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On this episode of How To Money, Matt and Joel answer listener questions about a wide variety of topics: how to make the best out of a bad “meme stock” situation, whether or not to rent or sell a house, how to talk to a spouse about money, and whether or not the possible salary increase from an advanced degree is worth the cost of tuition. Their first caller is living paycheck to paycheck and wants to know how she can decrease stress in her financial planning. Matt and Joel love that she’s already investing in a Roth IRA, but advise her not to start investing until she’s got a little more financial cushion on her side. “When you’re using last month’s money to pay this month’s bills, that’s when you have margin,” Joel says – and that’s when she can start thinking about investing. “A good money move isn’t necessarily a good move if it’s done in the wrong order.”
Another caller is moving from San Diego to Washington state, and he’s wondering if he should sell his house. On one hand, it’s worth a whole lot right now – on the other, he may move back to San Diego one day, and it would be nice to have a house ready to move to, but he’s worried about being a long-distance landlord. Matt and Joel agree that that’s not ideal, and moreover, if he sells the house now, he can save a lot of money on the capital gains tax. However, if he sells it after renting it out for awhile, he’ll owe that money – and the house might lose value in the meantime. They suggest a two-year trial period as a perfect compromise: He can see if he likes (and can manage) being a landlord, and if not, he’s still within the window to save on the tax payment.
One caller is beating himself up a little bit because he invested some money in GameStop and lost all of it. He’s not destitute, but he feels stupid and wonders if there’s anything he can do to make the best of it. The guys tell him that first of all, if he learns from the mistake, it’s no bad thing – he’s already a better investor. More practically, if he has some stock that’s doing well, he can sell some in the same calendar year – his loss in the stock market might offset the taxes he would have to pay on his gains. Plus, should someone pay tens of thousands of dollars for an advanced degree? Matt and Joel remind them of the POT score formula and other important things to keep in mind. Hear all this great advice and more on this episode of How To Money.
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