August 25, 2023 • 33 mins
Time for a Friday Flight- our 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: AMC stockholder perks, kitchen appreciation surcharge, swelling swipe fees, credit card rewards potentially on the chopping block, Aldi acquisitions, ghostly gift cards, unwealthy stocks, Bitcoiners beware, TikTok Shop, girl math, & canceled cheap cars.
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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 and I am Matt,
and today we're talking TikTok shop, bitcoinners, beware, and kitchen
appreciation fees.
Speaker 2 (00:28):
Yeah, buddy, this is our Friday flight, and we're gonna
talk about the relevant stories that we think you need
to be aware of. We're gonna talk about the stories
you mentioned, Ol, We're gonna talk about investing. I feel
like at least once per episode we got to touch
on investing a little bit, the proper thing to that
you should be doing with your money.
Speaker 1 (00:43):
It's a core necessity that we talk about often.
Speaker 2 (00:45):
Absolutely. But before we get to that, so Amy over
in our Facebook group, she mentioned that there's this perk
that if you are a stockholder of a MC stock,
so the movie theater chain, you get certain perks occasionally
by being a stockholder. This is the way that they're
reaching out to stockholders to kind of like connect them
with the actual act of going to the movie theater.
Speaker 1 (01:06):
Well, this really goes back to kind of when AMC
became a meme stock and it was a way to
reward those people who are helping prop up the company.
Speaker 2 (01:12):
That's right, and so occasionally they will offer you like
free popcorn. I was sad to see that. It'd be
one thing if like every time you went in you
could just get free popcorn, But it's like, oh, you
get a free refill, so you have to actually buy
some popcorn first. And there's some other kind of random
perks that they that they roll out. But my question
for you is, basically, is this a frugal or cheat?
Is it a frugal move in your opinion to get
(01:35):
you some of that AMC stock in order to receive
some of these perks that you're getting there in the
movie theater.
Speaker 1 (01:39):
So I'm not going to do it. But it's not
because even my stance against single stock ownership, it is.
It is more because I don't ever go to the movies.
But I think if you're the kind of person who
goes same to the movies and AMC is like your
closest theater or whatever, and you're not going just to
kind of score the pre popcorn paying thirty bucks to
get in the door to watch a movie. But if
you're like I go any this is just a way
(02:00):
to get some you know, free concessions. When I do
go see a movie, I think it's I think it's great,
and why not buy a single share sort.
Speaker 2 (02:08):
Of thing and say that's that's exactly how I feel it.
Like I would much rather though, be at home watching
a movie on my own TV, sitting on my own couch,
next to my own wife, not somebody else's wife, out
in public, eating the popcorn that she's made, drinking delicious
coc and rum that I've made. Like that's the kind
of experience that I want versus you know, actually going
(02:30):
into it. Yeah, I think it could make sense if
this is something that you like to like to do often,
something that you can take advantage of. But I wouldn't
necessarily go out of my way to go ahead and buy,
you know, a single stock of AMC in order to
di scorre.
Speaker 1 (02:43):
This benefits kind of on the note of food and
Frooguler cheap. I was talking to a friend, you know,
we go there our local water park or whatever here
in outside of Atlanta. You and I we got like
sick deals on season passes for the family. We've been
going to do that. And I was talking to a
friend there the other day and he was saying, next year,
you got to get the meal passed. And some people
come into the water park to get their free meal
(03:04):
and then they go home and eat that meal because this,
apparently the food pass is so cheap. I think we
talked about this at one point with some dude using
his six Flags pass and the meal pass attached to it.
It's like a couple dollars a meal when you factor
it out. If you're going every day to get to
get your free food.
Speaker 2 (03:19):
Have you heard about this? Ah, I think I've seen it.
But like the food that you get at concession stands,
it's one thing if you're gonna help it, like grab
a lemonade or something like that. But I'm not necessarily
going to go all the way out to a theme
park just to grab, yeah, a bunch of hotter.
Speaker 1 (03:32):
This was close to our house, it's like six or
seven minutes away, and so it's almost like going to
instead of going to Wendy's or McDonald's. If you're a
fast food person, it's like you go there instead. But
you're right, I mean, if you're eating that every day,
it's it's not going to be good for other reasons.
Oh yeah, I'll let you try that one out. Maybe
this and this next year. You let me know, not me,
all right? All right, let's get on to the Friday flight, Matt.
It's a sampling of stories, of course, that we found
interesting this week that pertain to your personal finances. Let's
(03:55):
start off by talking We'll keep talking about food, talking
about restaurant fees. There was an article Matt in the
La Times just a couple of weeks ago about the
annoying and sometimes downright deceptive restaurants surcharges that are still
plugging customer bills after they finished their meals. This is
one of those things, like, I don't know, tipping done wild.
It feels like is what's happened in our country, right,
especially in major metropolitan cities. And a lot of this
(04:18):
had to do with COVID, and a lot of us
were more than happy to support our favorite restaurants. We
realized that they had to tack on these fees for
a time, but those fees persist, right, and so there's
a certain amount of not responsibility. But we wanted to
prop up our favorite local restaurants. We talked about this
back tour on our prisdetic, like we went out to.
Speaker 2 (04:34):
The favorite spots in bav Yeah, just to like, man,
the amount of takeout that we ordered just to make
sure that we were contributing to our community, just that
that entire mindset.
Speaker 1 (04:44):
We were buying gift cards that we didn't know we
would actually end up getting to use because we cared
about our restaurants.
Speaker 2 (04:48):
It was more like a donation as opposed to a
smart way of spending your money.
Speaker 1 (04:52):
But now now things are back to normal. Customers are
fighting back there saying enough is enough, especially when I
get blindsided, you know, when I get the bill, and
so Reddit users in LA and Chicago they've created these
public Google sheets to reveal, to basically highlight the restaurants
that are imposing these fees on their customers, and it's boker.
Some of the names are hilarious, like the Health and
Happiness Fee or the Kitchen Love surcharge. And people's bills
(05:16):
are magically growing up, going up by like five to
eighteen percent. This was a lot that you're not expecting
when you get the final bill, and it's it's not
great for servers either, because a lot of people think, oh,
this probably goes this is probably in lieu of a tip,
but at a lot of these places it's it's not.
And so I guess what we would tell restaurant owners
is just raise the menu prices so that we can
see front and center when we're looking at what we
(05:38):
want to order, what the cost is is the it's
or at least let people know, but what they Yeah,
it's a transparency, Like I don't like just fees anyway,
build it into the price. Let's get rid of the fees.
And we gave you a lot of leeway during COVID,
but it's time for restaurants to kind of change their
tactic on some of these goofy fees are charging.
Speaker 2 (05:56):
Yeah. Well, and then the problem is is oftentimes like
you think that that charge is going to servers, but
in a lot of cases it's not. It's straight to
the pockets, to the arm. So it foolds you into
thinking that you don't need to leave a tip. And
so that's why specifically in the La Times example, they
were talking about how servers are like suing this restaurant
group or whatever. But it's also just a like, in
my mind, attack it. Like it's just not a good
(06:18):
customer experience because when you sit down and you see
all these line items, like I don't want to have
to have an accounting degree to be able to review
my receipt as opposed, like you're just telling me how
much everything costs. No, that just tell me how much
the I just want to bottom line number, because it's
not like by breaking those things out that you can
remove those things. There is no power or control that
you have. And so from that standpoint, I'm not a
(06:40):
huge fan of it either.
Speaker 1 (06:41):
Well, the one thing I would tell people when you
get the receipt, if you weren't told in advance about
this charge, talk to a manager certainly about it. Yeah,
what is this fee? What does it go to?
Speaker 2 (06:50):
Why am I paying it?
Speaker 1 (06:51):
And then if if they refuse to like eliminate it,
or they don't have a good explanation, or or they
didn't tell you ahead of time. I mean that might
be a restaurant, probably not go back, you may not
frequent again. Yeah, so that's the kitchen appreciation fees. But
credit card fees are becoming more common these days too,
in particular at restaurants. But like it used to be,
you would see this mostly at gas stations, small boutique
(07:13):
retailers you see like liquor stores at least around here.
But as paying with a credit card becomes essentially ubiquitous
restaurants are doing their best to claw back some of
the essentially they're called like swhite fees that they pay
to Visa and MasterCard. It's one of their largest expenses.
And so I kind of get it right, like, I
actually don't mind if they're trying to pass some of
those expenses along to the customers. There's not a whole
(07:36):
lot of margin when it comes to running a successful restaurant.
It's not a sneaky, contrived attempt just to get more
money out of you. But with this one, I think
folks they definitely do have the ability to modify how
it is that they're going to pay in order to
avoid this additional fee, because you know, depending on how
much the actual fee is, I am still likely going
to pay with my credit card because I'm optimized. Yeah
(07:58):
there are if it was a Temperton fee, but if
it's a no, yeah, two or three percent fee, you'll
still play with past plastic exactly.
Speaker 2 (08:04):
And I think this is something too that I think
you can push back on because if you saw that
fee after you get wrung up, I think you could say, oh, actually,
do you mind re ringing that? Because I didn't know
you're going to charge me specifically for using a credit card,
and I don't think they would mind if you're like, oh, sure,
actually I want to switch over to cash because I
see there's a little discount built in by doing that.
