WEBVTT - Friday Flight - Ginormous Jackpots, Expensive Algorithms, & Geriatric Roommates #546 0:00:00.120 --> 0:00:03.040 Welcome to How the Money. I'm Joel and I am Matt, 0:00:03.120 --> 0:00:08.920 and today we're discussing ginormous jackpots, expensive algorithms, and geriatric roommates. 0:00:28.160 --> 0:00:30.680 That's right, Joel. This is our Friday Flights where we 0:00:30.800 --> 0:00:33.159 are talking through some of the different stories we came 0:00:33.200 --> 0:00:35.839 across this week. We're gonna specifically talk about how they 0:00:35.840 --> 0:00:39.640 are going to impact our finances and your finances. If 0:00:39.680 --> 0:00:42.040 you're listening, and before we get to the stories, though 0:00:42.360 --> 0:00:45.199 the time has come, you likely have heard about the 0:00:45.280 --> 0:00:48.000 How the Money socks rumors are flying. These are the 0:00:48.320 --> 0:00:52.680 meticulously designed socks that we created with the nice folks 0:00:52.720 --> 0:00:54.800 over at Sock Fancy. I am holding a pair in 0:00:54.800 --> 0:00:56.560 my hands right now, Matt. They look so good. They 0:00:56.600 --> 0:01:00.360 are not only are they gorgeous, they are so ridiculously company. 0:01:00.520 --> 0:01:02.520 And again, the reason these took so long is because 0:01:02.520 --> 0:01:04.200 we really did want to make sure we had some 0:01:04.440 --> 0:01:06.360 merch that we were proud of, not some of these 0:01:06.400 --> 0:01:09.040 soft companies where they just printed the pictures. And we 0:01:09.240 --> 0:01:12.039 joked about sharing the pictures of the some of the 0:01:12.040 --> 0:01:14.000 crappy ones. I we will totally do that, will throw 0:01:14.000 --> 0:01:15.720 it up at least on Instagram. I just held them 0:01:15.720 --> 0:01:17.559 by the way, they smell like Hinton can either to listen, 0:01:19.160 --> 0:01:21.200 you can eat them, but they smell so yeah. We 0:01:21.200 --> 0:01:23.760 gave a few of several pairs of these away to 0:01:24.040 --> 0:01:28.759 some folks who submitted listener money tips back for ourisode, 0:01:29.000 --> 0:01:31.400 but we are now giving away five pairs to listeners 0:01:31.400 --> 0:01:34.280 out there who leave a review over on Apple podcast 0:01:34.440 --> 0:01:36.520 or if you give us a rating on Spotify or 0:01:36.600 --> 0:01:38.800 some of the other platforms as well, like podcast Addict. 0:01:38.800 --> 0:01:40.440 There are a lot of folks who listened over there 0:01:40.440 --> 0:01:42.200 on that app as well, So all you gotta do 0:01:42.280 --> 0:01:44.800 leave a review, even those old reviews that you may 0:01:44.840 --> 0:01:47.360 have left previously, those count as well. But then send 0:01:47.480 --> 0:01:51.360 us a screenshot or an email to resubmit your review 0:01:51.440 --> 0:01:53.680 for the giveaway. Send those two how the money pot 0:01:53.720 --> 0:01:55.680 at gmail dot com. Just make sure to do that 0:01:55.720 --> 0:01:58.840 before end of day this coming Wednesday, and we will 0:01:58.880 --> 0:02:02.560 announce those five winners on our next Friday flight, that's right, 0:02:02.560 --> 0:02:05.000 And then we'll ship these gorgeous, lovely things out to 0:02:05.040 --> 0:02:07.440 you and you'll be like, this is the best clothing 0:02:07.440 --> 0:02:08.800 eye on my own. You might even throw away all 0:02:08.800 --> 0:02:10.239 your other clothes and only where the hat of money 0:02:10.240 --> 0:02:12.720 socks um. Although we don't suggest. If that's the case, 0:02:12.880 --> 0:02:15.720 I'm fine with it. Uh that before we get to 0:02:15.960 --> 0:02:18.200 kind of all the meatia stories we have to get 0:02:18.240 --> 0:02:20.280 to this week. One thing I want to mention I 0:02:21.040 --> 0:02:23.120 just talked about. We just talked about how crusty my 0:02:23.120 --> 0:02:25.359 phone was getting. And it was one of those things 0:02:25.400 --> 0:02:28.280 where I, as a frugalalite, was hoping to keep my 0:02:28.280 --> 0:02:31.560 phone for a minimum of three years, and I threw 0:02:31.560 --> 0:02:33.840 in the towel man I bought a new phone. Um, 0:02:33.919 --> 0:02:36.080 it crossed my mind. But here's what pushed me over 0:02:36.080 --> 0:02:38.520 the edge. I got the new I pre ordered the 0:02:38.520 --> 0:02:41.040 new Google Pixel six A. Right now, I'm rolling with 0:02:41.080 --> 0:02:43.359 the four A. The six A is at the newest. 