WEBVTT - Friday Flight - Peak Inflation, Saving Money Sucks, & Insurance Scams #378 0:00:00.120 --> 0:00:02.920 Welcome to How the Money. I'm Joel and I am Matt, 0:00:03.000 --> 0:00:06.720 and today we're discussing peak inflation by saving money, sucks 0:00:06.960 --> 0:00:28.360 and insurance games. That's right, Joel. This is our Friday 0:00:28.360 --> 0:00:30.560 Flight episode where every week we sit down we talked 0:00:30.640 --> 0:00:32.640 through some of the different stories and articles that we 0:00:32.680 --> 0:00:35.559 came across, uh, and specifically how they are going to 0:00:35.600 --> 0:00:38.280 affect our money, how they're going to affect your money 0:00:38.320 --> 0:00:40.400 if you're listening to this podcast. Uh, And so we're 0:00:40.400 --> 0:00:42.279 gonna get to those. We're also going to announce our 0:00:42.360 --> 0:00:45.880 winners of our book giveaway, the rate our bookshelf book 0:00:45.920 --> 0:00:47.879 giveaway that we do every now and then. We'll get 0:00:47.880 --> 0:00:49.839 to that at the end of this episode. But first, man, 0:00:49.880 --> 0:00:54.040 you wanted to talk about Bobby Bonilla Days. Yeah, that's it, 0:00:54.080 --> 0:00:56.200 that's it. You are much more of a fan of 0:00:56.200 --> 0:00:58.720 baseball than I am. Well, growing up, I mean, I've 0:00:58.720 --> 0:01:01.600 watched Bob Bonia like my Atlanta Braids a whole lot. Yeah, 0:01:01.640 --> 0:01:03.640 he was, he's he's a good ball player and he 0:01:03.640 --> 0:01:05.160 played for the mess for quite a long time. But 0:01:05.200 --> 0:01:08.960 Bobby Bonia Day is special in the personal finance community 0:01:09.000 --> 0:01:14.080 because he uh the perfect intersection of personal fighting yeah. 0:01:14.560 --> 0:01:17.559 So basically Bobby Bonia signed this contract where the Mets 0:01:17.600 --> 0:01:20.600 were like, hey, you know, we owe you six million dollars, 0:01:20.640 --> 0:01:23.120 but what if ten years from now we start paying 0:01:23.120 --> 0:01:26.000 you one point two million dollars a year for the 0:01:26.040 --> 0:01:29.000 next twenty five years. And Bobby Bonia was like, I'll 0:01:29.000 --> 0:01:31.399 take that guaranteed money. That that sounds good. That's that's 0:01:31.400 --> 0:01:34.240 actually a whole lot more money than than So I 0:01:34.240 --> 0:01:36.800 think it what works out to almost thirty million dollars 0:01:36.920 --> 0:01:38.320 something like that they have to pay him over twenty 0:01:38.319 --> 0:01:40.280 five years, So that's that's a whole lot more than six. 0:01:40.520 --> 0:01:42.800 Um and so people think that Bobby Bonia is just 0:01:42.880 --> 0:01:45.720 like shrewd negotiator and or he and his agent really right, 0:01:45.760 --> 0:01:47.800 like both those guys they're like, yeah, let's do this, 0:01:48.120 --> 0:01:49.600 um and and so it's just kind of one of 0:01:49.640 --> 0:01:53.880 those fascinating things. Um it. I think deferred gratification. I 0:01:53.960 --> 0:01:55.880 love seeing it, Like it's a perfect example of deferred 0:01:55.880 --> 0:01:58.000 gratification where it's like I could take the lump sum now, 0:01:58.200 --> 0:02:00.480 or I could take you know, a smaller amount but 0:02:00.520 --> 0:02:03.960 for a really long period of time instead. Um but Matt, 0:02:04.000 --> 0:02:07.080 you actually kind of ran the numbers and you you said, 0:02:07.240 --> 0:02:09.840 I would have actually done the opposite of what Bobby did, right. 0:02:09.840 --> 0:02:11.480 But yeah, we saw some other stories going around and 0:02:11.480 --> 0:02:13.960 they were talking about how this actually made sense for 0:02:14.000 --> 0:02:16.760 everybody because essentially they were paying him about in an 0:02:16.800 --> 0:02:19.480 eight percent rate of return on his money. Right, But 0:02:19.560 --> 0:02:21.280 that actually I guess what they didn't do. They didn't 0:02:21.280 --> 0:02:23.160 take into account the fact that there was a ten 0:02:23.240 --> 0:02:25.880 year delay before he was going to start receiving those payments. 