November 10, 2023 • 32 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: the most affordable eyeglasses around, pressure to go paperless, learning from buyers remorse, the shopping social network, #dupe, BNPL for travel?, the rise of Apple Pay Later, 8 figures needed for financial freedom?, the subprime tax, a priceless privacy app, & holiday shopping stats.
Want more How To Money in your life? Here are some additional ways to get ahead with your personal finances:
- Knowing your ‘money gear’ is a crucial part of your personal finance journey. Start here.
- Sign up for the weekly HTM newsletter. It’s fun, free, & practical.
- Join a thriving community of fellow money in the HTM Facebook group.
- Find the best credit card for you with our new credit card tool!
- Massively reduce your cell phone bill each month by switching to a discount provider like Mint Mobile.
And please help us to spread the word by letting friends and family know about How to Money! Hit the share button, subscribe if you’re not already a regular listener, and give us a quick review in Apple Podcasts or wherever you get your podcasts. Help us to change the conversation around personal finance and get more people doing smart things with their money. Have an awesome weekend!
Best friends out!
See omnystudio.com/listener for privacy information.
Mark as Played
Transcript
Episode Transcript
Available transcripts are automatically generated. Complete accuracy is not guaranteed.
Speaker 1 (00:00):
Welcome to Had of Money. I'm Joel and I am Matt.
Today we're talking pressure to go paperless, the subprime tax,
and a priceless privacy app.
Speaker 2 (00:28):
You know what, buddy, those are some of the stories
we're gonna get to.
Speaker 1 (00:30):
We've got a lot more to get to on those
Friday flight.
Speaker 3 (00:33):
And by the way, we call it the Friday Flight
because it is gonna be a nice little sampling of
some of the most important financial stories that we've come
across this week, the ones that we think you need
to be paying attention to.
Speaker 1 (00:44):
By the way, when I say priceless, I mean priceless,
but I also mean free, So it's both both of
those things. It's invaluable and also it doesn't cost you
a dime double on tundra. Yeah yeah, But okay, Matt.
Before we get to kind of all the stories that
we think you need to know about this week, I
just wanted to quickly mention our friend's rich and reg
They posted something on Twitter or the other day that
Zenny Optical, which you and I have talked about before
(01:05):
many times, they now have they make prescription glasses for
VR headsets. I don't not see that. I feel like
I've known about Zenny for you probably you have too,
probably over a decade now, right, Yeah, Zenny's been dude
like the best way to save money wearing.
Speaker 3 (01:20):
Right now, I know they look Okay, question for you,
do my glasses look expensive? Do they look fancy to you?
Speaker 1 (01:25):
I mean a lot of the Zenny they look kind
of like Warby Parker. Yeah.
Speaker 3 (01:29):
So the reason I ask is because recently Kate and
I were on a date night and we stumbled upon
a watch club, like a wristwatch, like a fancy wristwatch club.
I think they're called like Red Bar or something like that, Okay,
and I was intrigued, and it's kind of we're waiting
for our table. So I got a beer and started
chatting with them and ended up talking with him for
a while, like thirty forty five minutes, and I get
(01:52):
to learn about fancy watches. Also kind of a dangerous conversation.
Now you've got a new expensive hobby. These guys, they're
just enthusiasts. Basically, they're not trying They weren't trying to
sell anything. But I was talking to one gentleman in particular,
and he was kind of explaining why he's so into them.
He's like, it's jewelry for men, right, it's an accessory.
He's talking about fashion, and he looks over at me.
(02:14):
He's like, I mean, I see the glasses you've got on.
I can tell you're a fashionable how you appreciate the
nicer things in life. And in the back of my mind,
I'm thinking.
Speaker 2 (02:21):
Homie, these are Zendies. I dropped twenty bucks on these things.
Speaker 1 (02:25):
Over your eyes.
Speaker 3 (02:26):
I didn't say anything, of course, because I was flattered.
But yeah, I've been a fan of Zenny for if
not a decade, close to a decade.
Speaker 1 (02:34):
It's just interesting to see what we're so affordable.
Speaker 3 (02:36):
And when I say twenty dollars, literally twenty dollars for
a pair of frames, you can spend a little bit
more because you can get the anti smudge or the anti.
Speaker 1 (02:44):
Let's frames and lenses glare coating, not just on the lenses.
Speaker 3 (02:48):
Well, some of them are that affordable, but when you
start adding some of the special special features, then the
price can go up, like if for instance, because you
can get them tinted as well. That's how I have
prescription sunglasses and they are a little more expensive than
the twenty dollars frames. Maybe forty bucks, but still that
is so much more affordable than what it is you're
gonna pay.
Speaker 1 (03:07):
Yeah, you go to one of the traditional eye glass retailers,
you're gonna spend like ten x sometimes. Yeah, you're paying
off the nose even costco, which is great when it
comes to going getting an eye exam, getting glasses.
Speaker 3 (03:17):
Go there for the eye exams. Any's way better, but
not for the glasses. Yeah yeah, yeah, yeah, any optical doctor.
Speaker 1 (03:22):
It was just interesting to see, Well, I guess it
makes sense that that you need prescription eyeglasses for virtual
reality headsets. Oh yeah, but it's kind of cool to
see him. Back to the original story. How far is
Enny's come? Right, They're like, they're so futuristic at this
point that they're they're even making prescription lenses for I guess.
Speaker 3 (03:38):
You need that you are into the metaverse, which who
is at this point? It's all about the AI not
the metaverse, right, Zuck, Sorry, Zuck?
Speaker 1 (03:47):
Yeah, all right, let's move on to the mat Let's
get to the stories that we found interesting this week,
and let's start with kind of a paperless conundrum. There's
a city bank is getting hella serious about not sending
you paper statements. They don't want you to be able
to get paper statements from them in the mail. Well,
how serious are they getting? You're not going to be
able to log into your accounts if you insist on
(04:08):
getting a paper statement sent in the mail. They're kind
of doing this as a trial run. They really, they
really really really don't want to pay the postage and
go through the burden of sending you that statement in
the mail. And so this is, like I said, there
is a test program they might be rolling out on
a larger scale. And I in some ways I kind
of don't blame City. I get I totally get it.
I get why they're going for this because.
Speaker 3 (04:28):
It's a line item that they can look at on
their at the end of the year and they're like,
all right, how do we increase profits? Oh, how about
we acts this entire thing that nobody, nobody looks at.
It just shows up in the mail and.
Speaker 1 (04:38):
You just throw it in the trash, which is what
most recycling Usually it's inertia bias that people say, oh, yeah,
I'm gonna keep you in the paper sent They just
never go turn it off. Maybe they're prompted when they
log in and they just like click the X button.
But if you're a customer who wants a physical statement,
you can print it out at home. Right, there's like
the PDF or that you can you can easily print
that statement out. I don't know why we need to
get them physically mailed to us anymore. But the thing
(05:00):
is they also might be running a foul a federal law.
That's kind of a murky point right here. It's and
the way they're going about it, I would say it's
kind of bad customer service instead of just kind of saying, listen,
I totally agree with it. If you don't agree to
turning off paper statements, you can't log into your account.
That feels like an ultimatum. That is pretty harsh, right,
And so a lot of people are actually saying, you
(05:21):
know what, I'm so mad the city is doing this.
I'm leaving and I'm not doing business with them anymore. Instead,
instead of panalizing, they should be encouraging, right, basically incentivize
people with a perk to take the action you want,
instead of making it impossible to log in and access
to their accounts, which just feels ridiculous and uncool. Sure, well,
it also decreases the like.
Speaker 3 (05:40):
There's a lot of variety when it comes to how
it is that people interact with their finances, right, Like,
everyone has a personalized way. Nobody does it the exact
same way. And when you turn off the ability for
people to receive paper statements, you're limiting those healthy habits
and behaviors that folks have developed over the years. And
I think you can spect to feel people's wrath if
(06:01):
you started removing some of the or the very least,
you can expect them to jump ship in thin a
lot of folks might do.
Speaker 1 (06:06):
I would offer a little bit of incentive to turn
them off, give them perk, maybe some city points or
something like that, right, but also start charging for those
paper statements, because it really is a cost center for
the little search arge. So say, hey, listen, sure three
bucks a month if you want to keep getting your
paper statement. And for people who really want it, they'll
poney up. And then a lot of people will say,
wait a second, I don't want to pay. I just
kind of did it because I never got around that
(06:26):
not doing it. Yeah, and a lot of people will
then I think, make it, change it, will change it.
Speaker 3 (06:30):
Then, yeah, take the frontier or the spirit air approach.
Uh Nickel and Dion Bouks. Let's talk about inflation, because
it has not been tamed all the way, that's for sure.
And I think in our post COVID world fun things
they have experienced some of the most dramatic price increases.
So concerts, for instance, they've been one of the most
in demand purchases lately, and the price reflects that new reality.
(06:54):
There is some truth to the fact that we derive
more pleasure when we spend our money on experiences instead
of a lot of studies kind of points of that,
But when prices skyrocket quickly like they have, it con
taint our view of that experience. So, for instance, some
amazing concert that you go to for fifty dollars, well,
that might feel like money well spent.
