Speaker 1: Welcome to How the Money. I'm Joel and I'm Matt
Speaker 1: and today we're talking boa on blast, second home slip
Speaker 1: ups and buses are back.
Speaker 2: Yeah, And by the way, we're not trying to mislead
Speaker 2: anybody when we say that, like a second home slip up,
Speaker 2: but it's not like you actually you stumble until like
Speaker 2: buying a second home. But there are some notions out
Speaker 2: there about real estate and investing and how smart of
Speaker 2: a decision that can be. We're gonna be talking about that,
Speaker 2: plus all of the other top stories that we came
Speaker 2: across this week here in our Friday flight. And by
Speaker 2: the way, we call it a Friday flight because when
Speaker 2: you go to a brewery, you get that nice flight,
Speaker 2: that sampling of beers, you get a little taste of
Speaker 2: each one. You don't have to commit necessarily to one
Speaker 2: big story. And that's what we do here on the
Speaker 2: Friday flights.
Speaker 1: But what's to cover every week right in the Personal
Speaker 1: Finance News and there's always a nugget takeaway for individuals
Speaker 1: like Okay, well, how does this apply to me? And
Speaker 1: so we got a bunch of good stuff lined up.
Speaker 2: That's what we do.
Speaker 1: Before you say, Matt, before we get to that. It
Speaker 1: just I wanted to mention I'm not a complainer by nature.
Speaker 1: I'm usually happy, go lucky fella. But in we've talked
Speaker 1: about recently, I've had like a bunch of stuff happened
Speaker 1: in my life, a lot of bad stuff. Really are
Speaker 1: difficult things, right, And one of those things was the
Speaker 1: tree full through my roof blah blah blah blah blah.
Speaker 2: Not fun.
Speaker 1: And then like soon after that we got rear ended,
Speaker 1: like the next week. Yeah, it wasn't long after that,
Speaker 1: And so dealing with the insurance companies on both ends
Speaker 1: has not been like a cup of tea. But one
Speaker 1: of the most annoying things actually for me, and hopefully
Speaker 1: the listeners can get something out of this, was that
Speaker 1: when my car, my car was totaled because it was
Speaker 1: so old that even just a fender benderman, it was total.
Speaker 2: They're like, oh, this thing's done.
Speaker 1: Yeah, it's worth about four grand. Yeah it needs like
Speaker 1: three grand worth of repairs. It's totaled, right, And so
Speaker 1: I got paid out on that. But the one thing
Speaker 1: that the insurance company refused to pay me for was
Speaker 1: the tax that I would owe when I were to
Speaker 1: buy another car of similar value, and so I pushed
Speaker 1: back repeatedly saying like, listen, no, I'm going to now
Speaker 1: I have to buy another one, and I'm going to
Speaker 1: incur sales tax and this is coming out of my pocket.
Speaker 1: You guys should make me whole. And they disagreed, and
Speaker 1: they said, actually, the state not a standard thing. They said,
Speaker 1: the state doesn't require us. They only require it in
Speaker 1: a case where it's your primary insurance company covering your loss,
Speaker 1: not this third party company covering my loss because I
Speaker 1: wasn't at fault, which makes no sense. And so what
Speaker 1: I did. I reached out to the state insurance department
Speaker 1: to file a complaint. Because there are always ways things
Speaker 1: at your disposal, right and like the CFPV we talk
Speaker 1: about that for consumer complaints. If you're having a problem
Speaker 1: with a bank or a financial institution, you can reach
Speaker 1: out to them and oftentimes your voice will get hurt
Speaker 1: and something will happen. Sadly, in this case, my voice
Speaker 1: did not get hurt. Oh but well it got heard
Speaker 1: at least.
Speaker 2: But I was assuming there's gonna be a happy ending here.
Speaker 2: But I'm sorry, dude.
Speaker 1: Well it's funny. Actually, at one point.
Speaker 2: The interest could be like this, great takeaway for it
Speaker 2: for Everybody's just well, even if you don't get restitution,
Speaker 2: but you still got to try it. You gotta try.
Speaker 1: Yeah, it's important to complain. I'm gonna, you know, I
Speaker 1: think I'm gonna take the time to write to my
Speaker 1: congress person and just say, listen, this isn't right that
Speaker 1: the insurance companies are not forced to make people fully
Speaker 1: whole in you know, in a case like this, But
Speaker 1: it sucks to Yeah. These are the kind of things
Speaker 1: that it's like a deductible on top of your deductible.
Speaker 2: Yeah, you know, like it's money that you're having to
Speaker 2: pay in order to be me a whole. It sucks.
Speaker 1: Yeah, which is it's just it's not right. But I
Speaker 1: want to encourage people. You know, you might not always,
Speaker 1: it might not always pan out in your favor. Lots
Speaker 1: of times it does. But in this case, it's still
Speaker 1: worth the complaint. It's still worth putting it on the
Speaker 1: radar of the people in charge and saying, hey, let's
Speaker 1: fix the system because this It doesn't make sense to
Speaker 1: hold insurance companies accountable in a primary insurance sort of case,
Speaker 1: but not in a third party case.
Speaker 2: That's right, man, I like it well pay pretty soon.
Speaker 2: You're gonna be like a recent guest on the show,
Speaker 2: you know Espinal, and you're gonna be like a lobbyist.
