WEBVTT - Ask HTM Special Edition: Tariffs, Market Volatility, & How It All Impacts You #973 0:00:00.080 --> 0:00:02.800 Welcome to Out of Money. I'm Joel, I'm Matt. 0:00:03.080 --> 0:00:05.680 Today we got a special ask kind of money episode 0:00:05.680 --> 0:01:06.560 for you. We're addressing tariff's volatility and their impact on you, you. 0:00:28.520 --> 0:00:32.360 Know, a buddy. This is the Tariff's special edition. How 0:00:32.360 --> 0:00:34.960 it's going to impact investing, How it's going to impact 0:00:35.159 --> 0:00:38.879 your job, your income, what you're spending, whether or not 0:00:38.920 --> 0:00:41.919 you should buy or sell a house. Perhaps these are 0:00:41.960 --> 0:00:44.240 all topics that we're going to be getting to during 0:00:44.240 --> 0:00:48.159 today's episode. Yeah, a lot to cover, and it's therefore 0:00:48.200 --> 0:00:50.519 we don't have any short quick stories to share with 0:00:50.560 --> 0:00:52.479 them this week. We've got a lot to get to 0:00:52.560 --> 0:00:53.400 during today's episode. 0:00:53.440 --> 0:00:55.200 As you and I have discussed multiple times to the 0:00:55.320 --> 0:01:00.240 constantly changing policy, that's got a factor to this discussion. Two, 0:01:00.440 --> 0:01:02.840 it's not like there's some set in stone let's plan 0:01:02.920 --> 0:01:05.600 on this. There are still like tariffs that are supposed 0:01:05.600 --> 0:01:08.119 to come into being in you know, less than three months. 0:01:08.480 --> 0:01:10.520 Will those are won't those happen? That's also part of 0:01:10.520 --> 0:01:11.240 the discussion here. 0:01:11.319 --> 0:01:13.920 Yeah, that's so true, because so we're literally recording this 0:01:13.920 --> 0:01:16.600 episode just like a few days before, you are hearing 0:01:16.640 --> 0:01:20.480 this out there and even and certainly between us recording 0:01:20.560 --> 0:01:23.400 and you hearing this episode, things could have changed. But literally, 0:01:23.440 --> 0:01:27.240 like while we're talking, like things are so dynamic, and 0:01:27.480 --> 0:01:29.240 I don't know if there's ever been a time where 0:01:29.280 --> 0:01:32.199 we've seen so much change in such a short amount 0:01:32.200 --> 0:01:35.600 of time. I heard specifically the terriffs I heard referred 0:01:35.600 --> 0:01:38.560 to recently as like the wax on wax off tariffs. 0:01:38.560 --> 0:01:41.080 It's the mister that Trump is the mister Miyagi of 0:01:42.000 --> 0:01:44.839 of international trade some truth for that which totally cracked 0:01:44.840 --> 0:01:46.640 me up. But the beer that you and I are 0:01:46.640 --> 0:01:49.480 going to enjoy during this episode is called a yellow Rose. 0:01:49.720 --> 0:01:53.040 This is a smash IPA. I did not know that 0:01:53.240 --> 0:01:55.880 was a category of Iba smash Burger's, but not smashed 0:01:55.880 --> 0:01:58.800 ipa smash I pa. I don't know Loane Pint Brewery. 0:01:58.840 --> 0:02:03.080 They are the of this particular drink, but never called 0:02:03.080 --> 0:02:05.480 it a drink before, but as a beer that we're 0:02:05.480 --> 0:02:07.160 gonna enjoy, and we'll share our thoughts at the end 0:02:07.160 --> 0:02:08.280 of the episode. True story. 0:02:08.280 --> 0:02:10.120 And by the way, if you have a money question, 0:02:10.560 --> 0:02:12.359 just go to how to money dot com slash ask 0:02:12.440 --> 0:02:14.440 for the simple directions on how to submit yours. If 0:02:14.440 --> 0:02:17.200 you've got one about the macroeconomy, how it impacts your 0:02:17.240 --> 0:02:20.440 personal finances. Please do send your questions our way, or 0:02:20.440 --> 0:02:22.280 you can just record your question on the voicemad Mo 0:02:22.360 --> 0:02:24.240 app of your phone email it over to us. 0:02:24.440 --> 0:02:24.639 Matt. 0:02:24.680 --> 0:02:28.680 Let's get to a question specifically about international investing in 0:02:28.720 --> 0:02:29.799 the age of tariffs. 0:02:30.200 --> 0:02:34.000 Hey, guys, this is Bryant and I'm calling in from Cutzer. 