May 30, 2025 • 34 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: CPAP on the cheap, Southwest charging extra, TACO trading, tariffs getting blocked, investing via the Big Beautiful Bill, pointless points, Discover Capital One merger, getting priced out of the housing market, millionaire renters, and house swapping.
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Transcript
Episode Transcript
Available transcripts are automatically generated. Complete accuracy is not guaranteed.
Speaker 1 (00:00):
Welcome to Had of Money.
Speaker 2 (00:01):
I'm Joel, I'm Matt.
Speaker 1 (00:02):
Today we're talking about taco trading pointless points and millionaire renters.
Speaker 2 (00:25):
Taco Cat Go Cheese Pizza, Joel, Is that a game
that you'll play?
Speaker 3 (00:28):
Oh?
Speaker 2 (00:28):
Yeah, that's fun.
Speaker 1 (00:29):
Yeah.
Speaker 3 (00:31):
For all the folks with kids out there, If you
have not yet tried the card game Taco Cat Goat
Cheese Pizza, I.
Speaker 2 (00:35):
Would highly recommend. It's a ton of fun.
Speaker 1 (00:37):
They have like a holiday themed one that's like, dude,
I forget what it's like, Santa Elf something. Yeah, but
those are fun to play with the kids.
Speaker 2 (00:45):
Yeah.
Speaker 3 (00:45):
But in fact, this is our Friday flight where we're
going to talk about the best headlines from this past
week how they pertain to your personal finances. Joel real
quick man. I was talking to a family member about
getting a c PAP. This is something that was put
on his radar by his doctors talking about how much
of a hassle it is, which by.
Speaker 1 (01:04):
His wife probably Yeah, he snore. Man, why don't you
fix that?
Speaker 2 (01:08):
But what's the latest with you?
Speaker 3 (01:09):
Because I know that's something that you looked into, you know,
getting some of that oxygen flowing at night, So you.
Speaker 2 (01:15):
Seem to want to have your breathing interrupted.
Speaker 1 (01:17):
Actually all about listener Seth just sent us an email
this week and he was asking like, Hey, whatever happened
with that and how did you Because he's I'm facing
down a many thousand dollars bill to get the sleep
test and get the equipment. I think you said you
did it for cheaper and I was like, oh, yeah, yeah,
let me let me mention that on the podcast. I'll
give the details. So basically, my friend Garrett had done
(01:37):
this and he tipped me off. He said, hey, you
can actually do an at home sleep test. Now, by
the way, this is not medical advice. I'm not a
medical practitioner here, but I there's a site called Lafta,
and you I think there's like two points of contact,
ones on the finger and then ones around your chest.
If I remember correctly, it's been a minute. But so
then they record you the way you sleep during the
(01:59):
night and they say, hey, you either have sleep apnea
or or you don't. I did. I pretty much knew that.
Speaker 2 (02:07):
You were like, yeah, yeah, I figured figured that was
a kid.
Speaker 1 (02:09):
Yeah, so but uh, and then Lafta will also sell
you the equipment. But I'm at home sleep test is
super cheaps less less than two hundred bucks. And when
you're talking about going into a hospital facility overnight to
do that's.
Speaker 3 (02:20):
That seems like the big advantage. I remember when you
mentioned that because this was something that you'd done previously, right,
I guess like when you were a kid, when I
were like a young adult basically yeah, not a kid, yea,
but when you had benefits provided by the man. And
that's not something that we don't have that are being
self employed. But that sounded like a nightmare scenario. It's like,
it sounds like some of these like university studies where
(02:41):
you're in this cold laboratory and you're like, okay, sleep
on the steel table.
Speaker 1 (02:44):
You feel like a guinea pig.
Speaker 2 (02:45):
For sure, it's terribly that's not gonna I'm not gonna
be able to sleep.
Speaker 1 (02:49):
It was much nicer to have it done in your
bed at home and then literally just you know, you upload,
upload the results of your sleep and then they tell you, yeah,
you do you need this or whatever and uh, and
you can pay them more for kind of more guided
help along the way in choosing your SEATPAP machine. And
I think there are other companies out there that do this.
By the way, this is just the company I use
that my friend used.
Speaker 3 (03:07):
By the way, it's worth mentioning. We don't have any affiliation,
No Lafta.
Speaker 2 (03:11):
Not at all. Which do they?
Speaker 3 (03:12):
Is there a company called Lafta that also makes mattresses
or something probably something very less sound like a mattress
company like Lafta.
Speaker 1 (03:20):
Well, and then you can buy your seatpap equipment from
Lafta because they're essentially writing you a prescription. But you
can also take that prescription and shop elsewhere, which is
what I did. I chopped around on the open market
for that seatpap machine, and I was able to save
a lot of money buying it from an internet company.
There were like some great sales going on, so I
would just say, yeah, get that home sleep sleep study
(03:42):
and then look around for the machine that is going
to work for you. And you should be able to
do this instead of for many, many thousands of dollars,
for less than a thousand dollars total.
Speaker 3 (03:51):
You didn't get your equipment from Timu or anything. No,
Jill lags up in the middle of the night and
his equipment of strangling him. I can't breathe just breathing
in straight lead. No, I do think I love that
this is an option, that there are other options out
there for folks where you don't necessarily have to spend
thousands of dollars.
Speaker 2 (04:06):
Hopefully, have you been wearing it like consistently?
Speaker 3 (04:09):
That's the thing, Matt, It's you got the kind that's
like the pigtail out the top of your s right
so that you could roll around.
Speaker 1 (04:15):
There's all sorts of different kinds of masks that you
can choose from.
Speaker 2 (04:18):
Not that I watch you while you sleep, but you
told me, you told me about it.
Speaker 1 (04:21):
Yeah, some that are more invasive than others, and that
is has been the best kind that I've that I've tried.
Speaker 2 (04:29):
As they go, that has been the most successful.
Speaker 1 (04:31):
But unit, it's really hard not to get used to it.
And so do I find myself ripping it off?
Speaker 2 (04:37):
Yes?
Speaker 1 (04:37):
Have I found myself not putting it on at all
many nights?
Speaker 2 (04:41):
Yes?
Speaker 1 (04:41):
Also I get it. So is the cpath that you
bought that you got to let a much better price
on still a good deal if you don't use it.
That's that might be a philosophical I would never know
the answer to.
Speaker 3 (04:52):
Even Still, I'd rather spend a few hundred dollars and
a few thousand dollars when the potential outcome might be
the same, which is you not necessarily wearing it. All right, man,
let's keep moving. But let's talk about travel and vacationing
because Southwest has officially made their change. Paying for check
bags started on Wednesday, much to our shigrin that being said,
(05:13):
if you bought a ticket before that deadline, you will
get to enjoy free check bags one more time. That
was me, That was me, yeah, so, but moving forward,
it is going to cost you thirty five dollars for
that first bag, forty five dollars for the next. Sounds
like typical airline. It's like fee structure right here, man,
everybody else it's certainly gonna make uh. That was like
(05:34):
our favorite reason, one of the reasons to go with Southwest,
specifically the free check bag. That's that's how you get
the nice beer haul. That's right when you are flying
from other cities, which was something that you got to
do one last time.
Speaker 1 (05:45):
Yes, from Texas. And I'm not usually a huge checked
bag guy. I don't like the check bags unless I'm
checking for beer or I'm going on my annual backpacking
trip in which case, I'm bringing a lot more than
I normally do my giant backpacking bag, and so in this.
Speaker 3 (05:59):
Case seem to fit all everything you need in tiny
little CoA wis. It's like a real man living off
of the off the land. At that point, there's more
you need for that. In addition to that, though, basic
economy fairs are going to be implemented, which will replace
the want to get away option that you've gotten used
to see, it's really hard for me to hear the
one to get away. Every time I would see I
would think of that Lene Kravitz song.
Speaker 2 (06:21):
The I Want to get Away.
Speaker 3 (06:24):
I get that I get by from the nineties. But
then to twist the knife even further, flight credits are
going to expire within six months before they actually never expired.
Speaker 2 (06:34):
You could just hang on to that.
Speaker 3 (06:35):
So but that means if you cancel a trip this
is something you got, you got to basically add it
to the calendar that, hey, we need to make sure
that we use utilize those credits.
Speaker 2 (06:43):
In order to not lose those credits.
Speaker 1 (06:45):
That was one of the greatest perks of being a
Southwest customer was, Hey, you know what, I cancel that
that trip and I can use those points anytime into
the future. The six month thing is real drag. All
these things are big drag, and it should, I think,
reduce the loyalty you feel. If you've been someone who's
like I fly Southwest because they're great, and I'm sure
(07:05):
they'll still be great in some ways. There's a lot
of reasons to be less loyal and just shop for
the lowest fare, and Southwest was pretty competitive unfairs, although
not always the lowest, of course. But I think this
just should push all of us more in the direction
of shopping and being less loyal to any airline in particular.