Speaker 2: You're going to be there at the capitol change and
Speaker 2: changing the laws. Maybe maybe so how the money two
Speaker 2: point zero is we get political? But h yes, this
Speaker 2: is our Friday flight and our first story this week
Speaker 2: has to do with the banks, because yes, Boa Bank
Speaker 2: of America, they just got slapped with two hundred and
Speaker 2: fifty million dollars in fines and refunds that they're having
Speaker 2: to sound like a big number pay back to customers.
Speaker 2: Let's be honest to them. It's probably not um change
Speaker 2: it is. Hey, it's money, dude. But they regulators penalize
Speaker 2: the US's second biggest bank for a number of consumer abuses,
Speaker 2: including opening credit card accounts without consent, charging overdraft fees twice,
Speaker 2: and withholding credit card rewards. And so let's kind of
Speaker 2: let's dive into the details here. Let's itemize the crappiness
Speaker 2: of Boa here for a minute, because while they were
Speaker 2: not only charging insanely high fees when a transaction was
Speaker 2: declined because of insufficient funds, but they were basically double dipping. So,
Speaker 2: for instance, l C, you didn't have enough money in
Speaker 2: your account and you're getting a three dollar coffee, you
Speaker 2: try to buy it, well, you were going to be
Speaker 2: charged in extra seventy bucks. It's thirty five dollars a
Speaker 2: pop for their insufficient fee.
Speaker 1: But thirty five dollars wasn't enough for Bank of America.
Speaker 1: They said no, no, no, we're gonna We're gonna hit you
Speaker 1: twice for one transaction, which is just completely bugging.
Speaker 2: It's it's bonkers. But they were also this is they
Speaker 2: were kind of taking a page out of Wells Fargo's book.
Speaker 2: They were creating unauthorized accounts because of sales incentive goals
Speaker 2: that were basically impossible to hit without cheating. And so
Speaker 2: not only did they pull credit reports, which of course
Speaker 2: hurt your credit score without asking you, but they also
Speaker 2: charged customers' fees on that account that they opened fraudulently
Speaker 2: in your name. So there's always a nice, wholesome group
Speaker 2: of folks that we were counting over there at Bank
Speaker 2: of America.
Speaker 1: Yeah, oh man, swell people who you just wanted to
Speaker 1: invite over for like family dinner or artecue.
Speaker 2: Good people. The folks over the Boa.
Speaker 1: Right now this year to infuriate every single person who
Speaker 1: has banked with Bank of America, or even if you haven't,
Speaker 1: like you should just make sure now to steer clear
Speaker 1: of them completely. Same with Wells Fargo. We've been banging
Speaker 1: that trump for years, but it gets even worse than
Speaker 1: that match. So let's let's continue to talk about how
Speaker 1: bad Bank of America is. They also didn't pay out
Speaker 1: rewards as agreed on credit card sign ups. So let's
Speaker 1: say you hit your spending threshold and Bank of America says, now,
Speaker 1: we don't really feel like paying the you know, cash
Speaker 1: or travel awards that we told you were going to
Speaker 1: receive if you hit these these this sort of spending
Speaker 1: in a certain amount of time.
Speaker 2: Yeah, they're trying to alienate everybody, not only the folks
Speaker 2: that don't have enough money in their count but also
Speaker 2: the folks who are trying to optimize and take their
Speaker 2: finances to the next level. Just in case they didn't
Speaker 2: piss off one grip, just let's just really stir the pot.
Speaker 1: Yeah, exactly.
Speaker 2: They don't.
Speaker 1: They hate everyone equally, right, So it just seems like
Speaker 1: that they don't discriminate, no, no, and it seems like
Speaker 1: the height of arrogance to me, right, that there's just
Speaker 1: massive cultural rot some of the biggest banks, specifically Wells
Speaker 1: Fargo and Bank of America, and it's you know, they're
Speaker 1: often the worst place to go for loans, for savings,
Speaker 1: and for fees. I mean, like there's just no reason
Speaker 1: to do business with these guys at all. They treat
Speaker 1: their customers like dirt, and so we would take consumers
Speaker 1: need to rethink which banks they do business with. And
Speaker 1: at some point it's on us if we continue to
Speaker 1: go back into the crappiest banks who are for the
Speaker 1: worst service and even you know, continue to commit criminal
Speaker 1: actions against our customers. It's almost like returning to a
Speaker 1: partner habitually who lies, steals and cheats you, right, I
Speaker 1: mean like this is at some point you have to
Speaker 1: say enough is enough, and I'm out of here. And
Speaker 1: I think it's terrible what Bank of America did. I
Speaker 1: wish the CFPB had done even more to hold them accountable.
Speaker 1: But we have to now make a change. It's in
Speaker 1: our best interest, and staying with the big banks like
Speaker 1: Bank of America and Wells Fargo in particular, is a
Speaker 1: terrible idea really for any reason.
Speaker 2: Yeah, I mean, you've got to vote with your dollars
Speaker 2: because shaming them, calling them out for the fact that
Speaker 2: they've done wrong, like that doesn't move the needle. For it,
Speaker 2: I don't think it'll feel shame. They don't care exactly.
Speaker 2: And it's the way that you're able to move the
Speaker 2: needle is by voting with your feet, voting with your dollars,
Speaker 2: and taking your business elsewhere. That is how they're going
Speaker 2: to respond. And it seems small.
