Speaker 1: Welcome to How the Money.
Speaker 2: I'm Joel and I am Matt and today we're talking
Speaker 2: the wealth effect Christmas returns.
Speaker 1: And b in p L I r L. Yeah. And
Speaker 1: by the way, everyone saying a prayer for Joel.
Speaker 2: Because dude, it sounds like you've got something nasty over there.
Speaker 2: You're I think your voice is gonna gonna hold up
Speaker 2: for us.
Speaker 1: So no, this is our Friday flight.
Speaker 2: And yeah, Ben pl I r L will explain what
Speaker 2: all that means later on if you're.
Speaker 1: Not privy to the fact. But Joel, I got a quick,
Speaker 1: frugal or cheap for you.
Speaker 2: Uh. So the other day I took a jar of
Speaker 2: pennies to our local Kroger and uh because I was like,
Speaker 2: you know what, We've had this jar sitting around four forever.
Speaker 2: I'd actually sort of them out from like the quarters
Speaker 2: and stuff that we pay our kids allowance with sometimes
Speaker 2: for the different jobs. And so I finally took it
Speaker 2: to the grocery store and I was getting ready to
Speaker 2: dump it in the coin star and I thought, wait
Speaker 2: a minute, I don't want to pay this company a
Speaker 2: cut for the change that I have on hand, or
Speaker 2: do they charge like eight percent? It's like ten or
Speaker 2: eleven percent, and I thought, man, forget that. It's unless
Speaker 2: you opt for a gift card instead.
Speaker 1: Oh is it?
Speaker 2: I didn't look that that hard at it, but regardless,
Speaker 2: we needed some a few grocery items, so I thought,
Speaker 2: you know what I'll do. I'll just I'll buy some milk,
Speaker 2: some eggs, get some bananas, and I'll pay for it
Speaker 2: using pennies at the register. I'm not going to put
Speaker 2: the burden on the cashier. I was going to go
Speaker 2: through the self checkout because they've got like a little cup.
Speaker 2: I thought to kind of make it easy. So in
Speaker 2: my mind, it's like a self administered like a manual coinstar,
Speaker 2: where I get to reap off the benefit from it.
Speaker 2: Here's the downside. It didn't really have what I envisioned.
Speaker 2: I thought there was like a little bowl for you
Speaker 2: just to kind of like drop all the change, and no,
Speaker 2: I had to kind of like take stacks of pennies
Speaker 2: and run them across this little slot for them to
Speaker 2: fall down, and it kept getting jammed, and no joke,
Speaker 2: it took me like at least ten extra minutes to
Speaker 2: pay for my stupid my purchase with the pennies. And
Speaker 2: when I actually did the math. I'm like, wait a minute,
Speaker 2: I saved like a dollar plus just give myself.
Speaker 1: A massive amount of headache. And so I'm curious, Joel,
Speaker 1: what are your thoughts? Was this frugal or cheap?
Speaker 2: Sounds cheap math? I think he answered your own question
Speaker 2: majorly cheap. Move on, Like it wasn't even wasted time
Speaker 2: and effort. It was like a minute And I'm like,
Speaker 2: what am I doing?
Speaker 1: This is?
Speaker 2: This is so dumb. But at the same time, what
Speaker 2: are you gonna do with all these pennies? Like you've
Speaker 2: got them on hand and you're gonna throw it away
Speaker 2: like it's it's literally money. But pennies, man, they're just
Speaker 2: they're worth I mean, they're literally worth less than what
Speaker 2: it cost to actually make it penny. I think it
Speaker 2: costs like three cents. Penny should be abolished.
Speaker 1: We all know that.
Speaker 2: It's just no one's had the fortitude to stand up
Speaker 2: to big Penny to kick him out. But yeah, they
Speaker 2: got a strong lobby. Maybe next time, check out the
Speaker 2: coinstar machine and see if you can get I think
Speaker 2: usually you can get like an Amazon gift card, and
Speaker 2: then I think so and then.
Speaker 1: You don't pay anything. We use Amazon that's for sure.
Speaker 2: Yeah, so that that'd be a better way to go,
Speaker 2: because that sounds like a stressful situation.
Speaker 1: It sucked, Yeah, not.
Speaker 2: Worth the jamming. And then there's somebody there who was
Speaker 2: like trying to get it unjammed. I just felt bad
Speaker 2: for them. Yeah, I'm just like, I'm sorry, I'm wasting
Speaker 2: all of our time here, and yeah, don't don't be
Speaker 2: like me. Yeah, I'm sure they were like, this guy sucks,
Speaker 2: he doesn't come back, but this guy has a money podcast.