And I think that's just been more and more of
(07:27):
the case in general too, especially as airlines are saying
it's less about how frequently you travel on us, it's
more about how much money you're spending. So if you're
the kind of normal person who flies a few times
a year, then shopping around makes even more sense than
being loyal, because you're not going to get rewarded for
your loyalty at airlines nearly as much these days. And
(07:47):
then pack light two because I think I would love
to see more folks avoid checking bags all together. I
know it's not always possible, especially like on my backpacking trip, right,
but I think it is more possible than most folks
to avoid checking a bag. So whatever airline you're on,
Southwest included, now think about the added costs that checking
a bag is going to add to your life, and
(08:10):
hopefully you can travel lighter.
Speaker 3 (08:12):
That's right, buddy, And as is usual on our Friday flight,
we have our standing tariff updates. Heavy terrifts against the
EU were threatened and then pulled back.
Speaker 1 (08:20):
We didn't talk about before tariff's by the way.
Speaker 3 (08:22):
We talked about shrinkflation and how much money the government
was going to infuse into our bank accounts via the
stemmy money egg prices.
Speaker 2 (08:29):
Egg prices that was a little.
Speaker 3 (08:30):
Bit more recent, which, by the way, I feel like
we've seen those prices come back down.
Speaker 2 (08:34):
Actually, But this.
Speaker 3 (08:35):
Rebounding nature of Trump's terraffs has been true of essentially,
I mean, honestly, every trade policy threat that the Trump
administration has made, where he says that tariffs are God's
gifts of the world, but then in reality that they
only seem to be used as like this blunt instrument
in order to force other countries to negotiate whether or
(08:55):
not it's working is debatable, but it's working for some
investors who are per anticipating in taco trading. And so
the acronym stands for Trump always chickens out, thus the
taco and Joel. Some investors are making their investment decisions
based on terror threats that don't actually materialize. They're making money.
This is something that I feel like we were alluding
(09:16):
to this when it came to Terras the first time around,
when it's just like, you know what, there's a whole
lot of talk, but let's actually see if this pans
out as something that gets implemented. By the way, we
would not recommend for folks to participate in taco trading.
This is a pure speculative, casino gambling like mentality. It
is not how you grow your wealth over the long run.
Speaker 2 (09:38):
Yeah.
Speaker 1 (09:38):
But that being said, I mean, do you remember I
think when President Trump truthed out, hey, now's a good
time to buy, and he was spot on because he
controls the lever essentially of what's gonna happen with the
economy with a lot of these tariffs. And so if
you listened to the truth and you bought at that
very moment in time, you would have done quite well
(09:58):
for yourself. We've seen man like a twenty plus percent
run up in the stock market since then. So I
get why people are saying, I'm going to trade on
this because it sure looks like I'm seeing a trend
here which is threatened tariffs that don't actually come to pass,
at least not in any significant manner. So when the
stock market freaks because of the proposal, then and I'll
buy in at the low side, and I am richer
(10:21):
because of the comeback of that stock or specific industry experiences.
But also on the tariff talk, Matt, tariffs might not
just be rolled back by Trump himself, right, That has
become a pattern. But the courts are now weighing in
and they have said that the president lacks the legal
authority to institute widespread tariffs as he's been doing. Yeah,
(10:42):
it's kind of a one man wrecking ball. And they said,
stop it so familiar, You're not allowed to do that.
And the stock market was pleased when they when they
saw that ruling. But a federal trade court basically said
that this big chunk of tariffs that have been levied
by the executive branch is an overreach of that branch
of government and that their I guess legal footing is substandard.
(11:04):
But also like will this ruling stick around what happens
with appeals? We don't know, But for the time being,
that's kind of where things stand. And it makes me
think back to when the Biden administration tried to eliminate
and forgive student loan debt. The courts basically said, hey,
you guys don't have the legal authority to do this,
and so they attempted to find other legal means, like
(11:25):
get different basically legal footing to get the to pass
what they wanted to pass. Well, President Trump is likely
to do the same here. He might say, actually, the
statute I was using to try to institute tariffs on
other countries, well, I'm going to use this other statute
over here. Now it's okay, right as usual. It would
be great if Congress would do their job. This is
(11:46):
kind of one of a role that was especially built
for them that they seem to be abandoning. But for
the time being, tariff rates have been rolled back. Where
things go from here is anybody's guests. We will continue
in all likely next week on how to money tariff
talk I'm sure.
Speaker 2 (12:02):
That's right man.
Speaker 3 (12:03):
All right, So we briefly mentioned the MAGA accounts element
of the big beautiful bill that barely passed the House
last week.
Speaker 2 (12:10):
The reason, or I would say, one of the reasons
there's so.
Speaker 3 (12:12):
Much focus on this is because the tax cuts and
jobs at will sunset at the end of this year. That,
in addition to the fact that the GOP has rolled
all of their they put all their eggs in one basket,
all the hopes of streams. This one basket is the BBB.
But let's discuss a few of the other potential changes
that would impact your personal finances if it were to
pass the Senate and get signed into law, one of
(12:35):
which is that hsas could get even better doubling the
allowed annual contribution. If that remains, that's going to mean
you can funnel even more money into that triple tax
advantage account, which is fantastic.
Speaker 1 (12:46):
And I think there was a change in the law
that basically said, oh, you can use your HSA for
more things in including a gym membership, which is kind
of cool. So HSA could be getting a heck of
a lot better soon.
Speaker 3 (12:58):
Then it begs a question, Okay, well, what if you
decide to implement your own gym at your own house
and therefore by equipment. Maybe maybe child tax credits will
be bumped from two thousand to twenty five hundred dollars.
Speaker 1 (13:09):
Per child, which makes you want to have more children.
Speaker 3 (13:11):
Yeah, there's a higher standard deduction for folks who are
sixty five and older, and the ev tax credit would
be repealed at the end of the year as well,
And there's of course plenty more that's included. But we
will continue to cover this as things move along or
not move along. Maybe as it gets sent back after
the Senate, perhaps makes makes some changes as way, but
(13:32):
we'll keep folks posted well.
Speaker 1 (13:33):
Taxing different types of earnings differently is a big part
of the proposal too. It's right specif we like no
tax on tips and overtime pay. That's not something that
we love though, And I think the domino effect of
this getting baked into tax policy could have annoying, cascading consequences, right,
including more requests for tips. Think about if you are
(13:56):
an industry that thrives on tips, you're gonna want to
find a way to get customers to funnel even more
money in tips your way because they're tax free dollars
coming into your bank account. And so I think it's
it's just interesting that we're prioritizing or saying that different
ways you earn income will be taxed. Definitely, we already
say that to a small extent, but we'd be making
(14:19):
that an even wider gap. And I just I don't
love the precedent that sets. And on the tip tipping thing,
Americans already frustrated by the frequency of tip requests that
we experience in modern day modern days, right, and so
how people are going to react individually to being asked
for more tips and then for bigger tips. That's going
to be interesting to watch because I feel like we're
(14:41):
already experiencing a bit of a tipping rebellion happening right now.
Speaker 3 (14:44):
Man.
Speaker 1 (14:45):
I mean, I was buying a pizza the other night
and the check I was going to go pick it up,
they're not delivering it. And at check out they're like, hey,
do you want to do like a fifteen, twenty or
twenty five percent tip? And I was just shocked. That
felt pretty uncouth to even ask that when I'm going
to pick the PiZZ up. It's different if you're delivering
it to me, and I think those are the kind
(15:06):
of things that a lot of Americas are just kind
of frustrated by with tipping culture right now, it's like
everybody's asking for a tip. That might only get worse
if the no tax on tips becomes a reality.
Speaker 3 (15:16):
Yeah, the Big Beautiful Bill also is going to have
an impact on student loans as well. The new plan
would be to take the alphabet soup of repayment plans
down to just two, which I will say would make
it easier to understand, but also it's going to make
it a bit less generous, and so essentially the more
you borrow, the longer that you're going to have to
pay it back, up to twenty five years for folks
(15:38):
who are borrowing over one hundred thousand dollars, which we
would not recommend. By the way, the income based plan
ties your payment to a percentage of your income, so
basically a sliding scale that requires you to pay a
lot less if you make less. And the bill would
also eliminate subsidized student loans as well as forbearans and defferments,
which actually might not be necessary given the way the
(15:59):
income based plot and is structured. So it's not necessarily perfect,
but student loan plans will be easier to understand in
the way that the structured it could help tamp down
tuition inflation. Again, whether or not this remains as it
is currently written, after the Senate takes a look at it,
that's of course going to have an impact as to
the implementation of the new student loan rules moving forward.
Speaker 1 (16:21):
Where the kind of state and local deduction thing will land.
That's another thing that's like a really important piece of
this legislation that's kind of being battled right now as well.
