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Speaker 1: Welcome to How the Money. I'm Joel and I am Matt,

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Speaker 1: and today we're discussing peak inflation by saving money, sucks

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Speaker 1: and insurance games. That's right, Joel. This is our Friday

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Speaker 1: Flight episode where every week we sit down we talked

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Speaker 1: through some of the different stories and articles that we

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Speaker 1: came across, uh, and specifically how they are going to

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Speaker 1: affect our money, how they're going to affect your money

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Speaker 1: if you're listening to this podcast. Uh, And so we're

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Speaker 1: gonna get to those. We're also going to announce our

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Speaker 1: winners of our book giveaway, the rate our bookshelf book

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Speaker 1: giveaway that we do every now and then. We'll get

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Speaker 1: to that at the end of this episode. But first, man,

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Speaker 1: you wanted to talk about Bobby Bonilla Days. Yeah, that's it,

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Speaker 1: that's it. You are much more of a fan of

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Speaker 1: baseball than I am. Well, growing up, I mean, I've

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Speaker 1: watched Bob Bonia like my Atlanta Braids a whole lot. Yeah,

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Speaker 1: he was, he's he's a good ball player and he

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Speaker 1: played for the mess for quite a long time. But

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Speaker 1: Bobby Bonia Day is special in the personal finance community

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Speaker 1: because he uh the perfect intersection of personal fighting yeah.

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Speaker 1: So basically Bobby Bonia signed this contract where the Mets

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Speaker 1: were like, hey, you know, we owe you six million dollars,

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Speaker 1: but what if ten years from now we start paying

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Speaker 1: you one point two million dollars a year for the

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Speaker 1: next twenty five years. And Bobby Bonia was like, I'll

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Speaker 1: take that guaranteed money. That that sounds good. That's that's

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Speaker 1: actually a whole lot more money than than So I

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Speaker 1: think it what works out to almost thirty million dollars

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Speaker 1: something like that they have to pay him over twenty

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Speaker 1: five years, So that's that's a whole lot more than six.

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Speaker 1: Um and so people think that Bobby Bonia is just

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Speaker 1: like shrewd negotiator and or he and his agent really right,

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Speaker 1: like both those guys they're like, yeah, let's do this,

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Speaker 1: um and and so it's just kind of one of

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Speaker 1: those fascinating things. Um it. I think deferred gratification. I

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Speaker 1: love seeing it, Like it's a perfect example of deferred

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Speaker 1: gratification where it's like I could take the lump sum now,

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Speaker 1: or I could take you know, a smaller amount but

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Speaker 1: for a really long period of time instead. Um but Matt,

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Speaker 1: you actually kind of ran the numbers and you you said,

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Speaker 1: I would have actually done the opposite of what Bobby did, right.

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Speaker 1: But yeah, we saw some other stories going around and

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Speaker 1: they were talking about how this actually made sense for

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Speaker 1: everybody because essentially they were paying him about in an

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Speaker 1: eight percent rate of return on his money. Right, But

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Speaker 1: that actually I guess what they didn't do. They didn't

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Speaker 1: take into account the fact that there was a ten

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Speaker 1: year delay before he was going to start receiving those payments.

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Speaker 1: And so that would have made sense if he were

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Speaker 1: to start receiving those payments that first imperially, right, but

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Speaker 1: if he had to win a decade, Really you're not

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Speaker 1: looking at a twenty five year period. You're looking at

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Speaker 1: a thirty five year period, right, And so if he

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Speaker 1: would have taken that lump sum, say six million, and

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Speaker 1: it immediately stuck that in the market as opposed to

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Speaker 1: sitting on it, you know, like if he got that

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Speaker 1: six million, would have just like taken it and you know,

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Speaker 1: put it in the bank and done nothing with it

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Speaker 1: for two years and then started investing. I mean, I mean,

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Speaker 1: if you're looking at it just from an analytical standpoint, Okay,

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Speaker 1: you start from day one, and so when you calculate,

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Speaker 1: you know, an average return of what he would have

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Speaker 1: received from that money from that lump sum invested over

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Speaker 1: thirty five years. It turns out that he would have

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Speaker 1: done much better. He would have basically had twice the

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Speaker 1: money had he invested them. That's basic percent return, but

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Speaker 1: in actuality the returns have been higher in that time span.

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Speaker 1: Something Okay, So I also crushed the numbers, and over

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Speaker 1: the past twenty five years, the SMP has returned over

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Speaker 1: twelve percent. I mean, you look at the past five years,

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Speaker 1: it's been over and granted at the time, you don't

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Speaker 1: know what the market is gonna do, right, because I

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Speaker 1: know for you that was one of your things is that, well,

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Speaker 1: you don't exactly know what the market is going to

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Speaker 1: give you. Guaranteed eight percent return that is impossible to

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Speaker 1: find anywhere, really, right If someone says, uh, did they

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Speaker 1: have a guaranteed eight percent return to give you, then um,

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Speaker 1: you're you're probably being led down a path. And actually,

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Speaker 1: interestingly enough, the owner of the Mets was had his

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Speaker 1: money invested with Bernie Madoff who was promising him guaranteed

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Speaker 1: double digit returns every year, and said, I think that's

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Speaker 1: why they felt like they could give Bobby Bonia this,

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Speaker 1: you know, long term pay out. They're like, well, we're

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Speaker 1: going to make more than that every single year because

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Speaker 1: we got our money with made off and it turned

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Speaker 1: out obviously that that was a scam wasn't real. So

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Speaker 1: if someone promises you that it's it's probably not true. Right.

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Speaker 1: There's there's bumps in the road when it comes to investing,

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Speaker 1: but it's always an interesting day. I love seeing these stories.

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Speaker 1: But yeah, I love that you ran the numbers two

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Speaker 1: and it's like, actually, if Bobby Bonia had taken you know,

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Speaker 1: the five point nine million dollars or whatever it was,

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Speaker 1: he would have come out way ahead if he had invested.

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Speaker 1: But the other thing to take into account, and this

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Speaker 1: is what everyone out there has to take into account

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Speaker 1: when they have run into some sort of lump sum

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Speaker 1: or long term payout conundrum, is like, what am I

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Speaker 1: actually going to do? Right? Because your behavior comes into

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Speaker 1: play in a big way here. Uh. And you know,

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Speaker 1: if you take that five point nine million and you

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Speaker 1: spend you know, half of it and then you try

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Speaker 1: to invest the rest, you're not going to come out ahead.

