00:00:00 Speaker 1: Welcome to How to Money. I'm Joel. I'm Matt. 00:00:03 Speaker 2: And today we're talking illiterate Americans, shrinking shoulder season, and rate hike reactions. 00:00:16 Speaker 1: That's right. We're not just talking about Americans who can't read, Joel. We're not going to talk about that. We're not going to talk. 00:00:23 Speaker 2: About the state of education, but the state of personal. Although Americans are reading less. They are reading less, Matt. 00:00:27 Speaker 1: It is. Man, there's a whole lot of talk over the summer about folks being just Americans and not just Americans, but the entire world being less literate, like basically us being less of a text-based society. And you know what I was thinking the whole time? Like Ezra Klein had a big piece, big, big episode about this and everyone was talking about it. And I was just thinking, man, Joel, you are part of the problem because here we are making this podcast and people aren't reading anymore. Essentially, I mean, the Friday flight, that's what today's episode is. Like we talk about the news stories from this past week. We talk about how it's going to impact your money as opposed to folks getting in there, reading the stuff themselves. So who knows? I don't know if that's some overblown sort of concern, but we are kind of contributing to it. But it means that people can drive their car to work or wherever and also hear what's going on out there. 00:01:23 Speaker 2: There's pros and cons, but I will take the mea culpa and say I'm sorry to our listeners who don't read books anymore because they listen to so much Matt and Joel. 00:01:29 Speaker 1: Yeah. What are you reading these days, by the way? Okay. 00:01:32 Speaker 2: So, oh, I just literally just started. I read a couple Tom Wolfe novels because my neighbor had recommended them. My neighbor is a voracious reader, my neighbor Matt. But I'm reading one about the history of America called How to Hide an Empire. 00:01:45 Speaker 1: Oh, interesting. 00:01:47 Speaker 2: It's really, I mean, it's really interesting. It's kind of some of the formation, how the United States established territories, how they treated those territories. It's some of the history you don't really learn in school or you hear this much about. It's going into much greater depth. 00:02:04 Speaker 1: It's really fascinating. Interesting. What Tom Wolfe stuff? I just looked him up as the man in the iconic white suit. Yeah. Yes. Okay. With a swaggering pen. I've never heard of this guy. 00:02:17 Speaker 2: Oh, he's a fascinating person and established kind of a different brand of journalism and novel writing. But the book I read was called, oh, I'm losing it. It was one about kind of rocket technology and astronauts, like early astronauts. 00:02:37 Speaker 1: It was really fascinating. Pump House Gang? No. Candy Color Tangerine. 00:02:42 Speaker 2: And then there was one based in Atlanta. 00:02:46 Speaker 1: Let's see. Sorry. I'll look it up right now. 00:02:48 Speaker 2: A Man in Full. 00:02:49 Speaker 1: Okay. But I accidentally read the abridged version. A Man in Full. Okay. Oh, yeah. Set in Atlanta. 00:02:56 Speaker 2: Yeah. 00:02:56 Speaker 1: The Jewel of the Rising New South. So interesting. So interesting. 00:02:59 Speaker 2: But it makes me want to go back and read the whole novel. I feel like I missed out on some stuff. 00:03:03 Speaker 1: Fascinating. Fascinating. See, the reason I asked is because you don't talk about people should read more. We talk about books that we are currently reading and that we're excited about, right? Like this is where you got to live it a little. You're reading my favorite book of all time right now. Yes. Yeah. East of Eden. I started rereading it while I was out in California, basically about one hour north of the Salinas Valley. There's something about being in the environment that something is, which is why the A Man in Full- That one stood out to me in part because it's set in Atlanta. So how fun is that to be able to live? It's a more immersive experience when you are enjoying a piece of literature that's set in a similar sort of setting, you know, similar context as what you're in. 00:03:50 Speaker 2: There's all these neighborhoods and streets and like inner city Atlanta culture that if you have lived in the city of Atlanta, like you will know and recognize a bunch of stuff. 00:04:02 Speaker 1: That's cool. 00:04:03 Speaker 2: And it feels like Atlanta from 25, 30 years ago. 00:04:07 Speaker 1: Yeah. So it is a fascinating read. I recommend it. I dig it. I dig it. Hey, a quick little personal note I wanted to share with folks. I thought that I was part of the upper crust. I thought I was like one of the 1%, Joel. We know you are. No, no, no. I thought I was. Not a new revelation. And with that potential... newfound revelation i thought that i could go around not carrying my phone in a case like i was on um succession or something uh but i i decided i'm just not cut out for that man i didn't drop it or anything okay i was ready for the story of the multi-dollar repair okay i just i was just literally yeah i was pulling something up on my phone and before i unlocked it i could see against the black there's like a tiny little scratch in the top corner i was like oh no I flipped it over, looked on the back too. I was like, oh no, shoot, there's one over here too, right next to the lens. Luckily not on the lens. I'm assuming that happened from some of our travels. I feel like phones get beat up a little bit more when you're traveling. You're shoving it in a bag. You're using it a lot more. But I was like, you know what? Neither one of these are impacting the ability for me to fully enjoy the phone. But it was enough of a shot across the bow for me to say, let me just buy a stupid case. get a screen protector on there. So I literally did that yesterday in order to help preserve my, my device. Um, yeah, I will say I don't. 00:05:35 Speaker 2: Like it as much with the case on it, but yeah, I mean, that's why when I think that the iPhone air didn't do very well because it was like the thinnest iPhone ever. And people are like, well, I'm going to slap a case on anyway. And so the, the case is a lot of, we get asked questions about this. The case is, the cheapest form of insurance you can have. And it really means for most people that you don't need any sort of actual square, whether it's square trade, whether it's from the manufacturer, you don't need any sort of insurance on your electronics, right? 