Speaker 1 (07:15):
But if you forked over triple that, right, let's say
you paid one fifty for the same show, you're going
to likely feel different. And you know, the only way
prices on these fun outings stop skyrocketing is if we
collectively stop.
Speaker 3 (07:27):
This was an article that was in the Journal, and
they're basically highlighting how folks are in real time are
realizing that they're having buyers remorse, which I don't think
is necessarily a bad thing because these are inputs. This
is our ability to see does this or does this
not bring me joy, happiness, satisfaction, and then you can
change and modify your behaviors based on those things.
Speaker 1 (07:50):
It's not a.
Speaker 3 (07:50):
Total loss, I guess, is what I'm saying. I think
if you can learn from that experience and then just
make different decisions moving forward, I think it could be
a good thing.
Speaker 1 (07:57):
Yeah. And I think it all comes down to value, right, Yeah,
And how much is it that you value?
Speaker 3 (08:01):
And the things that we value change over time, right,
like we are and the price point were evolving.
Speaker 1 (08:06):
To pay for things, right, So as these concert prices
continue to go up, up and up, at some point
there's a breaking point for us as individuals and I
think societally. But you have to say, like listen, oh,
Taylor Swift concert for two hundred bucks. That sounds great.
Taylor Swift Swift concert for twelve hundred bucks. Sorry, lovey Tay,
but not going to happen. That's really an individual thing
that people have to come to grips with how much
does it actually worth to me? So much depends on
(08:27):
how much you have in savings and how how much
you care about that event. But there's a lot of
I think yolo going on in this too, and then
a lot of, like you said, buyer's remorse regret at
the end of the day for having spent that money.
All right, man, there's a new app we have to discuss.
There's actually a really good app that we want to
talk about later. This is a bad app. This is
an app that we don't want people actually downloading. I
only found out about it this week on the site
(08:48):
the Free Press. There's probably one that we should all
be avoiding because it's called Flip and it's billed.
Speaker 3 (08:53):
As and not the flip app that brings together all
of the circular right then local flipp two ps, this
is one singular p.
Speaker 1 (09:01):
Yeah, And so this one has been called it the
social media app for shoppers. And of course you know
that there's like alarm bells sounding in my head as
I read that bad news. Yeah. On the site it
says you can get rewarded for shopping and for thinking
about shopping, which cannot be good. It's booming though, because
of the ability for users to refer their friends for
(09:22):
large amounts of credit to spend on the app, and
so because like, oh, I can get like forty bucks
to spend on this app if I refer my friends somebody.
The author on the article in the Free Press Mat
said if she referred all her friends, she'd have like
forty thousand dollars to spend on the app flip credit,
which is amazing and flip credits, yeah, which's that's a
lot of money. So it's spreading like wildfire because of that.
But like we've talked about kind of the social mediafication
(09:45):
of other apps, like ones for investing and making money transfers,
Public is the one for investing where it's like, oh
invest in the social media awesome way, or Venmo. It's
like make everyone aware of every money transfer you ever make,
which is so weird. It's like this dystopian future we
deserve in a country obsessed with consumerism, to extend that
all the way to shopping. It's to me, it's kind
(10:07):
of like a QBC esque products. Oh yeah, like a
little blast from the past, but in this new packaging.
And I haven't tried flip personally, I don't plan on it,
but from everything I've read, it sounds incredibly frightening and
so I'd be curious to know if any how to
money listeners are using it. If you think we're way off,
please reach out to us and tell us if we're wrong.
But I feel like this app has a mega ability
to derail people's ability to achieve their savings and investing
(10:30):
goals because they're spending too much time on the app,
spending more money than they know the wise planned. Yeah.
Speaker 3 (10:34):
I was actually going to use this opportunity to share
my flip referral link, but I based on how you've
approached it, I'm gonna choose not.
Speaker 1 (10:41):
Hey man, you could have made big bucks from it.
Forty dollars.
Speaker 2 (10:45):
No, I mean kind of going back to the previous
story where we're talking about.
Speaker 1 (10:48):
Just have to buy all credibility simultaneously.
Speaker 3 (10:50):
Buyers remorse, Like what I hate about this? Like, yes,
I bet there are some deals to be found on there. Yes,
it's not like it's a scam. There are actual dollars credit,
you know, flip credit or whatever.
Speaker 1 (10:59):
I don't. We don't know.
Speaker 3 (11:00):
We haven't downloaded it. But you can actually earn these
dollars and you can buy actual products. And I'm sure
there's a lot of folks who might say oh no,
this is legit for real, Like I was able to get.
Speaker 1 (11:10):
This, this, and this.
Speaker 3 (11:11):
But what I hate about this is that it is
feeding individuals products that they think that they need, that
they think are going to actually make them happy and
provide fulfillment, but they're not. Again going back to the
buyer's remorse, we think that products are the answer, when
in reality, what is it that brings people the most
life satisfaction? Oftentimes it's meaningful relationships, and this is kind
(11:33):
of does the exact opposite of that, because what you're
doing is you're like harvesting your friends as opposed to real,
actual lasting friendships. You're selling out and you're undermining your
ability to have actual happiness because you're not partaking in
actual relationships. You're just referral links and sending messages off
to people you haven't been in touch with for a
couple of years. Like poisons the water, it poisons the well.
(11:56):
And that's the sort of the saddest part about this
is that we think it's going to make us happy,
but in reality it's probably going to lead to the
exact opposite.
Speaker 1 (12:04):
Yeah. Yeah, And I think the other thing that makes
us happy is free time and guess what. We have
more free time when.
Speaker 3 (12:09):
You're not having less money if you and if you're
not sitting there glued to the screen trying to find
the next deal.
Speaker 1 (12:13):
And you might not have to work as much if
you're not spending as much.
Speaker 3 (12:15):
Bro.
Speaker 1 (12:16):
But yeah, this is truly concerning to me seeing an
app like this spread like wildfire, because it's antithetical to
what I think is it's good. It makes me think
of a conversation that you and I had a long
time ago with Joshua Becker about minimalism, and my goodness,
we could all stand for a dose of that again,
because I think he's right on the money when it
comes to fewer possessions are actually going to lead to
(12:38):
increased amounts of happiness and a life that's centered around
the things that matter more. Yeah.
Speaker 3 (12:43):
Yeah, so I hadn't thought about him in forever. But
it's not just the time that you're spending earning the
money that you're going to then spend to buy the stuff.
It's not just the time that you are wasting away
as you're scrolling through products. It's also the time on
the back end when you have a garage full of
all this scrap and that was Joshua Becker's right. His
son is wanting to play with him, and he's like, no,
we got to clean up the garage. And then he
(13:05):
finally realized, wait a minute, why do I have all
of this stuff? You know, we've all got garages or
closets or addicts full of all this crap that we
don't need, that we don't value.
Speaker 1 (13:15):
Some kind of have a few bins of Christmas items
and not hating on that, but do we overdo it?
For sure? Yeah, as a country, absolutely overdo it. Ninety
percent of us if we're honest, there's wee could pair
back and and we could what was it we talked
about junk last week, Matt and and that Atlantic article.
It would be better if we win avoided in the
(13:36):
first place, because guess what, we're going to spend the
money we're gonna get the thing, We're not going to
enjoy it as much as we thought. Then it's going
to end up at the good will anyway.
Speaker 3 (13:43):
Yeah, unless you do actually need something, and the goal
there then, of course, is to spend less getting that item.
Speaker 1 (13:49):
Have you heard of dupes? Oh? Yeah, so dupes. It's
like hot new trend as opposed to because we're up
on all the honey trends, as opposed to like knockoffs,
where you've got an item that looks like it's a
name brand item and it's got like the fake what Gucci,
the fake Supreme or whatever that that's on there, but
it's like massively inferior, poorly made. Yeah, it's a piece
of junk. Whereas dupes, they seem like they're more it's
(14:12):
like a movement towards decently quality goods, but without the label,
which I am all about. It seems like it's become
more of a TikTok trend, and it kind of seems
like the TikTok generation their ability to provide language to
the old school idea of generic or store brands, which
is fine, you.
Speaker 2 (14:30):
Want to call them dupes instead of store brand, that's.
Speaker 1 (14:33):
Fine with me.
Speaker 3 (14:34):
If as long as that means if that means you're
not spending money, that you don't have to buy stuff
you don't need to impress people you don't care about,
then more power to you.
Speaker 1 (14:42):
What makes me think of my grandpa who when he
would buy a car, he would actually take off like whatever,
like the Ford emblem or the yeah I love that
he would pry that off because he was like, that's
free advertising for the car company. I'm not giving it
to them, And so it was kind of like his
version of a dupe, like fifty years ago.
Speaker 3 (14:58):
Take me back in time, I would have had it
here with your grand Yeah, isn't that cool? I mean, yeah,
that was totally me as a kid as well, not
to the point.
Speaker 1 (15:05):
Catch me if you can.
Speaker 2 (15:05):
You remember that was one of the one of his.
