Speaker 1: Welcome to Out of Money. I'm Joel.
Speaker 2: I am Matt, and today we're talking paper, wealth, target,
Speaker 2: date trends, and bye bye Buffett.
Speaker 1: You know what, buddy, this is our Friday flight where
Speaker 1: we're going to tackle the most pressing personal finance headlines
Speaker 1: out there, specifically how they pertain to your wallet. Joel,
Speaker 1: you got to note here about Walmart. What's what's the
Speaker 1: latest with Walmart?
Speaker 2: I want to give you a big fan I want
Speaker 2: to give a quick I'm not not a fan of Walmart.
Speaker 1: Walmart. Yeah, so we've been doing more shopping there lately.
Speaker 1: It's just not our you know, there's only one place
Speaker 1: in my heart, and it's shaped like Aldi.
Speaker 2: You should actually get an Aldie tattoo over your heart.
Speaker 2: I think that'd be great, maybe one of these days.
Speaker 2: So okay to two different retailer police. Then I wanted
Speaker 2: to highlight here one that's consumer friendly in one that's
Speaker 2: not so Walmart. And I didn't realize this until I
Speaker 2: went in the other day. I bought some shoes from
Speaker 2: my little dude online and turns out they were too big,
Speaker 2: so I had to go in the store.
Speaker 1: You're not gonna hang on to them, wait for them
Speaker 1: to grow into them.
Speaker 2: You're right, I probably could, but I had to go
Speaker 2: in anyway, okay, right to buy the right size, and
Speaker 2: they the when I got there, the price at the
Speaker 2: store for those shoes was higher than it was online,
Speaker 2: and they wouldn't let me do an exchange. And they
Speaker 2: wouldn't so I could return and then I could buy
Speaker 2: and then if but then I was going to be
Speaker 2: spending more than what I would have paid online. So
Speaker 2: they that I was just unfamiliar with the fact that
Speaker 2: Walmart does not match online prices in stores, which to
Speaker 2: me does not seem And I guess I would get
Speaker 2: it too, because there's more third party sellers on Walmart. Now,
Speaker 2: if it wasn't actually sold by Walmart, it's like, all right,
Speaker 2: I get that, don't price match that. But if it
Speaker 2: is sold in Walmart item, Yeah, if it's sold in
Speaker 2: ship by Walmart, why wouldn't they match it?
Speaker 1: You know, who would match that? Who's that Aldi? Would
Speaker 1: I don't know how many pairs of shoes they're buying
Speaker 1: an Aldi, But you know, like Kate and I we
Speaker 1: joke about this. Anytime there's something kind of random that
Speaker 1: we need, we just look at each other and I'm like, oh,
Speaker 1: we've just voiced it into existence, because then you walk
Speaker 1: down that seasonal aisle or like I swear it pops up,
Speaker 1: it's there, Like you were recently talking about getting a
Speaker 1: composter tapped into your home. I think it just means
Speaker 1: that I'm just way more typical average American consumer than
Speaker 1: maybe I would like to admit. That could be. That's
Speaker 1: all I go.
Speaker 2: So I highlighted I highlighted a negative store policy. Let
Speaker 2: me highlight a positive one from best Buy. So my
Speaker 2: dad texted me and he's like, hey, I know you're
Speaker 2: like where you live, they're better about picking up old
Speaker 2: electronic items and stuff like that. Can can I drop
Speaker 2: them off at your house? And can you ask your
Speaker 2: trash provider to pick it up? And I was like, yeah,
Speaker 2: but you know you could take this stuff to best
Speaker 2: Buy instead. And when you go to best Buy, look
Speaker 2: at their like electronics recycling page. They will take almost
Speaker 2: anything for for free. So if you've got like my
Speaker 2: dad had, like old modems and DVD players and stuff
Speaker 2: lying around remotes, they'll take old TV's under a certain size.
Speaker 2: So if you're like I've kind of accumulated a lot
Speaker 2: of junk electronics that's past their prime and they're not
Speaker 2: you can't sell them, and you're gonna actually have to
Speaker 2: actually pay money to dispose of them.
Speaker 1: See take them to best Buy. I know you're supposed
Speaker 1: to recycle, but I think there's a whole lot of folks, dude,
Speaker 1: who are out there just tossing that stuff. You know.
Speaker 1: I think that's probably like do you ever feel that
Speaker 1: way about recycling?
Speaker 2: Kind of can't with a fifty five inch TV, but
Speaker 2: you probably can with that old murder.
Speaker 1: But could he not sell that fifty five inch even
Speaker 1: for like well it was maybe. I mean that's a
Speaker 1: good point too, because like a no, no, here's a
Speaker 1: flas screen, but like the screen just went out, you
Speaker 1: can't sell that.
Speaker 2: Yeah, I was gonna say, I mean maybe there's some
Speaker 2: tinkerer hobbyists who would be interested in that.
Speaker 1: You know. What I was gonna say was that sometimes
Speaker 1: I feel like it is not a futile endeavor, but
Speaker 1: like it, like recycling, like I do regular recycling. Like
Speaker 1: this morning, even I was preparing some strawberries from my lunch,
Speaker 1: Like what did I do with a plastic strawberry container?
Speaker 1: Tossed it in the recycling bin, like we could know
Speaker 1: we're even composting actually, like we are, like we're cutting
Speaker 1: the little tops off and so hip we are reducing
Speaker 1: our wasst and so we are doing our small little part.
Speaker 1: But like sometimes when I think about it, I feel
Speaker 1: like we are only moving the needle, like points zero
Speaker 1: zero zero zero, Like I don't know, you can put
Speaker 1: tons of zeros one percent, like just even in our country.
