1 00:00:05,280 --> 00:00:08,600 Speaker 1: On this episode of News World, inflation is eating away 2 00:00:08,600 --> 00:00:12,280 Speaker 1: at wage increases. The DALL is down eighteen percent for 3 00:00:12,320 --> 00:00:15,440 Speaker 1: the year so far. The Fed just raised interest rates 4 00:00:15,520 --> 00:00:18,400 Speaker 1: three quarters of a point and gases over five dollars 5 00:00:18,360 --> 00:00:21,080 Speaker 1: a gallon. And the real question is are we headed 6 00:00:21,120 --> 00:00:24,560 Speaker 1: towards a recession? On Meet the Press, Larry Summers, who 7 00:00:24,560 --> 00:00:28,120 Speaker 1: served as Sector of the Treasury under President Clinton, said, 8 00:00:28,160 --> 00:00:33,680 Speaker 1: we are headed towards a recession. All economic forecasts have uncertainty. 9 00:00:34,080 --> 00:00:38,280 Speaker 1: My best guess is that a recession is ahead. I 10 00:00:38,440 --> 00:00:40,640 Speaker 1: based that on the fact that we haven't had a 11 00:00:40,720 --> 00:00:47,400 Speaker 1: situation like the present with inflation above four and unemployment 12 00:00:47,479 --> 00:00:51,960 Speaker 1: below four without a recession following within a year or two. 13 00:00:52,520 --> 00:00:55,880 Speaker 1: When talking with reporters on Monday in Robe with Beach, Delaware, 14 00:00:56,280 --> 00:00:58,800 Speaker 1: President Biden said when asking, a recession is more likely 15 00:00:58,880 --> 00:01:06,360 Speaker 1: than ever if this word, there's nothing inevitable about the session. 16 00:01:07,240 --> 00:01:10,440 Speaker 1: Depending on who you believe about a possible recession. There 17 00:01:10,560 --> 00:01:13,240 Speaker 1: is no time like the present to be prepared for 18 00:01:13,280 --> 00:01:18,160 Speaker 1: the future. I came across Michelle Singletary's thoughtfully written column 19 00:01:18,800 --> 00:01:22,319 Speaker 1: seven Ways you can financially prefer for a recession and 20 00:01:22,480 --> 00:01:25,000 Speaker 1: found it so helpful. I wanted to have her on 21 00:01:25,080 --> 00:01:28,559 Speaker 1: so she could share with our listeners. So I'm really 22 00:01:28,640 --> 00:01:32,440 Speaker 1: pleased to welcome my guest, Michelle Singletary. She writes the 23 00:01:33,000 --> 00:01:37,040 Speaker 1: nationally syndicated column The Color of Money, which appears in 24 00:01:37,080 --> 00:01:41,560 Speaker 1: the Washington Post on Wednesdays and Sundays. She's also written 25 00:01:42,040 --> 00:01:46,080 Speaker 1: four personal finance books, including What to Do with Your 26 00:01:46,080 --> 00:01:50,160 Speaker 1: Money When a Crisis Hits, A Survival Guide, and the 27 00:01:50,280 --> 00:01:54,240 Speaker 1: twenty one Day Financial Fast Your Path to Financial peace 28 00:01:54,360 --> 00:02:08,560 Speaker 1: and Freedom. Michelle, Welcome, and thank you for joining me 29 00:02:08,600 --> 00:02:11,440 Speaker 1: on news World. Thank you for having me. So we 30 00:02:11,520 --> 00:02:13,600 Speaker 1: heard Larry Summers, I'll meet the press say we are 31 00:02:13,639 --> 00:02:16,840 Speaker 1: headed towards a recession. Then Janet Yellow on the current 32 00:02:16,880 --> 00:02:19,000 Speaker 1: Sector of the Treasury appeared on this week and said, 33 00:02:19,360 --> 00:02:23,920 Speaker 1: I expect the economy to slow. It's been growing at 34 00:02:24,000 --> 00:02:27,239 Speaker 1: a very rapid rate. As the economy is, the labor 35 00:02:27,320 --> 00:02:31,800 Speaker 1: market is recovered, and we've reached full employment, it's natural 36 00:02:31,960 --> 00:02:37,040 Speaker 1: now that we expect a transition to steady and stable growth. 37 00:02:37,480 --> 00:02:41,560 Speaker 1: But I don't think a recession is at all inevitable 38 00:02:42,080 --> 00:02:44,840 Speaker 1: in your judgment, Pushian Americans believe at this point, do 39 00:02:44,880 --> 00:02:47,560 Speaker 1: you have a sense that we are moving towards a 40 00:02:47,639 --> 00:02:50,919 Speaker 1: recession or not. You know, I wish I really could say, 41 00:02:50,919 --> 00:02:52,639 Speaker 1: because I think it would ease a lot of people's 42 00:02:52,720 --> 00:02:56,280 Speaker 1: mind even if we were headed or currently in a recession. 43 00:02:56,680 --> 00:02:59,880 Speaker 1: But we really don't know. There's still some other really 44 00:03:00,080 --> 00:03:04,960 Speaker 1: strong indicatives like unemployment though unemployment, and people are still 45 00:03:05,000 --> 00:03:08,240 Speaker 1: buying even though they're pulling back some because of inflation. 46 00:03:08,280 --> 00:03:10,320 Speaker 1: I mean, you look at the housing market. It's still 47 00:03:10,440 --> 00:03:15,480 Speaker 1: very hot, but definitely there's some hot spots that's problematic, 48 00:03:16,000 --> 00:03:20,280 Speaker 1: rising consumer prices, gas prices, rents, and so forth. So 49 00:03:20,600 --> 00:03:24,480 Speaker 1: at this point, it's too soon to say whether or 50 00:03:24,480 --> 00:03:27,640 Speaker 1: not we're in a recession. I thought it was interesting 51 00:03:27,720 --> 00:03:32,080 Speaker 1: that JP Morgan Chase of CEO Jamie Diamond said at 52 00:03:32,120 --> 00:03:36,560 Speaker 1: the Bernstein's thirty eighth Annual Strategic Decisions Conference, quote an 53 00:03:36,560 --> 00:03:39,520 Speaker 1: economic hurricane is coming, and he pointed to the war 54 00:03:39,560 --> 00:03:42,680 Speaker 1: in the Ukraine, rising inflation and interest ry tights from 55 00:03:42,680 --> 00:03:45,800 Speaker 1: the Federal Reserve. You went on to say, quote, right now, 56 00:03:45,840 --> 00:03:49,680 Speaker 1: it's kind of sunny. Things are doing fine. Everyone thinks 57 00:03:49,720 --> 00:03:52,560 Speaker 1: the Fed can handle this. That hurricane is right out 58 00:03:52,600 --> 00:03:55,119 Speaker 1: there down the road coming our way. We just don't 59 00:03:55,160 --> 00:03:57,880 Speaker 1: know if it's a minor one or a superstorm, you 60 00:03:57,960 --> 00:04:01,560 Speaker 1: better brace yourself. So I was fascinating against that background 61 00:04:01,560 --> 00:04:04,120 Speaker 1: where people aren't quite sure what's going to happen. You 62 00:04:04,240 --> 00:04:08,320 Speaker 1: decided to write seven ways that you can financially prepare 63 00:04:08,360 --> 00:04:10,800 Speaker 1: for a recession, which I think has to be about 64 00:04:10,800 --> 00:04:13,800 Speaker 1: as timely a column as I've seen in a long time. 65 00:04:14,280 --> 00:04:16,799 Speaker 1: What led you to do that? Well, because I feel 66 00:04:16,839 --> 00:04:19,320 Speaker 1: like there's so much panic right