
If You’re Worried About Money, Watch This
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Financial stress has a tangible negative impact, impairing cognitive functions and hindering one's ability to perform at work, manage finances, and build a desired future. Joel Larsgaard, co-host of the "How to Money" podcast, aims to help individuals break free from this cycle, drawing from his upbringing witnessing his parents' financial struggles. His own financial journey and advice heavily feature real estate investing, particularly through house hacking and allowing equity to compound.
Larsgaard's passion for personal finance stems from his childhood experiences. He observed his parents making poor financial decisions, such as buying a home slightly beyond their means based on the expectation of future promotions, which ultimately led to significant financial distress when those promotions didn't materialize and his father was laid off. This created a stressful atmosphere at home, fueling Larsgaard's desire to handle money effectively to avoid similar issues in his adult life. This personal motivation converged with his professional career when he worked for syndicated consumer advice radio host Clark Howard for 14 years. This experience allowed him to address his personal pain point while realizing the widespread nature of financial challenges faced by millions of Americans.
The conversation then shifted to the debate surrounding whether it's harder to be in the middle class today compared to previous decades. Larsgaard acknowledges that certain aspects are more challenging, citing the disconnect between the average income needed to purchase a median-priced home and the actual cost, which has worsened even in the last five years. However, he also points to ways in which it has become easier. Information on personal finance is more accessible than ever, and initiatives like automatic enrollment in 401(k) plans have made saving and investing more passive for many. He notes the increasing investment keenness of Gen Z, attributing it partly to a realization that the onus for their financial future rests on them, leading to more proactive investing.
Larsgaard emphasizes that personal finance becomes even more critical during difficult economic times. He observes that during recessions and events like the COVID-19 pandemic, savings rates tend to increase as people respond to negative events by saving more. He advocates for proactive saving, suggesting that preparing for such eventualities prevents drastic lifestyle cutbacks when they occur. He also highlights the role of individual expectations and the abundance of consumer goods as contributing factors to current financial struggles. He suggests that a willingness to want less and adjust expectations, such as being content with older vehicles or smaller homes, can significantly reduce financial strain. He uses an anecdote of a friend taking out a 401(k) loan for a pool and another loan for windows, alongside purchasing two Teslas, as an example of decisions made to keep up with perceived societal norms rather than actual needs. He stresses the importance of focusing spending on what truly matters to an individual, rather than succumbing to peer pressure.
The discussion then moved to the concept of intentional spending and avoiding the "deprivation mentality" often associated with personal finance. Larsgaard uses the example of his enjoyment of craft beer, acknowledging he's willing to spend a significant amount on it, while being more frugal in other areas, like driving an older vehicle. He contrasts this with a desire to live for the future at age 65, calling it "lame advice." Instead, he advocates for a balanced approach: saving for the future while positively allocating funds towards enjoyable present-day experiences. He and Dave Meyer discover a shared affinity for older Toyota 4Runners, highlighting how personal values dictate spending priorities. Larsgaard also mentions his fondness for splurging on fancy hotels and vacations, demonstrating that a personalized approach to spending is key.
Larsgaard's personal real estate investment journey began in September 2009 in Atlanta, a period of low prices but economic uncertainty. He recognized that the cost of homeownership, even with a mortgage, was comparable to or less than renting, especially when factoring in the potential to rent out rooms. This led him to purchase his first single-family home for under $100,000, viewing it as a "once in a lifetime opportunity" for long-term price appreciation. A few years later, as prices rose, he adopted a strategy of buying a new property every couple of years, renting out his previous one, and holding them for the long term. He describes this as a methodical approach to building wealth.
Initially, Larsgaard didn't immediately consider himself a real estate investor, viewing his early ventures as opportunistic. However, through experience, he learned essential skills like finding good tenants and planning for vacancies. He emphasizes that while real estate investing isn't easy, it's fundamentally simple and understandable. He highlights the importance of "buying well," especially in the current market, and cautions against rushing into real estate solely based on the idea of it being a path to riches without thorough due diligence.
While building his portfolio, Larsgaard continued to contribute to his 401(k) and Roth IRA, setting a personal benchmark of maxing out his employer match and Roth IRA contributions before investing further in real estate. His portfolio grew to include two single-family homes and a duplex. He self-managed and performed many repairs himself, believing this hands-on approach was crucial for learning and profitability, especially in the early years. He learned the critical importance of thorough tenant screening. He later acquired another duplex and employed a house-hacking strategy by purchasing a property to live in while renovating his primary residence, then converting it into a rental. This involved periods of discomfort, like his infant son sleeping in a pack-and-play in a small bathroom, which he deemed necessary for acquiring a property that would make a good rental.
Larsgaard stresses the importance of understanding one's risk tolerance, contrasting his own preference for "boring rental properties" and a slow-and-steady approach with individuals who might take on higher risks for quicker gains. He advocates for a comfortable life rather than extreme wealth accumulation, suggesting that real estate can facilitate this with lower risk. He also touches on the concept of "thinking in bets," separating decisions from outcomes, and advises against beating oneself up over past decisions made with incomplete information.
He notes that the current environment makes it harder to maintain a slow, fundamentals-based approach due to the abundance of noise and advice from influencers. He reiterates that financial independence is a journey, not a destination, and encourages celebrating incremental wins like acquiring profitable rental properties. He contrasts this with the pressure to achieve a specific "financial number" quickly, which can lead to excessive risk-taking. He champions a "stealth wealth" lifestyle, where financial success is not overtly displayed, citing that many outwardly affluent individuals may not be financially secure.
Regarding the current real estate market (as of 2026), Larsgaard describes it as an "interesting spot" with unpredictable outcomes that vary significantly by market. He advises investors to conduct more due diligence than ever, plan conservatively for contingencies like vacancies and maintenance costs, which have risen significantly. He personally adopts a "risk-off" approach in the current macroeconomic climate due to uncertainty, emphasizing the importance of a longer-term ownership horizon (at least seven to ten years) to mitigate risks.
In terms of other asset classes, Larsgaard remains an optimist about the long-term economic dynamism of the United States. While acknowledging the potential for corrections and recessions, he believes in investing like an optimist over decades. He advocates for low-cost, diversified index funds for stock market investing, rather than individual stock picks. He advises against investing short-term funds (18-24 months) in the stock market, recommending high-yield savings accounts instead. He expresses faith in the US economy and suggests that owning a portion of the global economy is also wise. He concludes by emphasizing that optimism, coupled with a long-term perspective, remains a strong case for future investment success.
People can find Joel Larsgaard on "The How to Money" podcast, which releases three times a week and is available on all major podcast platforms.