Ask HTM - Recasting to Lower Your Mortgage Payment, A Solar Panel Conundrum, & Forfeiting I Bond Interest #568

that before. Keep paying it on the line for us and we'll get back to you here right after this break. Now, I think I'd be a lot of fun if we actually, when we do get to engage with listeners, like we just talked about on Friday, how we went to Finn Con and a bunch of nerdy financial personal finance folks there, and actually, when we landed at the airport work, we ran into a listener. Gosh, I'm trying to remember what his name was. It was such a quick, quick hang

for twelve seconds. Took a quick picture, but really, as we're hopping into our Uber, yes, I know, I wish we had gotten more time, but literally, are Uber was pulling up, but it's it's one of those things where those interactions like energize me, and so if we got to do them, even just digitally or over the phone, I'll be down. You just want to be a celebrity, you just want you want your face blastered on, trust me, Milk Carton's. Now that's not when I'm into. Yeah, you

don't want to get abducted, but I'd like that. That's when your face is on the milk carton. But when, when you hear from here, from listeners via email, when we get to hear their voices or get to see him in person like that is more exciting to me than having my face on a billboard. Absolutely no, I completely agree, especially hearing from listeners who have made changes to their lives. And so we don't always get around

to responding to every single email that comes our way. We, I would say, we get back to like, I don't know, maybecent of them, but those, somehow, the people who don't get fun and sort like, what's wrong with me? Man? I guess sometimes they just sad. You having put any numb is that sometimes we slip through the gate and then you just got some busy days. That doesn't mean we don't love you anyway. I don't know how we got on talking about that, but we've got five awesome

listener questions we are going to get to. Uh. We have a listener who is considering a creative way to lower her mortgage payment. We're gonna get to that one. Another listener. He's got a solar panel dilemma that he's facing, as well as somebody else who's considering forfeiting some I bond interest. We'll get to those three, plus a couple others, right after this. I like it all right. One thing. It made it sound like we' about to take a break. No,

I wanted to. I want to mention real quick that I just started reading matt the brothers Karamasov, and it is a I've never read it. It's wait a minute, that's that's supposedly the best novel of all time. That's a Russian book. I can't. You're like a turncoade over here. You can't be reading Russian literature. No, the the Russian authors are still some of the best, especially from from that era. You're about to get canceled. Now. Everybody, like,

almost everybody like. If you, if you, if you, like looked up a list of best books of all time, this book would be on there, but I've always been reticent to tackle it because it's like a thousand pages. Yes, it's super thick, and so I'm like, I'm more like the three page book kind of Guy. And but I realized I just have to finally read this book because if it really is one of the best books ever written, I can't let the fact that it's humongous get in

my way and prevent me from reading a masterpiece. And so I decided like, okay, how do I do this? I'M gonna do it one by at a time, one chapter at a time, I'm gonna get into so I'm trying to read one chapter a day. That's my goal, and it might take me like four or five six months to read this book. How many chapters are there? So that I don't know exactly how many chapters there are, but there's like a chapter ten, ten page chapters, and

it's about a thousand pages. Six months. So okay, so it's probably like three and a half month, let's right. Is it likely likely how long I feel like it's taking me that loan. So, so you're reading a long book. I'M IN THE MIDDLE OF WARREN BUFFETTS auto biophy, not autobiography. I think it's the only biography that was officially approved by by Warren Buffett, but it's something like that. I think it's it's over eight hundred pages and it's taken me, Oh,

all time to get through this. It is a beast but also really interesting. So wait, how how far into yours are you? So I'm like a hundred fifty pages. I'm of the way through, enjoying it so far. Enjoying it so far. Learn anything? UH, yeah, for sure. It's

just it's really well written. I'm so glad. I mean, I'm reading it and I think one of the most popular sub stacks out there is people who are literally reading Frankenstein like a few pages at a time or something like that, if you just get it in box every day. And I thought, well, that's so cool, little

snippets every single day. Yeah, and like that's how that's how you can get the job done, and I think the same thing can be true sometimes if you're maybe I have a lot of financial hurdles, obstacles in your way. You feel like you're making progress slower than you want to take that one bite at a time approach, like you can't do it all in one day. You can't

do it all in one fell swoop. It takes time to get your to get your money together, just like it takes time to read a freaking thousand page books. So Um, hopefully that is encouraging to how the money listeners out there and I will report back when I finish this book in three months time. Check back in around Christmas. Uh Nights Man. All right, let's introduce the beer that we are going to enjoy during this episode.

This is a German chocolate cake, another beer that's a part of the guilty pleasures series over at wicked weed. I'm looking forward to enjoying this one. We will share our thoughts at the end of the episode. All right, let's get to our first question up. By the way, if you have a question for us, you can submit yours at how to money dot com. Slash ask. Super Simple directions there, and we love to hear your lovely

voice on the next ask htm episode. But this one comes from a Listenermott, who wants to know about recasting a mortgage, which isn't something we've talked about very much. Hi,

Matt and Joel, this is Rachel from Minneapolis. My husband and I are currently in money gear seven and recently purchased our second home, where we hope to be for at least the next ten years, at a purchase price of four hundred and eighty thousand, with a thirty year mortgage at four point nine interest and ten percent down.