I think as long as customers and consumers, as long
(08:25):
as they have the option to do something about it,
that's I don't mind it. If you are giving folks
the option. Well, and again, this is a hard cost
the restaurants have.
Speaker 1 (08:33):
The kitchen appreciation fee is just kind of a bogus
thing and it's like, oh, just make your prices what
they should be. But they have a legitimate hard cost
when it comes to taking credit cards. And if they
want to incentivize people to get a discount to pay
with cash, I mean I'm okay with that.
Speaker 2 (08:46):
That's something that you can do something about, right as
opposed to it just being this line item that's just
listed doubt and it's just like oh great, okay, can't
do anything about that. Maybe I just want to, like
you said, choose not to come back here again.
Speaker 1 (08:56):
Well, and like, I think the reason you said that
you would potentially still pay with a credit card is
because of the rewards that you get in some of
our favorite cards, you get three or four percent cash
back when you're eating out. And so if the if
the credit card fees three percent, well guess what my
costco Visa card comes with a three percent three percent
cash back when eating out. You've got one that gives
you four percent cash back when you're eating out. And
(09:17):
so that's a good reason to say, oh yeah, I'll
still pay with credit card. It's it's a wash, But
let's keep talking about credit card fees. Mat there's I
feel like we've all gotten used to credit card reward
points over the years. We just did a whole episode
with Lynn Metler about how to fly for free with
your family and using credit card rewards. Yeah, TLDR, the
only way you can get there is through credit cards.
(09:38):
There's no other, no other way that I know of
that's going to allow you to travel for free around
the world or around the country. This is all thanks
to the credit card companies. But it's not just because
they're benevolent other credit card users who don't pay off
their balances in full every month. They're kind of subsidizing
our rewards. But on top of that, because the credit
card companies make massive swipe fees like we just talked
(09:58):
about that are burdening these restaurants every single time we
use our cards. These fees are actually kind of on
the chopping block. They might not be around for much longer.
And if Congress decides to pass the Credit Card Competition
Act as it's called, this could substantially inhibit the s
white fees that Visa and MasterCard are able to charge,
which would in all likelihood inhibit the rewards that we're
(10:20):
able to earn. Is this even going to pass, Is
it going to get a vote even? I don't know,
but this two percent transaction costs is a huge part
of the reason we all have rewards these days. And
if something does get done, if this practice gets cracked
down upon, then those rewards they might not be around
much longer.
Speaker 2 (10:36):
That's true. Yeah, And typically I'll say I'm skeptical anytime
the government wants to step in and play artificial limits
on anything, right, but I will say I am slightly
more hopeful about this bill because they're looking to increase competition,
and so the different the way the networks work is,
they're thinking about making it so that one of the
two networks that they are using is not either Visa
(10:58):
or MasterCard, which dominate, like I think, over eighty percent
of the market.
Speaker 1 (11:01):
They basically have a duopoly, which is two companies that
run there. And so I like this from the standpoint
of it introduces competition, and anytime there's competition, you're not
just stifling an industry. It opens the door for.
Speaker 2 (11:13):
Some creative expansion, which is something that I do like
to see. It makes me think of there's a study
like a long time ago, I think over at MIT,
but they studied the airlines and any time a low
cost budget airline moved into a new market, a new city,
what did that do to all the other airline fares?
It lowered them. I think they caught it like the
Southwest effect. But basically, by introducing more competition and giving
(11:36):
people more options, it drove prices down, which ultimately saves
us all money.
Speaker 1 (11:39):
Same thing happens when it all d launches in a neighborhood, right,
I mean it's Kroger prices at Kroger that's half a
mile away. The prices go down there too because now
they've got a competition.
Speaker 2 (11:49):
Yeah, yeah, I love it. And we haven't even talked
about the fact that when Dixie and Ald the fact
that all the bought when Dixie. Yeah, that's promising. And
so if you've got a win Dixie near you, fingers crossed,
that is one because they're only choosing to convert certain
numbers of the wind Dixies to about four hundred stores,
but to these they're only converting some, right, So yeah,
fingers crossed that your wind Dixie will turn into an
(12:11):
Ald but hopefully it doesn't impact the existing Aldis and
the incredible prices that they're able to offer folks. Yeah,
so again this is this is vapor where this is
potential legislation, but and it could have an impact on
credit card fees. And you know what, Matt, I'm.
Speaker 1 (12:25):
Okay if the if those white fees go down, and
if it reduces costs for retailer.
Speaker 2 (12:31):
I'm all about of those fees go. Yeah, it's about
how they sure are able to limit this.
Speaker 1 (12:35):
But I'm all good with that because I don't mind
missing out on some of those rewards if it lowers prices, right,
And I kind of like the system the way it is,
but I know it's also not the most fair system.
So if those fees go down, no sweat off my back.
I'm okay with with fewer fewer rewards. But since we're
talking about cards and plastic, let's talk about gift cards
for a second. There's a lot of unused gift cards.
(12:55):
This is something that continues to be an American problem,
and forty seven percent of US adults have gift cards
languishing in their wallet, their purse, or like their underwear jar.
Speaker 2 (13:06):
That's that's where a lot of people keep there, right,
So we keep your cash on it's right, yeah, because
I look through your underword, which is weird.
Speaker 1 (13:13):
But like the real thing, Matt is, people need to
spend the gift cards that they have, right, pull them together.
Emily and I did this. We started going back to
these places where we had gift cards and taking our
date nights based on where we had a gift card too.
So use I use the gift cards you have on hand,
or if you're like, hey, this isn't really my jam,
buy something for somebody else at that retailer, or sell
your unused gift card that you're never gonna use, you're
(13:34):
never gonna get get around to using. It's just basically
like worthless in your life, will turn it into something
positive and yeah, you can sell it at a site like
card cash dot com.
Speaker 2 (13:42):
Can you so, can you sell a gave credit there?
Do you and Emily get one of my favorite intown restaurants? Well,
and then we also have a gave credit or different.
I think we're all out now. Yahay. We used it
all right before we moved up, because that's a hall
to go all the way back in town like that.
That's kind of a friugler cheap as well. It's just like, oh,
it's so far away. Is it worth the additional time
the gas to take advantage of money that you've already spent,
because then you start dealing with a little bit of
(14:03):
the some cost fallacy, right, You're like, we already have it.
Speaker 1 (14:06):
It is if you love the place, right and you
want to go back there because it's one of your favorites.
And the whole reason I bought gift cards to that
restaurant so frequently is because they offer deals. There were
always great deals. It was like, hey, if you spend
one hundred bucks, you'll get one hundred and forty dollars
in gift cards to our restaurant. And that's when gift
cards make sense, right, win value there when you're getting
a special deal. But for the most part, I think
gift cards when you're just trading a dollar that can
(14:28):
be spent anywhere for a dollar that has to be
spent in one specific place that doesn't really compete with me,
it doesn't really make much sense. So I would say, like,
if you're thinking about getting a gift card for somebody
as a gift and you're not getting any sort of
additional perk, give cash instead with a thoughtful letter that
says like, Hey, I know you're you've been wanting this,
or I know you would love this, or I know
you you'd love to go spend this on an experience
or something like that. I mean, think about wedding registries now, Matt,
(14:50):
people want cash more than anything to like a home
down payment. Yeah, they want down payments or honeymoon dollars,
right and so, but people want to give you plates
and forks and stuff like that, and sometimes like the
best gift is cash.
Speaker 2 (15:03):
Yeah, you're more of an absolutist on this one, which
is normally the roles have reversed a little bit. I
feel like I normally like the absolutists, but I do
think it makes sense if you want to give somebody,
like you said, an experience, because that otherwise they would
not pay for themselves, right, and so like it makes
like a favorite coffee shop here Tuesday, they make the
best call, Like they pull the best espresso, they make
the best coffee. The actual shop is gorgeous, it's awesome.
(15:26):
And I think there's a lot of folks who would say, well,
I don't really want to go there. But if I
basically am curating an experience, and I'm saying I really
want you to experience what I get to experience when
I go there, that's when I think it makes sense
because otherwise you could write a note, but you can
take them there or even better, absolutely even better. But
I think that's one exception as well. So certainly if
(15:48):
you get a deal, if you're able to get more
by getting ordering buying a gift card than the actual
cost of the gift card. But then there's a whole
experience side of it as well that I think can
make a lot of sense. Lots of time.
Speaker 1 (16:00):
It can be it can be kind of a lazy gift, right,
And you're calling me lazy. No, we're not trying to
throw shade. I'm just saying I know from personal experience
that sometimes that's like a oh, I kind of know
they like that retailer, maybe I'll just grab something there
and oh yeah, yeah and so And I mean, I'm guilty, guilty,
because I've done it too, But I do think that
that cash is is often a better gift, And especially
(16:22):
when you look at that stat and you're like, man,
there's a decent chance this goes unused, not even because
they didn't think it was a good gift, but because
it got lost somewhere they didn't get around to. It
fell behind the cracks of your dresser or that kind
of whatever. And and that's kind of what I want
to avoid. I hate seeing like, just what is it
more than a billion dollars in uneedscope. It's it's like
so much money, but yeah, I.