0:02:34.160 --> 0:02:37.240 My wife and I are both originally from the United States, 0:02:38.440 --> 0:02:42.320 but we are currently living and working in Cutzer as professors, 0:02:44.160 --> 0:02:49.679 and we are worried about the kind of state of 0:02:49.720 --> 0:02:57.080 the US economy, and we recently decided to keep living here, 0:02:57.200 --> 0:03:00.560 so we just turned down job offers extra c m 0:03:00.680 --> 0:03:05.840 M in order to kind of stay here and work here. 0:03:06.720 --> 0:03:13.480 Sellers are higher cost or lower. There's there's some perks involved, 0:03:14.680 --> 0:03:19.480 and we are kind of wondering where to go from 0:03:19.520 --> 0:03:26.240 here with our investments. We currently have most most of 0:03:26.240 --> 0:03:33.639 our investments are currently in the US stock market, mostly 0:03:33.720 --> 0:03:38.680 in the Vanguard et F v o O. But given 0:03:38.880 --> 0:03:44.320 kind of the decline of the dollar and the kind 0:03:44.360 --> 0:03:49.440 of fluctuation in the in the stock market currently and 0:03:49.520 --> 0:03:55.200 with everything else going on, we are considering investing internationally. 0:03:55.960 --> 0:04:01.520 So we've been looking at some European ETFs like the 0:04:02.120 --> 0:04:06.800 VGK and some other ones, And we were kind of 0:04:06.880 --> 0:04:09.960 just wondering if you have advice about that, what you 0:04:10.000 --> 0:04:16.680 think about if there's any picks that you would suggest. Yeah, thanks, Yes. 0:04:17.160 --> 0:04:19.640 Do you like how Bryant said, if we had any picks, 0:04:20.480 --> 0:04:21.960 We're here to dish out the stock tips. 0:04:23.000 --> 0:04:25.080 He's not, at least he's not asking about individual stocks. 0:04:25.120 --> 0:04:28.640 He's talking about, Hey, should I diversify internationally? Which is 0:04:28.680 --> 0:04:30.880 and it's honestly, that's a question as old as time, 0:04:31.120 --> 0:04:33.320 since the beginning of stock market investing. 0:04:33.400 --> 0:04:35.599 Yeah, Brian, he's a part of the VU family. He 0:04:35.600 --> 0:04:38.159 feels like a brother to me, Joel, because that's pretty 0:04:38.240 --> 0:04:39.720 much fully invested in VU. 0:04:40.040 --> 0:04:42.040 Yeah, I'd be curious to know, by the way, what 0:04:42.120 --> 0:04:44.919 it feels like to be living internationally right now, reading 0:04:44.960 --> 0:04:48.720 about all this American news from overseas. It's it's like, right, 0:04:48.920 --> 0:04:51.400 we feel inundated by it. I wonder if, because he's 0:04:51.640 --> 0:04:54.600 in the Middle East, if it feels more or less impactful. 0:04:54.920 --> 0:04:57.320 Maybe it feels even a little less unclear because the 0:04:57.839 --> 0:05:00.040 coverage is a little more sparse. I I don't no, 0:05:00.320 --> 0:05:02.520 but it is. It would be interesting to have that 0:05:02.600 --> 0:05:04.440 kind of Bird's eye view in What is it actually 0:05:04.480 --> 0:05:06.000 like living in what? How do you pronounce it Cutter? 0:05:06.200 --> 0:05:08.479 I've always had a tough time pronouncing that one. 0:05:08.640 --> 0:05:11.160 But that's I think that's how you pronounce it if 0:05:11.200 --> 0:05:13.760 you are a local, like if you live are That's 0:05:13.800 --> 0:05:16.120 how I always said. Yeah, I mean that's as I think. 0:05:16.120 --> 0:05:18.800 As English speakers, I've always heard it referred to as Qatar. 0:05:18.960 --> 0:05:20.800 But folks who say cutter, you have to be a 0:05:20.839 --> 0:05:23.360 professor living in Cutter to be able to say it 0:05:23.360 --> 0:05:25.200 that way. Joe, Yeah, so you're not allowed to say 0:05:25.200 --> 0:05:27.520 it like that, Okay, I won't just so you know. Good, good, 0:05:27.760 --> 0:05:29.400 Thanks for clarifying that ahead of the time. A whole 0:05:29.400 --> 0:05:31.120 lot of other words you're also not allowed to say either, right, 0:05:31.200 --> 0:05:34.719 because of who you are. But that's true, okay. But 0:05:34.920 --> 0:05:37.680 I also I get to worry that Bryant is experiencing here, right. 0:05:37.720 --> 0:05:38.000 I think. 