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

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Speaker 1: Today we're discussing new cheap travel hacks, borrowing is back,

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Speaker 1: and beware of neo banks. That is right, Joel. This

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Speaker 1: is our Friday Flight episode where every week we look

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Speaker 1: at some different headlines that we've come across this week

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Speaker 1: and we want to talk about how they pertain to

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Speaker 1: our personal finances, how it affects our money. So we're

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Speaker 1: gonna get to those stories that you mentioned there at

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Speaker 1: the top, plus some other stories to like hiring bonuses

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Speaker 1: and our thoughts on the way that folks are investing

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Speaker 1: their money these days. We'll get to those stories as well.

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Speaker 1: But I know first you wanted to you kind of

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Speaker 1: had like a little halftime pump up speech for for

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Speaker 1: all of us, right with us now being in the

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Speaker 1: middle of the year, with it being July. Yeah, yeah,

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Speaker 1: we we like literally just passed the half point of

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Speaker 1: the year, right, And Joel, I'll give one of those

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Speaker 1: Friday night light speeches or something like that. I never

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Speaker 1: even watched the show, but no Varsity Blues for you

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Speaker 1: never did that one either, Sorry, but yeah, I just

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Speaker 1: wanted to basically tell people, hey, now that we're halfway

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Speaker 1: through the year, This is like the perfect chance to

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Speaker 1: kind of check in on your goals, like how are

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Speaker 1: you progressing the things that you wanted to accomplish at

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Speaker 1: the beginning of the year, Like have you fully funded

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Speaker 1: that roth Ira if that was your goal, or you

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Speaker 1: at least halfway there? Right? I feel like halftime of

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Speaker 1: a ball game is the perfect time to kind of

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Speaker 1: assess how your team is doing and kind of figure

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Speaker 1: out what adjustments you need to make. I think it's

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Speaker 1: the same thing for us when it comes to our

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Speaker 1: financial planning for the year. Halftime through the year is

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Speaker 1: a great chance to reassess and see am I making

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Speaker 1: the progress I wanted? What changes do I need to

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Speaker 1: make in order to get there? If I'm not? Or

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Speaker 1: you know, give yourself a little pat on the back

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Speaker 1: of you if you're doing great, totally man and you know,

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Speaker 1: with personal finances, it hardly ever goes the way you

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Speaker 1: expected to write. And so maybe at the end of

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Speaker 1: last year you're kind of looking ahead, when you're feeling optimistic,

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Speaker 1: you've maybe you've underspent that year, You've you've come under

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Speaker 1: budget because a lot of us couldn't spend a whole

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Speaker 1: lot of money with everything being closed last year, and

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Speaker 1: so maybe looking ahead, you set some overly optimistic, ambitious

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Speaker 1: goals for your money, and maybe you haven't looked at

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Speaker 1: where things are because you know, you've kind of blown

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Speaker 1: things out of the water over the past few months

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Speaker 1: as things have opened up, right, as we've all kind

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Speaker 1: of re emerged, and we're kind of getting back to

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Speaker 1: our previous levels of spending. Hopefully we haven't exceeded those levels.

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Speaker 1: But I think it could be easy for a lot

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Speaker 1: of folks to think, you know what, like just the

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Speaker 1: rest of one whatever, like I'm just gonna live my life. Uh,

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Speaker 1: it's might be in ostrich. I'm gonna take my head

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Speaker 1: in this hand. Yeah, when it comes to the numbers,

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Speaker 1: keep on keeping on exactly. But we don't want you

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Speaker 1: to do that. We have a lot of the year

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Speaker 1: still left, and there are some changes that you can

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Speaker 1: make to your budget, some tweaks that you can make,

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Speaker 1: because here's the thing, we want you to still set goals.

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Speaker 1: We still want you to seek after those goals, but

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Speaker 1: you need to make sure that they're attainable, and so

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Speaker 1: hopefully you can maybe make some changes that will still

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Speaker 1: be challenging for you. And your money. But at the

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Speaker 1: same time, they're gonna be goals, uh that are within reach.

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Speaker 1: You want those goals to be realistic, Yeah, no doubt.

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Speaker 1: I don't want to dwell on this too long, but

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Speaker 1: I did just want to encourage people take a look,

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Speaker 1: don't bury your head in the sand. Um. And even

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Speaker 1: if you can't reach the goal that you set out

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Speaker 1: at the beginning of the year, it doesn't mean you

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Speaker 1: have to scrap it all together. You can get close

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Speaker 1: to that in all likelihood, you know. And and so, uh,

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Speaker 1: now is the perfect time to kind of check in

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Speaker 1: and evaluate and have that discussion with your partner if

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Speaker 1: you got one, or to just kind of do some

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Speaker 1: self evaluation and then work towards finishing the year strong.

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Speaker 1: But Matt, let's let's keep moving on. Let's get to

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Speaker 1: those stories that we found this week. And the first

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Speaker 1: thing we were talking about is travel. Matt. It made

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Speaker 1: me a little sad this week. I read a story

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Speaker 1: about bolt Bus. They announced that they're no longer giving

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Speaker 1: bus rides there. No, they've suspended operations. Yeah. So I

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Speaker 1: saw that story and I have never even heard of

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Speaker 1: bolt Bus. I am not one. I'm not Yeah, I

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Speaker 1: haven't I don't know if I'm their ideal customers that

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Speaker 1: the different discount bus lines that exist, but this is

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Speaker 1: one that I am sad to say. I mean, you're

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Speaker 1: sad to see them go, but I'm sad that I

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Speaker 1: had never even heard of them before. Yeah, well I

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Speaker 1: I had heard of bold Bus, but I had never

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Speaker 1: rowed on bolt Bus. But I'm still sad that they're gone.

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Speaker 1: You've seen bolt as their spokespersons should have. They probably

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Speaker 1: couldn't afford it, though, because the way bolt Bus operated,

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Speaker 1: It's this cheap inner city bus service, right, and so

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Speaker 1: bolt Bus sold at least one ticket on every trip

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Speaker 1: for just a dollar. That's gonna make it kind of

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Speaker 1: hard to pay, you know, the commanding fee that you

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Speaker 1: saying Bolt requires in order to sponsor your company. But yeah,

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Speaker 1: I feel like, yeah, you can't do much better than that, right,

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Speaker 1: a trip for a dollar to another to another town.