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Speaker 1: You can take an easy one mill off the top

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Speaker 1: and be like, all right, I'm gonna be smart with

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Speaker 1: the rest of the five maybe, and then all of

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Speaker 1: a sudden, well that changes the equation a whole lot.

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Speaker 1: But sometimes, you know, forcing yourself to not have access

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Speaker 1: to the money is actually the best way and best

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Speaker 1: thing for you, just from a behavioral standpoint. And of course,

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Speaker 1: Bobby been a day was yesterday, July one, So that's

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Speaker 1: why we're talking about it right at top of mine. Yeah,

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Speaker 1: all right, Well, let's get to the rest of our

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Speaker 1: Friday Flights stories this week, Matt, the sampling of stories

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Speaker 1: we find interesting that affects people's personal finances. Um. And

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Speaker 1: you know, one of the biggest stories from this week

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Speaker 1: was record high temperatures out west, right we had. I've

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Speaker 1: seen people frying eggs on the sidewalk in Portland, Organ,

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Speaker 1: that's how hot it got. Um. So yeah, and I

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Speaker 1: hate it for folks out there. Um it hit a

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Speaker 1: hundred and fifteen degrees in Portland on Monday. Might have

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Speaker 1: even been like one seventeen. I don't know. I think

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Speaker 1: the forecast was set for one seventeen, but maybe it

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Speaker 1: actually hit. I mean, I'm sure it just depends on

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Speaker 1: where you place your third Mamma. It's always like ten

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Speaker 1: degrees hotter in the car, right right, Yeah, well, and

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Speaker 1: and that's actually four degrees higher than it's ever been

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Speaker 1: in Atlanta, which is crazy, like you know, and like

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Speaker 1: we don't call it Hotlanta, no, but some people do, yeah,

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Speaker 1: not us. And to make things worse, Matt, so many

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Speaker 1: people who live in the Pacific Northwest don't have air

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Speaker 1: conditioning units in their palms. So yeah, that that obviously

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Speaker 1: makes it more difficult to handle those hot temperatures. But yeah,

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Speaker 1: how does that apply to your personal finances? Right? Well,

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Speaker 1: it turns out that of your utility bills come from

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Speaker 1: cooling your home. When temperatures are that hot, A much

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Speaker 1: higher percentage of your electricity bill will come from cooling

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Speaker 1: your home. But but yeah, Consumer Reports had an article

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Speaker 1: about how to lower your utility bills. And we've talked

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Speaker 1: about some of these things before, but it's worth mentioning again.

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Speaker 1: Like turning your thermostat up is kind of a no

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Speaker 1: dust suggestion, right, Like just keeping it generally warmer in

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Speaker 1: the house, But don't forget to do that, right, don't

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Speaker 1: forget to actually change the temperature and bump it up.

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Speaker 1: And it might make sense to install a smarter thermostat

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Speaker 1: that will automatically raise the temperature when you aren't there,

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Speaker 1: like a nest thermostat. Yeah, we've got a couple of those.

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Speaker 1: Love this thing well. And the goal thing to Matt

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Speaker 1: is is that a lot of utility companies will subsidize

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Speaker 1: the cost of that nest thermostat. So like I know,

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Speaker 1: for instance, Georgia Power they'll give you one for fifty

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Speaker 1: dollars UM. So it's just way cheaper than what you're

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Speaker 1: gonna pay at you know, Amazon or Target or something

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Speaker 1: like that. So yeah, it will include a link to

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Speaker 1: where you can check out the Nest thermostat, but make

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Speaker 1: sure to check out your local power company um and

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Speaker 1: to see if they're giving it to you. Some someone

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Speaker 1: give it to for free, because yeah, you're gonna be

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Speaker 1: using less electricity then, which is helping the grid out overall.

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Speaker 1: That's right. And don't forget to use ceiling fans as well.

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Speaker 1: This is kind of another no brainer, but they can

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Speaker 1: make it feel a whole lot cooler than it actually is,

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Speaker 1: as much as four degrees color in fact, I mean,

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Speaker 1: we've got a thermometer set up in west East room

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Speaker 1: just to you know, make sure you don't want it

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Speaker 1: to get to an unsafe temperature, especially here in the summer.

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Speaker 1: But anytime we have the fan on, like in my mind,

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Speaker 1: I calculate five degrees cooler. I'm like, Okay, it says

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Speaker 1: it's seventy four, you know in his room, but in reality,

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Speaker 1: with the fan on, I know that means it's actually

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Speaker 1: sixty nine. Yeah. And also according to the Department of Energy,

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Speaker 1: with the clever use of blinds, curtains, and awnings, you

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Speaker 1: can actually reduce the solar heat game from windows by

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Speaker 1: up to seventy we'll link to that, but you know,

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Speaker 1: definitely check that out so you can stay cool the

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Speaker 1: summer without those massive electric bills. We actually have a

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Speaker 1: neighbor and they've got one of these shades on the

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Speaker 1: outside of their house. Uh it's it's on their porch

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Speaker 1: and so it's easily accessible. But what it does it

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Speaker 1: keeps that afternoon sun from blasting through their front windows,

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Speaker 1: heating up the inside of the house. That that sun

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Speaker 1: hits that shade on the outside, it circulates around their house,

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Speaker 1: that he never even enters their home. I love that,

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Speaker 1: and I think a lot of people, Yeah, I think

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Speaker 1: a lot of people are like, I just need some

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Speaker 1: new windows that are like triple paint or quintuple paint,

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Speaker 1: which one like argon gas something like you know, like

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Speaker 1: some special gas that keeps it better. How don't people

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Speaker 1: don't know, but they're just like, oh, gasses, Yeah, that's

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Speaker 1: what it needs in there. And and you know, it's

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Speaker 1: nice windows. I'm sure it helps a little bit. It's

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Speaker 1: it helps them, and they often are more functional than

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Speaker 1: some of the older windows, but they're really expensive to

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Speaker 1: put in and there are a lot a lot of

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Speaker 1: more cheaper solutions that you could employ. Yeah, like blackout curtains,

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Speaker 1: like a ceiling fan that's way cheaper than like replacing

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Speaker 1: your windows. Right, absolutely, So yeah, you don't necessarily need

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Speaker 1: to go Defcon five when it comes to uh, you know,

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Speaker 1: cutting down on those energy costs. But it isn't definitely

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Speaker 1: one like you start at five and then you work

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Speaker 1: your way down that I don't know, I think. So okay,

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Speaker 1: all right, since we've had a Cold War, Yeah, well yeah,

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Speaker 1: And it's interesting to Matt because it's important to you know,

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Speaker 1: make those decisions and to take action to to lower

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Speaker 1: your personal utility bills. But what about letting someone else

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Speaker 1: make that thermostatic decision? For you right, and I'm not

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Speaker 1: just talking about like your significant other or like battle,

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Speaker 1: yeah exactly, Like yeah, which happens in most households, but

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Speaker 1: utility companies are actually adjusting thermostats automatically in certain locations, right,

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Speaker 1: specifically in order to keep the power grid from completely

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Speaker 1: buckling in times of high demand. So yeah, some consumers

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Speaker 1: can opt into the program and then you get entered

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Speaker 1: into a sweepstakes where your power bill is like paid

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Speaker 1: for for the year. But so there's like this extra incentive.

