Speaker 1: Welcome to How the Money. I'm Joel and I'm Matt,
Speaker 1: and today we're discussing price profiteering e s g b
Speaker 1: S and second hand smarts E s g b S.
Speaker 1: We're gonna get to that story, plus a bunch of
Speaker 1: others today on our Friday flights. These are the headlines
Speaker 1: that we've come across this week. But real quick, man,
Speaker 1: I wanted to share, so listener. Benjamin he emailed into
Speaker 1: us and he wanted to make sure that we knew
Speaker 1: about the Capital One bonuses that have been rolling us,
Speaker 1: not the red alert to everybody out there. He's like, hey,
Speaker 1: if you if you're still banking with a crumby bank,
Speaker 1: not only can you do business with someone who doesn't
Speaker 1: hate you, but also there's a bonus at stake two.
Speaker 1: Capital One they are a legitimate online savings account, checking account.
Speaker 1: Total P likes to keep all of your They are
Speaker 1: one of the O G good online bank accounts. Yeah,
Speaker 1: what was it? The used to be I n G
Speaker 1: Direct back in the day, and then I had that
Speaker 1: same electric Orange chetric Orage, So I'm like grandfathered in man,
Speaker 1: I've been there a long time. That was back when
Speaker 1: they were paying like five percent on that Electric Orange
Speaker 1: account back in two thousand and five. I think it was.
Speaker 1: I think it was that long ago. It's crazy. If
Speaker 1: only we had five get your faces on savings accounts,
Speaker 1: I think those days are over. But it turns out
Speaker 1: you can get a one hundred and fifty dollar bonus
Speaker 1: if you deposit twenty dollars with Capital one and if
Speaker 1: you have fifty thousand dollars sitting around. Turns out you
Speaker 1: can get a four and fifty dollar bonus by making
Speaker 1: that deposit and keeping that account open for I think
Speaker 1: something like three months. The same thing with a checking account.
Speaker 1: To right, you can get that's two d fifty bucks
Speaker 1: just for opening a checking account doing two direct deposits.
Speaker 1: Both of these deals and in mid to late June
Speaker 1: will link to to them in the show notes. But yeah,
Speaker 1: if you're if you're disappointed with your current bank or
Speaker 1: with what you're making at your current bank, these are great.
Speaker 1: I love not just the ability to matt earn just
Speaker 1: a lightly higher rate of interest, but the bonuses. It's
Speaker 1: like the it's like the whip cream on top and
Speaker 1: cherry and like you knew you wanted it anyway, but
Speaker 1: this just sweetens the deal even more for a lot
Speaker 1: of people, it's like, Okay, that's gonna get me off
Speaker 1: my stuff and make it happen. Yeah. Well, simultaneously, I
Speaker 1: do think we are going to see more deals by
Speaker 1: some of the different banks because I think the competition
Speaker 1: has gotten a little more stiff as banks are saying
Speaker 1: that folks have less less cash on hand. I mean,
Speaker 1: we we can see, like you can if you check
Speaker 1: with a FED that they've got an awesome chart where
Speaker 1: it shows that the personal savings rate it's back down
Speaker 1: to pre pandemic levels. We're back to the way things
Speaker 1: where folks have less cash on hand. But there's no
Speaker 1: guarantee that they're going to be upcoming bonuses, but I
Speaker 1: wouldn't be surprised. Yeah, okay, Well, you know, we will
Speaker 1: continue to put out information if we see good bonuses
Speaker 1: for switching banks, and we'll also call him out in
Speaker 1: our How the Money newsletter. By the way, you can
Speaker 1: sign up at how the Money dot com slash newsletter.
Speaker 1: But Matt, let's get to the Friday Fight, the sampling
Speaker 1: of stories we found interesting this week and how they
Speaker 1: pertain to your personal finances. And let's let's start off
Speaker 1: by talking about something free that all of our listeners
Speaker 1: qualify for and its one likes a freebie. That's right.