Speaker 1: Like and when I start thinking about the world large,
Speaker 1: like at large, like you think about China, if you
Speaker 1: think about countries that are burning massive amounts of coal
Speaker 1: fossil fuels, and how does that they handle waste, I'm
Speaker 1: just like, man, maybe like for our little neighborhood over here,
Speaker 1: we're doing a good thing. But I don't know, sometimes
Speaker 1: I get discouraged when I think about just the world
Speaker 1: at large, man, and all that's going on. Oh man,
Speaker 1: we went broad. You should still do the right thing.
Speaker 1: I like, we are still recycling, but sometimes I have
Speaker 1: a hard time, I guess, get getting super excited about that.
Speaker 1: But that being said, I'm glad you brought the policy up.
Speaker 1: Talk about the deforestation of the Amazon rainforest. Now, Matt,
Speaker 1: it's and it's certainly great that there are companies out
Speaker 1: there who are processing these electronics, making sure that there's
Speaker 1: not what is it lad and mercury getting into the
Speaker 1: water supply and different things like that. Agree, glad that
Speaker 1: they're taking care of that, because I don't want to
Speaker 1: be living somewhere man where those forever chemicals and whatever.
Speaker 1: Is that that what they're called forever chemicals? Yeah, forever
Speaker 1: thinks forever plastics. Yeah, that's the new thing now, plastics, microplastics.
Speaker 1: We're all eating the microplastics inside of us. It's true.
Speaker 2: So trying to highlight something good and bad, I feel
Speaker 2: like we have down more of the bad path.
Speaker 1: Not bad.
Speaker 2: Maybe, Okay, let's highlight something else that's good though here
Speaker 2: because we talked what last week about the slate truck
Speaker 2: that's twenty grand, which is awesome thing. Love that that's
Speaker 2: good news. Well, now, not just our cars shrinking and
Speaker 2: getting less expensive, but we're seeing signs that new homes
Speaker 2: in the United States they're continuing to shrink in size.
Speaker 2: So I think part of that is because of negative news,
Speaker 2: the higher cost the building, and the fact that prices
Speaker 2: are remaining elevated. Builders are like, well, I can produce
Speaker 2: the square footage of the house that I'm building, and
Speaker 2: I could do just fine and make a profit, and
Speaker 2: I'm gonnapeld more buyers. So and we are seeing some
Speaker 2: price cuts too in the housing market. We're actually going
Speaker 2: to dedicate a whole lot of money newsletter to housing soon,
Speaker 2: so please sign up for that. But yeah, some of
Speaker 2: the new apartment sizes are actually shrinking in size two.
Speaker 2: So when new apartments are being built, especially gen zs,
Speaker 2: they're like, yeah, give me all the amenities, but give
Speaker 2: me a tiny box in which to stick my bed
Speaker 2: and I'll be fine. So I think this is a
Speaker 2: good thing. I think bigger isn't always better, And in fact,
Speaker 2: when you think about it, bigger means more maintenance costs.
Speaker 2: It means higher utility bills. The five thousand square foot
Speaker 2: house versus the twenty five hundred square foot house, Yeah,
Speaker 2: it's going to cost you a lot more money to maintain.
Speaker 2: We talked about secondary cost last week, Well you got
Speaker 2: a factor in the secondary cost of home ownership two.
Speaker 2: And like, I think just bigger is better mentality, maybe
Speaker 2: it's falling by the wayside a little bit. Finally, I
Speaker 2: just think being content to live in smaller quarters, it
Speaker 2: just it means less money going towards housing, and more
Speaker 2: money that you have to save and invest to grow
Speaker 2: your net worth, to have more options when it comes
Speaker 2: to work and free time. The more we tossed into
Speaker 2: our homes, the less flexibility we have.
Speaker 1: Totally agree. Yeah, I also wonder if the pendulum is
Speaker 1: swinging back as well as fewer folks are working from home.
Speaker 1: Now I'm having to go in so I'm just looking
Speaker 1: for a place to crash at night. For the most part,
Speaker 1: I think that's probably true.
Speaker 2: Yeah, for a minute, there was that push towards especially
Speaker 2: I remember my little sister living in a studio apartment.
Speaker 1: That's when they upgraded, right, Yeah, and they were like,
Speaker 1: we can't both work from home here exactly. It makes sense.
Speaker 1: So while we're speaking of homes, the average American homeowner
Speaker 1: is also rich in home equity. Collectively speaking, we've got
Speaker 1: more than thirty five trillion dollars in our homes thanks
Speaker 1: to the appreciation that they've experienced over time. And so
Speaker 1: if you, let's say, bought a house in the last
Speaker 1: ten to fifteen years, you have inevitably increase your net
Speaker 1: worth because of that home, just because of the trend. Yeah,
Speaker 1: it's it is up something like eighty percent since twenty twenty,
Speaker 1: so even the more recent years it has been even
Speaker 1: more significant. But it is really only wealth on paper,
Speaker 1: and it can add to this thing called the wealth effect.
Speaker 1: And let me explain that basically, you feel richer, it
Speaker 1: can lead to increased spending. Because of that, you spend
Speaker 1: a little bit more freely. But you know, the tough
Speaker 1: thing is home equity. It isn't all that liquid. And
Speaker 1: because we are typically beneficiaries of home appreciation right like,
Speaker 1: we are not necessarily working for it. I think it
Speaker 1: could mean for some folks out there that it's easier
Speaker 1: to borrow and spend, kind of like an easy come,
Speaker 1: easy go sort of thing. I think. So I want
Speaker 1: to put this on folks radar because I want them
Speaker 1: to be careful of this. You want to be careful
Speaker 1: of this temptation. I think more than ever, it's important
Speaker 1: to I think the rule of thumb here is to
Speaker 1: know thyself, because I do think that there are some
Speaker 1: folks like I don't think about the homes that we
Speaker 1: own like investment properties at all when I calculate my
Speaker 1: my net worth, when I calculate some far off payout
Speaker 1: amount once the homes are paid for that kind of thing.
