Speaker 1: Welcome to Head of Money. I'm Joel, I'm Matt, and
Speaker 1: today we're talking about student loan shakeups, doom spending, and
Speaker 1: the mounting mini stack session.
Speaker 2: That's right. This is our Friday flight where we take
Speaker 2: a look at the headlines from the past week and
Speaker 2: specifically look at how they are going to impact your
Speaker 2: personal finances. And so when you say a mini stack session,
Speaker 2: you need to say mini stack session because that's uh
Speaker 2: when we get on my helium balloon first. That's how
Speaker 2: the the economists that coined that is attempting to predict
Speaker 2: the future. We're not going to make the predictions, but
Speaker 2: there are different folks who are looking off into the future.
Speaker 1: They're trying to sometimes based on present stuff, right, which
Speaker 1: it's helpful to like he's trying to read the tea
Speaker 1: leaves though, and say this is what's coming down the pike.
Speaker 1: And I think it's helpful for us to at least
Speaker 1: understand kind of what they're pointing to those elements, but
Speaker 1: also not hold up with the grainess.
Speaker 2: I think, more than anything, just to alleviate fears, right,
Speaker 2: not to say to be convinced of that this is
Speaker 2: why the thing is happening, but just as folks are
Speaker 2: freaking out to understand I guess some of the different
Speaker 2: positions that folks are approaching the argument with.
Speaker 1: When that is helpful when you see more headlines they
Speaker 1: use a scary word like, we want to talk about
Speaker 1: it and shed some light. And because there's a lot
Speaker 1: of deep in glue out there, can we start off
Speaker 1: by talking about something that I've been prioritizing in my
Speaker 1: budget over the past I don't know, a year and
Speaker 1: a half, I'll say, and.
Speaker 2: That is to enjoy more more cultural events. And I
Speaker 2: have literally called.
Speaker 1: Them cultural events. This is the thing that I've been
Speaker 1: shooting for. Is that the line item on your non budget? Yeah, yes,
Speaker 1: that you don't have. He just any time Emily questions
Speaker 1: you about something, You're like, baby, that's that's part of
Speaker 1: my cultural events spending.
Speaker 2: Is exactly right, That's exactly right. That's botta. That was
Speaker 2: my cultural event. Sounds like the expenses they are spending
Speaker 2: coming out of like a Parks and reg department. Yeah, so, okay,
Speaker 2: you joke.
Speaker 1: But I have been attempting to pull off and I
Speaker 1: made it initially a once a quarter goal and then
Speaker 1: I said, you know what, No, I want to I
Speaker 1: want to try to do this once a month, the
Speaker 1: cultural event, and so that could you start that this year?
Speaker 1: I started that last year. Okay, so you put what
Speaker 1: it could be a concert. All the concert ticket prices
Speaker 1: have gone up substantially. It could be going into the
Speaker 1: debt for that. Yeah, that Actually, it could be going
Speaker 1: to see a play. It could be like I took
Speaker 1: my daughter to see a Shakespeare play at the Shakespeare
Speaker 1: Tavern recently and it was awesome, to being the best time.
Speaker 1: And they're just I think cultural events are are underrated
Speaker 1: and and there was actually, as I told my wife
Speaker 1: about kind of why we're I want to prioritize this
Speaker 1: more and more, she said, actually, I just read something
Speaker 1: the other day. You should check this out, and there
Speaker 1: was here's the headline. Psychiatrist discovered doing this just once
Speaker 1: a month cut your risk of depression in half? Was it?
Speaker 2: Cultural events? Cultural events? Taking a cultural event? So not
Speaker 2: enough to defend your own case. She's done it for you.
Speaker 1: That's right, So thank you Emily for contributing to the
Speaker 1: show here. But what they said was if you do
Speaker 1: one outing, one cultural events outing every few months, like
Speaker 1: I was doing once a quarter initially, it reduces your
Speaker 1: risk of depression by thirty two percent. If you instead
Speaker 1: prioritize a cultural event on a monthly basis. That could
Speaker 1: be by the way, a museum, ounting, going to the
Speaker 1: botanical gardens. There are so many ways that you can
Speaker 1: use that culture plan. It doesn't even have to be expensive.
Speaker 1: It will, though, cause your risk of depression to fall
Speaker 1: by nearly half, by forty eight percent. So do they
Speaker 1: also call them cultural events? They literally call them cultural events.
Speaker 1: Body in there because that's what I'd been labeling them.
Speaker 1: I didn't know what else to call them. That's pretty hilarious,
Speaker 1: and so I think maybe this can hopefully incentivize people
Speaker 1: to think about I think it could also think about
Speaker 1: the wanderlust that people feel Matt.
Speaker 2: They they're like, I got to go to Europe. I
Speaker 2: got to get out of here.
Speaker 1: There's something about instituting more regular cultural events into your
Speaker 1: life and into your budget that maybe feels like you
Speaker 1: don't have to take the big swing on the expensive A.
Speaker 2: Can splurges more often. I totally love that, and I
Speaker 2: love that you specifically have identified this for you. But
Speaker 2: I will say I think it was like, it is
Speaker 2: important to be a stay depressed well No, I'm just saying, like,
Speaker 2: the argument I'm going to make is that it's not
Speaker 2: like I do think folks would probably push themselves to
Speaker 2: do something like that. But you know, for you, it
Speaker 2: moves the needle significantly. Yeah, I think for some folks
Speaker 2: they're gonna be like meh, I don't I don't really
Speaker 2: want to. For some folks, it's like, well, I'd rather
Speaker 2: go on a cruise. I just like sitting there, going
Speaker 2: to island, hoppin that kind of thing. I think there
Speaker 2: might be some folks who are just like, well, when
Speaker 2: I have some time and money, I just like to
Speaker 2: go shopping, like that's how I unwind. And I don't
Speaker 2: think we would consider either of those cultural cultural events. No,
Speaker 2: I wouldn't, And so they're in a different category for sure. Yeah,
Speaker 2: it's just to identify that for some folks spending I think,
Speaker 2: can look a little bit different and it may not
Speaker 2: move the needle as much for them. But whatever that is,
Speaker 2: for you figure out what that thing is.