Speaker 2 (16:40):
Mean as a substantial amount of money. So it is
a lot, Yeah, that different retailers that they have on
their books as gift cards that hasn't quite yet been redeemed.
Speaker 1 (16:47):
So even though I think I agree with you in
principle it's thoughtful right to give that, that's that that
can be though I don't know, but yeah, I think
it can be thoughtful and it shows, Hey, I want
you to have this interesting day. But if that gift
card gets lost or you know, misplaced, then that just
kind of went down the toilet.
Speaker 2 (17:04):
Yeah, all right, we do have additional stories we're gonna
get to, including how bitcoiners need to beware. We will
get to that plus a few other stories right after
the break.
Speaker 1 (17:22):
All right, the Friday flight continues said, of course, we
got to get to our Ludger's headline of the week.
This one is titled most stocks are bad for your wealth,
which doesn't sound like a great title, but.
Speaker 2 (17:34):
I do like the headline because it makes it sound
like's like this is bad for your health to avoid
this thing, I like smoking. I like that. Oh yeah, exactly,
Surgeon General's warning, right, Jerne Palace warning.
Speaker 1 (17:43):
This one comes from the Financial Times, which is a
great newspaper from across the pond, and so it just
made me think, like, wait a second, are you guys
telling me that investing in stocks is a bad idea? No,
of course, as always, this is a headline that's meant
to evoke a click in some sort of emotional response.
But let's check the numbers, right. The stats do show
that the majority fifty eight point six percent to be exact,
(18:06):
of stocks underperform a basic cash strategy. Right, so more
than half of stocks, if you were to invest in them,
they would do worse than just holding on to your
dollar bills. The Financial Times literally concludes at the end
of this article that the median global stock has been
worse than dollars in a cookie jar, which is crazy.
So a bunch of stocks are not going to help
(18:27):
you out. And this is crazy but true. There's nuance
here though, right, just because most stocks won't help you
build wealth, it doesn't mean that investing in the market
as a whole is going to let you down. Right.
The stocks that don't suck, well, those ones more than
makeup for their underperforming peers.
Speaker 2 (18:42):
Essentially, this entire story can be explained by looking at
the difference between average returns and median returns, because they're
looking at median returns and that's not what you get
when you invest in the entire market, which is what
we advocate for. Like it's like a modern day parable,
Like if you heard the story of when Elon Musk
walks into a bar, the net worth of everyone in
(19:03):
the bar on average goes up like twenty to fifty
million or something like that. Does that mean that each person,
each patron in that bar, that they actually got rich
or no, But if you're looking at the average.
Speaker 1 (19:13):
It effectively does. And that is what happens when you
buy the entire market as opposed to individually picking stocks.
And by the way, we actually talked about the dangers
of single stock investing back in episode four ninety seven,
So that's one that you can go back and listen
to if you want to do a deep dive into
some investing. But let's kind of pull this all together.
(19:34):
This is not a case for hoarding cash.
Speaker 2 (19:36):
We're not saying that it's a better move to stick
that money in your underword draw or in the cookie jar.
It's another argument though, in favor of index funds and
against investing in single stocks. Even though most stocks end
up doing worse than money that you're actually just keeping
as physical cash, it's still too difficult to pick the
(19:57):
actual winners in the actual lose. It's like going into
a bar. Let's say you didn't know what Elon Musk
looked like, and you had to like pick somebody and say, okay,
you get to share the wealth of one person in
as far, it's like, what if you don't end up
picking the guy that's saddled with like forty thousand dollars
in student loan debt. That's essentially the equivalent of single
stock investing. You don't know which ones are going to perform.
So that's why we we like to point folks towards
(20:19):
index investing, investing in the entire market. I don't even
like typically saying investing in stocks because it does have
that connotation of okay, well, which ones as opposed to say, no,
you need to invest in the market.
Speaker 1 (20:29):
The only single stock you should own is one share
of AMS in.
Speaker 2 (20:32):
Order to get that Bob.
Speaker 1 (20:33):
Yeah, because usually it really is the hope and a
hunch and a prayer sort of mentality when it comes
to single stock investing. It's like, oh, well I watch Netflix,
sometimes I should invest in that, or it's like whatever,
I mean that CEO, he's kind of crazy and out there.
Maybe I should invest in that stock. But there's so
many things that influence the value in the direction of
a of single stock, and that it's just a really,
(20:56):
even if that company is great, it doesn't mean their
stock is properly valued, right, And so yeah, it looks
like maybe, let's say Nvidia has a lot of room
to run as a company, doesn't mean their stock has
a lot of room to run. Not necessarily. It might
be super overvalued right now. I don't know who knows.
That's the thing though, we don't know. And like it
literally takes dedicating your entire life, like Charlie Munger or
(21:18):
Warren Buffett to analyzing different companies, then yeah, you might
be able to outperform Otherwise the rest of us, all
the rest of us peons you invest in the entire market.
And that's honestly, why so many individual investors end up
underperforming the index and underperforming other more conservative ways of
investing too, is because they're trading frequently.
Speaker 2 (21:36):
Based on what they read some headline exactly.
Speaker 1 (21:38):
They're like, oh, maybe you should hop in on that
one then or And I think I heard Carl Richards,
who does like those sketches on the napkins for the
New York Times.
Speaker 2 (21:47):
He the behavior guy.
Speaker 1 (21:48):
He I think recently said if you don't have something
in your portfolio that's underperforming that you're kind of annoyed with,
you're not diversified enough. And so yeah, I think like
the fact that we're diversified. We're not going to have
the tops. We're not gonna have, We're not gonna be
overweighted towards the stocks that are doing the absolute best.
But it also prevents us from that downside, being too
heavily invested in some of these stocks that are gonna
(22:09):
perform worse than cashing our wallet. So something else, by
the way, that can impact your returns is your bitcoin exposure.
And the folks at morning Star did a ride up
on this, and they found that even just a little
bit of bitcoin will add a lot of volatility to
the mix of your investments, and too much volatility can
cause you to take actions that you probably wouldn't have
made otherwise. Right, And so they give this example of
(22:31):
how adding just five percent bitcoin to your portfolio, which
is in our estimation, the absolute most you should have
to like a balance portfolio of sixty forty portfolio of
stocks and bonds, well, from a volatility perspective, it's going
to make it feel more like a ninety ten ninety
percent stocks ten percent bond portfolio. And so for a
lot of people, I just I think it's important to
(22:52):
say the right crypto exposure for a whole lot of people.
The right bitcoin exposure is zero, because if you do
opt to invest in bitcoin at all, even just a
little bit, that you'll experience bigger portfolio swings. Can you
handle it, then you might be okay having a little
bit of exposure, but know that these swings are often
what cause investors to make changes that aren't in their
best interest. And so I thought that was a good
write up. It's helpful because there's still a lot of
(23:14):
interest even though I guess, I don't know, is the
crypto winter still around? It seems like bitcoin hasn't done
much right.
Speaker 2 (23:20):
It's doing pretty good over the I guess the past year,
it's but not compared to it's high it's like two
three years ago or whatnot. But let's talk about a
new way jel for us to spend our money. Not
us personally because we avoid TikTok and got time for that.
But tilly, if we are on TikTok, but we you
and I have no control of Yeah, personally, I am
(23:41):
not on there. Don't want to get sucked in. But
the TikTok shop has now been unleashed, and yeah, that's
yet another way that they've greased the skids and the
different social media companies are trying to part you from
your money. The algorithm they're on TikTok of course, it's
promoting different videos that are promoting products that you can
hand purchase via TikTok shop, and so doom scrolling. It's
(24:02):
not only gonna suck all of your time, but it's
also gonna cost you money. It's gonna steal your money
as well. And so we would recommend to either take
the app off your home screen or just considering deleting
it altogether because you're gonna be able to avoid this
new virtual mall. You'll probably be a little bit happier
as well, based on any of the recent research that
(24:23):
the impact that has on mental health. But it's I
wanted to admit that I buy things on social media,
specifically Instagram, but I feel like it's a little bit
different because I've when I see an ad on Instagram,
it high like it feels more like a marketplace, at
least in my own experience. I know that, for instance, Steepencheep,
they serve me up a Patagonia down jacket that was
(24:46):
on massive sale. I'm a basic bro Okay, I got
my Paddy to go to jacket. But what it feels
like TikTok is doing is that it feels like they're
actually manufacturing consumption. Like it's almost as if they're manufacturing
demand and they're selling stuff that I'm sure there might
be some decent stuff up there within the shop, but
it feels like stuff that is part meme and like
(25:07):
they're basically blurring the line between memes and real life essentially,
And so I feel like what that does is it
just feels consumption. It feels waste, Like have you seen
have you heard about like these pickle t shirts or
the stuff like that, where I'm just like, okay, you
have blurred the line up between social media and real
life and when it comes to different memes and what
(25:28):
it is that think how things are trending online and
on social media. It costs you your time if you
are kind of getting sucked into that. But they are
on actual products being manufactured. And I hate this because
it just feels like fast faction, fast fashion taken to
like the nth degree, where someone's going to get something
because they think it's funny and maybe they wear it
or they use it whatever for like a week and
then it just ends up in the landfall. I hate
(25:49):
that aspect of what it feels like that the TikTok
shop is doing well.
