Welcome back to Portfolio Rescue. Today's show is sponsored by Innovator ETFs. Before we got on today, I was explaining to Duncan how these buffered ETFs work. So, what they have is three different buffers, a 9%, a 15%, and a 30%. Basically, what you have is that's how much protection you get to the downside.

So, let's say the market is down 20%-ish now. If you had a 9% buffer, you'd be down 11%. If you had the 15% buffer, you'd be down 5%. If you had that 30% buffer, right, you're still protected. But I think it protects you from -5 to -35. Anyway, each of them, the bigger the buffer, the lower your cap is on the upside.

Interestingly enough, though, they make these strategies using options. And the more volatile the market, the better priced your options can be, right? So, actually, your cap is a little higher these days, Innovator tells me. So, if you want to learn more about them, they have a tool on their website, actually, that you can go price these things out.

You buy them on the first of the month because that's when they roll over. Go to innovatoretfs.com to learn more. Yeah, they sound - the reason I had so many questions, they sound like too good to be true, you know? That's why I had a bunch of questions. It's interesting, yeah.

Again, listen to our old animal spirits with Bruce Bond, we kind of go through them back and forth. But they're going to be sponsoring the show for a while, so we'll kind of go through some of the pros and cons of those things. But it's an interesting way to define a range of outcomes.

Okay, YouTube comments from last week since I talked about the housing market a little bit. Someone said, "Okay, Ben, you're kind of pessimistic about what's happening in the housing market right now. What's the best case scenario?" Okay, so let me lay out the glass cephal. Higher rates cause prices to stall out for a bit, especially in places like Boise and Austin that have these really hot housing markets.

Let's say inflation comes in a little bit, the Fed tightening slows things down. Mortgage rates can come back to a more normal level for people, which I don't know what normal is these days, but I don't know, call it 4 or 5%. Millennials are still in their household formation years, so they're going to be buying houses.

And maybe things just get back to where supply and demand are a little bit more in balance. But the question really depends on what kind of perspective you're talking about. First, a homebuyer or someone who owns a home? Because obviously, if you're a current homeowner, you want things to keep going higher, but that's not very fair to other people.

So, for everyone involved, I would just like to see more homes being built. So, John, pull up this chart that I created a while ago. Number of homes built by decade. You can see the 2010s was by far the lowest of any decade since the 1970s. This is really what we need to do.

Unfortunately, it's probably a pipe dream because, as we can see with how cyclical things are, homebuilders are probably not going to do this unless they're incentivized. So, David Halberstam has this book called The 50s. I've referenced it a bunch on my blog and on Animal Spirits before. And he talks about how the Great Depression and World War II really crushed the housing market.

They just didn't have enough houses. They estimated when people got back from World War II, all the soldiers came back, they needed over 5 million homes. You know what the government did? They rushed this federal housing bill through, and it had very little in the way of controls. So, it basically, they did this federal insurance program to protect builders by any means.

And they offered, like, mortgage guarantees, and the builders just went crazy. So, they said in 1944, there was 100,000 new homes being built. By 1950, it was 1.7. So, they built a bunch of homes. There was one thing in the book where they said down payments were either negligible or $1 for a new home.

So, and they were selling $11,000 houses. That's like $133,000 in today's dollars. So, unfortunately, that's the pipe dream. I honestly think the only hope we have is, say, by the end of the decade, the baby boomers all begin to downsize and sell their homes. And that brings supply and demand a little bit more into balance.

Obviously, if rates stay high here for a while, I think that's gonna help. I really wish there was a way to make it more affordable for more people to buy homes. And I think building is the answer. But unless the government steps in and really does something and I'm not holding my breath on that, I don't know that there's a very good answer here.

Unless rates just stay higher for a while and just keep people on the sidelines. Yeah, I mean, you look at the calculators now of how much home you can afford, and yeah, it's gotten worse. Last year, it already felt, or months ago, it already felt pretty bad. But yeah, with mortgage rates going up, it's worse.

