September 15, 2023 • 32 mins
***Beers on us, today at Inner Voice Brewing, 4-8pm, we'll see ya there!***
And speaking of beers, it’s 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: latest greatest iPhone, stickier high inflation, beer surge pricing, majors over pedigrees, investing in all the wrong ways, the downside of shopping for insurance coverage, (the death of) car privacy, fixed rates vs ARMs, & assumable mortgages.
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Transcript
Episode Transcript
Available transcripts are automatically generated. Complete accuracy is not guaranteed.
Speaker 1 (00:00):
Welcome to How to Money. I'm Joel, I'm Matt, and
today we're talking searche pricing for beer majors, over pedigree,
and the death of privacy. That's right, man, This is
(00:29):
our Friday flight and we're going to cover the top
stories from this week and how they pertain to your
personal finances. But first we want to make sure that
we highlight the fact that how to Money is going
down in real life. It's htm irl, not in the metaverse.
Not in the metaverse. You want to share with folks
the details on where it is, they can grab a
beer with us. So if you're here today, yeah tonight,
(00:50):
if you're listening to this and you're somewhere in the
southeast United States within a six hour drive, you can
make it to Inter Voice Brewing in Decatur, just outside
of Atlanta, were Matt, you and I were trucking down
back in the city for this hang because Inner Voice
has some of the best IPAs around and we just
want to had like a couple of their beers, but
(01:13):
they were so good, we've got to hit this place
off in person. So it's kind of an excuse for
us to have some awesome beers. But what better way
to enjoy those beers than in the company of other
fellow money nerds. All right, and so we'll be there
from four to eight pm. So come on down, we'll
buy your first beer and guess what they have some
of the best pizza actually on tap as well. So
(01:33):
Glide pizza, Yeah, is delicious. When you say pizza on tap,
it makes it seem like that you can just drink it.
I wish that is not how you can assume this pizza.
But yeah, we do hope to see there. This isn't
an actual story, Joel, but the iPhone was released earlier
this week. On that I feel like we got to
talk about that, the titanium twelve on or it just
seems exorbitant. And again we've talked about just the incremental
(01:55):
increases in technology if they feel like minimal upgrades. And
then and then obviously say they went to USBC because
they were kind of forced to do that by the
European Union. And so of course, being Apple, doing what
they do, they create a twenty nine dollars dollar dongle
to adapt your lightning cable to this Apple being app USBC,
this is this is exactly like what Apple would do
(02:17):
oh yeah. I mean, like they've been doing this since
the beginning. But you can probably get one on Amazon
for like four ninety nine. Yeah, you could probably. You
could probably get like ten of them for twenty bucks, right, Like,
you can just get it. There'll be a ship from
some warehouse in China, and then you can hit them
out to your friends as well. But they might not
have the Apple logo on the matter. They won't, they won't.
But here's here's my take. I'm still an Apple fanboy,
(02:38):
but I just don't see what compels folks to go
out and get the newest one when you do have
these incremental upgrades, because like back in the day, there
were massive Well, first of all, they can't replicate the
spectacle that was the original iPhone and failing right, like
when you've set the bar that high, it's I think
folks are coming back for that same whoa, yeah, exactly.
(03:02):
And I think a lot of it, honestly has to
do with consumers in media needing to kind of like
cool your jets a little bit, like temper of your
expectations as to what is going to be coming down
the pike. Because yes, it's a perfectly fine phone, but
I don't think folks are going to be blown away
like they have those releases. They used to be like
the technology equivalent of the Super Bowl. They were they
literally were. I used to watch everybody was live live
(03:25):
blogging and live tweetlings. Amazing the things that they were
unveiling early on. We were huge, honestly so kind of
it's just kind of tough to keep up, right, Like
at some point you can't maintain that, And I guess
that's what that's again why I don't understand why folks
are looking at the new one, because it's like it's
not that much better. It makes me think I feel
like a parallel might be cars, because every year they
(03:45):
come up with a new version of the same car.
Is it that much better than the last year's version?
Not really. It's just like with the phones. There's some
new colors, a couple of new features, but it's not enough,
I think for most folks, folks who are trying to
be smart with their money to go out of their
way in order to buy this new thing, as opposed
to buying a model that's used, or at least last
year's model, where it's already taken a massive price cut.
(04:08):
I agreed. Like, by the way you mentioned cars, we're
actually going to talk about another reason not to buy
new cars, not just a price tag, but there's actually
so you might be getting into something that in vajor privacy,
so we'll think that's true. Yeah, bottom line, just get
yourself an old used iPhone. I've got a thirteen. You've
got the fancy fourteen, which was the newest one for
all of two months. I'm still I'm still not sold though,
(04:32):
I still miss my Android and I'm not sure what
to do. I feel like I'm over here in like
the middle of the road land. Now I missed my pixel.
It's good, but I missed the pixel. All right, let's
get onto the Friday flight. Some sampling of stories we
found interesting this week, and let's start with inflation. It
certainly looked like inflation was being tamed by the Federal
Reserve via sustained interest rate hikes, but new inflation numbers
(04:54):
came out on Wednesday, and it looks like it's still
too early to declare victory. The main culprit, as anyone
listing in California knows, is gas prices. I saw someone
post the other day Matt like gas prices are north
of six bucks a gallon there. It's just it's frightening.
That's insane enough to make anybody go ev Right, But
so gas prices went up to the tune of double
digits in a single month, which was a large part
(05:16):
of kind of this bump in inflation. And so it
even promped that actually our governor here in Georgia to
eliminate the state gas tax for the next month. Yeah,
I guess right, Yeah, fine with that. But insurance increases
there are another one of the major culprits. So what's
the FED gonna do here? Well, energy prices are incredibly volatile.
The Fed isn't looking at just the headline inflation number.
(05:38):
They're looking at what's causing those price increases and how
sticky those categories are. And so you know, these gas
price increases there. You know, although they're tough to stomach
from a consumer standpoint, they're not necessarily assigned that inflation
has not been tamed. So just because you see the
headline inflation number go up, don't be surprised if the
Fed hold rate steady and waits for more data. Yeah, okay,
So speaking, we're just kind of talking about used cars,
(06:01):
or I mentioned that in parallel with like the new
phones whatever. I did see in the data that the
price of used cars and used trucks dropped, and it
has been dropping since last year, but it dropped ptty
significantly from from last month. It's down one percent and
it's down a full seven percent from this time last year.
That's great, that's actually, that's great news. Even though you
might be paying more for gas. Maybe it must for
(06:22):
the car. Yeah, even hold it, holding out, trying to
not buy a car while prices are at all time highs.
But now you can. Maybe there's like a collective sigh
of relief for all those who've kind of been making
do as their car has been limping along, slapping some
duct tape on it or whatever to keep it to work.
But as prices are rising, surge pricing is all the
(06:43):
rage in order to keep supply and demand and balance.