00:06:08 Speaker 1: Self-insuring. 00:06:10 Speaker 2: And one of the best ways to self-insure is putting on a case. So I'm proud of you, buddy, for recognizing that. 00:06:15 Speaker 1: Thanks. Thanks. It does make it less, yeah. I really enjoyed being able to quickly pull it out of my pocket. Like right now, I hate it because- the gym shorts or the running shorts I always wear, it's got like this one pocket in the back where I stick my phone and it doesn't like sliding in and out of there easily. Maybe in the winter, like if, like when you're wearing a jacket and you got the coat pocket, maybe that's a different story. But I will say like right now, I really don't like it because it's just, yes, it's grippier in the hand, but I don't want it. I want it to be able to slide in and out of the pocket. Either way though, it's probably smart for most folks, including myself to, uh, Make sure that thing's wrapped up in a case. 00:06:49 Speaker 2: These devices cost too much money. They cost too much. They cost a lot, man. Even if you're not going with the folding one. 00:06:56 Speaker 1: Yeah. Well, yeah. And it put me down this rabbit hole, too, of being like, okay, how durable is it? And I found this guy that just does drop tests. He goes and he buys brand new iPhones and he just drops them. He's like, all right, from pocket height. And he's like, let's compare it to last year's because I've got a 16 Pro. So he's like, all right, let's compare the 16 Pro to the 15 Pro. He drops them both from the same height. And what's crazy is that it takes a while before that, because of the ceramic shield, the screen on these suckers are so durable that it takes a lot. Like the case has to take a ton of beating before the screen actually cracks. So the case is all busted up. It's got dings and scuffs and divots all over it, but it's the, the screen actually stays intact until it doesn't. And then it feels like your phone should be. Throw it away or something like that. Anyway, let's talk about some general personal finance topics, Joel. I saw that Price Waterhouse Coopers, they put out a new, I guess a new projection. And they're saying that Christmas spending this year is going to be down a little bit, like a teeny tiny bit. But basically, it's going to be the same as last year. Hold steady. Yeah, it's basically going to hold steady. And hopefully, folks out there, it's fall now. As of, was it this past Tuesday, it's officially fall, Joel, which means no better time for us to start talking about getting ready for the holidays, getting ready for Christmas. So hopefully you're a nerd like us and started socking money aside in January. But if you haven't, no time like the present. 00:08:29 Speaker 2: Yeah, people got their pumpkin spice lattes in hand, Matt. It's time to start saving for Christmas if you haven't already done that. And you're right, like starting in January just gives you the most time, means you have to put aside the littlest amount in what they're known as sinking funds, right? So just saying, earmarking money for the future, the longer you have means the less you have to put away each month. And it just feels nice to have that prepaid, right? And to be going into the Christmas season, knowing how much money you have to spend, having your list made out so that when the sales happen, you're ready to pounce and you're not spending more than you have. Because I think I saw a stat, something like a quarter of Christmas shoppers, Matt, will be paying for the gifts that they buy six months past Christmas. So into summer of next year, they will still have a credit card bill lingering. And we'll talk about this a little bit later that with the rate hikes and stuff, credit card interest rates are going up even higher. And that means paying a lot more for the gifts than you would have had you saved up on the front end and paid cash. 00:09:34 Speaker 1: That's true. Yeah. And I don't think you have to be a total nerd, right? But You do need to have some sort of a plan. Otherwise, you're going to find yourself most likely spending more than you want to. You want to kick off the financial literacy story? Yeah, so this I saw. This was from our friend of the show, Alison Schrager, and she writes for Bloomberg. And she was talking about how Americans continue to get more financially illiterate. And it was from, I believe, a TIA survey that they do every year. And over the last decade, things have just gotten worse. And they're not just getting worse because young people know less. That is part of it, right? 00:10:14 Speaker 2: Young people seem to know less about personal finance, but also every generation of Americans kind of sucks when it comes to money. And this is a perpetual problem. Part of that is, and we've talked about this in other episodes on the show when we had Professor John Campbell from Harvard on just how complicated the system of personal finance has gotten in our modern world. There is some truth to that, right? And how it feels like, I talk about this all the time, it feels like another language that you have to learn. Like, I don't know Portuguese. I can't talk to somebody who speaks Portuguese. Even though I know a little bit of Spanish, maybe I could glean a little bit, but I'm going to fail, right? And so you do have to, that's part of the reason this podcast exists, learn the language and learn the ropes. And then part of, you know, we've talked about high school classes around the country being required to teach personal finance in many states now. Well, I was talking with a friend this past weekend and her son is in high school and she was telling me he's not learning anything great. He was learning about state benefit programs and he's not learning about the nuts and bolts of saving money. and investing and compounding returns and how to buy a house. 