Speaker 1 (25:53):
And I think you and I would say, whether it's
TikTok or Instagram, however, you're getting served ads and you
see something it's like, oh, that's a decent deal, and
that's something that I would like, Well, incorporate a twenty
four or forty eight hour rule right where you're like, Okay,
do I still feel this way about that jacket or
that pill shirt forty eight hours later, and if you don't,
if you're saying, well, well, in the moment, yeah, it
seemed nice and it seemed like a good deal, but
(26:13):
now I'm realizing, wait, I have other financial priorities. If
you have a rule like that in place, and you're
not buying stuff on a whim, that's being served up
to you realize there's being You can't go on the
internet now and not be and not have someone attempt
to sell you something. And so the more we can
avoid that and incorporate habits into our lives that prevent
us from making knee jerk purchases, I think that's what's important.
(26:34):
And you mentioned it's the virtual mall like that, that's
the perfect way to phrase it.
Speaker 2 (26:37):
Like they're just perusing along and something flashes in front
of you, like you weren't necessarily looking for something. And again,
I know it's a fine line.
Speaker 1 (26:44):
It's wait, it's like Spenser's like the Goofy t shirts
and stuff like that. I don't even know if that
store still exists, but that's that's kind of what TikTok's
trying to do. And you didn't need the like Burdon
Earning Goofy retro shirt or anything like that, but now
TikTok says.
Speaker 2 (26:56):
Hey, oh, why don't you check it?
Speaker 1 (26:58):
And then that then they're like, yeah, why not? But
that money adds up, right, And there's this.
Speaker 2 (27:02):
Hey, it's your money, you spend it like you want.
Speaker 1 (27:04):
You spend it like you want, but create habits to
prevent you from spending it in a knee jerk way,
and they're gonna upend your budget. And there's another TikTok trend,
by the way, it's apparently called girl math man. I
don't know if you've heard of this sounds kind of sexist.
Speaker 2 (27:15):
I don't know if I'm allowed to be.
Speaker 1 (27:16):
Talking about it, but it's kind of a joke really,
Like one of the girl math trends is to view
cash as free money, or to think that you're making
money when you don't buy a Lotte at your favorite
coffee shop that day, or that you're losing money when
you don't buy something that's a good deal. All those
things are not true.
Speaker 2 (27:32):
We know that, right.
Speaker 1 (27:33):
Basically it's dumb mental accounting. But it's something that we've
all been guilty of at different times, right, Yeah, we've
all done something like that to justify something that we
want to buy, like a splurts that we want to
partake in as a way to emotionally not feel as
bad about it. But just because these jokes are swirling
around social media, don't let them impact how you view
your dollars. Right, your dollars are workers that can help
(27:54):
you on the path the financial independence. And yes, that
includes physical cash. That's real money too.
Speaker 2 (27:59):
And even though personally for me that isn't a completely
separate bucket as well, because it's just it's literally not
on the books anywhere, and I keep like this little
stash of petty cash around, yeah, which doesn't feel real,
though I know it is exactly.
Speaker 1 (28:12):
But I think if you trick yourself into thinking that
some of these purchases are free money, or that not
spending money is saving money, those are different things, right.
Speaker 2 (28:21):
I saw some folks justifying that, like, if you get
you split a bill a friend, venmo's you some money,
and so that money is sitting there in your Venmo account,
it feels unaccounted for. Oh, that's free money, and you
can just spend it however you want.
Speaker 1 (28:31):
But no, you should be accounting for that, and especially
if you have big financial goals, every dollar matters, that's right.
Speaker 2 (28:36):
Yeah. But what makes it funny, though, is that there
is a kernel of true. What makes anything funny is
that it's slightly true, and so it's okay to laugh
at it and enjoy the joke, but simultaneously, we hope
that you are making wise decisions with your money, that
you are doing the right things. Jill, did you see
that there are no longer any cars that you can
mind you that are less than twenty thousand dollars? Now?
(28:57):
See that? Yeah? So the Mitsubishi mirage is just like that.
It's a mirage no longer exists. It's calm, which personally
I don't even know what a Missubishi Mirage looks like,
and say, in my mind, I didn't know anybody that
drove one. And so I feel like that the sub
twenty thousand dollars car, maybe it disappeared a long time.
Speaker 1 (29:15):
Ago, but it's a couple of years ago that there
were some others too that were sub twenty The Corolla
used to be one. Really that was a dependable sub
twenty k car, but now it's a and that was
just the starting price, by the way, like that sure
when you put on extra stuff, it was gonna cost
more than that.
Speaker 2 (29:27):
Any more expensive. Yeah, it's a bummer because it seems
like cars are getting more affordable less affordable, I should say,
Which got me thinking, though, is this just is this
the reality or is this just perception? Is just just
what it seems to be? And so I actually, so
I did a little bit of research. I started digging,
and I was like, Okay, what's a good solid car
that they made like thirty years ago? So I was like, oh,
like a Honda Accord. So I look back in nineteen
(29:50):
ninety three, how much do you think a new Honda Accord.
Speaker 1 (29:52):
Cost nineteen ninety three. I'm gonna say it costs fourteen
hundred dollars.
Speaker 2 (29:57):
Oh my gosh, excellent. Guess it was like right around
fifty ten thousand dollars, all right, And so, but what
do you think the average annual salary was in nineteen
ninety three.
Speaker 1 (30:06):
I'm gonna say the average annual salary was thirty nine
eight hundred dollars.
Speaker 2 (30:10):
So it was thirty thousand dollars. Okay, thirty thousand dollars.
So you do the math. Basically, a good solid car
back thirty years ago was about half of the annual salary.
And so, so guess what the annual American salary is today? Wow,
I'll just tell you it's like seventy four thousand, sixty
is it's right at sixty thousand dollars. So based on
that math, that should tell you that, okay, maybe a
(30:31):
solid decent car today that's new should cost you around
thirty thousand dollars, which is, you know, obviously substantially more
than a twenty thousand dollars vehicle. And so I guess
I wanted to present that piece of information. I guess
with with some of the numbers are showing because even
though there are fewer affordable cars in relation to what
cars used to cost. It it seems like it's kind
(30:52):
of keeping in line. It seems to be tracking well.
Speaker 1 (30:54):
The average price of a new car sold in America
is like forty five hundred dollars, So that's true.
Speaker 2 (30:59):
Yeah, I mean that also takes into account just how
nice cars have gotten, right, that's true. Definitely isn't apples
to apples.
Speaker 1 (31:04):
And according which is three is not the same as
an accord in twenty twenty.
Speaker 2 (31:07):
Three, That is true. That is true.
Speaker 1 (31:08):
Same with houses, right, Like houses have improved in a lot,
so're you're not comparing apples to have apples on either
one of these. But it is I think disheartening for
people to see that it's hard to buy a new
car for sub twenty k and car prices are still
just kind of crazy right now, which only reinforces keep
your car longer, like maintain.
Speaker 2 (31:27):
It well, consider used as well. If folks are out
there and they've never actually purchased a used car, I mean,
you could like, do not take that depreciation hit, buy
a car that's three years old, save a ton of money,
and have a virtually new car. Yeah.
Speaker 1 (31:38):
I ran into my best friend from childhood growing up
you're my current best friend, so oh yeah, don't feel
like you. But so he and I went to a
concert the other the other day and he pulled up
in his in his Hyundai. It's thirteen years old. He
paid thirteen thousand dollars for it thirteen years ago and
he's still driving it. And by the way, it's like
just like tiny accounto box and he's like six six, which.
Speaker 2 (31:59):
I just think is a mate. People.
Speaker 1 (32:01):
It gets pretty good, guess mama, If you're willing to
suffer a little bit, drive something that's not very cool,
that might not even be all that comfortable, you can
save a ton of money. And that's all that car
has done for him. He bought a brand new Yeah.
Speaker 2 (32:11):
I just heard you. I just read a stered to
my mind. So you and this other guy, I bet
y'all are on like the front row at the oh yeah,
blocking to everybody's right hey down in front.
Speaker 1 (32:20):
But it's just a good lesson, right, Like couldn't afford
something nice for sure? But does he choose to drive
this so he can spend money freely in other wise?
Speaker 2 (32:26):
Yeah? He does. And I don't know.
Speaker 1 (32:28):
I think it's a good example.
Speaker 2 (32:30):
Absolutely all right. I think that's gonna be it for
this Friday flight. You can find all the stories that
we mentioned today up on the website at howamoney dot com.
There in the show notes, we'll link to any of
the resources that we may have mentioned. But Buddy, that's
gonna be it for this episode. So until next time,
best Friends Out, Best Friends Out,
Welcome to How to Money. I'm Joel and I am Matt,
and today we're talking TikTok shop, bitcoinners, beware, and kitchen
appreciation fees.
Speaker 2 (00:28):
Yeah, buddy, this is our Friday flight, and we're gonna
talk about the relevant stories that we think you need
to be aware of. We're gonna talk about the stories
you mentioned, Ol, We're gonna talk about investing. I feel
like at least once per episode we got to touch
on investing a little bit, the proper thing to that
you should be doing with your money.
