February 7, 2025 • 31 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: cheap Valentines tips, Trump’s tariff tussle, home construction and renovation costs, end of the CFPB, paying eggs-stra, WaHo surcharges, shell shocked, don’t buy the dip, a wealth of common sense, Vanguard cutting fees, ESG funds are out, Robinhood betting, and gaming your kids credit scores.
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Transcript
Episode Transcript
Available transcripts are automatically generated. Complete accuracy is not guaranteed.
Speaker 1 (00:00):
Welcome to had of money. I'm Joel Matt. Today we're
talking Trump's tariff tussle, paying extra and don't buy the dip.
Speaker 2 (00:27):
And you're not talking about not buying the dip as
in the dip for the big game, which no buy
that dip, buy that dip by the wings, by the
the chips, don't buy the companies that make the microchips.
Speaker 1 (00:39):
That's right, Just try to tie it all together to
win the son prices down. We'll talk about why not
buying the dip makes sense. But because I've seen a
lot of headlines this week mad about oh bisters are
buying the dip, and I get the appeal, but we'll
maybe like throw some shade on that. Sure, Okay, so
are you? You and I we've talked about the story.
Neither of us are super duper into Valentine's Day, right, Yeah,
(01:01):
not my favorite holiday in our household. You do like
to dress up as a cupid, but that's different. That's
a different thing, that's a whole there's a reason but
I like to do that. We will talk about that.
But yeah, our family, same thing. But I want to
I know some people love the holiday, and part of
I guess our version to it is, yeah, it feels manufactured.
And if you're gonna go out to dinner, it's more
(01:22):
expensive that night. So I don't know, go on the
night before instead or the night after. Uh. And flowers
typically get more expensive too, right, crook something at home.
Speaker 2 (01:32):
There's ways of celebrating that don't involve breaking the bank. True,
what is that what you're gonna do? You're gonna well,
we're not really, we don't really celebrate early in the week.
Are you gonna go ahead and buy some flowers in
just well ahead of time? I probably will be yes,
wait on the sales afterwards. No, I think I will
get flowers ahead of time. But uh, the basically my
favorite place is to get flowers or crater jokes. We
(01:52):
don't have one close by, and then the other great
place where you can get flowers. And I was thinking
some people like to get their flowers delivered, Well what
uh they do? I've never done it before because it's
too expensive. There's some wealthy folks I know freaks me out.
It's so expensive the prices through the one hundred flower
service and something, and I'm like, no way, but I
saw Costco same day you can get the flowers that
(02:12):
they sell at Costco and you can have those delivered.
So maybe that for the person who likes to get
flowers liver, maybe that's the ideal way to get interesting. Yeah,
Like it's via the same grocery delivery service. It's not
like they ship you flowers in a box that shows
up via FEDX.
Speaker 1 (02:24):
No. Okay, yeah, no, it's the same thing where a
human actually brings them drops them off at your door.
So they also flowers and like throw them like on
your doorstop. Yeah, just like only if they're like single
and mad about it, I think.
Speaker 2 (02:37):
But okay, so you're ready for my little soapbox on
Valentine's Day. Specifically, I am of two minds because on
one hand, I do want to be able to model
the fact that I love and appreciate my wife, to
be able to and my kids as well. I've got
three girls, you've got two, but to model that well
for them, to demonstrate what that looks like, even to
my little dude as well.
Speaker 1 (02:56):
And so because of that, I want to do a
good job with it. But I also hate the past
that our culture has taken, especially when it comes to
the candy and like chocolate, specifically the gross mass produced
chocolates here in the United States. Man, they it drives
me crazy, and ever since, I'm going to ruin chocolate
for everybody. But the butyric acid that the.
Speaker 2 (03:17):
Mass manufacturers add to our chocolates that make it taste
a little gross, uh huh. Specifically, it makes it taste
a little bomb, a little vomity personally grosses me out.
And so we've got these multiple holidays like Saint Patrick's Day,
Easter even and it just all revolves around candy. I
guess for us it does, given the fact that we're
kind of in that like kid's stage of life. And
(03:38):
when you think about it, like one hundred years ago,
that was something special because candy was like this rare thing.
But like the day and age that we live in now,
it can be had for so cheap and it's just everywhere.
Speaker 1 (03:46):
It's just not special, even if it being cheap means
it's kind of nasty, especially because of that.
Speaker 2 (03:51):
But I would much rather like what we typically do
is have like a a nice fancy breakfast, do like
heart pancakes and make them bacon perfectly in the oven,
and like something healthy as well, Right, like that That's
the other thing is just like, are we gonna I'll
go being healthy? I'm with you on Yeah, probably get
some pushback on that, but it's like with some you know,
(04:11):
some fruit, maybe some oatmeal, whatever. But there are ways
to celebrate it without kind of going down the mass consumption,
total consumeristic sort of path that I feel like our
country has gone down.
Speaker 1 (04:21):
There are also ways to show your partner that you
love them without doing the finding the whole Valentine's Day thing.
And if you are hearing this and you're like, yeah,
maybe I should buck the system a little bit, well,
now is the perfect time to kind of break that
news to your partner and also do something special for
them in advance of Valentine's Straight. Right, So it's like, hey,
guess what star thinking now start writing that letter now, Yeah,
(04:41):
I'm going to do the thing next Friday, but I'm
gonna do I'm doing something this weekend that shows them
that I care. Uh, And that way it feels less
like you just cheaping out or not caring about them.
So communication is key on that.
Speaker 2 (04:56):
Yeah, just like we do around the holidays. If you're
thinking about scaling back the number of gifts you're given,
that's not something you spring on them the night before
Christmas morning. You gotta start talking about ahead of time.
Speaker 1 (05:06):
I didn't tell you. I'll get you anything that doesn't fly, No,
it doesn't. All right, Matt, Let's get to the stories
we found interesting this week and how they pertain to
people's personal finances. And some of them do happen to
be in the political arena, which is posted something on
Facebook this week in the how to Money Facebook group.
We're trying to avoid the politics side of these economic realities,
(05:30):
but there are changes afoot and we have to talk
about them. So we are less than two weeks into
the Trump presidency. It's been real quiet. Not much happening
over there in the Oval Office, Matt. Have you noticed, like,
what's going on? Nothing? I don't heard anything from the
White House. Nothing worth talking about. Just kidding. We got
to talk about tariffs. Feels like a really like a
fire hose of kind of information policy changes going on
(05:51):
right now, and again we'll try to stick the facts
as much as possible, but specifically on the tariff fronts.
That's the big macroeconomic news that might have I mean,
full impact on every single American if they come to pass,
which is still an if they've been delayed.
Speaker 2 (06:08):
I just realized we missed out on calling this terrifying tariffs.
Oh dude, Yeah, I'm sorry.
Speaker 1 (06:13):
I'm sorry. They come to me like as we're talking
about it. Yeah, all right. So these the tariffs in
the first Trump administration were targeted in nature, and then
the Biden administration basically kept those tariffs around. But Trump's
tariff thoughts in two point zero Trump Trump World, they
seem to have differed. So initially they targeted China, you know,
(06:36):
eight years ago, and now they're targeting our neighbors and
friends and allies like Canada and Mexico if they come
to pass, right again, is this just a bargaining ship?
What's going on on a broad level, Matt, As you
and I have said before about tariffs, If these tariffs
do come to pass, if it's not just a month's delay,
but they do become implemented, this is going to impact
prices on a variety of goods and services that all
(06:59):
of use and love, because tariffs get passed on to
the consumer as essentially attacks. And so will we see
tariffs on Canada and Mexico come to pass, which would
definitely have an impact on our budgets. We don't know,
but at least that threat scared a lot of businesses.
It did change the way they act. Bloomberg had an
(07:20):
article mat and some business business owners were saying, this
actually kind of feels like COVID, we're maybe front loading
some buying. Maybe we're even changing our outlook on how
we're approaching staffing. Like those kinds of things are coming
into play as this terror discussion unfolds.