Speaker 1: It's been a ministers we've talked about this, but COVID
Speaker 1: cases are back up across the nation. We've seen a
Speaker 1: sixty increase in the past two weeks alone, which is
Speaker 1: obviously crappy news. But on the right side, everyone out
Speaker 1: there can get more free at home COVID tests. So
Speaker 1: just head to COVID tests dot gov and you can
Speaker 1: snag eight free antigen rapid tests for home use. What
Speaker 1: was it, Matt, We were able to get four a
Speaker 1: few months ago. I don't keep track. Now you can
Speaker 1: get eight and so yeah, just in case you want
Speaker 1: to avoid paying fifty bucks at the store for a
Speaker 1: couple of tests, you can get them for free from
Speaker 1: the federal government. I think that's the federal government just saying,
Speaker 1: how don't we don't want to keep these sitting around
Speaker 1: and warehouses anymore. Let's just go ahead and send them
Speaker 1: out so we don't have to sign another lease. All right,
Speaker 1: let's keep moving our buddy five am Joel. He sent
Speaker 1: us a recent survey from op you. They've got a
Speaker 1: bunch of free resources and free little classes that they
Speaker 1: offer online, but they found that seventy of folks don't
Speaker 1: have a budget that they follow regularly, which is obviously
Speaker 1: not good. Uh. Personally, I think everyone needs a budget,
Speaker 1: regardless if you are on the frugal end of the
Speaker 1: of the spectrum or if you're a spendthrift, right because
Speaker 1: I think you need a budget for different reasons. Obviously,
Speaker 1: if you are a spendthrift and you need you need
Speaker 1: a budget to regulate your expenses because you're over spending
Speaker 1: most likely. But even folks who are on the frugal
Speaker 1: end of the spectrum, I think need to have a
Speaker 1: budget on hand to make sure that they're spending their
Speaker 1: dollars the way that they want to, the way that
Speaker 1: they have decided. Makes them the happiest if they're not
Speaker 1: freaking out every time they spend a dollar because they're like, oh, no,
Speaker 1: I budget for that. It's okay, even and I know
Speaker 1: that my incomes go into investments and savings, you know that.
Speaker 1: I think the budget can release some stress, even for
Speaker 1: frugal people. It puts on paper what you say that
Speaker 1: you're going to do with your money, and it kind
Speaker 1: of keeps your emotions in check. I think living life
Speaker 1: without a budget sort of like like riding a motorcycle
Speaker 1: without a helmet. It's incredibly risky, or it's it's like
Speaker 1: running a football play without just winning. It's just like
Speaker 1: everybody just run, let's see what happens. That's where you
Speaker 1: get the flee flicker. I think I think that's where
Speaker 1: that came from, exactly. But the longer that you go
Speaker 1: without tracking your spending and and creating a budget that
Speaker 1: you can actually stick to, the more likely you are
Speaker 1: to spend money in ways that don't align with your values,
Speaker 1: the more likely you are to take on debt, even
Speaker 1: for purchases that that don't move the needle for you.
Speaker 1: And it'll likely also take a lot longer to get
Speaker 1: some financial breathing room, much less for you to reach
Speaker 1: some of those bigger financial goals that you might have.
Speaker 1: And so definitely make sure to check out Mint. You
Speaker 1: can use their software for free wide NAP. We've talked
Speaker 1: about you need a budget before, but you're gonna pay
Speaker 1: nine dollars a month in order to use their software.
Speaker 1: But maybe that is the sort of buy and maybe
Speaker 1: that's the skin in the game that you need in
Speaker 1: order to actually follow through every everyone I talked to
Speaker 1: who has used wine they love. I was literally talking
Speaker 1: to a parent at at school yesterday and she didn't
Speaker 1: know what I did. Got to talk about the podcast
Speaker 1: and she looked at me like locked eye. Oh, then
Speaker 1: you know about why NAP right, And I was like, oh, yeah,
Speaker 1: you are you a fan? She's like, I love Why
Speaker 1: NAPA And so if you have not checked amount, make
Speaker 1: sure to look into it. And by the way, back
Speaker 1: in the episode three sixty two, we actually talked about
Speaker 1: why it is that not only that you need a budget,
Speaker 1: but that you need a bare bones budget, and that
Speaker 1: when we shared why it is incredibly important for you
Speaker 1: to know how little you could potentially live on, we're
Speaker 1: stuff to hit the fan, especially with the looming recession
Speaker 1: talks Matt, It's it's nice to have that bare bones
Speaker 1: budget in your back pocket, knowing that you can cut
Speaker 1: your spending and dramatically improve your finances overnight. So we
Speaker 1: love people going through that practice and having that on hand.
Speaker 1: So let's talk about housing, because not having a budget
Speaker 1: is obviously something you're you're likely to regret. You're not
Speaker 1: gonna be optimizing where your money is going, and that
Speaker 1: will have significant ramifications in the short and the long
Speaker 1: term on your financial health. But another regret that folks
Speaker 1: are having that also has disastrous financial consequences is waving
Speaker 1: a home inspection and we've seen people doing that hand
Speaker 1: over fist lately. Bad idea. Yeah, and buying a car.