Speaker 1 (00:43):
It's a core necessity that we talk about often.
Speaker 2 (00:45):
Absolutely. But before we get to that, so Amy over
in our Facebook group, she mentioned that there's this perk
that if you are a stockholder of a MC stock,
so the movie theater chain, you get certain perks occasionally
by being a stockholder. This is the way that they're
reaching out to stockholders to kind of like connect them
with the actual act of going to the movie theater.
Speaker 1 (01:06):
Well, this really goes back to kind of when AMC
became a meme stock and it was a way to
reward those people who are helping prop up the company.
Speaker 2 (01:12):
That's right, and so occasionally they will offer you like
free popcorn. I was sad to see that. It'd be
one thing if like every time you went in you
could just get free popcorn, But it's like, oh, you
get a free refill, so you have to actually buy
some popcorn first. And there's some other kind of random
perks that they that they roll out. But my question
for you is, basically, is this a frugal or cheat?
Is it a frugal move in your opinion to get
(01:35):
you some of that AMC stock in order to receive
some of these perks that you're getting there in the
movie theater.
Speaker 1 (01:39):
So I'm not going to do it. But it's not
because even my stance against single stock ownership, it is.
It is more because I don't ever go to the movies.
But I think if you're the kind of person who
goes same to the movies and AMC is like your
closest theater or whatever, and you're not going just to
kind of score the pre popcorn paying thirty bucks to
get in the door to watch a movie. But if
you're like I go any this is just a way
(02:00):
to get some you know, free concessions. When I do
go see a movie, I think it's I think it's great,
and why not buy a single share sort.
Speaker 2 (02:08):
Of thing and say that's that's exactly how I feel it.
Like I would much rather though, be at home watching
a movie on my own TV, sitting on my own couch,
next to my own wife, not somebody else's wife, out
in public, eating the popcorn that she's made, drinking delicious
coc and rum that I've made. Like that's the kind
of experience that I want versus you know, actually going
(02:30):
into it. Yeah, I think it could make sense if
this is something that you like to like to do often,
something that you can take advantage of. But I wouldn't
necessarily go out of my way to go ahead and buy,
you know, a single stock of AMC in order to
di scorre.
Speaker 1 (02:43):
This benefits kind of on the note of food and
Frooguler cheap. I was talking to a friend, you know,
we go there our local water park or whatever here
in outside of Atlanta. You and I we got like
sick deals on season passes for the family. We've been
going to do that. And I was talking to a
friend there the other day and he was saying, next year,
you got to get the meal passed. And some people
come into the water park to get their free meal
(03:04):
and then they go home and eat that meal because this,
apparently the food pass is so cheap. I think we
talked about this at one point with some dude using
his six Flags pass and the meal pass attached to it.
It's like a couple dollars a meal when you factor
it out. If you're going every day to get to
get your free food.
Speaker 2 (03:19):
Have you heard about this? Ah, I think I've seen it.
But like the food that you get at concession stands,
it's one thing if you're gonna help it, like grab
a lemonade or something like that. But I'm not necessarily
going to go all the way out to a theme
park just to grab, yeah, a bunch of hotter.
Speaker 1 (03:32):
This was close to our house, it's like six or
seven minutes away, and so it's almost like going to
instead of going to Wendy's or McDonald's. If you're a
fast food person, it's like you go there instead. But
you're right, I mean, if you're eating that every day,
it's it's not going to be good for other reasons.
Oh yeah, I'll let you try that one out. Maybe
this and this next year. You let me know, not me,
all right? All right, let's get on to the Friday flight, Matt.
It's a sampling of stories, of course, that we found
interesting this week that pertain to your personal finances. Let's
(03:55):
start off by talking We'll keep talking about food, talking
about restaurant fees. There was an article Matt in the
La Times just a couple of weeks ago about the
annoying and sometimes downright deceptive restaurants surcharges that are still
plugging customer bills after they finished their meals. This is
one of those things, like, I don't know, tipping done wild.
It feels like is what's happened in our country, right,
especially in major metropolitan cities. And a lot of this
(04:18):
had to do with COVID, and a lot of us
were more than happy to support our favorite restaurants. We
realized that they had to tack on these fees for
a time, but those fees persist, right, and so there's
a certain amount of not responsibility. But we wanted to
prop up our favorite local restaurants. We talked about this
back tour on our prisdetic, like we went out to.
Speaker 2 (04:34):
The favorite spots in bav Yeah, just to like, man,
the amount of takeout that we ordered just to make
sure that we were contributing to our community, just that
that entire mindset.
Speaker 1 (04:44):
We were buying gift cards that we didn't know we
would actually end up getting to use because we cared
about our restaurants.
Speaker 2 (04:48):
It was more like a donation as opposed to a
smart way of spending your money.
Speaker 1 (04:52):
But now now things are back to normal. Customers are
fighting back there saying enough is enough, especially when I
get blindsided, you know, when I get the bill, and
so Reddit users in LA and Chicago they've created these
public Google sheets to reveal, to basically highlight the restaurants
that are imposing these fees on their customers, and it's boker.
Some of the names are hilarious, like the Health and
Happiness Fee or the Kitchen Love surcharge. And people's bills
(05:16):
are magically growing up, going up by like five to
eighteen percent. This was a lot that you're not expecting
when you get the final bill, and it's it's not
great for servers either, because a lot of people think, oh,
this probably goes this is probably in lieu of a tip,
but at a lot of these places it's it's not.
And so I guess what we would tell restaurant owners
is just raise the menu prices so that we can
see front and center when we're looking at what we
(05:38):
want to order, what the cost is is the it's
or at least let people know, but what they Yeah,
it's a transparency, Like I don't like just fees anyway,
build it into the price. Let's get rid of the fees.
And we gave you a lot of leeway during COVID,
but it's time for restaurants to kind of change their
tactic on some of these goofy fees are charging.
Speaker 2 (05:56):
Yeah. Well, and then the problem is is oftentimes like
you think that that charge is going to servers, but
in a lot of cases it's not. It's straight to
the pockets, to the arm. So it foolds you into
thinking that you don't need to leave a tip. And
so that's why specifically in the La Times example, they
were talking about how servers are like suing this restaurant
group or whatever. But it's also just a like, in
my mind, attack it. Like it's just not a good
(06:18):
customer experience because when you sit down and you see
all these line items, like I don't want to have
to have an accounting degree to be able to review
my receipt as opposed, like you're just telling me how
much everything costs. No, that just tell me how much
the I just want to bottom line number, because it's
not like by breaking those things out that you can
remove those things. There is no power or control that
you have. And so from that standpoint, I'm not a
(06:40):
huge fan of it either.
Speaker 1 (06:41):
Well, the one thing I would tell people when you
get the receipt, if you weren't told in advance about
this charge, talk to a manager certainly about it. Yeah,
what is this fee? What does it go to?
Speaker 2 (06:50):
Why am I paying it?
Speaker 1 (06:51):
And then if if they refuse to like eliminate it,
or they don't have a good explanation, or or they
didn't tell you ahead of time. I mean that might
be a restaurant, probably not go back, you may not
frequent again. Yeah, so that's the kitchen appreciation fees. But
credit card fees are becoming more common these days too,
in particular at restaurants. But like it used to be,
you would see this mostly at gas stations, small boutique
(07:13):
retailers you see like liquor stores at least around here.
But as paying with a credit card becomes essentially ubiquitous
restaurants are doing their best to claw back some of
the essentially they're called like swhite fees that they pay
to Visa and MasterCard. It's one of their largest expenses.
And so I kind of get it right, like, I
actually don't mind if they're trying to pass some of
those expenses along to the customers. There's not a whole
(07:36):
lot of margin when it comes to running a successful restaurant.
It's not a sneaky, contrived attempt just to get more
money out of you. But with this one, I think
folks they definitely do have the ability to modify how
it is that they're going to pay in order to
avoid this additional fee, because you know, depending on how
much the actual fee is, I am still likely going
to pay with my credit card because I'm optimized. Yeah
(07:58):
there are if it was a Temperton fee, but if
it's a no, yeah, two or three percent fee, you'll
still play with past plastic exactly.
Speaker 2 (08:04):
And I think this is something too that I think
you can push back on because if you saw that
fee after you get wrung up, I think you could say, oh, actually,
do you mind re ringing that? Because I didn't know
you're going to charge me specifically for using a credit card,
and I don't think they would mind if you're like, oh, sure,
actually I want to switch over to cash because I
see there's a little discount built in by doing that.
I think as long as customers and consumers, as long
(08:25):
as they have the option to do something about it,
that's I don't mind it. If you are giving folks
the option. Well, and again, this is a hard cost
the restaurants have.
Speaker 1 (08:33):
The kitchen appreciation fee is just kind of a bogus
thing and it's like, oh, just make your prices what
they should be. But they have a legitimate hard cost
when it comes to taking credit cards. And if they
want to incentivize people to get a discount to pay
with cash, I mean I'm okay with that.
Speaker 2 (08:46):
That's something that you can do something about, right as
opposed to it just being this line item that's just
listed doubt and it's just like oh great, okay, can't
do anything about that. Maybe I just want to, like
you said, choose not to come back here again.