Speaker 1: I mean, I think we all want to take everybody
Speaker 1: wants to take a big action that but really to
Speaker 1: go down to the capitol, like, yeah, exactly, But it's
Speaker 1: a bunch of small actions, right, And yes it is
Speaker 1: an email here or there to your congress person, or
Speaker 1: it is actually taking your business elsewhere. It does make
Speaker 1: a difference. And yeah, you can't single handedly, you know,
Speaker 1: bring Bank of America to its knees overnight, but a
Speaker 1: bunch of us doing the right thing over a period
Speaker 1: of time could see these banks being hurt substantially.
Speaker 2: Yeah, Like it kind of makes me think of politics.
Speaker 2: There's the like there's individuals who get overly obsessed with politics,
Speaker 2: like on a federal scale, like national politics, right, But
Speaker 2: Oftentimes the biggest change you can make is locally, is
Speaker 2: by voting, is by pay paying attention to what's happening
Speaker 2: there at the local level. That's how you're going to
Speaker 2: be able to move the needle.
Speaker 1: Or getting on the school board yourself, right as opposed
Speaker 1: to the Does the president have a difference, Sure, but
Speaker 1: like some of those local positions, you're right, have more
Speaker 1: of a day to day impact on our life.
Speaker 2: Totally. Yeah. That being said, there is some good news
Speaker 2: on the banking front, because it's looking like more folks
Speaker 2: are avoiding some of the different banks out there that
Speaker 2: aren't paying much an interest. More customers are finally waking up.
Speaker 2: More folks are realizing that as the Fed has been
Speaker 2: raising interest rates, that the gap the discrepancy is growing
Speaker 2: between rates at different banking institutions. Folks are realizing that
Speaker 2: if they don't make the switch, that they are potentially
Speaker 2: leaving a lot of money on the table. And if
Speaker 2: banks want to grow their deposits, they're realizing that they'll
Speaker 2: have to create a meaningful incentive to in order to
Speaker 2: either keep folks or attract new customers. There's more competition
Speaker 2: now than ever with banks like CIIT. We talk about
Speaker 2: them all the time. They're at like almost five percent
Speaker 2: right now betterment they've increased their payout to five and
Speaker 2: a quarter. Yeah, so keep that in mind. If you're
Speaker 2: with one of the big banks, it could cost you
Speaker 2: on multiple fronts. It's time to ditch them. And I
Speaker 2: also know that talking about banking is kind of boring,
Speaker 2: but like it's so foundation, Like it makes me think
Speaker 2: about getting enough sleep. It's something that no one really
Speaker 2: talks about. And everybody knows that they should get the
Speaker 2: proper amount of sleep, but instead they stay up and
Speaker 2: watch TV. Guilty as charged. Like I do this too,
Speaker 2: but like you know deep down that this is something
Speaker 2: that you should do, but you just kind of keep
Speaker 2: avoiding it. No, this is something you just need to do. Now,
Speaker 2: get enough sleep a but then also switch away from
Speaker 2: some of the big banks. Go with one of the
Speaker 2: banks that are going to treat you well, that are
Speaker 2: paying a decent rate. Yeah.
Speaker 1: I rarely let TV mess with my sleep, but I
Speaker 1: did allow The Bear season two to do.
Speaker 2: What did you really, Oh, we haven't talked about that.
Speaker 2: It's so good. You were you were like, oh, you
Speaker 2: should really watch it. I actually got Kate to watch it.
Speaker 2: That's the only reason I watched it. Okay, I only
Speaker 2: watched TV if I can get Kate to do it,
Speaker 2: because then we're spending time together.
Speaker 1: One of the best shows that you dig it. Oh yeah,
Speaker 1: I thought it was pretty good. I thought season two
Speaker 1: is better than season one.
Speaker 2: Really. Yeah, well they introduced the relational side of things, yes,
Speaker 2: but right, nice enough about TV. Yeah, yeah, but no,
Speaker 2: you're right.
Speaker 1: It is kind in one of those Maull ring But man,
Speaker 1: when you see a bank doing things like this, hating
Speaker 1: on their customers so hard, and then you see, wow,
Speaker 1: wait a second, it's more than that. It's like they're
Speaker 1: still paying point zero one percent on savings, And then
Speaker 1: are these other banks who actually care about my business.
Speaker 1: They're trying to win me over as a customer. Why
Speaker 1: are we saying no and staying with the piece of
Speaker 1: craft institutions to treat us poorly. Let's not do that anymore?
Speaker 2: All right?
Speaker 1: While we're talking about banks, Matt, though, there's another lesson
Speaker 1: that all of us can learn from the bank failures
Speaker 1: that took place earlier this year. We've already talked about
Speaker 1: FDIC insurance. Everybody knows hey don't have more than two
Speaker 1: hundred and fifty K in a given account, because if
Speaker 1: your bank goes bust, you're out some of that money potentially,
Speaker 1: even though a lot of those deposits didn't actually lose money.
Speaker 1: It's important to recognize the limits of FDIC insurance. But
Speaker 1: there's something else, though, that we can all glean from
Speaker 1: what happened those three bank failures, something we should avoid
Speaker 1: it all costs, and that is buying stock in the
Speaker 1: company you work for. And when those banks failed earlier
Speaker 1: this year, a lot of employees lost not only their
Speaker 1: income but a chunk of their retirement savings at the
Speaker 1: same time because they've been investing in company stock, which
Speaker 1: is just super sad, like how it's like insult to injury, right,
Speaker 1: And so SVB and First Republic, they were both of
Speaker 1: them were encouraging their employees to do just that, to
Speaker 1: buy company stock with their retirement savings, which is bad advice.