So yeah, we'll keep our eyes on this, and it
is just fascinating to see that there's a lot of
changes that could really impact your finances and your taxes
in particular moving forward. So I'm sure we'll have more
(16:44):
discussions on this soon, Matt. We've got more to get
to on today's show, though. We're going to talk about
the devaluation of credit card points, and then we're also
going to talk about house swapping how that could make
your vacation a whole lot cheaper. We'll get to that
and more right after this.
Speaker 3 (17:05):
All right, buddy, we are back from the break, and
now it is time for the ludicrous headline of the week,
and this one is from the site Miles to Memories.
The headline reads City thank You points will soon be
worth twenty five percent less Joel. The credit card companies
that giveth and they taketh away City points are being
devalued by twenty five percent beginning in August, which will
(17:27):
likely come as a big shock to folks who have
been accruing points via their city credit cards. So, first
of all, it's okay to be frustrated. This isn't something
that I like, I don't think like. For instance, like
when you're at the grocery store and you experience some shrinkflation,
it feels less egregious because you have a choice to
buy something else, right, You've got options, But deflating the
actual value of your points that you've accrued by a
(17:48):
meaningful amount feels a bit more like robbery.
Speaker 2 (17:51):
Right.
Speaker 3 (17:52):
It's not like you have some other option of being like, Okay,
well you stay with us, and maybe we'll only devalue
it by fifteen percent or ten No, no, no, just
a twenty five percent cut cross the board. But just
know that you have a small window to use those
points at the current full value before that value gets slashed.
That's gonna be August twenty fourth, yet another date to
put on the calendar. It reminds me of subscriptions, right, like,
(18:12):
put it on the calendar. Know that this is something
you need to because right now you're listening. Maybe you're
sitting at a stoplight, right Brittany Chris, I know you're listening,
but you're not gonna dive into figuring all of this
out right there now, you know. But add it to
your calendar. Make sure this is something that you pay
attention to, because I would hate for folks to miss
out on some of the value that they are entitled
to overnight just because they miss it by a couple
(18:33):
of days.
Speaker 1 (18:33):
Yeah, and you might have been using that card in
hopes of booking travel in the future, and you're like
just stashing the point, stashing the points so you can
plan an epic vacation and then for city to come
out and pull the rug from under you and be like,
h I mean, you're gonna have to have a lot
more points now to get the vacation you'd hope for.
That's just a frustrating thing to experience. So booking sooner
than later is a good idea. And by the way,
City is not the only company doing this, I mean Hyatt.
(18:56):
Earlier this year they shifted hotel tiers to make it
more expected to book with points at some of their properties,
and these point devaluations are becoming normalized. The CFPB, the
Consumer of Financial Production Bureau, I believe they're on life support.
They were poised to do something about this at the
end of twenty twenty four. They were basically saying, hey,
shot across the bow, credit card companies, you can't devalue
(19:18):
points like this, or we're going to come after you. Well,
that's unlikely to continue now because, like I said, the CFPB,
they are barely breathing, they're barely holding on, so they're
probably not going to actually see that through. I think
it's important for folks to not overestimate the value of
their points and to just get about using them. The
(19:40):
more you hoard them, the less valuable they become over time.
So yeah, plan your fun trip asap. Let this be
an excuse to start using the points instead of just
holding on to them. And I think too, Matt, this
is actually maybe another change that people might want to
consider making is if travel rewards points are becoming less valuable.
(20:01):
It makes straight up two percent cash back cards more attractive. Yeah,
because you don't really have to think about it. And
so yeah, if you're like, oh, yeah the travel points
game playing that has got me some sick deals, well
the if the deals are less sick, then cash back
credit cards just seem to make a little bit more
sense these days.
Speaker 3 (20:20):
Yeah, I think folks might be less interested in jumping
through all the different hoops in order to like the
five percent rotating category spend am u is it discover
But it kind of comes down to, I guess what
phase of life you're in, Because if you are in
the phase of life where you're looking to simplify your
finances in streamlines and things like, I'm all about finding
ways to optimize and get the best bang for your buck.
(20:43):
But beyond a certain point, it just feels like too much.
You know, like if you were the kind of person
who wants to squeeze every last bit of toothpaste out
of the tube, I'm gonna squeeze it a little bit,
you know, but like, you know what, I've never done.
Have you ever cut the end of it off and
then like scraped out the toothpaste. I have You've seen
people do that hyperfergal friends. Yeah, And I'm just like, Okay,
maybe you can get like what two more days of
(21:04):
I don't know. I guess it depends on how often
you I guess, but I'm like, I'm willing to give
it a little bit of a squeeze, but I'm not
willing to like go through the steps of cutting it.
And that's what it feels like, some of these different
requirements and hoops that we have to jump through in
order to garner the mo ast benefit from these different
banks that they're asking of us. Speaking of actually Discover,
(21:24):
I saw that they're now part of Capital One. I
didn't realize that, but someone in the how to Money
Facebook group mentioned that the only credit card that they
have are both Discover and Capital one cards.
Speaker 1 (21:35):
Which are now essentially going to become the same institution.
We don't know how it's exactly going to shake you.
Speaker 3 (21:40):
I think it's necessarily going to impact anyone's credit per se,
but I think more importantly it just raises the question
of just, oh, what kind of cards have you been using?
Have you been garnering the kind of benefit from those
cards as opposed to just not questioning it. I think
there are just some simple changes that you can make
that will allow you to give the most bang for
your buck, right.
Speaker 1 (21:58):
I think one of those things is do I are
the only credit cards I have? Do they come from
one issuer? Because let's say you only use City cards, right, Well,
now you're like, well, man, City just did this thing
to my points and they're worthless. Man, I should have
been banking points with somebody else too, And the same
thing is true. If you only have Discover a Capital
one cards, you might want to say, oh, maybe I
(22:18):
should get a NAMEX card or a Chase card in addition,
so that I'm not wholly exposed to one credit card issue.
I think that would be a wise move for the
person that had money Facebook group that had that issue,
and for anybody else out there listening who has a
similar issue.
Speaker 3 (22:32):
Yeah, but no, I don't want folks to hear me
say like throw some shade at Discover and say that
like we don't like Discover, Like they're a great company,
and specifically.
Speaker 1 (22:39):
Both of those banks. So I'm curious state to see
what it looks like for them to merge, because they
don't even really fully know yet.
Speaker 3 (22:45):
But right right, my longest standing credit card that I've
ever had, and I'm talking like twenty or twenty five
years is with Discover and recently Angel I was playing
with some tools with I don't know if it was
with one of the credit rors or with one of
the scores that are provided by one of the credit
card companies, but they've got like this estimator, and it's
just like, hey, what happens if you were to get
rid of this card, or were you to pay off
some reduce to the amount of spending or add in.
(23:07):
Of course they're wanting you to add a card next.
That way you can increase your overall amount. But I
was crazy shocked to see and this was just a simulator,
but I was really surprised to see that my longest
standing card where I had to nix, that they were
estimating that my score was only going to drop by
like two points, Wow, which I would have expected like
at least.
Speaker 2 (23:24):
Ten times that at least like twenty points or something.
Speaker 1 (23:26):
Yeah, but yeah, it's probably because you have so many
other credit cards you've had for a long time too,
maybe I guess so.
Speaker 3 (23:31):
But even still in my mind that one Discover card
I'm like, oh, yeah, that's the one I've had since
discover Capital one, Discover since I've had that I've had
since I was a teenager.
Speaker 2 (23:40):
But evidently you wouldn't be wouldn't.
Speaker 3 (23:42):
Be that big of a disruptor to the overall credit score.
Just take that with a grain of salt, though.
Speaker 1 (23:46):
Very interesting. Yeah, all right, let's talk housing, Matt. There's
a recent Redfin report and it highlighted just how much
more expensive it it is to buy a home than
it is to rent these days. And this is something
that we've been documenting over the past few years, in
particular as housing prices have just gone through the roof.
But it's fascinating. I love seeing the data, Like, Okay,
(24:09):
how bad is it actually? Well, buying a home now
requires fifty thousand dollars more in salary than renting. So essentially,
you need an annual income of around one hundred and
sixteen thousand dollars to afford a mid priced home. That's
roughly eighty two percent more than the sixty four thousand
dollars you'd need to be able to afford a mid
(24:29):
price department. Quite the disparity, dramatic difference, right, and a
bank Rade study also found that is cheaper to rent
than buy in all fifty of the largest metro areas,
So there's like not one metro area they found of
the largest ones where it would be cheaper for you
to buy than rent, and that was not the case
ten years ago. That was not the case ten years ago,
(24:50):
which makes renting look pretty good, makes it look a
whole lot better than it did a decade ago, and
more folks who would have bought a home in the past,
they're just kind of getting zen with renting. Rich households
in particular, they're choosing to rent more than ever. This
was according to rent Cafe. You and I, we own
our homes. We're happy with our choice. We're also real
estate investors. But the case are renting, especially in today's economy,
(25:14):
is a strong one. And the old adage that you're
just throwing away money, it's just not true. That is
like one of those ingrained beliefs for a lot of people,
renting equals throwing away money. And if there's one thing
that we can say, like we're not telling any individual
renting is right for you or buying is right for you,
it can be very circumstantial, but I just want to
dispel the notion that people instinctively feel about renting being
(25:39):
a really dumb financial move. That's just not true, and
it's especially not true right now.
