Speaker 1: Welcome to Out of Money. I'm Joel, I am Matt.
Speaker 1: Today we're talking REFI Revival, Delay, Pay Disaster, and Landline.
Speaker 2: Love Landlines Baby.
Speaker 1: Yeah, you know we're gonna get nostalgic. I'm not talking
Speaker 1: about love Line. The Doctor Drue show that I never watched.
Speaker 1: That was him and Adam Krolla.
Speaker 3: Didn't they have that? It was?
Speaker 1: It was they were on n TV back in the day. Yeah, yeah,
Speaker 1: I don't remember that one take.
Speaker 3: It wasn't. Well, that was a cultural moment. I feel like, well,
Speaker 3: there are certain things. I was just talking to a friend.
Speaker 1: I don't really watch it, but I know it exacts
Speaker 1: about other.
Speaker 3: Shows on MTV, like MTV Unplugged, like there are certain concerts,
Speaker 3: certain sessions that stand out in my mind. I don't
Speaker 3: remember the love Line.
Speaker 2: Sorry.
Speaker 1: MTV was such a culture generator and it's not it was.
Speaker 1: You think the Celebrity Death Mat exhibit showed about my
Speaker 1: ride road Rules. Yeah, I think that's basically what is
Speaker 1: the first?
Speaker 3: Reality TV fueled my desire to want to go see
Speaker 3: the world to a certain extent. But no, we will
Speaker 3: talk about ways to get in touch with other people,
Speaker 3: but in an affordable way. This is our Friday flight.
Speaker 3: We're going to cover the top stories, the ones that
Speaker 3: impact your personal finance is the most.
Speaker 1: Speaking of getting in touch with other people, Matt, we
Speaker 1: got text messages this week, you and I did.
Speaker 3: From talk about the coin Base. Yeah.
Speaker 1: I'm wondering if other listeners got this text because you
Speaker 1: and I both got it, which is rare that you know,
Speaker 1: you and I both get the same scam text message.
Speaker 1: And it was like, hey, your coin boat based account,
Speaker 1: someone try to log in from this android phone in Sydney,
Speaker 1: Australia or something like that. If this wasn't you call
Speaker 1: this number? Of course, I don't have a coinbase account.
Speaker 1: Complete attempt to get me to call a number, so
Speaker 1: you weren't at all concerned, correct, Okay, but I'm sure somebody,
Speaker 1: well here's a coinbas account might be freaked out.
Speaker 3: Here's the deal. So, as you're saying and that, I
Speaker 3: put my hand up and I pointed to myself because
Speaker 3: I've got a coin Base account. I'm not that being said,
Speaker 3: I wasn't too concerned because I have a small a
Speaker 3: smaller amount of money over there, only a couple of
Speaker 3: mill in, just a few couple ten thousand. But okay,
Speaker 3: so here, okay, so here's the real question. Then what
Speaker 3: if you had gotten a text from a company or
Speaker 3: brokerage that you do do business with. Let's say it
Speaker 3: was Fidelity reaching out to you R Vanguard. These are
Speaker 3: two brokerages.
Speaker 1: Never call that, even if you have a relationship with
Speaker 1: that business, Never call them over. Go to the website,
Speaker 1: login yourself.
Speaker 3: But do you think you would have felt emotionally charged
Speaker 3: a little bit more? Because coinbas You're like, Okay, that's
Speaker 3: like telling me that my payless credit card, you know,
Speaker 3: payless to the shoe store. That's like, that's where I
Speaker 3: get all my shoes. Basically, it was the equivalent of
Speaker 3: that for you because it's not not even on your radar.
Speaker 1: But for me, I felt it a little bit. I thought,
Speaker 1: But if it was like your Huckberry account's been compromised,
Speaker 1: not that you would have been like, oh my Bucks.
Speaker 3: By the way, if they don't call them Huckbucks, they
Speaker 3: or they're missing out. We should be on their marketing team.
Speaker 3: But yeah, I think those are the instances they are
Speaker 3: hoping to find folks who actually do have those accounts,
Speaker 3: And so yeah, like, do you think you would feel
Speaker 3: a little bit differently? If you had received a text
Speaker 3: message saying, hey your Fidelity, Hey, there is an outgoing
Speaker 3: wire from your Fidelity account. Yeah, if that wasn't you
Speaker 3: call us number now to let us know that that
Speaker 3: is not legit.
Speaker 1: I would have for a split second, But then I
Speaker 1: would have known, I know the rules because we do
Speaker 1: this for a living and we talk about it. I
Speaker 1: would have known to go to my account to log
Speaker 1: in into check and to not call a number that
Speaker 1: someone sends me on a text message, and also realize
Speaker 1: the Fidelity isn't sending These companies are not sending text Typically,
Speaker 1: they might send you a verification code via text when
Speaker 1: you're trying to log in, but they're not going to
Speaker 1: send you a text with the phone number to call.
Speaker 1: That's just not how it works, That's true. It's like
Speaker 1: the IRS scams, like very very very similar, where the
Speaker 1: IRS sends paper notices in the mail exactly right, So
Speaker 1: if everybody deals.
Speaker 3: With the IRS, so that's an instance where it might
Speaker 3: seem a little more plausible, right, Yeah. I was just
Speaker 3: trying to paint a situation because like if what if
Speaker 3: you were like out with your family eating dinner at
Speaker 3: a restaurant, you got the kids, you're having a great
Speaker 3: time and you happen to look down and you see
Speaker 3: a text and you don't have the ability to immediately
Speaker 3: hop on the computer or to log into your account.
Speaker 3: That I think that's the kind of situation that folks
Speaker 3: might find themselves in where they are a little tempted,
Speaker 3: but like you said, don't do it, don't do it.
Speaker 1: That's where they get people too, with utility scams, like
Speaker 1: small business owners and they're like, hey, we're gonna shut
Speaker 1: your electricity off if you don't pay this fine and
Speaker 1: you have to do it with a one of those
Speaker 1: you know, gift cards, prepaid gift cards, and man, your
Speaker 1: business like people are people are going to come into
Speaker 1: lights out, like your restaurant is shut down for the
Speaker 1: evening if you don't pay up. And it feels like this,
Speaker 1: like because they put a time limit on it, and
Speaker 1: there's a necessity, a quick necessity. You don't have time
Speaker 1: to log in, check your account and actually verify the
Speaker 1: emotional state.
