September 19, 2025 • 33 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:
- RATE CUTS
- Pricey porch pumpkins
- Recency bias and expecting the rosiest returns
- Twitter for trading
- Job hugging
- Tips only please (no taxes on tips)
- 401k raiding to pay down debt
- Sticking it through a divorce (bc the mortgage rate is too good)
- Saving for a spouse
- AI for investing advice
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Transcript
Episode Transcript
Available transcripts are automatically generated. Complete accuracy is not guaranteed.
Speaker 1 (00:00):
Welcome to Hada Money.
Speaker 2 (00:01):
I'm Joel.
Speaker 1 (00:02):
I'm nottt Today we're talking pricey porch, pumpkins, Twitter for
trading and saving for a spouse.
Speaker 2 (00:26):
Oh, saving for a spouse. What does Joel mean when
he says that we'll get to that story. We'll find
out in a little bit. Yes, yeah, you will. I've
already purchased mine. Uh so you know you're right, there's
aspects of saving up for a wedding. But that's not
even what we're gonna talk about, is it. Uh, this
is our Friday flight. We're gonna get to some of
(00:46):
the best stories that we came across this week and
how they specifically pertain to your personal finances. And first,
do we gotta talk about the ray cut Brown twenty
five basis points.
Speaker 1 (00:58):
I mean, it was like the racer. The predictions were
spot on. This is what happened. And maybe I think
just from a personal finance standpoint, this is like a
socio political economic thing. But when it gets down to
the personal finance level, Matt, a quarter point rate cut?
Speaker 2 (01:12):
What that means for? Are you kidding? I wouldn't say
everything it's time to buy a house? Broh kidding?
Speaker 1 (01:22):
We will see what the impact is on mortgage rates.
Typically that takes a lot longer right to the system.
So like, will mortgage rates collapse by a quarter point tomorrow, No,
that's not it's well, your savings rate collapse by a
quarter point tomorrow probably probably a little bit faster.
Speaker 2 (01:38):
Yeah, it's yeah. It's interesting to.
Speaker 1 (01:40):
Think by tomorrow, I mean yesterday, it might already have.
Speaker 2 (01:44):
Immediately. Yeah, it does depend on so there are certain things,
certain factors. I mean, I would say that we saw
the market react even before the rate cut was announced,
because folks are like, we're pretty sure that we're going
to see a rate cut, so that was kind of
built in. But in addition to that, you see faster
movements within the market. When it comes to actual lending costs,
that takes a little bit longer. I wouldn't be surprised
(02:05):
if we see lending costs take months to adjust as
it trickles through the market. But as far as the
overall economy, and I think that's the biggest reason to
pay attention to this, that hopefully things will get back
to flowing, especially when it comes to the housing market.
Man like things folks have I think folks have felt
trapped wherever they currently are. I think there's a lot
of individuals who are thinking, man, I would like to
(02:27):
be able to move to a different location or to
take this opportunity, but barring costs have been so high.
So hopefully that's something that we will get to see.
Speaker 1 (02:35):
I think one eventually, once we see rights have been
taking down. I think once they touch the level, like
the five level, it'll be interesting to see how that
impacts the housing market, because I agree that's a big
part of what's kind of jamming up the gears, preventing
people from wanting to sell, preventing people from wanting to buy.
And so maybe we start to reach this point where
there's a little more fluidity in that market.
Speaker 2 (02:55):
Yeah, yeah, hope.
Speaker 1 (02:56):
And so let's talk about pumpkins for a second. Back
we talked about pumpkins words, Yeah, let's do it. Since
we're getting close to Halloween. I mean, they I feel
like they put out costumes like three months ago, which
was ridiculous, But now we are actually getting close enough
to where I'm enjoying seeing that stuff on the rack.
Or I don't drink pumpkin spice lattes. It's kind of
a personal thing. We know, kind of hate it. You
(03:17):
hate the stuff? Yeah, you like You're okay with pumpkin
spice lattes, right, Nope, okay, you don't like the metal.
Speaker 2 (03:22):
I don't do anything. I will get a flavor. I
will get a caramel latt okay. So if it's a
coffee shop, and especially if they make their own caramel, right,
if they're starting the sugar and they I mean, come on,
if someone is actually crafting it like that, that's a
quality drink.
Speaker 1 (03:34):
I don't want to rain on other people's parade, though.
If they're into it, I'm not judging. You enjoy what
you love.
Speaker 2 (03:39):
I'm a coffee snobs often get much of anything from Starbucks.
Speaker 1 (03:43):
Yest okay, But specifically, I was talking to a neighbor
the other day and his daughter does exterior fall holiday decorating,
and I didn't know that was a thing. I I've
seen people saying, Oh, we'll put up your Christmas lights
for money, and we'll bring them, you know, take them
down for each.
Speaker 2 (04:00):
I've seen that up. There's a billboard over as we
get closer to the holidays, there's a billboard that goes
up and it's a company that specializes in that which
I get because there's an actual risk if you think
about it. I mean, how many people fall and get
hurt if you got to too. It's one thing if
you've got a ranch, Yeah, you've got a well, you
gotta split what do you call it? Split level? Split level? Yeah,
but you know that means half of it's a range.
(04:23):
But like there's a you're tall, so you only have
to like step up on a bucket you're putting and
you're putting lights up. But for folks not the two
story home, it's like, oh, that's a real danger to
put your own lights up. That's you are not being
frugal if you were to put your own lights up,
maybe being cheap, because you might end up hurting yourself. Again, yeah,
I mean that's that's true.
Speaker 1 (04:44):
But I will say, like, you're less likely to get
hurt putting pumpkins out around your mailboxer on your front porsch.
Speaker 2 (04:50):
I believe it.
Speaker 1 (04:50):
And so now this is another service where people are like,
let me put a bunch of gords around your house
to spice up your autumnal flare. And again I didn't
this until my neighbor told me this is what his
daughter does. But then Axios had an article this week
about the rise of like porch pumpkin decorating and people
are hiring pumpkins. Yeah, people are hiring folks for you know,
(05:10):
seven eight hundred bucks to pop up to like thirteen
hundred bucks to toss pumpkins on the porch. Is a
like a twenty eight pumpkin package. There's a ninety six
pumpkin package.
Speaker 2 (05:20):
Like, what is ninety six pumpkins? Isn't insane? That's ninety
four pumpkins that are too many? Yeah, that's it's quite
a few. Like you put a couple of pumpkins out,
that's fine. Maybe three if you don't like the symmetry
between two, Okay, three is fine.
Speaker 1 (05:35):
I think three. I've got three steps on the front porch.
I'm down put three pumpkins out there. I think, on
one hand, I love that people can start a side
hustle or a small business doing something for other people.
Sure they can make money doing something that people don't
want to do. The Christmas Lights thing being a perfect
example of that. How people are like, hey, it's dangerous, Eh,
I'm gonna make It's not gonna look as good if
I do it.
Speaker 2 (05:53):
I'm willing to.
Speaker 1 (05:54):
Hire that out. I haven't hired that out, but I
don't know. Maybe someday, but my goodness, people spending one
thousand dollars to have someone else put pumpkins out around
their house seems crazy massive.
Speaker 2 (06:02):
Yeah. No, I instead will be going to Aldie, of course,
and I'll buy some pumpkins. I think a lot of
times they come in earlier, so keep an eye out,
like towards the end of September, early October, they'll get
the first batch. And oftentimes I remember at least people
are se already decorated outside, So I guess somebody already
has pumpkins. Yeah, somebody does. Uh, I haven't been to
Aldi yet this week. So regardless, do that swing by
(06:23):
a home deepot, pick up a bale of hay, break
out the knives and sharpies, cover up your own pumpkin,
and uh, this is something you could I don't know,
it's something you do as a family as well. I
feel like there's so much outsourcing that we do in
our lives as opposed to Hey, what about the old
fashion like sit down with the kids. Oh, oh, let's
die our own Easter eggs, Oh, let's carve out These
are like core memories I had, at least as a kid.
(06:44):
Maybe this is me harken back to the eighties and
how great things were. But I think that it was
not only not only is a fun thing to do,
but of course it's going to save you a ton
of money.
Speaker 1 (06:54):
I still remember when my little sister they used to
make the dies. They came in little tablets that look
like sweethearts. Yep, totally ate one foaming at the mouth
with colors coming out. That was That's a core memory,
was it, Sally?
Speaker 2 (07:06):
Yeah? I mean who else would it be? I guess
Katie would have been too old, Yeah, she would have
known better. Yeah, good times, that's I mentioned. I'm sure
her teeth were so stained. And I mean that's like
a hardcore die. Yeah.
