Listen Money Matters - Free your inner financial badass. All the stuff you should know about personal finance.

Financial issues are a leading cause of divorce.  Before you take the plunge, find out what you need to know so you don’t become a statistic. Our guest Jeff will share some things he learned about preparing your finances for marriage.  Because once the honey moon is over and life starts, having systems in place to deal with finances will be important to your life as a married couple. Some partners will bring an equal amount of financial knowledge into the marriage.  For many, one will know a lot more than the other.  For many people, this means managing money defaults to the more knowledgeable spouse.  This is not a good recipe for a happy marriage.  The partner dealing with the finances can feel resentful that such a big job isn’t being shared and the partner with less experience might feel left out of important decisions. Jeff was more knowledgeable about finance so he and his fiance took Dave Ramsey’s Peace University together to help get her up to speed. One of the most important things to discuss before marriage is how much debt each of you have.  And how will the debt be handled?  Does it become a joint effort to pay off or is it still the responsibility of the individual partner? Sometimes love doesn’t conquer all.  If the person you want to build a life with has what seems to you to be an insurmountable pile of debt, you may need to make some hard decisions.  They didn’t get to that point because they make good choices and while anyone can change, mostly they don’t. Make sure each partner has some “fun money” that each can spend without justifying it to the other.  No one likes to feel every penny is being scrutinized.  Schedule regular meetings to reassess where you are and make any necessary tweeks.  Being open with each other about finances is really the key to managing them successfully. That money causes so many families to break up is a travesty.  Don’t let it come between you and your spouse, talk about it, plan it, and manage it so you can live happily ever after.  Show Notes Unita Brewing MonkShine:  Belgian style blonde ale. Ommegang Hop House:  Belgian style pale ale. LMM Tool Box:  All the resources you need to manage your finances in one place. Learn more about your ad choices. Visit megaphone.fm/adchoices

Perfect is the enemy of good when it comes to  trying to improve.  Dwelling too much on minutia hurts the overall result. Are you waiting for the perfect time to start investing?  Right job, $1000 to start with, after the holidays.  You know what would be better than that?  Investing. There is no more perfect time than right now.   We have too many choices and too many sources of information.  This can be paralyzing.  Should you invest with Betterment, ShareBuilder, E-Trade, Van Guard?  What do my co-workers think, my family, Reddit?  How can I decide anything before consulting /r/personalfinance? You can spend weeks researching all this and you know how much money that will make you, none.  If you just made the leap, you might already be up a few bucks.  We don’t advocate doing no research but there comes a point when too much is well, too much.  JUST PICK SOMETHING!  Ugh, like Krusty would say it. How do you overcome this quest for perfection when it comes to money and anything else in your life, really?  Just start.  Don’t go out and buy any supplies, you don’t need fancy graph paper to make a budget, you can do it on the bank of an envelope. You don’t need to research and hire a “financial adviser” to start investing.  Open a Betterment account.  You don’t need to be kitted out in Lululemon to start running.  A good pair of shoes is all it takes. The perfect moment will never come and even if it does, it will come later than now. Show Notes Maine Root Blueberry Soda:  If you’re a hipster, this is the soda for you, unless you prefer RC Cola in an ironic fashion. Superfuzz Blood Orange Pale:  A fruity, summer beer. The Lean Startup:  A book about getting the bare bones product out, listen to feedback and improve.     Learn more about your ad choices. Visit megaphone.fm/adchoices