0:02:43.639 --> 0:02:45.840 The six A is the newest. I like literally just 0:02:45.880 --> 0:02:47.680 came out, Like it's sitting at my house now and 0:02:47.680 --> 0:02:50.880 I haven't even opened yet. But so, because of all 0:02:50.919 --> 0:02:54.120 the issues I mentioned, the crack screen, the battery life, 0:02:54.200 --> 0:02:58.079 messing up the charging board is is actually the biggest annoyance. 0:02:58.400 --> 0:03:00.480 It's so hard to actually get my phone to charge 0:03:00.520 --> 0:03:02.680 these days. But because of all those things, I was like, 0:03:02.720 --> 0:03:04.519 I was at least interested. I was gonna look and 0:03:04.560 --> 0:03:06.280 I was gonna see, you know how much can I 0:03:06.280 --> 0:03:08.239 get from my phone? And some from folks in the 0:03:08.560 --> 0:03:11.880 Facebook group, We're like, hey, check out Swap, check out Gazelle. 0:03:11.880 --> 0:03:13.640 We've talked about the most websites on the show in 0:03:13.639 --> 0:03:15.320 the past, but I was like, you're right, I should 0:03:15.320 --> 0:03:18.119 go check those out. And uh, guess how much Gazelle 0:03:18.120 --> 0:03:20.040 offered me for my two year old phone? Two year 0:03:20.080 --> 0:03:24.320 old phone? How much was that phone? Brand new fifty 0:03:24.800 --> 0:03:26.920 and it's kind of busted up, So I'm gonna guess 0:03:26.960 --> 0:03:29.240 like sixty bucks? Okay, So they offered me twenty one 0:03:30.240 --> 0:03:32.600 very much even worse. And then I went to cell Cell, 0:03:32.680 --> 0:03:36.360 which is kind of like an aggregator, and the best 0:03:36.560 --> 0:03:37.960 the most I could get paid for that phone was 0:03:38.040 --> 0:03:42.120 eighty five from there, but decently, Yeah, that's still fair 0:03:42.200 --> 0:03:44.320 for for what you got going on. It's okay, but 0:03:44.840 --> 0:03:47.520 guess what. I went through the Google steps to see 0:03:47.520 --> 0:03:49.560 how much Google would give me from my phone if 0:03:49.600 --> 0:03:52.119 I were to pre order the source the Pixel six 0:03:52.160 --> 0:03:56.720 A and two sixty two dollars what they offer. Yeah, 0:03:57.120 --> 0:03:59.040 so it was like almost like a free phone for 0:03:59.080 --> 0:04:01.080 the last couple of years. Did you realize I'll bust 0:04:01.080 --> 0:04:02.920 it up? It is? Yeah, So they asked that once 0:04:02.920 --> 0:04:04.720 you receive it, are they're gonna be like, oh, sorry, buddy, 0:04:04.720 --> 0:04:08.720 we're gonna if I had money, I hope that they 0:04:08.720 --> 0:04:10.400 asked if it had a bus to screen. I'm like yeah, 0:04:10.680 --> 0:04:12.760 and uh, And if it hadn't, I think I would 0:04:12.760 --> 0:04:15.080 have gotten three hulls, which is still shocking that you 0:04:15.080 --> 0:04:17.080 could only lose fifty bucks on the phone after two years. 0:04:17.200 --> 0:04:19.839 So it's one of those things where, um, it made 0:04:19.920 --> 0:04:22.559 sense because of that. That's a great deal. It changed 0:04:22.640 --> 0:04:25.400 the economics of of getting into a lot of folks 0:04:25.400 --> 0:04:27.080 out there who might have an older pixel like you. 0:04:27.240 --> 0:04:28.560 I mean, can you trade in some of your some 0:04:28.560 --> 0:04:30.760 of the older pixel pixels as well? I think so. Yeah, 0:04:30.760 --> 0:04:32.440 Well I think actually no, I think the four A 0:04:32.600 --> 0:04:34.640 is the oldest down So if you're rolling with a 0:04:34.680 --> 0:04:37.360 three or three A, it's probably not valuable enough. Um, 0:04:37.400 --> 0:04:39.680 but if you got a four A or newer, it's 0:04:39.720 --> 0:04:41.360 a great deal. Yeah, the upgrade might make sense. And 0:04:41.400 --> 0:04:43.480 I think right now, yes, right now they're doing for 0:04:43.640 --> 0:04:45.280 like a limited