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Untucked Episode 100

On this episode of Untucked, the team discusses the things you shouldn’t focus on when making financial decisions. The Coach’s Corner clip can be listed to here or you can listen to the entire episode here.

Meghan Tait: [00:00:00] Um, today we are going to talk about a tweet from Thomas Kopelman. Um, he tweeted a thread that he titled six things you should not focus on financially. Um, and we wanted to, to maybe react to it or, or add to it because a lot of the things we discuss are things you should do. So we thought this was maybe a good, a good topic to think through some of the things Maybe that aren’t worth your time, energy, or efforts.

Um, I’ll just run through the seven he listed and then we can talk about them individually or anything we want to add. Um, so he talked about moving high yield savings accounts for a slightly higher yield, trying to create multiple streams of income, um, best credit card strategies, complex investment products, leveraging 0 percent interest, timing the market, and cutting out the small things you enjoy.

Any of [00:01:00] them stand out to you guys?

Jeff Mastronardo: The last one stood out to me, and I actually just came across an article maybe yesterday or today about that. Uh, not about cutting out the small things. Like this person was advocating to be mindful of like the Starbucks coffee. And so I guess disagreeing with Thomas.

And I read the article, and I just. I kind of like scoffed at it because the guy, I think the example he said was, you know, spending money on like useless things, call it 26 a week on useless things. It’s like 1, 300 a year. And I just don’t think 1, 300 a year is going to change anyone’s life. And the amount of time and the amount of dissatisfaction and, and, and disenjoyment.

If that’s even a word that, that [00:02:00] you have to experience because you spend time and energy to try to save 13 or 25 a week, it seems absolutely useless to me. So I a hundred percent agree with that.

Mike Traynor: I do too, but I’ll asterisk is that there are people who love that. Meaning like there are people who. will drive the extra five minutes to their destination on a non toll road to avoid paying the 3.

40 toll and they feel a big win from doing that. So, I just, the caveat to me is that there are people who just love cutting out the little nickels and dimes because it’s just a big part of their, who they are.

Jeff Mastronardo: I don’t think it’s a love for them, I think it’s a disease.

Mike Traynor: I mean, I know

Jeff Mastronardo: people that won’t do that.

raise and lower their garage door more than they should because of the energy [00:03:00] it, it, it, it, it, it spends, which is wild to me. Uh, my dad will drive to whatever different gas station to save 10 cents a gallon. What does 10 cents a gallon actually even work out to over 20 gallons, 2 that just does, it seems so insignificant.

I find it like very, you know, I’d rather sit in my house at 84 degrees than to put on the air conditioner because it’s gonna cost an extra, I don’t even know. Hey, let’s close the lights because it’s gonna save us.

Meghan Tait: Cents.

Jeff Mastronardo: It’s like literally cents. That, that whole, um, mindset. I’m not saying be wasteful. But our garage door goes up and down 50 times during the course of a day like at least

Mike Traynor: yeah

Jeff Mastronardo: And I can’t even imagine, like, telling my kids, Whoa, whoa, whoa!

Don’t open the garage, walk in through the [00:04:00] front door. It doesn’t cost us any money if you go in through the front door. Yeah. Like, that’s just wild to me.

Meghan Tait: Well, it’s similar to the first one he says, moving high yield savings accounts for slightly higher yield. So thinking about, you know, your Capital One account that’s paying you 4.

25, and then Ally has, you know, It’s a high yield savings account that’s paying you 4. 5, right? And you’re opening a new account, you’re moving money, um, for what is in the grand scheme of things, very, very little return. Um, so I think the, the, the mindset is one of, um, disease feels strong, but in the examples that we’re describing, maybe that is what it is.

Mike Traynor: But on number one, I would say not to. You know, uh, Confused people but If you’re getting 1 percent at your bank and it’s 5 percent at [00:05:00] Capital one. That’s that’s a different story. Sure. So like the his point is for one tenth of one percent Well, don’t don’t bother. Yes, which we agree with. Yes

Jeff Mastronardo: Let’s spend some time on the seven streams of income because I think that’s a very popular mindset in today’s world with influencers and, um, social media and the internet and, and these like entrepreneurial people that are like, you, you need to just, you need to develop different forms of income and passive income versus, uh, like when I hear that, it’s like, okay, so you want seven streams of income, which means you’re going to be crappy at seven different things.

Like who is an expert and just dialed in as a landlord, as a financial planner, as a, as a, as a real estate, like as an influencer on, on social media, like who’s doing [00:06:00] four different things exceptionally well and generating income from it. You’re not optimizing your time. If you’re really good at something, do that.

Expand there. Find different sources of income there, not from a completely different activity. Like that’s just, that’s just crazy to me.