Speaker 3 (15:07):
Yah you'd like, pull the labels off stuff. I was
almost to that extent as a kid, removing with a
stitch ripper.
Speaker 1 (15:14):
What I feel about clothes now, I'm like, I would
prefer zero branding at all on any for sure. I
don't want to signal anything to people based on the
thing it's you know I have. It's not that I
don't care about my style, but I don't care about
signaling via like labels or brand names. Conspicuous consumption. Yeah,
let's talk about buy now, Pay Later for a second.
That there are new stats that find then more people
(15:35):
are using buy now Paylater, which is something we have
talked smack about for for quite a long time. They're
using it now for holiday travel, and I don't want
to dwell on this because again we do talk about
this kind of regularly and you kind of know our take.
But one in five Americans are planning to pay that
plane ticket off over time instead of all at once.
So these stats kind of they make me sad. They
make me nervous at the same time too, And you know,
(15:56):
we certainly don't want you doing it with jeans or
a sweater buying, just like the clothing items over in installments.
But those airline tickets, man, those get easily crossed a
four digit threshold for a lot of families. Are family
of four, family of five traveling. You could be talking
about fifteen nineteen hundred bucks or something like that.
Speaker 2 (16:12):
Only six Why do you think I've never cloned anywhere?
Speaker 1 (16:15):
Dude's right, then you're talking about like thirty thousand dollars
for one flight to Oklahoma or something like that. And
I get the desire to not feel the full impact
of that purchase in one fell swoop, but by now
pay later. It just makes it so much easier to
spend more than you otherwise would. And I know this
is going to sound old school, I'm okay with that.
But if you don't have the money on hand, you
can't afford it, and by now pay later might seem
(16:37):
like a great option, allowing you to take that trip
to get the family where you want to go for
the holidays, but the behavioral ramifications becoming more of a
payment buyer. This has long lasting negative impacts on most
buy now Pay Later users to become addicted to it,
and Matt All the stats show that a lot of
high earners are using buy now, Pay Later, and they're
kind of getting on that month to month cycle. A
(16:58):
lot of people getting overwhelmed by all the buy now,
Paid later purchases that they've been making, and buy now
Pay Later is just extending into other parts of the economy,
which is just bad bad news. Yeah.
Speaker 3 (17:09):
Yeah, six figure earners are not immune to the trap
of consumption. And Apple, of course they have been getting
into the game as well. They've got their pay later feature.
It started out initially as a test Now it is
available nationwide, and broadly speaking, Apple's migration into the financial
space it's kind of been good and bad like so.
(17:29):
The savings account is solid, the credit card isn't bad either.
You can get two percent rewards when you buy anything
with Apple Pay, which is accepted basically everywhere, and two
percent is basically.
Speaker 1 (17:39):
The upper echelon of what credit cards offer. It's what
the Fidelity Card has the City Double Cash, which are
two cards we love.
Speaker 3 (17:45):
So unless you're unless you're gonna nerd out even more
and really do to dive into it into individual categories.
But pay later, of course, is an offering that we
want you to turn down. When we talk about the
holiday debt hangover that so many folks experience in January,
that's usually referring to credit card debt, and we want
you to avoid that too. But buy now, pay later
payments extending into spring, we feel that those are going
(18:06):
to be a rude awakening for a lot of folks.
We don't want you to be one of those folks.
And as I was, we were kind of reading more
about Apple pay or pay Later specifically, and I noticed
one thing is that they were saying how you need
to make sure that your credit is not frozen in
order to get approved, which makes sense because these are
very small loans and in effect, even if it's a
(18:27):
soft poll, that your credit still has to be unfrozen.
And then so I went digging a little bit because
this isn't something we've talked about before, and I was curious,
does this also apply apply to the other companies as well?
And it does so affirm Klarna, the same thing applies.
If your credit is frozen, you actually cannot participate in
buy now, Pay later.
Speaker 1 (18:48):
Which is a good thing.
Speaker 2 (18:49):
This is like yet another reason to go ahead and
freeze your credit because.
Speaker 1 (18:52):
I think it pros your credit with TransUnion, and they
never actually did it, and.
Speaker 3 (18:56):
They probably can it, but I think it can be
an incredible accountability mechanism to keep you from that temptation
of overspending. Right Like in the heat of the moment,
you might be thinking, all was gonna hit pay now,
but I was thinking about tapping.
Speaker 1 (19:11):
Pay later, but get so tempting.
Speaker 3 (19:13):
If you credit is frozen, you will not get approved
for that. So that's one thing you can proactively.
Speaker 1 (19:18):
Do for sure. I like yourself in check. Yeah, we
got more to get to Matt on this episode, including
how much is bad credit gonna cost you? There's like
some hard numbers on that that we're gonna get to
and what does it take to achieve financial freedom? Well,
not as much as some more friends might lead you
to believe. We'll get to that and more right after this,
(19:45):
All right, Joe, we're back.
Speaker 3 (19:46):
We've got plenty more topics to get to and of
course it is now time for the ludicrous headline of
the week. This week's comes from CNBC and the headline reads,
it may take ten million dollars to achieve financial freedom.
Earn your leisure hosts. And of course this is going
to sound incredibly demoralizing to I'm going to guess ninety.
Speaker 2 (20:08):
Five percent of the country, ninety five.
Speaker 3 (20:10):
Percent of folks at least, who have eighty thousand or
less set aside in their retirement.
Speaker 1 (20:15):
So here a financial experts say you need ten million
to achieve financial freedom. That it kind of makes you
just want to like forget it. Yeah, yeah, you even
thought about it.
Speaker 3 (20:23):
So, I mean, here's the thing. We've had these guys
on before. We feel like that they're good dudes on
a on a good mission. They care about financial literacy
just like we do. But these statements are just so
counterproductive because even if you do everything right, say you
start young, you have a high savings rate, say you
invest meaningful dollars in tax advantaged accounts, most folks are
never going to come close to eight figures in their
(20:45):
retirement accounts, and we take the middle road. We like
to have conversations where there's nuance. But I know that
path in the middle between someone who's living that lean
fire life where they're living in their van and they're
retired at age thirty, they're a software developer on one
end of the spectrum. On the other end of the spectrum,
like someone that's got a ten million dollar nest egg.
We know that nuance kind of conversation is not going
(21:06):
to make the headline.
Speaker 1 (21:07):
Nobody's talking about the average person who outsaved their peers
and ended up with one point three million dollars in
the bank, right.
Speaker 3 (21:13):
But that is I think going to be the situation
that most folks find themselves in. And that is why
we talk about it the way that we do, because
we want to highlight the fact that this is something
that is replicable, that this is something that's doable, as
opposed to maybe quickly skimming a headline, seeing a huge
number and then giving up before you even had a chance.
Speaker 1 (21:32):
To start, which I think is what it does for
most of a lot of people are going to say
that's not for me. I don't think I could possibly
achieve that. So maybe I just need to nip it
in the butt and stop investing if I can ever
achieve financial freedom, it only reinforces this limiting belief that
so many people have I think about their ability to
invest for and be able to achieve financial freedom. Sure,
the truth is, nobody really needs ten million dollars in
(21:54):
retirement right. If we're looking at the four percent rule
for guidance, that means that ten million dollar portfolio gets
you four hundred thousand dollars a year that you can
draw down and basically essentially never run out of money.
I'm not gonna lie, man, I wouldn't be mad if
I had ten mil I guess in my retirement accounts.
I'm not gonna I can find a way to spend
foreigner K year. I mean, if someone dropped it in there,
(22:14):
I'm not going to punch them in the face or
anything like that. But there just aren't that many people
who truly need to build a nest egg of that size.
I'm not saying that you can't have big goals, that
you shouldn't aspire to build wealth that gives you more
options in your life. But like we talked about earlier,
this year. Financial independence exists on a spectrum. That was
episode six ninety two, and I feel like that is
such a powerful way to think about financial independence. It's
(22:35):
not all or nothing. And that a goal of ten million,
Oh maybe you hit it at seventy you achieve financial
independence and then guess what you die? Right, And so
that's like a really crummy way to think about financial independence,
and it's applicable to almost nobody. The truth is, it
takes far less than ten million dollars to experience the
independence that good many habits can provide. And while I
love Troy and Rashad, their good dudes do not internalize
(22:58):
this part of their message.
Speaker 3 (23:00):
Sure, and I will say the fault doesn't entirely lie
with them because in the headline it said that it
may take two million. Yeah, sure, Like I'm sure there
are some folks where it might actually take. It might
take to a million for them to be happy. And
it's not even is CNBC. Yeah, it's not even them,
because like the headline's accurate, and so I think it's
worth saying too, like some of the fault rests with
(23:21):
us and how it is that the masses consume media,
Because if you were to quickly look at that and
not actually read it and dive into the details, you
would get discouraged.
Speaker 1 (23:29):
Right as opposed to It's why we love podcasts.
Speaker 3 (23:32):
It's why we have a podcast because it's the ability
to have a more nuanced conversation.
Speaker 1 (23:37):
That is what we're all about. Yeah, those headlines, they
don't necessarily they can be they can be misleeping thisstge.