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Speaker 1: It's not that like the power company just wants control

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Speaker 1: over your thermostat. I mean they do um, and it's

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Speaker 1: in very rare circumstances. Yeah yeah, yeah, like but they

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Speaker 1: can text u I think maybe twice a year, does

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Speaker 1: the utility company, you know, crank your thermostat up maybe

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Speaker 1: like five degrees Yeah yeah, but that is going to

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Speaker 1: be probably the hottest days of the year when they

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Speaker 1: do that. So it's gonna be the days that you

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Speaker 1: want air conditioning the most, and you're gonna have to

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Speaker 1: kind of suffer through that. So yeah, what's your take?

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Speaker 1: Is it frugal or chief to try to like maybe

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Speaker 1: potentially a little money totally frugal yeah, I mean, okay,

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Speaker 1: at least with the program that they were talking about

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Speaker 1: in Texas and will link to the article. But you

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Speaker 1: can change it back. It's just a matter of being

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Speaker 1: opted into the program. Right. But then, yeah, you lose

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Speaker 1: out on your potential to the sweepsticks, right. Yeah. And

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Speaker 1: so for folks who are at home, you know, why

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Speaker 1: why not sign up? You can make the adjustment if

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Speaker 1: you can't handle the heat. But if you happen to

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Speaker 1: maybe you're not even home while that's happening, well that's

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Speaker 1: a perfect opportunity for you to take advantage of some

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Speaker 1: savings not only in your utilities, but also too with

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Speaker 1: this program. To be entered into having your power paid

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Speaker 1: for for an entire year. I would totally do it.

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Speaker 1: That'd be pretty sweet. I also am willing to enter

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Speaker 1: the pain. Uh you know, and it's but I think

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Speaker 1: if there was like a firm payback as opposed to

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Speaker 1: a potential payback, I'd like be into it even again,

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Speaker 1: kind of going back to the body VideA story, like

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Speaker 1: if you can, if you can crunch the numbers and

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Speaker 1: know that like, okay, can I handle that? Yes or no?

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Speaker 1: Make that decision and kind of go from there. But

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Speaker 1: it's like if you enter into it and the next

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Speaker 1: five Julys you get a zero out power bill, I'd

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Speaker 1: be like sure, I'm yeah, absolutely, all right, let's keep going, Matt.

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Speaker 1: Let's talk about inflation for a second, because that's still

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Speaker 1: top of mind now for a lot of folks. And

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Speaker 1: I guess you know, I'm kind of asking the question

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Speaker 1: right now, have we reached peak inflation? It's obviously a

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Speaker 1: hard thing to call in the moment, right what we'll

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Speaker 1: know three years from now, like like, well, what ended

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Speaker 1: up happening there? Even six months a year from now.

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Speaker 1: But yeah, car prices, gas prices, they're still high. Bacon

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Speaker 1: apparently to cost a lot more right now. But at

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Speaker 1: least it's good to see that the law of supply

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Speaker 1: and demand really is still working. Right. Lumber costs are

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Speaker 1: one of the things that we can point to as

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Speaker 1: evidence that we might be getting through some of the

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Speaker 1: worst pain points when it comes to rising prices. They

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Speaker 1: have fallen precipitously by over fifty from their high um

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Speaker 1: and you know that's also because their high was outrageous. Really, yuh,

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Speaker 1: would was starting to cost a whole lot. But yeah,

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Speaker 1: it's a it's a good sign that as prices rose,

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Speaker 1: suppliers kicked into overdrive to take advantage of increased profits

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Speaker 1: that they were seeing. Some companies were adding more shifts,

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Speaker 1: and some companies even brought defunct sawmills back to life.

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Speaker 1: They put like millions of dollars worth of investments into

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Speaker 1: some of these mills to bring them back. Um. And

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Speaker 1: so yeah, would started flowing freely again in in the economy. Um.

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Speaker 1: And that's led to what we're seeing now with a

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Speaker 1: strong price correction. Um. And I think, you know, as

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Speaker 1: some of these supply chain issues dry up, I think

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Speaker 1: some people have talked about long term inflation and they've

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Speaker 1: been worried about that. You know, in our inflation episode,

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Speaker 1: we were like, it remains to be seen, but I

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Speaker 1: don't know. Seeing like what's happening would right now as

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Speaker 1: some of these you know, chip factories come back online

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Speaker 1: and begin to produce, I do think it's gonna be

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Speaker 1: a semi transitory event. Um. I don't know what that that. Yeah,

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Speaker 1: Like we said, well we'll see, Yeah, time will tell,

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Speaker 1: but yeah, seeing specifically the lumber industry respond like that,

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Speaker 1: I mean, that's the a sign of a healthy market, right,

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Speaker 1: The ability for them to make changes like that and

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Speaker 1: to meet that demand. I love seeing that. And we

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Speaker 1: are still seeing the effects on the car market right

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Speaker 1: A substantial rise in used car prices has led to

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Speaker 1: almost one third of the inflation that we've been seeing lately.

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Speaker 1: Uh yeah, And so since you know those all important

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Speaker 1: ships like you mentioned are still in low supply, it

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Speaker 1: turns out that your car might actually be worth more

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Speaker 1: uh than when you bought it. According to Black Book,

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Speaker 1: use cars right now are worth thirty more than they

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Speaker 1: were one year ago. Normally, you lose an insane amount

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Speaker 1: of money just by driving your new car off the

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Speaker 1: dealership lot. But you know, kind of a strange twist

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Speaker 1: of fate, dozens of gently used models are now selling

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Speaker 1: for more than their original sticker price, which is totally insane.

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Speaker 1: Should I start investing in used cars? That's that what

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Speaker 1: you're saying. I think you might be investing at the peak.