Speaker 1 (08:56):
Well, and like, I think the reason you said that
you would potentially still pay with a credit card is
because of the rewards that you get in some of
our favorite cards, you get three or four percent cash
back when you're eating out. And so if the if
the credit card fees three percent, well guess what my
costco Visa card comes with a three percent three percent
cash back when eating out. You've got one that gives
you four percent cash back when you're eating out. And
(09:17):
so that's a good reason to say, oh yeah, I'll
still pay with credit card. It's it's a wash, But
let's keep talking about credit card fees. Mat there's I
feel like we've all gotten used to credit card reward
points over the years. We just did a whole episode
with Lynn Metler about how to fly for free with
your family and using credit card rewards. Yeah, TLDR, the
only way you can get there is through credit cards.
(09:38):
There's no other, no other way that I know of
that's going to allow you to travel for free around
the world or around the country. This is all thanks
to the credit card companies. But it's not just because
they're benevolent other credit card users who don't pay off
their balances in full every month. They're kind of subsidizing
our rewards. But on top of that, because the credit
card companies make massive swipe fees like we just talked
(09:58):
about that are burdening these restaurants every single time we
use our cards. These fees are actually kind of on
the chopping block. They might not be around for much longer.
And if Congress decides to pass the Credit Card Competition
Act as it's called, this could substantially inhibit the s
white fees that Visa and MasterCard are able to charge,
which would in all likelihood inhibit the rewards that we're
(10:20):
able to earn. Is this even going to pass, Is
it going to get a vote even? I don't know,
but this two percent transaction costs is a huge part
of the reason we all have rewards these days. And
if something does get done, if this practice gets cracked
down upon, then those rewards they might not be around
much longer.
Speaker 2 (10:36):
That's true. Yeah, And typically I'll say I'm skeptical anytime
the government wants to step in and play artificial limits
on anything, right, but I will say I am slightly
more hopeful about this bill because they're looking to increase competition,
and so the different the way the networks work is,
they're thinking about making it so that one of the
two networks that they are using is not either Visa
(10:58):
or MasterCard, which dominate, like I think, over eighty percent
of the market.
Speaker 1 (11:01):
They basically have a duopoly, which is two companies that
run there. And so I like this from the standpoint
of it introduces competition, and anytime there's competition, you're not
just stifling an industry. It opens the door for.
Speaker 2 (11:13):
Some creative expansion, which is something that I do like
to see. It makes me think of there's a study
like a long time ago, I think over at MIT,
but they studied the airlines and any time a low
cost budget airline moved into a new market, a new city,
what did that do to all the other airline fares?
It lowered them. I think they caught it like the
Southwest effect. But basically, by introducing more competition and giving
(11:36):
people more options, it drove prices down, which ultimately saves
us all money.
Speaker 1 (11:39):
Same thing happens when it all d launches in a neighborhood, right,
I mean it's Kroger prices at Kroger that's half a
mile away. The prices go down there too because now
they've got a competition.
Speaker 2 (11:49):
Yeah, yeah, I love it. And we haven't even talked
about the fact that when Dixie and Ald the fact
that all the bought when Dixie. Yeah, that's promising. And
so if you've got a win Dixie near you, fingers crossed,
that is one because they're only choosing to convert certain
numbers of the wind Dixies to about four hundred stores,
but to these they're only converting some, right, So yeah,
fingers crossed that your wind Dixie will turn into an
(12:11):
Ald but hopefully it doesn't impact the existing Aldis and
the incredible prices that they're able to offer folks. Yeah,
so again this is this is vapor where this is
potential legislation, but and it could have an impact on
credit card fees. And you know what, Matt, I'm.
Speaker 1 (12:25):
Okay if the if those white fees go down, and
if it reduces costs for retailer.
Speaker 2 (12:31):
I'm all about of those fees go. Yeah, it's about
how they sure are able to limit this.
Speaker 1 (12:35):
But I'm all good with that because I don't mind
missing out on some of those rewards if it lowers prices, right,
And I kind of like the system the way it is,
but I know it's also not the most fair system.
So if those fees go down, no sweat off my back.
I'm okay with with fewer fewer rewards. But since we're
talking about cards and plastic, let's talk about gift cards
for a second. There's a lot of unused gift cards.
(12:55):
This is something that continues to be an American problem,
and forty seven percent of US adults have gift cards
languishing in their wallet, their purse, or like their underwear jar.
Speaker 2 (13:06):
That's that's where a lot of people keep there, right,
So we keep your cash on it's right, yeah, because
I look through your underword, which is weird.
Speaker 1 (13:13):
But like the real thing, Matt is, people need to
spend the gift cards that they have, right, pull them together.
Emily and I did this. We started going back to
these places where we had gift cards and taking our
date nights based on where we had a gift card too.
So use I use the gift cards you have on hand,
or if you're like, hey, this isn't really my jam,
buy something for somebody else at that retailer, or sell
your unused gift card that you're never gonna use, you're
(13:34):
never gonna get get around to using. It's just basically
like worthless in your life, will turn it into something
positive and yeah, you can sell it at a site like
card cash dot com.
Speaker 2 (13:42):
Can you so, can you sell a gave credit there?
Do you and Emily get one of my favorite intown restaurants? Well,
and then we also have a gave credit or different.
I think we're all out now. Yahay. We used it
all right before we moved up, because that's a hall
to go all the way back in town like that.
That's kind of a friugler cheap as well. It's just like, oh,
it's so far away. Is it worth the additional time
the gas to take advantage of money that you've already spent,
because then you start dealing with a little bit of
(14:03):
the some cost fallacy, right, You're like, we already have it.
Speaker 1 (14:06):
It is if you love the place, right and you
want to go back there because it's one of your favorites.
And the whole reason I bought gift cards to that
restaurant so frequently is because they offer deals. There were
always great deals. It was like, hey, if you spend
one hundred bucks, you'll get one hundred and forty dollars
in gift cards to our restaurant. And that's when gift
cards make sense, right, win value there when you're getting
a special deal. But for the most part, I think
gift cards when you're just trading a dollar that can
(14:28):
be spent anywhere for a dollar that has to be
spent in one specific place that doesn't really compete with me,
it doesn't really make much sense. So I would say, like,
if you're thinking about getting a gift card for somebody
as a gift and you're not getting any sort of
additional perk, give cash instead with a thoughtful letter that
says like, Hey, I know you're you've been wanting this,
or I know you would love this, or I know
you you'd love to go spend this on an experience
or something like that. I mean, think about wedding registries now, Matt,
(14:50):
people want cash more than anything to like a home
down payment. Yeah, they want down payments or honeymoon dollars,
right and so, but people want to give you plates
and forks and stuff like that, and sometimes like the
best gift is cash.
Speaker 2 (15:03):
Yeah, you're more of an absolutist on this one, which
is normally the roles have reversed a little bit. I
feel like I normally like the absolutists, but I do
think it makes sense if you want to give somebody,
like you said, an experience, because that otherwise they would
not pay for themselves, right, and so like it makes
like a favorite coffee shop here Tuesday, they make the
best call, Like they pull the best espresso, they make
the best coffee. The actual shop is gorgeous, it's awesome.
(15:26):
And I think there's a lot of folks who would say, well,
I don't really want to go there. But if I
basically am curating an experience, and I'm saying I really
want you to experience what I get to experience when
I go there, that's when I think it makes sense
because otherwise you could write a note, but you can
take them there or even better, absolutely even better. But
I think that's one exception as well. So certainly if
(15:48):
you get a deal, if you're able to get more
by getting ordering buying a gift card than the actual
cost of the gift card. But then there's a whole
experience side of it as well that I think can
make a lot of sense. Lots of time.
Speaker 1 (16:00):
It can be it can be kind of a lazy gift, right,
And you're calling me lazy. No, we're not trying to
throw shade. I'm just saying I know from personal experience
that sometimes that's like a oh, I kind of know
they like that retailer, maybe I'll just grab something there
and oh yeah, yeah and so And I mean, I'm guilty, guilty,
because I've done it too, But I do think that
that cash is is often a better gift, And especially
(16:22):
when you look at that stat and you're like, man,
there's a decent chance this goes unused, not even because
they didn't think it was a good gift, but because
it got lost somewhere they didn't get around to. It
fell behind the cracks of your dresser or that kind
of whatever. And and that's kind of what I want
to avoid. I hate seeing like, just what is it
more than a billion dollars in uneedscope. It's it's like
so much money, but yeah, I.
Speaker 2 (16:40):
Mean as a substantial amount of money. So it is
a lot, Yeah, that different retailers that they have on
their books as gift cards that hasn't quite yet been redeemed.
Speaker 1 (16:47):
So even though I think I agree with you in
principle it's thoughtful right to give that, that's that that
can be though I don't know, but yeah, I think
it can be thoughtful and it shows, Hey, I want
you to have this interesting day. But if that gift
card gets lost or you know, misplaced, then that just
kind of went down the toilet.
Speaker 2 (17:04):
Yeah, all right, we do have additional stories we're gonna
get to, including how bitcoiners need to beware. We will
get to that plus a few other stories right after
the break.
Speaker 1 (17:22):
All right, the Friday flight continues said, of course, we
got to get to our Ludger's headline of the week.
