'd never
17:57
heard of. And how do you prepare for
17:59
finances for having kids for the first time?
18:01
Jeremy, you just recently got married and you have two kids,
18:05
so this is the perfect question for you.
18:07
I feel like you have a lot of knowledge on this.
18:09
Talk to us this. Is the first perfect question
18:11
for me to be asking, and I have no business answering this
18:13
question. Yeah, I just celebrated my one
18:16
year anniversary in October. So I'm still kind of newlywed
18:21
even though I'm an older guy for a first marriage.
18:24
And yeah, we have two kids. One is from my wife's previous
18:28
relationship. One is our new baby, Ty, who is
18:31
not even yet 10 months old. And yeah, so just for
18:38
transparency, you know, I'm not the foremost experienced expert
18:46
on. You know Ramit Sethi.
18:48
I do I, I think I have his phone number or at least we're on Adm
18:51
ING basis so. Well, he's like the finance
18:54
relationship expert. Guy yeah, that's like his whole
18:57
podcast, yeah, but yeah, he's. He's great.
19:01
He obviously crushes it. He kind of covers everything.
19:03
But anyway, this isn't let's not talk about my.
19:05
Oh, sorry. Sorry.
19:06
Sorry your friends like you. Guys are funny.
19:09
I like him. I'm sure he's a listener.
19:11
Hi, Ramit. Just kidding.
19:13
All right. So.
19:14
Yeah, this isn't my specific area, back to Word, but like Jen
19:17
said, I can share my experience and you know, we can use the
19:22
large amount of podcasting equipment in the world to just
19:26
put more, to put more audio out there.
19:28
So here's what I do 4 things #1 transparency.
19:31
I think most money problems in a relationship really at the core
19:37
are problems of transparency. People doing things without the
19:41
other's knowledge, hiding accounts, secret spending not
19:46
being on the same page, not good communication.
19:49
And I think the first step to transparency is to make a joint
19:53
net worth statement. A network statement is where you
19:56
open up a spreadsheet. At the top, list all of your
19:58
assets. These are positive financial
20:01
accounts you have. Checking account, savings
20:04
account, investment account, car, home, everything owned of
20:08
significant value over, you know, at least like a grand or
20:10
two. You don't need to get into
20:12
clothes and little stuff, but just, you know, your big
20:14
financial accounts. Maybe if you've got some like,
20:16
you know, treasured heirlooms or something like that.
20:19
List them all at the top. Then at the bottom below that,
20:22
you list all of your liabilities, your debts, student
20:26
loan, car loan, mortgage. The, the house thing always
20:29
confuses people. So if your house is worth 400K,
20:32
you put 400K at the top. And if your loan IS300K, you put
20:35
-300 K at the bottom, that Nets out to $100,000 of equity,
20:40
right? So you do this for both, you
20:42
know, one spreadsheet, both partners list it all out.
20:47
And then you can even have a column for like who controls
20:50
that account or who's who came into the marriage of that
20:52
account and figure out what your joint net worth is.
20:55
And I just think that transparency, that conversation,
20:58
where are we at is a huge first step.
21:01
Because if you don't do that, then you're always in this me
21:04
versus them situation. Oh, my accounts, her accounts.
21:08
You really want to grow your joint net worth and don't let
21:12
your divorce proceedings be the first time that you figure out
21:18
what each other has, right, Because I think that's what
21:20
happens is there's like people keep secret money and don't
21:23
don't share and aren't transparent and aren't on the
21:25
same page. And then it turns bad.
21:27
And then there's this divorce and trying to figure out what
21:29
the other one has. And I think that leads to the
21:31
divorce, right? I don't, I don't take an
21:33
official stance on they they mentioned a post nuptial.
21:37
I don't take an official stance on prenups, but I I like
21:40
prenups, not necessarily because you're going to take it into
21:44
court and like prove what you owe, what you're owed one day
21:47
and you're going to beat your spouse.
21:49
I think no, I shouldn't not. I mean that in a abusive way and
21:52
in like a I'll compete them or whatever, but I.
21:56
Didn't think about like, yeah. Sorry when I just say beat your
21:59
spouse it just. Somebody's going to clip that.