Speaker 2 (23:41):
Yeah, and they can just be pullaright.
Speaker 3 (23:43):
Podcasts are like the exact opposite of Twitter basically, and
headlines are certainly more akin to Twitter than podcasts. But due,
let's talk about carloans. Because most folks know that bad
credit equals higher interest rates. That's definitely true. New data
shows that auto loans are much more expensive for folks
with bad credit. So this is one of our leading
(24:05):
headlines in the Fronday Flight this week. It's been called
the subprime tax because anyone with a subpar score is
going to be forced into a loan with higher interest rates,
resulting in a higher total cost of ownership of that vehicle.
There's this app out there, Jerry, it's a car ownership app.
But they found that the subprime tax has gotten even
(24:25):
higher as interest rates have been increasing, so I guess
it shouldn't be much of a surprise there, But how
much higher will those interest rates be? Evidently two to
three times higher than someone with great credit, and those
rates are partially justified given the financial standing that that
person entered into that transaction with, but they're often doled
out in a more predatory manner as well, which is
(24:48):
a big reason why it does not.
Speaker 1 (24:50):
Make us happy. Yeah, yeah, I know, you're right, man.
It's like, yeah, the credit score equates to a big
part of the increase. But then there's also the fact
that you might also be doing business with a because
a financial services company who says, you know, I think
we can eke out an even higher interest rate than
we would otherwise need to because this person is at
our mercy essentially, And there's so many folks with a
(25:11):
bad credit score who haven't saved up much cash either,
which makes it this double whammy, this massive conundrum. They
end up going to a buy here, pay here lot
in order to secure to buy the car, to secure
financing because they likely wouldn't qualify at their credit union,
which is you know, it's basically the most expensive option
in existence to go to one of those buy here,
pay here. Lots stats show that delinquent auto loans have
(25:31):
increased too, you know, and more borrowers are just being
rejected for car loans altogether. So I would say there's
basically two takeaways here. One, pay close attention to your
credit score, work to improve it, because a rough credit
score is going to cost you in so many ways. Yes,
at two to three times higher interest rate, which can
equate to on a thirty thousand dollars used car, we
(25:52):
could talk that could be anywhere between eight and twelve
thousand dollars extra in total costs over the years that
you're paying off on that loan. A lot of that's right,
So pay attention to your credit score, but better get
save up more money so you can buy that car
with cash if at all possible in the future. That
goes for folks with good credit too, but especially for
folks in that subprime range. It's like, who are really
(26:13):
paying out the nose for The more cash you can
have on hand, the stronger position you're going to be in.
And even if you do have a higher interest rate attached,
at least you're financing less of that purchase. Matt, you
and I we still lean hard in the direction of
like not paying not having a car note at all,
like buy a car with cash. It's easier said than done.
Not everyone can do that, I get it, but that
is still the goal to aim for.
Speaker 3 (26:34):
And I think it can just keep that car purchase
in check as well, because I think it can allow
us to approach that car purchase with maybe the proper
lens as opposed to, of course, how much can I
afford every single month?
Speaker 1 (26:46):
Yeah, which is how most people make the decision. Oh,
it's like what their payment buyers, How big of a
payment can I fit in my budget as opposed to
how little can I spend so I can do awesome
a lot of other awesome other stuff with my money, exactly. Okay.
Speaker 3 (26:57):
New research from Pew it shows how Americans view data privacy,
and it turns out that most folks are confused and
they're concerned about how the private companies and the government
is using our data. I think you can probably count
us among both of those camps. The fine print, it
just goes on for days. When you go to download
(27:18):
a new app, you just click that box, check that box.
Speaker 1 (27:20):
You agree to it, and you're like, what are they using?
Like who knows, oh this free service that I've got, Like,
what data are they gathering? And it turns out it's
a lot.
Speaker 3 (27:28):
Yeah, And with credit breaches like the Equifax one back
in twenty seventeen, it kind of feels like our information
is already out there in the ether, floating around. So
I think a worthwhile question is should we just toss
up our hands, should we just say screw it? Well, no,
we don't think that that's the case, and we don't
necessarily have perfect advice on this front, but like we
were saying earlier, doing a credit freeze on the front end,
(27:50):
that is one of the most important things that you
can do. And I don't necessarily have data to back
this up, but I think you can avoid the worst
of what's out there on the web by making sure
you've got a strong passwords. We're talking about like data hygiene,
but passwords that are maybe longer than like five, six,
seven characters long. I've saw a paper recently where they're
(28:11):
showing how four words in a row, so like a
phrase that password, because of the length of the password,
is much much stronger than like a ten digit random
selection of numbers and upper case lowercase exclamation mark, all
the standard things. The digits need to be guessed, yes, exactly,
And so like picking four random words can go a
really long way. But it's just in my mind, it
(28:31):
can be incredibly overwhelming to try to think, how is
it even going to be possible for me to fortify
myself against all the folks out there who are trying
to hack into my accounts and steal my money? But
I think just something as simple as making sure that
you've got solid passwords and that you're not reusing passwords
as well, because once there's a data breach in one random,
(28:51):
crummy site that you happen to make an account with,
well if that once that information gets out there, all
those all those hackers are going to try that same
password with your same email on all the other sites
that they can assume you most likely have.
Speaker 1 (29:03):
That's why a password manager like bitwarden makes a whole
lot of sense, does It's free, highly rated, and so
that's probably the direction that a lot of people should go in.
And on the privacy front, we should also mention a
new privacy app from some of our favorite folks, the
people at Consumer Reports. They just launched a new app
called permission slip and you can quickly and easily tell
companies to delete your personal information and or delete your
(29:24):
account altogether. It's pretty darn cool. I just started using it.
Apparently was so popular that the app basically crashed for
a while. I was like trying to use it last
week and I couldn't, and then this week I was
able to actually get on there and do some stuff.
And so if you try to do this with each
individual company, there's like the legislation passed in a bunch
of states saying that you have more right over your data,
but you've got to reach out of these companies to
(29:45):
basically say stop using it. Well, if you had to
do that on a one on one basis to all
these companies, it would take forever. And so Consumer Reports
is trying to make it easy where you can enter
your information once with them and then tell all these
companies pretty quickly, hey knock it off and we'll link
to this app in the show notes again with you, man,
I think I get the reticence of the confusion on
(30:06):
the privacy front, and there really should be more legislation
putting more safeguards around our ability to control who has
access to and the ability to sell our data. But
I would say, don't give up. Do what you can
with on the password front, on the credit freeze front,
and then with an app like this from Consumer Reports,
you have at least some control, even though you might
not have ultimate control.
Speaker 3 (30:26):
Yeah, and fingers crossed that they don't get hacked, just
like I guess with like the bit warden.
Speaker 1 (30:32):
I will say, it's Consumer Reports and they're so reputable,
they've been doing great work for so long. Yeah. Can
I trust for the people? If I trust anybody, I
trust them. Yeah.
Speaker 3 (30:40):
Okay, So last story, we saw some crazy holiday shopping
stats from a wallet hub.
Speaker 1 (30:45):
A few to share with all of y'all out there.
One and four folks.
Speaker 3 (30:48):
Are still in debt from the holidays last year. Wow,
and that's pretty painful to hear. Evidently, one in three
folks are going to be foregoing gifts because of inflation.
Speaker 1 (30:59):
That's actually a stat.
Speaker 3 (31:00):
I don't mind seeing the fact that folks are being
challenged to potentially spend less, even though it's because of
higher prices. I think when the prices of everything have
only been increasing, scaling back, you're spending in a way
I think can just almost prove to yourself that you
have the ability to do that. I think it can
be potentially empowering.
Speaker 1 (31:17):
For fusing the number of people you buy for and
reducing the price point that that's expected essentially for some
of those gifts.
Speaker 3 (31:23):
Makes a whole lot of sense, totally. Yeah, So we'll
link to the full survey in our show notes. But
as wise to know what your budget is now and
who it is that you're buying for before the shopping
season gets pretty cray, We're actually gonna talk with Julie.
She is with the deal aggregator site deal News. We're
going to talk with her on Wednesday about how it
is you can shop intelligently during this holiday season, where
(31:45):
it is that you can find the best deals as well,
So you can look forward to that one next week
on Wednesday.
Speaker 1 (31:50):
She like eats, sleeps, and breathes deals. That's kind of
her life. She's been in that space for a long
time's I think she's gonna have a lot of good
advice to share when it comes to like, yeah, where
to shop window shop because that is and like, well
what happens if you buy something and the price drops? Oh,
can you get the lower price? Now? She'll have answered
so a bmuch of those kinds of questions on Wednesday,
but Matt, that's gonna do it for This episode will
(32:11):
have of course, links to a lot of the stuff
we mentioned in our show notes up on our website
at howtomoney dot com.
Speaker 3 (32:17):
That's right, buddies, So until next time, Best Friends out,
best Friends out.
Speaker 1 (32:34):
Beat the train, Beat the train. It's like we're back
in Scotland. Race Wars Express
Welcome to Had of Money. I'm Joel and I am Matt.