You ask and we answer!  Today we’ll discuss joint finances, joint credit cards, stock options, credit card debt, and money allocation. 1.  How do you update your fiscal strategy when combining finances with a partner?  Each person should be contributing but if one makes much more than the other, the contributions should be a percentage rather than split evenly.  Opening a joint checking account where each person contributes the agreed on percentage and use this  account to pay shared expenses. 2.  Should I add my partner who has no credit card to my account or should she get a separate card? If you open a joint card, you each take 50% of the risk.  If you add someone to your card, you take 100% of the risk.  A joint account also builds the credit score for each of you, important when it comes to one day taking out a mortgage together.  That said, unless you are 100% certain not only of staying together but also of the other person’s financial responsibility, keep it separate. 3.  My company is giving out mid-year bonuses.  Do I take stock options with three years vesting or the cash?  Alice’s company is a small start up so it’s not possible to research it.  A bird in the hand is worth two in the bush but what if the company is the next Google?  What if it’s not? The cash can be invested so in this scenario we say, take the cash. 4.  I have credit card debt that I am managing aggressively at 0% interest but I have the cash to pay it off.  Should I pay it off or use the cash to invest?   As long as the debt is 0% APR, keep your cash in investments.  Once the 0% runs out, pull out the cash and pay the debt. 5.  My family owns several rental properties.  I need help allocating an extra $2000 a month.  Invest, put if toward a mortgage on one of the properties, a down payment on the next property, or safely invest in bonds?  We suggest investing in bonds and then using that money for the next down payment. Thanks for the questions guys, keep them coming. Show Notes Unita Brewing Monkshine:  A Belgian blonde ale. Ommegang Hop House:  A Belgian style pale ale. Betterment:  Start investing today. LMM Tool Box:  Everything you need to manage your money like a bad ass. Learn more about your ad choices. Visit megaphone.fm/adchoices

We check in with Andrew’s Lending Club strategy to find out if he’s making any money and if it might be a good investment for the rest of us. Lending Club is a peer-to-peer lending company.  If you need a loan, rather than going through a bank, you make a pitch and a pool of hundreds of people will lend you the money.  Kind of like crowdsourcing for a loan.  The interest rate you’re charged will be lower than what most banks would offer. And the return for the lenders can be high. On Lending Club, your interest rate will range depending on the letter grade you are assigned which denotes how risky you are.  If you apply and are honest on your application, you are almost certain to get a loan.  For the lender, you can allow Lending Club to loan out your money based on your set criteria or you can hand pick the loans you want to make.  If you hand pick, you will be privy to a lot of information about the borrower, job, where they live, if they rent or own a home, etc. Andrew has $2700 invested and to date his returns are 18.5%!  He hand picks his borrowers and spends a lot of time choosing them.  He considers it his high risk, high return investment.  He mostly invests in small business loans and refinancing.  In order to choose whom to lend to, he sorts it by people with the highest credit scores and highest interest rates. The key to succeeding in Lending Club is knowing how to sort, spending time researching the borrower and making as many investments as you can and being diversified so if one person defaults, you won’t feel it.  To this point, Andrew has not lost a cent through Lending Club. Lending Club can be a great way to make money, but remember, there are no tricks.  Andrew has done so well because he spends so much time analyzing the best people to borrow to.  If you decide to try it yourself, let us know how you do. Show Notes Smuttynose Bouncy House:  The all occasion ale. Lending Club:  A crowd sourcing site for peer-to-peer loans. LMM Tool Box:  Everything you need to get money savvy. Featured Image Photo Credit: “Black & White Handshake – Still from the film Colour Blind (2009)” by Pui Shan Chan on Wikipedia Learn more about your ad choices. Visit megaphone.fm/adchoices