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Speaker 1: That's that's the problem with timbing of the market. Uh So,

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Speaker 1: here's a random takeaway. If if you're an a lease,

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Speaker 1: it's almost lock that you should buy the car at

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Speaker 1: the price that you've agreed to in your contract, even

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Speaker 1: if you don't want to keep it, because then you

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Speaker 1: can turn back around and sell it. Obviously, do your

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Speaker 1: homework first, you need to know what that car is

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Speaker 1: likely to sell for. But a listener actually emailed US

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Speaker 1: listener Becky uh saying that she did this very thing,

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Speaker 1: and she actually made about five thousand dollars on the spread,

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Speaker 1: she basically said, for a year at lease famous right

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Speaker 1: there by by just buying it and then selling it

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Speaker 1: right after she was done with it. Absolutely, and that's

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Speaker 1: not something you can count on because typically, I mean,

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Speaker 1: we have never seen use cars ever be worth more

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Speaker 1: than they were in the past. This is highly abnormal type, yes,

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Speaker 1: but if that's the situation that you're in, realize that

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Speaker 1: this is an instance where you can take some lemons

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Speaker 1: and make some lemonade out of it. But Matt, we

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Speaker 1: talked about inflation overall, but inflation is also highly personal.

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Speaker 1: It kind of depends on where you're spending your money,

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Speaker 1: right because, yeah, if you're buying a car right now,

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Speaker 1: inflation is awful for you. If you're buying a house

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Speaker 1: right now, inflation is awful for you. If you're renovating

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Speaker 1: or or stuff like that, Like, inflation is has not

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Speaker 1: been kind to you. But you're feeling it exactly. Yeah,

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Speaker 1: you're feeling it viscerally because those prices have gone it

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Speaker 1: more than others. So if you're curious not just about

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Speaker 1: the overall rate of inflation, but you want to know

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Speaker 1: maybe your own personal rate of inflation, well it turns

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Speaker 1: out there's a calculator for that, and CNN actually created

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Speaker 1: this tool to help you determine your own personal rate

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Speaker 1: of inflation based on your specific spending patterns. It's kind

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Speaker 1: of interesting because you might find that rising prices have

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Speaker 1: either higher or a lower impact on you in particular

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Speaker 1: based on how you spend um. So it's kind of yeah,

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Speaker 1: fun little ex ties to be like, I spend this

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Speaker 1: much at the grocery store, I spend this with a

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Speaker 1: little here and there, and then yeah, let it spit

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Speaker 1: out what your actual inflation number is. Yeah, nice little

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Speaker 1: calculator for all the all the nerds out there. Most

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Speaker 1: people are probably like, I'm fine, yeah, but Jill, one

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Speaker 1: thing that isn't rising are the rates that are being

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Speaker 1: paid on the money that you're saving. It certainly feels

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Speaker 1: like saving money sucks right now. Yeah. Yeah, one year

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Speaker 1: CD rates are at record lows, averaging at point one seven. Yeah,

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Speaker 1: even our our favorite online banks are paying right around

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Speaker 1: point five percent to lock your money up in a

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Speaker 1: CD for a year. Yeah, it is not a good

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Speaker 1: time to be a saver. But cash we want we

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Speaker 1: want to mention this because cash still holds an important

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Speaker 1: place in your life, even if you're seeing those cash

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Speaker 1: reserves grow at a snail's pace. Uh, even if you're

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Speaker 1: actually in reality losing money because it's not keeping up

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Speaker 1: with inflation. Even still, it's important to have your emergency

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Speaker 1: fund accessible and liquid. Uh. And so yeah, fingers crossed

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Speaker 1: that in the coming years, saving money won't feel like

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Speaker 1: such a crushing blow. Hopefully in the future it won't

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Speaker 1: feel like like you're on this raft that's slowly leaking

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Speaker 1: air and you're just like sinking down into the into

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Speaker 1: the pool, because that's basically what's happening right now with

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Speaker 1: the banks paying such a pitoly amount on those savings

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Speaker 1: accounts and c d s. Yeah, I mean, I think

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Speaker 1: that's why we've had so many questions where listeners are like,

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Speaker 1: can I please invest my money instead of keeping it

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Speaker 1: locked in a savings account that's not really doing much

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Speaker 1: for me at all right now. But yeah, like you said,

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Speaker 1: the thing is you have to have some liquid cash

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Speaker 1: available because you can't predict the future and you can't

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Speaker 1: lock it away. Even if you're hoping for higher returns.

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Speaker 1: It's always important to have that emergency cash on hand

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Speaker 1: in case you need it. But Matt, let's get to

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Speaker 1: some more stories, including anybody who's taking out student loans.

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Speaker 1: They're gonna pay higher interest rates next year. We'll get

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Speaker 1: to that and more right after this. All right, we're

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Speaker 1: back angel. It is now time to get to our

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Speaker 1: ludicrous headline of the week. Okay, I like it, You

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Speaker 1: like my Okay, So I did that because we've been

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Speaker 1: reading reading Harry Potter. You have been reading it to

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Speaker 1: your girls as well, and we are also reading Harry Potter,

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Speaker 1: and uh we both do the voices. Was that your snap?

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Speaker 1: That was No? That was my Harry Potter voice. Oh

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Speaker 1: d we gotta work on that. I feel like it's

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Speaker 1: pretty good. Maybe folks will disagree, but okay. Our ludicrous

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Speaker 1: headline this week is Peloton disabled, a free running feature

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Speaker 1: on its treadmills, forcing owners to pay up. Dude. This

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Speaker 1: one comes from CNBC and basically, if you own one

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Speaker 1: of these super fancy and incredibly expensive treadmills. You know,

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Speaker 1: there might be some folks out there who have a

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Speaker 1: Peloton you were able to hop on and just go

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Speaker 1: for a run without having to take a Peloton class

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Speaker 1: in order to to get an indoor run, right, which

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Speaker 1: is a perfectly reasonable thing to be able to want

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Speaker 1: to do on your treadmill. But that's no longer the case. Now.