Speaker 1: But I think there might be some folks where, you know,
Speaker 1: if they still got the Zillow app on their phone
Speaker 1: and they're like, oh, it's increasing again, that's elevating over
Speaker 1: every price of use. Yeah. It kind of makes me
Speaker 1: think of like credit lines. Like if you are the
Speaker 1: kind of person who can handle a thirty thousand dollars
Speaker 1: available credit on your credit card and you hardly spend
Speaker 1: on that card at all, You don't go anywhere near
Speaker 1: that thirty thousand dollars, maybe put like three hundred bucks
Speaker 1: on it here and there, then I think you are
Speaker 1: probably the kind of person who isn't necessarily tempted by
Speaker 1: that increased home equity. But if you are the kind
Speaker 1: of person who's just like, woh, they just upgrade. I
Speaker 1: got seven more thousand dollars available to me. I just
Speaker 1: went from twenty one thousand to twenty eight like time
Speaker 1: to keeping track of that, time to go out and spend.
Speaker 1: If you, yeah, exactly, if that's if you're that kind
Speaker 1: of person, I would also say be careful when it
Speaker 1: comes to home equities. So I think there's two things here.
Speaker 2: I think one, don't treat your home like a piggybank,
Speaker 2: because if if you do, there are financial repercussions down
Speaker 2: the line. And then also kind of going on that
Speaker 2: wealth effect thing just because it exists. Don't let that
Speaker 2: give you the permission right to spend money in a
Speaker 2: more ridiculous way just because you're like, why, yeah, I'm
Speaker 2: not bloaded, man, I got like three hundred and fifty
Speaker 2: grand in home equity, so I don't need to be
Speaker 2: as worried. I can be a little more profligate with
Speaker 2: my spending. I don't think that's the case. Or let's
Speaker 2: talk about target date funds, Matt. They just crossed an
Speaker 2: important threshold. There are now more than four trillion dollars
Speaker 2: in assets that are held inside specifically of target date funds,
Speaker 2: and morning Star wrote an article about this and they
Speaker 2: basically detailed the rise of target date funds in the
Speaker 2: last couple of decades. They're also holding up better right now,
Speaker 2: right you have in the recent market volatility there because
Speaker 2: of their more balanced approach, they're not going to see
Speaker 2: as dramatic of a decline typically as somebody who is
Speaker 2: invested more like you and I, who's one hundred percent
Speaker 2: invested in stocks. On top of this, z fees on
Speaker 2: these funds continue to decline. Morning Stars said that in
Speaker 2: twenty fifteen they were zero point five to five percent
Speaker 2: on average. Now they're point twenty nine percent on average.
Speaker 2: So I like that target date funds are experiencing the
Speaker 2: same decline in fees in expense ratios that many other
Speaker 2: funds have seen as competition has increased, and the big
Speaker 2: low cost investment houses like Vanguard, Fidelity, and Schwab.
Speaker 1: Have really pushed the envelope on that.
Speaker 2: And so Vanguard and Fidelity in particular have some of
Speaker 2: the best low cost target date fund options. Their expense
Speaker 2: ratio is a heck of a lot less than even
Speaker 2: the average. We're talking about zero point oh eight percent,
Speaker 2: which is pretty darn good. And so for investors who
Speaker 2: like simplicity, who like low costs, I do think it's
Speaker 2: it is important for us to consistently mention that target
Speaker 2: date funds can still be a great option, particularly inside
Speaker 2: of your retirement accounts, because if you invest in a
Speaker 2: target date fund, it's going to automatically shift the allocation
Speaker 2: as you age. It's easy, PZ. It's a set it
Speaker 2: and forget it sort of. And I think target date
Speaker 2: funds while they're not my one hundred percent favorite fully
Speaker 2: optimized way to invest for really young people. I think
Speaker 2: they're still like, don't let perfect be the enemy a
Speaker 2: good They can still be a good option.
Speaker 1: You're still solid. Yeah, let's talk about another investing trend.
Speaker 1: Gold is the talk of the town these days, in
Speaker 1: particularly because of the less predictable economic conditions that we've
Speaker 1: been experiencing. Actually, gold, it has seen better returns than
Speaker 1: the S and P five hundred over the past twenty
Speaker 1: years to think about, and it is. Yeah, it's a
Speaker 1: bit more of like cherry picking data, I think, but
Speaker 1: still twenty here's a long term recent Yeah, I mean,
Speaker 1: but if you zoom out to thirty years, the SMP
Speaker 1: blows it away. Yeah, you zoomed out to thirty forty fifty. Uh,
Speaker 1: you zoom out one hundred years, dude, Like, it's not
Speaker 1: even close. Over the last six months, last six months,
Speaker 1: last twenty years, surprisingly it has done better. But the
Speaker 1: question then comes up, should we all jump on this
Speaker 1: gold investing bandwagon on this trend? Most experts out there
Speaker 1: would tell you that gold isn't a necessary part of
Speaker 1: your investment portfolio, But if you want to hold a
Speaker 1: little bit of gold. I think that can makes a
Speaker 1: whole lot of sense. We always talk about holding five
Speaker 1: percent or less of your overall portfolio in different things
Speaker 1: that we think are okay, yeah, like precious metals, bitcoin,
Speaker 1: like you just gold could be one of those you
Speaker 1: just love this one company and you're like, you know what,
Speaker 1: I'm going to go buy me some Warner Brothers like
Speaker 1: I did after we talked about Harry Potter being released,
Speaker 1: or did you Yeah, I mean, just like one share
Speaker 1: part of your play portfolio. It's just for kicks, just
Speaker 1: to have time stamps. Oh this is when that happened.