Speaker 2 (25:43):
Yeah, it's definitely not true.
Speaker 3 (25:45):
Like, it's not true that you have to be oh,
if you are renting an apartment you're broke, because there's
actually been a rise in millionaire renters and there's a
reason for that, right Yeah. So this is another article
we came across this week. We're seeing more luxury rentals
that offer these fancy amenities, drawing in folks who have
high net worths who are renting. That coupled with the
flexibility and the convenience that renting offers, as well as
(26:06):
the fact that you don't have to save up a
massive down payment, dude, this means you can invest more
in the overall sod market instead of funneling it towards
higher housing costs as well as maintenance and repairs that
are oftentimes vastly underrated, underestimated, undersaved for. But a lot
of intentional renters and that's the key part, man, You
got to be intentional about this. You can achieve greater
(26:29):
levels of financial success than your home owning peers by
pouring money into the market as opposed to pouring money
into your housing.
Speaker 2 (26:36):
Owning a home.
Speaker 3 (26:37):
It can certainly be a great goal, but it's just
not for everyone out there, and honestly, on the flip side,
it's not a guaranteed thing to continue. We're actually seeing
signs of softening in the.
Speaker 2 (26:46):
Real estate market.
Speaker 3 (26:47):
The big real estate sites, they've been predicting a housing
market swoon, which actually seems to be materializing.
Speaker 2 (26:52):
So if you're a hopeful buyer, this is actually good
news out there.
Speaker 3 (26:55):
A small little anecdote, Jal just received my property tax
bill assessment and I opened it expecting the worst, which
I mean, let's be honest, over the past few years,
we've only seen increased housing prices increase, which means paying
more to when it comes to property taxes.
Speaker 4 (27:12):
And I did a little whoo because I saw our
home value actually decrease. So nice, which I'm sure there's
a lot of folks might who are listening and they're
just like, wait, Matt's taking crazy pills, Like what is
going on? But when you see an increase in the
what the city estimates your property to be, like, these
are just paper gains right like this, that is not
an increase that you get to realize until it comes
(27:34):
time for you to sell your house or unless you're
trying to pull some equity out of your home. But
guess what you realize on a on a month by
month basis the amount going towards ESCO in order to
save up for your tax bill.
Speaker 1 (27:45):
So this is again is a silver lining for It's a.
Speaker 3 (27:48):
Small silver lining, and this is anecdotal, but we are
seeing this in more metros across the country.
Speaker 1 (27:53):
I was just talking to my sister who is moving
to another city, and she was there looking at place
is to rent. They've been renters, they're happy being renters,
and there was a condo that they actually ended up
settling on, and the price that they're paying for the
condo was like a lot less than what they would
pay to buy a similar sized unit in that complex.
(28:17):
So it's just fascinating to see the person who's renting
it out they bought it not that long ago, and
I'm like, they're going to be losing money every single
month by renting this apartment to them. They must have
no other choice. It's just interesting that renters can make
out like bandits here so I don't even know what
the hoafee would be, but like that's included in the
rent that they pay, So there's like substantial savings to
(28:37):
be a renter, and then they can do a lot
with that excess cash, right, do smart stuff with that money,
investing for their future instead of putting more and more money.
Because what buying is the only way you build, you know,
you build a high net worth. Well that's just not true,
and it's less true than it was ten years ago too.
Like buying a house can make sense based on your
specific circumstances, your specific goals, but you just have to
(29:01):
run the numbers and you have to know the trade
offs because for most people right now, continuing to rent
can make a lot of financial sense.
Speaker 3 (29:07):
Yeah, I do think though the trick is being intentional
about it. And folks who by defaults have kept their
savings rate pretty minimal, whether it's just you know, a
four one k at work or investing in addition to
what it is that their workplace is offering, realizing that
they don't have a default amount going towards the building
up of home quite right, Like there's almost there's like
a mental switch that maybe has been taking place right
just with the given the democratization of investing, the ability
(29:29):
for folks to do that more on their own, on
their own terms, where it feels a little more accessible
as opposed to it feeling like something that was kind
of out of their reach. When it's like the things
have switched essentially right, Like like back in the day,
it felt like home ownership was a bit more attainable,
and investing aggressively in the market felt like something that
that really only the one percent did. But now it's
almost like the opposite where where it's like, oh no, no,
(29:51):
everybody can invest, even just with like the spare change
in your in your pocket, but you bought.
Speaker 1 (29:55):
A home, like exactly must be independently will do that, Yeah,
exactly so. But I do think think that those tides
are going to turn. This isn't this disparity will not
last forever.
Speaker 2 (30:03):
I totally agree. Yeah, I don't think this is a
permanent change, Joe.
Speaker 3 (30:07):
While we're talking about housing, we are certainly fans of
using Airbnb while you're traveling, but there are other ways
to get a cool place when you are taking a
big trip, and that is by partaking in a house
swap I'll the holiday with Jack Black and oh yeah.
Speaker 1 (30:25):
This is for some reason making me think of I
think it was a Fox TV show wife swap, which
one mom would go to another house and vice versa,
and then you would see how the family acted, and uh,
that's reality TV at its finest.
Speaker 2 (30:37):
Sounds like it was one of your favorites that you're
t voing.
Speaker 1 (30:40):
I can't describe it accurately, but just go look up
King Curtis on YouTube. I think that it's one of
my favorite clips from television history. Is that an actual
I think it was from white Swap and this young
kid did not like the new mom was in the
South that week, and the way you reacted was television gold.
Speaker 2 (30:59):
I might have to look it up.
Speaker 3 (31:01):
But we're talking about house swapping. Yeah, not why swapping.
These platforms are growing as a way to allow folks
to travel for less. So obviously instead of buying nights,
you are essentially bartering your exchanging nights at your own
place and the different sites out there. Of course you
got them kind of hip sounding ones like Kindred, which
sounds super bouge what I was reading about that one.
(31:23):
But swap house is one home exchange that's another one
these platforms. These sites, they allow you to offer your
place up when you are out of town to earn
nights that you can use on the platform in the future.
On one hand, I don't like it, Joel, because it
is an inefficient exchange of value, right, like it's an
inefficient market. It kind of makes me think of gift cards,
like why would you do this intermediary sort of step.
(31:44):
It makes me think of timeshares almost right, like like
you are handcuffed to this thing. But I do think
it makes more sense in different markets where they're starting
to crack down more on airbnbs, where they're imposing more
strict regulations like up in New York City.
Speaker 1 (31:59):
Spain even banned them all together, didn't they.
Speaker 3 (32:01):
I don't know if they band them all completely outright,
but they are really cracking down because they're winning because
and I get it, like these towns they're starting to
lose the charm that made them what they wear when
they're just inundated by tours. And so from that standpoint,
it makes sense as a creative workaround.
Speaker 2 (32:15):
But I don't know, Man, the.
Speaker 3 (32:17):
Dollar cash, the universal exchange store of value, the ability to.
Speaker 1 (32:21):
Use that I'm still more of a fan of I
don't know. Still I like bartering renting. I like barnering,
so I like the way these sites, what these sites
are trying to do. And one of the other things
that they note on there is that they're not reducing
housing supply in local places because you're just swapping, right,
and so there isn't like this unit that's being taken
(32:42):
offline to be fully dedicated to full time short rental use,
which is interesting. But there are other sites too. Met
maybe think of this one called Trusted House Sitters, which
has been around for a long time too. Yeh, go
walk a dog, right, Yeah, Like, if you're a pet
lover and you don't necessarily want to give up your home,
you can just go stay at somebody's home for free
(33:02):
if you agree to take care of their pets. I
have done this before, not on not via this website,
but I remember doing this, like when I was a
pretty young fella for a family when they were out
of town their rabbit died. I felt really bad about it.
I didn't get paid afterwards, but so yeah, yeah, make
sure check your home insurance to make sure you're covered
before you do a home swap like this, but those
(33:23):
sites can be a cool way to maybe like help
you find an interesting location you weren't planning on visiting,
or to find a free or cheap way to go
abroad while keeping your budget like within reason. Right when
at this point it feels like airfare is one of
the is less obtrusive, less of a cost, then where
(33:45):
are you going to stay? Like that's a more that's
the biggest cost now of most trips.
Speaker 2 (33:48):
I think, Yeah, man, I like it.