When should you put your money into the market? When should you pull it out? Is there a best and worst time? Are you timing the market? If you are timing the market according to headlines, you’re doing it wrong. We’ll show you the correct way to time the market. Put simply, timing the market is trying to figure out the best times to put your money into and pull it out of the stock market.  We’ve all heard, “buy low, sell high,” but when do you know the optimal time to do that?  You don’t, and neither do the talking heads trying to convince you that they do. Being conservative doesn’t sell newspapers or television advertising.  Jim Kramer ranting like a lunatic sells those things.  But screaming lunatics are seldom right.  Do you take advice from the “dirty ass unemployed gentleman” (call back!) screaming about end times outside the subway station?  Well, if he had a TV show, he could be Jim Kramer. The stock market offers a wonderful gift of an average of 7% returns.  There will be highs and lows, but in the long term, the market goes up.  It’s the short term that the prognosticators are trying to predict and they are usually wrong. There are just too many variables, and no one can predict the future.  The prognosticators are just loud and get a lot of attention, and they make really bold predictions all the time.  Once in a while they get it right and suddenly they look like Nostradamus. The correct way to time the market is through dollar cost averaging, which we explained it Episode 99.  This just means slow dripping your investing money into the market rather than throwing it in all at once.  This is a good philosophy for new people who are nervous about investing.  But you will make more, over the long term, if you lump sum it. Market corrections happen often.  All kinds of things can effect this, domestic political events, world political events, natural disasters even.  This doesn’t affect us long-term; you shouldn’t be checking your investment accounts daily and freaking out over the fluctuations. A bear market is when all the investors are “hibernating” and not putting money into the market.  This is bad.  But a bear market is always followed by a bull market when investors come “charging” into the market. If the knowledge that these gurus have, which they will generously bestow upon you in their newsletter for the low low price of $19.99 was so great, why aren’t they richer than Warren Buffett?  Something to ponder. The takeaway is to get your money in the market.  There is no one tip that will make Wall Street hate you.  It’s not sexy, but it will get the job done. Show Notes Blue Coat Gin:  A local Philly gin. The Five Mistakes Every Investor Makes:  If you’re nervous about getting into the market, read this and learn to avoid mistakes. Betterment:  Set it and forget it. LMM Tool Box:  Everything you need to get good with your money in one place. Learn more about your ad choices. Visit megaphone.fm/adchoices

Laurel Staples joins us to teach us how to forget the American dream and talk about her journey becoming an entrepreneur. Start living our own dreams on our own terms. In 2007 Laurel quit her job as a mechanical engineer to launch her popular blog, Go Fire Yourself.  In January she will publish her book about how to quit your day job and run your own business.  She is also a business coach and a photographer. Like many of us, Laurel followed the prescribed path, leave high school, go to college, get a job.  She worked for Lex Mark designing laser printers.  And she hated it.  She knew she would hate it buy hey, that’s what you do in America.  Fork out a fortune for college and slave away in a job you hate. She has always been interested in things like health and the environment and planned to open an eco-friendly clothing store. After spending about a year planning it, she quit her job and opened the store in December 2007. Unfortunately around the same time the economy crashed. After all the blood, sweat and tears, Laurel soon found herself in the same 9-5 grind she had been trying to leave. She closed the shop and started working as first a health coach and then a business coach.  That change is what finally put Laurel where she wanted to be. When coaching clients Laurel emphasized planning and doing things the right way.  But there comes a point when you just have to make the leap, otherwise you’ll be stuck forever.  There is no set amount of money you should have before quitting your job. Laurel has seen people make it work with very little saved and people fail with thousands saved.  In fact, the people with less may succeed more often because they don’t have the option of failing.  Don’t have a Plan B because if you do, you won’t work as hard on Plan A. It’s a scary thing but Laurel advises us to trust our instincts and to remember, you don’t have to make “forever decisions.”  She didn’t like the retail world so she moved on to something different.  Working with a coach or mentor can help keep you on track or show you new ways of doing things. It is important to get your side business set up while still working.  There is a learning curve to being and entrepreneur and it’s easier to learn while a paycheck is still coming in.  This is especially important if you have a family. You need to discuss your decision with them. Perhaps you can cut back enough to survive on one salary while the business is getting off the ground.  If not, you will need to really ramp your side business up before jumping and show your partner that you are bringing some money in. When deciding to jump, put things into three columns, “must have,” “nice to have,” and “don’t need.”  This will show where you can trim expenses before money starts coming in.  Try want Andres is going to do, before you decide anything, try a thirty day challenge to live as minimally as possible.  Chances are, it won’t be as hard as you imagine.  When you make it through the month, you’ll see what life will be like until your venture starts succeeding. We all hear and read about people who quit a job they hated and created their own life and wonder what they have that we don’t.  The biggest difference between them and us, is that they took the leap. Show Notes Smuttynose Bouncy House IPA:  an all occasion American ale. Martini:  made with Blue Coat gin and vermouth. Go Fire Yourself:  Laurel’s blog dedicated to teaching small business owners to quit there day jobs and start living life on their terms.   Learn more about your ad choices. Visit megaphone.fm/adchoices