Speaker 1: We've for people talking about buying a card that's a
Speaker 1: lemon that just like has the same issue on repeat
Speaker 1: that ends up costing people. It's it's just a it's
Speaker 1: a money pit. Well that's a bad thing, but buying
Speaker 1: a home that's a lemon is catastrophic. It's far worse
Speaker 1: than even buying a car that's a lemon. But so
Speaker 1: many folks have been doing that over the past eighteen
Speaker 1: months as the housing market has heated up. You know,
Speaker 1: we've warned on the show against waving inspection rights. I
Speaker 1: know a lot of folks were doing it in an
Speaker 1: effort to win a bidding more because like they felt
Speaker 1: like there was no other way for them to get
Speaker 1: the house they wanted, but still they needed to take
Speaker 1: us up a drastic step to set them apart from
Speaker 1: the competition. That's right, but a lot of people are
Speaker 1: finding out on the backside of that that there are
Speaker 1: a lot of issues with this house that they didn't
Speaker 1: they weren't aware of because they didn't have an inspection done.
Speaker 1: And now some folks are regretting it and they're having
Speaker 1: a hile a ton of money into a house that
Speaker 1: they thought had a clean bill of health. But yeah,
Speaker 1: it's been especially risky for for home buyers lately, especially
Speaker 1: inexperienced home buyers. It's it's incredibly risky to wave a
Speaker 1: home inspection. We want to wave a large red caution
Speaker 1: flag to to make you think twice before you wave
Speaker 1: a home inspection with any offer. And hopefully is the
Speaker 1: housing market appears to be cooling off at least a
Speaker 1: little bit, that will feel less necessary for lots of
Speaker 1: folks to yet Yeah, well, I mean, honestly, it's better
Speaker 1: just to keep renting than to get in over your
Speaker 1: head with the house that has a ton of issues.
Speaker 1: But yeah, we I think we are seeing a little
Speaker 1: bit more supply on that. You know, within the housing market,
Speaker 1: we're seeing some more price cuts. We're seeing some houses
Speaker 1: sitting longer on the market. Uh, And that means that
Speaker 1: a home inspection clause that you would normally include is
Speaker 1: going to be less likely to prevent your offer from
Speaker 1: being considered moving forward, we believe, and a home inspection
Speaker 1: isn't a necessity in every single case. In some instances,
Speaker 1: some home sellers have actually been providing their own home inspection,
Speaker 1: provided by a third party, just to kind of grease
Speaker 1: the wheels, grease the skids a little bit, uh, to
Speaker 1: kind of smooth out the process. But that is not
Speaker 1: something we would recommend. We would still should get your own,
Speaker 1: want you to get your own exactly. Yeah, you want
Speaker 1: to make sure that that multi hundred thous and dollar
Speaker 1: purchase is in good working order before you drop down
Speaker 1: all of that change. Yeah, there are certain things that
Speaker 1: certain regrets that people have in life. This is one
Speaker 1: we don't want you to have because it can cost
Speaker 1: you a ton of money and just a lot of
Speaker 1: headaches too. Let's talk about financial literacy for a second, Matt.
Speaker 1: There's a there's this thing called the spillover effect, which
Speaker 1: you and I we've never really talked about on the show,
Speaker 1: but there was a white paper written recently just released
Speaker 1: that talks about this very phenomenon. And you know, you
Speaker 1: and I were big fans of virtually any form of
Speaker 1: financial literacy, and and we're always looking to highlight when
Speaker 1: states are making it a priority in K to twelve education.
Speaker 1: You know, our fine state of Georgia just made a
Speaker 1: requirement for personal finance classes moving forward starting next year.