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Speaker 1: Your three thousand dollar treadmill is a giant, expensive brick

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Speaker 1: until you fork over the forty a month membership that

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Speaker 1: they charged highway robbery Matt seriously, And you know, this

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Speaker 1: has been a case with a lot of other products

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Speaker 1: too before Peloton, including smart phones. Right. So the reason

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Speaker 1: we're mentioning the story is we want for you to

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Speaker 1: be careful with what products you buy. If the hardware

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Speaker 1: that you're purchasing needs software and regular updates to work,

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Speaker 1: you're at the mercy of the company that sells the product,

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Speaker 1: and in this case too, Man. I think one of

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Speaker 1: the most ludicrous aspects of the story is that Peloton

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Speaker 1: said that the reason this happened was because of a

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Speaker 1: software safety update. Sure Peloton, Yeah, yeah, yeah. The the

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Speaker 1: only free feature available on the Peloton got rolled back

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Speaker 1: somehow with a safety update. You know that they were

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Speaker 1: just basically seeing how folks were gonna respond, seeing if

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Speaker 1: they could get away with because if folks were gonna

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Speaker 1: be quiet about it and it wasn't a big deal,

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Speaker 1: it's like, oh, this is a way that we can

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Speaker 1: increase our revenues. But with the backlash, they're totally walking

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Speaker 1: it back and they're saying, oh, we're gonna get right,

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Speaker 1: you know, We're we're getting to work on this. H

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Speaker 1: The next software update will enable the free run feature. Uh,

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Speaker 1: It's just yeah, that to me, that's the part where

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Speaker 1: I'm just like, come on, guys, seriously, Yeah, I agree.

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Speaker 1: I'm kind of ethically opposed to paying three thousand dollars

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Speaker 1: for a treadmill anyway, whether it comes with a forty

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Speaker 1: dollar a month classes or not. If it's your your

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Speaker 1: craft beer equivalent, Uh, you know what you want. You

427
00:19:06,280 --> 00:19:08,160
Speaker 1: can still get a great treadmill for a lot less

428
00:19:08,160 --> 00:19:10,399
Speaker 1: than that, doublets, or you can run outside you be

429
00:19:10,520 --> 00:19:14,600
Speaker 1: you all right? Well, yeah, speaking of free stuff, that

430
00:19:14,840 --> 00:19:17,560
Speaker 1: now Cross Money. Matt Venmo has announced that they're gonna

431
00:19:17,560 --> 00:19:21,240
Speaker 1: start to charge for certain types of payments soon or actually,

432
00:19:21,320 --> 00:19:24,679
Speaker 1: well they've they've always charged transactions for business accounts. But

433
00:19:24,800 --> 00:19:27,280
Speaker 1: for those who use their personal account for their business.

434
00:19:27,280 --> 00:19:29,320
Speaker 1: But I've never gotten around us setting up a separate

435
00:19:29,320 --> 00:19:32,720
Speaker 1: business account. That's going to change on July. Start cracking

436
00:19:32,720 --> 00:19:36,600
Speaker 1: down right. So Venmo is saying they're making it easier

437
00:19:36,960 --> 00:19:40,320
Speaker 1: for small business owners to be compliant because customers will

438
00:19:40,320 --> 00:19:42,200
Speaker 1: be able to select whether they're the money they're sending

439
00:19:42,280 --> 00:19:44,320
Speaker 1: is for a good or service, and then a fee

440
00:19:44,400 --> 00:19:46,640
Speaker 1: is going to be deducted from the amount that's sent.

441
00:19:46,720 --> 00:19:49,280
Speaker 1: So Venmo is trying to Now that they've gotten just

442
00:19:49,320 --> 00:19:52,479
Speaker 1: a massive user base, they're trying to make a profit

443
00:19:52,600 --> 00:19:55,840
Speaker 1: on that user base. The upside for customers is that

444
00:19:55,880 --> 00:20:00,239
Speaker 1: those transactions are eligible for Venmo's purchase protection plan. But

445
00:20:00,520 --> 00:20:02,680
Speaker 1: the bad news is that you might start to see

446
00:20:02,760 --> 00:20:04,960
Speaker 1: prices go up and companies are gonna have to start,

447
00:20:05,119 --> 00:20:07,800
Speaker 1: you know, adding that fee into what they charge you

448
00:20:07,920 --> 00:20:10,399
Speaker 1: for that good or service. And also, Matt, Venmo is

449
00:20:10,440 --> 00:20:13,960
Speaker 1: also upping its cost for instant transfer of funds, so

450
00:20:14,200 --> 00:20:16,320
Speaker 1: your your friend pays you money and you transfer it

451
00:20:16,359 --> 00:20:18,000
Speaker 1: to your bank account. They used to charge a one

452
00:20:18,000 --> 00:20:19,920
Speaker 1: percent fee and now it's gonna be a one point

453
00:20:19,960 --> 00:20:23,960
Speaker 1: five percent fee. So yeah, basically, wait those three or

454
00:20:23,960 --> 00:20:26,840
Speaker 1: four days. Don't ever pay a fee to move money

455
00:20:26,840 --> 00:20:29,840
Speaker 1: from Venmo into your bank account. That's an easy few

456
00:20:29,880 --> 00:20:33,600
Speaker 1: to dodge. Absolutely, let's talk about scams. More millennials and

457
00:20:33,800 --> 00:20:36,720
Speaker 1: jin zers are actually losing money to scams these days. Uh.

458
00:20:36,800 --> 00:20:40,560
Speaker 1: Scammers and the different cons they pull are getting more sophisticated,

459
00:20:40,840 --> 00:20:43,480
Speaker 1: and they are targeting a younger, more tech savvy audience.

460
00:20:43,800 --> 00:20:46,480
Speaker 1: Our friend Ron Lieber he wrote an excellent article about

461
00:20:46,480 --> 00:20:48,640
Speaker 1: this in the New York Times this week after the

462
00:20:48,680 --> 00:20:52,160
Speaker 1: FDC released numbers about which age cohorts are the most

463
00:20:52,160 --> 00:20:54,840
Speaker 1: susceptible to scams these days. Dude, it wasn't even close.

464
00:20:56,119 --> 00:20:59,960
Speaker 1: Of people ages twenty nine have lost money to fraud,

465
00:21:00,119 --> 00:21:04,000
Speaker 1: whereas only of adults from seventy to seventy nine have

466
00:21:04,119 --> 00:21:07,520
Speaker 1: lost money to a scammer. Obviously, that cohort is likely

467
00:21:07,560 --> 00:21:10,359
Speaker 1: to be online. More and more these scams are moving online.

468
00:21:10,520 --> 00:21:12,080
Speaker 1: But it's just something to be aware of. Right. If

469
00:21:12,119 --> 00:21:14,560
Speaker 1: you think that you're impervious to scams, think again. It's

470
00:21:14,560 --> 00:21:16,920
Speaker 1: important to keep your guard up and to be wary

471
00:21:17,000 --> 00:21:19,960
Speaker 1: before you enter your your credit card information anywhere online.