Once the sale of our first home is complete in a couple of weeks, we'll walk away with enough equity to pay down the mortgage past so we only carry P M I for one month and also refill some savings buckets we used to buy the new home. Once we pay down the new mortgage, we have the chance to recast the loan, since it will be within the

first sixty days. This means they would keep our interest rate the same, but it just our monthly payments to be based on the new loan value of around three four K over thirty years versus the original Fot k over thirty years, our monthly payments would go down about four d our question is this, is it better to recast the mortgage that we have a lower monthly payment, or would it be better to leave it as is and just appreciate that paying down the mortgage a big

chunk right away means paying off the mortgage sooner than thirty years. As a side note, we have a friend who rents one of our spare bedrooms currently. He is moving with us and renting the basement of the new place, so he'll be paying part of that mortgage when he moves out. Someday. The new basement will be used as an AIRBNB and a guest space. Thanks, guys. If you're ever in Minneapolis, let us know and we'll take you to our favorites of the thirty plus Craft Breweries. Uh,

plus craft breweries. I had no idea there are that mini breweries up there in Minnesota. Did she said this in Minneapolis, our Minneapolis. So that's that's a lot of brewers. I Guess Minneapolis is. It's bigger than I think it's. It's a decent well, it's got the Minneapolis Saint. Paul Combo Right, that's true. It's like a dual city. I have never been there, so we will visit there one of these days. But Rachel thinks. So much for your question.

And you mentioned too that you are in money year number seven, which I wanted to highlight, because that means you have a ton of flexibility. Uh, and that also means that you have worked really hard to get where you are currently. By the way, if you don't know about the money years, it's basically our financial order of operations. You can find those at how the money dot com. If you click the start here button, you can kind of see you follow along and figure out which money

you're you're ine. That's right. Yeah, and also, Rachel, she didn't say this in her voice memo, but in her email she told us that she actually recently quit her job as a civil engineer in order to work part time at a local coffee shop and to launch her own etsy business. So we know that she has been working really hard and now she's kind of on more

of that coast slash Burrista fire a path. Yeah, I love that, because we know that civil engineers make more money than Barissa's just just almost all the time, right across the board. Yeah, I can pretty much guarantee that that's like. But to be able to do well enough with your money to where you can make that decision consciously and say I just like working in the coffee

shop more than I like this other job. I think that's so cool and that's the kind of power you have, that you achieve as you handle your finance as well, like Rachel has. And it sounds like to Matt that that Rachel, that she's letting her financial choices be determined by and informed. Why? We talked about that a lot, but it's crucial in order to ensure that your money gets funneled into the most helpful places for you personally.

So let's talk about mortgage recasting here, Matt, because it's it's like I said, it's not something we've talked about a lot, but there are some real parks for at least some folks to doing a mortgage recast, and it's very different than a refinance, which is typically the thing you hear about. But the thing about refinancing is that it's expensive, as everyone knows. It's gonna cost you thousands of dollars to to refinance your mortgage, and doing a

refinance is a major pain. You gotta provide all of your information, your paste dubs, your tax documentation like there's just there's a lot of paperwork involved in approved for a giant loan again, that's right. Yeah, yeah, and in addition to that, doing a refinance right now it doesn't make much sense because rates have gone up. You don't want to go from a three and a half percent

rate to a seven percent rate. That's just dump. But but if you can do a recast with your current mortgage provider, you can pay a lump sum and you can lower your mortgage payments for years to come. It basically it reambortizes the loan, which can be a pretty cool option. If that is what you're after, if that's

what works for your situation, that's right. Yeah, so when you pay a lump sum to your mortage provider without recasting, you will lessen the overall life of the loan because you're paying down that principal balance, which means you will run out of balance to pay down, basically, but you're not going to reduce how much you owe every single month. You'RE gonna pay off the mortgage sooner, but your payments

will stay the same. But when you do opt to do a recast, you you can actually lower that monthly amount, that mortgage amount, while key being those other terms in place. You're able to keep the number of years you have left, you're able to keep your mortgage rate locked in place. Hopefully that rate is lower than than more things currently

are and you would want to hang onto it. And if there is a fee, if it does cost you some money, it is going to be so much less than what you pay for maybe a couple hundred bucks. But the range I saw out there, it's sometimes free up to at most maybe five hundred bucks, which is a fraction of what you're looking to pay when you

are looking at a refinance. And again, this is particularly advantageous in Rachel's case because not only will it lower the monthly mortgage amount, that will also eliminate that Pesky P M, I. That private mortgage insurance, saving her a ton of money for years to come. So, you know, for these reasons, it sounds like this is a great decision. This is a slam dunk yes from us to take

advantage of this recast opportunity. And and again, Matt you started off by talking about the fact that Rachel is in money year number seven, which means the world is her oyster. She is basically at this point of financial independence where she can make moves for a lot of

different reasons that make just sense to her. Right that because she's got just ultimate flexibility over her finances at this point and and this this might not make quite as much sense, though, for for some folks who haven't

made quite this much progress to their finances. For example, if you were like just getting started your money gear number two or three, you're saving up that fund, you're trying to get that that company match in Your Four, O one K, it would probably makes sense for you to use that lump sum of money to get a company match to make sure you're fully taking advantage of

that perk, or to pay off higher interest consumer debt. Like, instead of opting to put a lump some down on that mortgage, you might instead want to pay down credit card debt that you still owe. Yeah, definitely. Yeah, like that would mathematically, of course, make the most sense, which is why I think it's important that Rachel pointed out the fact that they are on money gear number seven, because when it comes to some of those other things,

those are steps that they've already eliminated. Yeah, if you if they were much earlier, long in their in their personal finance progress, we would say, I don't know, you want to hold off, you want to achieve some other things first. You might want to prior ties, putting your funds elsewhere before you recast this mortgage and put a lump sum into it. But we just want you to take into account all those different variables. But for Rachel,

definitely take advantage of this recast offer. Yeah, I will say so. Like what we kind of talk through some of the math, like the mathematical reasons for her to make sure to have accomplished those other things right, like eliminating high interest rate consumer debt, that kind of thing. But there are like personal reasons to not pay this