Speaker 1: We're excited about that. But there might be some naysayers
Speaker 1: out there. I don't know who they are, but bring
Speaker 1: them my way and I'll set them straight. Who they
Speaker 1: might wonder if, well, is it any of that's really
Speaker 1: making a difference, right, or even just some skeptics who
Speaker 1: are less enthusiastic because of how long it's going to
Speaker 1: take for these financial lessons to make their way into
Speaker 1: the real world, Like should we actually be teaching kids
Speaker 1: about how to handle money well? Or is it a
Speaker 1: waste of time? But I feel like those are the
Speaker 1: same folks who are not willing to plant an acorn
Speaker 1: or like a seed link to see that tree grow
Speaker 1: up in shade the house, because it's like, well, it's
Speaker 1: not going to benefit me at all. But even still,
Speaker 1: I think what we're talking about here is paying it forward. Yes,
Speaker 1: I agreed, And some recent research actually proves that there's
Speaker 1: a large what's called a spillover effect of this newly
Speaker 1: acquired financial knowledge that kids partake in in elementary, middle
Speaker 1: or high school, and you know it's it's actually it's
Speaker 1: interesting because it's not just the students who are benefiting,
Speaker 1: it's the parents too. This study was done over the
Speaker 1: course of a full semester, and researchers found that there
Speaker 1: was quote unquote and economically significant increase in financial literacy
Speaker 1: not only from what the students encountered in the classroom,
Speaker 1: but in the knowledge that their parents acquired secondhand as well,
Speaker 1: because those kids are bringing the lessons they're learning back
Speaker 1: to the dinner table, they're having family conversations, and so
Speaker 1: the parents are benefiting from what the kids are learning
Speaker 1: to exactly. And we love hearing this, of course, because
Speaker 1: it reinforces our belief that learning how to money will
Speaker 1: not only create a better life for yourself, but also
Speaker 1: for those around you. Uh. There's also another interesting aspect
Speaker 1: of the research. It showed that the spillover effect it
Speaker 1: didn't apply to all parents equally, but not surprisingly, there
Speaker 1: was more of an increase in the parents who had
Speaker 1: more of these face to face interactions with their kids
Speaker 1: throughout the week, Meaning the more we talk about personal finances,
Speaker 1: the better we should be doing with our personal finances.
Speaker 1: So the t l d R is just to keep
Speaker 1: talking about money with with everyone that you love. We're
Speaker 1: all about making personal finance and talking about money more commonplace.
Speaker 1: We do not want it to be to do and
Speaker 1: so we're gonna encourage you to do the same. Yeah.
Speaker 1: It makes me think of a conversation Matt, you and
Speaker 1: I had years ago with Dan Lessal, who is now
Speaker 1: he's a principal, I think, but he at the time
Speaker 1: he was a teacher, and he like made money tangible
Speaker 1: for the kids the personal finance classes at this inner
Speaker 1: city school in Philadelphia. He gave them money, he gave
Speaker 1: them jobs, they had actual cash on hand to start investing.
Speaker 1: And one of the side effects that he mentioned was
Speaker 1: that parents of these kids who didn't know much about
Speaker 1: personal finance. As these kids were learning a ton, the
Speaker 1: parents were learning a lot too, And I thought that
Speaker 1: was cool. The spillover effect. We never really talked about it,
Speaker 1: but now that I'm thinking back, I'm like, oh, well,
Speaker 1: we kind of referred to at least that's what that was. Yeah,
Speaker 1: that's what was happening in that case. That's right. Okay,
Speaker 1: let's keep moving. Let's talk about how the Washington post
Speaker 1: they wrote this article about an airport beer. You'll know,
Speaker 1: we're not against paying more for some great beer, but
Speaker 1: we're not talking about paying that much for an incredible
Speaker 1: barrel aged stout or some meticulously crafted fruited sour. I'll
Speaker 1: pay a lot of money for a cantio on my friend, right. No, No,
Speaker 1: this is a dollar Sam Adam summer ale ouch, which
Speaker 1: is what I'm not going to knock on Same Adams.
Speaker 1: Seven bucks is a lot. It's not worth it, and
Speaker 1: it set off this crackdown on concession prices by the
Speaker 1: New York Ports Authority. I think this beer was sold
Speaker 1: at La Guardia. It's kind of funny that just a
Speaker 1: really expensive, generic, some somewhat craft beer can set off
Speaker 1: like some sort of government intervention. Well, honestly, like that's
Speaker 1: that That's a part of why we're talking about this,
Speaker 1: right because the real question is should there be a
Speaker 1: bunch of interventions just because someone decided to pay that
Speaker 1: much for the for a beer, Like, let people make
Speaker 1: their dumb decisions if they want to with with their money, right.
Speaker 1: I mean if I had seen that, of course I
Speaker 1: would have been like, wait, the same amount of summer
Speaker 1: and this is worth maybe a third of this at most,
Speaker 1: and I would have kept I would kept walking or
Speaker 1: ordered water instead, or ordered another beer that didn't cost
Speaker 1: as much. But I'm usually like, I'm not much of
Speaker 1: an airport beer guy, just because the prices are inflated
Speaker 1: at the airport. Like, just keep moving on down the road.