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Speaker 1: But I wanted to mention that all the bolt Bus

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Speaker 1: is no longer around, Megabus still is, and they have

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Speaker 1: a really similar business model. And I have written on

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Speaker 1: Megabus before. I've done a few different trips. Yeah, I've

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Speaker 1: done that a lot. Yeah, it's uh, it's kind of fun. Uh,

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Speaker 1: and it's super cheap, right, So these aren't like the

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Speaker 1: greyhound busses maybe that you're used to seeing from like

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Speaker 1: Thanten seventies and eighties, Like these are better busses than those.

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Speaker 1: Oh yeah, these are premium. These are like the night

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Speaker 1: bus from Harry Potter and The Prisoner of Azkaban. Yes,

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Speaker 1: something like that. We're on book three right now if

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Speaker 1: you're wondering, and yeah, like the great thing. Yeah, they

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Speaker 1: don't have beds and they don't part traffic, but otherwise, uh,

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Speaker 1: the pretty nice, similar level, similar level. Yeah, and they're

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Speaker 1: double decker buses. They've got WiFi on board. Um, although

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Speaker 1: it's not gonna be like as blazing past you used

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Speaker 1: to with the WiFi your house. But yeah, you can

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Speaker 1: travel to some cool destinations, especially if you live on

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Speaker 1: the East Coast, for for very little money in relative comfort.

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Speaker 1: So yeah, if you're looking for an option away to

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Speaker 1: get out of town, uh, and do it without spending

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Speaker 1: too much money, without hopping on a plane, or maybe

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Speaker 1: even just avoiding some of the higher gas prices right now,

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Speaker 1: I would say megabus might be a good place for

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Speaker 1: you to turn. That's right, Yeah, yeah, speaking of travel,

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Speaker 1: it's expensive to hop on a plane or rent a car.

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Speaker 1: At the moment, we've talked about the massive sky high

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Speaker 1: prices of running a car and gas prices, like you said,

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Speaker 1: they have been surging recently, they're likely to continue going

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Speaker 1: up through August through the rest of the summer. This

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Speaker 1: is according to Triple A. So yeah, this is not

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Speaker 1: the time to take some cross country road trip, especially

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Speaker 1: if the road trip involves a gas guzzling rental vehicle.

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Speaker 1: That'd be like the most expensive way to travel. I

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Speaker 1: can't wait to go like Atlanta to California. It's like, no,

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Speaker 1: not in a suburban here's nothing else. But you know,

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Speaker 1: one of the things you might want to consider is,

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Speaker 1: obviously just try to postpone your trip. Try waiting until

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Speaker 1: the fall the travel, if you're able to, prices will

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Speaker 1: likely be lower and the crowds are definitely going to

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Speaker 1: be smaller. Everyone has looked to outdoor destinations, like different

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Speaker 1: national and state parks. Man, have you seen how some

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Speaker 1: of the national parks are like completely ditching a lot

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Speaker 1: of the hours like this ridiculous. And a friend who

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Speaker 1: just went to Glacier National Park and he said, you

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Speaker 1: can either get in before five am or after five pm.

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Speaker 1: They're not allowing people in during the other parts of

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Speaker 1: the day. Like that's how crowded these national parks are getting. Yeah, so,

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Speaker 1: I mean, just generally speaking, off feak travel. It's a

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Speaker 1: good idea, right, and it'll save you a hundreds, if

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Speaker 1: not thousands of dollars on airfare and accommodations if you

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Speaker 1: can be flexible throughout the course of the year. Being

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Speaker 1: flexible on those travel dates can save you a bunch

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Speaker 1: of money. Uh, And it's also helpful to prioritize cheaper

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Speaker 1: accommodations as well. Hip camp is a this cool website

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Speaker 1: that is basically the equivalent of Airbnb, but it's for

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Speaker 1: camping and glamping. You know, do you want to explain

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Speaker 1: with clampings clamping? You know, it's like staying in uh

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Speaker 1: something camping fancy camping like a yurt or something like

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Speaker 1: that where you can post pictures to Instagram and it

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Speaker 1: looks like that you're into the outdoors. Actually had a

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Speaker 1: friend recently that they booked a campsite via hip camp,

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Speaker 1: and uh, it's something that he said his girlfriend had

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Speaker 1: used for years now. But he pointed out the fact

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Speaker 1: that it was really cool because they were able to

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Speaker 1: hike on this property that they otherwise wouldn't have been

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Speaker 1: able to unless they were trespassing, which we obviously can't recommend.

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Speaker 1: But obviously you're staying in a location that's unique and cool,

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Speaker 1: but to be able to explore the grounds, and this

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Speaker 1: property had hundreds of acres out in the wilderness. So

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Speaker 1: that's another cool benefit of staying out of place that

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Speaker 1: is listed there on hip camp. So yeah, if you

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Speaker 1: feel the need for a vacation, but maybe your light

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Speaker 1: on cash this summer, Uh yeah, check out hip camp.

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Speaker 1: That might be able to help hip camp and megabus.

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Speaker 1: Yeah maybe megabused to that hip camp site. Know, that's

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Speaker 1: the way to do it. That's how you're gonna get

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Speaker 1: a really cheap vacation if you could do. If there's

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Speaker 1: anybody out there who this summer either already has done

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Speaker 1: that or is planning to let us know, we would

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Speaker 1: love to hear that, and yeah, we'll talk about on

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Speaker 1: the show. If you do, you'll be our new best friends. Uh.

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Speaker 1: Let's talk about unemployment Matt two and the federal unemployment benefits.

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Speaker 1: There are have been a couple of dozen states at

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Speaker 1: this point who have decided to end the extra benefits

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Speaker 1: early as employers continue to have difficult time finding folks

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Speaker 1: to fill open jobs, including here in the state of Georgia.