00:11:23 Speaker 1: There's a difference too, though, between what you're calling the nuts and bolts, which, yeah, that is important to learn, but you also have to put that in practice, right? And so I think that's one of my bigger pushbacks against mandated state-run personal finance being taught in high schools or in classes is that It's like, why is it that people are failing these questions on these quizzes on personal finance, right? Even 54% of boomers are the ones getting the answers right. Everyone else is not. And it's because it's just constantly changing. So it's really dynamic. It's really hard to create a curriculum around something that is as dynamic as personal finance is in our world today. And it takes beyond just knowing or having an idea of what compounding is as opposed to getting out there and living it. Right. Like this is Alison Schrager. Uh, the book when she came on the show was an economist walks into a brothel. Great title of a book. Yeah, for sure. But it's all about evaluating risk. And it's really hard to evaluate risk in a perfectly contained, scientifically sterile environment, right? What you got to do is get out in real life, be exposed to some of the different things that you could spend your money on, to be exposed to some of the different ways that you can earn money. And it takes the individual getting comfortable with that, like evaluating risk. Oh, where do I want to invest my dollars? okay, this feels a little less certain. This feels a little more volatile. Oh, it could lead to potentially higher returns, but there's higher risk involved. And it takes the individual, I think, evaluating what it is they feel comfortable with and proceeding with caution, right? Like getting out there and making some small mistakes here and there, but learning from that and then moving on to the next thing. Like it takes, yeah, I think oftentimes it takes living life. It takes the experience. It takes, Wisdom, which is something that we glean from actually living life. Well, I'm sure you remember our conversation many years ago with Dan LaSalle, who was vice principal or principal at an inner city high school in Philadelphia. And that was kind of the thing he took to heart was, no, we need to get money in these kids' hands so that they can figure out not just the lessons, but that they can put those lessons into practice. And it connects the dots in a completely different way. But the thing is, those personal finance classes in schools aren't doing that. They don't really have the ability to do that most of the time. Dan got like this special exception and got funding for it. That'd be cool. They could. 00:13:58 Speaker 2: But this is really incumbent on us as parents and as a community to help raise the next generation when it comes to personal finance. And this is another reason, I think, where high schoolers should get a job. Even if they're working five, six, eight hours a week, it doesn't have to be a ton. But it has to be something. Maybe they're starting their own business. Maybe they're babysitting. Maybe they're working at the local fast food joint. It's such a good teacher in terms of a bunch of things. But one of those things is getting your own paycheck and then deciding what to do with it. 00:14:34 Speaker 1: Exactly. And then, yeah, yeah, yeah. And then, oh, you decided to do what with your paycheck? Okay, that's a lesson learned, right? Like each one of those is a lesson learned and it just builds that resilience. You got to get out there. You got to live a little. You got to take some risks. One risk, Joel, that we all take when it comes to our money and when we purchase items is going cheap, right? Like this is core to the am I being frugal or am I being cheap sort of argument that we have. Uh, if you end up buying too cheap, you end up having to replace that item. Therefore squandering all of the potential savings that you may have garnered by going with a discounted item in the first place. 00:15:13 Speaker 2: This is why you and I have never bought anything. I believe you haven't either from Shein or Timu, like the cheap Chinese sites. There's a bunch of them. 00:15:23 Speaker 1: I mean, maybe I have, but without, I haven't like sought them out. I don't know. Yeah. Full confession, we are heavy Amazon purchasers, man. I don't know about you guys. Which there's a lot of cheap crap on all those sites, like Amazon, Walmart, all that stuff. So that's, I don't know. I partly interpret that question. Like I just bought some windshield wipers off of Amazon and I'm like, okay, I know those aren't like, those are, what are they? Michelin. That's not, I don't know. They're not like Michelin's from like team or something like that. Um, but there's so many other items too that aren't necessarily branded that I'm just like, gosh, is this, is this going to be a overly cheap item? I don't know. It's tough. Okay. 00:16:06 Speaker 2: So I'm curious to hear from you. How, how do you know the difference between buying something because it's a brand name and it makes you feel good and you're paying extra just for a name on something versus paying more, uh, paying more for something because it's actually better and it's going to last longer? 00:16:26 Speaker 1: Dude, that's a good question. I mean, so it's funny. I mentioned the wipers. I specifically used to just get the cheapest wipers possible, but I remember it hadn't been very long. We'd suck some wipers on the van and in the winter, especially when the rubber gets kind of hard, you're using the wipers and it like, it's like, it's just really noisy as like the rubber skipping across the windshield. And I remember riding with you in your van. And your wipers are just like making no noise. I'm like, dude, what wipers are you using? You're like, oh, it's the ones they got up at Costco on sale. I'm just like, dang it. 00:17:02 Speaker 2: They're not that much more than probably what you spent. 