Speaker 1: But some folks would argue that, like, oh no, the
Speaker 1: airport beer is the best kind of beer, you know,
Speaker 1: like like there's all there's there's all different types of
Speaker 1: beers that are dependent upon the situation in which you drink,
Speaker 1: like a hot tub beer, shower beer, the beach beers. Also,
Speaker 1: I didn't know airport beer was included in that. Oh
Speaker 1: I think not for me personally, because I'm not willing
Speaker 1: to pay the inflated rates as well. But for those
Speaker 1: who want to pay stupid prices for that airport beer,
Speaker 1: I think they should be allowed to do so. It's
Speaker 1: not like they're being forced to pay that for something
Speaker 1: that they must have in order to survive or something like.
Speaker 1: It's not like it's it's not like we're talking about
Speaker 1: baby formulas, right, Like, there's a big difference between big
Speaker 1: difference formula and a summer ail. But we've actually got
Speaker 1: more to discuss in the realm of ridiculous prices, and
Speaker 1: we will get some more of that right after this.
Speaker 1: All right, we're back and it's it's time to get
Speaker 1: into the ludicrous headline of the week. Matt. We were
Speaker 1: just talking about expensive beer at the airport. Well, this
Speaker 1: week's ludicrous headline comes from the New York Times and
Speaker 1: it reads, I listened in on big business. It's profiting
Speaker 1: from inflation and you're paying for it. Time to talk
Speaker 1: about price gouge. Let's talk about price gouging, price profiteering.
Speaker 1: It's it is true than in this time of rising prices,
Speaker 1: many businesses have actually seen increased profits. You know, some
Speaker 1: of these businesses have been able to pass higher costs
Speaker 1: and a little bit more onto consumers. Uh. In recent months,
Speaker 1: this has led to more folks, including some politicians, pointing
Speaker 1: fingers at Corporate America with accusations of price gouging. But
Speaker 1: here's the thing. In a market based economy, a company
Speaker 1: that rips off its customers doesn't often perform well in
Speaker 1: the long term. Like to that beer example, most folks
Speaker 1: see the price and they keep walking on because they
Speaker 1: say that's ludicrous, even though it was. I also saw
Speaker 1: that still more than a dollar announced my friend, very
Speaker 1: very expensive. Well, plus, many of these businesses are taking
Speaker 1: those profits, they're investing more back into the business, training
Speaker 1: more employees, offering raises to their employees. Other businesses are
Speaker 1: actually reporting less than stellar numbers. Look at what happened
Speaker 1: with Walmart and Target and their earnings reports this week.
Speaker 1: You know, if customers get taken advantage of, they tend
Speaker 1: to vote with their wallets and they go elsewhere in
Speaker 1: the future. Profit padding, I would say, is is not real.
Speaker 1: You know, it's not the reason that we're seeing higher
Speaker 1: than normal inflation. Yeah. Again, going back to the beer story,
Speaker 1: I think only like three people had purchased, had had
Speaker 1: spent that much money on that on that dumb beer.
Speaker 1: But my question would be, like those people probably had
Speaker 1: expense accounts and you know, they had experiencing their employer
Speaker 1: was paying for it, because it's not an individual who
Speaker 1: is price sensitive paying for that, right. But it's it's
Speaker 1: not like a bunch of companies got together and you
Speaker 1: know all at once decided to become a little more greedy,
Speaker 1: but actually caused the change because competition is still strong
Speaker 1: in most sectors of our economy. Uh. And even though yeah,
Speaker 1: there are some corporations that have seen increased profits, that
Speaker 1: doesn't mean that these profits are going to continue to
Speaker 1: be inflated uh in the coming months into the future.
Speaker 1: And here's the thing, you don't even have to This
Speaker 1: is more of kind of like the opinion corner right now,
Speaker 1: proud of money, but you don't have to op ed section.
Speaker 1: Take our word for it. A survey of economists shows
Speaker 1: that the vast majority of economists disagree with the narrative
Speaker 1: that businesses are exploiting the inflationary environment to rake in
Speaker 1: more dough. And on top of that, almost all of
Speaker 1: these economists disagreed with the idea that government use of
Speaker 1: price controls would help rein in inflation as well COVID delays,
Speaker 1: supply shortages, these these have all been difficult for many
Speaker 1: businesses to deal with, but it's important to remember that
Speaker 1: healthy businesses helped to create a healthy economy that we
Speaker 1: all end up benefiting from in the end. Yeah, we
Speaker 1: can talk about a lot of reasons that inflation has
Speaker 1: taken off the way that it has, and I know
Speaker 1: that it's painful for consumers, but if you want things
Speaker 1: to get more painful. Just try instituting price controls. Just
Speaker 1: try creating more levers over who can charge what for
Speaker 1: what good or service. There are some historical examples we
Speaker 1: can point to you of how that works out. But
Speaker 1: a perfect example also of what we're talking about was
Speaker 1: reflected in another story actually from Bloomberg this week. A
Speaker 1: T and T and Verizon are raising prices on cell
Speaker 1: phone plans. It's not by a ton, it's not a
Speaker 1: big move forward, but millions of customers are going to
Speaker 1: start seeing an increased administration charge on their bill, meaning
Speaker 1: they're gonna pay a dollar thirty five more moving forward
Speaker 1: starting next month. Are these companies trying to eke out
Speaker 1: some additional profit? Maybe? Do Do we hate fees? Yes?
