January 24, 2025 • 33 mins
Time for a Friday Flight- our little sampling of the week’s financial news and what it means for your personal finances. There are a lot of headlines out there, but we boil them down to specific takeaways that will allow you to kick off the weekend informed and help you to get ahead with your money. In this episode we explain some relevant and helpful stories like: NO to the cash-out refi, Trump 2.0 and your money, Melania coin, feds returning to the office, insufficient savings, ghost jobs, WFH job scammers, TOYS are a scam, why the rise of touchscreen kiosks, everyone is tipping less, ballooning escrow accounts, & apartment rents on the decline.
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Transcript
Episode Transcript
Available transcripts are automatically generated. Complete accuracy is not guaranteed.
Speaker 1 (00:00):
Welcome to How to Money. I'm Joel, I'm Matt, and
today we're talking Trump V two, ghost jobs and insufficient savings.
Speaker 2 (00:26):
Personally, Joel, I would have said Trump two point zero.
That's what everyone's calling it.
Speaker 1 (00:29):
That's why don't you didn't you out me? I like
V two as well.
Speaker 2 (00:33):
Okay, but uh no, this says our Friday flight, our
weekly roundup of the different headlines we've come across this week,
and specifically we're going to talk about how they pertain
to your money.
Speaker 1 (00:43):
That's someone else's money. This is all about you. Well,
I'm not infallible with my naming conventions. I will say,
as you just pointed out, Trump two point h would
have been better. Well, I just rolled.
Speaker 2 (00:52):
Off the tongue. I think I've heard more folks recently
talking about it.
Speaker 1 (00:55):
Well, we'll talk about there have been a flurry, there's
been a flurry of activity this week on the political
front that does impact your money. We'll get to that
in just a second. Matt. I logged into the back
end of my mortgage account recently, though, and you know
what it said. On the right hand side. They were
essentially trying to get me to do a cash out refinance,
which would be a terrible idea.
Speaker 2 (01:16):
Does not surprise me at all because this is a
newer mortgage servicer. I'm assuming that purchased your old That's
right there, you go, dude, that is what they do.
That is the business that they're in. They're all about
trying to get you to take on some of these
additional loan products that pad their bottom line.
Speaker 1 (01:30):
And as anybody out there knows, if you've had your
mortgage for any length of time, rates have gone up significantly.
A cash out ref would put me in a really,
really bad financial position. But what it said, like the
marketing efforts said, your cash out resolution paid down debt
using equity. And they're trying.
Speaker 2 (01:46):
The new year, new you, that's right messaging and branding.
Speaker 1 (01:49):
They're trying to get that, hey, why don't you get
a lumps on a cash in your life to I
don't know, get rid of other crappy debts that might
be worse than your mortgage. What a bad idea that
would be for basically everyone, right to take a three
percent mortgage, turn it into a seven percent mortgage and
then yeah, maybe pay down ten thousand dollars worth a
credit card debt or something like that. But then you've
(02:10):
got that mortgage debt looming for thirty years. The next
thirty years, you're probably extending the life of that loan
significantly by doing that cash out refine, I mean cashier refis.
They just make sense for basically no one.
Speaker 2 (02:22):
Right, just given the fact that there's a chance that
we never go back to these I think some folks
are thinking, well, it'll come down at some point. We
don't know that that is actually going to happen. It
is yet to be determined those predictions. And we talked
about this at the time, where you know, real estate
agents mortgage brokers were telling people, well, Mary, the house date,
the rate, Yeah, it doesn't look like a great suggestion.
Speaker 1 (02:45):
We set it at the time, and I think we
have been proven right, and yeah, will rates could rates
potentially go down in the coming years, Maybe maybe, but
it's not like totally could. But we don't know that
they're going to We don't know, all right, man.
Speaker 2 (02:58):
We saw a return to the Oval office for President Trump,
and I think a lot of folks might be wondering
how this might impact our economy as a whole. How
is this going to impact your personal finances? That remains
to be seen. There's always a whole lot of talk
and bluster when it comes to President Trump. There's a
litany of things that we can discuss. For instance, the
new twenty five percent tariffs against Canada and Mexico that
(03:21):
could be implemented as early as next week.
Speaker 1 (03:23):
In terris.
Speaker 2 (03:24):
They might serve a geopolitical purpose, but they essentially act
as a tax on consumers.
Speaker 1 (03:30):
And raising the price of everyday goods right, whether it's
auto parts, food, the litany of things.
Speaker 2 (03:36):
It's counter to the free market and the ability for
companies to produce goods at the absolute lowest price. And again,
I understand it from a geopolitical strategy standpoint, But how
this impacts Americans, we will see.
Speaker 1 (03:49):
How broad those terrorists are. That will also impact how
we feel them.
Speaker 2 (03:53):
But there certainly is a chance that inflation, which has
calmed it could potentially be stoked by this policy change.
Were executive orders that could have an impact in the
coming months, like an attempt to curb building restrictions in
order to increase supply. How that actually will work in reality,
It's it's gonna be hard to discern.
Speaker 1 (04:11):
It sounds good on paper, but yeah, well yeah, how
well for that, Yeah, because that's what we need.
Speaker 2 (04:16):
For instance, when it comes to housing, the largest line
item on everyone's monthly budget, more supply leads to lower prices.
Speaker 1 (04:22):
Building codes are often local. So how is some sort
of you know, yeah, and which is yeah. Everyone who
is a big fan of Trump, of course, is praising
the stroke of the pen, the phone call, and the
ability to make everyone's lives better here in the States.
But Dave Chappelle, he actually said it really well on
Saturday Night Live. He said, whether people voted for.
Speaker 2 (04:43):
You or not, everyone is counting on you good luck,
which I appreciate. Always count on Dave Chappelle to inject
a little bit of common sense into the discourse of
the time.
Speaker 1 (04:53):
Yeah, I appreciate Dave, and that well said. Right, Well,
so we are. We're hoping for the best. We always
hope for the best for our presents, whether you've voted
for them or not, because we want the best for
our country and the three hundred and forty million people
inside of it. I'm sure we're gonna have a lot
to talk about in the coming months. Matt on the
political front and how the political regime change impacts are
our finances, because it will, it will have an impact.
Speaker 2 (05:16):
And hopefully we will pay attention to the headlines that
are actually going to matter, Yeah, and the things that
are actually going to happen, because I'm sure so many
media companies are like, yeah, strops back in office because
it gives them something to report on this and like
the craziness that oftentimes comes from the.
Speaker 1 (05:32):
Tweets or truths or whatever it is that Trump is saying,
and you and I will attempt to our best to
keep it a political and focus on the money stuff. Indeed,
one thing we have to discuss is the meme coins
that the President and the first Lady launched a head
of the inauguration. It was kind of a crazy stunt, right, and.
Speaker 2 (05:49):
Politics aside, It doesn't matter where you laying on the spectrum.
Speaker 1 (05:51):
This is ridiculous, and we've kind of trashed meme coins thoroughly,
and the cryptocurrency space. We have, i think, given a
lot of caution in our assessment of cryptocurrency and what
kind of approach normal investors should have towards crypto. And
some folks did make money in this kind of mean
coin bonanza if they bought early. They bought that Trump
(06:12):
coin early, then the cashed out quick. But this is
just another reminder that the mean coin space is rife
with grift. The majority of people lose money. And it's
interesting too, Matt, because the crypto space, I think they
were hoping that a Trump presidency would usher in vibes
of legitimacy, and there has been a lot of talk about,
you know, bitcoin in particular having a national Bitcoin Strategic
(06:35):
Reserve or something like that. Is that going to be
a boon to some of the more popular, more long
standing cryptocurrencies. Maybe if it happens. Yeah, But just this
little stunt, I guess hasn't really aided in the legitimacy
of crypto. It hasn't started off in a good way.
And the takeaway for individuals listening is don't participate in
(06:58):
the mean coin insanity no matter w Yeah, and I
will say, be ready to lose your shirt if you yeah.
And again this is I think this is an a
political statement, but this shouldn't be anything new for folks
who have like followed what it is that Trump has done,
Like this is like typical behavior for him, right, Like
more recently, it's like the branded it's the dumb Lee
Greenwood bibles that Trump is selling for.
Speaker 2 (07:19):
How much was he selling this for?
Speaker 1 (07:20):
I don't six.
Speaker 2 (07:21):
But then like the sneakers then, but even before he
was president, would you look great in those? By the way,
even before he was president? Like the like the Trump
steaks and the vodka, like this is something that he does.
And so on one hand, it's just it's more of
the same. I will say, I was shocked to see
the pastor that gave one of the benedictions at the
(07:42):
end of the inaugural address or whatever, he launched.
