December 8, 2024 • 32 mins
Hour 2: The airlines are raking in big bucks off seat and baggage fees. And they testified about their fee structure in front of Congress this week.
Ask HTM: Dan's medium-term returns have not been good. What to do about it!?
Launchpad jobs can help folks who avoid college make more money over time. And if you go to college, internships are the road to higher earnings and more job security!
Ask HTM: What are the best savings challenges and how much of an impact can they have?
links: Why you're losing money with your big bank (and what to do about it)
Ask HTM: Dan's medium-term returns have not been good. What to do about it!?
Launchpad jobs can help folks who avoid college make more money over time. And if you go to college, internships are the road to higher earnings and more job security!
Ask HTM: What are the best savings challenges and how much of an impact can they have?
links: Why you're losing money with your big bank (and what to do about it)
Mark as Played
Transcript
Episode Transcript
Available transcripts are automatically generated. Complete accuracy is not guaranteed.
Speaker 1 (00:00):
Kf I AM six forty. You're listening to how to
Money on demand on the iHeartRadio app.
Speaker 2 (00:07):
All Joel and Matt want to do is help you save,
invest and enjoy more of what matters. This is how
to Money with Joel lars Guard and Matt altmics.
Speaker 1 (00:39):
KFI AM six forty live everywhere on the iHeartRadio app.
Speaker 3 (00:43):
This is how to Money. I'm Joelarsgard and I in
Matt Altmix.
Speaker 4 (00:47):
Don't forget to sign up for the how to Money
newsletter over at howamoney dot com slash newsletter.
Speaker 1 (00:52):
Now it's time to get to the ludicrous headline of
the week. This comes from Axios and the headline reads
five airlines made twelve point four billion dollars on seat
fees over the last six years. I will say this, Matt,
at least they didn't make a dime from the two
of us. For me, none of that billions that they
raked in came from my wallet.
Speaker 3 (01:13):
Yeah. I can't afford those expensive seats, that's right.
Speaker 4 (01:16):
Orton, or maybe even if I couldn't, not to prioritize,
I don't want to pay for that junk. Really, well,
you've got long legs. I'm surprised you haven't done anything. Still,
seat upgrades, I still refuse. I still refuse. I would
rather be cramped than principle than pay extra.
Speaker 3 (01:29):
Yeah.
Speaker 4 (01:29):
Well, do you like, are you able to slide your
feet because you got the bar right that stops the
person in front of you from shoving their personal item.
Speaker 3 (01:35):
All the way back? Yeah?
Speaker 4 (01:36):
Do you just like straddle that and put your feet
on either side and just get it way up under there?
Usually try to sit on the person in front of
you looks down and they see your feet coming out
the I usually try to sit on the aisle and
then I try to kind of get let my feet
go into the aisle at times.
Speaker 1 (01:49):
But that does as strategy. But then the fighter tendants
don't love it. They're like putting their carts down, ramming
me in the leg or the like half an.
Speaker 3 (01:56):
Inch on either side of the snack car.
Speaker 1 (01:59):
Yeah, but I'm not willing to pay the money. So
that's just that's the way it's going to go down.
But if you've been listening to the show for any
length of time, you probably know that we don't love fees,
even though we're actually kind of okay with airlines charging them.
Part of the reason airfare is so inexpensive these days
is because of the additional fee revenue airlines are able
to generate. Yeah, and that's actually what the Frontier CEO
(02:21):
said when he was being grilled by Senator Josh Holly,
like super hard it was he didn't look so great.
But I will say this, like, even though he didn't
come off looking great in the hearings, I would prefer
to take the low fares and then avoid the fees
at the same time. And I think that's and I
think one of the things that Frontier CEO said as
(02:41):
well is that almost fifty percent of customers end up
doing that. They avoid these fees altogether. It's the unlucky
other half that didn't pay attention to or jump through
the hurdles that get screwed and ended up paying significant fees.
And we hope the same is true for you out
there that you are able to, I don't know, book
your airfare and maybe use some of these low fare
airlines without paying the insane fees that they're trying to charge.
(03:02):
The big airlines Southwest excluded, are making money handover fists
like twenty bucks at a time for seating charges or
I don't know twenty to one hundred plus dollars for
baggage fees. I think what people need to know, Matt,
is that there are ways to avoid the extra fees
that airlines are trying to stick us with. And whether
it's having the right credit card or just being more
(03:23):
flexible or paying more attention, Like we're still living in
the Golden age of travel. Yeah, you got to jump
through the right hoops to take advantage to avoid the
annoying fees and paying for a better seat on your flight.
It's a voluntary choice for most people.
Speaker 3 (03:36):
Yeah.
Speaker 4 (03:36):
So, actually, during that congressional grilling, the Frontier CEO which,
by the way.
Speaker 3 (03:42):
His name, did you catch his name? Well, his things
Barry Biffel. Wow.
Speaker 4 (03:49):
Like, honestly, I think it's just a pr nightmare because
he just sounds like a bully, Like literally that's the
biff you know, like back to the future. And so
I think I think that's why it probably had a
lot of coverages, because he just looks like somebody that.