Do you sometimes get into a slump, just a malaise that you can’t really pinpoint a reason for?  It happens to us all.  Together we’ll stay motivated! Sustained motivation can be tough, whether it’s motivation to stick to a budget, an eating plan, or an exercise routine.  There are ways to create a positive feed back loop that will help keep you motivated. Get back into your routine.  If you are a largely healthy person and you slip on the food and exercise, you will start to feel pretty crappy, you might even feel depressed.  Eating and exercising well are good for your physical and mental health.  Once you get back to normal, the feelings should clear up. Getting bad feedback can sap motivation, whether it’s bad I-tunes reviews :( or the Dow is down, it can make you feel helpless.  But those things are not in your control.  Don’t obsess over things you can do nothing about. Make a list of everything you need to do that day, even if it’s  really small things.  As you do them, check them off.  Even if you can’t finish everything, looking back at the list shows just how much you were able to do. Read something that you find inspirational for a few minutes in the morning and before bed.  Listen to a podcast that is geared toward the goals you want to reach.  I listen to health based pods when I run and it motivates me because the pod reinforces what I’m doing. Try a few things out, what works for one might now work for everyone.  Let us know in the comments how you get out of a rut. Here are a few more tips on how to stay motivated. Show Notes Daily Rituals:  The habits of creative people. Nerdist:  The podcast Matt uses to get motivated. LMM Tool Box:  All the things that will help you to succeed with your financial goals.   Learn more about your ad choices. Visit megaphone.fm/adchoices

Are you broke? Can you pinpoint why?  We’re going to give you twenty one reasons for your brokeness.  Listen hard and shape up! 1.  You think “budget’ is a bad word.  A budget doesn’t have to be a complicated spread sheet, just using Mint is a start. 2.  You try to keep up with the Jones’s.  All that stuff that you envy may be built of a house of cards made of credit card debt.  The feeling of having no debt is a better feeling than having a boat. 3.  You can’t say “no.”  You don’t have to accept every invitation that comes your way.  If your finances would be better served by saying no sometimes, that should decide it for you. 4.  You think the government will fix your problems.  Lol!  Whose government, ours?  Jeez, have you not be paying attention?  The cavalry is not coming.  They’re too busy over in the Middle East bombing stuff to give a shit about you. 5.  Finding someone to blame is more important than finding a solution.  This is an insidious practice and it will poison all aspects of your life.  Stop this immediately. 6.  You love money too much.  This was kind of unclear.  We think it means, you love the jolt you get from spending money. 7.  You think all rich people are evil.  A lot of them are but there are some good ones out there, Warren Buffett and Bill Gates have given billions of dollars to worthy causes.  But for every one of them there are ten Koch brothers running around hatching diabolical plans so I see why you think this. 8.  Holidays revolve around gifts.  I like presents so I’m guilty of this.  We all know it’s really about family etc etc, but come on, gifts! 9.  You quit learning.  You dear listener, have not because you’re reading and listening to LMM!  You can skip to the next one. 10.  You have bad habits.  We all do, some are more expensive than others.  You know what your’s are and you know you should stop.  We aren’t going to belabor the point. 11.  You impulse buy.  You can fix this with the thirty day list.  If what you want costs over X amount of dollars, you have to wait thirty days.  If you still want it, you can have it.  Usually what happens is that you forget or decide you can do without it. 12.  You pay the minimum payments on your debts.  Want to never pay off your credit cards?  This is how you do that. 13.  You play the lottery.  Guys, we went through this in Episode 130.  Come on! 14.  You have no goals.  You need to know what you’re working for and a plan to get there.  Saying, “I want one million dollars!” is not a goal. 15.  You hang out with the wrong crowd.  This can mean negative people, people who don’t share your goals, people who pressure you to spend.  Bad influences in other words. 16.  You’re lazy.  The occasional weekend spent on the couch watching a Nexflix marathon is one thing, but if this is how you spend every weekend, you are probably lazy in other areas of your life too and it’s hurting you. 17.  You don’t value yourself enough.  You don’t ask for a raise, you let people low bid you for jobs.  You’re better than that.  Demand what you’re worth. 18.  You don’t invest or pay yourself first.  Investing is how the rich get that way quickly.  If you don’t pay yourself first, you won’t have anything to invest. 19.  Your house is a mess.  Clutter and disorder are distracting and a sign that you are disordered in other areas of your life, not least of which are finances. 20. Learn more about your ad choices. Visit megaphone.fm/adchoices