0:02:26.080 --> 0:02:27.600 And so that would have made sense if he were 0:02:27.680 --> 0:02:30.640 to start receiving those payments that first imperially, right, but 0:02:30.720 --> 0:02:32.480 if he had to win a decade, Really you're not 0:02:32.560 --> 0:02:34.280 looking at a twenty five year period. You're looking at 0:02:34.280 --> 0:02:36.280 a thirty five year period, right, And so if he 0:02:36.280 --> 0:02:38.360 would have taken that lump sum, say six million, and 0:02:38.400 --> 0:02:40.520 it immediately stuck that in the market as opposed to 0:02:40.880 --> 0:02:42.600 sitting on it, you know, like if he got that 0:02:42.639 --> 0:02:44.400 six million, would have just like taken it and you know, 0:02:44.400 --> 0:02:45.720 put it in the bank and done nothing with it 0:02:45.760 --> 0:02:48.560 for two years and then started investing. I mean, I mean, 0:02:48.639 --> 0:02:51.160 if you're looking at it just from an analytical standpoint, Okay, 0:02:51.160 --> 0:02:53.640 you start from day one, and so when you calculate, 0:02:53.840 --> 0:02:55.720 you know, an average return of what he would have 0:02:55.760 --> 0:02:58.800 received from that money from that lump sum invested over 0:02:59.000 --> 0:03:01.280 thirty five years. It turns out that he would have 0:03:01.320 --> 0:03:03.440 done much better. He would have basically had twice the 0:03:03.480 --> 0:03:07.560 money had he invested them. That's basic percent return, but 0:03:07.800 --> 0:03:10.800 in actuality the returns have been higher in that time span. 0:03:10.880 --> 0:03:14.120 Something Okay, So I also crushed the numbers, and over 0:03:14.160 --> 0:03:16.680 the past twenty five years, the SMP has returned over 0:03:16.760 --> 0:03:19.079 twelve percent. I mean, you look at the past five years, 0:03:19.120 --> 0:03:22.040 it's been over and granted at the time, you don't 0:03:22.040 --> 0:03:23.799 know what the market is gonna do, right, because I 0:03:23.840 --> 0:03:25.600 know for you that was one of your things is that, well, 0:03:25.639 --> 0:03:28.119 you don't exactly know what the market is going to 0:03:28.160 --> 0:03:32.040 give you. Guaranteed eight percent return that is impossible to 0:03:32.040 --> 0:03:34.720 find anywhere, really, right If someone says, uh, did they 0:03:34.800 --> 0:03:37.800 have a guaranteed eight percent return to give you, then um, 0:03:37.840 --> 0:03:40.360 you're you're probably being led down a path. And actually, 0:03:40.400 --> 0:03:44.160 interestingly enough, the owner of the Mets was had his 0:03:44.240 --> 0:03:48.200 money invested with Bernie Madoff who was promising him guaranteed 0:03:48.200 --> 0:03:50.440 double digit returns every year, and said, I think that's 0:03:50.440 --> 0:03:53.480 why they felt like they could give Bobby Bonia this, 0:03:53.560 --> 0:03:55.000 you know, long term pay out. They're like, well, we're 0:03:55.000 --> 0:03:56.760 going to make more than that every single year because 0:03:56.760 --> 0:03:58.119 we got our money with made off and it turned 0:03:58.120 --> 0:04:00.600 out obviously that that was a scam wasn't real. So 0:04:00.640 --> 0:04:03.440 if someone promises you that it's it's probably not true. Right. 0:04:03.480 --> 0:04:06.040 There's there's bumps in the road when it comes to investing, 0:04:06.280 --> 0:04:10.080 but it's always an interesting day. I love seeing these stories. 0:04:10.120 --> 0:04:11.760 But yeah, I love that you ran the numbers two 0:04:11.800 --> 0:04:15.000 and it's like, actually, if Bobby Bonia had taken you know, 0:04:15.080 --> 0:04:17.080 the five point nine million dollars or whatever it was, 0:04:17.240 --> 0:04:19.240 he would have come out way ahead if he had invested. 0:04:19.240 --> 0:04:21.160 But the other thing to take into account, and this 0:04:21.240 --> 0:04:23.240 is what everyone out there has to take into account 0:04:23.360 --> 0:04:26.240 when they have run into some sort of lump sum 0:04:26.360 --> 0:04:29.279 or long term payout conundrum, is like, what am I 0:04:29.320 --> 0:04:32.200 actually going to do? Right? Because your behavior comes into 0:04:32.240 --> 0:04:34.640 play in a big way here. Uh. And you know, 0:04:34.760 --> 0:04:37.240 if you take that five point nine million and you 0:04:37.279 --> 0:04:39.120 spend you know, half of it and then you try 0:04:39.160 --> 0:04:41.200 to invest the rest, you're not going to come out ahead. 