Speaker 1: And I don't know. It's just a little something that's
Speaker 1: fun to do. But it's worth mentioning because you're going
Speaker 1: to see more headlines about gold. You're going to see
Speaker 1: more advertisements specifically from gold buying companies, especially with the
Speaker 1: runoff and values that we've seen. They're loaded. Then they're
Speaker 1: gonna be like, y'all need to get in on this,
Speaker 1: and they've got so much money come through our proprietary
Speaker 1: system to buy gold because every investor needs some gold
Speaker 1: in their lives, and they're gonna do the hard pitch.
Speaker 1: We would actually prefer if you want to old some gold.
Speaker 1: We would prefer that you stick with some low cost
Speaker 1: ETFs that invest in gold specifically, like GLDM. That is
Speaker 1: a great option with a very small fee.
Speaker 2: Is Costco still selling the gold bars?
Speaker 1: Depens on the season? Okay? Are they still selling giant
Speaker 1: wheels of cheese of Parmisan? Yeah?
Speaker 2: I guess Palmagano. Yeah, I don't know what the regiano
Speaker 2: the gold buying season is, but yeah, I wonder. Typically
Speaker 2: when they when they put them out there, they sell
Speaker 2: it quickly. But even that, like they're.
Speaker 1: Still selling two thousand dollars Yu steaks, I mean probably.
Speaker 1: Sometimes they put these things out there and I'm just like,
Speaker 1: who the heck somebody is is buying this?
Speaker 2: Obviously somebody is, But I think that you're right, Like
Speaker 2: buying it inside of a low cost ETF makes more
Speaker 2: sense even than buying like physical gold at a place
Speaker 2: like Costco, which is going to give you a better
Speaker 2: deal than you're going to get almost anywhere else for
Speaker 2: buying gold. And some people like I don't want to
Speaker 2: stick it under their mattress or something like that, that's.
Speaker 1: Not a deal.
Speaker 2: Like, if you want some gold exposure, low cost ETFs
Speaker 2: are typically the best way to go. Well, we're talking
Speaker 2: about investing, Matt. Let's talk about the main headline this week,
Speaker 2: the one that hits us right in the sweet spot
Speaker 2: in our hearts. Warren Buffett stepping down as the CEO
Speaker 2: of Berkshire Hathaway, did you shed a tear when.
Speaker 1: You heard the news? I not really. I'm like, yeah,
Speaker 1: he's like so old.
Speaker 2: Good for him at the age of ninety four for
Speaker 2: finally like saying I mean again, it doesn't at the
Speaker 2: end of the year, in seven months or whatever.
Speaker 1: And maybe because I know you and I we've had
Speaker 1: more conversations too, I mean, with Charlie Munger having died,
Speaker 1: we talked about Warren Buffett earlier this year. We actually
Speaker 1: had David clark On talking about the new towel of
Speaker 1: Warren Buffett. Yeah. I don't know, it makes sense. It
Speaker 1: totally makes sense. He's old, he's a sharp guy.
Speaker 2: I don't begrudge him this, and I actually encourage him
Speaker 2: in this endeavor to like I bag work and live
Speaker 2: out the rest of your years with I don't know,
Speaker 2: hopefully a little less. But apparently he's going to remain
Speaker 2: the chairman of Berkshire, so he's not like closing out
Speaker 2: completely altogether. But he really is the goat and and been.
Speaker 2: So many of the moves he's made over the decades
Speaker 2: that you could highlight have been impressive. And Berkshire's returns
Speaker 2: you're talking about the gold versus the S and P.
Speaker 2: Will Berkshire his company, those returns have far outpaced in
Speaker 2: the S and P during his investing tenure, or something
Speaker 2: like basically twenty percent returns versus ten plus percent returns
Speaker 2: for the S and P over those many decades. But
Speaker 2: I think it's important to highlight the fact that he
Speaker 2: is an anomaly and most of us shouldn't aspire to
Speaker 2: be like Warren Buffett. I mean, in some ways we should, right,
Speaker 2: I appreciate his humility and his intelligence, but his frugal nature. Yeah,
Speaker 2: But in other ways, it's like, don't try to do that.
Speaker 2: Because I saw the stat Matt Jason's wagen the Wall
Speaker 2: Street Journal estimates that Warren Buffett has read more than
Speaker 2: one hundred thousand financial statements of companies, and he said,
Speaker 2: that's actually probably pretty conservative. I bet Warren thread quite
Speaker 2: a bit more than that. And my question to how
Speaker 2: the money listeners is are you willing to do that?
Speaker 2: Are you, Nope, Are you going to spend your days,
Speaker 2: your evenings instead of hanging out with your partner or
Speaker 2: doing a hobby reading financial statements of companies. Some people
Speaker 2: are gonna say, yeah, I am, because that's really fun
Speaker 2: for me. Then maybe you are in the Warren Buffett
Speaker 2: ilk who can and should invest in single stocks. But
Speaker 2: for most of us normies who don't do that, then
Speaker 2: I think it's just a good le Hey. Index funds
Speaker 2: make the most sense, and that's why, Yeah, we shall
Speaker 2: also do what Warren Buffett says, not what he does.
Speaker 2: What he says to every day investors is like, yeah,
Speaker 2: investing most of your assets into the S and P
Speaker 2: five hundred is going to build you wealth over time.
Speaker 2: You don't even need to do it the way I
Speaker 2: did it. I love that he did it the way
Speaker 2: he did it. I think he's passed on a lot
Speaker 2: of great lessons to individual investors over the years, patients
Speaker 2: long term thinking, the beauty of simplicity. He's just been
Speaker 2: such a remarkable fixture in the investing landscape for so long.
