Latest / Becoming Financially Confident / BFC Weekly Recap: Mortgage Rates Hit 6.71%, the New $2,000 1099 Rule, and Who Owes Debt After Death

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BFC Weekly Recap: Mortgage Rates Hit 6.71%, the New $2,000 1099 Rule, and Who Owes Debt After Death · Becoming Financially Confident

• 0:00
  Foreign.
• 0:15
  Here's the big things.
• 0:16
  Couple things to look for.
• 0:17
  They're never going to charge you a fee to apply.
• 0:20
  Nope.
• 0:21
  So if you're trying to get take advantage of a class action settlement, don't pay a fee.
• 0:28
  Second thing, they're never going to ask you for your full Social Security number.
• 0:34
  One of them is Google Play.
• 0:37
  So Google Play has Google.
• 0:40
  Sorry, there's another one with O'Reilly Auto Parts.
• 0:43
  Both of those have September deadlines.
• 0:46
  September 14th and 28th.
• 0:48
  Yeah.
• 0:48
  So I guess this is for the audience.
• 0:50
  If you have purchased anything from O'Reilly Parts or Google Play, maybe in the last year or so, you could be part of a class action lawsuit and just get some extra change money or something.
• 1:01
  So take a look at that.
• 1:02
  Absolutely.
• 1:05
  Everybody keeps saying rates are about to fall, mortgage rates are about to fall, but the 30 year mortgage just climbed to 6.71%, the highest in more than a year and up again from the week before.
• 1:17
  Ralph, if you are buying a house or waiting to refinance, what does this number mean for you?
• 1:24
  Well, this is really interesting because a lot of people thought that rates were going to actually come down.
• 1:29
  So what this really means is that in general, interest rates are on the way.
• 1:35
  And a lot of people don't want to hear this.
• 1:37
  They're on their way up.
• 1:39
  I think we've already hit the bottom.
• 1:40
  I don't think we're going to go any lower.
• 1:42
  Most mortgage lenders will lend you up to 28% of your monthly gross income for a mortgage.
• 1:51
  Okay.
• 1:51
  So if your mortgage payment is based on a 6% interest rate, then you can afford X value of house with that interest rate goes up to 6.5%.
• 2:03
  Then what happens?
• 2:03
  Your mortgage payment goes up.
• 2:05
  If your mortgage payment goes up, then the amount of house you can actually afford to buy goes down.
• 2:11
  So that 6.71 is up from a year ago, which is really interesting.
• 2:17
  So a year ago it was at 6.04%.
• 2:21
  So it's gone up quite a bit.
• 2:23
  I think the reality on the ground is that interest rates are about where they're going to be.
• 2:28
  The feds are going to be meeting again middle of September.
• 2:32
  Right.
• 2:33
  We talked about this on the show before.
• 2:34
  A couple of the federal governors, they're called, their Federal Reserve governors, have indicated they actually want to increase interest rates.
• 2:42
  So it wouldn't shock me, and I don't have a crystal ball, it wouldn't shock me if we actually got into a period of where interest rates are going up.
• 2:50
  So I guess the lesson here Right now is just like, keep in mind that the, especially for mortgages, if you're going to refinance, you're going to buy, purchase a house.
• 2:59
  This might be one of the, the lowest of the rates for a while until we get our next housing bubble burst or something like that.
• 3:06
  So just keep that in mind as you navigate those money conversations with yourself, with your partner.
• 3:13
  Anything related to a house, a client now only has to send a 1099 if they paid you $2,000 or more, up from $600.
• 3:25
  Ralph, what does that actually change for someone who freelances or does gig work?
• 3:29
  What this is going to do is it's going to confuse the hell out of everyone.
• 3:33
  And I'm going to be very blunt about that because for the last, ever so long, and I can remember we've always heard this rule, if you pay anybody more than $600 a year, you got to give them a
• 3:45
  1099.
• 3:46
  Yes.
• 3:47
  So people have become accustomed to that and now they've changed the rules.
• 3:52
  And basically, if you're paying someone, here's the new rule.
• 3:55
  If you're paying someone who is not a corporation, general way of saying it, you can now pay them up to $2,000 per year per person without giving them a 1099 at the end of the year.
• 4:08
  Okay?
• 4:09
  So if you are a freelancer, a gig worker or something like that, don't expect to get a 1099 from every person you've worked with, only those that you've made more than $2,000 with.
• 4:22
  This is what's going to confuse people, because then what's going to happen is when that gig worker, like you, if you were the gig worker, goes to file your tax return, you're going to say, wait a minute, I
• 4:31
  never got a 1099 from this person.
• 4:33
  I guess I don't have to claim that income.
• 4:35
  Wrong answer.
• 4:36
  Wrong.
• 4:37
  Yeah, correct.
• 4:38
  So whatever you collect, whatever, it could be $10, it could be $3, you have to claim that on your tax return, regardless of whether you get a form or not.
• 4:51
  As an authorized user, you are not responsible for that debt.
• 4:57
  So the whole question, number one, is whose name was on the debt in the first place?
• 5:03
  Authorized users are not the same as a joint account holder.
• 5:06
  Okay?
• 5:07
  In general, what happens is a person, when they pass away, an estate is created.
• 5:12
  Now, you might not have a technical attorney create this thing, but estate basically means that whatever is left over after a person dies away should pour into what's called an estate.
• 5:24
  That would be any cash accounts they have, any stuff they have cars, furniture, all those sort of things.
• 5:30
  Not things that were assigned to somebody.
• 5:33
  Because I'll give you a great example of this.
• 5:35
  Let's say that your mother passed away and she had an IRA account.
• 5:40
  That IRA account has a named beneficiary.
• 5:44
  Those things go directly to the named beneficiaries, not to the estate.
• 5:49
  Oh, okay.
• 5:50
  But then.
• 5:51
  Then I guess for this ira, does it technically mean it came from the estate or like it came from the.
• 6:00
  No, it came directly from the decedent.
• 6:02
  So it passes without going through the estate.
• 6:04
  That's why this is such an important thing.
