December 5, 2025 • 37 mins
Time for a Friday Flight- our little sampling of the week’s financial news and what it means for your personal finances. There are a lot of headlines out there, but we boil them down to specific takeaways that will allow you to kick off the weekend informed and help you to get ahead with your money. In this episode we explain some relevant and helpful stories like:
- Cyber Monday malaise
- Gen Z paring back
- AI toys
- Reluctant retailer returns
- Gift cards galore
- BTW, here is that site that allows you to donate gift cards for good.
- Trump accounts
- (little) dudes getting a Dell!
- Homeowners held hostage
- More affordable apartments
- Impoverished Americans
- Geographic arbitrage
- Real ID fees
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Transcript
Episode Transcript
Available transcripts are automatically generated. Complete accuracy is not guaranteed.
Speaker 1 (00:00):
Welcome to How the Money. I'm Joel, I'm Matt.
Speaker 2 (00:02):
Today we're talking AI toys, homeowners held hostage, and impoverished Americans.
Speaker 1 (00:26):
That's right, buddy. This is our Friday Flight, the collection
of stories of news articles that we came across and
the ones that we think you need to pay attention
to because they impact your finances the most.
Speaker 2 (00:37):
I think you need to pay attention so much, we're
going to force you to listen to us for the
next thirty something minutes.
Speaker 1 (00:42):
Yeah, speaking of folks held hostage, we'll get to that
homeowner's held hostage story here in a second. But before
we kick things off, let's give a massive, massive thanks
to all of the How to Money listeners out there
who participated in the Daffy Voices for Good challenge. We
went up against like six, no, seven other podcasts, and
(01:02):
the reason I know this specific number was because there
was one podcast that beat us. But I was so happy.
I want to it's all relative here, because what I
calculated was the fact that something like pinching pennies, I
forget what it's called.
Speaker 2 (01:17):
I don't know, I don't remember what they call their podcasts.
Speaker 1 (01:19):
So we came in second and we were only a
few thousand dollars short of taking that first place spot.
So I'm really proud of the generosity of our listeners percent.
But I was also super stoked to see that the
next six podcasts that competed in this challenge raised only
half as much combined that we were able to raise
with our listeners, which just demonstrates such an incredible generous
(01:43):
spirit man, and.
Speaker 2 (01:44):
That not only are heart yeah, trying to build wealth,
they want to do good things.
Speaker 1 (01:49):
With it and they're serious givers. Yeah, And honestly, I
hope that a lot of folks are checking out donor
advised funds, specifically with Daffy, because we, again, we have
been such big of Daffy. What it does they do.
We've been with them for a long time and they
finally reached out and we're like, hey, maybe we'll start
advertising with you. Guys Like great a little bit, which
(02:09):
is something we started. Wait did we do that last
did we start the end of last year? I think
it was maybe? I think it was a beginning of
last year. Maybe, Okay, And yeah, Daffy was a we
like such a great part if it's a company we
already use and love it's like the perfect slam Dune partnership.
So yeah, and really fun to participate in this challenge.
Next year, hopefully we do this again. Next year, we're
gonna crush Pinching Pennies take the number one spot. Yeah,
(02:31):
well we'll beat them because our listeners are awesome and
maybe I don't know, maybe Matt, you'll we'll match even
more next year.
Speaker 2 (02:37):
Yeah, I think let's do it. Let's go h okay. Oh,
one last thing. I'm seeing all the Spotify raps coming
out now. It's really fun to see. It's amazing how
much some people listen to specific podcasts and just to
see people like I listened to How the Money for
fifteen thousand minutes last year and I'm like, oh my goodness,
and so much time listening to our voices. I hope
you haven't gone insane.
Speaker 1 (02:58):
But time for me to do my once a month's
social media log in and I'll repost a bunch of
those folks tag us over on Instagram. Specifically, you kind
of run the Instagram. I kind of run the Facebook group.
People have been posting in the Facebook group, so I'm
sure you'll go to find some on Instagram for share.
But Thank you for listening. Give us a follow if
you don't at how the Money Pod.
Speaker 2 (03:17):
All right, let's get to the Friday flight sampling stories
we found interesting this week. Let's talk about Black Friday
Cyber Monday. Did you participate the shopping holiday?
Speaker 1 (03:26):
You snag yourself a deal? A little? Not much? Okay?
Speaker 2 (03:28):
The main thing I talked about buying tires. There's like
an early Black Friday sale or whatever. Nice but running shoes.
I stocked up on cheap but good running shoes, so solid,
like the high end Adidas for all right, fifty bucks?
All right, yeah, way to go do it's happy to
get those?
Speaker 1 (03:43):
You are are you? Are you brand loyal? Now you
have a lot? Only get the Adida shoes. Yeah, you
have a lot of Adidas when you know, because they
have the best sales to be you know, the sizing
and like you kind of know what brand or not brand,
what models they go for it as well. Well, you
are like an ultra person. I have, like I know
Ault people, and if Alter had shoes that were like
in that price range, I would totally consider it, but
(04:04):
they're a lot more expensive. Well, you're also cranking through
the shoes, that's true.
Speaker 2 (04:08):
I do okay, So, but like a lot of people
bought stuff on Black Friday and Cyber Monday, sales reup
something like four percent year over year. Online sales in particular,
we're up nine percent year over year. But because of
inflation and tariffs and higher prices in general, those numbers
could be slightly more inflated than they seem. So maybe
actually people weren't buying a lot more. It's just that
things cost more money. And by the way, Costco has
(04:30):
even sued for a refund of the teriffs they've been
forced to pay, which I kind of love to see that,
like Costco's sticking up for themselves. We always stay with Costco.
Matt here on how to money gen Z shoppers appear
to be feeling the biggest pinch, and they're dialing back
spending accordingly. I want to say this, if you overdid it,
that's okay on Black Friday and Cyber Monday, but it's
(04:51):
crucial to note the return policy so you can get
your money back before it's too late. If you're like,
all these packages are starting to arrive, I forgot I
even got that thing weight, I don't need that thing.
Return it, you might maybe be able to mitigate some
of the damage that you did if you ever spent
The head of consumer insights over at Salesforce, that person
credited their spending rise this year to artificial intelligence, and
(05:14):
I think I think it was she She called it
the ultimate purchase accelerator AI. We're not anti AI, but
I just think caution is warranted for your budget when
you're using AI. It worries me to think that people
are like using that to facilitate even more buying habits,
which I.
Speaker 1 (05:30):
Think is true. Yeah, yeah, so all the note of AI. Actually,
we're going to see more AI toys on the market
this year. The problem though, is that some are being
marketed for kids as young as two years old, which
then leads ovacy groups out there like fair Play to
issue some stark warnings and rightly so. And it makes
me think of some of the more educational devices, or
(05:50):
at least that's maybe what we tell ourselves, because like
I think a typical response might be, well, you know,
these toys, they're educational, this is going to help them
to learn, but man, it's so oh. It seems obvious
to me though, that two year olds are pretty ill
equipped to deal with AI and I don't know just
the proper way to interact with it. I actually asked
chat whether we should give our kids AI toys Joel,
(06:12):
and guess what, give me a pretty stern warning against it.
This is AI itself. You would think it would be
a bit more self propagating, none them like pluribus. It's
uh oh, I'll watch the biological mandate. I'm only a
couple episodes in and the verdict is out. I'll keep
you posting. But just even like myself as an adult,
I'm still trying to figure out how much, into what
(06:33):
capacity that AI should have in my life undred percent,
And so with that in mind, I don't know. You
don't have to take this advice, but I am all
for keeping AI toys at a nice distance from our kids.
Shoul get out there and touch some grass.
Speaker 2 (06:46):
Yeah, there's a lot of risk when you're putting those
into your kids hands because of the nature of AI
and like large language learning models, what are they going
to encounter? Like, you don't know, And we've seen some
really sad stories about teens, young people and what a
relationship with AI has done to them. I think we're
(07:07):
still tread lightly, especially in the early innings. And let's
talk about returns for just another second, Matt. As shoppers
make more returns and the cost of accepting those returns
has risen, some retailers have quietly been shortening their return window.
They're saying, hey, more people are making returns, and it
just it really harms our bottom line. So we want
(07:28):
to make it maybe a little more difficult to actually
follow through. Sephora and Ulta those are those are makeup shops, Matt.
I'm not sure if you've been in them.
Speaker 1 (07:36):
Oh, yeah, I've been to Sephora. Your daughter she's getting
into the makeup right, like, uh, well, are a little bit,
but yeah, I took her there too long ago, a
little daddy daughter date. Well, they got to learn what's
going on next time you go to there. Next time
they get some makeup, if they want to return it,
they only have thirty days. They don't sixty days anymore.
So note that can you take can you take makeup
back if it's been used, like if you try it out.
I don't know, that's a good question. I don't know.
(07:57):
I would I would think probably not. These are uncharted
waters for me.