Speaker 3 (04:02):
You just want to want to hate, completely destroyed.
Speaker 4 (04:05):
But he called passengers who try and avoid bag fees
shoplifters and thiefs.
Speaker 3 (04:10):
Which which seems so antagonistic and so like.
Speaker 4 (04:13):
I get the fact that, like, these are the rules,
and these are the rules that Frontier has implemented, and
by following these rules you get one of.
Speaker 3 (04:22):
The lowest fares out there.
Speaker 4 (04:23):
I totally get that, which we took advantage of earlier
this year, Like we're all for it, and we saved
big money flying Frontier to our destination. So you just
have to know the rules, right, Like, them's the rules,
you gotta follow them. But folks get their painties all
up in a wid because, especially when it comes out
that so I actually didn't know this that the gate
agents receive a commission for every bag that they check
(04:44):
or not check.
Speaker 3 (04:44):
Well, yeah, every bag that they are able.
Speaker 4 (04:47):
To snag and are like, hey put that in the
little box yep, and they get like a ten dollars commission.
Speaker 3 (04:53):
They're calling it like a commission or a bounty.
Speaker 4 (04:55):
Yes, which feels again that feels not deceptive, but it
feels like dirty, little dirty, a little antagonistic. But I
think they tens of millions of dollars have been paid
out to gate agents.
Speaker 3 (05:05):
Over the past few years, who because.
Speaker 4 (05:08):
They're like that was the most surprising part of that
it's like their version of a tip.
Speaker 3 (05:12):
Here, it's look amazing.
Speaker 4 (05:14):
Here's the thing though, that bothers me less because as
soon as you show up at an airport, like at
the ticketing office or a ticketing booth or whatever, like
they've got the metal structures and it's like, hey, check
your bag.
Speaker 3 (05:24):
Like if it doesn't fit.
Speaker 4 (05:25):
If you are thinking, you know what, I'm going to
try to try to get by with it this time
and avoid it all together, well, yeah, like you are
most likely going to be paying.
Speaker 3 (05:33):
I mean you are paying way more.
Speaker 4 (05:34):
Yeah, when you gate check it as opposed to prepaying,
it's so much less expensive by prepaying it. To me,
it's the seat selection because and I've you know again,
we got to experience this firsthand. But with Frontier, you know,
they guide you along the process of buying your tickets,
and in order to do that, you have to click
continue and they're like, Okay, now it's.
Speaker 3 (05:51):
Time to pick your seats. And unless you.
Speaker 4 (05:54):
Scroll all the way down to the bottom and see
the small, little barely marked link that says skip seats selection, yeah,
you are paying those additional fees. And so I don't
mind the rules. I just want the rules to be
more transparent, and when they are trying to guide you
into spending more money with them, that's a whole lot
different than somebody rolling the dice saying, I bet they're
(06:14):
not going to check my bag. It doesn't look that
much bigger than the twelve y fourteen by eighteen whatever.
Speaker 3 (06:19):
It depends on. It depends on the game agent, because
some of them don't care.
Speaker 1 (06:22):
On our way to our destination, the agents weren't nearly
as intent on checking the size of my bag on
the way back, Oh man, like they mine. It was
the same bag, but I had to shove it. I
guess I had had a couple of souvenirs I was
bringing back or something, and it was a little bigger.
It looked a little swallow, and I'd just shove a
few things in my pockets in order to make it
fit in there. And they were serious about it. They
weren't going to let me go until it was all
the way in. So yeah, you got to be willing
(06:43):
to jump through those hoops in order to save It'll
be interesting to see what happens from this congressional grilling
and whether these airlines choose to change some of their
ways when it comes to baggage and seat fees because
they do frustrate customers, But I think the smart savvy
customers really there's never been a better time to fly. Yep,
and packing light packing light packing one of those Code
(07:05):
of PACs he twenty eight leater backpacks we talk about
could save your bacon and save you a lot of money. Alright,
let's talk about tariffs for a second, Matt. They've become
more popular over the past decade, and it's not just
one political party or one leader touting them. Although President
elect Trump he's a massive fan. Didn't he say it's
like the most beautiful word in the English language, most beautiful?
Speaker 3 (07:25):
Yeah, it's like better than love. I think that's like
really better than love.
Speaker 4 (07:28):
First done Trumpet press on the show. Yeah, I don't
think I've ever actually tried to do a Trump peppression.
Should We should probably work on.
Speaker 3 (07:35):
That consider and he's easy. We'll be talking about him more,
I'm sure ever yours.
Speaker 1 (07:39):
Yeah, Well, but you and I were not nearly as
big fans of tariffs as the current administration or the
upcoming Trump administration. And if tarif's come about in the
way that President Trump is suggested, they're gonna have implications
for all of our finances. And tariff's might have some
use from a like a geopolitical standpoint, but they act
(08:00):
as a sales tax on consumers, so we ultimately end
up paying more, raising the price of imported goods washing machines.