Speaker 1 (07:22):
Not only did they called poison control, I think, and
Mom's freaking out. Well, in these companies, Matt, they will
also charge you extra to take off those moldy pumpkins
to throw them in the tresh so you don't have to.
Speaker 2 (07:32):
Do it yourself.
Speaker 1 (07:32):
Well, you can't find a service for anything, but like if.
Speaker 2 (07:36):
You if you carve them, So that's that's the plus.
Because we've intentionally not carved some of our pumpkins in
order to make them laught, like, you can stick them
out on the on the front porch and they'll last
for weeks and weeks, and then you bring them inside
and then you can chop that thing up fresh and
then use that pumpkin to make some pumpkin pie. That's
what roast those pumpkin seeds. Man so good, my favorite.
(07:57):
Let's talk about vesting and specifically Jason and why wants
us all to be careful of the assumptions that we
make as investors. He had a great article about specifically
how great returns have been lately, and I think we
might all have a case of recency bias, right like
you might expect the same fifteen percent returns that we've
experienced over the past decade to just maybe perhaps continue
(08:20):
over the next decade. Stock market highs they have helped
account balances sore, which certainly feels nice, But there is
a downside to it, which is getting used to the
fact that we have seen returns sore this high, and
then once you've gotten used to it, you start to
expect it, and we tend to forget the likelihood of
reversion to the norm. Instead, we're thinking that stocks are
(08:42):
going to likely continue to outperform historical returns basically in perpetuity,
and this is causing some investors to assume these higher
returns and they're likely to receive, which is then leading
them to save less for the retirement because they're like,
it's like an e asist for their investments. They're just like, oh,
it's so easy. But at some point, I think the
juice is going to run out of the battery and
(09:03):
then you're stuck like, oh, not only do I not
have that additional support, Now the bike's a little bit
heavier because I got this dead weight them having to
pedal along with me. I think when you start to
count on the kind of returns that we've experienced over
the past ten years, that's when things can begin to
start getting getting dicey.
Speaker 1 (09:18):
I guess the kind of assumption that can blow up
in your face, especially if it leads to you saying, great,
I can take my foot off the gas pedal just
a little bit. Maybe it's like an entitled attitude that
investors are kind of starting to adopt as returns have
been incredibly, incredibly robust and compounding returns. They're a phenomenal thing.
But the more we contribute, right, especially in those early years,
the more we benefit from the compounding returns. So don't
(09:42):
take your foot off the gas pedal in assuming that
compounding returns will do all the work for you.
Speaker 2 (09:47):
You have to participate in the.
Speaker 1 (09:49):
Ability for your dollars to grow. And so let's talk
about robin Hood for a second, Matt, speaking of investing,
they had a good week last week. They saw in
a nice stock bump up in price after being added
to the S and P five hundred. Nice And then
though they announced that they are similar to other trading
apps adding social media elements for Robinhood users, they kind
(10:11):
of want too, I guess, take over the role maybe
that Wall Street bets on Reddit has been playing. But
I now don't think there's an way they're gonna be
able to replace that.
Speaker 2 (10:20):
Yeah, have you ever been over there like once? I have,
for educational purposes, not because I'm over there trying to
get hot stock tips or anything like that.
Speaker 1 (10:28):
I know what you're doing behind the scenes. No, Honestly,
it's hilarious.
Speaker 2 (10:32):
And like my take is that if robin Hood is
if they're looking to emulate something like that, if they
truly are trying to replace this sort of memory that
goes on. I think that's one thing because there's a
whole lot of jokes, and it can be very funny
because there's a lot of folks who are just poking fun.
They're making fun of themselves or being idiots going all in.
(10:52):
Like I just sawid recently where it's just like me
listening to an earnings call of a company where I
own just one stock and guns share. He's like, RUMs
one share, yeah, and he's just sitting there listening.
Speaker 1 (11:02):
To the My forty dollars could go up to forty
five after as well.
Speaker 2 (11:06):
It's so dumb, so that I appreciate not taking yourself seriously.
But if it leads to hope, you know, some folks
thinking oh maybe i'll do with that guy over there's doing.
Oh they you know, they posted some wins. If it
turns into like the Instagram for a copycat of social
media where it's like creates that that that envy, that
the medic sort of desire where you're just like, oh,
I'm gonna hop over there because that seems to be winning.
Speaker 1 (11:27):
That's the part of it that I don't like. Yeah, yeah, well,
so on this robin Hood Social which is supposed to
launch soon. You can post your trades, you can offer
your own investing insights, telling everyone else, Yeah, what's you're
up to and why you think that such and such
stock is going to the moon or whatever. And first,
I don't think any of us really need more in
social media apps in our lives, Like, aren't we already
(11:49):
overrun with just social media request other things that we
have to check in on. That's just a non starter
for me. And on the bright side, users are going
to have to show proof of trades in order to post,
so you can't just like be pumping stuff that you
didn't actually participate in, which could be super misleading. But
I think this is still the opposite of our aim,
(12:09):
Matt and what we encourage people to do, which is
to keep buying, but to not really participate in trading
because you're gonna do better, You're gonna keep more precious
mental bandwidth at the same time, and you're gonna avoid
this temptation to trade or to participate in activity that
could lead to inferior results and a lot of wasted effort.
Speaker 2 (12:28):
True. Yeah, I guess the reason I'm saying I'm allowing
for there to be some possibility of folks entertaining the idea.
I just don't want to outright ban it and be like, hey,
you can't do this, because then it becomes the forbidden fruit,
you know, like like people are going to experiment, they're
gonna take a look at it, They're gonna be like, oh,
what's going on over here. But it's just about taking
I think, the right approach, which is honestly why I
(12:49):
kind of mostly appreciate the Wall Street bets and I
know there's a lot of unhealthy advice being given over there,
but the fact that folks are just cracking jokes and
making fun of themselves and making fun of each.
Speaker 1 (12:59):
Other, I'm not mad that it exists. I just think
you need to be careful before. You've got to be
careful to go all in, and you've got to know yourself.
I've moor my life according to this code of conduct
that the people around me are living by.
Speaker 2 (13:10):
I think another silver lining is if people are able to, like,
if folks are more not just posting their wins, but
if they're also like, I would love to see a
ton of folks posting their losses, because then if they're
sitting there and they're lamenting their losses. And then you've
got individuals who are able to see that and be like, ooh,
homie just lost ten grand, like in thirty minutes. That's
(13:31):
not something I can afford. I don't want to emulate that,
And hopefully there can be some secondhand lessons learned from
any sort of posting of that flavor.
Speaker 1 (13:40):
I agreed, Yeah, all right, let's talk jobs. The labor
market is tightening. We mentioned the revised Bureau of Labor
Statistics stats that they released about how many jobs were
created and the decline in pay for switching jobs. We've
talked about that too. There was this massive spike and hey,
if you go try to find another job, you might
get paid fifteen or twenty percent, thirty percent more of
(14:02):
the Some of the stories we heard from how to
Money listeners were incredible matter of how much they were
able to make by just looking for a job with
another employer. But this ain't twenty twenty two anymore, man,
This ain't Kansas anymore, Toto. And this means that move
over job hopping. We're doing more job hugging these days, which,
of course there's got to be a cute sea word
for it. That's part of the part of the everyday lexicon.
Speaker 2 (14:25):
Part of the media land scape.
Speaker 1 (14:26):
Yeah so, And it's just what it sounds like like
people are becoming more attached to their current job as
the economy appears to be tightening, and they're just clinging
to it for dear life, I guess.
Speaker 2 (14:36):
And this is not a.
Speaker 1 (14:37):
Bad thing, right, especially if you like your job, like
why why not stay put if you're fond of it,
But a lack of fluidity in the workforce it's just
not the best thing for a dynamic economy either. So
hug your job if you need to make yourself invaluable.
So they're hugging back onto you. But just also know
(14:57):
that because the trend is isn't your friend, right, that
doesn't mean you can't find something more fulfilling your lucrative
just because it's less likely and it's not as the
job market isn't in the same place it was a
few years back, that you can't that it's impossible right
to go out there and earn more or get a
better paying job or something that you're more excited about.
(15:20):
It's never been a bad idea to be prepared for
a layoff. By the way, if you're really bored, right,
you might be able to even engineer your own layoff
if you've been saving for that possibility, it can make
a lot of sense. But yeah, the job market is
in a tougher place for a lot of folks. But
that doesn't mean I don't think Matt. I think sometimes
people read those headlines and they're like, that means I
have zero options, and I just don't think.