Speaker 2 (08:02):
We'll look that up. But we're also seeing retailers attempting
to steer you towards their preferred method of making a
return that costs them less money. Like Amazon, they want
to get you to return stuff to Whole Foods because
they own Whole Foods instead of a UPS location that's
potentially much closer to you. And you're like, a Whole
food is like twenty minutes out of the way. I
don't really want to go there. It makes the return
a much bigger pain. And not to tout Costco's greatness
(08:25):
too much on this podcast already, but there's just a
lot of peace of mind when you buy from a
retailer who has a really great return policy, where you're
just not quite as worried. It might even be I
think sometimes at times worth paying a tiny bit extra
knowing that you're buying from a place that has a
good return policy. You can also, by the way, finagel
(08:46):
extra return time at a place like Target by having
their credit card. So just know what the return policy
is before you buy, and be prepared to jump through
the hoops and stay organized to make those returns in
a timely manner, because returns are definitely a part of
the holiday shopping reality.
Speaker 1 (09:01):
Yeah, most stuff. Yeah. My dad actually just purchased a
Blackstone griddle and he was at Costco and it was
on sale, and he's like, should I go for it?
And I said absolutely, because I've been preaching the gospel
of the outdoor griddle for like seven years now. Like
everybody I come in contact with, I tell them just
how this has revolutionized how we cook our meals, specifically
(09:22):
the proteins outside, but not even the rotin's like, dude,
a big breakfas Saturday morning breakfast, like twenty four pancakes
on the It's insane. Everybody who converts, they never want
to go I know. And I told him, I was
just like, you are going to love this, but if
you don't Costco. So he rest assured that he would
be able to take that back. Joe, I've got a
stat here for you that I think you're going to
(09:43):
be able to vamp on for minutes. The average American
has almost two hundred and fifty dollars in unused gift cards.
A third of those Americans have admitted to losing some
of that money due to the fact that the cards
either expire soon the retailer has closed, or they straight
up lost the gift card and my inside's are turning
(10:05):
right now, go for it. I wish you could see.
I know this is like the hill I die OneD.
I don't know. I know you don't like gift cards.
I don't mind them, but I figured this would give
you something to play with.
Speaker 2 (10:15):
Okay, I'm gonna go on the dietrive I go on
every year, which is that you're turning cash, money that
you can use at any location across the United States
and you know, the parts of the world too, into
something that is used usable at really only one retailer.
And why would you do that to yourself? Why would
you take money that you can use anywhere and like
(10:37):
turn it into money you can only use in one place.
Speaker 1 (10:39):
I think most people are doing it for other people,
not themselves.
Speaker 2 (10:41):
And they are, they are so much of the time.
But that's why we have this problem where people leave
their gift cards in their underweards or or forget that
they have them, or that the retailer that they have
a gift card too does go out of business and
then they're kind of out of luck. So just be
careful when buying gift cards this season. If you have
gift cards, you haven't used, gather them up and start
(11:04):
using them, consider giving them away if you don't care
about that retailer, or you can sell them. You're not
going to make as much money as the face value
of the gift card, but you can sell them on
a site like card cash dot com. There's also a
cool site that will link to in the show notes
where you can donate unused gift card dollars. So if
you find yourself in that vein we're like, I got
some random one slider, I don't know what to do
(11:24):
with them, Well, you can donate them, which is cool.
Speaker 1 (11:26):
That's pretty cool.
Speaker 2 (11:27):
And there's actually the only time I'm down with gift
cards where I think they actually make sense from a
purchasing perspective is when you're getting a discount. So Costco
has the discount of gift card section, like use seventy
or eighty bucks for one hundred bucks worth of gift cards.
If you're going to use them, why not get a
discount and make some money on that target This Weekend
(11:49):
is doing their ten percent off gift cards. They do
it every single year. That's like one of those super
popular retailers. So if you're like I want to get
a gift card for somebody. I want them to have
a wide range of options for what they can buy
with them, and I also don't want to pay full price.
That could be a good option. Do y'all shop at
Target frequently? I would say frequently enough where the discounted
gift cards would make sense for us.
Speaker 1 (12:10):
The last time I went in there, I don't know.
Maybe it's just online shopping has just ruined it for me.
But just walking through there and being inundated with the
smells and the stuff. Just what is Target smell is
drew like a combination of crappy coffee drinks and popcorn.
Well they have the Starbucks they have? Yeah, that makes sense,
Like that's the first thing. The door. What's worse walking
(12:30):
into a into a Target and the smell there, or
the smell at Sephora where there there's all these tweens
who are spraying perfume everywhere. I think, I think the
perfume smell. I can't handle that? What but we when
I shop at Target usually it's usually it's online try
to avoid I don't know, I'm just not much for
going in store shoping. I get it. Hey, let's talk
about some some policy implications some things that are happening
(12:50):
at a very high level, and how that's impacting h
impacting folks their ability to save specifically, because we're going
to talk about the Trump accounts for baby.
Speaker 2 (13:00):
I'm so stoked that babies can now save money, invest
and get rich.
Speaker 1 (13:04):
Yeah. The One Big Beautiful Bill Act, because it officially
passed that made these Trump accounts a reality, but it
has taken some time to get them off the ground
as far as like what are the particulars, what are
the details? It can be a bit confusing, but there
is more coming to lights. These accounts are available to
kids eighteen and under. But and this is the headline
(13:27):
thing that I think drew a lot of the eyeballs
in initially there is that they're dangling that carrot right
of the free thousand dollars that, though is only available
to children who are born between like January first, twenty
twenty five or the very end of twenty twenty eight.
You also have to be a US citizen with a
Social Security number. And so if you are, you know,
(13:52):
if you've already had a kid this year or congratulations
if you have to get off congrats, yeah, oh man.
Every time we have a listener question who mentioned if
it's a like we should be talking about that. I
you know, it hasn't even popped into my mind.
Speaker 2 (14:04):
Else we should do we have had the money socks
for adults, we should get baby hod of money socks
and then we should ship those how to money socks
every time a listener has a baby.
Speaker 1 (14:12):
Instead of how the money baby socks about how to
money onesies. Because of that that sounds even cutere.
Speaker 2 (14:17):
Because the baby soxs would be like kind of tiny,
you wouldn't be able to see the.
Speaker 1 (14:20):
Yeah, good point, and uh but onesies, onesies are where
it's at. You might have to actually look into that.
Is there a sock fancy? But for onesies probably ones fancy?
God exist. But we're mentioning this because if you if
if that is you and you've got a kid or
think you might certainly grab that free money for your
child if you are eligible, there's a specific form you're
gonna need to keep it out for IRS form forty
(14:41):
five forty seven. That's what you're gonna want to fill
out if you do have a child this year or no,
what if you had a child this year?
Speaker 2 (14:47):
Is that reference to Trump being the forty fifth and
forty seventh president.
Speaker 1 (14:50):
Oh my gosh, I didn't think about that until just now.
Are you serious? That's crazy? This is so stupid. Gosh,
it's like we're living living in a real life meme.
But I think you're probably right. Probably is gosh. An
online portal is going to open this coming summer to
make it easier as well. The good news though, is
that you can invest the dollars in low cost ETFs,
(15:10):
which is certainly the way to go to help that
nesse grow for your little one. I think it's a
cool idea, although it does have a limited timeframe and
it certainly has a limited ability as to what you
can do with that account, right, Like the functionality is limited,
which means that long term, I do think the actual
impact of these accounts might be limited.
Speaker 2 (15:31):
It's a seed of a good idea, and it will
help some kids and some families, and but is it
going to have this wide ranging major impact on their
future lives. I think it's overstand probably, And by the.
Speaker 1 (15:44):
Way, I'm willing to be open to it, right because
I'm sure when they created like the four to one K,
they're like, what's this dumb four to one you know,
like or this thing that they named after the senator
Senator Roth, but like, look at what those have turned into.
And so I'm willing to be open minded, but I
am a bit skeptical.
Speaker 2 (16:00):
Yeah, And I think it's really important to look at
the details of this account because some people might be
drawn to putting more money in these accounts beyond the
free thousand dollars, and that might not be the smartest
move because even though you can contribute even more to
these accounts, it makes very little sense to utilize them
past the free money, because the taxes can be complicated
(16:20):
or excessive if the money isn't used for a home
down payment or for education.
Speaker 1 (16:24):
So that is just how its tax is pretty complicated,
is yeah, okay, a portion of it is taxed at
this rate, it gets pretty funky.
Speaker 2 (16:31):
So the five P twenty nine account is probably a
better way to save for your kids or even like
the UTMA accounts like are likely better than these Trump
accounts for are putting more money into take the free money,
but after that, probably look elsewhere. And interestingly enough, Matt
the Dell computers entrepreneur Michael Dell. He announced this week
(16:52):
that he's offering an additional two hundred and fifty dollars
for kids ten and younger who would have otherwise been
left out of this Trump account goodness. And at first
when I saw that, I was like, oh, man, the
public private partnership. Sometimes it like makes me a little squeamy,
But man, it seems like this is just like a
philanthropic good deed that Michael Dell is doing and for
(17:15):
the children. And even some of our kids are going
to be eligible for this, So not only if you
just had a newborn, but if you have a kid
who's elementary school age, you might be your kids might qualify.
He's donating I think we like six and a half
billion dollars to make this.
Speaker 1 (17:29):
A realitmendous amount of money.