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Speaker 1: We've now eliminated that increased federal unemployment benefits, and Matt,

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Speaker 1: you and I we've talked with multiple local store owners,

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Speaker 1: restaurant owners, and breweries who aren't able to get back

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Speaker 1: to regular hours right now or to even full capacity

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Speaker 1: because of the worker shortage. One of my favorite restaurants, like,

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Speaker 1: they haven't gone back to having waiters and waitresses. You

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Speaker 1: still just order at this kiosk at the front because

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Speaker 1: they don't have enough people. Yeah, exactly. But yeah, I'll

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Speaker 1: be curious to see if things change where we live

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Speaker 1: in the coming week, because Yeah, there was a story

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Speaker 1: that the Wall Street Journal put out and they were

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Speaker 1: reporting that states who have ended federal jobless benefits earlier,

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Speaker 1: like Missouri did towards the beginning of the last month,

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Speaker 1: they're seeing a larger percentage of people getting back to work.

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Speaker 1: And then Uh, a St. Louis based hotel company, they

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Speaker 1: saw a massive uptick in the number of job seekers

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Speaker 1: at a job fair that they held after those benefits

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Speaker 1: were discontinued. So it does seem like that was impacting

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Speaker 1: the decisions of people to come back to work or not.

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Speaker 1: And I know it's been tough for employers to just

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Speaker 1: try to find people to fill the gaps, and so

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Speaker 1: hopefully we're going to see more equilibrium in the job

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Speaker 1: market soon. Yeah, that specific hotel chain, I think they

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Speaker 1: said that two weeks before the additional benefits ended, they

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Speaker 1: had zero people show up to one of their job fairs.

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Speaker 1: Then they had a fair that was pretty close, so

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Speaker 1: when the benefits had ended and they had like seven

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Speaker 1: people show up, but then two weeks after that they

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Speaker 1: had forty people show up for them. It seemed to

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Speaker 1: them at least that it was pretty clear. It'll be

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Speaker 1: really interesting to see the data in the coming weeks

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Speaker 1: and months to see if it really was those additional

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Speaker 1: benefits that were keeping job position is from getting filled.

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Speaker 1: You know, because like from an economist standpoint, like you

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Speaker 1: would argue that individuals respond to incentives, right, and so

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Speaker 1: it's important to make sure that you're incentivizing the behavior

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Speaker 1: that you want to see more of, and so to

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Speaker 1: that this is a big reason that we're continuing to

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Speaker 1: see bonuses for new workers becoming the new normal. So

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Speaker 1: let's give some examples here. There's this food concessions company

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Speaker 1: in Texas is offering a two dollar bonus if you

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Speaker 1: come on board full time, and then they're offering four

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Speaker 1: referral bonuses to current employees. There's this restaurant in New

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Speaker 1: Jersey offering a seven and fifty dollar signing bonus. Uh.

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Speaker 1: And the T s A the transportation is a yeah,

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Speaker 1: security administration, right, they're offering huge I don't even know,

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Speaker 1: like you always hear the T s A but that's

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Speaker 1: like one of those acronyms that you never say the

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Speaker 1: whole thing. But they're offering this massive sign up bonus

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Speaker 1: as well. They're looking to hire six thousand new airport

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Speaker 1: security screeners uh, and they're offering a one thousand dollar

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Speaker 1: bonus to each one of those individuals. That is crazy, man,

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Speaker 1: one thousand dollar bonus. I have to to additional anecdotal

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Speaker 1: things to offer here. So one of our mutual friends,

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Speaker 1: Matt Uh, she was trying to recruit my wife to

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Speaker 1: work at the hospital where she works because she gets

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Speaker 1: a bonus for getting bringing new employees in and they're

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Speaker 1: like super short staffed, so I know that's the case.

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Speaker 1: And then I was like filling up my gas tank

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Speaker 1: last night, you know. And they have those like gas

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Speaker 1: station TVs that and there was like an ad for

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Speaker 1: Amazon and they're like one tho dollar signing bonuses for

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Speaker 1: certain jobs and amazzes. So I'm like, it's it's happening

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Speaker 1: all over the place. Um, And so yeah, if you

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Speaker 1: have been out of the workforce, one know that there's

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Speaker 1: a lot of demand and then to get one of

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Speaker 1: those sweet bonuses if you can. And employers are are

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Speaker 1: less likely to be raising wages to attract new higherslth

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Speaker 1: although we have seen wage increases to but that's another

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Speaker 1: reason why we're seeing so many of these bonuses. And

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Speaker 1: as employers are having a difficult time finding workers with experience,

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Speaker 1: it turns out that teenagers are stepping up and taking

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Speaker 1: advantage of these labor shortages. This is like the perfect

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Speaker 1: environment to be a teenager looking or some of them,

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Speaker 1: and they have been able to find jobs that pay

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Speaker 1: way more than they wouldn't it would have been able

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Speaker 1: to find like just two years ago, right yeah, Whereas

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Speaker 1: like so in years past, i would see like an

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Speaker 1: eighteen year old with a brand new iPhone. I'm just like,

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Speaker 1: oh man, you're spoiled. But now I see these kids

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Speaker 1: and I've got a phone that's like four years older

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Speaker 1: than what they got. I'm just like, oh man, you

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Speaker 1: probably bought that yourself. Yeah, you're working hard for your

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Speaker 1: money and then you're spending it. Was like, yeah, yeah,

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Speaker 1: that was my sign up for my summer job, right. Yeah.

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Speaker 1: And according to the Financial Times, UH teens accounted for

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Speaker 1: thirty six percent of new hires last month. That's compared

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Speaker 1: to the typical ten percent that we see in recent

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Speaker 1: normal years. But yeah, now is a great time to

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Speaker 1: find a job. If you're in the market for a

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Speaker 1: new position, just make sure that you're looking around to

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Speaker 1: see what different employers are offering, so you can ask

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Speaker 1: for a bonus if competitors are offering it, and so

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Speaker 1: that you're not leaving any money on the table. There's

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Speaker 1: a lot of power in the corner of workers right now.

