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Speaker 1: Welcome to How the Money. I'm Joel on that. Today

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Speaker 1: we're discussing cars that last, sp fraudster, and tricky tax forms.

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Speaker 1: That's right, buddy, this is our Friday flight, and we're

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Speaker 1: going to discuss the best stories that we came across

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Speaker 1: this week, the different headlines that we think actually you

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Speaker 1: don't need to read, because we're gonna talk about them

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Speaker 1: right now. We don't want you to read. In fact,

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Speaker 1: if you're illiterate and we want you to enjoy the show,

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Speaker 1: we will give you all that like a baby a

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Speaker 1: baby bird getting fed by its mother, mama bird, not us.

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Speaker 1: That's where the mama bird. Did you ever do that

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Speaker 1: skit in college? Mama bird? I don't think I did.

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Speaker 1: Oh yeah, you don't want to you don't want to

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Speaker 1: hear about it. By the way, have you I feel

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Speaker 1: like I knocked out a lot of holiday Christmas shopping

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Speaker 1: over the past couple of days. Have you gotten all

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Speaker 1: of yours all done? Yes? So thrilled with that that

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Speaker 1: it's not even on my radar anymore. Have you already

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Speaker 1: wrapped everything? Everything's wrapped? Well? No, I have one thing left,

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Speaker 1: one thing left for all my stuff is in the mail,

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Speaker 1: right Now, well, that's good because you know why you're

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Speaker 1: gonna pay less because you've already shipped it. And that's

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Speaker 1: that's actually a good thing to mention to all. How

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Speaker 1: the money listeners real quick, is that December seventeen, this Saturday,

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Speaker 1: is the deadline for first class mail if you wanted

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Speaker 1: to arrive in time for Christmas. So if you are

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Speaker 1: procrastinating and you don't get things, I guarantee you lines

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Speaker 1: are gonna be hideous tomorrow of the post office. But

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Speaker 1: still you might want to get that stuff shipped today

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Speaker 1: or tomorrow so that you can avoid paying more to

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Speaker 1: ship your goods or just missing Christmas and letting everyone down.

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Speaker 1: That's right, you don't want to do that. Yeah, I

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Speaker 1: still got a couple of packages. I need a mail

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Speaker 1: actually stuff for that we need to send. We're sending

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Speaker 1: some beer meal some friends of ours. Uh, and so

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Speaker 1: I've got to get that out. Actually, by the time

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Speaker 1: this episode hits first thing Friday morning, I'm gonna be

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Speaker 1: at the post office. Ups whichever is cheaper, good man?

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Speaker 1: All right, Yeah, make sure we don't overpay for that

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Speaker 1: beer mail shipment. All right, let's move on the mat.

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Speaker 1: Let's get to the sample of stories we found interesting

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Speaker 1: this week. Of course, in the world of crypto, SPF,

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Speaker 1: the former disgrace and now disgraced CEO of f t X,

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Speaker 1: he was taken into custody by police in the Bahamas.

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Speaker 1: He had like this palatial resort where he had a

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Speaker 1: bunch of roommates and stuff like that, and at the

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Speaker 1: request of the U. S. Government, he is now in

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Speaker 1: custody right and a few different agencies are are filing

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Speaker 1: charges ranging from wire fraud, money laundering, and conspiracy. It's

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Speaker 1: it's not looking good for SPF. And apparently he even

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Speaker 1: had a slack channel called wire fraud. So I'm not

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Speaker 1: sure how difficult this case is going to be to

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Speaker 1: proof um And I've I've seen some jokes about him

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Speaker 1: trying to post bail with the token he created f

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Speaker 1: t T which is very funny. But it surely seems

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Speaker 1: like this was not a case of incompetence, although that's

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Speaker 1: what SPF seems to be claiming in his little media tour. Yeah. Well,

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Speaker 1: I mean, we were just talking about this. But even

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Speaker 1: if he is claiming incompetence, even if this was a

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Speaker 1: told a mistake, fact is you defrauded folks. The fact

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Speaker 1: is you have to be held responsible for your actions,

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Speaker 1: like there are going to be consequences regardless of whether

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Speaker 1: or not that this is something you did intentionally. For sure,

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Speaker 1: it's gonna be interesting to see how this all shakes out.

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Speaker 1: And not to say that all crypto exchange owners are

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Speaker 1: fraudulent thieves like SPF, Like I think there are some

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Speaker 1: good people in positions of power in the crypto space,

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Speaker 1: but because of his actions, we would say it's important

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Speaker 1: to be even more careful when investing in crypto right now.

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Speaker 1: Keep your exposure to this asset class minimal, make sure

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Speaker 1: that it's your money is being held somewhere safe. The

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Speaker 1: domino effect is real and it's hitting other crypto exchanges,

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Speaker 1: and so yeah, if you feel that right now you're

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Speaker 1: too exposed to cryptocurrency, you might want to hit your bets.

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Speaker 1: I think I saw that. I mean prosecutors and regulators.

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Speaker 1: They're also trying to find like the missing money, because

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Speaker 1: I mean there's billions of dollars here of investors money

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Speaker 1: that can't be found. Yeah, and I don't think they're

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Speaker 1: gonna find it, Joel, because I mean, the whole thing,

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Speaker 1: like it was a giant heramid scheme like it was.

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Speaker 1: It was a house of cards and that money was

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Speaker 1: siphoned over to Alimator research. And fact is that, I

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Speaker 1: mean that money was used to speculate. And like anybody

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Speaker 1: who who's owned any sort of crypto over the past year,

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Speaker 1: you have seen it crater and so yeah, I don't

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Speaker 1: it's not like they're gonna find some account and all

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Speaker 1: the money is gonna be like it's evaporated unfortunately sitting

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Speaker 1: over here in some l I account exactly, in different

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Speaker 1: little savings buckets and stuff. No, that's not what happened.

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Speaker 1: It wasn't like the Bernie made Off thing where they

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Speaker 1: actually did have that money sitting that he was stealing himself.