Speaker 1: We do. Is this gouging though? We would say no.
Speaker 1: And the great thing is you can leave those companies
Speaker 1: whenever you want to. You can do business elsewhere. And
Speaker 1: we would say, if you're with either of those two companies,
Speaker 1: you should, Yeah, you should leave right now, you should
Speaker 1: go down the road. Just like the bonuses for the
Speaker 1: different checking accounts. This is the perfect opportunity for you
Speaker 1: to say, you know what, Like from a principal standpoint,
Speaker 1: it is time for me to move all it's just
Speaker 1: a buck thirty. But guess what, I don't want to
Speaker 1: deal with that, and I'm already paying more than I
Speaker 1: should be in so Mintmobile, Visible and Google five are
Speaker 1: all vastly superior options, and those companies have actually been
Speaker 1: reducing rates and fees in recent months. So competition is
Speaker 1: alive and well in most sectors and it's benefiting all
Speaker 1: of us. Yeah. Again, as long as we have options
Speaker 1: to spend our money in the ways that we want to,
Speaker 1: we will see the market correct itself. We will see
Speaker 1: people looking because because here's the thing, if there's not
Speaker 1: competition like there wasn't ten years ago in the cell
Speaker 1: phone service provider space, you're gonna see companies like Visible
Speaker 1: and Mints and Google five pop up because they see
Speaker 1: that opportunity is going to happen overnights. No, and so
Speaker 1: there will be I think some periods of time when
Speaker 1: we might be paying a little bit more than we
Speaker 1: would like to, but that is leaving the door open
Speaker 1: for opportunity for somebody who is willing to be a
Speaker 1: little more entrepreneurial and to provide a service that people
Speaker 1: are willing to pay for. So, Joel, you know, we're
Speaker 1: not sold on the company's gouging US narrative necessarily, but
Speaker 1: gouging is taking place in some industries. Consumer Reports they
Speaker 1: detailed car repair loans, not car loans. Car repair loans
Speaker 1: that uh. I didn't even really know these worthing until
Speaker 1: I read this Consumer Reports article. Yes, some I went
Speaker 1: some car repair chains are engaging now in this practice. Like,
Speaker 1: we're not even fans of taking out a loan to
Speaker 1: buy a car, much less than getting a loan for
Speaker 1: repairs on your car. But some of the more well
Speaker 1: known car repair brands like Amco, Jiffy Lube, Precision Tune
Speaker 1: sat up well known, I would say notorious. It's probably
Speaker 1: they're charging massive rates of interest on loans that they're
Speaker 1: dolling out to customers who can't afford to pay for
Speaker 1: that repair upfront. Some of these loans had interest rates
Speaker 1: up to one and eight nine percent. That's paid a
Speaker 1: loan territory. It's pretty messed up. The CFPB. They're seeing
Speaker 1: a rise in complaints for these sorts of predatory car
Speaker 1: repair loans as well. So our advice don't ever take
Speaker 1: out one of these loans. Never. It's a it's a
Speaker 1: financial necessity to save up for potential future car repairs. Uh.
Speaker 1: And you do this by just setting aside money every
Speaker 1: single month. You know it's inevitable, Like you know that
Speaker 1: at some point in time, even if you have an
Speaker 1: ev you're going to have to make some repairs to
Speaker 1: your car, whether that's just paying for like new winchell
Speaker 1: wipers or new tires or something larger. Uh. And you
Speaker 1: take out a loan for winch of wipers, than you're
Speaker 1: in a really bad position. But even if you absolutely
Speaker 1: had to borrow somebody to make a larger repair something
Speaker 1: and you know, bigger than wiper blades, your credit union
Speaker 1: that is likely going to have much better options for you.