That's like the best example we can give from the
first Trump administration and how washing machine prices went up
quite a bit because of tariffs. And you know there
have been particular threats of tariffs to protect US auto
(08:22):
manufacturers this time around, for instance. So the question is
should you consider buying a car now before tariffs kick in, Well,
we would say to you, as an individual, you probably
shouldn't start pre stocking on stuff because ab utcoming tariffs.
I think the best projection I saw or is that
an overall price increase of two and a half percent
on new cars is likely to come about because of
(08:43):
these tariffs. It could be more, but we just don't know.
Unless you were already planning on buying a new car,
I think our advice would be to just stand pat.
If you were like, no, no, I'm probably planning on
doing that in February, well, then maybe go ahead and
buy that car now. Also, because end of the year
is a better time to buy, you'd be hitting the
sweet spot. The only exception to this would be electric
(09:04):
vehicles because the tax credits that currently exist for electric vehicles.
President Trump is threatened to eliminate those And think about that,
paying seventy five hundred bucks more for that vehicle, not
to mention potentially increase tariffs as well. So if you're like, no,
I'm planning on getting an EV anyway, well now it's
probably the time.
Speaker 3 (09:22):
That's right.
Speaker 4 (09:23):
I am six forty. You're listening to How to Money
on demand on the iHeartRadio app. If you are over
on Facebook and you want to join a group of
like minded folks who have money questions and insight, please
go ahead and join the how to Money Facebook group.
Speaker 1 (09:39):
All right, let's get to a question about rebo advising
for medium term savings goals.
Speaker 5 (09:43):
Hey, Matt Jeel, this is Dan from New York City.
I've been listening to the podcast for several years and
appreciate all you guys.
Speaker 3 (09:51):
Do I have a question for you.
Speaker 5 (09:52):
I have some money in a betterment account that's set
aside to be used just a couple of years from now.
Would be part of the home purchase. It's on auto
adjust and they keep reallocating more into bonds, currently thirty
four sixty six stocks to bonds.
Speaker 3 (10:08):
It hasn't got a great return.
Speaker 5 (10:10):
It's gotten about eight percent total return since March twenty twenty,
and so I'm wondering if I'd be better off just
moving into a savings account instead. Part of me has
felt that I should just trust the process and that
maybe most of the games would come as time goes
on it gets closer to the target date, but it
just seems like a very low return and I'm not
really sure if that's actually going to happen. So just
(10:33):
wondering what the best thing for the money in this
account would be from this point forward.
Speaker 3 (10:38):
Thanks Ooh, Joe.
Speaker 4 (10:39):
Eight percent since twenty twenty, I'm pretty sure what he's
saying there is eight percent total, so he's we're looking
at an average of two percent a year.
Speaker 3 (10:47):
Not the kind of position that I would want to
find myself in.
Speaker 1 (10:50):
And not the position, to be honest and not to
rub salt in the woundstand that many people find themselves
in given kind of what's happened even with just basic
savings straight So this that's really tough to.
Speaker 4 (10:58):
Adore, that is true unless I trust Betterment first. As
far as we can tell, it's the best one out
there on the market in our opinion. And they've sort
of changed the game right like they have given DIY
investors a middle of the road choice that isn't either
just like a low cost brokerage firm like one of
our favorites like Fidelity or Vanguard, where you are completely
on your own, you're flying solo. That's one option, but
(11:21):
then the other option is, okay, I got to hire
a fully fledged financial advisor. Well, Betterment is offering that
sort of middle of the road path, all for fairly
reasonable price and with other bells and whistles that can
help you to stay the course when it comes to
your investing. And actually it was a couple of weeks
ago we talked with Dan Egan who is over there
at Betterment. He's a behavioral psychologist on the team. We'd
(11:42):
recommend for folks to listen to that episode if you
missed it.
Speaker 1 (11:45):
Yeah, it gives you kind of some inside baseball onto
how Betterment system is run and how it's kind of
set up to help people make better decisions with their
investments and Dan. These medium term money goal questions are
often the hardest to tackle, right We talked about those
regularly on the show. Depending on what your timeline is
and what your risk tolerance is, it can be really
hard to figure out exactly what you should be doing
(12:06):
if you have a money goal that's two, three, four
or five years down the road, and you are, of
course disappointed with your returns because the stock market has
been crushing it and you've had your money in more
conservative investment choices, and the returns have been even below
that of a savings account these days, although Matt, I
think what savings rates ticked up in twenty twenty two
(12:27):
significantly back in twenty twenty twenty twenty one, they're still
pretty paltry, and I totally get that you'll be bummed
out by that, But I also have to say that
that's the nature of target date funds that start out
with a decent chunk of bond exposure and bonds have
not done so well over the past five years, and
then those accounts get adjusted to have more and more
bonds that closer you get to the target date, and
(12:49):
when you look at the performance of total bond dtfs
like Vanguard's B and D. It's actually had a negative
return since March of twenty twenty, minus ten percent, to
be exact, more heavily. It's not something you could have predicted.