now. It's like that 67 00:04:19,480 --> 00:04:22,080 Speaker 1: story Chicken Little, the sky is falling. The sky is falling, 68 00:04:22,200 --> 00:04:24,560 Speaker 1: and for some people it is, but for a great 69 00:04:24,680 --> 00:04:28,240 Speaker 1: number of Americans it isn't. Are you upset that you 70 00:04:28,320 --> 00:04:31,159 Speaker 1: have to pay more at the gas pump? Yes, I am, 71 00:04:32,040 --> 00:04:35,080 Speaker 1: but I can still go on a vacation. My family 72 00:04:35,080 --> 00:04:38,080 Speaker 1: can still go eat out. It might cost us more, 73 00:04:38,160 --> 00:04:42,160 Speaker 1: but we can handle that. And I just wanted to say, listen, folks, 74 00:04:42,560 --> 00:04:46,560 Speaker 1: calm down. Feel what you feel because it is scary, 75 00:04:46,680 --> 00:04:50,080 Speaker 1: but don't act on those fears. And so there's lots 76 00:04:50,080 --> 00:04:53,200 Speaker 1: of criticism right now about who should have done what 77 00:04:53,320 --> 00:04:56,440 Speaker 1: and when, But it's like, I don't know, nude. I'm 78 00:04:56,480 --> 00:04:59,040 Speaker 1: not a big sports fan, but I sit in front 79 00:04:59,040 --> 00:05:01,080 Speaker 1: of a football game and I'm like, oh, what did 80 00:05:01,160 --> 00:05:03,080 Speaker 1: you do? You should have kicked this, You should have 81 00:05:03,080 --> 00:05:05,839 Speaker 1: gotten this. But I'm not on the field. I couldn't 82 00:05:05,920 --> 00:05:09,040 Speaker 1: kick anything. And I really think that's what's going on 83 00:05:09,200 --> 00:05:12,480 Speaker 1: right now. And so what I wanted to say is, yeah, 84 00:05:12,520 --> 00:05:15,240 Speaker 1: we're in a bear market, but guess what that actually 85 00:05:15,240 --> 00:05:18,279 Speaker 1: works to your benefit if you do dollar costs averaging, 86 00:05:18,360 --> 00:05:20,240 Speaker 1: meaning you put a certain amount of money in the 87 00:05:20,279 --> 00:05:23,960 Speaker 1: market on a regular basis, and so now you're buying 88 00:05:24,120 --> 00:05:27,719 Speaker 1: more things if you will on sale, and if you've 89 00:05:27,720 --> 00:05:30,800 Speaker 1: got some time to go, it's gonna work out for 90 00:05:30,920 --> 00:05:34,839 Speaker 1: sessions in bear markets in and if we use history, 91 00:05:35,400 --> 00:05:38,880 Speaker 1: the markets recover and then some, and so you gotta 92 00:05:38,920 --> 00:05:42,080 Speaker 1: wait for that, then some and you can't be there 93 00:05:42,240 --> 00:05:44,960 Speaker 1: in place for that if you pull out, if you 94 00:05:45,040 --> 00:05:49,360 Speaker 1: pull back, if you make rash financial decisions in the 95 00:05:49,360 --> 00:05:52,480 Speaker 1: heat of the moment, you know, And I wanted to 96 00:05:52,520 --> 00:05:55,320 Speaker 1: just say I'm with you on that. I'm a regular 97 00:05:55,360 --> 00:05:57,640 Speaker 1: person too. I got a regular four on one K. 98 00:05:58,279 --> 00:06:01,320 Speaker 1: My husband's a government worker, he's got a TSP AT 99 00:06:01,320 --> 00:06:03,760 Speaker 1: through savings account. So we're there with you, you know, 100 00:06:03,960 --> 00:06:07,160 Speaker 1: kids coming out of college, but we're not gonna panic. 101 00:06:07,240 --> 00:06:09,599 Speaker 1: And I want to show you how not to panic. 102 00:06:09,960 --> 00:06:12,800 Speaker 1: So take advantage of the bearer market. Be a super 103 00:06:12,839 --> 00:06:16,320 Speaker 1: saver right now, if you still have your job, if 104 00:06:16,360 --> 00:06:19,520 Speaker 1: you still got income coming in, if a recession is coming, 105 00:06:19,600 --> 00:06:23,160 Speaker 1: nouns the time to stockpile some cash, have bonds in 106 00:06:23,240 --> 00:06:26,279 Speaker 1: your portfolio, don't pull back on bonds. And if you've 107 00:06:26,279 --> 00:06:28,640 Speaker 1: got time in your schedule, go ahead and get a 108 00:06:28,680 --> 00:06:31,120 Speaker 1: second job, get a gig job, get something, and then 109 00:06:31,200 --> 00:06:33,680 Speaker 1: save that money. There are things that you can do 110 00:06:33,880 --> 00:06:36,440 Speaker 1: leading up to this, so if a recession does hit, 111 00:06:36,960 --> 00:06:40,880 Speaker 1: the worst happens, you'll be better prepared for that storm. 112 00:06:41,400 --> 00:06:43,000 Speaker 1: I have to ask you, on behalf of all of 113 00:06:43,080 --> 00:06:45,000 Speaker 1: us who don't know nearly as much as you do 114 00:06:45,040 --> 00:06:48,640 Speaker 1: about finances, can you describe what a bearer market is? 115 00:06:48,680 --> 00:06:52,000 Speaker 1: And why is it called a bearer market? So basically, 116 00:06:52,000 --> 00:06:54,599 Speaker 1: a bear market is you know, at some point you say, 117 00:06:54,600 --> 00:06:57,560 Speaker 1: in January the market hit it high, and then from 118 00:06:57,640 --> 00:07:01,840 Speaker 1: January till now it decreased. It went down twenty percent, 119 00:07:02,200 --> 00:07:05,479 Speaker 1: it's twenty percent less than that it's recent high. And 120 00:07:05,520 --> 00:07:08,720 Speaker 1: then you enter a bear market, and they use the 121 00:07:08,800 --> 00:07:11,480 Speaker 1: bear because you know, everyone's like really scared of what's 122 00:07:11,520 --> 00:07:14,880 Speaker 1: happening with equities or stocks. And as I understand that 123 00:07:15,200 --> 00:07:18,600 Speaker 1: the bear market doesn't last forever, that's right, that's right. 124 00:07:18,720 --> 00:07:20,840 Speaker 1: We had a pandemic bear market less than a month, 125 00:07:21,680 --> 00:07:25,840 Speaker 1: you know, and different ones last longer, but on average 126 00:07:25,880 --> 00:07:29,520 Speaker 1: about eleven months and some shorter or some longer. So 127 00:07:29,600 --> 00:07:33,440 Speaker 1: that's why you have to not panic and just be 128 00:07:33,600 --> 00:07:37,240 Speaker 1: calm about it, particularly if you have some time before retirement, 129 00:07:37,560 --> 00:07:39,680 Speaker 1: or even if you're in retirement. I mean, I had 130 00:07:39,760 --> 00:07:42,360 Speaker 1: this woman say, I got so scared, I moved everything 131 00:07:42,400 --> 00:07:45,680 Speaker 1: into bonds. But what I pointed out to her was 132 00:07:45,720 --> 00:07:48,120 Speaker 1: that you weren't going to use all that money at 133 00:07:48,160 --> 00:07:51,320 Speaker 1: one time. So you want to make sure that your 134 00:07:51,320 --> 00:07:54,119 Speaker 1: money isn't a place that it has the potential to 135 00:07:54,200 --> 00:07:58,640 Speaker 1: grow and keep pace with inflation. And so you don't 136 00:07:58,680 --> 00:08:00,640 Speaker 1: want to