Speaker 1 (33:49):
All right, Maddie, that's gonna do it. For this episode,
we will link to some of the resources we mentioned
in the show notes up on our website at how
toomoney dot com. But until next time, best Friends Out,
Best Friends Out,
Welcome to Had of Money.
Speaker 2 (00:01):
I'm Joel, I'm Matt.
Speaker 1 (00:02):
Today we're talking about taco trading pointless points and millionaire renters.
Speaker 2 (00:25):
Taco Cat Go Cheese Pizza, Joel, Is that a game
that you'll play?
Speaker 3 (00:28):
Oh?
Speaker 2 (00:28):
Yeah, that's fun.
Speaker 1 (00:29):
Yeah.
Speaker 3 (00:31):
For all the folks with kids out there, If you
have not yet tried the card game Taco Cat Goat
Cheese Pizza, I.
Speaker 2 (00:35):
Would highly recommend. It's a ton of fun.
Speaker 1 (00:37):
They have like a holiday themed one that's like, dude,
I forget what it's like, Santa Elf something. Yeah, but
those are fun to play with the kids.
Speaker 2 (00:45):
Yeah.
Speaker 3 (00:45):
But in fact, this is our Friday flight where we're
going to talk about the best headlines from this past
week how they pertain to your personal finances. Joel real
quick man. I was talking to a family member about
getting a c PAP. This is something that was put
on his radar by his doctors talking about how much
of a hassle it is, which by.
Speaker 1 (01:04):
His wife probably Yeah, he snore. Man, why don't you
fix that?
Speaker 2 (01:08):
But what's the latest with you?
Speaker 3 (01:09):
Because I know that's something that you looked into, you know,
getting some of that oxygen flowing at night, So you.
Speaker 2 (01:15):
Seem to want to have your breathing interrupted.
Speaker 1 (01:17):
Actually all about listener Seth just sent us an email
this week and he was asking like, Hey, whatever happened
with that and how did you Because he's I'm facing
down a many thousand dollars bill to get the sleep
test and get the equipment. I think you said you
did it for cheaper and I was like, oh, yeah, yeah,
let me let me mention that on the podcast. I'll
give the details. So basically, my friend Garrett had done
(01:37):
this and he tipped me off. He said, hey, you
can actually do an at home sleep test. Now, by
the way, this is not medical advice. I'm not a
medical practitioner here, but I there's a site called Lafta,
and you I think there's like two points of contact,
ones on the finger and then ones around your chest.
If I remember correctly, it's been a minute. But so
then they record you the way you sleep during the
(01:59):
night and they say, hey, you either have sleep apnea
or or you don't. I did. I pretty much knew that.
Speaker 2 (02:07):
You were like, yeah, yeah, I figured figured that was
a kid.
Speaker 1 (02:09):
Yeah, so but uh, and then Lafta will also sell
you the equipment. But I'm at home sleep test is
super cheaps less less than two hundred bucks. And when
you're talking about going into a hospital facility overnight to
do that's.
Speaker 3 (02:20):
That seems like the big advantage. I remember when you
mentioned that because this was something that you'd done previously, right,
I guess like when you were a kid, when I
were like a young adult basically yeah, not a kid, yea,
but when you had benefits provided by the man. And
that's not something that we don't have that are being
self employed. But that sounded like a nightmare scenario. It's like,
it sounds like some of these like university studies where
(02:41):
you're in this cold laboratory and you're like, okay, sleep
on the steel table.
Speaker 1 (02:44):
You feel like a guinea pig.
Speaker 2 (02:45):
For sure, it's terribly that's not gonna I'm not gonna
be able to sleep.
Speaker 1 (02:49):
It was much nicer to have it done in your
bed at home and then literally just you know, you upload,
upload the results of your sleep and then they tell you, yeah,
you do you need this or whatever and uh, and
you can pay them more for kind of more guided
help along the way in choosing your SEATPAP machine. And
I think there are other companies out there that do this.
By the way, this is just the company I use
that my friend used.
Speaker 3 (03:07):
By the way, it's worth mentioning. We don't have any affiliation,
No Lafta.
Speaker 2 (03:11):
Not at all. Which do they?
Speaker 3 (03:12):
Is there a company called Lafta that also makes mattresses
or something probably something very less sound like a mattress
company like Lafta.
Speaker 1 (03:20):
Well, and then you can buy your seatpap equipment from
Lafta because they're essentially writing you a prescription. But you
can also take that prescription and shop elsewhere, which is
what I did. I chopped around on the open market
for that seatpap machine, and I was able to save
a lot of money buying it from an internet company.
There were like some great sales going on, so I
would just say, yeah, get that home sleep sleep study
(03:42):
and then look around for the machine that is going
to work for you. And you should be able to
do this instead of for many, many thousands of dollars,
for less than a thousand dollars total.
Speaker 3 (03:51):
You didn't get your equipment from Timu or anything. No,
Jill lags up in the middle of the night and
his equipment of strangling him. I can't breathe just breathing
in straight lead. No, I do think I love that
this is an option, that there are other options out
there for folks where you don't necessarily have to spend
thousands of dollars.
Speaker 2 (04:06):
Hopefully, have you been wearing it like consistently?
Speaker 3 (04:09):
That's the thing, Matt, It's you got the kind that's
like the pigtail out the top of your s right
so that you could roll around.
Speaker 1 (04:15):
There's all sorts of different kinds of masks that you
can choose from.
Speaker 2 (04:18):
Not that I watch you while you sleep, but you
told me, you told me about it.
Speaker 1 (04:21):
Yeah, some that are more invasive than others, and that
is has been the best kind that I've that I've tried.
Speaker 2 (04:29):
As they go, that has been the most successful.
Speaker 1 (04:31):
But unit, it's really hard not to get used to it.
And so do I find myself ripping it off?
Speaker 2 (04:37):
Yes?
Speaker 1 (04:37):
Have I found myself not putting it on at all
many nights?
Speaker 2 (04:41):
Yes?
Speaker 1 (04:41):
Also I get it. So is the cpath that you
bought that you got to let a much better price
on still a good deal if you don't use it.
That's that might be a philosophical I would never know
the answer to.
Speaker 3 (04:52):
Even Still, I'd rather spend a few hundred dollars and
a few thousand dollars when the potential outcome might be
the same, which is you not necessarily wearing it. All right, man,
let's keep moving. But let's talk about travel and vacationing
because Southwest has officially made their change. Paying for check
bags started on Wednesday, much to our shigrin that being said,
(05:13):
if you bought a ticket before that deadline, you will
get to enjoy free check bags one more time. That
was me, That was me, yeah, so, but moving forward,
it is going to cost you thirty five dollars for
that first bag, forty five dollars for the next. Sounds
like typical airline. It's like fee structure right here, man,
everybody else it's certainly gonna make uh. That was like
(05:34):
our favorite reason, one of the reasons to go with Southwest,
specifically the free check bag. That's that's how you get
the nice beer haul. That's right when you are flying
from other cities, which was something that you got to
do one last time.
Speaker 1 (05:45):
Yes, from Texas. And I'm not usually a huge checked
bag guy. I don't like the check bags unless I'm
checking for beer or I'm going on my annual backpacking
trip in which case, I'm bringing a lot more than
I normally do my giant backpacking bag, and so in this.
Speaker 3 (05:59):
Case seem to fit all everything you need in tiny
little CoA wis. It's like a real man living off
of the off the land. At that point, there's more
you need for that. In addition to that, though, basic
economy fairs are going to be implemented, which will replace
the want to get away option that you've gotten used
to see, it's really hard for me to hear the
one to get away. Every time I would see I
would think of that Lene Kravitz song.
Speaker 2 (06:21):
The I Want to get Away.
Speaker 3 (06:24):
I get that I get by from the nineties. But
then to twist the knife even further, flight credits are
going to expire within six months before they actually never expired.
Speaker 2 (06:34):
You could just hang on to that.
Speaker 3 (06:35):
So but that means if you cancel a trip this
is something you got, you got to basically add it
to the calendar that, hey, we need to make sure
that we use utilize those credits.
Speaker 2 (06:43):
In order to not lose those credits.
Speaker 1 (06:45):
That was one of the greatest perks of being a
Southwest customer was, Hey, you know what, I cancel that
that trip and I can use those points anytime into
the future. The six month thing is real drag. All
these things are big drag, and it should, I think,
reduce the loyalty you feel. If you've been someone who's
like I fly Southwest because they're great, and I'm sure
(07:05):
they'll still be great in some ways. There's a lot
of reasons to be less loyal and just shop for
the lowest fare, and Southwest was pretty competitive unfairs, although
not always the lowest, of course. But I think this
just should push all of us more in the direction
of shopping and being less loyal to any airline in particular.