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Speaker 1: But regardless, let's talk about the housing industry because mortgage

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Speaker 1: rates they have been ticking down. They're actually closer now

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Speaker 1: to six percent than they are to seven percent at

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Speaker 1: this point. That's still a lot more than they were

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Speaker 1: a year ago. Uh, And that has a direct influence

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Speaker 1: on what your mortgage payment would be if you were

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Speaker 1: to buy a house in the near future. But it

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Speaker 1: is also massively helpful to see rates mellow out a

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Speaker 1: little bit, because that's gonna be good for the real

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Speaker 1: estate market. I don't think any he really wants to

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Speaker 1: see a repeat of the frenzy with housing prices skyrocketing,

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Speaker 1: and I think we're unlikely to. But just having a

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Speaker 1: completely frozen housing market isn't good either. We'll see what

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Speaker 1: the Fed does. As everyone saw earlier this week, they

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Speaker 1: continued to raise rates, although at a slower pace fifty

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Speaker 1: basis points rather than the seventy five, so that's encouraging.

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Speaker 1: The Federate doesn't go up or down in tandem with

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Speaker 1: mortgage rates, so that's interesting to see too, that Federate

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Speaker 1: continues to climb a mortgage rates are going down right

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Speaker 1: now exactly, so we'll see what happens. By the way,

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Speaker 1: don't forget to shop around as you're looking for a mortgage.

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Speaker 1: According to Freddie Mac, they say that buyers could save

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Speaker 1: an average dollars over the life of the loan by

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Speaker 1: getting just one additional quote, and that savings increases to

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Speaker 1: about three thousand dollars if you compare five quotes, and

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Speaker 1: we'll say that that's a pretty big difference. Although I

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Speaker 1: saw also that this is before the incredible volatility that

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Speaker 1: we have seen so far, a few years ago, that

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Speaker 1: they really that guidance, but it could be more than that.

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Speaker 1: I guarantee, I personally guarantee it. You let me know.

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Speaker 1: Definitely kidding, but there's no way that you could not

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Speaker 1: save much more, just with the volatility of rates recently,

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Speaker 1: because there are certain banks that maybe we're most likely

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Speaker 1: quick to raise rates as as they client, but maybe

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Speaker 1: now as they've dipped a little bit, they're thinking, we

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Speaker 1: kind of liked it up here, that's that's what we

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Speaker 1: want to charge, even those shock there are. And how

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Speaker 1: much I was able to save this summer getting a mortgage,

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Speaker 1: the disparity in interest rates between a few different local banks,

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Speaker 1: it was more than more massive. It would have been

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Speaker 1: more than three thousand dollars. Oh yeah for you. Oh yeah.

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Speaker 1: I saved probably five figures right over the life that alone,

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Speaker 1: just by shopping around. And so it's one of those

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Speaker 1: things where you have the more. It's we we we've

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Speaker 1: learned to shop for everything. We got the honey plug

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Speaker 1: in for a little consumer goes, we buy online, but

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Speaker 1: when it comes to shopping for mortgage, most people go

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Speaker 1: to one place. That's a bad idea. If you're in

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Speaker 1: the market for a house, you're gonna want to shop

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Speaker 1: around to be able to save most lots of money

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Speaker 1: over a big period of time. Let's talk about cars, Matt,

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Speaker 1: one of the other big line items in our budgets.

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Speaker 1: And uh, one of the questions that a lot of

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Speaker 1: people want to know is which car, if I buy

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Speaker 1: it is gonna last the longest. Not everybody wants to

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Speaker 1: keep their car a really long time. We would say

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Speaker 1: it's a super smart financial move if you do. And

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Speaker 1: for frugal folks, that's just one of the best questions

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Speaker 1: you could ask about your transportation device, because the longer

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Speaker 1: you keep that car, the more money you save. And

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Speaker 1: so every time you trade in an old car for

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Speaker 1: a newer model, that's just money out of your pocket

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Speaker 1: that you could have been doing other awesome things with.

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Speaker 1: I get it. Some people they like to spend money

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Speaker 1: on cars. That's fine if that's your craft beer equivalent.

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Speaker 1: But the folks but the craft beer equivalent, right, I

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Speaker 1: hate to see it. I think about how much craft

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Speaker 1: beer we could buy with just one used card. I know,

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Speaker 1: I'd rather see you pick something cheaper. But I get it.

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Speaker 1: Some people love to have a nice car, and the

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Speaker 1: folks over at I see cars. They did a study

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Speaker 1: to see which cars have the longest lifespan, and the

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Speaker 1: results were conclusive. Toyota cars are made really well, and

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Speaker 1: that's not necessarily shocking to me, Matt, But but I

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Speaker 1: think what was shocking was that Toyota took ten of

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Speaker 1: the top twenty spots, fully half of the most the

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Speaker 1: cars that last a long be impressive. Yeah, So if

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Speaker 1: you're in doubt about which brand of car to consider,

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Speaker 1: that should help narrow it down right. That evidence right there.

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Speaker 1: And on top of that, I see cars they said

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Speaker 1: that with regular maintenance, you can expect to drive these

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Speaker 1: cars for upwards of two hundred and thirty thousand miles.

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Speaker 1: That's some real longevity. And I think most people think, oh,

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Speaker 1: my car, that it's never going to get to that

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Speaker 1: point in time, but more and more car cars really

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Speaker 1: can these days. Yeah, definitely. Yeah. I was surprised to

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Speaker 1: not see as many Honda's in that top twenty, and

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Speaker 1: I think there's only something like three that broke the

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Speaker 1: top twenty. Honda Odyssey was definitely up there. But yeah,

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Speaker 1: if you if you want that long lasting car, you

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Speaker 1: definitely get the Toyota over the Honda. And Dude, I

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Speaker 1: also think it's a good idea to reframe our concept

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Speaker 1: of what we consider to be an old car, because, um,

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Speaker 1: guessing there are still a lot of folks out there

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Speaker 1: who think that their car, their vehicle is getting long

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Speaker 1: in the tooth when it crested a hundred thousand miles.