But surge pricing for beer, that's right, it's actually happening,
at least across the pond. Over in the UK, prices
are apparently going to increase on beers at pubs, and
specifically pubs that are owned by the stone Gate GROUPWN
like something like eight hundred pubs, So they're like, all right, listen,
(07:04):
this price increases during the busiest times at the pub,
that's right. Yeah, So chances are if you've been to
a pub in the UK, you probably have been to
a stone Gate pub or one that they own. We
obviously we love beer and would prefer for our favorite IPA's,
our favorite barrel age sours to be less expensive, but
search pricing it has been the norm in other industries,
(07:24):
and we actually don't bat an eyelash, like I don't
mind this all that much. Like you've seen this in
the airline industry. You've seen it with hotels, concert tickets,
uber rides, they have all implemented similar pricing strategies. Even restaurants,
you know, like that's pretty day and close to pubs
as far as like the industry goes. But they often
certain like the same meals, the same dish at lunch
(07:46):
for a reduced price in order to get people in
the door as well. And so the fact that this
is crossing over a little bit into our world, the
world of beer, it honestly doesn't bother us all that much. Yeah,
the same burger and price can be thirteen by launch
and seventeen Bucks at dinner, and we were just like, okay, cool,
that's just the way the way it goes. Yeah, yeah,
all of a sudden, and I think people like beer
(08:07):
beer pub goers in I think it. Yes, it's it's
kind of it's a cultural institute culture around it, and
so I get more of the pushback there, But I
would not be surprised if we see that even here stateside. Yeah,
all right. The one potentially fatal flaw here though, to me,
is really just a marketing mistake, right, Like search pricing
is going to piss people off if you implement it
the wrong way, and like AMC, they just walk back
(08:29):
their effort to charge more for a nice re seats
because people are like, hey, that's not cool. The better
approach in this case is the carrot approach instead of
the stick approach. Right, So my suggestion to the Stonegate
group would be to offer discounts for grabbing a pint
at less busy times of day. Joel is now open
for consultants. It's right, heads up, and I'm giving this
this lesson for free right here. Okay, you don't have
to pay, it's on the house, and I would just
(08:50):
say charging full price, right even if that full price
goes up a little bit at other times, that's a
good way to do it. And then discounting the beer
at other times of day, Like people love happy hour
because they're getting a discount, and so exactly, it's a
psychological thing. It makes sense the prices would increase a
bit at the busiest time of day. But this public congomerate,
they just did a bad job implementing those price changes.
(09:11):
There's a better way to do it. Instead of being
like we're gonna charge extra, we're gonna smack you in
the face when you try to order a beer from
five to eight or whatever when the pub is busy,
to go the opposite route and offer people discounts. People
will be thrilled. Yeah, that's the half the glass half
full approach as opposed to focusing on the negative. But
uh yeah, And what this means for individuals, Like, the
(09:31):
reason this doesn't bother us is because it's just the
concept of supply and demand at work. And what this
means is just like when it comes to travel in
booking airfare, look at going when other people aren't going right,
and so the just over season, this doesn't mean that
you need to show up to the pub at ten
in the morning, that's probably not healthy. But consider do
consider some of the other times anytime you can zig
(09:52):
while other folks are zaging, like, that's when you're gonna
see the most benefit and nobody is forcing you. It's
not like this is some inalienable right to that you
should have access to beer. Sure and well, and think
about how bad it would get really quickly if the
airline prices were the same no matter what time of
day the flight was taken off, no matter what time
(10:13):
of year it was happening. If the flights on December
twenty third cost the same as a flight February eleventh,
that Christmas travel like they have to be able to
price it. They're going to lose money out other times
the year in order to make money on the busiest
even out that demand a little bit. Yeah, I think
it makes sense. Let's talk about higher education, because it
turns out most Americans have lost faith in the value
(10:36):
of college. Specifically, fifty six percent of Americans say that
getting a college degree is not worth it, and gen
Z is not surprising. They're more disillusioned with the prospect
of college as starting salaries remain stagnant as the college
ticker price has been rising, and this brings up the
question is college actually worth it? And we think it
(10:58):
is if you choosers and if you choose your major wisely,
we don't want you to go overboard with that. If
that's the approach that you take, we think that it
still makes sense for a lot of folks. Obviously it's
not for everyone out there, but it can still be
incredibly valuable. The Journal they just released their Best Colleges
in America rankings last week, and to their credit, they
focus specifically on whether or not colleges actually help students
(11:22):
graduate on time, right, and so where is the like
are our incentives aligned here? Like do you have a
vested interest in an ability to get a student through
as opposed to being like, yeah, yeah, go ahead and enroll.
And for your saying, hey, check out all these kaggers
going on. Don't you want to just waste an extra
couple of years while at the same time you're contributing
to the economy of our town and paying tuition? Why
(11:44):
all at the same time, why not stay put for
the better part of a decade. It's nice here exactly,
But they're they're taking that into account with this study.
Within these rankings, they're taking into account how much that
education translates into higher income upon graduation as well. Those
are the two of the most important metrics, because fewer
years trying to get your degree, that's going to typically
mean less money spent overall, and the value of college.
(12:07):
It's it's also proven by how education translates into real
world income. Does that actual degree give you a chance
to succeed or is it just a fancy piece of
piece of paper like it's they're focusing on outcomes as
opposed to just the Again. Yeah, like we mentioned at
the top of the episode title this episode, the pedigree. Yeah,
but before college prices went berserk, especially kind of in
(12:30):
that upper eschelon sector, it made sense to rank colleges
based on kind of some other metrics, I think. But
now these are like the two most important metrics, right
for most people to know before they choose where they're
going to go to school. Yeah, and we love it,
Like I can quickly see this very much outpacing the
US World News Report with rankings, which is just like
completely arbitrary. Yes, it seemed like that maybe was pot
(12:52):
and paid for in some ways too. Yeah, possibly well.
In the Status Show, the getting a college degree still
lead to significantly higher lifetime earnings, but your major actually
matters more than where you choose to go to school,
which should give high schoolers the confidence to opt for
the less expensive routh the less expensive school, which often
improves the ROI of that degree. So if you're getting
the same they go about, Yeah, nobody cares, especially after
(13:14):
you get that first job. Nobody cares where you went
to school. It doesn't really, it doesn't really matter as
long as you have the degree in the subject of
that matters, and the work ethic and the ability that
go along with it, right, totally. Yeah. And by the way,
if you are maybe you're not a fan of the
journal the same data as being I don't know how
long it's been collected by the Department of Education, but
we've mentioned this on the show before, but the Department
(13:35):
of Education they have a college scorecard and you can
enter in specific schools, you can cover in specific degrees,
and you can see what the likely earnings are upon graduation.
We'll make sure to link to that mission. It's just
so helpful. I mean, there's when you're talking about value,
knowing what the return on that investment on it's a
big time and money investment to go to school, so
(13:55):
knowing what the likely return on investment is going to be,
it's just really important before you embark on the journey.
Just like everything else in life, value comes down to
how much the thing costs, how much it takes from you,
and then how much it gives. And the headline price,
yes of college has gone up significantly, but financial aid
has also increased significantly too. We talked about that in
episode six fifty five, I think it was with a
Garcia and so for just like how to get the
(14:17):
college degree for a whole lot less and how to
make sure that you're getting the best bank for your buck.
So I would encourage you to check that one out.
And actually, next week we're going to talk about debt
free degrees with our friend Jason Brown, who got two
debt free degrees, and that's going to be a fun
conversation and just really hopefully help push people in the
at least thinking along the lines of being able to
get a higher education degree, being able to go to
(14:38):
college without maybe even taking on any debt at all,
which really puts you in the cafards seat. Right, if
you've got the education that translates to higher earnings without
having any sort of debt load to go along with it. Yeah,
for parents out there, one of the ways you can
help your kids to achieve debt free degrees. So five
twenty nine plans, we talk about them all the time,
but evidently contributions to five twenty nine plans are drastically
(14:59):
rising compared to last year, and it makes sense. There's
a lot more flexibility that's involved with those if were
you to not use that for higher education, the ability
to transfer to roll that into a roth ira is huge.
We love them as long as you are taking care
of your own investing for your own retirement first, right.
But one of the interesting things in that in that
story was that they're highlighting the fact that one of
(15:21):
the reasons that folks are contributing more this year compared
to last year by a significant amount, is because the
slab market is up this year, which is crazy because
that just highlights how terrible we are as investors and
how we invest based on our feelings as opposed to
knowing that, oh yeah, at some point this is going
to go up. Uh huh. People are investing more because
they feel richer because just because the market is up
and they think that that is going to continue. What's
(15:43):
the exact opposite. It's the exact opposite, as I know,
it's true. As opposed to had you dumped them a
bunch of money in last year while the market was down,
you'd be looking at like fifteen to twenty twenty five
percent returns depending on whenever you stuck that money into
a five twenty nine. Your kid with ridiculous more money
in that account just by the fact of the stock
market doing well because you put it in a down
period exactly. So if that's something you want to prioritize,
(16:05):
I love it. But just like we often recommend for folks,
dollar cost average, make that just a part of your
investing plan. Don't look at the headlines, try to ignore
how it is that you feel based on the performance
of the stock market. All right, Matt, we got to
get to more stories. We got to talk about adjustable
rate mortgages to those makes sense, and also the privacy
problem with new cars. It's massive. We'll talk about that
(16:27):
and more right after this. All Right, we're back and
we will get to whether or not adjustable rate mortgagesn't
make sense today. But first we got to finish up
because we've got some beer to drink with listeners in
just a minute. Depending on when you're listening to this,
(16:47):
maybe we already have those, because hopefully that's not the case.