move it all to the mattress or to 137 00:08:00,800 --> 00:08:03,720 Speaker 1: bonds or something low, because you want to make sure 138 00:08:03,760 --> 00:08:05,760 Speaker 1: that your money in the future it's going to buy 139 00:08:05,800 --> 00:08:08,000 Speaker 1: the things that you need in the future. So even 140 00:08:08,040 --> 00:08:11,840 Speaker 1: in retirement, you need to have some exposure to growth, 141 00:08:12,040 --> 00:08:14,120 Speaker 1: and that means taking on a little bit more risk. 142 00:08:14,560 --> 00:08:18,560 Speaker 1: Now you talk about dollar cost averaging, what is that. 143 00:08:19,120 --> 00:08:20,880 Speaker 1: It's what most of us doing. We don't even know 144 00:08:20,960 --> 00:08:23,880 Speaker 1: we're doing it. If you have a workplace retirement plan. 145 00:08:24,320 --> 00:08:26,520 Speaker 1: You tell your employer, hey, take this amount of money 146 00:08:26,560 --> 00:08:29,640 Speaker 1: out of my paycheck and put it in the market, 147 00:08:29,680 --> 00:08:32,800 Speaker 1: you know, either mutual funds, equities, bonds, and so forth, 148 00:08:32,920 --> 00:08:35,720 Speaker 1: and you do it on a regular basis every paycheck. 149 00:08:35,880 --> 00:08:39,160 Speaker 1: That's dollar cost averaging. So basically, when the market is hot, 150 00:08:39,200 --> 00:08:42,440 Speaker 1: things cost more, you're not buying as much. But when 151 00:08:42,480 --> 00:08:46,000 Speaker 1: things go down, you're buying more shares, and it all 152 00:08:46,080 --> 00:08:48,760 Speaker 1: kind of evens out. It kind of all averages out, 153 00:08:49,040 --> 00:08:52,600 Speaker 1: and that's what dollar cost averaging is. So you really 154 00:08:52,600 --> 00:08:55,520 Speaker 1: would have sort of a pattern for most people of 155 00:08:55,640 --> 00:08:59,680 Speaker 1: regularly buying some stock no matter what the market itself 156 00:08:59,760 --> 00:09:02,880 Speaker 1: is doing. That's right. I don't own individual stocks. I 157 00:09:03,040 --> 00:09:06,000 Speaker 1: do mutual funds, low index funds and so forth. But 158 00:09:06,120 --> 00:09:10,280 Speaker 1: that's what I think regular average investors should do. You 159 00:09:10,320 --> 00:09:12,920 Speaker 1: don't need to watch the markets every day. As an 160 00:09:12,960 --> 00:09:15,720 Speaker 1: average investor, you're not day trading, you're not trying to 161 00:09:15,840 --> 00:09:19,320 Speaker 1: hedge get something, and so you set it and you 162 00:09:19,559 --> 00:09:22,760 Speaker 1: kind of forget it. You make sure that you're diversified, 163 00:09:22,960 --> 00:09:27,120 Speaker 1: your portfolio meets your risk tolerance. So maybe if you're 164 00:09:27,200 --> 00:09:29,480 Speaker 1: kind of a risky person, maybe you've got sixty or 165 00:09:29,520 --> 00:09:32,360 Speaker 1: seventy percent in equities or stocks and then the rest 166 00:09:32,440 --> 00:09:35,320 Speaker 1: in bonds and vice versa. But the whole point is 167 00:09:35,320 --> 00:09:38,959 Speaker 1: that you set up a portfolio that is diversified, has 168 00:09:39,040 --> 00:09:42,920 Speaker 1: something in each asset classes, so that when things happen, 169 00:09:43,480 --> 00:09:46,120 Speaker 1: you are coverage. It doesn't mean that your portfolio is 170 00:09:46,120 --> 00:09:48,000 Speaker 1: not going to go down, but it won't go down 171 00:09:48,080 --> 00:09:49,959 Speaker 1: as much as say, if you had all your money 172 00:09:49,960 --> 00:09:52,160 Speaker 1: in one stock and the stock kind of blew up. 173 00:09:52,559 --> 00:09:57,480 Speaker 1: So you also really urge people not to try to 174 00:09:57,520 --> 00:10:01,160 Speaker 1: time the market. What do you mean by that. There 175 00:10:01,240 --> 00:10:03,959 Speaker 1: was an experiment with stock picking and monkeys, and the 176 00:10:04,200 --> 00:10:06,720 Speaker 1: monkeys you know, through the darts, and they kind of 177 00:10:06,720 --> 00:10:10,920 Speaker 1: outperform the professionals. So the point is we don't know 178 00:10:10,960 --> 00:10:13,319 Speaker 1: where things are going, and so people will say, well, 179 00:10:13,360 --> 00:10:15,840 Speaker 1: I'm just gonna get out until the market gets better 180 00:10:15,880 --> 00:10:18,200 Speaker 1: and then I'm going to get back in. Well, what 181 00:10:18,280 --> 00:10:20,240 Speaker 1: we found is that when people did that in a 182 00:10:20,280 --> 00:10:24,160 Speaker 1: great recession, guess what, they didn't come back in because 183 00:10:24,200 --> 00:10:26,920 Speaker 1: they just got used to being out and they're so 184 00:10:27,000 --> 00:10:29,400 Speaker 1: afraid and you don't know when to jump back in. 185 00:10:29,520 --> 00:10:31,560 Speaker 1: You have to know where the bottom is to come 186 00:10:31,559 --> 00:10:34,080 Speaker 1: back in. That's the definition of trying to time the market. 187 00:10:34,200 --> 00:10:37,040 Speaker 1: Even the professionals can't do that, and so as a 188 00:10:37,120 --> 00:10:40,120 Speaker 1: regular person, you can't try to figure out I'm gonna 189 00:10:40,160 --> 00:10:41,760 Speaker 1: get out and when things get better, I'm going to 190 00:10:41,800 --> 00:10:43,720 Speaker 1: get back in. You may get back in at the 191 00:10:43,760 --> 00:10:47,080 Speaker 1: bottom of the top. You don't know, and so you 192 00:10:47,240 --> 00:10:50,560 Speaker 1: don't try to time it. You just set the amount 193 00:10:50,600 --> 00:10:52,400 Speaker 1: that you're going to invest. This is what I have 194 00:10:52,559 --> 00:10:56,040 Speaker 1: to invest, three hundred, four hundred, five hundred, whatever part 195 00:10:56,040 --> 00:10:58,280 Speaker 1: of your paycheck. Then you put it in the market 196 00:10:58,320 --> 00:11:00,640 Speaker 1: and you let the market do what it does, which 197 00:11:00,679 --> 00:11:04,280 Speaker 1: is historically, over time, gives you a good return that 198 00:11:04,360 --> 00:11:07,199 Speaker 1: will help you keep pace with inflation. So you're dollar 199 00:11:07,280 --> 00:11:10,040 Speaker 1: today and ten years is going to buy the milk 200 00:11:10,080 --> 00:11:12,920 Speaker 1: and bread and housing that you need in ten years. 201 00:11:13,440 --> 00:11:16,840 Speaker 1: One of the most famous investors in the nineteen twenties 202 00:11:17,520 --> 00:11:20,240 Speaker 1: used to sit on a bench in Jackson Park in 203 00:11:20,280 --> 00:11:24,480 Speaker 1: Washington and was asked by a reporter one day what 204 00:11:24,720 --> 00:11:26,600 Speaker 1: was the secret. He said, well, it's really pretty simple. 