period of time. I think yeah, I 0:04:45.320 --> 0:04:46.840 think so. I think it's literally just for a few 0:04:46.880 --> 0:04:49.520 more days. So get out of folks, and and there's 0:04:49.520 --> 0:04:52.240 a you get a free Google pixel buds that your 0:04:52.279 --> 0:04:54.680 buds to with the pre order, and I'm like, I 0:04:54.720 --> 0:04:56.280 don't even know if I want them. I might sell them, 0:04:56.320 --> 0:04:58.280 but uh and make some of that money back. But 0:04:58.680 --> 0:05:00.120 it felt like a no brainer when your kids will 0:05:00.200 --> 0:05:02.120 use them for for something I'm sure they're trying to 0:05:02.120 --> 0:05:04.240 steal on my cave. Okay, so the real question, will 0:05:04.279 --> 0:05:07.640 you get a case for this phone discussion? We'll see, 0:05:07.680 --> 0:05:09.800 we'll see probably, or are you're just gonna ride this 0:05:09.839 --> 0:05:12.760 wave of cheap phones straight to the landfill Over the course, 0:05:12.880 --> 0:05:14.640 You're gonna just have to deal with this on your conscience, 0:05:14.680 --> 0:05:16.160 you know, when you're laying there on your deathbed and 0:05:17.120 --> 0:05:19.400 I ruined the planet. That being said, I still don't 0:05:19.400 --> 0:05:23.080 have a case or a screen cover, and if I 0:05:23.120 --> 0:05:26.680 crack my stupid screen, I have no place to complain, 0:05:26.720 --> 0:05:28.320 Like I will not come on the show and complain 0:05:28.360 --> 0:05:31.400 about it. But that being said, I definitely want to. 0:05:31.400 --> 0:05:33.360 I just keep forgetting, but at least your screen get. 0:05:33.360 --> 0:05:37.600 The protective equipment is more it's more solid than than well, 0:05:37.839 --> 0:05:39.840 it's heavier too, which mean you know, the heavier, the 0:05:39.839 --> 0:05:43.800 bigger they are, the harder they fall. That's true. All right, 0:05:43.880 --> 0:05:45.960 let's move on let's get to the Friday flight, the 0:05:45.960 --> 0:05:48.599 sampling of stories we found interesting this week. Let's quickly 0:05:48.640 --> 0:05:52.680 touch on kind of the big headline from yesterday, which 0:05:52.839 --> 0:05:55.400 is the fact that we are we are now technically 0:05:55.880 --> 0:05:58.000 kind of sort of in a recession, right, So we're 0:05:58.040 --> 0:06:00.520 technically not in a recession, right, So like according to 0:06:00.920 --> 0:06:03.960 the National Bureau of Economic Research, they're the folks who 0:06:03.960 --> 0:06:06.520 gets us say that, yes, this is, as they're pushing 0:06:06.560 --> 0:06:09.159 up their glasses, we are now officially in a recession. Yeah, 0:06:09.160 --> 0:06:11.039 they have not come down from on high and spoken 0:06:11.160 --> 0:06:14.240 and and said that that this is the case. But 0:06:14.480 --> 0:06:17.400 the typical definition of recession has been met, right, which 0:06:17.440 --> 0:06:20.880 is two quarters of declining growth um in a row. 0:06:21.240 --> 0:06:23.760 And so I don't know, it feels like the definition 0:06:23.760 --> 0:06:25.560 of recession is kind of up in the air right now. 0:06:25.600 --> 0:06:28.479 But for most folks, we're kind of in one. But 0:06:28.720 --> 0:06:30.400 we are. But that doesn't this is really that we're 0:06:30.400 --> 0:06:31.960 going to be here as well. Yeah, we we we 0:06:32.080 --> 0:06:34.039 figured this is gonna be the case, but that doesn't 0:06:34.040 --> 0:06:36.400 mean that this is. Recessions can look different, right, they 0:06:36.400 --> 0:06:38.200 don't have to all look the same. And right now, 0:06:38.520 --> 0:06:40.000 as we've talked about on the show, there's still a 0:06:40.040 --> 0:06:42.360 lot of positive economic data to point to a lot 0:06:42.440 --> 0:06:44.839 of people are still if they didn't read the headlines, 0:06:44.960 --> 0:06:46.880 they wouldn't realize that we were in a recession. It 0:06:46.880 --> 0:06:49.440 doesn't seem to have impacted really a whole lot of folks. 