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Speaker 1: By the way, where does that come from? Long in

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Speaker 1: the tooth the tooth? Yeah, Like I think so squirrels

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Speaker 1: they have to chew like they chew on stuff to

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Speaker 1: cut their teeth, like their teeth brill like fingernails, And

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Speaker 1: so I think when something is getting old, it gets

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Speaker 1: along in the tooth, which means it's older. That's my understanding.

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Speaker 1: Thank you for the explanation. That's I mean, that's why it.

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Speaker 1: Squirrels will like chew in your house or like your

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Speaker 1: siding or different stuff like that. They do it obviously

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Speaker 1: to like try to get into the warm attic, but

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Speaker 1: I think it's also to it's like a way to

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Speaker 1: trim trim down them teeth a little bit, makes sense,

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Speaker 1: But but yeah, I do think it's important for us

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Speaker 1: to kind of reframe how it is that we're thinking

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Speaker 1: about it. The truth is, your your car is probably

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Speaker 1: like just over the hill when maybe you're you know,

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Speaker 1: passing a hundred thousand miles, maybe even fifty thousand miles.

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Speaker 1: If you're driving a Toyoda, it's likely got a lot

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Speaker 1: of life left in its Especially if you're driving a Toyoda.

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Speaker 1: The car manufacturer definitely matters, right, because if you're driving

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Speaker 1: a Jeep, maybe you are nearing the end of life,

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Speaker 1: and how well you maintain it matters to right. Yeah,

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Speaker 1: those regular oil changes which you're like, oh, they have

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Speaker 1: to go in and get do it again, Well, yeah

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Speaker 1: you do. And because it's gonna make your car last longer,

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Speaker 1: it's a smart investment to keep that thing chugging along.

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Speaker 1: And I think we overestimate to Matt that costs of

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Speaker 1: repairs on old cars were like, oh gosh, I just

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Speaker 1: forked over bucks for this repair on my old Toyota. Well,

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Speaker 1: look at what car payments cost you. It's gonna be

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Speaker 1: a heck of a lot more than the repair costs

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Speaker 1: in cars. I think the numbers one time and a

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Speaker 1: single car payment of an average car that's finance today

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Speaker 1: is more than the expenses associated with a used car

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Speaker 1: annual costs of less than a caring and and another

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Speaker 1: thing that will save you money for driving an older

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Speaker 1: car is you'll save money on insurance, and especially if

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Speaker 1: that car is old enough to where you can drop

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Speaker 1: comprehensive and collision and self insure. Right, And that's a

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Speaker 1: more important tactic than ever because insurance rates are rising

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Speaker 1: in a real and meaningful way and surifies the website

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Speaker 1: and they say that the the average driver is going

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Speaker 1: to spend more than a hundred and fifty dollars a

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Speaker 1: month on insurance next year, which is almost two thousand

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Speaker 1: dollars a year. And every car you own, by the way,

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Speaker 1: is costing you this much money to ensure. It's costing

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Speaker 1: you more than you think in all likelihood. So driving

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Speaker 1: that older, more reliable car is a great thing. Ditching

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Speaker 1: a car from your life altogether is even better. We

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Speaker 1: talked about that, Matt back in episode to forty two.

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Speaker 1: We want to see people have fewer cars in their life.

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Speaker 1: Not only is it like better for the planet, well,

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Speaker 1: who that's a good thing, but it's gonna save you

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Speaker 1: a ton of money, especially as insurance races are just

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Speaker 1: like going through the roof totally. Yeah, I've still have

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Speaker 1: been impressed at how little I've needed to use uber

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Speaker 1: or lift since we've moved out to the burbs. I

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Speaker 1: was thinking that it was gonna be something I was

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Speaker 1: gonna need need to do a lot more. But maybe

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Speaker 1: at the very end of the year, I like total

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Speaker 1: all those all those costs up. But by the way, man,

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Speaker 1: one thing that makes ditching a car altogether no problem.

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Speaker 1: Uh And actually I think that's the name of that episode,

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Speaker 1: No car, no problem. But one of the ways that

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Speaker 1: you can do that a little more easily is if

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Speaker 1: you're allowed to ride the bus full free wherever it

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Speaker 1: is that you live. Axios they recently documented the rise

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Speaker 1: of free bus services around the country. Washington, d C.

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Speaker 1: They just voted to make their bus system completely free

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Speaker 1: to riders, and they they're not alone. They joined other

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Speaker 1: cities like Kansas City, Alexandria in Virginia they do that

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Speaker 1: as well. Uh And so yeah, we'll see if this

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Speaker 1: this catches on. But if we're gonna subsidize anything, I

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Speaker 1: think making bus travel a little more affordable or totally

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Speaker 1: free seems to be a smart one. And so keep

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Speaker 1: that in mind. If riding the bus is free wherever

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Speaker 1: it is that you live, jump on it. We would

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Speaker 1: recommend you find a way to take an ax to

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Speaker 1: what's typically the second largest line idem of everybody's monthly budget. Yeah,

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Speaker 1: and even transportation. If that bus cost money, it's likely

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Speaker 1: way the heck cheaper than your automobile, So it's likely,

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Speaker 1: if you can stand. I had a friend who lived

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Speaker 1: up here in the Bourbs, Matt road into the city

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Speaker 1: on the bus every single day to get to work,

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Speaker 1: and people looked at him like he was crazy, because

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Speaker 1: nobody does that. Everybody drives in their own personal vehicle,

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Speaker 1: like are you kidding me? But they're also expecting him

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Speaker 1: to have his newspaper and his thermis of hot coffee.

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Speaker 1: He was able to read a book. I mean, he

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Speaker 1: got a lot done on that trip, not to mention

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Speaker 1: doesn't have to be in the stressed out by bumper

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Speaker 1: to bumper traffic, and he say being a ton of

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Speaker 1: money on top of it. I think we underestimate the

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Speaker 1: role that a bus can play in our lives, whether

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Speaker 1: three or a cost money. But let's move on, Matt.