Speaker 1 (07:46):
A meme coin.
Speaker 2 (07:47):
Oh really, yes, that is incredibly disheartening, Like like that
makes me angry. This is like a pastor, someone who's
supposed to be forsaking worldly riches in a self sacrificial
way to serve other people, and man talk about like
that made me really upset when I when I heard that.
It just feels so counter to what someone who is
(08:07):
in ministry or someone who's a pastor that they should
be doing.
Speaker 1 (08:09):
Does this mean we're canceling the launch of our mean
coin that we have planned.
Speaker 2 (08:13):
No, no, no, we're not ministry.
Speaker 1 (08:14):
But we can do it. We can do it, Okay.
Speaker 2 (08:16):
Something else though, that struck me was the mandate for
government workers to return to the office. Dude, working from home.
So twenty twenty, we're turning to the office rto. That's
the name of the game now. And I will say
there's evidence that working from home, at least at the
federal level hasn't had great results. That is costing the
government therefore us as taxpayers billions of dollars.
Speaker 1 (08:38):
Yeah, there's a report issued kind of towards the end
of last year, I think from one of the senator's
offices that headlined, you know, just how much less productive
certain government agencies and certain individuals have been and just
how costly that's become.
Speaker 2 (08:50):
Yeah, yeah, dude, we're talking especially like given all the
office space that is sitting empty, like that's real estate,
is incredibly expensive. And similar to the companies who have
issued returned to off orders, I think the government they
may not be crying you or river if you end
up quitting over this. It appears that increased efficiency at
the office and a trimm or payroll are simultaneous goals.
(09:11):
So we think that the smartest employers out there who
are looking to retain top notch talent will offer more
of a hybrid or more of a flex approach where
they do trust their great employees to do their job
wherever they are. But I do think as an employee
you might have to make up difficult choice if going
back into the office, let's say five days a week,
if that's going to be too tough of a pill
(09:32):
to swallow. I think eventually it'll settle out somewhere in
the middle, because I think there had to be this
sort of hard correct right, Like the pendulum swung so
far to one side and now I think it's almost
having to swing hard in the other direction in order
to I don't know for employees, for employers to communicate
too employees that they're taking this a bit more seriously,
But I think it'll eventually settle somewhere in the middle.
Speaker 1 (09:52):
And so much depends on the industry, right, and it
depends on specific employees too, like how long have they
been with the company, how well do they know that
ask how well are they able to communicate with people
who are also working remotely. But I guess on the
flip side of this, this could impact the government's ability
to hire some of the top talent if some of
that top talent says, yeah, I'm not coming to the
(10:12):
office five days a week. I'm not doing that DC
hellish DC commute that I'm imagining is pretty rough, depending
on where you live and how far your commute is.
But I do think that the RTO trend is only
going to increase in the coming months, and that's going
to impact a lot of how to Money listeners if
their employer is kind of keen on pulling that off too,
(10:33):
all right, Matt, Something else that everyone might want to
consider is rethinking their emergency fund, how much money they
have stored up in their high yield savings account. MarketWatch
pointed this out that changing economic realities might mean that
you don't have enough money saved up in your bank account.
You might not have enough liquidity, and instead of the
traditional three to six months that is typically recommended, some
(10:56):
folks are opting to increase the amount of money they
have on hand to nine months or even more. And
that is I think a potentially smart move, specifically if
your industry or your particular job is less stable, right,
So yeah, yeah, if you're in a position that feels
a little more precarious, like I would want to have
more cash on hand, that seems like a smart move.
(11:19):
The average duration of unemployment has actually gone up as well,
lasting on average five and a half months, So if
you lose your job, you're talking almost six months to
get the next one. So yeah, if that's the case,
three months certainly doesn't seem like quite enough. I guess
I kind of bland somewhere in the middle on this though.
Mat I think that telling people to save up nine
plus months worth of expenses that can feel a little
(11:41):
demoralizing because it's really hard to do and how much
you actually need it really does depend on a variety
of factors, like are you a two income household, do
you have a bare bones budget that you could implement
immediately upon the loss of a job, and how much
would that actually save you? Because if you're willing to
do that, hey, what looks like three months worth the
normal expenses could be five months worth of bare bones
(12:02):
budget expenses. And ultimately, I think having six months worth
of any fund it's better than having three. And some
folks might understandably need or want to save even more.
And I think if you do experience a job loss,
you are going to be thankful that you thought ahead
of time, that you were planning, and that you had
a little bit extra on hand, that's true.
Speaker 2 (12:22):
Yeah, And as we talked with Katie North about this
past Wednesday about sabbaticals, you might be able to parlay
some of those additional funds into a sabbatical where you're
being a little more introspective there.
Speaker 1 (12:32):
Time off losing your job means a severance. If you've
got plenty of savings on hand and then three, five,
six months worth of severance, it's like set.
Speaker 2 (12:40):
Yeah, So, okay, the unemployment rate is low, but that
doesn't mean that the job market is booming for job
seekers out there, or that hunting for a new gig
is easy. This is a part of why it takes
longer for most average job seekers to find a new gig,
and part of the difficulty is navigating a slew of
job postings online, many of which are so hiring platform Greenhouse.
(13:02):
They just released an analysis of online job listings and
they found that one in five are fake listings. And
it's not that the listing itself is an actual scam,
but that there was never actually any hiring activity for
that listed job. And so you might be wondering why
a company would do such a thing, Why would they
post a position that they don't actually intend to fill.
Speaker 1 (13:22):
It does seem sailing well.
Speaker 2 (13:23):
It could be their speculation that could be in an
attempt to project growth that's not actually happening. Evidently, some
companies are using it as sort of like a fishing
line that they keep out permanently in hopes of catching
a rare talent.
Speaker 1 (13:36):
But still, what would like a rare fish be man,
if you got a rare fish just leaving that line out.
Speaker 2 (13:41):
Narwhall, I don't know that's a whale though, right, Yeah,
but it doesn't make it any easier for hard to
reel that in who are looking for work. It's something
to be aware of that you think it's going to
be easier than you think. In part, I think because
there are so like, oh, everywhere I look, there's a
job listing. The Internet makes job hunting easy, right, It
makes it look so simple and jobs appear to be plentiful,
(14:04):
But that is not the case.
Speaker 1 (14:05):
Yeah, I think just kind of approving some of those
job boards. It's not that you can't find a job online,
or that those job listings aren't helpful and can't put
you in the right direction, can't get you at least
on the right trail in the right scent. But I
think it can get your hopes up when you see
a position that looks awesome and it looks like it
pays well, and then you never hear back upon reaching
out or applying. That's just kind of the reality of
(14:26):
you have to kind of like cast your net wide
on the Internet and you're just hoping for someone to
respond on the other end. Seeing that, Matt, you mentioned
that these listings are not scams, We'll see that just
had a piece about job scams, and they're coming in
to folks via text message, like actual job scams. Yeah, yeah, gotcha.
These are just fake the ones you talked about. But
now we're talking about actual scammy jobs. What's happening in
(14:48):
these text messages that the person who's sending you the
message pretends to be a recruiter who has a solid
work from home job, and hey, maybe your employer just
said you got to come back to the office four
days a week and you're like, wait, I don't know.
Speaker 2 (15:01):
Taking me back to twenty twenty, yeah, I like this work.
Speaker 1 (15:03):
From home job that this person's texting me about. But
what they're trying to get you to do is to
pay them for like a starter kit. Hey you got
this awesome job, but we have to mail you a
computer and stuff like that, so you need to send
us like seven or eight hundred bucks that's going to
get this ball rolling. Well, the truth is, no legitimate
employer needs money from you upfront, so be careful, especially
(15:23):
if you're getting any text message about employment. It is
almost inevitably a scam. Most employers are going to reach
out via email, right It's like when the irs a
going to text you either, So be careful the medium
that's being used. And I think this is also just
a good time out to issue a reminder that the
majority of jobs come through a good old fashioned networking.
(15:44):
It's not that online job hunting is a complete waste
of time. Again, I think it can put you on
the right sense, but we're still talking about eighty percent,
only eighty percent of those listings being legit, and we're
talking about the potential for scams as well, So don't
neglect the tried and true method that has worked for decades.
It really does. So much of the time come down
to who you know, keeping that network active, staying in
(16:05):
touch with people who might be consequential in your career
moving forward.
Speaker 2 (16:08):
That's right, man, And speaking of networking reminds me a
friend of the show, Jordan Harbinger, who always talks about
digging the well before you need it, before.
