Podcast Episode 194: Answering Questions on Renting, Health Insurance, and Dividends

Today’s Wisdom:

We turn to the mailbag once again and answer the questions that are on your mind. Today we have a few that will cover a wide range of topics, including health insurance, renting vs owning, and whether you can invest exclusively in dividend-paying stocks.

Want to save time? Click the timestamps below to jump ahead to specific spots in the episode.

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What You’ll Learn:

Every week we try to move our focus to one specific area of financial planning for the podcast, but we do our best to take your questions and answer them on the show for everyone to learn from.

That’s what we do on this episode of Money Wisdom. Three very good questions hit our inbox and we ask Joel to provide guidance on each topic with the information available. As always, you want to get specific advice from a financial professional before making any decisions. Having a plan in place is always the best approach.

Renting vs Owning

The first question on the show comes in from someone who is weighing the decision to sell their home and start renting. Believe it or not, a lot of people are in this same boat right now. It’s not a concept many people bought into 15-20 years ago, but more and more people are moving towards renting instead of owning. There are many benefits to renting like not having to worry about repairs, property taxes, and other expenses that retirees are starting to prefer.

It all comes down to personal preference. Many people still want to own something and build equity over time, but don’t be close-minded to the idea that it might make financial sense or lifestyle sense to rent instead.

Health Insurance

The next question we received comes in from someone that is trying to decide on whether or not to get married because it would impact access to health insurance options they currently have. This isn’t something that we can really guide you on because it’s up to you to determine what you’re willing to sacrifice. Is that extra savings more important or is the marriage? That’s only something you can answer but we’re open to helping you explore your options if you want to set up a Money Map review.

Investing in Dividend-Paying Stocks

Our last question for this episode asks about investing in dividend stocks. For this listener, they think it’s an easy strategy and wonder why they would need to do anything else. Well, if you can buy enough high-quality stocks to earn enough off the dividends, then that’s great and it could work.

But keep in mind that the value of that portfolio will likely drop by 40% or so at some point. Are you comfortable hanging in there when the market drops significantly? Most people can’t stomach seeing such a large chunk of their portfolio losing that much value so asking yourself that question first is a great starting point.

The bottom line though is there aren’t many people that have saved enough or built a large enough nest egg to just live off the dividends from stocks, but it could be an option for some.

If you ever have anything on your mind, feel free to reach out and send your question in and we’ll do our best to work it into a future episode.

Let’s get started with the show. You can listen to it by using the audio player above and click on the timestamps to skip to a specific topic of conversation.

[0:09] – Mailbag Question on Renting vs Owning

[3:24] – Mailbag Question on Health Insurance

[4:54] – Mailbag Question on Dividend-Paying Stocks

Thanks for listening to this episode. We’ll be back again next week for another show.

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Final Thoughts:

“When you put pen to paper and you start to do the math, for many, many retirees from a convenience standpoint and a pure cost standpoint, a lot of folks come to the conclusion that they’re better off renting than owning.”

– Joel Johnson, Money Wisdom Podcast

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