Episode-1357- Listener Calls for 5-30-14 — 55 Comments

  1. I have not listened to the show, but this just made me reach for my ear buds:

    “Help my money is stuck in my 401K, what do I do, well, you’re screwed”

    • I know you hate debt Jack but here is a new twist. I can borrow against my “401K” up to $50K/50% (which ever is less) with a max 5 year payback at current government bond rate. I’m a postal employee so my “401K” is called the thrift savings plan. I have a couple commercial storage buildings which I will have to refinance this october on another 3 year balloon. In 2017 I will borrow the max of $50k to pay off the commercial loan, pay myself the interest and have my storage building free and clear except for the payments I make to my own “401k”. If the sh*t hits the fan I can default and at worst pay taxes and penalties. Considering that I’ve already paid off almost $120K in the almost 10 years since I jumped in a new business I think the possibility of default is small.

      • The “safe” way to do a 401k loan is to have the penalties and tax amount set in a savings account prior to taking the loan, and then borrow against the 401k so that you pay yourself the interest. Catch is resisting the temptation to use the savings account, so it isn’t for those lacking financial discipline.

    • I cannot imagine why someone would not want to put money in an employer’s 401k and take advantage of the employer’s matching contribution. Most employer’s match all or some portion of the employee’s contribution up to a maximum percentage. So an employer that matches 100% up to 6% gives you 6% meaning you get a 100% return on your investment right out of the gate.

      • Wow, seriouisly?

        1. Most employers currently do not do matching with 401s, those days are long gone

        2. Did you hear the caller, 14 years on the job, was told he could withdraw with taxes and penalties when he signed up, now not happy with the investment options and told they changed it without his concent and the only way to withdraw or roll to an IRA is to quit his job. I can’t see why anyone would want to sign up for that.

        3. Even if there is a match there is usually a 5 year vesting period to claim it. So if you don’t keep the job for that 5 years you get diddly squat of the match. Some do prorated vesting say 50% at three years, 75% at 4 and 100% at 5 but those are being phased out.

        4. The government has its eyes all over retirement accounts, trying to figure out how to get a piece.

        5. Over the last 5 years employers and financial companies have removed the cash option from over 90% of the 401Ks based on a survey of this audience. So now your “safe option” is government debt.

        6. Today most 401s only offer 5-10 choices for investing your money, many suck and are funds that are managed by the very companies that administer the plan (though surrogates) which falsely inflate the funds value via guaranteed purchases.

        7. 401s are dominated by mutual funds (bond and stock) and as such all monies are held hostage into investment types. If you hold a mid cap fund and your fund manager sees a big hit coming to mid cap stocks, he has to sit there and take it while you take it up the butt by the way! He can’t move assets into cash, he can’t got to safer investments, all mutual funds work this way. You are stuck in the asset class of the fund, and most 401s give you 5-6 places to be stuck, 80% will be stocks that all take it in the shorts at the same time by the way.

        Getting an employer match doesn’t matter if it doesn’t exist, you don’t ever get it due to vesting or your investments get hammered by shitty options. One can invest 5500 a year in an IRA, and if you want to control tax sheltered retirement that gives you the most freedom. If you want to shelter or defer more than that, what you can do is invest the lion’s share in an IRA and when you hit your cap you invest the balance into a 401 with work. This puts the bulk of your money in your control.

        In fact many people would do well to create a side business just for the option of a soloK, simple IRA or SEP they could set up if they did if all they wanted was to contribute more income.

        Employer matches can be attractive if they are indeed dollar for dollar but that is also rare even where matching exists. I have seen plans now with “matches” doing a quarter to a dime. People tell me the great deal they get on say a dime on the dollar up to 5%. You do the math and they are doing say 4000 a year in savings. So they get 400 in matching, woop te do da! So for 400 bucks I get my money tied up for as long as I have a job, the governmetn looking to steal it, no exit strategy at all and 6-10 generally shitty investing options, well holly shit bat man where do I sign up?