Speaker 3: Yeah, you're a heightened emotional state and you might do anything,
Speaker 3: but don't actually call the number that you're texting. But Joels,
Speaker 3: this is something that we haven't said in a long time.
Speaker 3: A lot of the home owners out there are refinancing.
Speaker 3: There's been a pretty significant increase in refis new mortgage
Speaker 3: applications over the past year. Interest rates have ticked down slightly,
Speaker 3: and folks who bought when rates were like peaking above
Speaker 3: seven percent, they are seeing rates now in the low sixes.
Speaker 3: They're ready to pounce.
Speaker 1: Even in this just last week or so, we've seen
Speaker 1: a bunch of bunch more refis than we've had in
Speaker 1: recent memory.
Speaker 3: And adjustable rate mortgages, so arms, they are becoming even
Speaker 3: more popular as well. So roughly ten percent of all
Speaker 3: refis right now are arms, and this is in part
Speaker 3: because they've I think they've sort of lost their Great
Speaker 3: Recession stigma, where back then it's just like, well, you'd
Speaker 3: be a fool to go with an ARM when you're
Speaker 3: at like historical lows. We haven't been at historical lows
Speaker 3: these days.
Speaker 1: Well, And like we've talked about arms, were there were
Speaker 1: a lot worse ARM product ARM products back then, and
Speaker 1: they've improved significantly. And there are some arms, like we
Speaker 1: talked about our credit union, a fifteen year arm where
Speaker 1: the interest rate only changes one time, and so for
Speaker 1: a lot of people giving that lower rate makes a
Speaker 1: lot of sense.
Speaker 3: Yeah, well, and with rates likely to drop an arm
Speaker 3: might you know, might mean less need to refinance in
Speaker 3: the future as well. That being said, you are subject
Speaker 3: to greater levels of risk if they don't if we
Speaker 3: don't see seat rates take down. But still I think
Speaker 3: a question worth asking, as folks are I don't know,
Speaker 3: there's a lot of it seems like there's a whole
Speaker 3: lot of refinancing chum in the water. So I think
Speaker 3: some folks might be saying, well, how often should I
Speaker 3: be refinancing? Because oftentimes it's not like a helock. A
Speaker 3: helock is free, that's an easy way. The race is
Speaker 3: going down. If the rates are going down.
Speaker 1: Yeah, but when it comes to refinancing, they cost some money.
Speaker 3: That's exactly right.
Speaker 1: So you know, I think you and I, Matt, we
Speaker 1: used to kind of say, well, you probably need to
Speaker 1: drop your interest rate by about a point to make
Speaker 1: it worth it. But really that's a rule of thumb,
Speaker 1: and it's hard to say that. That's not like a
Speaker 1: hard and fast rule because it depends on a lot
Speaker 1: of things. Right, Either might will to refit into a
Speaker 1: lower rate, even if you can't quite save a full
Speaker 1: point or you might want to hold off even longer
Speaker 1: in hope, in hopes the rates go down even further
Speaker 1: so that you're not refinancing multiple times, because it costs
Speaker 1: money to refinance so much. Really depends even on how
Speaker 1: long you plan to stay in the home, because if
Speaker 1: you're like I'm probably only gonna be here for a
Speaker 1: few more years, refinancing probably doesn't make much sense. And
Speaker 1: the key I think is to figure out your break
Speaker 1: even point. So will the refinance save you enough in
Speaker 1: monthly payments to pay for those closing costs in less
Speaker 1: than two years. If so, it might make sense. Even still,
Speaker 1: you might want to chill for just a second and
Speaker 1: see if rates drop a little bit lower so that
Speaker 1: you're not kicking yourself wishing you'd waited four or five
Speaker 1: months to refinance. And then if a refinance is right
Speaker 1: for you, shop around. That is super key because you
Speaker 1: can save maybe an extra eighth of a point quarter point.
Speaker 1: Compare apples to apples and see what other lenders are
Speaker 1: offering so that you get the best rate around, not
Speaker 1: just a better rate.
Speaker 3: Yeah, yeah, I'm with you all back you on the
Speaker 3: two years two years time frame, because I think.
Speaker 1: Outside of that so much of your life.
Speaker 3: Can change, right, Like you're just guaranteeing yourself even less time,
Speaker 3: or you're guaranteeing yourself that you've got to stay in
Speaker 3: the house for a longer period of time, and like
Speaker 3: in two years, man, I don't know. I think a
Speaker 3: lot of individuals can find their life situation changing pretty
Speaker 3: drastically within that sort of time period. Let's talk about investing, because.
Speaker 1: Even better if you can make it payoff in a
Speaker 1: shorter time.
Speaker 3: Oh yeah, even sooner. Yeah, it makes it even more
Speaker 3: of a slam dunk decision. But the irs, man, they
Speaker 3: have released updated retirement account contribution limits for twenty twenty six.
Speaker 3: Que the air horns. I'm all about this, man. Next year,
Speaker 3: we're gonna be able to stick more money into our
Speaker 3: workplace retirement accounts in four one ks if we're so inclined.
Speaker 3: Four one K and four or three B contribution limits
Speaker 3: have been bumped up by one thousand bucks, so it's
Speaker 3: going from twenty three five hundred dollars to twenty four thousand,
Speaker 3: five hundred dollars. The additional and roth IRA max contributions
Speaker 3: have gone up from seven thousand dollars bumped up five
Speaker 3: hundred bucks to seventy five hundred dollars. HSA limits went
Speaker 3: up as well by a couple hundred bucks for couples,
Speaker 3: And this is great news. And so I think one
Speaker 3: of the reasons I'm so excited about this is because
Speaker 3: I think what this demonstrates to me is that there
Speaker 3: is a shift in our culture and the expectations surrounding
Speaker 3: a retirement.
Speaker 2: Right.