0:06:49.560 --> 0:06:53.720 That's true. Yeah, everyone notices the higher prices, everyone notices inflation, 0:06:53.760 --> 0:06:56.320 but the recession part of the story maybe a little 0:06:56.360 --> 0:06:58.960 bit less. So a quick p s A for everyone 0:06:58.960 --> 0:07:02.080 out there, don't play the lottery. I'm sure this is 0:07:02.120 --> 0:07:04.400 a conversation you and your friends have already had. Maybe 0:07:04.440 --> 0:07:07.240 you're thinking about going in on a like within a 0:07:07.279 --> 0:07:09.640 pool together where it's like, okay, let's all get together, 0:07:09.680 --> 0:07:11.480 we'll promise to split it, because really, who needs a 0:07:11.520 --> 0:07:14.960 billion dollars? I mean, really, beyond like a few million, 0:07:15.120 --> 0:07:17.440 does life really look all that different for for most folks. 0:07:17.440 --> 0:07:19.400 It's more attempting now than ever before. Though, when you're 0:07:19.400 --> 0:07:21.760 talking about a billion dollars jackpot, that is well, that's 0:07:21.760 --> 0:07:23.520 the thing you can go into in a pretty huge 0:07:23.520 --> 0:07:26.800 pool of folks and everyone could still end up benefiting 0:07:26.800 --> 0:07:29.600 pretty handsomely. But just bottom line, this is a bad 0:07:29.600 --> 0:07:33.000 wealth building strategy because of the odds of winning are 0:07:33.200 --> 0:07:37.560 one in three two million. Again, that jackpot is for 0:07:37.600 --> 0:07:40.560 more than a billion dollars. Now that drawing happens tonight, 0:07:40.760 --> 0:07:43.360 which is exciting for a lot of folks, But there 0:07:43.400 --> 0:07:45.920 are countless other things that you likely should be thinking 0:07:45.920 --> 0:07:49.280 about rather than the infantasmally small chance that you're gonna 0:07:49.320 --> 0:07:52.440 win big. But plus, you know we've talked before how 0:07:52.520 --> 0:07:55.239 winning the lottery, how it's usually bad for your life. 0:07:55.440 --> 0:07:58.440 People die, people o d on drugs, it's bad for 0:07:58.480 --> 0:08:00.600 your relationships. It's something like seventy present a lot of 0:08:00.600 --> 0:08:03.280 winners to clared bankruptcy at the point, and exactly just 0:08:03.320 --> 0:08:05.280 imagine how many how people start to look at you 0:08:05.320 --> 0:08:07.640 if they know you're a billionaire. They they're looking at 0:08:07.680 --> 0:08:09.160 you for money. Now they want to loane and it's 0:08:09.160 --> 0:08:11.440 going to drastically change. It's gonna alter the course of 0:08:11.480 --> 0:08:13.000 your life. And you might think that it's all good, 0:08:13.320 --> 0:08:15.680 but there's a lot of downsides too. Yes, you need 0:08:15.720 --> 0:08:18.320 to think about the negatives. Although I'm not against people 0:08:18.360 --> 0:08:19.760 playing it, Like if you want to do it because 0:08:19.800 --> 0:08:22.360 it's fun, just know that you're doing it. You're paying 0:08:22.360 --> 0:08:25.680 two dollars thinking that, Okay, this is gonna provide me 0:08:25.720 --> 0:08:27.720 a little bit of fun. Like if that means that 0:08:27.760 --> 0:08:29.920 you can be a part of all of the excitement, 0:08:30.120 --> 0:08:32.360 I am okay with that, but don't count like, don't 0:08:32.360 --> 0:08:34.320 think of it as like an investment strategy by by 0:08:34.360 --> 0:08:36.840 any means. And I also like how it can cause 0:08:36.840 --> 0:08:38.840 people to think about and how it could get them 0:08:38.880 --> 0:08:40.800 to ask some bigger questions in their lives. Because if 0:08:40.800 --> 0:08:43.000 you're thinking through, okay, oh, I would do this, and 0:08:43.040 --> 0:08:45.040 I would do this, and I would do this if 0:08:45.080 --> 0:08:47.199 you would change your life in a significant way, I 0:08:47.240 --> 0:08:50.480 think it's worth thinking through, okay, what steps could I 0:08:50.480 --> 0:08:54.119 take now that could allow me to start to replicate 0:08:54.160 --> 0:08:57.439 some of those changes now, right without having won the lottery. 