Speaker 2 (17:30):
Yeah, so it's a pert I didn't see coming. And
I think maybe the best part of this, the silver lining,
could be that more kids are going to be made
aware of compounding returns and investing in how the market
works from an earlier age because they're like, I got
this account, Like you might start telling your kid about
it at age six or seven. That's the upside, and
then they kind of they get to learn exactly. So
(17:51):
maybe that's like the most underrated part of these accounts.
Speaker 1 (17:53):
I wish instead I could just roll that Dell money
just straight into their five twenty nine, you know, like
I don't have to open up another account, but I'm
probably going to because two hundred fifty bucks, I mean,
I think I want to get my hands on that.
Don't want to leave free money behind. Yeah, And it's
I'm also like I kind of gave like the the
I'm open minded, like this could lead somewhere kind of argument.
But it's hard not to be cynical, especially when they're
(18:15):
called Trump accounts, right, Like, because what do you think
of when you hear Trump accounts. I think of like
Trump hotels, or I think of like Trump stakes, Trump
are Rex, like any It just seems like another opportunity
for him to throw his name on something. And I'm
not trying to be trump coin overly political here or anything,
but like it feels like a band aid on something
of like rising prices, and they're like, oh, let's throw
(18:35):
the people a bone. Let's find a way to get
money back into the back into the hands, and not
addressing underlying issues, right, not addressing inflation initially started by
the government injecting ridiculous amounts of money into our economy
but then kept alive with tariffs. Yes, but then on
top so it's it's both sides of the aisle who
(18:56):
are at fault here. And and we talked about those
you what a couple of weeks ago that he basically
admitted that, yeah, terris do cause prices to rise because
you know what, we're gonna get breakfasts to be more
affordable for you again with your banana and your beef
and what a coffee? And so it's so they know,
(19:18):
the administration knows that this raises prices, which you know,
then can there's an argument to be made that like, oh, okay,
well it's just a negotiating tactic, right like that, just
hang on and we're going to negotiate better trade deals
and who knows man Again, it just feels like a
giant meme sort of environment that that we're currently living in.
Speaker 2 (19:37):
We are living in interesting times. But just I think
practical takeaway for everybody out there is at least take
advantage of free money, yep, even though it means opening
up a new account and having something else to track
and take care of, even if it seems silly, go ahead,
go for you mean, you don't have to agree with everything,
but it's available there for you.
Speaker 1 (19:55):
Yeah, agreed.
Speaker 2 (19:56):
Or We've got more to get to, including people feeling
like they're handcuffed to their home. We'll talk about that
and then where what actually constitutes poverty in the United States.
There's been a warring war of arguments in the past week.
We'll talk about that and more right after this.
Speaker 1 (20:19):
All right, buddy, we are back from the break and
it is now time.
Speaker 2 (20:23):
What are we during that break, Matt? The people want
to know.
Speaker 1 (20:26):
I lean back and I stretch take a sip. Do
you see me over here drinking my hot water? And
at the very beginning I put it down without taking
a sip because I was afraid it was gonna burn
my mouth. I think I got out. Don't do it
right before you have to speak? Got it a little
too hots right before we sat down to record. But
our ludicrous headline of the week comes from the New
York Times, and the headline reads, they rush to buy
(20:49):
a home during the pandemic. Now some feel trapped and
I'm gonna save everyone the time and having to go
read this article, Meil, Can I just say it makes
me think of the d R. R. Kelly song like
trapped in a closet? Isn't that Remember that album came out.
I'm more remember the disease joke about R. Kelly. But uh, basically,
(21:11):
some folks who you know, who bought a home back
during the pandemic a few years ago, they found that
the home it's a little tight for them right now.
It's it's uh, it's not quite accommodating. They're growing family,
it's not quite to their liking as their circumstances have changed.
But of course they've got that sweet low rate and
they are loath to give it up. So with no
easy way to make a change, they are quote unquote
(21:33):
trapped and trapped. Yeah, just the closet. But it don't
you feel bad for him, Joel, It's I'll be honest,
it's hard to feel sad for folks who bought a home.
They've got some equity, they've got a locked in low rate.
Like the folks. I feel bad for the folks out
there who actually want to buy a home but can't
afford you because they're their wages haven't kept up with
(21:53):
home pricing increases, and affordability is out of reach.
Speaker 2 (21:56):
I don't know if your mom ever said this to
you growing up, but my mom would be like, I've
got the world's tiniest violin here playing. I don't know
where that came from, but she would. She would say
that to me rubber fingers together. And that's how I
feel for these people. You're locked in your home, that
you have equity, and like, I'm still saying at three
percent rate, I'm so sorry for you. It just felt
like such a self indulgent article from the New York Times.
(22:19):
I don't even know why they felt like they needed
to print those stories of people who are like, I've
got two hundred thousand dollars in equity, but I'm stuck
because you're not stuck. The truth is you're not stuck
if you're in that case, and you can totally make
it different. Option You've got options. This is also, by
the way, if you feel like you are stuck in
a home that you are, that you have bought, that
(22:40):
you're paying down that mortgage regularly, well you could have
opted for renting instead. And that's in particular a good idea.
If you're planning to u or you're not, you're not
thinking you're in a state in a home for at
least five years better off seven or more years. That's
typically what makes buying a home makes sense. In stats
from just this week Matt show that apartment rents are
(23:02):
down and vacancies are up, continuing to put more power
back in the hands of renters and just lower costs.
I don't think you have experienced this because you're a
better landlord than I am. But I have experienced like
decreases and what I'm able to get from my properties
in the last year a.
Speaker 1 (23:19):
Year only because I have taken these opportunities to do
some slight upgrading in order to keep that rent line.
So you having to put more into it and be
able to keep that right or yes, I would also
be offering those places for less as well.
Speaker 2 (23:33):
Yeah, so most likely that's where I'm at, which which
is you know, I'm not mad about it. I think
this is a great thing overall, because rents became excessively expensive.
It's it's good news after pandemic years of rapid price
increases the people experience.
Speaker 1 (23:48):
So let's say too, especially in multi families. So like
apartment complexes in particular have seen the most because of
the it's just a lot easier for developers to build
those types of units as opposed to single family rents.
I think we actually talked about this a few weeks
ago as well. There isn't clear data on that, but yeah,
it seems that those are not dropping as much as
(24:10):
kind of holding steady, at least nationwide. Yeah, obviously it
depends on your specific market. I think you and I
would both agree that owning a home, it can be
a lovely endeavor, can be a smart choice, and it
can be a great long term move for a whole
lot of folks. It's just not for everyone, and it's
not always better from a wealth building perspective. And I
think that kind of cult of home ownership mentality is
(24:31):
something that has been developed over many decades in this country,
and it's led people to believe that like the way
to live the American dream and to build some sort
of financial future for myself just to own a home.
And that just doesn't have to be the case I
used to be. But you don't have to follow that
same playbook. And I think there's the folks who are
talking the loudest about that are trying to encourage folks
(24:53):
to follow the same playbook that they have taken because
they have, you know, and I understate it because they
have seen how well it's done for them, But that
you don't have to follow that playbook. There are plenty
of other great ways to invest. It's more accessible to
for folks to invest in the market just while you're
sitting on the couch. In some ways, that's not great,
But I mean, I want to talk about even just
(25:14):
the lifestyle. Like you were saying that home ownership is
not for everyone, and I think that's something that I
need to get more used to because I love home
ownership and specifically I even love spending money on my
house and like the expenses that go into like making
little changes and making upgrades. Have we talked about my dishwasher? Oh?
I think we did? Yeah? Do we? On the show?
(25:35):
You got the fancy one? Yeah? Okay, so yeah. But like,
on one hand, I'm bummed because I'm like, this is
going to cost you know, it was an unexpected costs
that we didn't budget for because the old one should
have been good but it crapped out. But of course
I'm gonna end up getting a bosh. Uh. Well, I
shouldn't say of course I wanted to prioritize consumer reports.
You're getting a bus, you're getting ash and so got
(25:56):
and I got the more expensive b wash, the one
that pops open so that you know it's so great,
come down in the morning. The plate not only are
the plate.
Speaker 2 (26:03):
Strigil the plastic stride, does it read a story to you?
Speaker 1 (26:06):
And it plays a little song? But I like, I
enjoy doing that. But guess what those are additional expenses
that you have to be willing to pony up and
to part with your dollars in order to cover some
of these expenses. When you are a renter, you ain't
gotta worry about that when something craps out. I mean,
unless you actually had a runner who wanted to upgrade
(26:27):
the dishwasher. But when something breaks, you call up your landlord.
Just right. Speaking of another comic makes me like the
mitch Heedburg joke. It's like I went to home depot yesterday,
which is totally unnecessary. I need to go to an
apartment depot. Just a bunch of people standing around. We
don't have to fix jack. But like that, it's one
of the biggest benefits. It's one of the biggest benefits,
(26:47):
and that's you just got to keep in mind that
that is what you're signing up for with home ownership.