Yeah. And I do think, hopefully, having rates be much higher will at least put a cap on those prices. And maybe, especially in the busiest and hottest housing markets, will bring it down a little bit. So, we'll see. That's, unfortunately, my best case scenario. Still not very great. But that's where we are.

All right, let's do the first one. Okay, up first today, we have a question from Adam, who writes, "In the era of free money, having 2% to 3% interest debt for things like a car and a house were easy to take on because your investment returns made it worthwhile.

However, in the current economy, should I use money I would be putting into a brokerage account to pay off my house and car early? Even at 2.8% interest, that's way higher than what stocks are paying right now. And real estate has been a great hedge against inflation in the current market." All right.

This, again, depends on what perspective you're looking at it from. So, this is from Adam. And I think Adam is saying he already has a house loan and a car loan, right? So, if you have those loans already, I look at it the opposite way. If you still have debt costs that are 2% to 3%, that's even more valuable now that rates are higher and inflation is higher, right?

I will personally be paying off my 3% mortgages as slow as possible. If they said, "Ben, we're going to take your 3% mortgage and allow you to pay it off over 50 years instead of 30," I'd take them up on that offer. I'm going to hold on to that 3% mortgage for dear life.

It's tax advantage. It's more than 5% lower than inflation right now. Why would I pay that off? Inflation is a bad thing for spending purposes, but it's awesome for people who hold debt. Why? Because if you're making fixed payments over time, those payments are worth less and less over time.

So, let's say you took out a $350,000 mortgage last year with a 30-year fixed rate of 3%, which is around what it was. With inflation running at 8% over the last year, it's actually, whatever, 8.6%, your $1,475 monthly payment would now be running around $1,350. In real terms, right?

Based on last year. And even if inflation going over the next five years was 3%, let's say it comes back down, that $1,350 now is equivalent to $1,165 in five years. Right? Because that's maybe the one silver lining of inflation, that it eats up debt. And I know a lot of people are worried about our government's huge debt problem.

It's kind of weird to think that inflation is actually a solution for it, but it is. Inflation is actually eating away at government debt. So, that's a good thing for people who hold debt. So, you're saying this could all be part of the master plan? Lewis: It's possible. But, the other way is, if you're taking out new loans.

Now, let's say you're taking out a new loan, and you're paying 6% mortgage, and you're paying 5% on your car loan. I think that's a much different story, where you can start to think, well, that's almost a guaranteed return on that money, paying it back. And it's a much higher hurdle rate.

And I think then, the calculus changes on that. Obviously, we've talked about this before, the question of whether to pay off debt or not is a personal one. It doesn't always come down to hurdle rates or inflation calculations, and sometimes people really want to pay it off. But, I think if we're comparing 2-3% borrowing rates to stocks and bonds today, financial assets are much more appealing to me than paying off 2-3% debt, especially when it's tax advantaged.

Bond yields are much higher than they've been for a long time. The last year, 10-year Treasuries were this high, it was like 2011. I know they're falling a little bit today. And I know it doesn't feel like it, but stock market returns are going up, as stocks are going down.

Expected returns are going up. So, as long as you have the ability to service your debts, I see no reason to pay them off if your bogey is the stock and bond markets right now, and if you have those lower interest rates. If you have higher interest rates now, I think that's a different question.

Yeah, that makes sense. All right, let's do another one. Speaking of bonds, let's do a bond one here. Okay. So, up next, we have a question from Mike. "I'm 49 years old, high earner, high savings rate, $1 million in retirement accounts, and $2 million in property. I have historically maintained an allocation of 35% US index, 33% international index, 30% bond funds, and 2% speculation in stocks.

Bonds have been getting crushed. Should I continue to hold this allocation knowing that this portion is definitely going to drop in value? I'm thinking about moving a portion of my bond allocation to some strong companies that have been clobbered but pay 2-3% dividends. I've been thinking my bond allocation is too high given investments in property.