22:02
Right. So that's not why I like
22:05
prenups. I like prenups because it forces
22:07
you to have this conversation. And I think when you have the
22:09
conversation, you realize, oh, I assumed X and you assumed Y.
22:14
And that little like piece of sand of disagreement, while
22:19
small, when you're in the honeymoon phase, can irritate
22:23
and grow into this huge problem. And when you have the agreement
22:26
beforehand, you're like, OK, this is how you expect to handle
22:29
money. That's why I think transparency
22:31
is a, is a big one. So that's number one.
22:33
Number two. Can you?
22:34
Are you going to explain what a postnuptial is?
22:36
No postnuptial. Prenuptial is a legal agreement
22:39
you get into before you get married that basically says if
22:42
we were to separate, this is how we will do it.
22:45
You could even you're going to even have other things.
22:46
If we don't separate, this is how we're going to handle money.
22:49
And I think a lot of people do that before marriage so that if
22:53
the marriage goes bad, they have a previously agreed upon set of
22:58
rules that they don't have to like fight out while they hate
23:01
each other. A postnuptial is simply that
23:04
same agreement that that you'd get after you get married.
23:08
I've never heard of it. Right.
23:09
And a lot of times they're less common because often times one
23:16
or the other partner lists a prenup as a condition of
23:20
marriage, whereas once you're already married, suddenly
23:24
there's no incentive for both. You know, if there's, if there's
23:27
like a financial imbalance or something, you know, one of the
23:29
partners might not want to sign it and then they don't.
23:32
But if you know, but if you want to for whatever reason, you can.
23:36
But yeah, gotcha. Also, I'm not a family law
23:40
attorney so. Gotcha.
23:42
Yeah, here's a list of advice not to the criminal medicine
23:45
legal. OK, so yeah, we're going to have
23:48
to check #1 transparency, make a net worth statement #2 look at
23:52
your income and expenses. So together add up all your
23:54
income. Go look at the last three months
23:56
of your expenses. You can do it on a spreadsheet.
23:58
You can do it using one of these fancy apps out there.
24:01
And and then just get a sense of where you're at as a team.
24:04
Are you bringing in $8000 a month and spending $12,000 a
24:09
month? If so, address that because
24:12
that's going to become a very, you know, when you see your
24:14
spouse ordering a DoorDash and you and your, and you're, you
24:18
know, looking for pennies and, and the couch to save money to
24:22
clear this $4000 deficit, that's going to be a problem.
24:26
And I don't like my wife doesn't share my like sociopathic love
24:30
of transparency like I do. But you know, we've had issues
24:34
like this where where like she feels bad about money and I
24:37
don't where I feel bad about money and she doesn't.
24:40
And when we kind of go through this together, we either both,
24:44
we suddenly feel the same way, which is good.
24:46
You know, if one's feeling bad about money 1 isn't that's where
24:49
these these rifts can come where I'm like, I'm trying to save
24:51
money and you don't care about a $4000 deficit.
24:54
Maybe they don't, they don't even know about the $4000
24:56
deficit, right. So you got to get on the same
24:57
page. That's number two.
24:59
Number three is I'd like to use a joint account for all of your
25:03
income, both paychecks, all your income comes into a joint
25:06
checking account. You can also have just like we
25:08
talked about in the previous segment, you can also have a
25:10
joint savings account for your family short goals.
25:14
So if you're going to have a big vacation, new cars, kids,
25:19
college, whatever it is, you can put that in your savings account
25:22
and then you can even have a joint investment account if you
25:24
want. Most investment accounts are
25:26
actually individual IRA. The I censor individual foreign
25:29
KS are generally individual, but you can have a joint account and
25:33
then you pay your bills out of that.
25:36
And then I also like to have separate accounts.
25:39
So you, in addition to your joint checking account, you can
25:43
each have your own checking account.
25:44
And then at then when you're meeting and you're discussing,
25:47
you know, you're looking at your budget and your income and your
25:49
expenses. You make a little deal and say,
25:50
hey, every month we've we make 8000 bucks a month.
25:54
We're spending 6000 great with you're going to take 750 put
25:58
into your account out of put 750 put in my account.
