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welcome to the best interest podcast where we believe Benjamin Franklin's advice that an investment in knowledge
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pays the best interest both in finances and in your life every episode teaches you personal finance and investing in
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simple terms now here's your host Jesse Kramer hello and welcome to episode 89
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of the best interest podcast my name is Jesse Kramer later in today's episode
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Katie got tosson from the money with Katie show will be joining us we're very
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excited to have Katie on the show but first we're going to do our usual little
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thing a quick little monologue from me and before we get to that we'll have our
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customary review of the week this one comes in from WRB Superman who wrote excellent concise easy to understand and
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responsive my multi-millionaire friend recommended the best interest podcast and it is my go-to on my drive into to
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work well Superman I'm glad that your friend made the referral and and and the
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fact that they seemingly have found some financial success hopefully means that they have uh good taste in podcasts
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thank you for the kind words I'm glad you find it concise and easy to understand that is the goal here so WRB
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Superman if you're listening to this shoot me an email Jesse bestter interest. blog and we'll get you hooked
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up with a super soft best-interest t-shirt and now as you'll hear later Katie from the money with Katie show
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does a really cool job of kind of weaving in stories that have to do with the economy RIT large society as a whole
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and how these things affect us on a personal finance level and one topic that I've written about a few times
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before and I I think I'm have some some nuanced thoughts on where I kind of see
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both sides of the argument is the whole student loan conversation so I'm going
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to talk a little bit before we bring Katie on today about some of my thoughts on student loan forgiveness or the whole
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student loan and student debt epidemic that that we're seeing here in the US
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now this first post is called loan forgiveness ain't magic and I think this is useful and helpful and it it's just
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factual it's not too opinionated yet it's the kind of thing where I mean
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share this with anyone in your friend group who believes that Uncle Sam that the US government can just magically
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snap his giant fingers to eliminate student loan debt because student loan forgiveness is not the same as student
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loan disappearance there's nothing magic going on here and we're going to start
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with a very simple loan analogy imagine that you lend $500 to your brother and of course that $500 could be in your
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pocket earning you know 4% in a high yield savings account so you agreed to a 4% interest rate on the loan and I know
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would you charge your own brother interest well first off relax it's an analogy and second off at least here in
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the USA even personal loans like family loans and friend loans per the IRS per the law you need to charge interest on
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those loans of course you can do something behind the irs's back if you want to that is on you but yeah
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technically speaking you do have to charge interest on loans even to family it's okay you lend your brother $500 and
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you charge him interest and your brother makes a few payments back to you but eventually your brother complains to
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your parents he says that the loan is just too burdensome and he wants it forgiven and he must be pretty
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convincing cuz he convinces your parents and your parents agree and they forgive
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the loan so poof Presto magic the loan is now forgiven and of course from that day on everybody lives happily ever
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after well except for you right because you're still out the $500 you can't just
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make a loan disappear because somebody somewhere is owed that money so let's
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repeat that you can't just make a loan disappear because somebody somewhere is
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owed that money now when a loan is Forgiven their forgiving party such as your parents they take on responsibility
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for that loan they pay the lender that's you they pay the lender the balance of
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the loan and then they tell the borrower your brother that they are now forgiven
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but forgiveness is not the same as disappearance because someone and in this case it's your parents someone is
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now out the $500 right the original $500 principal is still quote unquote missing
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and that debt or that payment either ends up on your parents balance sheet as a debt or it ends up on their
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essentially their cash flow or their p&l statement if you were a business it ends
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up somewhere as a loss someone is losing that money now an alternative forgiveness method I suppose something
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like the government forcing A lender to forgive a loan is the equivalent of your
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parents forcing you to just eat the $500 debt that your brother owes you how you
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know the Injustice right I mean that's just not fair now in the case of student
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loans here in the US about 92% of student loan debt is owned by the US government the US government is the
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lender in that case it's not owned by a person uh like the way that you would
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own your brother's debt it's not owned by private lenders only about 8% of US
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debt is owned by private lenders now I think that this fact the fact that an intangible government body owns the debt
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combined with some other factors like loan forgiveness programs political loan forgiveness rhetoric combined with the
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fact that we don't always clearly understand or explain how loan forgiveness actually works it leads
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people to falsely believe that the government can magically make student loans simply disappear well the debt
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doesn't dis disappear right it's either paid off and forgiven where the government takes on responsibility for
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the loans just like your parents took on responsibility for the the money that your brother owed to you or the loans
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could be unjustly and and forcibly forgiven which as far as I can tell doesn't happen in Equitable Society
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that's kind of like a Law and Order type thing it just that wouldn't happen in in
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in a fair society that wouldn't happen so in other words it's really just the
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first option it's the first option where the government decides to take on the
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debt themselves onto their balance sheet and since the federal government obviously owns 92% of the student loan
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debt it means that student loan forgiveness equates to the government eating that loss just as your parents
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could have eaten the $500 your brother owed you and what that really means is that taxpayers will eat the loss now is
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that good is that bad well that's not really the point of this article personally I'm a big fan of certain ways
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in which the government chooses to spend money to benefit Society and I really don't like other ways in
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which it chooses to spend money and I bet you have your opinions too and you probably like some governmental spending
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and you dislike others now personally I'm a big fan as an example of the pslf
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which is public sector loan forgiveness program and and similar programs although in practice the programs
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Administration has been bungled pretty badly pslf if you're not familiar it's
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not complete forgiveness it requires a borrower to make uh 10 years worth of ontime payments of their student loans
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and it also requires that person to work a public service job for 10 years something like a teacher or a law
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enforcement officer or a firefighter in other words it requires the borrower to make some sacrifices and to give back to
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society in a very direct way through a public service job and if they follow those two rules 10 years worth of
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payments and then 10 years in a public service job the remainder of their loan is forgiven by tax dollars right by tax