0:05:38.200 --> 0:05:39.520 I think a lot of the norms that we've grown 0:05:39.520 --> 0:05:42.520 accustomed to, they're being shaken up right now. You and 0:05:42.560 --> 0:05:45.840 I were always talking about how politics shouldn't impact how 0:05:45.880 --> 0:05:47.800 you invest. That's particularly true right when we're getting to 0:05:48.120 --> 0:05:50.480 election season and people like, oh, if the Democrat or 0:05:50.480 --> 0:05:52.800 the Republican gets selected that maybe I should shake things 0:05:52.839 --> 0:05:54.080 up because I don't know if they're going to handle 0:05:54.120 --> 0:05:57.239 the economy as well. And that has always been based 0:05:57.240 --> 0:05:59.360 on the reality that both the R and the d's 0:05:59.480 --> 0:06:01.240 they kind of tend to hold a belief in the 0:06:01.240 --> 0:06:04.280 benefits of global free trade. And for the first time 0:06:04.279 --> 0:06:07.000 in a long time, Matt, the free trade bias that's 0:06:07.080 --> 0:06:12.400 essentially been held for generations, it's being upended. And so yeah, 0:06:12.400 --> 0:06:15.400 I do think the discussion of changing your investing strategy 0:06:15.720 --> 0:06:17.560 takes on a bit more weight in this environment. Like 0:06:17.560 --> 0:06:19.880 the question is different than what if an R or 0:06:19.920 --> 0:06:22.080 D gets elected. It's like, well, what if the way 0:06:22.120 --> 0:06:24.799 we think of the global economy is shifting dramatically? 0:06:24.920 --> 0:06:28.480 Yeah, and it does. I will say it appears like 0:06:28.560 --> 0:06:31.600 that sort of free trade approach to global trade is 0:06:31.640 --> 0:06:33.680 being upended. There's also a chance, of course, that it 0:06:33.680 --> 0:06:35.239 could just sort of be a blip on the radar 0:06:35.480 --> 0:06:38.640 in terms of stock market and investments. It could be 0:06:38.720 --> 0:06:41.320 just some of that short term volatility that has yet 0:06:41.360 --> 0:06:44.400 to be seen. And honestly, that kind of that's the 0:06:44.400 --> 0:06:47.240 filter I'm viewing all the questions we're going to kind 0:06:47.240 --> 0:06:50.279 of get to today. We're gonna address and try to 0:06:50.279 --> 0:06:52.279 answer the questions as best we can given what we 0:06:52.360 --> 0:06:55.560 know at the moment. So Bryant's question should he be 0:06:55.800 --> 0:07:00.560 investing internationally? There are gonna be valid arguments on both 0:07:00.600 --> 0:07:04.039 sides whether or not you should continue to invest solely 0:07:04.120 --> 0:07:06.680 in the in US companies or if you should expand 0:07:06.720 --> 0:07:10.840 that to international indexes as well, because many believe that 0:07:11.080 --> 0:07:15.480 US centric ETFs like VU offers enough overseas exposure that 0:07:15.520 --> 0:07:18.560 it just minimizes or it even completely eliminates the need 0:07:18.600 --> 0:07:23.440 to own funds that own foreign companies specifically, So basically 0:07:23.680 --> 0:07:28.120 you're getting enough diversification by owning a single index like 0:07:28.240 --> 0:07:33.440 VU because McDonald's, Apple, Amazon, these are all companies who 0:07:33.480 --> 0:07:36.240 are doing a lot of business in countries around the world, 0:07:36.440 --> 0:07:39.119 which achieves a just like a good enough kind of result. 0:07:39.160 --> 0:07:40.600 If you travel to Asia, man, you know how many 0:07:40.640 --> 0:07:42.480 kfs as you see a lot are there. 0:07:42.480 --> 0:07:45.040 I don't know. It's been a long time I've been 0:07:45.040 --> 0:07:47.760 in Asia. So we have always felt this way, and honestly, 0:07:47.800 --> 0:07:51.200 despite the tariff induced market volatility, we still feel that 0:07:51.240 --> 0:07:54.360 most folks will do just fine investing in low cost 0:07:54.480 --> 0:07:57.640 total stock market index funds or s and P five 0:07:57.720 --> 0:07:59.000 hundred ETFs over the years. 