Speaker 2 (15:42):
That's the case either. I totally agree. Let's talk about
how you're taxed on the money that you make at
your job. We're going to talk now about no taxes
on tips because that's something that we heard a lot
about leading up to the presidential campaign. Certainly became a
Republican and a Democrat cause.
Speaker 1 (15:59):
Both candidates were shouting from the rooftop.
Speaker 2 (16:02):
Everybody was jumping on and so it was finally implemented
in the One Big Beautiful Bill Act through twenty twenty
eight and the Treasury. So they just released a list
of jobs that are going to qualify, and of course
there are many jobs that qualify, like the food industry,
beauty jobs right, like barbers, nail salons, yea, like places
(16:26):
where you are used to leaving tips, but also right,
so you got to like all the jobs that you
could imagine, like you might assume would get this. Yeah,
like we're like waiting room attendant, you know, or I
don't know, like all these different places where there's someone's
standing there and it's like, oh, this is one of
those instances where I'm supposed to give you a few dollars, isn't.
Speaker 1 (16:44):
It because you just handed me my napkin or my
towel to wipe my hands off.
Speaker 2 (16:48):
Oh what kind of fancy restaurants? Or I've heard about them?
But that big said, there are also some jobs on
there that you wouldn't have expected, like digital content creators,
like which I think podcasters actually qualify. Like like we
we are under that subheading musicians, electricians, plumbers, landscapers, nannies.
(17:12):
We will will link to the list. But it's fascinating
because up to twenty five thousand dollars can be deducted
from these earn't tips, and like I was saying, you
need to act accordingly. It's not exactly clear how it
is that folks should be taking advantage of this, but
it certainly starts with the fact that these are dollars
that need to be paid as tips. So you can't
(17:32):
just be like, Okay, now.
Speaker 1 (17:34):
I'm reclassifying my tips.
Speaker 2 (17:36):
Yeah, I don't think it's going to be that straightforward,
but it's just a fascinating look at what it is
that changes in tax policy, how that can impact how
much we pay in taxes.
Speaker 1 (17:47):
Sure, and it's also I think it's also one of
those things, Matt where a lot of tips weren't reported
as income anyway. So maybe this is just a chance
to totally agree to let the tax code mirror human behavior.
Speaker 2 (17:59):
Catch up a little bit. Yeah, it's like it formalizes
something that and we're not advocating I'm you know, you're
not certainly encouraging that folks don't report earned wages or whatever.
But like fact is, I'm sure there's plenty of folks,
and especially like the more traditional garnered tips via cash.
I got a feeling that there's a lot of those
folks that weren't reporting that, and so this sort of formalizes, yeah,
(18:21):
what's actually happening on the ground.
Speaker 1 (18:22):
By the way, you'll still owe state taxes and payroll
taxes on tips. This does not eliminate that. It just
eliminates up to a certain percentage or up to a
certain dollar amount in five thousand, Yeah, the federal tax
requirement on those tips get Yeah. It almost makes me
think of what if the federal government was like, hey,
you know what, from now on, we're not going to
give speeding tickets if you.
Speaker 2 (18:42):
Go five miles per hour over the speeding over the
speed limit. And I think there's a lot of folks
it's like a collective guilt that everyone or a lot
of people have that there's just like a blanket relief
of like, Okay, we don't have to worry about that anymore.
Speaker 1 (18:56):
But then imagine getting the ticket for going six miles
an hour over and you're like, come on.
Speaker 2 (19:01):
That's the thing. You break the law, you should and
you get caught, you should expect to suffer the consequences.
That's the part of it. You do the crime, you
pay the time. Is that what is that from? I
don't know, Judge Judy. Probably was that one of the
ones that used to watch your grandma Fortune Judge?
Speaker 1 (19:18):
It was it was mostly prices, right, Oh, that's right.
Speaker 2 (19:20):
I thought you did Wheel of Fortune too a little bit.
Speaker 1 (19:22):
She likes Jeopardy a lot. She still likes Jeopardy.
Speaker 2 (19:25):
That's why. See, this is why you're so good at
just like winging it and guessing. Uh, did you ever
you watch Grocery? Grocery? What was the Sweet Stakes? Oh?
Supermarket Sweet? Yeah, the one where they're running through the
supermarket with a car. No.
Speaker 1 (19:36):
One was not nearly as good, but I would watch
it on.
Speaker 2 (19:38):
Casion you didn't like that one. It was I remember
as a kid loving at least the I just love
the fact that they're running through a grocery store and
that's not something as the kid I was allowed to
do it.
Speaker 1 (19:45):
I think it was always on some like ratchet channels,
so maybe I was never found it. Okay, I watched
it a couple of times.
Speaker 2 (19:51):
Maybe it was on like t MT.
Speaker 1 (19:54):
Yeah that could be are We've got more to get to,
including let's talk about using AI for money advice and
just when it comes to making life decisions, your finances
have a huge impact over those decisions. We'll talk about
that and more right after this. All right, we're back Matt.
(20:16):
Time for the ludicrous headline of the week.
Speaker 2 (20:18):
Yes it is.
Speaker 1 (20:18):
This one comes from CNBC. It says the headline was
gen Z is using retirement savings to pay down debt.
And I saw this and I was like, no, like
super slow mo, because you and I we love the
idea of people paying down debt. We want people to
be debt free except for that mortgage. Maybe if it's
like three percent, you probably want to do other things
with that money before you start paying that mortgage down.
(20:40):
But truly, especially if we're talking about credit card debt,
some of the more nefarious forms of debt, like, we
want you to get after it. We want you to
get that out of your life. We rarely want to
discourage people from paying down their debts, right. I guess
in maybe a few cases, it might make sense to
take money from retirement accounts to pay down an egregious debt.
Let's say, for instance, you had a payday loan and
(21:03):
it was becoming an albatross around your neck, then maybe
this is something we would suggest. But I think this
is becoming just an access problem. Because it's easier to
access money from your four to one K these days
without fully understanding the trade offs. People are doing it.
It's becoming more common. And so this article revealed that
half of gen Zer's have already tapped their workplace retirement account.
(21:26):
So we're talking about gen zers where the average age
is what twenty low twenties or or is it twenty
eight is the upright end of the spectrum.
Speaker 2 (21:35):
So when you think still half right, that's a lot.
That's a lot, a lot of folks.
Speaker 1 (21:39):
And so it seems like at least it's not just
to buy stuff like, oh, I'm taking out of money
out of my retirement account to like, you know, purchase
more like purchase a jet ski or something like that.
But it is to pay down debt. But still it's
a bad idea, right, because it's better to get frugal
to come up with a debt payoffs strategy that you
can execute in short order, scrappy. Yeah, or if here
(22:01):
is what I want to see, like a significant debt issue,
get help from a nonprofit like Money Management International, but
like robbing your future self. It might feel like the
easiest way to get rid of that debt quickly, but
it just leads to other complications in your financial life.
Speaker 2 (22:15):
Yeah. No, we're talking about missed time in the market,
and you could be at risk for taxes and penalties
if you don't jump through the right hoops. If you're
not if that money hasn't been there long enough, and
maybe you're not fully vested. You could miss out on
some of those match dollars as well. But it poses
added behavioral risk as well, because if you grab the
easy pile of cash instead of going through the discipline
(22:37):
debt payoff slog, well, you might not learn your lesson
I think as effectively, meaning that you can just find
yourself back in the exact same position. And these are
retirement dollars. So I've got to quote Charlie Munger because
he pointed out that the first rule of compounding is
to never interrupt it unnecessarily. We want folks to come
up with a debt payoff plan that doesn't involve putting
(22:59):
your your sticky fingers into retirement. We don't want you.
It's like, yeah, it's like you're messing with a cake
that's bacon. You're gonna mess it all up. Yeah, just
let it be, let it cook. Yeah, exactly.
Speaker 1 (23:08):
So pay off your debts, but don't use your retirement
dollars to do so. A right, There was an article
in the Wall Street Journal, Matt that I was reticent
to bring up on the show today. It probably because
it's talking about like substantial life things that people go through.
This article specifically highlighted the rise of divorces living together
(23:29):
after they've split up because the low mortgage rate was
just too good to let go of, Like, hey, we
got this two point twenty five percent mortgage. Gosh, we
really don't like each other right now, or we know
that it's best for us not to stay together for
the long term, but we got to stay together for
now because we're financially it's it's it's the only move
we can really make. And so the more I thought
about it, though, the more it was apparent that this
(23:51):
is indicative of an ever present reality that personal finance
influences an incredible number of our life decisions. Yea, and
that you know, basically the financial reality of selling a
home with a locked in low rate mortgage it's just
too much to bear for some people in the current environment,
even if the home no longer works for your family.