Speaker 3: And so back in the day, there were many more workplace,
Speaker 3: workplace sponsored retirement plans, government sponsored pensions. Right, So like you,
Speaker 3: you're talking about more defined benefit plans as opposed to
Speaker 3: defined contribution plans. And by seeing this uptick, it shifts
Speaker 3: the responsibility slightly to individuals and companies as well, right,
Speaker 3: because we are seeing the uptick when it comes to
Speaker 3: four to one k's as well. But you might say, well,
Speaker 3: it also has to do with inflation. And I got
Speaker 3: curious and dug into the numbers a little bit, and
Speaker 3: I was super shock to see that the limits back
Speaker 3: in nineteen seventy five, let's say, on an IRA, was
Speaker 3: fifteen hundred bucks. It took twenty five years to get
Speaker 3: from nineteen seventy five the fifteen hundred dollar limit there
Speaker 3: to the year two thousand, where the limit increased only
Speaker 3: by guess one thousand dollars five hundred bucks. Wow, it
Speaker 3: was only two thousand dollars in the year two thousand,
Speaker 3: and then between two thousand and twenty twenty five it
Speaker 3: increased from two thousand to seven thousand dollars, a massive uptick, right,
Speaker 3: And if you're only looking at inflation, you might say, well,
Speaker 3: wait a minute, guess what we had a lot of
Speaker 3: between nineteen seventy five and the year two thousand. We
Speaker 3: had a ton of inflation and very little inflation between
Speaker 3: the year twenty twenty I'm sorry, between twenty and twenty
Speaker 3: twenty five.
Speaker 1: And so my hypothesis is that what COVID blip in there.
Speaker 3: Well, yeah, but what took place more within that period
Speaker 3: of time was just an expectation as to who was
Speaker 3: a little bit more responsible for their retirement dollars. It's
Speaker 3: just something I can totally get excited and be appreciative of.
Speaker 1: So, if you're looking to figure out how much should
Speaker 1: you should contribute to your IRA every single month in
Speaker 1: order to max that puppy out, Matt the math says
Speaker 1: six hundred and twenty five dollars a month.
Speaker 2: Ooh, I like it.
Speaker 3: Yeah, so nice. Nice.
Speaker 1: Need even start setting that John calen adopilot come January
Speaker 1: and then you'll you'll max it out by the end
Speaker 1: of the year. So we would love ideally everyone listening
Speaker 1: to the sound of our voices to max out there
Speaker 1: Rath every single year. The other thing they got update
Speaker 1: because everything's getting updated by the IRS this time of year,
Speaker 1: was the capital gains taxes and at what levels you
Speaker 1: pay zero, fifteen and twenty percent?
Speaker 3: And I didn't see that.
Speaker 1: You can make almost one hundred thousand dollars a year
Speaker 1: now and pays zero in capital gains taxes.
Speaker 3: Used to be like was it ninety two thousand?
Speaker 1: And I think it's like ninety eight nine hundred? Al right,
Speaker 1: I should have written still never down. Still glad to
Speaker 1: see that increases.
Speaker 3: So all the frugal, frugal early retirees out there, they're
Speaker 3: fist pumping your.
Speaker 1: Taxbile broker's account can be away to you might be
Speaker 1: able to avoid the fifteen percent capital gains tax if
Speaker 1: you're smart, If you're savvy, So should you stick more
Speaker 1: in a low cost s and P five hundred ETF
Speaker 1: because you have the ability to stock more into those
Speaker 1: workplace retirement accounts. Historically it's been a pretty fantastic choice.
Speaker 1: Even recent history has proven it to be a super
Speaker 1: smart bet. Returns this year actually set to crush every
Speaker 1: projection from Wall Street firms for the third year in
Speaker 1: a row. Met Those projections continue to fail consistently, often
Speaker 1: on the underside, sometimes on the over. But the experts
Speaker 1: in this CNBC article experts, I should probably put that
Speaker 1: in quotation marks. They're saying that this strategy, it's not
Speaker 1: looking as smart moving forward, is not diversified enough, they say.
Speaker 1: And to be honest, I think these these experts make
Speaker 1: some reasonable points, Like one is that while you own
Speaker 1: five hundred companies in an S and P five hundred fund,
Speaker 1: your eggs are in fewer baskets to a certain extent
Speaker 1: because or at least maybe like a couple of your
Speaker 1: eggs are gargantuan and a lot of the other ones
Speaker 1: are super duper tiny because of the massive market cap
Speaker 1: that AI companies like Microsoft and then Video hold, So
Speaker 1: just a few stocks really make up something like twenty
Speaker 1: percent of your SP five hundred fund, which.
Speaker 3: Those max seven eggs are quite large. The rest of
Speaker 3: them are like little jelly bean eggs. It feels a
Speaker 3: little risky.
Speaker 1: It does feel a little risky, So I get that,
Speaker 1: And then you know, when returns have been significantly higher
Speaker 1: than average for many years now, a reversion to the
Speaker 1: mean is likely. Like when you've seen outsize gains and
Speaker 1: that historical average is something closer to ten percent. Well,
Speaker 1: what should you expect in coming years? Well, you should
Speaker 1: probably expect the average to level out at some point.
Speaker 1: So should you change your strategy? This is something we
Speaker 1: talk about regularly here on the show. We talked about
Speaker 1: it with a Nick Majulia article that was written not
Speaker 1: too long ago.
Speaker 3: I think so much.
Speaker 1: Depends on your goals, and it depends on your risk tolerance.
Speaker 1: Those are the things you have to assess. So for
Speaker 1: some people out there, they might say, I am too nervous.
Speaker 1: I can't stomach the potential volatility coming down the pike.
Speaker 1: I should make some changes. You should know yourself emotionally.
Speaker 1: There are other solid approaches, but I think to investing.
Speaker 1: But a knee jerk response to articles like this, that's
Speaker 1: the thing we want people to avoid. That would be
Speaker 1: on wise.
Speaker 3: Yeah, And in addition to that, it's been a glorious
Speaker 3: time to be a diversified investor, but it could get
Speaker 3: a little harder in the coming years. And also, so
Speaker 3: like you're saying, just don't expect these incredible returns in perpetuity.