Thoughts?" All right, it is true. Bonds have been getting crushed. But it's not been an even distribution. So, John, throw up this chart here of bond returns. This is bond drawdowns. And I went across the spectrum. So, the longest duration, which is zero coupon. Then I looked at the 20 to 30 year treasury, all the way down to one to three year treasury.

You can see zero coupon bonds and 20 to 30 year treasuries are down even more than the stock market. And these are from the lows in March 2020, actually, when weights went really, really low. But you can see even the U.S. aggregate, which is like a bond index fund.

It's in a 12 or 13% drawdown right now. Three to seven year treasuries are down 10%. And then you look at one to three year treasuries, not down as much, 4%. So, it really depends on what kind of bonds you're talking about here in the duration. But I can't say for certain that this viewer thinks bonds are going to continue to get crushed.

We don't know that for sure. Interest rates could continue to go higher. But here's the thing that's different this time around. Because rates are now higher, you actually have a little bit of a cushion for once. It's not like treasuries are coming from 50 basis points all the way up and you have no yield to protect you.

So, bonds getting crushed means bond returns in the future are higher. Because starting yield really matters. And because if you look at expected returns, bonds are guided by math. Not over the short term, but over the long run. So, stocks, their yes fundamentals like earnings growth and dividend yield, these things matter.

But the other piece of stock market returns is, what are investors willing to pay for them? We've been seeing this year, not only have stocks been coming down, but P/E ratios have been coming down even faster, right? And P/E ratios are really, evaluations of all kinds, are really emotions.

Like, what are people willing to pay for stocks or the stock market? Bonds are guided by math. So, let's, John, throw up this first one of five year treasury yields versus one year returns. So, this is a starting five year treasury yield going back to the 60s. And then, the orange line there is forward one year returns.

You can see they're all over the map. It's kind of in the same general direction over time, the highs and lows. But it's way, way wider than the ranges. So, the correlation here between five year yields, starting yields and one year returns is like 0.6. It's got a relationship, for sure, and it's positive.

But it's not perfect. So, now let's go out a little further. Let's go to three year returns, right? This is starting five year treasury yields versus three year forward returns. Now, we're looking a little closer here, right? The correlation is closer to 0.8. You can see, but there's still some wide swings where returns get a little wider than or lower than the actual starting yield.

And now, let's do the last one. Five year yields versus five year returns. Now, we're pretty close. The correlation here is like 0.92. So, this is a very strong relationship where your starting yield is going to determine your longer run returns and bonds. So, if bond yields right now are 3%, I feel pretty good saying, you know, five to seven years, maybe ten years, if you're using intermediate term bonds, you're probably going to get roughly 3% returns, give or take.

Because obviously, the interest rates move a little bit. That can change things. But no one knows what's going to happen with bonds in the short term. Interest rates can move and fluctuate. But over the long term, the starting yield is the thing that matters. That's why I was so worried about bonds in March of 2020, because rates were so low.

So, you can't exactly live off the interest right now. But it's much better than it has been. And so, even if things get dicey for the next 6 to 12 months, if rates could go higher from here and inflation stays high, sure, bonds could continue to get hurt. But you're in a much better place than you were.

Now, having said all that, this doesn't necessarily mean you have to invest in bonds. This viewer asked if they really need bonds because of real estate investments, right? Yeah, there's high allocation of real estate. Some people think that real estate holdings are like a form of debt, so that makes it kind of like bonds, right?

Where you have a hurdle rate, which we talked about in the last question. I think a lot of this depends on how you think about portfolio management. Like, did you invest -- why did you invest in bonds in the first place? Did you invest in them because they're a form of dry powder?

Because sometimes they are not as volatile when stocks go down. That's not the case this year, but most of the time it is. You can't really rebalance a real estate property, right? If you were using bonds to rebalance your stock portfolio, you can't do that with real estate. A house is not liquid.

You can't spend it. So, this answer really depends on your ability to live with 100% stock in a real estate portfolio and not have some sort of liquid savings that you can use to potentially rebalance and have diversification. So, I don't know. Does a stock market real estate portfolio make sense to you?