So one of the families they highlighted in this article,
(24:13):
Matt was they took turns living in the house and
then an airstream in the backyard.
Speaker 2 (24:17):
Yep. And so in that part, and in that case,
it seem like they're doing it also for the kids
right to help provide some stability.
Speaker 1 (24:23):
There, which which makes sense.
Speaker 2 (24:25):
I totally get it seems like such a messy situation.
Speaker 1 (24:27):
For sure, And I don't think either you or I
are trying to judge the relational decisions these folks are making.
We're just pointing out that's saving more, reducing your debt.
It creates more margin in your life, and it allows
for a wider range of decisions that you might prefer
to make for non monetary reasons, right, and so just
living paycheck to paycheck has bigger consequences if other circumstances
(24:50):
in your life that are outside of your control, if
those change, or even things that are kind of inside
of your control. The less money you have on hand,
the fewer options you give yourself when things When you
end up in a tough spot, what do you think
about the couple You don't have that peace out money?
Speaker 2 (25:06):
I guess you know that's true. That's true. But in
this case with a divorce, what if it means that, hey,
they kind of give it a second shot, and it
causes them to stick around a little bit longer and
they kind of work through it. Oh they've they're let's
go see accounts there before you know they're back together.
Speaker 1 (25:18):
Hey, that's that's that's the bright spot, right, potential bright spot,
the potential upside of.
Speaker 2 (25:23):
Not having the financial financial margin. I'll be hoping that
for those folks. Yeah, So this makes me think of
another article from The Times about money and life and
whether you should wait on love until you've made more
progress when it comes to your your finances with your money.
More young Americans are waiting to get married or they're
waiting to have kids in an effort to create more
(25:43):
financial security because they're assuming that having more money is
gonna basically add stability to the relationship. And I am
all for exercising some wisdom and not jumping willy nilly
into a relationship where you're you know, your finances or
their finances are in complete. But man, this is a
scenario where I think if you if you are too
(26:05):
focused on this, you're taking things too far. Right. I
think the very act of committing to a relationship is
in and of itself character for me, right like it
is formational going through the process of marriage. And I
think a lot of times in our culture we have
such a consumption based mindset around how we approach different
things like this, And I think some folks see getting
(26:27):
married or that spouse as being this like, oh, this
is the goal, this is that's the final boss, like
the capstone event. I'm gonna yeah once that I'm leveling
up right, as opposed to seeing it as something that
you do together, right, Like what's more beautiful to me
at least than to having worked through some of these
hard things in life with your best friend, essentially that
(26:49):
you that you've married. And the same thing is true
with kids. So many people are are are thinking, oh,
I've got to get to a point to where I
feel like, oh, we need to have this much set aside.
Oh we need to do this. Oh we can't be
in this old, run down house. Oh the kids can't
share a bedroom. Like these are all excuses that we
give as opposed to saying no, we want to have kids.
And quite literally, there's a biological clock that's ticking that's
(27:11):
kind of that window of time is narrowing, and the
very act of having children it's edifying. It's really hard,
but like there is so much that you learn about
yourself and the sacrifices that you make in order to
provide for those kids, that the very act of having
the kids is what makes you ready to be the
person that you're ultimately going to be. Right, It's just weird.
Speaker 1 (27:33):
How it calls you into something bigger and greater.
Speaker 2 (27:36):
Yeah, yeah, And I.
Speaker 1 (27:37):
Think the financial impetus that it puts on you is
actually can be a good thing. You're like, Okay, I
gotta grow up now, I gotta be lights a fire,
And you're right. Yeah, And so I think the same
thing is true of marriage and having kids, that both
will help you form better habits and help you make
progress in your findis. And there's something there's something too
about growing in from not having a lot and then
(28:01):
having more together. There's something about the cohesion that creates
in your relationship to do that with with your teammate, yeah,
with your partner, with your partner for life. You do
it solo and then you come together with like gobs
of money. You actually you kind of miss something along
the way, I think.
Speaker 2 (28:14):
So I don't love it.
Speaker 1 (28:16):
And honestly, it makes me think too of the literary
character Ebenezer Scrooge Matt because when you know, they go
back to the go to Christmas path, go to chrismas
past and he sees his old girlfriend, and of course
he realizes he put more emphasis on making money than
he did on tending to the love of his life
and he missed out because of it. Yeah, and I
(28:37):
just think that's a real possibility that people don't get there,
just like I'll just get married later, or I'll just like, yeah,
I have kids down the road and yeah, at some
point maybe, but that's also not promised to you.
Speaker 2 (28:49):
So I not guarantee. Yeah, and I don't.
Speaker 1 (28:51):
I don't think most people do it from a heart
that he had, but I think they're just like, I
want to have my stuff together, and I understand that impulse.
Speaker 2 (28:58):
I think I think it comes from a heart of good.
But that's well, that's why I said it at the beginning.
It's it's like taking that sort of planning mentality and
taking it too far. It's it's where and it doesn't
seem crazy to say, oh, I need to be financially
in a decent place before we take these you know,
more formal steps. But yeah, there's something there's something about
going through that process that is kind of the goal, right,
(29:19):
It's not to have like, honestly, it makes me think
of education, like higher ed as well, because I think
so much there seems to be a focus on just
getting the grades or getting the degree, getting the MBA right,
and it's and there's not as much attention being paid
to what it is you're actually learning, right, like forming
the rigor of the education, how it's forming you, how
(29:39):
it's turning you into hopefully a better, more productive, more
virtuous citizen that's going to contribute to our society. Right,
And there's like a desire to kind of take the shortcut.
Like it's one of the problems with AI. You just
want the credential. You don't want the end result, and
you don't really you're not paying attention to what actually
needs to happen in the in the process, and I
feel like we're kind of going more to cold critique.
(30:00):
But that's one of the issues with AI, is that like, hey,
it doesn't matter, I just need to do what I
need to do to get the GPA right or in
order to pass my finals in college.
Speaker 1 (30:09):
Even if it means allowing artificial intelligence to write the
answer for me or yeah, to do most of the word.
Speaker 2 (30:15):
Yeah, Because you're not only obviously cheating the system, but
like you're cheating yourself from being able to be formed
into the essentially the best version of yourself.
Speaker 1 (30:24):
Yeah, speaking of AI, let's talk about using artificial intelligence
specifically to get money advice.
Speaker 2 (30:30):
It's a feeling I'm going to disagree with this.
Speaker 1 (30:34):
Well, obviously, the rise of AI for search has been
fascinating to watch, like it's been incredibly quick, and visits
to sites like ours, like howdomoney dot com have gone
down pretty significantly because Google has become less integral to
the way people look for information, right, and even Google
results implement a lot of artificial intelligence as well. So
(30:57):
people are like, I'll just take that summary and I'm
not actually going to click over to the article that
somebody took a lot of time to write to think through.
I want the synopsis. And it's no wonder that folks
are turning to artificial intelligence for money questions.
Speaker 2 (31:10):
They have too.
Speaker 1 (31:11):
They're asking about saving strategies and debt management or even
stock picking advice, and so I think generative AI can
be a powerful tool. I've actually started using it a
little bit more in my life and it's been I
will say helpful in moderation. But I think most people
they seem to be happy with like the custom budget
(31:32):
that chatchept, for instance, can create for them. But a
recent credit Karma survey finds that more than half of
those who acted on the financial advice that they got
from artificial intelligence they feel like they ended up making
a poor financial decision. That's a lot of people Matt
to feel like, actually, it really let me down, and
I went in the wrong path because I took that answer,
(31:52):
And so I think it's just important to be careful.
I made a query of chat gpt about five twenty
nine plans the other day, and because I know this stuff,
I knew it was spitting out the wrong information. I
knew it was incorrect about the tax deduction in certain
states that you could get from making that five twenty
nine contribution. But a lot of people they might be like,
(32:13):
they might take that as gospel stick money in not
realize that they are actually eligible for to contribute more
and still receive more of a tax deduction. I think
the effective use of AI actually comes from knowing the
subject fairly in depth first, and if you're kind of
turning over that learning process of personal finance and you're
just assuming that whatever one of these AI spits out
(32:35):
is going to tell you what you need to know,
no prior knowledge needed first. I think you're probably sorely
mistaken and you could end up in that fifty percent
of people who says, yeah, let me astray. I made
some bad moves because.
Speaker 2 (32:47):
Of it, that's right, man. Yeah, proceed with caution, folks,
But we hope everyone has a fantastic weekend. That's going
to be it for our Friday flight. Everyone enjoy your
time out there. I feel like it's like the perfect
time of year, perfect time a year for a folk
art festival, which is which you got lined up it.
Speaker 1 (33:02):
Basically, my it's like Christmas number two for.
