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

Peer to peer lending isn’t a new concept, but with the advent of the internet, it’s become much more mainstream than it was in the past. Just as robo investors like Betterment made investing more widely available, peer lenders made two things available to a broader audience.Banks make money, lots of it. What is their primary source of revenue?For most banks, loans are the primary use of their funds and the principal way in which they earn income. Consumer lending makes up the bulk of North American bank lending, and of this, residential mortgages make up by far the largest share.Peer to Peer lending lets us little people get in on this very lucrative business.The second thing peer to peer lending allows for consumers to have an alternate place to borrow money than a bank. This has been especially important for consumers whom banks won’t touch for one reason or another.Banks don’t make money by taking risks when it comes to loaning money, but a risky borrower is not necessarily a dead beat borrower.If you want to get in on this whole banking thing and start loaning money, or you want to borrow money but can’t or won’t deal with banks, we’ll detail everything you need to know to make peer loans and to become a peer borrower. Because peer to peer lending is an excellent way for individual investors to make money and borrowers to save money.So what exactly is peer to peer lending? P2P lending connects regular people who want to lend money to ordinary people who want to borrow money, neatly cutting banks out of the equation. The platform where these two groups connect is called peer lending platforms and are found online; they don’t have brick and mortar locationsFull Article Here Learn more about your ad choices. Visit megaphone.fm/adchoices

It’s that time of year again, New Year’s Resolutions.  Matt and Andrew discuss their resolutions, all the biggies, money, health, and fitness. Are you making resolutions?  Have you made them for so many years running that they’re more like traditions now?  Yeah, us too.  Let’s see what we can do to get serious this year. The key to creating a good New Year’s Resolution list is to keep it actionable and measurable. For instance, just “getting healthy” or “make more money” isn’t really a good place to start — how will you know if you’re successful, and how do you get started? Be more specific.  Change getting healthy to eating three servings of veg a day.  (You need more but if you’re eating next to none, this is a good place to start.) Change make more money to devoting an hour a day to working on your side business. What you don’t need to accomplish resolutions is motivation.  What you need is discipline.  Discipline leaves no wiggle room when you don’t feel like doing something.  If you rely on motivation, you won’t do anything when it wanes.  Discipline is what carries you through when you don’t feel like it. Surround yourself with things that help you reach your goals.  Like minded friends, books, podcasts, Ted Talks.  It helps to keep your goal in the forefront during your day to day life. Even if you fall off the wagon, it’s not the end of your resolution.  You can re-set things anytime.  You messed up, that’s okay.  Figure out what caused you to get off track and what you can do to avoid it happening again when the same obstacle comes up. We can have this same discussion next year or you can finally resolve your resolution. Show Notes Black Flip Cocktail:  It’s like a frothy chocolate milkshake with alcohol!  Try this recipe. The Simple Dollar and I Will Teach You To Be Rich are two books Matt recommends on personal finance. Learn more about your ad choices. Visit megaphone.fm/adchoices

In this episode, we talk to one of our listeners, Hersh, about his personal financial profile and offer up some advice. Full credit to Hersh for this show idea. He found our podcast through an Android app on his phone and became a huge fan. He reached out to us via Facebook and wanted to come on the show to copy a segment from Suze Orman called “How Am I Doing?” We thought it would be cool to bring his own, find out what his financial situation is and do our best to help him improve it. Hersh is a successful air traffic controller with a wife and newborn son from upstate New York. He owns a home, two cars, has no credit card debt, and paid off his student loans by taking a loan from himself via his TSP fund. He’s now currently paying off that loan. Hersh has some rental income and gets some overtime at work.  He has a college fund for his baby son.  Hersh is making some good money but essentially living pay check to pay check because all his spare money goes to his loan. Hersh is not doing much investing and he doesn’t have an emergency fund.  He needs to take some of the money toward the loan and start a rainy day fund. At least one month of expenses, but three to six is the gold standard. Betterment is the perfect place to stash that emergency fund.  You are making crap interest if that money is sitting in your checking account so you might as well be getting those gains. Overall Hersh is doing well but he has an expensive lifestyle and no emergency fund and those are the things he can improve upon. Show Notes Betterment:  The smart way to invest. Mint:  Track your own expensive lifestyle.   Learn more about your ad choices. Visit megaphone.fm/adchoices