472
00:21:20,080 --> 00:21:22,840
Speaker 1: Make sure that you're not entering your social security anywhere

473
00:21:22,840 --> 00:21:24,960
Speaker 1: like one of the scams you mentioned were these employment

474
00:21:25,000 --> 00:21:26,720
Speaker 1: scams where it's like, all right, we gotta you know,

475
00:21:26,800 --> 00:21:28,679
Speaker 1: run the background check and run all these things on you,

476
00:21:28,920 --> 00:21:30,920
Speaker 1: and they want you to put in your birthday your

477
00:21:30,920 --> 00:21:33,280
Speaker 1: Social Security and it turns out someone's about to steal

478
00:21:33,280 --> 00:21:35,600
Speaker 1: your identity again. And one other thing Matt, people really

479
00:21:35,640 --> 00:21:37,680
Speaker 1: need to do to protect themselves is to freeze their credit.

480
00:21:37,960 --> 00:21:39,880
Speaker 1: I wrote, you know, an article on how the Money

481
00:21:39,880 --> 00:21:42,440
Speaker 1: dot Com about how people can do that. It's super chill,

482
00:21:42,480 --> 00:21:44,440
Speaker 1: It's not gonna take you long at all, um, and

483
00:21:44,640 --> 00:21:47,840
Speaker 1: especially right now, let's say you did accidentally give away

484
00:21:47,840 --> 00:21:50,640
Speaker 1: some of your personal information, Freezing your credit is going

485
00:21:50,680 --> 00:21:53,080
Speaker 1: to ensure that you're less susceptible to a lot of

486
00:21:53,080 --> 00:21:55,800
Speaker 1: the collateral damage that would otherwise take place. Right And

487
00:21:55,840 --> 00:21:58,320
Speaker 1: not only is it easy and quick to freeze your credit,

488
00:21:58,359 --> 00:22:00,840
Speaker 1: it's also crazy fast to unfree your credit as well.

489
00:22:00,840 --> 00:22:02,520
Speaker 1: So for instance, if you want to apply for a

490
00:22:02,520 --> 00:22:06,320
Speaker 1: new card, maybe you're applying for a mortgage, something like that. Literally,

491
00:22:06,359 --> 00:22:08,560
Speaker 1: I've tied myself before and it takes me like one

492
00:22:08,600 --> 00:22:12,520
Speaker 1: minute per bureau. And speaking of scams, Matt, the Texas Observer,

493
00:22:12,880 --> 00:22:15,720
Speaker 1: they had an excellent article this week that basically called

494
00:22:15,800 --> 00:22:18,320
Speaker 1: title insurance a scam. Yeah, and so yeah, this is

495
00:22:18,480 --> 00:22:21,959
Speaker 1: a big cost center when you're applying for a mortgage

496
00:22:21,960 --> 00:22:23,440
Speaker 1: when you're buying a home. It's one of those line

497
00:22:23,440 --> 00:22:25,800
Speaker 1: items that you see and you're like, why does it

498
00:22:25,840 --> 00:22:27,560
Speaker 1: cost that much? What's it for? I don't really know.

499
00:22:28,480 --> 00:22:30,199
Speaker 1: I guess I need it though. Yeah, and and not

500
00:22:30,280 --> 00:22:32,920
Speaker 1: only are you supposed to purchase an owner's type policy

501
00:22:33,200 --> 00:22:35,679
Speaker 1: when you're buying a home to protect yourself against you know,

502
00:22:35,760 --> 00:22:39,720
Speaker 1: legal defects or incorrect surveys or potentially forged deeds, which

503
00:22:39,720 --> 00:22:42,959
Speaker 1: are all things that don't happen very frequently, but you

504
00:22:43,040 --> 00:22:45,639
Speaker 1: also have to pay for one on behalf of the

505
00:22:45,640 --> 00:22:48,840
Speaker 1: mortgage company protecting their steak in the house. So yeah,

506
00:22:48,840 --> 00:22:51,399
Speaker 1: how much a title insurance policy costs, It depends on

507
00:22:51,400 --> 00:22:54,119
Speaker 1: where you live. And no wonder this article showed up

508
00:22:54,119 --> 00:22:56,920
Speaker 1: in the Texas Observer Matt because title insurance in the

509
00:22:56,960 --> 00:22:59,199
Speaker 1: state of Texas is sky high, in the range of

510
00:22:59,240 --> 00:23:01,840
Speaker 1: two thousand dollars for a basic house. So you're buying

511
00:23:01,880 --> 00:23:04,440
Speaker 1: a home that's two k added on to the price

512
00:23:04,480 --> 00:23:06,639
Speaker 1: of that home, um, and there's not much you can

513
00:23:06,720 --> 00:23:08,800
Speaker 1: do about it. Right where other people live, well, it

514
00:23:08,880 --> 00:23:11,120
Speaker 1: might cost more like a thousand dollars or maybe even

515
00:23:11,160 --> 00:23:13,440
Speaker 1: as low as five hundred bucks. And actually in Iowa,

516
00:23:13,640 --> 00:23:17,600
Speaker 1: that state provides this insurance for a hundred and ten dollars.

517
00:23:17,680 --> 00:23:21,119
Speaker 1: So yeah, big thumbs up to Iowa for everyone buying

518
00:23:21,119 --> 00:23:24,480
Speaker 1: homes there. Yeah, it makes it reasonable because, yeah, some

519
00:23:24,520 --> 00:23:27,760
Speaker 1: of those prices are just exordinant. And in Texas specifically,

520
00:23:27,960 --> 00:23:31,480
Speaker 1: it's one of these insurance products that it's not a scam,

521
00:23:31,520 --> 00:23:35,040
Speaker 1: but it feels like a scam in particular because I mean,

522
00:23:35,080 --> 00:23:37,120
Speaker 1: I don't know if I've ever heard of any anybody

523
00:23:37,480 --> 00:23:40,320
Speaker 1: actually having to use that title insurance. It's one of

524
00:23:40,320 --> 00:23:43,359
Speaker 1: those rarely rarely used insurance products. But also to the

525
00:23:43,400 --> 00:23:45,240
Speaker 1: stakes are high. Yeah, you know, this is one of

526
00:23:45,280 --> 00:23:47,159
Speaker 1: the things that technologies should be able to fix in