Today we're talking pressure to go paperless, the subprime tax,
and a priceless privacy app.
Speaker 2 (00:28):
You know what, buddy, those are some of the stories
we're gonna get to.
Speaker 1 (00:30):
We've got a lot more to get to on those
Friday flight.
Speaker 3 (00:33):
And by the way, we call it the Friday Flight
because it is gonna be a nice little sampling of
some of the most important financial stories that we've come
across this week, the ones that we think you need
to be paying attention to.
Speaker 1 (00:44):
By the way, when I say priceless, I mean priceless,
but I also mean free, So it's both both of
those things. It's invaluable and also it doesn't cost you
a dime double on tundra. Yeah yeah, But okay, Matt.
Before we get to kind of all the stories that
we think you need to know about this week, I
just wanted to quickly mention our friend's rich and reg
They posted something on Twitter or the other day that
Zenny Optical, which you and I have talked about before
(01:05):
many times, they now have they make prescription glasses for
VR headsets. I don't not see that. I feel like
I've known about Zenny for you probably you have too,
probably over a decade now, right, Yeah, Zenny's been dude
like the best way to save money wearing.
Speaker 3 (01:20):
Right now, I know they look Okay, question for you,
do my glasses look expensive? Do they look fancy to you?
Speaker 1 (01:25):
I mean a lot of the Zenny they look kind
of like Warby Parker. Yeah.
Speaker 3 (01:29):
So the reason I ask is because recently Kate and
I were on a date night and we stumbled upon
a watch club, like a wristwatch, like a fancy wristwatch club.
I think they're called like Red Bar or something like that, Okay,
and I was intrigued, and it's kind of we're waiting
for our table. So I got a beer and started
chatting with them and ended up talking with him for
a while, like thirty forty five minutes, and I get
(01:52):
to learn about fancy watches. Also kind of a dangerous conversation.
Now you've got a new expensive hobby. These guys, they're
just enthusiasts. Basically, they're not trying They weren't trying to
sell anything. But I was talking to one gentleman in particular,
and he was kind of explaining why he's so into them.
He's like, it's jewelry for men, right, it's an accessory.
He's talking about fashion, and he looks over at me.
(02:14):
He's like, I mean, I see the glasses you've got on.
I can tell you're a fashionable how you appreciate the
nicer things in life. And in the back of my mind,
I'm thinking.
Speaker 2 (02:21):
Homie, these are Zendies. I dropped twenty bucks on these things.
Speaker 1 (02:25):
Over your eyes.
Speaker 3 (02:26):
I didn't say anything, of course, because I was flattered.
But yeah, I've been a fan of Zenny for if
not a decade, close to a decade.
Speaker 1 (02:34):
It's just interesting to see what we're so affordable.
Speaker 3 (02:36):
And when I say twenty dollars, literally twenty dollars for
a pair of frames, you can spend a little bit
more because you can get the anti smudge or the anti.
Speaker 1 (02:44):
Let's frames and lenses glare coating, not just on the lenses.
Speaker 3 (02:48):
Well, some of them are that affordable, but when you
start adding some of the special special features, then the
price can go up, like if for instance, because you
can get them tinted as well. That's how I have
prescription sunglasses and they are a little more expensive than
the twenty dollars frames. Maybe forty bucks, but still that
is so much more affordable than what it is you're
gonna pay.
Speaker 1 (03:07):
Yeah, you go to one of the traditional eye glass retailers,
you're gonna spend like ten x sometimes. Yeah, you're paying
off the nose even costco, which is great when it
comes to going getting an eye exam, getting glasses.
Speaker 3 (03:17):
Go there for the eye exams. Any's way better, but
not for the glasses. Yeah yeah, yeah, yeah, any optical doctor.
Speaker 1 (03:22):
It was just interesting to see, Well, I guess it
makes sense that that you need prescription eyeglasses for virtual
reality headsets. Oh yeah, but it's kind of cool to
see him. Back to the original story. How far is
Enny's come? Right, They're like, they're so futuristic at this
point that they're they're even making prescription lenses for I guess.
Speaker 3 (03:38):
You need that you are into the metaverse, which who
is at this point? It's all about the AI not
the metaverse, right, Zuck, Sorry, Zuck?
Speaker 1 (03:47):
Yeah, all right, let's move on to the mat Let's
get to the stories that we found interesting this week,
and let's start with kind of a paperless conundrum. There's
a city bank is getting hella serious about not sending
you paper statements. They don't want you to be able
to get paper statements from them in the mail. Well,
how serious are they getting? You're not going to be
able to log into your accounts if you insist on
(04:08):
getting a paper statement sent in the mail. They're kind
of doing this as a trial run. They really, they
really really really don't want to pay the postage and
go through the burden of sending you that statement in
the mail. And so this is, like I said, there
is a test program they might be rolling out on
a larger scale. And I in some ways I kind
of don't blame City. I get I totally get it.
I get why they're going for this because.
Speaker 3 (04:28):
It's a line item that they can look at on
their at the end of the year and they're like,
all right, how do we increase profits? Oh, how about
we acts this entire thing that nobody, nobody looks at.
It just shows up in the mail and.
Speaker 1 (04:38):
You just throw it in the trash, which is what
most recycling Usually it's inertia bias that people say, oh, yeah,
I'm gonna keep you in the paper sent They just
never go turn it off. Maybe they're prompted when they
log in and they just like click the X button.
But if you're a customer who wants a physical statement,
you can print it out at home. Right, there's like
the PDF or that you can you can easily print
that statement out. I don't know why we need to
get them physically mailed to us anymore. But the thing
(05:00):
is they also might be running a foul a federal law.
That's kind of a murky point right here. It's and
the way they're going about it, I would say it's
kind of bad customer service instead of just kind of saying, listen,
I totally agree with it. If you don't agree to
turning off paper statements, you can't log into your account.
That feels like an ultimatum. That is pretty harsh, right,
And so a lot of people are actually saying, you
(05:21):
know what, I'm so mad the city is doing this.
I'm leaving and I'm not doing business with them anymore. Instead,
instead of panalizing, they should be encouraging, right, basically incentivize
people with a perk to take the action you want,
instead of making it impossible to log in and access
to their accounts, which just feels ridiculous and uncool. Sure, well,
it also decreases the like.
Speaker 3 (05:40):
There's a lot of variety when it comes to how
it is that people interact with their finances, right, Like,
everyone has a personalized way. Nobody does it the exact
same way. And when you turn off the ability for
people to receive paper statements, you're limiting those healthy habits
and behaviors that folks have developed over the years. And
I think you can spect to feel people's wrath if
(06:01):
you started removing some of the or the very least,
you can expect them to jump ship in thin a
lot of folks might do.
Speaker 1 (06:06):
I would offer a little bit of incentive to turn
them off, give them perk, maybe some city points or
something like that, right, but also start charging for those
paper statements, because it really is a cost center for
the little search arge. So say, hey, listen, sure three
bucks a month if you want to keep getting your
paper statement. And for people who really want it, they'll
poney up. And then a lot of people will say,
wait a second, I don't want to pay. I just
kind of did it because I never got around that
(06:26):
not doing it. Yeah, and a lot of people will
then I think, make it, change it, will change it.
Speaker 3 (06:30):
Then, yeah, take the frontier or the spirit air approach.
Uh Nickel and Dion Bouks. Let's talk about inflation, because
it has not been tamed all the way, that's for sure.
And I think in our post COVID world fun things
they have experienced some of the most dramatic price increases.
So concerts, for instance, they've been one of the most
in demand purchases lately, and the price reflects that new reality.
(06:54):
There is some truth to the fact that we derive
more pleasure when we spend our money on experiences instead
of a lot of studies kind of points of that,
But when prices skyrocket quickly like they have, it con
taint our view of that experience. So, for instance, some
amazing concert that you go to for fifty dollars, well,
that might feel like money well spent.
Speaker 1 (07:15):
But if you forked over triple that, right, let's say
you paid one fifty for the same show, you're going
to likely feel different. And you know, the only way
prices on these fun outings stop skyrocketing is if we
collectively stop.
Speaker 3 (07:27):
This was an article that was in the Journal, and
they're basically highlighting how folks are in real time are
realizing that they're having buyers remorse, which I don't think
is necessarily a bad thing because these are inputs. This
is our ability to see does this or does this
not bring me joy, happiness, satisfaction, and then you can
change and modify your behaviors based on those things.
Speaker 1 (07:50):
It's not a.
Speaker 3 (07:50):
Total loss, I guess, is what I'm saying. I think
if you can learn from that experience and then just
make different decisions moving forward, I think it could be
a good thing.
Speaker 1 (07:57):
Yeah. And I think it all comes down to value, right, Yeah,
And how much is it that you value?
Speaker 3 (08:01):
And the things that we value change over time, right,
like we are and the price point were evolving.
Speaker 1 (08:06):
To pay for things, right, So as these concert prices
continue to go up, up and up, at some point
there's a breaking point for us as individuals and I
think societally. But you have to say, like listen, oh,
Taylor Swift concert for two hundred bucks. That sounds great.