0:07:59.120 --> 0:08:01.560 Yeah, And I think that's for multiple reasons, right, because 0:08:02.040 --> 0:08:05.760 despite this growing anti free trade sentiment, the US economy, 0:08:06.080 --> 0:08:09.440 it's still the most vibrant in existence, right, and our 0:08:09.480 --> 0:08:12.280 business environment is the envy of the world. Like when 0:08:12.320 --> 0:08:14.720 you think about the biggest companies in the world, it's 0:08:14.880 --> 0:08:18.680 not even close like the United States, especially when you're 0:08:18.680 --> 0:08:21.720 talking about the mag seven or whatever. Companies in other 0:08:21.760 --> 0:08:25.480 countries just can't hold a candle to the largest companies 0:08:25.520 --> 0:08:27.800 that we have in the United States here. True, and 0:08:27.880 --> 0:08:30.640 also when it comes to the breath and the diversity 0:08:30.960 --> 0:08:34.480 of companies and industries that the United States participates in. 0:08:35.040 --> 0:08:38.240 It's all our belief too that there's no real stomach 0:08:38.640 --> 0:08:41.559 for significant tariffs to remain over the long term. Right. 0:08:41.559 --> 0:08:45.200 We've already seen tariffs paused, reduced, rolled back, and then 0:08:45.240 --> 0:08:50.199 exceptions created for specific companies and sectors specifically like computers, smartphones. 0:08:50.520 --> 0:08:52.840 Right when you think of a company like Apple, they're 0:08:52.920 --> 0:08:57.600 lobbying hard to have tariffs reduced on smartphones in particular. 0:08:57.880 --> 0:09:00.400 And I think the administration is starting to understand how 0:09:00.480 --> 0:09:03.640 negative of an impact lasting tariffs could have. And it's 0:09:03.679 --> 0:09:06.360 obviously it's hard to predict when trade policy is kind 0:09:06.400 --> 0:09:08.200 of at the mercy of one man's whims right now. 0:09:08.559 --> 0:09:11.440 But the willingness to minimize tariffs and to shift when 0:09:11.440 --> 0:09:14.640 tide's turn, I think that's at least somewhat positive. So 0:09:14.960 --> 0:09:18.560 one we can see that the US economy is incredibly resilient, 0:09:18.840 --> 0:09:22.240 and two, it looks like tariff policy can and will 0:09:22.320 --> 0:09:26.319 change right as the American economy reacts negatively yes to 0:09:26.400 --> 0:09:28.240 the imposition of those tariffs. I think those are two 0:09:28.559 --> 0:09:31.720 at least positive signs that being a US centric investor 0:09:32.360 --> 0:09:33.199 still seems like. 0:09:33.120 --> 0:09:36.320 A reasonable idea, right But Bryant might feel differently. He 0:09:36.480 --> 0:09:39.280 might come down, you know, given the same information, he 0:09:39.360 --> 0:09:41.480 might make a totally different decision. And I think that's okay. 0:09:41.600 --> 0:09:43.400 There are a lot of really smart people out there 0:09:43.400 --> 0:09:47.080 who believe that international exposure is crucial for investors. And 0:09:47.120 --> 0:09:50.679 this is even before tariffs came on the scene. Even 0:09:50.960 --> 0:09:54.679 if international stocks have performed poorly versus US stocks over 0:09:54.720 --> 0:09:57.760 the past decade, that still doesn't mean that they will 0:09:57.760 --> 0:10:00.680 over the next decade. You know, like things could turn around, 0:10:00.960 --> 0:10:05.440 particularly if US policy continues to march down this road. Brian, 0:10:05.520 --> 0:10:07.839 if you do feel that you need to change things, up. 0:10:08.040 --> 0:10:11.719 I would say, don't change things up like immediately, Like 0:10:11.760 --> 0:10:13.360 you don't need to slam on the e break and 0:10:13.480 --> 0:10:16.840 pull ui. I would just consider buying other low few 0:10:16.880 --> 0:10:21.160 funds that offer non US talk exposures with new investment 0:10:21.280 --> 0:10:24.240 dollars over time. This isn't like a call to say 0:10:24.280 --> 0:10:28.199 just sell everything and you completely upend your financial or 0:10:28.200 --> 0:10:29.560 at least your investing life. Yeah. 0:10:29.600 --> 0:10:32.640 I think if you're going to change your investing strategy, like, 0:10:33.000 --> 0:10:34.920 make sure you write it down, be thoughtful about it, 0:10:34.960 --> 0:10:37.200 and say no no, because of this, It's changed my 0:10:37.880 --> 0:10:40.320 happening