205 00:11:26,600 --> 00:11:29,760 Speaker 1: He said. You know, you buy low and you sell high. 206 00:11:31,040 --> 00:11:33,480 Speaker 1: And the reporter said, well, how do you know high 207 00:11:33,520 --> 00:11:35,000 Speaker 1: and low? He said, we know. That's sort of the 208 00:11:35,080 --> 00:11:40,000 Speaker 1: magic of it. I think since most of us aren't magicians. 209 00:11:40,840 --> 00:11:43,360 Speaker 1: We don't quite have that nact. That's right, we are 210 00:11:43,400 --> 00:11:53,960 Speaker 1: not hi. This is newt We have serious decisions to 211 00:11:54,000 --> 00:11:57,160 Speaker 1: make about the future of our nation. Americans must confront 212 00:11:57,200 --> 00:12:00,920 Speaker 1: big government socialism, which is taken over the modern Democratic Party, 213 00:12:01,200 --> 00:12:06,079 Speaker 1: big business, news, media, entertainment, and academia. In my new book, 214 00:12:06,440 --> 00:12:11,520 Speaker 1: Defeating Big Government Socialism Saving America's Future, I offer strategies 215 00:12:11,520 --> 00:12:15,440 Speaker 1: and insights for everyday citizens to save America's future and 216 00:12:15,640 --> 00:12:18,640 Speaker 1: ensure it remains the greatest nation on Earth. It is 217 00:12:18,679 --> 00:12:22,760 Speaker 1: a must read for any concerned citizen. Here's a special 218 00:12:22,800 --> 00:12:26,320 Speaker 1: offer for my podcast listeners. You can pre order my 219 00:12:26,400 --> 00:12:30,720 Speaker 1: book Defeating Big Government Socialism right now at gingwish three 220 00:12:30,800 --> 00:12:33,440 Speaker 1: sixty dot com slash book and the book will be 221 00:12:33,480 --> 00:12:36,760 Speaker 1: shipped directly to you when it comes out in July twelfth. 222 00:12:37,400 --> 00:12:40,400 Speaker 1: Don't miss out on this special offer to pre order 223 00:12:40,520 --> 00:12:43,400 Speaker 1: my new book today. Go to Gingwich free sixty dot 224 00:12:43,440 --> 00:12:47,000 Speaker 1: com slash book to order your copy. Now order it 225 00:12:47,120 --> 00:12:59,080 Speaker 1: today at Gingwich three sixty dot com slash book. Now, 226 00:12:59,200 --> 00:13:02,480 Speaker 1: you also are people and this really well done and 227 00:13:02,640 --> 00:13:06,960 Speaker 1: fascinating article to get rid of their credit card debt? Now, Now, 228 00:13:06,960 --> 00:13:09,319 Speaker 1: why is that well, first of all, it's the most 229 00:13:09,320 --> 00:13:12,520 Speaker 1: suspensive debt for you to carry. And right now, we 230 00:13:12,640 --> 00:13:15,839 Speaker 1: know that the FED is trying to control inflation by 231 00:13:15,920 --> 00:13:20,400 Speaker 1: increasing its interest rates, which eventually impact the rates you 232 00:13:20,440 --> 00:13:23,200 Speaker 1: pay on your credit cards. So we know that rates 233 00:13:23,200 --> 00:13:26,200 Speaker 1: on credit cards are going to increase as the FED 234 00:13:26,280 --> 00:13:29,680 Speaker 1: tries to control inflation. They've said, if we can't control it, 235 00:13:29,720 --> 00:13:32,720 Speaker 1: we're going to keep raising rates, which means your credit 236 00:13:32,720 --> 00:13:34,600 Speaker 1: card rates are going to go up. And it's not 237 00:13:34,720 --> 00:13:37,280 Speaker 1: just on the current purchases, it's on things you bought 238 00:13:37,400 --> 00:13:41,040 Speaker 1: long ago. So if you're rolling over credit card debt 239 00:13:41,120 --> 00:13:43,960 Speaker 1: from mom to mom, it's gonna cost you more and 240 00:13:44,000 --> 00:13:46,120 Speaker 1: you need to get rid of that debt. And here's 241 00:13:46,120 --> 00:13:47,719 Speaker 1: the other reason why you want to get it. If 242 00:13:47,760 --> 00:13:51,439 Speaker 1: we go into a recession or a long term down market, 243 00:13:51,920 --> 00:13:54,680 Speaker 1: the less you have on your books, the less debt 244 00:13:54,720 --> 00:13:57,200 Speaker 1: you have, the less things you have to pay, the 245 00:13:57,320 --> 00:14:00,360 Speaker 1: more likely you can weather that storm if you lose 246 00:14:00,360 --> 00:14:03,360 Speaker 1: your job or have a destruction in your income. I 247 00:14:03,400 --> 00:14:07,800 Speaker 1: hate debt, dude, I hate it with a passion. I mean, like, 248 00:14:07,840 --> 00:14:10,760 Speaker 1: if debt was a person, I'd slap it. And so 249 00:14:10,880 --> 00:14:13,560 Speaker 1: I want other folks to hate it. So much that 250 00:14:13,640 --> 00:14:17,880 Speaker 1: they get it off their books. So if the worst happens, 251 00:14:17,880 --> 00:14:21,320 Speaker 1: we do intercession, you know you'll be able to pay 252 00:14:21,360 --> 00:14:24,320 Speaker 1: your bills because you're not being dragged down by the 253 00:14:24,400 --> 00:14:27,160 Speaker 1: debt that you have. My husband's a golfer, that's so 254 00:14:27,320 --> 00:14:29,720 Speaker 1: I look at it, and he likes to buy those 255 00:14:29,760 --> 00:14:33,080 Speaker 1: really beautiful golf umbrellas that are really sturdy and big. 256 00:14:33,280 --> 00:14:35,520 Speaker 1: And I'm very frugal, So I'll go to the dollar 257 00:14:35,600 --> 00:14:37,800 Speaker 1: storm and buy like a dollar umbrella, you know, but 258 00:14:37,840 --> 00:14:39,440 Speaker 1: I have to buy a whole bunch of them because 259 00:14:39,440 --> 00:14:42,360 Speaker 1: they all the wind comes and it's gone. But my 260 00:14:42,480 --> 00:14:47,080 Speaker 1: husband's umbrella protects him. And there may be a storm 261 00:14:47,080 --> 00:14:49,680 Speaker 1: that comes that rips that umbrella, but it's got to 262 00:14:49,760 --> 00:14:53,440 Speaker 1: be a really strong storm. My dollar umbrellas, you just 263 00:14:53,600 --> 00:14:56,280 Speaker 1: look at it and it breaks. So if you don't 264 00:14:56,320 --> 00:14:59,040 Speaker 1: have debt, think of it it's having that golf umbrella. 265 00:14:59,200 --> 00:15:01,440 Speaker 1: If you have savings, think of it as having that 266 00:15:01,560 --> 00:15:05,520 Speaker 1: golf umbrella. It may not last a whole part of 267 00:15:05,520 --> 00:15:08,160 Speaker 1: the storm, but it's sure we'll keep you dry for 268 00:15:08,280 --> 00:15:12,560 Speaker 1: most of it. And you don't just recommend a credit card, Depp, 269 00:15:12,560 --> 00:15:15,120 Speaker 1: but you go a step further and suggest that people 270 00:15:15,160 --> 00:15:19,760 Speaker 1: should stockpile savings. Oh yeah, definitely. Savings is your savings grace. 