        Now if that person can actually get a dollar on a dollar on that 4K and if vesting is reasonable, say three years of the job at least seems VERY STABLE I can see doing it. And if it maxed at say based on salary 5000 I would tell said person not to save ONE CENT above that per year and that would be ONLY if that person could save at least an additional 2-3K in a self directed IRA and another 3-5K a year in just basic savings in non deferred investments.

        I know a lot of people that are F’d with one simple 2500 dollar “emergency” yet they have a quarter of a million sitting in shitty mutual funds for their “retirement” some day.

        • I’d agree with most of that period, but some of it only if they are part of the growing job market that has an absolute POS for a 401k. Part of that is job competition for wages that represent the overall best pay package, but that is a slightly different tangent.

          Personally, I get quarter to dime matching up to 5% on my 2%. I was 50% vested at 3 years, 75% at 4 and 100% at 5, and that included non consecutive and contact work time. I can at my option save traditional (IDK why anybody would ever do that), traditional after tax (only earnings are taxed, but my contribution amount can be withdrawn at any time still), or Roth (gets tied up for 5 years but can then be withdrawn). I can’t imagine why I wouldn’t contribute 2% like that.

          As for the funds, I like most was miffed by the US bond thing, but putting the principle aside and being objective, is there a lot of difference between a certificate of debt and a certificate of debt payable in that same debt? They live and die on the same pulse, which is probably why is was an easy backdoor sell to fund managers.

          Then the other funds, yes they all suck compared to open investment options. They suck so bad you have to bribe me 250% just to get me to put a rounding error of my paycheck into them. That said, I’m not a financial wiz, but I’ve yet to have a negative PRT for even a month (including back in 2008-10 – I actually made a killing off the dead bounces and zombie recovery).

          As for staying in the same company for decades, it is a lesson that got force fed to me, but I’m glad I learned instead of buying into the one sided loyalty BS. You stay in the same company very long and you loose a lot more investments than just retirement opportunities. Even “really competitive” employers don’t even keep up with inflation with wages unless you periodically change jobs to force the competition. If I had been with a company for 14 years, unless I was a couple years off from retirement, I’d be looking for a new company long before I’d be looking for an internal way to cash out a 401k.

        • I have yet to work for an employer that did not have a match (maybe I am lucky). One was 50% match and the others were 100%. Vesting was virtually immediate in all instances. Most large companies operate their 401k that way, otherwise they cannot recruit good talent. Smaller companies seem to have longer vesting schedules.

          I agree that I would only put enough in a 401k to do get the company match and that the funds offered in a 401k are not the best. Some companies allow you to shift funds within the 401k to a self-directed brokerage account that is still within the 401k but there you can buy things that normally show up in an IRA (meaning there are more options). I agree there is no cash option, the closest thing is a money market.

          I agree that there is risk of the government deciding to go after some of the monies in retirement accounts.

        • I don’t know where you get your facts man, but they are way off. No most big companies today do not do a match any more. I have confirmed this, by polling hundreds of peoples plans in the audience of this show. No vesting isn’t almost immediate in most companies either, again I have confirmed this.

          Also things don’t “show up” in IRAs, you can buy almost anything in an IRA. It doesn’t show up, you just execute the trade. You can buy options in an IRA, you can buy ETFs, you can even buy and manage real estate (though I don’t recommend it).

          Frankly you sound like a product of the system you are part of. I’ll bet your savings balance outside of retirement is far less than 90 days of your income, isn’t it? Frankly you should not be putting a dime into a 401 or IRA until you get that done first.

          The key though with 401s is they can and do change the rules on a whim and a money market is basically a cash option by the way. It is in essence a “dollar fund”. Yes and I get the technical differences from a savings account. Though in an IRA you could do a savings account if you wanted by the way, you can hold a ficken group of staggered CDs if you wanted to.

          All I am saying is pick your head up a bit and look around Jerry. The “financial adviser” your company rolls in every time there is a change to your 401 is better termed a financial liar, he is a run of the mill relationship salesmen that could be selling cars just as easily as investment advice. If you want your money held hostage by your employer, go ahead and max out that 401! To me employers have enough power over their people and don’t need to be given more.