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dollars so it's this middle of the road solution that incentivizes something
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that our society needs that's a win-win so anyway that's just one of my opinions
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now I'm not here to pass judgment on the government or taxpayers taking a loss on
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their balance sheet to forgive student loans I mean maybe it's net positive maybe not but the point instead is a
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simple reminder to you listening that loan forgiveness isn't Magic the debt must be paid off somehow someone must
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take responsibility for that debt somehow and in the case of these student loan forgiveness proposals
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the method that's going on behind the scenes behind the curtain that no one really wants to explain is that
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taxpayers are absorbing the loss I'll let you be the judge on that and obviously you can call your elected
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representatives to make your opinion heard now going backward I I wrote an article in December of 2020 so it's a
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pretty old article now and it's called curses Miracles and the best interest
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student loan solution cuz you know again student loans uh and student loan debt it comes in and out it weaves in and out
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of the public discourse at various different times and I was thinking to myself on the one hand we have people
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saying forgive the entire thing and on the other hand we have people saying no no you borrowed the money it is your
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responsibility and you got to pay it off I found that the public discourse was a
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bit binary right it was one or the other status quo is this haunting curse that kind of looms over a lot of my peers
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young adults Millennials but then again the proposed solution was this kind of divine Miracle right government coming
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down and and forgiving the entire thing and I thought why not try to find something in between so my idea whether
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it's good or bad I'm sure it has holes in it but my idea is that I think people
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should repay the principle that they borrow but if need be we could have Smart incentivized Systems to lend a
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helping hand with paying back the interest and I think this proposal it checks all the good boxes I think the
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math works it tiptoes this tenuous line of personal responsibility and morality that that some people would bring up uh
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I think the government would be equipped to enact such a program so I ask you to
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consider this proposal if you feel like biting my head off again you can uh submit those complaints to Jesse ATB
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bestin interest. blog so before we talk about the college loan solution let's go
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back to one of my favorite places that I've talked about many times here on the
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podcast including I think last episodes let's go back to the adarand every year
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thousands of people descend upon the beautiful adarand mountains seeking the silence and Solitude and remoteness of
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the mountains unfortunately many of them come unprepared uh longdistance hiking is not just a walk in the woods it's not
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a simple walk in the woods and despite the efforts of outdoor Educators hikers regularly find themselves in over their
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heads miles out in the woods not enough food not enough water no warm clothes no
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survival skills uh it happens all the time in the aderan deck like a weekly basis you get articles about um search
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and rescue that happens up there now if these hikers were student debtors I think some people would say screw them
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you chose that hike you're out there it's on you we all got to die somehow
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deal with it and I think other people might say oh my gosh someone stuck out in the woods all hands on deck all
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points bulletin yank out all the stops we have to save that person by any means necessary but okay how does our society
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actually react in those situations well in reality a small team of New York Department of Environmental Conservation
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Rangers they hike out to the people in trouble they give them Aid if needed and then they tell these troubled hikers tie
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up your boots again we're walking out of here we're not going to carry you on a
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gurnie unless you're truly injured and we're going to give you a ticket for
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being unprepared it's certainly not full forgiveness for getting yourselves in
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this trouble but it's legitimate aid for someone who found themselves in over
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their heads I think that's a pretty interesting example and we'll keep that
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in mind now there is a bit of a moral hazard of forgiving loans and I think people you know whether it's people on
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the left whether it's Democrats liberals people who kind of skew that direction
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they might fall in line with the this kind of sweeping student loan forgiveness for example Alexandria
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Ocasio Cortez supported the student debt cancellation Act of 2019 which would forgive outstanding Federal and private
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student loans of all previous and current students in our education system we would forgive all again we already
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talked about this 92% are owned by the government 8% are private and this act would have canceled all of them or would
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have forgiven all of them essentially meaning again that the taxpayer would take on the entire debt and Bernie
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Sanders supported a similar program which would cancel all student loan debt for some 45 million Americans who at
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that time owed about $1.6 trillion in debt and then it would place a cap on student loan interest rates going
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forward at 1.88% which at the time was above what typical interest rates were right 1.88%
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at the time you could probably only get 0. 25.5% in a high yield Savings bank so
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that interest rate maybe made sense at that time but many Americans many people find or found uh significant problems
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with those proposals and for what it's worth I don't blame those people at all
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I get it there's a missing sense of I don't know if Justice is the right word
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but there's a missing sense of responsibility or Justice in in the full forgiveness proposal for example number
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one it would reneg on a clear agreement if I borrow $20 from you we both expect that I will pay you back number two it
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would provide more benefits to people who made ostensibly worse choices right if you borrow $200,000 to attend Harvard
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my first question would be does it make more sense to just borrow $100,000 and attend a state school instead if you
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forgive everybody student loans I mean you are essentially providing more benefits to people who made essensially
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worse choices number three everything about the college attendance process was voluntary right we all chose to attend
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the colleges we went to or not we chose our Majors uh we chose our future career
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prospects in that way so does it make sense for the taxpayer to bail people people out who find themselves in
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student debt number four if we're going to forgive student loan debt why not
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bail out credit card debt why not bail out Automotive debt let's pay everyone's
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mortgage too if student debtors are receiving trillions of dollars of debt relief why aren't other debtors as well
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number five who exactly becomes responsible for the cost of school itself if everything's forgiven will
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students care will colleges care what the cost is right it's free essentially
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now College becomes free universities won't care for the same reasons why they
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don't care much right now that is that their customers the students have easy
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access to free money so who becomes responsible for the cost of college itself well the taxpayer the government
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does in that case and the number six which is related to number five about the rising cost of school baby boomers
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don't fully understand their the crisis right now because their four-year education cost well like less than a
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sixpack of beer right College costs have rocketed through the poorly maintained fraternity roof and now it's raining on
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the pong table and if you go back and at this time this is just a chart that I'd