Mike Traynor: Yeah, I agree. I mean, it’s like, I don’t even know. I’ve never even heard of this seven streams thing, but I know what it’s about. It’s like, you should have three side hustles and a W2 job.

And then you should also own property in which you get that passive income. What? I mean, no, I agree with you. Like, it’s just, Somebody has to work three jobs to make ends meet. That’s different. But deliberately creating, I guess, diversification of your income and your cashflow, that’s great in theory, but

Jeff Mastronardo: what?

I’m sure this is this opinion that I have and that Mike has [00:07:00] is very like people would disagree with this very strongly.

Meghan Tait: I think there’s a, there’s a camp of people who would disagree with it, and I think you’re right in that a lot of it is, is kind of social media influenced, um, because you see people who Have done all of the things you’re describing, right? Whether it’s like they call it house hacking, right? Um, for the real estate piece of it, or they have a side hustle beyond their, their W 2 income.

So I think when those people have a platform that reaches other people, um, and they try to come off as like, if I could do it, anybody could do it kind of thing. Yeah. I think there’s a camp of people who would see that and say, Well, why can’t I make that work? But when you frame it about your time, which is what you’re describing, Jeff, and your [00:08:00] ability to maybe not be as good at all of those things as you could or should be, or your ability to be a partner, a father, a mother, a friend, like have a life outside of, of these streams of income.

Like there’s only so much time in a day. So I think that the vision of it and the reality of it are very disconnected and the people who appear to make it work Do so behind a screen that no one actually knows the success they may or may not be having. Um, and I feel like that’s, that’s a lot of what these, these things, how, how a lot of these things you shouldn’t focus on get, um, kind of forced onto us is, is through that microphone of social media.

You hear one, two or three people, um, right? Well, you have to move your savings account for a slightly higher yield. It’s like a no brainer. You’re going to get more money over here. Like there’s, there’s very few [00:09:00] people who are just being real about these things and saying it’s not a sustainable way to exist by trying to maximize all of these different areas of your life.

Um, For what?

Mike Traynor: I

Meghan Tait: mean, like the credit card strategy one, it’s another one. You could go onto Instagram or Tik TOK, or you could Google it. Like how to best use my credit card, how to pick the credit card. That’s going to give me the most X. Like how many people do I, do I feel like I probably misuse some of my credit card points?

Sure. Do I do that to the extent that it’s going to keep me up at night or force me to spend time figuring out a better way to, no, it’s just not worth my time. Um, but it’s, there’s no shortage of people telling you that any of these things are worth the time and effort without [00:10:00] truly knowing if they’ve had any success in any of them.

Mike Traynor: Yep. Yep. I agree. I agree. I mean, uh, I’m sure that if you spent a lot of time You could open up multiple, you could have a strategy to open up multiple credit cards, transfer balances, get points for the initial sign up, and then, you know, spend that money, right. For the rewards or whatever, and continue to do that and come out ahead.

You would totally, but is it worth it? Hell no. No.

Jeff Mastronardo: If my wife wants to do that, like spend hours upon hours doing that, that means I have to go pick up the kids from school. I have to make them dinner. I have to do the laundry, which means I can’t be here working. So you’re getting a benefit from it, but it’s, it’s detracting from, it has to detract from something else because it’s all time related.

We don’t have to spend any money on timing the market. We’ve beat that to death. If you’re spending time trying to time the market, you’re wasting your time because you’re [00:11:00] eventually going to not do as well as the market. So don’t even bother. Um, I agree a hundred percent with his complex investment products.

Like there’s so many things that are complex out there and God, I want to say like 99 out of a hundred of them are not advisable for most people to own. I can’t think of a complex investment product or something like that. That is in someone’s best interest.

Mike Traynor: I can’t think of a single one. Either.

Jeff Mastronardo: No,

Mike Traynor: not a one.

Jeff Mastronardo: I mean, aren’t hedge funds like really good.

Mike Traynor: Yeah. For the people who sell them and run them. Don’t they like beat the market? Yeah.

Jeff Mastronardo: Isn’t that why all rich people put all their money in hedge funds? Cause they’re like, the people are so smart and like, you don’t even know what they’re doing, but you’re just making like, they make a lot of money.[00:12:00]

I’m kind of poking the bear

Mike Traynor: the only The ones that are consistently killing it don’t want or even will take your money It’s all their own money, right? So I mean, it’s all of them are just They’re sold on the same basis, which is that this is something for the Well, whether it’s the rich people or the, or the exclusive investors who have it, it’s all, it’s all bullshit.

And it’s every one of the examples here, private equity, real estate syndications, permanent insurance, or complex insurance products. They’re all designed to pay the producers.