271 00:15:20,240 --> 00:15:22,680 Speaker 1: And I'm gonna tell you it's harder for me to 272 00:15:22,720 --> 00:15:26,000 Speaker 1: get people to save in good times. It's actually kind 273 00:15:26,000 --> 00:15:28,520 Speaker 1: of count acontuitive, right, because you think when you have 274 00:15:28,600 --> 00:15:30,880 Speaker 1: good times, you've got more to save, So of course 275 00:15:30,920 --> 00:15:36,280 Speaker 1: you would save. But people don't anticipate bad times. As 276 00:15:36,280 --> 00:15:39,200 Speaker 1: long as that regular paycheck is coming in. Oh, I'll save, 277 00:15:39,280 --> 00:15:41,880 Speaker 1: I'll get to it. I'll get to it until it's 278 00:15:41,920 --> 00:15:44,960 Speaker 1: too late. And so I encourage you, like in my 279 00:15:45,040 --> 00:15:46,880 Speaker 1: book What to Do with your Money When Crisis is, 280 00:15:47,000 --> 00:15:49,520 Speaker 1: I say, I live like I'm always in a recession, 281 00:15:49,960 --> 00:15:52,040 Speaker 1: and people are like, well, that's just sounds so depressing. 282 00:15:52,120 --> 00:15:55,760 Speaker 1: I'm like, know what it says is it recognizes that, 283 00:15:55,800 --> 00:15:58,080 Speaker 1: you know what, we may be in a recession and 284 00:15:58,160 --> 00:16:00,280 Speaker 1: it's going to be over and guess what, there's another 285 00:16:00,320 --> 00:16:02,240 Speaker 1: one that's going to come behind that. That's just how 286 00:16:02,280 --> 00:16:05,480 Speaker 1: our economy works. And so if I always stay in 287 00:16:05,560 --> 00:16:09,760 Speaker 1: the position that something could happen, it forces me to save. 288 00:16:09,920 --> 00:16:12,960 Speaker 1: When I've got that money to save. It forces me 289 00:16:13,040 --> 00:16:15,920 Speaker 1: to not take on debt. My husband and I pay 290 00:16:16,080 --> 00:16:19,040 Speaker 1: cash for our cars. We've sent all our kids to 291 00:16:19,120 --> 00:16:24,400 Speaker 1: college debt free because we're super savers, and now things 292 00:16:24,440 --> 00:16:27,320 Speaker 1: are great for our kids. My youngest is just graduated. 293 00:16:27,360 --> 00:16:30,000 Speaker 1: She's gonna be an educator, and she's graduated into an 294 00:16:30,000 --> 00:16:32,120 Speaker 1: economy there gas is more food, is more of a 295 00:16:32,240 --> 00:16:35,280 Speaker 1: guest what. She doesn't have any student owned debt, so 296 00:16:35,400 --> 00:16:38,200 Speaker 1: her teacher's salary will go a lot further for her 297 00:16:38,640 --> 00:16:41,120 Speaker 1: because she doesn't have debt on her books because her 298 00:16:41,200 --> 00:16:46,120 Speaker 1: parents saved even when things were good. You know, you 299 00:16:46,200 --> 00:16:50,800 Speaker 1: also have interesting advice for younger workers that gives them 300 00:16:50,960 --> 00:16:54,080 Speaker 1: a greater ability to weather any kind of storm. And 301 00:16:54,120 --> 00:16:56,880 Speaker 1: I think it's fascinating you actually think it's good for 302 00:16:57,000 --> 00:17:00,240 Speaker 1: younger workers to have roommates and the share of the 303 00:17:00,240 --> 00:17:04,280 Speaker 1: cost of housing. Yeah, I do. I think most young adults, 304 00:17:04,320 --> 00:17:06,960 Speaker 1: if they can, should live with their parents. And I'm 305 00:17:07,000 --> 00:17:08,800 Speaker 1: not talking for a couple of years. It's gonna like 306 00:17:08,800 --> 00:17:11,040 Speaker 1: blow your way, Like I think they should be there 307 00:17:11,040 --> 00:17:14,560 Speaker 1: at five, six, seven years. We have three young adults 308 00:17:14,640 --> 00:17:17,600 Speaker 1: who all college educated, living with us right now, and 309 00:17:17,720 --> 00:17:21,560 Speaker 1: we encourage it. It was by design because if they 310 00:17:21,680 --> 00:17:24,359 Speaker 1: live at home for that olimpic time and they take 311 00:17:24,400 --> 00:17:28,680 Speaker 1: almost all their paycheck, which they're doing and save it. 312 00:17:29,040 --> 00:17:31,480 Speaker 1: For example, my oldest she's twenty seven, she will never 313 00:17:31,520 --> 00:17:34,520 Speaker 1: have a car note because she's saving for her next car. 314 00:17:34,800 --> 00:17:37,040 Speaker 1: Because she's living here, we don't have to charge her rent. 315 00:17:37,280 --> 00:17:40,320 Speaker 1: And she's saving probably like ninety percent of her paycheck, 316 00:17:40,760 --> 00:17:43,640 Speaker 1: and she's putting fifteen percent in her retirement plan. And 317 00:17:43,680 --> 00:17:45,720 Speaker 1: she's saving for that card that she's gonna buy in 318 00:17:45,800 --> 00:17:48,840 Speaker 1: three or four years. And if she stayed longer, I'm 319 00:17:48,880 --> 00:17:51,159 Speaker 1: not sure she will. But if she does, if she 320 00:17:51,240 --> 00:17:53,280 Speaker 1: saved almost all her paycheck, by the time it comes 321 00:17:53,280 --> 00:17:55,760 Speaker 1: for her to be a homeowner, she could almost buy 322 00:17:55,760 --> 00:17:59,600 Speaker 1: her house outright, if not close to it. Now, imagine 323 00:17:59,680 --> 00:18:03,200 Speaker 1: you're young adult buying a house in their early thirties 324 00:18:03,320 --> 00:18:09,199 Speaker 1: with no mortgage. That is a financial game changer. But 325 00:18:09,320 --> 00:18:12,520 Speaker 1: in our culture, they get into the twenties, ah, they 326 00:18:12,560 --> 00:18:14,440 Speaker 1: gotta be on their own. They gotta show how they're 327 00:18:14,480 --> 00:18:18,119 Speaker 1: being responsible. What to spend two three thousand dollars a 328 00:18:18,160 --> 00:18:20,680 Speaker 1: month in an apartment on rent when they could save 329 00:18:20,760 --> 00:18:24,000 Speaker 1: that money and secure the rest of their life. And 330 00:18:24,160 --> 00:18:27,520 Speaker 1: you know, it's hard living with younger those and older parents, 331 00:18:27,640 --> 00:18:29,919 Speaker 1: but you know, we get through it. We have rules 332 00:18:29,920 --> 00:18:34,000 Speaker 1: in place, and it works. And we're just so elated 333 00:18:34,040 --> 00:18:35,720 Speaker 1: that they're here and there will be able to save. Now, 334 00:18:35,800 --> 00:18:38,800 Speaker 1: it's not for everybody. Maybe you've got some issues with 335 00:18:38,840 --> 00:18:41,840 Speaker 1: your home life. But if you can do it, if 336 00:18:41,840 --> 00:18:44,640 Speaker 1: you've got all the relatives, do it. If you can 337 00:18:44,840 --> 00:18:47,159 Speaker 1: keep the roommates, a couple of roommates to keep that 338 00:18:47,280 --> 00:18:51,320 Speaker 1: cost down for as long as possible and set yourself 339 00:18:51,440 --> 00:18:55,360 Speaker 1: up for financial freedom. In the end, it's worth it 340 00:18:55,480 --> 00:19:01,240 Speaker 1: to share your space for that decade or two to 341 00:19:01,240 --> 