26:00
And then I can go take my debit card that goes to my account.
26:03
I can spend on whatever I want with no oversight.
26:06
Like no, like that's my money on my own adult human with my own
26:11
decision making that we've agreed upon.
26:13
Like there's a that's a no judgement zone that doesn't
26:16
impact our family goals. That doesn't.
26:17
That's not taking money out of retirement.
26:20
OK, wait, pause. Yeah.
26:21
So if you'd when you do that, are you putting the money in the
26:25
joint account and then taking it out?
26:26
Or are you splitting your paycheck from the get where like
26:29
750 will go to your separate account?
26:32
Either could work. I like to put every single penny
26:34
of new income into your joint account and so there isn't this
26:38
like lack of transparency. And then from there, once you've
26:40
got the stream income coming into one main account, then you
26:43
automate every month on the 1st of the month, 750 each goes in
26:47
each of our accounts. Doesn't even need to be equal,
26:49
you know, like my wife has needs to spend more than I do, so she
26:52
gets more than I do. Whatever you know, whatever you
26:54
agree upon, automate into your Iras, each automate into your
26:59
savings account, automate, you know, automate all those away
27:01
and then from what's left. Then you guys can spend all you
27:04
can pay for all your pay the mortgage, pay all your family
27:06
bills and then any, you know, frivolous spending can do out of
27:10
your own accounts. And I think that's like a nice
27:11
balance between same team, all our goals got to make sure our
27:16
joint account is always healthy. But then if I want to go, you
27:20
know, do something that my spouse doesn't think is like a
27:23
wise use of money, I'll just pay it out of my own account and
27:25
then there's there's no worry. So when you go to the club every
27:28
Friday, that's your 750 money. That might not be a money
27:32
problem. That might be a my wife's gonna
27:34
divorce me problem. Fair, that's another podcast.
27:37
And you're at the club. You weren't cool enough for
27:39
clubs when you were 21. You certainly aren't when you're
27:41
45. What are you doing, Jeremy?
27:44
And she would be right. And then and then #4 is I would
27:47
say revisit it because this, these are always moving pieces
27:51
and it's always like slowly coming apart if you're not
27:54
putting it together. And so every month or two, put
27:56
it on your calendar and say, hey, let's go back to our net
27:59
worth statement. Let's go back to our income and
28:02
expenses, our budget. Let's go back and look at our
28:04
joint account and make sure everything's right.
28:06
And the other thing is I meant forgot to mention is once you
28:09
have your net worth and your income expenses, go put those
28:13
numbers into a.retirementinvestmentcalculatortheresagreat1@hellonectarine.com
28:19
recently released. And this is another kind of
28:22
story for my own life. This is one of those times where
28:26
I felt bad about money and my wife didn't because I was like,
28:28
I was like, oh, man, like as we just moved into a new house,
28:33
had, you know, have two kids, got married, like our expenses
28:35
just went like skyrocketed from what it was with me living in a
28:40
condo as a single person. I'm like, I'm like, we're like,
28:43
we're, we like pushed the yoke on a plane into the ground.
28:46
We're going to crash. And my wife was like, was like,
28:48
no, like, we're fine. And like we're not, We're not
28:50
being frivolous. And so we sat down and we did
28:52
this and we put our numbers into a retirement calculator.
28:55
And I was like, oh, we're actually based on our like
28:57
trailing 3 months of expenses, which I think are just like mind
29:01
blowingly outrageous. We're actually doing fine.
29:03
It's spending a lot, but it's actually OK for us where we're
29:06
at. And that made me feel better.
29:08
And I'm like, I don't need to be unnecessarily frugal and be, you
29:12
know, mad just because we're spending money if we can afford
29:15
it and, and we can't. So I think that helps just for
29:18
that transparency. Wow.
29:20
Oh, she also has a lot of kids. You're right, she has a lot of
29:22
questions. This is only two.
29:24
Kids, yeah. And, and kids are expensive.
29:27
I, you know, I looked up beforehand, there's like all
29:29
sorts of different surveys, but they kind of boil down to kids
29:32
are going to cost out 30,000 bucks a year each based on more
29:36
needs for housing, food, childcare.
29:38
Clothes. A lot of money.