0:04:41.240 --> 0:04:42.880 You can take an easy one mill off the top 0:04:42.920 --> 0:04:44.440 and be like, all right, I'm gonna be smart with 0:04:44.480 --> 0:04:46.200 the rest of the five maybe, and then all of 0:04:46.240 --> 0:04:48.320 a sudden, well that changes the equation a whole lot. 0:04:48.480 --> 0:04:51.279 But sometimes, you know, forcing yourself to not have access 0:04:51.279 --> 0:04:53.760 to the money is actually the best way and best 0:04:53.800 --> 0:04:56.240 thing for you, just from a behavioral standpoint. And of course, 0:04:56.240 --> 0:04:58.400 Bobby been a day was yesterday, July one, So that's 0:04:58.440 --> 0:05:00.360 why we're talking about it right at top of mine. Yeah, 0:05:00.360 --> 0:05:02.200 all right, Well, let's get to the rest of our 0:05:02.520 --> 0:05:05.200 Friday Flights stories this week, Matt, the sampling of stories 0:05:05.240 --> 0:05:09.440 we find interesting that affects people's personal finances. Um. And 0:05:09.560 --> 0:05:11.880 you know, one of the biggest stories from this week 0:05:12.080 --> 0:05:15.880 was record high temperatures out west, right we had. I've 0:05:15.920 --> 0:05:18.479 seen people frying eggs on the sidewalk in Portland, Organ, 0:05:18.520 --> 0:05:20.760 that's how hot it got. Um. So yeah, and I 0:05:20.760 --> 0:05:22.720 hate it for folks out there. Um it hit a 0:05:22.800 --> 0:05:25.080 hundred and fifteen degrees in Portland on Monday. Might have 0:05:25.080 --> 0:05:26.880 even been like one seventeen. I don't know. I think 0:05:26.920 --> 0:05:29.040 the forecast was set for one seventeen, but maybe it 0:05:29.120 --> 0:05:31.039 actually hit. I mean, I'm sure it just depends on 0:05:31.480 --> 0:05:34.040 where you place your third Mamma. It's always like ten 0:05:34.080 --> 0:05:36.280 degrees hotter in the car, right right, Yeah, well, and 0:05:36.279 --> 0:05:38.720 and that's actually four degrees higher than it's ever been 0:05:38.760 --> 0:05:43.360 in Atlanta, which is crazy, like you know, and like 0:05:44.560 --> 0:05:46.960 we don't call it Hotlanta, no, but some people do, yeah, 0:05:47.040 --> 0:05:49.240 not us. And to make things worse, Matt, so many 0:05:49.240 --> 0:05:51.960 people who live in the Pacific Northwest don't have air 0:05:51.960 --> 0:05:54.800 conditioning units in their palms. So yeah, that that obviously 0:05:54.880 --> 0:05:57.480 makes it more difficult to handle those hot temperatures. But yeah, 0:05:57.480 --> 0:05:59.680 how does that apply to your personal finances? Right? Well, 0:05:59.839 --> 0:06:02.760 it turns out that of your utility bills come from 0:06:02.760 --> 0:06:05.000 cooling your home. When temperatures are that hot, A much 0:06:05.080 --> 0:06:07.919 higher percentage of your electricity bill will come from cooling 0:06:07.920 --> 0:06:10.680 your home. But but yeah, Consumer Reports had an article 0:06:10.880 --> 0:06:13.560 about how to lower your utility bills. And we've talked 0:06:13.560 --> 0:06:15.920 about some of these things before, but it's worth mentioning again. 0:06:16.240 --> 0:06:19.240 Like turning your thermostat up is kind of a no 0:06:19.360 --> 0:06:22.240 dust suggestion, right, Like just keeping it generally warmer in 0:06:22.279 --> 0:06:24.440 the house, But don't forget to do that, right, don't 0:06:24.480 --> 0:06:26.840 forget to actually change the temperature and bump it up. 0:06:27.000 --> 0:06:29.520 And it might make sense to install a smarter thermostat 0:06:29.600 --> 0:06:32.400 that will automatically raise the temperature when you aren't there, 0:06:33.000 --> 0:06:35.320 like a nest thermostat. Yeah, we've got a couple of those. 