in the world. It's changed my belief in this way, 0:10:40.880 --> 0:10:43.920 and put pen to paper so that you have an 0:10:44.000 --> 0:10:46.719 informed view of why you're making those changes, so you're 0:10:46.720 --> 0:10:49.280 not just making them emotionally and half past exactly. That's 0:10:49.280 --> 0:10:50.559 a bad idea and it. 0:10:50.520 --> 0:10:52.679 Makes me think too. So at the beginning or in 0:10:52.720 --> 0:10:55.000 his question, he was talking about how they chose to 0:10:55.040 --> 0:10:58.320 stay there in Katar based on a couple of things, 0:10:58.800 --> 0:11:02.800 based on higher pay as well as lower lower cost 0:11:02.840 --> 0:11:05.520 of living. I think is what he said there that's 0:11:05.600 --> 0:11:08.000 great as opposed to thinking that, oh, it seems like 0:11:08.000 --> 0:11:10.679 the US economies and shambles. I'm not totally sure. I mean, 0:11:10.720 --> 0:11:15.240 he did mention like the weekend US dollar, but hopefully 0:11:15.320 --> 0:11:17.760 he primarily made the decision based on some of these hard, 0:11:17.960 --> 0:11:20.640 tangible number crunching that he was able to do, as 0:11:20.679 --> 0:11:23.760 opposed to projecting into the future what might be happening 0:11:24.000 --> 0:11:26.160 in a similar way. That's how I would want Bryant 0:11:26.200 --> 0:11:29.240 to approach his investing, like, yes, total, it's totally fine 0:11:29.280 --> 0:11:31.679 to say I want to maybe diversify a little bit 0:11:31.679 --> 0:11:34.440 more internationally, but make sure you're doing that with a 0:11:34.480 --> 0:11:37.040 plan while looking out the numbers as opposed to that 0:11:37.080 --> 0:11:38.760 sort of knee jerk emotional reaction. 0:11:38.520 --> 0:11:41.079 In a proactive, not reactive way. And the proactive, I 0:11:41.120 --> 0:11:43.040 think is exactly what you mentioned, Matt, just kind of 0:11:43.040 --> 0:11:48.319 buying into other index funds internationally over time to increase 0:11:48.320 --> 0:11:51.400 your exposure there, instead of making some sort of whiplash 0:11:51.679 --> 0:11:55.240 sell by sort of thing in one of your tax 0:11:55.240 --> 0:11:59.199 advantage retirement accounts. Right, and Bryant, he mentioned VGK that's 0:11:59.200 --> 0:12:01.800 a good one for your specific investing. It's a Vanguard fund, 0:12:02.040 --> 0:12:04.599 and then there's there are funds like VXUS it's a 0:12:04.800 --> 0:12:07.360 it's a broader international fund. They could do the trick 0:12:07.400 --> 0:12:07.760 as well. 0:12:08.120 --> 0:12:10.520 Also low cost. Also cost also starts with the V 0:12:10.640 --> 0:12:12.640 so I'm pretty sure Brian's going to be into it, 0:12:13.800 --> 0:12:15.679 and I think ultimately what it comes down to, Matt, 0:12:15.720 --> 0:12:18.320 part of what makes a good portfolio for anybody out 0:12:18.360 --> 0:12:20.839 there listening is if it allows you to sleep at night, 0:12:21.280 --> 0:12:24.920 If you are a nervous nelly, right, if you believe 0:12:25.280 --> 0:12:28.240 that ramping up to let's say, twenty percent international stock 0:12:28.280 --> 0:12:30.520 exposure over the coming years, if that would help you 0:12:30.640 --> 0:12:31.720 rest a little more. 0:12:31.520 --> 0:12:35.160 Easily, do it. If you have gone if you saw 0:12:35.200 --> 0:12:38.520 those those jaw dropping multiple five percent drops back to 0:12:38.559 --> 0:12:40.719 back and you were like, I can't handle this. I'm 0:12:40.720 --> 0:12:42.640 looking at my four one k and I'm freaking well, 0:12:42.640 --> 0:12:44.440 then it probably means you are too stock heavy and 0:12:44.480 --> 0:12:48.320 you need to have a more balanced investment approach, Like 0:12:48.440 --> 0:12:51.840 you don't do something, don't have so much exposure to 0:12:51.880 --> 0:12:55.000 stocks that if we do have a correction, like it's 0:12:55.040 --> 0:12:58.080 too emotionally difficult for you to stomach. I would also 0:12:58.160 --> 0:13:00.920 just note don't sleep on target date fund either. There's 0:13:00.960 --> 0:13:03.920 still US centric, but