Speaker 2 (07:37):
That's true, and I like that you said that we
are attempting to take a more a political approach to
these stories, because I do think that folks on the
left are going to say, dude, Trump, he got lucky.
He's trying to save face. This is why he hit
pause on the terraffs. But then folks on the right,
I think are saying, well, of course, this is a
negotiation tactic.
Speaker 1 (07:54):
He knew that from the beginning. He's smart. We got
to trust the man.
Speaker 2 (07:58):
And we're not going to say either way whether or
not either of those opinions are correct. But I do
think we can just look at what is the net
result in four years.
Speaker 1 (08:08):
Let's have this conversation.
Speaker 2 (08:09):
But the day to day twenty four hour news cycle
makes it difficult to figure out what's going on.
Speaker 1 (08:14):
Yeah, I'm feeling some whiplash over here, Matt.
Speaker 2 (08:16):
The reality of what the threat of these terrorists would
do is causing Canada and Mexico to change their tune
a little bit. And in the case of both, what
they have done is agreed to help police the border
in order to stop the inflow of drugs like fentanyl,
regardless of motivation. That is what's happening. But from a
financial standpoint and how this impacts us, Like we said
(08:37):
a couple weeks ago, terriffs are bad for free trade,
they're bad for consumers. And if these terriffs do get implemented,
and if they stick around, well we're all going to
feel the pressure on our finances. We're all going to
feel the differences in our expenses every single month. We'll
see inflation tick back up. It remains to be seen
if our neighbors will continue to ocave to demands or
if this just sets off a longer, honestly mess, your
(09:00):
trade war, the trade war that the Journal they called
the dumbest trade war in history. If it goes beyond
these short term negotiations, that's likely true because global free
trade is good for everyone to have these open, free
flowing markets.
Speaker 1 (09:14):
Can I say my favorite result, Matt, of this sort
of tariff kerfuffle is it Shean and Timu, those cheap
Chinese websites, Well, everything is actually going to cost more
when you order for them from them now because of
this loophole that was closed, the deminimous loophole, which if
it was like a fancy term, yeah, essentially a package
(09:35):
sent directly from China under a certain dollar threshold.
Speaker 2 (09:40):
Basically it's not an import because you're buying directly from
the country, right, Yeah, it's on the ship.
Speaker 1 (09:44):
And now that's gone, which means, yeah, the prices they're
gonna tick up. They're gonna have to be more competitive
and with other companies like it. Just it just wasn't fair.
They had an unfair exemption, and so I'm glad to
see that gone, and hopefully it just means fewer peop
buying those cheap items of clothing then now just got
a little more expensive anyway, or more than clothing, all
(10:06):
the stuff that those sites sell. And the truth is
too there's no such thing as American made anymore, at
least to a certain degree, right, everything is made globally.
Think about car companies from across the world. We have
Hyundai and Kia manufacturing centers in the Southeast, Mexico and
Canada are instrumental to the manufacturing of American automobiles, and
(10:26):
tariffs over time could create higher levels of unemployment as well,
so there could be cascading effects in these industries. We're
already seeing the car manufacturers saying this ain't good for us.
And one industry that could be particularly hit hard by
tariffs is home building. New statistics revealed that home renovation
spending is increasing quickly. This company house It finds that
(10:48):
the cost of renovations has doubled over the past fifteen years,
which makes sense, especially given what we saw during COVID,
Although some of those price increases have moderated. We've heard
from listeners who would have moved, but paying for renovation
and keeping that three percent mortgage intact made a lot
more financial sense for them, and it's making more and
more sense for a lot of people, even though the
(11:10):
cost of lumber, concrete, and labor have been going up
and could be going up even more if tariffs are implemented.
If you want to make some changes to your home.
Our advice is to save up all, right, Joel, Let's
touch on another policy change coming out of DC and
another unsurprising effort the CFPB, the Consumer Financial Protection Bureau.
Speaker 2 (11:30):
It might not be long for this world. The former
director was fired last week and the new Treasury Secretary
has taken the helm, and his first order was to
shut down all the work that's currently taken place.
Speaker 1 (11:42):
The changing the director isn't abnormal. That kind of happens
often when the administration takes place.
Speaker 2 (11:46):
But the shutdown of all litigation essentially that was currently
taking place, like the different.
Speaker 1 (11:52):
Lags, you guys saying, kick back, put your feet up
on the desk, don't do anything.
Speaker 2 (11:55):
The different lawsuits and the enforcement of some of the
items against some of the largest financial institutions in the
country will now essentially cease. Like we just talked about
Capital One. That was the CFPB who had filed that
lawsuit against Capital One relief right now, I think there
is a good chance that that will never actually see
the light of day. The ultimate reality for the CFPP
(12:16):
might be that it just gets completely shuttered. It's unfortunate
because it's helped a lot of consumers get results when
being stymied by their banks. Over the years, that era
of petitioning to a higher authority to get help is
likely coming to an end. This is certainly something we'll
be following and certainly a reason why we continue to
talk about these topics because Joel, you and I were
(12:37):
journalists and as we're podcastism but like to be able
to shine light on companies that are misbehaving, bringing attention
to companies that have unfair policies.
Speaker 1 (12:47):
That's a small part of what we do here well,
and we have over the years pointed a whole lot
of people in the direction of CFPB dot gov. Consumer
finance dot gov takes you the same place because the
Consumer Financial Protection Bureau offers a place to turn when
you're not getting anywhere trying to talk to the customer
service arm of your financial institution, whether it's local or national,
(13:08):
and they have the ability to kind of prod because
they have kind of like a bowlly pulpit to a
certain extent, and maybe it was used poorly in some ways,
but it's been used to the benefit of consumers in
other ways. So the loss of the CFPB I would
at least shed a tear Matt something else. I'm shedding
a tear over egg prices. They're continuing to increase, supplies
(13:30):
are dwindling. There were none at Costco the other day.
Speaker 2 (13:33):
Really when I went that's that's kind of like the
Costco mentality of like stalking up you know, guess what,
there's total There's plenty of eggs over.
Speaker 1 (13:40):
At Aldi, are they Okay? Yes? I went into regular
and organic and they were just there were scattershot. You
could tell it had been like rifled through, and there
was like an eighth of the normal amount there broken
eggshells on the ground. Yeah, it's like what happened. It
felt like a little post apocalyptics. The best restaurant on
the planet, which I think you and I can agree
(14:00):
on this waffle House.
Speaker 2 (14:01):
I like waffle holes, but I'm not gonna call it
the best restaurant chain.
Speaker 1 (14:05):
It's at least what you're meaning to say. I'm sure. No, no,
just best restaurant on the planet. Okay, sorry, Noma, Yeah, yeah,
waffle House wins. And you can shorten it to us
as who, which is also four letters and kind of
cool too, right, Waho and Noma? Yeah, Waffless just announced
a fifty cent per egg surcharge to all the items
on the menu that contain eggs, which is the vast
(14:25):
majority of menu items because it's a breakfast joint. So
I can't blame the good folks of waffle House here.
They're hoping, as are we all, that the impact of
the ab and flu will diminish in the coming months. Yeah,
but for the time being, the increased cost of eggs
has to be passed on to the consumer. And the
truth is, get ready to pay more for all of
(14:46):
your all star breakfasts. And there's no sign of this
stopping either. Matt. The projections for egg price increases in
the coming months are are steep too. Yeah.
Speaker 2 (14:55):
I don't know if the shade towards waffle House. It's
just that breakfast is like one of the things that
everyone should know how to make, you know. Yeah, Like
there's a big part that there's when you're in college,
whaff House is great because, let's be honest, I barely
knew how to fry an egg when I was in college.
Speaker 1 (15:08):
But like, as you get older, I appreciate waffle House
lesson less. That's all I'm gonna say. But I like it.
I don't go as often nearly as often as I
used to.
Speaker 2 (15:17):
But from a missologis standpoint, is that why you think
you're going more or whenever you do go?
Speaker 1 (15:21):
Maybe? I mean I do like the food, it's just
kind of your basic thing. I mean, yeah, but think
about what you can make out fronts or money.