Speaker 1 (16:15):
You're thirsty, man, before you're thirsty. But we've got more
to get to.
Speaker 2 (16:18):
We're gonna talk about the direction that rents have been
trending over the past year.
Speaker 1 (16:22):
We'll get to that and more right after this. We
are back. Now it's time, as always, to get to
the ludicrous headline of the week. This one comes from
the Washington Post and WAPO. Yeah. Listener Kathy posted this
(16:43):
in not a fancy neighborhood, it's a media organization that
sound like a fast neighborhood. Listener Kathy posted this in
the how to Money Facebook group, and if you're not
a member of the how to Money Facebook group, go
check it out because twelve thousand plus members helping each
other out with their personal finances. But the title of
this article was toys are a scam gets right to
(17:04):
the point. And maybe we're saying this too late now,
like that kind of headlight. Maybe we're covering this after
the fact, because Christmas was, after all, about a month ago. Well,
I will say.
Speaker 2 (17:14):
We talked we had a similar story to this prior
to like leading up to Christmas. We're giving folks awarding,
like give them a little heads up.
Speaker 1 (17:21):
This is a news to us well, and you and
I we talked about like some of the changes we
were making to what we were buying our kids this
Christmas because of the toy overload. Right, but the gist
of this article is that kids ask for toys, we
buy them, and then those toys don't get played with
very much. Classic and the author they actually make a
distinction which I appreciated, between like bikes and games and
(17:42):
art supplies versus basically all the other toys out there.
And I think even my kids got obsessed for a
minute with those surprise toys. It was like a little
I mean, it's just plastic crap and then they're they're
inside of like a ball or whatever, and you open
it up and you have no idea what's going to
be inside, but it's one of like four different things.
It's like a puppy dog, stuffed animal or something like that. Right,
(18:02):
when do you buy these toys? Uh? Target, I guess, Okay,
my parents got some of these for of them they
kind of fed into the It's more about the thrill
of the hunt, right, yeah, exactly, as opposed to like
that thing gets tossed aside, it's played with again. So
I've been there as a parent, and as much as
my kids don't want to hear it, I think there
is a lot of truth to the claim that toys
are a scam. I think the authors onto something here.
(18:25):
My kids have too many toys, and some they play
with religiously, but others get used rarely, if ever. And
I bet I think actually now is the time to
talk about this because my guess is that every parent
out there can see this clearly. Right now, Matt, We've
got a delivery of a big bookshelf the other day.
Oh and do you know how many hours my kids
played with the cardboard dude that that the bookshelf came in.
(18:49):
It's classic. It's it's amazing. Yeah, Like it's almost like
a meme from the nineties or something like that, but
like it's so true the fact that even the toys
that they receive often it's like, oh, what can we
do with this box?
Speaker 2 (19:01):
Or oh the bubble rap, Like the amount of time
my kids play popping the little bubble wrap, which honestly
is rare and rare now because normally now it's just
like the big air pockets yeah, which sounds like a
shotgun going off inside the house, versus like the little yeah,
the small ones. But I think a solution could be
it's obviously hard to get your kids to want less stuff,
(19:23):
but I do think that the ads that they see
certainly is going to influence what they want. Like, we
are all in a better place now, I think than
we were when cable was dominant, Like do you remember
the constant stream of toy ads when we were kids?
Speaker 1 (19:36):
My parents remember it.
Speaker 2 (19:37):
How would I have ever known about Hungry Hungry hippos
if I hadn't seen those kids playing with it on
the TV.
Speaker 1 (19:43):
There are fortunately fewer.
Speaker 2 (19:44):
Commercials on streaming, and oftentimes it's not for kids toys.
It's like for perfume. And we talked about this, how
I like change my tune on going with the lower
cost streaming plan. Letting like the ability to expose them
to advertising something to inoculate them, and for that to
be a launching off point for us to have these conversations.
And I love too that it's not toys because that
(20:05):
would honestly be a little bit trickier, as opposed to
ads that they think are terrible and that they think
are so dumb, Like when the perfume and the colonna
ads come on, they like roll their eyes, they make
barfing noises.
Speaker 1 (20:16):
They are the worst. They're the worst.
Speaker 2 (20:18):
It's like Katie Perry on Mars or something. They're confused
because they're like, well, how does that? How's that supposed
to sell a perfume? And it's like, well, you can't
show a smell, and so they what they're trying to do.
Speaker 1 (20:27):
Is show you that this is creative feeling. Yeah, you
could be this cool or this is the kind of
life that you could.
Speaker 2 (20:32):
You would have this many friends and you'd be dancing
at night and driving in this car, running along this
beach with the moon. You know, all the things that
they show. And it's a great way for us to
have these kind of conversations. But I totally agree it's
the things that spur creativity in additional things, as opposed
to the toys being an end in and of themselves.
Like it makes me think of our my youngest, my son,
(20:53):
you know what his favorite thing to do is, like
right now, it's freezing outside, and so we've been reading
a lot of books. But aside from that, like when
we go outside, what he loves to do is find
scraps of wood that the builders, that the framers have
left all around the house, and he takes those pieces
of wood. He's got a little wittedly knife and he
carves them into swords. So he's got the secret stash
of wooden swords and neighbors daggers.
Speaker 1 (21:15):
Knives and you know what he wants.
Speaker 2 (21:16):
He doesn't want toy see whatts me to like join
him in this creative world that he's created, Like that
is so much fun.
Speaker 1 (21:22):
He's not playing with half the stuff.
Speaker 2 (21:23):
Yeah, that we would have gotten for him at Christmas,
but we actually didn't because we scaled back because we
did have this conversation.
Speaker 1 (21:28):
Yeah, at a.
Speaker 2 (21:28):
Time when we're like, hey, we're gonna do the switch,
the Nintendo switch.
Speaker 1 (21:31):
Yes, well, and that's why we talked about this beforehand.
But it's it's actually worked out really well. Like the
you and I both got a Nintendo switch for the kids,
and now they've announced that Nintendo switch too, and I'm
totally fine with the fact that we'll have the one
for many years and not be upgrading.
Speaker 2 (21:44):
Well, I think we also knew that it was coming,
which is why they were on sale. It's a bundle
with Mario kard.
Speaker 1 (21:49):
Eight, you know well, and that has been kind of
a fun way to do things together as a family
to play. It's almost like a board game, a digital
version of a board game totally, and so it's better
than watching TV, I think. But we also did that
in an attempt to not just add a bunch of
random crap to our to our households, and so the one,
the bigger present made a big, big difference in you
(22:10):
in second splash, Yeah, you guys got aerial silks for
your daughter Evy recently, and you guys have been they've
been playing on that stuff that.
Speaker 2 (22:19):
Yeah, dude, Well here's what's awesome as well. Talk about
the teaching kids the value of a dollar. We didn't
buy that for them. The kids all chipped in together,
oh really, and we said, hey, you know, by the
time Christmas rolls around, this is something that we consider
buying for y'all. But they they wanted it now, and
so they all they got together and conspired. They didn't conspire,
but they're like, hey, okay, I'm willing to put this
much towards it. And so I don't think Westy, I
(22:40):
don't think he contributed any money.
Speaker 1 (22:42):
But the girls, they all pitched in. I mean he
doesn't get to use him. Uh, he actually doesn't use him.
He's not as interested.
Speaker 2 (22:48):
He's like, I don't understand why these pieces of cloth
hanging from the bailing, why that's.
Speaker 1 (22:52):
So much fun.
Speaker 2 (22:53):
But yeah, when your girls came over, man, they played
on it for hours, literally for hours.
Speaker 1 (22:57):
It's so much fun.
Speaker 2 (22:58):
And again, it leads to other activity and it just
leads to a healthier kind of lifestyle as well, you know,
just like y'all with rock climbing, Like y'all have gotten
into that more like it's something that leads to something else,
additional skills, the building of strength and character, you know,
like all these awesome sort of side effects as opposed
to just like vegging out and playing.
Speaker 1 (23:16):
With a toy. Yeah. And I think maybe as a society,
we've kind of made it seem like, oh, you show
your kids that you love them if you buy them
plastic stuff. I think it's important for us to push
back on that. And it's I think it's really important
to have a well conceived family approach to toy accumulation right,
and to communicate that in a kind and understandable way
to your kids so that when the topic comes up,
(23:37):
they understand because they might see that catalog in the mail,
point to it, circle stuff in it, and be like,
I want this giant piece of plastic. And it's not
that you will never buy them a toy ever, but
I think kind of having an ethos about how much
you do allow into your house. One it could save
you money, but two it can like prevent you from
pulling your hair out because that stuff gets literally all
(23:58):
over the floor too.