part of the appeal is the 0:13:03.920 --> 0:13:06.559 inclusion of some foreign stocks and bonds, So target date 0:13:06.559 --> 0:13:09.200 funds could be another reasonable choice for Briant and for 0:13:09.240 --> 0:13:11.319 other people out there, And it's something that we mentioned 0:13:11.400 --> 0:13:14.079 kind of frequently, especially because it is one of those 0:13:14.080 --> 0:13:15.800 set it and forget it things where you invest in 0:13:15.840 --> 0:13:18.079 the target date fund and it changes as you get 0:13:18.080 --> 0:13:19.200 closer to your retirement date. 0:13:19.320 --> 0:13:21.040 Yeah, but in a similar way, I feel like even 0:13:21.160 --> 0:13:23.240 VU is a set it and forget it kind of thing. 0:13:23.280 --> 0:13:24.959 You know, It's like, this isn't something that you really 0:13:25.000 --> 0:13:26.840 need to look at. It's it's a NIC and PFUF fund, 0:13:26.840 --> 0:13:29.160 an index fund. It automatically rebounces and take into account 0:13:29.200 --> 0:13:31.319 the different companies that are included in the troops. 0:13:31.320 --> 0:13:34.200 But it's getting closer to tapping those retirements. Certain percent 0:13:34.240 --> 0:13:37.439 stock oriented, certainly if you are approaching retirement. But I 0:13:37.480 --> 0:13:39.600 mean it seems like Brian is just looking at how 0:13:39.640 --> 0:13:41.440 am I going to be able to maximize my returns 0:13:41.480 --> 0:13:43.719 moving forward. So I do think that there's a way 0:13:43.720 --> 0:13:47.679 to sort of steal man the international exposure case, and 0:13:48.000 --> 0:13:51.280 like this is an aspect of not terrorists, but just 0:13:51.360 --> 0:13:52.959 our current form, current White. 0:13:52.800 --> 0:13:55.360 House's foreign policy. And hopefully this isn't venture too much 0:13:55.400 --> 0:13:57.480 in the politics. But like one of the things that 0:13:57.520 --> 0:13:59.839 we've heard recently is that the US isn't going to 0:13:59.880 --> 0:14:02.120 be like the world's police right like that, it's not 0:14:02.200 --> 0:14:04.280 going to be like the global cop on the beat, 0:14:04.520 --> 0:14:09.319 as evidenced by the Vice President's statement that got the 0:14:09.520 --> 0:14:12.160 signal gate whatever the thing this is a few weeks ago, 0:14:12.280 --> 0:14:14.040 it's just like, Oh, I hate that we're bailing out 0:14:14.080 --> 0:14:18.840 Europe again. And there seems to be this distancing from 0:14:18.920 --> 0:14:21.240 other countries. I mean not only in funding that we're 0:14:21.240 --> 0:14:24.280 cutting to other countries from a soft diplomacy standpoint, but 0:14:24.360 --> 0:14:27.680 also literally from a defense backing standpoint as well. So 0:14:27.840 --> 0:14:30.560 from a Steelman best case scenario for investing internationally, it 0:14:30.640 --> 0:14:32.680 almost seems like that there is an opportunity for all 0:14:32.680 --> 0:14:37.200 these countries who have previously been reliant specifically on US 0:14:37.320 --> 0:14:41.400 defense to have to get their books in order for 0:14:41.480 --> 0:14:43.120 companies to be like, oh, this is something that we're 0:14:43.120 --> 0:14:45.600 going to have to start doing, and I see potentially 0:14:45.640 --> 0:14:48.600 an opportunity for a lot of foreign countries to ramp 0:14:48.680 --> 0:14:50.640 I mean they're talking about ramping up like Germany, right, 0:14:50.720 --> 0:14:52.640 I mean they're like, oh, we've already seen defense stocks 0:14:52.640 --> 0:14:57.120 in Europe going and as companies get more efficient, that's 0:14:57.160 --> 0:14:59.800 going to lead to higher profits and potentially higher returns 0:14:59.800 --> 0:15:02.720 of well, so I could see that being sort of 0:15:02.800 --> 0:15:04.840 a not a best case scenario argument, but like a 0:15:04.880 --> 0:15:09.760 Steelman case for international investing, specifically because of the US's 0:15:10.000 --> 0:15:11.960 stance towards other countries. But who knows. 