          I was also a partner in TWO recruiting companies for quite a while. Key word PARTNER (as in owner) and in those years we never recruited top talent based on the fricken 401K. It was seldom even a concern. We recruited technical, management and C-Level, none cared very much. It might tick a box on a list of benefits, but no one placement was lost to a competitor EVER where the reason was, “well the other guys do a better 401K match”.

      • @Jack – would you consider Caterpillar a large company?

        They do dollar for dollar up to 6% and after they froze the pension plan they gave you another 3, 4, or 5% non-matching distribution based on your age + years service, that additional % was based on total earnings including any bonus pay received in the prior year. You were vested in the 401(k) at Caterpillar on day 1 so you could start investing right away. Plus they had a Self-Directed Brokerage account which gave you thousands of more options, I don’t think Stocks were included but you did have a “cash account” (money market type of holding account).

        Neovia Logistics (formerly Caterpillar Logistics) had the same plan and option of Self-Directed brokerage account.

        StateFarm matches up to $900 but they have a traditional pension plan. Roth 401(k) & Regular 401K

        I would encourage everyone to ask their employer about getting a self-directed brokerage account.

        • Cat yes they are large, the claims were

          1. Most large companies – pointing to a few doesn’t equal most.

          2. Most vest almost instantly. The only vesting you mention is the first example and that doesn’t come across as “vesting” it comes off as eligible to participate. Vested means when you leave, you keep the money they put in. Not saying Cat doesn’t do that, just saying the way you present doesn’t mean that they do.

          Again the claim is most, and most don’t and less are every day. In fact most that continue to do so are not large companies, they are huge companies like the ones you mentioned. They often change vesting because the old times don’t care. But if they change matching they have to do it across the board. Meaning you can’t say, okay the guys that were here continue to get X and anyone hired after this day gets Y. You can increase the match based on tenure but all most be treated equally.

      • The only vesting that I remember seeing in all the documents, and I read them all, had to do with the pension. When I left Cat I had just passed the vesting time period for my pension so I was able to roll that over to an IRA. There was no vesting for the 401(k), they matched immediately.

        When I left Neovia I was able to take their match with me.

  2. I totally agree with you on the death of retail, even the lines at the super Wal-Mart in the small town where I live are almost non-existent and they rarely have more than 2 registers open except on weekends and even then it’s no where near the mad house with the screaming kids it used to be.

    • The death of retail will be accompanied by a downturn in commercial real estate. What are they going to put into all those abandoned Radio Shacks, Staples, Barnes&Nobles, Sears, etc etc……nail salons?

      • Absolutely I have been hearing that for a few years now that we haven’t seen the Commercial Real Estate bubble burst yet, I always love your input to the show brother!

    • Gerald Selente predicted the collapse of retail to happen in 2012. It didn’t happen as a collapse, but perhaps it was the beginning of a slow death. It is interesting to see Permaculutre at work even in retail space. Like weeds that pop-up in poor soil, so do dollar generals stores and the like start popping up in retail spaces where once stood high end department stores. Soon the mall is a heaven for gangs.

      • Gerald Celente seems like a decent guy, but he predicts tons of stuff and most of his roar and thunder fizzles out with a whimper. The sky is always falling. He is usually spot on with the current state and trend analysis, but his dates and severities are often way early and extreme.

    • I noticed the same thing at the wal-mart in my town (central Illinois). I go to wal-mart maybe once every 3 months. Every time I go, there are only 2 registers open and the lines aren’t very long either. The place always seems to have a bunch of cars though. Maybe half those cars are the employees and the other half are actually shoppers? We have a lot of commercial real estate available in our town as well….but that could have more to do with the fact our city govt is not very good.

