Looking to be a better investor in 2024? A few simple adjustments could help your money work much harder for you this year, and our hosts are here to lend a hand!

In part three of our four-part money tips series to kick off 2024, Mindy and Kyle offer some top-notch advice on how to invest your money this year. You’ll learn about the importance of tracking your finances year-round, savvy retirement planning, and, if you’re a real estate investor, putting some of your “lazy” equity to better use!

Beyond investing, our hosts provide several money hacks that will help you chip away at your expenses this year—whether it’s taking advantage of autopay or annual-pay discounts or pivoting to a low-cost phone plan. Finally, they discuss how spending money can actually propel you toward your FIRE goal!

 

Mindy:
Hello, hello, hello and welcome to the BiggerPockets Money Podcast. Today is our third installation of 24 Money Tips for 2024. My name is Mindy Jensen and joining me today is my financial mastermind co-host, Kyle Mast.

Kyle:
Hey Mindy, how are you doing today?

Mindy:
I’m great, Kyle. How are you doing?

Kyle:
I’m doing great. It’s going to be another fun episode of hitting these tips and just plowing through them here at the beginning of 2024, to try to give people a leg up right at the beginning of the year with their finances.

Mindy:
Yep, I am super excited. Let’s jump in. The first tip we have today is reevaluate the way you keep track of your finances. I see so many people get so motivated to keep track of their finances, and then they set up these super fancy Excel spreadsheets and get really, really detailed. If your system is holding you back from tracking your expenses, make a new one.
I was keeping track of my expenses in a notebook, and that worked just fine for me for a while. So there’s nothing wrong with whatever you’re doing, as long as it’s something that’s going to keep you keeping eyes on your finances. So find a system that works for you and use it.

Kyle:
Love it, yeah. Number two, go through your bills, all of them and look for a couple of things. See if you can put them on Autopay and also see if there are discounts available for annual payments versus monthly payments. Putting things on Autopay will really make a difference as far as any late payments that you might accidentally do with different items, whether it’s a mortgage, from the big end of things or something as small as some sort of subscription or garbage service, things where you might have a $10 fee. Autopay takes away pretty much all of that, and very rarely does it fail, unless you close a bank account or switch credit cards or something. So try that first, and sometimes you get discount for doing Autopay too. A lot of times insurance companies will offer you a discount for doing Autopay.
But the other thing is look at annual payments versus monthly payments and I’m a huge fan. I’m not always an annual payment guy. If I actually look at the percent interest savings that it is and if I can do better with that on some other sort of use of the money. But if your annual payment gives you a significant discount, go ahead and pay something annually.
However, if it doesn’t, I would argue that just put it up on the Autopay for monthly payment. Why give money away too early ahead of time if you’re not going to get reimbursed for it, when you could use that to pay down some debt in the meantime or have it in an investment account and grow differently, and even have it as emergencies for reserves for some reason. But look at Autopay, look at annual payments for subscriptions, see if you can use those to reduce your fees and get some discounts.

Mindy:
I love that. I love annual payments ’cause then I don’t have to think about it every single month. Why think about it 12 times when you could think about it… Reevaluate your phone plan? I use Mint Mobile. Why? Because it’s $15 a month. They have higher plans, more expensive plans for more data, but I never even use all of my data. Why would I pay a $100 a month for the exact same service I get for $15 a month? So if you’re tired of paying more than you need to, check out a new discount phone operator.