0:06:35.440 --> 0:06:37.239 Love this thing well. And the goal thing to Matt 0:06:37.320 --> 0:06:40.839 is is that a lot of utility companies will subsidize 0:06:40.880 --> 0:06:42.840 the cost of that nest thermostat. So like I know, 0:06:42.960 --> 0:06:45.599 for instance, Georgia Power they'll give you one for fifty 0:06:45.680 --> 0:06:48.000 dollars UM. So it's just way cheaper than what you're 0:06:48.000 --> 0:06:50.600 gonna pay at you know, Amazon or Target or something 0:06:50.640 --> 0:06:52.760 like that. So yeah, it will include a link to 0:06:52.800 --> 0:06:54.560 where you can check out the Nest thermostat, but make 0:06:54.600 --> 0:06:57.680 sure to check out your local power company um and 0:06:57.680 --> 0:06:59.520 to see if they're giving it to you. Some someone 0:06:59.560 --> 0:07:01.760 give it to for free, because yeah, you're gonna be 0:07:01.880 --> 0:07:05.560 using less electricity then, which is helping the grid out overall. 0:07:05.600 --> 0:07:08.160 That's right. And don't forget to use ceiling fans as well. 0:07:08.160 --> 0:07:10.920 This is kind of another no brainer, but they can 0:07:10.920 --> 0:07:13.240 make it feel a whole lot cooler than it actually is, 0:07:13.640 --> 0:07:15.920 as much as four degrees color in fact, I mean, 0:07:16.080 --> 0:07:18.960 we've got a thermometer set up in west East room 0:07:19.200 --> 0:07:20.640 just to you know, make sure you don't want it 0:07:20.640 --> 0:07:23.240 to get to an unsafe temperature, especially here in the summer. 0:07:23.360 --> 0:07:25.200 But anytime we have the fan on, like in my mind, 0:07:25.240 --> 0:07:27.480 I calculate five degrees cooler. I'm like, Okay, it says 0:07:27.560 --> 0:07:30.200 it's seventy four, you know in his room, but in reality, 0:07:30.240 --> 0:07:31.640 with the fan on, I know that means it's actually 0:07:31.640 --> 0:07:34.560 sixty nine. Yeah. And also according to the Department of Energy, 0:07:34.720 --> 0:07:37.960 with the clever use of blinds, curtains, and awnings, you 0:07:38.000 --> 0:07:40.920 can actually reduce the solar heat game from windows by 0:07:41.000 --> 0:07:44.040 up to seventy we'll link to that, but you know, 0:07:44.040 --> 0:07:46.040 definitely check that out so you can stay cool the 0:07:46.040 --> 0:07:49.160 summer without those massive electric bills. We actually have a 0:07:49.160 --> 0:07:50.800 neighbor and they've got one of these shades on the 0:07:50.840 --> 0:07:53.280 outside of their house. Uh it's it's on their porch 0:07:53.640 --> 0:07:55.840 and so it's easily accessible. But what it does it 0:07:55.880 --> 0:07:58.720 keeps that afternoon sun from blasting through their front windows, 0:07:58.840 --> 0:08:00.760 heating up the inside of the house. That that sun 0:08:01.000 --> 0:08:03.920 hits that shade on the outside, it circulates around their house, 0:08:04.080 --> 0:08:06.280 that he never even enters their home. I love that, 0:08:06.320 --> 0:08:07.840 and I think a lot of people, Yeah, I think 0:08:07.880 --> 0:08:09.360 a lot of people are like, I just need some 0:08:09.440 --> 0:08:13.440 new windows that are like triple paint or quintuple paint, 0:08:13.480 --> 0:08:16.280 which one like argon gas something like you know, like 0:08:16.320 --> 0:08:19.239 some special gas that keeps it better. How don't people 0:08:19.240 --> 0:08:21.000 don't know, but they're just like, oh, gasses, Yeah, that's 0:08:21.000 --> 0:08:22.880 what it needs in there. And and you know, it's 0:08:23.440 --> 0:08:25.560 nice windows. I'm sure it helps a little bit. It's 0:08:25.600 --> 0:08:28.280 it helps them, and they often are more functional than 0:08:28.280 --> 0:08:30.840 some of the older windows, but they're really expensive to 0:08:30.840 --> 0:08:32.160 put in and there are a lot a lot of 0:08:32.200 --> 0:08:36.520 more cheaper solutions that you could employ. Yeah, like blackout curtains, 0:08:36.559 --> 0:08:39.400 like a ceiling fan that's way cheaper than like replacing 0:08:39.400 --> 0:08:42.000 your windows. Right, absolutely, So yeah, you don't necessarily need 0:08:42.040 --> 0:08:45.000 to go Defcon five when it comes to uh, you know, 0:08:45.240 --> 0:08:47.439 cutting down on those energy costs. But it isn't definitely 0:08:47.440 --> 0:08:49.199 one like you start at five and then you work 0:08:49.200 --> 0:08:51.120 your way