Speaker 2: But I think this is a good reminder to learn
Speaker 2: from Warren Buffett and not necessarily try to mimic him.
Speaker 1: Okay, So I don't know if this is uncouth to
Speaker 1: bring this up, but maybe with Warren getting oh yeah,
Speaker 1: ninety four years old, maybe this is a good reminder
Speaker 1: to review your beneficiaries if you haven't on your different accounts.
Speaker 1: I'm sure Warren has this so you know, buttoned up.
Speaker 1: I'm sure he does. But I saw a recent article
Speaker 1: talking about this. We haven't mentioned this on the show
Speaker 1: in a while, but if there have been any major
Speaker 1: life changes, make sure that you make those changes within
Speaker 1: the back end of your retirement accounts. Contrary to popular belief,
Speaker 1: your beneficiary it actually supersedes what is in your will,
Speaker 1: so like you don't want the money that you've been
Speaker 1: working hard to grow to be left to someone that
Speaker 1: maybe you no longer intend for that money to go
Speaker 1: to you. In that article they actually mentioned Heath Ledger
Speaker 1: and how with his unexpected death, he hadn't named his
Speaker 1: daughter as the beneficiary. Instead he had left all the
Speaker 1: money to like his sisters and his parents. That's like
Speaker 1: a you know, celebrity obviously, so it gets slightly more attention,
Speaker 1: but that's just a great example. In the end, they
Speaker 1: gave her all the money, so they took care of her,
Speaker 1: But that's still the kind of situation that you ideally
Speaker 1: want to completely avoid.
Speaker 2: And let's be honest, it'll make you all of forty
Speaker 2: five seconds to log into the back end of your
Speaker 2: account and do that. And if you don't have the
Speaker 2: right beneficiary listed and you were to pass away, like
Speaker 2: that's a man, think about the problem that you're leaving
Speaker 2: your loved ones. Sure, a random other aside on investing,
Speaker 2: Matt real quick, I saw this stat and it shocked me.
Speaker 2: You know, the trump coin that got released, it was
Speaker 2: widely publics.
Speaker 1: Which one or are there multiple? I feel like, oh,
Speaker 1: that's true, but I feel like there have been multiple
Speaker 1: stories about grifting taking place front within the White House.
Speaker 2: Well, this is something we've talked about on the show before.
Speaker 2: Bitcoin and crypto are kind of completely different things in
Speaker 2: a whole lot of ways, and there's a lot more
Speaker 2: room for to get swindled, I guess in the crypto space,
Speaker 2: and there is if you just invest some in bitcoin
Speaker 2: with regularity. Turns out only fifty eight people have made
Speaker 2: money owning trump coin. They've made almost a billion dollars
Speaker 2: in total. And wow, over seven hundred and fifty thousand
Speaker 2: people invested in trump coin, and almost all those people
Speaker 2: lost money. So fifty eight out of seven hundred and
Speaker 2: fifty thousand people made money, the rest of them lost.
Speaker 1: It sounds like a scam, yep.
Speaker 2: A lot of pump and dump style happening in the
Speaker 2: crypto space. Still, beware, I stay behind my term, or
Speaker 2: my use of the word grift, Yeah, because like that
Speaker 2: is what like talk about wealth transfer. Man, this is
Speaker 2: something that we hate seeing. This is regardless of whether
Speaker 2: or not you support him, the different policies that he's
Speaker 2: going for. I hate to see this, Yeah, and it's
Speaker 2: just another reminder to hey, yeah, invest some in bitcoin
Speaker 2: if you're so inclined, but don't mess with the rest
Speaker 2: of the crypto space. All Right, We've got more to
Speaker 2: get to, including we're talking about social security problems and
Speaker 2: how you can react. We'll talk about that and more
Speaker 2: right after this.
Speaker 1: All right, but we've got more Friday flight to get
Speaker 1: to and of course now it is time for the
Speaker 1: ludicrous headline of the week, and we're going to take
Speaker 1: this segment and talk about credit. There's an article from
Speaker 1: CNBC that I am unhappy with because the title of
Speaker 1: the article was I don't like seeing you unhappy how
Speaker 1: to raise your credit score one hundred and sixty points
Speaker 1: in thirty days. Well okay, so specifically, well, it wasn't
Speaker 1: the headline, it was what was contained within the story.
Speaker 2: Because yeah, the headline it sounds promising, right, Yeah.
Speaker 1: Yeah, we talk about improving your credit score all the time.
Speaker 1: This is something that we it's a regular feature here
Speaker 1: on the show. You don't want to ignore your credit score,
Speaker 1: and especially raising your credit score this much in just
Speaker 1: a month. I am all four, But sadly this article
Speaker 1: had some really bad advice that was mixed in with
Speaker 1: the good stuff. So first of all the good stuff
Speaker 1: they say to pay attention to your credit score, Yeah,
Speaker 1: totally true.
Speaker 2: When the reports in particular two right to say, hey,
Speaker 2: if there's an error on there, you want to find it.
Speaker 1: Exactly, there are mistakes on a huge percentage of those reports.
Speaker 1: Consider reports says that half of folks who actually go looking,
Speaker 1: they're going to find an error. So that's something that
Speaker 1: you can be on the look at.
Speaker 2: Basically, the credit bureaus not so great at the record keeping,
Speaker 2: which is their primary.
Speaker 1: Job on it. But in addition, so that's like a
Speaker 1: small example of something that was good in addition to
Speaker 1: that the article said to consider hiring a credit repair company,
Speaker 1: and also interspersed and mixed throughout this entire article. I
Speaker 1: think it was sort of like a pay to play.