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Speaker 1: This doesn't come as any sort of shock, but gen

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Speaker 1: z and millennial shoppers are turning to social media for

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Speaker 1: their holiday shopping in a big way. Yeah. Yeah, something

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Speaker 1: like guilty you you are a millennial and something like

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Speaker 1: I've used it to inform ideas. I try not to

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Speaker 1: go straight from like the ad to the purchase because

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Speaker 1: I don't know. To me, that's like a barrier I

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Speaker 1: don't want to cross. But I'll let it. I'll let

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Speaker 1: it be like give me a suggestion and then I'll

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Speaker 1: check it out on my own time. I've mostly done

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Speaker 1: it when I had been researching a couple of different products.

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Speaker 1: And then obviously the cookies are implanted or whatever. However

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Speaker 1: the technology works and they know, and so then they

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Speaker 1: feed me a great sale, and I think that's exactly

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Speaker 1: what I was what I had been looking for. How

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Speaker 1: did you know now is the time if you're gonna

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Speaker 1: give me? Yeah, that's normally normally what I do. Although, yeah,

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Speaker 1: I recently bought something for the kids. Like I was

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Speaker 1: fed something. This is the first time I've ever done this,

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Speaker 1: but it was I was fed a completely random toy,

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Speaker 1: and I was just like, that's just that's just too good.

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Speaker 1: So Clever's really cheap. It's just like one of those

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Speaker 1: little dumb things. Got some fore your kids as well,

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Speaker 1: so you can look forward to that. Thank you appreciated. Well,

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Speaker 1: something like six folks in that age range will do

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Speaker 1: at least some shopping on TikTok, YouTube or Instagram this season.

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Speaker 1: That's according to the National Retail Federation. So whether it's

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Speaker 1: the hyper tailored ads that are served up to us

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Speaker 1: add nauseum they know what we like sometimes before we

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Speaker 1: know it, or the influencers who we follow who just

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Speaker 1: have the best taste, right, Like, folks are finding themselves

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Speaker 1: compelled to make a couple of extra clicks in order

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Speaker 1: to buy that item for themselves or for a loved

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Speaker 1: one or for their friends kids. Right, and uh, social media.

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Speaker 1: We're not trying to say social media's the devil or

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Speaker 1: anything like that, but just keep in mind that they

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Speaker 1: can have these subtle effects and it can have a

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Speaker 1: negative influence on you over time, and it can counteract

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Speaker 1: some of the personal finance progress you're attempting to make. So,

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Speaker 1: especially this time of the year, I think we are

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Speaker 1: more and more susceptible to ads that because we're like, oh, yeah,

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Speaker 1: that's gonna be perfect for my friend Sheila or whatever,

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Speaker 1: and we click through, we buy it, and oftentimes we

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Speaker 1: end up spending more than we intended to. Just yeah,

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Speaker 1: it's it's a great idea to let social media maybe

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Speaker 1: inform you to take some of that inspiration from other posts,

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Speaker 1: but if you use it as like a shopping mechanism

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Speaker 1: that can quickly get out of control. Nice. Yeah, I

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Speaker 1: like what you said. It's not the devil, but definitely

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Speaker 1: be careful a with how much time you're spending on

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Speaker 1: social media, but then be how they are encouraging you

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Speaker 1: to spend more of your dollars. Joel, we're gonna take

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Speaker 1: a quick break, but we've got a couple more stories,

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Speaker 1: including one that everybody should be aware of if they've

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Speaker 1: received over six hundred dollars in payment via Venmo or

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Speaker 1: cash app, different apps like that. We'll get to that

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Speaker 1: story plus others right after this. All right, we're back

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Speaker 1: to the break, and of course every Friday flight we

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Speaker 1: get to our ludicrous headline of the week. It's something

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Speaker 1: we saw on the web this week and it shocked

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Speaker 1: and amazed us and we had to talk about it

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Speaker 1: here on the show. And this one comes from Bloomberg

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Speaker 1: and the title of this piece reads, retail traders lose

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Speaker 1: three fifty billion dollars in brutal year for taking risks.

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Speaker 1: So it ain't so that's us, man. We are the

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Speaker 1: retail traders. We have lost money this month or this year. Well, yes,

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Speaker 1: but hopefully not as much. They're talking more about that.

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Speaker 1: They're talking were long term. We're long term retail investors, right,

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Speaker 1: and these are retail traders, which is a different thing.

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Speaker 1: And they passed that out really in this article because

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Speaker 1: estimates from a couple of different research firms in this

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Speaker 1: piece revealed that the average individual trader, and I think

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Speaker 1: that's the keyword here, has a portfolio that's down more

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Speaker 1: than from the top of the market, which occurred in

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Speaker 1: January of this year. Well, how much is the SMP

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Speaker 1: five hundred down as of this point, more like in

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Speaker 1: the upper teams, right, So this the story is familiar.

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Speaker 1: At this point, more folks stuck in their houses with

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Speaker 1: additional government funds hitting their account they opted to start investing.

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Speaker 1: But instead of using the boring route, they wanted to

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Speaker 1: try the sexy path and see if that was gonna

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Speaker 1: work out. And it didn't for most folks. And so

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Speaker 1: if you've opted for the boring route that we advocate,

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Speaker 1: you might be bummed that you've seen a dip in

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Speaker 1: your portfolio and probably your net worth as well this year,

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Speaker 1: unless you were just like funneling a ton of money

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Speaker 1: towards investments even as the market was going down. But

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Speaker 1: the truth is that the alternative is even more financially painful.