lump sum to wants her mortgage as well. And so, Rachel, This wasn't something you mentioned in your voice memo or anything that you shared with us, but if you had some other goals that y'all wanted to see happen sometime soon, that also might be another reason to potentially consider not doing the recast right. Like you could see this lump sum of money as seed money, say you wanted to start your own business and it was going to require

some upfront capital. That would be a great reason to not necessarily take all of this money and then dump it into your primary residence. It sounds like it's going

to keep those other goals in mind as well. Agreed. Yeah, it sounds like even though after they do this recast and get rid of P M I, they'll still have maybe some money left over from that home so, which I think is best of both worlds, because you and I we don't really like P m I. It's kind of feels like throwing money away every month then, and so to be able to get rid of it through

this recast is a brilliant move. And so, Rachel, it sounds like that's probably the best move for you and less, like Matt said, you've got some killer business idea that you just got a fun right away. So, Rachel, we wish you guys the best of luck moving forward. You guys are already already crushing it. Matt, we've got more questions to get to, including a frugal or cheap when it comes to buying a board game. We'll get to

that one right after this. All right, we're gonna get to that I bons question here in in a minute, but first let's get to that one from a listener who has a frugal or cheap for us. Hi, Matt and Joel, this is Wayne from Philadelphia. I have a frugal or cheap? I'd like to hear your opinion on a day ago, I bought a board game from Amazon. Today, when checking the same listing, I noticed that was nine dollars cheaper. Yes, still sold by Amazon, so not a

different seller. This board game hasn't even been shipped yet, so I figured, Hey, Amazon probably will give me the nine dollars. It should be a pretty simple interaction. So I contact their support and I say, Hey, guys, nine dollars cheaper. Could you just give me the difference? Amazon apparently has a policy where they just don't do that.

The solution I was provided with was to set up a return and then bring it to a coal's or whole foods, which is very possible and I guess I'm happy to do that, but it just doesn't make a lot of sense to me. Why would you push support to have your customers waste their time and energy to return an item when you're already going to have to ship out the same item to that same customer? And what makes it even more ridiculous is that I've already purchased the second board game and both of them will

be delivered tomorrow. So I will have to take one of those two coals and or whole foods to get my full refund. So my question. Nine dollars. Am I being frugal or cheap making such a big deal over that? And then, on top of that, am I crazy, like, wouldn't this just be easier if they just go oh, yeah, nine dollars cheaper, it's yours, because we know you're just gonna cancel the item and return it anyways, you have it.

Are they relying on people being lazy, or are they just so big that they don't see the inefficiencies of their own company? Yes, that's right, I'm criticizing Amazon. Come at me, Bezos. Let me know what you think, guys, and have a good one. All Right, Matt. First off, I think we have to tell Jeff bezos this is Wayne here speaking, not not us. I don't want to get attacked. That guy's really muscular. We can even he's really strong. We can send bezos Wayne's email and his

home address. Wayne, you're on the hook for this, not us. No, I'm just kidding, but uh, I just want to say to Matt like that the first offer was on to hear that Wayne is buying board games because board games are basically the best hobby in the world for Frugal folks that disc golf. I don't know. We like we like to talk about like cool hobbies that don't cost you very much money. Board Games is one of those.

It's one of those things. That's how we roll man by one time and you can play endless amounts of times, right and and you know what? You and I, we don't really play as much as we used to, sadly, but we we played every night on our annual beach vacation this past this past summer, didn't we? It just goes to show that we have lots of other things going on in our day to day lives, but when

we go off in vacate, specifically, we UH. Like the past few years we've been playing acquired it's such a good game and I don't know what's going on, but my wife destroys, but it never used to be the case. We could always count on her to bring in the rear for us and and one of us. We played like five nights in a row, sometimes multiple games per night. Did you win once? I think I didn't. I think. I think. I think. I only want like once. Maybe twice, but the rest of the entire rest of the trip

she just totally mopped the floor with this dude. I don't know if she was cheating or what she had going on, but but yeah, if you're in prostgate for dominating in a choir, if you're a budding real estate investor, acquire might be a fun board game to check out because, my gosh, it's so good. Well, it's not just real estate, but it's it talks. I mean it incorporates shares and

so it has like this investing elements. It's fantastic. I think that's probably that's why we like it so much, because it kind of combines investing and real estate all in one, although we like other ones to like. Viticulture is a good one about like, but once the last time you play vinticulture over the past three years, the number of times you've you've played a choir versus some

of these other a lot more. Acquire has definitely been at the top of the list, even though the version that we have is terrible, like the design of the game. Every time we play it we complain about it and maybe will actually like by one of the old school, like vintage versions of the game. The game was just laid out better than yeah, yeah, exactly. But let's get

to Wayne's questions. He's asking if this is a frugal or cheap move, and we're gonna say that it depends, because there are obviously a number of factors involved in a decision like this. Um First of all, Wayne, I'm glad you reached out to customer service, because that's a great first step. It'll often work out for you to to get your money back. Sadly not in this case. But you know, now you've got to figure out how

much your time is worth. We talked about this actually back in episode nine, and you know, if that whole foods uh, if that return site or the coals, if that's on your way to work, for instance, or if it's just a walk or a bike ride away, then we would say typically, Hey, this is totally worth it. That's something that you're already gonna do right, that you can incorporate into your life. But if we're talking about it like a fifteen minute drive, it's less likely going

to make sense for you. Although now that you've already ordered the new one, now that you have to showing up, YOU'RE gonna be out more than is nine bucks if you don't make that return. is a different question. Before he ordered the second one because it's but now that you've ordered the second one, it's like you're gonna be out forty something dollars instead of just nine dollars. Yeah, well, he could hang onto that second copy of it, maybe give it to a friend if if you really likes it.