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Speaker 1: And plus I feel like if you were to ask

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Speaker 1: and show that initiative, like someone doing the hiring would

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Speaker 1: be like, Okay, that's that's pretty smart. And I feel

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Speaker 1: like I would want to hire a teenager who had

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Speaker 1: that kind of mentality, Uh, not that the mental day

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Speaker 1: of they're trying to you know, just make an extra buck,

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Speaker 1: but that they're just being creative and how they're going

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Speaker 1: about solving this problem of well, I want to work

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Speaker 1: for you, but there's this other employer and you know

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Speaker 1: they're they're offering two or fifty dollar little sign up bonus, Like,

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Speaker 1: is there anything that you can do? Certainly the power

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Speaker 1: has swung to the worker to make sure that you

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Speaker 1: keep this in mind as you're applying for different jobs

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Speaker 1: out there. Yeah, if you are looking for a new position,

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Speaker 1: you don't want it to be like a shakedown, but

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Speaker 1: you want to be a shrewd, smart kind negotiation. Yeah.

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Speaker 1: For everyone else, this might be why you start seeing

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Speaker 1: younger and younger looking teenagers working at your local establishments,

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Speaker 1: which I know that we have you shoot. Your boss

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Speaker 1: is going to be an eighteen, Like can you see

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Speaker 1: the manager? Police and high schooler shows up. Okay, But

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Speaker 1: even with these fat hiring bonuses, more than twenty million

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Speaker 1: American adults say that they don't have enough food. This

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Speaker 1: is according to the Census Bureau. Man. This is really

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Speaker 1: sad news for multiple reasons. But here's something that is encouraging.

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Speaker 1: Free food is becoming a thing as fridges and pantries

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Speaker 1: sort of like the little free libraries as they are

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Speaker 1: like proliferating across the US. UH In some locations they're

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Speaker 1: called a friedge, like a you know, mash up between

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Speaker 1: free like I can dig it. There's like a whole

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Speaker 1: network associated with those refrigerators. We've got one here just

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Speaker 1: less than a mile from where we live, Joel and

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Speaker 1: here in our neighborhood. They're called free nine in nine fridges,

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Speaker 1: not three nine free nine and nine that's the best price.

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Speaker 1: But we love that there are these local mechanisms to

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Speaker 1: to reduce food insecurity, food waste. I hate seeing food

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Speaker 1: waste as well. Um AND talked about that last week. Yeah,

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Speaker 1: but at the same time, these organizations like they're doing

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Speaker 1: this locally and they're hoping to build stronger communities simultaneously.

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Speaker 1: So I love that um AND related to this to

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Speaker 1: Google has this new tool to help you find food

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Speaker 1: in the community. If if you find yourself in need,

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Speaker 1: and you can find that at the site find Food

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Speaker 1: Support dot with Google dot com. It's just a cool

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Speaker 1: little tool. I mean, we all love Google Maps, we

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Speaker 1: use them frequently, and it's just really cool to see

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Speaker 1: Google using such a ubiquitous application like Google maps and

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Speaker 1: using that to help alleviate this need. Yeah, and even

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Speaker 1: if it's not you that's in need of food, right,

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Speaker 1: like you're maybe not struggling, if you meet somebody who is, like,

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Speaker 1: you can help point them to this resource. You can

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Speaker 1: help drive them to the spot to get the food.

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Speaker 1: It's just a nice resource for you to be able

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Speaker 1: to help someone else who might come up to you, because, Matt,

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Speaker 1: happens all the time where we live here in our

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Speaker 1: part of town. There are homeless people, there are hungry people,

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Speaker 1: and I don't always have cash on me or food

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Speaker 1: on me, and so um, if I can show them

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Speaker 1: where it is or take them to this spot, this

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Speaker 1: is a resource I'm gonna use. But Matt, We've got

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Speaker 1: more to get to on this Friday flight. We got

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Speaker 1: to talk about neo banks, and we also have to

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Speaker 1: talk about taking on debt to invest. We'll get to

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Speaker 1: those stories and more. Right it for this break, All right,

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Speaker 1: we are back. This is our Friday flight where every

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Speaker 1: week we cover some different stories in the news that

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Speaker 1: we came across. This week, and Joel, it's after the break,

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Speaker 1: and so you know that that means it is now

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Speaker 1: time for our ludicrous headline, Oh the week, I like that.

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Speaker 1: I tried to go straight from the diaphragm. Yeah, just

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Speaker 1: like this guttural sort of talk. Yeah, going, I like

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Speaker 1: it when you talk to me like that. Our ludicrous

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Speaker 1: headline this week came from the Wall Street Journal and

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Speaker 1: it goes something like this, borrowing is back. Sign ups

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Speaker 1: for auto loans, credit cards hits records. Joel. You know,

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Speaker 1: I we've been cheering the financial progress that many Americans

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Speaker 1: have been making during the pandemic. Right We've seen credit

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Speaker 1: cards being paid down in a massive way and savings

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Speaker 1: rates skyrocketing over the past fifteen months or so. That

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Speaker 1: was really cool to see, right, But it looks like

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Speaker 1: that era of prosperity for a lot of Americans is

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Speaker 1: coming to an end. It's not prosperity, it's just a

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Speaker 1: focus on you know, We're not like going to turn

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Speaker 1: into some third world country. I'm just people aren't focusing

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Speaker 1: on these really good things and as much anymore. It

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Speaker 1: seems that folks are not being as smart with their

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Speaker 1: money as much. Auto loans least originations are hitting records.

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Speaker 1: More people than ever are opening up credit cards and

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Speaker 1: putting purchases. Uh, they're paying for those purchases with debts

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Speaker 1: than plus. Banks are trying to draw customers back themselves.