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Speaker 1: Folks who are day trading their money, folks who are

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Speaker 1: investing in meme stocks, are folks who are investing in

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Speaker 1: the hot stock at the moment. I mean, look at

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Speaker 1: something like Carbona Matt. I mean that that is a

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Speaker 1: business that looked like it had legs and was doing

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Speaker 1: really well, especially as the used car market was crushing,

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Speaker 1: and now like that company is almost out of business,

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Speaker 1: And so you have to be careful when you're opting

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Speaker 1: for the day trading route as opposed to the long

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Speaker 1: term investing route. Most it's just interesting to see that

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Speaker 1: these the folks who are are trading regularly, they have

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Speaker 1: much bigger losses, right, And it looked good on the

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Speaker 1: run up, but it's looking worse on the come down. Aggling. Yeah,

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Speaker 1: And that's a good distinction to make because even yeah,

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Speaker 1: like you said, even having having taken the boring route, like,

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Speaker 1: we're still looking at a portfolio that's down about you know,

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Speaker 1: like pretty damn close to that right now. Nobody praised

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Speaker 1: for that or wants that. Nobody wants that that's where

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Speaker 1: a lot of us are sitting. But like you said,

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Speaker 1: folks who are who are invested more in crypto in

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Speaker 1: single stocks, uh, they're seeing there. Honestly, I'm surprised to

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Speaker 1: see that number wasn't higher. Like, honestly, that tells me

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Speaker 1: that there's a lot more folks who have invested in

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Speaker 1: a more conservative way, because it's one of the predictions

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Speaker 1: I think was thirty eight percent, was that that that's

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Speaker 1: where the average traders down. And I'm like, that's double

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Speaker 1: with the average average long term investors down. Sure, but

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Speaker 1: then you look at like single stocks like Tesla, they're

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Speaker 1: down over fifty You look at bitcoin ethereum, the biggest

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Speaker 1: cryptocurrencies are down over sixty percent, and so I don't know,

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Speaker 1: my mind, you picture a bunch of stock traders, uh,

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Speaker 1: who got their fingers cross that things are going to

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Speaker 1: go to the moon, and you I envisioned folks who

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Speaker 1: are sitting at losses that closer to six. But I

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Speaker 1: am actually maybe a little more encouraged to see that

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Speaker 1: it's not that severe. That's the Tesla one is interesting too,

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Speaker 1: because it's definitely a stock that had a story to

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Speaker 1: go along with it and a lot of a lot

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Speaker 1: of folks were saying, people will buy a story. Yeah,

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Speaker 1: and that's why one of the reasons we just wanted

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Speaker 1: dis way listeners from investing in single stocks are doing

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Speaker 1: it with a very very small portion of your investible

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Speaker 1: assets because the boring route. Yes it's boring, but it's

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Speaker 1: going to lead to ultimately more money for you over time,

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Speaker 1: and you're recommending the boring company another one of Elon

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Speaker 1: Musk ventures. Okay, now, although just making sure that people

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Speaker 1: aren't reading between the lines. No, I don't even think

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Speaker 1: that's a publicly traded company and nor should it be. Okay,

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Speaker 1: So on a related note, h now, I guess infamous

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Speaker 1: fund manager Cathy Woods fund it was, you know, it

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Speaker 1: was all the rage and as some of her favorite

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Speaker 1: bets were crushing during the pandemic. Um I feel like

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Speaker 1: to talk about her prowess and her skills were almost

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Speaker 1: as frequent as her CNBC appearances. But when you zoom out,

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Speaker 1: even Cathy Wood has actually underperformed the SMP over the

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Speaker 1: past few years just by her rapid pandemic successes. Her

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Speaker 1: what she called it was her innovation E t F.

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Speaker 1: It's it's down to the neighborhood of sixty two percent.

429
00:20:08,920 --> 00:20:10,119
Speaker 1: It sounds like what you want to be in. And

430
00:20:10,240 --> 00:20:13,440
Speaker 1: it's like innovative of course, uh yeah, or results of

431
00:20:13,840 --> 00:20:17,320
Speaker 1: have been more icorous, like uh recently. But The Times

432
00:20:17,440 --> 00:20:19,720
Speaker 1: they ran in an article last week about how hard

433
00:20:19,760 --> 00:20:22,480
Speaker 1: it is to beat the SMP over an extended period

434
00:20:22,480 --> 00:20:25,199
Speaker 1: of time. So this isn't just her who's kind of

435
00:20:25,280 --> 00:20:27,360
Speaker 1: you know, crap on the bed, it's everybody. And they

436
00:20:27,400 --> 00:20:30,680
Speaker 1: documented they did some research and they found that of

437
00:20:30,760 --> 00:20:35,400
Speaker 1: the two thousand, one thirty two actively managed mutual funds,

438
00:20:35,440 --> 00:20:38,359
Speaker 1: not a single one managed to consistently beat the market

439
00:20:38,400 --> 00:20:41,359
Speaker 1: over a five year period. So yeah, we want to

440
00:20:41,359 --> 00:20:43,680
Speaker 1: ship to share that because index funds certainly haven't been

441
00:20:43,760 --> 00:20:47,160
Speaker 1: just rainbows and sunshine this year, but the alternative strategy

442
00:20:47,480 --> 00:20:50,280
Speaker 1: has been even worse for millions of folks. We do

443
00:20:50,359 --> 00:20:52,960
Speaker 1: not want that to be an alternative that you You

444
00:20:53,000 --> 00:20:55,080
Speaker 1: can consider it, I guess, but just don't just don't

445
00:20:55,080 --> 00:20:57,960
Speaker 1: go down that path because picking single stocks, buying a

446
00:20:57,960 --> 00:21:00,720
Speaker 1: bunch of different funds because of if it rock star

447
00:21:01,160 --> 00:21:05,200
Speaker 1: managers or stockpickers will almost inevitably lose your money over

448
00:21:05,240 --> 00:21:07,359
Speaker 1: the long haul. Yeah, it feels like a tale as

449
00:21:07,400 --> 00:21:09,280
Speaker 1: old as time at this point or tail as old

450
00:21:09,280 --> 00:21:11,879
Speaker 1: as at least index funds tail as old as at

451
00:21:11,960 --> 00:21:16,120
Speaker 1: least like late the late nineteen seventies. But and if

