He is rolling the dice because if either him or his wife have a layoff or some type of job transition, they are in big trouble. I respect his ambition so I hope it all works out for them.
This was one of my favorite episodes! I'm so appreciative for Dan's vulnerability! Their situation is the most similar to ours that I've heard on the show (only we're 10 years older, so kudos to him and his wife!). Prayers to their little one. Ours was born with medical complications, but he's a happy toddler now. I pray for strength for both parents! It is likely terrifying now, but can get better. Your advice to Dan was wise and empathetic. I took all of it to heart. Thank you so much, Scott and Mindy! You're the best!! ❤🙏🏾
Why these financial advisers like telling people to stop contributing to their retirement if they have debt Can you guys just say reduce your percentages. He's maxing it out. He can contribute less example $5000 which is $96.00 weekly. He then has $20,000 to put towards his debt. You can do debt and retirement at the same time just reduce the contribution rather than putting zero in retirement. Everyone should be contributing something yearly. If he's contributing to Roth 401k he should switch to regular 401k for the reduced amount. This reduces his income. Some companies offers both. No one should stopped contributing to their retirement to pay off debt when you can reduce the percentages. The higher your salary the lower you can reduce and still have something meaningful in your retirement while using the extra to pay off debt.
Great Answer. Just adding that if your company match your contributions up to may be 3%, then contribute up to 3% to get the match. If you stop you leave free money on the table
I am going to reduce mine from 16 to 5%. Will likely reduce my wife at some point too. Just worried about hers cause she thinks about this less than me so having something consistent and automatic is what she needs. My biggest fear is once we stop we won't start again.
usually because of the interest costs. You'd have to run your numbers individually. for example CC debt @ almost 30% APR currently youre losing more money carrying that debt than gains you'd get investing an equal dollar amount in your 401k over time (8-10% + tax advantages). Once you have the debt above like 7% managed then redirect the money back to retirement savings or whatever's next in your fiscal plan
If your debt interest rates are higher than your investment interest rates then it doesn’t make sense to invest yet. You’ll get the most out of your money paying off the debt first.
Glad they told him to take a step back. Unexpected medical expenses for kids can tank a ship. Imagine multiple births with the same issue. It's time to slow down and really be present for mom and the baby when the baby comes home.
how about switching the contribution to a regular 401 K, max that out and getting the Tax deduction, and then taking a hardship loan from it. the interest will go back to him increase that money in the 401 K 🤔
Don't worry, definitely not selling the cash-flowing property. Especially at 2.9%, but I will reduce the 401k. Scott made a great point that trying to be heavily involved in both has actually turned against me.
I wonder how much their housing expenses would be if they moved back into the small house that doesnt slurp gas. And selling the gas slurp house to reset.
It would be substantially less. Our mortgage would be about $700 vs.$2600, not accounting for other expenses. I probably wouldn't sell this one though cause if I rented it out it would pay for itself.
Two insurance plans. How this works. Gonna use reply’s to do the steps. You will have one insurance that is primary. The other secondary. In this case they will use the birthday rule. The parent who has the earliest birthdate in the year is primary.
Let’s say this whole deal is $100,000 hospital bill. Primary insurance has a 5000 deductible and 70% co insurance. 100,000- $5000=95,000. 95000 at 70% will pay $66,500. Leaving $8500
Now secondary is billed $8,500. Another $5000 deductible leaves $3,500. That also has a coinsurance of 70% or $1,050. So 5000 ded plan 1, 5000 ded plan two, coinsurance 1,050 is 11,050.
Every plan is different. Some have copays that don’t count towards the deductible. Some deductibles May count towards out of pocket, some don’t. But this probably will take months to bill. If there is 6 bags of iv fluid and only 5 are allowed - the insurance company can pay, then take it all back and then send it again after adjustments. Just make sure they bill both and call your insurance companies (both) to make sure the cob (coordination of benefits) is correct. COB will mess up billing so much.
This is the worst episode ever when it comes to advice. Scott was just plowing through, and though Mindy tried, Scott just kept whistling past the grave yard and missed the 5 ton elephant in the room. They had a baby in December that will need to be in the NICU until April. Earth to Scott, that means the baby was born severely premature. Do you have any idea about the the time and resources those two will need to spend taking care of this child for at least the 1st 2 years? Basic childcare won't cut it. Sadly the medical expenses will be astronomical, even for (two?) insurance plans. 1st, stop worrying about FI, and worry about your child and necessities. You will need huge cash reserves over the next few years and you and your wife will not even have those 40 hours you spend on your rental. 2nd (as Mindy advised), sell that property even though it's your first and you really want to keep it. It's netting you $400/month, you have $200k in equity. Put in a HYBank account and you'll still be making around $4k more/year, and you'll have liquidity when you guys realize the costs you'll have, along with the reduction of income when one of you switches to part time. 3rd, stop worrying about YOUR future, and your dream of FI at thirty until your child is home, and stable, and you and your wife have any idea what the next 2 to 5 to 10 years will bring you. Scott owes this guy a do-over, with Mindy taking the lead because Scott's plan will have them in financial desperation that will add to all the pressures just around the bend, because when babies are in hospitals, others take care and are responsible for them, when they come home, it's the parents obligation 24/7.
He is rolling the dice because if either him or his wife have a layoff or some type of job transition, they are in big trouble. I respect his ambition so I hope it all works out for them.
Definitely got a lot to think about. Sticking to a defense year.
They are slightly over leveraged. Strengthing that cash position is essential. Long term they will be fine if they make the right moves now.