00:17:05 Speaker 1: No, no, they're even cheaper. They're like seven. I think on sale, they're like between seven and 11 bucks or something like that. They're not currently on sale. So that was an example of having to learn the hard way, right? That was an example of me taking the cheap route, thinking, oh, here's a way I can save. Wiper's a wiper. And so I'm realizing how much stress it caused my family anytime it rained and we're actually using our wipers. So, I mean, I think that's one of the ways in this, the Kiplinger article, they're money nerds over there. They dive into it and they set up some, there's some different rubrics that you can use. And one of the classic ones is look at the price per use, right? And so if you're talking about something that you use every day, it's like, all right, maybe it makes sense to splurge and to spend a little bit more on that item. I think that that can be, I think that can be a perfectly fine way of evaluating. There's another where folks are like, well, if it keeps you, if it's something that keeps you, that's between you and the ground. So your mattress, maybe your pillow, your shoes, your roller skates. Yeah. And so that's a rubric where I'm like, I don't know how much, That makes sense. But if it works for you, that's fine, right? Like people want to create systems. But more than anything, sort of like what we're talking about personal finance literacy, it comes down to evaluating and deciding what moves the needle for you. There are some things that just don't move the needle for me. I'm wearing, dude, this isn't, I'm wearing a shirt right here. This blue denim dyed t-shirt thing, whatever. I bought this off Amazon. I think it's like Good Threads or Goodfellas. I don't know. I bought it like five years ago and it came in and I was like, that's a good shirt. So I bought like three more of them. Because that's just how I roll. I don't care about like nice clothes. I'm going to wear shirts with holes in them. My shoes have holes in them. That's not something I care about. But I bought a brand new La Marzocco espresso machine that was expensive. But that's because that's something that I found that I cared about, right? We've mentioned darn tough socks regularly. And I'm like, I still have not put a hole in my darn tough socks. I can't tell you how many miles I've put on those freaking things. And you're running in those. Yeah. 00:19:15 Speaker 2: And I saw people on our Facebook group being like, uh, really, is that really worth the cost? And for me, yeah. And it's, and it's, it's, I'm spending more, but the price per use, I guarantee you is less than any other sock I've ever purchased for my life. 00:19:30 Speaker 1: Price per mile? Yeah. 00:19:32 Speaker 2: With the only exception being Bombas because Bombas has this great return policy, but I put holes in them really quickly. So I'm taking advantage whenever I have a pair of Bombas socks that gets a hole, I send a, or I don't even have to send them back. I just have to send a picture and they'll send me a new pair. So yeah, I think, and prioritizing brands that stand behind their product a good thing. For instance, this is Osprey makes great bags, right? And I have one of those like hydration vests for when I go on long runs. And there was a crack I found out on my backpacking trip. There was a crack in the bladder. And so it was leaking and I don't even, I have no idea how it got there. But I took a picture, sent it over. They're mailing me a new one. 00:20:14 Speaker 1: No questions asked. Nice, dude. Yeah, that's pretty sweet. Very sweet. Wait, is this on your, this is on your lightweight running vest or your hiking pack? Lightweight running vest, yep. I didn't know that was Osprey. Very, very nice. Yeah. 00:20:27 Speaker 2: Okay, so let's talk about travel for just a second and shoulder season in particular. That is something that people always assume and it has been very true in the past. that shoulder season is a great time to travel. That being where we live in the United States, oftentimes it's like, we'll go after the kids are back in school because far fewer people can travel then. And so, yeah, travel in mid-September to before the holidays and you can travel more cheaply. Well, it seems like shoulder season is shrinking, Matt, according to new statistics. And yeah, If you book in shoulder season, typically the estimates are that you're going to save on average something like 20% versus if you travel during the peak of summer or during the holidays. But you might need to wait a little bit longer if you're a shoulder season traveler. You and I do a little bit of travel here and there if somebody can watch our kids during shoulder season. But if we can't, as soon as we're forced to travel at peak times and often we're taking our car. 00:21:30 Speaker 1: That's what's tough when you got kids locked into the school schedule, you know? 00:21:34 Speaker 2: Yeah. 00:21:34 Speaker 1: Yeah. 00:21:34 Speaker 2: But I think for a lot of people, this means you might get a better deal in October or November. And it's still, the truth is, because of how airline prices work and dynamic pricing and constant fluctuation, airfare alerts are still the best way to go, even with a shrinking shoulder season, to be looking months in advance and to have those alerts set up so that you can pounce when the price is good. 00:21:57 Speaker 1: Yeah, well, I think that has a lot to do with why that is, right? Like, why are we seeing less opportunity for folks out there who are like the professional? It's like early on, there is low hanging fruit when it came to being able to snag a deal. Yeah. If you put a little bit of effort towards it, there's a lot of folks doing that, right? And so you had the opportunity to find your own deals to pounce. But given the technology and all the different sites and the apps and the services that you pay for, the the folks who are constantly reshopping and they only get paid if they save you money, not to mention some of the apps and folks out there who are taking even a subscription. There are a lot of different websites and software providers who are specializing in this, right? And so I think there's just less opportunity for regular folks to find