But of course, the folks who they're not happy with
living in an apartment, the folks out there who want
to purchase a home, those are the folks that we
feel for. Those of the folks who feel a bit
locked out of the market today, and the folks in
this article in particular. If you want to move, you
(27:07):
can still do that, like you just have to pay
a bit of a price for it. But and think
about people who bought at the peak of the market,
where home prices have receeated a little bit. Those people
are in a tougher spot because if your home is
now worth five percent less than what you paid for
it a year, eighteen months ago, something like that, and
you're like, oh, I really feel like I need to
do something different. You got to bring potentially a load
(27:29):
of cash to the closing table in order to make
a different decision. But if you if you bought a
home three or four years ago and it's appreciated and
you're you don't want to sell it because you don't
want to give up the low mortgage interest rate, you
still have that opportunity, though you still have that ability
without losing money in the process. Yeah, it just comes
out of trade offs. What are you willing to value?
Speaker 2 (27:51):
All right, let's talk about a really interesting debate that
happened really over the past over the past week.
Speaker 1 (27:58):
This is like one of those one of those Internet
things when there's something that just blows up and everyone's
talking about it. I'm really low to even talk about it.
Speaker 2 (28:06):
But there were responses everywhere, like the Washington Post and
some of our favorite everywords responded to everyone.
Speaker 1 (28:12):
Yeah, So it was like everyone had to take it's
it's in the water. We should we should talk about it.
So there was this firal article in the Free Press
last week attempting to make the case that Americans are
just so much poorer than we than we think. And
the case was essentially that the way that the US
poverty line is calculated, well that doesn't work anymore, not
in today's economy. But but it was wrong. I think
(28:34):
on a lot of levels. They made it.
Speaker 2 (28:36):
The author made it sound like a family of four
making one hundred and forty thousand dollars, they can barely
make it, They're barely scraping by. It's kind of like
I don't know some of the social media people making
two hundred and fifty k, and they're like, hey, but
I don't I don't know how many money left over
at the end of the month. And you're like, how
is that possible. Let's look at your budget.
Speaker 1 (28:53):
Oh, that's how Well.
Speaker 2 (28:54):
Tyler Cowen, who's like one of my favorite economists, he
wrote a response in the same publication, and it's well
where reading. He highlighted some of the realities of modern prosperity,
including like tech advancements and bigger homes, like we've all
got more square footage per person, fewer kids living in
the same room, food cost declines. You might have seen,
you know, food costs go up recently, but over the
(29:16):
course of decades, we've seen food costs go down.
Speaker 1 (29:19):
Him anyway, so we spend much less of our disposable
income feeding ourselves than our grandparents.
Speaker 2 (29:25):
Did, and then so much of the rest of the
world healthcare improvements. He documented so many things. The world
is just not as bad as some folks want you
to believe. I think that's maybe the heart of the response.
We want to get out.
Speaker 1 (29:36):
Yeah, no, well, and specifically some of the standards. So
the original the original author Green discorsion name Michael Green
and Michael Green. But uh, it's just ridiculous, like the
like these are luxuries that he's assuming that people not
only want but essentially are entitled to. And that's the
part that rubs me the wrong way, the fact that like,
oh yeah, like there are there's a wide range of
(29:59):
vehicles that are going to get you to and from work,
like you don't have to go with like the average
or median price of a brain new vehicle today. And
those again, those are the those are the sacrifices we make.
Those are the the trade offs that we make, as
opposed to saying, oh, the new poverty line should be
four times higher than four or five five times higher
than what it currently is right now. It's like it
(30:20):
makes me think of like if you're playing a game
and you're just complaining, like we've got man, we did
we ever give a shout out to a listener who
sent us the upgraded version of a choir? Well, we'll
pull into it. I'm not going to take a into
that right now, but I'm thinking about the board game Acquire.
You start off with a certain amount of money, uh,
and it's sort of like if I just out there
the whole time and complained that dude, we should start
(30:43):
out the game playing like with five times as much money.
It would make it so much easier. But like, guess
what that would also do make the game. It would
ruin the game, like there would you There would be
no incentive to be strategic, and everyone would just round
after round. You would just be buying things, except that
when it comes to real life there is a response,
which is that supply and demand. Well, okay, those units
(31:08):
of supply are going to go up in value because
there are more dollars chasing those limited goods. It just
I was not happy with the analysis of the original author.
Yeah it was. It wasn't great.
Speaker 2 (31:18):
It wasn't great, And there are other statistics I think
that could really combat his point of view too. Like
we highlighted recently in the how to Money newsletter that
a lot more families are making one hundred and fifty
thousand dollars now than we're fifty years ago. That's adjusted
for inflation, but it's a significant difference in the number
of families who have mid six figures are not mid six,
(31:40):
not five hundred k, but like one hundred and fifty
thousand dollars is really is quite a bit of money
in a lot of ways. And this is also not
to say that everything's great for everyone. We don't want
to sound completely dense and not understand and realize that
there are a lot of people living out there close
to the actual poverty line who are having a tough
time and who feel those grocery price rises more than
(32:03):
your middle class family, right, And it's it's true. Yeah,
inflation has attacked our wallets more in recent years, really
more than any other time we've seen in our adult lives,
and homes healthcare have gotten more expensive. But I think
articles like this seem to want modern economic reality to
be more negative than it actually is. They're highlighting, sure,
(32:24):
just cherry picking statistics.
Speaker 1 (32:26):
And that's the negative, negative news by.
Speaker 2 (32:28):
Yet to reveal their worldview instead of kind of coming
at it honestly.
Speaker 1 (32:32):
Yeah, and I mean it honestly reveals their like you said,
their worldview and what they expect everyone should have. Then
there's plenty of people who aren't, you know, and gosh,
I'm gonna sound like such a media type person, but
who are like the coastal elites who are very happy,
not having all of these amenities are West elites. No,
I don't. I feel like we're like right in the middle.
(32:52):
We're heartlanders. We live like near ish a major city,
but we're also approaching life with in sense in grit.
Like anyway, let's talk about building wealth, and potentially a
way that you can at least make your dollar go
further is moving overseas in order to stretch your dollar.
(33:14):
So folks who have kept up with like the Fire
movement know about this. It's called geographic arbitrage. But there
are new stats from the Defense Department, and they find
that there's a significant uptick in people who are taking
the strategy. And we're not talking about just like being nomadic, like,
we're talking about permanently moving to an international location that
(33:37):
has a much cheaper cost of living. And I think Portugal,
Thailand always comes to mind. Even Panama down in Central
America had an old neighbor who moved down to Panama,
Oh yeah, to retire, and like, I'm pretty sure she's
living the high life because it soldar house and it's
just your dollar goes a lot further down there, it does. Yeah,
And in some thriving xpac communities, I think you can.
(33:57):
Often you can find a solid community there along with
these lower costs in some you know, pretty decent healthcare
options too. This isn't for everyone. I actually talked about
this with my father in law recently because a buddy
of his was seriously thinking about moving down. I think
to Costa Rica, are you trying to get him further
away from you? No? You, if you move down to Chile,
(34:18):
do not have that kind of relationship with the in laws,
the classic in law relationship. Now I love them, They're great.
This isn't for everyone, but I think it's worth considering.
It's worth putting out there because this route could completely
change your financial independence path and what your life looks like.
Speaker 2 (34:33):
Yeah, I'm not like currently interested in moving abroad, but
I'm always like a little interested. Yeah, so maybe someday
I'm not going to say never. But it's like it's
like there are all these sort of things I've said
that I would never do that I ended up doing
later in life, and so, but but it does seem
like one of those things where, especially if you are
(34:54):
like I haven't saved as much as I thought I
would or wanted to, How can I retire at the
age I want to This is how this is a
way to do that right, Because you're stretching your dollars
so much further you need less to be able to
live that retired lifestyle that you want. On the note
of travel, the real ID rollout Matt has been bonkers.
So we've covered this a little bit over the years.
(35:14):
They keep pushing back the implementation day.
Speaker 1 (35:16):
Basically every nine months we provide an update for why
it's not like it's supposed to be.
Speaker 2 (35:22):
Yeah, and so yeah, this switch has just taking a
really long time, and there are still millions of Americans
who don't have an updated real ID, although the numbers
have gotten a lot better, a lot more people do
have this in their wallet already. If you haven't updated yours,
well you're going to punch yourself, I think if you
go to the airport without one, because it's about to
get a lot more frustrating and expensive starting February first,
(35:44):
you're gonna have to pay forty five bucks and go
through additional TSA vetting as you go through security. If
you have not upgraded to the real ID, and if
you're not sure whether your ID is updated, look for
a start in the upper right hand corner of your
driver's license. The start can look different depending on the state.
I think in California it's like inside of a bear YEP,
(36:04):
which makes sense. And if yours isn't compliant, update your ID,
especially especially before you make your next trip to the airport,
because uh yeah, not just the additional money, but it's
the additional hassle. Can you imagine, Matt trying to the
TSA line is already the pain of my existence when
I go, do they just hit you.
Speaker 1 (36:22):
Up for forty five bucks? Like right then and there?
How does it? How does it work? Yeah? They probably
have one of those like machines. They get a square
reader right there. They're just like tap here to pay,
and you're like, pay for what? For? Non compliance? Sir? Right?
That's what for? I mean, I have a feeling it's
just going to be a complete mess for people who
aren't really compliance. So make sure you get that done.
(36:43):
Look out for your loved ones to maybe help them
make sure they also doing it. That's right, before we go,
let's do a quick newsletter referral shout out to Lewis
L and Kathleen B. Thank you for not only reading
the how to Money the newsletter, but sharing it with friends.