Speaker 1: Of course, that's what your employer wants, but that's not
Speaker 1: what's best for you. And they're not alone, Matt. This
Speaker 1: makes you think, my mom, she just retired from Lockheed.
Speaker 1: And they also pushed to their employees to own company
Speaker 1: stock for many years, and so it's just an incredibly
Speaker 1: risky move. It's one that people should avoid. It is
Speaker 1: it likely that the place where you work is going
Speaker 1: to go bust over night? You're gonna lose your paycheck
Speaker 1: in your retirement saves of savings. I mean, no, it's
Speaker 1: probably not going to happen tomorrow.
Speaker 2: Not but yeah, you never know. Yeah right. That's the
Speaker 2: problem here, is that you just don't know. And I
Speaker 2: think the only exception to this rule are the different
Speaker 2: ESPP plans, the employee stock purchase plan options or benefits
Speaker 2: that are available, because those can offer significant discounts for
Speaker 2: employees to buy some company stock. But even then, you've
Speaker 2: got to pay close attention to the timeline. You've got
Speaker 2: to have an exist strategy so that you're not holding
Speaker 2: onto that company's stock indefinitely, but investing in your company
Speaker 2: stock inside of your four one K. This is a
Speaker 2: terrible idea because if you lose your job and you
Speaker 2: don't want your retirement dollars to get flushed down the toilet,
Speaker 2: at the same time, you got to make sure that
Speaker 2: those dollars are divorced from your job. Basically and honestly,
Speaker 2: even if you're let's say you are employed by a
Speaker 2: different company, a different bank, or say someone's employed by Lockheed.
Speaker 2: Well that doesn't then mean that you now have permission
Speaker 2: to put all of your retirement dollars into a single
Speaker 2: stock company like SVB, because someone might be thinking, oh, no,
Speaker 2: I'm diversified enough, I'm employed by this company, and I'm
Speaker 2: investing in this company right here. Well, no, that's still
Speaker 2: incredibly stinking risky. That's still putting all of your eggs
Speaker 2: in one basket. And even I was, so I was
Speaker 2: looking at the story closer sub like over the past decade,
Speaker 2: at one point the stock was up something like eight
Speaker 2: hundred to nine hundred percent, And so no wonder if
Speaker 2: folks were thinking, oh, yeah, this is this gravy train
Speaker 2: is going to keep on rolling. But it'd be a
Speaker 2: fool not to do that exactly, And so it makes
Speaker 2: sense as to why more and more folks were continuing
Speaker 2: to do that. But if you use.
Speaker 1: Around the water cooler, everybody's talking about how you know
Speaker 1: their retirement accounts growing faster than everybody else's.
Speaker 2: Because but you look at it now, But I did, I.
Speaker 1: Invested in this company, and this company.
Speaker 2: Is rocking now. They're at negative one hundred percent over
Speaker 2: the past ten years, so it is is too risky.
Speaker 2: It's why we recommend for folks to widely diversify their
Speaker 2: retirement dollars in index funds. Either invest in the entire
Speaker 2: stock market or invest in the S and P five hundred.
Speaker 2: That is how we want you to invest your retirement dollars. Yeah.
Speaker 1: Yeah, it might work out. It's not necessarily going to
Speaker 1: sink your battleship, but it could. It could, and you
Speaker 1: just don't want to put yourself at undue risk, especially
Speaker 1: when you're getting your paycheck from that.
Speaker 2: Employer as well. That's just too much volatility associated with
Speaker 2: single stock investing, too scary. Ye, all right, if you
Speaker 2: want to do it with a small percentage, I mean,
Speaker 2: this is I don't want this to turn it into
Speaker 2: an entire investing episode, but like you want to put
Speaker 2: five percent of your investable dollars into a single stock, sure,
Speaker 2: because guess what if you lose all that five percent? Yeah,
Speaker 2: you still got a lot of the rest of your
Speaker 2: nest egg that's unscathed. Yeah.
Speaker 1: One guy quoted in that article had put just a
Speaker 1: small amount in company stock in one of these banks,
Speaker 1: and he said, well, yes, the icing was taken off
Speaker 1: the cake, but the cake was still there, still got
Speaker 1: the cake. And I'm like, hey, that's if you want
Speaker 1: to do that, that's fine, but just make sure the
Speaker 1: cake is still there at the end of this.
Speaker 2: Right right. Yeah, And that guy isn't financially ruined, but
Speaker 2: a lot of people weren't. So well, how about you
Speaker 2: take it? Okay.
Speaker 1: I was just gonna say, let's get to the story
Speaker 1: about second homes. It's fascinating. Some of the worst financial
Speaker 1: advice I've seen in recent memory. We'll discuss that and
Speaker 1: more right after this.
Speaker 2: Yeah, we're back from the break. Yes, speaking of terrible
Speaker 2: ways to invest your dollars. We're gonna get to our
Speaker 2: ludicrous headline of the week, and this one comes from
Speaker 2: the brilliant minds.
Speaker 1: Over there at Yahoo Finance. The headline the dunce, cap
Speaker 1: on them and put them.
Speaker 2: In the corner. Headline reads, two thirds of wealthy Americans
Speaker 2: own a second home. Here's why everyone should consider this investment.