Speaker 2: That's right, that's right. All right, let's move on. Let's
Speaker 2: get to the Friday Flight assembly of stories we found
Speaker 2: interesting this week, and let's talk about four OL and
Speaker 2: kse for a second. There's there's another reason to not
Speaker 2: look at your four OAL and K statement now because
Speaker 2: it's down and you're tempted to fiddle with your investments.
Speaker 2: It's it's because your four and K is up and
Speaker 2: you might be tempted to to spend more money because
Speaker 2: of it. Right, not even by taking money out of
Speaker 2: your tax advantage account either. The truth is, if you
Speaker 2: invested mostly in stocks, it likely you likely saw your
Speaker 2: portfolio balloon by twenty percent or more in twenty twenty three. Sure,
Speaker 2: which feels good and there is no reason it shouldn't
Speaker 2: put a smile on your face. But there's something you
Speaker 2: need to watch out for. It's called the wealth effect.
Speaker 2: It's a behavioral economics term which means that folks tend
Speaker 2: to spend more as the value of their investments goes up,
Speaker 2: even if they don't have liquid access to the gains.
Speaker 2: It can lead you to think, h I got more
Speaker 2: money to spend even though you don't really, all of
Speaker 2: a sudden you feel rich. Yeah, just because your investments
Speaker 2: go up and value don't mean that you've got more
Speaker 2: discretionary income. You've got more long term income to spend
Speaker 2: off in the future. But this isn't money that you
Speaker 2: want to touch right now. And if you take this
Speaker 2: like too far, the wealth of that can result in
Speaker 2: taking on.
Speaker 1: Debt because of that perceived.
Speaker 2: Growth and your net worth, well, it's not perceived like
Speaker 2: your net worth is going up, but that does not
Speaker 2: have an impact on what you have now.
Speaker 1: You know.
Speaker 2: The same thing happens for a lot of folks, by
Speaker 2: the way, when their home value increases just because you
Speaker 2: bought a house back in twenty nineteen and it's now
Speaker 2: worth fifty percent more than what it is that you
Speaker 2: paid for. That doesn't mean you should start spending like
Speaker 2: there's no tomorrow. And simultaneously, we're not saying that you
Speaker 2: shouldn't enjoy your money, but just be cognizant of this
Speaker 2: potential brain wiring issue that's just lurking beneath the service
Speaker 2: that might prompt you to spend in ways that you
Speaker 2: wouldn't have.
Speaker 1: Let's say, after.
Speaker 2: Twenty twenty two when the market was down, think about
Speaker 2: how you felt back then, not how you feel right
Speaker 2: now after seeing the market do well last year. We
Speaker 2: are still trying to build wealth over the long haul
Speaker 2: in a healthy and sustainable way.
Speaker 1: Yep.
Speaker 2: And I think that it's just important to be aware
Speaker 2: of our behavioral tendencies, and this is one of them.
Speaker 1: All right, let's talk about student loans for a second.
Speaker 1: Student loans.
Speaker 2: They were such a regular part of our show during
Speaker 2: the pandemic and as the new save plan was rolling out,
Speaker 2: and we haven't really talked about them much since the
Speaker 2: payments started back in the fall, though. And economists they
Speaker 2: were worried about the payment restart. They thought that it
Speaker 2: was going to kind of lead to some tightening in
Speaker 2: the economy. But oddly enough, we just haven't seen it
Speaker 2: play out like that. Why it could be that folks
Speaker 2: who truly can't afford that student loan payment simply aren't paying,
Speaker 2: and so something like four and ten borrowers haven't paid
Speaker 2: anything since the payment restart happened in October. So should
Speaker 2: you pay your student loan bill? We would say, if
Speaker 2: you can afford to pay on it, yes, but also
Speaker 2: know that even though payments have restarted, there are still
Speaker 2: many months left. We're not paying on your loans is
Speaker 2: not going to get you into trouble. It's what's known
Speaker 2: is like this on ramp timeframe, and so this coming
Speaker 2: fall is when people are going to actually be held
Speaker 2: accountable for not paying their student loans. That's when it's
Speaker 2: going to be reported to the credit bureaus. That's right,
Speaker 2: That's when that'll resume. So if you have to prioritize
Speaker 2: the other financial goals for the time being, don't feel
Speaker 2: bad about doing so. But it was interesting to see
Speaker 2: I think that such a large section people are not
Speaker 2: paying on their student loder still, But I guess I'm
Speaker 2: also not surprised to either. Yeah, yeah, I mean, I
Speaker 2: think what's key is sort of what you said, which
Speaker 2: is like, hey, this is death that you took on.