But we've got our ludicrous headline of the week, and
this week's is from Consumer Reports. The headline reads, car
insurance quote Comparison websites save you time, but watch for
privacy pitfalls. And wanted to highlight this one because we
all know that comparison shopping is a frugal person's best friend.
(17:09):
Why pay more than you need to if you have
the time to be able to shop around? And you know, truly,
the more expensive an item or a service is, the
more helpful it can be to dig to find a
better price. My dad recently got a groupon to take
one of my kiddos to the jumpy place whatever, the
trampoline park nice and it's great. The green and blue
(17:31):
one or the black and red one, I don't know, Okay,
I don't know. That's how we talk about it. There's
two of them near us, and that's their color scheme.
I don't remember what twenty to te to but whatever
one had a group on, right, and which is great.
You save twelve fifteen bucks whatever it is, and then
you also realize that groupon still exists, right, I mean
I kind of forget about group on most of the
time now, but you remember you remember scout mob. Oh yeah,
scout mob was awesome for a hot minute, right, But yeah,
(17:54):
that is a small way to say when you can
chop around and save on recurring, bigger monthly or a like,
we're talking about calling big Bucks back into your life.
So no shame in the game of the group on.
That's great, but just don't don't screw it up and
only do the small stuff and out take advantage of
the big ones. And we totally want people to get
multiple quotes for those big expensive things. Right. Shopping around
for insurance every year or two is really important because
(18:17):
the discrepancies between different providers can be massive. But as
Consumer Reports found out in this article, aggregator sites can
help you do the shopping, but they might not do
it quite as well as they promise, right, And so
know that if you use these sites, you might not
get the transparent pricing information you're looking for. It's nice
to have aggregators help you do some of that shopping
(18:38):
so that you don't have to like reach out to
fifty different companies on your own. But this Consumer Reports
article was eye opening because it basically showed that you're
not necessarily getting the best price with them. You might
get a better rate reaching out to these insurance companies directly.
That's right. Yeah, some insurance companies like State Farm and
Farmer's Insurance, they don't participate at all because only agents
(18:58):
who work directly for them are allowed to write policies.
So keep that in mind when you go to some
of these aggregator sites. They're leaving out certain companies. It's
kind of like how Southwest how they don't publish their
rates on Google flights. So it's just important to note
that you're likely to get an inflated rate quote when
you shop on some of these sites, like the Zebra
orway dot com. Sometimes it'll be more expensive by just
(19:20):
a few bucks, but other times you might get a
quote for hundreds of dollars more than what you would
have paid had you gone directly to the insurance company itself.
And some of the crappier sites are just lead generation magnets.
This is where the privacy part of the story kicks in.
They get your information, they turn it over to insurance companies,
who then how'd you via phone and email? Person? I
(19:41):
get like it's just a part of like, I guess
living life now. I don't know. My phone number is
kind of everywhere, like on our different businesses and stuff
like that. So like literally I get sometimes three, but
sometimes like six or seven business voicemails and it's the
same chick, what is it lately? It's been Merry or
something like like, hey, it's Mary. It's ridiculous. They all
(20:01):
come from different numbers. And so Mary comes to get
beers with us tonight she will not Yeah, I get
it for you know someone, can we buy your house?
I mean, those are the I get a million of
those phone calls. It feels like every day. It's so frustrating.
You get on those lists and it's hard to get off.
And so that's really what Consumer Reports is pointing out here.
It's incredibly annoying. Yeah, So they actually interviewed a lawyer
who works in the legion industry who said that consumers
(20:21):
could get hundreds or even thousands of calls in the
coming years just from a single submission for some quotes,
and that's even if you are on the federal do
not Call list, and so it feels like we're between
a rock and a hard place. We do want, folks,
we do want you out there to shop around because
you could save a ton of money. But maybe consider
a local independent agent. They might likely be your best bet.
(20:45):
An aggregator site might help, but make sure to add
any independent agents into the into the mix, and maybe
try getting a quote directly from one of the insurers
who doesn't work with independent independent agents as well. It's
not quiet as easy as it would be to the
shop and say, but the savings could be substantial, So
we want you to shop anyway, and hopefully the technology
(21:06):
that allows them to spam us as much as they do,
that technology will increase in tandem and we will be
able to block those obviously, you know you block unknown numbers,
right like you've got that selected on the iPhone. I
probably should know. Maybe that's why I'm getting so many
of these Oh yeah settings phone, And there's a little
toggle that says block unknown collars, So any number that
(21:26):
comes in that and you're kind of out of the
whole insurance wrestling, you know, with your home and car
and whatnot. So you don't need to hear from anybody
if you don't know them. And if they if you
do need to hear from them, they they'll just leave
a voice, leave the rest and you can call them back.
That's right. Yeah, good to know. All right, Let's keep
talking about privacy map, because speaking of in invasion of privacy,
it kind of feels like privacy is dead. Like a
(21:47):
lot of our information is out there. The Equifext breach
of twenty seventeen kind of fully cemented that in a
lot of our brains, where something like one hundred and
fifty million Americans had a lot of that information just
kind of go out there into the ether. Some of
that is our own doing, though, well, right, the things
that we share publicly about our lives that the whole
world can see social media and TikTok and like all
that kind of stuff. I mean, you TikTok your tax returns, right,
(22:09):
like you always get this huge rush of scampus, that's right.
So why does that happen? I don't know. But there's
also been a fair amount of intrusion into spaces that
we thought were off limits. And the Mozilla Foundation, the
folks who make the Firefox browser that fewer and fewer
people use. They dropped a bombshell report this week showing
that the one place that you likely thought was off
limits isn't your car. Yes, as it turns out, is
(22:31):
spying on you, at least if you have a newer one.
So Mozilla they looked at the privacy policies of twenty
five car manufacturers, and it turns out they are all
collecting data on you via the technology that comes standard
on a whole lot of car models, because there's more
and more tech in these cars now, right, there's microphones
and cameras and screens and all that stuff. And they
specifically found that fifty six percent of these manufacturers will
(22:52):
share that data that they're collecting with law enforcement in
response to just an informal request, not even some sort
of like yeah, nothing, none of that stuff. And eighty
four percent will share or sell person personal data that
they gather on you too. So your newer model car,
as it turns out, is a privacy nightmare. Yeah. And
so all twenty five car companies that they researched, they
(23:16):
all basically failed. But that big said Nissan's policy actually
stood out as being the absolute worst. Turns out that
they can collect and share your no get this, your
sexual activity. Not totally sure how that comes into play, Like,
I have no idea, but they can share that. They
share and sell your health diagnosis data, genetic information alongside
(23:38):
other sensitive personal info for targeted marketing. Again, I don't
know how the heck there's and maybe this is just
written into their policy to where it's just like, not
sure exactly we're gonna get your genetic information, but when
we do, we're gonna sell it, right, But Nissan they
also disclose that that they're gonna share and sell and
this I'm gonna just read this quote. Inferences drawn from
(24:00):
any personal data collected to create a profile about a
consumer reflecting the consumer's preferences. They're characteristics, psychological trends, predispositions,
behavior attitudes, intelligence, abilities, and aptitudes to others for targeted
marketing that purposes, So creepy inference is drawn based on
the actual data. They're creating a dossia profile on you
basically and potentially even just making stuff up, which is insane, Like, yeah,
(24:24):
I just didn't know that we needed to dig through
a privacy policy before buying a new car. But the
problem is is all the companies failed. So even if
you dig dig, even if you did dig through it,
it's not like there is some sort of alternative, right
and so well, except for driving an older car, well,
that's certainly one tick like on the side of owning
(24:46):
an older car. But at some point the old like
the new cars that we have are going to turn
into old cars, and so we can avoid it for
the time being. But luckily, I mean so Mozilla, they
are a nonprofit and they're all about the Internet remaining
a place for good for the public, and they actually
there's a there's a petition that you can sign. And
so yes, we are all about folks driving old vehicles,
(25:07):
not only because they're more affordable, but because of the
privacy concerns. But at some point we're gonna run out
of runway, yeah, and we're gonna be faced with the
same concerns, even if it's in a car that's been
around for ten years. Well, I'm hoping that our well
links to that in the show notes where where does
that folks can sign because it needs to be more
an issue, and the fact is people aren't they're just
(25:27):
not digging into it. It's not something that folks are
aware of it, just like the terms of service, like
who really scrolls through and reads it every time? If
you did Mozilla, you never actually download ANAP. Fortunately. Yeah,
there are nonprofit organs out there like Mozilla doing doing
their due diligence, doing the research for us as consumers.