a deal on shoulder season. It's like it almost requires you to participate in this sort of commoditization of shoulder season or finding a deal. Yeah. Um, that sort of thing. I think it's the combination of that. Plus people just have, like, we're still, we're still living in a pre pandemic world, man. And a lot of folks still have a lot more flexibility. Yes. A lot of people working for the big fortune 500s are like, get your butt back in the office. Otherwise you're not getting promoted. But there are a lot of folks who still have a ton of flexibility. I think about that just even at like the girls volleyball games, you know, sitting there cheering and look over and someone's over there on their laptop and just doing a little bit of work, you know, like they might even be on a call. Dude sitting next to me has his own construction company. He's got projects all over the Southeast and it's his company. So he does what he wants. You know, the buzzer's blasting in the background, but he's just on, he's got his earpiece in and he's just chatting with folks. Folks have the flexibility to almost be Anywhere and everywhere while they continue to work. 00:23:49 Speaker 2: Some, obviously, yeah. Part of it is, are you the laptop class or are you not? Exactly. And there are people who listen to this podcast who are in the laptop class, and we are included amongst that. And then there are people who are not, and those people have less flexibility. 00:24:03 Speaker 1: Yeah, that's true. 00:24:04 Speaker 2: But how much financial flexibility do you have too? Because just know that most of the time, on average, you're going to pay more if you're traveling during those more peak times. I was talking to a friend yesterday, last night, who booked last minute travel, which is not usually the best time to book. But with points, he said there was one seat left. And so he was able to, on the flight that he wanted, he was able to go from spending like 39,000 points down to 13,000 and get the refund of the points. There's just all sorts of ways. And the person who's paying attention and continues to reshop, this is particularly true for like rental cars, right? Where if you continue to reshop that price, instead of just booking, being one and done and being like, I think I did well. The closer you get to your trip, continue to check. That's how you're going to potentially save. 00:24:51 Speaker 1: Speaking. Yeah. Well, I was just going to mention that. Was it payback? I think it was like P-A-I. Because the listener wrote in. Yeah. P-O. Oh, I get it. It's payback as in P-A-I, like AI. So using AI, stop overpaying for flights. But we had a listener, we mentioned that in sort of a travel app roundup a few weeks ago and a listener reached out and he was just like, dudes, I don't know if you've actually used that particular one, but he swears by it. So that's one after you wrote that in, that's on my radar that again, using these apps. Sorry, go ahead. 00:25:25 Speaker 2: But AI, before AI kills us all, let them help us save money, right? And even calling it them. Let it, I don't know how you're supposed to refer to AI. 00:25:35 Speaker 1: Them's. Y'all. Yeah. Y'all are our AI overlords. All right, let's talk about healthcare, Matt. 00:25:41 Speaker 2: Healthcare inflation continues to be a big pain, a big thorn in our sides. Open enrollment season is approaching, and it's just crucial to be aware of the fact that your healthcare coverage is going to cost you more this year. Even you and I on MediShare, it feels like every few months, they are cramping our style in terms of raising... premiums, whatever, they're not actual premiums. They're eliminating services, they're reducing benefits. There are all these ways they're trying to not pass on the full cost by just making our coverage worse, by degrading the product. And so employers, their costs are rising on average somewhere like 8%. And so what are they doing? Well, they're passing on premium increases to individual consumers, employees, or they're also saying, our coverage doesn't include this, this or that. And what is this, this or that? Well, Disney recently said, if your spouse is healthcare eligible at their place of work, they can't be on your plan. We're essentially dropping that coverage ability. There's also, I saw Starbucks dropping GLP-1 coverage because this is obviously a soaring cost for a lot of companies as well as more and more people get on get on GLP-1s and weight loss medication. So I think it's harder to save money in this space than it's ever been. But I think there are still a few ways that you should consider. One is, especially for healthy people, having higher deductible healthcare plans. This is a go-to and this feels, you can only really do that if you have cash on hand, right, to self-insure. But this is something you should consider. The higher deductible healthcare plans is gonna be lower premium, especially if you're healthy and you don't think you're gonna you know, spend up to that $ 12, 000, you know, max amount or whatever, then that, that could be a good choice for you. 00:27:37 Speaker 1: Um, and I think this sucks. 00:27:40 Speaker 2: It's weird, but like cutting back in other areas of your life because healthcare is more expensive at some point, you got to draw a line somewhere. 