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found that looked at 1978 through 2015 so what's that about 37 years and the
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cost of college has gone up about 250% which isn't even close to anything else when it comes to like inflationary
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costs in fact some things like new vehicles food apparel have actually decreased in overall inflation adjusted
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pricing so do I believe wholeheartedly in those six arguments I just outlined not necessarily I I understand all six
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arguments though right I can easily see why other people believe in those arguments there is a moral hazard which
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is a good economics term if you're not familiar there's a moral hazard associated with full forgiveness in
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economics moral hazard specifically refers to the lack of accountability or the lack of balance between risk and
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consequence we can also think about moral hazard in terms of traditional morality namely if you borrow money you
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should pay it back actions have consequences and circumventing that in some way feels a little bit amoral but
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then again right and this is where I I see both sides there's a moral hazard of
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letting people drown so having described the moral hazard of full forgiveness let
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me draw another Line in the Sand allowing the student loan crisis to continue unabated is more hazardous than
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full forgiveness and yes I I use the word drowning I know maybe it's a bit dramatic because previously I I
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mentioned some legitimate gripes about forgiveness and now I'm using this flowery emotive language to Pander to
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your emotions drowning well yeah debt truly is a life and death issue for some people it might not be deadly today and
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it might not be deadly for every person but there's clear data measuring the
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negative effects of debt on psychological and physical health and when multiplied across millions of
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people uh who are struggling with student loan debt there's no doubt about it that this is a important issue that
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truly impacts people's lives we can consult some surveys here granted surveys aren't necessarily the same as
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period reviewed data according to a survey of readers from student loan planner mental health issues and student
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loan debt are clearly linked for example the survey concluded that 53% of high debt student loan borrowers have
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experienced depression because of their debt that nine in 10 borrowers experienced significant anxiety due to
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their loan burden and that one in 15 student loan borrowers surveyed have considered suicide due to their student
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loans now that's millions of people right millions of people millions of lives these are our fellow citizens and
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they could use a little bit of help and here's an interesting one that many of
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you might know right these people can't utilize bankruptcy student loans are one
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of the very very few types of debt that are not forgiven by bankruptcy so we're
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we're chaining these people to a cinder block and telling them that they can't
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cut the chain it's like you know that Phil Collins song well if you told me you were drowning I would not lend a
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hand well me you were drowning I not a Phil Collins might not lend a hand but I think Phil's probably wrong
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and writing this article I went back and thought to myself how do you explain $100,000 of loans to a 17-year-old so
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here's one way to do it you're sitting down with a 17-year-old they're right in
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front of you and you say hey dude think back to the time when you were in kindergarten can you picture that yep
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that's 12 years ago when when Timmy spilled milk on your head okay now think
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about every single month from that time when you were in kindergarten until right now when you're junior or senior
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in high school and imagine for that every month that you've been paying $11,200 to a loan serer okay got it can
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you imagine that that's what $100,000 of loans is like well I can answer this
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hypothetical for the nation's 17-year-olds who would say no idiot Jesse I can't imagine that I don't even
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remember all my teachers names in school I can't contemplate I can't perceive the
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idea of paying $1,200 a month which is more money than I've ever earned in any
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sort of summer job I can't imagine paying that for the last 12 years it goes back to the the famous Bill Gates
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saying that's probably been overstated we always overestimate the change that
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will occur in the next two years and underestimate the change that will occur in the next 10 years our brains when
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we're that age when we're thinking about getting student loans when we're 17 or
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18 years old our brains are excited for what well for freshman year at school for freedom for new friends for
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interesting classes our brains are mildly prepared for the four years of Ramen dinner that we're about to consume
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but our brains are certainly not considering the 10 or 15 or 20 years of student loan induced Ramen dinner that
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will follow the first four right we're not even thinking about the fact that
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our 20s or 30s might be defined by student loan repayment all we're thinking about are the weeks or months
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or maybe even a couple years ahead of us at that time now quick little side note
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that I wasn't very familiar with it's the fact that actually the people who
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are typically in the worst positions when it comes to student loans are people who never finished College in the
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first place now many people feel some sort of pressure to attend college but then they find the classwork too
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difficult they maybe need to drop out due to family issues they drop out because of financial reasons and yes
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some people just party too much freshman year and they drop out too and people without college degrees have an average
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salary that's $32,000 per year lower than those with college degrees so College dropouts they still have to
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repay the loans that they've taken but they must do so on significant lower salaries so do we allow them to drown as
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well that's a question we should ask oursel and the highest default rates tend to come from student debtors who
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went to for-profit universities think things like the University of Phoenix or DeVry the kind of universities that are
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constantly having commercials on TV so is it a moral system where we encourage young adults to pursue their dreams yes
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pursue your dreams but we're going to saddle you with some debt and then we're
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going to profit off your struggle now surely that is some form of moral hazard as well so now that I've kind of argued
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both sides of the argument it brings me to the best interest student loan solution I don't want people to drown I
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don't want people to die in the woods but I also want to maintain some semblance of accountability here so my
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solution and I have the power of a of a calculator so you can see it for yourself is that we don't forgive
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student loan principle but we do help forgive at least partially student loan interest so we don't forgive the
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principle if I borrow $20 from you I'm going to pay it back however the principal the $20 isn't really the
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problem with student loans it's the interest or as I've described it before
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on on the blog interests and and debt it has this silent assassination technique
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right interest is really sneaky because many people are are paying thousands of dollars per month against their loans
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but sometimes quite often less than 10% of that payment actually goes toward principal the rest just pays off monthly
00:21:26
acre interest a lot of people don't know understand that which is also unfortunate and maybe this podcast can
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help educate them on that front it's a big issue but the student loan solution
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that I'm offering here provides them a way out so we'll look at an example
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graduate a person who's earning a $50,000 salary but they're $100,000 in
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debt and we'll say that their debt has a 5% interest rate so you probably know