Speaker 2: So there does folks, go ahead, buy that dope condo
Speaker 2: and Malibu, buy that second home in Jackson Hole or
Speaker 2: out in the Rockies in order to build wealth. Who
Speaker 2: knew that is going to be that easy? But of
Speaker 2: course basic flaw with this piece is that they are
Speaker 2: mistaking correlation and causation. Right. Is it that buying a
Speaker 2: vacation home is going to increase your net worth in
Speaker 2: a substantial way? Or is it that those who already
Speaker 2: have significant resources, who are already wealthy, that they're out
Speaker 2: there buying second homes. It's clearly the latter, right, Buying
Speaker 2: a vacation home is not going to make you rich.
Speaker 2: It's folks who are already rich who are buying those homes.
Speaker 2: It's like somebody looking around and being like, oh man,
Speaker 2: all the wealthy people I know have Rolexes. I need
Speaker 2: virolex because maybe then I'll be I'll be wealthy. Yeah, people,
Speaker 2: I don't even know if people wear fancy watches anymore,
Speaker 2: but some people do. It's it's iPhone fourteen pros like
Speaker 2: you fancy pants.
Speaker 1: I know, Joel's. Hey, I'm still holding on to my
Speaker 1: Cassio though.
Speaker 2: So you win, some you lose. That's right, Welcome to
Speaker 2: the Apple side. Okay, soft friend, Maybe i'll tell that
Speaker 2: story a later day. Yeah, but you got it on sale,
Speaker 2: so yeah, but I don't know if I made the
Speaker 2: right move. Well, really, it's it's a nicer piece of hardware,
Speaker 2: but I don't know if I like the software quite
Speaker 2: as much. You having some regrets, but maybe it's just
Speaker 2: like old me being an old man, being an old curmudgeon.
Speaker 2: It's gonna take me a few takes a second to
Speaker 2: get used to the iOS. You literally have never had
Speaker 2: an iPhone never, Yeah, so this is I've only ever
Speaker 2: had an iPhones. Yeah. I think it's the greatest thing ever,
Speaker 2: all right, And I love that I can actually like
Speaker 2: your texts and when you like like it, just does
Speaker 2: it in the proper way now instead of old green
Speaker 2: bubble Joel.
Speaker 1: Okay, I don't care about the bubble colors, but I
Speaker 1: know some people do. Let's keep talking about second homes, Matt,
Speaker 1: because here's the thing. If you've got the cash on
Speaker 1: hand and you you really want a vacation home to
Speaker 1: make family memories in or whatever, go for it. It's
Speaker 1: okay to splurge in that way, we'd say, but do
Speaker 1: not think of it as an investment unless you're actually
Speaker 1: going to rent that puppy out on Airbnb for most
Speaker 1: of the year, Like I have a buddy. He did
Speaker 1: that in Chattanooga. He lives in California, but man, he
Speaker 1: does well with it, and he gets to use it
Speaker 1: every you know, or two or three weeks a year.
Speaker 1: And so the truth is homes require repairs, maintenance, and upkeep,
Speaker 1: and a beach home in particular, because that saltwater and
Speaker 1: stuff like that is going to deteriorate the paint and
Speaker 1: the HVAC even quicker, so you're going to have to
Speaker 1: spend even more to keep that home up. All your
Speaker 1: hardware is rusted, like everything is rusted on the outside
Speaker 1: of a beach exactly. And so, you know, buying a
Speaker 1: second home that's purely for family fun, it can be
Speaker 1: a great goal to have if that's what you're into.
Speaker 1: But please don't read articles like this and assume that
Speaker 1: a vacation home is your ticket to wealth. It's not.
Speaker 1: It might be the opposite. Actually, in a purchase like this,
Speaker 1: it really is just a lifestyle play because there are
Speaker 1: just so many superior investment strategies that also come with
Speaker 1: fewer headaches. I also know, Matt, some people who own
Speaker 1: that a vacation home, when they take a trip there,
Speaker 1: it feels less RESTful because they're seeing all the things
Speaker 1: that they need to do to fix up their own place.
Speaker 1: Whereas if they rented it off to go there for
Speaker 1: a work week, yes, to kind of basically open the
Speaker 1: house back up. I have heard these phrases. Yeah, it's
Speaker 1: like if you it said, if you rented for a
Speaker 1: week or two on Airbnb or burbo, it's like you
Speaker 1: can go hassle free. So I mean, it's up to you.
Speaker 1: But it's more than anything. It's certainly not some sort
Speaker 1: of winning investment that's gonna put you over top and
Speaker 1: make you a millionaire overnight.
Speaker 2: That's right. Yeah, there are certainly worse ways to spend
Speaker 2: your money. Like I'm thinking of folks who go out
Speaker 2: there and I like, you buy a new car, the
Speaker 2: minute you drive it off the lot, you lose like
Speaker 2: ten percent, right because it's no longer a new car,
Speaker 2: it's a used car. But I don't think there's folks
Speaker 2: who are buying new cars who are fooling and convincing themselves.
Speaker 2: They're not delusional into thinking that, oh, this is an investment.
Speaker 2: And oftentimes I think when it comes to vacation homes,
Speaker 2: that is the mindset where you are fooling yourself into
Speaker 2: thinking that you've essentially talked yourself into making that purchase.
Speaker 2: Thinking that it's a wise financial move. It might be,
Speaker 2: but again there, like you said, there are better investment
Speaker 2: options out there for folks.
Speaker 1: It's not that it won't go in value. It probably will,
Speaker 1: but it's probably still not a great financial move. It's
Speaker 1: not a great investment if you're doing it just to
Speaker 1: grow your net worth. There are better ways to do that.