Speaker 2: So it is even though it's not necessarily that it
Speaker 2: totally isn't being reported right now to the credit viewers.
Speaker 2: That doesn't necessarily mean that you don't owe it. But
Speaker 2: the good news is is down the road it is
Speaker 2: going to be dropping from ten percent of your discretionary
Speaker 2: income down to five percent. So that's some relief that
Speaker 2: you can look forward to sure next summer. And by
Speaker 2: the way, if maybe you've got a more complicated situation
Speaker 2: and you need some help figuring out how to proceed
Speaker 2: with your student loans, this might be an instance where
Speaker 2: you might want to reach out to a pro over
Speaker 2: at Student Loan Planner. We've actually got an article over
Speaker 2: on the website that'll help you to understand whether or
Speaker 2: not you're a good candidate to consider going with somebody
Speaker 2: who can kind of walk you through a more complicated
Speaker 2: student loan payment process. And it makes more sense for
Speaker 2: people who have higher amounts of student loan yet, right,
Speaker 2: So if you're one of those folks who's like, I
Speaker 2: don't have like ten grand, I've got like fifty to
Speaker 2: sixty grand, then it might make sense to talk to
Speaker 2: a as well as those more complicated income driven repayment
Speaker 2: plans if you're trying to qualify and you're not sure
Speaker 2: what counts. Those are all similar situations that might require
Speaker 2: a professional. But on the note of student loans, on
Speaker 2: the note of paying for college, one new perk of
Speaker 2: the Secure Act two point zero it actually went live
Speaker 2: this week. You can now officially roll five twenty nine
Speaker 2: money into a roth IRA. So back before this saw passed,
Speaker 2: neither of us were really excited about five twenty nine plans.
Speaker 2: There were just so many other routes that you should
Speaker 2: take before saving, specifically for your kids college. The example
Speaker 2: we would always give is like make sure that you're
Speaker 2: putting your own oxygen mask on before you're trying to
Speaker 2: help your kid or help those around you. Basically, there
Speaker 2: is an order, a financial order of operations.
Speaker 1: We called it.
Speaker 2: The money Gears will make sure to link to that
Speaker 2: in our show notes as well. The five to twenty
Speaker 2: nine plane just falls way down on the list. Yes, exactly,
Speaker 2: and that's still true. But with this added flexibility, a
Speaker 2: significant chunk of money that you do funnel into a
Speaker 2: five twenty nine account for your kids, it can actually
Speaker 2: be rolled into a roth ira for their retirement years.
Speaker 2: It's supposed to basically be a relief for folks who
Speaker 2: just oversaved, who overdid it.
Speaker 1: On the saving for college front.
Speaker 2: But crafty listeners out there can use this sort of
Speaker 2: a think of it almost as like a loophole to
Speaker 2: start helping your kids do invest for decades down their road,
Speaker 2: even earlier, in particular if they don't end up using those.
Speaker 1: Dollars for higher education.
Speaker 2: And we've actually got a new article up on the
Speaker 2: site and you can go there for all the nuance
Speaker 2: and all the particulars that need to keep in mind.
Speaker 1: There's a lot of detail. There's a five year rule,
Speaker 1: there's an aging year process. You got to age this
Speaker 1: money man. That's right, fine cheese.
Speaker 2: So even though you can do it starting this year,
Speaker 2: there are a lot of people who won't be ready
Speaker 2: to do it this year. But it is definitely it
Speaker 2: makes five twenty nine plans look a whole lot more
Speaker 2: attractive because they have greater flexibility now. And Matt on
Speaker 2: the note of school, the FASTS launch, did you see that, Yeah,
Speaker 2: except for it basically just made people angry. It was
Speaker 2: just the worst launch of all time. And so I guess.
Speaker 2: We had Tina the fafts of Guru on the show
Speaker 2: Can to Steal, Yeah, a couple of months ago, and
Speaker 2: you know we were talking about, oh yeah, hey, this
Speaker 2: new shorter FAFTSA is gonna make it easier for a
Speaker 2: lot of people.