Speaker 2 (33:04):
Me, Christmas in September. But we'll see you back here
on Monday with a fresh ask count of money. And
until then, best friends out, best friends out there we
(33:26):
go see blowing
Welcome to Hada Money.
Speaker 2 (00:01):
I'm Joel.
Speaker 1 (00:02):
I'm nottt Today we're talking pricey porch, pumpkins, Twitter for
trading and saving for a spouse.
Speaker 2 (00:26):
Oh, saving for a spouse. What does Joel mean when
he says that we'll get to that story. We'll find
out in a little bit. Yes, yeah, you will. I've
already purchased mine. Uh so you know you're right, there's
aspects of saving up for a wedding. But that's not
even what we're gonna talk about, is it. Uh, this
is our Friday flight. We're gonna get to some of
(00:46):
the best stories that we came across this week and
how they specifically pertain to your personal finances. And first,
do we gotta talk about the ray cut Brown twenty
five basis points.
Speaker 1 (00:58):
I mean, it was like the racer. The predictions were
spot on. This is what happened. And maybe I think
just from a personal finance standpoint, this is like a
socio political economic thing. But when it gets down to
the personal finance level, Matt, a quarter point rate cut?
Speaker 2 (01:12):
What that means for? Are you kidding? I wouldn't say
everything it's time to buy a house? Broh kidding?
Speaker 1 (01:22):
We will see what the impact is on mortgage rates.
Typically that takes a lot longer right to the system.
So like, will mortgage rates collapse by a quarter point tomorrow, No,
that's not it's well, your savings rate collapse by a
quarter point tomorrow probably probably a little bit faster.
Speaker 2 (01:38):
Yeah, it's yeah. It's interesting to.
Speaker 1 (01:40):
Think by tomorrow, I mean yesterday, it might already have.
Speaker 2 (01:44):
Immediately. Yeah, it does depend on so there are certain things,
certain factors. I mean, I would say that we saw
the market react even before the rate cut was announced,
because folks are like, we're pretty sure that we're going
to see a rate cut, so that was kind of
built in. But in addition to that, you see faster
movements within the market. When it comes to actual lending costs,
that takes a little bit longer. I wouldn't be surprised
(02:05):
if we see lending costs take months to adjust as
it trickles through the market. But as far as the
overall economy, and I think that's the biggest reason to
pay attention to this, that hopefully things will get back
to flowing, especially when it comes to the housing market.
Man like things folks have I think folks have felt
trapped wherever they currently are. I think there's a lot
of individuals who are thinking, man, I would like to
(02:27):
be able to move to a different location or to
take this opportunity, but barring costs have been so high.
So hopefully that's something that we will get to see.
Speaker 1 (02:35):
I think one eventually, once we see rights have been
taking down. I think once they touch the level, like
the five level, it'll be interesting to see how that
impacts the housing market, because I agree that's a big
part of what's kind of jamming up the gears, preventing
people from wanting to sell, preventing people from wanting to buy.
And so maybe we start to reach this point where
there's a little more fluidity in that market.
Speaker 2 (02:55):
Yeah, yeah, hope.
Speaker 1 (02:56):
And so let's talk about pumpkins for a second. Back
we talked about pumpkins words, Yeah, let's do it. Since
we're getting close to Halloween. I mean, they I feel
like they put out costumes like three months ago, which
was ridiculous, But now we are actually getting close enough
to where I'm enjoying seeing that stuff on the rack.
Or I don't drink pumpkin spice lattes. It's kind of
a personal thing. We know, kind of hate it. You
(03:17):
hate the stuff? Yeah, you like You're okay with pumpkin
spice lattes, right, Nope, okay, you don't like the metal.
Speaker 2 (03:22):
I don't do anything. I will get a flavor. I
will get a caramel latt okay. So if it's a
coffee shop, and especially if they make their own caramel, right,
if they're starting the sugar and they I mean, come on,
if someone is actually crafting it like that, that's a
quality drink.
Speaker 1 (03:34):
I don't want to rain on other people's parade, though.
If they're into it, I'm not judging. You enjoy what
you love.
Speaker 2 (03:39):
I'm a coffee snobs often get much of anything from Starbucks.
Speaker 1 (03:43):
Yest okay, But specifically, I was talking to a neighbor
the other day and his daughter does exterior fall holiday decorating,
and I didn't know that was a thing. I I've
seen people saying, Oh, we'll put up your Christmas lights
for money, and we'll bring them, you know, take them
down for each.
Speaker 2 (04:00):
I've seen that up. There's a billboard over as we
get closer to the holidays, there's a billboard that goes
up and it's a company that specializes in that which
I get because there's an actual risk if you think
about it. I mean, how many people fall and get
hurt if you got to too. It's one thing if
you've got a ranch, Yeah, you've got a well, you
gotta split what do you call it? Split level? Split level? Yeah,
but you know that means half of it's a range.
(04:23):
But like there's a you're tall, so you only have
to like step up on a bucket you're putting and
you're putting lights up. But for folks not the two
story home, it's like, oh, that's a real danger to
put your own lights up. That's you are not being
frugal if you were to put your own lights up,
maybe being cheap, because you might end up hurting yourself. Again, yeah,
I mean that's that's true.
Speaker 1 (04:44):
But I will say, like, you're less likely to get
hurt putting pumpkins out around your mailboxer on your front porsch.
Speaker 2 (04:50):
I believe it.
Speaker 1 (04:50):
And so now this is another service where people are like,
let me put a bunch of gords around your house
to spice up your autumnal flare. And again I didn't
this until my neighbor told me this is what his
daughter does. But then Axios had an article this week
about the rise of like porch pumpkin decorating and people
are hiring pumpkins. Yeah, people are hiring folks for you know,
(05:10):
seven eight hundred bucks to pop up to like thirteen
hundred bucks to toss pumpkins on the porch. Is a
like a twenty eight pumpkin package. There's a ninety six
pumpkin package.
Speaker 2 (05:20):
Like, what is ninety six pumpkins? Isn't insane? That's ninety
four pumpkins that are too many? Yeah, that's it's quite
a few. Like you put a couple of pumpkins out,
that's fine. Maybe three if you don't like the symmetry
between two, Okay, three is fine.
Speaker 1 (05:35):
I think three. I've got three steps on the front porch.
I'm down put three pumpkins out there. I think, on
one hand, I love that people can start a side
hustle or a small business doing something for other people.
Sure they can make money doing something that people don't
want to do. The Christmas Lights thing being a perfect
example of that. How people are like, hey, it's dangerous, Eh,
I'm gonna make It's not gonna look as good if
I do it.
Speaker 2 (05:53):
I'm willing to.
Speaker 1 (05:54):
Hire that out. I haven't hired that out, but I
don't know. Maybe someday, but my goodness, people spending one
thousand dollars to have someone else put pumpkins out around
their house seems crazy massive.
Speaker 2 (06:02):
Yeah. No, I instead will be going to Aldie, of course,
and I'll buy some pumpkins. I think a lot of
times they come in earlier, so keep an eye out,
like towards the end of September, early October, they'll get
the first batch. And oftentimes I remember at least people
are se already decorated outside, So I guess somebody already
has pumpkins. Yeah, somebody does. Uh, I haven't been to
Aldi yet this week. So regardless, do that swing by
(06:23):
a home deepot, pick up a bale of hay, break
out the knives and sharpies, cover up your own pumpkin,
and uh, this is something you could I don't know,
it's something you do as a family as well. I
feel like there's so much outsourcing that we do in
our lives as opposed to Hey, what about the old
fashion like sit down with the kids. Oh, oh, let's
die our own Easter eggs, Oh, let's carve out These
are like core memories I had, at least as a kid.
(06:44):
Maybe this is me harken back to the eighties and
how great things were. But I think that it was
not only not only is a fun thing to do,
but of course it's going to save you a ton
of money.
Speaker 1 (06:54):
I still remember when my little sister they used to
make the dies. They came in little tablets that look
like sweethearts. Yep, totally ate one foaming at the mouth
with colors coming out. That was That's a core memory,
was it, Sally?
Speaker 2 (07:06):
Yeah? I mean who else would it be? I guess
Katie would have been too old, Yeah, she would have
known better. Yeah, good times, that's I mentioned. I'm sure
her teeth were so stained. And I mean that's like
a hardcore die. Yeah.
Speaker 1 (07:22):
Not only did they called poison control, I think, and
Mom's freaking out. Well, in these companies, Matt, they will
also charge you extra to take off those moldy pumpkins
to throw them in the tresh so you don't have to.
Speaker 2 (07:32):
Do it yourself.
