5 Questions: Debt Forgiveness, Credit Scores and More Golden Butterfly

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Table of Contents  
  1. Thanks. Everyone!
  2. Show Notes

It’s time for 5 questions about debt forgiveness, credit scores, and more Golden Butterfly. We got a ton of great questions lately, and the Golden Butterfly episode generated a lot of interest, so we wanted to dive a little deeper.

Question One: Golden Butterfly Questions

Part A
I travel so damn much for work. This year only, it’s February 28th, and I’ve been on 14 flights for 70 hours and a total of 51,275 km. For me, flights are my time for podcasts and spreadsheets. I love getting in the numbers.

So, specifically which funds/investments were made to balance out the Golden Butterfly? And which technology or medium did you use?


As a refresher, this is what the Golden Butterfly portfolio looks like.


  • 20% Domestic Total Stock Market VG fund
  • 20% Domestic Small Cap Value


  • 20% Long Term
  • 20% Short Term

Real Assets

  • 20% Gold

Golden Butterfly Portfolio

Where can you build this portfolio? If you have $100,000 or more in Betterment, you can DIY it there. If you don’t have that much you can put it together with the Vanguard Domestic Total Stock Market Fund (VTI), Domestic Small Cap Value (VBR), Short Term Bond Fund (BSV), Long Term Bone Fund (BLV), and Gold (GLD).

Part B

Fresh off the Golden Butterfly episode. Is there a periodic “rebalancing” that needs to happen to maintain that 20% bucketing of assets? Or is that the starting point and you let things go from there? Thanks for a great episode. Spot on with things I’m currently bumping my head against.


M1 Finance is a tool that allows you to automate the proportions you want in your portfolio and they handle the rebalancing for you. You can dollar cost average your contribution each month, and M1 Finance will rebalance for you by buying more of what you’re out of balance in to bring your total portfolio back into balance.

Question Two: Too Good to be True? Student Loan Edition

I recently graduated from Florida State University and have racked up about $35,000 worth of debt. Luckily, the day I graduated I started getting a paycheck from the US Navy.

Now I stumbled upon a program that will forgive my student debt after 10 years of public service as long as I make 120 minimum payments over that 10 years. So I’d pay ~$18,000 of my $35,000 bill.

My question is would it be better to take this longer option which I would pay less in the long run or throw all the money I can at the debt to make it go away faster?

I’m torn between the idea of spending less or the relief of being debt free sooner. I hope I can get your advice on this! Thanks!

Very respectfully,


There are several programs for student loan forgiveness. If you qualify, it’s a great tool. In this case, it will free up $17,000 for Elizabeth to invest where she will get a better return over time than she would pay in interest.

You can't retire on a $0 student loan balance.

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Even if the program were to be discontinued, she would have made more than the remaining $17,000 balance through her investments. The only caution is to not refinance these student loans. Once the loans are refinanced, they are no longer federal loans, but private loans and private loans are not eligible for student loan forgiveness programs.

Question Three: Just starting saving….. at 42

I’m about to turn 42 and have only really been saving for the last few months. I’m able to save 30% of my salary and in fear of the possibly impending economic collapse and end of times* have decided to put that in a “high” yield savings account with CIT Bank (not Citibank). I chose them based on them having the highest interest rate: 2.54%.

How careful should one be in trusting their money with a smaller, lesser-known bank such as CIT? Is liquidity on par with the bigger banks? Given my age and my tomfoolery of only beginning to take my
financial life seriously now, how do I strike a good balance between age suggested low-risk investments and higher risk ones for larger returns.

I feel that I must take greater risks as I have little late in life, but that goes against most of what I’ve read which always suggests being conservative as you approach 50. Again, I’m only 42. Only.


Saving 30% of your salary is a great achievement but yes, starting a little late makes a difference. If you continue to save 30% at age 42, you can retire in 28 years when you’re 70. If you could crank it up to 40%, you could retire at 64.

Your money is safe with CIT, and that’s not a bad interest rate for a bank account. But not good enough. You need to be investing, especially at this late stage. The conventional wisdom tells us to be more conservative as we near 50 and that’s true. But only if you’ve been investing for decades.