Speaker 2 (15:28):
Well, eaither they profile a bunch of other restaurants that
are considering raising prices as well on other dishes that
contain eggs, or even considering how many dishes to.
Speaker 1 (15:37):
Serve that have eggs all together.
Speaker 2 (15:39):
I think pretty soon we're gonna have like a you know,
like if you go to a fancy restaurant and like
all the seafood it's like catch the day or it's
got like market price. Yeah yeah, Like normally you see
that when it comes to like the swordfish, but now
I think it.
Speaker 1 (15:52):
Might be the case when it comes to eggs.
Speaker 2 (15:54):
But I do think we're going to see this the
impact of this decrease over time, because well, for one,
we had the ability to change our consumption habits. Right,
Like eggs, they're still super nutritious, they're just not quite
as affordable as they used to be. And so don't
just keep grinning and bearing it by let fewer eggs instead,
buy the steel cut oatmeal, and find other things to
(16:14):
eat in the morning. I think there's ways we can
modify our habits. But also I think I would just
say sit tight, because the farmers are having to call
their flocks, yeah, because of the flu, and it's sad,
it's terrible. But I think it only takes like three
or four months before a chicken star's laying eggs again,
and so just like hang in there. And I bet
in like five or six months, I bet egg prices
kind of resumed the I don't know, back to normal.
(16:35):
I hope you're right, that's my hope. I hope you're right.
Speaker 1 (16:37):
The thing is, when something like steak goes up in price,
people can moderate their habits and say I'm getting chicken
instead with eggs. Eggs are kind of they're kind of
one of a kind. There's not anything that you can
get that replaces it. You have to just say, I
guess I'm going for this another thing that I don't
like as much or whatever.
Speaker 2 (16:52):
Typically in the mornings, have some yogurt with some granola,
like we talked about earlier, maybe maybe a little more bacon,
perhaps there's other breakfast proteins that.
Speaker 1 (17:01):
We can all enjoy doing. What did you see that
forty thousand dollars worth of eggs, literally one hundred thousand
eggs were stolen off the trailer or whatever you mentioned
it at dinner last night. And then my daughter comp
came down after we put her to bed and she
was like, Daddy, is someone going to break into our
house and steal our eggs? And You're like, yes, that
they are. It's my daddy's packing heat. That's right, that's right.
I just thought that was the eggs hilarious that she
(17:23):
thought someone was going to come in and steal our eggs,
and uh, try to reassure that's not going to be
the case, although if they keep going up in price,
it might be. You never know. All right, mat We've
got more to get to on this episode, including fee
reductions on your favorite funds at one of our favorite
low cost brokerages. We'll talk about that and more right
after this. All right, Joel, we are back from the break.
(17:50):
We got more to get to on today's Friday flight,
so much more. It is now time for the ludicrous
headline of the week, which is from the journal The
headline reads, individual investors buy the dip Again, there is
a decent chunk of individual investors out there who ended
up buying the tariff dip on Monday. Stop Markey was
freaking out Monday morning.
Speaker 2 (18:11):
This is before obviously before the market's corrected, but basically
on the platforms where individual traders so not the big
investors where they're out there doing business by orders, they
far outweighed sell orders of stocks like Tesla and Nvidia
specifically as values were getting decimated. And despite our lack
(18:31):
of interest in single stocks, in some way, that's actually encouraging.
It's better to be a buyer than a seller if
you've got time to write it out as an investor.
But we just hear so many folks parroting the buy
the dip tag phrase the mantra, and there are some
flaws to that way of thinking that we would generally
recommend folks to not buy the dip.
Speaker 1 (18:51):
Yeah, I like the optimism, kind of like what you're
hinting at here, Matt, is that people are saying, oh,
buying the dip says I believe that this company has
room to run for the long haul, and that bowes well.
But you're right, I.
Speaker 2 (19:03):
Would rouseee folks doing that then folks freaking out, yes
and just selling yes, essentially one.
Speaker 1 (19:08):
Hundred percent, but still buying the dip is overrated. And
that's because what were you doing with the money before
the dip came along? Right? Was it just sitting there
in your banking account? And for how long was that
the case? Because it's just obviously hard to know when
a market correction might occur. Impossible actually, and that's particularly
true when the news headlines and the policy changes are
(19:30):
moving at lightning speed. A friend of the show, Ben Carlson,
wrote about that this week, and he said this. He said,
the problem is that although corrections are a normal part
of a functioning stock market, there are environments where corrections
don't occur for a very long time. So I think
by the dip, it's often this emotional strategy that makes
people feel like they're making smart moves. They're buy and low,
they're getting while the getting's good. But dollar cost averaging
(19:53):
is better than buy the dip because it just takes
less mental effort and it leads to better results. If
your money was sitting in savings like for the last
couple of months, well you're waiting for the dip. Well,
it would have been better being invested over the last
couple of months. They're waiting for a point and a
half pullback on a single day. Totally.
Speaker 2 (20:10):
Yeah, and even better than dollar costs averaging is lump
some investing if you had that money to deploy, because yeah.
Speaker 1 (20:16):
Like this is it's at least better seventy five percent
of the time, right, Totally. And I could not agree
anymore with Ben Carlson than just how he wrote that up. Joel.
Speaker 2 (20:24):
You know, I'm into the numbers, and so as I
closed out January last month, I was kind of going
over some stuff with Kate and I noticed that the
smp it was up three percent basically just in January,
which is crazy. And when you are invested in a
diversified way in the stock market and so you've got
the vast majority of your wealth tied up like that
has a big impact on your overall wealth as opposed
(20:45):
to if you want to dabble a little bit and
do some single stock investing. If Nvidia wasn't a position
that you held and you thought, okay, here's a way
for me to get a you know, let me get
a little bit of Nvidia my overall portfolio, sure, go
for it. Hopefully that's the case. It's just a very
small amount. But personally, guess what, I don't own any Nvidia.
I guess I do, actually, yeah, because it's in the
(21:05):
S and P actually probably makes up a decent chunk
of VOO. I'm guessing around five percent something like that,
And so I think that obviously, that's the approach that
we take when it comes to investing in individual companies
like this. On the note though, of investing Vanguard, man,
they did what they do best this week. They cut
fees and what is actually the largest fee reduction in
(21:27):
Vanguard history. The average expense ratio on a Vanguard fund
is now just point zero seven percent. I think the
industry average is sitting around point four to four percent,
so much better, yeah, than the rest of the brokerages
out there. And this isn't going to change the life
of any single investor, but it will collectively save investors
hundreds of millions of dollars. And it's just another display
(21:51):
of Vanguard doing everything they can to minimize fees.
Speaker 1 (21:54):
And it was great too.
Speaker 2 (21:56):
Is it just puts some some pressure on the competitors
out there who are like, if the industry averages point
four four percent, that means there's plenty of funks out
there who are charging well above that. Yeah, and I
think this is kind of like a to use Vanguard
terminology shot across the bow of some of those ships.
Speaker 1 (22:12):
I agreed. Yeah, and man turns out investors like low fees.
And I think another example of that phenomenon is increasing
outflows from ESG funds, funds that are prioritize environmental, sustainable
and governance, social social eyes. So who even knows because
it's been so long since we've talked about yet, we
haven't talked about it in a while. They they just
haven't been invoke I don't think in the same way.
(22:34):
And it's I don't think ESG funds are dead, but
they might be on life support because conventional equity funds
have have also performed better. That was one of the
biggest arguments for ESG was like, all right, hey, not
only are you investing your dollars in companies that I
don't know, don't produce oil or don't sell things that
are harmful, Although harmful was kind of depending on the
(22:57):
viewpoint that you had, right, because they were still investing
in bodies that were stealing our attention, so it really
was in the eye of the beholder. But another argument
for ESG was, hey, these are going to outperform just
a traditional index fund. That hasn't been the case, and
I think for ESG funds to be successful, they have
to prove that they do lead to increase returns and
(23:17):
that that outweighs the increased fees that they charge. They
haven't been able to prove that. You and I have
not been fans of ESG funds, not because we don't
love when people do good things for the world, but
because we don't want you. It just doesn't make sense
to invest in that way, especially given kind of the
data we've seen about fees and returns.