• 6:06
  If you have any kind of accounts, to the extent you can do it, name a beneficiary so that they go directly to that person.
• 6:14
  Like life insurance goes that way, all those type of things.
• 6:16
  Got it.
• 6:17
  Other things that don't are what is called in the estate.
• 6:20
  And generally, creditors can collect money from whatever money is in the estate.
• 6:26
  Okay.
• 6:28
  Most of the time, family members are not responsible to pay with their own money.
• 6:34
  In the end, if the estate can't cover it, guess what happens?
• 6:37
  The debt doesn't get paid.
• 6:39
  Yeah.
• 6:39
  So that's the thing you need to understand.
• 6:40
  If you're just an authorized user, even if you were using the card till the day before she died, if you've never signed an agreement for that debt, you're not responsible for that.
• 6:51
  And you can tell that guy to go pack sand.
• 6:53
  You can say, ralph told you that again, if you co.
• 6:56
  Sign for it.
• 6:57
  If you're a joint account holder, if you're the executor, if the state law imposes a duty, if you live in a community, a community property, state, all those things are the nuances to this.
• 7:07
  Those things would change this.
• 7:09
  Okay?
• 7:10
  And in general, you're not responsible for it.
• 7:14
  So how does she handle this guy who is becoming more and more hostile?
• 7:18
  I would certainly.
• 7:19
  I would just say to them, listen, dude, I am not the executor of the estate.
• 7:24
  I am an authorized user.
• 7:26
  I'm not responsible for this.
• 7:28
  If there is an executor to the estate, you can give them that person's information.
• 7:32
  You could also say to them, look, there's nothing left here whatever.
• 7:37
  Good luck.
• 7:38
  Yeah.
• 7:39
  I mean, it really comes down to we can spend an hour talking about this, but it's really pretty simple.
• 7:44
  Yeah.
• 7:44
  If there's money.
• 7:46
  My grandmother used to say, you can't get blood from a turnip, I think is what she said, or something like this, you know, and you just can't.
• 7:52
  Yeah.
• 7:53
  What if.
• 7:53
  What if the person keeps on pressuring Yvonne.
• 7:56
  Well then you can get into what's called the Fair Debt Collection Practices act and you can actually report it to the CP or cfbp, which is basically Consumer Protection Bureau.
• 8:07
  So you can actually say to them, this is a level of harassment, stop calling me.
• 8:12
  You got to understand, the collector just wants to get paid.
• 8:14
  I'm not blaming the collector.
• 8:16
  They see you as an authorized user.
• 8:18
  Probably a lot of times they call and the authorized user goes, I guess I'll just have to pay it, even though they don't.
• 8:24
  So that's the first thing.
• 8:25
  Second thing, there are a lot of state legal aid societies you can call to deal with for free.
• 8:31
  Because a lot of people ask the question, does a person's debt go away when they die?
• 8:35
  It just depends.
• 8:37
  So here's the big takeaway for this.
• 8:40
  You did not sign for it.
• 8:42
  So in most cases you do not owe it.
• 8:45
  The debt belongs to the estate, not to you.
• 8:48
  Don't let a phone call in the worst month of your year talk you into paying something that was never yours.
• 8:53
  That's really the whole key to this.
• 8:57
  So Ralph, what is this week's money move?
• 9:00
  So the money move this week is we're going to ask you to do a couple things.
• 9:04
  And the reason we're going to ask you to do that is because fraud is at a ridiculously high level.
• 9:10
  There's a couple things that we're going to recommend you do.
• 9:12
  Number one thing, most people have a phone in your pocket.
• 9:16
  There is a PIN number that you can add to your carrier so that no one can swap your sim.
• 9:21
  Basically we're going to get real complicated here.
• 9:23
  But what happens if someone can swap your sim?
• 9:26
  They can take over your account.
• 9:28
  Then you could have the best two factor authentication set up, like where you're getting texts and all that kind of stuff.
• 9:33
  But if somebody can rob your phone number from you, guess what?
• 9:37
  They can get those texts set up for them.
• 9:39
  So that's the thing we're going to ask you to do is go contact your carrier, if it's Verizon, AT&T, whatever those T mobile, and give them a PIN number.
• 9:49
  And that PIN number will make it so that no one could call in and change the service to you.
• 9:54
  They have to go through you first.
• 9:57
  Got it?
• 9:57
  It's a big number, we don't have time to get into it.
• 9:59
  But that's where a criminal moves your phone number onto their device and catches the one time codes for your bank.
• 10:05
  Big deal.
• 10:06
  Second thing we're going to tell you to Do.
• 10:07
  So that's number one.
• 10:08
  Add two factor authentication to your bank and to your email account.
• 10:13
  A lot of people don't think about that email account.
• 10:15
  These things are going to take 15 minutes at the most, and they don't cost you a dime.
• 10:22
  So here it is.
• 10:23
  Here's our money.
• 10:24
  Move of the week.
• 10:25
  Add a PIN or passcode to your mobile phone account and turn on two factor authentication on your bank and your email.
• 10:32
  And here's the homework.
• 10:33
  It's gotta be done before Friday.
• 10:36
  Sounds good.
• 10:37
  I think I'm already halfway there.
• 10:38
  But I do want to double check on my phone.
• 10:41
  I'm assuming, Ralph, you already have all this done, okay?
• 10:44
  So full transparency.
• 10:46
  I do, actually.
• 10:47
  I do have this set up because someone actually tried to steal my cell phone number from me.
• 10:52
  And I'm on Verizon, and they caught it and they made a phone call to me and they said, well, Mr.
• 10:57
  Ralph, you can prevent this by adding a PIN number.
• 11:00
  But here's the problem, Juliet.
• 11:03
  I forgot the PIN number.
• 11:04
  And when I went to go upgrade my phone the last time, they're like, well, we need you to put your PIN number.
• 11:09
  I don't know what it is.
• 11:10
  Oh.
• 11:10
  That became a whole hassle.
• 11:12
  They had to do this, and I had to stand on one foot and wave.
• 11:15
  And it was crazy.
• 11:16
  But anyway, it's a great thing to have.