If you want to make up for lost time, you’ll have to be less conservative. How much less depends on your personal tolerance for risk.

Question Four: Credit Score Bump

My husband and I are looking to by a home in the relatively close future. My credit score is 760, and his is 700. I added him as an authorized user to my credit card to bump up his score; it was at 600 before that.

I am trying to get his score up as quickly as possible so we can get pre-approved. He has $13K of debt on an auto loan of 8% (which is nuts). He over-pays his auto loan every month buy $200 to get it knocked out.

Since we are so close to applying for a mortgage is it even worth it to refinance his auto loan now that he has a higher credit score? Or would that actively harm the process of getting a mortgage? Would it make sense to have him open his first credit card and just putting our gym membership on it so he would have more on-time payments and more available credit? Or again is that too much activity too close to applying for a mortgage.


Don’t be in such a hurry to buy a home! If we’re heading towards a recession as many experts agree we are, housing prices will tumble, and you can get a bargain.

Use the extra time to increase your credit scores. Anything above about 780 will get you the best interest rates. Why is that important?


Here’s an example:

If you buy a $300,000 home with 20% down at 1% interest (you can’t get a mortgage for that rate, this is for illustrative purposes), you’ll pay $37,900 in interest. So for every additional interest point, you’ll pay almost $40,000. For every point lower, you’ll save nearly $40,000. Pretty good incentive to wait.

A streamlined refi could be a solution to the car loan. You’re changing the interest rate to a lower one but none of the other terms. Opening multiple credit cards and putting one payment (Netflix or something) on each one raises your credit score two ways. It reduces your utilization (below 30% is what to aim for) and increases on-time payments. So long as you make on-time payments. 

Yes, a refinance and taking out credit cards impacts your credit score but not by a lot and only temporarily.

Question Five: 7k hope you can help

I’m 36 years old with a 4-year-old and a 1-year-old. I’ve saved up $7,000. I’ve got about $10,000 in credit card debt. Other than that I’ve got my mortgage and car payment. Additionally, my wife has about $50,000 in student loans.

I want to get healthy financially. I fully contribute to my company 401k but don’t invest anywhere else.
Wondering what to do with this savings. I fear to spend it on debt in case I need anything for the kids or the house. I’ve considered opening a smart saver with some of it or starting a Betterment account in general. I’d love to invest but I’m clueless where to start.

Thought about seeing a financial planner. I’ve committed to getting financially healthy this year so here I am. Part of getting financially healthy has led me to your podcast. I’d ultimately love to start a business though no clue on what but that’s the dream.

Kind of lost.
FYI- I’m drinking Tito’s and club. Lots of ice.

You have two choices. You can take out a loan through a company like Lending Club or Earnest and use it to pay off the credit cards. Yes, you still owe money, but it will almost certainly be at a lower interest rate than your credit card charge.

Or you can decide you don’t want to mess around with a loan and take the $7,000 and pay the cards off. You can pay off the remaining $3,000 relatively quickly and be done with the whole thing.

Should an emergency expense come up (and we mean a real emergency) you still have the credit cards. Once the cards are paid off, it frees up a lot of money to start saving a proper emergency fund.

If you want to start a business, come check out Matt and Andrew’s other podcast, Money Lab. They talk about all facets of starting your own (mostly) online business.

Thanks. Everyone!

We’ve been doing 5 questions episodes more regularly because we get so many great questions so keep sending them in!

Show Notes

Imperial Doughnut Break: Evil Twin Brewing.

 Canvas: Outer Range Brewing Company

Candice Elliott - Senior Editor
Candice Elliott is a substantial contributor to Listen Money Matters. She has been a personal finance writer since 2013 and has written extensively on student loan debt, investing, and credit. She has successfully navigated these areas in her own life and knows how to help others do the same. Candice has answered thousands of questions from the LMM community and spent countless hours doing research for hundreds of personal finance articles. She happily calls New Orleans, Louisiana home-the most fun city in the world.
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