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this kind of person she might be a teacher or a nurse he might be the the guy in the office the new guy who's
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great at spreadsheets it's a pretty normal person and it's a pretty normal
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kind of situation $50,000 salary against $100,000 in debt if this person repays their loans using 10% of their salary
00:22:05
which is $47 per month they will end up paying a total of $390,000 over 78 years okay that's
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pretty unrealistic okay so let's apply a bit of my student loan proposal and part
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of my idea again we want to incentivize people to contribute what they can to paying back their loans so part of my
00:22:27
idea is that the more or someone's willing to contribute on a monthly basis and you know we can work through the
00:22:32
details of course maybe it's a percentage of their salary maybe it's just a flat dollar amount but the more
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that someone contributes the higher a percentage of Interest the government will forgive so in this case let's say
00:22:44
our our hypothetical person is paying 10% of their salary and let's say that
00:22:49
they would get 80% of their monthly interest paid by my Solutions governmental program again this only the
00:22:56
interest the principal is still on them but we're helping them pay off their
00:23:00
interest so via the program's interest assistance this particular loan would
00:23:05
instead be paid off in 22 years using $111,000 of the debtor's money and $45,000 from the government now that's a
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total difference of of $233,000 right it's 390,000 of repayment in the original solution versus
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156,000 in in my solution and it saves 56 years where of debt payments off this person's life now how is this Stark
00:23:32
difference even possible well it's because interest is the silent killer now even if you disagree with the the
00:23:38
details of this plan totally fine that's totally fine but I think the truth remains pretty clear if we if the
00:23:44
government if the taxpayer helps forgive interest payments in some form then principal repayment becomes much more
00:23:51
attainable and in this particular my particular student loan proposal the individual is incentivized to pay more
00:23:57
if they're able so if they contribute say 12% of their salary which would be
00:24:01
in this case $500 a month then maybe the government covers all of their interest
00:24:05
payments and that particular loan would be repaid in 17 years using $100,000 from the individual and $41,000 from the
00:24:13
government now both the individual well the individual saves money compared to the you're out on your own in the
00:24:20
wilderness plan that we currently have the current solution but the government saves money especially compared to this
00:24:26
whole idea of complete forgiveness now I do think it's worth understanding who wins who loses well I know at least
00:24:33
I think I know from the point of view of who who loses it's a zero sum game now
00:24:37
before Johnny was paying $150,000 to a loan serer and now Johnny is paying $100,000 to the loan serer the
00:24:46
government is paying $20,000 to the loan serer that the taxpayer but because the
00:24:51
loan has been paid off early the remaining $30,000 that would have gone to the loan serer in the future never
00:24:58
goes to the loan serer so you could say that the loan serer is out future income
00:25:04
but essentially all we're doing here is just reducing the repayment period of
00:25:08
the loan servicer whoever that is whether it's the government holding the debt or whether it's a private entity
00:25:13
they're still getting all their principal back and they're still collecting the correct amount of
00:25:18
Interest over the period of the loan if it's a 5% loan they're still receiving
00:25:23
all 5% for the number of years that the loan exists all we're really doing is
00:25:27
just cutting cutting off the term of the loan by increasing the rate at which the
00:25:31
loan is repaid and yes in that way I suppose we are messing with free enterprise and it might affect Loan
00:25:37
servicers in some way but that's the nature of government programs I suppose
00:25:42
right this isn't truly a Laz Fair economics free enterprise system that we live in anyway it's also not a socialist
00:25:49
system in which we aren't allowed the free movement of capital it's something
00:25:53
in between and I think this program this proposal again is something in between so feel free I I know listeners out
00:26:00
there are all over the political Spectrum you come here mainly to learn about personal finance and investing not
00:26:06
necessarily to learn about deep uh socioeconomic issues like student loans so I'm I'm an open book when it comes to
00:26:13
what you guys think of this idea here's a quick ad and then we'll get back to
00:26:17
the show every week I send a quick free email to thousands of readers that shares three Simple Things One my new
00:26:24
articles and podcasts two the best financial cont content of the week from all over the Internet and three a
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financial chart that explains some important Concept in the news that week it's a great primer to boost your
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financial knowhow ah but Jesse I don't want another email well this might not
00:26:43
be for you but I do hear you which is why I make it very short sweet and full of only the essentials a whopping 66% of
00:26:51
subscribers read my email at least once a month they're enjoying it and maybe
00:26:55
you will too you can subscribe for free on the homepage at bestter interest. blog again that's a free no strings
00:27:02
attached subscription at bestin interest. blog but with that I think it's high time to bring Katie Gotti
00:27:09
tosson onto the podcast Katie is the founder of money with Katie whose mission is to be the intersection where
00:27:16
the economic cultural and political meet the Tactical practical personal finance
00:27:22
education everyone needs money with Katie was founded in 2020 as a space for Katie to document everything she was
00:27:28
learning about Personal Finance on her journey to financial Independence and as she watched her net worth grow in tandem
00:27:35
with her financial literacy she realized just how valuable this information was and sharing it with others became her
00:27:42
Obsession Katie left her full-time job at the end of 2021 to devote all her energy to building money with Katie
00:27:49
which was acquired by morning Brew in 2022 and today Katie runs the money with ktie brand as part of a team of three
00:27:57
and they are rapidly growing so I'm very excited to introduce to you Katie Gotti
00:28:02
[Music] tosson Katie thank you for joining the best interest podcast today and from my
00:28:11
perspective as a reader and at times as a listener Katie I think I'd categorize
00:28:16
your content as this witty and and perceptive takes that go beyond you know the nuts and bolts of personal finance
00:28:22
and maybe focuses more on these broader socioeconomic topics but topics that certainly do affect our individual lives
00:28:30
for example you tend to say things like well we live in a society that does things this particular way and and why
00:28:36
is that and is that a good thing for us or not so I thought we'd start with an
00:28:39
interesting topic that we actually covered here on episode 79 with Phil Pearlman and that's the intersection of
00:28:45
wealth and health so Katie what is the news that makes money feel worthless yes well Jesse thanks for having me I really
00:28:54
appreciate that the news that makes money feel worthless I wrote a piece about this because I was in an Urgent
00:29:01
Care a couple weeks ago I have kind of The Chronic Millennial woman stomach issues where my stomach always hurts and
00:29:10
started to kind of manifest in this new and exciting way and I was like I should
00:29:13
probably go get this checked out so I drove down the street to the Urgent Care I had selected my New York Magazine that
00:29:20
I just come in the mail as my reading material to be like I'll probably be waiting for a little bit so let me bring
00:29:25
something to read not realizing that I had actually picked up the health issue of this magazine and basically all of
00:29:33
the stories in the magazine that issue were about people who went to the doctor saying I'm not feeling well the doctor
00:29:42
was like ah it's fine you need to eat more fiber uh it's no problem it's just
00:29:46
your hormones and then bada bing bada boom what do you know oh actually I have cancer and now it's stage three and I'm
00:29:52
screwed and so I'm sitting in this waiting room reading these stories about to go tell a doctor like hey I have this
00:30:00
issue and I started to reflect on how my material and how other personal finance
00:30:07
material and all of these little hacks and optimizations and incremental improvements must feel to somebody that
00:30:16
has just been told they have a stage three diagnosis I was like wow I can't imagine reading my silly little
00:30:24
newsletter about capitalism while I am literally fighting for my life and I was reflecting on that while at the same
00:30:32
time answering questions to this billing department about my insurance and I'm
00:30:38
like but interestingly enough finding out you're sick is both the news that makes money feel worthless and the news
00:30:47
that makes money now basically the most important tool that you have to get healthy again what do we typically do
00:30:54
with that information if you are a rational actor in a human body you're going to go well I will spend as much
00:31:02
money as I need to keep my life I will blow the life savings if it means I get to keep my life right and that was a
00:31:08
dichotomy that I was playing with and interested in and it kind of culminated in the piece and like yeah this is why
00:31:15
Healthcare doesn't work as a Marketplace because a market only functions if the
00:31:20
consumer has a rational alternative if they can walk away you can't walk away
00:31:26
if your life is on the line no rational person is going to make that choice you are going to do whatever you need to do
00:31:32
so the incentives are all screwed up so it was kind of a a little reflection based on an experience that I was having
00:31:39
I have since gotten a $600 bill for a 45 minute office visit you know how that goes oh always always yeah and you know
00:31:47
it was kind of a quintessential to your point about the way that I like to approach these topics it was also like
00:31:52
yeah and hey by the way the fact that we have a HealthCare Marketplace and not a
00:31:56
system is ridiculous and like let's point out all the reasons that this is ridiculous yeah Healthcare frustrates
00:32:06
the you know what out of me uh for no other reason than exactly what you just pointed out you have a little thing
00:32:11
that's nagging you a little pain you're a little more sick that's comfortable
00:32:15
you go in you do what you're quote unquote supposed to do go see a doctor and maybe you have Platinum Insurance
00:32:22