Speaker 1: It should be great. That's what we were promised, not
Speaker 1: from her but from the higher ups.
Speaker 2: Well, and the government had three years to get this
Speaker 2: right and they still botched it. So hopefully they're gonna
Speaker 2: get the kinks worked out.
Speaker 1: Will report back.
Speaker 2: But yes, you can technically fill out this now short
Speaker 2: shortened fats of form.
Speaker 1: Now you can try to. You can try to.
Speaker 2: Yeah, but I would just say, don't pull your hair out,
Speaker 2: don't go crazy, just wait a few weeks.
Speaker 1: Still get things sorted out totally, all right, dud.
Speaker 2: Let's talk about Christmas returns, because now that the dust
Speaker 2: has settled from Christmas in the holidays, it's about time
Speaker 2: to start making some of those returns. Listener Mackenzie, she
Speaker 2: actually emailed us and she sold a few of her
Speaker 2: own wanted gift cards via I think she specifically used
Speaker 2: card cash dot com. So if you're listening, you've got
Speaker 2: some gift cards that you don't love. Don't let them
Speaker 2: get buried in the bottom of your junk drawer until
Speaker 2: they expire or get accidentally thrown away. Get rid of
Speaker 2: them in just eroads their values, yes exactly. Unlove those
Speaker 2: things and turn those gift cards into actual dollars that
Speaker 2: you can spend today on things that you might value
Speaker 2: a little more. And if it's actual physical goods that
Speaker 2: you received that you don't plan on keeping, make a
Speaker 2: plan to do those returns soon. And although it's going
Speaker 2: to be easier to do an online return and just
Speaker 2: mail those items back, know that it's likely going to
Speaker 2: cost you more if you're wanting to go that route
Speaker 2: and just drop it off at the UPS store or
Speaker 2: wherever it is that you make returns. Instead, consider returning
Speaker 2: in store because that's going to help you to avoid
Speaker 2: those quote unquote return or restocking charges that are becoming
Speaker 2: more and more popular. Let alone not to mention the
Speaker 2: actual shipping costs if that's something that you.
Speaker 1: Have to pay for.
Speaker 2: But while you might have until the end of the
Speaker 2: month to make returns at some of the stores, other
Speaker 2: Christmas return policies actually and mid month, so make sure
Speaker 2: that you are reading the fine detail. Yeah, make a
Speaker 2: plan this weekend to go make those returns, and you're right, man,
Speaker 2: I mean they just those return policies are getting more stringent.
Speaker 2: It makes sense because it costs the retailers meaningful amounts
Speaker 2: of money to process those returns. It caught shipping's not free.
Speaker 2: It wasn't free when it got sent to you, and
Speaker 2: it's not free when you send it back to them.
Speaker 1: So I'm not.
Speaker 2: Mad about the fact that they're charging for that, but
Speaker 2: people need to be aware of that because it might
Speaker 2: change how they decide to make their return. We've got
Speaker 2: more to get to on this episode, including can you
Speaker 2: lease a used car? Turns out you might be able
Speaker 2: to pretty soon. We'll get to that and more right
Speaker 2: after this.
Speaker 1: Back from the break that's keep.
Speaker 2: This Friday flight train rolling and Joel, of course, you
Speaker 2: know that is now time for our ludicrous headline of
Speaker 2: the week. This one is from the journal Wall Street Journal,
Speaker 2: and the headline reads the new fitness gadgets that promise
Speaker 2: to change your life, which is it's kind of fun
Speaker 2: because you and I both have gotten more into fitness recently,
Speaker 2: so I think we were both like.
Speaker 1: Oh, let's see, let's see what's out there.
Speaker 2: It's funny specifically because some of the things that they're highlighting,
Speaker 2: like the gadgets, it's they're silly and they're crazy expensive.
Speaker 2: These different pieces of technology that are finding their way
Speaker 2: into our lives, These different products that are hitting the market.
Speaker 1: So for instance, there is one that was like a
Speaker 1: sweat lost tracker.
Speaker 2: Another product that they mentioned were adjustable compression leggings. Yeah,
Speaker 2: that one the one level of compression. Sorry, it's not
Speaker 2: doing it anymore. You need to be able to do
Speaker 2: It's kind of like the Reebok pumps. You can change it,
Speaker 2: dial it up a little bit. And there was also
Speaker 2: this like six thousand dollars stationary bike that vibrates. It's
Speaker 2: supposed to meant to mimic bicycling down a cobblestone street,
Speaker 2: you know, to get that real life experience like you
Speaker 2: wanted to at home when you're getting.