  3. Hey Jack – This is Aaron from CO and you DID hear me correctly. Between the 3 of us we caught 41 trout on that trip (just two short morning outtings). My six year old son and 3 YEAR OLD daughter had caught 11 before I even got a line in the water. Baiting hooks, unhooking fish, untangling lines, etc. The Pond was likely stocked a couple months ago b/c about a third of the fish were first year stockers (9-11in). But….I took home about 15 rainbows in the 13-15″ range and one fat hog that was 17″. MY grandpa’s favorite rig worked again: light tackle, egg weight, barrel swivel (as a stopper), 16″ flouro leader, and a #10-12 baitkeeper with salmon eggs or dough bait. I gotta say, there weren’t a lot of people catching fish that day and darn near every one of them was asking what I was fishing with. Another tip – considering what you had mentioned about knowing the structures I looked at the pond/lake on google earth and was able to identify a shallow point that intersected with a small runoff stream. God bless google.

    We brought ’em back to the cabin and my boy helped me clean them that afternoon. We foil pouched them with butter and S&P and my family ate like kings that night. That is the only way I know how to prepare trout and it is so blasted good that I’m not inclined to try any other way.

    Partial Stringer from morning #2:

  4. LOL a Berkey in the fridge? mines old so there might be smaller ones but mines close to 3 feet tall so you better have a big fridge LOL.
    I live in town and it sucks because I have city water so I use both top and bottom filters and with city water I do take my top filters out every so often and hit them with scotch-brite lightly when they discolor because I have the white filters but I have never had them clog up, I have wore them down and when they look smaller visually to the point where I wonder and then I replace them, nothing is better than a Berkey!
    Ohh one last thing I bought a ton of filters 15 years ago when I bought the system itself and have never had to buy filters since, they have a 25 year shelf life, but when I do buy more them I will go with the Black filters.

    • One other thing when I bought my Berkey there was no bottom filters at that time and I lived in the middle of nowhere with a well so I had no need for them.
      I bought my bottom filters from Jeff the Berkey guy and I called and asked them 20 question before I bought them and called them 2 times after trying to make sure I was doing it right and they were AWESOME! They answered all my questions and never acted like I was wasting their time, all my future business will go to him!

  5. So glad to hear your rant about the birth industry. Its sickening how many women are just given c-sections as a routine. As a doula and breastfeeding advocate and leader, I applaud you. More people need to bring light to this issue. Too many women just give all control over their doctor without informed consent. I also wanted a home birth but where I live in Florida it’s over $6k for a homebirth with a lay midwife. I instead opted for natural Bradley birth in a hospital for under $500 total using my insurance with a CNM (certified nurse midwife) and had a great experience, the second time around. I used an OB the first time so you can imagine how that turned out. No section, but I had to fight like hell to have a normal delivery. Women need to trust their bodies and trust birth. You were made to do this naturally; you were not made to have cesareans. Granted there are instances where a woman must have one, but they are few and far between and are not necessary in most circumstances. Women, I implore you to educate yourself about birth and watch the documentary “The Business of Being Born.” It will open your eyes to what a scam our health care industry is and how doctors and hospitals are making money hand over fist insisting you need a c-section when you actually don’t. It is also important to note that having a cesarean increases risk of breastfeeding difficulty, as well as the frustration of having to recover from major surgery while caring for a newborn. Whew, sorry to get off on my soap box but it’s so refreshing to hear this issue being brought to light.

    • Agree. Both our girls were very difficult births and between my wife and Kathleen Mayorga (our midwife) everything turned out great.

    • Thank you for your work as a doula, Elisabeth. Your work is so needed. The art of birth and taking care of the birthing women has been lost to the medical establishment and I, too, am glad Jack brought it up on his podcast. I haven’t had kids yet and I watched “The Business of Being Born”. The history segment in the documentary was very enlightening. I would love a homebirth, but we’ll see how it turns out. So many people are still scared of having a baby outside the hospital that I question myself sometimes (same thing on the vaccine front although shots are getting easier to say NO to). Something I would like to see is birthing centers – specific buildings created ONLY for prenatal care, birth, and postnatal care with all the options a birthing mother could want (shower, water birth, acupuncturist on staff, aromatherapy if desired, etc.) Hopefully that will come true in my lifetime…

  6. Ok so I have another theory on the lettuce call. So when I had my vasectomy a few years ago the doctor used the tearing technique instead of using a scalpel. The idea is the skin(or leaf) will tear in a more natural way, bleed less and heal much faster. I know its a weird link but I would think it may work the same way.