Jeff Mastronardo: They’re almost like, they’re almost like directly correlated. Like the more complicated a product is, the more expensive it is. The more costly it is and the less value the bottom line investor receives from it.

And [00:13:00] people just don’t want to believe that.

Meghan Tait: Yeah. Simple. Doesn’t sell.

Jeff Mastronardo: It does not. Yeah. Um, what was he talking about with leveraging 0 percent interest?

Meghan Tait: So the example he gave was, um, when you’re on Nordstrom and you get to check out and your cart is 450 bucks and you can pay it off in, incremental payments with, I think it’s like Klarna is one of the, the, um, platforms you can use.

Um, and his point was, you know, if you can’t afford to buy, something like that, that you need to split up over a couple of payments, then you shouldn’t be buying it. The opposite of that would be, I think Mike used this as an example when we were prepping, like getting a car loan at 0 percent interest is in fact a good opportunity.

Um, so larger purpose purchases using [00:14:00] 0 percent interest, um, pretty much a no brainer, but leveraging it in, in what, I mean, I guess there may be less consequential in terms of the purchase amount, um, is just not really very responsible. So good job, Thomas. Are there any things that maybe he didn’t list that come to mind?

To you guys that like shouldn’t be the focus of people’s financial priorities, maybe social media because of comparison and how you’re going to look at your friends Instagram feeds and see them going and doing and because of slight jealousy or FOMO, um, maybe committing to financially things that you just can’t afford and it being difficult to say no.

But. Avoiding social media, or at least the lens of I want to be able to do everything everyone else is doing just might not be [00:15:00] feasible. I think you took it as all of the different information on

Jeff Mastronardo: social media. Yeah, and I think I would add to that. Like I had a meeting yesterday with a client trying to explain to her why I think doing a Roth conversion for some of her IRA each year is probably a good thing for her in the long run, probably a good thing for her, her daughter in the long run.

Um, and at the end of it, like she got it, understood it, understood there was no like giant benefit to her immediately. And she’s like, yep, let me think about it. I’m like, yeah, no problem. Do it. Don’t do it. Your life isn’t going to change one way or the other. What I will say is everyone you talk to is going to tell you you’re crazy for doing it.

Your CPA, your friend, because everybody has there in the back of their mind, why would you pay taxes when you don’t have to pay taxes? So I would, I would throw that in the [00:16:00] category of, Stop taking advice or asking advice from people who know nothing about you. And I, I don’t mean like they know your name and they know how many kids you have, unless that person that you’re asking for advice from has your tax return, has your goal list, has like your entire financial plan in front of them to, to like delve through.

Don’t listen to anything they have to say. And so many people do that. They listen to, like, they have a conversation with someone and then they bring that back into our office and they’re like, none of my friends are doing this. They told me not to do this. Do your friends, have they seen your budget? Do they know where your investments are?

Do they know your effective and marginal tax bracket? Like, No. So why? Like, it drives me crazy.

Meghan Tait: I think that’s a good one.

Mike Traynor: Me [00:17:00] too, Meg. So just real quick before we move, um, avoiding social media for financial information at all, obviously, but I would, I would say media period, like all media, you know, I have friends who watch CNBC all the time, like every day they watch Kramer or Josh Brown on there talking about stocks and talking about markets and.

Maybe not aware what the business of media is, right? And falling into the trap of it. Cause that, that gets into your psyche. If you’re, if you’re listening to that stuff and we’re paying attention to it and maybe thinking, huh, this guy seems smart. He’s calling for a 25 percent correction by year. Like all that stuff is so poison to you.

The right things to do as from an investing standpoint, so I would just say never ever ever watch That stuff [00:18:00] Don’t read the magazines if they still are out there. I’m not sure. Do they have magazines anymore? I think they do like it’s all the same poison. So

Meghan Tait: So don’t watch tv. Don’t look at your phone and don’t talk to your friends

Mike Traynor: about financial stuff

Jeff Mastronardo: and invest right like well, it’s it’s the same in the medical field, but Right.

Like if there was something wrong with you physically, would you like go on a social media or like the Mayo clinic. com to diagnose yourself or would you go see a fricking doctor and have them take your blood pressure and do blood work, right? Like hook you up to an EKG.

Mike Traynor: Yeah.

Jeff Mastronardo: Yes. You’re having a heart attack.

Oh, well the Mayo clinic. com said I have high cholesterol.

Meghan Tait: Like my neighbor told me it’s

Jeff Mastronardo: the same damn thing, dude. Yeah. Yeah. Yeah. All right. That was good. Well, Mike, I appreciate that. Thank you for sharing.