00:27:48 Speaker 1: And it's more important, right? Like, like, like it's worth, like there, there's more folks who are going around uninsured because they don't think they can afford it. Oh, before I moved on. Not just lowering, I'm sorry, not just raising your deductibles or your annual household portion, which is what it's called, Joel, what we pay. But in some cases, lowering it. Sure. So I think you touched on this, was it a few weeks ago, that you're kind of talking about maybe. The tonsils? Yeah, like maybe doing that and finding, it's like, well, shoot, maybe this is the year that we're going to do a whole lot of procedures. And kind of essentially we talk about this when it comes to doing charitable giving. Most people, it doesn't make sense to itemize. You just take the standard. But when it comes to, oh, actually, we're going to give a lot this year. Maybe let's just pull some of our giving from next year as well. Bunch it, make it all happen this year. Take the standard next year. You can take a similar approach when it comes to your deductible. But you talked about maybe lowering your deductible, which would, of course, raise your monthly premium, but it could pay it out for you. Are you going to do that or no? Yes. 00:28:49 Speaker 2: So I need to run the math on what the premium difference is and then the overall out-of-pocket costs. But that is likely what we'll do because I think we have two kids who are going to need to get tonsils out. Might just throw the third one in there for good measure, Matt, you know. Heck, might even get my wife under there, get her tonsils out too. 00:29:08 Speaker 1: Who knows? It's like a Publix BOGO over here. That's right. That's right. No limit? Sign me up. 00:29:14 Speaker 2: Well, but that is a reasonable thing to consider if you're going into it, especially we've talked about this. If you're having a baby and you know it's happening next year, This is a great chance to reconfigure and a lower deductible plan might make the most sense for you. 00:29:29 Speaker 1: Run the numbers. 00:29:30 Speaker 2: Even still, it doesn't always. You need to know, well, how much am I going to save given the difference in premiums and the overall amount I'm going to have to spend, but yeah. And one of the other things, Matt, that people are doing that saddens me is more people are walking around this country uninsured because of the rise in health care costs. 00:29:48 Speaker 1: Yes. Which is not a risk worth taking, man. No. Oh, my gosh. 00:29:51 Speaker 2: That's like a sort of Damocles like over your head. 00:29:54 Speaker 1: Yeah. 00:29:55 Speaker 2: Yeah. 00:29:55 Speaker 1: Over 60% of personal bankruptcies are due to medical bills. It's such a destroyer of finances. I also understand. 00:30:05 Speaker 2: Like how could, if you are one of those people where, who have seen, you work for yourself and you've seen the subsidies from the federal government go away and you're going from a $ 8, 000 annual out of pocket to insure your family to $ 25, 000, which is not an exaggeration. 00:30:27 Speaker 1: Like that happens. 00:30:28 Speaker 2: Then I could, I, that's a pretty impressive sum it's hard to come up with the difference and that's just the premiums that's before you start paying right for to go see the doctor and for a surgery that you might need and so um i think it's also important for people to know about resources out there that can that can potentially help dollar4. org is a site that people should turn to if you have a medical bill that you can't pay uh also more more companies more medical companies matter saying hey um Health providers are saying, pay us before the procedure. And because they want to get paid and they realize people aren't paying on the back end as often. And that's something you can push back on and you can say, I'm going to wait to see what my insurance covers. They might be able to refuse you, but most hospitals and medical providers will not. 00:31:17 Speaker 1: Yeah. Yeah, plus that gives you time to be able to negotiate that bill after the fact as well. But all right, hey, let's keep moving. We've got more to get to. We'll get to the federal rate hike along with a whole lot of investing talk. We'll get to that and more right after this. All right, buddy, we are back from the break. We've got the ludicrous headline of the week to get to, which I'll go ahead and take the lead on. This is from Fortune. Headline. Gosh, this is so classic. Headline reads, stocks are in a late stage bubble and poised to crash 21% next year, analysts say. How do you feel about that, Joel? I'm selling immediately. Yeah. Dude, what else can you do? You just, yeah, do whatever the headlines say. Yeah. And I dislike this so much and I will let you start because I'm going to round it out by screaming. So I don't want to start screaming and then you feel like you have to amp up the Amp up the emotion. I can scream louder, man. 00:32:21 Speaker 2: Yeah, I mean, this is one of those things that we have to speak to regularly because there are always dumb headlines and analyst predictions. The thing it reminds me of the most, do you remember the Bloomberg headline, 100% chance of recession in the next year, experts say or whatever. And this is very similar to that where did the recession come to happen? 00:32:44 Speaker 1: No, it didn't. 00:32:45 Speaker 2: And there's like, so many more predictions of negative events that could or will or are likely to happen that don't come to pass than there are of actually things are probably going to go pretty swimmingly and solidly for the average investor. That is the headline that you never see because it doesn't sell. It doesn't light up the headlines like this does. Predictions, opinions, they're a dime a dozen. And like, we always are careful to say this too. Could this be correct? could we see a 20% market decline next year? Yeah, it happened in 2022. 2022, it could happen in 2027. I wouldn't be shocked, but my portfolio and my mindset is built to withstand a potential decline of that sort. But just don't assume that the analysts or the experts are going to be right on this and that you need to take action based on their predictions. 