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Speaker 1: Lendards are mailing personal loan solicitations in big numbers again

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Speaker 1: as well. Yeah, and basically, like all signs are are

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Speaker 1: pointing towards you taking on more debt right now. But

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Speaker 1: it's important to think twice before you bring any new

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Speaker 1: debt into your life. You want to make sure that

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Speaker 1: you're being just intentional and smart with the different financial

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Speaker 1: products that you're interacting with. Yeah, and especially as those

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Speaker 1: things come in the mail, you're like, all snap, preapproved,

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Speaker 1: Maybe I should jump on this. There's there's a sense

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Speaker 1: for those a week man. Yeah, I know there's a

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Speaker 1: sension which you. I think a lot of people, a

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Speaker 1: lot of people tend to believe, well, if this bank

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Speaker 1: says that I'm good for it, then obviously I should

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Speaker 1: get it or it makes sense. And Matt, we do

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Speaker 1: believe that there's a difference between good debt and bad debt,

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Speaker 1: right but lots of folks are taking on debt to

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Speaker 1: buy a new car, order to take a swee vacation

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Speaker 1: right there, not going the megabus megabus out there attempting

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Speaker 1: to live large, and they're putting those purchases on like

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Speaker 1: a credit card, and that is bad debt, right, It's

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Speaker 1: way better for your personal finances to save up and

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Speaker 1: to be able to pay for those things with cash.

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Speaker 1: And by cash, we mean you can still put it

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Speaker 1: on your credit card. We like credit cards. Just make

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Speaker 1: sure you can pay that balance off in full at

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Speaker 1: the end of the month. And when we look at

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Speaker 1: like the historical reactions to economic recessions, we've seen a

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Speaker 1: similar trend, Matt. A lot of these same things that

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Speaker 1: that happened over the last year happened during the Great Recession,

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Speaker 1: where people were pinched financially, and what they ended up

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Speaker 1: doing was he ended up saving more and they ended

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Speaker 1: up paying down debt. But then the good times resume

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Speaker 1: and people start to spend like they used to. They're

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Speaker 1: getting out of some of those good financial habits that

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Speaker 1: they started to develop. But we don't want how the

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Speaker 1: money listeners to follow that same pattern. We want some

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Speaker 1: of those good pandemic habits to stick with us. While

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Speaker 1: we see the spending spree going on around us, I

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Speaker 1: think we want to say I'm not gonna take part

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Speaker 1: to nearly degree. Yeah exactly, Yeah, pay This is like

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Speaker 1: one of those times when it pays to be a

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Speaker 1: contrarian right, like we want people to when everybody else

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Speaker 1: is ziggin, we want you to zag So while everyone

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Speaker 1: else is spending, we want you to not spend. We

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Speaker 1: want you to invest. And we we we talked about

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Speaker 1: this back in the spring. We did an episode called

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Speaker 1: the Temptation to Spend is Getting Real. We can link

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Speaker 1: to that one here in the show notes, because it

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Speaker 1: truly is that time has arrived and a lot of

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Speaker 1: Americans are unfortunately spending a lot of money that they

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Speaker 1: don't have. And Joel, speaking of debt, another terrible use

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Speaker 1: of debt is taking it on in order to do

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Speaker 1: more investing. A recent study by Magnified Money, they found

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Speaker 1: that huge swassa folks are all about taking on risky,

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Speaker 1: high interest rate debt in order to stick that money

429
00:19:39,840 --> 00:19:43,440
Speaker 1: in the market. Of investors that responded to the survey

430
00:19:43,480 --> 00:19:46,679
Speaker 1: admitted to taking on debt to invest, but this trend

431
00:19:46,760 --> 00:19:50,479
Speaker 1: it appears to be more prevalent among younger folks. So

432
00:19:51,320 --> 00:19:54,400
Speaker 1: of the gen Z respondents said that they had taken

433
00:19:54,400 --> 00:19:57,600
Speaker 1: on debt to invest, whereas only sixty percent of millennials

434
00:19:57,600 --> 00:19:59,800
Speaker 1: said that they've done it. Uh and that's just compared

435
00:19:59,840 --> 00:20:03,720
Speaker 1: to only nine percent of baby boomers. And what was

436
00:20:03,760 --> 00:20:06,800
Speaker 1: striking about the study is the type of debts that

437
00:20:06,840 --> 00:20:09,800
Speaker 1: folks were taking on in order to invest. Right the

438
00:20:09,840 --> 00:20:12,520
Speaker 1: majority of folks who responded, we're taking on personal loans

439
00:20:12,760 --> 00:20:16,240
Speaker 1: in order to do this, and we would not recommend that.

440
00:20:16,840 --> 00:20:19,080
Speaker 1: I mean, first of all, it's incredibly risky to use

441
00:20:19,119 --> 00:20:21,280
Speaker 1: debt to fuel You're investing at that level, right like

442
00:20:21,400 --> 00:20:24,680
Speaker 1: that should be done with savings. And the absolute best

443
00:20:24,800 --> 00:20:26,919
Speaker 1: rate that you'll find on personal loans right now is

444
00:20:27,080 --> 00:20:30,120
Speaker 1: it's like around six percent. But that's just the absolute

445
00:20:30,160 --> 00:20:32,360
Speaker 1: best that you can find, and oftentimes you don't qualify

446
00:20:32,480 --> 00:20:35,000
Speaker 1: for that rate. The average, according to bank rate, the

447
00:20:35,000 --> 00:20:37,159
Speaker 1: average lowest rate that folks are paining right now is

448
00:20:37,200 --> 00:20:39,919
Speaker 1: ten percent that which is much much higher and it

449
00:20:39,960 --> 00:20:43,359
Speaker 1: can go upwards of twenty and and so if you

450
00:20:43,560 --> 00:20:47,200
Speaker 1: do that, you're being way too optimistic about the future. Uh.

451
00:20:47,200 --> 00:20:49,439
Speaker 1: And you know this is coming from us who believe

452
00:20:49,520 --> 00:20:51,840
Speaker 1: in the market. We believe that it's going to continue

453
00:20:51,880 --> 00:20:55,159
Speaker 1: to go up into the right We're mostly optimistic fellas. Yeah,

454
00:20:55,280 --> 00:20:57,600
Speaker 1: so this this certainly feels like a u fork long

455
00:20:57,720 --> 00:21:00,600
Speaker 1: term bowl market move, but there are bound to be

456
00:21:00,720 --> 00:21:04,639
Speaker 1: negative consequences when you are borrowing at ten percent or

457
00:21:04,720 --> 00:21:07,800
Speaker 1: higher expecting to earn more than that over the long run.