And I think that's just been more and more of
(07:27):
the case in general too, especially as airlines are saying
it's less about how frequently you travel on us, it's
more about how much money you're spending. So if you're
the kind of normal person who flies a few times
a year, then shopping around makes even more sense than
being loyal, because you're not going to get rewarded for
your loyalty at airlines nearly as much these days. And
(07:47):
then pack light two because I think I would love
to see more folks avoid checking bags all together. I
know it's not always possible, especially like on my backpacking trip, right,
but I think it is more possible than most folks
to avoid checking a bag. So whatever airline you're on,
Southwest included, now think about the added costs that checking
a bag is going to add to your life, and
(08:10):
hopefully you can travel lighter.
Speaker 3 (08:12):
That's right, buddy, And as is usual on our Friday flight,
we have our standing tariff updates. Heavy terrifts against the
EU were threatened and then pulled back.
Speaker 1 (08:20):
We didn't talk about before tariff's by the way.
Speaker 3 (08:22):
We talked about shrinkflation and how much money the government
was going to infuse into our bank accounts via the
stemmy money egg prices.
Speaker 2 (08:29):
Egg prices that was a little.
Speaker 3 (08:30):
Bit more recent, which, by the way, I feel like
we've seen those prices come back down.
Speaker 2 (08:34):
Actually, But this.
Speaker 3 (08:35):
Rebounding nature of Trump's terraffs has been true of essentially,
I mean, honestly, every trade policy threat that the Trump
administration has made, where he says that tariffs are God's
gifts of the world, but then in reality that they
only seem to be used as like this blunt instrument
in order to force other countries to negotiate whether or
(08:55):
not it's working is debatable, but it's working for some
investors who are per anticipating in taco trading. And so
the acronym stands for Trump always chickens out, thus the
taco and Joel. Some investors are making their investment decisions
based on terror threats that don't actually materialize. They're making money.
This is something that I feel like we were alluding
(09:16):
to this when it came to Terras the first time around,
when it's just like, you know what, there's a whole
lot of talk, but let's actually see if this pans
out as something that gets implemented. By the way, we
would not recommend for folks to participate in taco trading.
This is a pure speculative, casino gambling like mentality. It
is not how you grow your wealth over the long run.
Speaker 2 (09:38):
Yeah.
Speaker 1 (09:38):
But that being said, I mean, do you remember I
think when President Trump truthed out, hey, now's a good
time to buy, and he was spot on because he
controls the lever essentially of what's gonna happen with the
economy with a lot of these tariffs. And so if
you listened to the truth and you bought at that
very moment in time, you would have done quite well
(09:58):
for yourself. We've seen man like a twenty plus percent
run up in the stock market since then. So I
get why people are saying, I'm going to trade on
this because it sure looks like I'm seeing a trend
here which is threatened tariffs that don't actually come to pass,
at least not in any significant manner. So when the
stock market freaks because of the proposal, then and I'll
buy in at the low side, and I am richer
(10:21):
because of the comeback of that stock or specific industry experiences.
But also on the tariff talk, Matt, tariffs might not
just be rolled back by Trump himself, right, That has
become a pattern. But the courts are now weighing in
and they have said that the president lacks the legal
authority to institute widespread tariffs as he's been doing. Yeah,
(10:42):
it's kind of a one man wrecking ball. And they said,
stop it so familiar, You're not allowed to do that.
And the stock market was pleased when they when they
saw that ruling. But a federal trade court basically said
that this big chunk of tariffs that have been levied
by the executive branch is an overreach of that branch
of government and that their I guess legal footing is substandard.
(11:04):
But also like will this ruling stick around what happens
with appeals? We don't know, But for the time being,
that's kind of where things stand. And it makes me
think back to when the Biden administration tried to eliminate
and forgive student loan debt. The courts basically said, hey,
you guys don't have the legal authority to do this,
and so they attempted to find other legal means, like
(11:25):
get different basically legal footing to get the to pass
what they wanted to pass. Well, President Trump is likely
to do the same here. He might say, actually, the
statute I was using to try to institute tariffs on
other countries, well, I'm going to use this other statute
over here. Now it's okay, right as usual. It would
be great if Congress would do their job. This is
(11:46):
kind of one of a role that was especially built
for them that they seem to be abandoning. But for
the time being, tariff rates have been rolled back. Where
things go from here is anybody's guests. We will continue
in all likely next week on how to money tariff
talk I'm sure.
Speaker 2 (12:02):
That's right man.
Speaker 3 (12:03):
All right, So we briefly mentioned the MAGA accounts element
of the big beautiful bill that barely passed the House
last week.
Speaker 2 (12:10):
The reason, or I would say, one of the reasons
there's so.
Speaker 3 (12:12):
Much focus on this is because the tax cuts and
jobs at will sunset at the end of this year. That,
in addition to the fact that the GOP has rolled
all of their they put all their eggs in one basket,
all the hopes of streams. This one basket is the BBB.
But let's discuss a few of the other potential changes
that would impact your personal finances if it were to
pass the Senate and get signed into law, one of
(12:35):
which is that hsas could get even better doubling the
allowed annual contribution. If that remains, that's going to mean
you can funnel even more money into that triple tax
advantage account, which is fantastic.
Speaker 1 (12:46):
And I think there was a change in the law
that basically said, oh, you can use your HSA for
more things in including a gym membership, which is kind
of cool. So HSA could be getting a heck of
a lot better soon.
Speaker 3 (12:58):
Then it begs a question, Okay, well, what if you
decide to implement your own gym at your own house
and therefore by equipment. Maybe maybe child tax credits will
be bumped from two thousand to twenty five hundred dollars.
Speaker 1 (13:09):
Per child, which makes you want to have more children.
Speaker 3 (13:11):
Yeah, there's a higher standard deduction for folks who are
sixty five and older, and the ev tax credit would
be repealed at the end of the year as well,
And there's of course plenty more that's included. But we
will continue to cover this as things move along or
not move along. Maybe as it gets sent back after
the Senate, perhaps makes makes some changes as way, but
(13:32):
we'll keep folks posted well.
Speaker 1 (13:33):
Taxing different types of earnings differently is a big part
of the proposal too. It's right specif we like no
tax on tips and overtime pay. That's not something that
we love though, And I think the domino effect of
this getting baked into tax policy could have annoying, cascading consequences, right,
including more requests for tips. Think about if you are
(13:56):
an industry that thrives on tips, you're gonna want to
find a way to get customers to funnel even more
money in tips your way because they're tax free dollars
coming into your bank account. And so I think it's
it's just interesting that we're prioritizing or saying that different
ways you earn income will be taxed. Definitely, we already
say that to a small extent, but we'd be making
(14:19):
that an even wider gap. And I just I don't
love the precedent that sets. And on the tip tipping thing,
Americans already frustrated by the frequency of tip requests that
we experience in modern day modern days, right, and so
how people are going to react individually to being asked
for more tips and then for bigger tips. That's going
to be interesting to watch because I feel like we're
(14:41):
already experiencing a bit of a tipping rebellion happening right now.
Speaker 3 (14:44):
Man.
Speaker 1 (14:45):
I mean, I was buying a pizza the other night
and the check I was going to go pick it up,
they're not delivering it. And at check out they're like, hey,
do you want to do like a fifteen, twenty or
twenty five percent tip? And I was just shocked. That
felt pretty uncouth to even ask that when I'm going
to pick the PiZZ up. It's different if you're delivering
it to me, and I think those are the kind
(15:06):
of things that a lot of Americas are just kind
of frustrated by with tipping culture right now, it's like
everybody's asking for a tip. That might only get worse
if the no tax on tips becomes a reality.
Speaker 3 (15:16):
Yeah, the Big Beautiful Bill also is going to have
an impact on student loans as well. The new plan
would be to take the alphabet soup of repayment plans
down to just two, which I will say would make
it easier to understand, but also it's going to make
it a bit less generous, and so essentially the more
you borrow, the longer that you're going to have to
pay it back, up to twenty five years for folks
(15:38):
who are borrowing over one hundred thousand dollars, which we
would not recommend. By the way, the income based plan
ties your payment to a percentage of your income, so
basically a sliding scale that requires you to pay a
lot less if you make less. And the bill would
also eliminate subsidized student loans as well as forbearans and defferments,
which actually might not be necessary given the way the
(15:59):
income based plot and is structured. So it's not necessarily perfect,
but student loan plans will be easier to understand in
the way that the structured it could help tamp down
tuition inflation. Again, whether or not this remains as it
is currently written, after the Senate takes a look at it,
that's of course going to have an impact as to
the implementation of the new student loan rules moving forward.
Speaker 1 (16:21):
Where the kind of state and local deduction thing will land.
That's another thing that's like a really important piece of
this legislation that's kind of being battled right now as well.
So yeah, we'll keep our eyes on this, and it
is just fascinating to see that there's a lot of
changes that could really impact your finances and your taxes
in particular moving forward. So I'm sure we'll have more
(16:44):
discussions on this soon, Matt. We've got more to get
to on today's show, though. We're going to talk about
the devaluation of credit card points, and then we're also
going to talk about house swapping how that could make
your vacation a whole lot cheaper. We'll get to that
and more right after this.