This one is titled most stocks are bad for your wealth,
which doesn't sound like a great title, but.
Speaker 2 (17:34):
I do like the headline because it makes it sound
like's like this is bad for your health to avoid
this thing, I like smoking. I like that. Oh yeah, exactly,
Surgeon General's warning, right, Jerne Palace warning.
Speaker 1 (17:43):
This one comes from the Financial Times, which is a
great newspaper from across the pond, and so it just
made me think, like, wait a second, are you guys
telling me that investing in stocks is a bad idea? No,
of course, as always, this is a headline that's meant
to evoke a click in some sort of emotional response.
But let's check the numbers, right. The stats do show
that the majority fifty eight point six percent to be exact,
(18:06):
of stocks underperform a basic cash strategy. Right, so more
than half of stocks, if you were to invest in them,
they would do worse than just holding on to your
dollar bills. The Financial Times literally concludes at the end
of this article that the median global stock has been
worse than dollars in a cookie jar, which is crazy.
So a bunch of stocks are not going to help
(18:27):
you out. And this is crazy but true. There's nuance
here though, right, just because most stocks won't help you
build wealth, it doesn't mean that investing in the market
as a whole is going to let you down. Right.
The stocks that don't suck, well, those ones more than
makeup for their underperforming peers.
Speaker 2 (18:42):
Essentially, this entire story can be explained by looking at
the difference between average returns and median returns, because they're
looking at median returns and that's not what you get
when you invest in the entire market, which is what
we advocate for. Like it's like a modern day parable,
Like if you heard the story of when Elon Musk
walks into a bar, the net worth of everyone in
(19:03):
the bar on average goes up like twenty to fifty
million or something like that. Does that mean that each person,
each patron in that bar, that they actually got rich
or no, But if you're looking at the average.
Speaker 1 (19:13):
It effectively does. And that is what happens when you
buy the entire market as opposed to individually picking stocks.
And by the way, we actually talked about the dangers
of single stock investing back in episode four ninety seven,
So that's one that you can go back and listen
to if you want to do a deep dive into
some investing. But let's kind of pull this all together.
(19:34):
This is not a case for hoarding cash.
Speaker 2 (19:36):
We're not saying that it's a better move to stick
that money in your underword draw or in the cookie jar.
It's another argument though, in favor of index funds and
against investing in single stocks. Even though most stocks end
up doing worse than money that you're actually just keeping
as physical cash, it's still too difficult to pick the
(19:57):
actual winners in the actual lose. It's like going into
a bar. Let's say you didn't know what Elon Musk
looked like, and you had to like pick somebody and say, okay,
you get to share the wealth of one person in
as far, it's like, what if you don't end up
picking the guy that's saddled with like forty thousand dollars
in student loan debt. That's essentially the equivalent of single
stock investing. You don't know which ones are going to perform.
So that's why we we like to point folks towards
(20:19):
index investing, investing in the entire market. I don't even
like typically saying investing in stocks because it does have
that connotation of okay, well, which ones as opposed to say, no,
you need to invest in the market.
Speaker 1 (20:29):
The only single stock you should own is one share
of AMS in.
Speaker 2 (20:32):
Order to get that Bob.
Speaker 1 (20:33):
Yeah, because usually it really is the hope and a
hunch and a prayer sort of mentality when it comes
to single stock investing. It's like, oh, well I watch Netflix,
sometimes I should invest in that, or it's like whatever,
I mean that CEO, he's kind of crazy and out there.
Maybe I should invest in that stock. But there's so
many things that influence the value in the direction of
a of single stock, and that it's just a really,
(20:56):
even if that company is great, it doesn't mean their
stock is properly valued, right, And so yeah, it looks
like maybe, let's say Nvidia has a lot of room
to run as a company, doesn't mean their stock has
a lot of room to run. Not necessarily. It might
be super overvalued right now. I don't know who knows.
That's the thing though, we don't know. And like it
literally takes dedicating your entire life, like Charlie Munger or
(21:18):
Warren Buffett to analyzing different companies, then yeah, you might
be able to outperform Otherwise the rest of us, all
the rest of us peons you invest in the entire market.
And that's honestly, why so many individual investors end up
underperforming the index and underperforming other more conservative ways of
investing too, is because they're trading frequently.
Speaker 2 (21:36):
Based on what they read some headline exactly.
Speaker 1 (21:38):
They're like, oh, maybe you should hop in on that
one then or And I think I heard Carl Richards,
who does like those sketches on the napkins for the
New York Times.
Speaker 2 (21:47):
He the behavior guy.
Speaker 1 (21:48):
He I think recently said if you don't have something
in your portfolio that's underperforming that you're kind of annoyed with,
you're not diversified enough. And so yeah, I think like
the fact that we're diversified. We're not going to have
the tops. We're not gonna have, We're not gonna be
overweighted towards the stocks that are doing the absolute best.
But it also prevents us from that downside, being too
heavily invested in some of these stocks that are gonna
(22:09):
perform worse than cashing our wallet. So something else, by
the way, that can impact your returns is your bitcoin exposure.
And the folks at morning Star did a ride up
on this, and they found that even just a little
bit of bitcoin will add a lot of volatility to
the mix of your investments, and too much volatility can
cause you to take actions that you probably wouldn't have
made otherwise. Right, And so they give this example of
(22:31):
how adding just five percent bitcoin to your portfolio, which
is in our estimation, the absolute most you should have
to like a balance portfolio of sixty forty portfolio of
stocks and bonds, well, from a volatility perspective, it's going
to make it feel more like a ninety ten ninety
percent stocks ten percent bond portfolio. And so for a
lot of people, I just I think it's important to
(22:52):
say the right crypto exposure for a whole lot of people.
The right bitcoin exposure is zero, because if you do
opt to invest in bitcoin at all, even just a
little bit, that you'll experience bigger portfolio swings. Can you
handle it, then you might be okay having a little
bit of exposure, but know that these swings are often
what cause investors to make changes that aren't in their
best interest. And so I thought that was a good
write up. It's helpful because there's still a lot of
(23:14):
interest even though I guess, I don't know, is the
crypto winter still around? It seems like bitcoin hasn't done
much right.
Speaker 2 (23:20):
It's doing pretty good over the I guess the past year,
it's but not compared to it's high it's like two
three years ago or whatnot. But let's talk about a
new way jel for us to spend our money. Not
us personally because we avoid TikTok and got time for that.
But tilly, if we are on TikTok, but we you
and I have no control of Yeah, personally, I am
(23:41):
not on there. Don't want to get sucked in. But
the TikTok shop has now been unleashed, and yeah, that's
yet another way that they've greased the skids and the
different social media companies are trying to part you from
your money. The algorithm they're on TikTok of course, it's
promoting different videos that are promoting products that you can
hand purchase via TikTok shop, and so doom scrolling. It's
(24:02):
not only gonna suck all of your time, but it's
also gonna cost you money. It's gonna steal your money
as well. And so we would recommend to either take
the app off your home screen or just considering deleting
it altogether because you're gonna be able to avoid this
new virtual mall. You'll probably be a little bit happier
as well, based on any of the recent research that
(24:23):
the impact that has on mental health. But it's I
wanted to admit that I buy things on social media,
specifically Instagram, but I feel like it's a little bit
different because I've when I see an ad on Instagram,
it high like it feels more like a marketplace, at
least in my own experience. I know that, for instance, Steepencheep,
they serve me up a Patagonia down jacket that was
(24:46):
on massive sale. I'm a basic bro Okay, I got
my Paddy to go to jacket. But what it feels
like TikTok is doing is that it feels like they're
actually manufacturing consumption. Like it's almost as if they're manufacturing
demand and they're selling stuff that I'm sure there might
be some decent stuff up there within the shop, but
it feels like stuff that is part meme and like
(25:07):
they're basically blurring the line between memes and real life essentially,
And so I feel like what that does is it
just feels consumption. It feels waste, Like have you seen
have you heard about like these pickle t shirts or
the stuff like that, where I'm just like, okay, you
have blurred the line up between social media and real
life and when it comes to different memes and what
(25:28):
it is that think how things are trending online and
on social media. It costs you your time if you
are kind of getting sucked into that. But they are
on actual products being manufactured. And I hate this because
it just feels like fast faction, fast fashion taken to
like the nth degree, where someone's going to get something
because they think it's funny and maybe they wear it
or they use it whatever for like a week and
then it just ends up in the landfall. I hate
(25:49):
that aspect of what it feels like that the TikTok
shop is doing well.
Speaker 1 (25:53):
And I think you and I would say, whether it's
TikTok or Instagram, however, you're getting served ads and you
see something it's like, oh, that's a decent deal, and
that's something that I would like, Well, incorporate a twenty
four or forty eight hour rule right where you're like, Okay,
do I still feel this way about that jacket or
that pill shirt forty eight hours later, and if you don't,
if you're saying, well, well, in the moment, yeah, it
seemed nice and it seemed like a good deal, but
(26:13):
now I'm realizing, wait, I have other financial priorities. If
you have a rule like that in place, and you're
not buying stuff on a whim, that's being served up
to you realize there's being You can't go on the
internet now and not be and not have someone attempt
to sell you something. And so the more we can
avoid that and incorporate habits into our lives that prevent
us from making knee jerk purchases, I think that's what's important.