Speaker 1: But I thought it was interesting to see this data
Speaker 1: because I do think the average person it is going
Speaker 1: to move the needle, and maybe you don't think about
Speaker 1: it like that. I think too, about the before, like
Speaker 1: looking up forward to the cultural event that's upcoming, I
Speaker 1: get to think about it for months, typically because I bought.
Speaker 2: A ticket or have something to do looking forward to.
Speaker 1: Yeah, it'saw on the calendar, and then I get to
Speaker 1: look back at that event and say, oh, man, think.
Speaker 2: About how great that. Do you remember when we did that?
Speaker 1: It was so good? Kind of like a vacation. I mean,
Speaker 1: that's one of the things that our friends Scott Kayes
Speaker 1: talks about with vacations is like half the fun is
Speaker 1: planning and getting ready for it, not just the taking
Speaker 1: of the vacation.
Speaker 2: I do wonder if they accounted for the social sort
Speaker 2: of spillover or crossover, like in the ven diagram between
Speaker 2: cultural events and the relationships and community, how much overlap
Speaker 2: is there, because, like I said, so, I do think
Speaker 2: for some people they're kind of like, eh, I don't know,
Speaker 2: like that it sounds like it would be fun, but
Speaker 2: maybe for me less. So I do think, And there
Speaker 2: has been tons and there continues to be research that
Speaker 2: points to the fact that that we have fewer relationships
Speaker 2: than ever yeah, and that when we do prioritize those
Speaker 2: that we tend to live happier, longer. Lives that increases
Speaker 2: life satisfaction. And that's regardless if you are an introvert
Speaker 2: or an extrovert. I think that there is a degree
Speaker 2: of us needing to push ourselves a little bit more
Speaker 2: than what we think we need when it comes to
Speaker 2: social interactions, but that's not the path that we find
Speaker 2: ourselves on. Right. I can think about the what is
Speaker 2: the Harvard Longitudal Happiness Study, and the number one thing
Speaker 2: that leads to the highest amounts of happiness and self
Speaker 2: satisfaction and fulfilling life are those relationships and and often
Speaker 2: a lot of cases, I think what you're finding in
Speaker 2: these different cultural events they include other people. So is
Speaker 2: it the ticket? Is it ensure there's a certain amount
Speaker 2: of enjoyment. I think it's a personal development that you're
Speaker 2: getting out of that. But there's a whole lot of
Speaker 2: friendship and community and being around other people that in
Speaker 2: my mind, directly overlays the this. You know, those two circles, yeah,
Speaker 2: might be highly overlapping worth something worth considering as well.
Speaker 2: We've got a little So what I'm saying is that
Speaker 2: a cultural outing or of it could be even be
Speaker 2: buying some cured meats at Aldi and having a picnic
Speaker 2: in the park with some friends, right.
Speaker 1: Like, but I love to overthink it and don't think
Speaker 1: that you got to go see Beyonce when she comes
Speaker 1: to town and spend nine hundred dollars on that ticket.
Speaker 2: That's insane.
Speaker 1: To enjoy a cultural event with your friends like you
Speaker 1: don't have to. There's affordable ways of doing it, and
Speaker 1: sometimes it might be a semi expensive concert ticket, but
Speaker 1: other times it can be a whole lot cheaper totally
Speaker 1: or potentially free.
Speaker 2: Especially I was just thinking about this too, and especially
Speaker 2: if you're not dropping big maney of those expensivefications.
Speaker 1: I was thinking in the library has offers the ability
Speaker 1: to go to get some of those cultural events for free, potentially,
Speaker 1: like going to the zoo or the aquarium, more the
Speaker 1: botanical gardens. You might be able to pull off that
Speaker 1: cultural event for zero dallas and enjoy even going to
Speaker 1: the library like kids after school.
Speaker 2: Sometimes they're just like meeting up there hanging out and
Speaker 2: again there's that social element.
Speaker 1: Yeah, I love it all right, cultural events for the win.
Speaker 1: Let's talk about student loans. Matt that the trend of
Speaker 1: student loan forgiveness and of income based or payment programs
Speaker 1: has been to make them more and more generous. Right
Speaker 1: as student loan debt it's become a more significant issue
Speaker 1: for mars. We've just seen that up into the right
Speaker 1: trend for student loan debt and one point seven trillion
Speaker 1: dollars overall, I think in student loan debt these days.
Speaker 1: And so these ballooning debt burdens, they've basically been the
Speaker 1: norm as college prices increased so much faster than the
Speaker 1: rate of inflation in recent decades. Oh yeah, and while
Speaker 1: student loan borrowers they still made more money than their
Speaker 1: peers who didn't get a degree. We've talked about that
Speaker 1: too before, what a million dollars in lifetime earnings on
Speaker 1: average for the versus the typical high school graduate. Well,
Speaker 1: various government administrations have opted to make those loans less
Speaker 1: onerous through different repayment programs like pay and Repay and
Speaker 1: then most recently the safe Plan that was attempted a
Speaker 1: couple of years ago. But the current administration is taking
Speaker 1: a different route. They seem to be of the opinion
Speaker 1: that student loan benevolence has kind of gone too far.
Speaker 1: And then so after a January court ruling again save
Speaker 1: and then another recent one in March. The Education Department,
Speaker 1: they actually just recently took applications for student loan forgiveness
Speaker 1: and for repayment plans off the website as these court
Speaker 1: rulings have essentially put those biden to minus illustration plans
Speaker 1: that were more generous on hold, which puts a lot
Speaker 1: of borrowers in limbo. Matt, there's essentially now zero ability
Speaker 1: to switch or to sign up for a new or
Speaker 1: different repayment plan, or to even verify your income if
Speaker 1: your date is approaching because of this freeze, and it's
Speaker 1: just kind of leaving student loan borrowers in alert right now.
Speaker 1: Yeah yeah, So how long will that freeze last? We
Speaker 1: don't know.
Speaker 2: But the sad thing is that student loan borrowers continue
Speaker 2: to be kept on pins and needles. So first, initially
Speaker 2: it was waiting and hoping for student loan forgiveness, and
Speaker 2: now I was just waiting to see what sort of
Speaker 2: payment plan that you're going to be able to get
Speaker 2: on how long your path too potential forgiveness might take.