00:33:40 Speaker 1: Yeah, I feel like that, and that is about half, I'm guessing, I don't know, Financial advisors out there can email us and let us know. But I would love to know how much of your work is spent talking your clients down off the ledge when it comes to making drastic changes to your portfolio based on what's going on in the economy. But, man, I think what I hate the most about this is that Americans, for the most part, aren't investing enough as it is, right? Yeah. This is not something that they want to do. And so all you got to do is give them this excuse. Oh, well, if the market's going to crash 21% next year, I would be a fool to invest my money now. Let's just, let's just spend it instead. Right? Like what these headlines do, it's, it feels, it's so nefarious and like, and this is why I hate it is because it feels so like evil and sneaky, but it just sows this seed of doubt. Yeah. And that is just all people need. to give themselves the permission to say, you know what, actually, it's, you know, I was thinking this wasn't going to be the year that we that we were going to finally max out the Roth IRA. And now I saw this headline. And that's all they needed, right? They were just looking for that for that excuse, as opposed to investing day in day out year after year doing these. Yeah, I don't know, just the small wins that don't get any praise. But like, that's just the discipline that I would love to see more Americans have where they're just investing automatically. This is a part of the reason why we see, is it Fidelity that had reported that there are more 401k millionaires than ever right now. But in part, it's because of the fact that it's automatic. It's a behavioral thing, right? It's not about picking the right stocks. If you're thinking of that, then you're too in the weeds, man. Like the biggest enemy is yourself and your ability to set it and forget it, to have that automatically deducted That's how you become a 401k millionaire. 00:35:39 Speaker 2: Part of the thing that rarely gets said too is that a 20% decline in let's say the S & P 500 means that younger investors are buying at a discount. They're able to, this is a good event, right? For people in the wealth building stage of their lives. And so what sounds like this cataclysmic reality is a normal part of how markets function. And then at the same time, it allows young people to hoover up more stocks and be able to build their net worth more quickly. So don't be, especially if you are younger, don't be afraid of something like that. Be ready to keep buying. And if you are older and closer to needing the money that's in your portfolio, make sure your portfolio is allocated in a more conservative way so that a 20% decline in the S & P doesn't mean a 20% decline in your specific portfolio. 00:36:37 Speaker 1: That's right. Joe, you'll talk about, let's continue talking about emotions and the role that they play when it comes to not only how we invest our dollars, but then even how we sell and pull that money out of the market. 00:36:50 Speaker 2: We will talk about retirees getting close, right, to needing that money. There was a recent survey by this life insurance company and they found that 39% of retirees are reluctant to spend their retirement savings. And then, something like close to three quarters of still working Americans said, I'm pretty sure I'm gonna be scared to spend when I get to that age too. I'm gonna be afraid to tap the money that I've built up over a long period of time. And I think this, I understand it. It's really hard to go from save, save, save, frugal, frugal, frugal to it's okay to spend the money that you've been able to build up. But I think it's really important to make that change, right? Because saving is ultimately just delayed spending. It's not about who dies with the most assets and a 401k wins. It's about utilizing that money later in your life. And there are ways, I think, to help with that. And actually, I'm going to talk to Jean Chatzky on the show soon. And Matt, she's got a book that helped me reframe how annuities can help people potentially in retirement. And typically, a lot of experts would say, oh, they're too expensive. And there is some truth to that. And I'll cover that with her. But there's also the truth to the stats that say retirees who opt for a more annuitized form of a form of regular income in retirement, they actually spend the money that they built up. They feel more comfortable with it because it acts like a paycheck, which is what they're used to from the working years. And so, um, yeah, I look forward to releasing that episode. Um, and talking to Jean, but this is just one of those things where being, it makes me sad that people are afraid to spend the money that they've, they've been able to accumulate. 00:38:41 Speaker 1: But there's ways around that though too, right? Like I think the annuity can make a lot of sense for folks who, who are used to a paycheck, who, you know, who've earned a wage their entire life. They work for the man, but I mean, I've said this before, but I think everybody needs to practice pulling money together. out of their investments. They need to practice selling, not buying, and then actually buying stuff with the money that they've acquired from selling. But it's just, I want people to face the fear. And I think you do that just by little bits at a time, right? Like talk to Emily, right? This is CBT. This is cognitive behavioral therapy. This is widely researched, widely accepted. Many practitioners implement this type of therapy and it is addressing head on slowly initially at first. So you don't like, I don't know, I'm talking above my head, my depth at this point, but like it's practicing, it's getting better at it. And that's the kind of bootstrap DIY approach that especially for folks, I don't know, that I want to push folks towards. I would say maybe I have a more Like I might be naturally more disposed to think in that way because of my sort of more entrepreneurial, I don't know where my income is coming from mindset. Sometimes it's easier for you. And it's been like that for the past 20 years, basically, in the all-mix household. I understand. And so maybe because of that, over the past two decades, I've sort of built up. Like I've got calluses when it comes to how I feel when I'm unsure where my money is going to come from. But most people don't, right? Like they're used to that steady trickle, that nice stream. But I think there are ways though, if you are interested in saving more money, I think there are ways that you can expose yourself to that a little bit, to try it out. It doesn't have to be a big thing. You don't have to do it for like a massive renovation or purchasing another home. But like, yeah, let me take $ 5, 000 out to go towards this vacation or something like that. Like, what does that look like? What does that feel like? 00:40:45 Speaker 2: And we're not saying pull money out of your 401k early and pay the penalty. 