Speaker 2 (23:59):
Totally okay, Kiosks, Joel, They are becoming the norm for
ordering food, at least at some fast food chains. I'm
thinking of McDonald's in particular, Shake Shack. They're actually leaning
into Kiosk as well. But interestingly enough, it turns out
it's not about reducing employee headcount in order.
Speaker 1 (24:17):
To save on labor costs.
Speaker 2 (24:19):
All.
Speaker 1 (24:19):
That's the knee jerk reaction people have. It's like, Oh,
they're just trying to cut cutstaff.
Speaker 2 (24:22):
We're gonna yeah, it's all about the mechanization and robots everywhere. No,
these restaurants they seem to be keeping all their employees,
they're just redirecting them to other tasks. The reason that
the kiosk and the screens are all there is because
it's about selling you more food. CNN they highlighted the
upselling that's occurring at these kiosks, and you got you know,
(24:43):
maybe a minimum wage worker, that person there brand new
on the job. They might forget to ask you to
supersize your meal. But guess what, especially if it's a
long line. That's true a computer, it never forgets. Which
it kind of surprises me because you think I would
think a smiling face and get interaction with a guest
there at the store that might lead to me maybe
(25:03):
supersizing it. But I guess again, maybe the problem is
is you got folks you don't care whether or not
you supersize it. Right, they're just there earning a paycheck,
and there's a lot of money to be made when
it comes to some of that upselling that takes place.
Speaker 1 (25:14):
We're not living in those Morgan's Purlock Supersize met days anymore. Matt,
that still was like the game changing documentary of our time,
I feel like, but he would go to a lot
of restaurants and they didn't ask him to supersize.
Speaker 2 (25:25):
Really, the whole documentary was erroneous because of the fact
that it came out after the fact that he was an.
Speaker 1 (25:32):
Alcoholic when he went into the doctor and he's just like,
oh my gosh, the toll this has taken on your
liver and turns out he was like, could have been
the fifteen Gen and Tonics that's doing that. Yeah, that's right. Well,
I don't really like those kioski there. I feel like
they are always takes me a minute to navigate to
what I'm trying to get. I would rather i'm a
ult school matter rather order with the actual human being.
(25:53):
It's just becoming less regular at some of these restaurants.
But hey, I'm not really going to McDonald's anyway. So,
but just a word to the wise else out there,
don't let the computer make you spend more money. While
we're talking about food and spending money, Americans are tipping
less than they have in recent years. Prices have yes
risen significantly, particularly at restaurants, and folks are being less
(26:14):
generous with their servers because of it, Like as the
price tag goes up on their meal at whatever, restaurant
they're eating at. They're saying, hmm, I just don't feel
like I can tip as much because of that. And
it's true, yes, eating out is quite expensive. When you
look at the inflation charts, it's become far more expensive
than eating out at home. Like the rate of inflation
on food at the grocery store versus food at restaurants
(26:36):
has grown, right, so that the prices are climbing faster
essentially at when you eat out, and that can be frustrating, Right, Matt,
I think I would personally opt for the European model
if given a choice, I think you would. I think
you prefer the tipping model.
Speaker 2 (26:50):
That's a right, Yeah, don't really haven't opinion right now? Okay,
well it's it's also gotten you want to take the
Steve Bizemi. Yes, well, it's also it's and more confusing
as some restaurants have implemented mandatory fees than people are like, well,
where are those fees going? Is this the tip or
is this just going to the owners of the restaurant.
So I think as a consumer it's become more difficult
(27:13):
to know how much to tip because of some of
those ancillary fees as well. I think it's important to
ask right if you see a fee that you don't understand,
and also to not take your frustration out on your
server by being a bad tipper. And I think the
ultimate solution for a lot of people is going to
be to eat out less so that you can still
tip reasonably when you do go out. Eating out less
(27:34):
is obviously going to save you a lot of money
eating more meals at home, but tipping less, yeah, it
might be a way to cut down your eating out budget,
but it's not a good one, that's right. Let's talk
about housing, Joel. Folks say that one of the best
things about owning your house as opposed to renting is
that your payment it stays the same while rents continually increase.
But that's only kind of true, and it's actually really
(27:55):
it's not as true as of late. While folks who
bought between let's say that rate recessions so it lu's
two thousand and nine up to about twenty twenty three,
you know, maybe they find themselves in a decent spot.
The economics of home ownership are changing, even if you
bought at a good price with a reasonable rate, and
that's because insurance and taxes have been rising really quickly.
(28:16):
Today a third of the mortgage payment goes towards those
two line items, which is a record amount. And for
almost ten percent of homeowners, they make up more than
half of your mortgage.
Speaker 1 (28:27):
Pains and crazy, that's insane.
Speaker 2 (28:29):
It means your annual escrow notice is more frightening than
ever and some homeowners are having a tough time dealing
with significant payment increases. And so we bring this up
to highlight that there's no silver bullet here as opposed
to maybe loosening some building regulations to increase the supply,
but challenge property tax increases if they are out of line.
If that's something that you've seen we've mentioned own well before.
(28:52):
More of an automated service. They take a cut of
the amount that they're able to reduce your property tax increase. Yeah,
but only they succeeds. So if they fail, you don't
pay them. They don't pay money upfront. Shop around for
your homeowners insurance and I think this used to be
something that maybe was a little bit more of like
a cheap guy or a frugal guy thing to do.
(29:12):
But like self insure more, raise your your deductible so
that you're not as reliant on your insurance when something
happens to your house, because you're gonna save money immediately
now because you're gonna see your premiums decrease when you
increase your deductible. But over time, because you are less
reliant on your insurance, it means you're less likely to
use it, which means you're not gonna get booted, not
(29:32):
booted off your insurance, but they're not gonna ejacuorrates up
to sky high levels. Yeah.
Speaker 1 (29:37):
Yeah, And I think part of the reason that we've
seen increases to the extent that we have is just
inflation in general, right, rising home prices, rising costs of
building like that means that if something does happen in
your home, the insurance going to be out more money,
so hey, they've got to cover that in premium increases.
But it's also natural disasters in parts of the country,
and particularly thinking about places like Florida and California, But
(30:00):
that impacts people not just in those states, but really
across the country. As insurers sometimes disperse the pain a
little more widely, it's become really tough out there for
homeowners from an insurance expense in the last couple of
years in particular, and not to go back to the
well on this too much, Matt, but home ownership is
often seen as the number one way to build wealth. Like,
there are a lot of people out there who truly
(30:22):
believe that owning a home is their best way to
achieve the American dream and to be able to retire successfully.
And when you look at the numbers, it does kind
of sort of look like that, right, that owning the
home is what contributes to more greater levels of financial independence.
Homeowners do have a much greater net worth than renters.
(30:43):
But it's really just not that simple, right when it
comes down to it, home ownership is not the key
to building wealth. Investing in general is, which, in part
having a mortgage payment forces you to do. It's like,
you know, it's that forced method of saving yah. Yeah, yeah,
But if you had taken the additional money and invested instead,
you might have come out ahead over the years. Better
investments out there, for sure. Yeah. But case in point here,
(31:06):
I think this actually kind of highlights the fact that
renting might make more sense than buying for a lot
of people. Rents are actually down over the past twelve months.
Most people think again. Rents go up year after year,
and especially during COVID and stuff like that, it felt
like rents were going up at an insane pace because
they were. Well, that has not just slowed down, but
(31:27):
rent growth is actually declining. So you might have to
be able to get a better deal on the apartment
or the home that you're renting next month or next year.
And you know, buying can be a solid personal decision
and a reasonable financial one if that's what you're into.
It has provided outsize gains at certain points in time,
but you got to contend with the trade offs of
home ownership as well. Home maintenance, for instance, Matt averages
(31:51):
something like five hundred dollars a month. According to Zillo,
you got to contend with all the costs of home
ownership before taking the plunge. Insurance, right, maintenance, taxes, all
that stuff all skyrocket and quickly impacting homeowners Printing might
not seem quite as bad when you take all those
costs into account, and you'll have more financial flexibility and
(32:11):
room to invest if you wait a little longer. I
don't want to like dissuade everyone and say homeownership bad,
don't do it, but it's just not as simple as
a lot of people have made it out to be either.
That's true.
Speaker 2 (32:21):
Yeah, and you can especially get a deal if you
are looking at an apartment which has seen the largest
declines over the past twelve months. We've had a flurry
of newsletter sign ups Joel and so we want to
give a quick referral shout out to Joanna V as
well as h Whitworth for recommending the how To Money
newsletter to a bunch of their friends. And you can
find the how to Money newsletter over at housemoney dot
(32:44):
com for slash that's right, you guessed it newsletter. But
we will see you back here on Monday with a
fresh ask how to Money episode, and we hope that
everyone has a fantastic weekend.