down that I don't know, I think. So okay, 0:08:51.120 --> 0:08:55.280 all right, since we've had a Cold War, Yeah, well yeah, 0:08:55.400 --> 0:08:57.440 And it's interesting to Matt because it's important to you know, 0:08:57.480 --> 0:08:59.920 make those decisions and to take action to to lower 0:09:00.120 --> 0:09:03.280 your personal utility bills. But what about letting someone else 0:09:03.360 --> 0:09:05.840 make that thermostatic decision? For you right, and I'm not 0:09:05.840 --> 0:09:09.400 just talking about like your significant other or like battle, 0:09:09.480 --> 0:09:12.960 yeah exactly, Like yeah, which happens in most households, but 0:09:13.080 --> 0:09:17.559 utility companies are actually adjusting thermostats automatically in certain locations, right, 0:09:17.760 --> 0:09:20.640 specifically in order to keep the power grid from completely 0:09:20.640 --> 0:09:23.360 buckling in times of high demand. So yeah, some consumers 0:09:23.400 --> 0:09:26.320 can opt into the program and then you get entered 0:09:26.320 --> 0:09:28.760 into a sweepstakes where your power bill is like paid 0:09:28.800 --> 0:09:31.480 for for the year. But so there's like this extra incentive. 0:09:31.480 --> 0:09:34.000 It's not that like the power company just wants control 0:09:34.040 --> 0:09:36.680 over your thermostat. I mean they do um, and it's 0:09:36.679 --> 0:09:39.280 in very rare circumstances. Yeah yeah, yeah, like but they 0:09:39.320 --> 0:09:41.920 can text u I think maybe twice a year, does 0:09:41.960 --> 0:09:44.199 the utility company, you know, crank your thermostat up maybe 0:09:44.240 --> 0:09:46.960 like five degrees Yeah yeah, but that is going to 0:09:47.000 --> 0:09:48.760 be probably the hottest days of the year when they 0:09:48.840 --> 0:09:50.840 do that. So it's gonna be the days that you 0:09:51.360 --> 0:09:53.440 want air conditioning the most, and you're gonna have to 0:09:53.480 --> 0:09:55.240 kind of suffer through that. So yeah, what's your take? 0:09:55.320 --> 0:09:58.240 Is it frugal or chief to try to like maybe 0:09:58.240 --> 0:10:01.280 potentially a little money totally frugal yeah, I mean, okay, 0:10:01.320 --> 0:10:03.520 at least with the program that they were talking about 0:10:03.520 --> 0:10:05.680 in Texas and will link to the article. But you 0:10:05.720 --> 0:10:07.959 can change it back. It's just a matter of being 0:10:07.960 --> 0:10:10.080 opted into the program. Right. But then, yeah, you lose 0:10:10.120 --> 0:10:12.600 out on your potential to the sweepsticks, right. Yeah. And 0:10:12.640 --> 0:10:14.960 so for folks who are at home, you know, why 0:10:15.080 --> 0:10:17.440 why not sign up? You can make the adjustment if 0:10:17.480 --> 0:10:19.240 you can't handle the heat. But if you happen to 0:10:19.400 --> 0:10:21.559 maybe you're not even home while that's happening, well that's 0:10:21.559 --> 0:10:23.960 a perfect opportunity for you to take advantage of some 0:10:24.040 --> 0:10:26.560 savings not only in your utilities, but also too with 0:10:26.600 --> 0:10:29.320 this program. To be entered into having your power paid 0:10:29.320 --> 0:10:31.319 for for an entire year. I would totally do it. 0:10:31.360 --> 0:10:33.640 That'd be pretty sweet. I also am willing to enter 0:10:33.679 --> 0:10:35.520 the pain. Uh you know, and it's but I think 0:10:35.520 --> 0:10:37.480 if there was like a firm payback as opposed to 0:10:37.559 --> 0:10:40.320 a potential payback, I'd like be into it even again, 0:10:40.440 --> 0:10:42.840 kind of going back to the body VideA story, like 0:10:42.880 --> 0:10:44.559 if you can, if you can crunch the numbers and 0:10:44.640 --> 0:10:46.800 know that like, okay, can I handle that? Yes or no? 0:10:47.200 --> 0:10:48.880 Make that decision and kind of go from there. But 0:10:48.880 --> 0:10:50.800 it's like if you enter into it and the next 0:10:50.800 --> 0:10:53.360 five Julys you get a zero out power bill, I'd 0:10:53.360 --> 0:10:56.640 be like sure, I'm yeah, absolutely, all right, let's keep going, Matt. 0:10:56.720 --> 0:10:58.960 Let's talk about inflation for a