0:15:12.000 --> 0:15:14.440 All right, Matt, let's get some more questions we've got. Specifically, 0:15:14.440 --> 0:15:16.320 we're gonna get to a lot of questions that people 0:15:16.360 --> 0:15:19.560 pose in our Facebook group about tariffs and markets and 0:15:19.600 --> 0:15:21.560 how they should be reacting right now. This question comes 0:15:21.600 --> 0:15:25.600 from Justin. He says, in explaining tariffs, can you discuss 0:15:25.840 --> 0:15:28.720 if a tariff is a form of a regressive tax policy? 0:15:29.040 --> 0:15:31.800 For simplicity's sake, if tariff's raise the cost of groceries 0:15:31.840 --> 0:15:34.120 by one hundred bucks equally for all consumers, that one 0:15:34.200 --> 0:15:36.400 hundred dollars is a much larger percentage for a person 0:15:36.480 --> 0:15:38.680 making two grand a month than for the person making 0:15:38.800 --> 0:15:39.600 ten grand a month. 0:15:39.920 --> 0:15:44.440 Yep, yep. I mean, that's basically true. Terrafs are regressive 0:15:44.480 --> 0:15:46.560 in this way. And it's super fascinating because at least 0:15:46.640 --> 0:15:50.640 one of the major reasons offered for implementing teriffs was 0:15:50.720 --> 0:15:54.280 to help lower income Americans, so bringing back the manufacturing 0:15:54.400 --> 0:15:56.560 jobs that were lost to other countries, is one of 0:15:56.600 --> 0:15:59.880 the main goals, and I of course understand the thought 0:16:00.080 --> 0:16:03.080 process here. I just don't think that recreating a world 0:16:03.160 --> 0:16:07.200 where the US is a manufacturing powerhouse is likely or 0:16:07.360 --> 0:16:10.440 even makes the most sense for our economy. It makes 0:16:10.600 --> 0:16:12.280 A few days ago or last week, we were talking 0:16:12.320 --> 0:16:14.560 about we were looking at the digital rendering or the 0:16:14.600 --> 0:16:17.960 flyover of the BID factory in China, which it's like 0:16:18.480 --> 0:16:21.160 larger than Manhattan, It's like almost as big as San 0:16:21.200 --> 0:16:25.280 Francisco or something like that. Mind blowing dorms for their workers, 0:16:25.440 --> 0:16:28.080 and I'm wanting it. It's crazy impressive and you're just like, 0:16:28.200 --> 0:16:32.560 this is amazing that the singular private company. But then 0:16:32.600 --> 0:16:34.760 to think, wait, are we going to compete with that? 0:16:35.120 --> 0:16:37.560 Not from a do we have the ability to? But 0:16:37.640 --> 0:16:40.800 do we have the do we want to do that? Right? Like? 0:16:41.200 --> 0:16:44.360 Is that the kind of manufacturing powerhouse that we're looking 0:16:44.400 --> 0:16:46.560 for the US to become? Is that the kind of job? 0:16:46.960 --> 0:16:52.200 Do you want to be confined to whatever corporate dorm 0:16:52.520 --> 0:16:54.880 you know, because that's closest to the factory that you're 0:16:54.960 --> 0:16:56.680 now working in and you don't have a life outside 0:16:56.720 --> 0:16:58.760 of that. Do you want that for your kids? You know? Like, 0:16:58.880 --> 0:17:02.120 and that's where I have a really tough time grappling 0:17:02.520 --> 0:17:04.880 with the fact that this is something that's an actual 0:17:05.320 --> 0:17:07.440 goal or aim of the current administration. It's one of 0:17:07.480 --> 0:17:09.280 those things to work at a Silicon Valley company where 0:17:09.280 --> 0:17:11.720 they have like professional chefs and massuses and stuff like that, 0:17:11.960 --> 0:17:14.040 and so you're kind of coerced into staying, but you're 0:17:14.080 --> 0:17:17.600 not forced to be there. And I see that as yeah, 0:17:17.840 --> 0:17:19.960 person of the job, as opposed to be like, oh no, no, 0:17:20.080 --> 0:17:23.080 you have to live in It's like a modern day Hooverville, Right, 0:17:23.480 --> 0:17:25.399 That's what it looks like. It could turn into agreed, 0:17:25.440 --> 0:17:26.680 agreed where we did in that path. 0:17:26.760 --> 0:17:28.960 Yeah, when it comes down to back to Justin's question, 0:17:29.080 --> 0:17:31.280 tariff policies are going to hurt the bottom half of 0:17:31.359 --> 0:17:33.919 income earners much harder than folks who have a lot 0:17:33.960 --> 0:17:38.240 more financial resources