This is one of those things that happens though, when
you're investing in the stock market and in the bond market,
and the more heavily towards bonds your portfolio has been allocated. Unfortunately,
(13:12):
the worst it's performed for you. Yeah, and Dan said,
should I just trust the process?
Speaker 4 (13:16):
And this is an instance where we would say, well, no,
you don't actually want to trust the process. You trust
the process if you're invested in the stock market when
you've got rolling time, rolling returns. Well, and it's not
just about time, it's the fact that literally his portfolio
is literally changing to be more conservative, which means likely
that it's going to continue to underperform. Right, So as
you gain more bond exposure, you're looking for preservation of capital,
(13:40):
you're looking for most folks are looking for a more
stable portfolio, which means that you're not going to see
like a rebound. I guess Dan, on the returns that
you've seen so far, Unfortunately, like you basically have seen
like the you've experienced the worst four year period when
it comes to bonds since like the Great Recession, and
that is just again that's the nature of investing in
(14:01):
the market. It's not necessarily guaranteed, but it is what
bonds seek to do, which is to provide stability to portfolios.
And I you know, it's tough to miss out on
a bowl market like this when you are looking at
the stock market, but hopefully you have experienced some of
those gains in other accounts like a four h one
K or within an IRA that you have.
Speaker 3 (14:20):
That's a good point.
Speaker 4 (14:21):
I mean, maybe it's cold comfort, but those dollars are
designated for decades down the road and they should be
invested mostly in the stock market, so you haven't completely
missed the glory years. Just this important portion of your
money for a down payment. But it's for a good reason, right,
Like what if the market, let's say you're invested fully
in the stock market and the market were down thirty
percent this year instead of it being up well, your
(14:42):
goal of buying a home would likely need to be
punted much further down the road.
Speaker 3 (14:48):
Rather than not having the most.
Speaker 4 (14:49):
Optimal returns you possibly would have even lost money. So
that's important to keep in mind, because once you know
why you're making the decision, and you have a good
why for not invest seeing those dollars fully in the market,
I think we would recommend for you to kind of
get zen with whatever results come your way, knowing that
you did the right thing.
Speaker 3 (15:07):
In this way, you have sort of trusted the process.
Speaker 4 (15:10):
But I guess he's asking what to do now, and
there is an action that he can take from this
point moving forward.
Speaker 1 (15:16):
And I get why you would say the results didn't
pan out as well as I'd hoped, or as well
as I could have had I just been in like
a straight up savings account. But that doesn't mean that
you did the wrong thing, right. I think that's what
you're saying, Matt, is like you might have still you
still made the decision for the right reason, and it's
important to highlight that because you don't want to brace
yourself for this.
Speaker 3 (15:35):
Move when you really shouldn't.
Speaker 4 (15:37):
And so he did the right thing at the time,
knowing what he knew exactly in hindsight, it's like, well, yeah,
of course I should have just stuck my money in
savings accounts and at least gotten that but well, you know, the.
Speaker 1 (15:46):
Savings account right sucked when he was doing this in
twenty twenty two. So it's like, you can't beat yourself
up over this, and you can't cry over spilled milk.
Speaker 3 (15:53):
So what do you do with that that account? Now?
Speaker 1 (15:55):
What do you do with the money in that account?
I would personally want those dollars in savings unless you're
willing to expand your timeline, like two years down the
road just really isn't that far at this point, and
it would be an absolute shame to expose yourself to
too much risk when you're getting closer and closer to
your goal. And you know, we've discussed this on the
show before, but CDs are the perfect vehicle for a
home down payment. These days, rates on hyol save these accounts.
(16:18):
They are starting to fall, although they're not terrible, and
you can lock in a CD rate that can protect
you against further rate drops. So I see that as
like a solid happy medium. Yeah, to kind of preserve
this capital and grow it without taking on undue risk
and potentially underperforming that savings. Like your savings might underperformed
the bond market in the coming two years. But I
(16:38):
think it's it's given the timeframe that you have left
until this really important purchase, that's the route I would
want to take. This is Joel Larscard and Matt Altmis
and you're listening to KFI AM six forty how to
Money on Demand on the iHeartRadio app. By the way,
if you're looking for the right credit card for your wallet,
well you want to be able to use it responsibly.
(16:59):
But if you do that, if you pay your credit
card on time and in full every single month, well
check out our credit card tool. You can find that
up on the website at howtomoney dot com. All right,
let's talk about jobs for a second, Matt. New research
from Burning Glass Institute finds that folks who avoid college
can still prosper. And we've talked about this on the
(17:19):
show a lot over the years, and not some people
should go to college and other people shouldn't. Right, it's
not necessarily a cut and dry everyone should go in
this path or not. But they highlighted what they called
launch pad jobs for high school students. They're going to
help propel them to hire earnings in the coming years.
And basically what they're highlighting is that, well, yeah, the
(17:41):
initial job itself might not be incredibly lucrative, but the
skills and the connections that you can get at these
launch pad jobs can be instrumental for future career success.
And so a few of the jobs they highlighted are
being a bank teller, being a telemarketer.