Speaker 2: That's right. Let's talk about buying more affordable stuff online.
Speaker 2: Not not houses per se, but watch out for final
Speaker 2: sale items when you're making purchases online. We're seeing more
Speaker 2: and more retailers who are resorting to this method in
Speaker 2: an attempt to avoid those costly returns which are eating
Speaker 2: into online retailer's profits. Yes, you might get a better
Speaker 2: price if you see something that's marked as final sale.
Speaker 2: But what if you don't like the fit? What if
Speaker 2: you don't like the item because it's not something you've
Speaker 2: ever ordered before, right, Like, if that happens, like you
Speaker 2: are stuck with that item and you were out the money,
Speaker 2: and you.
Speaker 1: Thought it was mustard yellow on the site, but it
Speaker 1: turns out it's pute green and.
Speaker 2: You're like, dang it, no, wait, this is a this
Speaker 2: is canary. We have talked about how like a lot
Speaker 2: of retailers they're already cutting down on free returns or
Speaker 2: they're making you jump through more hoops in order to
Speaker 2: return an item, like returning it to a designated location,
Speaker 2: a physical location of their choosing. But the uptrend in
Speaker 2: final sale items that could catch a lot of folks
Speaker 2: off guard, costing them a lot of money. You know,
Speaker 2: I think it's it's probably only worth it if you
Speaker 2: know that specific brand or if you know that style
Speaker 2: really well. I think that's an advantage to a more
Speaker 2: boring approach to clothing, which I feel like I've taken
Speaker 2: up recently, is that once I find it like there's
Speaker 2: only a few shirts or shorts or paints that I
Speaker 2: own that I actually wear or that I really like,
Speaker 2: and so whenever those things those bad boys go on sale,
Speaker 2: I know the exact size, I know the exact thing
Speaker 2: to get, and I'm there's no risk there. You're just
Speaker 2: buying a backup. It's just a backup because eventually this
Speaker 2: one's and sometimes I'll you know, I don't even wait.
Speaker 2: It's not like I wait for one to wear out.
Speaker 2: I've got like different versions of them, the same thing.
Speaker 2: I've got my different Matt uniforms, but certainly an advantage
Speaker 2: to a less adventurous form of clothing yourself.
Speaker 1: Which I mean, I think is probably better suited to
Speaker 1: males who do wear more boring wardrobes. I don't know,
Speaker 1: it depends on the person. I guess depends on the.
Speaker 2: No the ladies out there doing the capsule wardrobe where
Speaker 2: they're keeping things simple as well.
Speaker 1: So which, Yeah, I like that approach. And I think
Speaker 1: final sale, like you said, could save you money, but
Speaker 1: it also could cost you if you're like, eh, I
Speaker 1: don't really like this thing. The other thing too. I
Speaker 1: guess maybe if you're great those return policies. Yeah, if
Speaker 1: you're great on eBay, you might be able to flip
Speaker 1: it for a property. I mean, i'd say, Okay, if
Speaker 1: I don't like this, well, they're only charge with me
Speaker 1: twenty bucks. I know I can get thirty on eBay,
Speaker 1: then okay, if you don't mind going through that jump
Speaker 1: through those hoops, give it a shot. But speaking of shopping, Matt,
Speaker 1: there was a c NET article and it was talking
Speaker 1: about specifically buying TVs, and they were suggesting that you
Speaker 1: go with the older model, which we've talked about in
Speaker 1: the past. Two like Hey, when new models come out,
Speaker 1: the old model gets discounted. Why not save a few bucks?
Speaker 1: And this is true when we're talking about clothing, right
Speaker 1: last season's clothes, they often go on sale, like if
Speaker 1: you buy them right when they hit the website, there's
Speaker 1: no discounts yet. That right, but right now, if you're
Speaker 1: buying a winter jacket, you might save more money than
Speaker 1: you would come like September. But yeah, c Neet talked
Speaker 1: about how TVs are pretty similar to smartphones in a
Speaker 1: whole lot of ways, that the improvements are just minor
Speaker 1: and incremental every single year. So going with an older model,
Speaker 1: a twenty twenty two model will save you a lot
Speaker 1: of money and you're not really sacrificing very much. And
Speaker 1: so the other thing to remember here is that November
Speaker 1: in January or the two best times to buy a TV.
Speaker 1: Our suggestion would be own fewer TVs, maybe just.
Speaker 2: One, and don't us TV in general.
Speaker 1: Yeah, and don't work for the bear for the bear.
Speaker 2: But evidently it's Joel and Matt.
Speaker 1: Approved, which means you know it's good two thumbs up,
Speaker 1: or like Siskel and Eber.
Speaker 2: A lot of the way, or should we start reviewing
Speaker 2: reviewing shows, we'll think about. It kind of goes counter
Speaker 2: to what we're saying watching watching TV, right, which, yeah.
Speaker 1: But man, I had the same TV for ten years
Speaker 1: before we upgraded. It was one like the first flat
Speaker 1: screen I bought back in a Black Friday, like two
Speaker 1: thousand and six or something like that. And one other
Speaker 1: thing I wanted to say. We've talked about Telly and
Speaker 1: the basically how you can get a free television from
Speaker 1: Telly that's going to display ads across the bottom. I
Speaker 1: actually I signed up. I'm gonna see if I can
Speaker 1: get one.
Speaker 2: So did you really?