• 11:19
  More secure is better than not secure, I would say.
• 11:21
  Yeah, absolutely.
• 11:21
  I mean, it's something else to prevent your account being overtaken.
• 11:26
  Having your account overtaken is not a fun situation because all of us use these Multi factor authentication.
• 11:31
  You used to get text codes all the time.
• 11:34
  If somebody can take over your phone number, that means they can get access to your text codes, which means that your security has a huge hole in it.
• 11:43
  Because Juliet said something.
• 11:44
  She said, ralph, we use the words financially confident every single day on the show.
• 11:49
  But what does that mean?
• 11:50
  What does it mean to be financially confident?
• 11:53
  Because a lot of us would think confident.
• 11:55
  That means, oh, I'm picturing somebody who's rich or somebody that's got it all figured out.
• 12:01
  Not somebody who lies awake at night wondering about what's going on.
• 12:04
  I want to throw something out there because there's an interesting thing that the Federal Reserve does every year, and this is where I think a great place to start.
• 12:11
  The Federal Reserve asks people a simple question every single year.
• 12:16
  If you had an unexpected $400 expense hit you right now, how would you pay for it?
• 12:21
  Of percent of adults who are asked that question, 1 in 8 said they couldn't pay for it.
• 12:28
  A $400 charge.
• 12:30
  They couldn't do it with cash.
• 12:32
  They didn't do it with a credit card.
• 12:33
  They couldn't borrow, not by selling something.
• 12:36
  Another 15% said they'd put it on a credit card, which.
• 12:41
  That sounds good, but you have to.
• 12:44
  Pay off the balance.
• 12:45
  That's right.
• 12:46
  So 15%, they said they'd put it on a credit card and carry the balance.
• 12:50
  10% said they'd borrow from friends or family.
• 12:53
  You might know those people.
• 12:55
  7% said they would sell something.
• 12:58
  Right.
• 12:59
  But here's the scary statistic.
• 13:01
  63% said they could handle it, they could pay for it with cash, with savings or a card.
• 13:07
  They would pay off on the next statement.
• 13:11
  Sorry, let me cough it out real quick.
• 13:14
  The frog has escaped and it's gone to California.
• 13:18
  Ralph, why did you do this to me?
• 13:20
  We are not even in the same state.
• 13:22
  And she's got the frogginess going on.
• 13:26
  Duchess of NJ said credit card.
• 13:28
  If you can pay it off within a month.
• 13:30
  I think that's exactly the point that I wanted to highlight.
• 13:33
  Right?
• 13:33
  Because just because you have a credit card, just because you can't do that, that's not it.
• 13:38
  If you're carrying a balance.
• 13:39
  And what I will say there is, we talk about emergency funds.
• 13:42
  Yes, a credit card is not your emergency fund.
• 13:45
  No, a credit card is fine to use.
• 13:48
  My oldest son loves his credit card.
• 13:49
  He pays it every week.
• 13:51
  Use it for points, use it for convenience, use it for safety.
• 13:55
  But if you have to put stuff on a credit card, you're going to carry that balance over to the next month, you've got a problem.
• 14:04
  Financial confidence is not a feeling about your money.
• 14:07
  Let's start there.
• 14:08
  It's not a feeling.
• 14:10
  It is knowing what is true about your money and knowing what you would do next.
• 14:17
  The way you get to that point is you collect evidence until confidence is the only reasonable conclusion.
• 14:23
  Right.
• 14:25
  Stage one is awareness.
• 14:28
  The question that it's answering is what is actually true?
• 14:33
  And when I say to somebody, for example, I've asked this on this show the last couple days, what did you spend last month?
• 14:40
  That's awareness.
• 14:42
  What came in, what went out.
• 14:45
  If you can say your numbers out loud without looking away, if you know, hey, my mortgage, is this.
• 14:50
  My property taxes, is this.
• 14:51
  My car loan, is this?
• 14:52
  Right.
• 14:53
  I'm the accountant, and there have been seasons in my life where I didn't want to look at my bank account, where I didn't want to look at that credit card statement.
• 15:02
  I didn't want to look at what was really going on.
• 15:04
  I had no idea what my debts were.
• 15:06
  And it wasn't that I didn't care.
• 15:08
  It was just.
• 15:09
  I just didn't have the ability to.
• 15:10
  I felt overwhelming at that point.
• 15:13
  Yeah, that's the only entry fee to what we're talking about today.
• 15:16
  If you don't want to be aware, I'm sorry, this show is not for you.
• 15:19
  I can't help you.
• 15:19
  That's just the truth.
• 15:22
  The stage two thing to me is intentionality.
• 15:25
  And Dutchess kind of said this.
• 15:27
  She said, be an ability to pay for the things I want to do.
• 15:32
  And I actually think that I could interchange both of these, because when a lot of people hear that, I'm actually working on a book.
• 15:39
  It's called the Dollar Job Framework.
• 15:41
  And I built a core structure that we're going to be able to offer here to our.
• 15:44
  To people here on the show.
• 15:45
  But basically, I don't start with restriction, because if you hear the word budget, most people hear diet, most people hear, well, I can, I can, I can't.
• 15:53
  I start off a little bit different.
• 15:54
  I start off with what I call the dream.
• 15:56
  And the dream is where you start that.
• 15:58
  And it's all about being intentional.
• 15:59
  Because the question you're asking yourself in stage two is, where do I want it to go?
• 16:05
  Where do I want my money to go?
• 16:08
  So we start with awareness, then we get into intentionality, and then we get to stability.
• 16:12
  Let's talk about what stability looks like.
• 16:15
  And it goes along lines that we just talked about.
• 16:17
  Can I absorb that surprise?
• 16:21
  What does that surprise look like?
• 16:24
  It's kind of like if you had a $1,500 problem, let's say all of a sudden, you wake up tomorrow morning, you go to take a shower, you turn on the hot water, and that puppy is cold.
• 16:34
  You got no hot water at all.
• 16:36
  Right?
• 16:37
  And the first thing you think of is, uh, oh, you know that hot water heater in the basement?