00:19:04,720 Speaker 1: make sure that things are okay. So you actually helped 342 00:19:04,800 --> 00:19:08,600 Speaker 1: launch them beyond their education. We do we doo. And 343 00:19:08,640 --> 00:19:11,639 Speaker 1: it's so funny because my oldest she was not feeling it. 344 00:19:11,720 --> 00:19:14,040 Speaker 1: She's like, I don't know, and it turned out to 345 00:19:14,080 --> 00:19:17,240 Speaker 1: be brilliant because she's able to save so much. And 346 00:19:17,359 --> 00:19:20,479 Speaker 1: my son, who is on the autism scale, you know, 347 00:19:20,520 --> 00:19:24,560 Speaker 1: he's trying to launch himself and so here living with us, 348 00:19:24,920 --> 00:19:27,199 Speaker 1: there's no pressure of rent, there's no pressure if he 349 00:19:27,280 --> 00:19:29,520 Speaker 1: loses his job or takes a little bit longer to 350 00:19:29,560 --> 00:19:33,280 Speaker 1: find his career path. And even my youngest who's like, yeah, 351 00:19:33,359 --> 00:19:35,919 Speaker 1: I'm not feeling living with y'all, and she's got a 352 00:19:35,920 --> 00:19:38,119 Speaker 1: little bit of commute if she lives with us, but 353 00:19:38,280 --> 00:19:40,560 Speaker 1: she started to look for apartments and she said, you 354 00:19:40,600 --> 00:19:42,400 Speaker 1: know what, I think you're right about that. I think 355 00:19:42,440 --> 00:19:45,840 Speaker 1: I'm gonna live at home and save this money. And 356 00:19:45,920 --> 00:19:48,320 Speaker 1: she's the most difficult one. Isn't the youngest, the one 357 00:19:48,359 --> 00:19:52,280 Speaker 1: that gives you the most trouble. But you know, I'm 358 00:19:52,359 --> 00:19:55,400 Speaker 1: okay with it. Fussing with my husband, we closed doors 359 00:19:55,400 --> 00:19:59,280 Speaker 1: like like. But I know at the end, once they 360 00:19:59,440 --> 00:20:03,520 Speaker 1: all launch, they won't have to come back. And that's 361 00:20:03,520 --> 00:20:05,560 Speaker 1: how we do it. We look at down the road 362 00:20:06,240 --> 00:20:09,000 Speaker 1: and hopefully by that time they will have learned a 363 00:20:09,000 --> 00:20:10,840 Speaker 1: lot of your habits and they'll be on the same 364 00:20:10,880 --> 00:20:30,960 Speaker 1: track of success and the same opportunity. You go a 365 00:20:31,040 --> 00:20:35,960 Speaker 1: step beyond savings. You also strongly recommend establishing a backup 366 00:20:36,040 --> 00:20:39,120 Speaker 1: to your emergency fund. Well, now what does that mean? 367 00:20:39,520 --> 00:20:42,400 Speaker 1: So I was talking to one expert from morning Star 368 00:20:42,640 --> 00:20:45,800 Speaker 1: and she said, so, I don't advise to do this 369 00:20:45,840 --> 00:20:49,280 Speaker 1: as a first resort, but while you have a job, 370 00:20:49,440 --> 00:20:52,080 Speaker 1: while your income is good, to line up, say a 371 00:20:52,119 --> 00:20:55,119 Speaker 1: home equity line of credit. It's the idea of just 372 00:20:55,200 --> 00:20:59,200 Speaker 1: to have it there if the worst case situation happens 373 00:20:59,720 --> 00:21:02,439 Speaker 1: you lose your job or something happens, and then you 374 00:21:02,480 --> 00:21:06,960 Speaker 1: can tap that doing the hard times or you know, 375 00:21:07,200 --> 00:21:10,359 Speaker 1: it's really important to have good relations with your folks, 376 00:21:10,400 --> 00:21:14,360 Speaker 1: your people, your relatives and friends, so that maybe your 377 00:21:14,520 --> 00:21:18,520 Speaker 1: backup emergency, you can say, hey, listen, I need your help. 378 00:21:19,000 --> 00:21:21,359 Speaker 1: Can you help me? You can't do that if you 379 00:21:21,400 --> 00:21:24,320 Speaker 1: don't have good, strong relations with folks. And it's not 380 00:21:24,400 --> 00:21:28,159 Speaker 1: a matter of using them, but just saying, in my 381 00:21:28,359 --> 00:21:32,159 Speaker 1: time of need, I can go to these folks to say, 382 00:21:32,440 --> 00:21:36,639 Speaker 1: help me out. And if you are doing well for yourself, 383 00:21:36,880 --> 00:21:40,560 Speaker 1: you ought to position yourself to help people without them 384 00:21:40,600 --> 00:21:43,760 Speaker 1: even asking. We had a relative who lost her job 385 00:21:43,800 --> 00:21:46,439 Speaker 1: during the pandemic. She worked in food services and you know, 386 00:21:46,520 --> 00:21:49,960 Speaker 1: lots of restaurants were closed down, and I found out 387 00:21:50,000 --> 00:21:52,200 Speaker 1: that she was having difficulty. I didn't make a big 388 00:21:52,240 --> 00:21:55,080 Speaker 1: deal about it. My husband I disgusted it. We sent 389 00:21:55,200 --> 00:21:58,199 Speaker 1: her payments for a couple of months and she's like, 390 00:21:58,240 --> 00:22:00,800 Speaker 1: I'll pay you back. It's like, absolutely not. We don't 391 00:22:00,800 --> 00:22:03,720 Speaker 1: known anybody any money we give it to them, but 392 00:22:03,760 --> 00:22:06,560 Speaker 1: we have a good relationship with her. So that backup 393 00:22:06,600 --> 00:22:08,680 Speaker 1: could be a home equilt of credit. It could also 394 00:22:08,760 --> 00:22:12,679 Speaker 1: be a relationship. And if you've got some shaky relationships, 395 00:22:12,680 --> 00:22:14,920 Speaker 1: you need to fix them nail. You know that means 396 00:22:14,920 --> 00:22:17,600 Speaker 1: getting therapy. Getting therapy if you're not in good relationship 397 00:22:17,640 --> 00:22:20,879 Speaker 1: with your parents, you know, get better relationships or your siblings, 398 00:22:21,000 --> 00:22:23,679 Speaker 1: especially those who may be doing better for themselves. And 399 00:22:23,760 --> 00:22:26,720 Speaker 1: if you are the sibling doing better, I would hope 400 00:22:26,760 --> 00:22:30,240 Speaker 1: that you live by the principle to who much is given, 401 00:22:30,320 --> 00:22:34,240 Speaker 1: much is required. That's a great, great principle. No, do 402 00:22:34,320 --> 00:22:37,480 Speaker 1: you say something here that I've never understood in all 403 00:22:37,520 --> 00:22:39,920 Speaker 1: the years that I've sort of messed around with investing, 404 00:22:40,440 --> 00:22:43,520 Speaker 1: And you say, don't underestimate the power of having bonds 405 00:22:43,520 --> 00:22:47,040 Speaker 1: and your retirement portfolio. What is the virtue of bonds 406 00:22:47,080 --> 00:22:51,239 Speaker 1: which often return less than stock, but also tend to 407 00:22:51,240 --> 00:22:54,560 Speaker 1: not lose as much as stock. Why do you like bonds? Well, 408 00:22:54,760 --> 00:22:57,800 Speaker 1: the idea of an investment portfolio is to have balance. 