But I will say too, I mean that's something. Well, we've never talked about this, but since we moved out to the BURBS, drawl y'all definitely took advantage of the free ups Amazon pickup at your front door. Right. Yeah, we've done that back in the day, but they don't do that out here in the burbs, and so we actually do have to save up our packages, if we do have returns, and take them back to the up store.

But the good thing is like a formative drive. But it's still not well and it's directly across from the Costco. It's like right there. So that's a visit that we do make fairly off right. Well, and the reality is too for Wayne and for everyone else out there that I don't know. Prices are changing constantly online. So if it's not like there's a static price and it changes and there's a sale once a month or anything like this. Like sometimes dozens or more times in a single twenty

four our period, a price can fluctuating. So the likelihood that there is a price drop from what you paid an hour ago is just higher than it's ever been before, and that makes it more difficult to know whether or not you're getting a great deal because of just how opaque prices have gotten. And so we would say camel, camel, camel and honey are great browser plug ins tell you see what the price has been over the past ninety days. That's just a quick way to see at a glance,

like okay, cool, is this? Is this a good deal, or or should I be waiting? You can kind of tell at a glance whether or not you're getting a deal, and that, maybe, combined with a search on a site like slick deals, can help you buy with confidence, knowing

that you're not overpaying. And it's it's you're not always gonna get the lowest price, like this is gonna Happen, uh, and it might be annoying, but, and you know, it's always worth just a quick query to a customer service, but it might not always be worth hopping in your car driving ten minutes to to save nine bucks. It just so much depends on the situation and how community it is for you. Totally. Yeah, and he was saying

like is Amazon just counting on on people being lazy? Yeah, this, I feel like this is an example of Amazon like just not being cool. Uh. Some credit cards, especially capital one credit cards, like the quicksilver card, and we just look this up, it'll give you the price difference if the price drops. That Quick Silver Card specifically gives you a one twenty day window, which is pretty great. That's a long amount of time for the price of dropping

for you to get some money. That's the easiest way to kind of get that money back in your pocket without if the retailers kind of being stubborn. They got your back. We'll link to that card in the show notes Um. And so that's credit cards who offer that price protection. But then some stores will offer protection as well, Costco, for instance. We just mentioned them, but they do that. They give you a thirty day window, and so it's really easy to go up to the counter. You get

a small refund thanks to that item. Now being on sale. But the thing is, again, we go to costco all the stinking time. What I make a separate trip two coals to call nine dollars back? Well, you know, it depends on the number of things. Again, it depends on how much free time I've gotten and what else I've got going on. I definitely hate to waste money. It's you know, it's difficult for Frugal folks like us to

leave even nine dollars on the table. But I've also come to the point where I'm not necessarily gonna jump through a bunch of hoops pour a bunch of time into calling just a few bucks back. Makes me think about like anytime I left something on facebook marketplace, one of the questions I ask myself is will I be able to sell this at least for twenty bucks, because if it's less than that, I'm going to be more likely just to put it out on the curb, do

a curb alert, even donate the item. But if it's more than twenty bucks and I think, Oh, you know, there's a chance I might get even thirty, thirty five for this, at that point I'm definitely willing to list the item. Yeah, because it's just not worth all the Hass all the back and forth, your time, people not showing up if it's if you're gonna sell something for eight dollars right. And so, yeah, your your personal financial threshold for how much hassle you're willing to endure for

that money is. I mean really, it's up to you. It's a personal thing. And Yeah, I guess basically Amazon is counting on you being lazy, like you said, Wayne, that's that's exactly. That's exactly what they're expecting out of you. They're expecting on you not to return that item. And and whether or not it's lazy, whether or not it's frugal or cheap, is probably in the eye the beholder, depends on your personal circumstances and, like we said, proximity to the return site. So I would say take your

own personal situation into accounts and then act accordingly. So best of luck making a wise decision. And, Matt, I don't know if we have like a list by the way, of our favorite nerdy board games, but if we don't, we should totally put a list together. We could name a bunch more right now, but uh, nerdy board games again, still just a fantastic pastime and I hope Wayne, hope way,

you got a good one. That's right. Yeah, Wayne, I hope you enjoyed both of those board games if you happen to take the UH, if you don't end up taking that second board game back, but I'm pretty sure you're going to. He's gonna Waste Way too much money if he doesn't take it. The other one back in exactly. Well, again, I think he could totally give it as a gift. He's like, I enjoyed this game so much that I wanted to gift you with it as well. Our next

question comes from a listener and he is asking. He's he's asking about the interest that you're gonna lose were he to pull his money out of this investment a little too early. Let's hear that question. Hi, guys, this is Scott from West Bomb Beach. Enjoy the PODCAST. My question is about I bombs. My wife and I own three ten thousand dollar I bombs, all less than five years.