Speaker 4 (17:56):
Interesting enough, I bank teller mayn that guy's taking home
ten thousand dollars a day.
Speaker 3 (18:01):
How's he do it?
Speaker 1 (18:03):
Yeah, I don't know how the telemarketer I think fits
in there, though, flight attendants, pharmacy aids, and restaurant hosts. Like,
if you're any of those jobs, these are launch pad
jobs that are going to, even though they might not
pay very much right now, lead you to better opportunities
in the future.
Speaker 4 (18:15):
I think the telemarketer might be similar to restaurant hosts.
It's like, maybe more about the interpersonal communications. Yeah, maybe
it's the ability to talk to any but like it's
especially a telemarketer, Like, that's a sales job. So if
you can, dude, if you crush as a telemarketer, can
you imagine if you're selling I don't know, some crappy
financial products working for a Wall Street.
Speaker 3 (18:33):
Company, you probably could make a lot of money.
Speaker 1 (18:35):
It's like if you sold vacuums door to door back
in the day, like and you did it. You had
so many reps, you learned how to talk to people.
You're in a sales right, So that makes sense. And
so what they're trying to highlight here is that two
jobs with the same starting salary are not necessarily going.
Speaker 3 (18:49):
To lead to equal outcomes.
Speaker 1 (18:51):
And you and I, we've always said we believe that
a college degree can be good. You and I both
have college degrees, but it's also of course less of
a necessity now, especially depending on what you want your
future career, your future work life to look like. But
knowing which jobs offer the highest chance for long term
success is really crucial. So we'll put a link to
(19:11):
that report in the show notes up on how tomoney
dot com so you can see for yourself what the
range of jobs are that are more likely to have
a higher payoff for you if you opt to not
take the college out totally.
Speaker 4 (19:24):
Yeah, And one way to make a college degree payoff
more fully is to get work experience while going to school.
Speaker 3 (19:31):
Internships is what we're talking about here.
Speaker 4 (19:32):
They can provide a meaningful pathway to a great job
after graduation.
Speaker 3 (19:36):
There's an article about schools.
Speaker 4 (19:38):
Like Drexel that prioritize this real life work experience for students.
Ninety four percent of young adults there take a six
month break to work in a job in their perspective field.
Speaker 3 (19:50):
I love it.
Speaker 4 (19:51):
I remember the first time hearing about this literally when
I was in college a lifetime ago, but hearing about
friends who were going to Georgia Tech and the co
op model where basically you go to school for a semester,
you work for a semester, rinse, and repeat. But this
model often leads to employment upon graduation. It often leads
to higher starting salaries. Could you get some work experience? Yeah,
(20:12):
that makes sense because as a young adult oftentimes that's
what you're looking for if you are looking to launch
your careers right out of college, like this is likely
going to be the past, and it's not only for
tech schools. Like if you were in engineering, I mean
I had friends and focusing on liberal arts degrees and
even still taking internships over the summer.
Speaker 3 (20:28):
Yeah, can be invaluable. Whereas I I.
Speaker 1 (20:31):
Credit my internship to Yeah, a huge part of the
early career success that I had.
Speaker 4 (20:35):
Whereas me I was just like off in the Mountains
working at a boys outdoor camp, which meant that, like
I can accurately report that my starting salary at my
first job upon a graduation was less than that of
my friends who were interning literally in New York City.
But that being said, what we're talking about here is
having the right information, because jobs and careers not all
(20:56):
about the money, but you need to know, you need
to be an informed decision maker. And for folks who
are looking to get their career started on the right foot,
don't forget that co ops and internships are a great
way to make that happen.
Speaker 1 (21:07):
It's also incredible to think that you might not even
have to apply for jobs because you intern somewhere, and
if you do a good job and they're hiring, like
you're like right in the pipeline, so you might not
even have to like create a resume.
Speaker 3 (21:20):
It's just a fun way to try out the industry
the field as well.
Speaker 4 (21:23):
Like again, my brother in law he co opted with
a boat maker. They made like these nice yacht not
like full on yachts, but like, I don't know, somewhere
in between expensive boats and yachts.
Speaker 3 (21:33):
I don't know what you call that.
Speaker 4 (21:35):
No idea but like, these are really nice boats, and it
was a great exposure to that industry, and I think
he had a lot of fun. But I think that
helped him to realize, Yeah, that was cool, but it's
not what I want to focus on when I actually
do graduate from Clemson. In his case, he was focusing
on an engineering degree.
Speaker 3 (21:51):
There, that's a good point.
Speaker 1 (21:51):
You might have more of an idea of what you
want to do by trying out things that you don't
want to do. You decide you don't want to do
after doing it, doing it for six months or something.
Little test drive.
Speaker 4 (21:59):
Yeah, this is Matt Almix and joelars Guard and you
are listening to kf I am six forty the Money
on demand on the iHeartRadio app. It is now time
for the Facebook Question of the Week, which is from
Justin and he wrote, can anyone recommend a savings challenge?