Agreed. I am going to focus on the cash position for now.
This was one of my favorite episodes! I'm so appreciative for Dan's vulnerability! Their situation is the most similar to ours that I've heard on the show (only we're 10 years older, so kudos to him and his wife!). Prayers to their little one. Ours was born with medical complications, but he's a happy toddler now. I pray for strength for both parents! It is likely terrifying now, but can get better. Your advice to Dan was wise and empathetic. I took all of it to heart. Thank you so much, Scott and Mindy! You're the best!! ❤🙏🏾
Why these financial advisers like telling people to stop contributing to their retirement if they have debt Can you guys just say reduce your percentages. He's maxing it out.
He can contribute less example $5000 which is $96.00 weekly. He then has $20,000 to put towards his debt. You can do debt and retirement at the same time just reduce the contribution rather than putting zero in retirement. Everyone should be contributing something yearly. If he's contributing to Roth 401k he should switch to regular 401k for the reduced amount. This reduces his income. Some companies offers both.
No one should stopped contributing to their retirement to pay off debt when you can reduce the percentages. The higher your salary the lower you can reduce and still have something meaningful in your retirement while using the extra to pay off debt.
Great Answer. Just adding that if your company match your contributions up to may be 3%, then contribute up to 3% to get the match. If you stop you leave free money on the table
I am going to reduce mine from 16 to 5%. Will likely reduce my wife at some point too. Just worried about hers cause she thinks about this less than me so having something consistent and automatic is what she needs. My biggest fear is once we stop we won't start again.
usually because of the interest costs. You'd have to run your numbers individually. for example CC debt @ almost 30% APR currently youre losing more money carrying that debt than gains you'd get investing an equal dollar amount in your 401k over time (8-10% + tax advantages). Once you have the debt above like 7% managed then redirect the money back to retirement savings or whatever's next in your fiscal plan
If your debt interest rates are higher than your investment interest rates then it doesn’t make sense to invest yet. You’ll get the most out of your money paying off the debt first.
Glad they told him to take a step back. Unexpected medical expenses for kids can tank a ship. Imagine multiple births with the same issue. It's time to slow down and really be present for mom and the baby when the baby comes home.
how about switching the contribution to a regular 401 K, max that out and getting the Tax deduction, and then taking a hardship loan from it. the interest will go back to him increase that money in the 401 K 🤔
Suggesting to sell a cash flowing property instead of reducing roth 401k contributions is crazy lol
Don't worry, definitely not selling the cash-flowing property. Especially at 2.9%, but I will reduce the 401k. Scott made a great point that trying to be heavily involved in both has actually turned against me.
@@househackandhustleThat's awesome, totally agree, good luck!
Thank you for the advice!
I wonder how much their housing expenses would be if they moved back into the small house that doesnt slurp gas. And selling the gas slurp house to reset.
It would be substantially less. Our mortgage would be about $700 vs.$2600, not accounting for other expenses. I probably wouldn't sell this one though cause if I rented it out it would pay for itself.
Two insurance plans. How this works.
Gonna use reply’s to do the steps.
You will have one insurance that is primary. The other secondary. In this case they will use the birthday rule. The parent who has the earliest birthdate in the year is primary.
So if mom is feb 2, 1990 and dad is June 5th 1988. Mom I s primary.
That primary will get billed first.
Let’s say this whole deal is $100,000 hospital bill.
Primary insurance has a 5000 deductible and 70% co insurance.
100,000- $5000=95,000.
95000 at 70% will pay $66,500. Leaving $8500
Now secondary is billed $8,500.
Another $5000 deductible leaves $3,500. That also has a coinsurance of 70% or $1,050.
So 5000 ded plan 1, 5000 ded plan two, coinsurance 1,050 is 11,050.
Every plan is different. Some have copays that don’t count towards the deductible. Some deductibles May count towards out of pocket, some don’t.
But this probably will take months to bill. If there is 6 bags of iv fluid and only 5 are allowed - the insurance company can pay, then take it all back and then send it again after adjustments. Just make sure they bill both and call your insurance companies (both) to make sure the cob (coordination of benefits) is correct. COB will mess up billing so much.
This is the worst episode ever when it comes to advice. Scott was just plowing through, and though Mindy tried, Scott just kept whistling past the grave yard and missed the 5 ton elephant in the room. They had a baby in December that will need to be in the NICU until April. Earth to Scott, that means the baby was born severely premature. Do you have any idea about the the time and resources those two will need to spend taking care of this child for at least the 1st 2 years? Basic childcare won't cut it. Sadly the medical expenses will be astronomical, even for (two?) insurance plans.
1st, stop worrying about FI, and worry about your child and necessities. You will need huge cash reserves over the next few years and you and your wife will not even have those 40 hours you spend on your rental.
2nd (as Mindy advised), sell that property even though it's your first and you really want to keep it. It's netting you $400/month, you have $200k in equity. Put in a HYBank account and you'll still be making around $4k more/year, and you'll have liquidity when you guys realize the costs you'll have, along with the reduction of income when one of you switches to part time.
3rd, stop worrying about YOUR future, and your dream of FI at thirty until your child is home, and stable, and you and your wife have any idea what the next 2 to 5 to 10 years will bring you.
Scott owes this guy a do-over, with Mindy taking the lead because Scott's plan will have them in financial desperation that will add to all the pressures just around the bend, because when babies are in hospitals, others take care and are responsible for them, when they come home, it's the parents obligation 24/7.