Speaker 2: The lack of clarity, which I totally get, is so
Speaker 2: frustrating and so at least one piece of advice that
Speaker 2: we can offer in these uncertain times is to keep
Speaker 2: making payments no matter what plan that you're on. The
Speaker 2: Journal actually profiled steep credit drops for borrowers who didn't
Speaker 2: resume making payments back in October, and so what they
Speaker 2: found was that ninety days after that resumed, scores began
Speaker 2: to plummet. Yeah, so clearly there is just a large
Speaker 2: amount of confusion. This is a quote from the Journal.
Speaker 2: Forty three percent of borrowers who owe payments on federal
Speaker 2: student loans haven't resumed making them. That's witch chazy, it's crazy,
Speaker 2: and it's like, I wonder if too. I think it's
Speaker 2: less confusion and maybe just that they are ill informed
Speaker 2: because when that was something that you've been promised over
Speaker 2: the past four years. I get the confusion, I get
Speaker 2: the misunderstanding, but I get there's.
Speaker 1: Also even out of sight, out of mind, right, Yeah, exactly, Hey,
Speaker 1: don't pay your student loans. Don't pay your student loans.
Speaker 1: Don't pay your student loans. Wait a second, pay your
Speaker 1: student loans. And you're like, I I didn't get the
Speaker 1: last moment.
Speaker 2: Yeah, So, like we're talking about one hundred plus point
Speaker 2: drop for some borrowers, which impacts every area of your
Speaker 2: financial life, so we're highlighting this. We do know the
Speaker 2: student loans space is a complete mess. If you're not
Speaker 2: sure where you stand, make log in, check your plan,
Speaker 2: check your payment status over on studentaid dot gov. Either
Speaker 2: take screenshots of your payment history or download some of
Speaker 2: those transactions to be able to keep up with the
Speaker 2: payments you've already made the plan that you're currently on
Speaker 2: to be able to document this. It's it shouldn't be
Speaker 2: this way, but it feels like it's sort of the
Speaker 2: wild West. We're not totally sure where this. It's like
Speaker 2: a Safari expedition where there's like no road and it's
Speaker 2: just like, well, are we going to go over there
Speaker 2: like where it looks super sketchy and rough, or we
Speaker 2: maybe we'll go like this direction. We're not totally sure
Speaker 2: which direction the government is going to choose to go. Yeah.
Speaker 1: Well, and I think if you are in the Save
Speaker 1: plan and you're banking on those payments, being like right
Speaker 1: now you're in for parents if you're on the Safe plan,
Speaker 1: but if you're banking on the having those Save Plan
Speaker 1: payments once the hoping that it comes back online, I
Speaker 1: would not plan on that, and I would plan on
Speaker 1: making a payment that's probably double whatever the safe plan
Speaker 1: payment was likely to be, which obviously is like a
Speaker 1: crazy thing to hear, but I think it's the only
Speaker 1: rational way to approach this and then plan for the
Speaker 1: worst but hope for the best, and for parents of
Speaker 1: upcoming students who are going to college soon, keeping student
Speaker 1: loan debt to a minimum. I think it's just more
Speaker 1: important than ever, Matt. I mean, it's always been something
Speaker 1: that we have stressed, but given the uncertainty in the
Speaker 1: student loan space and the fact that we're probably gonna
Speaker 1: have less generous repayment plans on offer, like I would
Speaker 1: just want to take on less debt in general because
Speaker 1: of that.
Speaker 2: That's right, Okay. Consumer Reports they just put out their
Speaker 2: list of the best new cars for twenty twenty five.
Speaker 2: Toyota and Subaru we're both well represented. This continues my
Speaker 2: streak of wanting to own a Toyota, specifically, Angel I've
Speaker 2: been on this Toyota kick for a while. They're pretty great.
Speaker 2: They're so evidently they're like super you know, it's supposed
Speaker 2: to be super reliable. I might until the U want
Speaker 2: to I want to see in a hybrid is what
Speaker 2: I I want a minivan that's a hybrid where I'm
Speaker 2: getting better gas milge than what I'm getting right now
Speaker 2: because for those solid or drive solid state evs that
Speaker 2: Toyota's gonna put out. So when is that gonna be
Speaker 2: like twenty twenty eight, I think it's going to continue
Speaker 2: to get kicked down the redue things. Well, I mean,
Speaker 2: look at the current administration.
Speaker 1: You know they're cutting some of that, But that doesn't
Speaker 1: mean that Toyota technology is going to be.
Speaker 2: Yeah, there's there's fewer incentives.
Speaker 1: Toyta basically said we're gonna bet on hybrids now, yeah,
Speaker 1: and we're going to push towards better EV technology. And
Speaker 1: when that comes down the pike, it's gonna be a
Speaker 1: game changer for eb's.
Speaker 2: I do whenever it does actually get implemented and start
Speaker 2: where they start selling it to the masses. Yes, I
Speaker 2: totally agree. Back to Consumer Reports though, the cheapest new
Speaker 2: car that they highlighted is the Nissan CenTra, which it
Speaker 2: can be had for not much more than twenty thousand dollars,
Speaker 2: which is car. When I first met her, it was
Speaker 2: the centrals look better than they used to back in
Speaker 2: the day, Like I see centrals now, I'm just like,
Speaker 2: that's a sharp looking car. Man, reliability, fuel economy. They
Speaker 2: were two of the top metrics that Consumer Reports was
Speaker 2: keeping in mind. But still we would prefer to hear
Speaker 2: folks in the direction of buying used cars, not in
Speaker 2: these new Select twenty twenty five cars. I'll say, I
Speaker 2: think the exception is if you're worried about perhaps maybe
Speaker 2: buying a lemon, and you're willing to keep that new
Speaker 2: car for at least ten years if you can. I
Speaker 2: don't know, Man, even part of that makes me a
Speaker 2: a little hesitant.
Speaker 1: It's not gonna be the best financial move, but it's
Speaker 1: such a reasonable one, and there's just.
Speaker 2: Such a financial hit that you're taking with that those
Speaker 2: first three years, especially of depreciation, that really like you
Speaker 2: need to be in such a solid position financially in
Speaker 2: order before you're buying a new car, even a new
Speaker 2: Nissan CenTra. But if you are keen on buying something
Speaker 2: brand new, opting for one of Consumer reports favorites, I
Speaker 2: think that would be totally wise. Yeah, while we're talking
Speaker 2: about cars, icy cars, which is like a data aggregate.