And I just hope that when this information gets brought
to light, that it holds the car manufacturer's feet to
(25:47):
the fire yep, and that they say, we didn't think
we're gonna get caught. We didn't think anybody read that stuff.
But now that they know there's a cop on the beat,
to a certain extent, maybe they'll reform their ways. Maybe
Nissan will say, hey, listen, we're not gonna to any
of this stuff, and the small amounts of data that
we do collect, we're going to you know, we're going
to make sure we don't sell it and make any
money off it. I don't know. I'm curious to see
(26:08):
how they respond or if they just ramp up their
info selling side hustle right right, or if they like
discount the price of the car because you know, they're
making so much money on your data that they can
tell you a car for like fifteen grand who knows, maybe,
But all right, let's talk about mortgages for a second.
Should you get a fixed rate or an adjustable rate mortgage?
That's kind of a big personal finance conundrum for a
(26:28):
lot of people, and a whole lot of people in
this space will tout the fifteen or thirty year mortgage
with the fervor of a religious sell it. Some people
don't even like the thirty year mortgage, like, no way,
that's the only thing, you idiot, The only thing you
should even consider is the fifteen because you got to
pay off your debt as quickly as possible. Well, when
rates were crazy low, like in the twos and threes,
we liked the idea of locking in a rate for
(26:49):
decades to come. Yeah, the thirty year mortgage looked really
appealing right in those years. But as rates have risen,
it started to in some cases make sense to opt
for an ARM. And I say in some cases, because
so much depends on how long you're likely to be
in that home, how long the rate stays s four
in the arm, right, is it a five to one
arm or is it a ten one arm, or is
it a ten six arm? That kind of thing, And
so that ten to one arm, for instance, provides ten
(27:12):
years of a much lower rate. Oftentimes. I took out
an arm actually last summer when we bought the house
at ten one arm, because the rate difference was so significant.
But it looks like that gap is shrinking. According to
new data from Bank Rate, arms are no longer offering
such an appealing spread, which is making fixed rate more
you just look superior again. So arms that were kind
(27:33):
of winning there last year for a little while not
so much straight now. Yeah, But do shop around because
the fact is there could be a difference. It depends
on so many different factors. I'll say. One of the
reasons that I think fixed rates were so stink and
popular is because people and I feel this to a
certain extent myself, But there's a permanence that comes with that,
like you know that, like I never have to worry
(27:54):
about this thing ever again. But the more I guess,
the longer we've been in personal finance, the more I
think I've realized that that proposition is overvalued because we
move more often than we think. I look this up.
The US Census Bureau found that the average American moves
once every five years, And so you're saying to yourself,
(28:14):
all right, yeah, for the next thirty years, I'm going
to be here and I don't have to worry about
my rate going up. Well, chances are, I mean, five
years is much much less time than a natural thirty years. Yeah.
So the reality is that don't think about avoiding an
ARM because you're afraid of what it's going to reset to.
Certainly keep that in mind, I guess. But if you
(28:35):
are able to get a significantly lower rate by going
with an ARM, I wouldn't be too concerned thinking that, well,
in ten years from now, that thing's going to reset
to a higher rate. Chances are, based on the data
that you are probably going to be yeah, yeah, by
that point, And it mattered. Just consider that, I guess,
because the younger younger you are, the more likely you
are to move, and the older you are, the more
(28:57):
you put on roots and you tend not to move
as much. Depends on a lot of things. Important to
note that not all arms are created equal, right, A
five to one arm and a ten one arm are different.
Like if if last summer I had been offered a
five to one arm. It would have drastically changed the
way I thought about it. But I was like, ten
years locked in at a point and a half lower.
That's a no brainer, And hopefully over the next decade
I will have saved up enough to where I can
pay off the rest of the balance. In the worst
(29:19):
case scenario, the rates skyrocket. They're much higher than I thought. Yeah,
ok so, by the way, one of the main things
that's led to the housing market basically seizing up is
a lot of folks who have a locked and low
rate for decades to come, even if they would like
to move. It's like these incredibly low rates are acting
like a said of golden handcuffs, keeping folks in a
home that they would otherwise probably would have considered leaving.
(29:43):
But assumable mortgages they would be a great answer to
greasing the wheels. They're popular in the commercial real estate world,
but not so much on the consumer side of things.
But one startup, I think literally they launched this past week,
but they're trying to make that a reality. It's a
company called Rome, and apparently one in five, like a
little over twenty percent of mortgages have some sort of
(30:05):
assumable mortgage clause written into the language of that mortgage,
and whence you pay more for a house in order
to snag that owners three percent rates? Absolutely, so will
this company actually get traction? Who knows? They've got a
few things go Assumable mortgages in general have a few
things going against them, like the lenders. They don't make
(30:26):
nearly as much money by transferring that mortgage as opposed
to underwriting an entirely new one. That's one thing. The
other thing is just the down payment that's required because
or I guess it's not technically a down payment. But
if you if you assume someone's mortgage, but you have
a purchase price that is over that amount, you got
to come to the table with a different extra cash out. Yeah,
let's they say you bought a home from somebody. They
(30:47):
paid four hundred thousand for that home and over, you know,
and they get that balance down to three hundred thousand.
But let's say you come in and you're like, yeah,
we'll buy your house for five hundred thousand. Well, you
assume that three hundred thousand balance, but they need to
be paid two hundred thousand dollars. So instead of you
having put twenty percent down on a five hundred thousand
dollars home, which is one hundred thousand dollars You got
(31:09):
to pay double that in order to acquire that house,
which can make it more difficult from how much cash
have you stayed at the buyer house standpoints don't have
that much money in hand. There's a lot of folks
who aren't putting twenty percent down, let alone, the difference
between the purchase price and whatever the remainder balances. But
for folks who can, for folks who have saved up more,
and for you know, people who want to go check
out Room's website, it's cool because checking out trying to
(31:32):
match sellers and buyers. Seller might be able to make
a little more Buyers able to get you a ridiculously
low rate that they don't have access to any more
in this market. And depending on how long you stay
in that house, and depending on how much cash you'll
have on hand, it could be a match made in heaven.