0:08:57.840 --> 0:09:00.319 And if you're lucky enough that you're thinking, I don't 0:09:00.320 --> 0:09:02.000 think there would be a ton of changes I would 0:09:02.000 --> 0:09:03.719 I would make. Well, then I would say that that's 0:09:03.720 --> 0:09:06.600 a great sign that you are you know, you're doing well, 0:09:06.600 --> 0:09:08.280 you're working hard, that that you are on the right 0:09:08.280 --> 0:09:10.760 track with how it is you want to live your life. 0:09:10.760 --> 0:09:12.760 So I do like that it can cause you to 0:09:12.920 --> 0:09:15.200 maybe have some bigger questions about life. It makes me think. 0:09:15.240 --> 0:09:18.680 We did an episode, episode four ten, was entitled what 0:09:18.760 --> 0:09:21.120 if You want the lottery, and I think it's it. 0:09:21.200 --> 0:09:22.880 Maybe this is a good time to go breeth visit 0:09:22.920 --> 0:09:24.480 that one if you didn't get a chance to listen 0:09:24.840 --> 0:09:27.880 because some food or thought right about what what you 0:09:27.920 --> 0:09:31.439 would actually do and how that impacts Well, you're probably 0:09:31.440 --> 0:09:33.480 not gonna win a lottery, so how how should you 0:09:33.520 --> 0:09:35.760 live life? In life of that? Um? But let's move on. 0:09:35.960 --> 0:09:37.800 Let's talk about personal loans here for a second, because 0:09:38.360 --> 0:09:42.040 there was an article in CNBC basically stating that that 0:09:42.240 --> 0:09:45.400 some some people are taking out personal loans in an 0:09:45.400 --> 0:09:50.080 effort to build wealth. Uh. That struck me as ridiculous, 0:09:50.840 --> 0:09:53.920 sounds a little backward surprising. I'm like, who takes out 0:09:54.240 --> 0:09:57.839 like debt that's in the upper single digits or low 0:09:57.920 --> 0:10:00.200 double digits in order to build wealth like that? That's 0:10:00.200 --> 0:10:02.920 not smart. So yeah, inside of that CNBC article, math 0:10:02.960 --> 0:10:06.120 they they talked about a survey by lending Tree which 0:10:06.160 --> 0:10:08.520 said that people are using personal loans in order to 0:10:08.520 --> 0:10:10.640 make improvements to their home. And I guess I guess 0:10:10.640 --> 0:10:12.480 those people are hoping that that's going to increase the 0:10:12.559 --> 0:10:15.240 value of their home, there by increasing their net worth. UM. 0:10:15.440 --> 0:10:17.600 But that seems like some pretty flawed logic to me 0:10:17.880 --> 0:10:20.439 because when you look at the numbers, very few home 0:10:20.440 --> 0:10:24.200 improvements actually pay off. You typically lose money by making 0:10:24.280 --> 0:10:26.800 upgrades to your residents. And we'll actually link to some 0:10:26.960 --> 0:10:28.720 recent research on this. In the show notes. You can 0:10:28.720 --> 0:10:30.840 actually see kind of what the payoff looks like for 0:10:30.920 --> 0:10:32.520 a bunch of different things that you could do to 0:10:32.559 --> 0:10:35.400 your home. The truth is, on top of that, there 0:10:35.400 --> 0:10:37.640 are better products if you're wanting to do work to 0:10:37.679 --> 0:10:39.320 your house. So why would you take out a personal 0:10:39.400 --> 0:10:41.360 loan when you could take out a home equity line 0:10:41.360 --> 0:10:43.400 of credit instead, which is going to carry better terms, 0:10:43.440 --> 0:10:47.000 a better interest rates. Personal loans mostly suck. We want 0:10:47.000 --> 0:10:49.520 people to avoid them. And I was just shocked to 0:10:49.559 --> 0:10:51.959 think that some people think taking out personal loans is 0:10:51.960 --> 0:10:54.760 actually going to lead to more wealth for them in 0:10:54.760 --> 0:10:58.240 the future. It's the exact opposite. Every dollar you decide 0:10:58.280 --> 0:11:01.280 to take from a bank or credit union that is 0:11:01.280 --> 0:11:03.680 class time as a personal loan is going to hamstring 0:11:03.720 --> 0:11:06.400 your ability to build wealth to the future. That's right. Yeah, 0:11:06.440 --> 0:11:09.439 And what's interesting too, they were talking about how borrowers 0:11:09.480 --> 0:11:11.720 who have lower credit score scores, how they don't have 0:11:11.760 --> 0:11:15.319 the ability to take out these personal loans, thereby denying 0:11:15.480 --> 0:11:19.680 their potential ability to build