And if you're listening and you've never even heard of
the Hota Money newsletter, head to hodamoney dot com forward
(37:03):
slash you guessed it newsletter.
Speaker 2 (37:06):
Now packed with all the vitamins and minerals you need
to live a healthy lifestyle.
Speaker 1 (37:10):
This was everybody, but that's gonna be it soone. Until
next time, Best friends out, Best friends Out.
Welcome to How the Money. I'm Joel, I'm Matt.
Speaker 2 (00:02):
Today we're talking AI toys, homeowners held hostage, and impoverished Americans.
Speaker 1 (00:26):
That's right, buddy. This is our Friday Flight, the collection
of stories of news articles that we came across and
the ones that we think you need to pay attention
to because they impact your finances the most.
Speaker 2 (00:37):
I think you need to pay attention so much, we're
going to force you to listen to us for the
next thirty something minutes.
Speaker 1 (00:42):
Yeah, speaking of folks held hostage, we'll get to that
homeowner's held hostage story here in a second. But before
we kick things off, let's give a massive, massive thanks
to all of the How to Money listeners out there
who participated in the Daffy Voices for Good challenge. We
went up against like six, no, seven other podcasts, and
(01:02):
the reason I know this specific number was because there
was one podcast that beat us. But I was so happy.
I want to it's all relative here, because what I
calculated was the fact that something like pinching pennies, I
forget what it's called.
Speaker 2 (01:17):
I don't know, I don't remember what they call their podcasts.
Speaker 1 (01:19):
So we came in second and we were only a
few thousand dollars short of taking that first place spot.
So I'm really proud of the generosity of our listeners percent.
But I was also super stoked to see that the
next six podcasts that competed in this challenge raised only
half as much combined that we were able to raise
with our listeners, which just demonstrates such an incredible generous
(01:43):
spirit man, and.
Speaker 2 (01:44):
That not only are heart yeah, trying to build wealth,
they want to do good things.
Speaker 1 (01:49):
With it and they're serious givers. Yeah, And honestly, I
hope that a lot of folks are checking out donor
advised funds, specifically with Daffy, because we, again, we have
been such big of Daffy. What it does they do.
We've been with them for a long time and they
finally reached out and we're like, hey, maybe we'll start
advertising with you. Guys Like great a little bit, which
(02:09):
is something we started. Wait did we do that last
did we start the end of last year? I think
it was maybe? I think it was a beginning of
last year. Maybe, Okay, And yeah, Daffy was a we
like such a great part if it's a company we
already use and love it's like the perfect slam Dune partnership.
So yeah, and really fun to participate in this challenge.
Next year, hopefully we do this again. Next year, we're
gonna crush Pinching Pennies take the number one spot. Yeah,
(02:31):
well we'll beat them because our listeners are awesome and
maybe I don't know, maybe Matt, you'll we'll match even
more next year.
Speaker 2 (02:37):
Yeah, I think let's do it. Let's go h okay. Oh,
one last thing. I'm seeing all the Spotify raps coming
out now. It's really fun to see. It's amazing how
much some people listen to specific podcasts and just to
see people like I listened to How the Money for
fifteen thousand minutes last year and I'm like, oh my goodness,
and so much time listening to our voices. I hope
you haven't gone insane.
Speaker 1 (02:58):
But time for me to do my once a month's
social media log in and I'll repost a bunch of
those folks tag us over on Instagram. Specifically, you kind
of run the Instagram. I kind of run the Facebook group.
People have been posting in the Facebook group, so I'm
sure you'll go to find some on Instagram for share.
But Thank you for listening. Give us a follow if
you don't at how the Money Pod.
Speaker 2 (03:17):
All right, let's get to the Friday flight sampling stories
we found interesting this week. Let's talk about Black Friday
Cyber Monday. Did you participate the shopping holiday?
Speaker 1 (03:26):
You snag yourself a deal? A little? Not much? Okay?
Speaker 2 (03:28):
The main thing I talked about buying tires. There's like
an early Black Friday sale or whatever. Nice but running shoes.
I stocked up on cheap but good running shoes, so solid,
like the high end Adidas for all right, fifty bucks?
All right, yeah, way to go do it's happy to
get those?
Speaker 1 (03:43):
You are are you? Are you brand loyal? Now you
have a lot? Only get the Adida shoes. Yeah, you
have a lot of Adidas when you know, because they
have the best sales to be you know, the sizing
and like you kind of know what brand or not brand,
what models they go for it as well. Well, you
are like an ultra person. I have, like I know
Ault people, and if Alter had shoes that were like
in that price range, I would totally consider it, but
(04:04):
they're a lot more expensive. Well, you're also cranking through
the shoes, that's true.
Speaker 2 (04:08):
I do okay, So, but like a lot of people
bought stuff on Black Friday and Cyber Monday, sales reup
something like four percent year over year. Online sales in particular,
we're up nine percent year over year. But because of
inflation and tariffs and higher prices in general, those numbers
could be slightly more inflated than they seem. So maybe
actually people weren't buying a lot more. It's just that
things cost more money. And by the way, Costco has
(04:30):
even sued for a refund of the teriffs they've been
forced to pay, which I kind of love to see that,
like Costco's sticking up for themselves. We always stay with Costco.
Matt here on how to money gen Z shoppers appear
to be feeling the biggest pinch, and they're dialing back
spending accordingly. I want to say this, if you overdid it,
that's okay on Black Friday and Cyber Monday, but it's
(04:51):
crucial to note the return policy so you can get
your money back before it's too late. If you're like,
all these packages are starting to arrive, I forgot I
even got that thing weight, I don't need that thing.
Return it, you might maybe be able to mitigate some
of the damage that you did if you ever spent
The head of consumer insights over at Salesforce, that person
credited their spending rise this year to artificial intelligence, and
(05:14):
I think I think it was she She called it
the ultimate purchase accelerator AI. We're not anti AI, but
I just think caution is warranted for your budget when
you're using AI. It worries me to think that people
are like using that to facilitate even more buying habits,
which I.
Speaker 1 (05:30):
Think is true. Yeah, yeah, so all the note of AI. Actually,
we're going to see more AI toys on the market
this year. The problem though, is that some are being
marketed for kids as young as two years old, which
then leads ovacy groups out there like fair Play to
issue some stark warnings and rightly so. And it makes
me think of some of the more educational devices, or
(05:50):
at least that's maybe what we tell ourselves, because like
I think a typical response might be, well, you know,
these toys, they're educational, this is going to help them
to learn, but man, it's so oh. It seems obvious
to me though, that two year olds are pretty ill
equipped to deal with AI and I don't know just
the proper way to interact with it. I actually asked
chat whether we should give our kids AI toys Joel,
(06:12):
and guess what, give me a pretty stern warning against it.
This is AI itself. You would think it would be
a bit more self propagating, none them like pluribus. It's
uh oh, I'll watch the biological mandate. I'm only a
couple episodes in and the verdict is out. I'll keep
you posting. But just even like myself as an adult,
I'm still trying to figure out how much, into what
(06:33):
capacity that AI should have in my life undred percent,
And so with that in mind, I don't know. You
don't have to take this advice, but I am all
for keeping AI toys at a nice distance from our kids.
Shoul get out there and touch some grass.
Speaker 2 (06:46):
Yeah, there's a lot of risk when you're putting those
into your kids hands because of the nature of AI
and like large language learning models, what are they going
to encounter? Like, you don't know, And we've seen some
really sad stories about teens, young people and what a
relationship with AI has done to them. I think we're
(07:07):
still tread lightly, especially in the early innings. And let's
talk about returns for just another second, Matt. As shoppers
make more returns and the cost of accepting those returns
has risen, some retailers have quietly been shortening their return window.
They're saying, hey, more people are making returns, and it
just it really harms our bottom line. So we want
(07:28):
to make it maybe a little more difficult to actually
follow through. Sephora and Ulta those are those are makeup shops, Matt.
I'm not sure if you've been in them.
Speaker 1 (07:36):
Oh, yeah, I've been to Sephora. Your daughter she's getting
into the makeup right, like, uh, well, are a little bit,
but yeah, I took her there too long ago, a
little daddy daughter date. Well, they got to learn what's
going on next time you go to there. Next time
they get some makeup, if they want to return it,
they only have thirty days. They don't sixty days anymore.
So note that can you take can you take makeup
back if it's been used, like if you try it out.
I don't know, that's a good question. I don't know.
(07:57):
I would I would think probably not. These are uncharted
waters for me.
Speaker 2 (08:02):
We'll look that up. But we're also seeing retailers attempting
to steer you towards their preferred method of making a
return that costs them less money. Like Amazon, they want
to get you to return stuff to Whole Foods because
they own Whole Foods instead of a UPS location that's
potentially much closer to you. And you're like, a Whole
food is like twenty minutes out of the way. I
don't really want to go there. It makes the return
a much bigger pain. And not to tout Costco's greatness
(08:25):
too much on this podcast already, but there's just a
lot of peace of mind when you buy from a
retailer who has a really great return policy, where you're
just not quite as worried. It might even be I
think sometimes at times worth paying a tiny bit extra
knowing that you're buying from a place that has a
good return policy. You can also, by the way, finagel
(08:46):
extra return time at a place like Target by having
their credit card. So just know what the return policy
is before you buy, and be prepared to jump through
the hoops and stay organized to make those returns in
a timely manner, because returns are definitely a part of
the holiday shopping reality.