Speaker 1: A work out. It's it's ridiculous.
Speaker 2: I certainly plan to continue to exercise more in twenty
Speaker 2: twenty four, or at least maintaining what I did last year,
Speaker 2: but I don't plan on purchasing any of these items
Speaker 2: that purport to help me. I think there's nothing wrong.
Speaker 2: Let's say with buying a normal, used, perhaps stationary bike
Speaker 2: to have at home, or paying to join a gym
Speaker 2: that you pay a monthly fee for. But if you
Speaker 2: go too far down the gear rabbit hole, I think
Speaker 2: you might find yourself with less cash on hand, and
Speaker 2: simultaneously you may not be any closer to being fit.
Speaker 1: Yeah.
Speaker 2: I mean a lot of those gadgets were just kind
Speaker 2: of ridiculous. There was one it almost looked like an
Speaker 2: ab roller, but it was like seven hundred and fifty dollars.
Speaker 2: They claimed to be a total body workout and I'm like,
Speaker 2: how is that possible? And so yeah, it just thinking
Speaker 2: that the new fitness item is what's going to help
Speaker 2: you get in shape.
Speaker 1: No, no, no, no, it's about.
Speaker 2: You and actually following through and finding a fitness regimen
Speaker 2: that you can keep doing through thick and through thin,
Speaker 2: throughout the year.
Speaker 1: Sure, it's not.
Speaker 2: About getting the right gadget. And Matt, this is one
Speaker 2: of those instances where we see some parallels between physical
Speaker 2: health and financial health. We're oftentimes looking for the easy
Speaker 2: button that's going to provide us with all the results.
Speaker 2: Oh yeah, but without all the effort, right, I mean
Speaker 2: that's when you if you were to boiler down. That's
Speaker 2: what I want, but it just that's not how life works,
Speaker 2: and we want to see that progress in a fraction
Speaker 2: of the time that's actually necessary to build up a durable,
Speaker 2: healthy foundation. So just like we're tempted to buy gadgets
Speaker 2: to get healthy, we also might be tempted into thinking
Speaker 2: that joining an investing club or shocking money into cryptocurrency
Speaker 2: is to ticket to building wealth. It's like, hey, listen,
Speaker 2: I don't have time to wait for ten percent annualized
Speaker 2: compounding returns in the S and P I got to
Speaker 2: strike it rich much more quickly. I got to take
Speaker 2: bigger risks. Well, that's going to lead to heartache for
Speaker 2: most people. And someone might look at last year's S
Speaker 2: and P FI five hundred and they think, wow, dang,
Speaker 2: I just missed out on twenty four percent returns. But
Speaker 2: those returns didn't happen on December thirty first. They took
Speaker 2: place over the three hundred and sixty five previous days
Speaker 2: that slow and steady investors kept at it regardless of
Speaker 2: what the market was doing. There's no easy button. Yeah,
Speaker 2: we can be so obsessed and fixated on the end
Speaker 2: result as opposed to knowing like.
Speaker 1: The process that it takes to get there, right.
Speaker 2: Like the hours and days of sweat and denying your
Speaker 2: self dessert or or you know, when it comes to
Speaker 2: physical fitness, but when it comes to investing, sacrifice that's
Speaker 2: involved with saying no to purchases and socking that money
Speaker 2: away into those those tax advantage retirement accounts. The small
Speaker 2: things like, hey, literally, what if it's a new year.
Speaker 2: You go into your four oh one K, the back
Speaker 2: end of your four oh on and K, and you
Speaker 2: increase your contributions by one percent. Maybe you're at seven percent,
Speaker 2: maybe you're at four percent right now, but if you
Speaker 2: increase it by one percent, it seems like a small move,
Speaker 2: but it ends up being a really big move that's
Speaker 2: going to help you out and help you just build
Speaker 2: more wealth in the coming months and years. And if
Speaker 2: you are kind of new to investing, we have a
Speaker 2: beginner's guide of how to invest. We'll link to that
Speaker 2: article in our show notes. Matt, let's talk about cars
Speaker 2: for a second. We've always said, you and I have
Speaker 2: always said that leasing a car is like lighting money
Speaker 2: on fire, like it's it's just a horrible idea.
Speaker 1: Yeah, pretty much.