wealth. And I was thinking, yeah, no, 0:11:19.880 --> 0:11:21.840 like like they that's that's great, Like that's how the 0:11:21.840 --> 0:11:24.600 game works. You don't want the lenders do not want 0:11:24.640 --> 0:11:28.120 to lend credit, lend money to folks who have proven 0:11:28.440 --> 0:11:30.440 to not be able to maintain a high credit score, 0:11:30.480 --> 0:11:33.280 whether that's because they are using too much of their credit, 0:11:33.280 --> 0:11:35.240 whether that's because they don't make their payments on time. 0:11:35.480 --> 0:11:37.920 But I feel that this is uh an example of 0:11:37.920 --> 0:11:40.840 the system working well. We do not want folks who 0:11:40.880 --> 0:11:43.760 have not handled money well to then take on more debt, 0:11:44.200 --> 0:11:47.160 specifically personal loans and just because you have a great 0:11:47.160 --> 0:11:49.520 credit score and banks are willing to lend you money 0:11:49.720 --> 0:11:51.959 doesn't mean you should take it. Right, there are certain 0:11:51.960 --> 0:11:55.120 instances where it does make sense for you based on 0:11:55.160 --> 0:11:57.960 your personal financial situation, how carefully you've been with money, 0:11:57.960 --> 0:12:00.480 the fact that you prioritize saving and investing to take 0:12:00.480 --> 0:12:02.760 on debt to help you accomplish other goals such as 0:12:02.760 --> 0:12:04.880 buying a house or maybe doing some renovations to that house. 0:12:04.880 --> 0:12:08.240 I mean, uh, not everybody can save up cash and 0:12:08.240 --> 0:12:10.880 and and buy a house. You know mortgage tree, right, 0:12:10.920 --> 0:12:12.720 But just because it's there doesn't mean you should be 0:12:12.760 --> 0:12:15.240 jumping all over that exactly. And and and for folks who 0:12:15.240 --> 0:12:17.280 have lower credit scores, the goal shouldn't be to get 0:12:17.280 --> 0:12:19.520 your credit score high enough to warry. Now, oh you 0:12:19.600 --> 0:12:21.760 qualify for personal loans, you know, like, there are other 0:12:21.760 --> 0:12:23.240 reasons you want to get your credit score up so 0:12:23.280 --> 0:12:25.319 that when you do have enough, and you have saved 0:12:25.360 --> 0:12:27.000 up enough for a down payment, you can get the 0:12:27.040 --> 0:12:29.960 best mortgage that's available to you, But not to get 0:12:30.080 --> 0:12:33.439 a personal loan. Uh do, Let's let's keep moving. Jason's y. 0:12:33.640 --> 0:12:36.040 He had this this great article in the Journal recently 0:12:36.040 --> 0:12:39.319 about some companies who are offering super high savings rates, 0:12:39.760 --> 0:12:43.240 and he sounds promising. It does u but even as 0:12:43.400 --> 0:12:45.320 rates are going up, they're still pretty crummy from a 0:12:45.400 --> 0:12:50.160 historical perspective, especially given the reality of what's happening with inflation. 0:12:50.679 --> 0:12:53.680 So some folks are making risky your bets in an 0:12:53.720 --> 0:12:58.400 attempt to get higher returns on their cash stable coins. Actually, 0:12:58.559 --> 0:13:01.160 like those are one avenue that some have taken that 0:13:01.200 --> 0:13:04.720 hasn't panned out very well. But some fintech companies that 0:13:04.960 --> 0:13:07.320 like kind of sort of look like banks. They are 0:13:07.400 --> 0:13:10.480 offering between like three and five percent returns right now, 0:13:10.880 --> 0:13:14.600 even higher on basic savings type vehicles, or at least 0:13:14.720 --> 0:13:17.520 they purport to be that. So, for instance, is why 0:13:17.600 --> 0:13:20.880 he highlighted a company called Save and they're promising returns 0:13:20.880 --> 0:13:23.560 in the four to ten percent range, which sounds pretty great. 