Speaker 1 (09:01):
Yeah, most stuff. Yeah. My dad actually just purchased a
Blackstone griddle and he was at Costco and it was
on sale, and he's like, should I go for it?
And I said absolutely, because I've been preaching the gospel
of the outdoor griddle for like seven years now. Like
everybody I come in contact with, I tell them just
how this has revolutionized how we cook our meals, specifically
(09:22):
the proteins outside, but not even the rotin's like, dude,
a big breakfas Saturday morning breakfast, like twenty four pancakes
on the It's insane. Everybody who converts, they never want
to go I know. And I told him, I was
just like, you are going to love this, but if
you don't Costco. So he rest assured that he would
be able to take that back. Joe, I've got a
stat here for you that I think you're going to
(09:43):
be able to vamp on for minutes. The average American
has almost two hundred and fifty dollars in unused gift cards.
A third of those Americans have admitted to losing some
of that money due to the fact that the cards
either expire soon the retailer has closed, or they straight
up lost the gift card and my inside's are turning
(10:05):
right now, go for it. I wish you could see.
I know this is like the hill I die OneD.
I don't know. I know you don't like gift cards.
I don't mind them, but I figured this would give
you something to play with.
Speaker 2 (10:15):
Okay, I'm gonna go on the dietrive I go on
every year, which is that you're turning cash, money that
you can use at any location across the United States
and you know, the parts of the world too, into
something that is used usable at really only one retailer.
And why would you do that to yourself? Why would
you take money that you can use anywhere and like
(10:37):
turn it into money you can only use in one place.
Speaker 1 (10:39):
I think most people are doing it for other people,
not themselves.
Speaker 2 (10:41):
And they are, they are so much of the time.
But that's why we have this problem where people leave
their gift cards in their underweards or or forget that
they have them, or that the retailer that they have
a gift card too does go out of business and
then they're kind of out of luck. So just be
careful when buying gift cards this season. If you have
gift cards, you haven't used, gather them up and start
(11:04):
using them, consider giving them away if you don't care
about that retailer, or you can sell them. You're not
going to make as much money as the face value
of the gift card, but you can sell them on
a site like card cash dot com. There's also a
cool site that will link to in the show notes
where you can donate unused gift card dollars. So if
you find yourself in that vein we're like, I got
some random one slider, I don't know what to do
(11:24):
with them, Well, you can donate them, which is cool.
Speaker 1 (11:26):
That's pretty cool.
Speaker 2 (11:27):
And there's actually the only time I'm down with gift
cards where I think they actually make sense from a
purchasing perspective is when you're getting a discount. So Costco
has the discount of gift card section, like use seventy
or eighty bucks for one hundred bucks worth of gift cards.
If you're going to use them, why not get a
discount and make some money on that target This Weekend
(11:49):
is doing their ten percent off gift cards. They do
it every single year. That's like one of those super
popular retailers. So if you're like I want to get
a gift card for somebody. I want them to have
a wide range of options for what they can buy
with them, and I also don't want to pay full price.
That could be a good option. Do y'all shop at
Target frequently? I would say frequently enough where the discounted
gift cards would make sense for us.
Speaker 1 (12:10):
The last time I went in there, I don't know.
Maybe it's just online shopping has just ruined it for me.
But just walking through there and being inundated with the
smells and the stuff. Just what is Target smell is
drew like a combination of crappy coffee drinks and popcorn.
Well they have the Starbucks they have? Yeah, that makes sense,
Like that's the first thing. The door. What's worse walking
(12:30):
into a into a Target and the smell there, or
the smell at Sephora where there there's all these tweens
who are spraying perfume everywhere. I think, I think the
perfume smell. I can't handle that? What but we when
I shop at Target usually it's usually it's online try
to avoid I don't know, I'm just not much for
going in store shoping. I get it. Hey, let's talk
about some some policy implications some things that are happening
(12:50):
at a very high level, and how that's impacting h
impacting folks their ability to save specifically, because we're going
to talk about the Trump accounts for baby.
Speaker 2 (13:00):
I'm so stoked that babies can now save money, invest
and get rich.
Speaker 1 (13:04):
Yeah. The One Big Beautiful Bill Act, because it officially
passed that made these Trump accounts a reality, but it
has taken some time to get them off the ground
as far as like what are the particulars, what are
the details? It can be a bit confusing, but there
is more coming to lights. These accounts are available to
kids eighteen and under. But and this is the headline
(13:27):
thing that I think drew a lot of the eyeballs
in initially there is that they're dangling that carrot right
of the free thousand dollars that, though is only available
to children who are born between like January first, twenty
twenty five or the very end of twenty twenty eight.
You also have to be a US citizen with a
Social Security number. And so if you are, you know,
(13:52):
if you've already had a kid this year or congratulations
if you have to get off congrats, yeah, oh man.
Every time we have a listener question who mentioned if
it's a like we should be talking about that. I
you know, it hasn't even popped into my mind.
Speaker 2 (14:04):
Else we should do we have had the money socks
for adults, we should get baby hod of money socks
and then we should ship those how to money socks
every time a listener has a baby.
Speaker 1 (14:12):
Instead of how the money baby socks about how to
money onesies. Because of that that sounds even cutere.
Speaker 2 (14:17):
Because the baby soxs would be like kind of tiny,
you wouldn't be able to see the.
Speaker 1 (14:20):
Yeah, good point, and uh but onesies, onesies are where
it's at. You might have to actually look into that.
Is there a sock fancy? But for onesies probably ones fancy?
God exist. But we're mentioning this because if you if
if that is you and you've got a kid or
think you might certainly grab that free money for your
child if you are eligible, there's a specific form you're
gonna need to keep it out for IRS form forty
(14:41):
five forty seven. That's what you're gonna want to fill
out if you do have a child this year or no,
what if you had a child this year?
Speaker 2 (14:47):
Is that reference to Trump being the forty fifth and
forty seventh president.
Speaker 1 (14:50):
Oh my gosh, I didn't think about that until just now.
Are you serious? That's crazy? This is so stupid. Gosh,
it's like we're living living in a real life meme.
But I think you're probably right. Probably is gosh. An
online portal is going to open this coming summer to
make it easier as well. The good news though, is
that you can invest the dollars in low cost ETFs,
(15:10):
which is certainly the way to go to help that
nesse grow for your little one. I think it's a
cool idea, although it does have a limited timeframe and
it certainly has a limited ability as to what you
can do with that account, right, Like the functionality is limited,
which means that long term, I do think the actual
impact of these accounts might be limited.
Speaker 2 (15:31):
It's a seed of a good idea, and it will
help some kids and some families, and but is it
going to have this wide ranging major impact on their
future lives. I think it's overstand probably, And by the.
Speaker 1 (15:44):
Way, I'm willing to be open to it, right because
I'm sure when they created like the four to one K,
they're like, what's this dumb four to one you know,
like or this thing that they named after the senator
Senator Roth, but like, look at what those have turned into.
And so I'm willing to be open minded, but I
am a bit skeptical.
Speaker 2 (16:00):
Yeah, And I think it's really important to look at
the details of this account because some people might be
drawn to putting more money in these accounts beyond the
free thousand dollars, and that might not be the smartest
move because even though you can contribute even more to
these accounts, it makes very little sense to utilize them
past the free money, because the taxes can be complicated
(16:20):
or excessive if the money isn't used for a home
down payment or for education.
Speaker 1 (16:24):
So that is just how its tax is pretty complicated,
is yeah, okay, a portion of it is taxed at
this rate, it gets pretty funky.
Speaker 2 (16:31):
So the five P twenty nine account is probably a
better way to save for your kids or even like
the UTMA accounts like are likely better than these Trump
accounts for are putting more money into take the free money,
but after that, probably look elsewhere. And interestingly enough, Matt
the Dell computers entrepreneur Michael Dell. He announced this week
(16:52):
that he's offering an additional two hundred and fifty dollars
for kids ten and younger who would have otherwise been
left out of this Trump account goodness. And at first
when I saw that, I was like, oh, man, the
public private partnership. Sometimes it like makes me a little squeamy,
But man, it seems like this is just like a
philanthropic good deed that Michael Dell is doing and for
(17:15):
the children. And even some of our kids are going
to be eligible for this, So not only if you
just had a newborn, but if you have a kid
who's elementary school age, you might be your kids might qualify.
He's donating I think we like six and a half
billion dollars to make this.
Speaker 1 (17:29):
A realitmendous amount of money.
Speaker 2 (17:30):
Yeah, so it's a pert I didn't see coming. And
I think maybe the best part of this, the silver lining,
could be that more kids are going to be made
aware of compounding returns and investing in how the market
works from an earlier age because they're like, I got
this account, Like you might start telling your kid about
it at age six or seven. That's the upside, and
then they kind of they get to learn exactly. So
(17:51):
maybe that's like the most underrated part of these accounts.
Speaker 1 (17:53):
I wish instead I could just roll that Dell money
just straight into their five twenty nine, you know, like
I don't have to open up another account, but I'm
probably going to because two hundred fifty bucks, I mean,
I think I want to get my hands on that.