527
00:23:47,200 --> 00:23:50,520
Speaker 1: the future. Blockchain technology specifically could make title insurance a

528
00:23:50,600 --> 00:23:54,240
Speaker 1: relic of the past, as these transfers of properties are

529
00:23:54,359 --> 00:23:57,000
Speaker 1: digitally stored, there's no fraud that can take place on that,

530
00:23:57,040 --> 00:23:59,200
Speaker 1: you know, on the public blockchain. We'll see at that

531
00:23:59,240 --> 00:24:01,840
Speaker 1: tech actually works way into the housing industry, But for

532
00:24:01,920 --> 00:24:04,040
Speaker 1: right now, it's one of those insurance products that that

533
00:24:04,080 --> 00:24:06,040
Speaker 1: people still need to purchase, you know, at least for

534
00:24:06,080 --> 00:24:09,320
Speaker 1: the time being, even though it basically does feel like

535
00:24:09,320 --> 00:24:11,879
Speaker 1: a rip off. In your likelihood of having to file

536
00:24:12,000 --> 00:24:14,400
Speaker 1: a title claim are pretty close to zero. Not having

537
00:24:14,440 --> 00:24:16,640
Speaker 1: the insurance is just too big of a risk for you.

538
00:24:16,760 --> 00:24:19,639
Speaker 1: So make sure that you, yeah, purchase that owner's title

539
00:24:19,720 --> 00:24:21,439
Speaker 1: policy as well. And just and we're pointing out here

540
00:24:21,440 --> 00:24:23,240
Speaker 1: too that, yeah, you have to purchase one of those

541
00:24:23,280 --> 00:24:25,679
Speaker 1: plans for your lender, otherwise they're not going to be

542
00:24:25,680 --> 00:24:27,960
Speaker 1: willing to give you that loan. Yeah, in some states,

543
00:24:28,000 --> 00:24:31,159
Speaker 1: you can shop for your own owner's title policy. You

544
00:24:31,200 --> 00:24:32,680
Speaker 1: don't have to go with the one that the lender,

545
00:24:32,720 --> 00:24:35,800
Speaker 1: that the lender recommends, And so in those states where

546
00:24:35,800 --> 00:24:37,919
Speaker 1: you can shop, shop around and see if you can

547
00:24:37,920 --> 00:24:41,320
Speaker 1: find a better deal. Again, because it is hopefully, hopefully

548
00:24:41,760 --> 00:24:43,400
Speaker 1: you know, a type of insurance that you're never going

549
00:24:43,440 --> 00:24:45,880
Speaker 1: to use. Matt, Let's talk about another form of insurance

550
00:24:45,920 --> 00:24:48,080
Speaker 1: to that is feels like a total waste of money.

551
00:24:48,119 --> 00:24:50,160
Speaker 1: And and and this one is actually one that you should

552
00:24:50,200 --> 00:24:53,879
Speaker 1: be avoiding. That's extended car warranties. Yeah, We've mentioned how

553
00:24:53,960 --> 00:24:57,200
Speaker 1: much we dislike these before because they cost just massively

554
00:24:57,240 --> 00:25:00,760
Speaker 1: outweigh the benefits. They're bad buy for pretty much everybody,

555
00:25:00,800 --> 00:25:02,720
Speaker 1: And there's just so many pitfalls when you're looking to

556
00:25:02,720 --> 00:25:06,199
Speaker 1: purchase an extended warranty that it makes this space just

557
00:25:06,320 --> 00:25:09,760
Speaker 1: fraught with a lot of downside for people. And one

558
00:25:09,800 --> 00:25:12,320
Speaker 1: of the biggest potential pitfalls is that a lot of

559
00:25:12,320 --> 00:25:14,720
Speaker 1: folks buy end up buying a warranty from a third

560
00:25:14,720 --> 00:25:17,439
Speaker 1: party company instead of buying one from the company that

561
00:25:17,440 --> 00:25:21,000
Speaker 1: actually manufactured the vehicle, and that third party warranty is

562
00:25:21,000 --> 00:25:24,399
Speaker 1: worth little to nothing because who knows how long that

563
00:25:24,440 --> 00:25:26,560
Speaker 1: company has been around. Many of the companies that sell

564
00:25:26,680 --> 00:25:29,679
Speaker 1: extended warranties for vehicles are more of the fly by

565
00:25:29,760 --> 00:25:32,800
Speaker 1: night variety, And so, yeah, does that warranty even cover

566
00:25:33,080 --> 00:25:34,920
Speaker 1: was likely to go wrong with the vehicle? Maybe there's

567
00:25:34,960 --> 00:25:37,159
Speaker 1: some language in there that prevents you from actually being

568
00:25:37,200 --> 00:25:39,439
Speaker 1: able to use it when something does go wrong, And

569
00:25:39,480 --> 00:25:41,840
Speaker 1: so yeah, there's just way too many loopholes to make

570
00:25:41,840 --> 00:25:45,159
Speaker 1: car warranties a smart buy. It's almost always better to

571
00:25:45,240 --> 00:25:47,520
Speaker 1: keep that money on hand and self insured instead of

572
00:25:47,520 --> 00:25:49,840
Speaker 1: forking over the money for one of these warranties that

573
00:25:49,960 --> 00:25:52,240
Speaker 1: might or might not in all like they could pay off.

574
00:25:52,280 --> 00:25:54,879
Speaker 1: It's usually why like two thousands to get one of

575
00:25:54,920 --> 00:25:58,600
Speaker 1: these extended warranties. Keep that money in your savings account instead, uh,

576
00:25:58,640 --> 00:26:01,440
Speaker 1: and be ready to pay for the things that happened

577
00:26:01,480 --> 00:26:03,720
Speaker 1: to your vehicle out of money that you have on hand,

578
00:26:03,760 --> 00:26:06,080
Speaker 1: not trying to rely on one of these warranties that

579
00:26:06,240 --> 00:26:08,880
Speaker 1: probably isn't gonna work out anyway. That's right, even though

580
00:26:09,080 --> 00:26:11,200
Speaker 1: you aren't gonna be earning much money on that money

581
00:26:11,200 --> 00:26:13,439
Speaker 1: that's sitting there in that savings account. Student loans, man,

582
00:26:13,520 --> 00:26:15,960
Speaker 1: let's talk about those so won't be thrown away. Yeah,

583
00:26:16,000 --> 00:26:19,639
Speaker 1: that that is true. As of yesterday, interest rates on

584
00:26:19,680 --> 00:26:23,280
Speaker 1: student loans are higher. That's a little surprising given the

585
00:26:23,320 --> 00:26:25,320
Speaker 1: low interest rates that we've been seeing across the board.