where the the premium is probably multiple thousands of dollars a month but if you don't have that Platinum
00:32:26
Insurance maybe you have a high deductible Health Plan well that's a multi office visit out of pocket which
00:32:33
nine times out of 10 they say you know what yeah it's just a little bit of the
00:32:36
flu and uh want me to drink some more fluids and here's a script for you and
00:32:40
it just doesn't quite feel I mean it's just very expensive and I've certainly
00:32:43
had sometimes where I'll sit there at home and go well am I sick enough to pay
00:32:48
$500 right exactly that's not a fun that's not a that's a calculus anyone
00:32:53
wants to be making yeah exactly I think what I learned this time with that bill I have a high deductible plan and as I'm
00:33:01
sure your listeners know from a financial perspective that actually almost always is going to make more
00:33:05
sense unless the deductible is like outrageous but I max out the HSA right I'm in a high marginal tax bracket so I
00:33:12
get some good tax savings there it's invested all the best best practices have been followed but the issue that
00:33:19
I'm running into and that I ran into in this particular instance because I've
00:33:22
now been to four appointments for this issue with one of the appointments that they charged me 64 $ for I call them cuz
00:33:30
I see that my insurance only knocked off 81 bucks and I'm like hey trying to
00:33:34
negotiate right I'm like employing all my little tips and tricks for okay I know the Medicare reimbursement rate I
00:33:39
looked at the CPT code I'm going to try to haggle with you to get this down I go
00:33:44
I'm willing to pay 350 today they go well you have Anthem and our contract with Anthem says that we are allowed to
00:33:52
charge you $564 for this appointment I said cool then I don't want to use Anthem let's do cash pay what's cash pay
00:33:59
they go oh it's 46% off okay quick calculation that's 350 bucks I'm like
00:34:04
cool I all do cash pay they go you can't you have Anthem so we have to charge you
00:34:08
that and I'm like the fact that having Insurance makes it more expensive to you
00:34:14
out of pocket than not having Insurance the price signal is broken the fact that
00:34:20
Anthem can collude with the healthcare provider and so those are the types of things that yes it is helpful to know
00:34:27
how the system works you can navigate it a little more Savvy if you understand those nuances you can at the outset say
00:34:34
what's your cash pay rate and they're going to go do you have insurance and
00:34:37
you say I asked what the cash pay rate is I'm not answering that question yet
00:34:42
because I need to assess this but even knowing that information is not the perfect solve because if they tell you
00:34:48
oh it's 350 you're probably going to go oh there's no way insurance is going to
00:34:52
make it cost more than that but it can and it's that lack of transparency that is the connection
00:34:58
between the lack of transparency in a system like that and how it necessarily is going to have Downstream impacts on
00:35:07
you as the consumer and it's going to impact your personal finances yes it behooves you to understand it but it
00:35:13
also behooves you to realize that like that is absurd and that is only that way because there are laws that say they can
00:35:22
do that but laws can change and if enough people know that oh my health insurance is the one that's deciding how
00:35:30
much this thing can charge me and I would actually have a cheaper path if I didn't have insurance at all if enough
00:35:36
people can realize that well now we actually have a chance at fixing some of that stuff and people going you know
00:35:41
what hey we don't like this like we should be able to choose yeah I can have
00:35:45
my private health insurance but I should be able to choose if I want to pay out of pocket what the sticker price is and
00:35:50
what it cost to go through insurance so now I'm really on a tangent this was
00:35:54
Jesse you should have known better than bringing up the Healthcare System with me but I think it's just like it's the
00:36:00
perfect example of individual choices and the systemic reality coming together to create a more complex and more
00:36:07
nuanced picture than like here's how a deductible works I totally relate Katie
00:36:13
you you you aren't going on tangents we like tangents here actually we we like a
00:36:16
good tangent I don't know if I've told this story on mic with the podcast
00:36:20
audience or not but so we had our first baby a baby daughter back in early June now it's August 23rd thank you thank you
00:36:27
and as a personal finance nerd financial planner I'm like okay we're going to get
00:36:31
our ducks in a row and figure out what this is going to cost child birth is not cheap hospitals charge a pretty high
00:36:38
amount for it and and what if it's a C-section and what's our all these kind
00:36:42
of questions are floating around in my mind and so I say you know we're going
00:36:45
to call we're going to figure this out well ahead of time so I reach out to First the insurance provider because I
00:36:50
figure that's the good place to start and I ask those kind of Common Sense questions what is this going to cost me
00:36:55
how much is going to be out of pocket are there any monsters lurking behind in the shadows behind the curtain of the
00:37:00
hospital room that I need to be aware of and their answer is pretty simple they say you know what that's a great
00:37:04
question you need to reach out to the hospital do you know where you're delivering so I go yeah I do know where
00:37:09
I'm delivering okay I'll reach out to the hospital well the hospital says
00:37:11
Jesse great questions make sure you reach out to your insurance provider I said I just did that and literally it's
00:37:17
the Spider-Man meme of they're pointing at each other and I'm the Lan consumer
00:37:21
in the middle and ultimately what I ended up doing was downloading a spreadsheet of CPT codes a specific
00:37:28
spreadsheet that's put out by the hospital that says here are the CPT codes and here's what the payouts pay
00:37:34
ratios whatever the terminology is for all the various insurance providers locally so I find the CPT code for
00:37:40
childbirth I find my insurance provider and then I start to get a picture of oh okay this is what they would charge me
00:37:47
this is what the insurance provider would cover and therefore this is how much is coming out of pocket it was a
00:37:52
few hours of work right some annoying phone calls and I just sat there and thought to myself I mean how many
00:37:57
individual consumers are willing to do that are going to do that it's such a
00:38:02
frustrating process and you have these legitimately billion dollar organizations on either side and here I
00:38:09
am the lone consumer just one guy with a pregnant wife it's like what are you
00:38:14
going to do you're going to be like oh well I'm G to actually not go to the
00:38:18
hospital then it's like you don't have a choice you literally don't have a choice
00:38:23
they have you on the ropes the fact that you were even able to I've done the same
00:38:28
thing with like downloading the CPT code spreadsheet I know exactly what you're
00:38:31
talking about but the fact that you were able to even associate those CPT codes with prices and rates I think it's
00:38:36
actually a law that they do have to publish the rates but the fine for not publishing them is like $500 a day so
00:38:46
the vast majority of these hospitals that make billions of dollars a year are just like all right we'll just pay the
00:38:51
fine we're not going to publish our rates that does nothing to help us okay ready for a tangent there's a great
00:38:57
story in the book Freakonomics if if if you've read it or if any listeners have
00:39:01
read it uh and it has to do with an Israeli daycare center that had a problem of chronic late pickups yes I
00:39:08
remember this yes and so it's it's annoying right you have workers you have
00:39:12
employees they want to go home at a reasonable time but they can't because the kids are still here because the
00:39:16
parents are coming in on time so they said you know what we're putting our foot down every time you're late to pick
00:39:21
up your kids we're going to find you I don't know what the Israeli currency is
00:39:25
shame on me $10 we'll say and the delinquency rate went up because parents said oh 10 bucks just to come and pick
00:39:33
that's great that's a luxury I'll pay that all day and it just go right when
00:39:37
you have perverse incentives if the fine isn't harsh enough yeah well they're
00:39:40
just G to say great I'll just pay the fine and continue on business as usual
00:39:45
here's a quick ad and then we'll get back to the show one of the more common
00:39:49
questions I hear is Jesse what do you like and use books blogs podcasts even Banks and brokerage firms what are your
00:39:56
recommendations so to answer that question I put together a web page you can check it out
00:40:02
at bestin interest. blog reccommendations again that's bestin interest. blog reccommendations to check
00:40:10
out how I'm improving my financial life all right let's switch gears a little
00:40:15
bit about some other things that we're concerned about this isn't a specific
00:40:18
question at all Katie do you at all worry that your savings and Investments these things that we talk about and here
00:40:24
we are young we want compound interest to work on our side are you worried that all this time and effort and saving and
00:40:30
sacrifice that you're doing today will simply get passed down to some future
00:40:34
nephew or stepson who's just going to spend it all chasing 70-year-old then Taylor Swift touring around the country
00:40:41
or I guess put another way how do we balance the the constant reminders to sa for our future with the current reality
00:40:47
that life is passing Us by absolutely I worry about that the balance and the reason I think this is difficult
00:40:55
particularly when you are in educator is that you almost always are going to have
00:41:01
two very different types of people that are listening to you some of those people that are listening to you are
00:41:08
Savers they're obsessed with personal finance they got 60% save rates already
00:41:13
they're trying to eek out a couple more percentage points they're into the hacks
00:41:16
baby they want to know how to get as rich as possible that group does not need to be told to save more money right
00:41:23
they need to be told hey go touch grass go on a vacation spend some of your money the other group that's listening
00:41:29
to you are people who cannot hold on to a dollar who have a either a compulsive relationship with spending or just have
00:41:37
never been taught how to manage money and so they are struggling right they need to be told this is how much you can
00:41:43
save this is how you do it here's how you can optimize so the problem that I
00:41:47
run into as a publisher of this type of material is I'm trying to balance between how do I talk to both of those
00:41:54
groups and deliver the information that they need to hear perfect example of this we just did an episode about money
00:42:01
dysmorphia which is essentially it's a it borrows from the phrase body dysmorphia which is where your
00:42:07
perception and reality are not matching up and so typically with finances this manifests in one of two ways you're
00:42:14
killing it you're crushing it but you never feel like you're doing enough you