Speaker 2: I know, they really surveys and lots of data that
Speaker 2: we like to look at icy cars also released a
Speaker 2: new study of the most reliable used cars, and at
Speaker 2: the top of the list Honda Fit Baby. It's got
Speaker 2: the best five and ten year track record.
Speaker 1: I think the ten year old car was like, what
Speaker 1: eleven thousand dollars for a ten year old home to fit?
Speaker 2: What's super affordable? And we published we released this this
Speaker 2: past week in our newsletter. But the average used vehicle
Speaker 2: now is fourteen years old. That's that's on the road.
Speaker 2: And when I came across that, dude completely blew my mind,
Speaker 2: specifically because I always saw myself as like someone who's
Speaker 2: an average car, yes in this case older than average.
Speaker 2: And I'm like, wait a minute, I got a twenty twelve.
Speaker 2: That means my van is only thirteen years old. There's
Speaker 2: a bunch of folks out there who were beating me.
Speaker 2: It makes me want to keep that car on the
Speaker 2: road even longer because I'm just like, wait a minute,
Speaker 2: I'm barely average. You got to do better by it.
Speaker 2: I know.
Speaker 1: This is make you want to sell that and you
Speaker 1: go get like a two thousand and six or something,
Speaker 1: not at all, but it does make me want to
Speaker 1: take care of that thing.
Speaker 2: Wait, I never posted pictures, remember I talked about making
Speaker 2: the side mirrors like I was seeing them down especially.
Speaker 2: I totally did that, and like these small little things
Speaker 2: to maintain your vehicle, it makes you feel better about it,
Speaker 2: sort of like when you're talking about cleaning up, cleaning
Speaker 2: up your blackstone, getting all the grease off. You're like,
Speaker 2: wait a minute, this is a solid grill. That's how
Speaker 2: I feel about our ride now, So I'm going to
Speaker 2: keep it on the road. Maintenance goes a long way
Speaker 2: for much much longer, many more years of life on nothing.
Speaker 1: Sticking with the car stuff. If you get in a wreck,
Speaker 1: which I hope nobody out there listening does, especially if
Speaker 1: you're driving right now, pay attention right Uh, there's a
Speaker 1: higher likelihood actually that your car is going to be
Speaker 1: totaled these days. If you do end up in an accident,
Speaker 1: instead of getting that car repaired, it's likely to be scrapped.
Speaker 1: And that's at least partially because cars come with more
Speaker 1: expensive parts these days and smarter computer elements. I think
Speaker 1: it's also just matt the rising car of labor in
Speaker 1: that sector.
Speaker 2: Oh yeah.
Speaker 1: Electric vehicles are also part of the reason why why
Speaker 1: this is the case as well, because battery damage can
Speaker 1: cause repair prices to soar significantly that EV gets in
Speaker 1: an accident and the battery elements get damaged and boomshock
Speaker 1: a lock. You're talking about replacing the whole arm battery
Speaker 1: that ain't cheap?
Speaker 2: Is the when the solid state rolls around? Is that
Speaker 2: gonna Is that gonna impact the ability to replace certain elements?
Speaker 2: That's a good question.
Speaker 1: If you could just replace certain like the damaged portion
Speaker 1: of the ye some of the cells that are damaged,
Speaker 1: instead of replacing the whole pack that in mind, that
Speaker 1: would I'd be smart.
Speaker 2: That'd be a games if you could just like pop
Speaker 2: out a few bricks like a bunch of legos.
Speaker 1: Yep, that sounds cool. That'd be brilliant. But this also means,
Speaker 1: you know, repair times are increasing. I think the average
Speaker 1: repair weight is like close to a month now, which
Speaker 1: is crazy.
Speaker 2: What does this all mean? Man? I believe that one
Speaker 2: of my neighbors he's been driving a rental vehicle. I
Speaker 2: don't think his car gott in a wreck, but maybe
Speaker 2: it had a recall so it's back of the I'm
Speaker 2: assuming it's back out of the dealership because it's like
Speaker 2: a new pickup truck and he's been driving this other
Speaker 2: pickup truck. And it's been a few weeks now, So
Speaker 2: I did not even think.
Speaker 1: About what I think about your turn law when he
Speaker 1: had an issue with his car, and man, it was
Speaker 1: in there for months, yeah, like multiple.
Speaker 2: Months, and they had an actual limon. Yeah, they ended
Speaker 2: up having to actually make a claim with the dealership
Speaker 2: and have that thing they bought it back.
Speaker 1: Basically, don't sleep on lemon laws in your state if
Speaker 1: you need it. But this is I think, just another
Speaker 1: data point that points that we're going to see higher
Speaker 1: car insurance prices that will likely outpace general inflation moving forward.
Speaker 1: You also might not get enough money right that equals
Speaker 1: the value of.
Speaker 2: The total vehicle. So they say, hey, the vehicle's totaled,
Speaker 2: here's what we think it's worth. Here's what we pay.
Speaker 1: We we're paying, And you might need to fight back
Speaker 1: and say, no, actually it's worth this much here My
Speaker 1: sois Yeah, you might need to appeal what they say
Speaker 1: and also save up because you might need to use
Speaker 1: other dollars that you have to subsidize, right, the price
Speaker 1: of that next car if you're let's say upgrading it,
Speaker 1: getting a few years neweror that's what we did the
Speaker 1: last time matt our car our two thousand and six
Speaker 1: Odyssey was in an accident and it got totaled. We
Speaker 1: upgraded to a twenty thirteen Odyssey. We weren't playing on upgrading,
Speaker 1: but it just made sense, I think at that point
Speaker 1: in time. But yeah, you just have to be prepared
Speaker 1: from a financial perspective and from an insurance perspective.