• 16:42
  It's probably about 15 years old, probably needs to be replaced.
• 16:46
  And you kind of have an idea.
• 16:48
  So you go into your chat GPT and say, what is a new hot water heater?
• 16:51
  And it says 1500 bucks.
• 16:53
  Yeah.
• 16:54
  Well, being stable is the difference between that being an annoyance and becoming a true crisis.
• 17:02
  Because it's.
• 17:03
  Stability means that you have $1,500.
• 17:05
  You understand, you've planned ahead, you've been intentional, you're aware where your money's going to, and it doesn't become a crisis.
• 17:11
  The final stage for me is growth, and we can Also use the word renewal here if you want.
• 17:16
  And I just thought about that as I was talking here.
• 17:18
  Let's hear it.
• 17:19
  Because the question here is, what do I want this to buy me?
• 17:24
  And it's not about more stuff.
• 17:26
  Dutchess said it perfectly.
• 17:28
  It gives you options.
• 17:30
  Yeah.
• 17:31
  When you're in a stage of growth, you've already aware, you've already been intentional, you have that stability, and now you can say, hmm, what could I do with this?
• 17:44
  I don't drink coffee, so for me, it's easy.
• 17:46
  But, like, for me, it might be Dunkin Donuts.
• 17:48
  When I used to be big and fat, I used to stop at Dunkin Donuts all the time.
• 17:52
  But here's the difference.
• 17:54
  I decide to not go through the drive thru because I want to be able to put $100 a week into my retirement fund.
• 18:04
  And I gotta be blunt with you, Juliet.
• 18:05
  One of the things that stuck out to me is that you had been downsized from your work.
• 18:10
  You had gone from a typical corporate job.
• 18:13
  And one of the things that Juliette put in her thing is she says, but I built enough Runway.
• 18:18
  Yeah.
• 18:19
  Okay.
• 18:20
  So being downsized, like building that emergency savings the first time around, it definitely required a lot of awareness and intentionality.
• 18:26
  And I did that.
• 18:27
  I think when I was downsized, I kind of.
• 18:31
  I mean, it always hurts when you're downsized.
• 18:33
  You kind of go into a little, like, emotional tornado.
• 18:37
  And at that time, I was very much like, I don't want to see my credit card statements anymore.
• 18:43
  I don't want to see these bills.
• 18:44
  I know they're happening.
• 18:45
  I know I can do it, but I don't want to know the exact number.
• 18:49
  It sucks to see something.
• 18:51
  I spent a lot of time and energy building up my emergency savings, seeing that number go down and being like, oh, my God, is that the cost of my daily living, my monthly living?
• 19:01
  And then.
• 19:02
  So now I'm trying to rebuild that, but I'm even more intentional in how I want to rebuild that.
• 19:08
  Right.
• 19:08
  Like, when I was in corporate, it was very, very difficult.
• 19:11
  Not just emotionally, physically, and mentally, but now that I'm like, I want to rebuild my savings, I want to do it in a way where holistically, I feel so much healthier and do it in a better way before.
• 19:23
  So even though it's slow, it's tough right now, but overall, I feel a lot more capable and I feel a lot happier.
• 19:35
  I lift weights now as part of my health journey.
• 19:37
  And there's a thing in weightlifting called muscle memory.
• 19:40
  Yes.
• 19:40
  And it's A real thing.
• 19:42
  Because I spent years not lifting weights anymore for a while.
• 19:45
  And when I.
• 19:46
  I guess it's probably been about a year and a half now, I just started to start lifting weights again.
• 19:50
  And what you're really talking about is that muscle memory.
• 19:53
  Because when I started lifting, it didn't take me but a couple weeks and I was back up to lifting the same amount of weight that I was lifting before.
• 19:59
  Amazing.
• 19:59
  So it's not that you're starting over.
• 20:01
  And that's what I want people to hear.
• 20:03
  You already know the things to do.
• 20:06
  You already have those muscles.
• 20:07
  You just haven't worked out those muscles in a while.
• 20:13
  It starts off with the dream.
• 20:14
  And like I said before, don't start off with restriction.
• 20:18
  I think to be effective in any kind of budgeting decision, I call it the dollar job framework.
• 20:24
  Because I want you to dream about.
• 20:25
  What does that look like for you?
• 20:26
  So the very first question I'm going to ask you, what do you want your money to make possible?
• 20:32
  The second thing is to define, and this is one that trips up a lot of people.
• 20:37
  This is where you have to put a number and a date.
• 20:39
  It's not.
• 20:40
  It's one thing to say, well, I want to get all my credit cards paid off.
• 20:44
  Okay, that's not a definition, that's a hope that happens.
• 20:48
  Third thing goes right to understanding where you are.
• 20:51
  Awareness.
• 20:52
  I call it discover.
• 20:54
  And that's where you find out exactly what's true about your money right now.
• 20:59
  Now, this is one of those things that it hurts a little bit because when you look at it, when you open up the envelopes you've been putting off, when you open up those credit card statements, when you look
• 21:10
  at how much debt you have, how much is left on the student loan, how much upside down you are on your car, all those type of things.
• 21:17
  This is a discovery phase.
• 21:19
  It's not about shaming you.
• 21:20
  These are decisions you made before.
• 21:21
  You can't change them.
• 21:23
  Yeah.
• 21:24
  But you need to be aware of them.
• 21:26
  So that's the third level, is discover what is actually true about your money right now without shame.
• 21:32
  So one of the things I tell people to do there is really to create two documents.
• 21:36
  Document number one is a list of all of your assets, what you own, cars, furniture, stuff.
• 21:44
  Column number two is what you owe, every single debt.
• 21:48
  Credit card, mortgage, car loan, whatever those things are.
• 21:52
  The buy here, pay here, the buy now, pay laters, all those type of things.
• 21:56
  List them all.
• 21:57
  The difference between those two numbers is what we call net worth for a lot of people, the net worth is zero or close to zero because they don't have enough to justify the debt.
• 22:11
  Then we start to design.
• 22:12
  This is where we actually grab a little bit more of that intentionality.