Speaker 2 (23:36):
Indeed, on a related note, investing app Robinhood attempted to
blur the lines between investing and gambling as they attempted
to partner with Calshi in.
Speaker 1 (23:45):
Order to allow Super Bowl betting on their app.
Speaker 2 (23:48):
It was short lived, though, as they had to pull
the rug back on that one after government officials mentioned the.
Speaker 1 (23:53):
Likely illegal nature of the.
Speaker 2 (23:56):
Predictions markets and just how I guess the robin Hood
was implementing that from a high level. If everyone listening
knows our take on sports gambling just in general, we
don't like it, and too many folks are seeing the
ads they're signing up. They're saying, man, you're you're leaving
money on the table if you're not gonna claim that
free offer. But what you're ending up doing is just
forking over way too much money as you're in pursuit
(24:19):
of this entertainment or the false idea of making more
money and the idea of combining sports gambling on the
robin Hood app where you invest for your future, where
you have a retirement account. Man, is a dangerous like
crossing of the streams in essence, Like personally I'm not
a fan. Does that mean that Robinhood should be barred
from doing this? I'm not totally sure if I'm if
(24:39):
I would go that far, but it does start. It
puts a lot of responsibility on the individual to decide
what kind of limits am I going to place on this?
You know, Like like when it comes to single stock investing,
we've always said, hey, up to five percent. Same thing
with crypto even like, hey, you want to you wanta
dabble a little bit there? Okay, let's keep that silo
(24:59):
to five. That's a personal choice. That's a personal yeah.
And beyond that, ooh, you are really playing with fire.
We definitely would not advise for folks to do that,
which then makes me think Joel, Okay, let's say that
a lot of the apps included some future markets predictions
betting on you know, on their platforms. Do you think
that that could fit within the five percent sort of
window if folks had the itch right as that sort
(25:21):
of pressure relief out.
Speaker 1 (25:22):
I don't think so. I think I think gambling is
specifically entertainment budget. So if you want to dial back
on what you're spending on Netflix or going out to
concerts to spend on gambling thing.
Speaker 2 (25:31):
That's where it should come out of your entertainment budget,
as opposed to feeling like it's an investment that I
think I agree with that because inherently, what like, even
if you're investing within a single stock, you're this is
more like a warm Buffett argument. You are you are
investing within a company, a company that produces products, that
does something good, that's putting out value in the world.
But when you're betting on something, you're just making a
wager that something's either is going to happen or isn't
(25:54):
going to.
Speaker 1 (25:54):
Happen, Like there's no value value creation there, and we
have the downsides and the potential addiction that many people
in our country are suffering now that because of the
widespread availability, you have to be careful in that regard
to So, Yeah, if you can handle it responsibly and
you can do it in a way where it's hey,
it's just entertainment money. That's how I think of it,
and I've budgeted for it, that's great. I just think
(26:15):
there's a lot of people who don't know how to
stop themselves too. Totally agree. All right, let's talk about
credit scores for a second. They are an important part
of our financial lives. The Atlantic had an article about
parents gaming their kids credit score, and the author didn't
seem to love the fact that parents can give their
kids a leg up by adding them as an authorized
user in order to get them started on the right
(26:36):
foot from a credit building perspective. The basic argument was
it's not fair, and I get that. It's a weak argument.
As my mom would say, I don't get that life's
not always fair. Honey. My mom was right. I tell
my kids the same thing. Sometimes so, yes, it is true,
like being able to help get your kids started on
the right foot from a credit perspective when other people
(26:59):
don't have to know how Like, yeah, maybe there is
some unfairness to that. Kids with parents who are paying
attention jumping through the proper hoops can help their kids
launch with the solid credit score along with hopefully more importantly,
the proper knowledge to know how to navigate the system.
Kids who have parents who aren't credit savvy, well, they
(27:19):
might have to learn the hard way. It still incentives
exist to help your kid establish a solid credit score.
I don't see the harm in it. I think it's
a good thing that people who wise up can help
their kids do that them a the rules of the road.
Speaker 2 (27:33):
I mean, I think, yeah, this might be a little
off topic, but I actually dove in a little deeper.
Speaker 1 (27:38):
So the author of that article there on the Atlantic,
and I was kind of reading some of his other
articles that he had written, and you want to hear
one that's super fascinating. There was one that was titled
learn to be Photogenic. Hollywood invented the idea that some
people are more naturally beautiful on camera. Don't believe it,
which think about that for a second. Some people are
more naturally beautiful.
Speaker 2 (27:58):
But what he's saying, though, is that, like you can
over come this thing, which is in total opposition to
the idea that he's putting forth here as far as
the credit score, the fact that there are some people
then it's not fair and you should just accept that. Like,
take that same idea of being able to take a
better selfie and apply that to your personal finances, Like
give the power to the people, the ability for us
to make some changes in our lives to not only
(28:19):
better our own financial situation, but our kids as well.
Like that's the kind of argument. I mean, that's the
argument that we make every single day here on the show.
Here on the podcast, I will say the subheading of
the parents gaming the credit score system was because of
course they are, which I totally agree with that sentiment, right,
the fact that if there is something that you can
measure via like numerically, that people are going to do that,
(28:44):
And like there is such an obsession with numbers, whether
it's like our weight, our grades for kids, SAT scores
or in this case, credit scores. And if you are
so focused on your kids credit score that you're not
paying attention to other things in life, like reading to
them at night, or connection, like connecting with them emotionally,
figuring out what they're scared about earlier in the day,
(29:05):
Like if you didn't have the patience to be like,
oh wait, you're concerned that someone's gonna make into our
house and see her like that, You're you're missing the boat,
like you are, like, there are more important things in
life than focusing on this precious credit score. And if
that's like what you're really spending a lot of your
energy on, I will agree with the writer and say
you're I think you're doing it wrong. Yeah, But at
(29:26):
the same time, if you're gonna add your kid as
an authorized user and not give them the credit card
in order to give them a leg up, a little
boost to their credit score, I'm totally fine.
Speaker 1 (29:33):
It's just some minor things to do. If you're putting
too much emphasis, it's not like a life philosophy, right, Yeah,
I mean it really takes all of two minutes to
add your kid as an authorized user, and if you
handle your credit well, you can help them launch with
a better credit score. I don't see any harm in that.
But yeah, if you I don't know how many people
are putting that much state we talked about I guess
that one guy who's pursuing a perfect credit score, and
(29:55):
it was like, dude, you're way over thinking this, putting
way too much time into it. There's some folks out
there they upset their majoring and the miners, Yeah, don't
do that, And Matt, the truth is their winners and
losers in every area of personal finances, like credit card rewards.
That's just another one of those areas where some folks
win big they rack up cash back travel miles by
using credit cards. Effectively, other people end up paying the
(30:17):
credit card companies like Vsend MasterCard thousands of dollars by
not paying off their balance on time and in full,
or by paying just the minimums. Like we talked about recently.
The system's not perfect, but it's the system that we
all have to navigate. Yeah, And I do think maybe
the one area of agreement I have too with the
author is that basically credit scores determined too much of
our adult lives. I think that's particularly concerning given how
(30:38):
badly the credit bureaus have behaved, how unresponsive they've been
to done a crappy job. Yeah, consumer complaints, so that
that's a place I can I can agree with the author.
Speaker 2 (30:49):
Nice and maybe that's why it wasn't our ludicrous headline
of the week, because they're in the Venn diagram of
what we agree with and what.
Speaker 1 (30:55):
He agrees with. There's some overlaps, there is some, but.
Speaker 2 (30:57):
That's gonna be it for this Friday flight. We hope
everyone has the fantastic the weekend. We'll see you back
here on Monday with a fresh asskut of Money episode
for the super.
Speaker 1 (31:05):
Bowl, the Big Game. Don't do hard boiled eggs for
the Big Game. It's gonna be too expensed.
Speaker 2 (31:09):
My gosh, did you imagine if you're serving up deviled eggs?