second, because that's still 0:10:59.200 --> 0:11:01.400 top of mind now for a lot of folks. And 0:11:01.440 --> 0:11:03.360 I guess you know, I'm kind of asking the question 0:11:03.440 --> 0:11:06.080 right now, have we reached peak inflation? It's obviously a 0:11:06.080 --> 0:11:07.880 hard thing to call in the moment, right what we'll 0:11:07.880 --> 0:11:10.160 know three years from now, like like, well, what ended 0:11:10.200 --> 0:11:12.240 up happening there? Even six months a year from now. 0:11:12.440 --> 0:11:15.480 But yeah, car prices, gas prices, they're still high. Bacon 0:11:15.600 --> 0:11:18.560 apparently to cost a lot more right now. But at 0:11:18.600 --> 0:11:20.360 least it's good to see that the law of supply 0:11:20.440 --> 0:11:23.640 and demand really is still working. Right. Lumber costs are 0:11:23.679 --> 0:11:25.560 one of the things that we can point to as 0:11:25.600 --> 0:11:27.560 evidence that we might be getting through some of the 0:11:27.600 --> 0:11:30.280 worst pain points when it comes to rising prices. They 0:11:30.280 --> 0:11:33.520 have fallen precipitously by over fifty from their high um 0:11:33.600 --> 0:11:37.960 and you know that's also because their high was outrageous. Really, yuh, 0:11:38.360 --> 0:11:40.720 would was starting to cost a whole lot. But yeah, 0:11:40.720 --> 0:11:43.360 it's a it's a good sign that as prices rose, 0:11:43.679 --> 0:11:47.440 suppliers kicked into overdrive to take advantage of increased profits 0:11:47.480 --> 0:11:50.160 that they were seeing. Some companies were adding more shifts, 0:11:50.200 --> 0:11:53.160 and some companies even brought defunct sawmills back to life. 0:11:53.200 --> 0:11:55.680 They put like millions of dollars worth of investments into 0:11:55.720 --> 0:11:57.560 some of these mills to bring them back. Um. And 0:11:57.640 --> 0:12:01.400 so yeah, would started flowing freely again in in the economy. Um. 0:12:01.400 --> 0:12:04.240 And that's led to what we're seeing now with a 0:12:04.280 --> 0:12:06.880 strong price correction. Um. And I think, you know, as 0:12:06.920 --> 0:12:09.240 some of these supply chain issues dry up, I think 0:12:09.320 --> 0:12:11.720 some people have talked about long term inflation and they've 0:12:11.760 --> 0:12:14.240 been worried about that. You know, in our inflation episode, 0:12:14.360 --> 0:12:16.240 we were like, it remains to be seen, but I 0:12:16.280 --> 0:12:18.959 don't know. Seeing like what's happening would right now as 0:12:19.000 --> 0:12:21.280 some of these you know, chip factories come back online 0:12:21.480 --> 0:12:24.400 and begin to produce, I do think it's gonna be 0:12:24.920 --> 0:12:27.800 a semi transitory event. Um. I don't know what that that. Yeah, 0:12:27.840 --> 0:12:30.480 Like we said, well we'll see, Yeah, time will tell, 0:12:30.480 --> 0:12:34.280 but yeah, seeing specifically the lumber industry respond like that, 0:12:34.320 --> 0:12:36.319 I mean, that's the a sign of a healthy market, right, 0:12:36.559 --> 0:12:38.320 The ability for them to make changes like that and 0:12:38.320 --> 0:12:41.240 to meet that demand. I love seeing that. And we 0:12:41.280 --> 0:12:43.679 are still seeing the effects on the car market right 0:12:44.240 --> 0:12:47.240 A substantial rise in used car prices has led to 0:12:47.360 --> 0:12:50.640 almost one third of the inflation that we've been seeing lately. 0:12:51.160 --> 0:12:53.360 Uh yeah, And so since you know those all important 0:12:53.360 --> 0:12:55.480 ships like you mentioned are still in low supply, it 0:12:55.480 --> 0:12:58.000 turns out that your car might actually be worth more 0:12:58.360 --> 0:13:01.560 uh than when you bought it. According to Black Book, 0:13:01.640 --> 0:13:04.160 use cars right now are worth thirty more than they 0:13:04.160 --> 0:13:07.120 were one year ago. Normally, you lose an insane amount 0:13:07.120 --> 0:13:09.160 of money just by driving your new car off the 0:13:09.200 --> 0:13:12.360 dealership lot. But you know, kind of a strange twist 0:13:12.400 --> 0:13:15.440 of fate, dozens of gently used models are now selling 0:13:15.440 --> 0:13:19.720 for more than their original sticker price, which is totally insane. 