Speaker 2: Yeah, and to know that it probably is going to
Speaker 2: be smart to not buy at the top end of
Speaker 2: your car budget because there are some of these other
Speaker 2: expenses that maybe you aren't necessarily counting on. While we're
Speaker 2: talking about transportation, there's a relatively new e bike rebate
Speaker 2: program that's attempting to reduce the price of e bikes
Speaker 2: for folks who don't make a whole lot of money
Speaker 2: in the fair city of Atlanta, and it turns out
Speaker 2: that is working out quite well. New stats find that
Speaker 2: folks who got an e bike through the program are
Speaker 2: driving their cars less. Seventy four percent of the recipients
Speaker 2: they ride their new e bike at least two days
Speaker 2: a week, and those folks are driving forty percent less
Speaker 2: to either work or to school after their e bike purchase,
Speaker 2: which is awesome. This love it. Of course, it reduces
Speaker 2: congestion on the road. I think it also does a
Speaker 2: good amount of stress reduction, and of course it increases
Speaker 2: the amount of activity, the amount of exercise for those bikers.
Speaker 2: Even with the e assist, you still are moving your
Speaker 2: legs a little bit way more than just pressing the
Speaker 2: pedal when you know when the light trens green.
Speaker 1: Being on an e bike is better than being in
Speaker 1: a car. Absolutely, And for the city, I think it's
Speaker 1: money well spent too. You know, it's just just cheaper
Speaker 1: than adding more infrastructure for the cars.
Speaker 2: It's much it's going to be a lot more affordable
Speaker 2: over the long haul to maintain bike lanes, paths or
Speaker 2: even roads that bikes are riding on. Of course, then
Speaker 2: you know three thousand pound vehicle, what, yeah, there is that?
Speaker 2: How much cars away? I don't even know. I made
Speaker 2: nothing like that.
Speaker 1: Thousand three to four thousand hounds maybe, But yeah, I
Speaker 1: think that the more bike infrastructure we have, it's almost
Speaker 1: like if you build it, they will come, and if
Speaker 1: you pay people to get them, people will actually like
Speaker 1: jump on it and it can I think, revolutionize the
Speaker 1: way people get around town. And then once there's like
Speaker 1: a critical mass of bikers. That's a good thing for
Speaker 1: the city right as a whole. It's a good thing
Speaker 1: for pollution, and it's a good thing for infrastructure. You're right,
Speaker 1: I think it can reduce the government's costs overall. Plus
Speaker 1: it's fine kind of leaning in d bikes and it's fun.
Speaker 1: It's fun, and you see your neighbors more, you talk
Speaker 1: to them more when you walk and ride your bike
Speaker 1: versus driving your car.
Speaker 2: It did a whole episode on this way back in
Speaker 2: the day, back when we're much younger.
Speaker 1: Dads, let's rehab you the whole thing right now. Well,
Speaker 1: other towns like Denver right have offered bike rebase for
Speaker 1: citizens too, But I think most town of money listeners
Speaker 1: they don't have access to a subsidized e bike. But still,
Speaker 1: I think it's it's worth noting that e bikes have
Speaker 1: come down in price significantly. Cargo e bikes. You and
Speaker 1: I what, You have a cargo regular bike. I have
Speaker 1: a cargo e bike. Those are great if you have
Speaker 1: kids or if you're hauling stuff. But I think looking
Speaker 1: to brands, they're not like the top tier brands. The
Speaker 1: top tier brands are going to cost a lot of money. Still,
Speaker 1: but like rad power bikes and electric those are solid.
Speaker 1: You can get solid bikes from them for less than
Speaker 1: a grand. Or if you're wanting to buy used, scour
Speaker 1: Facebook marketplace you can find a pretty solid e bike
Speaker 1: that someone else said. Yeah, I didn't really ride that
Speaker 1: very much, and you might be able to get it
Speaker 1: half off from what the MSRP was. So right, this
Speaker 1: is a case I think we're spending a little bit
Speaker 1: of money. If you actually use the bike, it's going
Speaker 1: to save you more money over time.
Speaker 2: Yeah, and you mentioned that I've got that regular muscle
Speaker 2: powered e bike or not eba. This it's an oxymorony,
Speaker 2: not necessarily, but just a traditional non electric cargo bike.
Speaker 2: And have we talked about this on the show Don't
Speaker 2: Plenty to sell mine? You kind of listened to the mundo. Well,
Speaker 2: I listed it in the middle of the winter, and
Speaker 2: nobody wants to ride a bike when it's like freezing outside.
Speaker 2: Now it's a great time. But I'm gonna, yeah, renew it.
Speaker 2: Drop the price, you know, like one hundred bucks. But
Speaker 2: I'm so sad, dude, it's like the end of an era.
Speaker 2: Like we have so many it feels like a part
Speaker 2: of the family. That we're giving away or selling or
Speaker 2: something like that. But like, we have so many memories,
Speaker 2: especially early to give it away with a kid on
Speaker 2: the ball. Back in the day when our oldest girls
Speaker 2: started pre k that's how we got them to pre kah. Like,
Speaker 2: it wasn't carpool, it was bike pool. You would swing
Speaker 2: by in the morning, you had your oldest already there
Speaker 2: on a bike. EV would get on there, you would
Speaker 2: ride off, drop them off, and then I would pick
Speaker 2: them up in the like I had more flexibility. That's
Speaker 2: when I was, like, I'm still self employed, but back
Speaker 2: then I had the ability to go in the middle
Speaker 2: of the day and pick them up at like one
Speaker 2: or two whatever. But like, man, it was afternoon bikeros.
Speaker 2: Oh my gosh, dude, I have such fun memories. It's
Speaker 2: gonna be sad to see that thing go. Yeah, but
Speaker 2: we're just in a stage of life where we're not
Speaker 2: using them nearly as much as we used to. Kids
Speaker 2: getting older and they're riding their own bikes, don't need
Speaker 2: the cargo bike anymore. We can get it. Still have
Speaker 2: a whole arsenal stable of traditional bikes. But man, for
Speaker 2: those years when your kids are real young and they
Speaker 2: get hop on the back. It's so sticking for so money.
Speaker 1: Yeah, all right, we've got more to get to, Matt,
Speaker 1: including we'll talk about doom spending and a national cryptocurrency reserve.
Speaker 2: Is that a good idea and how will that impact
Speaker 2: your finances. We'll get to that and more right after this.
Speaker 2: We are back from the break, and of course it
Speaker 2: is now time for the ludicrous headline of the week,
Speaker 2: which is from CNBC. The headline reads, one in five
Speaker 2: Americans are doom spending and here's how that can backfire. Joel.