Speaker 1 (32:54):
Buddy.
Speaker 2 (32:54):
Until next time, best friends Out, Best Friends Out.
Speaker 1 (33:00):
The
Welcome to How to Money. I'm Joel, I'm Matt, and
today we're talking Trump V two, ghost jobs and insufficient savings.
Speaker 2 (00:26):
Personally, Joel, I would have said Trump two point zero.
That's what everyone's calling it.
Speaker 1 (00:29):
That's why don't you didn't you out me? I like
V two as well.
Speaker 2 (00:33):
Okay, but uh no, this says our Friday flight, our
weekly roundup of the different headlines we've come across this week,
and specifically we're going to talk about how they pertain
to your money.
Speaker 1 (00:43):
That's someone else's money. This is all about you. Well,
I'm not infallible with my naming conventions. I will say,
as you just pointed out, Trump two point h would
have been better. Well, I just rolled.
Speaker 2 (00:52):
Off the tongue. I think I've heard more folks recently
talking about it.
Speaker 1 (00:55):
Well, we'll talk about there have been a flurry, there's
been a flurry of activity this week on the political
front that does impact your money. We'll get to that
in just a second. Matt. I logged into the back
end of my mortgage account recently, though, and you know
what it said. On the right hand side. They were
essentially trying to get me to do a cash out refinance,
which would be a terrible idea.
Speaker 2 (01:16):
Does not surprise me at all because this is a
newer mortgage servicer. I'm assuming that purchased your old That's
right there, you go, dude, that is what they do.
That is the business that they're in. They're all about
trying to get you to take on some of these
additional loan products that pad their bottom line.
Speaker 1 (01:30):
And as anybody out there knows, if you've had your
mortgage for any length of time, rates have gone up significantly.
A cash out ref would put me in a really,
really bad financial position. But what it said, like the
marketing efforts said, your cash out resolution paid down debt
using equity. And they're trying.
Speaker 2 (01:46):
The new year, new you, that's right messaging and branding.
Speaker 1 (01:49):
They're trying to get that, hey, why don't you get
a lumps on a cash in your life to I
don't know, get rid of other crappy debts that might
be worse than your mortgage. What a bad idea that
would be for basically everyone, right to take a three
percent mortgage, turn it into a seven percent mortgage and
then yeah, maybe pay down ten thousand dollars worth a
credit card debt or something like that. But then you've
(02:10):
got that mortgage debt looming for thirty years. The next
thirty years, you're probably extending the life of that loan
significantly by doing that cash out refine, I mean cashier refis.
They just make sense for basically no one.
Speaker 2 (02:22):
Right, just given the fact that there's a chance that
we never go back to these I think some folks
are thinking, well, it'll come down at some point. We
don't know that that is actually going to happen. It
is yet to be determined those predictions. And we talked
about this at the time, where you know, real estate
agents mortgage brokers were telling people, well, Mary, the house date,
the rate, Yeah, it doesn't look like a great suggestion.
Speaker 1 (02:45):
We set it at the time, and I think we
have been proven right, and yeah, will rates could rates
potentially go down in the coming years, Maybe maybe, but
it's not like totally could. But we don't know that
they're going to We don't know, all right, man.
Speaker 2 (02:58):
We saw a return to the Oval office for President Trump,
and I think a lot of folks might be wondering
how this might impact our economy as a whole. How
is this going to impact your personal finances? That remains
to be seen. There's always a whole lot of talk
and bluster when it comes to President Trump. There's a
litany of things that we can discuss. For instance, the
new twenty five percent tariffs against Canada and Mexico that
(03:21):
could be implemented as early as next week.
Speaker 1 (03:23):
In terris.
Speaker 2 (03:24):
They might serve a geopolitical purpose, but they essentially act
as a tax on consumers.
Speaker 1 (03:30):
And raising the price of everyday goods right, whether it's
auto parts, food, the litany of things.
Speaker 2 (03:36):
It's counter to the free market and the ability for
companies to produce goods at the absolute lowest price. And again,
I understand it from a geopolitical strategy standpoint, But how
this impacts Americans, we will see.
Speaker 1 (03:49):
How broad those terrorists are. That will also impact how
we feel them.
Speaker 2 (03:53):
But there certainly is a chance that inflation, which has
calmed it could potentially be stoked by this policy change.
Were executive orders that could have an impact in the
coming months, like an attempt to curb building restrictions in
order to increase supply. How that actually will work in reality,
It's it's gonna be hard to discern.
Speaker 1 (04:11):
It sounds good on paper, but yeah, well yeah, how
well for that, Yeah, because that's what we need.
Speaker 2 (04:16):
For instance, when it comes to housing, the largest line
item on everyone's monthly budget, more supply leads to lower prices.
Speaker 1 (04:22):
Building codes are often local. So how is some sort
of you know, yeah, and which is yeah. Everyone who
is a big fan of Trump, of course, is praising
the stroke of the pen, the phone call, and the
ability to make everyone's lives better here in the States.
But Dave Chappelle, he actually said it really well on
Saturday Night Live. He said, whether people voted for.
Speaker 2 (04:43):
You or not, everyone is counting on you good luck,
which I appreciate. Always count on Dave Chappelle to inject
a little bit of common sense into the discourse of
the time.
Speaker 1 (04:53):
Yeah, I appreciate Dave, and that well said. Right, Well,
so we are. We're hoping for the best. We always
hope for the best for our presents, whether you've voted
for them or not, because we want the best for
our country and the three hundred and forty million people
inside of it. I'm sure we're gonna have a lot
to talk about in the coming months. Matt on the
political front and how the political regime change impacts are
our finances, because it will, it will have an impact.
Speaker 2 (05:16):
And hopefully we will pay attention to the headlines that
are actually going to matter, Yeah, and the things that
are actually going to happen, because I'm sure so many
media companies are like, yeah, strops back in office because
it gives them something to report on this and like
the craziness that oftentimes comes from the.
Speaker 1 (05:32):
Tweets or truths or whatever it is that Trump is saying,
and you and I will attempt to our best to
keep it a political and focus on the money stuff. Indeed,
one thing we have to discuss is the meme coins
that the President and the first Lady launched a head
of the inauguration. It was kind of a crazy stunt, right, and.
Speaker 2 (05:49):
Politics aside, It doesn't matter where you laying on the spectrum.
Speaker 1 (05:51):
This is ridiculous, and we've kind of trashed meme coins thoroughly,
and the cryptocurrency space. We have, i think, given a
lot of caution in our assessment of cryptocurrency and what
kind of approach normal investors should have towards crypto. And
some folks did make money in this kind of mean
coin bonanza if they bought early. They bought that Trump
(06:12):
coin early, then the cashed out quick. But this is
just another reminder that the mean coin space is rife
with grift. The majority of people lose money. And it's
interesting too, Matt, because the crypto space, I think they
were hoping that a Trump presidency would usher in vibes
of legitimacy, and there has been a lot of talk about,
you know, bitcoin in particular having a national Bitcoin Strategic
(06:35):
Reserve or something like that. Is that going to be
a boon to some of the more popular, more long
standing cryptocurrencies. Maybe if it happens. Yeah, But just this
little stunt, I guess hasn't really aided in the legitimacy
of crypto. It hasn't started off in a good way.
And the takeaway for individuals listening is don't participate in
(06:58):
the mean coin insanity no matter w Yeah, and I
will say, be ready to lose your shirt if you yeah.
And again this is I think this is an a
political statement, but this shouldn't be anything new for folks
who have like followed what it is that Trump has done,
Like this is like typical behavior for him, right, Like
more recently, it's like the branded it's the dumb Lee
Greenwood bibles that Trump is selling for.
Speaker 2 (07:19):
How much was he selling this for?
Speaker 1 (07:20):
I don't six.
Speaker 2 (07:21):
But then like the sneakers then, but even before he
was president, would you look great in those? By the way,
even before he was president? Like the like the Trump
steaks and the vodka, like this is something that he does.
And so on one hand, it's just it's more of
the same. I will say, I was shocked to see
the pastor that gave one of the benedictions at the
(07:42):
end of the inaugural address or whatever, he launched.
Speaker 1 (07:46):
A meme coin.
Speaker 2 (07:47):
Oh really, yes, that is incredibly disheartening, Like like that
makes me angry. This is like a pastor, someone who's
supposed to be forsaking worldly riches in a self sacrificial
way to serve other people, and man talk about like
that made me really upset when I when I heard that.