• 22:17
  Okay?
• 22:17
  And this is where I give this whole idea of giving every dollar a job.
• 22:21
  This is why I think this works for so many people.
• 22:24
  Most people understand what it means to be to have a job.
• 22:27
  When somebody hires you, they give you a job assignment, right?
• 22:31
  You have a job.
• 22:31
  When you were working in corporate, you had a job.
• 22:35
  You had a job description.
• 22:36
  You had accountability.
• 22:37
  So once you've designed the jobs, once you put the job descriptions for every single dollar, then you deploy it.
• 22:44
  Deploy it.
• 22:45
  And what that means is that every dollar gets a job before it leaves your bank account.
• 22:49
  Because here's the thing I've found.
• 22:51
  Unassigned dollars go away.
• 22:54
  You don't know where they went.
• 22:55
  Yeah.
• 22:56
  And then we go into debrief, because this is true debrief.
• 23:00
  Yeah, because you got to look at how it actually played out.
• 23:03
  Because it's one thing to have an idea of how you want it to.
• 23:05
  Play out and then try to execute.
• 23:08
  Yes.
• 23:08
  So the execution is.
• 23:09
  Then you gotta go back and say, well, how did things actually perform?
• 23:12
  That's why I call it the debrief.
• 23:15
  This is where you meet with yourself every week, and you say, okay, here were my plans.
• 23:19
  Were.
• 23:20
  Here's what actually happened.
• 23:22
  And finally, finally develop.
• 23:26
  Develop.
• 23:26
  What are we developing?
• 23:27
  We're adjusting the plan, and we're growing the next dream.
• 23:33
  And what she said.
• 23:34
  You guys have inspired me to pay down my one outstanding credit card.
• 23:38
  I had to dip into my savings to do.
• 23:40
  Sorry.
• 23:40
  But I am confident I can replace the savings faster than paying the debt monthly.
• 23:45
  Well done, Duchess.
• 23:47
  You have a dream, and you've put that dream into motion.
• 23:52
  We are all apprentices of our own money.
• 23:54
  Until you feel like you're you.
• 23:56
  You are the master of your own money.
• 23:58
  When you feel like you know how to use your money to do whatever you want, then you become master and be financially confident.
• 24:08
  There's four numbers on this page that you need to key in on.
• 24:12
  Number one number is the amount billed.
• 24:14
  That's what the provider charged.
• 24:17
  Almost nobody pays that.
• 24:19
  So ignore that, because providers will bill whatever they can.
• 24:23
  It's kind of like throwing spaghetti at a wall.
• 24:25
  They want to see what sticks.
• 24:27
  The second number is the allowed amount.
• 24:30
  That's what your insurance company has negotiated with the provider.
• 24:34
  What they're willing to pay, what your plan will pay, and what the provider already agreed.
• 24:38
  The Service is actually worth.
• 24:41
  Okay, third thing, plan paid.
• 24:45
  Which means what did your insurance send them already?
• 24:48
  Because by the time you get to an eob, the insurance company will have already sent them something.
• 24:53
  So I'll use my sons as an example.
• 24:55
  Because the actual charges were almost 70, $800, the insurance company paid the difference between his deductible and that for that particular provider.
• 25:06
  So the insurance company turned around and sent a check or an electronic payment for what the plan paid.
• 25:12
  And then the final column, which will startle you and make you want to stand up in your chair, is the patient responsibility.
• 25:19
  That one is yours.
• 25:21
  And that's the only number on the page that should ever show up with a bill with your name on it.
• 25:28
  There are basically, with Turo directly, there's three earning plans that you can pick from.
• 25:33
  And the way that it works is depending upon which plan you pick, the more of the price you get to keep.
• 25:38
  But as you keep more, more of the damage claim is yours.
• 25:40
  And that's one of the things we're going to talk about right here from the beginning.
• 25:43
  Understand that you are renting out your personal vehicle.
• 25:47
  If someone decides to destroy your personal vehicle, you're going to be responsible for that because you may have a loan on that vehicle.
• 25:55
  Yeah.
• 25:55
  So all of these companies, turo, and we're not picking on Turo, each of them have different plans based on what they're willing to cover for damage.
• 26:03
  But here's the thing.
• 26:03
  They don't cover.
• 26:04
  They don't cover wear and tear.
• 26:07
  They don't cover the normal, hey, here's what happens when you rent your car out six days a week and you drive it once.
• 26:12
  Right.
• 26:13
  It doesn't cover lost income while your car is in this shop.
• 26:17
  So if you rent it to somebody and they wreck the car, they destroy the car, these things are not going to give you money back for the lost rental income that you may be.
• 26:26
  And here's the problem with a side hustle like this, this may work out really well for you, and you start to live on that extra income.
• 26:33
  You start to bank on that extra income.
• 26:36
  Well, these plans aren't going to give you that, and they're not going to help you with replacement of a vehicle.
• 26:42
  Yes, it's going to cover the crash.
• 26:44
  It doesn't cover the car getting older faster.
• 26:46
  So here are four questions that everybody needs to ask.
• 26:52
  Number one question, when you're looking at doing this, what does the platform you're going to work with keep?
• 26:59
  How much do they keep for being on their platform?
• 27:02
  What's that percentage.
• 27:04
  Second question, what does it consume that you already own?
• 27:07
  What I mean by that is what are you going to get from that?
• 27:10
  Third question, what tax is nobody withholding because you're self employed now, you are going to get potentially a 1099 at the end of the year.
• 27:18
  And then the final question is how many unpaid hours does it eat with Turo directly, there's three earning plans that you can pick from.
• 27:27
  And the way that it works is depending upon which plan you pick, the more the price you get to keep.
• 27:32
  But as you keep more, more of the damage claim is yours.
• 27:35
  And that's one of the things we're going to talk about right here.
• 27:36
  From the beginning, understand that you are renting out your personal vehicle.
• 27:41
  If someone decides to destroy your personal vehicle, you're going to be responsible for that because you may have a loan on that vehicle.
• 27:49
  Yeah.