00:42:19
always feel like you should be doing a little bit more you always got that kind of chip on your shoulder that that
00:42:24
concern the monkey on your back of like I don't know is it going to be enough
00:42:27
and so you're constantly on your back foot operating from this position of scarcity and to your point you're
00:42:32
forgetting that life is passing you by right now or you are avoidant with money and you are not attached in any
00:42:41
meaningful sense to your financial reality that you can't afford to go to yacht week because you have a $500 to
00:42:49
your name and the credit card is maxed out but you're avoidant right you've got
00:42:53
your head in the sand you don't want to look at it you for whatever reason believe that everything is going to be
00:42:58
okay even though there is nothing about your reality that would be indicating to
00:43:01
you that you should be feeling that way well when I put out a call for questions
00:43:04
I said hey tell me if you feel like you have money dysmorphia here's what it is
00:43:08
here are some different ways it can manifest email me and let me know 137 people emailed me and about 125 of them
00:43:17
it was the former it was I never feel like I'm doing enough hey I'm 28 and I
00:43:21
have a paid off house and half a million dollars in Investments am I going to be
00:43:24
okay I still feel like I should be saving it was that type of person right only like 10 people of this hundred and
00:43:31
something submission were like yeah I don't know I just can't stop spending
00:43:35
and like for whatever reason I'm just not worried about it but someone after
00:43:39
the fact so we do the episode with that larger audience in mind hey guys you know chances are you're actually doing
00:43:45
quite a bit you're listening to this show which tells me you're probably
00:43:48
thinking about this a lot but someone reached out and was like that episode really missed the mark for me I it made
00:43:53
me feel really really insufficient because like I'm living paycheck to paycheck on $160,000 a year I can't
00:44:00
figure it out like I've love your show but sometimes I feel like I just need
00:44:03
the basics I need you to give me the tough love and tell me that I need to save money it's just the nature of the
00:44:11
game right totally and I think for me personally I definitely skew more the former camp and that's why thinkers like
00:44:17
R Sati have been so impactful thinkers like Bill Perkins people who remind you that your life has to be lived now and
00:44:26
there are experiences that you can have now that you cannot have when you're 60
00:44:31
years old so if you are thinking that you are going to defer all of your enjoyment of life into the future you
00:44:37
need to think really hard about the bet that you're making and what you are giving up in the present moment to do
00:44:43
that you mentioned Taylor Swift one of the things that I did this past summer was I spent $10,000 taking myself and
00:44:51
three of my friends to Paris to the ARs tour and I paid for all of it it was the
00:44:57
best money that I have ever spent and it was such an incredible experience I am so happy that I am in a position to be
00:45:06
able to do that and I want to hold myself to doing things like that every single year 10 grand I mean in some ways
00:45:14
that's a lot of money in other ways for like a once- in a-lifetime experience
00:45:19
that is a decision I would make 8 days a week that is a a thing that I'm going to
00:45:23
remember for the rest of my life and I think that Perkins is idea concept of memory dividends is so valuable in that
00:45:31
way because it puts it in terms that Finance people can understand it's like
00:45:35
oh yeah the earlier I do this the more of my life I'm going to be able to spend
00:45:40
looking back on that and being like wow what an incredible experience trying to unpack and understand what things you
00:45:46
can spend money on that are going to really give you that high Roi emotionally is an introspective Journey
00:45:55
but that's something that three years ago when I was so deep in the fire mentality I never in a million years
00:46:01
would have taken other people on a trip I feel so lucky that I've been able to
00:46:06
go on this journey now not just financially but psychologically to be able to do that and feel incredible
00:46:12
about it and I'm like I would have spent 10 times that to have that experience it
00:46:16
was that good I think that that's really important that that reminder the whole
00:46:21
idea of almost you know I'm thinking of this this image in my head of literally
00:46:24
like a fir Walker walking through fire I I went through the same thing Katie and
00:46:28
just when I read whether it's Reddit when I hear from my readers or listeners
00:46:32
it seems like a kind of common theme where you discover Financial Independence you discover this idea of a
00:46:38
savings rate and keeping costs low and I can retire by what an early age and you
00:46:43
start down this very good path in terms of improving your personal finance habits but at some time you kind of
00:46:48
realize like wait so I'm just going to I'm going to retire early I'm going to
00:46:51
have this big pot of money that I'm going to sit on but I'm kind of always
00:46:55
going to be a little bit chronically concerned that that's going to run out so I'm going to live a relatively meager
00:46:59
Frugal lifestyle yeah and at some point you realize like is that really what I want and you have to kind of find some
00:47:04
balance right the pendulum swings back and forth as you were describing your audience and that ratio of whatever it
00:47:09
was you know 125 out of 137 emails were all on the one side where people are saying I'm constantly worried about
00:47:16
money even though objectively I'm probably doing all right I I wonder about that too and I have a feeling that
00:47:22
my audience would probably skew somewhat similarly and I just wonder if that's
00:47:26
like a selection surv bi you say what kind of people are going to be out here listening to our convers right now it's
00:47:33
people who about their own personal finances enough that they're probably doing all right and that's why they're
00:47:39
probably here to learn more because maybe they're worried if they're not
00:47:41
doing enough but it is interesting I I thought too as you were giving your answer about the the Dave ramies or like
00:47:47
the Caleb hammers of the world who very much I feel like serve the other end of the spectrum where they're quite
00:47:54
deliberately seeking out conversations with people who can't keep a dollar in
00:47:58
their pocket and whether you approve of their tough love approach or not at least there is someone out there who's
00:48:05
directly talking about people who really do need those kind of square one Basics
00:48:10
nuts and bolts how do I keep more money in my pocket and what do I do with it so
00:48:13
you know it's all all shapes and sizes well the Caleb Hammer example is a good
00:48:17
one because I went into his subreddit once sub about his show cuz I was like I want to get a Vibe for like who are the
00:48:24
people that are watching this because it is so aggressive style it's like a very particular style
00:48:31
I wouldn't go there I think he's playing a character and there were some posts in
00:48:35
here that are like Caleb saved my life I was $30,000 in credit card debt and still taking my family on these luxury
00:48:43
vacations we couldn't afford that tough love style there is a market for it there is a place for it it is necessary
00:48:51
there are areas of my life where I need someone to have tough love with me I will sit there and eat a bag of twist
00:48:57
if no one stops me but I needed a nutritionist to be like stop doing that you need fiber idiot you need protein
00:49:05
I'm going to teach you how to eat and then you're going to track it in this
00:49:08
app and I'm going to watch what you're eating and we are going to work on this
00:49:11
together I needed someone to hold my hand and kind of force the issue so that I could see how much better it feels to
00:49:20
have enough protein and water and fiber intake to go oh yeah wait this rocks like I'm going to eat like this all the
00:49:26
time I'm going to put down the bag of Twizzlers but for some people spending
00:49:30
is the bag of Twizzlers and until someone kind of forces them in to seeing it differently and how good it feels to
00:49:36
be financially secure it's just people are wired differently so I completely
00:49:40
agree like I don't love the Dave Ramsey like methodology around how he runs his
00:49:46
business but from a messaging standpoint for him KB the more tough love types like we need that too cuz for every
00:49:55
person that's listening to this who has they're you know what together there's
00:49:58
someone else that needs someone to kind of step on them a little bit and help them get it together and like that's
00:50:04
what they're seeking they want someone to step on them a little bit because they feel like they need that push for
00:50:10
you it was Twizzlers for me it's Wheat Thins and Tostitos whole bag whole bag
00:50:15
it's probably Twizzlers are probably better I don't know NE neither one's
00:50:17
great but you reminded me there of a couple of my high school classmates teammates we had this one basketball
00:50:24
coach thankfully only for a year here who was such a dick I know you you just prevented yourself from swearing which I
00:50:31
appreciate I don't mind saying dick this guy was such a dick and borderline like
00:50:35
physically abusive and Midway through the season all of us on the B go we all look at each other we're like we hate
00:50:40
this guy right yeah we hate but then after the season a few of the players were like you know what I actually liked
00:50:45
him I liked him because he pushed me in a way that I I didn't push myself before
00:50:50
maybe they just didn't have a disciplinarian in their life and they actually liked a little bit of
00:50:54
discipline and structure and and it made me realize and especially now maybe with
00:50:57
the benefit of hindsight and a little more maturity that yeah I mean some people out there they don't want to be
00:51:03
yelled at or screamed at and but some people they say you know what if in the end I'm actually a better person for
00:51:09
being yelled at maybe yell at me it's it's not me personally and it's it's
00:51:14
probably not your style either it sounds like but yeah there for some people out
00:51:18
there it obviously hits home those two individuals we mentioned specifically I mean they've done pretty interesting
00:51:23
things in this whole personal finance space thinking of Looking Backward at life I look at the way that my parents
00:51:29
and grandparents lived and I feel like I'm not participating enough maybe not
00:51:34
volunteering enough know not running for the school board not coaching Little League Boy Scouts what whatever instead
00:51:40
I feel like I'm this atomized individual and that is stealing some verbiage from
00:51:45
from one of your articles Katie because as you pointed out it can even extend to
00:51:49
a fear that you're somehow even a burden in people's lives like you you choose to
00:51:53
kind of pull yourself out of society or out of communities you're hesitant to
00:51:57
ask your friends or neighbors for a favor I have a lot of different thoughts when it comes to this but what exactly
00:52:02