Speaker 2: I don't like money on fire and I don't lease cars,
Speaker 2: but what if you could lease a used car?
Speaker 1: Would that be better? Maybe?
Speaker 2: Honda and Accura, it turns out, are going down this
Speaker 2: path of leasing generally used, certified pre owned cars for
Speaker 2: less money in order to lure in younger drivers. I
Speaker 2: kind of sort of like it because leasing a four
Speaker 2: year old Honda that's in great shape is a better
Speaker 2: financial move than leasing a brand new Honda Cord or
Speaker 2: something or something like that. It's a better option than
Speaker 2: leasing something bright new because like, basically what a lease
Speaker 2: is you.
Speaker 1: Are paying for depreciation. And when you have a brand new.
Speaker 2: Vehicle, guess what those are the vehicles that depreciate the fastest. Yeah, So, like,
Speaker 2: is it a card depreciates fifty percent within the first
Speaker 2: five years, ten percent just from driving it off the lot,
Speaker 2: and there remaining remaining forty percent basically over the next
Speaker 2: four years, I guess.
Speaker 1: But just keep that in mind.
Speaker 2: While it's not our favorite thing, it is better than
Speaker 2: leasing a brand new vehicle, Yeah, for sure. And because
Speaker 2: the payments, I mean, they're gonna be a lot more reasonable,
Speaker 2: I guess, is what I'm saying than leasing something that's
Speaker 2: completely brand new. Oh yeah, no, it's gonna it's kind
Speaker 2: of shades of great here massively, massively trimmed that monthly
Speaker 2: amount that you have to pay an Accura. But just
Speaker 2: like we always say, Matt better yet, go ahead and
Speaker 2: just buy the four year old car yep and drive
Speaker 2: it for a decade. That's gonna save you a lot
Speaker 2: more over the years than leasing, even if you're leasing
Speaker 2: used So I kind of like that leasing used cars
Speaker 2: is gonna become a thing, and I'm curious to see
Speaker 2: how it plays out. But I think even for how
Speaker 2: to money listeners, while it's a less egregious money mistake
Speaker 2: than leasing a brand new car, it's still not the.
Speaker 1: Optimal move exactly. Yeah, it's a better option, it is
Speaker 1: not the best option.
Speaker 2: Owning is still going to be better than leasing, I
Speaker 2: think like ninety nine percent of the time. But one
Speaker 2: other model that's gaining steam and maybe it'll be the future,
Speaker 2: does involve ownership either. But it's about having flexible access
Speaker 2: to transportation. So we've seen car sharing sites like zip
Speaker 2: car that's certainly made a difference in the market. Turo
Speaker 2: they have as well. But these resources are great because
Speaker 2: they can help you to ditch a car from your
Speaker 2: life completely, but then you still have access to a
Speaker 2: car when you need one or whenever you want one.
Speaker 2: So yeah, leasing is going to be more flexible, but
Speaker 2: these other non ownership models are even honestly, I think,
Speaker 2: more flexible, but not in mind. It's a great goal
Speaker 2: to try and own fewer depreciating assets. And it also
Speaker 2: makes me think of even just bicycling, because guess what,
Speaker 2: that's also a depreciating asset. But it's vastly more affordable
Speaker 2: to own a bicycle, and I know you can't bike everywhere. Well,
Speaker 2: the depreciation hit from buying a fifty thousand dollars car
Speaker 2: or a five hundred dollars bike is vastly different.
Speaker 1: Yeah, yeah, right, it's kind of like apples and oranges.
Speaker 2: Yeah, or something even more stark, right, but like, yeah,
Speaker 2: we've talked about this, and we'll link to this episode
Speaker 2: in the show notes. We've talked about trying to get
Speaker 2: rid of a car from your life, and especially for
Speaker 2: two car households, and there's more work from home happening
Speaker 2: and stuff like that. Just add up all the costs
Speaker 2: of this car and think, could I if I did
Speaker 2: some ride share, a little bit of zip car, a
Speaker 2: little bit of Touro. Could we have just one car,
Speaker 2: maybe in our garage, one car in our possession, and
Speaker 2: that way we're not taking the depreciation hit on two
Speaker 2: cars simultaneously. It's it leaks worth looking into. And I
Speaker 2: think it's a goal of a whole lot of people
Speaker 2: can accomplish. It's gonna bring thousands and thousands of dollars
Speaker 2: back into your life every single year exactly. Yeah, dude,
Speaker 2: So this makes me think. I know I talked about
Speaker 2: rent using Turo to rent a Tesla, and I shared
Speaker 2: like the electric car versus gasoline. Yeah, numbers, I crunch
Speaker 2: those numbers. But I don't think I talked about the
Speaker 2: actual Turo experience. This is last year when Kate and
Speaker 2: I were out in Colorado.