Speaker 2: There is a new report and they find that twenty
Speaker 2: percent of folks out there are partaking in what's now
Speaker 2: being called doom spending, which is just another term. You
Speaker 2: know how these news organizations come up with the different terms.
Speaker 2: We feel like they're being coined right and left. It
Speaker 2: is essentially buying more stuff because of fears about the future.
Speaker 2: You are expecting the worse, and some folks out there
Speaker 2: are citing incoming tariffs as a reason to buy stuff
Speaker 2: now that the otherwise would have avoided or at least
Speaker 2: we died longer to purchase. And you know, you listen
Speaker 2: to how to Money before you've heard our take on this.
Speaker 2: You know, we don't love this mindset to buy something
Speaker 2: before you otherwise would. It's like we're always either in
Speaker 2: a period of economic uncertainty or we're just around the
Speaker 2: corner for something from something terrible happening. Joel, don't let
Speaker 2: other shoes about to drive. Yeah, don't let this instill fear,
Speaker 2: and you don't let it change your money, actions, your habits,
Speaker 2: especially if that reaction would be to increase your spending.
Speaker 1: Yeah, don't freak out, folks. Maybe doom saving. Doom saving
Speaker 1: is a better way of going. And that's what the
Speaker 1: emergency fund is all about. It's like, if you're nervous
Speaker 1: about the future, which it should, it should lead you
Speaker 1: to stockpile more cash.
Speaker 2: But like, but even still, that's it doesn't It shouldn't
Speaker 2: be in reaction to something that's going on, Like you
Speaker 2: should all that regardless of what's going on in rosy
Speaker 2: times or when things aren't looking so good, you should
Speaker 2: have that emergency fund because then, so I'm pushing back
Speaker 2: because if someone starts freaking out and they start thinking, well,
Speaker 2: I can't invest money if only bad times or ahead,
Speaker 2: they're not gonna they're not gonna be willing to dollar
Speaker 2: cost average, and they're gonna pull back a little bit,
Speaker 2: they're gonna sit on cash, potentially miss out on obviously
Speaker 2: what that would have done had that been invested in
Speaker 2: experience dot compounding.
Speaker 1: Yeah, yeah, I agree, And I think some people out
Speaker 1: for doom spending when their debt is feeling out of control,
Speaker 1: like with the logic of why not because I'm like
Speaker 1: digging myself into a bigger holes.
Speaker 2: Like throwing the talent Essentially, I think that's.
Speaker 1: Exactly what happens here, right, And but the truth is
Speaker 1: those additional purchases will catch up to you and it
Speaker 1: makes the eventual payoff process even more painful. And by
Speaker 1: the way, if you're in that position, you're like, man,
Speaker 1: my debt is overwhelming. There are nonprofits that can help you,
Speaker 1: like Money Management International. It's worth talking to a budget
Speaker 1: counselor there. We've also met, we've talked about how tariffs
Speaker 1: are likely to impact prices, and so I think that's
Speaker 1: part of why people are doom spending. They're seeing kind
Speaker 1: of tariff implementation economic uncertainty, and they're saying, man, I
Speaker 1: need to frontloads and purchases because prices are about to
Speaker 1: go up. That's what I'm reading about. And you know,
Speaker 1: Trump called the terror against Mexico and Canada off last month,
Speaker 1: but they wouldn't to affect this Tuesday, and then got
Speaker 1: pulled back in part they're.
Speaker 2: Making organizations as well, especially the US Mexico Canada agreements.
Speaker 1: And then products, some agricultural products right are gonna also
Speaker 1: be taken off the chopping block.
Speaker 2: Oh man, it's so confusing, and you're like, dang it.
Speaker 2: I bought a bunch of stuff on Tuesday.
Speaker 1: I stockpiled avocados because I thought the prices were gonna
Speaker 1: go up, right, And the truth is, prices are going
Speaker 1: to rise on a lot of goods if tariffs stay
Speaker 1: around for long. But will they stay around, We don't know.
Speaker 1: We don't know what's gonna happen with big question. So
Speaker 1: much sea sawing happening. And I think, no matter what,
Speaker 1: it still doesn't mean that you should front load spending,
Speaker 1: especially especially if it means taking on more debt. I
Speaker 1: think that increases anxiety and that leads to a doom
Speaker 1: spending doom loop. And that's that's what I foresee for
Speaker 1: a lot of people. If if you partake in doom spending,
Speaker 1: it's it's likely to unravel things instead of help.
Speaker 2: Yeah, we'll definitely be keeping up with the tariff conversation
Speaker 2: how it impacts our money, because they could end up
Speaker 2: sparking stagflation, which is a combination of weak economic growth
Speaker 2: and inflation. And here we go, so one economists use
Speaker 2: the adorable term mini stag session. It's so much more
Speaker 2: palatable many stag session. We're not fans of making predictions, man,
Speaker 2: we try not to do it. We're not changing our
Speaker 2: investing strategy, We're not changing how what it is that
Speaker 2: we're buying. But even if stagflation doesn't materialize, uncertainty it's
Speaker 2: one of the worst words, I think for business owners
Speaker 2: and operators, and I think that's a big part of why.
Speaker 2: I mean, that's why we're seeing fluctuations like crazy in
Speaker 2: the market right now, intra day fluctuations that are they've
Speaker 2: been insane. Yeah, they've been insane, and hopefully you aren't
Speaker 2: glued to the headlines and adjusting not only how it
Speaker 2: is that you're spending on a day to day basis,
Speaker 2: but we certainly don't want to see you change how
Speaker 2: it is that you're investing your dollars because honestly, in
Speaker 2: the I mean personally, I think everything is going to
Speaker 2: be fine, not because anyone is brilliant or anything. I
Speaker 2: don't know, Like we've kind of had this conversation. But
Speaker 2: and this is where I don't know, maybe folks are
Speaker 2: going to say I'm more of a conspiracy theorist, Joel,
Speaker 2: But I've shared this with you. Who was sitting there
Speaker 2: on the podium with Trump when he got inaugurated like
Speaker 2: two months ago? Oh, the tech, all the guards, you
Speaker 2: saw Tim Cook or Tim Apple? Right, of course Elon
Speaker 2: was there, but like Bezos, who else was there? Sundar
Speaker 2: from Google Zuckerberg he was there as well. Right, these
Speaker 2: are the biggest companies in the US, are you telling me?