458
00:21:07,840 --> 00:21:10,320
Speaker 1: It's just not gonna happen. Yeah, And I feel like, Matt,

459
00:21:10,320 --> 00:21:12,160
Speaker 1: you're right, it is a sign of too much euphoria.

460
00:21:12,440 --> 00:21:14,520
Speaker 1: But the reason I think maybe people are doing this

461
00:21:14,560 --> 00:21:18,560
Speaker 1: is because there was another recent study and US investors

462
00:21:18,600 --> 00:21:21,520
Speaker 1: as a group apparently expect seventeen and a half percent

463
00:21:21,520 --> 00:21:23,919
Speaker 1: returns in the market over the long term, which is

464
00:21:24,080 --> 00:21:27,920
Speaker 1: historically like not gonna happen. Right, But when you expect that,

465
00:21:27,960 --> 00:21:30,040
Speaker 1: you're like, well, sure, I'll take on debt at eight

466
00:21:31,119 --> 00:21:34,320
Speaker 1: in order to get those higher returns. Ten percent spread,

467
00:21:34,320 --> 00:21:37,960
Speaker 1: why not? Yeah, exactly. But that is fantasy world, and

468
00:21:38,000 --> 00:21:40,840
Speaker 1: a lot of those people are going to be severely

469
00:21:40,880 --> 00:21:43,199
Speaker 1: disappointed when it doesn't play out that way. And I

470
00:21:43,200 --> 00:21:46,200
Speaker 1: think recency bias is at play here. Right, the SMP

471
00:21:46,320 --> 00:21:49,200
Speaker 1: five did have an eighteen percent return last year, or

472
00:21:49,200 --> 00:21:51,479
Speaker 1: actually just slightly above that. Well yeah, I mean, and

473
00:21:51,480 --> 00:21:54,199
Speaker 1: that's including the correction, Like that's from January to December. Right,

474
00:21:54,200 --> 00:21:55,840
Speaker 1: Like if you look at like if you if you

475
00:21:55,880 --> 00:21:58,920
Speaker 1: had started even like at the low point last spring,

476
00:21:58,920 --> 00:22:01,639
Speaker 1: you're looking at sixty per scent. Uh, you know between

477
00:22:01,840 --> 00:22:04,199
Speaker 1: you know, last March and today. So I mean, I

478
00:22:04,200 --> 00:22:08,199
Speaker 1: think people like seeing that they're expecting similar returns in perpetuity.

479
00:22:08,280 --> 00:22:14,120
Speaker 1: So like worst case scenario, best case scenario six that's nothing. Yeah,

480
00:22:14,119 --> 00:22:17,520
Speaker 1: and if you've held mostly equities for the past decade,

481
00:22:17,560 --> 00:22:19,919
Speaker 1: you've seen monstrous growth too. But what are we going

482
00:22:20,000 --> 00:22:22,480
Speaker 1: to see over the next decade? Is it gonna look

483
00:22:22,480 --> 00:22:25,960
Speaker 1: like this past one? Well it's highly unlikely. So yeah,

484
00:22:26,000 --> 00:22:28,840
Speaker 1: taking on debt to invest is a bad idea. But

485
00:22:29,040 --> 00:22:31,880
Speaker 1: should you stop investing? Well, no, no way, we would say,

486
00:22:31,920 --> 00:22:34,440
Speaker 1: no way, right, keep shocking away money every single month

487
00:22:34,760 --> 00:22:36,879
Speaker 1: in your workplace retirement account and in your I ra A,

488
00:22:36,960 --> 00:22:39,399
Speaker 1: your h s A, or your brokerage account. But just

489
00:22:39,520 --> 00:22:43,160
Speaker 1: don't be surprised if and when a correction comes. Don't

490
00:22:43,160 --> 00:22:45,680
Speaker 1: be shocked to see returns in the four to six

491
00:22:45,680 --> 00:22:49,399
Speaker 1: percent range over the next decade instead of this hyper optimistic,

492
00:22:50,440 --> 00:22:52,920
Speaker 1: bold prediction four to six percent over the next decade.

493
00:22:53,119 --> 00:22:55,360
Speaker 1: I mean, that's what a lot of people have said,

494
00:22:55,359 --> 00:22:57,640
Speaker 1: based on the returns we've seen over the past decade,

495
00:22:58,160 --> 00:23:01,000
Speaker 1: that to kind of get back into line with historical

496
00:23:01,160 --> 00:23:03,520
Speaker 1: returns of the market, a lot of smart people say

497
00:23:03,520 --> 00:23:05,600
Speaker 1: we're not going to see returns in the ten percent

498
00:23:05,680 --> 00:23:09,240
Speaker 1: range over the next ten years because of the incredible

499
00:23:09,240 --> 00:23:11,879
Speaker 1: returns we've seen over the last time. But still investing

500
00:23:12,000 --> 00:23:14,360
Speaker 1: is one of the best ways to build wealth. Just

501
00:23:14,600 --> 00:23:17,040
Speaker 1: don't take on massive amounts of debt at high interest

502
00:23:17,080 --> 00:23:18,680
Speaker 1: rates in order to do it. Yeah, and the only

503
00:23:18,720 --> 00:23:21,679
Speaker 1: time will tell, right, because who knows. We could have

504
00:23:21,720 --> 00:23:25,280
Speaker 1: another ten years of excellent growth in the market. But

505
00:23:25,520 --> 00:23:27,720
Speaker 1: what we do know is what the past has shown us,

506
00:23:27,760 --> 00:23:30,240
Speaker 1: which is ten percent on average. Do you take inflation

507
00:23:30,240 --> 00:23:32,919
Speaker 1: into account and you're looking at around seven percent personally,

508
00:23:33,000 --> 00:23:36,959
Speaker 1: I think that's realistic. Uh, much more realistic than seventeen percent. Right.