Speaker 3 (17:05):
All right, buddy, we are back from the break, and
now it is time for the ludicrous headline of the week,
and this one is from the site Miles to Memories.
The headline reads City thank You points will soon be
worth twenty five percent less Joel. The credit card companies
that giveth and they taketh away City points are being
devalued by twenty five percent beginning in August, which will
(17:27):
likely come as a big shock to folks who have
been accruing points via their city credit cards. So, first
of all, it's okay to be frustrated. This isn't something
that I like, I don't think like. For instance, like
when you're at the grocery store and you experience some shrinkflation,
it feels less egregious because you have a choice to
buy something else, right, You've got options, But deflating the
actual value of your points that you've accrued by a
(17:48):
meaningful amount feels a bit more like robbery.
Speaker 2 (17:51):
Right.
Speaker 3 (17:52):
It's not like you have some other option of being like, Okay,
well you stay with us, and maybe we'll only devalue
it by fifteen percent or ten No, no, no, just
a twenty five percent cut cross the board. But just
know that you have a small window to use those
points at the current full value before that value gets slashed.
That's gonna be August twenty fourth, yet another date to
put on the calendar. It reminds me of subscriptions, right, like,
(18:12):
put it on the calendar. Know that this is something
you need to because right now you're listening. Maybe you're
sitting at a stoplight, right Brittany Chris, I know you're listening,
but you're not gonna dive into figuring all of this
out right there now, you know. But add it to
your calendar. Make sure this is something that you pay
attention to, because I would hate for folks to miss
out on some of the value that they are entitled
to overnight just because they miss it by a couple
(18:33):
of days.
Speaker 1 (18:33):
Yeah, and you might have been using that card in
hopes of booking travel in the future, and you're like
just stashing the point, stashing the points so you can
plan an epic vacation and then for city to come
out and pull the rug from under you and be like,
h I mean, you're gonna have to have a lot
more points now to get the vacation you'd hope for.
That's just a frustrating thing to experience. So booking sooner
than later is a good idea. And by the way,
City is not the only company doing this, I mean Hyatt.
(18:56):
Earlier this year they shifted hotel tiers to make it
more expected to book with points at some of their properties,
and these point devaluations are becoming normalized. The CFPB, the
Consumer of Financial Production Bureau, I believe they're on life support.
They were poised to do something about this at the
end of twenty twenty four. They were basically saying, hey,
shot across the bow, credit card companies, you can't devalue
(19:18):
points like this, or we're going to come after you. Well,
that's unlikely to continue now because, like I said, the CFPB,
they are barely breathing, they're barely holding on, so they're
probably not going to actually see that through. I think
it's important for folks to not overestimate the value of
their points and to just get about using them. The
(19:40):
more you hoard them, the less valuable they become over time.
So yeah, plan your fun trip asap. Let this be
an excuse to start using the points instead of just
holding on to them. And I think too, Matt, this
is actually maybe another change that people might want to
consider making is if travel rewards points are becoming less valuable.
(20:01):
It makes straight up two percent cash back cards more attractive. Yeah,
because you don't really have to think about it. And
so yeah, if you're like, oh, yeah the travel points
game playing that has got me some sick deals, well
the if the deals are less sick, then cash back
credit cards just seem to make a little bit more
sense these days.
Speaker 3 (20:20):
Yeah, I think folks might be less interested in jumping
through all the different hoops in order to like the
five percent rotating category spend am u is it discover
But it kind of comes down to, I guess what
phase of life you're in, Because if you are in
the phase of life where you're looking to simplify your
finances in streamlines and things like, I'm all about finding
ways to optimize and get the best bang for your buck.
(20:43):
But beyond a certain point, it just feels like too much.
You know, like if you were the kind of person
who wants to squeeze every last bit of toothpaste out
of the tube, I'm gonna squeeze it a little bit,
you know, but like, you know what, I've never done.
Have you ever cut the end of it off and
then like scraped out the toothpaste. I have You've seen
people do that hyperfergal friends. Yeah, And I'm just like, Okay,
maybe you can get like what two more days of
(21:04):
I don't know. I guess it depends on how often
you I guess, but I'm like, I'm willing to give
it a little bit of a squeeze, but I'm not
willing to like go through the steps of cutting it.
And that's what it feels like, some of these different
requirements and hoops that we have to jump through in
order to garner the mo ast benefit from these different
banks that they're asking of us. Speaking of actually Discover,
(21:24):
I saw that they're now part of Capital One. I
didn't realize that, but someone in the how to Money
Facebook group mentioned that the only credit card that they
have are both Discover and Capital one cards.
Speaker 1 (21:35):
Which are now essentially going to become the same institution.
We don't know how it's exactly going to shake you.
Speaker 3 (21:40):
I think it's necessarily going to impact anyone's credit per se,
but I think more importantly it just raises the question
of just, oh, what kind of cards have you been using?
Have you been garnering the kind of benefit from those
cards as opposed to just not questioning it. I think
there are just some simple changes that you can make
that will allow you to give the most bang for
your buck, right.
Speaker 1 (21:58):
I think one of those things is do I are
the only credit cards I have? Do they come from
one issuer? Because let's say you only use City cards, right, Well,
now you're like, well, man, City just did this thing
to my points and they're worthless. Man, I should have
been banking points with somebody else too, And the same
thing is true. If you only have Discover a Capital
one cards, you might want to say, oh, maybe I
(22:18):
should get a NAMEX card or a Chase card in addition,
so that I'm not wholly exposed to one credit card issue.
I think that would be a wise move for the
person that had money Facebook group that had that issue,
and for anybody else out there listening who has a
similar issue.
Speaker 3 (22:32):
Yeah, but no, I don't want folks to hear me
say like throw some shade at Discover and say that
like we don't like Discover, Like they're a great company,
and specifically.
Speaker 1 (22:39):
Both of those banks. So I'm curious state to see
what it looks like for them to merge, because they
don't even really fully know yet.
Speaker 3 (22:45):
But right right, my longest standing credit card that I've
ever had, and I'm talking like twenty or twenty five
years is with Discover and recently Angel I was playing
with some tools with I don't know if it was
with one of the credit rors or with one of
the scores that are provided by one of the credit
card companies, but they've got like this estimator, and it's
just like, hey, what happens if you were to get
rid of this card, or were you to pay off
some reduce to the amount of spending or add in.
(23:07):
Of course they're wanting you to add a card next.
That way you can increase your overall amount. But I
was crazy shocked to see and this was just a simulator,
but I was really surprised to see that my longest
standing card where I had to nix, that they were
estimating that my score was only going to drop by
like two points, Wow, which I would have expected like
at least.
Speaker 2 (23:24):
Ten times that at least like twenty points or something.
Speaker 1 (23:26):
Yeah, but yeah, it's probably because you have so many
other credit cards you've had for a long time too,
maybe I guess so.
Speaker 3 (23:31):
But even still in my mind that one Discover card
I'm like, oh, yeah, that's the one I've had since
discover Capital one, Discover since I've had that I've had
since I was a teenager.
Speaker 2 (23:40):
But evidently you wouldn't be wouldn't.
Speaker 3 (23:42):
Be that big of a disruptor to the overall credit score.
Just take that with a grain of salt, though.
Speaker 1 (23:46):
Very interesting. Yeah, all right, let's talk housing, Matt. There's
a recent Redfin report and it highlighted just how much
more expensive it it is to buy a home than
it is to rent these days. And this is something
that we've been documenting over the past few years, in
particular as housing prices have just gone through the roof.
But it's fascinating. I love seeing the data, Like, Okay,
(24:09):
how bad is it actually? Well, buying a home now
requires fifty thousand dollars more in salary than renting. So essentially,
you need an annual income of around one hundred and
sixteen thousand dollars to afford a mid priced home. That's
roughly eighty two percent more than the sixty four thousand
dollars you'd need to be able to afford a mid
(24:29):
price department. Quite the disparity, dramatic difference, right, and a
bank Rade study also found that is cheaper to rent
than buy in all fifty of the largest metro areas,
So there's like not one metro area they found of
the largest ones where it would be cheaper for you
to buy than rent, and that was not the case
ten years ago. That was not the case ten years ago,
(24:50):
which makes renting look pretty good, makes it look a
whole lot better than it did a decade ago, and
more folks who would have bought a home in the past,
they're just kind of getting zen with renting. Rich households
in particular, they're choosing to rent more than ever. This
was according to rent Cafe. You and I, we own
our homes. We're happy with our choice. We're also real
estate investors. But the case are renting, especially in today's economy,
(25:14):
is a strong one. And the old adage that you're
just throwing away money, it's just not true. That is
like one of those ingrained beliefs for a lot of people,
renting equals throwing away money. And if there's one thing
that we can say, like we're not telling any individual
renting is right for you or buying is right for you,
it can be very circumstantial, but I just want to
dispel the notion that people instinctively feel about renting being
(25:39):
a really dumb financial move. That's just not true, and
it's especially not true right now.