I'm looking to participate in one or two, but I
am interested in those that offer savings advice in ways
to minimize spending.
Speaker 3 (22:20):
A Google search showed an overwhelming number of them, so
I wasn't sure where to start.
Speaker 4 (22:24):
Any that you would recommend Joel, you personally, what would
you recommend.
Speaker 3 (22:28):
That's a good question, Matt, and I think people feel
do you like savings challenges at all? Like, what's the
what's what are your thoughts of them? Do you like
savings challenge?
Speaker 1 (22:35):
I feel like last time we talked about this, we
got some flak from some listeners and they're like, it's
just moving deck chairs around on the Titanic or something.
Speaker 3 (22:42):
That was kind of the general response for people.
Speaker 4 (22:44):
Your personal finances are going down, don't even try.
Speaker 1 (22:47):
Well, or it's just you're just shuffling dollars around, and
so a savings challenge isn't actually doing anything meaningful for you.
Speaker 3 (22:53):
But I disagree. I totally disagree.
Speaker 1 (22:55):
Some people find them gimmicky, and I do think past
a certain point in your financial journey they become unnecessary.
But for a whole lot of folks who aren't inherently
frugal or on the front end of the money gears,
money challenges can make a real difference I think in
your mindset, kind of in how you just approach your
personal finances in general. They can start to shift you
towards greater levels of frugality and just intentionality with your money.
(23:18):
And it could also actually make a difference in your
trajectory towards building wealth too.
Speaker 3 (23:23):
Yeah.
Speaker 4 (23:23):
Yeah, you will literally hopefully see more in your savings,
but it can just provide a framework, I think for
folks when you are just looking at your general personal finances,
like you've got a savings account or whatever, and there's
no there's no like guardrails, there's no parameters there, and
you don't even know what goals to set out for yourself.
Not having a savings challenge can give you something very
achievable that can I think provide some movement for.
Speaker 1 (23:44):
Folks, especially especially if you're like I'm in the e
fund phase, whether it's in the very first money gear
of establishing that twenty four hundred and sixty seven dollars
emergency fund, or if you're in the money gear where
you're trying to mass that three to six months, like
if you're just trying to stop file that these savings
challenges can help like get.
Speaker 3 (24:02):
You there quicker.
Speaker 4 (24:03):
Absolutely, and so we would recommend for you to head
over to our website. We actually have the few over
there for you to check out. But one that comes
to mind is the paintry challenge. This is a food
related challenge, right, This is a way to try and
cut your grocery bill significantly over the course of a month.
Speaker 1 (24:17):
I thought you were going to say, this is where
you rent out your pantry on Airbnb for someone to
stay in.
Speaker 3 (24:21):
Yeah, that's a form of extreme house house.
Speaker 4 (24:23):
Yeah right, No, you literally just like empty your freezer,
empty your pantry, make do with what you've got on hand.
Maybe only head to the grocery store for like fresh
veggies and milk, but otherwise we are going to make
meals based on what we have on hand. But you
can also challenge yourself not to eat out for a
full month, right Like you are packing your lunch, you're
meal planning, you are making bulk meals on Sundays. We've
(24:44):
got friends who do like the breakfast burritos and they
freeze them, they stick them in the freezer and then
they take them to work and they throw them in
the microwave.
Speaker 3 (24:50):
That kind of thing.
Speaker 4 (24:51):
But I think that's another challenge than not eating out
for a month.
Speaker 3 (24:54):
Challenge.
Speaker 4 (24:55):
That's another one that can help you to cut down
on that food spending specifically.
Speaker 1 (24:58):
Yeah, and those are the kind of things where normally
we just go with the flow and our food bill
remains elevated. Because we're not making significant changes, or maybe
we're just kind of like nibbling around the edges. And
the more extreme you can make it, the truth is
you'll realize, oh, wait, I've actually got a lot of
food randomly hanging out in my pantry or in my freezer.
That and I you know, it might not be the
(25:20):
most appetizing meal by like day twenty eight of the month,
but you're able to do it. You're able to pull
it off. And just to prove yourself that it can
be done, and to see how much money you might
be able to not funnel towards grocery stores there for
a hot minute, it can be pretty impressive. And yeah,
I think it can be confidence building when it comes
to your personal financial progress.
Speaker 4 (25:39):
I think more than anything, that's what these challenges do.
They prove to yourself that in fact can be done. Yeah,
that you have more control and agency of your life
than you thought otherwise.
Speaker 1 (25:46):
I Mean, we talk about the barebones budget sometimes, Matt,
and that's not like a money challenge per se, but
I think everyone should create a barebones budget, and that
is just to say, well, what if I did get unemployed,
what are the bear essentials I need to be spending
money on every single month, and it's like the roof
of the head and it is the groceries on the
table right. But then there it proves to you that
there are so many other things you actually could live
without and maybe all of the fluff that actually is
(26:08):
in outgoing every month. And it's not that you want
to eliminate all those things from your life and just
live a menastic existence or something like that, but just
by actually doing the step of creating the bare bones budget,
it can be enlivening, I think, to realize that there
are a lot of changes you could make if you
needed to, and that you can make just because you
want to. If you want to make quicker progress. You
(26:29):
could also, I think, challenge yourself to cut out all
of your recurring subscriptions for an entire month, and you
might end up leaving some of those subscriptions behind for good.