• 27:49
  So all of these companies, Turo and we're not picking on Turo, each of them have different plans based on what they're willing to cover for damage.
• 27:57
  But here's the thing, they don't cover.
• 27:59
  They don't cover wear and tear.
• 28:01
  They don't cover the normal.
• 28:02
  Hey, here's what happens when you rent your car out six days a week and you drive it once, right?
• 28:07
  Yeah.
• 28:08
  It doesn't cover lost income while your car is in the shop.
• 28:11
  So if you rent it to somebody and they wreck the car, they destroy the car, these things are not going to give you money back for the lost rental income that you may be.
• 28:21
  And here's the problem with a side hustle like this, this may work out really well for you and you start to live on that extra income.
• 28:28
  You start to bank on that extra income.
• 28:30
  Well, these plans aren't going to give you that and they're not going to help you with replacement of a vehicle.
• 28:36
  Yes, it's going to cover the crash.
• 28:38
  It doesn't cover the car getting older faster.
• 28:40
  So here are four questions that everybody needs to ask.
• 28:47
  Number one question, when you're looking at doing this, what does the platform you're going to work with keep?
• 28:53
  How much do they keep for being on their platform?
• 28:56
  What's that percentage?
• 28:58
  Second question, what does it consume that you already own?
• 29:01
  What I mean by that is what are you going to get from that?
• 29:04
  Third question, what tax is nobody withholding because you're self employed now?
• 29:09
  You are going to get potentially a 1099 at the end of the year.
• 29:13
  And then the final question is how many unpaid hours does it eat?
• 29:19
  You hand your pharmacist your insurance card, and you get one price.
• 29:22
  But there are at least three different prices.
• 29:25
  Published analysis estimate that on 20% to 25% of prescriptions filled in this country, the price they quote you at the counter is not the cheapest one available.
• 29:36
  Ralph, why would insurance ever be the expensive option?
• 29:40
  Although now that since we've been doing this show, I'm just like, insurance, always the more expensive option, right?
• 29:45
  Well, see, and here's the thing.
• 29:47
  Like, everybody assumed that pharmacies are out there to help you feel better.
• 29:51
  You know what pharmacies are doing?
• 29:53
  They're there to make money.
• 29:55
  They're a business.
• 29:56
  So nobody asked this question because.
• 29:59
  Oh, it's rude.
• 30:00
  No, it's okay.
• 30:01
  Ask the pharmacist a couple of questions.
• 30:05
  Number one, is there a generic form of this prescription?
• 30:09
  Because what most insurance companies give you a benefit or a lower price if you pick the generic.
• 30:16
  93% of generic prescriptions cost under $20.
• 30:19
  A lot of people don't know that because they don't ask.
• 30:22
  In fact, what I do is when I go to the doctor, I say to the doctor, hey, you want me to try out this cool new prescription?
• 30:27
  Is there something that works just as good, that costs less money?
• 30:30
  So that's thing number one.
• 30:32
  Second thing.
• 30:33
  A lot of people have a copay with their health insurance for prescriptions.
• 30:37
  That copay could be $20, $25, could be higher than that.
• 30:42
  Ask the pharmacy what the cash price is, because sometimes the cash price is actually less than your copay.
• 30:50
  There's a great app out there called GoodRx.
• 30:53
  You can go in the GoodRx, put in the prescription that your doctor wrote you, and say, here's what I want to do.
• 31:00
  So instead of giving them your insurance card, you give them your GoodRx number.
• 31:06
  This will save you hundreds of dollars.
• 31:09
  If you actually want to play this game, there also are insurance issues.
• 31:17
  Call your insurance company.
• 31:19
  Not all insurance companies will allow you to do this.
• 31:23
  Personal auto policies typically exclude car sharing and that the owner can be personally liable for any damage and injuries during a rental.
• 31:33
  That coverage, including legal defense, could be denied.
• 31:38
  So ask.
• 31:39
  So before you decide to rent your car out, right, pick up the phone, go online, reach out to your insurance carrier, whether it be Geico, Travelers, whatever.
• 31:47
  The big ones are all State.
• 31:48
  I don't even know all them.
• 31:49
  State Farm, whatever those are, and ask them, hey, I'm thinking about renting my car out on Turo.
• 31:55
  What are my options?
• 31:57
  Is there a rider that I can buy?
• 31:58
  A rider is something you Add to your policy bottom line, it's going to cost you more.
• 32:03
  So you got to factor that into it.
• 32:04
  But some insurers are going to say to you, we won't cover that.
• 32:09
  Yeah.
• 32:10
  Because now you're operating as a business, and most of the time people's insurance is personal insurance, not business insurance.
• 32:18
  Ralph, I don't actually want to start with the fight.
• 32:21
  You know, I want to start before it.
• 32:23
  So what did it look like in your house when you thought everything was fine?
• 32:28
  Having dealt with this for a long time, I honest believe, honestly believe that financial issues are the number one cause of divorce in this country.
• 32:38
  I don't think it's infidelity.
• 32:41
  I don't think it's alcoholism.
• 32:42
  I don't think it's any of those things.
• 32:43
  I think the number one cause is financial issues because of the stress it causes.
• 32:49
  Yeah.
• 32:50
  And so the way this all starts is there were years when I thought everything was fine because I'm an accountant.
• 32:57
  I got this handled.
• 32:59
  And from my side of the house, everything looked great.
• 33:02
  But what I didn't realize is that's not how it felt to her.
• 33:06
  And see, being the one who handles the money is not the same as being partners in it.
• 33:12
  91% of partnered adults say they can talk openly about money with their partner.
• 33:16
  Now, I found this statistic interesting.
• 33:19
  Like 91% of partners, say, could talk openly.
• 33:22
  Yeah.
• 33:22
  Which is interesting.
• 33:23
  But here's the other side of that.
• 33:24
  Only 29% actually do discuss day to day finances regularly.
• 33:31
  And so maybe I was in the 91.
• 33:33
  Like I always thought, oh, everything's fine.
• 33:35
  I got this covered.
• 33:36
  Don't worry about it.
• 33:36
  We're in the 91%.
