Let’s talk about everything from the latest headline to hit the news to how to best care for our own finances. What does Nathan think about these hot financial topics?
One $1.2 billion program in Los Angeles intended to “quickly” help house the city’s homeless population. Six years later, they have built 12,000 units at the cost of roughly $837,000 per person. Is this the kind of “efficiency” promised? What might be a better plan?
When it comes to our personal decisions, which strategy is better: paying off debt or building up savings? Nathan says it’s crucial to do both, but to start out with, you have to build up savings. Without having savings, you might fall into the trap of accruing more debt if an emergency were to happen. As you get closer to retirement, the savings is probably good and so paying off debt then becomes the goal.
Should you pay off the house or keep the mortgage? Nathan says most people have lower interest rates on their house right now with markets making historically more than that. You may feel the need to eliminate the debt, but make sure it doesn’t hurt your financial plan or your income potential for the future. Paying it off early isn’t always the best idea.
When looking for life insurance, should you get term life or permanent life insurance? When you’re young and married with a mortgage and a few kids, you want the cheapest insurance possible at that point with the largest amount you can get. Most of the time, people don’t need permanent life insurance.
Which is better, mutual funds or ETFs? Nathan says there is a difference, but he likes them both. Are annuities good or bad? Most of the time, Nathan feels they are oversold and not used correctly, but there is a place for them and a tool that can be used in the right situation.
Finally, Nathan’s least favorite question: should you buy gold? No! It’s nice to give as a gift as jewelry, but it is not a good investment. You don’t see growth over time because it’s not producing anything. It’s not a good inflation hedge either so don’t be tempted by something that isn’t worth your investment.
Listen to the entire episode or skip ahead to hear more about a particular quote.
[1:03] – What’s an example of a housing plan gone awry?
[6:06] – What is better, paying off debt or building up savings?
[7:27] – Should you pay off the house?
[9:30] – Term life or permanent life insurance?
[11:40] – Mutual funds vs. ETFs?
[12:54] – Are annuities good or bad?
[15:01] – Should you own gold?
A Point Of Wisdom:
Gold: it is not a good investment. It doesn’t make anything; it doesn’t produce anything.