29:40
And, you know, I think a lot of people aren't having kids for
29:43
that reason. And, you know, to me, that's a
29:45
shame. I kind of think you should have
29:48
kids if you want to have kids and then, you know, figure out
29:50
the money because, you know, this is life, right?
29:53
You know, money isn't about dying with, like, the fanciest
29:56
grave. It's about living the best life.
29:59
And having kids is a huge part of that.
30:00
And obviously, if you don't want to have kids, don't.
30:03
But if you do want to have kids, I think you'll figure it out.
30:06
You know, there's ways to be frugal with kids.
30:08
It doesn't have to be $30,000. And so yeah, gonna have to start
30:12
budgeting for that. Damn hard truths here.
30:16
Yeah. OK, Grace, I hope that answered
30:20
two of your 95 questions. Thanks for listening.
30:25
Let's move on to our next segment of the episode, Scroll
30:32
Patrol. Scroll Patrol.
30:36
Hey hey, I found some videos on the Internet and I'm making
30:41
Jeremy watch them. They're getting more and more
30:45
absurd as we go on because not only am I running out of things
30:47
to find, but like there's only so many types of a financial
30:51
quote, UN quote advice. There's.
30:53
So much out there. Send your scroll patrol to Jen.
30:56
Help her out? No.
30:56
Listen, it's like, it's just like the same dude talking about
31:00
the same thing. All that.
31:01
Anyway, I'm just finding videos that I find fun at this point.
31:04
So, Jeremy, why don't you go ahead and click on that?
31:06
We'll see, I've not seen this. OK.
31:10
I'm trying to be respectful because there's a woman on here
31:12
who was talking about her engagement and her fiance.
31:15
It was like a totally awful man. And she talked about how he had
31:19
purchased a multi $1,000,000 property in Copenhagen and then
31:23
immediately after told her like he had money issues because the
31:26
property required a bunch of renovations that cost $50,000.
31:30
And I'm just here to say, like, if you are with an alleged
31:35
millionaire and the alleged millionaire cannot come up with
31:38
$50,000, you are not with a millionaire.
31:42
That's not possible because if this is a person who is worth
31:46
millions of dollars, enough money such that they can buy
31:49
investment properties for millions of dollars, that means
31:54
they can qualify for a $50,000 loan.
31:58
That's, that's what it should mean at least.
32:00
And if they can't, they're dealing with something that'll
32:04
be an illegal or it's all a lie in a scam.
32:10
I'm excited to hear the rest of her story, but I just wanted to
32:13
stress that like that's not the thing that happened.
32:16
You don't you don't make millions of dollars.
32:19
You don't spend 2K on hotels every single night but then not
32:23
have $50,000? What is that but a two week
32:25
vacation to that man? What just.
32:29
Happened there. Let me give you some context cuz
32:32
this is what happens. I know we don't see the same
32:33
videos on TikTok, but a lot of times what happened on my feed
32:36
is that somebody will be referencing a quote, UN quote
32:40
viral video, which what does that even mean nowadays?
32:42
And like you, TikTok is so annoying because they'll be
32:45
referencing something that you'll never see and you'll try
32:47
and click on the little blue link that's like story about
32:50
girl who got scammed by ex-boyfriend.
32:52
And then it'll take you to somebody else, like talking
32:53
about it instead of the actual source video.
32:56
So it's really aggravating. But this is 1 where I was just,
32:58
I thought it was funny because as somebody who is dating in Lai
33:02
don't really deal with like broke dudes, but like, you know,
33:04
there's lots of other issues. You know, I had a young, I had a
33:07
young man take me for $2.00 tacos the other day.
33:09
So I was like, he didn't get me even a Coca-Cola classic.
33:12
So we gotta we. You know, for many reasons I Are
33:15
they good tacos? I would do 2.
33:17
Workouts, right? But it was like we're going for
33:18
a deal night and you would get me a drink.
33:20
I just want a little bubble like a seltzer or something.
33:23
Well, did you order one? No, he said.
33:25
No. Well, who's that?