You can always, of course, go back to the ones
that you love and sign up again. You can say
I really miss Netflix or whatever it is and then
jump back, but I don't know for a whole month
to be like no streaming, what's this look like for
our family? And what's this look like for our budget.
(26:51):
There are other good ones on the list on our
website as well at how tomoney dot com. There's the
Sell your Stuff Challenge or the roth Ira challenge. And
you know, we like the sellings because you're decluttering and
you're bringing money into your life, and then you can
use that money to fund the roth Ira that do
both at the same time. Maybe, yeah, make the selling
your stuff thing be the funding the roth Ira challenge,
and then yeah, I think while these challenges can act
(27:14):
like a financial stimulus of sorts, the goal is to
keep some of these habits up. But maybe with a
little more moderation than an extreme month long savings challenge
would encourage people to do.
Speaker 4 (27:25):
That's right, And again you can find this up on
the website at howdomoney dot com a list of those
different challenges.
Speaker 3 (27:30):
Joe, Let's take another one from John.
Speaker 4 (27:31):
He wrote, We're concerned about where the US is headed
and might see a lot of unrest or even a
civil war, which.
Speaker 3 (27:38):
Would possibly collapse the dollar.
Speaker 4 (27:40):
I'm considering investing ten percent of our assets in gold
as a hedge. What are your thoughts? First off, what's
your personal opinion on gold? I think politics has got
a whole lot of people on edge right now, Matt.
I think that's to me what this question highlights is
that there's this kind of general reticence that people have
about what's happening in our culture and what's happening in
(28:00):
our political sphere. And I know that John is not
alone in feeling this way, But he's also not alone
in the context of human history, which I think it's
important to point out. It's not that truly consequential things
that alter our existence and our future don't happen. Like
we've all lived through COVID, a that was a true
life changing experience for a whole lot of people, for
(28:22):
almost everyone listening to the show. But it's also hard
to know in advance which events are going to make
a significant impact and what the fallout is going to be,
right Like, I think in twenty nineteen, a lot of
us thought we knew what the future was going to hold,
and then as COVID came about, there were a lot
of predictions about what the future was going to entail, like, Hey,
this is what COVID is going to change in our lives.
(28:43):
Business travel is dead, New York City never coming back.
Speaker 3 (28:46):
No one's going to want to live there anymore.
Speaker 1 (28:48):
On top of each other, because the pandemic has proved
that large cities and.
Speaker 4 (28:52):
Most the point of living in a city when there's
no entertainment to be had, right, no Broadway.
Speaker 1 (28:56):
Right, the millennials are moving to rural America, and this
is going to change the face of the country for
the Yeah, it didn't happen, right, even work from home,
which was like lauded as this is going to change everything,
and it has in some respects, but in other ways
we're talking about where.
Speaker 4 (29:11):
Every single week there's another company or another government agency
that yes, like, oh now we're going we're going to
go back to four, if not five days a week.
Speaker 1 (29:18):
So none of those things that we all thought were
going to be true indefinitely moving forward turned out to
be true. So I guess my first piece of advice
to John here is just to not overreact.
Speaker 4 (29:29):
Yeah, you're going one hundred percent in on zoom Stock
didn't pan out either, did it? Joel Thin didn't that?
Uh what no one meane you and Kathy would No.
It's it's not that I think that the US dollar
is going to be the world's reserve currency for forever.
But there's also not a clear there's not a better
alternative rising up to take its place, and so John,
I mean, you could certainly invest a portion of your
(29:49):
portfolio in gold, but then that raises other questions like, uh,
what does that look like? Do you buy a gold fund,
do you buy gold bullion, do you buy physical gold?
And if things actually really do the fan like a
civil war, do you think that a gold fund or
even gold bars would make you and your family more
secure personally? Even though I find myself getting pulled more
(30:10):
and more in the direction of being able to live
off of the grid, I am not some like doomsday prepper.
I do not have what do you call it, like
a reseller, a bunker lined with leads for like nuclear
filout or anything like that. But like honestly stocking up
on food and living a more sustainable lifestyle, they probably
are better ways to prepare for whatever might end up
(30:32):
happening off in the future, even if you are assuming
the worst, even if you are taking a more pessimistic sort.
Speaker 3 (30:36):
Of point of view.
Speaker 1 (30:37):
It's interesting that people always turn towards like gold is
going to protect me, but then when you talk about
their fears, like the actual solution to their fears is
probably better planning and changing their lifestyle a little bit
so that they can be more self sustaining instead of
like just having a slightly slightly more of their investments
targeted towards a gold rock. And I think ultimately, when
(30:59):
it comes down to it, you and I'm we would
be we'd be fine with people having gold precious metals
allocation of roughly five percent of their portfolio, sure, preferably
through a low cost fund like gld's. That's a good
one if you're so inclined. And gold actually has done
really well over the past two decades, but we just
don't feel the need to have it ourselves, although we
(31:19):
understand why you do and why some people do, and
we don't want to minimize those feelings either.