Speaker 1 (07:32):
Well, you can't find a service for anything, but like if.
Speaker 2 (07:36):
You if you carve them, So that's that's the plus.
Because we've intentionally not carved some of our pumpkins in
order to make them laught, like, you can stick them
out on the on the front porch and they'll last
for weeks and weeks, and then you bring them inside
and then you can chop that thing up fresh and
then use that pumpkin to make some pumpkin pie. That's
what roast those pumpkin seeds. Man so good, my favorite.
(07:57):
Let's talk about vesting and specifically Jason and why wants
us all to be careful of the assumptions that we
make as investors. He had a great article about specifically
how great returns have been lately, and I think we
might all have a case of recency bias, right like
you might expect the same fifteen percent returns that we've
experienced over the past decade to just maybe perhaps continue
(08:20):
over the next decade. Stock market highs they have helped
account balances sore, which certainly feels nice, But there is
a downside to it, which is getting used to the
fact that we have seen returns sore this high, and
then once you've gotten used to it, you start to
expect it, and we tend to forget the likelihood of
reversion to the norm. Instead, we're thinking that stocks are
(08:42):
going to likely continue to outperform historical returns basically in perpetuity,
and this is causing some investors to assume these higher
returns and they're likely to receive, which is then leading
them to save less for the retirement because they're like,
it's like an e asist for their investments. They're just like, oh,
it's so easy. But at some point, I think the
juice is going to run out of the battery and
(09:03):
then you're stuck like, oh, not only do I not
have that additional support, Now the bike's a little bit
heavier because I got this dead weight them having to
pedal along with me. I think when you start to
count on the kind of returns that we've experienced over
the past ten years, that's when things can begin to
start getting getting dicey.
Speaker 1 (09:18):
I guess the kind of assumption that can blow up
in your face, especially if it leads to you saying, great,
I can take my foot off the gas pedal just
a little bit. Maybe it's like an entitled attitude that
investors are kind of starting to adopt as returns have
been incredibly, incredibly robust and compounding returns. They're a phenomenal thing.
But the more we contribute, right, especially in those early years,
the more we benefit from the compounding returns. So don't
(09:42):
take your foot off the gas pedal in assuming that
compounding returns will do all the work for you.
Speaker 2 (09:47):
You have to participate in the.
Speaker 1 (09:49):
Ability for your dollars to grow. And so let's talk
about robin Hood for a second, Matt, speaking of investing,
they had a good week last week. They saw in
a nice stock bump up in price after being added
to the S and P five hundred. Nice And then
though they announced that they are similar to other trading
apps adding social media elements for Robinhood users, they kind
(10:11):
of want too, I guess, take over the role maybe
that Wall Street bets on Reddit has been playing. But
I now don't think there's an way they're gonna be
able to replace that.
Speaker 2 (10:20):
Yeah, have you ever been over there like once? I have,
for educational purposes, not because I'm over there trying to
get hot stock tips or anything like that.
Speaker 1 (10:28):
I know what you're doing behind the scenes. No, Honestly,
it's hilarious.
Speaker 2 (10:32):
And like my take is that if robin Hood is
if they're looking to emulate something like that, if they
truly are trying to replace this sort of memory that
goes on. I think that's one thing because there's a
whole lot of jokes, and it can be very funny
because there's a lot of folks who are just poking fun.
They're making fun of themselves or being idiots going all in.
(10:52):
Like I just sawid recently where it's just like me
listening to an earnings call of a company where I
own just one stock and guns share. He's like, RUMs
one share, yeah, and he's just sitting there listening.
Speaker 1 (11:02):
To the My forty dollars could go up to forty
five after as well.
Speaker 2 (11:06):
It's so dumb, so that I appreciate not taking yourself seriously.
But if it leads to hope, you know, some folks
thinking oh maybe i'll do with that guy over there's doing.
Oh they you know, they posted some wins. If it
turns into like the Instagram for a copycat of social
media where it's like creates that that that envy, that
the medic sort of desire where you're just like, oh,
I'm gonna hop over there because that seems to be winning.
Speaker 1 (11:27):
That's the part of it that I don't like. Yeah, yeah, well,
so on this robin Hood Social which is supposed to
launch soon. You can post your trades, you can offer
your own investing insights, telling everyone else, Yeah, what's you're
up to and why you think that such and such
stock is going to the moon or whatever. And first,
I don't think any of us really need more in
social media apps in our lives, Like, aren't we already
(11:49):
overrun with just social media request other things that we
have to check in on. That's just a non starter
for me. And on the bright side, users are going
to have to show proof of trades in order to post,
so you can't just like be pumping stuff that you
didn't actually participate in, which could be super misleading. But
I think this is still the opposite of our aim,
(12:09):
Matt and what we encourage people to do, which is
to keep buying, but to not really participate in trading
because you're gonna do better, You're gonna keep more precious
mental bandwidth at the same time, and you're gonna avoid
this temptation to trade or to participate in activity that
could lead to inferior results and a lot of wasted effort.
Speaker 2 (12:28):
True. Yeah, I guess the reason I'm saying I'm allowing
for there to be some possibility of folks entertaining the idea.
I just don't want to outright ban it and be like, hey,
you can't do this, because then it becomes the forbidden fruit,
you know, like like people are going to experiment, they're
gonna take a look at it, They're gonna be like, oh,
what's going on over here. But it's just about taking
I think, the right approach, which is honestly why I
(12:49):
kind of mostly appreciate the Wall Street bets and I
know there's a lot of unhealthy advice being given over there,
but the fact that folks are just cracking jokes and
making fun of themselves and making fun of each.
Speaker 1 (12:59):
Other, I'm not mad that it exists. I just think
you need to be careful before. You've got to be
careful to go all in, and you've got to know yourself.
I've moor my life according to this code of conduct
that the people around me are living by.
Speaker 2 (13:10):
I think another silver lining is if people are able to, like,
if folks are more not just posting their wins, but
if they're also like, I would love to see a
ton of folks posting their losses, because then if they're
sitting there and they're lamenting their losses. And then you've
got individuals who are able to see that and be like, ooh,
homie just lost ten grand, like in thirty minutes. That's
(13:31):
not something I can afford. I don't want to emulate that,
And hopefully there can be some secondhand lessons learned from
any sort of posting of that flavor.
Speaker 1 (13:40):
I agreed, Yeah, all right, let's talk jobs. The labor
market is tightening. We mentioned the revised Bureau of Labor
Statistics stats that they released about how many jobs were
created and the decline in pay for switching jobs. We've
talked about that too. There was this massive spike and hey,
if you go try to find another job, you might
get paid fifteen or twenty percent, thirty percent more of
(14:02):
the Some of the stories we heard from how to
Money listeners were incredible matter of how much they were
able to make by just looking for a job with
another employer. But this ain't twenty twenty two anymore, man,
This ain't Kansas anymore, Toto. And this means that move
over job hopping. We're doing more job hugging these days, which,
of course there's got to be a cute sea word
for it. That's part of the part of the everyday lexicon.
Speaker 2 (14:25):
Part of the media land scape.
Speaker 1 (14:26):
Yeah so, And it's just what it sounds like like
people are becoming more attached to their current job as
the economy appears to be tightening, and they're just clinging
to it for dear life, I guess.
Speaker 2 (14:36):
And this is not a.
Speaker 1 (14:37):
Bad thing, right, especially if you like your job, like
why why not stay put if you're fond of it,
But a lack of fluidity in the workforce it's just
not the best thing for a dynamic economy either. So
hug your job if you need to make yourself invaluable.
So they're hugging back onto you. But just also know
(14:57):
that because the trend is isn't your friend, right, that
doesn't mean you can't find something more fulfilling your lucrative
just because it's less likely and it's not as the
job market isn't in the same place it was a
few years back, that you can't that it's impossible right
to go out there and earn more or get a
better paying job or something that you're more excited about.
(15:20):
It's never been a bad idea to be prepared for
a layoff. By the way, if you're really bored, right,
you might be able to even engineer your own layoff
if you've been saving for that possibility, it can make
a lot of sense. But yeah, the job market is
in a tougher place for a lot of folks. But
that doesn't mean I don't think Matt. I think sometimes
people read those headlines and they're like, that means I
have zero options, and I just don't think.
Speaker 2 (15:42):
That's the case either. I totally agree. Let's talk about
how you're taxed on the money that you make at
your job. We're going to talk now about no taxes
on tips because that's something that we heard a lot
about leading up to the presidential campaign. Certainly became a
Republican and a Democrat cause.
Speaker 1 (15:59):
Both candidates were shouting from the rooftop.