Speaker 3: But I wanted to talk about target date funds because
Speaker 3: they can be a really good choice for many folks
Speaker 3: out there if you are looking for more bond exposure,
Speaker 3: if you're looking for more international exposure. The abilit want
Speaker 3: to be so us heavy, and yeah, I get that
Speaker 3: desire that there's a decent argument to be made there,
Speaker 3: but one of the things we might be seeing is
Speaker 3: private equity it might be forcing its way into target
Speaker 3: date funds soon, which is no bueno. And so instead
Speaker 3: of just having the option to invest in alternative assets,
Speaker 3: you would now be forced to own them in various
Speaker 3: target date funds that you might own if companies like
Speaker 3: Blackstone and Apollo have their way. There's conversations evidently that
Speaker 3: are happening on Wall Street about including those in some
Speaker 3: of these target day funds.
Speaker 1: And you and I we've kind of talked about how
Speaker 1: we don't like the idea of even alternative assets being
Speaker 1: widely available in retirement accounts gives people maybe too much choice,
Speaker 1: and choice it's not even really helpful for the average investor.
Speaker 1: I think it feels even more nefarious to have them
Speaker 1: inside of a target date fund because target date funds
Speaker 1: feel like this set and forget its strategy for a
Speaker 1: lot of people. Yeah, and to have you who don't
Speaker 1: those the average investor doesn't need exposure to alternatives. If
Speaker 1: they end up in target date funds, I think they
Speaker 1: actually could ruin something that serves a lot of people.
Speaker 3: Pretty well. Sure, Yeah, I don't know if I would
Speaker 3: agree with you and say there's too much freedom. I
Speaker 3: think you can. You should be allowed to invest.
Speaker 1: The paradox of choice whatever anti Aldy.
Speaker 3: Sure, But that being said, if you want the choice,
Speaker 3: there is still another store that you can go to.
Speaker 3: It's not forcing everybody. I don't want to force everyone
Speaker 3: to go to ALDI because I think that they should
Speaker 3: limit their choices, but you should have the option to.
Speaker 3: But I do agree with you one hundred percent. The
Speaker 3: fact that if there's private equity getting sort of like
Speaker 3: shoved into this porkage, but they're still maintaining the target
Speaker 3: date fund, That's where it feels it just backwards, you know,
Speaker 3: like you know, like this feels like an instance to
Speaker 3: where like like oil and water doesn't mix, and it
Speaker 3: feels like they're trying to mix the two. Things like
Speaker 3: target date funds are known for being affordable, relatively affordable
Speaker 3: private equity, isn't.
Speaker 1: You can see the expense ratios taking up on some
Speaker 1: of those funds.
Speaker 3: Yeah, yeah, it does not seem like it's a good match.
Speaker 3: And so that's an instance. It's just something that we're
Speaker 3: going to keep an eye on because hopefully this is
Speaker 3: an instance where we see some of the better brokerages
Speaker 3: out there, like Vanguard and Fidelity holding the line. But
Speaker 3: if they don't, we're going to call them out on it. Well,
Speaker 3: but we will talk about it. And it just feels
Speaker 3: like another way for private equity to get their hands
Speaker 3: on your dollars. Like it used to be the rock
Speaker 3: star fund managers it's like, Oh, that's how we can
Speaker 3: that's how we can garner more in expenses. Now it
Speaker 3: feels like private equity. It's like, oh, you need to
Speaker 3: pay more for access to this opportunity to potentially experience
Speaker 3: outside returns, just a higher.
Speaker 1: Level of risk, or at least they had to go
Speaker 1: court accredited investors, people who had enough income or enough
Speaker 1: net worth and say and sell them on investing in
Speaker 1: their scheme. And now if they're inside of target date funds,
Speaker 1: they're getting every day people to invest in their schemes
Speaker 1: instead of having to sell the people who really do
Speaker 1: have the investing knowledge and ability. Because I don't feel
Speaker 1: bad for a credit I mean I feel bad sometimes,
Speaker 1: but I don't feel too bad for credit investors who
Speaker 1: lose money because they invested in alternative investments. That's something
Speaker 1: that I got into with eyes wide open, play at
Speaker 1: your own risk. Every day investors who kind of unwinningly
Speaker 1: are investing in alternative assets. That feels a little different
Speaker 1: to me. Let's talk about the comeback of student loan payments.
Speaker 1: Matt that the of those have been widely documented and
Speaker 1: they have put many Americans between what I would call
Speaker 1: maybe a rock and a hard place, choosing between paying
Speaker 1: your student loans and your credit cards. It's not easy,
Speaker 1: right if you have limited funds. And so there was
Speaker 1: this new TransUnion survey which found that borrowers are ranking
Speaker 1: their student loan payment ahead of their credit card payment,
Speaker 1: which makes sense because the stakes are higher with that
Speaker 1: student loan, especially given the wage garnishment threats that are
Speaker 1: likely to come about the administration is set. We're even
Speaker 1: going to hay take money out of your tax refund
Speaker 1: if you're not paying your student loans, So the money's
Speaker 1: gonna come out and find its way to pay off
Speaker 1: your student loan servicer. Either way, it sounds like I
Speaker 1: guess if you find yourself in the position where you
Speaker 1: can't pay your debts, it's crucial to talk to a
Speaker 1: professional at like a nonprofit. We would suggest a place
Speaker 1: like Money Management International. They have the power to help
Speaker 1: where other folks truly can't. There are a lot of
Speaker 1: people purporting saying that they can help you if you
Speaker 1: are in debt that's over your head. Most of them
Speaker 1: will take your money and not do much help. But
Speaker 1: the nonprofits are the way to go. Yeah, and actually, Matt,
Speaker 1: I've heard from the folks that MMI recently, and they
Speaker 1: told me that AI many of those AI systems like
Speaker 1: chatchpt are recommending MMI. So, hey, chat GPT is getting
Speaker 1: it right. People are going there and droves because they're
Speaker 1: turning too AI for some of these questions.
Speaker 3: Yeah to chat GPT on that one. Hey, it's not
Speaker 3: all badge, all right. Although I've got a story here
Speaker 3: that actually points to ALI use in a more inifarious way.