33:26
I'm on you. It was a whole thing like he
33:29
ordered. So then it was like bro, it was
33:31
like a walk up thing. It doesn't matter the point of
33:32
it being like, the point of it being like this, These are
33:35
people, you know, those shows that you see on like Netflix
33:37
that are like, I got scammed by this guy or maybe this woman or
33:40
whatever. And I think this is something
33:42
that that's just what happened to this young woman where she,
33:44
he said he was a millionaire and he couldn't afford $3000.
33:47
I don't know why if you're just dating this person that you
33:49
don't, why are you even in his finances like that to know
33:51
whether or not he can afford $2000 or whatever.
33:54
But yeah. All right, let me get my
33:56
reaction. So, you know, she was kind of
33:59
all over the place with details. And like now I'm like reacting
34:02
to this like third hand, like she was reacting to what she
34:04
saw. Like we're, we're like, kind of
34:06
like a few layers deep into the inception here.
34:08
But you know, I don't know if the guy was an actual
34:12
millionaire or a scammer, but I'll tell you this.
34:14
Like, like my net worth these days is around $6 million.
34:18
I could potentially buy a property in Copenhagen.
34:21
And if I did and there's 50 grand worth of unexpected
34:24
renovations, you hear me bitching about it like that's
34:27
still a lot of money. And, and her like conclusion is
34:31
that he can qualify for a loan. Maybe.
34:34
But like you wouldn't, you know, the a millionaire means having
34:37
like an actual net worth, everything you own minus
34:40
everything you owe, like we talked about just now of over
34:43
$1,000,000, right. And so that has nothing to do
34:46
with qualifying for a loan. In fact, as a millionaire, I, I
34:49
wouldn't want to borrow money because then you're kind of
34:51
putting yourself at more risk because I don't want to lose my
34:54
millionaire staff by borrowing a bunch of money and then having
34:56
that property go bad. I would just go to my assets and
34:59
sell some stocks or something. And so, you know, I don't know
35:02
if the video she's describing the guy is a scam or not, but I
35:05
think that for sure. I mean, my wife can attest.
35:09
I talked about her a lot on the show.
35:10
I don't think she listens to to be honest.
35:12
Probably for for a good for a good cause for the.
35:15
Best, yeah. Yeah, for the best.
35:17
But you know, I will complain about any amount of money.
35:21
And so it doesn't mean I'm not a millionaire.
35:23
I just think it means that, you know, you want to stay a
35:26
millionaire and not spend your money well.
35:27
And I certainly wouldn't want to go into debt to do renovations
35:31
on a like a vacation home or something like that.
35:33
So I do think there is like just a lot of misconceptions.
35:37
Like she's talking about $2000 a night on a hotel.
35:40
Like, you know, never have I spent, you know, a couple times
35:44
I like really splurged like we kind of went on a baby moon and
35:47
spent like $600 a night on a like Southern California, like
35:50
pretty nice hotel. But even that was like, that was
35:53
like a special thing. If you're, if you have 1,000,000
35:56
bucks and you're spending $2000 a night, you're not going to be
35:58
a millionaire for very long, right?
35:59
That goes pretty quickly. And, and most millionaires think
36:02
about money in terms of a way to grow.
36:04
I guess that's that's a real that's a real thing I want to
36:06
address about this video is that most wealthy people live simply
36:13
drive used cars, invest most their money.
36:17
We wouldn't notice it walking on the street.
36:19
And I think a lot of like pop culture, including social media
36:23
and movies will have you believe that being a millionaire is
36:27
$2000 hotel rooms and Lamborghinis.
36:29
And you know, and I even like billionaires.
36:32
I don't like they always talk how how Mark Cuban like just
36:34
wears AT shirt instead of a suit because like he can, he wears
36:37
whatever he wants to. So yeah, I yeah, I don't know
36:43
how to. So is he a millionaire or no?
36:44
No, I'm just kidding. I have no, I have no idea
36:46
kidding. I'm kidding.
36:47
Based on based on his behavior, I think he could be I don't
36:49
know, he's buying properties and stuff, but but yeah, I give I
36:53
give that great. I give that video AB because I
36:56
think it's a fun video and very salacious, but I don't think
37:02
it's a really good representation of how how you
37:06
assess whether or not someone's a millionaire or how
37:07
millionaires should behave. Welcome to my side of the
37:11
Internet. I'm going to continue to bring
37:12
you deeper and deeper in. Keep it up, I know I'll be
37:16
watching Love Island one of these days.