586
00:26:25,359 --> 00:26:28,440
Speaker 1: But undergraduate students will now be taking out loans from

587
00:26:28,440 --> 00:26:31,199
Speaker 1: the federal government just shy of four percent. That's a

588
00:26:31,280 --> 00:26:34,359
Speaker 1: one percent increase over last year's rate. Graduate student loans

589
00:26:34,359 --> 00:26:37,200
Speaker 1: will be at five point to eight percent. Uh. And

590
00:26:37,240 --> 00:26:39,160
Speaker 1: we're actually we're not even gonna mention the parent plus

591
00:26:39,160 --> 00:26:41,560
Speaker 1: loans because those are even higher and they're just not

592
00:26:41,640 --> 00:26:44,679
Speaker 1: worth considering the worst. They're the worst student loan products

593
00:26:44,720 --> 00:26:47,520
Speaker 1: out there. And so it's important for all students to

594
00:26:47,520 --> 00:26:50,120
Speaker 1: be careful with how much they choose to borrow. We're

595
00:26:50,200 --> 00:26:53,760
Speaker 1: not against folks taking on debt to fund their education. Uh,

596
00:26:53,840 --> 00:26:56,280
Speaker 1: we feel that can be a really good investment in

597
00:26:56,480 --> 00:26:59,280
Speaker 1: your personal ability to earn more money down the road, right,

598
00:26:59,640 --> 00:27:02,400
Speaker 1: But it's crucial to do it wisely. Into find ways

599
00:27:02,440 --> 00:27:05,240
Speaker 1: to lower your borrowing needs. We don't want you to

600
00:27:05,280 --> 00:27:09,240
Speaker 1: hamstring your future by overloading yourself with tons of debt.

601
00:27:09,280 --> 00:27:12,480
Speaker 1: Now again, even for something as wonderful as in education,

602
00:27:12,800 --> 00:27:15,960
Speaker 1: fill out that FAFTSA, Look for merit scholarships, Look at

603
00:27:15,960 --> 00:27:18,399
Speaker 1: all the countless other ways that you can find money

604
00:27:18,440 --> 00:27:20,320
Speaker 1: that is out there to fund your education before you

605
00:27:20,320 --> 00:27:22,639
Speaker 1: start looking to products like student loans where you're paying

606
00:27:22,760 --> 00:27:25,440
Speaker 1: debt in order to fund your education. Achiever school, that's

607
00:27:25,440 --> 00:27:27,200
Speaker 1: another thing you can consider to right, just go in

608
00:27:27,240 --> 00:27:29,160
Speaker 1: to a cheaper school, that's right, man, All right, well, Matt,

609
00:27:29,280 --> 00:27:30,800
Speaker 1: last week on the show, we said we're gonna give

610
00:27:30,840 --> 00:27:34,480
Speaker 1: away some books rate our bookshelf, and yeah, it's so fun,

611
00:27:34,560 --> 00:27:37,119
Speaker 1: Like so many listeners were kind enough to submit a

612
00:27:37,200 --> 00:27:40,280
Speaker 1: nice review for the show and they emailed us and

613
00:27:40,800 --> 00:27:43,840
Speaker 1: we have the results of that book giveaway, those winners,

614
00:27:44,200 --> 00:27:49,160
Speaker 1: the screen names for those reviews where b secon macgoul

615
00:27:49,200 --> 00:27:53,320
Speaker 1: twenty two and Evil three. I think it's evly let me,

616
00:27:55,160 --> 00:27:58,119
Speaker 1: but Evil three sounds pretty funny. Sound funny? All right, Everly,

617
00:27:58,280 --> 00:28:01,000
Speaker 1: good job. So yeah, well we'll get those books sent out.

618
00:28:02,480 --> 00:28:06,120
Speaker 1: Uh yeah, I don't know. I was thinking. I guess

619
00:28:06,119 --> 00:28:08,520
Speaker 1: maybe that's how we spelled it. Uh yeah, I know.

620
00:28:08,880 --> 00:28:11,359
Speaker 1: Thanks to everybody who submitted a review, and just reminder,

621
00:28:11,400 --> 00:28:13,600
Speaker 1: if you didn't win, that review can still count towards

622
00:28:13,640 --> 00:28:16,560
Speaker 1: future rate our bookshelf giveaways, and so just a little

623
00:28:16,640 --> 00:28:19,080
Speaker 1: encouragement for all those folks who didn't win this time.

624
00:28:19,240 --> 00:28:21,520
Speaker 1: You know, another one's coming soon, that's right. Yeah, And

625
00:28:21,680 --> 00:28:24,560
Speaker 1: also to happy fourth of July to everybody. Joel, you

626
00:28:24,600 --> 00:28:26,320
Speaker 1: and I were planning to take Monday off. I think

627
00:28:26,320 --> 00:28:29,160
Speaker 1: we're gonna take a How to Money family beach Lake trip,

628
00:28:29,200 --> 00:28:31,080
Speaker 1: but we will still have a great episode on Monday,

629
00:28:31,160 --> 00:28:33,280
Speaker 1: waiting for you. We're actually going to have a guest

630
00:28:33,280 --> 00:28:36,920
Speaker 1: on and we're gonna talk all about passive income financial

631
00:28:36,920 --> 00:28:38,720
Speaker 1: freedom the fourth of July. You kind of see the

632
00:28:38,760 --> 00:28:41,320
Speaker 1: overlap there. It's financial independence next week on How the Money,

633
00:28:41,320 --> 00:28:43,600
Speaker 1: So yeah, we're gonna be covering that topic a whole lot.

634
00:28:43,680 --> 00:28:47,680
Speaker 1: And our guest on Monday, Rachel Richards, has already achieved that,

635
00:28:47,720 --> 00:28:49,200
Speaker 1: and she achieved at a really young age. So I'm

636
00:28:49,200 --> 00:28:52,360
Speaker 1: really looking forward to putting that out into your earbuds

637
00:28:52,400 --> 00:28:55,280
Speaker 1: on Monday. But until then, have a great weekend celebrating

638
00:28:55,400 --> 00:28:57,920
Speaker 1: America's independence. All Right, Matt, that's gonna do it for

639
00:28:57,960 --> 00:29:01,440
Speaker 1: this episode. Until next time, Best AND's Out, Best Friends Out,