Don't want to leave free money behind. Yeah, And it's
I'm also like I kind of gave like the the
I'm open minded, like this could lead somewhere kind of argument.
But it's hard not to be cynical, especially when they're
(18:15):
called Trump accounts, right, Like, because what do you think
of when you hear Trump accounts. I think of like
Trump hotels, or I think of like Trump stakes, Trump
are Rex, like any It just seems like another opportunity
for him to throw his name on something. And I'm
not trying to be trump coin overly political here or anything,
but like it feels like a band aid on something
of like rising prices, and they're like, oh, let's throw
(18:35):
the people a bone. Let's find a way to get
money back into the back into the hands, and not
addressing underlying issues, right, not addressing inflation initially started by
the government injecting ridiculous amounts of money into our economy
but then kept alive with tariffs. Yes, but then on
top so it's it's both sides of the aisle who
(18:56):
are at fault here. And and we talked about those
you what a couple of weeks ago that he basically
admitted that, yeah, terris do cause prices to rise because
you know what, we're gonna get breakfasts to be more
affordable for you again with your banana and your beef
and what a coffee? And so it's so they know,
(19:18):
the administration knows that this raises prices, which you know,
then can there's an argument to be made that like, oh, okay,
well it's just a negotiating tactic, right like that, just
hang on and we're going to negotiate better trade deals
and who knows man Again, it just feels like a
giant meme sort of environment that that we're currently living in.
Speaker 2 (19:37):
We are living in interesting times. But just I think
practical takeaway for everybody out there is at least take
advantage of free money, yep, even though it means opening
up a new account and having something else to track
and take care of, even if it seems silly, go ahead,
go for you mean, you don't have to agree with everything,
but it's available there for you.
Speaker 1 (19:55):
Yeah, agreed.
Speaker 2 (19:56):
Or We've got more to get to, including people feeling
like they're handcuffed to their home. We'll talk about that
and then where what actually constitutes poverty in the United States.
There's been a warring war of arguments in the past week.
We'll talk about that and more right after this.
Speaker 1 (20:19):
All right, buddy, we are back from the break and
it is now time.
Speaker 2 (20:23):
What are we during that break, Matt? The people want
to know.
Speaker 1 (20:26):
I lean back and I stretch take a sip. Do
you see me over here drinking my hot water? And
at the very beginning I put it down without taking
a sip because I was afraid it was gonna burn
my mouth. I think I got out. Don't do it
right before you have to speak? Got it a little
too hots right before we sat down to record. But
our ludicrous headline of the week comes from the New
York Times, and the headline reads, they rush to buy
(20:49):
a home during the pandemic. Now some feel trapped and
I'm gonna save everyone the time and having to go
read this article, Meil, Can I just say it makes
me think of the d R. R. Kelly song like
trapped in a closet? Isn't that Remember that album came out.
I'm more remember the disease joke about R. Kelly. But uh, basically,
(21:11):
some folks who you know, who bought a home back
during the pandemic a few years ago, they found that
the home it's a little tight for them right now.
It's it's uh, it's not quite accommodating. They're growing family,
it's not quite to their liking as their circumstances have changed.
But of course they've got that sweet low rate and
they are loath to give it up. So with no
easy way to make a change, they are quote unquote
(21:33):
trapped and trapped. Yeah, just the closet. But it don't
you feel bad for him, Joel, It's I'll be honest,
it's hard to feel sad for folks who bought a home.
They've got some equity, they've got a locked in low rate.
Like the folks. I feel bad for the folks out
there who actually want to buy a home but can't
afford you because they're their wages haven't kept up with
(21:53):
home pricing increases, and affordability is out of reach.
Speaker 2 (21:56):
I don't know if your mom ever said this to
you growing up, but my mom would be like, I've
got the world's tiniest violin here playing. I don't know
where that came from, but she would. She would say
that to me rubber fingers together. And that's how I
feel for these people. You're locked in your home, that
you have equity, and like, I'm still saying at three
percent rate, I'm so sorry for you. It just felt
like such a self indulgent article from the New York Times.
(22:19):
I don't even know why they felt like they needed
to print those stories of people who are like, I've
got two hundred thousand dollars in equity, but I'm stuck
because you're not stuck. The truth is you're not stuck
if you're in that case, and you can totally make
it different. Option You've got options. This is also, by
the way, if you feel like you are stuck in
a home that you are, that you have bought, that
(22:40):
you're paying down that mortgage regularly, well you could have
opted for renting instead. And that's in particular a good idea.
If you're planning to u or you're not, you're not
thinking you're in a state in a home for at
least five years better off seven or more years. That's
typically what makes buying a home makes sense. In stats
from just this week Matt show that apartment rents are
(23:02):
down and vacancies are up, continuing to put more power
back in the hands of renters and just lower costs.
I don't think you have experienced this because you're a
better landlord than I am. But I have experienced like
decreases and what I'm able to get from my properties
in the last year a.
Speaker 1 (23:19):
Year only because I have taken these opportunities to do
some slight upgrading in order to keep that rent line.
So you having to put more into it and be
able to keep that right or yes, I would also
be offering those places for less as well.
Speaker 2 (23:33):
Yeah, so most likely that's where I'm at, which which
is you know, I'm not mad about it. I think
this is a great thing overall, because rents became excessively expensive.
It's it's good news after pandemic years of rapid price
increases the people experience.
Speaker 1 (23:48):
So let's say too, especially in multi families. So like
apartment complexes in particular have seen the most because of
the it's just a lot easier for developers to build
those types of units as opposed to single family rents.
I think we actually talked about this a few weeks
ago as well. There isn't clear data on that, but yeah,
it seems that those are not dropping as much as
(24:10):
kind of holding steady, at least nationwide. Yeah, obviously it
depends on your specific market. I think you and I
would both agree that owning a home, it can be
a lovely endeavor, can be a smart choice, and it
can be a great long term move for a whole
lot of folks. It's just not for everyone, and it's
not always better from a wealth building perspective. And I
think that kind of cult of home ownership mentality is
(24:31):
something that has been developed over many decades in this country,
and it's led people to believe that like the way
to live the American dream and to build some sort
of financial future for myself just to own a home.
And that just doesn't have to be the case I
used to be. But you don't have to follow that
same playbook. And I think there's the folks who are
talking the loudest about that are trying to encourage folks
(24:53):
to follow the same playbook that they have taken because
they have, you know, and I understate it because they
have seen how well it's done for them, But that
you don't have to follow that playbook. There are plenty
of other great ways to invest. It's more accessible to
for folks to invest in the market just while you're
sitting on the couch. In some ways, that's not great,
But I mean, I want to talk about even just
(25:14):
the lifestyle. Like you were saying that home ownership is
not for everyone, and I think that's something that I
need to get more used to because I love home
ownership and specifically I even love spending money on my
house and like the expenses that go into like making
little changes and making upgrades. Have we talked about my dishwasher? Oh?
I think we did? Yeah? Do we? On the show?
(25:35):
You got the fancy one? Yeah? Okay, so yeah. But like,
on one hand, I'm bummed because I'm like, this is
going to cost you know, it was an unexpected costs
that we didn't budget for because the old one should
have been good but it crapped out. But of course
I'm gonna end up getting a bosh. Uh. Well, I
shouldn't say of course I wanted to prioritize consumer reports.
You're getting a bus, you're getting ash and so got
(25:56):
and I got the more expensive b wash, the one
that pops open so that you know it's so great,
come down in the morning. The plate not only are
the plate.
Speaker 2 (26:03):
Strigil the plastic stride, does it read a story to you?
Speaker 1 (26:06):
And it plays a little song? But I like, I
enjoy doing that. But guess what those are additional expenses
that you have to be willing to pony up and
to part with your dollars in order to cover some
of these expenses. When you are a renter, you ain't
gotta worry about that when something craps out. I mean,
unless you actually had a runner who wanted to upgrade
(26:27):
the dishwasher. But when something breaks, you call up your landlord.
Just right. Speaking of another comic makes me like the
mitch Heedburg joke. It's like I went to home depot yesterday,
which is totally unnecessary. I need to go to an
apartment depot. Just a bunch of people standing around. We
don't have to fix jack. But like that, it's one
of the biggest benefits. It's one of the biggest benefits,
(26:47):
and that's you just got to keep in mind that
that is what you're signing up for with home ownership.
But of course, the folks who they're not happy with
living in an apartment, the folks out there who want
to purchase a home, those are the folks that we
feel for. Those of the folks who feel a bit
locked out of the market today, and the folks in
this article in particular. If you want to move, you
(27:07):
can still do that, like you just have to pay
a bit of a price for it. But and think
about people who bought at the peak of the market,
where home prices have receeated a little bit. Those people
are in a tougher spot because if your home is
now worth five percent less than what you paid for
it a year, eighteen months ago, something like that, and
you're like, oh, I really feel like I need to
do something different. You got to bring potentially a load
(27:29):
of cash to the closing table in order to make
a different decision. But if you if you bought a
home three or four years ago and it's appreciated and
you're you don't want to sell it because you don't
want to give up the low mortgage interest rate, you
still have that opportunity, though you still have that ability
without losing money in the process. Yeah, it just comes
out of trade offs. What are you willing to value?