Taylor Swift Swift concert for twelve hundred bucks. Sorry, lovey Tay,
but not going to happen. That's really an individual thing
that people have to come to grips with how much
does it actually worth to me? So much depends on
(08:27):
how much you have in savings and how how much
you care about that event. But there's a lot of
I think yolo going on in this too, and then
a lot of, like you said, buyer's remorse regret at
the end of the day for having spent that money.
All right, man, there's a new app we have to discuss.
There's actually a really good app that we want to
talk about later. This is a bad app. This is
an app that we don't want people actually downloading. I
only found out about it this week on the site
(08:48):
the Free Press. There's probably one that we should all
be avoiding because it's called Flip and it's billed.
Speaker 3 (08:53):
As and not the flip app that brings together all
of the circular right then local flipp two ps, this
is one singular p.
Speaker 1 (09:01):
Yeah, And so this one has been called it the
social media app for shoppers. And of course you know
that there's like alarm bells sounding in my head as
I read that bad news. Yeah. On the site it
says you can get rewarded for shopping and for thinking
about shopping, which cannot be good. It's booming though, because
of the ability for users to refer their friends for
(09:22):
large amounts of credit to spend on the app, and
so because like, oh, I can get like forty bucks
to spend on this app if I refer my friends somebody.
The author on the article in the Free Press Mat
said if she referred all her friends, she'd have like
forty thousand dollars to spend on the app flip credit,
which is amazing and flip credits, yeah, which's that's a
lot of money. So it's spreading like wildfire because of that.
But like we've talked about kind of the social mediafication
(09:45):
of other apps, like ones for investing and making money transfers,
Public is the one for investing where it's like, oh
invest in the social media awesome way, or Venmo. It's
like make everyone aware of every money transfer you ever make,
which is so weird. It's like this dystopian future we
deserve in a country obsessed with consumerism, to extend that
all the way to shopping. It's to me, it's kind
(10:07):
of like a QBC esque products. Oh yeah, like a
little blast from the past, but in this new packaging.
And I haven't tried flip personally, I don't plan on it,
but from everything I've read, it sounds incredibly frightening and
so I'd be curious to know if any how to
money listeners are using it. If you think we're way off,
please reach out to us and tell us if we're wrong.
But I feel like this app has a mega ability
to derail people's ability to achieve their savings and investing
(10:30):
goals because they're spending too much time on the app,
spending more money than they know the wise planned. Yeah.
Speaker 3 (10:34):
I was actually going to use this opportunity to share
my flip referral link, but I based on how you've
approached it, I'm gonna choose not.
Speaker 1 (10:41):
Hey man, you could have made big bucks from it.
Forty dollars.
Speaker 2 (10:45):
No, I mean kind of going back to the previous
story where we're talking about.
Speaker 1 (10:48):
Just have to buy all credibility simultaneously.
Speaker 3 (10:50):
Buyers remorse, Like what I hate about this? Like, yes,
I bet there are some deals to be found on there. Yes,
it's not like it's a scam. There are actual dollars credit,
you know, flip credit or whatever.
Speaker 1 (10:59):
I don't. We don't know.
Speaker 3 (11:00):
We haven't downloaded it. But you can actually earn these
dollars and you can buy actual products. And I'm sure
there's a lot of folks who might say oh no,
this is legit for real, Like I was able to get.
Speaker 1 (11:10):
This, this, and this.
Speaker 3 (11:11):
But what I hate about this is that it is
feeding individuals products that they think that they need, that
they think are going to actually make them happy and
provide fulfillment, but they're not. Again going back to the
buyer's remorse, we think that products are the answer, when
in reality, what is it that brings people the most
life satisfaction? Oftentimes it's meaningful relationships, and this is kind
(11:33):
of does the exact opposite of that, because what you're
doing is you're like harvesting your friends as opposed to real,
actual lasting friendships. You're selling out and you're undermining your
ability to have actual happiness because you're not partaking in
actual relationships. You're just referral links and sending messages off
to people you haven't been in touch with for a
couple of years. Like poisons the water, it poisons the well.
(11:56):
And that's the sort of the saddest part about this
is that we think it's going to make us happy,
but in reality it's probably going to lead to the
exact opposite.
Speaker 1 (12:04):
Yeah. Yeah, And I think the other thing that makes
us happy is free time and guess what. We have
more free time when.
Speaker 3 (12:09):
You're not having less money if you and if you're
not sitting there glued to the screen trying to find
the next deal.
Speaker 1 (12:13):
And you might not have to work as much if
you're not spending as much.
Speaker 3 (12:15):
Bro.
Speaker 1 (12:16):
But yeah, this is truly concerning to me seeing an
app like this spread like wildfire, because it's antithetical to
what I think is it's good. It makes me think
of a conversation that you and I had a long
time ago with Joshua Becker about minimalism, and my goodness,
we could all stand for a dose of that again,
because I think he's right on the money when it
comes to fewer possessions are actually going to lead to
(12:38):
increased amounts of happiness and a life that's centered around
the things that matter more. Yeah.
Speaker 3 (12:43):
Yeah, so I hadn't thought about him in forever. But
it's not just the time that you're spending earning the
money that you're going to then spend to buy the stuff.
It's not just the time that you are wasting away
as you're scrolling through products. It's also the time on
the back end when you have a garage full of
all this scrap and that was Joshua Becker's right. His
son is wanting to play with him, and he's like, no,
we got to clean up the garage. And then he
(13:05):
finally realized, wait a minute, why do I have all
of this stuff? You know, we've all got garages or
closets or addicts full of all this crap that we
don't need, that we don't value.
Speaker 1 (13:15):
Some kind of have a few bins of Christmas items
and not hating on that, but do we overdo it?
For sure? Yeah, as a country, absolutely overdo it. Ninety
percent of us if we're honest, there's wee could pair
back and and we could what was it we talked
about junk last week, Matt and and that Atlantic article.
It would be better if we win avoided in the
(13:36):
first place, because guess what, we're going to spend the
money we're gonna get the thing, We're not going to
enjoy it as much as we thought. Then it's going
to end up at the good will anyway.
Speaker 3 (13:43):
Yeah, unless you do actually need something, and the goal
there then, of course, is to spend less getting that item.
Speaker 1 (13:49):
Have you heard of dupes? Oh? Yeah, so dupes. It's
like hot new trend as opposed to because we're up
on all the honey trends, as opposed to like knockoffs,
where you've got an item that looks like it's a
name brand item and it's got like the fake what Gucci,
the fake Supreme or whatever that that's on there, but
it's like massively inferior, poorly made. Yeah, it's a piece
of junk. Whereas dupes, they seem like they're more it's
(14:12):
like a movement towards decently quality goods, but without the label,
which I am all about. It seems like it's become
more of a TikTok trend, and it kind of seems
like the TikTok generation their ability to provide language to
the old school idea of generic or store brands, which
is fine, you.
Speaker 2 (14:30):
Want to call them dupes instead of store brand, that's.
Speaker 1 (14:33):
Fine with me.
Speaker 3 (14:34):
If as long as that means if that means you're
not spending money, that you don't have to buy stuff
you don't need to impress people you don't care about,
then more power to you.
Speaker 1 (14:42):
What makes me think of my grandpa who when he
would buy a car, he would actually take off like whatever,
like the Ford emblem or the yeah I love that
he would pry that off because he was like, that's
free advertising for the car company. I'm not giving it
to them, And so it was kind of like his
version of a dupe, like fifty years ago.
Speaker 3 (14:58):
Take me back in time, I would have had it
here with your grand Yeah, isn't that cool? I mean, yeah,
that was totally me as a kid as well, not
to the point.
Speaker 1 (15:05):
Catch me if you can.
Speaker 2 (15:05):
You remember that was one of the one of his.
Speaker 3 (15:07):
Yah you'd like, pull the labels off stuff. I was
almost to that extent as a kid, removing with a
stitch ripper.
Speaker 1 (15:14):
What I feel about clothes now, I'm like, I would
prefer zero branding at all on any for sure. I
don't want to signal anything to people based on the
thing it's you know I have. It's not that I
don't care about my style, but I don't care about
signaling via like labels or brand names. Conspicuous consumption. Yeah,
let's talk about buy now, Pay Later for a second.
That there are new stats that find then more people
(15:35):
are using buy now Paylater, which is something we have
talked smack about for for quite a long time. They're
using it now for holiday travel, and I don't want
to dwell on this because again we do talk about
this kind of regularly and you kind of know our take.
But one in five Americans are planning to pay that
plane ticket off over time instead of all at once.
So these stats kind of they make me sad. They
make me nervous at the same time too, And you know,
(15:56):
we certainly don't want you doing it with jeans or
a sweater buying, just like the clothing items over in installments.
But those airline tickets, man, those get easily crossed a
four digit threshold for a lot of families. Are family
of four, family of five traveling. You could be talking
about fifteen nineteen hundred bucks or something like that.
Speaker 2 (16:12):
Only six Why do you think I've never cloned anywhere?