But yeah, super interesting. Always fun to see some sort
of tech startup trying to create an arrangement that would
(31:52):
otherwise be almost impossible to col a matchmaker a little bit. Yeah,
it's like the harmony for homes. But Matt, that's going
to do it. For this episode. We got to go
drink beers now with listeners again InterVoice Brewing Indicator from
four to a PM. We hope to see you there
if you're in the Atlanta area. If you're not, you know,
we're going to be in New Orleans next month, so
we might do one there and we might Yeah, maybe
(32:13):
we need to do more traveling too. We need to
get out there. But that's gonna be it. I hope
you have a great weekend, Matt. Until next time, best
Friends Out, best Friends Out,
Welcome to How to Money. I'm Joel, I'm Matt, and
today we're talking searche pricing for beer majors, over pedigree,
and the death of privacy. That's right, man, This is
(00:29):
our Friday flight and we're going to cover the top
stories from this week and how they pertain to your
personal finances. But first we want to make sure that
we highlight the fact that how to Money is going
down in real life. It's htm irl, not in the metaverse.
Not in the metaverse. You want to share with folks
the details on where it is, they can grab a
beer with us. So if you're here today, yeah tonight,
(00:50):
if you're listening to this and you're somewhere in the
southeast United States within a six hour drive, you can
make it to Inter Voice Brewing in Decatur, just outside
of Atlanta, were Matt, you and I were trucking down
back in the city for this hang because Inner Voice
has some of the best IPAs around and we just
want to had like a couple of their beers, but
(01:13):
they were so good, we've got to hit this place
off in person. So it's kind of an excuse for
us to have some awesome beers. But what better way
to enjoy those beers than in the company of other
fellow money nerds. All right, and so we'll be there
from four to eight pm. So come on down, we'll
buy your first beer and guess what they have some
of the best pizza actually on tap as well. So
(01:33):
Glide pizza, Yeah, is delicious. When you say pizza on tap,
it makes it seem like that you can just drink it.
I wish that is not how you can assume this pizza.
But yeah, we do hope to see there. This isn't
an actual story, Joel, but the iPhone was released earlier
this week. On that I feel like we got to
talk about that, the titanium twelve on or it just
seems exorbitant. And again we've talked about just the incremental
(01:55):
increases in technology if they feel like minimal upgrades. And
then and then obviously say they went to USBC because
they were kind of forced to do that by the
European Union. And so of course, being Apple, doing what
they do, they create a twenty nine dollars dollar dongle
to adapt your lightning cable to this Apple being app USBC,
this is this is exactly like what Apple would do
(02:17):
oh yeah. I mean, like they've been doing this since
the beginning. But you can probably get one on Amazon
for like four ninety nine. Yeah, you could probably. You
could probably get like ten of them for twenty bucks, right, Like,
you can just get it. There'll be a ship from
some warehouse in China, and then you can hit them
out to your friends as well. But they might not
have the Apple logo on the matter. They won't, they won't.
But here's here's my take. I'm still an Apple fanboy,
(02:38):
but I just don't see what compels folks to go
out and get the newest one when you do have
these incremental upgrades, because like back in the day, there
were massive Well, first of all, they can't replicate the
spectacle that was the original iPhone and failing right, like
when you've set the bar that high, it's I think
folks are coming back for that same whoa, yeah, exactly.
(03:02):
And I think a lot of it, honestly has to
do with consumers in media needing to kind of like
cool your jets a little bit, like temper of your
expectations as to what is going to be coming down
the pike. Because yes, it's a perfectly fine phone, but
I don't think folks are going to be blown away
like they have those releases. They used to be like
the technology equivalent of the Super Bowl. They were they
literally were. I used to watch everybody was live live
(03:25):
blogging and live tweetlings. Amazing the things that they were
unveiling early on. We were huge, honestly so kind of
it's just kind of tough to keep up, right, Like
at some point you can't maintain that, And I guess
that's what that's again why I don't understand why folks
are looking at the new one, because it's like it's
not that much better. It makes me think I feel
like a parallel might be cars, because every year they
(03:45):
come up with a new version of the same car.
Is it that much better than the last year's version?
Not really. It's just like with the phones. There's some
new colors, a couple of new features, but it's not enough,
I think for most folks, folks who are trying to
be smart with their money to go out of their
way in order to buy this new thing, as opposed
to buying a model that's used, or at least last
year's model, where it's already taken a massive price cut.
(04:08):
I agreed. Like, by the way you mentioned cars, we're
actually going to talk about another reason not to buy
new cars, not just a price tag, but there's actually
so you might be getting into something that in vajor privacy,
so we'll think that's true. Yeah, bottom line, just get
yourself an old used iPhone. I've got a thirteen. You've
got the fancy fourteen, which was the newest one for
all of two months. I'm still I'm still not sold though,
(04:32):
I still miss my Android and I'm not sure what
to do. I feel like I'm over here in like
the middle of the road land. Now I missed my pixel.
It's good, but I missed the pixel. All right, let's
get onto the Friday flight. Some sampling of stories we
found interesting this week, and let's start with inflation. It
certainly looked like inflation was being tamed by the Federal
Reserve via sustained interest rate hikes, but new inflation numbers
(04:54):
came out on Wednesday, and it looks like it's still
too early to declare victory. The main culprit, as anyone
listing in California knows, is gas prices. I saw someone
post the other day Matt like gas prices are north
of six bucks a gallon there. It's just it's frightening.
That's insane enough to make anybody go ev Right, But
so gas prices went up to the tune of double
digits in a single month, which was a large part
(05:16):
of kind of this bump in inflation. And so it
even promped that actually our governor here in Georgia to
eliminate the state gas tax for the next month. Yeah,
I guess right, Yeah, fine with that. But insurance increases
there are another one of the major culprits. So what's
the FED gonna do here? Well, energy prices are incredibly volatile.
The Fed isn't looking at just the headline inflation number.
(05:38):
They're looking at what's causing those price increases and how
sticky those categories are. And so you know, these gas
price increases there. You know, although they're tough to stomach
from a consumer standpoint, they're not necessarily assigned that inflation
has not been tamed. So just because you see the
headline inflation number go up, don't be surprised if the
Fed hold rate steady and waits for more data. Yeah, okay,
So speaking, we're just kind of talking about used cars,
(06:01):
or I mentioned that in parallel with like the new
phones whatever. I did see in the data that the
price of used cars and used trucks dropped, and it
has been dropping since last year, but it dropped ptty
significantly from from last month. It's down one percent and
it's down a full seven percent from this time last year.
That's great, that's actually, that's great news. Even though you
might be paying more for gas. Maybe it must for
(06:22):
the car. Yeah, even hold it, holding out, trying to
not buy a car while prices are at all time highs.
But now you can. Maybe there's like a collective sigh
of relief for all those who've kind of been making
do as their car has been limping along, slapping some
duct tape on it or whatever to keep it to work.
But as prices are rising, surge pricing is all the
(06:43):
rage in order to keep supply and demand and balance.
But surge pricing for beer, that's right, it's actually happening,
at least across the pond. Over in the UK, prices
are apparently going to increase on beers at pubs, and
specifically pubs that are owned by the stone Gate GROUPWN
like something like eight hundred pubs, So they're like, all right, listen,
(07:04):
this price increases during the busiest times at the pub,
that's right. Yeah, So chances are if you've been to
a pub in the UK, you probably have been to
a stone Gate pub or one that they own. We
obviously we love beer and would prefer for our favorite IPA's,
our favorite barrel age sours to be less expensive, but
search pricing it has been the norm in other industries,
(07:24):
and we actually don't bat an eyelash, like I don't
mind this all that much. Like you've seen this in
the airline industry. You've seen it with hotels, concert tickets,
uber rides, they have all implemented similar pricing strategies. Even restaurants,
you know, like that's pretty day and close to pubs
as far as like the industry goes. But they often
certain like the same meals, the same dish at lunch
(07:46):
for a reduced price in order to get people in
the door as well. And so the fact that this
is crossing over a little bit into our world, the
world of beer, it honestly doesn't bother us all that much. Yeah,
the same burger and price can be thirteen by launch
and seventeen Bucks at dinner, and we were just like, okay, cool,
that's just the way the way it goes. Yeah, yeah,
all of a sudden, and I think people like beer
(08:07):
beer pub goers in I think it. Yes, it's it's
kind of it's a cultural institute culture around it, and
so I get more of the pushback there, But I
would not be surprised if we see that even here stateside. Yeah,
all right. The one potentially fatal flaw here though, to me,
is really just a marketing mistake, right, Like search pricing
is going to piss people off if you implement it
the wrong way, and like AMC, they just walk back
(08:29):
their effort to charge more for a nice re seats
because people are like, hey, that's not cool. The better
approach in this case is the carrot approach instead of
the stick approach. Right, So my suggestion to the Stonegate
group would be to offer discounts for grabbing a pint
at less busy times of day. Joel is now open
for consultants. It's right, heads up, and I'm giving this
this lesson for free right here. Okay, you don't have
to pay, it's on the house, and I would just
(08:50):
say charging full price, right even if that full price
goes up a little bit at other times, that's a
good way to do it. And then discounting the beer
at other times of day, Like people love happy hour
because they're getting a discount, and so exactly, it's a
psychological thing. It makes sense the prices would increase a
bit at the busiest time of day. But this public congomerate,
they just did a bad job implementing those price changes.