  7. Jack- here’s a ROTH compensation limit “workaround” for you to consider (not giving tax advice, only stating facts):
    – Couple can not contribute to ROTH if combined income >=$191k
    – BUT that same couple can contribute to a Traditional IRA WITHOUT the tax deduction (ie after tax dollars) [IRAs have no income limit on FUNDING only on ability to take a tax deduction]
    – There are no income limits on CONVERSION of an IRA to a ROTH- so immediately convert the IRA to a ROTH…no taxes or penalties due because the contribution was made with after tax money.

    That’s the way I understand the rules- there could be complexities depending on your personal situation (like you can not co-mingle this contribution with a preexisting IRA balance) ALWAYS consult your CPA or tax attorney.

    FYI- couldn’t agree with you more on ROTH being the primary retirement vehicle, fund 401k up to the company match.

  8. 1999 my C-section cost me $10,000. In 2001, my hospital birth with an epidural and episiotomy cost me $6000. My UA home birth with an EMT neighbor in the know and ready to whisk me away at a moments notice cost me nothing.

    I went to every prenatal appointment, and I never had anything showing any sort of complication. The C-section was caused by an infection that my doctor didn’t listen to me about and let it go too long. The epidural was brought on by scare tactics, and the episiotomy by an impatient doctor that didn’t bother to check and make sure that the heart rate monitor was placed correctly.

    My homebirth was beautiful, loving, and painless. It’s not for everyone, you have to prep for it but we know about prepping. 🙂

    Keep educating yourself, know exactly which emergencies can only be handled at the hospital, find someone you trust, and trust your own instincts.

    Congratulations and best of luck!

    PS feel free to write me if you want to talk birth stories.

  9. BIG JACK…good job. your learning will paddawon on your keeping of the bees. I am so glad that Jason and You are doing well. You hit very good points on food forging for the bees. the bees will take what ever sugar sorce that they can get. so any thing that is the nector pollen, sap, water, and in the air is going to be in your honey. Can me make it so there is no problems….Bees have been around for hundreds of years…and only now are we finding we have problems…..DO TO BAD FARMING PRACTICES…. So working as a PermApiculturest we try to feed the bees thing to make them feel better after the crap they intake.

    On one note. ask your local AG Dept if they tell people the have beehives when people are spraying…they may gps your site and then call you when people are spraying in that 5 mile space so you can relocate your bees.

    if you can not relocate your bees place two frames of honey and a door feeder on the hive.. then close the hive so the bees can not leave. they will do fine for two weeks then they will need to remove waste from the hive…but this will keep them going untill the spray and poison is gone. (avg 13 days and 9 if you have good rain)

    Bee Whisperer out!

    good job Jack.

    • Thanks for the info Michael. I was wondering how long the poison would stay on the plants. I was worried that it would be for the whole growing season. I plan on keeping bees starting next spring and there are two farms within 2 miles of my place.


  10. The medical profession itself, not just the insurance companies, have to take some of the blame for the exorbitant costs of medical care. There’s a union for you, although doctors don’t like to think of the AMA that way. Doctors as a group have encouraged and taken advantage of people’s vulnerability and fear for far too long, and have far too much influence, none of which they are willing to give up or share, no matter what. Medical costs are simply absurd. Having a baby is a natural process and most healthy women have no medical issues at all. The costs mentioned for a normal delivery are insane.

    What is it that we give medical people permission to be such economic thugs?

    One thing, though, some women – possibly many- agree to have c-sections for the same reasons that surgery to “replace” the hymen or to increase the size of their breasts or to change the shape of their butts is popular. It’s not just women, read an article yesterday from Britain saying that men having surgery to apparently increase the size of their penis (only works while it isn’t erect, sorry) is up 40 % in the last two years.

    We have as a society gotton pretty weird and unhappy ..when people have such self loathing that they’ll undertake surgery for no valid medical reason it’s no wonder we have kids (and adults) running around shooting people and committing suicide.