is going on here from your point of view and and what can we do either individually or societally to start
00:52:08
working together more asking for simple favors participating I mean what what's
00:52:12
going on well the way that I thought about it and the reason that I noticed it is because I kept seeing strains of
00:52:19
this rhetoric online that we're kind of taking the concept of boundaries to a
00:52:25
really extreme place like don't ask me to drive you to the airport don't
00:52:30
inconvenience me in that way like I'll save a friendship get an Uber to LAX that type of language same thing with
00:52:37
like a lot of that therapy speak that got really popular during the pandemic where it was like here is a copypaste
00:52:45
paragraph that you can send to your friend if they're dumping on you in a time when you don't have the capacity
00:52:50
and it's like hey can you maybe schedule a time to have this breakdown with me it
00:52:54
just I was reflecting on it because we were going to be going out of town and I was hiring a sitter to come over and
00:53:01
feed my cat and at the same time my nextdoor neighbor had come over and was like hey I I'm bringing you we picked
00:53:10
these peaches from our tree in our back yard here you go was kind of thinking about the fact that like when they had
00:53:15
gone out of town they were like hey can you come over and walk Toby I was like yeah I'd be happy to do that for you so
00:53:20
we kind of have this very mutually beneficial relationship where they do things for us we do things for them
00:53:27
and I was like oh there's actually a really interesting Financial angle here
00:53:31
and if I'm being a little bit tinfoil hat about it it would make sense that in
00:53:36
a highly individualized capitalist Society it would be beneficial to the people in power if everybody is super
00:53:43
atomized from one another because that means you have to pay for everything you need you have to pay for all the food
00:53:49
you need you have to pay for every ride you need you have to pay for someone to come over and help you mount a
00:53:56
television you have to pay for someone to come over and watch your pets if you're not getting anything that you
00:54:02
need from the fabric of your community the only thing that is left is to Shell out money to meet those needs and I just
00:54:11
thought it was really interesting to think about that type of boundary setting and this idea of being a burden
00:54:17
and this idea of inconveniencing others thought it was interesting to think about it from a financial perspective in
00:54:23
that way and ultimately what I decided was the relationship that I have with that neighbor it feels really good I
00:54:30
really like to do things for them it does it's not a burden to me I like to be needed you know I like to help them
00:54:37
and I think they like to help us too and so the fact that it ends up saving both
00:54:41
of us money that we're able to kind of be there for one another is obviously an
00:54:46
ADD and bonus but it reveals this reality that when we're afraid to burden others what we're really doing is
00:54:52
robbing ourselves and them of building meaning Community friendship is not about convenience like friendship is
00:55:00
about being there for one another even when it is not convenient for you but to willingly atomize yourself to
00:55:09
voluntarily atomize yourself is to deprive yourself of that chance to build community and in that way it's very
00:55:17
shortsighted because you're also not being there for other people when that's
00:55:21
kind of your Mo and when that's the collective Mo and what was really cool about that piece is I heard from some
00:55:27
people that live in neighborhoods where they have a very very tight-knit Community a lot of these neighborhoods
00:55:33
are people who lived somewhere during Co so during the the lockdown stage of Co I
00:55:39
should say and during the lockdown stage they would have they called them gappy hours which were happy hours but in
00:55:46
their front yard six feet apart so they would be like sitting in these chairs social distanced and that through that
00:55:53
period they developed relationships with one another now they help out with each other's kids
00:55:58
they make each other food they lend each other tools they help with house projects and like it has created these
00:56:05
vibrant little communities in these neighborhoods that they never would have gotten had they not been willing to ask
00:56:12
and receive and I think it's just that Humanity of asking and receiving that we
00:56:17
give up when we financialized every single transaction of everything that we need so not to you know drop the comma
00:56:25
quote joke but like we really do exist exist in the context we live in a society there is no escaping that and we
00:56:32
shouldn't want to escape it I think is the point and so it's like you shouldn't
00:56:35
see yourself as a burden for needing help needing help is very human so is helping others you remind me of the
00:56:41
principle of reciprocity if someone does something nice for me I'm kind of hardwired because we're social animals
00:56:46
that that is kind of the fabric of community and Society is this natural reciprocity that we all feel of looking
00:56:52
out for one another and and even to hearken back to like it sounds kind of CLE cliche but what's it you know it
00:56:57
takes a village to raise a child like that kind of thing and it's like well if
00:57:00
I don't know anybody in my neighborhood like is it taking a village to raise a
00:57:05
child or is it all up to me or I mean again takes a lot of money to raise a kid right money has to fill in the Cs or
00:57:12
just like child care itself is this thing where daycare is so godforsaken expensive that I I think to myself like
00:57:20
okay you and I both know the stats and we know what the median salary is and what certain people are earning and it's
00:57:26
like how do people below a certain income level have children and continue to work and the answer for some of them
00:57:33
is that the family is their community at the very least where it's like oh well
00:57:37
Grandma she's not doing anything she's going to watch the kids while I go work
00:57:41
and that I think probably used to be a little bit more commonplace maybe or or maybe there was just a little bit more
00:57:46
trust in society and you had latch key scenarios or whatever it may be where it's like you know what that the
00:57:51
community will take care of the children enough such that they can be trusted on
00:57:55
their own but for whatever reason I don't know enough about it I'm not a
00:57:58
sociologist or Anthropologist or anything like that but there is this atomization that seems to be going on or
00:58:04
I I certainly feel it in my life and I I wonder if I should be participating more
00:58:09
but last last one I want to throw a quote at you Katie it's a really cool quote that you wrote or or maybe that
00:58:15
that one of your friends spoke to you and then and then you put it down and the quote is I kept struggling to decide
00:58:21
whether to film it or just to be present and enjoy it and that quote has has to do with what filming a live show a music
00:58:28
a concert something like that and referring to your friend's desire to to film the show and then to share it on
00:58:34
social media and now I more or less abandoned social media certainly I cut down my use by you know 95% or whatever
00:58:41
a couple years ago but I did so I think at my own Peril because you know selfishly here any traffic to the best
00:58:47
interest from Instagram or Twitter or Facebook probably has gone to zero and there might be a 100 plus content
00:58:55
creators that I used to network with or be connected with socially on social media I haven't interacted with them in
00:59:00
years and meanwhile you've used successfully used social media as a part of money with Katie's amazing growth and
00:59:07
so I suppose maybe this is a personal question I don't know how many of the listeners are going to be interested but
00:59:11
I suppose they're probably all on social media themselves most of them so do you
00:59:15
feel like you've struck a good balance between harnessing the good of social
00:59:18
media while avoiding the bad this is such a funnily timed question because I was literally just this morning my
00:59:26
friend Caro she's incredible she's a novelist she just sold her film rights
00:59:32
to an Hathaways production companies she's she's on the CB up she's a stock
00:59:36
that's on the rise and I bought in early so but she's like a 100,000 followers on
00:59:43
Tik Tok and she posts these very it's like uh the think boy she's like a
00:59:47
thought daughter okay she she's the opposite she's a think girl so she's
00:59:52
always posting this cultural criticism cultural commentary on Tik Tok she's accumul ated 100,000 followers doing
00:59:58
this and she recently like in the last day or two posted this video being like hey I don't think I'm going to post here
01:00:05
very much anymore because what I don't like about this platform is that anonymity in the profiles and anonymity
01:00:13
in the users is really not conducive to a positive environment for creators so she kind of sets up this dichotomy the
01:00:24
creators are the people who are creating the product they are making the thing that everyone else is consuming and the
01:00:32
vast majority of people on Tik Tok are just consuming content they are not producing it but when a platform
01:00:39
culturally however it develops and whatever the incentives are that like Instagram anonymity is not as common as
01:00:46
Tik Tok anonymity most people on Instagram are being themselves right it's unusual to have like a troll on
01:00:52
Instagram that isn't at least tied to someone's real account on Tik Tok that's
01:00:56
very prevalent and she was like this platform basically incentivizes and allows anonymity at a level that
01:01:02
emboldens people to be really nasty I think X has this same problem on Twitter you also have a lot of trolls that are
01:01:12
potentially Bots potentially real people but they're not people that are putting
01:01:15
their name in face behind what they're saying so yes on the internet people are
01:01:20
emboldened to be a little bit spicier but when anonymity is involved it's much
01:01:26
worse so she said you know what I don't need this I'm not making these I'm out
01:01:30
at least for a couple months I need a break because I am exhausted from arguing with people that
01:01:37
I'm not even convinced are real they might be Russian Bots user 7654321 and she was like it's just not a
01:01:44
good use of my time and I text her about it I'm like hey is everything okay like
01:01:48
did something specific happen or what cuz I get it like I've been there I know
01:01:52
that when you put out a video or you put out a post and it strikes the wrong cord
01:01:58
it blows up your entire day if not your week because you are Fielding responses you are monitoring comments you are
01:02:05
going back and forth with people it is a nightmare and Beyond the time that it takes to do that monitoring and
01:02:11
responding it psychologically just railroads you because all you can think about as humans we are wired for this
01:02:18
right we don't want to be ousted we don't want to be in the outg group that's dangerous so if you feel like
01:02:23
everyone online is pissed at you and taking the wrong way you are not going to be able to meaningfully think about
01:02:29