Speaker 3: We're sadly seeing a rise in debt collection lawsuits right now.
Speaker 3: There's some experts who are interviewed by the Times, and
Speaker 3: they suggest that AI has made it easier for companies
Speaker 3: out there to file a large number of these suits
Speaker 3: and courts around the country. There's not hard evidence, but
Speaker 3: they're pointing, certainly pointing to correlation, and they're hoping the
Speaker 3: research will follow soon. But debt collectors are often able
Speaker 3: to buy pass due debt for pennies on the dollar.
Speaker 3: They file a suit and they get a judgment. This
Speaker 3: is why it is so crucial to respond to any
Speaker 3: legal notice that comes your way, even if you don't
Speaker 3: think you've ever done business with that company, that particular company,
Speaker 3: because guess what, well, it's already been sold. That's been
Speaker 3: what's it called when they when the creditor where they
Speaker 3: market is something that is not collectible or they think.
Speaker 1: It's they write it off basically and they sell it
Speaker 1: for again. The company contacting you could be the most
Speaker 1: likely the debt collection agency. And yeah, you didn't new
Speaker 1: business with them. You did this with a hospital group
Speaker 1: who sold this debt to them and that's why they're
Speaker 1: in possession of that debt. Now, that's why they're reaching
Speaker 1: out to you, even though you haven't heard their name. Yeah,
Speaker 1: and which makes it Yeah, I get it's weird as
Speaker 1: it could.
Speaker 3: Be, could be totally legit though, but if you don't
Speaker 3: even show up to defend yourself, though, you may lose
Speaker 3: by default. If you do show up, even just being there,
Speaker 3: the debt collectors, they can easily lose. They had an
Speaker 3: example of that just because they don't have the right paperwork.
Speaker 3: They can't support because they're not organized enough. And this
Speaker 3: happens regularly and they don't have a case because they
Speaker 3: don't have any evidence. You win and you didn't have
Speaker 3: to do much. Yeah, you just have to know your rights.
Speaker 3: And a lot of this comes down to what the
Speaker 3: laws are in the state where it is that you reside.
Speaker 3: Because let's say this does good to court, you're not showing.
Speaker 3: I mean, they could garnish your wages in some states.
Speaker 3: They there can like if you're a no show in
Speaker 3: some states, you can even be arrested. And I don't
Speaker 3: think that's likely. And this isn't legal advice because I
Speaker 3: don't think that they would do that because then you're
Speaker 3: even less likely to be able to pay fay that debt.
Speaker 3: Put in my high art. We don't have debtor's prisons,
Speaker 3: but that is a possibility, So you need to know
Speaker 3: the laws of your state.
Speaker 1: Yeah, we're actually going to talk a little bit more
Speaker 1: about AI and chatbots in just a bit. But Matt,
Speaker 1: there was a new story about buy now, Pay later.
Speaker 1: Let's talk about that one when we get back from
Speaker 1: the breaks.
Speaker 3: All right, buddy, we are back from the break and
Speaker 3: everyone knows that this is typically What if we switched
Speaker 3: it up and decided to move the ludicrous headline of
Speaker 3: the week from our Friday flight? People would revolt? Would they?
Speaker 3: That's exactly what I was gonna say.
Speaker 1: What if we instituted a new segment that was more
Speaker 1: happy and shiny? Oh you think, like, what were those
Speaker 1: websites in back in the day and they only had
Speaker 1: good published good news?
Speaker 3: They probably did they fold? Because yeah, unfortunately, yes, yeah,
Speaker 3: if it doesn't bleed, it doesn't lead. No. The lucris
Speaker 3: of the ludicrous headline of the Week came from The
Speaker 3: Times and listener Dan He actually sent this one our away.
Speaker 3: I think he said he was getting just stressed out,
Speaker 3: just reading it and so much of.
Speaker 1: It, it was tough, man, These individual lives ruined because
Speaker 1: of buy now, Pay later.
Speaker 3: Also, whoever did the photography for the story too, Like
Speaker 3: they're showing people with all the stuff that they purchased.
Speaker 3: This is this is a buy now, pay later story,
Speaker 3: But they're just surrounded by all their stuff and even
Speaker 3: just being surrounded by that much stuff that you know
Speaker 3: is financed. I think maybe I started to feel it too,
Speaker 3: started getting a little sweat eazy. Yeah, But the headline
Speaker 3: it read they got to live a life of luxury.
Speaker 3: Then came the fine print. More folks are they're facing
Speaker 3: the music after embracing buy now, pay later, full on klarna,
Speaker 3: after pay their ilk, they are more than happy to
Speaker 3: oblige with limits that far surpass what most credit card
Speaker 3: issuers will give you and what seems like a harmless
Speaker 3: way to buy stuff that you want. Man, they can
Speaker 3: be far worse if you can't pay the bill. You know,
Speaker 3: it seems like such an easy, innocent way to do
Speaker 3: the pay in for it's free and so easy, so
Speaker 3: chill well could go wrong. It's such a slippery slope
Speaker 3: because the interest fees are much worse than credit cards
Speaker 3: up to thirty six percent they can accrue if you
Speaker 3: can't make the payments on time, and then the late
Speaker 3: the late fees they can pile up as well. And
Speaker 3: I don't want to be those guys, Joel, but we've
Speaker 3: been we've been warning folks about buy now, pay later,
Speaker 3: basically since they came on the scene, and it feels
Speaker 3: like we're this is a case of I told you so.
Speaker 3: But I think a lot of it just has to
Speaker 3: do with the fact that there are folks who just
Speaker 3: haven't learned their lessons yet when it comes to buy now,
Speaker 3: pay later, because it's novel, it's new, you know, like it.
Speaker 1: Makes sense, it was attractive and that people were like, yeah,
Speaker 1: I'll give it a shot, whereas like.