0:13:23.840 --> 0:13:25.920 Just your liquid cash. That sounds nice, right, I mean 0:13:26.000 --> 0:13:29.960 it'd be great, true, but Save they are investing your money, 0:13:29.960 --> 0:13:31.920 they're not saving it, So of course there was going 0:13:31.960 --> 0:13:33.840 to be a catch. So it's it's sort of like 0:13:33.920 --> 0:13:36.640 it's it's more of a hopeful pinky promise than anything else, 0:13:36.640 --> 0:13:38.920 and we would not recommend for you to do this 0:13:39.600 --> 0:13:41.520 with the liquid cash that you're planning to keep on 0:13:41.559 --> 0:13:43.319 hands or something like an emergency fund. When you look 0:13:43.320 --> 0:13:45.120 at the fine print, it is more like a pinky promise, 0:13:45.240 --> 0:13:48.280 and it looks good displayed in big type on the 0:13:48.320 --> 0:13:51.319 screen based on historical returns over the past ten years. 0:13:51.440 --> 0:13:53.400 But we've only been around for ten months. So and 0:13:53.440 --> 0:13:56.320 when we're talking about savings, right, it's it's a different 0:13:56.320 --> 0:14:00.560 ballgame for for money you need liquid, you can't take 0:14:00.559 --> 0:14:03.960 those risks. And so yeah, a lot of these fintech companies, Matt, 0:14:04.000 --> 0:14:06.320 they are f d i C insured, but you're gonna 0:14:06.320 --> 0:14:07.960 want to make sure that that is definitely the case 0:14:08.000 --> 0:14:10.199 before you even attempt to put your money with one 0:14:10.200 --> 0:14:13.040 of these guys. But so the money you deposit isn't 0:14:13.080 --> 0:14:15.920 necessarily at risk, but there's a real chance that your 0:14:16.000 --> 0:14:18.760 returns on the money, uh it could be something like 0:14:19.040 --> 0:14:21.400 zero percent. And so instead of that, we would suggest 0:14:21.440 --> 0:14:23.640 going with the bank that's tried and true, right like 0:14:24.040 --> 0:14:26.560 ally Discover or see I T. The banks we've been 0:14:26.560 --> 0:14:28.600 talking about for years now. Marcus is another good one, 0:14:28.800 --> 0:14:31.520 and yesterday see I T. We've I feel like this 0:14:31.600 --> 0:14:33.840 is the case every week now, like every two weeks, 0:14:33.920 --> 0:14:35.960 rates are just going up. Bump these things up, which 0:14:36.120 --> 0:14:38.040 which is great because he just is awesome for all 0:14:38.040 --> 0:14:40.720 the savers out there, bump their savings connect account up 0:14:40.760 --> 0:14:44.760 to one nine so pretty close to two. Yeah, not 0:14:44.800 --> 0:14:47.760 as good as those theoretical promised returns right from some 0:14:47.800 --> 0:14:49.760 of those other guys, But it's starting to look like 0:14:49.800 --> 0:14:51.840 it used to look like ten years ago, which is 0:14:52.960 --> 0:14:54.560 it makes me feel good about being a savor and 0:14:54.600 --> 0:14:56.800 having that money in uh in savings. Yeah, it sucks 0:14:56.840 --> 0:14:58.320 just a little bit less to be a saver right now, 0:14:58.360 --> 0:15:00.680 which is good. And and and one other thing that 0:15:00.720 --> 0:15:03.360 we just have been mentioning and will continue to mention 0:15:03.440 --> 0:15:06.560 is I bonds as another place for guaranteed returns because 0:15:06.840 --> 0:15:08.640 here's the thing, though, you have to lock your money 0:15:08.640 --> 0:15:11.800 away for at least a year. But the rates on 0:15:11.880 --> 0:15:14.160 I bons right now, we're almost ten percent, and so 0:15:14.280 --> 0:15:15.840 it's one of those things and they're not going to 0:15:15.920 --> 0:15:18.160 come cratering back down to earth anytime soon. I don't 0:15:18.200 --> 0:15:21.240 think I bonds are still one of the best kind 0:15:21.280 --> 0:15:24.360 of short ish to medium term savings vehicles for lots 0:15:24.360 --> 0:15:27.000 of folks. That's right. Yeah. Another place you should avoid 0:15:27.040 --> 0:15:29.760 storing your money though, is with the biggest banks because 0:15:29.800 --> 0:15:32.720 they pay you almost nothing, which is super sucky. But 0:15:32.800 --> 0:15:34.880 that's not your only problem that you'll encounter with them, 0:15:34.880 --> 0:15:37.960 because overdraft fees are out of this world on many 0:15:38.000 --> 0:15:41.400 of those checking accounts. Back in twenty nineteen, banks, all 0:15:41.400 --> 0:15:44.360 those big banks, they made fifteen billion dollars from folks 0:15:44.400 --> 0:15:47.920 who overdrafted their accounts. And so now Congress is looking 0:15:47.960 --> 