Speaker 2 (16:02):
Everybody was jumping on and so it was finally implemented
in the One Big Beautiful Bill Act through twenty twenty
eight and the Treasury. So they just released a list
of jobs that are going to qualify, and of course
there are many jobs that qualify, like the food industry,
beauty jobs right, like barbers, nail salons, yea, like places
(16:26):
where you are used to leaving tips, but also right,
so you got to like all the jobs that you
could imagine, like you might assume would get this. Yeah,
like we're like waiting room attendant, you know, or I
don't know, like all these different places where there's someone's
standing there and it's like, oh, this is one of
those instances where I'm supposed to give you a few dollars, isn't.
Speaker 1 (16:44):
It because you just handed me my napkin or my
towel to wipe my hands off.
Speaker 2 (16:48):
Oh what kind of fancy restaurants? Or I've heard about them?
But that big said, there are also some jobs on
there that you wouldn't have expected, like digital content creators,
like which I think podcasters actually qualify. Like like we
we are under that subheading musicians, electricians, plumbers, landscapers, nannies.
(17:12):
We will will link to the list. But it's fascinating
because up to twenty five thousand dollars can be deducted
from these earn't tips, and like I was saying, you
need to act accordingly. It's not exactly clear how it
is that folks should be taking advantage of this, but
it certainly starts with the fact that these are dollars
that need to be paid as tips. So you can't
(17:32):
just be like, Okay, now.
Speaker 1 (17:34):
I'm reclassifying my tips.
Speaker 2 (17:36):
Yeah, I don't think it's going to be that straightforward,
but it's just a fascinating look at what it is
that changes in tax policy, how that can impact how
much we pay in taxes.
Speaker 1 (17:47):
Sure, and it's also I think it's also one of
those things, Matt where a lot of tips weren't reported
as income anyway. So maybe this is just a chance
to totally agree to let the tax code mirror human behavior.
Speaker 2 (17:59):
Catch up a little bit. Yeah, it's like it formalizes
something that and we're not advocating I'm you know, you're
not certainly encouraging that folks don't report earned wages or whatever.
But like fact is, I'm sure there's plenty of folks,
and especially like the more traditional garnered tips via cash.
I got a feeling that there's a lot of those
folks that weren't reporting that, and so this sort of formalizes, yeah,
(18:21):
what's actually happening on the ground.
Speaker 1 (18:22):
By the way, you'll still owe state taxes and payroll
taxes on tips. This does not eliminate that. It just
eliminates up to a certain percentage or up to a
certain dollar amount in five thousand, Yeah, the federal tax
requirement on those tips get Yeah. It almost makes me
think of what if the federal government was like, hey,
you know what, from now on, we're not going to
give speeding tickets if you.
Speaker 2 (18:42):
Go five miles per hour over the speeding over the
speed limit. And I think there's a lot of folks
it's like a collective guilt that everyone or a lot
of people have that there's just like a blanket relief
of like, Okay, we don't have to worry about that anymore.
Speaker 1 (18:56):
But then imagine getting the ticket for going six miles
an hour over and you're like, come on.
Speaker 2 (19:01):
That's the thing. You break the law, you should and
you get caught, you should expect to suffer the consequences.
That's the part of it. You do the crime, you
pay the time. Is that what is that from? I
don't know, Judge Judy. Probably was that one of the
ones that used to watch your grandma Fortune Judge?
Speaker 1 (19:18):
It was it was mostly prices, right, Oh, that's right.
Speaker 2 (19:20):
I thought you did Wheel of Fortune too a little bit.
Speaker 1 (19:22):
She likes Jeopardy a lot. She still likes Jeopardy.
Speaker 2 (19:25):
That's why. See, this is why you're so good at
just like winging it and guessing. Uh, did you ever
you watch Grocery? Grocery? What was the Sweet Stakes? Oh?
Supermarket Sweet? Yeah, the one where they're running through the
supermarket with a car. No.
Speaker 1 (19:36):
One was not nearly as good, but I would watch
it on.
Speaker 2 (19:38):
Casion you didn't like that one. It was I remember
as a kid loving at least the I just love
the fact that they're running through a grocery store and
that's not something as the kid I was allowed to
do it.
Speaker 1 (19:45):
I think it was always on some like ratchet channels,
so maybe I was never found it. Okay, I watched
it a couple of times.
Speaker 2 (19:51):
Maybe it was on like t MT.
Speaker 1 (19:54):
Yeah that could be are We've got more to get to,
including let's talk about using AI for money advice and
just when it comes to making life decisions, your finances
have a huge impact over those decisions. We'll talk about
that and more right after this. All right, we're back Matt.
(20:16):
Time for the ludicrous headline of the week.
Speaker 2 (20:18):
Yes it is.
Speaker 1 (20:18):
This one comes from CNBC. It says the headline was
gen Z is using retirement savings to pay down debt.
And I saw this and I was like, no, like
super slow mo, because you and I we love the
idea of people paying down debt. We want people to
be debt free except for that mortgage. Maybe if it's
like three percent, you probably want to do other things
with that money before you start paying that mortgage down.
(20:40):
But truly, especially if we're talking about credit card debt,
some of the more nefarious forms of debt, like, we
want you to get after it. We want you to
get that out of your life. We rarely want to
discourage people from paying down their debts, right. I guess
in maybe a few cases, it might make sense to
take money from retirement accounts to pay down an egregious debt.
Let's say, for instance, you had a payday loan and
(21:03):
it was becoming an albatross around your neck, then maybe
this is something we would suggest. But I think this
is becoming just an access problem. Because it's easier to
access money from your four to one K these days
without fully understanding the trade offs. People are doing it.
It's becoming more common. And so this article revealed that
half of gen Zer's have already tapped their workplace retirement account.
(21:26):
So we're talking about gen zers where the average age
is what twenty low twenties or or is it twenty
eight is the upright end of the spectrum.
Speaker 2 (21:35):
So when you think still half right, that's a lot.
That's a lot, a lot of folks.
Speaker 1 (21:39):
And so it seems like at least it's not just
to buy stuff like, oh, I'm taking out of money
out of my retirement account to like, you know, purchase
more like purchase a jet ski or something like that.
But it is to pay down debt. But still it's
a bad idea, right, because it's better to get frugal
to come up with a debt payoffs strategy that you
can execute in short order, scrappy. Yeah, or if here
(22:01):
is what I want to see, like a significant debt issue,
get help from a nonprofit like Money Management International, but
like robbing your future self. It might feel like the
easiest way to get rid of that debt quickly, but
it just leads to other complications in your financial life.
Speaker 2 (22:15):
Yeah. No, we're talking about missed time in the market,
and you could be at risk for taxes and penalties
if you don't jump through the right hoops. If you're
not if that money hasn't been there long enough, and
maybe you're not fully vested. You could miss out on
some of those match dollars as well. But it poses
added behavioral risk as well, because if you grab the
easy pile of cash instead of going through the discipline
(22:37):
debt payoff slog, well, you might not learn your lesson
I think as effectively, meaning that you can just find
yourself back in the exact same position. And these are
retirement dollars. So I've got to quote Charlie Munger because
he pointed out that the first rule of compounding is
to never interrupt it unnecessarily. We want folks to come
up with a debt payoff plan that doesn't involve putting
(22:59):
your your sticky fingers into retirement. We don't want you.
It's like, yeah, it's like you're messing with a cake
that's bacon. You're gonna mess it all up. Yeah, just
let it be, let it cook. Yeah, exactly.
Speaker 1 (23:08):
So pay off your debts, but don't use your retirement
dollars to do so. A right, There was an article
in the Wall Street Journal, Matt that I was reticent
to bring up on the show today. It probably because
it's talking about like substantial life things that people go through.
This article specifically highlighted the rise of divorces living together
(23:29):
after they've split up because the low mortgage rate was
just too good to let go of, Like, hey, we
got this two point twenty five percent mortgage. Gosh, we
really don't like each other right now, or we know
that it's best for us not to stay together for
the long term, but we got to stay together for
now because we're financially it's it's it's the only move
we can really make. And so the more I thought
about it, though, the more it was apparent that this
(23:51):
is indicative of an ever present reality that personal finance
influences an incredible number of our life decisions. Yea, and
that you know, basically the financial reality of selling a
home with a locked in low rate mortgage it's just
too much to bear for some people in the current environment,
even if the home no longer works for your family.
So one of the families they highlighted in this article,
(24:13):
Matt was they took turns living in the house and
then an airstream in the backyard.
Speaker 2 (24:17):
Yep. And so in that part, and in that case,
it seem like they're doing it also for the kids
right to help provide some stability.
Speaker 1 (24:23):
There, which which makes sense.