I know you've mentioned in the past that if you withdraw all are part of an I bond before or five years is up, that you for or fit one quarter of interest. So my question is which quarter of interest do you forfeit? Since we have a large variance, starting under three all the way up until now we have nine and a half percent. Do you forfeit the most recent quarter of interest, the earliest quarter of interest or, unlikely, can we choose our own quarter that we forfeit? Anyways,

look forward to your answer. Thanks a lot, Matt. If only it were that simple and it was to choose your own adventure and you could forfeit the quarter in which you got paid the least amount of interest, I would say that that would not be simple. That would be more complicated, and we know the government can't handle that. We're gonna take whatever steps necessary to avoid any more complexity. So just personal story here. Trying to pay quarterly taxes

the other day. We was funny. The website is so beyond broken for for doing that, especially for it's like you have your pin, which is what you lost. I lost my pen. But even the state website is just so much better than actually site the Georgia Tax Center. Yeah, recently there must have updated their site, because it works much more. Yes, it does, and right. But right as I was trying to pay my quarterly taxes, the this like, Hey, take a survey now, let us know what you think

about the site. And it looks like something from two and I don't even know if they had websites back then, but it looks like it was from a pre website era Ms Doss, just a flashing green box. I still didn't have time to take the survey and tell them how much I loathe their website. But let's get to Scott's question and Matt, let's set the table here for a second first and just talk about I bonds for a second, because maybe it's been a minute. We love

talking about I bonds and and they remained. We've done strong there for a couple couple of weeks several months ago. But it's time to revisits, time to let folx know the beauty of the I bond. They're still stands for inflation, by the way. Yeah, they they're inflation index bonds and they're still a stellar deal for anyone who has medium term savings that they want to sock away or, in

a decent rate, to return on. But they're not like necessarily just want to stick it on the market because they could lose their capital right in a short order and so, uh, if it, it has to be money that you don't need for at least a year and you want it back in your hands, likely within a few years. Five years is optimal because that's you don't

forfeit any interest. But there's just no better storage facility for that money than I bonds right now, and that is because inflation continues to be just nasty, like we talked about on Friday, I bonds are a federally guaranteed way to make sure your money is keeping pace with the actual rate of inflation. And the current rate that I bonds are paying is nine point six two percent. Compare that to your trusty savings account, even if it's

one of the better online savings accounts. It's a lot better, right. And and that rate is likely going to reset downward by just a bit on November one, although it might not drop by too much. And and even if rates go down a little bit, they're still top notch. are still one of the best places to save money in the current moment. That's right. It's a fantastic place to to soccer ways in thousand dollars. Uh. And, like Scott said, you gotta keep any I bonds that you purchased for

at least a year. You you just can't get that money back if it's been less than a year, like a lockbox you can't touch. Yeah, but it's true that if you don't keep each I bond that you purchased for at least five years that you're gonna be forced to pay a penalty. Essentially, you're you you have to forfeit one quarter of interest, and so Scott wants to know about which interest rate that he's gonna be losing out on if he opts to cash those I bonds

out early. It's a great question, and it's not easy to see actually on the Treasury Department's website, again, largely because that website also looks like something like a website that was put together in the eighties. Yeah, I'm sensing a theme here, Matt, that for some reason federal government websites are poorly constructed. Most of them are. But the short answer, Scott, is that you are going to lose

the most recent quarter of interest. So that means it's gonna be a little more gut wrenching actually to cash in your I bonds right now, since you'd be forfeiting most likely the highest return that you've been been able to score. You've been doing this for a number of years now, and you're thinking, I don't know, not, just most likely, unless he's had an I bond that's fifty

years old. It's like literally the highest rate of return we've seen in a long time exactly, and so it makes it a little more painful in order to pull that money out. But again, you're you're talking about a quarters worth of interest and if you you have other goals, if you have other things that you want to do with that money, it could make sense for you, and I think I would just want to hold on as long as I could so that I didn't lose any

of those higher earning months. That's ideal, right, unless you legitimately have something like much better to do with that money. If, let's say, you're wanting to invest in a more long term way, that might be worth it. But but who wants to really lose out on an interest rate of nearly ten? Not Many folks are like, yeah, let me get let me give that up because it's a good deal.

And you know we're gonna keep talking about I bonds, Matt on the show, as rates change and as the value proposition shifts because a year from now, uh, you might not be giving quite as much of a return if inflation gets tamed quite a bit. But yeah, the reality is, Scott, that titching those I bons right now unless you've got a much better place for that money or you just absolutely have to have the money you've

stuck into I bonds back in your life immediately. I bonds are not the path to riches in most circumstances, but they have just been a good short term haven as of late. Investing regularly in the stock market is still going to be your best path to building wealth, but the resurgence of I bonds and the healthy rates we've been able to to see attached to those has been has been kind of cool to watch. Definitely it's

been encouraging, to say the least. All right, we've got a couple other questions we're gonna get to right after the break. They're both gonna have to do with homes. Listeners asking about solar panels and another is thinking about becoming a first time landlord. We'll get to those right after this. All right, Mat that that landlording question we're gonna get to in just a second. Is An interesting one because this landlord doesn't plan to be in that

location for very long. We'll get to that in just a second, but first let's get a question about using the sun to provide energy if your home. Hi, man and Joel, my name's Scott and my wife and I just bought a home down here in Greenville, South Carolina, and we were approached about adding solar to the roof and I wanted to just ask your girls opinion on solar if it's worthwhile. Um, the pitch the guy gave

me sounded really nice and send it like it made sense. However, I feel like I would just be exchanging a loan payment for what I would pay monthly in electricity. I would just be switching those two payments out for the next twenty five years. Um, I would love to hear your opinion on it. UH, yeah, look forward to it. Thank you. Greenville. That's uh, that's where my in laws lift. It's a little town I like to visit every now

and then. I went to college just outside of Greenville for two years and I will say you're both of it's a phenomenal little town in the south. I like it. I would they oh, Manos to a lot of good outdoorsy stuff. Oh Yeah, they've got that going on, and they've got is an eighth state. That's a brewery that has some some fantastic beer from before. It really does have it punches above its white class for craft beer. Totally.