(26:34):
And you mentioned it's the virtual mall like that, that's
the perfect way to phrase it.
Speaker 2 (26:37):
Like they're just perusing along and something flashes in front
of you, like you weren't necessarily looking for something. And again,
I know it's a fine line.
Speaker 1 (26:44):
It's wait, it's like Spenser's like the Goofy t shirts
and stuff like that. I don't even know if that
store still exists, but that's that's kind of what TikTok's
trying to do. And you didn't need the like Burdon
Earning Goofy retro shirt or anything like that, but now
TikTok says.
Speaker 2 (26:56):
Hey, oh, why don't you check it?
Speaker 1 (26:58):
And then that then they're like, yeah, why not? But
that money adds up, right, And there's this.
Speaker 2 (27:02):
Hey, it's your money, you spend it like you want.
Speaker 1 (27:04):
You spend it like you want, but create habits to
prevent you from spending it in a knee jerk way,
and they're gonna upend your budget. And there's another TikTok trend,
by the way, it's apparently called girl math man. I
don't know if you've heard of this sounds kind of sexist.
Speaker 2 (27:15):
I don't know if I'm allowed to be.
Speaker 1 (27:16):
Talking about it, but it's kind of a joke really,
Like one of the girl math trends is to view
cash as free money, or to think that you're making
money when you don't buy a Lotte at your favorite
coffee shop that day, or that you're losing money when
you don't buy something that's a good deal. All those
things are not true.
Speaker 2 (27:32):
We know that, right.
Speaker 1 (27:33):
Basically it's dumb mental accounting. But it's something that we've
all been guilty of at different times, right, Yeah, we've
all done something like that to justify something that we
want to buy, like a splurts that we want to
partake in as a way to emotionally not feel as
bad about it. But just because these jokes are swirling
around social media, don't let them impact how you view
your dollars. Right, your dollars are workers that can help
(27:54):
you on the path the financial independence. And yes, that
includes physical cash. That's real money too.
Speaker 2 (27:59):
And even though personally for me that isn't a completely
separate bucket as well, because it's just it's literally not
on the books anywhere, and I keep like this little
stash of petty cash around, yeah, which doesn't feel real,
though I know it is exactly.
Speaker 1 (28:12):
But I think if you trick yourself into thinking that
some of these purchases are free money, or that not
spending money is saving money, those are different things, right.
Speaker 2 (28:21):
I saw some folks justifying that, like, if you get
you split a bill a friend, venmo's you some money,
and so that money is sitting there in your Venmo account,
it feels unaccounted for. Oh, that's free money, and you
can just spend it however you want.
Speaker 1 (28:31):
But no, you should be accounting for that, and especially
if you have big financial goals, every dollar matters, that's right.
Speaker 2 (28:36):
Yeah. But what makes it funny, though, is that there
is a kernel of true. What makes anything funny is
that it's slightly true, and so it's okay to laugh
at it and enjoy the joke, but simultaneously, we hope
that you are making wise decisions with your money, that
you are doing the right things. Jill, did you see
that there are no longer any cars that you can
mind you that are less than twenty thousand dollars? Now?
(28:57):
See that? Yeah? So the Mitsubishi mirage is just like that.
It's a mirage no longer exists. It's calm, which personally
I don't even know what a Missubishi Mirage looks like,
and say, in my mind, I didn't know anybody that
drove one. And so I feel like that the sub
twenty thousand dollars car, maybe it disappeared a long time.
Speaker 1 (29:15):
Ago, but it's a couple of years ago that there
were some others too that were sub twenty The Corolla
used to be one. Really that was a dependable sub
twenty k car, but now it's a and that was
just the starting price, by the way, like that sure
when you put on extra stuff, it was gonna cost
more than that.
Speaker 2 (29:27):
Any more expensive. Yeah, it's a bummer because it seems
like cars are getting more affordable less affordable, I should say,
Which got me thinking, though, is this just is this
the reality or is this just perception? Is just just
what it seems to be? And so I actually, so
I did a little bit of research. I started digging,
and I was like, Okay, what's a good solid car
that they made like thirty years ago? So I was like, oh,
like a Honda Accord. So I look back in nineteen
(29:50):
ninety three, how much do you think a new Honda Accord.
Speaker 1 (29:52):
Cost nineteen ninety three. I'm gonna say it costs fourteen
hundred dollars.
Speaker 2 (29:57):
Oh my gosh, excellent. Guess it was like right around
fifty ten thousand dollars, all right, And so, but what
do you think the average annual salary was in nineteen
ninety three.
Speaker 1 (30:06):
I'm gonna say the average annual salary was thirty nine
eight hundred dollars.
Speaker 2 (30:10):
So it was thirty thousand dollars. Okay, thirty thousand dollars.
So you do the math. Basically, a good solid car
back thirty years ago was about half of the annual salary.
And so, so guess what the annual American salary is today? Wow,
I'll just tell you it's like seventy four thousand, sixty
is it's right at sixty thousand dollars. So based on
that math, that should tell you that, okay, maybe a
(30:31):
solid decent car today that's new should cost you around
thirty thousand dollars, which is, you know, obviously substantially more
than a twenty thousand dollars vehicle. And so I guess
I wanted to present that piece of information. I guess
with with some of the numbers are showing because even
though there are fewer affordable cars in relation to what
cars used to cost. It it seems like it's kind
(30:52):
of keeping in line. It seems to be tracking well.
Speaker 1 (30:54):
The average price of a new car sold in America
is like forty five hundred dollars, So that's true.
Speaker 2 (30:59):
Yeah, I mean that also takes into account just how
nice cars have gotten, right, that's true. Definitely isn't apples
to apples.
Speaker 1 (31:04):
And according which is three is not the same as
an accord in twenty twenty.
Speaker 2 (31:07):
Three, That is true. That is true.
Speaker 1 (31:08):
Same with houses, right, Like houses have improved in a lot,
so're you're not comparing apples to have apples on either
one of these. But it is I think disheartening for
people to see that it's hard to buy a new
car for sub twenty k and car prices are still
just kind of crazy right now, which only reinforces keep
your car longer, like maintain.
Speaker 2 (31:27):
It well, consider used as well. If folks are out
there and they've never actually purchased a used car, I mean,
you could like, do not take that depreciation hit, buy
a car that's three years old, save a ton of money,
and have a virtually new car. Yeah.
Speaker 1 (31:38):
I ran into my best friend from childhood growing up
you're my current best friend, so oh yeah, don't feel
like you. But so he and I went to a
concert the other the other day and he pulled up
in his in his Hyundai. It's thirteen years old. He
paid thirteen thousand dollars for it thirteen years ago and
he's still driving it. And by the way, it's like
just like tiny accounto box and he's like six six, which.
Speaker 2 (31:59):
I just think is a mate. People.
Speaker 1 (32:01):
It gets pretty good, guess mama, If you're willing to
suffer a little bit, drive something that's not very cool,
that might not even be all that comfortable, you can
save a ton of money. And that's all that car
has done for him. He bought a brand new Yeah.
Speaker 2 (32:11):
I just heard you. I just read a stered to
my mind. So you and this other guy, I bet
y'all are on like the front row at the oh yeah,
blocking to everybody's right hey down in front.
Speaker 1 (32:20):
But it's just a good lesson, right, Like couldn't afford
something nice for sure? But does he choose to drive
this so he can spend money freely in other wise?
Speaker 2 (32:26):
Yeah? He does. And I don't know.
Speaker 1 (32:28):
I think it's a good example.
Speaker 2 (32:30):
Absolutely all right. I think that's gonna be it for
this Friday flight. You can find all the stories that
we mentioned today up on the website at howamoney dot com.
There in the show notes, we'll link to any of
the resources that we may have mentioned. But Buddy, that's
gonna be it for this episode. So until next time,
best Friends Out, Best Friends Out,
Hosts And Creators
Joel Larsgaard
Matthew Altmix
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If you've ever wanted to know about champagne, satanism, the Stonewall Uprising, chaos theory, LSD, El Nino, true crime and Rosa Parks, then look no further. Josh and Chuck have you covered.
Dateline NBC
Current and classic episodes, featuring compelling true-crime mysteries, powerful documentaries and in-depth investigations. Follow now to get the latest episodes of Dateline NBC completely free, or subscribe to Dateline Premium for ad-free listening and exclusive bonus content: DatelinePremium.com
On Purpose with Jay Shetty
I’m Jay Shetty host of On Purpose the worlds #1 Mental Health podcast and I’m so grateful you found us. I started this podcast 5 years ago to invite you into conversations and workshops that are designed to help make you happier, healthier and more healed. I believe that when you (yes you) feel seen, heard and understood you’re able to deal with relationship struggles, work challenges and life’s ups and downs with more ease and grace. I interview experts, celebrities, thought leaders and athletes so that we can grow our mindset, build better habits and uncover a side of them we’ve never seen before. New episodes every Monday and Friday. Your support means the world to me and I don’t take it for granted — click the follow button and leave a review to help us spread the love with On Purpose. I can’t wait for you to listen to your first or 500th episode!