409 00:22:58,320 --> 00:23:03,400 Speaker 1: So historically stocks are crashing, bonds are doing okay because 410 00:23:03,560 --> 00:23:07,160 Speaker 1: people fully to the safety of bonds, and so they 411 00:23:07,240 --> 00:23:11,880 Speaker 1: become more desirable. Now lately, bonds of fand not much 412 00:23:11,920 --> 00:23:14,719 Speaker 1: at all, especially when you compare it to inflation. But 413 00:23:14,840 --> 00:23:18,040 Speaker 1: you want to have that safety part of your portfolio, 414 00:23:18,480 --> 00:23:20,800 Speaker 1: so that, for example, you're in retirement, and you've got 415 00:23:20,800 --> 00:23:23,840 Speaker 1: to pull money out, right, So bonds aren't tanking like 416 00:23:23,960 --> 00:23:26,439 Speaker 1: maybe your equities are stocks, so then you can cash 417 00:23:26,560 --> 00:23:29,240 Speaker 1: those out to fund the things that you need to 418 00:23:29,359 --> 00:23:32,959 Speaker 1: while you let the stocks stay put to recover because 419 00:23:33,240 --> 00:23:37,359 Speaker 1: they historically will for the most part, in a balanced portfolio. 420 00:23:37,760 --> 00:23:40,920 Speaker 1: So it's just about having balance, right. It's the same 421 00:23:40,920 --> 00:23:43,560 Speaker 1: principle of not putting all your eggs in one basket. 422 00:23:43,600 --> 00:23:46,040 Speaker 1: It's the same principle of not having all of your 423 00:23:46,080 --> 00:23:50,919 Speaker 1: investment in one stock or one god forbid cryptocurrency. You know, 424 00:23:51,040 --> 00:23:56,120 Speaker 1: you want to have diversity, and bonds gives you that diversity. Finally, 425 00:23:56,160 --> 00:23:58,919 Speaker 1: you suggested a lot of people are to look at 426 00:23:58,920 --> 00:24:01,960 Speaker 1: getting a part time job in addition to their main 427 00:24:02,080 --> 00:24:05,600 Speaker 1: job and then should attempt to save whatever the part 428 00:24:05,640 --> 00:24:09,800 Speaker 1: time income is. That's right. Yeah, so people will sometimes 429 00:24:09,880 --> 00:24:11,280 Speaker 1: get a part time job because then you want to 430 00:24:11,280 --> 00:24:13,320 Speaker 1: elevate their lifestyle. Right now, some people get a part 431 00:24:13,320 --> 00:24:15,159 Speaker 1: time job because one job can't do it all. It 432 00:24:15,280 --> 00:24:17,399 Speaker 1: can't put the food on their table or keep the 433 00:24:17,480 --> 00:24:20,160 Speaker 1: roof over their heads. I'm not talking about those folks. 434 00:24:20,440 --> 00:24:24,040 Speaker 1: People who are struggling. They have two jobs because that's 435 00:24:24,080 --> 00:24:26,400 Speaker 1: what they need. But there's some of us who get 436 00:24:26,440 --> 00:24:28,480 Speaker 1: part time jobs because we want to do more, We 437 00:24:28,560 --> 00:24:31,240 Speaker 1: want to have more. And so if you're in that 438 00:24:31,400 --> 00:24:34,520 Speaker 1: ladder group, get that job, that weekend job or after 439 00:24:34,600 --> 00:24:37,920 Speaker 1: hour's job, or maybe you can monetize your skills, if 440 00:24:37,920 --> 00:24:40,840 Speaker 1: you're a tutor, or you teach, or you play music, 441 00:24:40,920 --> 00:24:44,440 Speaker 1: maybe you do some music lessons, maybe you're good with xcel. 442 00:24:44,520 --> 00:24:47,800 Speaker 1: You create something online, and then use that money to 443 00:24:47,840 --> 00:24:51,479 Speaker 1: build your emergency fund, not to elevate your lifestyle. So 444 00:24:51,520 --> 00:24:52,879 Speaker 1: you're not going to use that money to take a 445 00:24:52,960 --> 00:24:56,680 Speaker 1: vacation or buy more clothes or buy a bigger, better car. 446 00:24:57,080 --> 00:25:00,280 Speaker 1: You're gonna then take that money and stockpilot. And I 447 00:25:00,359 --> 00:25:02,720 Speaker 1: don't tell people anything that I don't do myself. So 448 00:25:02,760 --> 00:25:06,320 Speaker 1: I write books for financial books. Do you know, I 449 00:25:06,359 --> 00:25:09,000 Speaker 1: can't really even pinpoint anything that I use with that 450 00:25:09,200 --> 00:25:12,879 Speaker 1: money to buy myself something. And we use that money 451 00:25:12,920 --> 00:25:15,320 Speaker 1: to put into our kids college fund so that they 452 00:25:15,320 --> 00:25:19,000 Speaker 1: wouldn't graduate with debt. And we keep our cars for 453 00:25:19,080 --> 00:25:21,680 Speaker 1: like ten, fifteen, twenty years. I mean, I'm on a 454 00:25:21,720 --> 00:25:24,280 Speaker 1: first name basis with the local toe truck drivers because 455 00:25:24,280 --> 00:25:26,800 Speaker 1: I just keep my car forever. And so that actual 456 00:25:26,880 --> 00:25:30,200 Speaker 1: income that came from my books. We didn't buy better cars, 457 00:25:30,240 --> 00:25:35,240 Speaker 1: I didn't buy clothes or shoes or purse. We stockpiled 458 00:25:35,240 --> 00:25:38,200 Speaker 1: that because we knew the greatest gift we could give 459 00:25:38,240 --> 00:25:40,879 Speaker 1: to our children is for them to graduate with no debt. 460 00:25:41,240 --> 00:25:43,439 Speaker 1: The greatest gift we could give to our children is 461 00:25:43,480 --> 00:25:45,280 Speaker 1: that if they decided they want to go get a 462 00:25:45,320 --> 00:25:48,640 Speaker 1: masters to elevate their ear any potential, we could pay 463 00:25:48,680 --> 00:25:50,679 Speaker 1: for that. So we can pay for them to get 464 00:25:50,720 --> 00:25:52,680 Speaker 1: a masters and they don't have to have any debt. 465 00:25:52,720 --> 00:25:55,600 Speaker 1: We did that for our oldest she has a masters. 466 00:25:55,640 --> 00:25:57,840 Speaker 1: We paid for it so that she wouldn't have to 467 00:25:57,880 --> 00:26:01,080 Speaker 1: take on any debt and so use at income to 468 00:26:01,320 --> 00:26:05,800 Speaker 1: do something that has a lasting effect for your financial life. 469 00:26:06,040 --> 00:26:08,359 Speaker 1: What do you say to people who are literally just 470 00:26:08,560 --> 00:26:11,879 Speaker 1: trying to make ends meet in a period where inflation 471 00:26:11,960 --> 00:26:15,120 Speaker 1: is going up faster than salaries, and they're just trying 472 00:26:15,119 --> 00:26:17,240 Speaker 1: to pay their render, their mortgage, just trying to pay 473 00:26:17,280 --> 00:26:20,719 Speaker 1: their monthly bills and their guests, the groceries. What's your 474 00:26:20,720 --> 00:26:23,440 Speaker 1: advice to somebody's right at the margin where they're just 475 00:26:23,480 --> 00:26:26,800 Speaker 1: a little bit below being able to save. That's such 476 00:26:26,840 --> 00:26:30,120 Speaker 1: a hard question, and every time somebody