37:17
Yes, I would love. That instead of just listening
37:19
to the soundtrack on Spotify. OK, let's get into our last
37:24
segment of the episode. Money, money.
37:28
Jeremy had time today. I had time I respond to your
37:32
comments. We're in the comments section.
37:34
We got to see what people have to say.
37:36
I realized I didn't put the original post, but this is the
37:38
tie post. Yeah, OK, great.
37:41
This is the tie post that you put or you expose his beautiful
37:45
young face and talked about getting him set up for to be a
37:49
millionaire in the future. And we had one commenter say,
37:53
well. Let me explain the post first,
37:55
then you can then you can give the count.
37:56
So basically I, I gave a little example.
37:59
I was like, hey, I said a baby. If you open up a, an AGMA on
38:03
AGMA, which is a custodial brokerage account, which is
38:06
basically an investment bank account in your child's name
38:10
that you are the custodian of you control until they're a
38:13
18121, depending on your state. Then you put 25 bucks a month
38:17
into it, starting with their birth when they are 65, they'll
38:21
have $1.5 million. And it just shows us like
38:25
incredible power of compound growth.
38:27
And I put something kind of like a little bit corny in there
38:30
about how it's, you know, growth is taxed to the child's rate.
38:33
And so you're probably going to experience a very little tax
38:36
amount in the, in the early years.
38:38
And so that might be one way to invest for a baby.
38:43
And you know, with all these social media posts, it's just
38:47
like you're trying to at least what I try to do is sell with
38:51
curiosity, right? This wasn't the Bible of tax
38:55
law. It was, hey, here's one thing
38:58
you can do and here's the outcome.
39:00
Let's explore that more. And then this commenter said.
39:04
So they say just be aware that if he goes to college, 20% of
39:08
any money in your child's custodial account is counted for
39:10
financial aid purposes. If we were held as parents
39:14
money, only 5.64% would count. Do you know what this means and
39:18
is it true? So I'm going to start and finish
39:21
by saying this commenter is like dead on.
39:23
This is exactly right. Bravo.
39:27
You know, no notes. I guess there are notes because
39:30
I'm going to be talking about the notes for the next few
39:32
minutes. But so they're right.
39:34
So let me break into what they're talking about.
39:36
First of all, colleges is expensive and there are several
39:40
programs federal, state, your, your, your college, whatever
39:45
that can help you pay for college.
39:47
And that's generally called financial aid.
39:49
And it can be things like Pell grants, which are federal
39:52
grants, gifts like not gifts like money given to you to help
39:56
you pay for it or federal work study.
39:58
Basically we can get like a good paying job or you know, better
40:03
jobs based on your need to work subsidized federal loans where
40:08
they'll basically. Instead of giving you the money,
40:11
which is a grant, they'll loan you the money but at
40:13
advantageous terms or rates or needs based grants from your
40:17
college or from or your state or whatever.
40:19
And so basically, you can apply for financial aid and maybe be
40:25
able to afford college more cheaply than just doing it,
40:28
paying it yourself out of pocket.
40:30
When you apply for that federal aid or for that financial aid,
40:34
there's this thing called the student aid index Sai, and they
40:38
figure out basically how much are you able to pay for college.
40:42
And so, for example, my kids probably, at least
40:47
philosophically, shouldn't get any federal student aid because
40:51
they have rich parents who can just pay for it, right?
40:54
And in order to figure out where, you know, you're applying
40:59
for these big federal programs, there's like, a little algorithm
41:02
to figure out, OK, how much can you afford?
41:04
Are you the poorest of the poor and you've been eating rice and
41:06
beans your whole life and your parents are both in prison or
41:09
the worst of the worst? Or are you a multimillionaire
41:12
whose parents make $10 million a year and you've got billions of
41:15
dollars of assets and the cost of college?
41:18
Is the drop in the bucket for you?
41:20
Or is it somewhere in between? And so Sai is basically a little
41:25
algorithm to figure out what you're able to pay.