That's right. But okay, Scott, one of the first things we wanted to mention, uh, is that, like, you said that you were approached. Uh, you said that you got pitched. These are phrases that we that kind of like put up the red flags and reminds sense when we were listening to your question. We have mat we you know,

how the money send. The reality is that sales folks, they can make anything sound awesome, but you are gonna want to do a lot more due diligence before you decide to move forward on an expensive project like this or before you you opt to work with this company directly. We want you to, you know, to basically do more research. You'RE gonna want to know how much money will will getting solar on your home cost? How much will it

actually save you overtime? You know, gaining some of this real data, getting some hard numbers, is what we want to encourage. You to do. Uh, and then after that, getting multiple quotes is going to be key to making the smart decision here, is not just going with the first guy that happens to walk up. I I'm not going to speculate here, but like I would be surprised.

Maybe I am speculating by saying this, I wouldn't be surprised if there are now financing companies and they're basically selling solar on behalf of the different installers because, like, it makes me think about retail, right, and how they're always pushing the credit cards. So often the tail can wag the dog. I don't want to be overly skeptical or pessimistic here, but I would definitely be wary of

somebody coming door to door talking to you about solar. Yeah, I don't want anyone coming to my doormat to tell me religion or whatever. You know, like that's just typically what coies okay, Al Right, I won't turn them away, but usually when someone comes to your door, mudgeon over there, get off my lawn. Uh. No, I love talking to my neighbors, but usually when someone comes to your door to sell you something, it's not the best thing for you. Right or you would have pursued it on your own.

And so let's talk about what that due diligence involves, like where, where Scotch should start researching. We really like the site energy stage dot com. They've got a solar calculator that can help you run the numbers before you take just like a random salesperson's word for how much money it's gonna save you. You get the type in your address and they take take things like your roof configuration. They incorporate shade data, so the tree coverage basically at

your house, and then your specific electricity bill. They look at all those things, they take it into consideration and then they'll show you what the likely PAYPA period is going to be, like how long it's gonna gonna take you to pay off that solar system. And one caveat, by the way, that they spit out is how much it's going to increase your property value. And it's kind

of true. Some of the stats show that homes that have solar that if you sell that home, that it is going to be worth more than your neighbor's house who doesn't have solar. But you take it with a grain of salt because your house isn't gonna appreciate like overnight because you just stuck the solar system in there. But the cool thing is energy stage is also going to help you get a few quotes at the same time.

It's kind of this like one stop shop place and and I would say also like take a look at that website, but also picked the brain of a neighbor or two who might have solar panels on their home. They might have recommendations or insights. That would be helpful. If you know somebody down the street who just had a project like this done, ask them who they went with. Was the final cost the same as the estimate they were given at the beginning? How was it working with

this solar installer? I mean you can learn a lot just from a quick minute conversation with with the neighbor who's done the same thing you're looking to do. Yeah, and in particular that side is fantastic. Actually entered our new address into there to see kind of what kind of data it would it would give me, and I think I've been contacted already by four different UH solar installers, and so the quotes have ranged, but that side alone is going to be phenomenal. And you being able to

get multiple points of data very easily. And Scott, you also mentioned getting a loan, or you said that you might be paying on a loan for the next twenty five years to get these solar panels. We would want you to be really careful in that front, because that can increase the cost by a decent bit. How much depends on the specific terms of your financing. It's typically better to finance that with a helock instead of directly with the solar install company or whatever Financi here is,

you know, working on you know, on their behalf. But either way, what happens if you move before you are done paying your solar panels off right like? If that were to be the case, you might have to make a lump some payment on those, and so we would rather see you save up and pay for those panels in cash. That way, all of the savings are going to be going directly to you, and the main thing that you want to avoid, no matter what uh like, by far the worst option is if you were to

lease a solar system. Seeing almost anything is a bad idea typically, but especially when it comes to solar panels. You're talking about TV, a couch or even solar panels. Or that's right, but those are the the trickiest arrangements. Uh. And by leasing you're gonna miss out on one of the biggest financial perks to installing solar on your home, which is the pretty enormous federal tax credit. I'm glad you brought that up, Matt, because a lot of people

already know this. But the additional perk of installing solar panels is that additional tax break that you're gonna going to receive. The United States federal government, in its kindness, has said if you install solar panels on your house, we will pay for almost a third of that bill. And and because of the recent Um so called inflation reduction act that was signed into law, the tax credit for installing solar is not going to remain at thirty

for the next decade. It was supposed to phase out starting next year, but that's no longer going to be the case. So that was kind of lighting a fire under a lot of people's butts to get solar put on their on the roof. It was dropping down to this year. Next year it was gonna be dropping down. Is gonna keep dropping down until it was phased out. Well, well, now it's gonna stick around at thirty four a while to come. So I don't know that that should make

this process a lot less hectic. You've got more time because the federal government will continue for the next decade plus to pay that much towards your solar installed bill. So we would say take the time to shop around and make an informed decision that's best for your overall finances. There's just no need to rush into this. There's no need to do it a sap or anything like that. Um, and that being said, if someone else is is listening and they already pulled the trigger, this year you are

eligible for the full thirty percent tax credit. Just make sure that your accountant knows or that your tax software that you plug it incorrectly. So do you see that tax credit come your way? That's right. You want to make sure you've got that two version of the software, not that doesn't have I mean, I can't imagine that any software that folks are using is like software that you actually install onto your computer like a via via,

a disk. Remember the people used to do that? Right, you go to the store and you buy a CD ROM. I don't think people do that anymore. It's all over the web, baby, Um. And the other part. Two to keep in mind is, I think the reality is that the price of solar panels, it's going to continue to drop as we see more solar installations taking place. Economy is a scale like. They are at play here and

they're going to benefit you. And not only that, but just advances in solar technology could dramatically reduce the costs as well. For instance, I was reading that engineers are using a shoal nanoparticle inc in three D printers that allows them to make super thin and flexible solar film, right, like this crazy thin film, rather than like the super thick and stiff solar panels that were used to uh

and so, basically like fat heads, remember those? So you could like stick the when you're well, they were like cutouts of NBA players and football players and okay, it sounds like that. Maybe it's like a thicker and you can just like stick it directly to your roof. Is that what we're talking essentially, like you can roll them out. I pictured them like x Ray screens for film or whatever.