asks it makes 477 00:26:30,119 --> 00:26:33,840 Speaker 1: me want to cry because I don't have this cookie 478 00:26:33,840 --> 00:26:38,199 Speaker 1: cutter quick answer. But what I do tell them is 479 00:26:38,320 --> 00:26:40,879 Speaker 1: look at the parts of your budget that costs you 480 00:26:40,920 --> 00:26:45,840 Speaker 1: the most, and housing is number one. And so if 481 00:26:45,920 --> 00:26:49,440 Speaker 1: you can have shared housing situations, if you're single mom 482 00:26:49,520 --> 00:26:52,399 Speaker 1: with kids, maybe there's another single mom with kids that 483 00:26:52,480 --> 00:26:55,719 Speaker 1: you guys kid get a house together or apartment together, 484 00:26:56,160 --> 00:26:58,399 Speaker 1: if you can go back and live with your parents 485 00:26:58,520 --> 00:27:01,400 Speaker 1: or other relatives. I've had les with kids who were 486 00:27:01,440 --> 00:27:03,479 Speaker 1: in a situation where somebody lost their job and they 487 00:27:03,480 --> 00:27:05,680 Speaker 1: were just barely making I said, call your parents and 488 00:27:05,760 --> 00:27:08,080 Speaker 1: see can everybody come back and live And everybody's gonna 489 00:27:08,080 --> 00:27:09,960 Speaker 1: be on top of everybody, and everybody may not even 490 00:27:10,000 --> 00:27:12,359 Speaker 1: have their own bed, but that's okay for them, and 491 00:27:12,440 --> 00:27:15,680 Speaker 1: some people are already doing that. And then while you're 492 00:27:15,720 --> 00:27:18,560 Speaker 1: still doing it, do what you can to elevate your 493 00:27:18,640 --> 00:27:21,359 Speaker 1: skills so that you can maybe get a better job. 494 00:27:21,960 --> 00:27:25,480 Speaker 1: So take advantage of any courses that have training at 495 00:27:25,480 --> 00:27:28,840 Speaker 1: community college. Don't want you take on any debt for that, 496 00:27:29,080 --> 00:27:33,159 Speaker 1: but look for opportunities to train yourself so that you 497 00:27:33,280 --> 00:27:36,520 Speaker 1: can get more money. And then you've got to be 498 00:27:37,160 --> 00:27:42,000 Speaker 1: just masterful at your budget. You just don't have any 499 00:27:42,040 --> 00:27:44,960 Speaker 1: extra and that's really hard in a country where we 500 00:27:45,520 --> 00:27:49,800 Speaker 1: live above our means. Everybody, right, the people making good money. 501 00:27:49,840 --> 00:27:52,600 Speaker 1: I mean, I know people making high six figures and 502 00:27:52,640 --> 00:27:55,600 Speaker 1: if they lost their job would be broke day one, 503 00:27:56,160 --> 00:27:58,400 Speaker 1: and so it's really hard to tell them to pull 504 00:27:58,480 --> 00:28:01,000 Speaker 1: back even more when they see so many other people 505 00:28:01,080 --> 00:28:04,080 Speaker 1: getting and doing things. But I can tell you that 506 00:28:04,119 --> 00:28:07,240 Speaker 1: you can do it. It's very tough. I was raised 507 00:28:07,240 --> 00:28:10,120 Speaker 1: by my grandmother who had a minimum waste type job, 508 00:28:10,200 --> 00:28:13,600 Speaker 1: and she was able to do it raising five grandchildren 509 00:28:13,920 --> 00:28:16,760 Speaker 1: with no public assistance. By the way, she didn't take 510 00:28:16,760 --> 00:28:18,880 Speaker 1: the money. She took to healthcare but not the money, 511 00:28:19,240 --> 00:28:22,480 Speaker 1: and she managed to do it by watching her budget 512 00:28:22,520 --> 00:28:25,960 Speaker 1: and being as frugal as possible and saying no to 513 00:28:26,080 --> 00:28:28,639 Speaker 1: us when we wanted things that she couldn't afford to 514 00:28:28,640 --> 00:28:32,120 Speaker 1: get us. It's amazing. You're a remarkable person. I mean, 515 00:28:32,200 --> 00:28:35,480 Speaker 1: I think you're personal story is as good as your column. 516 00:28:37,040 --> 00:28:38,680 Speaker 1: And I'm really glad we had a chance to talk 517 00:28:38,680 --> 00:28:42,120 Speaker 1: about things, and you make it so real and you 518 00:28:42,240 --> 00:28:45,120 Speaker 1: come alive in a way that's very exciting and very 519 00:28:45,240 --> 00:28:48,200 Speaker 1: very positive. So I want to thank you for joining me. 520 00:28:48,240 --> 00:28:50,200 Speaker 1: I know how busy you are, and I want to 521 00:28:50,200 --> 00:28:53,640 Speaker 1: remind our listeners that you write a nationally syndicated personal 522 00:28:53,680 --> 00:28:57,440 Speaker 1: finance column entitled The Color of Money, which appears in 523 00:28:57,480 --> 00:29:00,520 Speaker 1: the Washington Post on Wednesdays and Sundays. And if they 524 00:29:00,560 --> 00:29:03,360 Speaker 1: have a personal finance question for you, they can call 525 00:29:03,600 --> 00:29:08,360 Speaker 1: one eight five five ask Post. That's one eight five 526 00:29:08,440 --> 00:29:12,440 Speaker 1: five two seven five seven six seven eight. I just 527 00:29:12,480 --> 00:29:15,080 Speaker 1: want to thank you. This is a very timely conversation 528 00:29:15,480 --> 00:29:17,600 Speaker 1: and it's going to help a lot of people do 529 00:29:17,760 --> 00:29:20,440 Speaker 1: better in the coming months. So thank you so much, Michelle, 530 00:29:20,480 --> 00:29:26,520 Speaker 1: Thank you, I precie you having me. Thank you to 531 00:29:26,600 --> 00:29:29,280 Speaker 1: my guest Michelle Singletary. You can get a link to 532 00:29:29,280 --> 00:29:32,600 Speaker 1: her article seven ways you can financially prepare for a 533 00:29:32,600 --> 00:29:36,640 Speaker 1: recession on our show page at newtsworld dot com. News 534 00:29:36,680 --> 00:29:40,440 Speaker 1: World is produced by Gingwish three sixty and iHeartMedia. Our 535 00:29:40,520 --> 00:29:45,000 Speaker 1: executive producer is Gornsey Sloan, our producer is Rebecca Howe, 536 00:29:45,280 --> 00:29:49,000 Speaker 1: and our researcher is Rachel Peterson. The artwork for the 537 00:29:49,040 --> 00:29:53,200 Speaker 1: show was created by Steve Penley. Special thanks to the 538 00:29:53,240 --> 00:29:57,120 Speaker 1: team at Gingwidge three sixty. If you've been enjoying Newtsworld, 539 00:29:57,400 --> 00:30:00,480 Speaker 1: I hope you'll go to Apple Podcast and both rate 540 00:30:00,560 --> 00:30:03,640 Speaker 1: us with five stars and give us a review so 541 00:30:03,760 --> 00:30:07,120 Speaker 1: others can learn what it's all about. Right now, listeners 542 00:30:07,160 --> 00:30:09,840 Speaker 1: of news World can sign up for my three free 543 00:30:09,960 --> 00:30:14,760 Speaker 1: weekly columns at Gingwich three sixty dot com slash newsletter. 544 00:30:15,160 --> 00:30:17,600 Speaker 1: I'm Newt Gingrich. This is news World