Kyle:
I use Mint Mobile too, go figure. My wife is on the $15 plan, but I have the unlimited plan, so when we’re road tripping or traveling and if we are going through data a lot faster, we can switch to my phone or if I’m working on the road. I pay a little bit more, but it’s still really, really reasonable. So great tip there, and if you do it with two people, you can kind of hack it a little bit more if you need some more data that you can share.
Next one, happily spend money on what you love. A Mindy and Ramit Sethi episode, maybe check that out, everyone. I’m giving Mindy a hard time here, but as one of the best episodes I have heard on personal finance, if you could check out what Mindy and Carl discussed with Ramit Sethi, it will impact you. So it might sound counterintuitive to spend money on what you love, but there does come a point where you need to focus on not just saving money all the time, not just living so frugally that you don’t enjoy life.
And this can actually be done in a way that you can still save and you can still advance yourself financially, but you just have to focus on the things that are really important to you. Is it really important for you to have a date one night a week at a restaurant with your spouse? Spend the money on that, save it somewhere else? Does that bring you a lot of joy? Spend it on that, save it somewhere else, that will make it sustainable so that you can continue on your financial journey and continue to advance, as opposed to just completely limiting everything, which will burn you out and will make you not want to make financial decisions.
It’s like habits as far as eating or exercise, anything, if you try to do too much at once and don’t enjoy yourself a little bit, it’s going to fail.

Mindy:
Yeah, absolutely. And you are 100% right, Kyle. I should take a little bit more of that to heart. I am. We’re working on it. It’s a work in progress. Next tip, review contribution limits for retirement accounts, and make a plan for your contributions for the entire year. Do you want to max it out? You don’t even have to review those limits. I’ll tell you. They’re $24,000 for a 401K, and $6,500 for an IRA. Now, these are your regular under 50 contributions. If you are turning 50 or older in 2024, your contributions are more. You can give an extra $6,000 to your 401k and an extra $1,000 to your IRA.

Kyle:
Next one, rebalance your portfolio. And I would also say along with this, not just rebalance, but try to optimize your portfolio. A lot of times with your stock investing, your bond investing or your real estate investing, you can be doing a really good job and adding to it, but things can get out of whack a little bit from stocks and bonds. Sometimes things grow more than other things, and it may be outside of the risk profile that you’re looking at, and that’s kind of maybe a big phrase, risk profile.
All it means is that you want to make sure that you’re investing according to what you’re comfortable with. And over time, if certain investments grow more than others, you might be invested uncomfortably more in one thing than you would like to be. As far as real estate goes, this is definitely something I think people do not pay attention to enough. Look at how much equity you have in a property. Look at how much cash flow you’re now getting from that. Have you had the property 10 years? Has the mortgage been paid down a lot? What’s your goal with that property? Is it to pay it off and then just have the cash flow? That’s one way to do it.
Is it to use that equity and get as much return on that as you can? It might mean refinancing it, pulling some of that out and getting another cash flowing property or another investment, or putting that into a stock portfolio in addition to your real estate. Try to pay attention to the lazy equity in your real estate portfolio and also look at properties that… Do the zero-sum thought process. If I didn’t have this today, would I buy it again and ask that question really hard. And if you wouldn’t, try to consider a way that you might pivot out of a certain property or a certain investment, to something that would be a good fit for your current situation.

Mindy:
I love that, that zero-sum, would I buy this again? Just because you’re holding onto it right now, it doesn’t mean you would buy it again. Like, oh, it’s okay. Maybe it’s not. Maybe it’s time to ditch that property.
That’s it for us today, but we will be back one final time, giving 24 Money Tips in 2024 next Thursday. In the meantime, tell us your money tips in our Facebook group, which can be found at facebook.com/groups/bpmoney.
All right, Kyle, thank you so much for joining me today.

Kyle:
Thanks, Mindy. This is just a lot of fun. Looking forward to the next one.

Mindy:
Me too. Okay, we’ll talk to you guys soon.

Speaker 3:
If you enjoyed today’s episode, please give us a five star review on Spotify or Apple. And if you’re looking for even more money content, feel free to visit our YouTube channel at youtube.com/biggerpocketsmoney.

Mindy:
BiggerPockets Money was created by Mindy Jensen and Scott Trench. Produced by Kailyn Bennett, editing by Exodus Media, copywriting by Nate Weintraub. Lastly, a big thank you to the BiggerPockets team for making this show possible.

 

 

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Note By BiggerPockets: These are opinions written by the author and do not necessarily represent the opinions of BiggerPockets.



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