(09:11):
There's a better way to do it. Instead of being
like we're gonna charge extra, we're gonna smack you in
the face when you try to order a beer from
five to eight or whatever when the pub is busy,
to go the opposite route and offer people discounts. People
will be thrilled. Yeah, that's the half the glass half
full approach as opposed to focusing on the negative. But
uh yeah, And what this means for individuals, Like, the
(09:31):
reason this doesn't bother us is because it's just the
concept of supply and demand at work. And what this
means is just like when it comes to travel in
booking airfare, look at going when other people aren't going right,
and so the just over season, this doesn't mean that
you need to show up to the pub at ten
in the morning, that's probably not healthy. But consider do
consider some of the other times anytime you can zig
(09:52):
while other folks are zaging, like, that's when you're gonna
see the most benefit and nobody is forcing you. It's
not like this is some inalienable right to that you
should have access to beer. Sure and well, and think
about how bad it would get really quickly if the
airline prices were the same no matter what time of
day the flight was taken off, no matter what time
(10:13):
of year it was happening. If the flights on December
twenty third cost the same as a flight February eleventh,
that Christmas travel like they have to be able to
price it. They're going to lose money out other times
the year in order to make money on the busiest
even out that demand a little bit. Yeah, I think
it makes sense. Let's talk about higher education, because it
turns out most Americans have lost faith in the value
(10:36):
of college. Specifically, fifty six percent of Americans say that
getting a college degree is not worth it, and gen
Z is not surprising. They're more disillusioned with the prospect
of college as starting salaries remain stagnant as the college
ticker price has been rising, and this brings up the
question is college actually worth it? And we think it
(10:58):
is if you choosers and if you choose your major wisely,
we don't want you to go overboard with that. If
that's the approach that you take, we think that it
still makes sense for a lot of folks. Obviously it's
not for everyone out there, but it can still be
incredibly valuable. The Journal they just released their Best Colleges
in America rankings last week, and to their credit, they
focus specifically on whether or not colleges actually help students
(11:22):
graduate on time, right, and so where is the like
are our incentives aligned here? Like do you have a
vested interest in an ability to get a student through
as opposed to being like, yeah, yeah, go ahead and enroll.
And for your saying, hey, check out all these kaggers
going on. Don't you want to just waste an extra
couple of years while at the same time you're contributing
to the economy of our town and paying tuition? Why
(11:44):
all at the same time, why not stay put for
the better part of a decade. It's nice here exactly,
But they're they're taking that into account with this study.
Within these rankings, they're taking into account how much that
education translates into higher income upon graduation as well. Those
are the two of the most important metrics, because fewer
years trying to get your degree, that's going to typically
mean less money spent overall, and the value of college.
(12:07):
It's it's also proven by how education translates into real
world income. Does that actual degree give you a chance
to succeed or is it just a fancy piece of
piece of paper like it's they're focusing on outcomes as
opposed to just the Again. Yeah, like we mentioned at
the top of the episode title this episode, the pedigree. Yeah,
but before college prices went berserk, especially kind of in
(12:30):
that upper eschelon sector, it made sense to rank colleges
based on kind of some other metrics, I think. But
now these are like the two most important metrics, right
for most people to know before they choose where they're
going to go to school. Yeah, and we love it,
Like I can quickly see this very much outpacing the
US World News Report with rankings, which is just like
completely arbitrary. Yes, it seemed like that maybe was pot
(12:52):
and paid for in some ways too. Yeah, possibly well.
In the Status Show, the getting a college degree still
lead to significantly higher lifetime earnings, but your major actually
matters more than where you choose to go to school,
which should give high schoolers the confidence to opt for
the less expensive routh the less expensive school, which often
improves the ROI of that degree. So if you're getting
the same they go about, Yeah, nobody cares, especially after
(13:14):
you get that first job. Nobody cares where you went
to school. It doesn't really, it doesn't really matter as
long as you have the degree in the subject of
that matters, and the work ethic and the ability that
go along with it, right, totally. Yeah. And by the way,
if you are maybe you're not a fan of the
journal the same data as being I don't know how
long it's been collected by the Department of Education, but
we've mentioned this on the show before, but the Department
(13:35):
of Education they have a college scorecard and you can
enter in specific schools, you can cover in specific degrees,
and you can see what the likely earnings are upon graduation.
We'll make sure to link to that mission. It's just
so helpful. I mean, there's when you're talking about value,
knowing what the return on that investment on it's a
big time and money investment to go to school, so
(13:55):
knowing what the likely return on investment is going to be,
it's just really important before you embark on the journey.
Just like everything else in life, value comes down to
how much the thing costs, how much it takes from you,
and then how much it gives. And the headline price,
yes of college has gone up significantly, but financial aid
has also increased significantly too. We talked about that in
episode six fifty five, I think it was with a
Garcia and so for just like how to get the
(14:17):
college degree for a whole lot less and how to
make sure that you're getting the best bank for your buck.
So I would encourage you to check that one out.
And actually, next week we're going to talk about debt
free degrees with our friend Jason Brown, who got two
debt free degrees, and that's going to be a fun
conversation and just really hopefully help push people in the
at least thinking along the lines of being able to
get a higher education degree, being able to go to
(14:38):
college without maybe even taking on any debt at all,
which really puts you in the cafards seat. Right, if
you've got the education that translates to higher earnings without
having any sort of debt load to go along with it. Yeah,
for parents out there, one of the ways you can
help your kids to achieve debt free degrees. So five
twenty nine plans, we talk about them all the time,
but evidently contributions to five twenty nine plans are drastically
(14:59):
rising compared to last year, and it makes sense. There's
a lot more flexibility that's involved with those if were
you to not use that for higher education, the ability
to transfer to roll that into a roth ira is huge.
We love them as long as you are taking care
of your own investing for your own retirement first, right.
But one of the interesting things in that in that
story was that they're highlighting the fact that one of
(15:21):
the reasons that folks are contributing more this year compared
to last year by a significant amount, is because the
slab market is up this year, which is crazy because
that just highlights how terrible we are as investors and
how we invest based on our feelings as opposed to
knowing that, oh yeah, at some point this is going
to go up. Uh huh. People are investing more because
they feel richer because just because the market is up
and they think that that is going to continue. What's
(15:43):
the exact opposite. It's the exact opposite, as I know,
it's true. As opposed to had you dumped them a
bunch of money in last year while the market was down,
you'd be looking at like fifteen to twenty twenty five
percent returns depending on whenever you stuck that money into
a five twenty nine. Your kid with ridiculous more money
in that account just by the fact of the stock
market doing well because you put it in a down
period exactly. So if that's something you want to prioritize,
(16:05):
I love it. But just like we often recommend for folks,
dollar cost average, make that just a part of your
investing plan. Don't look at the headlines, try to ignore
how it is that you feel based on the performance
of the stock market. All right, Matt, we got to
get to more stories. We got to talk about adjustable
rate mortgages to those makes sense, and also the privacy
problem with new cars. It's massive. We'll talk about that
(16:27):
and more right after this. All Right, we're back and
we will get to whether or not adjustable rate mortgagesn't
make sense today. But first we got to finish up
because we've got some beer to drink with listeners in
just a minute. Depending on when you're listening to this,
(16:47):
maybe we already have those, because hopefully that's not the case.