That's how I envisioned it. Um, actually there's some some researchers, researchers down in Australia that we're using these things to drive their tesla all the way around the entire continent. Really, they just like put it all around the outside of the vehicle. They would drive all day and then they had like a huge roll of it and that and once they got to wherever they're going, they would just unroll it and it would just recharge the Tesla. Okay,

that's cool, evidently. Yeah, but the bottom line, though, is that with the financial incentives, with the widespread adoption as more and more folks install solar uh and with panel innovation and all of these things are going to continue to drive the price down year after year, and so we don't necessarily want you to be in a rush to do this, especially when that rush means that you're financing it, which means you're paying more than you need to.

I know I'm definitely excited about the possibility of solar and what it could mean for us moving forward, but it's you know, when you're an early adopter, a lot of times you get stuck with the oldest, most inefficient technology and, dude, it makes me think about remember the giant satellite dishes you would see on people, like at People's houses, especially when you're driving out in the country, and like literally it's a satellite dishes that's like twelve

ft across or something like that. They're huge. And how many years later was it before folks had that were like only a foot across that would go on the corner of Your House? And I'm sure those folks who had the big ones are like Dang it, which we wouldn't have been the early adopters out here, even though that's, you know, that's how they were able to watch the

news and do whatever. There's gonna be a lot of ingenuity in this space and it is going to drop the cost, like you said, and it's gonna make it less of an ice or in all likelihood, to you install solar on your roof, for in your yard, and especially if you don't have the money to pay for it yet. And now we know that the federal tax incentive is going to be robust for years and years to come. Why I rush? Yeah, there's just no reason to rush into it, but it's Scott, best of luck

in your shopping solar panels. It's one of those things to matt that that buying it can ultimately, over time, save you money. So, Um, I think if it I do like that. Maybe not quite as an investment, but kind of sort of. So it's it's in the van at least, so it's got good luck on that one. But, Matt, let's get to our our last question for this episode. This one is about becoming a landlord when you move all the time. Hey, guys, this is a hunter from Logan, UTAH.

So in December I'll finish up Grad school and then I'll start my first full time job. In January we'll be moving across the country and we're starting to think about buying a house in that new location. However, we know that we'll only be living there for a year or two before relocating and that that's likely the pattern that the first six or eight years of my crew will take, knowing that we'd want to rent out those

houses that we buy in each place after leaving. But I don't know enough about being a landlord to consider all of the difficulties of doing it remotely. What kind of things should I be considering and one of my best options, if we do decide to go down that path, I love your show and my wife has also recently started listening. We love how discussing episodes can help us talk about our goals and our opinions about personal finance.

As a bonus question, we'd love to know what you guys consider your greatest hits or the best five or six episodes for a new listener like my wife, to serve as a basic introduction to some of the most important aspects of personal finance. Thanks for taking my questions and for making a great podcast. All right, hunter, thank you so much for your question and, by the way, I love that you are listening to the show with

your wife. Just makes me happy, like literally kind of makes me smile, thinking that like you two are kind of sitting there listening to Joel and I talk about you now. Not only are we talking about personal finances, but we're talking about you and and your money right now. Can you believe it? I hope they're like smoking a pipe by a fireplace with like the tweet jacket on. Why does like like a like a fireside chat? Exactly. Yeah, you're like really fun of the Olden Radio Days. But Hunter,

congrats on being like almost done with Grad School. But when it comes to buying a house. We almost never want folks to buy a home if they only plan on living there for just a year or two. If that were to be the case, wrenching. It's almost always going to be a better option. Uh. The only exception is if you plan to then keep that home and rent it out, like you're thinking. Uh. And even then, though,

it's not always going to be a slam dunk. But yeah, we'll go ahead and give you our thoughts, though, and you know how to know whether or not it's going to make sense for you and your wife. That's right when it comes down to Matt Really, when it comes to real estate investing in general, if you were to say what's the most important thing, I think there's a

couple most important things. It's it's hard to nail it down to just one thing, but buying right is, in all likelihood the most important thing to get right, and that's because, you know, most folks, when they're buying a primary home in particular, they're thinking about through whether or not it fits into their budget, which is obviously an important consideration, but they're also thinking about a slew of other things, paint colors, fixtures, curb appeal, but what never

really crosses your mind is whether or not it's going to make a good rental. That is not a question most homebuyers actually ask, like well, if, if I decided to rent this out in a couple of years, would the numbers make sense? But that is going to need to be a lynch pin consideration for hunter, because, and hunter, you're gonna want to find a property that suits you well for living in but that also has the ability

to cash flow for years to come. That means doing some market research to find out what the rent amount is likely to be on the place that you're buying and what your mortgage is likely to be too. And as an investor, you're gonna be hoping for appreciation as well. That's understandable. But while that home going up in value,

it can help build your network. Think of it as kind of the Cherry on top, not something to to bank on, but buying right to buying the right house, not a house it's just you can afford and it's going to make sense for you to live in for the time being. You want to make sure the numbers on that house makes sense from a rental, from a landlord perspective, when you're crunching the numbers, you want to make sure that you're looking at all of the different expenses, because,

is owning any property, but especially a rental property. It's not going to be cheap because of course you're gonna need to set aside money for repairs and you'll inevitably need to have the added expense of hiring a property management company to help you to run that rental when