I guess for the right type of investor, they understand those risks. Bonds haven't helped much of late, but that doesn't mean they won't in the next downturn. So, do you want to get out of bonds because you've experienced some losses and you're just ready to pull the ripcord, or just because they don't fit your personality and you want something else?

But, yeah, having that real estate exposure, that opens you up to a bunch of other different risks. So, I think you've got to define what you want to get out of it and why do you have it in the first place. What do you think could be the long-term ramifications of so many people souring on bonds now, being like, "They didn't protect me when I thought they were supposed to protect me," et cetera?

It is interesting, the psychological scars that markets can -- because after 2008, no one wanted to touch the stock market forever, right? Everyone thought the stock market was a casino and a roller coaster, and guess what? The stock market did wonderfully for the next 10 to 12 years. That's the thing with bonds now, is that bond yields are higher, again, meaning expected returns are going higher, but people look in the rearview mirror and see losses.

So, yeah, I think you're right. There could be a psychological component where people say, "I'm not going to wait around to see that happen again." But then that pushes you out of the risk spectrum, right? And makes you take more risks. So, yeah, maybe that is a possibility. Yeah, the chat's not having it.

77% of people said no, they do not have a meaningful bond allocation in their portfolio. That's 57 votes, but still, maybe significant. We are an anti-survey show, but we'll take it. Let's do another one. Up next, we have a question from Jolie. They are based in Hong Kong. "I'm turning 24 in a few days and I'm from Hong Kong.

Happy birthday." I don't know when this came in, but happy birthday anyway. "I make around $40,000 a year, currently have around $60,000 saved, half equity, half cash, savings insurance, retirement account, and other stuff. Due to the extremely high cost of living, the most expensive housing in the world for more than a decade, and the worsening political situation here, many Hong Kongers are considering migration.

Most of my friends are moving to the UK or Canada. I'm qualified for the UK's high potential individual visa, and Canada has a similar visa for degree holders. My big question is, how should people my age plan before moving to another country? Should I bear a few more years to save enough money, since Hong Kong is good for saving and I don't need to pay rent, then move with less pressure?" So, a couple questions built in here.

All right. So, Visual Capitalists actually did this infographic where they looked at the least affordable housing markets in the world. And I think number one was Duncan's neighborhood in Brooklyn when he re-ups his lease this year. Yeah. Definitely. Pretty close. Actually, Hong Kong is the worst. So, they calculated this by looking at median house price divided by median household income.

And they say anything above five is severely unaffordable. You can see a lot of them are actually in the US, mostly in California. It's LA, San Francisco, San Jose, then Honolulu, Vancouver, and Toronto around there, Sydney. But Hong Kong is the worst one. Now, this person says they don't need to pay rent.

So, maybe they're just worried about buying a house in a few years. Which makes sense to me. Isn't that stat on there crazy? 7% of Hong Kong is zoned for housing? I saw that on their infographic. It's crazy. Yeah. That makes sense. So, the good news is at 24, you have the ability to take some risks and try things out.

So, I think as long as you're comfortable moving to a new country, I say, yeah, go for it. Why not, right? Live in a new city, meet new people, try new things. You said you had some friends that are moving to these places. If it doesn't work out, you can always try to move back to Hong Kong or try somewhere else, right?

You talked about going to London or the States. I think if you have no responsibilities holding you back, now is the time to do something like this. And this seems like the kind of thing to me where there probably doesn't have to be a whole lot of planning involved.

As long as you have your career stuff figured out and you can find a job where you go and you can find a place to live, I think this is one of those regret type situations where in, I don't know, 20 years when you have more responsibilities and you're more settled down and maybe you have a family or something or you own a house and you're putting down roots, I don't know, are you really going to regret trying to move and live in a new city and try something new?

Again, you can always move back if it's an obvious mistake. The good news is when you're young you have a lot of time ahead of you to make up for mistakes, both in the form of decades ahead of you plus human capital savings. I think, and moving out of the least affordable city in the world and moving somewhere more affordable means financially it should be easier.