Speaker 2: And so because that they were there, there's no way
Speaker 2: that that was their first conversation that they've had with
Speaker 2: Trump or with the current administration, with the White House.
Speaker 2: I think, man, that there has got to be back
Speaker 2: channels open where they're having conversations with these big companies
Speaker 2: and saying, hey, all right, we gotta play tough, we
Speaker 2: gotta play hardball. We're we're gonna threaten these terrorists. Don't
Speaker 2: freak out. Everyone else is gonna be freaking out. Just
Speaker 2: keep on doing what you've always done. Obviously, this is
Speaker 2: a more generous interpretation of what's being going on.
Speaker 1: I don't even know if that's generous though, because then
Speaker 1: there's all these other small businesses. It's like, why are
Speaker 1: you linking up with lots of the richest America, the
Speaker 1: richest dudes who run the biggest companies, when all the
Speaker 1: other small businesses that uncertainly impacts them a lot more
Speaker 1: than it impacts the big companies, who often have ways
Speaker 1: of side stepping tariffs shining.
Speaker 2: You know, I'm having that. I think it's perceived uncertainty
Speaker 2: as opposed to actual uncertainty. That's I mean. And this
Speaker 2: is why we you know, big companies why they have
Speaker 2: earnings reports right, and small businesses pay attention to that.
Speaker 2: It sets the tone for what's going on in the economy.
Speaker 2: That's a generous optimistic interpretation. If Trump actually things that
Speaker 2: terifts are going to be good for our country, then
Speaker 2: I think he's an idiot because all economists appointed to
Speaker 2: the fact this is not going to make our countries
Speaker 2: well here.
Speaker 1: That's one of those things where if you ask any economists,
Speaker 1: no matter where they follow in the political spectrum, they're
Speaker 1: pretty much going to agree on that. Yeah, there are
Speaker 1: some outliers, of course, but it's the same thing when
Speaker 1: we talk about rent control. Almost all economists right and
Speaker 1: left agree the rent control is a terrible idea, and
Speaker 1: I think the same is true with how economists think
Speaker 1: about tariffs, and so totally agree.
Speaker 2: It's interesting that.
Speaker 1: We're still testing the tariff watters here, and I think
Speaker 1: that lack of clarity about when tariffs are going to
Speaker 1: be implemented, at what rate they're going to be implemented,
Speaker 1: and then how are friendly countries that we were friendly
Speaker 1: with and countries that were not as friendly with, how
Speaker 1: they're going to respond, and then how long we'll stick
Speaker 1: around that those are all clouding what's going to happen
Speaker 1: with the American economy, and I think it just leads
Speaker 1: to negative outcomes for consumers and for businesses alike.
Speaker 2: Yeah, so let's keep your money and government train rolling
Speaker 2: for a bit more hair jol. There's a new position
Speaker 2: that is being created.
Speaker 1: The affordabilities are I've already sent in my application there
Speaker 1: it's coming saying do you think I'll get the job, Matt,
Speaker 1: only if you promise to appoint me on the board.
Speaker 2: Because they are putting together a board. But we'll see
Speaker 2: how this shakes. My minis are it's nice right next
Speaker 2: to me. It's an interesting move given the twelve hundred
Speaker 2: dollars in average on anual spending impact that terrists are
Speaker 2: predicted to have on us households. But this Affordability Zar
Speaker 2: will likely be tasked with trying to reduce prices on
Speaker 2: everything from homes to cars, groceries, electronics as well. I'll
Speaker 2: do my best, Folks, I am highly skeptical. You don't
Speaker 2: think I can do it of this, not of you,
Speaker 2: but just of this government intervention. It seems insane. I
Speaker 2: do think, like, yeah, maybe there could be some wiggle
Speaker 2: room right in the healthcare space to encourage or to
Speaker 2: mandate some pricing transparency which could help consumers shop in
Speaker 2: a more informed way. We just were talking about the
Speaker 2: high cost of college. The only thing that is outpaced
Speaker 2: college when it comes to outpacing that the average rate
Speaker 2: of inflation is medical spending. So I think that could
Speaker 2: be good. But either way, keep listening to how to
Speaker 2: money and be your own affordabilities are folks. No one
Speaker 2: is going to look after your hard earned dollars like you.
Speaker 2: This seems completely unnecessary to It's a creation of another,
Speaker 2: perhaps government organization to counter what another part of the
Speaker 2: government is doing. Seems highly inefficient. I disapprove.
Speaker 1: Yeah well, and yeah that in intervention into markets to
Speaker 1: try and stemy cost increases, both sides of the aisle
Speaker 1: have kind of gone. We talked about that with attempts
Speaker 1: to rate in what we're being called gre inflation, and
Speaker 1: how we didn't think that was a good idea. And similarly,
Speaker 1: you're trying to go in there and and force companies
Speaker 1: to to cost cut prices. I think no matter from
Speaker 1: which side of the political fence you're sitting on, it's
Speaker 1: not gonna work out well. And as like interference, to me, yeah,
Speaker 1: the market is going to do better at regulating that,
Speaker 1: and we just have to pay attention and save the
Speaker 1: best we can.
Speaker 2: We talked about that a lot on the show. Here,
Speaker 2: don't we hashtag free the market? Like that? People still
Speaker 2: using hashtags these days. Yeah, they're gonna use that one. Okay. Well.
Speaker 1: President Trump also seems to be keen on starting a
Speaker 1: national cryptocurrency reserve. Hooray for taxpayers. I say that tongue
Speaker 1: in cheek because it's another policy we're just not keen on.
Speaker 1: He's not talking about the United States owning just bitcoin,
Speaker 1: but adding in some smaller and some lesser known cryptocurrencies too,
Speaker 1: fortunately not his own meme coin. Although details on what
Speaker 1: this National crypto Reserve is going to look like, those
Speaker 1: details are thin, and I think the goal is at
Speaker 1: least important to try and do what Norway has done.
Speaker 1: They have a sovereign wealth fund that allows the country
Speaker 1: to prosper as markets perform.
Speaker 2: Well.