at their disposal. So, for example, avocados 0:17:38.280 --> 0:17:40.879 have been much talked about. Matt loves most of our 0:17:40.880 --> 0:17:43.440 avocados come from Mexico. And if avocado goes from a 0:17:43.480 --> 0:17:45.879 buck twenty five apiece to two bucks apiece, well, the 0:17:45.920 --> 0:17:48.639 person with the higher salary and the greater savings they 0:17:48.720 --> 0:17:51.960 can more easily afford their avocado toast or their QUACAMOLEI 0:17:52.000 --> 0:17:56.080 habit because better than the person who's living paycheck to paycheck. Sure, 0:17:56.200 --> 0:17:59.560 that extra seventy five cents per avocado, it really does add. 0:17:59.720 --> 0:18:02.800 And that's just like literally one example of potentially hundreds 0:18:03.240 --> 0:18:05.960 of items that we buy regularly that could go up 0:18:06.000 --> 0:18:09.320 in price, and people who have less money coming in 0:18:09.359 --> 0:18:12.440 are just going to feel the upticking prices more. The 0:18:12.520 --> 0:18:15.040 same thing happened with inflation over the past few years, right, 0:18:15.840 --> 0:18:18.800 it was lower income households who felt more pain because 0:18:18.840 --> 0:18:21.680 of inflation. So yeah, on average, richer households will pay 0:18:21.760 --> 0:18:24.760 more overall thanks to tariffs, but less as a percentage 0:18:24.760 --> 0:18:27.640 of their income. And we haven't really seen massive price 0:18:27.720 --> 0:18:30.360 bumps yet, but as those come rolling in, I think 0:18:30.359 --> 0:18:32.760 the rock solid belief that tariffs are going to benefit 0:18:33.400 --> 0:18:37.480 economically disadvantaged folks in our society could dissipate quickly as 0:18:37.680 --> 0:18:40.720 public perception turns even more sour. And I think that's 0:18:40.800 --> 0:18:43.680 part of what's going to lead to the inability for 0:18:44.160 --> 0:18:46.239 substantial tariffs to remain in place over the long term. 0:18:46.480 --> 0:18:48.920 Yeah, going back to manufacturing, guess what, It's hard to 0:18:49.000 --> 0:18:51.600 manufacture avocados or coffee. 0:18:51.320 --> 0:18:53.359 For instance, Like you can't do that in the US. 0:18:53.680 --> 0:18:55.399 I guess you could try. There's like three countries that 0:18:55.480 --> 0:18:58.040 produce the vast majority of the world's coffee. Buteah, if 0:18:58.080 --> 0:19:00.159 we made a coffee in the US, it probably like 0:19:00.320 --> 0:19:01.520 the worst coffee in the world. 0:19:02.280 --> 0:19:03.840 And that's not because like that is out the stuff. 0:19:03.840 --> 0:19:05.399 I want an American stuck at making coffee, but I 0:19:05.400 --> 0:19:06.720 want to drink it because we don't have the climate 0:19:06.920 --> 0:19:08.240 to grow the bets, so we need to grow. 0:19:08.280 --> 0:19:08.399 Right. 0:19:08.400 --> 0:19:09.880 If we did have the climate, it'd be the best 0:19:09.920 --> 0:19:13.000 coffee in the world, right exactly, That's what Joel's saying. 0:19:14.000 --> 0:19:16.320 All Right, we've got more of your questions to get 0:19:16.359 --> 0:19:19.200 to about tariffs and the markets. We'll get to a 0:19:19.240 --> 0:19:20.280 bunch of those right after this. 0:19:28.080 --> 0:19:29.680 All right, man, we are back from the break. We're 0:19:29.680 --> 0:19:33.040 gonna take some more questions that listeners posted over there 0:19:33.520 --> 0:19:35.440 in the Facebook group. If you are not a member 0:19:35.600 --> 0:19:37.359 of the how to Money Facebook group, be sure to 0:19:37.680 --> 0:19:42.080 look it up. But let's see Becca, she asked about retaliation. 0:19:42.359 --> 0:19:45.920 She was talking asking about gold and crypto as well. Joel, 0:19:46.160 --> 0:19:47.520 one of your thoughts there, do you get any thoughts 0:19:48.080 --> 0:19:51.480 specifically about the trade war? That's that's the part that 0:19:51.680 --> 0:19:52.960 seems the most ominous. 0:19:53.240 --> 0:19:54.879 Yeah, I feel like that's kind of freaking people off 0:19:54.880 --> 0:19:56.920 the host I agree, And I think I'm glad she 0:19:57.000 --> 0:19:59.680