Speaker 3: Credit cards, they don't feel as attractive anymore. Like people
Speaker 3: who have used credit cards, I think maybe they've learned
Speaker 3: their lesson, they've gotten they've gotten burned, right, And so
Speaker 3: you've got like I'm thinking of the stories have been
Speaker 3: around for decades. Next, you've got a millennials, older millennials,
Speaker 3: and they're like, Okay, if they've gotten burned, they noticed
Speaker 3: it's shy away from that, or they've learned that they
Speaker 3: can handle it. Well, that's my hope at least, And
Speaker 3: it seems like gen Z in particular, they maybe haven't
Speaker 3: learned that lesson quite as much, and there's more or
Speaker 3: folks flock into the binyl.
Speaker 1: Payment and I hope, I hope that they can learn
Speaker 1: the lesson the easy way by hearing us rail against
Speaker 1: the buy now, pay later companies and how nefarious they are.
Speaker 1: And even though it seems it seems like they're trying
Speaker 1: to be trying to be helpful, it's a behavioral nightmare
Speaker 1: for people. So again, a world where you can delay
Speaker 1: paying for anything human behavior to consume is like kicking
Speaker 1: into another gear, just causing people to be like give
Speaker 1: me myself, yeah, I'll take it and lay away. Back
Speaker 1: in the day. At least you used to have to
Speaker 1: like wait to get your item, so you paid the money,
Speaker 1: are you paid in installments and then finally you got
Speaker 1: your item at the end of it. But when you
Speaker 1: get your item first and then you're like, oh, that
Speaker 1: was easy, I didn't even have to pay for the
Speaker 1: full price yet, Yeah, let me go do that again,
Speaker 1: And it just creates a six cycle. At least it's
Speaker 1: for a lot of people where they buy so much
Speaker 1: stuff that they can't afford. It's true, it's tough to watch,
Speaker 1: and it just I think part of it is like
Speaker 1: feels like fake money. That's what it feels like when
Speaker 1: you use buy now, pay later and you just keep buying,
Speaker 1: but not in like the nick Maduli just keep buying
Speaker 1: sense of the phrase. And that can wreck your finances, right,
Speaker 1: That spending hangover can leave this emotional and financial scars
Speaker 1: for people. And at the end of the day, you
Speaker 1: limit your choices because you've spent money that you don't have.
Speaker 1: It flies in the face of personal finance one oh one.
Speaker 1: And not to be too drastic, Matt, but this to
Speaker 1: me kind of feels like we're creating a generation of alcoholics,
Speaker 1: but binge buyers instead, which is like less stigmatized. I
Speaker 1: want to add more stigma to the binge buying thing
Speaker 1: because it's so detrimental to human flourishing and to your
Speaker 1: ability to have money in the bank account. We've even
Speaker 1: seen people make it steam like it's empowering, but I
Speaker 1: think the opposite is true. By now, paid later is
Speaker 1: disempowering to individuals.
Speaker 3: Yeah, and here's some basic old school advice, just don't
Speaker 3: buy it if you can't afford it, because unfortunately, we've
Speaker 3: got one more story that we want to get to
Speaker 3: where buy now, Pay later has found its way into
Speaker 3: paying for travel.
Speaker 1: The many tentacles of buy nowaylater.
Speaker 3: Nerd Wallet they found that one in five travelers are
Speaker 3: planning to use buy now, pay later to spread out
Speaker 3: their payments for the next trip, the next vacation that
Speaker 3: they're looking to take, and almost half of travel providers
Speaker 3: offer that ability.
Speaker 1: Now see it on your friendly Airline website instead of
Speaker 1: aware Everywhere Airline credit card. You can also pay in
Speaker 1: easy installments.
Speaker 3: Yeah, but of course buying travel via by not pay later,
Speaker 3: it creates even more problems because if there are issues
Speaker 3: with your travel itinerary, you're going to have far less recourse.
Speaker 3: And you know, we're just talking about credit cards. This
Speaker 3: is an instance where credit cards actually shine because there
Speaker 3: will rewards and the benefits that you receive, the protections
Speaker 3: that you receive if that just mentioned trip gets canceled
Speaker 3: or delayed. You can get rental car insurance, you can
Speaker 3: get travel insurance. There are all of these different travel
Speaker 3: benefits that you receive if you use the right card,
Speaker 3: especially when it comes to travel. That's one of the
Speaker 3: still one of the silver linings of credit cards in
Speaker 3: the travel space, Specifically, if you have a travel card
Speaker 3: and you are using it for a whole lot of travel,
Speaker 3: and that is not the case with buy now, pay later.
Speaker 3: All you're getting there is just the ability to not
Speaker 3: pay for it like right then, right, Like you just
Speaker 3: have the ability to pay for it in the for
Speaker 3: easy installments, just to.
Speaker 1: Delay, that's all. But yeah, you're right. When you use
Speaker 1: the credit card, there's a whole lot else you get
Speaker 1: with it. Yeah, we still want you to use it wisely,
Speaker 1: and we only want you to use it if you
Speaker 1: have the money in the bank account. We don't want
Speaker 1: you to go into debt for a trip, whether it's
Speaker 1: with buy now, pay later or a credit card. Yeah,
Speaker 1: but the credit card is at least an understandable way
Speaker 1: to purchase something, and buy now, pay later, to me,
Speaker 1: is not Matt. The Washington Post had an article about
Speaker 1: landlines making the comeback, and at first I was like,
Speaker 1: what please say so? Partly because land lines can be expensive,
Speaker 1: like something like thirty to forty bucks a month if
Speaker 1: you get a landline through the local phone company. I
Speaker 1: just didn't realize people did that anymore, and if you are,
Speaker 1: if you do still pay for a landline, strongly reconsider it.
Speaker 1: But they've talked about actually a new startup though, is
Speaker 1: really interesting called tin Can, which is offering eighties looking
Speaker 1: telephones that run over Wi Fi then cost ten bucks
Speaker 1: a month, which sounds reasonable. It's got the curly cord
Speaker 1: and everything. Yes, it does, Oh my gosh.
Speaker 3: It's the real question is can you can you get
Speaker 3: an aftermarket super long curly cord that can stretch all
Speaker 3: the way across the kitchen? Yes, that's right, that's the eighties.
Speaker 1: I'm sure some people are back that I love who
Speaker 1: are listening to this just don't know what we're talking about.
Speaker 1: So you should go to that website and.