It just feels so counter to what someone who is
(08:07):
in ministry or someone who's a pastor that they should
be doing.
Speaker 1 (08:09):
Does this mean we're canceling the launch of our mean
coin that we have planned.
Speaker 2 (08:13):
No, no, no, we're not ministry.
Speaker 1 (08:14):
But we can do it. We can do it, Okay.
Speaker 2 (08:16):
Something else though, that struck me was the mandate for
government workers to return to the office. Dude, working from home.
So twenty twenty, we're turning to the office rto. That's
the name of the game now. And I will say
there's evidence that working from home, at least at the
federal level hasn't had great results. That is costing the
government therefore us as taxpayers billions of dollars.
Speaker 1 (08:38):
Yeah, there's a report issued kind of towards the end
of last year, I think from one of the senator's
offices that headlined, you know, just how much less productive
certain government agencies and certain individuals have been and just
how costly that's become.
Speaker 2 (08:50):
Yeah, yeah, dude, we're talking especially like given all the
office space that is sitting empty, like that's real estate,
is incredibly expensive. And similar to the companies who have
issued returned to off orders, I think the government they
may not be crying you or river if you end
up quitting over this. It appears that increased efficiency at
the office and a trimm or payroll are simultaneous goals.
(09:11):
So we think that the smartest employers out there who
are looking to retain top notch talent will offer more
of a hybrid or more of a flex approach where
they do trust their great employees to do their job
wherever they are. But I do think as an employee
you might have to make up difficult choice if going
back into the office, let's say five days a week,
if that's going to be too tough of a pill
(09:32):
to swallow. I think eventually it'll settle out somewhere in
the middle, because I think there had to be this
sort of hard correct right, Like the pendulum swung so
far to one side and now I think it's almost
having to swing hard in the other direction in order
to I don't know for employees, for employers to communicate
too employees that they're taking this a bit more seriously,
But I think it'll eventually settle somewhere in the middle.
Speaker 1 (09:52):
And so much depends on the industry, right, and it
depends on specific employees too, like how long have they
been with the company, how well do they know that
ask how well are they able to communicate with people
who are also working remotely. But I guess on the
flip side of this, this could impact the government's ability
to hire some of the top talent if some of
that top talent says, yeah, I'm not coming to the
(10:12):
office five days a week. I'm not doing that DC
hellish DC commute that I'm imagining is pretty rough, depending
on where you live and how far your commute is.
But I do think that the RTO trend is only
going to increase in the coming months, and that's going
to impact a lot of how to Money listeners if
their employer is kind of keen on pulling that off too,
(10:33):
all right, Matt, Something else that everyone might want to
consider is rethinking their emergency fund, how much money they
have stored up in their high yield savings account. MarketWatch
pointed this out that changing economic realities might mean that
you don't have enough money saved up in your bank account.
You might not have enough liquidity, and instead of the
traditional three to six months that is typically recommended, some
(10:56):
folks are opting to increase the amount of money they
have on hand to nine months or even more. And
that is I think a potentially smart move, specifically if
your industry or your particular job is less stable, right,
So yeah, yeah, if you're in a position that feels
a little more precarious, like I would want to have
more cash on hand, that seems like a smart move.
(11:19):
The average duration of unemployment has actually gone up as well,
lasting on average five and a half months, So if
you lose your job, you're talking almost six months to
get the next one. So yeah, if that's the case,
three months certainly doesn't seem like quite enough. I guess
I kind of bland somewhere in the middle on this though.
Mat I think that telling people to save up nine
plus months worth of expenses that can feel a little
(11:41):
demoralizing because it's really hard to do and how much
you actually need it really does depend on a variety
of factors, like are you a two income household, do
you have a bare bones budget that you could implement
immediately upon the loss of a job, and how much
would that actually save you? Because if you're willing to
do that, hey, what looks like three months worth the
normal expenses could be five months worth of bare bones
(12:02):
budget expenses. And ultimately, I think having six months worth
of any fund it's better than having three. And some
folks might understandably need or want to save even more.
And I think if you do experience a job loss,
you are going to be thankful that you thought ahead
of time, that you were planning, and that you had
a little bit extra on hand, that's true.
Speaker 2 (12:22):
Yeah, And as we talked with Katie North about this
past Wednesday about sabbaticals, you might be able to parlay
some of those additional funds into a sabbatical where you're
being a little more introspective there.
Speaker 1 (12:32):
Time off losing your job means a severance. If you've
got plenty of savings on hand and then three, five,
six months worth of severance, it's like set.
Speaker 2 (12:40):
Yeah, So, okay, the unemployment rate is low, but that
doesn't mean that the job market is booming for job
seekers out there, or that hunting for a new gig
is easy. This is a part of why it takes
longer for most average job seekers to find a new gig,
and part of the difficulty is navigating a slew of
job postings online, many of which are so hiring platform Greenhouse.
(13:02):
They just released an analysis of online job listings and
they found that one in five are fake listings. And
it's not that the listing itself is an actual scam,
but that there was never actually any hiring activity for
that listed job. And so you might be wondering why
a company would do such a thing, Why would they
post a position that they don't actually intend to fill.
Speaker 1 (13:22):
It does seem sailing well.
Speaker 2 (13:23):
It could be their speculation that could be in an
attempt to project growth that's not actually happening. Evidently, some
companies are using it as sort of like a fishing
line that they keep out permanently in hopes of catching
a rare talent.
Speaker 1 (13:36):
But still, what would like a rare fish be man,
if you got a rare fish just leaving that line out.
Speaker 2 (13:41):
Narwhall, I don't know that's a whale though, right, Yeah,
but it doesn't make it any easier for hard to
reel that in who are looking for work. It's something
to be aware of that you think it's going to
be easier than you think. In part, I think because
there are so like, oh, everywhere I look, there's a
job listing. The Internet makes job hunting easy, right, It
makes it look so simple and jobs appear to be plentiful,
(14:04):
But that is not the case.
Speaker 1 (14:05):
Yeah, I think just kind of approving some of those
job boards. It's not that you can't find a job online,
or that those job listings aren't helpful and can't put
you in the right direction, can't get you at least
on the right trail in the right scent. But I
think it can get your hopes up when you see
a position that looks awesome and it looks like it
pays well, and then you never hear back upon reaching
out or applying. That's just kind of the reality of
(14:26):
you have to kind of like cast your net wide
on the Internet and you're just hoping for someone to
respond on the other end. Seeing that, Matt, you mentioned
that these listings are not scams, We'll see that just
had a piece about job scams, and they're coming in
to folks via text message, like actual job scams. Yeah, yeah, gotcha.
These are just fake the ones you talked about. But
now we're talking about actual scammy jobs. What's happening in
(14:48):
these text messages that the person who's sending you the
message pretends to be a recruiter who has a solid
work from home job, and hey, maybe your employer just
said you got to come back to the office four
days a week and you're like, wait, I don't know.
Speaker 2 (15:01):
Taking me back to twenty twenty, yeah, I like this work.
Speaker 1 (15:03):
From home job that this person's texting me about. But
what they're trying to get you to do is to
pay them for like a starter kit. Hey you got
this awesome job, but we have to mail you a
computer and stuff like that, so you need to send
us like seven or eight hundred bucks that's going to
get this ball rolling. Well, the truth is, no legitimate
employer needs money from you upfront, so be careful, especially
(15:23):
if you're getting any text message about employment. It is
almost inevitably a scam. Most employers are going to reach
out via email, right It's like when the irs a
going to text you either, So be careful the medium
that's being used. And I think this is also just
a good time out to issue a reminder that the
majority of jobs come through a good old fashioned networking.
(15:44):
It's not that online job hunting is a complete waste
of time. Again, I think it can put you on
the right sense, but we're still talking about eighty percent,
only eighty percent of those listings being legit, and we're
talking about the potential for scams as well, So don't
neglect the tried and true method that has worked for decades.
It really does. So much of the time come down
to who you know, keeping that network active, staying in
(16:05):
touch with people who might be consequential in your career
moving forward.
Speaker 2 (16:08):
That's right, man, And speaking of networking reminds me a
friend of the show, Jordan Harbinger, who always talks about
digging the well before you need it, before.
Speaker 1 (16:15):
You're thirsty, man, before you're thirsty. But we've got more
to get to.
Speaker 2 (16:18):
We're gonna talk about the direction that rents have been
trending over the past year.