• 33:40
  What changed is the day my wife said to me, I'm leaving you.
• 33:46
  And I said, what?
• 33:47
  What?
• 33:48
  You're what?
• 33:49
  Yeah, I'm going to be very transparent.
• 33:51
  It wasn't just the finances.
• 33:53
  And I shared this with Juliet yesterday because I am.
• 33:56
  I'm a man who's willing to admit my failures.
• 33:59
  And in a lot of ways, I make no excuses for it.
• 34:03
  But I was a tyrant.
• 34:04
  I was that guy who was meant.
• 34:06
  It was physically abusive.
• 34:08
  There was never any of that.
• 34:09
  But mentally abusive, verbally abusive.
• 34:13
  And so through a lot of prayer, through a lot of work, and I don't want to get into all the details, but she left, moved to another state, got engaged to another person.
• 34:24
  I did the same thing.
• 34:25
  I didn't move to another state, got engaged with another person.
• 34:27
  And we both realized that the grass isn't always greener on the other side.
• 34:33
  And it was about a week before our divorce was to be final.
• 34:37
  I gave her a call and I said, hey, how are things down where you are?
• 34:40
  She goes, not good.
• 34:41
  How are things with you?
• 34:42
  I'm like, not good.
• 34:44
  And so I'm happy to say today that two days before the divorce was final, we got back together.
• 34:50
  And that was in 19 or 2019.
• 34:54
  And yesterday we celebrated our 26th wedding anniversary.
• 34:59
  Well, the first thing I did was shut up and listen.
• 35:02
  And I asked her, I said, what is it about our finances that bothers you?
• 35:07
  And she was very transparent.
• 35:08
  She says, ralph, I'm worried about my retirement.
• 35:11
  She says, I don't have a job outside the home.
• 35:14
  I don't have a 401k plan.
• 35:16
  I don't have a backup plan.
• 35:18
  You are my backup plan.
• 35:20
  So what I did was, because I'm a.
• 35:22
  I'm a.
• 35:22
  I'm a guy who understands this, I put her on the payroll.
• 35:26
  And I said, you know what?
• 35:27
  Here's what we're going to do.
• 35:28
  I make a commitment to you that every year for the rest of the time we're working, I'm going to do.
• 35:32
  I am going to contribute 100% of whatever the maximum contribution is into our retirement plans, each of us.
• 35:40
  And I'm happy to say, as I sit here right now, I've done that for the last seven years straight.
• 35:46
  And it took me a long time to understand, like, why that was so important to her.
• 35:50
  I'll be honest with you.
• 35:51
  I'll share something else.
• 35:52
  My first marriage ended because of finances.
• 35:54
  And I'll tell you what happened.
• 35:55
  It's a very interesting story.
• 35:56
  My first wife was going to be.
• 35:58
  Is a school teacher.
• 36:00
  And she told me about seven or eight months before this particular situation happened that she was going to need to stop working and would have to go and student, teach, so she wouldn't be making any money.
• 36:12
  Okay.
• 36:12
  And of course, coming from this, and I'm not, I'm not, not, not saying I wasn't responsible, but coming from a place of living with my mom, who every dollar was, we don't have that kind of money.
• 36:24
  I heard that so many times when I was a kid.
• 36:25
  My mom used to say that all the time.
• 36:27
  We don't have that kind of money.
• 36:27
  God rest her soul, that's what she would say all the time.
• 36:29
  And I was like, well, what kind of money do we have?
• 36:31
  Because it sucks anyway.
• 36:33
  So I was going to spend money.
• 36:35
  If I made money, I spent money.
• 36:39
  Yeah.
• 36:39
  So my first wife, what do I do?
• 36:42
  As soon as she says to me, I'm going to quit my job, I went out and bought a motorcycle.
• 36:47
  Oh, that's an interesting response.
• 36:49
  And I went out and bought a big screen tv.
• 36:52
  And she goes, wow, you know, do you care about me?
• 36:59
  Being the one who handles the money is not the same as being on the same page.
• 37:03
  You got to accept that.
• 37:05
  And the fix isn't trying harder.
• 37:07
  It's a standing time, a shared number and one place.
• 37:10
  You can both see that's the key to all this.
• 37:13
  So our guest today here we have on screen is Karen Hackman.
• 37:17
  She's a finance coach who works with couples.
• 37:19
  She runs Money and Marriage.
• 37:21
  And she is here because yesterday Ralph told you what it cost him to not be on the same page with his wife.
• 37:26
  And Karen, does this work with couples?
• 37:28
  Over and over professionally.
• 37:30
  Karen, welcome.
• 37:32
  I want to start where you started.
• 37:33
  You were married 18 years before you and your husband got on the same page about money.
• 37:38
  What were those 18 years actually like?
• 37:40
  So, yeah, it was very frustrating because I am a saver and my husband is naturally a spender.
• 37:47
  And I just presumed that he would have the same attitude towards money that I did.
• 37:52
  And he didn't.
• 37:53
  And every time we, we.
• 37:55
  I brought up money that I wanted to talk about money, I had some plans, I had some ideas.
• 38:00
  They would always end in an argument.
• 38:02
  Juliet.
• 38:04
  And I was very much the control freak.
• 38:08
  And I was treating him like a child and I was the adult and I had to really step back and go, no, that you cannot do.
• 38:14
  That's why he's running away, because you're treating him like he's a three year old.
• 38:18
  You know, yes, he had like $4,000 on one card, but the interest was $100 a month.
• 38:25
  And I'm like.
• 38:27
  And when you could realize that it was right, I don't really want to be paying these people $100 a month of my hard earned cash.
• 38:36
  So let's make a plan.
• 38:37
  Let's get rid of this.
• 38:38
  Let's pay this down as quickly as we can.
• 38:41
  Yeah.
• 38:41
  And also, you know, when he first showed me that statement, yeah.
• 38:45
  Within 30 seconds, I knew something was wrong.
• 38:49
  And.
• 38:49
  But because he was so overwhelmed with his credit cards, he would not look at those statements.
• 38:55
  And you know what we discovered?