Speaker 1: Norway has crushed it when it comes to investing. They're
Speaker 1: almost as good as Nancy Pelosi, Matt. But Norway doesn't
Speaker 1: have the debt problems that we have, and so we
Speaker 1: have significant debt. So instead of paying down debt, we
Speaker 1: would be investing that money instead to pay down debt
Speaker 1: after we've seen our national cryptocurrency wallet. So I guess
Speaker 1: that's the plan. Yeah, that's the way. It's at least
Speaker 1: been positive. But as front of the show Noah Smith,
Speaker 1: who we had on recently said, he said, this is
Speaker 1: going to require either raising taxes on American people or
Speaker 1: making the US government go deeper into debt at a
Speaker 1: time when interest payments are already spiraling out of control.
Speaker 1: I just I just don't see a reason for US
Speaker 1: as taxpayers to be on the hook for a government
Speaker 1: run crypto endeavor.
Speaker 2: I think it's an okay idea. I don't like totally
Speaker 2: love it, but I also don't totally hate it because
Speaker 2: if you think it, like there's just so much ridiculous
Speaker 2: stuff that we are spending money on it, Like, would
Speaker 2: it be the worst thing for the US to have
Speaker 2: its own crypto wallet, I don't know, like I think
Speaker 2: about it. Like AI, we don't totally know what the
Speaker 2: implications of AI is going to be, and the government
Speaker 2: is doing the best it can to encourage the private
Speaker 2: development of AI, specifically to compete with China. Right, at
Speaker 2: least that creates jobs jobs, that is true, but bottom line,
Speaker 2: we don't know exactly how that's gonna shake out and
Speaker 2: what that's going to look like off in the future.
Speaker 2: That's kind of how how I feel about bitcoin.
Speaker 1: I like the way coin, but what about XRP and
Speaker 1: Solana and these other I definitely.
Speaker 2: Can't get behind those at least. Yeah, Trump's mean coin
Speaker 2: wasn't a part of a part of the announced reserve,
Speaker 2: but I guess I just see the potential downsides of
Speaker 2: the US not having a bitcoin reserve being greater than
Speaker 2: had we dumped some money into it. Okay, and who
Speaker 2: the heck knows what's gonna happen. But if like it
Speaker 2: hits one million by twenty thirty or twenty thirty five, like,
Speaker 2: that's something. These are predictions that are being made. We
Speaker 2: have a friend, Joel, and he recently shared that, and
Speaker 2: he wasn't he didn't like lay all his cards on
Speaker 2: the table, but he basically pointed out it was very
Speaker 2: easy to gather that from a small investment, like back
Speaker 2: in twenty seventeen in bitcoin, like anywhere between like a
Speaker 2: twenty thousand dollars and a fifty thousand dollars investment, that
Speaker 2: his bitcoin is now worth between two and eight million dollars.
Speaker 2: That's not chump change. And so you multiply that across
Speaker 2: something like what the US might be able to do
Speaker 2: often in the future. It's just something dick And said.
Speaker 2: I don't think it's the dumbest idea, especially given the
Speaker 2: vast amounts of money that the US is already spending.
Speaker 2: I guess I'm just a bit more neutral on the
Speaker 2: crypto reserve. Yeah, I'm less neutral specifically bitcoin, I'll say that. Yeah,
Speaker 2: and if it was bitcoin in particular, do you feel differently?
Speaker 2: If it was only bitcoin, I would feel little differently.
Speaker 1: I still don't think it's necessarily a smart move by
Speaker 1: our federal government to go hogwild on crypto, and I
Speaker 1: think part of it is that a close access that
Speaker 1: a lot of crypto enthusiasts have to the current administration.
Speaker 1: That's part of the reason it's happening. It's also been
Speaker 1: interesting to see the reaction from kind of certain DeFi
Speaker 1: enthusiasts who are now either rooting for government option. Not everybody, though.
Speaker 1: There are some people in the crypto space who say
Speaker 1: this No, that's the whole point was that like government
Speaker 1: wasn't involved, that this was essentially a non governmental asset.
Speaker 2: And yeah, I don't know.
Speaker 1: If it does come to fruition, some crypto investors stand
Speaker 1: to benefit, especially if you own one of these five
Speaker 1: coins in a meaningful amount. I think the other thing
Speaker 1: to point out here, Matt, is that some people might say, well,
Speaker 1: if this happens, I should buy more cryptocurrency. I should
Speaker 1: have If the government is getting into it to this degree, well,
Speaker 1: then certainly I should own a whole lot more cryptocurrency myself,
Speaker 1: and I think it maybe makes people think about having
Speaker 1: more of their wealth tied up in cryptocurrency, and that
Speaker 1: does worry me a little bit too, especially when you
Speaker 1: look at like the huge bump after the announcement and
Speaker 1: then guess what, crypto prices went right back down. It's
Speaker 1: such a volatile asset. I'm just worried about people thinking
Speaker 1: they need more cryptocurrency than they actually.
Speaker 2: Do, especially if they're neglecting the tried and true, the
Speaker 2: bread and the butter potatoes jool instead folks. We don't
Speaker 2: want folks to get focused on the flakwah.
Speaker 1: You might call it that fua, I might call it
Speaker 1: the parsley, but but I.
Speaker 2: Don't think anything that we have previously advocated for here
Speaker 2: on the show changes. Like if you wanted to have
Speaker 2: up to five percent of your overall portfolio in bitcoin,
Speaker 2: if you now want to consider some of these other coins,
Speaker 2: I think that's fine, but let's definitely keep it limited
Speaker 2: to five percent, ideally a lot less than that. Yeah.
Speaker 1: Yeah, you don't want to lose sleep over the machinations,
Speaker 1: And I think with how quickly it moves a lot
Speaker 1: of people do if they're over indexed towards crypto, all
Speaker 1: right man.
Speaker 2: That's going to do it.
Speaker 1: For this episode. We will put links to some of
Speaker 1: the stories we mentioned today on the show up in
Speaker 1: the show notes on our website at how toomoney dot com.
Speaker 1: Don't forget to sign up for the how to Money newsletter.
Speaker 1: It comes out every Tuesday. It's chock full of helpful
Speaker 1: information and we would love for it to show up
Speaker 1: in your inbox. You can find that out how to
Speaker 1: money dot com slash newsletter. But Matt, I'll do it
Speaker 1: for this one. Until next time, Best Friends Out, Best
Speaker 1: Friends Out,