00:40:49 Speaker 1: No, no, no. And be an idiot. Taxable brokerage specifically, if we're talking pre-retirement years. Yeah. 00:40:53 Speaker 2: Yeah. 00:40:53 Speaker 1: Let's say you're 48. 00:40:54 Speaker 2: And you're trying- Thank you for clarifying that. 00:40:58 Speaker 1: 53, right? 00:40:58 Speaker 2: And you're getting to the point where you're starting to think about that. What is it like to spend- Take the 10% penalty. 00:41:03 Speaker 1: Just take it. Just take it on the chin. Yeah. Just cell phone. 00:41:08 Speaker 2: Well, another thing, Matt, that it turns out some people are doing is they're claiming Social Security- early because of fear headlines that they're seeing, right, about the Social Security, the SSA being insolvent. And this Northwestern Mutual study found that 25% of Gen X and 40% of baby boomers who aren't yet eligible say they intend to claim as soon as they turn age 62. And that- Yeah, I saw filings are up 16%. compared to two years ago. That was the stat that stood out to me. I was like, wow, that's a big increase just from a couple. 00:41:49 Speaker 1: Of years ago. 00:41:50 Speaker 2: And I think that this is really, it's really important for us to talk about this well. There are some people, younger folks in particular, who the writing's on the wall that benefits are likely to be cut unless something's done politically. So what does that mean for young people? That means probably saving a higher percentage of their income so they're prepared that they're able to cover more of their own retirement, relying on social security less, but not assuming that it won't be there. And when it comes to when you claim, there are so many different factors involved, right? And it's really hard to make a clean cut case for one thing or the other. But that's why episode 1127 with Mike Piper is worth listening to. He's a social security expert who built the software Open Social Security, which is a free place for you to kind of go run the numbers for yourself to see what's best for you. But knee jerk saying I'm going to claim as soon as I turn 62 because I'm worried about the health of the Social Security system. That's that's not great either. I don't love seeing that seeing that people are doing that. 00:42:52 Speaker 1: Yeah. Hey, we got to touch on the Fed rate hike last week. It was seemed pretty clear and evident that that was going to happen. So it didn't really come too much, I think, as a surprise for folks. I feel like it was getting baked into the market weeks, even just leading up to the actual announcement. Also interesting to hear that they're thinking that there's going to be another rate hike later this year as well. But that has a lot to do with inflation, right? Like prices have not come, like they have not been tamed. And my mind just immediately went to the dumbest thing that you could do if we're seeing high inflation, which is to spend more money. I'm just thinking about the $ 5, 000 again and how stupid that is. But basically, but what this means for everybody is you're going to see higher borrowing costs pretty much across the board, especially on variable rate loans. Not necessarily on mortgages though, right? Not necessarily. 00:43:50 Speaker 2: Yeah, like longer term debt is a different beast and is not impacted nearly in the same way by Fed rate hikes. 00:43:59 Speaker 1: And directly by federated hikes, but yeah, more tied to the 10-year treasury note. 00:44:04 Speaker 2: So if you've got credit card debt, make a plan to pay it off. InDebt.it is like our favorite site to plan that out. And then, but there's always a silver lining, Matt. 00:44:14 Speaker 1: Good news. I was going to let you share the good news, Joel. 00:44:18 Speaker 2: Some people who have money in savings will see a slightly higher rate coming their way. Potentially this week, right? They've already seen it from their bank. Unless they're with one of the giant crappy banks that have a spot on every corner. 00:44:34 Speaker 1: Guess what? 00:44:34 Speaker 2: They're still going to pay you 0.01%. So if you want the additional rate, the additional higher savings rate, or you're looking to put money in a CD for some reason for like a shorter term savings goal, you're likely to see those rates ticking up. And especially if rates do go up again later this year, that could continue. 00:44:53 Speaker 1: So, man, it's still. 00:44:55 Speaker 2: It's still not great to be a saver, hasn't been great to be a saver in quite a while, but at least it hurts a little bit less. 00:45:01 Speaker 1: Yeah, I just looked up Bank of America's best rate right now, and it sounds like, I was just like, Joel always says the 0.01. No, it's still 0.01 for. 00:45:11 Speaker 2: Their basic, their basic, it is tiered though. 00:45:18 Speaker 1: So Joel, you could earn 4X the standard rate, which actually sounds pretty sexy and alluring, doesn't it? 4x our standard rate because it's a tiered system based on uh your combined balances and if you if you're part of the preferred rewards tier but that just all that does is take it to 0.04 which is one tick higher than what i pay to invest with vanguard uh via vu which is 0.03 that is that's so piddly it's yeah it's it's laughable so pathetic yeah pathetic but uh all right anything else you want to share. 00:45:54 Speaker 2: No, I feel great. This was a fun episode. I enjoyed it. 00:45:57 Speaker 1: Hey, I enjoyed it as well, my friend. It's always a delight to sit down with you, talk about personal finance, as well as some of the other things that we've got going on as well. But that's going to be it. Head over to HowToMoney.com and check out the new YouTube, the newish YouTube channel over at YouTube at HowToMoneyPod. That's our channel. We also have the old school newsletter. 00:46:23 Speaker 2: If you want to check that out, howtomoney.com slash newsletter goes out every Tuesday. 00:46:26 Speaker 1: Heck yeah. But that's going to be it, buddy, for this episode. So until next time. Best friends out. Best friends out.