Speaker 1: Do not take out a car repair loan. No, yes,
Speaker 1: please do not, especially from one of these chains that
Speaker 1: is charging ridiculous amounts of interest. So something that could
Speaker 1: might cost uh repair couldn't end up costing you or
Speaker 1: something like that because of the interest that they're charging
Speaker 1: on It makes sense though it's it's sort of like,
Speaker 1: I mean, these different car pair of places, they're taking
Speaker 1: a leaf out of there, taking the page out of
Speaker 1: Victoria's Secret, but in a Republic's playbook right where they're
Speaker 1: trying to get people to sign up for financing because
Speaker 1: that is how they make so much money, right, so
Speaker 1: they make their money. Speaking of financing, Matt, and you
Speaker 1: just mentioned we don't even like car loans. Well, um,
Speaker 1: the average car note as it stands is six fifty
Speaker 1: dollars a month and the average length of that car
Speaker 1: loan is almost six years. That's according to Edmunds. So
Speaker 1: those are recent stats. Man. I couldn't believe it when
Speaker 1: I saw it. So not only people are taking out
Speaker 1: these these car pair loans, when people are also just
Speaker 1: have on top of that some sort of six hundred
Speaker 1: fifty dollar a month uh debt in their life that
Speaker 1: they're paying religiously. It's crazy. So you could have a
Speaker 1: seventh grader and by the time you pay off that car,
Speaker 1: they're a freshman in college. Yeah, that's frightening. That's uh,
Speaker 1: that's really scary that it would take you that long
Speaker 1: to pay off your car loan and that it would
Speaker 1: cost you that much every single month. You know, Like
Speaker 1: Matt said, we're big fans of having no car payment
Speaker 1: at all. Paying cash for your next car is a
Speaker 1: great goal to have, and that means, uh, starting to
Speaker 1: save money for that now. So for these things, like
Speaker 1: you mentioned whine App earlier, Matt whine App is great
Speaker 1: at helping you plan for future expenses like that, but
Speaker 1: you know you don't need software to help you do that.
Speaker 1: You can do that on your own. And starting a
Speaker 1: sinking fund for that next car purchase so that you
Speaker 1: aren't signing yourself up for some sort of ridiculous six
Speaker 1: eight hundred dollar a month car payment is is crucial.
Speaker 1: Your car might be driving fine right now, but it
Speaker 1: can't hurt to start planning for something a few years
Speaker 1: down the road totally, especially if you're driving a much
Speaker 1: older car you know that's starting to have maybe a
Speaker 1: few more issues than I think. Starting a sinking fund
Speaker 1: for that new car purchase would be wise. Even just
Speaker 1: talking away a hundred or two hundred bucks a month
Speaker 1: would be a massive help, you know, when it comes
Speaker 1: time to buy that new car. Unfortunately, actually, use car
Speaker 1: prices are finally going down after a couple of years
Speaker 1: of those prices defining gravity and rising like a balloon
Speaker 1: go by a two year olds what was up was
Speaker 1: down And someone had told me three years ago, guess
Speaker 1: what use car prices are going too sore, I would
Speaker 1: like what, no way, that's like the opposite of everything
Speaker 1: you learned in personal finance one on one. Yeah, I mean,
Speaker 1: they're unlikely the crater back to pre pandemic levels in
Speaker 1: the near future, but it's good at least to see
Speaker 1: that we're starting to see signs of normalcy within that
Speaker 1: used car market inventory. Yeah, alright, Matt on a on
Speaker 1: a similar note of cars, well, there was an interesting
Speaker 1: story this week about electric car manufacturer Tesla and it's
Speaker 1: intersection of them with sustainable Investing. Yes, they're CEO is
Speaker 1: like outspoken then brash on Twitter apparently, um never heard
Speaker 1: of that guy who knew? But what's known as e
Speaker 1: s G funds that that prioritize environmental, social, and governance
Speaker 1: factors when it comes to the companies they invest in,
Speaker 1: while the S and P actually has its own E
Speaker 1: s G index, And they announced this week that they're
Speaker 1: kicking Tesla out. And of course, uh elon Musk, he's
Speaker 1: always got a response, he's always got some sort of
Speaker 1: something to say about everything that happens, but specifically anything
Speaker 1: happens with Tesla, and he called E s G funds
Speaker 1: the devil incarnate um overkill. Yeah, maybe maybe just a
Speaker 1: little bit. But my friend Jack, he writes over a
Speaker 1: Young Money Matt, he actually wrote this week that E
Speaker 1: s G and I quote isn't real, And I think
Speaker 1: he's onto something. We've talked about this before, that people
Speaker 1: place too much value on E s G funds, and
Speaker 1: the companies that are included in these e s G
Speaker 1: funds varies across the board, depends on who, depending on
Speaker 1: who's picking and uh for instance, like you know, if Tesla,
Speaker 1: the world's foremost e V maker, isn't worthy of inclusion
Speaker 1: in this e s G index, but x on Mobile is.