Speaker 2 (24:25):
I totally get it seems like such a messy situation.
Speaker 1 (24:27):
For sure, And I don't think either you or I
are trying to judge the relational decisions these folks are making.
We're just pointing out that's saving more, reducing your debt.
It creates more margin in your life, and it allows
for a wider range of decisions that you might prefer
to make for non monetary reasons, right, and so just
living paycheck to paycheck has bigger consequences if other circumstances
(24:50):
in your life that are outside of your control, if
those change, or even things that are kind of inside
of your control. The less money you have on hand,
the fewer options you give yourself when things When you
end up in a tough spot, what do you think
about the couple You don't have that peace out money?
Speaker 2 (25:06):
I guess you know that's true. That's true. But in
this case with a divorce, what if it means that, hey,
they kind of give it a second shot, and it
causes them to stick around a little bit longer and
they kind of work through it. Oh they've they're let's
go see accounts there before you know they're back together.
Speaker 1 (25:18):
Hey, that's that's that's the bright spot, right, potential bright spot,
the potential upside of.
Speaker 2 (25:23):
Not having the financial financial margin. I'll be hoping that
for those folks. Yeah, So this makes me think of
another article from The Times about money and life and
whether you should wait on love until you've made more
progress when it comes to your your finances with your money.
More young Americans are waiting to get married or they're
waiting to have kids in an effort to create more
(25:43):
financial security because they're assuming that having more money is
gonna basically add stability to the relationship. And I am
all for exercising some wisdom and not jumping willy nilly
into a relationship where you're you know, your finances or
their finances are in complete. But man, this is a
scenario where I think if you if you are too
(26:05):
focused on this, you're taking things too far. Right. I
think the very act of committing to a relationship is
in and of itself character for me, right like it
is formational going through the process of marriage. And I
think a lot of times in our culture we have
such a consumption based mindset around how we approach different
things like this, And I think some folks see getting
(26:27):
married or that spouse as being this like, oh, this
is the goal, this is that's the final boss, like
the capstone event. I'm gonna yeah once that I'm leveling
up right, as opposed to seeing it as something that
you do together, right, Like what's more beautiful to me
at least than to having worked through some of these
hard things in life with your best friend, essentially that
(26:49):
you that you've married. And the same thing is true
with kids. So many people are are are thinking, oh,
I've got to get to a point to where I
feel like, oh, we need to have this much set aside.
Oh we need to do this. Oh we can't be
in this old, run down house. Oh the kids can't
share a bedroom. Like these are all excuses that we
give as opposed to saying no, we want to have kids.
And quite literally, there's a biological clock that's ticking that's
(27:11):
kind of that window of time is narrowing, and the
very act of having children it's edifying. It's really hard,
but like there is so much that you learn about
yourself and the sacrifices that you make in order to
provide for those kids, that the very act of having
the kids is what makes you ready to be the
person that you're ultimately going to be. Right, It's just weird.
Speaker 1 (27:33):
How it calls you into something bigger and greater.
Speaker 2 (27:36):
Yeah, yeah, And I.
Speaker 1 (27:37):
Think the financial impetus that it puts on you is
actually can be a good thing. You're like, Okay, I
gotta grow up now, I gotta be lights a fire,
And you're right. Yeah, And so I think the same
thing is true of marriage and having kids, that both
will help you form better habits and help you make
progress in your findis. And there's something there's something too
about growing in from not having a lot and then
(28:01):
having more together. There's something about the cohesion that creates
in your relationship to do that with with your teammate, yeah,
with your partner, with your partner for life. You do
it solo and then you come together with like gobs
of money. You actually you kind of miss something along
the way, I think.
Speaker 2 (28:14):
So I don't love it.
Speaker 1 (28:16):
And honestly, it makes me think too of the literary
character Ebenezer Scrooge Matt because when you know, they go
back to the go to Christmas path, go to chrismas
past and he sees his old girlfriend, and of course
he realizes he put more emphasis on making money than
he did on tending to the love of his life
and he missed out because of it. Yeah, and I
(28:37):
just think that's a real possibility that people don't get there,
just like I'll just get married later, or I'll just like, yeah,
I have kids down the road and yeah, at some
point maybe, but that's also not promised to you.
Speaker 2 (28:49):
So I not guarantee. Yeah, and I don't.
Speaker 1 (28:51):
I don't think most people do it from a heart
that he had, but I think they're just like, I
want to have my stuff together, and I understand that impulse.
Speaker 2 (28:58):
I think I think it comes from a heart of good.
But that's well, that's why I said it at the beginning.
It's it's like taking that sort of planning mentality and
taking it too far. It's it's where and it doesn't
seem crazy to say, oh, I need to be financially
in a decent place before we take these you know,
more formal steps. But yeah, there's something there's something about
going through that process that is kind of the goal, right,
(29:19):
It's not to have like, honestly, it makes me think
of education, like higher ed as well, because I think
so much there seems to be a focus on just
getting the grades or getting the degree, getting the MBA right,
and it's and there's not as much attention being paid
to what it is you're actually learning, right, like forming
the rigor of the education, how it's forming you, how
(29:39):
it's turning you into hopefully a better, more productive, more
virtuous citizen that's going to contribute to our society. Right,
And there's like a desire to kind of take the shortcut.
Like it's one of the problems with AI. You just
want the credential. You don't want the end result, and
you don't really you're not paying attention to what actually
needs to happen in the in the process, and I
feel like we're kind of going more to cold critique.
(30:00):
But that's one of the issues with AI, is that like, hey,
it doesn't matter, I just need to do what I
need to do to get the GPA right or in
order to pass my finals in college.
Speaker 1 (30:09):
Even if it means allowing artificial intelligence to write the
answer for me or yeah, to do most of the word.
Speaker 2 (30:15):
Yeah, Because you're not only obviously cheating the system, but
like you're cheating yourself from being able to be formed
into the essentially the best version of yourself.
Speaker 1 (30:24):
Yeah, speaking of AI, let's talk about using artificial intelligence
specifically to get money advice.
Speaker 2 (30:30):
It's a feeling I'm going to disagree with this.
Speaker 1 (30:34):
Well, obviously, the rise of AI for search has been
fascinating to watch, like it's been incredibly quick, and visits
to sites like ours, like howdomoney dot com have gone
down pretty significantly because Google has become less integral to
the way people look for information, right, and even Google
results implement a lot of artificial intelligence as well. So
(30:57):
people are like, I'll just take that summary and I'm
not actually going to click over to the article that
somebody took a lot of time to write to think through.
I want the synopsis. And it's no wonder that folks
are turning to artificial intelligence for money questions.
Speaker 2 (31:10):
They have too.
Speaker 1 (31:11):
They're asking about saving strategies and debt management or even
stock picking advice, and so I think generative AI can
be a powerful tool. I've actually started using it a
little bit more in my life and it's been I
will say helpful in moderation. But I think most people
they seem to be happy with like the custom budget
(31:32):
that chatchept, for instance, can create for them. But a
recent credit Karma survey finds that more than half of
those who acted on the financial advice that they got
from artificial intelligence they feel like they ended up making
a poor financial decision. That's a lot of people Matt
to feel like, actually, it really let me down, and
I went in the wrong path because I took that answer,
(31:52):
And so I think it's just important to be careful.
I made a query of chat gpt about five twenty
nine plans the other day, and because I know this stuff,
I knew it was spitting out the wrong information. I
knew it was incorrect about the tax deduction in certain
states that you could get from making that five twenty
nine contribution. But a lot of people they might be like,
(32:13):
they might take that as gospel stick money in not
realize that they are actually eligible for to contribute more
and still receive more of a tax deduction. I think
the effective use of AI actually comes from knowing the
subject fairly in depth first, and if you're kind of
turning over that learning process of personal finance and you're
just assuming that whatever one of these AI spits out
(32:35):
is going to tell you what you need to know,
no prior knowledge needed first. I think you're probably sorely
mistaken and you could end up in that fifty percent
of people who says, yeah, let me astray. I made
some bad moves because.
Speaker 2 (32:47):
Of it, that's right, man. Yeah, proceed with caution, folks,
But we hope everyone has a fantastic weekend. That's going
to be it for our Friday flight. Everyone enjoy your
time out there. I feel like it's like the perfect
time of year, perfect time a year for a folk
art festival, which is which you got lined up it.
Speaker 1 (33:02):
Basically, my it's like Christmas number two for.
Speaker 2 (33:04):
Me, Christmas in September. But we'll see you back here
on Monday with a fresh ask count of money. And
until then, best friends out, best friends out there we
(33:26):
go see blowing
Hosts And Creators
Joel Larsgaard
Matthew Altmix
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