Speaker 1 (16:22):
We'll get to that and more right after this. We
are back. Now it's time, as always, to get to
the ludicrous headline of the week. This one comes from
the Washington Post and WAPO. Yeah. Listener Kathy posted this
(16:43):
in not a fancy neighborhood, it's a media organization that
sound like a fast neighborhood. Listener Kathy posted this in
the how to Money Facebook group, and if you're not
a member of the how to Money Facebook group, go
check it out because twelve thousand plus members helping each
other out with their personal finances. But the title of
this article was toys are a scam gets right to
(17:04):
the point. And maybe we're saying this too late now,
like that kind of headlight. Maybe we're covering this after
the fact, because Christmas was, after all, about a month ago. Well,
I will say.
Speaker 2 (17:14):
We talked we had a similar story to this prior
to like leading up to Christmas. We're giving folks awarding,
like give them a little heads up.
Speaker 1 (17:21):
This is a news to us well, and you and
I we talked about like some of the changes we
were making to what we were buying our kids this
Christmas because of the toy overload. Right, but the gist
of this article is that kids ask for toys, we
buy them, and then those toys don't get played with
very much. Classic and the author they actually make a
distinction which I appreciated, between like bikes and games and
(17:42):
art supplies versus basically all the other toys out there.
And I think even my kids got obsessed for a
minute with those surprise toys. It was like a little
I mean, it's just plastic crap and then they're they're
inside of like a ball or whatever, and you open
it up and you have no idea what's going to
be inside, but it's one of like four different things.
It's like a puppy dog, stuffed animal or something like that. Right,
(18:02):
when do you buy these toys? Uh? Target, I guess, Okay,
my parents got some of these for of them they
kind of fed into the It's more about the thrill
of the hunt, right, yeah, exactly, as opposed to like
that thing gets tossed aside, it's played with again. So
I've been there as a parent, and as much as
my kids don't want to hear it, I think there
is a lot of truth to the claim that toys
are a scam. I think the authors onto something here.
(18:25):
My kids have too many toys, and some they play
with religiously, but others get used rarely, if ever. And
I bet I think actually now is the time to
talk about this because my guess is that every parent
out there can see this clearly. Right now, Matt, We've
got a delivery of a big bookshelf the other day.
Oh and do you know how many hours my kids
played with the cardboard dude that that the bookshelf came in.
(18:49):
It's classic. It's it's amazing. Yeah, Like it's almost like
a meme from the nineties or something like that, but
like it's so true the fact that even the toys
that they receive often it's like, oh, what can we
do with this box?
Speaker 2 (19:01):
Or oh the bubble rap, Like the amount of time
my kids play popping the little bubble wrap, which honestly
is rare and rare now because normally now it's just
like the big air pockets yeah, which sounds like a
shotgun going off inside the house, versus like the little yeah,
the small ones. But I think a solution could be
it's obviously hard to get your kids to want less stuff,
(19:23):
but I do think that the ads that they see
certainly is going to influence what they want. Like, we
are all in a better place now, I think than
we were when cable was dominant, Like do you remember
the constant stream of toy ads when we were kids?
Speaker 1 (19:36):
My parents remember it.
Speaker 2 (19:37):
How would I have ever known about Hungry Hungry hippos
if I hadn't seen those kids playing with it on
the TV.
Speaker 1 (19:43):
There are fortunately fewer.
Speaker 2 (19:44):
Commercials on streaming, and oftentimes it's not for kids toys.
It's like for perfume. And we talked about this, how
I like change my tune on going with the lower
cost streaming plan. Letting like the ability to expose them
to advertising something to inoculate them, and for that to
be a launching off point for us to have these conversations.
And I love too that it's not toys because that
(20:05):
would honestly be a little bit trickier, as opposed to
ads that they think are terrible and that they think
are so dumb, Like when the perfume and the colonna
ads come on, they like roll their eyes, they make
barfing noises.
Speaker 1 (20:16):
They are the worst. They're the worst.
Speaker 2 (20:18):
It's like Katie Perry on Mars or something. They're confused
because they're like, well, how does that? How's that supposed
to sell a perfume? And it's like, well, you can't
show a smell, and so they what they're trying to do.
Speaker 1 (20:27):
Is show you that this is creative feeling. Yeah, you
could be this cool or this is the kind of
life that you could.
Speaker 2 (20:32):
You would have this many friends and you'd be dancing
at night and driving in this car, running along this
beach with the moon. You know, all the things that
they show. And it's a great way for us to
have these kind of conversations. But I totally agree it's
the things that spur creativity in additional things, as opposed
to the toys being an end in and of themselves.
Like it makes me think of our my youngest, my son,
(20:53):
you know what his favorite thing to do is, like
right now, it's freezing outside, and so we've been reading
a lot of books. But aside from that, like when
we go outside, what he loves to do is find
scraps of wood that the builders, that the framers have
left all around the house, and he takes those pieces
of wood. He's got a little wittedly knife and he
carves them into swords. So he's got the secret stash
of wooden swords and neighbors daggers.
Speaker 1 (21:15):
Knives and you know what he wants.
Speaker 2 (21:16):
He doesn't want toy see whatts me to like join
him in this creative world that he's created, Like that
is so much fun.
Speaker 1 (21:22):
He's not playing with half the stuff.
Speaker 2 (21:23):
Yeah, that we would have gotten for him at Christmas,
but we actually didn't because we scaled back because we
did have this conversation.
Speaker 1 (21:28):
Yeah, at a.
Speaker 2 (21:28):
Time when we're like, hey, we're gonna do the switch,
the Nintendo switch.
Speaker 1 (21:31):
Yes, well, and that's why we talked about this beforehand.
But it's it's actually worked out really well. Like the
you and I both got a Nintendo switch for the kids,
and now they've announced that Nintendo switch too, and I'm
totally fine with the fact that we'll have the one
for many years and not be upgrading.
Speaker 2 (21:44):
Well, I think we also knew that it was coming,
which is why they were on sale. It's a bundle
with Mario kard.
Speaker 1 (21:49):
Eight, you know well, and that has been kind of
a fun way to do things together as a family
to play. It's almost like a board game, a digital
version of a board game totally, and so it's better
than watching TV, I think. But we also did that
in an attempt to not just add a bunch of
random crap to our to our households, and so the one,
the bigger present made a big, big difference in you
(22:10):
in second splash, Yeah, you guys got aerial silks for
your daughter Evy recently, and you guys have been they've
been playing on that stuff that.
Speaker 2 (22:19):
Yeah, dude, Well here's what's awesome as well. Talk about
the teaching kids the value of a dollar. We didn't
buy that for them. The kids all chipped in together,
oh really, and we said, hey, you know, by the
time Christmas rolls around, this is something that we consider
buying for y'all. But they they wanted it now, and
so they all they got together and conspired. They didn't conspire,
but they're like, hey, okay, I'm willing to put this
much towards it. And so I don't think Westy, I
(22:40):
don't think he contributed any money.
Speaker 1 (22:42):
But the girls, they all pitched in. I mean he
doesn't get to use him. Uh, he actually doesn't use him.
He's not as interested.
Speaker 2 (22:48):
He's like, I don't understand why these pieces of cloth
hanging from the bailing, why that's.
Speaker 1 (22:52):
So much fun.
Speaker 2 (22:53):
But yeah, when your girls came over, man, they played
on it for hours, literally for hours.
Speaker 1 (22:57):
It's so much fun.
Speaker 2 (22:58):
And again, it leads to other activity and it just
leads to a healthier kind of lifestyle as well, you know,
just like y'all with rock climbing, Like y'all have gotten
into that more like it's something that leads to something else,
additional skills, the building of strength and character, you know,
like all these awesome sort of side effects as opposed
to just like vegging out and playing.
Speaker 1 (23:16):
With a toy. Yeah. And I think maybe as a society,
we've kind of made it seem like, oh, you show
your kids that you love them if you buy them
plastic stuff. I think it's important for us to push
back on that. And it's I think it's really important
to have a well conceived family approach to toy accumulation right,
and to communicate that in a kind and understandable way
to your kids so that when the topic comes up,
(23:37):
they understand because they might see that catalog in the mail,
point to it, circle stuff in it, and be like,
I want this giant piece of plastic. And it's not
that you will never buy them a toy ever, but
I think kind of having an ethos about how much
you do allow into your house. One it could save
you money, but two it can like prevent you from
pulling your hair out because that stuff gets literally all
(23:58):
over the floor too.
Speaker 2 (23:59):
Totally okay, Kiosks, Joel, They are becoming the norm for
ordering food, at least at some fast food chains. I'm
thinking of McDonald's in particular, Shake Shack. They're actually leaning
into Kiosk as well. But interestingly enough, it turns out
it's not about reducing employee headcount in order.
Speaker 1 (24:17):
To save on labor costs.
Speaker 2 (24:19):
All.