What is the 4% rule?  It is the magic formula for early retirement.  Make your money work for you while you no longer have to work. If you want to retire way before 65, listen up.  This is how you can do it. The 4% rule is a benchmark that can be used to calculate how much money to withdraw from your retirement accounts every year for at least thirty years without depleting those accounts and outliving your money. In 1994 William Bengen, a financial planner published a study showing the results of testing a number of rates of withdrawal based on historical rates of return. Bengen concluded that 4% was the highest rate that could be withdrawn for at least 30 years without running out of money.Full Article HereShow NotesThe Four Percent Rule:  Calculate how much you need to apply the rule.Betterment:  Start investing today. Learn more about your ad choices. Visit megaphone.fm/adchoices

Investing is a cornerstone of wealth building. No, we are not going to win the lottery, and most of us are not going to inherit a fortune from our parents. So we need to jump into the stock market and the earlier we start investing, the better because time is what really matters when it comes to building our nest eggs.But investing can be intimidating. Even the vocabulary around it sounds like a foreign language, mutual funds, market price, share price, robo-advisor.Don’t worry. Investing is not as complicated as it seems to the uninitiated. In fact, by the time you finish reading this, you will have all of the knowledge you need to start buying stocks, one way or another.So if you’re not sure how to buy stocks, our beginners guide to start investing is just for you.Full Article Here Show Notes Betterment: If you don’t want to pick your own, let Betterment do it for you.   Learn more about your ad choices. Visit megaphone.fm/adchoices

We want you to be sensible with your purchases.  But sometimes you just need a big one!  (Don’t we all). When is a big purchase justifiable? The topic for this episode came from a listener  Kristen. She wanted to know "How and when do you justify buying big ticket items like a laptop, high-tech camera, or new TV?"Sometimes you really do need a new computer, your current one is dead.  Or you need a car that isn’t in the shop every month costing you money.  Those are legit reasons for big cash outlays.  Wanting a big ass TV when you are in credit card debt has no justification. Put anything expensive on a 30 day list.  If at the end of thirty days, you still want it, than it may be a justifiable purchase. If it’s not something you really need, chances are you will have forgotten all about it by the end of the thirty days. If you’re making a large purchase, see if the seller has a 0% APR card you can open and put the purchase on.  You have to be on top of this though and make certain to pay the entire balance off before the 0% term ends or you will be in a world of shit. Just having the cash for something is not enough justification.  You could invest that money.  Would the thing you want to buy or do make you happy (for more than a few hours) or improve your life?  A great experience counts.  In fact, paying for a great, memorable experience has been proven to provide much longer lasting happiness than buying a thing. Once you have justified your purchase, do your research.  Check out But It For Life on Reddit.  There are threads dedicated to the best of anything you could possibly ever want to buy.  And by best, I don’t necessarily mean the most expensive.  Quality isn’t always linked solely to cost. Sometimes we need to buy things.  Just learn to distinguish between a want and a need.  Show Notes Motherf**king Bike: A hilarious YouTube video about riding bikes. Mint:  The easy way to track your spending.  Learn more about your ad choices. Visit megaphone.fm/adchoices

Is your bank nickel and diming you with their bullshit fees?  Learn how to avoid them and dispute the ones you may have already been charged. Banks have enough of your money that they use to make more money for themselves.  Don’t let them steal more with tacked on fees. Maintenance fee, minimum balance fee, foreign transaction fee, paper statement fee.  Those are just a sampling of the fees that some banks charge. Banks rake in a ton of cash on these fees because they know a lot of people either won’t notice them at all or if they do notice them, can’t be bothered to dispute them because calling the bank is a hassle. It just takes some research.  There are banks that don’t charge fees and various types of accounts that don’t come with fees.  There is usually some kind of catch, you need to have direct deposit, pay a bill via the bank’s auto-pay system, or maintain a certain balance. Banks offer new accounts that are fee free but check the fine print.  The fee-free period may only last a certain length of time before fees kick in. If you do notice a fee, call the bank and complain.  Don’t be rude, remember, more flies with honey and all that.  But if you are persistent enough, they will usually waive whatever you are complaining about. While you have them on the phone, be sure to ask what you can do to avoid being charged that fee in the future. There is no reason to pay a bank fee.  Shop around before opening an account. Show Notes Mint.com:  Mint will alert you to any strange fees. Simple.com: A new online bank that promotes no bank fees. Fidelity: The bank account that  Andrew recommends. They reimburse ATM fees!We’d  like to give a shout out to Grayson at DebtRoundUp.com, for helping Matt out with my business bank fees. Learn more about your ad choices. Visit megaphone.fm/adchoices