Speaker 1: It had to be sort of journalism. But you saw
Speaker 1: I didn't even check with you, but I assumed you
Speaker 1: also saw the I'm not going to call them out specifically,
Speaker 1: but it was a lending I'm sorry, a credit repair company,
Speaker 1: and they had like some charts to where it looked
Speaker 1: like it was a part of the story. But then
Speaker 1: there's also ads from the same company. There's like the
Speaker 1: small grade out thing that says ad in the bottom
Speaker 1: vapor sketchy. Don't like it because this is something that
Speaker 1: you can completely deiy. You don't need another expensive monthly subscription,
Speaker 1: which is the model that most of these companies operate under.
Speaker 2: It like one hundred and fifty bucks a month or
Speaker 2: something like that, right.
Speaker 1: And like you can tell oftentimes when something's a scam,
Speaker 1: when there's something called gosh, like a startup fee or
Speaker 1: like an onboarding those are the worst. Yeah, like a
Speaker 1: setup charge and like what needs to be set up,
Speaker 1: like you taking me as a customer. I don't like it,
Speaker 1: and we've actually got an article up on the website
Speaker 1: with some tips to rebuild your credit score, and it
Speaker 1: is a much better article than the one that CNBC
Speaker 1: was running.
Speaker 2: If you've got like a question because you feel like
Speaker 2: your credit score is not where it needs to be,
Speaker 2: send us a question. We'd be happy to take it
Speaker 2: on the podcast. But just do not do not sign
Speaker 2: up for one of these credit repair companies because they'll
Speaker 2: take more than they give and most of the things
Speaker 2: that they're offering to do, yeah, you can do yourself.
Speaker 2: More bad news on the credit front, Matt medical debt.
Speaker 2: It might be staying on credit reports after all. Because
Speaker 2: of these policy changes were essentially made by executive order,
Speaker 2: and it seems like that's the only way policy changes
Speaker 2: get made these days, which just puts more power in
Speaker 2: the hands of the president, no matter whether they have
Speaker 2: an R or a D by their name. But many
Speaker 2: of the changes that were enacted by the previous administration
Speaker 2: are now subject to change, and the same will be
Speaker 2: true of whoever is in the Oval office next. And
Speaker 2: as the Consumer Financial Protection Bureau has been downsized and
Speaker 2: its futures in jeopardy, a judge has been asked to
Speaker 2: vacate the rule that would have excluded medical debt from
Speaker 2: appearing on credit reports moving forward, And so this isn't final,
Speaker 2: but it does seem that the medical debt exclusion is
Speaker 2: unlikely to stick around. And although I think the credit
Speaker 2: bureaus have still basically on their own, of their own volition,
Speaker 2: said well, you know, medical debt under five hundred bucks,
Speaker 2: we're not going to put.
Speaker 1: On there anyway.
Speaker 2: But with this and what's happening with student loan collections,
Speaker 2: it's even more crucial to pay attention to your credit
Speaker 2: report and credit score.
Speaker 1: These days.
Speaker 2: We're likely to see average scores I would say, dropping
Speaker 2: in the coming years and in the future. I think
Speaker 2: it would make sense for both parties to get the
Speaker 2: legislative branch involved in writing and passing bills for the
Speaker 2: changes that they want to see endure, because otherwise it's
Speaker 2: just kind of kind of be this back and forth,
Speaker 2: this whiplash of like, no, we're going to do this,
Speaker 2: but if it's issued by executive order, the chances of
Speaker 2: that thing sticking around over the long term are just minimal.
Speaker 1: You're advocating for some sticky legislation, Yes, I totally agree. Man.
Speaker 1: So another article that was also ludicrous. So a little
Speaker 1: two for one today, but this one was from USA Today.
Speaker 1: Americans saved money in FinTechs. When money went missing, FDIC
Speaker 1: was nowhere to be found. This was okay. So this
Speaker 1: is like the opposite of the CNBC article. This is
Speaker 1: a you know, some good reporting that was taking place.
Speaker 1: And this article highlighted the way that fintech banks grew
Speaker 1: into these juggernauts for savers. They're promising higher rates, they're
Speaker 1: promising better perks, and the rise of these cool online banks.
Speaker 1: That's really a story of actual fintech growth. But as
Speaker 1: we have mentioned before, many of these fintech banks are
Speaker 1: on shaky ground. And what happens inevitably when customers of
Speaker 1: some of these neo banks lost or savings, the FDIC
Speaker 1: they had nothing to do about it.
Speaker 2: They're like, what huh are you? Are you reaching out
Speaker 2: to us because like that in our jurisdiction.
Speaker 1: Yeah.
Speaker 2: And so the reason for this is basically it's like
Speaker 2: that Spider Man meme where every one's pointing and the
Speaker 2: FDIC is pointing.
Speaker 1: That is exactly these our fault. So the company, these
Speaker 1: new startups, they aren't actual banks. Instead, what happens they
Speaker 1: work with FDIC insured banks through an intermediary. But still
Speaker 1: when these banks experienced again, when these tech companies experienced issues,
Speaker 1: the FDIC didn't do anything in order to help These customers.
Speaker 1: Call it I'm glad you call them tech companies because
Speaker 1: they're not They're not banks. They look and feel. That's
Speaker 1: the problem. Though on the website market themselves like a bank,
Speaker 1: they say that they are not banks, and so some
Speaker 1: of them. But if you just at first glance as
Speaker 1: a consumer, you it would be understandable that you would
Speaker 1: think they were exactly But this is why this has
Speaker 1: been a drum that we've continued to beat. We want
Speaker 1: folks to stay away from this. We want you to
Speaker 1: actually go with a real online bank, an actual company
Speaker 1: that's been around for a minute, that has their very
Speaker 1: own FDIC insurance.