But we've got our ludicrous headline of the week, and
this week's is from Consumer Reports. The headline reads, car
insurance quote Comparison websites save you time, but watch for
privacy pitfalls. And wanted to highlight this one because we
all know that comparison shopping is a frugal person's best friend.
(17:09):
Why pay more than you need to if you have
the time to be able to shop around? And you know, truly,
the more expensive an item or a service is, the
more helpful it can be to dig to find a
better price. My dad recently got a groupon to take
one of my kiddos to the jumpy place whatever, the
trampoline park nice and it's great. The green and blue
(17:31):
one or the black and red one, I don't know, Okay,
I don't know. That's how we talk about it. There's
two of them near us, and that's their color scheme.
I don't remember what twenty to te to but whatever
one had a group on, right, and which is great.
You save twelve fifteen bucks whatever it is, and then
you also realize that groupon still exists, right, I mean
I kind of forget about group on most of the
time now, but you remember you remember scout mob. Oh yeah,
scout mob was awesome for a hot minute, right, But yeah,
(17:54):
that is a small way to say when you can
chop around and save on recurring, bigger monthly or a like,
we're talking about calling big Bucks back into your life.
So no shame in the game of the group on.
That's great, but just don't don't screw it up and
only do the small stuff and out take advantage of
the big ones. And we totally want people to get
multiple quotes for those big expensive things. Right. Shopping around
for insurance every year or two is really important because
(18:17):
the discrepancies between different providers can be massive. But as
Consumer Reports found out in this article, aggregator sites can
help you do the shopping, but they might not do
it quite as well as they promise, right, And so
know that if you use these sites, you might not
get the transparent pricing information you're looking for. It's nice
to have aggregators help you do some of that shopping
(18:38):
so that you don't have to like reach out to
fifty different companies on your own. But this Consumer Reports
article was eye opening because it basically showed that you're
not necessarily getting the best price with them. You might
get a better rate reaching out to these insurance companies directly.
That's right. Yeah, some insurance companies like State Farm and
Farmer's Insurance, they don't participate at all because only agents
(18:58):
who work directly for them are allowed to write policies.
So keep that in mind when you go to some
of these aggregator sites. They're leaving out certain companies. It's
kind of like how Southwest how they don't publish their
rates on Google flights. So it's just important to note
that you're likely to get an inflated rate quote when
you shop on some of these sites, like the Zebra
orway dot com. Sometimes it'll be more expensive by just
(19:20):
a few bucks, but other times you might get a
quote for hundreds of dollars more than what you would
have paid had you gone directly to the insurance company itself.
And some of the crappier sites are just lead generation magnets.
This is where the privacy part of the story kicks in.
They get your information, they turn it over to insurance companies,
who then how'd you via phone and email? Person? I
(19:41):
get like it's just a part of like, I guess
living life now. I don't know. My phone number is
kind of everywhere, like on our different businesses and stuff
like that. So like literally I get sometimes three, but
sometimes like six or seven business voicemails and it's the
same chick, what is it lately? It's been Merry or
something like like, hey, it's Mary. It's ridiculous. They all
(20:01):
come from different numbers. And so Mary comes to get
beers with us tonight she will not Yeah, I get
it for you know someone, can we buy your house?
I mean, those are the I get a million of
those phone calls. It feels like every day. It's so frustrating.
You get on those lists and it's hard to get off.
And so that's really what Consumer Reports is pointing out here.
It's incredibly annoying. Yeah, So they actually interviewed a lawyer
who works in the legion industry who said that consumers
(20:21):
could get hundreds or even thousands of calls in the
coming years just from a single submission for some quotes,
and that's even if you are on the federal do
not Call list, and so it feels like we're between
a rock and a hard place. We do want, folks,
we do want you out there to shop around because
you could save a ton of money. But maybe consider
a local independent agent. They might likely be your best bet.
(20:45):
An aggregator site might help, but make sure to add
any independent agents into the into the mix, and maybe
try getting a quote directly from one of the insurers
who doesn't work with independent independent agents as well. It's
not quiet as easy as it would be to the
shop and say, but the savings could be substantial, So
we want you to shop anyway, and hopefully the technology
(21:06):
that allows them to spam us as much as they do,
that technology will increase in tandem and we will be
able to block those obviously, you know you block unknown numbers,
right like you've got that selected on the iPhone. I
probably should know. Maybe that's why I'm getting so many
of these Oh yeah settings phone, And there's a little
toggle that says block unknown collars, So any number that
(21:26):
comes in that and you're kind of out of the
whole insurance wrestling, you know, with your home and car
and whatnot. So you don't need to hear from anybody
if you don't know them. And if they if you
do need to hear from them, they they'll just leave
a voice, leave the rest and you can call them back.
That's right. Yeah, good to know. All right, Let's keep
talking about privacy map, because speaking of in invasion of privacy,
it kind of feels like privacy is dead. Like a
(21:47):
lot of our information is out there. The Equifext breach
of twenty seventeen kind of fully cemented that in a
lot of our brains, where something like one hundred and
fifty million Americans had a lot of that information just
kind of go out there into the ether. Some of
that is our own doing, though, well, right, the things
that we share publicly about our lives that the whole
world can see social media and TikTok and like all
that kind of stuff. I mean, you TikTok your tax returns, right,
(22:09):
like you always get this huge rush of scampus, that's right.
So why does that happen? I don't know. But there's
also been a fair amount of intrusion into spaces that
we thought were off limits. And the Mozilla Foundation, the
folks who make the Firefox browser that fewer and fewer
people use. They dropped a bombshell report this week showing
that the one place that you likely thought was off
limits isn't your car. Yes, as it turns out, is
(22:31):
spying on you, at least if you have a newer one.
So Mozilla they looked at the privacy policies of twenty
five car manufacturers, and it turns out they are all
collecting data on you via the technology that comes standard
on a whole lot of car models, because there's more
and more tech in these cars now, right, there's microphones
and cameras and screens and all that stuff. And they
specifically found that fifty six percent of these manufacturers will
(22:52):
share that data that they're collecting with law enforcement in
response to just an informal request, not even some sort
of like yeah, nothing, none of that stuff. And eighty
four percent will share or sell person personal data that
they gather on you too. So your newer model car,
as it turns out, is a privacy nightmare. Yeah. And
so all twenty five car companies that they researched, they
(23:16):
all basically failed. But that big said Nissan's policy actually
stood out as being the absolute worst. Turns out that
they can collect and share your no get this, your
sexual activity. Not totally sure how that comes into play, Like,
I have no idea, but they can share that. They
share and sell your health diagnosis data, genetic information alongside
(23:38):
other sensitive personal info for targeted marketing. Again, I don't
know how the heck there's and maybe this is just
written into their policy to where it's just like, not
sure exactly we're gonna get your genetic information, but when
we do, we're gonna sell it, right, But Nissan they
also disclose that that they're gonna share and sell and
this I'm gonna just read this quote. Inferences drawn from
(24:00):
any personal data collected to create a profile about a
consumer reflecting the consumer's preferences. They're characteristics, psychological trends, predispositions,
behavior attitudes, intelligence, abilities, and aptitudes to others for targeted
marketing that purposes, So creepy inference is drawn based on
the actual data. They're creating a dossia profile on you
basically and potentially even just making stuff up, which is insane, Like, yeah,
(24:24):
I just didn't know that we needed to dig through
a privacy policy before buying a new car. But the
problem is is all the companies failed. So even if
you dig dig, even if you did dig through it,
it's not like there is some sort of alternative, right
and so well, except for driving an older car, well,
that's certainly one tick like on the side of owning
(24:46):
an older car. But at some point the old like
the new cars that we have are going to turn
into old cars, and so we can avoid it for
the time being. But luckily, I mean so Mozilla, they
are a nonprofit and they're all about the Internet remaining
a place for good for the public, and they actually
there's a there's a petition that you can sign. And
so yes, we are all about folks driving old vehicles,
(25:07):
not only because they're more affordable, but because of the
privacy concerns. But at some point we're gonna run out
of runway, yeah, and we're gonna be faced with the
same concerns, even if it's in a car that's been
around for ten years. Well, I'm hoping that our well
links to that in the show notes where where does
that folks can sign because it needs to be more
an issue, and the fact is people aren't they're just
(25:27):
not digging into it. It's not something that folks are
aware of it, just like the terms of service, like
who really scrolls through and reads it every time? If
you did Mozilla, you never actually download ANAP. Fortunately. Yeah,
there are nonprofit organs out there like Mozilla doing doing
their due diligence, doing the research for us as consumers.