Speaker 3: Check it out. We'll link to it. No, they've watched movies,
Speaker 3: they if they haven't experienced it themselves, you're.
Speaker 1: Probably right and so but tin Can's kind of cool,
Speaker 1: Like I get what people are going after. They're what
Speaker 1: they're trying to do is to break the smartphone addiction.
Speaker 1: And so if your kid, if you've got a kid
Speaker 1: who you want to be able to talk to their
Speaker 1: friends and stuff like that after school, but you're not
Speaker 1: ready for them to have a smartphone, and not even
Speaker 1: from a cost perspective, because Matt, you and I we've
Speaker 1: talked about how cheap it can be, like US Mobile
Speaker 1: has eight dollars a month plans for like unlimited talk
Speaker 1: and text and two gigs of data. That's cheaper than
Speaker 1: ten can. But it does doesn't matter because for a
Speaker 1: lot of parents it's more about it's a protectionary mechanism
Speaker 1: to not bring the smartphone into their lives. And I
Speaker 1: think something like this could make a lot of sense.
Speaker 1: Allow your kid to feel like they kind of like
Speaker 1: we were able to do back in the day in
Speaker 1: middle school, call our friends and chit chat and stuff,
Speaker 1: but without some of the downsides of full on smartphone exposure.
Speaker 3: Yeah, for that reason, this is an argument I can
Speaker 3: get behind. This is the case that Jonathan Heights making
Speaker 3: and the Anxious Generation. If you have a child and
Speaker 3: you have not yet read that book, I think we
Speaker 3: would both. Would you recommend it as well? I haven't
Speaker 3: read it.
Speaker 1: You haven't know well, I've listened to him interviewed, you know,
Speaker 1: you know the Prince. I know the principles and I
Speaker 1: am pretty darn aligned exactly.
Speaker 3: But it's also hard for me to face the idea
Speaker 3: because the phone, even though it is retro cool looking,
Speaker 3: it's still seventy five bucks. Yeah, which I'm like, come on, like,
Speaker 3: I would still rather just put that seventy five bucks
Speaker 3: towards me upgrading my iPhone and let it one of
Speaker 3: the kids, you know, be able to use that, like
Speaker 3: to have their own phone that they can do a
Speaker 3: Wi Fi based call. But I think there is something.
Speaker 3: What is here is the fact that you're kind of
Speaker 3: encouraging or I guess in this case, you're not giving
Speaker 3: your kid another option to communicate with your friends other
Speaker 3: than to talk, which is something that I can totally
Speaker 3: get behind. I've not thought about that. I've not thought
Speaker 3: about how when we were literally talking with our friends,
Speaker 3: there weren't texting, There weren't emojis that were dropping into
Speaker 3: the text, or dropping the dookie emoji on someone's head
Speaker 3: like on the like in the video chat. All these
Speaker 3: dumb things that can just undermine the quality of the conversation.
Speaker 3: And it really does make me want to say to
Speaker 3: our seventh grader the next time that she says, hey,
Speaker 3: can I get on the phone, because we've got a
Speaker 3: little dumb down cell phone that we keep in the
Speaker 3: kitchen when she says, hey, can I get on there?
Speaker 3: Because she normally gets on there to check messages, I
Speaker 3: think I'm going to encourage her and say, hey, you
Speaker 3: can get on there, but only if you are looking
Speaker 3: to call on you one of your friends to talk
Speaker 3: with them. And maybe this is a conversation I have
Speaker 3: with other parents too, because I want the kids to
Speaker 3: be doing that more more of that, because one of
Speaker 3: the things on the I talks about is asynchronous communication,
Speaker 3: and so there's something that you lose when you send
Speaker 3: a message and then you don't have to respond in
Speaker 3: real time as opposed to the like what you and
Speaker 3: I are having right here, just the ability to end
Speaker 3: real time sorry what you say communicate to each other
Speaker 3: is so important.
Speaker 1: Well, it makes me I think, especially for girls in
Speaker 1: this age, in this age range too, that our oldest
Speaker 1: where our oldest are, those group texts can feel like
Speaker 1: like almost like an at home form of bullying. It
Speaker 1: can be a really tough thing to experience there, some
Speaker 1: of those girl group chats. I just know from hearing
Speaker 1: my daughter talk about it and hearing some of the
Speaker 1: other parents for some of them suck. Yeah, it can
Speaker 1: be really tough and so having a one on one
Speaker 1: conversation with a friend feels very different.
Speaker 3: You're not gonna get doesn't it nay feel humanizing? Yeah,
Speaker 3: Like just even talking about it, I can. It just
Speaker 3: sounds so much more relatable, more humanizing. And that's I
Speaker 3: think what we're looking and for when it comes to
Speaker 3: our technology.
Speaker 1: And I love the meta thing we're doing right now.
Speaker 1: We're just talking about talk talking about My son asked
Speaker 1: me about He literally prompted the conversation about conversations, and
Speaker 1: I thought it was like, I love having that.
Speaker 3: I love having that child.
Speaker 1: All right, buddy, we're about to go do He was like, Dad,
Speaker 1: tell me more about conversations and let's talk about that.
Speaker 1: And it was like it was super fun, just like
Speaker 1: what gives a conversation? Meaning he's six and he's asking
Speaker 1: questions about this man, that's fun. Maybe we should offer
Speaker 1: one more morning, Matt, because like for parents with kids,
Speaker 1: depending on your kids ages, you might want to also
Speaker 1: rethink how much accent and how much accent they have
Speaker 1: to a laptop and a computer as well, because there
Speaker 1: are a million ways to get in trouble online. I
Speaker 1: will not tell you what my child googled at school.
Speaker 1: The principle reached out to us, was like, she misspelled it,
Speaker 1: which is funny and it is a body part.
Speaker 3: Tell me the spelling after we stopped recording.
Speaker 1: Oh well, but so this happened at school under supervisions
Speaker 1: and she didn't get into too much trouble and then
Speaker 1: you know, the filter blocked it out. But this, like,
Speaker 1: kids are curious about stuff. I don't even think it
Speaker 1: was in the farious things she was trying to do.
