EP165 – Strategy for rising mortgage rates; Best funds for your 401K; Best time to fund your IRA

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Great questions sent into us this week with a common theme around the rising cost of living, war in Ukraine, gas prices, buying a home now with rising interest rates and more. We have received so many positive comments about these episodes. If you have a question for us please email to

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Just curious if I understand properly. Say mortgage rates get to 12% again, like they did in early 80’s, and real estate is still high.

1) is it still better to mortgage a house than rent?

2) would it make more sense to pay the mortgage off before putting 15% in retirement that is making under 12% most years?

Dave Ramsey recommends splitting up your 401k into four buckets evenly as in 25% each, right? The four buckets are all low cost index funds, large cap, mid cap, small cap, and international. Is that right? The returns are highest with Large cap, then a little less with mid cap, a little less on small cap, and international is the lowest returns over a ten year period. Is there a reason I shouldn’t put all 100% into large cap index fund that is averaging returns of 16% per year? The international index fund my employer offers is at 6% return.

How do you guys contribute to your Roth IRA? This is my first year contributing. My initial plan was to just dollar cost average every month until it was maxed out annually, but I’ve seen a lot of people just throwing the max contribution into the account ASAP for that year. Any thoughts?

I need some advice. I’ve spent $7,781 in the past 7 months in car repairs. (Transmission, lower control arm, axle, throttle body, etc.) I have a 2013 Jeep Compass (I now know this isn’t the best car) with 180,000 miles on it. I drive 60 miles everyday to work so I need something reliable.I’m thinking of selling my jeep and grabbing a 2011 or 2012 Corolla, Camry, Civic, or Accord as I heard these were the best cars.My question is: Should I keep the jeep (due to the amount I’ve already spent on it) or trade it in and get a different car with around 100k miles on it for around 10k? I can get about $5000 for the jeep.

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