And it sounds like you have your finances in order for a 24-year-old, right? When I was a senior in college, I lived in Philadelphia for a semester. Between my sophomore and junior years, our small tiny liberal arts college in West Michigan would send 60 kids to Vienna for a summer program every year.

I went there. Those are some of the greatest memories I have in my life. So I think going somewhere else and trying it out and trying a new culture and a new place, I think if you're adventurous enough and you're willing to do it, I see no reason not to as a young person.

Again, you can always move back if you need to. Yeah, and they mentioned the political situation there. So it seems like they have more on their mind than just the financial. So that's something that is kind of hard to quantify. Yes. Yes. Something that, yeah, I know we complain about politics here, but yeah, something like that, that's probably much scarier.

And I agree. Let's do another one. Okay. Up next, we have a question from Michael. And so this is one that our regular viewers are going to recognize from a couple of weeks back on what are your thoughts, but we had to do a deeper dive because it's just too- This is one where it came in and we were all passing it around, me and you and Michael and Josh and everyone and kind of going, "What?

What?" So we wanted to go over this one in a little more detail. Yeah, it's very cinematic. So yeah, this one, okay, I'm not going to say her name actually, but okay. Wait, Duncan. Yeah. Do you say cinema instead of movies? I use them kind of interchangeably, but yeah, I mean, cinema would be, I guess, the next level, right?

You have film. For me, the Pooh meme is movie, film, cinema. Right, exactly. Yeah, yeah. Kurosawa is cinema, right? Yeah. Okay. I'm a 40-year-old tennis coach in California. Our tennis club is a registered nonprofit and I'm grateful that they offer a 401(k) with a 4% match. Unfortunately, the general manager's spouse manages the plan.

He is not a CFP, charges 1.22% management fee, actively picks stocks and provides zero transparency with my 401(k) balance or his returns. I only know how much I've contributed and the company match, including vesting. Obviously, this is a conflict of interest, even though he isn't technically a fiduciary. I don't think it's a Ponzi scheme, but I'm only contributing the 4% to get the match instead of the max amount.

I'm maxing out my traditional IRA since I make too much for the Roth and I invest in real estate and have a brokerage account. Thoughts, suggestions? Alright, so the person that we went to on this internally is Dan LaRosa, who works at Ritual Wealth Management. He helps manage our corporate retirement plans.

Dan has worked with a lot of 401(k) plans over the years. Hey, Dan. Alright, Dan. When you saw this one, is this the most shocking 401(k) plan you've ever seen? And then, what is going on here? And also, for people who aren't quite this crazy, but maybe kind of crazy, what do you even do when you see a 401(k) plan that has obvious flaws in it?

Yeah, this is a tough one. I was actually pretty furious when I first read this and I think my response to Sean was a 7,000-word email, breaking it down. But go to management, first off. Talk to somebody. I know he said it would be uncomfortable. The general manager's husband is managing the account.

By the way, how often do you see that? Because I feel like a lot of times you would hear with small businesses, "Well, the reason we chose this 401(k) plan is because my brother-in-law uses it," or knows someone. Isn't that how this technically works for a lot of places?

It's not uncommon at all. It's really not. And that by itself wouldn't be necessarily a problem. But there are nine other items here that when combined with the fact that the general manager is his wife, it's not really a good look. But talk to management. You've got to keep in mind, the people that have, in most cases or usually, the people that have the larger balances in these retirement plans are management.

It's the owners. It's the people that maybe are making decisions on the retirement plan. So any suggestions you're making to lower the costs or increase the investment quality, whatever it is, is probably going to have an outsized impact on those individuals. Do you think that there's any ... Is this the type of situation where regulators need to get involved or could be brought in somehow?

This is my question for you guys. Just from a non-financial professional perspective, it sounds like something that would be illegal. Based on what he said here, I don't see anything necessarily illegal. Are there red flags? Yeah, there's red flags all over the place. But it's not a Ponzi scheme.