0:13:19.760 --> 0:13:21.400 Should I start investing in used cars? That's that what 0:13:21.400 --> 0:13:24.120 you're saying. I think you might be investing at the peak. 0:13:24.360 --> 0:13:27.120 That's that's the problem with timbing of the market. Uh So, 0:13:27.480 --> 0:13:29.320 here's a random takeaway. If if you're an a lease, 0:13:29.840 --> 0:13:33.199 it's almost lock that you should buy the car at 0:13:33.200 --> 0:13:35.640 the price that you've agreed to in your contract, even 0:13:35.640 --> 0:13:37.320 if you don't want to keep it, because then you 0:13:37.320 --> 0:13:40.480 can turn back around and sell it. Obviously, do your 0:13:40.480 --> 0:13:42.360 homework first, you need to know what that car is 0:13:42.400 --> 0:13:45.000 likely to sell for. But a listener actually emailed US 0:13:45.040 --> 0:13:47.719 listener Becky uh saying that she did this very thing, 0:13:47.760 --> 0:13:50.920 and she actually made about five thousand dollars on the spread, 0:13:51.160 --> 0:13:53.640 she basically said, for a year at lease famous right 0:13:53.679 --> 0:13:55.920 there by by just buying it and then selling it 0:13:56.360 --> 0:13:58.319 right after she was done with it. Absolutely, and that's 0:13:58.360 --> 0:14:00.600 not something you can count on because typically, I mean, 0:14:00.600 --> 0:14:03.200 we have never seen use cars ever be worth more 0:14:03.720 --> 0:14:07.640 than they were in the past. This is highly abnormal type, yes, 0:14:07.720 --> 0:14:10.280 but if that's the situation that you're in, realize that 0:14:10.320 --> 0:14:12.199 this is an instance where you can take some lemons 0:14:12.200 --> 0:14:13.840 and make some lemonade out of it. But Matt, we 0:14:13.840 --> 0:14:16.760 talked about inflation overall, but inflation is also highly personal. 0:14:16.920 --> 0:14:19.640 It kind of depends on where you're spending your money, 0:14:19.920 --> 0:14:21.800 right because, yeah, if you're buying a car right now, 0:14:21.960 --> 0:14:23.760 inflation is awful for you. If you're buying a house 0:14:23.800 --> 0:14:26.160 right now, inflation is awful for you. If you're renovating 0:14:26.320 --> 0:14:28.560 or or stuff like that, Like, inflation is has not 0:14:28.640 --> 0:14:31.400 been kind to you. But you're feeling it exactly. Yeah, 0:14:31.440 --> 0:14:33.680 you're feeling it viscerally because those prices have gone it 0:14:33.720 --> 0:14:35.960 more than others. So if you're curious not just about 0:14:36.000 --> 0:14:38.560 the overall rate of inflation, but you want to know 0:14:38.640 --> 0:14:41.520 maybe your own personal rate of inflation, well it turns 0:14:41.520 --> 0:14:44.320 out there's a calculator for that, and CNN actually created 0:14:44.320 --> 0:14:46.680 this tool to help you determine your own personal rate 0:14:46.680 --> 0:14:50.280 of inflation based on your specific spending patterns. It's kind 0:14:50.280 --> 0:14:52.640 of interesting because you might find that rising prices have 0:14:52.680 --> 0:14:56.640 either higher or a lower impact on you in particular 0:14:56.720 --> 0:14:59.440 based on how you spend um. So it's kind of yeah, 0:14:59.440 --> 0:15:00.960 fun little ex ties to be like, I spend this 0:15:01.000 --> 0:15:02.280 much at the grocery store, I spend this with a 0:15:02.360 --> 0:15:04.440 little here and there, and then yeah, let it spit 0:15:04.440 --> 0:15:08.080 out what your actual inflation number is. Yeah, nice little 0:15:08.080 --> 0:15:10.040 calculator for all the all the nerds out there. Most 0:15:10.080 --> 0:15:13.800 people are probably like, I'm fine, yeah, but Jill, one 0:15:13.800 --> 0:15:17.000 thing that isn't rising are the rates that are being 0:15:17.000 --> 0:15:19.400 paid on the money that you're saving. It certainly feels 0:15:19.440 --> 0:15:21.920 like saving money sucks right now. Yeah. Yeah, one year 0:15:21.960 --> 0:15:27.760 CD rates are at record lows, averaging at point one seven. Yeah, 0:15:27.800 --> 0:15:30.240 even our our favorite online banks are