    • People believe much of the fear mongering done by the medical establishment and media. Rockefeller took over control of medical education .. Alot of people work in health care and that whole system they probably see as benefiting them to a large extent. I think there is a whole ton of stuff that should be questioned and what the truth and lies really are would probably be pretty shocking to actually figure out.

  11. Oh I’ve been listening to a bunch of podcasts I missed when I was computerless for a couple of months earlier this year and one question that came up was the preservation of butter. You absolutely correctly said that getting more of the buttermilk out and adding salt will indeed also help. However, if there is a real surplus of cream as sometimes happens in the summer, consider looking into making ghee, at least for cooking.

    Ghee is how the people in India coped with the situation, it involves slowly heating the butter over low heat until the oils separate from the milk solids, then draining off the oil into clean glass jars and covering them. I have heard that it lasts indefinitely without refrigeration but although I’ve made ghee I’ve never experimented about how long it would last.

  12. In regards to the septic tank and garbage disposal. We built our house over 20 years ago and moved in and put just about everything down the garbage disposal as we could for the first few years until I did set up a compost. We have never had to have it cleaned out or any issues. We may just have a good system. So, I wouldn’t fret if Dorothy was to put down something in your garbage disposal that you didn’t quite agree with. It’s all good, I just thought I would share that.

  13. To the caller looking at Texas hill country. Its what Jack referred to as land porn when I was at his place. Jack was spot on with his suggestions. You can research water access on that website. I would suggest getting topographical maps for properties that you are looking at. Land with character: subtle elevation changes, water access, tree groves, natural creeks and springs, etc.

    I live in Liberty Hill. I am outside of Austin by about 30 miles. The commute is well worth it. Consider Burnet county as well. There are wonderful water ways and lakes in the area, but the price of land goes up for it.

    The Second Trinity Aquifer shows an excellent forecast for water availability for many years. Make sure your well goes down to it. Most likely 700 to 800ft down.

    I have two recommendations. Make sure that you have a water reservoir built into your well house. A large reservoir will help with out gassing and sediment to settle. Try and pick your house placement on a decent enough slope to allow for a conventional septic system (gravity). This will allow you to avoid needing pumps, grinders and other electronic components that will fail.

    Send me a contact request through my website if you want more ideas or suggestions. It can be reached by clicking on my name.

    Good luck!

  14. Bob from Flagstaff,

    I’m in Arizona and I am very interested in why you are choosing to go to Texas instead of buying land in Arizona. There are many places with similar or maybe better land than the Texas hill country. Again, I am truly interested as I am starting to look for land and need to make the decision to stay in Arizona or look elsewhere.


  15. Since you mentioned Mark Shepard….I went to a talk he gave this past Friday at a local farm here in central Illinois. His presentation is basically the same one that is on youtube, but I still enjoyed it. His ideas make sense and he helped me with some concepts that I was struggling to understand. However, I asked him a question at the end of the night and his answer was completely unexpected. I may call it into your show just to see what you think.

    One of the best (and most frustrating) parts about permaculture is learning from the different teachers. Because there is no centralized authority on permaculture, everyone can interpret and teach it differently. I love hearing the different outlooks on the design methodology and how other people have incorporated their experiences into permaculture. I think it goes to show that no one is right or wrong about permaculture. The validation comes through the evidence of a thriving, abundant permaculture farm. Geoff Lawton, Sepp Holzer, Mark Shepard – all have thriving farms and they all think and teach differently. Permaculture teaches me so much…not just about plants, but about life in general.

    • It was great to hear and see Mark in person at that event. Were you the one that asked about a species of plant? I met a couple of people at that event that listen to Jack. There was one lady that is signed up for the PermaEthos PDC.

      • Hmmmm…I wonder who you were?!? No, I did not ask about the species of plants. I asked Mark about access to land 🙂

        Good to know there were a few TSP listeners there!

      • Tall guy with Orange U of I t-shirt, short brown hair. I sat in the room that was connected to the front door. Are you taking the PE PDC?

    • His presentation was almost just like the podcast he did with Diego on permaculturevoices. If it wasn’t for Jack I wouldn’t know about Diego, Mark, and Greg. Thanks Jack!