0:15:49.960 to do something about it. I mean, like they don't 0:15:50.000 --> 0:15:53.000 actually get things done most of the time. That's probably 0:15:53.320 --> 0:15:55.720 that's probably not likely that things will change. But it's 0:15:56.000 --> 0:15:57.600 like the life cards on my local pool when they're 0:15:57.640 --> 0:15:59.200 on their phone, and I'm like, oh man, what a 0:15:59.320 --> 0:16:01.640 what a coushout. But that's what Congress seems like because 0:16:02.080 --> 0:16:05.000 you don't really actually do much legislating through more glad 0:16:05.000 --> 0:16:08.760 handing and cable news appearances. It's true, uh that that 0:16:08.800 --> 0:16:12.800 being said, the Overdraft Protection Act could potentially step into 0:16:12.920 --> 0:16:15.880 lesson or eliminate the ability for banks to to charge 0:16:16.000 --> 0:16:19.200 ridiculous overdraft fees, which by the way, mostly hurts the 0:16:19.200 --> 0:16:22.720 most financially vulnerable of folks. But this is an instance 0:16:22.720 --> 0:16:24.680 of where I think we don't need to necessarily wait 0:16:24.720 --> 0:16:28.120 around and like sit on our hands and hoping that 0:16:28.160 --> 0:16:29.560 the banks are going to do something or hope that 0:16:29.600 --> 0:16:31.840 Congress is actually going to act, because that's what I meant. 0:16:31.880 --> 0:16:34.560 I'm sorry. Yeah, if you're not for that, like you, 0:16:34.560 --> 0:16:36.400 you know, you might be sitting around a long time exactly, 0:16:36.520 --> 0:16:39.640 might grow a nice gray beard before that comes to past. Right. Well, 0:16:39.640 --> 0:16:41.600 And the thing is, too, it's just not necessary because like, 0:16:41.640 --> 0:16:43.880 this is not something that's overly complicated. I think there 0:16:43.880 --> 0:16:47.000 are some industries in some sectors where maybe some government 0:16:47.040 --> 0:16:50.760 intervention is necessary because it's it's just a really complicated process. Right, 0:16:50.760 --> 0:16:53.280 But we're talking about savings and checking accounts like these 0:16:53.280 --> 0:16:55.760 are accounts that you can open and set up for 0:16:55.800 --> 0:16:58.680 your kids, and even they understand how they work. It's 0:16:58.720 --> 0:17:01.000 not overly complicated. It's not like this makes me think 0:17:01.040 --> 0:17:05.760 of the semiconductor bill that just passed. Cool, that's probably 0:17:05.800 --> 0:17:08.680 necessary because that's in the best interest of our entire country, right, like, 0:17:08.680 --> 0:17:11.720 like the future of our country is at stake here, 0:17:12.040 --> 0:17:17.000 and like of semiconductors are made in Taiwan, and we 0:17:17.119 --> 0:17:21.240 like Taiwan, but China they don't like Taiwan in China. Anyway, 0:17:21.320 --> 0:17:24.000 we're getting political here or whatever. But all this being said, 0:17:24.000 --> 0:17:25.920 this is something that you can easily do, and hopefully 0:17:25.920 --> 0:17:28.760 an act does pass. But in the meantime, make sure 0:17:28.760 --> 0:17:31.040 that you are banking with the banks who aren't trying 0:17:31.119 --> 0:17:34.040 to financially ruin you. That's exactly right, because it's it's 0:17:34.040 --> 0:17:38.199 other banks have actually already disallowed over draft fees. They 0:17:38.200 --> 0:17:40.439 don't charge their customers any over draft fees, and so 0:17:40.640 --> 0:17:44.000 the market is actually providing some solutions to this. Over 0:17:44.080 --> 0:17:48.200 draftees are obviously too high, they're crazy costly. They screw 0:17:48.240 --> 0:17:50.360 over a lot of people, especially the most financially vulnerable. 0:17:50.359 --> 0:17:52.040 I would like to see them done away with. But 0:17:52.080 --> 0:17:54.040 the great thing is some great banks have already done that. 0:17:54.080 --> 0:17:56.840 So there's City, Ally and Capital One. Are are three 0:17:56.840 --> 0:18:00.440 banks that have eliminated over draftees for their customers. And 0:18:00.600 --> 0:18:03.440 it's worth mentioning that. So if you're if you want 0:18:03.440 --> 0:18:05.840