• 38:58
  For two years?
• 39:00
  There was fraudulent activity on that card.
• 39:03
  Two years.
• 39:05
  We had two.
• 39:07
  Yeah, two Amazon prime subscriptions.
• 39:11
  They were subtle.
• 39:12
  It was take 799, 399, and it was all adding up.
• 39:17
  And it was just before Christmas and I saw 7199 and I'm like, what?
• 39:22
  What?
• 39:22
  People buy $72 and it's like, nothing.
• 39:26
  And I'm like, you need to sort this out.
• 39:28
  That's one of the reasons I say to my clients, it's really important that you look at these statements every month.
• 39:34
  Yeah, that's a good reminder for me because I think you hit on exactly.
• 39:38
  Like some people, they don't look at their credit card statements because they just have an overwhelming feeling in whatever situation they're in.
• 39:47
  And one thing that I always say as well, that have been a complete game changer for us and I really do wish we'd known 20 years ago, sinking funds.
• 39:56
  And I didn't have that sinking fund, it would just go on the credit card and it would just take us a few more months to clear it again, you know, and it's just so depressing, isn't it?
• 40:05
  But it feels empowering.
• 40:06
  You know, you've been intentional.
• 40:07
  You've got this money.
• 40:09
  Yes.
• 40:09
  It's not a problem.
• 40:11
  Like, we can pay it off without even.
• 40:14
  Without even skipping a beat, you know, we're intentional.
• 40:16
  We've got this money.
• 40:17
  That's what it.
• 40:18
  That is what it's there for.
• 40:22
  A few years ago, we went to big supermarket and she wanted to buy a little Christmas tree for her bedroom.
• 40:28
  And then she.
• 40:30
  And then she wanted all the ornaments to go on it and the tinsel and the stars and everything.
• 40:34
  And I said, oh, that's brilliant.
• 40:35
  How much money have you got?
• 40:37
  Did you bring your press?
• 40:38
  And she's like, oh, yeah, but I've only got this much money.
• 40:40
  And I knew that she wanted me to buy the rest.
• 40:42
  And I'm like that, use your money, you have to spend it.
• 40:46
  And the next thing I know, she's putting all the decorations back.
• 40:50
  And I said, yeah, well, what happened to those decorations?
• 40:52
  And she said, oh, we've got lots of home, Mum, I don't need anything new.
• 40:57
  I love that.
• 40:58
  She's just like, oh, because.
• 40:59
  Because for her is, you know, she doesn't have a credit card right now.
• 41:02
  But if she did have a credit card, that would be an option for her.
• 41:05
  Right.
• 41:05
  But for her to already think it through and then make decision on her own and said, we already have enough.
• 41:10
  I'll just reuse.
• 41:11
  Love that.
• 41:12
  I love to see that.
• 41:13
  Exactly.
• 41:14
  Yeah.
• 41:14
  Because she wouldn't have made that decision had you not given her the opportunity to make that decision.
• 41:18
  Because I think as a parent, we all want to step in and go, oh, I'll take care of that.
• 41:22
  I've caught myself doing the same thing.
• 41:23
  I'll take care of that.
• 41:24
  And that's kind of the tough love part, isn't it, Karen?
• 41:28
  Yeah, absolutely.
• 41:29
  Because.
• 41:30
  But then what we're teaching them.
• 41:31
  We're teaching them just to come and call us and, you know, hand over the card whenever they want to on a Friday.
• 41:39
  I want to ask you, we talk about our wins of the week, will you share with us at least one win of the week?
• 41:46
  And does it have to be financially related?
• 41:47
  It could be anything else, too.
• 41:48
  Hold on.
• 41:49
  Before we do that, let me do this.
• 41:51
  Oh,.
• 41:57
  Karen, can I let you guys go first?
• 42:00
  Well, I think quickly, Ralph, I'm gonna punt it over to you.
• 42:04
  So I've caught the punt and I'm going to run with it.
• 42:07
  So my wins of the week number one is.
• 42:09
  Thank you, everybody who's joined us all week.
• 42:11
  This is the end of week two, and with our struggles today, and I feel really good about myself because I probably would have lost my crap for lack of a better way of saying it, when YouTube wouldn't work
• 42:22
  and then the fire alarm's going off and I'm hitting the wrong buttons.
• 42:25
  So.
• 42:26
  But, but thank you everybody who's joined us this week.
• 42:28
  My win this week is having Karen on the show.
• 42:30
  Number one, Karen and I've known each other for about a year now, and Karen is a great person.
• 42:34
  And we'll give her a minute here at the end to tell people how to reach her.
• 42:38
  But that's my win of the week.
• 42:39
  My big win of the week is.
• 42:40
  Is everybody here joining us?
• 42:42
  It's been a great time.
• 42:43
  We're looking forward to.
• 42:44
  To really doing more with this.
• 42:45
  And that's my win of the week.
• 42:48
  Okay.
• 42:49
  For me, before I do mine, I want to shout out to cause Kate, our duchess of NJ has said in the chat, I have drilled the importance of saving money to my daughters, hoping they learn from our mistakes.
• 43:00
  They've been pretty good about hearing the lesson, and I love to hear that as well.
• 43:04
  I love to see, like, the younger generations just be more financially savvy than we are.
• 43:09
  So that's amazing.
• 43:11
  My win of the week.
• 43:12
  Yes.
• 43:12
  We made it to second week of the show.
• 43:15
  And I think the big thing is we're trying to shape this community in a way that serves, you know, that helps the community.
• 43:22
  Right.
• 43:23
  So if it's like, if you guys want to share with your kids and your cousins and your enemies and your friends like this show and we would love to build that, and we're like Ralph and I and the
• 43:33
  team, we're very, very excited to do that.
• 43:34
  So that would be one of the week for me.
• 43:38
  Karen, Yours.
• 43:40
  Yeah.
• 43:40
  So mine is being here with you guys.
• 43:42
  What a great way to end the week.
• 43:44
  It's great to catch up with Ralph and to make a new friend with you, Juliet.
• 43:47
  Thank you.