Speaker 1: She's just curious because kids are curious. So obviously, what
Speaker 1: does that look like she did in trouble we had,
Speaker 1: we had to have a chat. But let's add maybe
Speaker 1: something else that you want your kids to avoid, which
Speaker 1: is chatbots. And not just because we don't want your
Speaker 1: kid to have fake digital friends, although I still put
Speaker 1: that in the weird camp. I don't I personally don't
Speaker 1: want any fake digital friends, but also because you're delivering
Speaker 1: more personal information into the hands of advertisers when you
Speaker 1: strike up more conversations with chatbots online. The Verge had
Speaker 1: an article documenting how Meta is going to use your
Speaker 1: AI chats to personalize your feed, serving you have advertisements
Speaker 1: based on your interactions with those said chatbots. You cannot
Speaker 1: opt out of this, and Matt, this is just another
Speaker 1: kind of check in the Brave New World camp. What
Speaker 1: have we entered into?
Speaker 3: I am uh.
Speaker 1: It makes me want to stay away because I don't
Speaker 1: want to deliver any information that the chatbots are going
Speaker 1: to recognize. And then every Facebook esque product they own,
Speaker 1: whatsapped too, is going to serve me up ads based
Speaker 1: on personal interactions I've had with the chatbot where I
Speaker 1: kind of thought they were off limits to advertisers. But no,
Speaker 1: of course they're not.
Speaker 3: You didn't you weren't expecting all the chatbot to go squealing.
Speaker 1: People are using chatbots for relational purposes, more, for therapy purposes, more,
Speaker 1: They're giving away more personal information on these things, And
Speaker 1: I think you just have to be wary from the
Speaker 1: get go about how much it's different to ask a
Speaker 1: question about a research paper you're writing. Right, that seems
Speaker 1: like less potentially harmful to you, but if you are
Speaker 1: using it for some of those other more highly relational purposes,
Speaker 1: you might find it super creepy what you get served
Speaker 1: up in the aftermath.
Speaker 3: Okay, So all on that note, our last related story here,
Speaker 3: did you see the story about verb dot verb ai? Oh? Yeah,
Speaker 3: which is a basically a data harvester. You download it, it
Speaker 3: puts a tracker on your device, and you get paid
Speaker 3: for letting them track you.
Speaker 1: Thoughts, what do you think for letting them watch everything
Speaker 1: you do on your smart Well, you search.
Speaker 3: Where you go, your browsing habits, I mean, how long
Speaker 3: you stay on certain apps? Literally everything?
Speaker 1: Yeah, I guess the only thing they're not supposedly scraping
Speaker 1: is what's taking with your.
Speaker 3: Bank exactly that bank information. I don't know. Man.
Speaker 1: That creased me out too. And it feels really different
Speaker 1: than going to donate plasma for money.
Speaker 3: Well that was okay, so yeah they actually, yeah you
Speaker 3: heard the story. They've actually got that there in the story.
Speaker 3: And like that's an instance where it feels like the
Speaker 3: equivalent isn't that you are going to donate plasma. It's
Speaker 3: it's almost as if the equivalent would be that our
Speaker 3: like our current data scraping industry is sort of like
Speaker 3: you going to your doctor and them running a check
Speaker 3: on you. You know, you're there for you're annual physical
Speaker 3: and they say, oh, you know what, we need to
Speaker 3: actually sample some of your blood and you're sitting there
Speaker 3: and you're hooked up for like thirty minutes and you're like,
Speaker 3: what are you guys doing? Yeah, and they're like, oh, nothing,
Speaker 3: and they're like secretly harvesting your blood. That's what it
Speaker 3: feels like now versus going to a plasma center where
Speaker 3: you are knowingly sitting down yours. Yes, where it feels
Speaker 3: intentional And so me personally, am I gonna do this?
Speaker 3: Am I gonna download this app? And you know, they're
Speaker 3: calling it like a new gen Z side gig where
Speaker 3: you can make fifty bucks a month. I don't think
Speaker 3: I'm gonna do it, but I think there's a there's
Speaker 3: a younger map that would have considered, like seriously considered it,
Speaker 3: maybe checked it out and seeing to see how it
Speaker 3: would have interfered. Because it feels like it's bringing that
Speaker 3: selling of personal information out into the open, I think,
Speaker 3: and that's the kind of transparency that I can get behind.
Speaker 3: I think that's a great point. I think, especially if
Speaker 3: you're alright, if you're using social media apps and you're
Speaker 3: not asking it to track you, they've already got your information.
Speaker 1: And you're just not getting paid for right when you
Speaker 1: when the product that you're using is free, then you're
Speaker 1: the product and you just kind of don't know all
Speaker 1: the ways they're accessing your personal data. At least this
Speaker 1: is a voluntary exchange and you're getting paid for your data. Still,
Speaker 1: this is something I wouldn't participate in because I don't
Speaker 1: want some app sitting in the background on my phone
Speaker 1: checking out every single thing I do. And you know,
Speaker 1: I don't know what percentage of the profits I'm getting
Speaker 1: as the product that they're mining. But it doesn't seem
Speaker 1: like it's enough to compel me to sign up.
Speaker 3: Yeah, I'm with you. I'm not gonna do it, but
Speaker 3: it's interesting to know that there is an option. There's
Speaker 3: somebody out there who thinks that this could be something
Speaker 3: that would succeed, no doubt.
Speaker 1: All Right, that's gonna do it. We'll put links to
Speaker 1: in the show notes to some of the websites and
Speaker 1: resources we mentioned on thebuarries. The website, of course, as
Speaker 1: you all know, is howtomoney dot com. If you want
Speaker 1: to get in touch with us, if you want to
Speaker 1: send Matt an email, how to moneypod at gmail dot com.
Speaker 1: Tell Matt how.
Speaker 3: Call me out. I'll get back to you.
Speaker 1: Excellent you think he is. Or if you've had something
Speaker 1: dumb that you didn't agree with today, let me know
Speaker 1: that too.
Speaker 3: Don't holler me though, just kidding. You can email with you.
Speaker 1: Oh, I have a great weekend. Until next time, best
Speaker 1: friends out, best friends Out,