I don't see anything necessarily illegal. But we also don't have all the details of what's going on here. The biggest thing here is this is not at all your traditional 401k plan, right? Most plans, the plan that we're in, the plan that most people are in, they're participant directed.

That just means that participants can make their own investment decisions. Within the confines of the plan, you can pick and choose how you want your money invested. You can make changes to it whenever you want. This sounds like a single pooled account where this advisor is managing the retirement plan's money in one single account for all the participants.

It's not popular or common at all. I don't know why they would opt into this sort of setup, other than maybe the nice fat management. What was your advice to check to see, just to make sure there's nothing nefarious going on here, to make sure that this plan is kind of legit?

What do you even do? Well, actually, the fact, I mean, the management fee, okay, yeah, it's high. The biggest thing here, and I think where he could maybe, the part that I would lean on, is no transparency. All retirement plans are required to provide participants at least annually, normally quarterly.

I think even these pooled plans, it's once a year, you have to get a 401k statement. That has to show not just what you've contributed and what the match was. You can find that out on a pay stub, but it has to show the breakdown, how that money's invested, a beginning balance and an ending balance.

The fact that he's not getting that, that's the biggest red flag for me. He said it would be an uncomfortable conversation and I appreciate that, but I think you still need to have it. This is where I would try and dig in, even if he says something like I'm working with an advisor and he or she was asking or requesting about information on all of my outside accounts, how that money's invested.

Well, you need to have that, so maybe the request for this information can come from a third party. Douglass: Unfortunately, sometimes in life you have to have uncomfortable conversations and this is one of those times where it certainly makes sense. All right, Duncan, let's do one more. Duncan: Okay, yeah.

Thanks for doing a deeper dive on that one. One follow-up on that I just wanted to mention for the new whales in the audience. You mentioned that management fee and they allude to the fact that it's really high. What's a more reasonable fee that you would expect to see on a plan like that?

I mean, anything north of 1% is usually ... In a 401(k) plan, it's usually going to be half a percent. Something like that would be reasonable. Again, we don't know anything, any specs of the plan. We don't know how large it is, how many people there are. We know he's actively picking stocks, which is ...

So, it's significantly higher than you would expect. Yeah, sounds like it. Okay. Last but not least, I have a HELOC with a variable interest rate of 6.5% and a balance of $39,000. I also have an unsecured line of credit with a balance of $9,500 and an interest rate of 14.2%.

I was quite surprised that the interest rate jumped so high. I pay both monthly, but these payments are only covering the interest. I'm considering taking a loan for my 401(k) plan to pay down the highest interest debt and make it more manageable. What are your thoughts? Also, you might remind people what a HELOC even is.

Yeah, home equity line of credit, and that's using your house as security for that debt. Obviously, as mortgage rates rise, those rates can rise a little, too. I'm guessing the unsecured line of credit is something similar to a credit card, would make sense to me. I don't know exactly what it is.

But, Dan, this is essentially a personal balance sheet move, where you use the 401(k) balance to pay it off. I'm trying to think if there's better ways to do this, but why don't you kind of compare and contrast taking the 401(k) loan to some kind of other debt consolidation?

What are the pros and cons of the 401(k) loan to get yourself out of debt elsewhere? Yeah, so basics on 401(k) loan. Generally, you can borrow up to $50,000. The loan has to be repaid normally within five years under most circumstances. You do pay interest on this, but it goes back into your 401(k) account.

The interest rate is prime plus one, sometimes prime plus 2%. Prime right now is 4.2%. That's the one that's never really made sense to me. Why do you pay interest to yourself on these? What's the point of that? Basically, I think the idea is, okay, taking money out of your 401(k) is a horrible idea.

You shouldn't be doing it, for obvious reasons. That's where the magic happens in any 401(k) loan. You take a retirement account with compounding, and when you take a loan out, that goes directly against it. You're taking money out of the market and still paying it back. If you have interest repayments going back into your 401(k) account, that helps make up for it a little bit.