Speaker 1: Yeah, I'll let you know what happens. I kind of
Speaker 1: changed my tune on it and I was like, why
Speaker 1: not free TV?
Speaker 2: I don't care?
Speaker 1: And I got one of my buddies said, well, what
Speaker 1: if you put like tape across that bottom advertising screen?
Speaker 1: You put just like a big black piece of paper
Speaker 1: over it. And I was like, yeah, actually that could work.
Speaker 1: So we'll see if I get one.
Speaker 2: It sounds like Joel's taking the more ratchet approach, but
Speaker 2: I like it. I like it, but I also hate
Speaker 2: it because like this makes me think about is it
Speaker 2: the time you survey that shows that Americans like like,
Speaker 2: aside from sleeping, which kind of mentioned earlier, Like the
Speaker 2: number one thing that they do is watch TV. Like
Speaker 2: it's literally America's number one hobby. It's it's like America's pastime,
Speaker 2: which I hate, like it kind of makes it makes
Speaker 2: me sad. But I think there's a lot of folks
Speaker 2: who are talking themselves maybe into making some of these
Speaker 2: upgrades and getting the newest model because to them it's
Speaker 2: the craft beer equivalent. Yeah right, they're thinking, well, this
Speaker 2: is this I love TV because of that, they're maybe
Speaker 2: one of the newest models. And maybe they're justifying it
Speaker 2: too because TV's are pretty cheap, they're pretty affordable. They've
Speaker 2: only gone down and they've only gotten done in price.
Speaker 2: It doesn't cost you much money, but it costs you
Speaker 2: in a whole lot otherwise. Yeah, it costs you your
Speaker 2: soul something like that as much TV. Let's talk about
Speaker 2: the auto industry because the car market is softening. We
Speaker 2: all knew that use car prices that they wouldn't continue
Speaker 2: to appreciate in value forever, but we also didn't know
Speaker 2: how long this odd trend was going to last. There
Speaker 2: are now more unsold cars onto dealer lots than we've
Speaker 2: seen in years, and this is typically measured the unit
Speaker 2: of measurement that the use is called the day's worth
Speaker 2: of supply, and so that is up to fifty three days,
Speaker 2: which is a seventy five percent increase from a year ago.
Speaker 2: And an abundance of evs is the main reason why
Speaker 2: we've already I think the number of evs on lots,
Speaker 2: if you only look at that sector, it's something like
Speaker 2: one hundred. It's over one hundred days. We've already seen
Speaker 2: Tesla prices drop like a rock.
Speaker 1: And by the way, I think the average just so
Speaker 1: people know, is like sixty days. So we're still not
Speaker 1: back even to normal supply on most car lots, but
Speaker 1: we're trending, but we're we're heading in that direction exactly.
Speaker 1: And we're also at an overabundance of eve.
Speaker 2: Ev specifically because well, it makes sense because the car
Speaker 2: manufacturers have figured figured it out. But folks, I think
Speaker 2: there's a lot of folks who are unwilling because of
Speaker 2: the infrastructure. The technology isn't quite there. They'll allow you
Speaker 2: to do like a cross country road trip feasibly, and
Speaker 2: then the infrastructure, like there aren't as many charging stations
Speaker 2: as there are gas stations, and I think that's going
Speaker 2: to be the tipping point that allowed that gives people
Speaker 2: the peace of mind.
Speaker 1: I think price was another factor, although that's starting to
Speaker 1: change too.
Speaker 2: Yeah exactly. I mean also forward, they just announced a
Speaker 2: ten thousand dollars price cut on the Lightning, on the
Speaker 2: entry level Lightning, after having jacked up the prices significantly
Speaker 2: after the truck debuted. But more ev models are coming
Speaker 2: down the pike, which just means that prices are likely
Speaker 2: going to decrease even more as more competition enters the
Speaker 2: market and overall with the car, the car market, you know,
Speaker 2: we may not be back to pre pandemic levels, but
Speaker 2: at least we are finally moving past the upside down
Speaker 2: car market that we've been in for a few years now.
Speaker 2: Hopefully it'll become a little more affordable to replace that
Speaker 2: old ride if you've kind of been limping along there.
Speaker 1: Yeah, And I think and EBE is starting to make
Speaker 1: more and more sense. Is financially speak for a minute,
Speaker 1: those prices were soaring a couple of years ago, and
Speaker 1: it was even though you were going to save potentially
Speaker 1: on maintenance costs and gas costs, it just didn't make
Speaker 1: financial sense. It might make more financial sense for more
Speaker 1: people now when they get certain models, especially when you
Speaker 1: factor in the federal tax credit on top of that. Right,
Speaker 1: but let's something else on the car front, Matt, Lenders
Speaker 1: are getting more cautious when they're giving out loans right now.