Speaker 1: But it was actually pretty damn good. And here's the thing.
Speaker 2: We actually hit a There was a hiccup, which is
Speaker 2: when we landed at the airport, I turned my phone
Speaker 2: off airplane mode or whatever, and the car that we
Speaker 2: were supposed to be receiving from Turo it hadn't been
Speaker 2: returned yet and so it wasn't going to be available.
Speaker 2: But somebody from Truro called me. It was like, hey,
Speaker 2: we've got another car.
Speaker 1: For you.
Speaker 2: You just have to approve it. I was like, okay,
Speaker 2: sounds great, same price, it was a nicer Tesla. Downside though,
Speaker 2: is that we had to wait around like an extra
Speaker 2: thirty minutes because they needed to deliver.
Speaker 1: It to the airport.
Speaker 2: Got as opposed to, how do we just gone with
Speaker 2: a standard rental car? Of course they would have just
Speaker 2: given us any car that's in their fleet that's already there,
Speaker 2: so slightly more customized experience, but just know, perhaps there
Speaker 2: might be some flexibility required of you. It's not unlike
Speaker 2: honestly renting from Airbnb, right like, you get a unique place,
Speaker 2: something that's more customizable to what it is you're looking for,
Speaker 2: but you're not going to have countless rooms to choose
Speaker 2: from at a hotel. Were your Airbnb for some reason
Speaker 2: not to be available for Yeah, but overall, just a
Speaker 2: good experience. We're definitely gonna check it out again in
Speaker 2: the future.
Speaker 1: Nice.
Speaker 2: Yeah, Well, let's talk about buying now, pay later for
Speaker 2: a second map, because do it until now it's been
Speaker 2: something you're only able to do online, but that just
Speaker 2: changed this past week. You can now buy now, pay
Speaker 2: later in real life, which in the flesh just freaking
Speaker 2: crazy to me. If you head to a self checkout
Speaker 2: lane at Walmart, now you can opt to pay for
Speaker 2: your purchases via multiple installments. Supposedly you can't do this
Speaker 2: with groceries, they said, by the way, which is good
Speaker 2: news because that would have worded me. But most other
Speaker 2: stuff you can purchase at Walmart up to four thousand dollars.
Speaker 2: I think of an order can be paid off over time.
Speaker 2: And American shoppers they're just so quickly getting used to
Speaker 2: affirm Klarna and after pay and they're starting to think
Speaker 2: of buy now, pay later as a normal way to pay.
Speaker 2: It's the adoption has been like rapid, but gosh, this
Speaker 2: is not a normal way to pay.
Speaker 1: It's super weird.
Speaker 2: And the fact that yeah, now we're normalizing buy now,
Speaker 2: pay later even more, that you can use it in
Speaker 2: the store, in the physical store, idn't. I don't like
Speaker 2: that you can use it online. I don't like that
Speaker 2: you can do it for buying airplane tickets. I don't
Speaker 2: like that you can do it for anything. But yeah,
Speaker 2: this it's the buy now, pay later. Things only get worse. Yeah,
Speaker 2: you're basically stealing from future you in order to satisfy
Speaker 2: present day you. That wants your stuff right that once
Speaker 2: your goods, and it is weird, but it is definitely
Speaker 2: becoming more widespread. A quarter of Americans have used it
Speaker 2: to pay for something at this point, and these services
Speaker 2: they're just gaining steam. And there's a reason that retailers
Speaker 2: are jumping on the bandwagon that they're offering the service.
Speaker 2: It's because shoppers tend to buy more when they can
Speaker 2: buy now.
Speaker 1: Pay later.
Speaker 2: This is the whole selling point that affirm Klarnaine, after
Speaker 2: pay give to the retailers or say listen or higher,
Speaker 2: you're gonna have bigger cards at checkout. People are gonna
Speaker 2: spend instead of spend sixty bucks, are going to spend
Speaker 2: one hundred and twenty bucks yeah, or seventy five Yeah.