41:28
And it includes things like how much money the student makes,
41:32
how much money the parents make, how many assets the student has
41:36
and how many assets the parent has.
41:37
And like those 4 main things, there's, there's little
41:40
equations in them to figure out how much each of those count.
41:43
And they come up with a stummer and they say, OK, based on the
41:46
fact that you are an 18 year old working part time and you've got
41:50
$5000 in your checking account and your parents make this much
41:52
money, we think you should be able to afford $6000 a year for
41:57
college. But college really costs $18,000
42:00
a year, so your need is $12,000 a year.
42:04
And so that's what this commenter is saying is saying,
42:05
hey, the more money you put into a kids account, it actually
42:09
counts more 20% per year rather than 5.64% per year that they
42:16
assume you should be able to pay.
42:17
And they're, and they're exactly right.
42:20
And that's something to be aware of.
42:22
And, and so, but I'll, I'll, I'll do the math for you just to
42:27
show you how big of a deal this is or maybe isn't.
42:30
If you save 25 bucks a month, like this post said, when you're
42:33
65, you'll have 1.5 million, but when you're 18, that number is
42:36
only 13,000. And so of that 13,000, that
42:40
student aid function will say, hey, you should be able to put
42:45
2740 per year of that towards college.
42:48
Since you already have all this money.
42:50
If it was in your parents brokerage account instead of
42:53
2740, it would only be about $700.
42:56
And so it is significantly more, which means it, it could
42:59
potentially lower the student aid or the, you know, the
43:02
financial aid you're eligible for.
43:03
That is if you're in this range where you are eligible, right?
43:06
If you are, if your parents are already rich and you weren't
43:09
eligible anyway, then that won't matter, right?
43:12
But the bottom line is a commenter's correct, and it's
43:14
not a great account if you're really aiming to get a bunch of
43:19
financial aid. Better accounts would be like
43:21
A529520 Nines are tax advantage accounts that are designed to
43:26
save for college. And those are still counted as
43:28
assets, but they're counted as parental assets, which is that
43:32
5.64% number, not the 20% percent number.
43:36
Or you could save in a general savings account, you know, up
43:39
until your kids are in college, if you think you're going to be
43:42
in this range where the parents have little enough assets that
43:45
they're not going to be phased out of any sort of financial aid
43:48
and this 5 to 20% is going to make a difference.
43:51
You could just save the money in the parental account and then
43:53
gift it to your kid on this 18th birthday and put it in a in
43:56
their brokerage account. So, you know, it's one of those
43:59
things. It's infinitely complex and this
44:02
may or may or may or may not matter to you, depending on
44:05
where your finances are and everything.
44:07
But it it certainly is a a good comment and something to be
44:10
aware of if you're going to be applying for financial aid.
44:13
OK, Good job, anonymous commenter and thank you Jeremy
44:18
for having the time today. That's it.
44:22
We. Made it to the end of the.
44:24
Episode again. It seems to happen every every
44:27
weeks. One of these weeks we might have
44:29
a never ending episode that just is a 24 hour live stream of.
44:33
She's your Twitch stream. Jen's colonoscopy, but.
44:36
Oh my God. See.
44:38
That's a callback that's called. That's how you see your comedian
44:41
now. Yeah, I'm, I'm, this is my stand
44:43
up hour. You have to listen to it
44:45
because. Insufferable.
44:46
Absolutely. OK, well, that's all.
44:48
We have time for you today on the Personal Finance Club show.
44:50
Thank you for listening and we will see you again next week.
44:54
Don't forget to follow the 2 rules of Personal Finance Club.
44:57
Rule #1 live below your means and rule #2 invest early and
45:02
often. The Personal Finance Club show
45:04
is produced by Jeremy Schneider and Jed Mundia, music by Essa
45:07
Balu and Homie. Send your questions to podcast
45:10
at personalfinanceclub.com. The Personal Finance Club show
45:13
is Co hosted by Jeremy Schneider who is a co-owner of Nectarine
45:17
and SEC Registered Investment Advisor.
45:20
The views expressed on this show are those of the hosts and
45:22
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45:24
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45:26
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45:30
This podcast is for informational and educational
45:32
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45:35
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45:40
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