Speaker 1: I guess I'm just really confused about what the actual
Speaker 1: credentials are for for inclusion or for a company that's
Speaker 1: considered to be doing socially responsible things. So it goes
Speaker 1: to show that your definition of sustainable investing it may
Speaker 1: not be someone else's definition. So our advice is to
Speaker 1: invest in these funds with caution and do it for
Speaker 1: the right reasons. Make sure that you're doing your due
Speaker 1: diligence to make sure that any E s G fund
Speaker 1: you're for taking in is actually investing in the companies
Speaker 1: you think are doing good work, and also pay attention
Speaker 1: to the fees these e s G funds are come
Speaker 1: with much higher fees typically than the index funds that
Speaker 1: Matt and I recommend. And I get the desire to
Speaker 1: invest in companies that are also doing good. It's just
Speaker 1: that not every E s G fund is actually doing that. Yeah,
Speaker 1: and I like what you said about making sure that
Speaker 1: you're investing for the right reasons, because I do think
Speaker 1: a lot of folks are making these investments just to
Speaker 1: kind of soothe over their conscience a little. You feel good,
Speaker 1: we've we've gotten into the habit I think of outsourcing
Speaker 1: our own responsibility towards the world and the environment and
Speaker 1: some of the other charitable causes that maybe folks used
Speaker 1: to participate in. But instead they buy a pair of socks,
Speaker 1: or they buy a pair of shoes, or the buy
Speaker 1: a pair of glasses, and guess what, they take care
Speaker 1: of the donation part of that. And I do think
Speaker 1: it's great that companies have more of a mission right,
Speaker 1: like they have more of a riitable mindset. But I
Speaker 1: do believe that that lets people off the hook a
Speaker 1: little bit, and then when it comes to something like
Speaker 1: this and how they invest they think, oh, E s G.
Speaker 1: That's much better when in fact, it's not necessarily better
Speaker 1: from the standpoint of the companies that they invest in,
Speaker 1: and like you said, oftentimes they are more expensive, even Vanguard.
Speaker 1: If you look at their total stock market e t
Speaker 1: F expense ratio of point zero three percent uh, their
Speaker 1: total stock market E s G fund is point zero
Speaker 1: nine that's three times more expensive. And granted that's not
Speaker 1: really it's still really cheap, right, Like we're talking about
Speaker 1: hundreds of a percent in here, but principally speaking, it's
Speaker 1: literally three times more expensive. And so are you going
Speaker 1: to going to see a bigger gap with a whole
Speaker 1: lot of other fund providers. So absolutely, yeah, this is
Speaker 1: van Like basically, this is as affordable of an E
Speaker 1: s G fund I think that you can get. If
Speaker 1: anyone's beating them, maybe it's Fidelity because they like to
Speaker 1: go zero with things. But again, just keep that in mind,
Speaker 1: makes make sure that you are investing for the right reasons.
Speaker 1: But as it stands, it seems like E s G
Speaker 1: investing is just a bunch of signaling. It's a bunch
Speaker 1: of theater unless you've been able to identify that the
Speaker 1: particular fund that you're investing it is excluding a certain
Speaker 1: type of industry that you don't want to be investing in. Yeah,
Speaker 1: and depending on how you view social media and what
Speaker 1: it's doing to the fabric of our society, an E
Speaker 1: s G fund might be creating more division in our
Speaker 1: culture as a whole because it is investing in some
Speaker 1: of the social media companies that maybe you might not
Speaker 1: be a big fan of. So much of it comes
Speaker 1: down to the particulars of each individual fund and it's
Speaker 1: something just just want to put that on your radar
Speaker 1: this week. But Matt, that's gonna do it for today's
Speaker 1: Friday flight. Uh. We hope everyone out there has a
Speaker 1: great weekend, and on Monday, we'll be back with a
Speaker 1: fresh episode with It's an interview with our new friend,
Speaker 1: Erica Young, who is a legit excellent money coach, and
Speaker 1: she's gonna talk all about what benefit you can derive
Speaker 1: from having a money coach in your corner. It's an
Speaker 1: excellent conversation and we look forward to sharing it with you.
Speaker 1: Then that's right, So that's gonna be it for today though,
Speaker 1: until next time, Best Friends Out, Best Friends Out.