Speaker 2: But they're like, this is you're going to get more
Speaker 2: money by allowing us to partner with you and giving
Speaker 2: your customers access to these beautiful, wonderful buy now pay
Speaker 2: later abilities.
Speaker 1: Yeah.
Speaker 2: And at some points though, the piper is going to
Speaker 2: have to be paid, right Like, at some point the
Speaker 2: bill quite literally.
Speaker 1: Is gonna come do.
Speaker 2: And I think this is gonna end up getting millions
Speaker 2: of folks into real trouble because what they're doing is
Speaker 2: just front loading these purchases that they should have instead
Speaker 2: waited to make until they had saved up enough to
Speaker 2: actually be able to afford it. Essentially, this is it's
Speaker 2: kind of like a way of time travel with your money, right,
Speaker 2: Like you are pulling these purchases from the future to
Speaker 2: present day, and you're just assuming that you're either going
Speaker 2: to have more money off in the future to pay
Speaker 2: this off you're gonna or you're assuming that you're gonna
Speaker 2: have more discipline to actually stick with it, or you're
Speaker 2: assuming that maybe in the future, I'm not gonna want
Speaker 2: as much stuff and so I'll be able to tomorrow
Speaker 2: pay for the things for today. But that's a false
Speaker 2: assumption on all three of those accounts. There, you likely
Speaker 2: like you're counting on the best case scenario happening, and
Speaker 2: that puts you behind the a bom and to see
Speaker 2: it everything you see twenty and thirty somethings who have
Speaker 2: started using by now pay later. It's become a crutch.
Speaker 2: They start using it regularly for all sorts of purchases,
Speaker 2: whether it's clothing, new electronics, item travel, whatever it is,
Speaker 2: and they just get they think of this as normal
Speaker 2: now to pay for something in installments, and a lot
Speaker 2: of them are overdoing those purchases, buying things that they
Speaker 2: really truly can't afford. That's right, all right, dude, Let's
Speaker 2: talk about housing, because if you're hoping that following interest
Speaker 2: rates might induce more inventory in the Springs housing market,
Speaker 2: you're not alone. We really could see more people willing
Speaker 2: to list their homes as rates get closer to six percent,
Speaker 2: because folks are saying, hey, at least it's it's not
Speaker 2: eight percent. It's it's not like it was before. And
Speaker 2: one tactic that did make sense for some home buyers
Speaker 2: was to opt for an ARM and adjustable rate mortgage.
Speaker 2: So what I did, actually the last, the first time
Speaker 2: I've ever gotten an adjustable rate mortgage was when we
Speaker 2: bought our house eighteen months ago. But why did you
Speaker 2: opt for an ARM over that thirty year because the
Speaker 2: difference in rate was significant?
Speaker 1: Exactly.
Speaker 2: Yeah, it only makes sense if you are getting a
Speaker 2: superior rate. But here's the thing. New data today it
Speaker 2: shows that almost nobody is getting a better deal by
Speaker 2: opting for an ARM these days, So certainly can't hurt
Speaker 2: to ask, But keep in mind, at a thirty year
Speaker 2: fixed rate, they are looking like the best option for
Speaker 2: most home buyers right now. That plus putting at least
Speaker 2: twenty percent down to avoid PMI private mortgage insurance.
Speaker 1: Although we know that this is a.
Speaker 2: Tall ask, it's a tough requirement, it is what we
Speaker 2: want to steer folks toward. Yeah, I think I was
Speaker 2: always like, for a long time, Mat just knee jerk
Speaker 2: against adjustable rate mortgages, and then I started to see
Speaker 2: the nuance and I'm like, yeah, they can make sense
Speaker 2: at times, depending on the terms, depending on how long
Speaker 2: you're going to live in that home, and depending on
Speaker 2: the rate decrease you're able to get by going with
Speaker 2: an ARM instead of an adjustab rate. But you're right,
Speaker 2: adjustable rate mortgages, because of the way mortgage rates flux
Speaker 2: and change, adjustbory mortgages just starn't nearly as good of
Speaker 2: a deal as they were a year ago. So fixed
Speaker 2: rate mortgages again top of the heat. That's right, But
Speaker 2: that's going to do it for this episode. Matt will
Speaker 2: have show notes with Lee. Thanks to some of the
Speaker 2: stuff that we mentioned on today's episode up on our
Speaker 2: website at howtomoney dot com. All right, man, let's get
Speaker 2: out of here until next time. Best friends out and
Speaker 2: best friends out