That's right, you're a baller, that's right. I guess if
you want to bring to your friends, yeah, just have
like tons of devil eggs out, insane, buddy.
Speaker 1 (31:20):
That'll be it until next time. Best friends out, Best
Friends Out.
Welcome to had of money. I'm Joel Matt. Today we're
talking Trump's tariff tussle, paying extra and don't buy the dip.
Speaker 2 (00:27):
And you're not talking about not buying the dip as
in the dip for the big game, which no buy
that dip, buy that dip by the wings, by the
the chips, don't buy the companies that make the microchips.
Speaker 1 (00:39):
That's right, Just try to tie it all together to
win the son prices down. We'll talk about why not
buying the dip makes sense. But because I've seen a
lot of headlines this week mad about oh bisters are
buying the dip, and I get the appeal, but we'll
maybe like throw some shade on that. Sure, Okay, so
are you? You and I we've talked about the story.
Neither of us are super duper into Valentine's Day, right, Yeah,
(01:01):
not my favorite holiday in our household. You do like
to dress up as a cupid, but that's different. That's
a different thing, that's a whole there's a reason but
I like to do that. We will talk about that.
But yeah, our family, same thing. But I want to
I know some people love the holiday, and part of
I guess our version to it is, yeah, it feels manufactured.
And if you're gonna go out to dinner, it's more
(01:22):
expensive that night. So I don't know, go on the
night before instead or the night after. Uh. And flowers
typically get more expensive too, right, crook something at home.
Speaker 2 (01:32):
There's ways of celebrating that don't involve breaking the bank. True,
what is that what you're gonna do? You're gonna well,
we're not really, we don't really celebrate early in the week.
Are you gonna go ahead and buy some flowers in
just well ahead of time? I probably will be yes,
wait on the sales afterwards. No, I think I will
get flowers ahead of time. But uh, the basically my
favorite place is to get flowers or crater jokes. We
(01:52):
don't have one close by, and then the other great
place where you can get flowers. And I was thinking
some people like to get their flowers delivered, Well what
uh they do? I've never done it before because it's
too expensive. There's some wealthy folks I know freaks me out.
It's so expensive the prices through the one hundred flower
service and something, and I'm like, no way, but I
saw Costco same day you can get the flowers that
(02:12):
they sell at Costco and you can have those delivered.
So maybe that for the person who likes to get
flowers liver, maybe that's the ideal way to get interesting. Yeah,
Like it's via the same grocery delivery service. It's not
like they ship you flowers in a box that shows
up via FEDX.
Speaker 1 (02:24):
No. Okay, yeah, no, it's the same thing where a
human actually brings them drops them off at your door.
So they also flowers and like throw them like on
your doorstop. Yeah, just like only if they're like single
and mad about it, I think.
Speaker 2 (02:37):
But okay, so you're ready for my little soapbox on
Valentine's Day. Specifically, I am of two minds because on
one hand, I do want to be able to model
the fact that I love and appreciate my wife, to
be able to and my kids as well. I've got
three girls, you've got two, but to model that well
for them, to demonstrate what that looks like, even to
my little dude as well.
Speaker 1 (02:56):
And so because of that, I want to do a
good job with it. But I also hate the past
that our culture has taken, especially when it comes to
the candy and like chocolate, specifically the gross mass produced
chocolates here in the United States. Man, they it drives
me crazy, and ever since, I'm going to ruin chocolate
for everybody. But the butyric acid that the.
Speaker 2 (03:17):
Mass manufacturers add to our chocolates that make it taste
a little gross, uh huh. Specifically, it makes it taste
a little bomb, a little vomity personally grosses me out.
And so we've got these multiple holidays like Saint Patrick's Day,
Easter even and it just all revolves around candy. I
guess for us it does, given the fact that we're
kind of in that like kid's stage of life. And
(03:38):
when you think about it, like one hundred years ago,
that was something special because candy was like this rare thing.
But like the day and age that we live in now,
it can be had for so cheap and it's just everywhere.
Speaker 1 (03:46):
It's just not special, even if it being cheap means
it's kind of nasty, especially because of that.
Speaker 2 (03:51):
But I would much rather like what we typically do
is have like a a nice fancy breakfast, do like
heart pancakes and make them bacon perfectly in the oven,
and like something healthy as well, Right, like that That's
the other thing is just like, are we gonna I'll
go being healthy? I'm with you on Yeah, probably get
some pushback on that, but it's like with some you know,
(04:11):
some fruit, maybe some oatmeal, whatever. But there are ways
to celebrate it without kind of going down the mass consumption,
total consumeristic sort of path that I feel like our
country has gone down.
Speaker 1 (04:21):
There are also ways to show your partner that you
love them without doing the finding the whole Valentine's Day thing.
And if you are hearing this and you're like, yeah,
maybe I should buck the system a little bit, well,
now is the perfect time to kind of break that
news to your partner and also do something special for
them in advance of Valentine's Straight. Right, So it's like, hey,
guess what star thinking now start writing that letter now, Yeah,
(04:41):
I'm going to do the thing next Friday, but I'm
gonna do I'm doing something this weekend that shows them
that I care. Uh, And that way it feels less
like you just cheaping out or not caring about them.
So communication is key on that.
Speaker 2 (04:56):
Yeah, just like we do around the holidays. If you're
thinking about scaling back the number of gifts you're given,
that's not something you spring on them the night before
Christmas morning. You gotta start talking about ahead of time.
Speaker 1 (05:06):
I didn't tell you. I'll get you anything that doesn't fly, No,
it doesn't. All right, Matt, Let's get to the stories
we found interesting this week and how they pertain to
people's personal finances. And some of them do happen to
be in the political arena, which is posted something on
Facebook this week in the how to Money Facebook group.
We're trying to avoid the politics side of these economic realities,
(05:30):
but there are changes afoot and we have to talk
about them. So we are less than two weeks into
the Trump presidency. It's been real quiet. Not much happening
over there in the Oval Office, Matt. Have you noticed, like,
what's going on? Nothing? I don't heard anything from the
White House. Nothing worth talking about. Just kidding. We got
to talk about tariffs. Feels like a really like a
fire hose of kind of information policy changes going on
(05:51):
right now, and again we'll try to stick the facts
as much as possible, but specifically on the tariff fronts.
That's the big macroeconomic news that might have I mean,
full impact on every single American if they come to pass,
which is still an if they've been delayed.
Speaker 2 (06:08):
I just realized we missed out on calling this terrifying tariffs.
Oh dude, Yeah, I'm sorry.
Speaker 1 (06:13):
I'm sorry. They come to me like as we're talking
about it. Yeah, all right. So these the tariffs in
the first Trump administration were targeted in nature, and then
the Biden administration basically kept those tariffs around. But Trump's
tariff thoughts in two point zero Trump Trump World, they
seem to have differed. So initially they targeted China, you know,
(06:36):
eight years ago, and now they're targeting our neighbors and
friends and allies like Canada and Mexico if they come
to pass, right again, is this just a bargaining ship?
What's going on on a broad level, Matt, As you
and I have said before about tariffs, If these tariffs
do come to pass, if it's not just a month's delay,
but they do become implemented, this is going to impact
prices on a variety of goods and services that all
(06:59):
of use and love, because tariffs get passed on to
the consumer as essentially attacks. And so will we see
tariffs on Canada and Mexico come to pass, which would
definitely have an impact on our budgets. We don't know,
but at least that threat scared a lot of businesses.
It did change the way they act. Bloomberg had an
(07:20):
article mat and some business business owners were saying, this
actually kind of feels like COVID, we're maybe front loading
some buying. Maybe we're even changing our outlook on how
we're approaching staffing. Like those kinds of things are coming
into play as this terror discussion unfolds.
Speaker 2 (07:37):
That's true, and I like that you said that we
are attempting to take a more a political approach to
these stories, because I do think that folks on the
left are going to say, dude, Trump, he got lucky.
He's trying to save face. This is why he hit
pause on the terraffs. But then folks on the right,
I think are saying, well, of course, this is a
negotiation tactic.