Speaker 1: We talked on Wednesday about the importance of having a
Speaker 1: good credit score and the massive downsides to having a
Speaker 1: bad one. Well, it can impact you in a number
Speaker 1: of ways on your personal finances, right and so it's
Speaker 1: even more important right now to have a good credit
Speaker 1: score because banks are tightening their lending standards, and close
Speaker 1: to one in five folks to apply for an auto
Speaker 1: loan right now, they're being rejected straight up. So that
Speaker 1: should be kind of enlightening to all of us, letting
Speaker 1: us know that we should do a few different things
Speaker 1: if we're looking to buy a car. One, improve your
Speaker 1: credit score. If you want to know more about that,
Speaker 1: go back and listen to Wednesday's episodes if you haven't,
Speaker 1: and we've got other resources on how to money dot
Speaker 1: com to teach you how to increase your credit score. Also,
Speaker 1: save up more money. The more cash you have on hand,
Speaker 1: the less you have to finance. Maybe maybe even you
Speaker 1: can pay for that car fully in cash, which would
Speaker 1: be awesome. So the next thing, that's what we recommend,
Speaker 1: buy a cheaper car. If you get turned down, it's like, hey,
Speaker 1: maybe you're looking at for something that's too expensive, that's
Speaker 1: out of your financial wheelhouse. So opt to find something
Speaker 1: that's cheaper, that's a little older maybe but still in
Speaker 1: good condition. And then also have a good relationship with
Speaker 1: a local credit union. You're going to get better rates
Speaker 1: that way. Anyway, credit unions are the best place to
Speaker 1: turn for financing for most things, including oftentimes new and
Speaker 1: used cars. So follow all those tips and hopefully this
Speaker 1: tightening lending standards in the auto industry, they're not going
Speaker 1: to impact you negatively.
Speaker 2: Yeah yeah, and again, just save up cash and you
Speaker 2: can avoid that headache all together because you're not Joel.
Speaker 2: Have you ever paid interest to on a car? Note therefore, boom.
Speaker 1: See if I financed a car one time because I got
Speaker 1: a zero percent though, and it was it was a
Speaker 1: new car. Is the only new car I've ever purchased,
Speaker 1: but it was an EV and it was back when
Speaker 1: there was a state and a federal incentive to buy it.
Speaker 2: You're able to.
Speaker 1: Double dip normally though, I don't know if you'll ever
Speaker 1: catching a new car ever again. Yeah, well not only
Speaker 1: a new car, but again just the the financing part
Speaker 1: of it, because you are it's just a bad move
Speaker 1: because you are financing a depreciating asset, and so I get.
Speaker 1: I just want to end on that note with as
Speaker 1: we're talking about cars and lending, because like, I don't
Speaker 1: want to beat around the bush, like it's just a
Speaker 1: much much smarter financial move. You can save up cash
Speaker 1: buy that thing outright. But while you're doing that, you
Speaker 1: might be thinking, well, how am I going to get around?
Speaker 1: How am I supposed get around if I don't have
Speaker 1: a car at all? Well maybe you could take the bus.
Speaker 2: Yes, in our mind, bus travel it never went away,
Speaker 2: but apparently it's back with a vengeance. We've talked before
Speaker 2: about Megabus. That's a pretty solid company. They offer fairly
Speaker 2: an expensive bus trips around the country.
Speaker 1: Have I detailed the time I went round trip to
Speaker 1: New Orleans? I think for eleven dollars round.
Speaker 2: Trip, I think like back in the day, Yeah, eleven
Speaker 2: dollars though that's like I was like twenty ten prices.
Speaker 1: So yeah, I haven't taken megabus in I don't know, probably.
Speaker 2: Do they still have the like where they sell off
Speaker 2: the first few seats for like one dollars yep, that's amazing. Yeah,
Speaker 2: And it's like the Costco dollar fifty hot dogs thing.
Speaker 2: It's like, yeah, a deal that you are can't be beat.
Speaker 1: And some of those decently comfortable seats and Wi Fi
Speaker 1: on board that kind of stuff, So it's it's really
Speaker 1: not that bad. I know most people are like the bus,
Speaker 1: what are you talking about?
Speaker 2: But we want folks to consider it. There's nicer buses
Speaker 2: now well, and especially given the problems that the airlines
Speaker 2: have experienced this year, it seems that folks are even
Speaker 2: more keen to stay on the ground when they travel.
Speaker 2: So Flicks and Greyhounds, it's they're owned by the same company,
Speaker 2: but they both experience a significant serve and writership. And
Speaker 2: obviously it's probably not going to be as quick as
Speaker 2: the flight in most cases at least, but it could
Speaker 2: be a whole lot cheaper, especially for folks who may
Speaker 2: not have a car. I think for a lot of
Speaker 2: folks who live in major cities like New York or
Speaker 2: something like that, you might be thinking, oh, the only
Speaker 2: way I get places is either take the subway or
Speaker 2: I fly somewhere. Nah, consider the bus. It's at least
Speaker 2: worth considering, checking the prices and seeing if it's worth
Speaker 2: the different trade offs for sure.
Speaker 1: All right, that's all of good stuff today, Matt. And
Speaker 1: if you ever have a suggestion, by the way, a
Speaker 1: story you want us to cover, or in particular a
Speaker 1: ludicrous headline you think we should mention on the show,
Speaker 1: we'd love to.
Speaker 2: These are always fun.
Speaker 1: You can always reach out. Our email is how to
Speaker 1: Moneypod at gmail dot com, and you can find show
Speaker 1: notes and links to some of the stuff we mentioned
Speaker 1: up on our website at howtomoney dot com.
Speaker 2: That's right, And if you like the show and haven't
Speaker 2: left us a review yet, head over to Apple Podcasts
Speaker 2: or or wherever you listen. It helps us to get the
Speaker 2: word out. Just click the five stars on Spotify. That helps.
Speaker 2: It's so easy to do. But we hope everyone out
Speaker 2: there stays cool, stay hydrated during this weekend. And Buddy,
Speaker 2: that's going to be it for this one until next time.
Speaker 2: Best Friend's Out and best Friends Out