509
00:23:37,440 --> 00:23:42,080
Speaker 1: Something I'm not as optimistic about at the moment is

510
00:23:42,119 --> 00:23:45,320
Speaker 1: the future of Chime Bank. You're gonna call O one

511
00:23:45,320 --> 00:23:49,760
Speaker 1: particular banking. I don't think we've talked about them specifically recently,

512
00:23:49,920 --> 00:23:52,400
Speaker 1: but they've been one of the fastest growing fintech companies

513
00:23:52,720 --> 00:23:55,600
Speaker 1: out there. They now have over twelve million customers. But

514
00:23:56,000 --> 00:23:58,159
Speaker 1: that's probably not gonna be the case for long if

515
00:23:58,240 --> 00:24:02,000
Speaker 1: the problems that they are experience seeing continue. Pro Publica

516
00:24:02,200 --> 00:24:05,240
Speaker 1: had an article this week that detailed the massive issues

517
00:24:05,560 --> 00:24:08,840
Speaker 1: at Chime. Right now, some Chime customers have been getting

518
00:24:08,840 --> 00:24:12,280
Speaker 1: their accounts shut down without any notice at all, and

519
00:24:12,480 --> 00:24:14,840
Speaker 1: in response, Chime just says that they're cracking down on

520
00:24:15,040 --> 00:24:18,960
Speaker 1: fraudulent deposits via stock email. Like they're not even interacting

521
00:24:18,960 --> 00:24:22,240
Speaker 1: with their customers. They're just sending these emails that are like, yeah, sorry,

522
00:24:22,280 --> 00:24:24,240
Speaker 1: we shut down your account. Um, and they're not really

523
00:24:24,280 --> 00:24:26,560
Speaker 1: giving people any sort of way to resolve the issue. Yeah,

524
00:24:26,560 --> 00:24:29,200
Speaker 1: it seems super sketch. And you know, in the process

525
00:24:29,240 --> 00:24:32,320
Speaker 1: they've left many other normal customers without any access to

526
00:24:32,400 --> 00:24:36,439
Speaker 1: their funds while being given no true explanation as to

527
00:24:36,440 --> 00:24:39,120
Speaker 1: why just that stock email like you mentioned so right now,

528
00:24:39,280 --> 00:24:42,680
Speaker 1: Chime actually has more complaints with the CFPB, the Consumer

529
00:24:42,680 --> 00:24:46,240
Speaker 1: Finance Protection Bureau and the BBB Better Business Bureau, right

530
00:24:46,720 --> 00:24:48,520
Speaker 1: all these different look at you. You're doing really good

531
00:24:48,560 --> 00:24:51,159
Speaker 1: with your acronyms today. I try, like we're just so

532
00:24:51,240 --> 00:24:53,840
Speaker 1: used to just saying the CFPB, but like sometimes it's

533
00:24:53,840 --> 00:24:56,760
Speaker 1: helpful to know what is the season, right, But there

534
00:24:56,800 --> 00:24:59,760
Speaker 1: are more complaints right now about Chime to those bureaus,

535
00:25:00,000 --> 00:25:03,199
Speaker 1: and there are about Wells Fargo. And you know that

536
00:25:03,240 --> 00:25:05,280
Speaker 1: when you are like beating Wells Fargo, at their own

537
00:25:05,320 --> 00:25:09,600
Speaker 1: game of showing crappy customers support. There are probably changes

538
00:25:09,640 --> 00:25:11,760
Speaker 1: that you need to make. Yes, exactly right, So if

539
00:25:11,800 --> 00:25:15,320
Speaker 1: you're currently with Chime, we would say consider moving your money.

540
00:25:15,440 --> 00:25:17,399
Speaker 1: So who should be bank with? Then? Well, how do

541
00:25:17,480 --> 00:25:19,840
Speaker 1: money listeners know that? We don't like the big banks

542
00:25:20,000 --> 00:25:22,800
Speaker 1: that have brick and mortar locations everywhere, like on every

543
00:25:22,840 --> 00:25:25,320
Speaker 1: street corner. That's not the best place to go open

544
00:25:25,359 --> 00:25:28,360
Speaker 1: an account. But we're also wary of some of these

545
00:25:28,400 --> 00:25:31,159
Speaker 1: new banks, the neo banks like Chime, that are springing

546
00:25:31,240 --> 00:25:33,080
Speaker 1: up online and it seems like there's a new one

547
00:25:33,119 --> 00:25:36,320
Speaker 1: every day. Matt, I'm seeing like an ad online or whatever,

548
00:25:36,520 --> 00:25:39,080
Speaker 1: a pitch to sign up for a new account with

549
00:25:39,160 --> 00:25:42,840
Speaker 1: like some cute little additional parks. But yeah, these neo

550
00:25:42,920 --> 00:25:46,560
Speaker 1: banks don't have much, if any history, and they aren't

551
00:25:46,680 --> 00:25:49,879
Speaker 1: actual banks either, Like instead, they're creating slick apps and

552
00:25:49,920 --> 00:25:53,680
Speaker 1: websites while calling themselves banks, but they're just an interface

553
00:25:53,720 --> 00:25:56,200
Speaker 1: that hands over the actual task of banking their money

554
00:25:56,200 --> 00:25:59,399
Speaker 1: real banks behind the scenes, their money management accounts what

555
00:25:59,440 --> 00:26:01,439
Speaker 1: they can call them. So I think it's confusing for

556
00:26:01,480 --> 00:26:04,679
Speaker 1: people because they purposely make it confusing. A lot of

557
00:26:04,720 --> 00:26:06,680
Speaker 1: the language they use on their site. They call themselves

558
00:26:06,680 --> 00:26:09,400
Speaker 1: a bank, but really they're just a fintech company with

559
00:26:09,480 --> 00:26:11,560
Speaker 1: a slick app and a website, and so they're also

560
00:26:11,640 --> 00:26:14,080
Speaker 1: not regulated in the same way. So yeah, we want

561
00:26:14,119 --> 00:26:17,160
Speaker 1: you to be with an actual bank, but like you said,

562
00:26:17,160 --> 00:26:18,719
Speaker 1: not one of the big ones. We're big fans of

563
00:26:18,760 --> 00:26:22,280
Speaker 1: the solid online banks like c I, T, Discover and

564
00:26:22,400 --> 00:26:25,080
Speaker 1: Ally they're still like some of the best in our opinion.