I think that just kind of lessens the blow of taking the money out. Okay, that makes sense. Again, loan repayments and interest, again, are going back into your 401(k) account. Generally speaking, I'm really anti 401(k) loan. I feel more of these types of questions than you would think. Actually, just a couple of hours ago, I spoke to someone in a somewhat similar situation, doing a home renovation and wanted to know about his 401(k) loan.

Again, you're taking money out of the market. You're kind of defeating the purpose of the 401(k), and then couple that with the fact that we're in the midst of a 20 plus percent drawdown. You're really selling low here, and then you're slowly reinvesting over time. You're missing out potentially, I don't know what markets are going to do, but missing out potentially on a lot of tax-deferred growth.

That's a good point. With stocks being down so much that you're taking this loan at a really unopportune time. You're saying in terms of different places to do debt, 401(k) loan should probably be one of your last options. That's what I usually say. It should be emergency only. It makes sense to me.

Something people don't often think of, your 401(k) loan, your 401(k) is an employer-sponsored plan. The biggest risk with the 401(k) is what happens if you leave your job? If you leave voluntarily or you get fired, whatever the case. If I take out a $10,000 loan today and I leave next week, I'm on the hook.

Normally, you have 90 days to pay back that loan. If you don't, the loan defaults. It's deemed a distribution, which means you pay tax on the outstanding balance. You also pay a 10% early withdrawal penalty if you're not age 59.5. There is that job security risk, as well, that you want to take into consideration.

Lewis: Yeah, which is really good consideration right now. If the Fed's trying to slow things down and throws us into a recession, unemployment rate increases, that's another good point. I would start with the unsecured loan, that 14.2%. Talk about a hurdle rate. There's a couple things you do. Some sort of debt consolidation, I would talk to one of those places.

But also, try to negotiate it. Say, "I can't pay more than the interest rate on this. I'm going to eventually have to default on this," or something. A lot of these places will actually negotiate with you. They would rather get something rather than nothing. The HELOC is a different story, but I would start with that 14.2%, that $9,500, and I would talk to them and see if they're willing to negotiate.

They might not make it out there with anything. That makes sense. I do like the idea of having that hierarchy of loans and having the 401(k) be that last, last, last line of defense. You're right, there's a lot of factors right now that go into it. Stocks are down, and maybe the economy slows and some people lose their jobs.

That's a double whammy if that happened to you. Lewis: So, you're saying play it hardball, then. Maxfield: Yeah. But honestly, if you call financial institutions, a lot of people hate negotiating. Listen, Duncan, I was on the phone with AT&T this morning. Every 12 months, my teaser rate goes away and my cable bill goes up.

What do I do every 12 months? "Hey, AT&T, I'm going to leave. Give me the retention department." "No, no, no, sir. We'll give you $50 off and bring you right back down to where you were." People hate negotiating in this country. You have to. Let's say you're wonderful with your bank and your credit cards and all that stuff, you pay stuff on time.

Let's say you accidentally missed a payment and you didn't have it automatically for some reason, and they charge you a late fee. Call them up. Tell them, "Listen, I've been a great customer with you for seven years. Can you take that off for me?" Nine times out of ten, they will do that.

Niu: I do that every time, and they take it off every time. Lewis: What if you are an investor in AT&T? Can you pull that card? Can you be like, "As a shareholder..." There you go. Just saying. Negotiating is not something I'm very great at, but you have to try it.

Remember, if you have any questions on credit cards, travel hacks, airline rewards, all that stuff, shoot us a question. Next week, we're having Chris Hutchinson, who is a travel hack connoisseur. If you're listening to this in podcast form, go leave us a review, even if you're not. If you're watching this on YouTube and you're not a subscriber, Duncan wants you to click that subscribe button.

Do it for him, not for me. I need you to click that subscriber button. If you want some Compound merch, we're at idontshop.com. Keep those questions and comments coming. Remember, askthecompoundshow@gmail.com. I want to thank Dan LaRosa for joining us today and helping us sort through a messy 401(k), and we will see everyone next week.

Thanks, everyone.