452
00:21:16,119 --> 00:21:17,600
Speaker 1: you want to know more about the history, we talked

453
00:21:17,640 --> 00:21:19,720
Speaker 1: with Rob and wiggles Worth about Index hundreds thing that

454
00:21:19,800 --> 00:21:23,280
Speaker 1: was super fun X episode. But it's something we will

455
00:21:23,280 --> 00:21:26,160
Speaker 1: continue to say, uh and continue to give the evidence

456
00:21:26,400 --> 00:21:28,840
Speaker 1: to support why index ones are a better choice. And

457
00:21:28,920 --> 00:21:30,600
Speaker 1: it's also nice because it's a set it and forget

458
00:21:30,640 --> 00:21:32,600
Speaker 1: it choice. You don't have to think about it, and

459
00:21:32,600 --> 00:21:34,080
Speaker 1: then you don't have to like wring your hair when

460
00:21:34,119 --> 00:21:36,560
Speaker 1: you're when you're underperforming and when things aren't going well,

461
00:21:37,160 --> 00:21:40,439
Speaker 1: which I think I appreciate the emotional stability that in

462
00:21:40,240 --> 00:21:44,560
Speaker 1: the index ones can provide. That's underrated totally. But mental health, man, yeah,

463
00:21:44,560 --> 00:21:47,560
Speaker 1: it's important. It's true. Index one's can help you out

464
00:21:47,600 --> 00:21:49,760
Speaker 1: on that front. Do it for your mental health. Yeah.

465
00:21:50,200 --> 00:21:52,640
Speaker 1: And since we're talking about investing, let's talk about retirement

466
00:21:52,640 --> 00:21:55,000
Speaker 1: for a second. It turns out that Gen z which

467
00:21:55,080 --> 00:21:57,240
Speaker 1: were older than that Matt, were millennials. But the gent

468
00:21:57,640 --> 00:21:59,880
Speaker 1: zoomers I like to call Hi zoomers zoomers like boomers,

469
00:21:59,880 --> 00:22:03,040
Speaker 1: but numers I like it and you know, zoom, you

470
00:22:03,080 --> 00:22:05,280
Speaker 1: get on zoom. They don't do that anymore. Get it,

471
00:22:05,840 --> 00:22:07,840
Speaker 1: and they don't do that anymore. They're doing other things,

472
00:22:07,840 --> 00:22:10,200
Speaker 1: I think. But they have a different view of retirement

473
00:22:10,240 --> 00:22:12,800
Speaker 1: than folks in other generations. As it turns out, according

474
00:22:12,840 --> 00:22:15,240
Speaker 1: to a recent Harris poll, they're more prone to think

475
00:22:15,280 --> 00:22:18,800
Speaker 1: that retiring early is an option and one that they

476
00:22:18,800 --> 00:22:23,760
Speaker 1: want to pursue. Folks and younger say they plan to

477
00:22:23,800 --> 00:22:27,240
Speaker 1: retire before they hit the age of sixty five. Gen

478
00:22:27,400 --> 00:22:30,000
Speaker 1: xers are more so reminded, less than a quarter of

479
00:22:30,040 --> 00:22:31,920
Speaker 1: them think they think that they're going to be able

480
00:22:31,960 --> 00:22:34,800
Speaker 1: to retire before sixty. But there's another stat in this poll,

481
00:22:34,840 --> 00:22:37,040
Speaker 1: Matt that made me think that a large swath of

482
00:22:37,119 --> 00:22:40,119
Speaker 1: gen z might just be wearing rose colored glasses like

483
00:22:40,160 --> 00:22:42,960
Speaker 1: these are hopes and dreams and not like actual realities

484
00:22:42,960 --> 00:22:45,919
Speaker 1: that are likely to occur, because only thirty five percent

485
00:22:45,960 --> 00:22:48,960
Speaker 1: of them said that saving for retirement was a financial

486
00:22:48,960 --> 00:22:51,440
Speaker 1: priority in their lives. So so like a lot more

487
00:22:51,440 --> 00:22:55,000
Speaker 1: people said yeah, I'm gonna retire pretty early, but very

488
00:22:55,160 --> 00:22:57,760
Speaker 1: very few said no, I'm definitely saving for retirement. It's

489
00:22:57,760 --> 00:23:00,359
Speaker 1: a priority for me. And those two things don't exist

490
00:23:00,400 --> 00:23:02,520
Speaker 1: there seems to be a disconnect here. Yeah, and you

491
00:23:02,760 --> 00:23:05,520
Speaker 1: we would say we want htm gen Z listeners to

492
00:23:05,560 --> 00:23:07,800
Speaker 1: have the option to retire early, to be able to

493
00:23:07,800 --> 00:23:10,479
Speaker 1: travel the world or pursue whatever passion project they might

494
00:23:10,520 --> 00:23:12,879
Speaker 1: have decades from now. But that goal just isn't going

495
00:23:12,920 --> 00:23:15,520
Speaker 1: to have a shot of occurring if those boring old

496
00:23:15,520 --> 00:23:18,080
Speaker 1: retirement accounts aren't made a priority in the here and now.

497
00:23:18,119 --> 00:23:20,680
Speaker 1: You've got to start doing it, start funneling money in

498
00:23:20,680 --> 00:23:23,800
Speaker 1: that direction, so you're giving yourself options in the future. Yeah,

499
00:23:23,800 --> 00:23:25,040
Speaker 1: and I think some of this might have to do

500
00:23:25,119 --> 00:23:27,880
Speaker 1: with like the definition of retirement because also saw that

501
00:23:28,320 --> 00:23:31,760
Speaker 1: of those gen Zers as well, those Zoomers, they also

502
00:23:31,800 --> 00:23:34,359
Speaker 1: expected to participate in what they called a second act,

503
00:23:34,680 --> 00:23:37,439
Speaker 1: Like basically, even though they're going to be retiring from

504
00:23:37,480 --> 00:23:39,760
Speaker 1: their quote unquote real job, there might be a secondary