Speaker 2: Yeah, it's we mentioned them consistently. We say Ally, C, I, T,
Speaker 2: Discover Capital one. Those are all online banks, but they're
Speaker 2: fully fledged banks. They're not super cutesy and stuff like
Speaker 2: that with the fintech names and the extra oh, get
Speaker 2: your paycheck two days early. They don't really have that
Speaker 2: kind of fancy stuff going on. But it's fine, Like,
Speaker 2: we don't think you need that stuff. They still pay
Speaker 2: competitive rates, they keep their fees low. We love those
Speaker 2: online banks. They're better than the traditional brick and mortar
Speaker 2: giant banks, and you can kind of get the best
Speaker 2: of both worlds with them, and you're not at risk
Speaker 2: of losing your money like you are with some of
Speaker 2: these fintech banks. I'm still curious to see how this
Speaker 2: shakes out and whether some of those consumers who had
Speaker 2: money with the fintech banks are going to get the
Speaker 2: fintech fox banks. I guess what we should you call them,
Speaker 2: are going to get their money back. That remains to
Speaker 2: be seen.
Speaker 1: Matt.
Speaker 2: Let's talk about Social Security for a second. The spotlight
Speaker 2: is on Social Security right now. Problems seem to be
Speaker 2: getting worse at the Social Security Administration. We've got staff cuts,
Speaker 2: changing requirements to claim benefits, have some folks on edge
Speaker 2: on top of that, which we've detailed this before on
Speaker 2: the show. We did dedicated a whole episode to it
Speaker 2: a couple of years back. The Social Security Trust Fund
Speaker 2: is set to run out sooner than expected in that year.
Speaker 2: It feels like that year keeps of when the trust
Speaker 2: funds gonna run out keeps getting pushed up and up,
Speaker 2: so in less than a decade. That's when the trust
Speaker 2: fund is set to expire, which has retirees worried about
Speaker 2: receiving the benefit they're entitled to. They might not get
Speaker 2: what's coming to them, what they've paid into for their
Speaker 2: whole lives. So what happens if or when we reach
Speaker 2: that point, well, benefits get automatically cut by essentially like
Speaker 2: a quarter. So retirees and soon to be retirees they're
Speaker 2: getting fearful about the solvency of Social Security. It's leading
Speaker 2: to early claims and so instead of wait until sixty
Speaker 2: seven or even later, they're starting to get that monthly
Speaker 2: check at sixty five or even earlier. And this is
Speaker 2: a personal decision. There's a lot at play in when
Speaker 2: you claim Social Security, and the reality is that there's
Speaker 2: trade offs right to claiming early and to waiting, especially
Speaker 2: if you're not in great health, like waiting till seventy
Speaker 2: if you're not doing so hot, well, I get why
Speaker 2: you might claim early, but a good chunk of folks
Speaker 2: would be when you run the numbers, better off waiting longer.
Speaker 2: Even with this kind of increased uncertainty around Social Security.
Speaker 2: And I also just think people in their sixties should
Speaker 2: be less worried about the future of social Security. It's
Speaker 2: people in their twenties and thirties and forties who should
Speaker 2: be like, hmm, player impact on them planning a little more,
Speaker 2: investing more for their own future retirement, and banking less
Speaker 2: on the reality of Social Security being a major major
Speaker 2: part of their retirement income plans.
Speaker 1: Yeah, let's talk about the specific numbers. Because the benefit
Speaker 1: is roughly seventy five percent higher if you wait, If
Speaker 1: you claim at age seventy as opposed to age sixty two,
Speaker 1: those early claims are going to reduce benefits for decades
Speaker 1: to come, and for if you're healthy, right, if you're
Speaker 1: a healthy retiree, the overall amount received could be reduced
Speaker 1: by up to six figures over your lifetime, essentially.
Speaker 2: One hundred and twenty thousand dollars less in your pocket
Speaker 2: because it's significant claim too early, right.
Speaker 1: Yeah, And obviously none of us out there know how
Speaker 1: long we're going to But if you are in good
Speaker 1: health at retirement age, if you can afford to wait,
Speaker 1: it's still likely the best option. If you want a
Speaker 1: little bit of additional reassurance, you can consult this fairly
Speaker 1: inexpensive software that's out there. There's this one called maximize
Speaker 1: my Social Security. If this is something you're trying to
Speaker 1: really crunch the numbers on. And again, like you mentioned Jil,
Speaker 1: for younger listeners, it is going to impact you more
Speaker 1: than if you're like sixty years old. But even still,
Speaker 1: I think it's going to be around for all of us.
Speaker 1: If you're listening to this just in a diminished fashion. Yeah,
Speaker 1: in some form of fashion, it's going to be there.
Speaker 1: But I do think our benefits are unlikely to be
Speaker 1: as high as what it's saying over at Social Security
Speaker 1: do like GOV.
Speaker 2: Yeah, if you log in, it'll give you kind of
Speaker 2: a projection for what your Social Security income is likely
Speaker 2: to be. I would take that with a grain of salt.
Speaker 2: I would reduce that meaningfully into my retirement projections, like
Speaker 2: something will be there in all likelihood. But the fact
Speaker 2: that our politicians have let it get to this point
Speaker 2: where social Security is kind of living on the precipice
Speaker 2: that it boggles the mind. And there's just it's gonna
Speaker 2: take some political will to change the future of Social
Speaker 2: Security so that it's going to be around stick around
Speaker 2: for the rest of us.