paying right around 0:15:30.240 --> 0:15:32.480 point five percent to lock your money up in a 0:15:32.560 --> 0:15:35.000 CD for a year. Yeah, it is not a good 0:15:35.000 --> 0:15:37.360 time to be a saver. But cash we want we 0:15:37.360 --> 0:15:39.640 want to mention this because cash still holds an important 0:15:39.640 --> 0:15:41.920 place in your life, even if you're seeing those cash 0:15:41.920 --> 0:15:45.320 reserves grow at a snail's pace. Uh, even if you're 0:15:45.320 --> 0:15:47.960 actually in reality losing money because it's not keeping up 0:15:48.000 --> 0:15:50.640 with inflation. Even still, it's important to have your emergency 0:15:50.640 --> 0:15:53.560 fund accessible and liquid. Uh. And so yeah, fingers crossed 0:15:53.560 --> 0:15:56.720 that in the coming years, saving money won't feel like 0:15:56.760 --> 0:15:59.080 such a crushing blow. Hopefully in the future it won't 0:15:59.120 --> 0:16:01.800 feel like like you're on this raft that's slowly leaking 0:16:01.840 --> 0:16:05.240 air and you're just like sinking down into the into 0:16:05.320 --> 0:16:07.720 the pool, because that's basically what's happening right now with 0:16:07.880 --> 0:16:11.160 the banks paying such a pitoly amount on those savings 0:16:11.200 --> 0:16:13.000 accounts and c d s. Yeah, I mean, I think 0:16:13.000 --> 0:16:15.040 that's why we've had so many questions where listeners are like, 0:16:15.280 --> 0:16:17.240 can I please invest my money instead of keeping it 0:16:17.760 --> 0:16:19.960 locked in a savings account that's not really doing much 0:16:19.960 --> 0:16:22.040 for me at all right now. But yeah, like you said, 0:16:22.080 --> 0:16:24.520 the thing is you have to have some liquid cash 0:16:24.600 --> 0:16:27.840 available because you can't predict the future and you can't 0:16:27.920 --> 0:16:30.520 lock it away. Even if you're hoping for higher returns. 0:16:30.760 --> 0:16:34.040 It's always important to have that emergency cash on hand 0:16:34.080 --> 0:16:35.960 in case you need it. But Matt, let's get to 0:16:36.240 --> 0:16:39.000 some more stories, including anybody who's taking out student loans. 0:16:39.080 --> 0:16:41.200 They're gonna pay higher interest rates next year. We'll get 0:16:41.240 --> 0:16:52.240 to that and more right after this. All right, we're 0:16:52.280 --> 0:16:54.360 back angel. It is now time to get to our 0:16:54.760 --> 0:16:58.480 ludicrous headline of the week. Okay, I like it, You 0:16:58.600 --> 0:17:00.680 like my Okay, So I did that because we've been 0:17:00.680 --> 0:17:02.640 reading reading Harry Potter. You have been reading it to 0:17:02.640 --> 0:17:05.399 your girls as well, and we are also reading Harry Potter, 0:17:05.760 --> 0:17:08.120 and uh we both do the voices. Was that your snap? 0:17:08.280 --> 0:17:10.040 That was No? That was my Harry Potter voice. Oh 0:17:10.920 --> 0:17:13.880 d we gotta work on that. I feel like it's 0:17:13.880 --> 0:17:18.479 pretty good. Maybe folks will disagree, but okay. Our ludicrous 0:17:18.520 --> 0:17:22.359 headline this week is Peloton disabled, a free running feature 0:17:22.440 --> 0:17:25.760 on its treadmills, forcing owners to pay up. Dude. This 0:17:25.800 --> 0:17:28.439 one comes from CNBC and basically, if you own one 0:17:28.440 --> 0:17:31.639 of these super fancy and incredibly expensive treadmills. You know, 0:17:31.680 --> 0:17:33.840 there might be some folks out there who have a 0:17:33.840 --> 0:17:36.960 Peloton you were able to hop on and just go 0:17:37.000 --> 0:17:39.840 for a run without having to take a Peloton class 0:17:40.359 --> 0:17:42.520 in order to to get an indoor run, right, which 0:17:42.520 --> 0:17:44.640 is a perfectly reasonable thing to be able to want 0:17:44.680 --> 0:17:47.520 to do on your treadmill. But that's no longer the case. Now. 0:17:47.680 --> 0:17:50.560 Your three thousand dollar treadmill is a giant, expensive brick 0:17:50.720 --> 0:17:53.680 until you fork over the forty a month membership that 0:17:53.720 --> 0:17:56.879 they charged highway robbery Matt seriously, And you know, this 0:17:56.960 --> 0:17:58.560