      I am planning on getting the video of PV1 later in the month.

  16. Pleasantly surprised to hear the mention of homebirth. I had most of my children at home with a midwife (Love you Cyndia!)

    It was so nice to be able to sleep at home, in my own bed with the babies in the side attachment afterwards. Couldn’t really sleep in the hospital, knowing anyone could walk in at any time (And they did!)

    And that was just one of the benefits.

    I encourage anyone who is thinking of expanding their family to read up on homebirth. 🙂

  17. Hey Jack,

    I’m a little late on listening to this podcast, but you mentioned that you do not grow many lettuces in your garden. I’m in Michigan, and all of my leaf lettuce bolted this week, so my lettuce season is done since I didn’t set up a shade cloth area since this is my first year. So that made me think – what veggis do you grow that you regularly eat?

    Lettuces and other greens (such as Swiss chard and spinach) are my favorite garden veggis, but I’m curious what else I should try next year (or maybe there is still time this year).

  18. re: the berkey- i have cleaned my filters [quick scrubbie rub] dozens of times. They are about 3 years old & going strong. They get covered with green goo after a month so i try to clean them before that happens ewer few weeks. This is with NYC so-called ‘clean water.’ We have microscopic crustaceans [kosher if ya can’e see em!] but with farm runoff our water is no longer the great new york water of 20-30 years ago… berkey rocks! berkey guy rocks! great show as usual!

  19. Jack, John from Virginia here. Thanks for the answer on the “SEP” IRA, right I didn’t mean SEP, I meant selfdirected. Spot on answers thanks. You hit the nail on the head at the end of the answer: yes, I have lots of money in my IRA from years of saving, and rolling over a 403b. Real tempting to take it out and buy land but its either taxes or restrictions on its use. You may be right, better to bite the bullet (hopefully in a lower tax year) and control the money. And Paul above covered my other idea. It is only $50K max, but I can borrow against my thrift savings plan, buy land, and pay myself back over time.
    BTW you may have finally convinced me that Roths beat traditional IRAs: I had always been considering the tax deferral now beats any promise of not taxing a Roth in the future. I guess I always figured that promise could easily be broken by means testing Social Security. “Oh look, you have all this money in your Roth, you don’t need all this social security do you?”

  20. I believe Jack mentioned selling a home and being able to keep $250,000 per person so a couple would be able to keep $500,000 tax free in gains. But I think he said you could only do that once in your lifetime. Unless the laws have changed you can do this over and over again. You have to have lived in the home 2 of the past 5 years. Some people fix and flip their homes every two years because of the tax free income. And I just researched it and the law that changed the rules was “Taxpayer Relief Act of 1997 ”
    Much more info here.

    • You can do it over and over UP TO 500K as a couple. That means, I sell house A, we make 50K it is tax free, we now have 450K left. We sell house B, we make 100K we now have 350K left. So yes the 500K is “one time” in that it is a limit but you are not limited in how many times you use it till you hit said limit.

      I would also say it is likely to be the least likely audit trigger that exists if it is cumulative over years and years. If you tried it in a single year with a big gain, (say 700K) your gonna get nailed but I highly doubt even the IRS has the man power to be adding up the total gains on sales of property over two decades or so for every tax payer. The thing is you don’t even put the gain on your return if it is under the limit. It isn’t like you put in, “Real Estate Income = 45,000” one one line, then “Prorated Deduction on Personal Real Estate 45,000” on another line to zero it out. The tax free income isn’t done with a deduction, there is just no reporting requirement on it.

  21. Jack the article says you can make $250K each person each time you sell a home which is how I’ve understood it.
    From the article
    “Even better, there’s no limit on the number of times you can use the home-sale exemption. In most cases, you can make tax-free profits of $250,000 (or $500,000 depending on your filing status) every time you sell a home.”

    If this was not the case you would want to keep all your receipts for improvements as you would have to keep track of your expenses to figure out what your profit is exactly. This would only apply now it you are making more than the $250K per person on a sale. The only question I’ve heard at closing is “has this home been your primary residence for 2 of the past 5 years”, which is what it takes to qualify.