Speaker 1 (24:19):
That's the knee jerk reaction people have. It's like, Oh,
they're just trying to cut cutstaff.
Speaker 2 (24:22):
We're gonna yeah, it's all about the mechanization and robots everywhere. No,
these restaurants they seem to be keeping all their employees,
they're just redirecting them to other tasks. The reason that
the kiosk and the screens are all there is because
it's about selling you more food. CNN they highlighted the
upselling that's occurring at these kiosks, and you got you know,
(24:43):
maybe a minimum wage worker, that person there brand new
on the job. They might forget to ask you to
supersize your meal. But guess what, especially if it's a
long line. That's true a computer, it never forgets. Which
it kind of surprises me because you think I would
think a smiling face and get interaction with a guest
there at the store that might lead to me maybe
(25:03):
supersizing it. But I guess again, maybe the problem is
is you got folks you don't care whether or not
you supersize it. Right, they're just there earning a paycheck,
and there's a lot of money to be made when
it comes to some of that upselling that takes place.
Speaker 1 (25:14):
We're not living in those Morgan's Purlock Supersize met days anymore. Matt,
that still was like the game changing documentary of our time,
I feel like, but he would go to a lot
of restaurants and they didn't ask him to supersize.
Speaker 2 (25:25):
Really, the whole documentary was erroneous because of the fact
that it came out after the fact that he was an.
Speaker 1 (25:32):
Alcoholic when he went into the doctor and he's just like,
oh my gosh, the toll this has taken on your
liver and turns out he was like, could have been
the fifteen Gen and Tonics that's doing that. Yeah, that's right. Well,
I don't really like those kioski there. I feel like
they are always takes me a minute to navigate to
what I'm trying to get. I would rather i'm a
ult school matter rather order with the actual human being.
(25:53):
It's just becoming less regular at some of these restaurants.
But hey, I'm not really going to McDonald's anyway. So,
but just a word to the wise else out there,
don't let the computer make you spend more money. While
we're talking about food and spending money, Americans are tipping
less than they have in recent years. Prices have yes
risen significantly, particularly at restaurants, and folks are being less
(26:14):
generous with their servers because of it, Like as the
price tag goes up on their meal at whatever, restaurant
they're eating at. They're saying, hmm, I just don't feel
like I can tip as much because of that. And
it's true, yes, eating out is quite expensive. When you
look at the inflation charts, it's become far more expensive
than eating out at home. Like the rate of inflation
on food at the grocery store versus food at restaurants
(26:36):
has grown, right, so that the prices are climbing faster
essentially at when you eat out, and that can be frustrating, Right, Matt,
I think I would personally opt for the European model
if given a choice, I think you would. I think
you prefer the tipping model.
Speaker 2 (26:50):
That's a right, Yeah, don't really haven't opinion right now? Okay,
well it's it's also gotten you want to take the
Steve Bizemi. Yes, well, it's also it's and more confusing
as some restaurants have implemented mandatory fees than people are like, well,
where are those fees going? Is this the tip or
is this just going to the owners of the restaurant.
So I think as a consumer it's become more difficult
(27:13):
to know how much to tip because of some of
those ancillary fees as well. I think it's important to
ask right if you see a fee that you don't understand,
and also to not take your frustration out on your
server by being a bad tipper. And I think the
ultimate solution for a lot of people is going to
be to eat out less so that you can still
tip reasonably when you do go out. Eating out less
(27:34):
is obviously going to save you a lot of money
eating more meals at home, but tipping less, yeah, it
might be a way to cut down your eating out budget,
but it's not a good one, that's right. Let's talk
about housing, Joel. Folks say that one of the best
things about owning your house as opposed to renting is
that your payment it stays the same while rents continually increase.
But that's only kind of true, and it's actually really
(27:55):
it's not as true as of late. While folks who
bought between let's say that rate recessions so it lu's
two thousand and nine up to about twenty twenty three,
you know, maybe they find themselves in a decent spot.
The economics of home ownership are changing, even if you
bought at a good price with a reasonable rate, and
that's because insurance and taxes have been rising really quickly.
(28:16):
Today a third of the mortgage payment goes towards those
two line items, which is a record amount. And for
almost ten percent of homeowners, they make up more than
half of your mortgage.
Speaker 1 (28:27):
Pains and crazy, that's insane.
Speaker 2 (28:29):
It means your annual escrow notice is more frightening than
ever and some homeowners are having a tough time dealing
with significant payment increases. And so we bring this up
to highlight that there's no silver bullet here as opposed
to maybe loosening some building regulations to increase the supply,
but challenge property tax increases if they are out of line.
If that's something that you've seen we've mentioned own well before.
(28:52):
More of an automated service. They take a cut of
the amount that they're able to reduce your property tax increase. Yeah,
but only they succeeds. So if they fail, you don't
pay them. They don't pay money upfront. Shop around for
your homeowners insurance and I think this used to be
something that maybe was a little bit more of like
a cheap guy or a frugal guy thing to do.
(29:12):
But like self insure more, raise your your deductible so
that you're not as reliant on your insurance when something
happens to your house, because you're gonna save money immediately
now because you're gonna see your premiums decrease when you
increase your deductible. But over time, because you are less
reliant on your insurance, it means you're less likely to
use it, which means you're not gonna get booted, not
(29:32):
booted off your insurance, but they're not gonna ejacuorrates up
to sky high levels. Yeah.
Speaker 1 (29:37):
Yeah, And I think part of the reason that we've
seen increases to the extent that we have is just
inflation in general, right, rising home prices, rising costs of
building like that means that if something does happen in
your home, the insurance going to be out more money,
so hey, they've got to cover that in premium increases.
But it's also natural disasters in parts of the country,
and particularly thinking about places like Florida and California, But
(30:00):
that impacts people not just in those states, but really
across the country. As insurers sometimes disperse the pain a
little more widely, it's become really tough out there for
homeowners from an insurance expense in the last couple of
years in particular, and not to go back to the
well on this too much, Matt, but home ownership is
often seen as the number one way to build wealth. Like,
there are a lot of people out there who truly
(30:22):
believe that owning a home is their best way to
achieve the American dream and to be able to retire successfully.
And when you look at the numbers, it does kind
of sort of look like that, right, that owning the
home is what contributes to more greater levels of financial independence.
Homeowners do have a much greater net worth than renters.
(30:43):
But it's really just not that simple, right when it
comes down to it, home ownership is not the key
to building wealth. Investing in general is, which, in part
having a mortgage payment forces you to do. It's like,
you know, it's that forced method of saving yah. Yeah, yeah,
But if you had taken the additional money and invested instead,
you might have come out ahead over the years. Better
investments out there, for sure. Yeah. But case in point here,
(31:06):
I think this actually kind of highlights the fact that
renting might make more sense than buying for a lot
of people. Rents are actually down over the past twelve months.
Most people think again. Rents go up year after year,
and especially during COVID and stuff like that, it felt
like rents were going up at an insane pace because
they were. Well, that has not just slowed down, but
(31:27):
rent growth is actually declining. So you might have to
be able to get a better deal on the apartment
or the home that you're renting next month or next year.
And you know, buying can be a solid personal decision
and a reasonable financial one if that's what you're into.
It has provided outsize gains at certain points in time,
but you got to contend with the trade offs of
home ownership as well. Home maintenance, for instance, Matt averages
(31:51):
something like five hundred dollars a month. According to Zillo,
you got to contend with all the costs of home
ownership before taking the plunge. Insurance, right, maintenance, taxes, all
that stuff all skyrocket and quickly impacting homeowners Printing might
not seem quite as bad when you take all those
costs into account, and you'll have more financial flexibility and
(32:11):
room to invest if you wait a little longer. I
don't want to like dissuade everyone and say homeownership bad,
don't do it, but it's just not as simple as
a lot of people have made it out to be either.
That's true.
Speaker 2 (32:21):
Yeah, and you can especially get a deal if you
are looking at an apartment which has seen the largest
declines over the past twelve months. We've had a flurry
of newsletter sign ups Joel and so we want to
give a quick referral shout out to Joanna V as
well as h Whitworth for recommending the how To Money
newsletter to a bunch of their friends. And you can
find the how to Money newsletter over at housemoney dot
(32:44):
com for slash that's right, you guessed it newsletter. But
we will see you back here on Monday with a
fresh ask how to Money episode, and we hope that
everyone has a fantastic weekend.
Speaker 1 (32:54):
Buddy.
Speaker 2 (32:54):
Until next time, best friends Out, Best Friends Out.
Speaker 1 (33:00):
The
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Joel Larsgaard
Matthew Altmix
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