anything else until that situation is resolved and so she tells me like no you know it just I'm really tired of the
01:02:36
psychological and emotional bandwidth that this takes and she was like and honestly I don't need it I'm a novelist
01:02:42
I want to spend my time producing long form work whether that is writing my book writing the screenplay or working
01:02:49
on you know we have she and I have a podcast together that's like a little substack project or doing our podcast
01:02:54
but she was like I just think my my time can be so much better spent and I sat there and I started to think about it
01:02:59
Jesse I was like you know what a lot of the people whose work that I pay to consume like if books could kill one of
01:03:08
my favorite podcasts so funny so well done the author Gia Tolentino who also writes for the New Yorker Haley n who
01:03:16
writes a substack called Maybe Baby Hunter Harris who writes a substack called hung up these are all people who
01:03:21
I pay at least $5 a month to consume their work not not one of them is on social media talking into the void right
01:03:29
and I still found them and like them enough to pay money for it so I'm like I
01:03:34
don't think that this is as much a necessity as we have all kind of been told that it is it does facilitate
01:03:41
growth but I think it's so important to ask at what cost what are you giving up
01:03:46
for that growth and are the people that are finding you on social media really going to go be subscribers or listeners
01:03:54
or what have you some of them will be that number is a lot lower than I think a lot of us want to believe and so I am
01:04:01
currently in that phase of like what is social media really giving me and is there a way that I can relate to it that
01:04:07
is just fun and beneficial how does that look because I think right now if I were
01:04:12
honest about the ROI I think it takes a lot more than it gives I feel your pain as far as what it's like when you get
01:04:20
dunked on right what it's like when you put something out there and people start
01:04:23
saying something bad about you I know reddit reddit was always the same thing for me I still spent a tiny bit of time
01:04:28
on Reddit Twitter obviously was the same with the anonymity but Reddit is just you know all just a username and there
01:04:36
were some times when I would share what in my opinion was extremely useful article there yeah oh but because it's
01:04:43
self-promotion it gets dunked on and you know so someone finds a way to make an argument with it you use I think you
01:04:50
said something about like it railroads your brain and it totally would I'd be
01:04:53
thinking about it all day I'd come back to it and see if someone else had dunked
01:04:56
on it see it's so it's so petty I remember once Jesse I can't remember how
01:05:02
I found this but I saw a post in the personal finance Reddit that was mine it was like someone shared my back to a
01:05:08
Roth IRA article and the top comment was like this is the most obnoxious thing I
01:05:14
have ever read and I remember just being like well then why don't you write something better yeah like good for you
01:05:21
you know it's like I think that there's it's just so easy to critique yeah and
01:05:26
it's much harder to produce totally totally and so I feel your pain I know I
01:05:31
I had to stop myself I was like I'm not going to read the rest of this I it's
01:05:33
none of my business what these people think about my writing style all that I care about is that I like what I'm
01:05:38
writing and that I'm proud of it and I'll check the scoreboard right like I'm
01:05:43
the one with the Porsche in the garage so you can talk your on Reddit and it's just kind of like at some point you
01:05:49
have to kind of like rope the ego back in but that is the only way that I have found that allow ows me to live with it
01:05:57
is like I have to pump myself back up I have to be like no I'm killing it I'm
01:06:02
doing a great job and people are going to some people are going to hate it and they're going to take to other platforms
01:06:06
they're going to anonymously troll me let them who cares talk about me go ahead but I don't like being that person
01:06:14
you know what I mean like I would much rather just not have to think about it at all than to play those psychological
01:06:19
games and to be like yeah but I'm successful and who knows what these people are they're they're spending
01:06:24
their time anonymously trolling me on the internet who cares but like yeah it's just sometimes I'm like it would
01:06:29
just be easier and better to not even have to spend any mental bandwidth playing that game or pumping myself back
01:06:36
up what if I wasn't getting torn down in the first place wouldn't that be better
01:06:40
like I don't know I'm still negotiating my relationship with social media I
01:06:43
don't really use it in a personal way in any meaningful sense like I post so
01:06:47
little on my personal account and at this point it is kind of a scarcity mindset thing where I'm like well if I'm
01:06:53
not there what's going to happen but I do think that it is ultimately better to
01:06:56
spend the time and energy on the things that move the needle in a real way putting out amazing podcast episodes
01:07:03
that people are going to find Value in putting out really thoughtful essays that are going to make people think
01:07:08
differently about things that is so much more it's such such a more valuable use
01:07:12
of our time than putting out a video that people are going to take the wrong way and then sitting there for eight
01:07:17
hours and like stressing out over the comments it's like H it's just stupid
01:07:21
but it's it's hard it's really hard to disengage because these platforms are
01:07:24
designed a designed to hook us psychologically and make us feel as though if we're not on them that like
01:07:30
we're missing out on something right right and two they've kind of changed
01:07:34
the way people consume information like distribution has been fundamentally Changed by them so I don't know do you
01:07:41
read any Cal Newport uh yeah I'm familiar with Cal Newport yeah I don't think he's on social media at all he's
01:07:46
pretty A-list and he's incredibly successful and I think that that's like
01:07:50
a I love looking at anytime I can point examples like that and like it is possible it possible to do this without
01:07:56
social media it is totally totally and that's I mean I I'll say I feel fomo or
01:08:01
you know scarcity mindset is what you said about essentially the opportunity that I've missed from not being on
01:08:07
social media not sharing my stuff as broadly as I could have been the last two years but at the same time right I I
01:08:13
see the podcast download stats I see the newsletter subscriber stats and I like okay things are working in some
01:08:18
Grassroots fashion which is great and also as far as communication channels I mean email has some unique manages in my
01:08:26
opinion and and email is this thing where well first off people really have to opt in if they want to be on your
01:08:31
email list they choose to be there they click to open it every week but then as far as email communication goes it's I
01:08:38
can't even think of an example where someone has gone out and dunked on me via email oneon-one in a private
01:08:45
conversation right it's just a different kind of it's not a public Arena it's if
01:08:50
their names at all associated with their email address they're just so maybe the
01:08:54
people who would dunk on me they just choose not to via email because who does that yeah and instead all I get are
01:08:59
positive emails and it's kind of nice it's kind of nice when you see someone
01:09:03
so anyway I've gotten some email dunks but what's funny is that when I respond
01:09:07
yeah they take it back immediately it's like oh my God I didn't know I was going
01:09:10
to read this like it's really it's a really funny Dynamic but you're right
01:09:15
it's the environment is different and I would say you see your stats right you
01:09:19
see your grassroot growth but you also what you're probably not thinking about
01:09:24
think about this sanity points you have gained think about how much time I have wasted over the last two years stressed
01:09:32
about this that you are not thinking about it like that is really valuable and at the end of the day when
01:09:37
it comes down to it like I think that's kind of the to wind it all back to the
01:09:42
conversation we were having about saving enough not saving enough you know money
01:09:45
money money money money we're probably both wired to optimize for money right
01:09:49
and so we're probably both wired optimized for growth but when I think about it I'm like I have enough money I
01:09:54
don't need more money okay so I grow a little bit slower okay but am I sane perfect that is an amazing tradeoff like
01:10:02
I am happy to make that trade-off and I think that that's like I I have been
01:10:06
winding back a lot of what I share like I used to post twice a day I now post twice a week if I'm sharing something
01:10:13
that is spicy I just won't read the comments I'll be like all right fight
01:10:16
amongst yourselves I'm not going to deal with this like take me the wrong way if
01:10:20
you must but I think that there are ways to change that relationship and my my dream world is one in which there's no
01:10:26
no Instagram meta goes down and never comes back I'd be like amazing I love it
01:10:31
Temptation gone Katie I think after this conversation some people are going to reach out and leave you some really nice
01:10:37
comments maybe send you some really nice emails and or or leave you a really nice
01:10:42
rating on Apple podcast something like that no dunking listeners not allowed I won't permit it by the way listeners if
01:10:49
you want to laugh go check out my Apple podcast and look at the one review that was a total dunk on me from a couple
01:10:54
years ago it's pretty hilarious it's still out there it's still out there
01:10:58
it's the one star review that's out there but the point being Katie people
01:11:01
are want to go listen to more of your cool thoughts how can they find you so if you like podcasts I would definitely
01:11:07
recommend checking out our show the money with Katie show you probably have a sense for like the vibe of it by now
01:11:13
after listening to me blabber and rant at Jesse for an hour if you like to read money withth katy.com is where I publish
01:11:19
my essays and there's also a newsletter that you can subscribe to there I send
01:11:22
them out on a weekly basis and if you are an Instagram user I am money with Katie on Instagram not sharing as much
01:11:30
there but that is a place that I share more casual thoughts and more short form stuff so Jesse thank you so much for
01:11:35
having me on it was a pleasure I loved your questions and it was just so fun to get to chat with you oh Katie thank you
01:11:41
for being here thank you for stopping by the best interest podcast thanks for tuning in to this
01:11:47
episode of the best interest podcast if you have a question for Jesse to answer on a future episode send him an email at
01:11:54
Jesse best interest. blog again that's Jesse at bestter interest. blog did you
01:12:00
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01:12:08
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01:12:16
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01:12:23
Financial advice and is not prescriptive of your financial situation