505
00:23:39,840 --> 00:23:42,960
Speaker 1: job where they're still able to, you know, generate some

506
00:23:43,000 --> 00:23:45,200
Speaker 1: sort of income, even if it's a lot less than

507
00:23:45,359 --> 00:23:47,359
Speaker 1: what they we're pulling in before, which I think is great,

508
00:23:47,359 --> 00:23:49,440
Speaker 1: But you still have to have money in the retirement

509
00:23:49,440 --> 00:23:53,040
Speaker 1: accounts supplement the dropping income unless you plan to dramatically

510
00:23:53,040 --> 00:23:56,119
Speaker 1: reduce your lifestyle. And so it's something that they need

511
00:23:56,160 --> 00:23:58,040
Speaker 1: to put this on the front burner if they want

512
00:23:58,080 --> 00:24:01,040
Speaker 1: to achieve even that ability to herb their career short

513
00:24:01,119 --> 00:24:03,560
Speaker 1: so they can pursue, I don't know, writing the next

514
00:24:03,600 --> 00:24:07,520
Speaker 1: great American novel or painting, whatever it may be. That's

515
00:24:07,560 --> 00:24:09,520
Speaker 1: totally fine. If you want to try a second career,

516
00:24:09,520 --> 00:24:11,639
Speaker 1: we encourage that, but you've got to be saving to

517
00:24:11,640 --> 00:24:14,960
Speaker 1: achieve it. That's right. Let's talk about taxes here for

518
00:24:15,000 --> 00:24:18,240
Speaker 1: a second, because millions of folks are going to be

519
00:24:18,240 --> 00:24:21,760
Speaker 1: getting a tax form that they're likely not used to

520
00:24:21,760 --> 00:24:24,840
Speaker 1: seeing thanks to a pandemic law that went into effect

521
00:24:24,880 --> 00:24:27,560
Speaker 1: earlier this year. If you buy and sell things on

522
00:24:27,840 --> 00:24:31,480
Speaker 1: different websites like eBay or Etsy, or if you even

523
00:24:31,520 --> 00:24:34,040
Speaker 1: if you've got like maybe less of a business, maybe

524
00:24:34,040 --> 00:24:36,200
Speaker 1: it's more of a side hustle. You consider it more

525
00:24:36,200 --> 00:24:37,720
Speaker 1: of a side hustle. And you rent out a room

526
00:24:38,119 --> 00:24:41,560
Speaker 1: uh in your house, or maybe on Airbnb, or even

527
00:24:41,560 --> 00:24:44,120
Speaker 1: if you just send money on Venmo or cash app,

528
00:24:44,560 --> 00:24:47,320
Speaker 1: there is an increased chance that you're gonna get a

529
00:24:47,400 --> 00:24:52,160
Speaker 1: ten K in the mail. The threshold for receiving one

530
00:24:52,200 --> 00:24:54,560
Speaker 1: of these forms used to be a lot higher, before

531
00:24:54,600 --> 00:24:57,399
Speaker 1: you had to perform a bunch of transactions that equal

532
00:24:57,480 --> 00:25:01,080
Speaker 1: to twenty thousand dollars or more, meaning that a lot

533
00:25:01,160 --> 00:25:04,240
Speaker 1: of folks were able to slide under the the tax

534
00:25:04,320 --> 00:25:06,439
Speaker 1: Minion's radar, under under the radar of the I R S.

535
00:25:06,840 --> 00:25:09,520
Speaker 1: But that threshold is a mere six hundred dollars now,

536
00:25:09,920 --> 00:25:13,240
Speaker 1: and you know, like, of course you should most definitely

537
00:25:14,119 --> 00:25:16,680
Speaker 1: you should have been reporting that income anyway. But now

538
00:25:16,880 --> 00:25:19,280
Speaker 1: the I R S is gonna know that you've made

539
00:25:19,280 --> 00:25:21,760
Speaker 1: that money and you'll have to report that income on

540
00:25:21,840 --> 00:25:24,560
Speaker 1: your taxes. This is I remember we talked about the

541
00:25:24,560 --> 00:25:27,320
Speaker 1: I R S earlier this year, Joel, and I feel

542
00:25:27,359 --> 00:25:28,720
Speaker 1: like we we almost kind of came down on the

543
00:25:28,720 --> 00:25:30,040
Speaker 1: side of the I R S a little bit because

544
00:25:30,080 --> 00:25:32,679
Speaker 1: they're getting something like eighty million dollars in additional funding

545
00:25:32,760 --> 00:25:34,840
Speaker 1: over the coming years. And and and there there there's

546
00:25:34,880 --> 00:25:39,240
Speaker 1: pictures of how the terrible conditions essentially of some of

547
00:25:39,240 --> 00:25:41,520
Speaker 1: these offices, and it seems like they've been understaffed for years.

548
00:25:41,560 --> 00:25:42,959
Speaker 1: And they made it sound like they're going to use

549
00:25:43,000 --> 00:25:46,119
Speaker 1: the increased funds to attack the hyper rich who are

550
00:25:46,119 --> 00:25:50,280
Speaker 1: avoiding things the most kind. This feels like the opposite happening. Yeah,

551
00:25:50,280 --> 00:25:51,680
Speaker 1: I feel like you're you're starting to wait in those

552
00:25:51,760 --> 00:25:53,399
Speaker 1: those political waters in a a little bit. Yeah, but I

553
00:25:53,400 --> 00:25:56,040
Speaker 1: mean in fact, rules are rules, though, right like if this,

554
00:25:56,119 --> 00:25:58,560
Speaker 1: if you are supposed to be filing certain forms and

555
00:25:58,600 --> 00:26:02,040
Speaker 1: reporting income, you've you've got to do that no matter what. However,

556
00:26:02,640 --> 00:26:05,000
Speaker 1: it definitely feels like this is not the most efficient

557
00:26:05,119 --> 00:26:09,400
Speaker 1: use of that money, right Like, aside from the values

558
00:26:09,440 --> 00:26:11,639
Speaker 1: and the principle of it, maybe the I R should

559
00:26:11,680 --> 00:26:15,360
Speaker 1: be focusing their efforts elsewhere, um that would generate perhaps

560
00:26:15,640 --> 00:26:18,160
Speaker 1: higher amounts of tax dollars as opposed to going after

561
00:26:18,160 --> 00:26:21,960
Speaker 1: somebody who may through their little side hustle. Yeah. And

562
00:26:21,960 --> 00:26:24,480
Speaker 1: now started this year, this new reporting threshold is changing

563
00:26:24,760 --> 00:26:27,080
Speaker 1: the way that some folks choose to provide their goods

564
00:26:27,080 --> 00:26:30,080
Speaker 1: and services something they don't want the i R s hassle.