Speaker 1 (07:54):
He knew that from the beginning. He's smart. We got
to trust the man.
Speaker 2 (07:58):
And we're not going to say either way whether or
not either of those opinions are correct. But I do
think we can just look at what is the net
result in four years.
Speaker 1 (08:08):
Let's have this conversation.
Speaker 2 (08:09):
But the day to day twenty four hour news cycle
makes it difficult to figure out what's going on.
Speaker 1 (08:14):
Yeah, I'm feeling some whiplash over here, Matt.
Speaker 2 (08:16):
The reality of what the threat of these terrorists would
do is causing Canada and Mexico to change their tune
a little bit. And in the case of both, what
they have done is agreed to help police the border
in order to stop the inflow of drugs like fentanyl,
regardless of motivation. That is what's happening. But from a
financial standpoint and how this impacts us, Like we said
(08:37):
a couple weeks ago, terriffs are bad for free trade,
they're bad for consumers. And if these terriffs do get implemented,
and if they stick around, well we're all going to
feel the pressure on our finances. We're all going to
feel the differences in our expenses every single month. We'll
see inflation tick back up. It remains to be seen
if our neighbors will continue to ocave to demands or
if this just sets off a longer, honestly mess, your
(09:00):
trade war, the trade war that the Journal they called
the dumbest trade war in history. If it goes beyond
these short term negotiations, that's likely true because global free
trade is good for everyone to have these open, free
flowing markets.
Speaker 1 (09:14):
Can I say my favorite result, Matt, of this sort
of tariff kerfuffle is it Shean and Timu, those cheap
Chinese websites, Well, everything is actually going to cost more
when you order for them from them now because of
this loophole that was closed, the deminimous loophole, which if
it was like a fancy term, yeah, essentially a package
(09:35):
sent directly from China under a certain dollar threshold.
Speaker 2 (09:40):
Basically it's not an import because you're buying directly from
the country, right, Yeah, it's on the ship.
Speaker 1 (09:44):
And now that's gone, which means, yeah, the prices they're
gonna tick up. They're gonna have to be more competitive
and with other companies like it. Just it just wasn't fair.
They had an unfair exemption, and so I'm glad to
see that gone, and hopefully it just means fewer peop
buying those cheap items of clothing then now just got
a little more expensive anyway, or more than clothing, all
(10:06):
the stuff that those sites sell. And the truth is
too there's no such thing as American made anymore, at
least to a certain degree, right, everything is made globally.
Think about car companies from across the world. We have
Hyundai and Kia manufacturing centers in the Southeast, Mexico and
Canada are instrumental to the manufacturing of American automobiles, and
(10:26):
tariffs over time could create higher levels of unemployment as well,
so there could be cascading effects in these industries. We're
already seeing the car manufacturers saying this ain't good for us.
And one industry that could be particularly hit hard by
tariffs is home building. New statistics revealed that home renovation
spending is increasing quickly. This company house It finds that
(10:48):
the cost of renovations has doubled over the past fifteen years,
which makes sense, especially given what we saw during COVID,
Although some of those price increases have moderated. We've heard
from listeners who would have moved, but paying for renovation
and keeping that three percent mortgage intact made a lot
more financial sense for them, and it's making more and
more sense for a lot of people, even though the
(11:10):
cost of lumber, concrete, and labor have been going up
and could be going up even more if tariffs are implemented.
If you want to make some changes to your home.
Our advice is to save up all, right, Joel, Let's
touch on another policy change coming out of DC and
another unsurprising effort the CFPB, the Consumer Financial Protection Bureau.
Speaker 2 (11:30):
It might not be long for this world. The former
director was fired last week and the new Treasury Secretary
has taken the helm, and his first order was to
shut down all the work that's currently taken place.
Speaker 1 (11:42):
The changing the director isn't abnormal. That kind of happens
often when the administration takes place.
Speaker 2 (11:46):
But the shutdown of all litigation essentially that was currently
taking place, like the different.
Speaker 1 (11:52):
Lags, you guys saying, kick back, put your feet up
on the desk, don't do anything.
Speaker 2 (11:55):
The different lawsuits and the enforcement of some of the
items against some of the largest financial institutions in the
country will now essentially cease. Like we just talked about
Capital One. That was the CFPB who had filed that
lawsuit against Capital One relief right now, I think there
is a good chance that that will never actually see
the light of day. The ultimate reality for the CFPP
(12:16):
might be that it just gets completely shuttered. It's unfortunate
because it's helped a lot of consumers get results when
being stymied by their banks. Over the years, that era
of petitioning to a higher authority to get help is
likely coming to an end. This is certainly something we'll
be following and certainly a reason why we continue to
talk about these topics because Joel, you and I were
(12:37):
journalists and as we're podcastism but like to be able
to shine light on companies that are misbehaving, bringing attention
to companies that have unfair policies.
Speaker 1 (12:47):
That's a small part of what we do here well,
and we have over the years pointed a whole lot
of people in the direction of CFPB dot gov. Consumer
finance dot gov takes you the same place because the
Consumer Financial Protection Bureau offers a place to turn when
you're not getting anywhere trying to talk to the customer
service arm of your financial institution, whether it's local or national,
(13:08):
and they have the ability to kind of prod because
they have kind of like a bowlly pulpit to a
certain extent, and maybe it was used poorly in some ways,
but it's been used to the benefit of consumers in
other ways. So the loss of the CFPB I would
at least shed a tear Matt something else. I'm shedding
a tear over egg prices. They're continuing to increase, supplies
(13:30):
are dwindling. There were none at Costco the other day.
Speaker 2 (13:33):
Really when I went that's that's kind of like the
Costco mentality of like stalking up you know, guess what,
there's total There's plenty of eggs over.
Speaker 1 (13:40):
At Aldi, are they Okay? Yes? I went into regular
and organic and they were just there were scattershot. You
could tell it had been like rifled through, and there
was like an eighth of the normal amount there broken
eggshells on the ground. Yeah, it's like what happened. It
felt like a little post apocalyptics. The best restaurant on
the planet, which I think you and I can agree
(14:00):
on this waffle House.
Speaker 2 (14:01):
I like waffle holes, but I'm not gonna call it
the best restaurant chain.
Speaker 1 (14:05):
It's at least what you're meaning to say. I'm sure. No, no,
just best restaurant on the planet. Okay, sorry, Noma, Yeah, yeah,
waffle House wins. And you can shorten it to us
as who, which is also four letters and kind of
cool too, right, Waho and Noma? Yeah, Waffless just announced
a fifty cent per egg surcharge to all the items
on the menu that contain eggs, which is the vast
(14:25):
majority of menu items because it's a breakfast joint. So
I can't blame the good folks of waffle House here.
They're hoping, as are we all, that the impact of
the ab and flu will diminish in the coming months. Yeah,
but for the time being, the increased cost of eggs
has to be passed on to the consumer. And the
truth is, get ready to pay more for all of
(14:46):
your all star breakfasts. And there's no sign of this
stopping either. Matt. The projections for egg price increases in
the coming months are are steep too. Yeah.
Speaker 2 (14:55):
I don't know if the shade towards waffle House. It's
just that breakfast is like one of the things that
everyone should know how to make, you know. Yeah, Like
there's a big part that there's when you're in college,
whaff House is great because, let's be honest, I barely
knew how to fry an egg when I was in college.
Speaker 1 (15:08):
But like, as you get older, I appreciate waffle House
lesson less. That's all I'm gonna say. But I like it.
I don't go as often nearly as often as I
used to.
Speaker 2 (15:17):
But from a missologis standpoint, is that why you think
you're going more or whenever you do go?
Speaker 1 (15:21):
Maybe? I mean I do like the food, it's just
kind of your basic thing. I mean, yeah, but think
about what you can make out fronts or money.
Speaker 2 (15:28):
Well, eaither they profile a bunch of other restaurants that
are considering raising prices as well on other dishes that
contain eggs, or even considering how many dishes to.
Speaker 1 (15:37):
Serve that have eggs all together.