Andrew has  $12,000 of debt!  And yes, I did mean Andrew and not Matt.  Has he forsaken his Listen Money Matters principles?  Find out the shocking details. It’s not as scandalous as it sounds. Half of this is on a zero APR Home Depot credit card and those were expenses to remodel the kitchen.  The other half is a series of things that all hit at once, conference tickets, a vacation, mortgage tax.  Life got in the way and he did end up with finance charges. This episode is one of the reasons I was a fan of LMM long before I started working here.  Andrew owns up to his mistake and talks about it so he can help other people avoid the same.  Because if it happens to someone like him, it can happen to any of us, no matter how together our shit. This is how Andrew plans to redeem himself, and as penance, he’s going to document it in an article for us all to judge, (getting a little Dave Ramsey up in here.) The first thing he did was to set up an account with our friends at Ready for Zero to make payments to kill the debt fast.  He’s going to automate the payments and use the stack method.   The next step is to take out a loan from Lending Club and refinance for less than 10% which will be less than half of the rate of the credit cards. Matt asks a good question, why not just pull money from investments to pay the debt? A few reasons, firstly, Andrew isn’t in dire straights.  This is a temporary set back.  The other reason is altruistic, for the love of his listeners, he’s going to take the hit because he doesn’t want to disrupt the Betterment Experiment. This is a learning experience for us all, Andrew included.  He wants to show that one mistake doesn’t have to completely derail your personal financial plans and to show how using Ready for Zero and the stack method work. This can happen to anyone and Andrew is angry with himself like anyone would be.  But he has a plan to right the ship.  If it can happen to him, it can happen to anyone.  But by seeing him fix it, we see how we can fix our own situations. Feel free to use the comments to berate Andrew or to cheer him on! Show Notes Art of Flight:  A cool snow boarding video. Betterment:  Start today so when disaster hits, you can weather it. Learn more about your ad choices. Visit megaphone.fm/adchoices

Are you still getting and paying bills by snail mail?  Grab a whip and a chair and we’ll teach you how to tame them.  Also learn about duck genitals! Do you open your mail box to a flood of bills?  I hate that, not so much because I mind bills but because it’s more paper to keep track of and they cram so much crap in the envelopes. Before I started paying bills on-line I would send all the extra paper they sent me back to them with the check, ha! There is no reason you have to be bothered with all those pieces of paper.  Most bills now allow you to opt out of getting a paper statement and will e-mail you a digital one.  You can pay these on-line.  It’s so much easier to keep track of digital “paper” than actual paper.  You probably don’t even need to make a folder for it, you can just log into your account and look at the back statements if you need to. You can automate some payments too so you don’t have to do anything.  Just set up auto pay and your bank will send the payment.  You sometimes can’t do this with variable bills but for something like rent that doesn’t change often, you can automate it. If you can pay a bill on a credit card, do it.  You will earn whatever reward your card offers, the credit card company will fight on your behalf if you dispute a charge, and it gives you fewer bills to pay.  To make it even easier, call up your credit card companies and ask them all to change your billing date to the same day.  That way when you sit down to pay it, you can do it all at once. At LMM we always advocate simplifying your financial life.  Set up a system to automate your bill paying and spend the time saved doing something more fun than paying bills. Show Notes Stranger Pale Ale Left Hand Brewing:  A pale ale with citrus, hop notes. Betterment:  Start investing today. Mint:  Set up your budget. Learn more about your ad choices. Visit megaphone.fm/adchoices