Speaker 1: It's a real issue that's going to like there are
Speaker 1: some things that are worth talking about or the politicians
Speaker 1: actually addressing, and there are some things that really aren't
Speaker 1: and it's just for show. This is like one of
Speaker 1: the real things that needs to be addressed, or's like
Speaker 1: it taking from a time bomb from exactly from a
Speaker 1: policy standpoint, But I want to go back as well
Speaker 1: to the like you mentioned that the personal factors and
Speaker 1: some of the different trade offs. You got to keep
Speaker 1: in mind too, some of the different life goals that
Speaker 1: you have, because I like, I for folks out there
Speaker 1: who are tapping it, who are tapping it early, right, Like,
Speaker 1: so so far, like we kind of we address the
Speaker 1: numbers sort of side of the equation, but like think
Speaker 1: through what it is that you want to be able
Speaker 1: to accomplish in your life while you still have the
Speaker 1: ability to write. And so for retirees, if you're like,
Speaker 1: you know, yeah, we could wait until age seventy and
Speaker 1: you know we're going to be wealthier. Yes, you definitely will.
Speaker 1: But that's that's like a no brainer, right, Like anytime
Speaker 1: you cruach.
Speaker 2: The numbers, waiting is always going to lead to you having.
Speaker 1: More a higher net worth. And so like I think
Speaker 1: the more important questions to ask are what am I
Speaker 1: likely going to want to be able to do within
Speaker 1: my retirement years or like what life goals am I
Speaker 1: trying to accomplish? What kind of impact am I looking
Speaker 1: to have? And I'll be like, maybe this is like
Speaker 1: a little bit of that confession time. I'm not having
Speaker 1: like retirement like questions. But Kate and I we've been
Speaker 1: talking about this more and we're not talking about are
Speaker 1: you going to claim now? Yeah, we're not like I'm sorry,
Speaker 1: sir to you you need a yeah come back three years?
Speaker 1: Uh wait hell am I? Yeah? But the ability to
Speaker 1: wrestle with some of these thornier issues. I think it's
Speaker 1: really important because and we're not again, so we're not
Speaker 1: talking about tapping retirement, but other dollars that we've invested,
Speaker 1: and it's kind of hard to wrap your mind around, like, Okay,
Speaker 1: this is something that we've been putting money into for
Speaker 1: a very long time. Uh, and so this is within
Speaker 1: a brokerage, But what do we want now what to
Speaker 1: do with that money? What is that going to allow
Speaker 1: us to accomplish that we may not have the ability
Speaker 1: to do a decade from now, two decades from now,
Speaker 1: knowing that yes, by waiting, it's going to lead to
Speaker 1: a larger sum of money, but what are the other
Speaker 1: factors that you need to take into account?
Speaker 2: And the game plan can change, right, So I've talked
Speaker 2: about this on the show. When my mom was diagnosed
Speaker 2: with cancer, like, the thought was, well, we will tap
Speaker 2: some of our retirement funds, maybe a little bit more
Speaker 2: than we otherwise would, just to be able to hold
Speaker 2: off on taking Social Security. And the plan flipped once
Speaker 2: my mom's diagnosis happened and it was like, no, no, no,
Speaker 2: we're I want as many months of Social Security as
Speaker 2: I can get because I don't know how long I'm
Speaker 2: going to be around. And then we'll leave the retirement
Speaker 2: funds a little more intact. And so this isn't necessarily
Speaker 2: a cut and dry always easy to figure out this scenario.
Speaker 1: I think this is like one of the hardest things
Speaker 1: to figure out, Like this truly is like one of
Speaker 1: the toughest nuts to crack. And Kate and I have
Speaker 1: had a lot of different conversations over the years about
Speaker 1: personal finances and business and like, okay, strategy different things
Speaker 1: like that, but man, this is it's so difficult, and
Speaker 1: I get we know we're not thinking through like life
Speaker 1: expectancy that like those are less the questions I guess
Speaker 1: that we're thinking about right now. But even still, like,
Speaker 1: am I guaranteed the ability to wake up a week
Speaker 1: from now and continue along doing the same things that
Speaker 1: I'm doing today now? And I'm not saying in the
Speaker 1: next week I'm gonna yolo durin my accounts? So you
Speaker 1: got to find some sort of balance though, between yolo
Speaker 1: or only looking to the long term, because that I
Speaker 1: feel like that can be just as seductive, right, Like.
Speaker 2: Let me build up the account balance as big as
Speaker 2: I humanly can. Let me guarantee the fattest social Security check.
Speaker 1: I've run. Guess what, I've run the compounding interest calculator,
Speaker 1: I've run through the different glide pass and scenarios, and like,
Speaker 1: that's a really easy button to hit. And if that
Speaker 1: is all you're doing, the easy button is also to
Speaker 1: just take social Security as quickly as you can be like,
Speaker 1: let me give that money.
Speaker 2: Yeah, and then you wake up five years down the
Speaker 2: road and you're like, this check isn't as big as.
Speaker 1: I wish it was or need it to be. Both
Speaker 1: ends of the spectrum can be really easing a little
Speaker 1: bit of layed gratification would have done me better. Yeah
Speaker 1: so now, Yeah, I think the ability for folks to
Speaker 1: address these sort of thorny topics more head on could
Speaker 1: lead to productive conversations not only with like your partner
Speaker 1: or your spouse, but even like maybe you don't you
Speaker 1: don't have a partner like you yourself to like like think,
Speaker 1: like spend some time thinking about this and like journaling
Speaker 1: to perhaps uncover some of the different Yeah, what's going
Speaker 1: on the under the hood? Yeah, what else are you
Speaker 1: are you looking to accomplish?
Speaker 2: Even that social security software? Are those calculators they don't
Speaker 2: account for that, they don't have the journaling feature included,
Speaker 2: So you do have to take some personal stuff into consideration.
Speaker 2: It's the numbers matter, but the numbers aren't the only
Speaker 2: thing that matters totally. All right, Matt, that's gonna do it.
Speaker 2: For this episode, we'll have links to some of the
Speaker 2: resources that we mentioned, including that maximize my social security
Speaker 2: link up on our website at howtomoney dot com.
Speaker 1: You know it. But until next time, best Friends Out,
Speaker 1: Best Friends Out,