Speaker 2 (15:39):
I think pretty soon we're gonna have like a you know,
like if you go to a fancy restaurant and like
all the seafood it's like catch the day or it's
got like market price. Yeah yeah, Like normally you see
that when it comes to like the swordfish, but now
I think it.
Speaker 1 (15:52):
Might be the case when it comes to eggs.
Speaker 2 (15:54):
But I do think we're going to see this the
impact of this decrease over time, because well, for one,
we had the ability to change our consumption habits. Right,
Like eggs, they're still super nutritious, they're just not quite
as affordable as they used to be. And so don't
just keep grinning and bearing it by let fewer eggs instead,
buy the steel cut oatmeal, and find other things to
(16:14):
eat in the morning. I think there's ways we can
modify our habits. But also I think I would just
say sit tight, because the farmers are having to call
their flocks, yeah, because of the flu, and it's sad,
it's terrible. But I think it only takes like three
or four months before a chicken star's laying eggs again,
and so just like hang in there. And I bet
in like five or six months, I bet egg prices
kind of resumed the I don't know, back to normal.
(16:35):
I hope you're right, that's my hope. I hope you're right.
Speaker 1 (16:37):
The thing is, when something like steak goes up in price,
people can moderate their habits and say I'm getting chicken
instead with eggs. Eggs are kind of they're kind of
one of a kind. There's not anything that you can
get that replaces it. You have to just say, I
guess I'm going for this another thing that I don't
like as much or whatever.
Speaker 2 (16:52):
Typically in the mornings, have some yogurt with some granola,
like we talked about earlier, maybe maybe a little more bacon,
perhaps there's other breakfast proteins that.
Speaker 1 (17:01):
We can all enjoy doing. What did you see that
forty thousand dollars worth of eggs, literally one hundred thousand
eggs were stolen off the trailer or whatever you mentioned
it at dinner last night. And then my daughter comp
came down after we put her to bed and she
was like, Daddy, is someone going to break into our
house and steal our eggs? And You're like, yes, that
they are. It's my daddy's packing heat. That's right, that's right.
I just thought that was the eggs hilarious that she
(17:23):
thought someone was going to come in and steal our eggs,
and uh, try to reassure that's not going to be
the case, although if they keep going up in price,
it might be. You never know. All right, mat We've
got more to get to on this episode, including fee
reductions on your favorite funds at one of our favorite
low cost brokerages. We'll talk about that and more right
after this. All right, Joel, we are back from the break.
(17:50):
We got more to get to on today's Friday flight,
so much more. It is now time for the ludicrous
headline of the week, which is from the journal The
headline reads, individual investors buy the dip Again, there is
a decent chunk of individual investors out there who ended
up buying the tariff dip on Monday. Stop Markey was
freaking out Monday morning.
Speaker 2 (18:11):
This is before obviously before the market's corrected, but basically
on the platforms where individual traders so not the big
investors where they're out there doing business by orders, they
far outweighed sell orders of stocks like Tesla and Nvidia
specifically as values were getting decimated. And despite our lack
(18:31):
of interest in single stocks, in some way, that's actually encouraging.
It's better to be a buyer than a seller if
you've got time to write it out as an investor.
But we just hear so many folks parroting the buy
the dip tag phrase the mantra, and there are some
flaws to that way of thinking that we would generally
recommend folks to not buy the dip.
Speaker 1 (18:51):
Yeah, I like the optimism, kind of like what you're
hinting at here, Matt, is that people are saying, oh,
buying the dip says I believe that this company has
room to run for the long haul, and that bowes well.
But you're right, I.
Speaker 2 (19:03):
Would rouseee folks doing that then folks freaking out, yes
and just selling yes, essentially one.
Speaker 1 (19:08):
Hundred percent, but still buying the dip is overrated. And
that's because what were you doing with the money before
the dip came along? Right? Was it just sitting there
in your banking account? And for how long was that
the case? Because it's just obviously hard to know when
a market correction might occur. Impossible actually, and that's particularly
true when the news headlines and the policy changes are
(19:30):
moving at lightning speed. A friend of the show, Ben Carlson,
wrote about that this week, and he said this. He said,
the problem is that although corrections are a normal part
of a functioning stock market, there are environments where corrections
don't occur for a very long time. So I think
by the dip, it's often this emotional strategy that makes
people feel like they're making smart moves. They're buy and low,
they're getting while the getting's good. But dollar cost averaging
(19:53):
is better than buy the dip because it just takes
less mental effort and it leads to better results. If
your money was sitting in savings like for the last
couple of months, well you're waiting for the dip. Well,
it would have been better being invested over the last
couple of months. They're waiting for a point and a
half pullback on a single day. Totally.
Speaker 2 (20:10):
Yeah, and even better than dollar costs averaging is lump
some investing if you had that money to deploy, because yeah.
Speaker 1 (20:16):
Like this is it's at least better seventy five percent
of the time, right, Totally. And I could not agree
anymore with Ben Carlson than just how he wrote that up. Joel.
Speaker 2 (20:24):
You know, I'm into the numbers, and so as I
closed out January last month, I was kind of going
over some stuff with Kate and I noticed that the
smp it was up three percent basically just in January,
which is crazy. And when you are invested in a
diversified way in the stock market and so you've got
the vast majority of your wealth tied up like that
has a big impact on your overall wealth as opposed
(20:45):
to if you want to dabble a little bit and
do some single stock investing. If Nvidia wasn't a position
that you held and you thought, okay, here's a way
for me to get a you know, let me get
a little bit of Nvidia my overall portfolio, sure, go
for it. Hopefully that's the case. It's just a very
small amount. But personally, guess what, I don't own any Nvidia.
I guess I do, actually, yeah, because it's in the
(21:05):
S and P actually probably makes up a decent chunk
of VOO. I'm guessing around five percent something like that,
And so I think that obviously, that's the approach that
we take when it comes to investing in individual companies
like this. On the note though, of investing Vanguard, man,
they did what they do best this week. They cut
fees and what is actually the largest fee reduction in
(21:27):
Vanguard history. The average expense ratio on a Vanguard fund
is now just point zero seven percent. I think the
industry average is sitting around point four to four percent,
so much better, yeah, than the rest of the brokerages
out there. And this isn't going to change the life
of any single investor, but it will collectively save investors
hundreds of millions of dollars. And it's just another display
(21:51):
of Vanguard doing everything they can to minimize fees.
Speaker 1 (21:54):
And it was great too.
Speaker 2 (21:56):
Is it just puts some some pressure on the competitors
out there who are like, if the industry averages point
four four percent, that means there's plenty of funks out
there who are charging well above that. Yeah, and I
think this is kind of like a to use Vanguard
terminology shot across the bow of some of those ships.
Speaker 1 (22:12):
I agreed. Yeah, and man turns out investors like low fees.
And I think another example of that phenomenon is increasing
outflows from ESG funds, funds that are prioritize environmental, sustainable
and governance, social social eyes. So who even knows because
it's been so long since we've talked about yet, we
haven't talked about it in a while. They they just
haven't been invoke I don't think in the same way.
(22:34):
And it's I don't think ESG funds are dead, but
they might be on life support because conventional equity funds
have have also performed better. That was one of the
biggest arguments for ESG was like, all right, hey, not
only are you investing your dollars in companies that I
don't know, don't produce oil or don't sell things that
are harmful, Although harmful was kind of depending on the
(22:57):
viewpoint that you had, right, because they were still investing
in bodies that were stealing our attention, so it really
was in the eye of the beholder. But another argument
for ESG was, hey, these are going to outperform just
a traditional index fund. That hasn't been the case, and
I think for ESG funds to be successful, they have
to prove that they do lead to increase returns and
(23:17):
that that outweighs the increased fees that they charge. They
haven't been able to prove that. You and I have
not been fans of ESG funds, not because we don't
love when people do good things for the world, but
because we don't want you. It just doesn't make sense
to invest in that way, especially given kind of the
data we've seen about fees and returns.
Speaker 2 (23:36):
Indeed, on a related note, investing app Robinhood attempted to
blur the lines between investing and gambling as they attempted
to partner with Calshi in.