Speaker 2 (25:43):
Yeah, it's definitely not true.
Speaker 3 (25:45):
Like, it's not true that you have to be oh,
if you are renting an apartment you're broke, because there's
actually been a rise in millionaire renters and there's a
reason for that, right Yeah. So this is another article
we came across this week. We're seeing more luxury rentals
that offer these fancy amenities, drawing in folks who have
high net worths who are renting. That coupled with the
flexibility and the convenience that renting offers, as well as
(26:06):
the fact that you don't have to save up a
massive down payment, dude, this means you can invest more
in the overall sod market instead of funneling it towards
higher housing costs as well as maintenance and repairs that
are oftentimes vastly underrated, underestimated, undersaved for. But a lot
of intentional renters and that's the key part, man, You
got to be intentional about this. You can achieve greater
(26:29):
levels of financial success than your home owning peers by
pouring money into the market as opposed to pouring money
into your housing.
Speaker 2 (26:36):
Owning a home.
Speaker 3 (26:37):
It can certainly be a great goal, but it's just
not for everyone out there, and honestly, on the flip side,
it's not a guaranteed thing to continue. We're actually seeing
signs of softening in the.
Speaker 2 (26:46):
Real estate market.
Speaker 3 (26:47):
The big real estate sites, they've been predicting a housing
market swoon, which actually seems to be materializing.
Speaker 2 (26:52):
So if you're a hopeful buyer, this is actually good
news out there.
Speaker 3 (26:55):
A small little anecdote, Jal just received my property tax
bill assessment and I opened it expecting the worst, which
I mean, let's be honest, over the past few years,
we've only seen increased housing prices increase, which means paying
more to when it comes to property taxes.
Speaker 4 (27:12):
And I did a little whoo because I saw our
home value actually decrease. So nice, which I'm sure there's
a lot of folks might who are listening and they're
just like, wait, Matt's taking crazy pills, Like what is
going on? But when you see an increase in the
what the city estimates your property to be, like, these
are just paper gains right like this, that is not
an increase that you get to realize until it comes
(27:34):
time for you to sell your house or unless you're
trying to pull some equity out of your home. But
guess what you realize on a on a month by
month basis the amount going towards ESCO in order to
save up for your tax bill.
Speaker 1 (27:45):
So this is again is a silver lining for It's a.
Speaker 3 (27:48):
Small silver lining, and this is anecdotal, but we are
seeing this in more metros across the country.
Speaker 1 (27:53):
I was just talking to my sister who is moving
to another city, and she was there looking at place
is to rent. They've been renters, they're happy being renters,
and there was a condo that they actually ended up
settling on, and the price that they're paying for the
condo was like a lot less than what they would
pay to buy a similar sized unit in that complex.
(28:17):
So it's just fascinating to see the person who's renting
it out they bought it not that long ago, and
I'm like, they're going to be losing money every single
month by renting this apartment to them. They must have
no other choice. It's just interesting that renters can make
out like bandits here so I don't even know what
the hoafee would be, but like that's included in the
rent that they pay, So there's like substantial savings to
(28:37):
be a renter, and then they can do a lot
with that excess cash, right, do smart stuff with that money,
investing for their future instead of putting more and more money.
Because what buying is the only way you build, you know,
you build a high net worth. Well that's just not true,
and it's less true than it was ten years ago too.
Like buying a house can make sense based on your
specific circumstances, your specific goals, but you just have to
(29:01):
run the numbers and you have to know the trade
offs because for most people right now, continuing to rent
can make a lot of financial sense.
Speaker 3 (29:07):
Yeah, I do think though the trick is being intentional
about it. And folks who by defaults have kept their
savings rate pretty minimal, whether it's just you know, a
four one k at work or investing in addition to
what it is that their workplace is offering, realizing that
they don't have a default amount going towards the building
up of home quite right, Like there's almost there's like
a mental switch that maybe has been taking place right
just with the given the democratization of investing, the ability
(29:29):
for folks to do that more on their own, on
their own terms, where it feels a little more accessible
as opposed to it feeling like something that was kind
of out of their reach. When it's like the things
have switched essentially right, Like like back in the day,
it felt like home ownership was a bit more attainable,
and investing aggressively in the market felt like something that
that really only the one percent did. But now it's
almost like the opposite where where it's like, oh no, no,
(29:51):
everybody can invest, even just with like the spare change
in your in your pocket, but you bought.
Speaker 1 (29:55):
A home, like exactly must be independently will do that, Yeah,
exactly so. But I do think think that those tides
are going to turn. This isn't this disparity will not
last forever.
Speaker 2 (30:03):
I totally agree. Yeah, I don't think this is a
permanent change, Joe.
Speaker 3 (30:07):
While we're talking about housing, we are certainly fans of
using Airbnb while you're traveling, but there are other ways
to get a cool place when you are taking a
big trip, and that is by partaking in a house
swap I'll the holiday with Jack Black and oh yeah.
Speaker 1 (30:25):
This is for some reason making me think of I
think it was a Fox TV show wife swap, which
one mom would go to another house and vice versa,
and then you would see how the family acted, and uh,
that's reality TV at its finest.
Speaker 2 (30:37):
Sounds like it was one of your favorites that you're
t voing.
Speaker 1 (30:40):
I can't describe it accurately, but just go look up
King Curtis on YouTube. I think that it's one of
my favorite clips from television history. Is that an actual
I think it was from white Swap and this young
kid did not like the new mom was in the
South that week, and the way you reacted was television gold.
Speaker 2 (30:59):
I might have to look it up.
Speaker 3 (31:01):
But we're talking about house swapping. Yeah, not why swapping.
These platforms are growing as a way to allow folks
to travel for less. So obviously instead of buying nights,
you are essentially bartering your exchanging nights at your own
place and the different sites out there. Of course you
got them kind of hip sounding ones like Kindred, which
sounds super bouge what I was reading about that one.
(31:23):
But swap house is one home exchange that's another one
these platforms. These sites, they allow you to offer your
place up when you are out of town to earn
nights that you can use on the platform in the future.
On one hand, I don't like it, Joel, because it
is an inefficient exchange of value, right, like it's an
inefficient market. It kind of makes me think of gift cards,
like why would you do this intermediary sort of step.
(31:44):
It makes me think of timeshares almost right, like like
you are handcuffed to this thing. But I do think
it makes more sense in different markets where they're starting
to crack down more on airbnbs, where they're imposing more
strict regulations like up in New York City.
Speaker 1 (31:59):
Spain even banned them all together, didn't they.
Speaker 3 (32:01):
I don't know if they band them all completely outright,
but they are really cracking down because they're winning because
and I get it, like these towns they're starting to
lose the charm that made them what they wear when
they're just inundated by tours. And so from that standpoint,
it makes sense as a creative workaround.
Speaker 2 (32:15):
But I don't know, Man, the.
Speaker 3 (32:17):
Dollar cash, the universal exchange store of value, the ability to.
Speaker 1 (32:21):
Use that I'm still more of a fan of I
don't know. Still I like bartering renting. I like barnering,
so I like the way these sites, what these sites
are trying to do. And one of the other things
that they note on there is that they're not reducing
housing supply in local places because you're just swapping, right,
and so there isn't like this unit that's being taken
(32:42):
offline to be fully dedicated to full time short rental use,
which is interesting. But there are other sites too. Met
maybe think of this one called Trusted House Sitters, which
has been around for a long time too. Yeh, go
walk a dog, right, Yeah, Like, if you're a pet
lover and you don't necessarily want to give up your home,
you can just go stay at somebody's home for free
(33:02):
if you agree to take care of their pets. I
have done this before, not on not via this website,
but I remember doing this, like when I was a
pretty young fella for a family when they were out
of town their rabbit died. I felt really bad about it.
I didn't get paid afterwards, but so yeah, yeah, make
sure check your home insurance to make sure you're covered
before you do a home swap like this, but those
(33:23):
sites can be a cool way to maybe like help
you find an interesting location you weren't planning on visiting,
or to find a free or cheap way to go
abroad while keeping your budget like within reason. Right when
at this point it feels like airfare is one of
the is less obtrusive, less of a cost, then where
(33:45):
are you going to stay? Like that's a more that's
the biggest cost now of most trips.
Speaker 2 (33:48):
I think, Yeah, man, I like it.
Speaker 1 (33:49):
All right, Maddie, that's gonna do it. For this episode,
we will link to some of the resources we mentioned
in the show notes up on our website at how
toomoney dot com. But until next time, best Friends Out,
Best Friends Out,
Hosts And Creators
Joel Larsgaard
Matthew Altmix