And I just hope that when this information gets brought
to light, that it holds the car manufacturer's feet to
(25:47):
the fire yep, and that they say, we didn't think
we're gonna get caught. We didn't think anybody read that stuff.
But now that they know there's a cop on the beat,
to a certain extent, maybe they'll reform their ways. Maybe
Nissan will say, hey, listen, we're not gonna to any
of this stuff, and the small amounts of data that
we do collect, we're going to you know, we're going
to make sure we don't sell it and make any
money off it. I don't know. I'm curious to see
(26:08):
how they respond or if they just ramp up their
info selling side hustle right right, or if they like
discount the price of the car because you know, they're
making so much money on your data that they can
tell you a car for like fifteen grand who knows, maybe,
But all right, let's talk about mortgages for a second.
Should you get a fixed rate or an adjustable rate mortgage?
That's kind of a big personal finance conundrum for a
(26:28):
lot of people, and a whole lot of people in
this space will tout the fifteen or thirty year mortgage
with the fervor of a religious sell it. Some people
don't even like the thirty year mortgage, like, no way,
that's the only thing, you idiot, The only thing you
should even consider is the fifteen because you got to
pay off your debt as quickly as possible. Well, when
rates were crazy low, like in the twos and threes,
we liked the idea of locking in a rate for
(26:49):
decades to come. Yeah, the thirty year mortgage looked really
appealing right in those years. But as rates have risen,
it started to in some cases make sense to opt
for an ARM. And I say in some cases, because
so much depends on how long you're likely to be
in that home, how long the rate stays s four
in the arm, right, is it a five to one
arm or is it a ten one arm, or is
it a ten six arm? That kind of thing, And
so that ten to one arm, for instance, provides ten
(27:12):
years of a much lower rate. Oftentimes. I took out
an arm actually last summer when we bought the house
at ten one arm, because the rate difference was so significant.
But it looks like that gap is shrinking. According to
new data from Bank Rate, arms are no longer offering
such an appealing spread, which is making fixed rate more
you just look superior again. So arms that were kind
(27:33):
of winning there last year for a little while not
so much straight now. Yeah, But do shop around because
the fact is there could be a difference. It depends
on so many different factors. I'll say. One of the
reasons that I think fixed rates were so stink and
popular is because people and I feel this to a
certain extent myself, But there's a permanence that comes with that,
like you know that, like I never have to worry
(27:54):
about this thing ever again. But the more I guess,
the longer we've been in personal finance, the more I
think I've realized that that proposition is overvalued because we
move more often than we think. I look this up.
The US Census Bureau found that the average American moves
once every five years, And so you're saying to yourself,
(28:14):
all right, yeah, for the next thirty years, I'm going
to be here and I don't have to worry about
my rate going up. Well, chances are, I mean, five
years is much much less time than a natural thirty years. Yeah.
So the reality is that don't think about avoiding an
ARM because you're afraid of what it's going to reset to.
Certainly keep that in mind, I guess. But if you
(28:35):
are able to get a significantly lower rate by going
with an ARM, I wouldn't be too concerned thinking that, well,
in ten years from now, that thing's going to reset
to a higher rate. Chances are, based on the data
that you are probably going to be yeah, yeah, by
that point, And it mattered. Just consider that, I guess,
because the younger younger you are, the more likely you
are to move, and the older you are, the more
(28:57):
you put on roots and you tend not to move
as much. Depends on a lot of things. Important to
note that not all arms are created equal, right, A
five to one arm and a ten one arm are different.
Like if if last summer I had been offered a
five to one arm. It would have drastically changed the
way I thought about it. But I was like, ten
years locked in at a point and a half lower.
That's a no brainer, And hopefully over the next decade
I will have saved up enough to where I can
pay off the rest of the balance. In the worst
(29:19):
case scenario, the rates skyrocket. They're much higher than I thought. Yeah,
ok so, by the way, one of the main things
that's led to the housing market basically seizing up is
a lot of folks who have a locked and low
rate for decades to come, even if they would like
to move. It's like these incredibly low rates are acting
like a said of golden handcuffs, keeping folks in a
home that they would otherwise probably would have considered leaving.
(29:43):
But assumable mortgages they would be a great answer to
greasing the wheels. They're popular in the commercial real estate world,
but not so much on the consumer side of things.
But one startup, I think literally they launched this past week,
but they're trying to make that a reality. It's a
company called Rome, and apparently one in five, like a
little over twenty percent of mortgages have some sort of
(30:05):
assumable mortgage clause written into the language of that mortgage,
and whence you pay more for a house in order
to snag that owners three percent rates? Absolutely, so will
this company actually get traction? Who knows? They've got a
few things go Assumable mortgages in general have a few
things going against them, like the lenders. They don't make
(30:26):
nearly as much money by transferring that mortgage as opposed
to underwriting an entirely new one. That's one thing. The
other thing is just the down payment that's required because
or I guess it's not technically a down payment. But
if you if you assume someone's mortgage, but you have
a purchase price that is over that amount, you got
to come to the table with a different extra cash out. Yeah,
let's they say you bought a home from somebody. They
(30:47):
paid four hundred thousand for that home and over, you know,
and they get that balance down to three hundred thousand.
But let's say you come in and you're like, yeah,
we'll buy your house for five hundred thousand. Well, you
assume that three hundred thousand balance, but they need to
be paid two hundred thousand dollars. So instead of you
having put twenty percent down on a five hundred thousand
dollars home, which is one hundred thousand dollars You got
(31:09):
to pay double that in order to acquire that house,
which can make it more difficult from how much cash
have you stayed at the buyer house standpoints don't have
that much money in hand. There's a lot of folks
who aren't putting twenty percent down, let alone, the difference
between the purchase price and whatever the remainder balances. But
for folks who can, for folks who have saved up more,
and for you know, people who want to go check
out Room's website, it's cool because checking out trying to
(31:32):
match sellers and buyers. Seller might be able to make
a little more Buyers able to get you a ridiculously
low rate that they don't have access to any more
in this market. And depending on how long you stay
in that house, and depending on how much cash you'll
have on hand, it could be a match made in heaven.
But yeah, super interesting. Always fun to see some sort
of tech startup trying to create an arrangement that would
(31:52):
otherwise be almost impossible to col a matchmaker a little bit. Yeah,
it's like the harmony for homes. But Matt, that's going
to do it. For this episode. We got to go
drink beers now with listeners again InterVoice Brewing Indicator from
four to a PM. We hope to see you there
if you're in the Atlanta area. If you're not, you know,
we're going to be in New Orleans next month, so
we might do one there and we might Yeah, maybe
(32:13):
we need to do more traveling too. We need to
get out there. But that's gonna be it. I hope
you have a great weekend, Matt. Until next time, best
Friends Out, best Friends Out,
Hosts And Creators
Joel Larsgaard
Matthew Altmix
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