565
00:26:25,240 --> 00:26:27,480
Speaker 1: They have actual customer service numbers where you can get

566
00:26:27,480 --> 00:26:29,239
Speaker 1: ahold of a real human being, because that's been one

567
00:26:29,240 --> 00:26:32,399
Speaker 1: of the biggest complaints against Chime is you're getting this

568
00:26:32,440 --> 00:26:33,960
Speaker 1: stock email and not being able to get in touch

569
00:26:33,960 --> 00:26:35,840
Speaker 1: with anyone and trying to figure out where your ten

570
00:26:35,840 --> 00:26:38,440
Speaker 1: thousand dollars that you hadn't savings went right. And so yeah,

571
00:26:38,600 --> 00:26:41,280
Speaker 1: they also offer reasonable interest rates on your savings while

572
00:26:41,280 --> 00:26:44,479
Speaker 1: minimizing fees. We would say go with the bigger online

573
00:26:44,480 --> 00:26:47,800
Speaker 1: banks that have a history of good customer service that

574
00:26:47,880 --> 00:26:50,920
Speaker 1: offer a great product. These neo banks they kind of

575
00:26:50,960 --> 00:26:53,640
Speaker 1: scare me a little bit, and Chime in particular, clean

576
00:26:53,720 --> 00:26:55,280
Speaker 1: things up, like take care of your customers. You've got

577
00:26:55,280 --> 00:26:58,600
Speaker 1: twelve million customers, quit screwing them over like this. Yeah,

578
00:26:58,600 --> 00:26:59,960
Speaker 1: it just goes to show that the grass is an

579
00:27:00,000 --> 00:27:03,840
Speaker 1: always greener with another bank just because maybe they're offering

580
00:27:03,880 --> 00:27:06,160
Speaker 1: like a half a percent more on their high interest

581
00:27:06,160 --> 00:27:08,560
Speaker 1: savings account, or just because they're offering some like you said,

582
00:27:08,560 --> 00:27:10,359
Speaker 1: like a cute ce perk, like just some sort of

583
00:27:10,359 --> 00:27:13,480
Speaker 1: thing that your paycheck two days early. It's like okay, cool,

584
00:27:13,880 --> 00:27:16,840
Speaker 1: or some additional benefit that they're offering. Uh, it is

585
00:27:16,880 --> 00:27:18,760
Speaker 1: not worth it. Make sure you stick with one of

586
00:27:18,800 --> 00:27:21,280
Speaker 1: these tried and true online banks that that we're fans

587
00:27:21,320 --> 00:27:23,359
Speaker 1: of and will link to those in our show notes. Joel,

588
00:27:23,520 --> 00:27:25,240
Speaker 1: we can even link to a story that you wrote

589
00:27:25,600 --> 00:27:27,639
Speaker 1: about why it is that you went with C I

590
00:27:27,720 --> 00:27:30,200
Speaker 1: T back in the day. Yeah, I've actually got accounts

591
00:27:30,200 --> 00:27:32,199
Speaker 1: with all three of the ones I mentioned, like literally,

592
00:27:32,760 --> 00:27:34,600
Speaker 1: and so yeah, I mean, you don't have to be

593
00:27:34,680 --> 00:27:37,160
Speaker 1: crazy like me and have three different bank accounts, But um,

594
00:27:37,320 --> 00:27:39,600
Speaker 1: I think going with any one of those three is

595
00:27:39,600 --> 00:27:42,200
Speaker 1: great idea. You're normally one who likes to simplify things,

596
00:27:42,280 --> 00:27:44,320
Speaker 1: so and I'm the one that has all of my

597
00:27:44,560 --> 00:27:47,080
Speaker 1: just day to day money with just a single bank. Ally,

598
00:27:47,119 --> 00:27:49,280
Speaker 1: I've been with him for I mean years and years now,

599
00:27:49,560 --> 00:27:51,480
Speaker 1: and I'm happy to say I've never had any problems

600
00:27:51,520 --> 00:27:53,679
Speaker 1: with him that they've always treated me well. But you

601
00:27:53,720 --> 00:27:55,520
Speaker 1: got anything else for us? Man? No, that's it, man,

602
00:27:55,560 --> 00:27:57,439
Speaker 1: al Right, well that's gonna be it. Then let's get

603
00:27:57,520 --> 00:28:00,840
Speaker 1: this puppy up for this for this episode. Did you

604
00:28:00,880 --> 00:28:02,840
Speaker 1: ever did you ever like ever wrap a pet or

605
00:28:02,920 --> 00:28:04,639
Speaker 1: like like as a kid, did you ever receive a

606
00:28:04,680 --> 00:28:07,520
Speaker 1: pet that was wrapped up or like no pet animal

607
00:28:07,600 --> 00:28:09,120
Speaker 1: like in a box at Christmas? That kind of thing

608
00:28:09,359 --> 00:28:11,320
Speaker 1: that the whole punched in the top. You just said,

609
00:28:11,359 --> 00:28:13,439
Speaker 1: wrap this puppy up. That's what I'm thinking of. I

610
00:28:13,480 --> 00:28:15,920
Speaker 1: know you're thinking about actually getting a pet for your daughter.

611
00:28:16,040 --> 00:28:18,240
Speaker 1: Maybe when that day does come, we'll talk about it

612
00:28:18,240 --> 00:28:20,679
Speaker 1: on the show. You can talk about the expenses associated

613
00:28:20,720 --> 00:28:23,840
Speaker 1: with that possible pet, but we won't say anything else

614
00:28:23,920 --> 00:28:26,679
Speaker 1: just in case that doesn't happen. Right Hopefully she's not

615
00:28:26,720 --> 00:28:28,800
Speaker 1: listening right now. Al Right, Well, that's gonna be it

616
00:28:28,880 --> 00:28:30,919
Speaker 1: for this episode. We will see you back here on Monday.

617
00:28:31,160 --> 00:28:33,399
Speaker 1: We've got a great listener questions episode lined up for you.

618
00:28:33,480 --> 00:28:37,000
Speaker 1: But until next time, Joel, best Friends Out, Best Friends Out,