Speaker 1 (16:15):
Dude's right, then you're talking about like thirty thousand dollars
for one flight to Oklahoma or something like that. And
I get the desire to not feel the full impact
of that purchase in one fell swoop, but by now
pay later. It just makes it so much easier to
spend more than you otherwise would. And I know this
is going to sound old school, I'm okay with that.
But if you don't have the money on hand, you
can't afford it, and by now pay later might seem
(16:37):
like a great option, allowing you to take that trip
to get the family where you want to go for
the holidays, but the behavioral ramifications becoming more of a
payment buyer. This has long lasting negative impacts on most
buy now Pay Later users to become addicted to it,
and Matt All the stats show that a lot of
high earners are using buy now, Pay Later, and they're
kind of getting on that month to month cycle. A
(16:58):
lot of people getting overwhelmed by all the buy now,
Paid later purchases that they've been making, and buy now
Pay Later is just extending into other parts of the economy,
which is just bad bad news. Yeah.
Speaker 3 (17:09):
Yeah, six figure earners are not immune to the trap
of consumption. And Apple, of course they have been getting
into the game as well. They've got their pay later feature.
It started out initially as a test Now it is
available nationwide, and broadly speaking, Apple's migration into the financial
space it's kind of been good and bad like so.
(17:29):
The savings account is solid, the credit card isn't bad either.
You can get two percent rewards when you buy anything
with Apple Pay, which is accepted basically everywhere, and two
percent is basically.
Speaker 1 (17:39):
The upper echelon of what credit cards offer. It's what
the Fidelity Card has the City Double Cash, which are
two cards we love.
Speaker 3 (17:45):
So unless you're unless you're gonna nerd out even more
and really do to dive into it into individual categories.
But pay later, of course, is an offering that we
want you to turn down. When we talk about the
holiday debt hangover that so many folks experience in January,
that's usually referring to credit card debt, and we want
you to avoid that too. But buy now, pay later
payments extending into spring, we feel that those are going
(18:06):
to be a rude awakening for a lot of folks.
We don't want you to be one of those folks.
And as I was, we were kind of reading more
about Apple pay or pay Later specifically, and I noticed
one thing is that they were saying how you need
to make sure that your credit is not frozen in
order to get approved, which makes sense because these are
very small loans and in effect, even if it's a
(18:27):
soft poll, that your credit still has to be unfrozen.
And then so I went digging a little bit because
this isn't something we've talked about before, and I was curious,
does this also apply apply to the other companies as well?
And it does so affirm Klarna, the same thing applies.
If your credit is frozen, you actually cannot participate in
buy now, Pay later.
Speaker 1 (18:48):
Which is a good thing.
Speaker 2 (18:49):
This is like yet another reason to go ahead and
freeze your credit because.
Speaker 1 (18:52):
I think it pros your credit with TransUnion, and they
never actually did it, and.
Speaker 3 (18:56):
They probably can it, but I think it can be
an incredible accountability mechanism to keep you from that temptation
of overspending. Right Like in the heat of the moment,
you might be thinking, all was gonna hit pay now,
but I was thinking about tapping.
Speaker 1 (19:11):
Pay later, but get so tempting.
Speaker 3 (19:13):
If you credit is frozen, you will not get approved
for that. So that's one thing you can proactively.
Speaker 1 (19:18):
Do for sure. I like yourself in check. Yeah, we
got more to get to Matt on this episode, including
how much is bad credit gonna cost you? There's like
some hard numbers on that that we're gonna get to
and what does it take to achieve financial freedom? Well,
not as much as some more friends might lead you
to believe. We'll get to that and more right after this,
(19:45):
All right, Joe, we're back.
Speaker 3 (19:46):
We've got plenty more topics to get to and of
course it is now time for the ludicrous headline of
the week. This week's comes from CNBC and the headline reads,
it may take ten million dollars to achieve financial freedom.
Earn your leisure hosts. And of course this is going
to sound incredibly demoralizing to I'm going to guess ninety.
Speaker 2 (20:08):
Five percent of the country, ninety five.
Speaker 3 (20:10):
Percent of folks at least, who have eighty thousand or
less set aside in their retirement.
Speaker 1 (20:15):
So here a financial experts say you need ten million
to achieve financial freedom. That it kind of makes you
just want to like forget it. Yeah, yeah, you even
thought about it.
Speaker 3 (20:23):
So, I mean, here's the thing. We've had these guys
on before. We feel like that they're good dudes on
a on a good mission. They care about financial literacy
just like we do. But these statements are just so
counterproductive because even if you do everything right, say you
start young, you have a high savings rate, say you
invest meaningful dollars in tax advantaged accounts, most folks are
never going to come close to eight figures in their
(20:45):
retirement accounts, and we take the middle road. We like
to have conversations where there's nuance. But I know that
path in the middle between someone who's living that lean
fire life where they're living in their van and they're
retired at age thirty, they're a software developer on one
end of the spectrum. On the other end of the spectrum,
like someone that's got a ten million dollar nest egg.
We know that nuance kind of conversation is not going
(21:06):
to make the headline.
Speaker 1 (21:07):
Nobody's talking about the average person who outsaved their peers
and ended up with one point three million dollars in
the bank, right.
Speaker 3 (21:13):
But that is I think going to be the situation
that most folks find themselves in. And that is why
we talk about it the way that we do, because
we want to highlight the fact that this is something
that is replicable, that this is something that's doable, as
opposed to maybe quickly skimming a headline, seeing a huge
number and then giving up before you even had a chance.
Speaker 1 (21:32):
To start, which I think is what it does for
most of a lot of people are going to say
that's not for me. I don't think I could possibly
achieve that. So maybe I just need to nip it
in the butt and stop investing if I can ever
achieve financial freedom, it only reinforces this limiting belief that
so many people have I think about their ability to
invest for and be able to achieve financial freedom. Sure,
the truth is, nobody really needs ten million dollars in
(21:54):
retirement right. If we're looking at the four percent rule
for guidance, that means that ten million dollar portfolio gets
you four hundred thousand dollars a year that you can
draw down and basically essentially never run out of money.
I'm not gonna lie, man, I wouldn't be mad if
I had ten mil I guess in my retirement accounts.
I'm not gonna I can find a way to spend
foreigner K year. I mean, if someone dropped it in there,
(22:14):
I'm not going to punch them in the face or
anything like that. But there just aren't that many people
who truly need to build a nest egg of that size.
I'm not saying that you can't have big goals, that
you shouldn't aspire to build wealth that gives you more
options in your life. But like we talked about earlier,
this year. Financial independence exists on a spectrum. That was
episode six ninety two, and I feel like that is
such a powerful way to think about financial independence. It's
(22:35):
not all or nothing. And that a goal of ten million,
Oh maybe you hit it at seventy you achieve financial
independence and then guess what you die? Right, And so
that's like a really crummy way to think about financial independence,
and it's applicable to almost nobody. The truth is, it
takes far less than ten million dollars to experience the
independence that good many habits can provide. And while I
love Troy and Rashad, their good dudes do not internalize
(22:58):
this part of their message.
Speaker 3 (23:00):
Sure, and I will say the fault doesn't entirely lie
with them because in the headline it said that it
may take two million. Yeah, sure, Like I'm sure there
are some folks where it might actually take. It might
take to a million for them to be happy. And
it's not even is CNBC. Yeah, it's not even them,
because like the headline's accurate, and so I think it's
worth saying too, like some of the fault rests with
(23:21):
us and how it is that the masses consume media,
Because if you were to quickly look at that and
not actually read it and dive into the details, you
would get discouraged.
Speaker 1 (23:29):
Right as opposed to It's why we love podcasts.
Speaker 3 (23:32):
It's why we have a podcast because it's the ability
to have a more nuanced conversation.
Speaker 1 (23:37):
That is what we're all about. Yeah, those headlines, they
don't necessarily they can be they can be misleeping thisstge.
Speaker 2 (23:41):
Yeah, and they can just be pullaright.
Speaker 3 (23:43):
Podcasts are like the exact opposite of Twitter basically, and
headlines are certainly more akin to Twitter than podcasts. But due,
let's talk about carloans. Because most folks know that bad
credit equals higher interest rates. That's definitely true. New data
shows that auto loans are much more expensive for folks
with bad credit. So this is one of our leading
(24:05):
headlines in the Fronday Flight this week. It's been called
the subprime tax because anyone with a subpar score is
going to be forced into a loan with higher interest rates,
resulting in a higher total cost of ownership of that vehicle.
There's this app out there, Jerry, it's a car ownership app.
But they found that the subprime tax has gotten even
(24:25):
higher as interest rates have been increasing, so I guess
it shouldn't be much of a surprise there, But how
much higher will those interest rates be? Evidently two to
three times higher than someone with great credit, and those
rates are partially justified given the financial standing that that
person entered into that transaction with, but they're often doled
out in a more predatory manner as well, which is
(24:48):
a big reason why it does not.
Speaker 1 (24:50):
Make us happy. Yeah, yeah, I know, you're right, man.