Speaker 2 (27:51):
All right, let's talk about a really interesting debate that
happened really over the past over the past week.
Speaker 1 (27:58):
This is like one of those one of those Internet
things when there's something that just blows up and everyone's
talking about it. I'm really low to even talk about it.
Speaker 2 (28:06):
But there were responses everywhere, like the Washington Post and
some of our favorite everywords responded to everyone.
Speaker 1 (28:12):
Yeah, So it was like everyone had to take it's
it's in the water. We should we should talk about it.
So there was this firal article in the Free Press
last week attempting to make the case that Americans are
just so much poorer than we than we think. And
the case was essentially that the way that the US
poverty line is calculated, well that doesn't work anymore, not
in today's economy. But but it was wrong. I think
(28:34):
on a lot of levels. They made it.
Speaker 2 (28:36):
The author made it sound like a family of four
making one hundred and forty thousand dollars, they can barely
make it, They're barely scraping by. It's kind of like
I don't know some of the social media people making
two hundred and fifty k, and they're like, hey, but
I don't I don't know how many money left over
at the end of the month. And you're like, how
is that possible. Let's look at your budget.
Speaker 1 (28:53):
Oh, that's how Well.
Speaker 2 (28:54):
Tyler Cowen, who's like one of my favorite economists, he
wrote a response in the same publication, and it's well
where reading. He highlighted some of the realities of modern prosperity,
including like tech advancements and bigger homes, like we've all
got more square footage per person, fewer kids living in
the same room, food cost declines. You might have seen,
you know, food costs go up recently, but over the
(29:16):
course of decades, we've seen food costs go down.
Speaker 1 (29:19):
Him anyway, so we spend much less of our disposable
income feeding ourselves than our grandparents.
Speaker 2 (29:25):
Did, and then so much of the rest of the
world healthcare improvements. He documented so many things. The world
is just not as bad as some folks want you
to believe. I think that's maybe the heart of the response.
We want to get out.
Speaker 1 (29:36):
Yeah, no, well, and specifically some of the standards. So
the original the original author Green discorsion name Michael Green
and Michael Green. But uh, it's just ridiculous, like the
like these are luxuries that he's assuming that people not
only want but essentially are entitled to. And that's the
part that rubs me the wrong way, the fact that like,
oh yeah, like there are there's a wide range of
(29:59):
vehicles that are going to get you to and from work,
like you don't have to go with like the average
or median price of a brain new vehicle today. And
those again, those are the those are the sacrifices we make.
Those are the the trade offs that we make, as
opposed to saying, oh, the new poverty line should be
four times higher than four or five five times higher
than what it currently is right now. It's like it
(30:20):
makes me think of like if you're playing a game
and you're just complaining, like we've got man, we did
we ever give a shout out to a listener who
sent us the upgraded version of a choir? Well, we'll
pull into it. I'm not going to take a into
that right now, but I'm thinking about the board game Acquire.
You start off with a certain amount of money, uh,
and it's sort of like if I just out there
the whole time and complained that dude, we should start
(30:43):
out the game playing like with five times as much money.
It would make it so much easier. But like, guess
what that would also do make the game. It would
ruin the game, like there would you There would be
no incentive to be strategic, and everyone would just round
after round. You would just be buying things, except that
when it comes to real life there is a response,
which is that supply and demand. Well, okay, those units
(31:08):
of supply are going to go up in value because
there are more dollars chasing those limited goods. It just
I was not happy with the analysis of the original author.
Yeah it was. It wasn't great.
Speaker 2 (31:18):
It wasn't great, And there are other statistics I think
that could really combat his point of view too. Like
we highlighted recently in the how to Money newsletter that
a lot more families are making one hundred and fifty
thousand dollars now than we're fifty years ago. That's adjusted
for inflation, but it's a significant difference in the number
of families who have mid six figures are not mid six,
(31:40):
not five hundred k, but like one hundred and fifty
thousand dollars is really is quite a bit of money
in a lot of ways. And this is also not
to say that everything's great for everyone. We don't want
to sound completely dense and not understand and realize that
there are a lot of people living out there close
to the actual poverty line who are having a tough
time and who feel those grocery price rises more than
(32:03):
your middle class family, right, And it's it's true. Yeah,
inflation has attacked our wallets more in recent years, really
more than any other time we've seen in our adult lives,
and homes healthcare have gotten more expensive. But I think
articles like this seem to want modern economic reality to
be more negative than it actually is. They're highlighting, sure,
(32:24):
just cherry picking statistics.
Speaker 1 (32:26):
And that's the negative, negative news by.
Speaker 2 (32:28):
Yet to reveal their worldview instead of kind of coming
at it honestly.
Speaker 1 (32:32):
Yeah, and I mean it honestly reveals their like you said,
their worldview and what they expect everyone should have. Then
there's plenty of people who aren't, you know, and gosh,
I'm gonna sound like such a media type person, but
who are like the coastal elites who are very happy,
not having all of these amenities are West elites. No,
I don't. I feel like we're like right in the middle.
(32:52):
We're heartlanders. We live like near ish a major city,
but we're also approaching life with in sense in grit.
Like anyway, let's talk about building wealth, and potentially a
way that you can at least make your dollar go
further is moving overseas in order to stretch your dollar.
(33:14):
So folks who have kept up with like the Fire
movement know about this. It's called geographic arbitrage. But there
are new stats from the Defense Department, and they find
that there's a significant uptick in people who are taking
the strategy. And we're not talking about just like being nomadic, like,
we're talking about permanently moving to an international location that
(33:37):
has a much cheaper cost of living. And I think Portugal,
Thailand always comes to mind. Even Panama down in Central
America had an old neighbor who moved down to Panama,
Oh yeah, to retire, and like, I'm pretty sure she's
living the high life because it soldar house and it's
just your dollar goes a lot further down there, it does. Yeah,
And in some thriving xpac communities, I think you can.
(33:57):
Often you can find a solid community there along with
these lower costs in some you know, pretty decent healthcare
options too. This isn't for everyone. I actually talked about
this with my father in law recently because a buddy
of his was seriously thinking about moving down. I think
to Costa Rica, are you trying to get him further
away from you? No? You, if you move down to Chile,
(34:18):
do not have that kind of relationship with the in laws,
the classic in law relationship. Now I love them, They're great.
This isn't for everyone, but I think it's worth considering.
It's worth putting out there because this route could completely
change your financial independence path and what your life looks like.
Speaker 2 (34:33):
Yeah, I'm not like currently interested in moving abroad, but
I'm always like a little interested. Yeah, so maybe someday
I'm not going to say never. But it's like it's
like there are all these sort of things I've said
that I would never do that I ended up doing
later in life, and so, but but it does seem
like one of those things where, especially if you are
(34:54):
like I haven't saved as much as I thought I
would or wanted to, How can I retire at the
age I want to This is how this is a
way to do that right, Because you're stretching your dollars
so much further you need less to be able to
live that retired lifestyle that you want. On the note
of travel, the real ID rollout Matt has been bonkers.
So we've covered this a little bit over the years.
(35:14):
They keep pushing back the implementation day.
Speaker 1 (35:16):
Basically every nine months we provide an update for why
it's not like it's supposed to be.
Speaker 2 (35:22):
Yeah, and so yeah, this switch has just taking a
really long time, and there are still millions of Americans
who don't have an updated real ID, although the numbers
have gotten a lot better, a lot more people do
have this in their wallet already. If you haven't updated yours,
well you're going to punch yourself, I think if you
go to the airport without one, because it's about to
get a lot more frustrating and expensive starting February first,
(35:44):
you're gonna have to pay forty five bucks and go
through additional TSA vetting as you go through security. If
you have not upgraded to the real ID, and if
you're not sure whether your ID is updated, look for
a start in the upper right hand corner of your
driver's license. The start can look different depending on the state.
I think in California it's like inside of a bear YEP,
(36:04):
which makes sense. And if yours isn't compliant, update your ID,
especially especially before you make your next trip to the airport,
because uh yeah, not just the additional money, but it's
the additional hassle. Can you imagine, Matt trying to the
TSA line is already the pain of my existence when
I go, do they just hit you.
Speaker 1 (36:22):
Up for forty five bucks? Like right then and there?
How does it? How does it work? Yeah? They probably
have one of those like machines. They get a square
reader right there. They're just like tap here to pay,
and you're like, pay for what? For? Non compliance? Sir? Right?
That's what for? I mean, I have a feeling it's
just going to be a complete mess for people who
aren't really compliance. So make sure you get that done.
(36:43):
Look out for your loved ones to maybe help them
make sure they also doing it. That's right, before we go,
let's do a quick newsletter referral shout out to Lewis
L and Kathleen B. Thank you for not only reading
the how to Money the newsletter, but sharing it with friends.
And if you're listening and you've never even heard of
the Hota Money newsletter, head to hodamoney dot com forward
(37:03):
slash you guessed it newsletter.
Speaker 2 (37:06):
Now packed with all the vitamins and minerals you need
to live a healthy lifestyle.
Speaker 1 (37:10):
This was everybody, but that's gonna be it soone. Until
next time, Best friends out, Best friends Out.
Hosts And Creators
Joel Larsgaard
Matthew Altmix
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