Speaker 1 (23:45):
Order to allow Super Bowl betting on their app.
Speaker 2 (23:48):
It was short lived, though, as they had to pull
the rug back on that one after government officials mentioned the.
Speaker 1 (23:53):
Likely illegal nature of the.
Speaker 2 (23:56):
Predictions markets and just how I guess the robin Hood
was implementing that from a high level. If everyone listening
knows our take on sports gambling just in general, we
don't like it, and too many folks are seeing the
ads they're signing up. They're saying, man, you're you're leaving
money on the table if you're not gonna claim that
free offer. But what you're ending up doing is just
forking over way too much money as you're in pursuit
(24:19):
of this entertainment or the false idea of making more
money and the idea of combining sports gambling on the
robin Hood app where you invest for your future, where
you have a retirement account. Man, is a dangerous like
crossing of the streams in essence, Like personally I'm not
a fan. Does that mean that Robinhood should be barred
from doing this? I'm not totally sure if I'm if
(24:39):
I would go that far, but it does start. It
puts a lot of responsibility on the individual to decide
what kind of limits am I going to place on this?
You know, Like like when it comes to single stock investing,
we've always said, hey, up to five percent. Same thing
with crypto even like, hey, you want to you wanta
dabble a little bit there? Okay, let's keep that silo
(24:59):
to five. That's a personal choice. That's a personal yeah.
And beyond that, ooh, you are really playing with fire.
We definitely would not advise for folks to do that,
which then makes me think Joel, Okay, let's say that
a lot of the apps included some future markets predictions
betting on you know, on their platforms. Do you think
that that could fit within the five percent sort of
window if folks had the itch right as that sort
(25:21):
of pressure relief out.
Speaker 1 (25:22):
I don't think so. I think I think gambling is
specifically entertainment budget. So if you want to dial back
on what you're spending on Netflix or going out to
concerts to spend on gambling thing.
Speaker 2 (25:31):
That's where it should come out of your entertainment budget,
as opposed to feeling like it's an investment that I
think I agree with that because inherently, what like, even
if you're investing within a single stock, you're this is
more like a warm Buffett argument. You are you are
investing within a company, a company that produces products, that
does something good, that's putting out value in the world.
But when you're betting on something, you're just making a
wager that something's either is going to happen or isn't
(25:54):
going to.
Speaker 1 (25:54):
Happen, Like there's no value value creation there, and we
have the downsides and the potential addiction that many people
in our country are suffering now that because of the
widespread availability, you have to be careful in that regard
to So, Yeah, if you can handle it responsibly and
you can do it in a way where it's hey,
it's just entertainment money. That's how I think of it,
and I've budgeted for it, that's great. I just think
(26:15):
there's a lot of people who don't know how to
stop themselves too. Totally agree. All right, let's talk about
credit scores for a second. They are an important part
of our financial lives. The Atlantic had an article about
parents gaming their kids credit score, and the author didn't
seem to love the fact that parents can give their
kids a leg up by adding them as an authorized
user in order to get them started on the right
(26:36):
foot from a credit building perspective. The basic argument was
it's not fair, and I get that. It's a weak argument.
As my mom would say, I don't get that life's
not always fair. Honey. My mom was right. I tell
my kids the same thing. Sometimes so, yes, it is true,
like being able to help get your kids started on
the right foot from a credit perspective when other people
(26:59):
don't have to know how Like, yeah, maybe there is
some unfairness to that. Kids with parents who are paying
attention jumping through the proper hoops can help their kids
launch with the solid credit score along with hopefully more importantly,
the proper knowledge to know how to navigate the system.
Kids who have parents who aren't credit savvy, well, they
(27:19):
might have to learn the hard way. It still incentives
exist to help your kid establish a solid credit score.
I don't see the harm in it. I think it's
a good thing that people who wise up can help
their kids do that them a the rules of the road.
Speaker 2 (27:33):
I mean, I think, yeah, this might be a little
off topic, but I actually dove in a little deeper.
Speaker 1 (27:38):
So the author of that article there on the Atlantic,
and I was kind of reading some of his other
articles that he had written, and you want to hear
one that's super fascinating. There was one that was titled
learn to be Photogenic. Hollywood invented the idea that some
people are more naturally beautiful on camera. Don't believe it,
which think about that for a second. Some people are
more naturally beautiful.
Speaker 2 (27:58):
But what he's saying, though, is that, like you can
over come this thing, which is in total opposition to
the idea that he's putting forth here as far as
the credit score, the fact that there are some people
then it's not fair and you should just accept that. Like,
take that same idea of being able to take a
better selfie and apply that to your personal finances, Like
give the power to the people, the ability for us
to make some changes in our lives to not only
(28:19):
better our own financial situation, but our kids as well.
Like that's the kind of argument. I mean, that's the
argument that we make every single day here on the show.
Here on the podcast, I will say the subheading of
the parents gaming the credit score system was because of
course they are, which I totally agree with that sentiment, right,
the fact that if there is something that you can
measure via like numerically, that people are going to do that,
(28:44):
And like there is such an obsession with numbers, whether
it's like our weight, our grades for kids, SAT scores
or in this case, credit scores. And if you are
so focused on your kids credit score that you're not
paying attention to other things in life, like reading to
them at night, or connection, like connecting with them emotionally,
figuring out what they're scared about earlier in the day,
(29:05):
Like if you didn't have the patience to be like,
oh wait, you're concerned that someone's gonna make into our
house and see her like that, You're you're missing the boat,
like you are, like, there are more important things in
life than focusing on this precious credit score. And if
that's like what you're really spending a lot of your
energy on, I will agree with the writer and say
you're I think you're doing it wrong. Yeah, But at
(29:26):
the same time, if you're gonna add your kid as
an authorized user and not give them the credit card
in order to give them a leg up, a little
boost to their credit score, I'm totally fine.
Speaker 1 (29:33):
It's just some minor things to do. If you're putting
too much emphasis, it's not like a life philosophy, right, Yeah,
I mean it really takes all of two minutes to
add your kid as an authorized user, and if you
handle your credit well, you can help them launch with
a better credit score. I don't see any harm in that.
But yeah, if you I don't know how many people
are putting that much state we talked about I guess
that one guy who's pursuing a perfect credit score, and
(29:55):
it was like, dude, you're way over thinking this, putting
way too much time into it. There's some folks out
there they upset their majoring and the miners, Yeah, don't
do that, And Matt, the truth is their winners and
losers in every area of personal finances, like credit card rewards.
That's just another one of those areas where some folks
win big they rack up cash back travel miles by
using credit cards. Effectively, other people end up paying the
(30:17):
credit card companies like Vsend MasterCard thousands of dollars by
not paying off their balance on time and in full,
or by paying just the minimums. Like we talked about recently.
The system's not perfect, but it's the system that we
all have to navigate. Yeah, And I do think maybe
the one area of agreement I have too with the
author is that basically credit scores determined too much of
our adult lives. I think that's particularly concerning given how
(30:38):
badly the credit bureaus have behaved, how unresponsive they've been
to done a crappy job. Yeah, consumer complaints, so that
that's a place I can I can agree with the author.
Speaker 2 (30:49):
Nice and maybe that's why it wasn't our ludicrous headline
of the week, because they're in the Venn diagram of
what we agree with and what.
Speaker 1 (30:55):
He agrees with. There's some overlaps, there is some, but.
Speaker 2 (30:57):
That's gonna be it for this Friday flight. We hope
everyone has the fantastic the weekend. We'll see you back
here on Monday with a fresh asskut of Money episode
for the super.
Speaker 1 (31:05):
Bowl, the Big Game. Don't do hard boiled eggs for
the Big Game. It's gonna be too expensed.
Speaker 2 (31:09):
My gosh, did you imagine if you're serving up deviled eggs?
That's right, you're a baller, that's right. I guess if
you want to bring to your friends, yeah, just have
like tons of devil eggs out, insane, buddy.
Speaker 1 (31:20):
That'll be it until next time. Best friends out, Best
Friends Out.
Hosts And Creators
Joel Larsgaard
Matthew Altmix
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