565
00:26:30,119 --> 00:26:32,439
Speaker 1: And they're operating for other platforms where there is no

566
00:26:32,560 --> 00:26:36,080
Speaker 1: middleman handling the money exchange. And so I think Facebook,

567
00:26:36,119 --> 00:26:39,120
Speaker 1: Marketplace or Craigslist. So people are actually changing like where

568
00:26:39,160 --> 00:26:42,800
Speaker 1: they sell their stuff in order to avoid this new hassle.

569
00:26:42,840 --> 00:26:45,080
Speaker 1: That is the ten that they're going to get in

570
00:26:45,080 --> 00:26:47,879
Speaker 1: the mail. And I think it's worth noting too that

571
00:26:48,000 --> 00:26:50,480
Speaker 1: some folks are nervous because they maybe use these apps

572
00:26:50,520 --> 00:26:52,560
Speaker 1: to transfer money back and forth to friends and family,

573
00:26:52,640 --> 00:26:54,600
Speaker 1: or they've been they split a lot of dinner bills

574
00:26:54,600 --> 00:26:58,440
Speaker 1: this way. But and and they're worried. And I think, honestly,

575
00:26:58,480 --> 00:27:00,639
Speaker 1: I understand the worry there were they're gonna get a

576
00:27:00,640 --> 00:27:03,919
Speaker 1: ten because of that, just because of their Venmo activity,

577
00:27:03,920 --> 00:27:07,560
Speaker 1: because they're rapid users. But you're not supposed to. That's

578
00:27:07,600 --> 00:27:10,520
Speaker 1: actually why Venmo started asking the question about whether you're

579
00:27:10,520 --> 00:27:12,760
Speaker 1: paying friends or family or not earlier this year, whether

580
00:27:12,800 --> 00:27:15,360
Speaker 1: it's a business transaction. It was an attempt to gauge

581
00:27:15,720 --> 00:27:18,080
Speaker 1: what folks are using their platform for so they can

582
00:27:18,160 --> 00:27:21,040
Speaker 1: document everything accordingly. And so, yeah, if you're using it

583
00:27:21,240 --> 00:27:25,280
Speaker 1: purely for those purposes, Venmo should be Hopefully Venmo and

584
00:27:25,359 --> 00:27:27,520
Speaker 1: cash up should be smart enough to know not to

585
00:27:27,520 --> 00:27:30,119
Speaker 1: send you a ten because you weren't using it for

586
00:27:30,160 --> 00:27:33,720
Speaker 1: business purposes. And there's a political initiative, by the way

587
00:27:33,720 --> 00:27:38,800
Speaker 1: to raise the threshold for sending forms back to dollars.

588
00:27:39,080 --> 00:27:41,080
Speaker 1: It looks like there's some momentum on that. I don't

589
00:27:41,119 --> 00:27:43,199
Speaker 1: know if it's going to happen in time, because not

590
00:27:43,280 --> 00:27:45,120
Speaker 1: much time left in the year to make that change.

591
00:27:45,160 --> 00:27:47,240
Speaker 1: We'll see. We'll report back if it does, though, yes

592
00:27:47,359 --> 00:27:50,080
Speaker 1: we will. Man but that's gonna be it for this episode.

593
00:27:50,480 --> 00:27:53,320
Speaker 1: We've got a great interview lined up for you on Monday.

594
00:27:53,400 --> 00:27:57,239
Speaker 1: We're gonna be talking about money and love, Werena, We're

595
00:27:57,240 --> 00:27:59,720
Speaker 1: gonna talk about relationships here on Monday, and how do

596
00:27:59,840 --> 00:28:03,320
Speaker 1: they davison how to make the biggest money decisions that

597
00:28:03,440 --> 00:28:07,800
Speaker 1: often involve money and relationships and other people. And she

598
00:28:07,880 --> 00:28:09,600
Speaker 1: lays out a great framework for how to do that.

599
00:28:09,640 --> 00:28:11,960
Speaker 1: And it's not actually, it's not everything to do with this.

600
00:28:12,040 --> 00:28:14,520
Speaker 1: It's not only about relationships. It's just about some of

601
00:28:14,520 --> 00:28:17,840
Speaker 1: these larger decisions that we have to make oftentimes in life.

602
00:28:17,880 --> 00:28:20,200
Speaker 1: Should we move, what should we do with our lives,

603
00:28:20,200 --> 00:28:22,119
Speaker 1: should we get married, should we have kids, It's like

604
00:28:22,160 --> 00:28:24,439
Speaker 1: all those kinds of things. She's got this great framework

605
00:28:24,480 --> 00:28:25,720
Speaker 1: that I think is going to help you make better

606
00:28:25,760 --> 00:28:28,400
Speaker 1: decisions when it comes to the big decisions exactly. Yeah,

607
00:28:28,400 --> 00:28:30,760
Speaker 1: So if that sounds interesting to you, be sure to

608
00:28:30,840 --> 00:28:33,440
Speaker 1: check that one out here on Monday. But Joel, again,

609
00:28:33,440 --> 00:28:35,800
Speaker 1: that's gonna be buddy until next time. Best Friends Out,

610
00:28:35,920 --> 00:28:37,120
Speaker 1: Best Friends Out,