It's like, yeah, the credit score equates to a big
part of the increase. But then there's also the fact
that you might also be doing business with a because
a financial services company who says, you know, I think
we can eke out an even higher interest rate than
we would otherwise need to because this person is at
our mercy essentially, And there's so many folks with a
(25:11):
bad credit score who haven't saved up much cash either,
which makes it this double whammy, this massive conundrum. They
end up going to a buy here, pay here lot
in order to secure to buy the car, to secure
financing because they likely wouldn't qualify at their credit union,
which is you know, it's basically the most expensive option
in existence to go to one of those buy here,
pay here. Lots stats show that delinquent auto loans have
(25:31):
increased too, you know, and more borrowers are just being
rejected for car loans altogether. So I would say there's
basically two takeaways here. One, pay close attention to your
credit score, work to improve it, because a rough credit
score is going to cost you in so many ways. Yes,
at two to three times higher interest rate, which can
equate to on a thirty thousand dollars used car, we
(25:52):
could talk that could be anywhere between eight and twelve
thousand dollars extra in total costs over the years that
you're paying off on that loan. A lot of that's right,
So pay attention to your credit score, but better get
save up more money so you can buy that car
with cash if at all possible in the future. That
goes for folks with good credit too, but especially for
folks in that subprime range. It's like, who are really
(26:13):
paying out the nose for The more cash you can
have on hand, the stronger position you're going to be in.
And even if you do have a higher interest rate attached,
at least you're financing less of that purchase. Matt, you
and I we still lean hard in the direction of
like not paying not having a car note at all,
like buy a car with cash. It's easier said than done.
Not everyone can do that, I get it, but that
is still the goal to aim for.
Speaker 3 (26:34):
And I think it can just keep that car purchase
in check as well, because I think it can allow
us to approach that car purchase with maybe the proper
lens as opposed to, of course, how much can I
afford every single month?
Speaker 1 (26:46):
Yeah, which is how most people make the decision. Oh,
it's like what their payment buyers, How big of a
payment can I fit in my budget as opposed to
how little can I spend so I can do awesome
a lot of other awesome other stuff with my money, exactly. Okay.
Speaker 3 (26:57):
New research from Pew it shows how Americans view data privacy,
and it turns out that most folks are confused and
they're concerned about how the private companies and the government
is using our data. I think you can probably count
us among both of those camps. The fine print, it
just goes on for days. When you go to download
(27:18):
a new app, you just click that box, check that box.
Speaker 1 (27:20):
You agree to it, and you're like, what are they using?
Like who knows, oh this free service that I've got, Like,
what data are they gathering? And it turns out it's
a lot.
Speaker 3 (27:28):
Yeah, And with credit breaches like the Equifax one back
in twenty seventeen, it kind of feels like our information
is already out there in the ether, floating around. So
I think a worthwhile question is should we just toss
up our hands, should we just say screw it? Well, no,
we don't think that that's the case, and we don't
necessarily have perfect advice on this front, but like we
were saying earlier, doing a credit freeze on the front end,
(27:50):
that is one of the most important things that you
can do. And I don't necessarily have data to back
this up, but I think you can avoid the worst
of what's out there on the web by making sure
you've got a strong passwords. We're talking about like data hygiene,
but passwords that are maybe longer than like five, six,
seven characters long. I've saw a paper recently where they're
(28:11):
showing how four words in a row, so like a
phrase that password, because of the length of the password,
is much much stronger than like a ten digit random
selection of numbers and upper case lowercase exclamation mark, all
the standard things. The digits need to be guessed, yes, exactly,
And so like picking four random words can go a
really long way. But it's just in my mind, it
(28:31):
can be incredibly overwhelming to try to think, how is
it even going to be possible for me to fortify
myself against all the folks out there who are trying
to hack into my accounts and steal my money? But
I think just something as simple as making sure that
you've got solid passwords and that you're not reusing passwords
as well, because once there's a data breach in one random,
(28:51):
crummy site that you happen to make an account with,
well if that once that information gets out there, all
those all those hackers are going to try that same
password with your same email on all the other sites
that they can assume you most likely have.
Speaker 1 (29:03):
That's why a password manager like bitwarden makes a whole
lot of sense, does It's free, highly rated, and so
that's probably the direction that a lot of people should go in.
And on the privacy front, we should also mention a
new privacy app from some of our favorite folks, the
people at Consumer Reports. They just launched a new app
called permission slip and you can quickly and easily tell
companies to delete your personal information and or delete your
(29:24):
account altogether. It's pretty darn cool. I just started using it.
Apparently was so popular that the app basically crashed for
a while. I was like trying to use it last
week and I couldn't, and then this week I was
able to actually get on there and do some stuff.
And so if you try to do this with each
individual company, there's like the legislation passed in a bunch
of states saying that you have more right over your data,
but you've got to reach out of these companies to
(29:45):
basically say stop using it. Well, if you had to
do that on a one on one basis to all
these companies, it would take forever. And so Consumer Reports
is trying to make it easy where you can enter
your information once with them and then tell all these
companies pretty quickly, hey knock it off and we'll link
to this app in the show notes again with you, man,
I think I get the reticence of the confusion on
(30:06):
the privacy front, and there really should be more legislation
putting more safeguards around our ability to control who has
access to and the ability to sell our data. But
I would say, don't give up. Do what you can
with on the password front, on the credit freeze front,
and then with an app like this from Consumer Reports,
you have at least some control, even though you might
not have ultimate control.
Speaker 3 (30:26):
Yeah, and fingers crossed that they don't get hacked, just
like I guess with like the bit warden.
Speaker 1 (30:32):
I will say, it's Consumer Reports and they're so reputable,
they've been doing great work for so long. Yeah. Can
I trust for the people? If I trust anybody, I
trust them. Yeah.
Speaker 3 (30:40):
Okay, So last story, we saw some crazy holiday shopping
stats from a wallet hub.
Speaker 1 (30:45):
A few to share with all of y'all out there.
One and four folks.
Speaker 3 (30:48):
Are still in debt from the holidays last year. Wow,
and that's pretty painful to hear. Evidently, one in three
folks are going to be foregoing gifts because of inflation.
Speaker 1 (30:59):
That's actually a stat.
Speaker 3 (31:00):
I don't mind seeing the fact that folks are being
challenged to potentially spend less, even though it's because of
higher prices. I think when the prices of everything have
only been increasing, scaling back, you're spending in a way
I think can just almost prove to yourself that you
have the ability to do that. I think it can
be potentially empowering.
Speaker 1 (31:17):
For fusing the number of people you buy for and
reducing the price point that that's expected essentially for some
of those gifts.
Speaker 3 (31:23):
Makes a whole lot of sense, totally. Yeah, So we'll
link to the full survey in our show notes. But
as wise to know what your budget is now and
who it is that you're buying for before the shopping
season gets pretty cray, We're actually gonna talk with Julie.
She is with the deal aggregator site deal News. We're
going to talk with her on Wednesday about how it
is you can shop intelligently during this holiday season, where
(31:45):
it is that you can find the best deals as well,
So you can look forward to that one next week
on Wednesday.
Speaker 1 (31:50):
She like eats, sleeps, and breathes deals. That's kind of
her life. She's been in that space for a long
time's I think she's gonna have a lot of good
advice to share when it comes to like, yeah, where
to shop window shop because that is and like, well
what happens if you buy something and the price drops? Oh,
can you get the lower price? Now? She'll have answered
so a bmuch of those kinds of questions on Wednesday,
but Matt, that's gonna do it for This episode will
(32:11):
have of course, links to a lot of the stuff
we mentioned in our show notes up on our website
at howtomoney dot com.
Speaker 3 (32:17):
That's right, buddies, So until next time, Best Friends out,
best Friends out.
Speaker 1 (32:34):
Beat the train, Beat the train. It's like we're back
in Scotland. Race Wars Express
Hosts And Creators
Joel Larsgaard
Matthew Altmix
Popular Podcasts
Stuff You Should Know
If you've ever wanted to know about champagne, satanism, the Stonewall Uprising, chaos theory, LSD, El Nino, true crime and Rosa Parks, then look no further. Josh and Chuck have you covered.
Dateline NBC
Current and classic episodes, featuring compelling true-crime mysteries, powerful documentaries and in-depth investigations. Special Summer Offer: Exclusively on Apple Podcasts, try our Dateline Premium subscription completely free for one month! With Dateline Premium, you get every episode ad-free plus exclusive bonus content.
On Purpose with Jay Shetty
I’m Jay Shetty host of On Purpose the worlds #1 Mental Health podcast and I’m so grateful you found us. I started this podcast 5 years ago to invite you into conversations and workshops that are designed to help make you happier, healthier and more healed. I believe that when you (yes you) feel seen, heard and understood you’re able to deal with relationship struggles, work challenges and life’s ups and downs with more ease and grace. I interview experts, celebrities, thought leaders and athletes so that we can grow our mindset, build better habits and uncover a side of them we’ve never seen before. New episodes every Monday and Friday. Your support means the world to me and I don’t take it for granted — click the follow button and leave a review to help us spread the love with On Purpose. I can’t wait for you to listen to your first or 500th episode!