you leave like that's something that you need a factor in. Uh, you know, you like you might be able to self manage from far away, but that's likely going to be difficult, especially if you're planning to do this, I mean house after House. Like I like the idea. I like that you're thinking that there's a chance that I might be able to own some investment properties and some very promising

neighborhoods and cities all across the country. I like the diversity, I like the potential there, but that also might be

quite difficult. But either way, the typical property manager is going to take a typically a ten percent cut of the monthly rent amount and they'll Alston take half, if not all, of the first month's rent for finding a new tenant Um and so it's certainly possible in many markets to still find a profitable rental even with all of these different expenses factored in, but you want to make sure that you are are assuming those costs before

you pounce. You need to calculate all of those expenses, because if that property can't make money even with those costs factored in, uh it is not going to be worth it. You need to basically go into this with

your Eyes Wide Open. Agreed, Matt. There's a lot of calculations to run, a lot of due diligence that's required on hunter's part before starting to make offers and finding the House that he wants, that he wants to live in for the next couple of years, because he has to make make sure it makes sense for the long haul. And I would also suggest that that hunter gets creative, because he'll likely be able to increase the likelihood that this is a goodbye if he purchases a multifamily home

instead of a single family home. Or if you attempt to buy a home that needs some extra fixing up, maybe, hunter, that you don't mind doing while you're living there, something that is a little more beat up. It's not as good looking. By doing that, you're you're gonna be able to force some appreciation into the property, improving it in order to increase the value and increase the amount you're gonna be able to charge for rent in the future.

So if you don't mind living in kind of a constant workspace for while you're living in that home, you're more, much more likely to be able to get a much better deal. And the sweat equity you pour into that house, he's going to help make the numbers work even more in your favor. Exactly. Yeah, the more that you can think outside of the box when it comes to real estate, the greater returns you can generate. It makes me think

of our friends Carl and Mindy Jensen. They do what they what they call live and flips, where they buy a home, it's their primary residence. They do a lot of work on that property, on that house while they're living in it Um and because it was their primary they don't have to pay any capital gains once they sell, all of that appreciation flows to them tax free Um. And so the last part of your question their hunter. You're asking about the greatest hits, which we don't necessarily have.

The greatest hits. We have five sixty eight episodes as greatest hits. Hunter like, honestly, I think for most folks who are like, well, how do I start listening to the show? Just I would say just start listening to it because every episode I don't think we're necessarily building on previous episodes so that it's required that you have to go back and be able to listen to previous episodes.

For back to episode. We're for back, but we we typically explain what it is that we're talking about, hopefully in a way that somebody who's never heard anybody talk about personal finance before can sit down and start listening and learning right off the bat. It's our goal. We won't always do it well, but let me try. But thanks to a question from a couple of weeks ago, actually we we did pick a top ten list of

episodes to listen to. If you are newer to the personal finance uh, it is up on our website and you can easily access it from the start here button. But but yeah, let your wife know that we are appreciative of her listening and we wish you guys the best of luck starting your journey into becoming landlords. Uh, you just you have to do it. You have to think about it in a way that most other people are not thinking about it. It means buying a house

that you are not necessarily super proud of. Like like it may, it might not be in love with the House exactly, it may not have that curb appeal right like you invite your friends over and they're going to be like, Oh, this is where you live, it's cute, I love the exposed food paneling that's been UN painted

for years. But then just make sure they give you a solid thirty minutes, at least an hour, to where you start sharing with them what your plan is to do with that property and then additional properties down the road, and they're going to be coming to you with all

their financial questions. Building wealth is not always beautiful, it is not always easy, and, especially when you're looking into rental real estate, like it's going to take doing some things that are uncomfortable in order to make the numbers work, in order to grow your bottom line. So hopefully you're willing to do that, hunter, and if so, then I think you can be successful in this endeavor most off. All right, good luck to you guys. Matt, let's get

back to the beer we had on this episode. This is called German chocolate cake and it is by a stout by wicked weed brewing. What were your thoughts on this beer? Yeah, I'm glad we actually were able to share this because I read in the past two weeks this is the second German chocolate cake stout that I had. I had one of those when when we're down in the Orlando add a little pub that you and I

popped into. But yeah, it's got those big dark roasty flavors, I guess, all the kind of flavors that you think of when you're thinking of a German chocolate k a little bit of coconut, a lot of chocolate, kind of yeah, one of those Dessert Beers for sure, that are becoming more and more popular and in particular, as the temperatures are starting to drop, man like I am totally getting an Itche to have some of the some of these

bigger wintertime beers. It's totally fine and okay to enjoy big dark beers in the middle of the summer, but now that it's like the evenings around here at least are they've been a lot cooler you biked up the mountain yesterday with your son. When I wrote in this morning I was just like, oh my gosh, that the Christmas that you feel in the air, in particular when

you're riding on, riding on the bike. It is unbeatable and it makes me just want to curl up, have that that smoking jacket with a tweet, sitting fireside a pipe. It's it's that whole vibe all over again. But Yeah, man, I'm glad you and I got to enjoy another one of these wicked Weed Beers today on the podcast. But

that is going to be it. Will make sure to link to any of the resources, anything that we may have mentioned during this episode, up on our show notes, up on the website at how the money dot com. That's right and by away. Our newsletter is only getting better and better. If you have not subscribed to how the money newsletter, I feel like it's been fire recently and this thing is free. That's not gonna cost you a time. It's gonna give you a good laugh, some

entertainment and some personal finance insights every Tuesday morning. Just got to how to money dot com, slash newsletter and sign up right there. We appreciate all of you guys being a part of the how to money community. All right, maw, that's going to do it for this episode. Until next time, best friends out, best friends out