You know you should be investing your money but where, how? Investing can be intimidating but it doesn’t have to be.  We’ll help you get started. Anyone can invest and everyone should.  We’ll walk you through the process so you can start making your money work for you. Money sitting in your checking or savings account is losing you money because the crummy interest the bank pays is less than inflation.  You have to put that money where it can earn you something.  That’s why investing is so important. Betterment is very easy to use.  You slide the scale to the amount of risk you want, more stocks is riskier, more bonds is safer.  The fee is .35% which is pretty low.  There is no minimum investment but wait until you have $100 to start your account. If you need the money in Betterment, you can pull it out and there is no fee. You can set an auto deposit so each month, the money will be invested.  You never have to think about it, Betterment handles everything for you. If you’re a bit sophisticated and want to buy individual stocks that you’ve chosen, you can open a brokerage account.  Fidelity, E-Trade, and Sharebuilder are all examples of brokerage accounts. If you have $1000 to start with, open a Vanguard Target Fund.  This fund balances your risk based on your preferred year of retirement. The closer you get to that date, the lower the risk balance on your investment. For a lot of us, the real way to get rich is going to be through investing.  Most of us don’t have big inheritances to look forward to and are unlikely to win the lottery.  The earlier you start investing, the longer your money will have to grow. Get over your fear and open an investment account today. Show Notes Andrew’s Betterment Experiment:  See how he’s doing. Mint:  The easy way to track your spending. Learn more about your ad choices. Visit megaphone.fm/adchoices

In this episode, we answer another listener question about whether he should invest in a Traditional 401k, a Roth 401k, or both. If you’re employed, chances are your employer offers a 401k. Normally, this would be a Traditional 401k, but check with HR to see if they offer both a Traditional and a Roth.401ks allow you to invest your pre-taxed income, and sometimes employers will match up to a certain percent. If they do, take it — it’s free money. However, Traditional 401ks have a yearly limit as to what you can invest. Therefore, some employers will also offer a Roth 401k which allows you to invest after-taxed money from your check — there is also a limit too. If you can afford to max out both, go for it. If not, go with a Traditional 401k, and anything over the limit to which you can invest, through that in the Roth — hopefully, your employer will do some matching there too. Show Notes Health Savings Account (HSA) — This is a savings account you can open to use for health-related costs. Learn more about your ad choices. Visit megaphone.fm/adchoices

Are you stuck with a mortgage that is underwater?  We’ll craft an escape plan so you can save money and move on. An underwater mortgage means the balance remaining on the mortgage is higher than the fair market value of your home.  In other words, you owe the bank more money than your home is worth.A lot of people found themselves in this situation when the economy crashed in 2008.  Even at that time, interest rates were lower than you will generally average in the market.  And mortgage interest is tax deductible.  Money tied up in a house is inaccessible.  You can pull money out of the market and have cash in hand within a few days. If you’re underwater, don’t overpay on your mortgage.  You’re only tying up more money.  Invest that money and get your average 7%. Give some thought to doing what Matt did when he found himself underwater.  He moved in with his brother, paying a very low amount of rent and rented out his condo.  In some cases, you can get more in rent than what you are paying for your mortgage.  You just need a friend or relative willing to give you cheap rent. A big housing bust like the one we had in 2008 doesn’t occur very often.  If you can afford your mortgage payments, hold onto the house.  Eventually, you will be above water and can sell the house if you decide to.  And maybe live in an apartment for a bit.  Owning a home is not all it’s cracked up to be and not necessarily still a part of the “American Dream.” Show NotesMint:  Track your spending. Betterment: The easy way to invest. Vanguard:  Among the lowest fees in the industry.   Learn more about your ad choices. Visit megaphone.fm/adchoices