    • IF that indeed matches the IRS’s actual guidance, that is great. It is not how I understood the code though.

  22. The healthcare rant…. facepalm. Look, I’m a nurse and I’ve worked NICU and C-sections can at times be done when not necessary but most are done for a reason. If you have a problem with the concept then take the time to research your doctors. I’ve also seen some not great midwives… and rather sick kids as a result.

    Please don’t make the whole industry sound like a bloodbath and money machine. The majority of my patients sincerely need to be in the hospital. And, I’m STILL seeing tons of patients with NO insurance even in this age of Obamacare.

    I know I’m posting this days late, but it irritates me to hear and read rants about the industry when I daily see lives being saved. Not aided, or helped, flat out you would be dead if not for the doctors and nurses, saved.

    • Well Jim I don’t think the entire industry is a “blood bath” I do think the entire industry is a money machine though and nothing you just said changes that. The numbers for C-sections alone are simply indefensible, completely and totally indefensible.

      Frankly I always say it, if I am in a wreck and have a Yield sign in my spleen I want nothing more than the life saving doctors of an ER and I want it as fast as I can get it.

      When it comes to child birth, the industry is now little more that a cash machine. The costs are ridiculous and the way it is handled is a disgrace.

      Guess what the thing en vogue is this week, stories on all the major networks about the rise in home births. Of course some bimbo in a white coat says “it can work for some but you are best off in a hospital where you know you are safe” at the end of each segment. They can’t just call it dangerous when so many do it safely.

      You say research the doctor, hospital and procedure? I’d rather see people research and find a good midwife and work with their obstetrician along the way. If a hospital is needed or if a procedure is warranted, they will know and any good midwife would know when to agree with any good obstetrician.

      The bill to have a child in this nation today, the cost alone, is criminal. Please don’t defend it.

      • Agreed. The doctors wouldn’t even entertain letting my sister have a VBAC and she was cut the same way I was. Now the standard seems to be “Once Cesarian, always Cesarian.”

        If I ever have another baby, as long as my pregnancy is healthy, the birth will be at home.

    • I appreciate the feedback comments.

      My point of view is having taken care of plenty of newborns who were stressed and sick from a prolonged delivery gives me a different view on the topic. I’m not even saying that one should not use a midwife, I think there are some excellent ones out there and being at home would be way more comfortable. I cant and wont argue against the fact that there are too many C-sections, yet the concept that doctors are pushing them for convenience was not what I was seeing as a whole. Maybe I was just seeing the C-sections that were more complicated, so perhaps I’m missing part of the picture.

      As to the money making side of it, I can kind of see what your saying but I think it’s not the whole story. OB doctors certainly have a lot of stress and should be compensated. Maybe some are pushing more expensive C-sections for insurance payments, I dunno. My youngest was a C-section and it was not a choice, it really was necessary.

      Anyways, I’m in a different part of the experience now, mostly traumas. I didn’t want to see the drug babies anymore, I needed a break.

      • Also, why is there automatically a picture associated with my post. I don’t recall setting that. I use that picture on a very separate forum, but don’t remember setting it on here. It always was the generic anonymous one before.

  23. Concerning the lettuce crop growing faster:

    I’m no gardener, but I’ll bet it reacts the same way as grasses do. Jack, your second “hunch” was mostly correct. Here is the short, short version of why grasses grow back faster when grazed vs. turned into hay (concerning just that portion of the reasons this is the case):

    When a cow or deer eats a grass plant, a portion of the roots die back. The plant roots death triggers communication to little critters in the soil to come eat the decomposing plant matter. This stimulates faster regrowth of the root system and hence the vegetative above ground portion of the plant. If that same grass is clipped for hay production, none of the above happens or happens much less. The cutting was so swift that the plant doesn’t realize it’s been “eaten”. No “tugging” action occurred to trigger the response from the roots to the soil critters.

    The best biological, scientific explanation of this I’ve ever been given was from a man named Ray Archuleta (from NRCS). You can find him on youtube.