Speaker 4 (31:23):
So it's done well over the past twenty years, but
it hasn't done well over the past forty years.
Speaker 3 (31:27):
Yeah you look at the past, Yeah, just.
Speaker 4 (31:29):
Care zooming out and you're like, oh, I guess we're
back to where we were when Joel Mett were born.
Speaker 1 (31:34):
That's right, And this was true leading up to the election.
This is true post election. Do not let your political
feelings run the investing ship. That you're steering and maybe
read some US history too, like, there have been so
many other times of extreme turbulence in our nation, and
there have been so many unforeseen black swan events. And
it's often the things that we are pointing to as
(31:54):
that's the thing that we're really nervous about. Something else
comes out of the woodwork, and it's far scarier and
is far more determined of our future than the thing
that seems most clear in the moment. So it's true,
and maybe consider bitcoin instead and humans we just live
in a perpetual state of chaos to a certain degree,
and it's really easy. It's always easy to identify the
(32:16):
massive threats to our financial security and to our lives.
But what's far more difficult, I think, to see is
the eternal march of human progress and the ways that
we have all been able to benefit from that just
as human beings, but also from a financial perspective. And
so I would maybe refocus on that. And that's the
reason why we invest, is because we're investing in companies
who are doing good for us and for humanity, and
(32:38):
we all stand a profit from investing in those companies.
You've been listening to how to Money with Joel arscard
and and you can always hear us live on kf
I am six forty twelve to two pm on Sunday
and anytime on the iHeartRadio app
Kf I AM six forty. You're listening to how to
Money on demand on the iHeartRadio app.
Speaker 2 (00:07):
All Joel and Matt want to do is help you save,
invest and enjoy more of what matters. This is how
to Money with Joel lars Guard and Matt altmics.
Speaker 1 (00:39):
KFI AM six forty live everywhere on the iHeartRadio app.
Speaker 3 (00:43):
This is how to Money. I'm Joelarsgard and I in
Matt Altmix.
Speaker 4 (00:47):
Don't forget to sign up for the how to Money
newsletter over at howamoney dot com slash newsletter.
Speaker 1 (00:52):
Now it's time to get to the ludicrous headline of
the week. This comes from Axios and the headline reads
five airlines made twelve point four billion dollars on seat
fees over the last six years. I will say this, Matt,
at least they didn't make a dime from the two
of us. For me, none of that billions that they
raked in came from my wallet.
Speaker 3 (01:13):
Yeah. I can't afford those expensive seats, that's right.
Speaker 4 (01:16):
Orton, or maybe even if I couldn't, not to prioritize,
I don't want to pay for that junk. Really, well,
you've got long legs. I'm surprised you haven't done anything. Still,
seat upgrades, I still refuse. I still refuse. I would
rather be cramped than principle than pay extra.
Speaker 3 (01:29):
Yeah.
Speaker 4 (01:29):
Well, do you like, are you able to slide your
feet because you got the bar right that stops the
person in front of you from shoving their personal item.
Speaker 3 (01:35):
All the way back? Yeah?
Speaker 4 (01:36):
Do you just like straddle that and put your feet
on either side and just get it way up under there?
Usually try to sit on the person in front of
you looks down and they see your feet coming out
the I usually try to sit on the aisle and
then I try to kind of get let my feet
go into the aisle at times.
Speaker 1 (01:49):
But that does as strategy. But then the fighter tendants
don't love it. They're like putting their carts down, ramming
me in the leg or the like half an.
Speaker 3 (01:56):
Inch on either side of the snack car.
Speaker 1 (01:59):
Yeah, but I'm not willing to pay the money. So
that's just that's the way it's going to go down.
But if you've been listening to the show for any
length of time, you probably know that we don't love fees,
even though we're actually kind of okay with airlines charging them.
Part of the reason airfare is so inexpensive these days
is because of the additional fee revenue airlines are able
to generate. Yeah, and that's actually what the Frontier CEO
(02:21):
said when he was being grilled by Senator Josh Holly,
like super hard it was he didn't look so great.
But I will say this, like, even though he didn't
come off looking great in the hearings, I would prefer
to take the low fares and then avoid the fees
at the same time. And I think that's and I
think one of the things that Frontier CEO said as
(02:41):
well is that almost fifty percent of customers end up
doing that. They avoid these fees altogether. It's the unlucky
other half that didn't pay attention to or jump through
the hurdles that get screwed and ended up paying significant fees.
And we hope the same is true for you out
there that you are able to, I don't know, book
your airfare and maybe use some of these low fare
airlines without paying the insane fees that they're trying to charge.
(03:02):
The big airlines Southwest excluded, are making money handover fists
like twenty bucks at a time for seating charges or
I don't know twenty to one hundred plus dollars for
baggage fees. I think what people need to know, Matt,
is that there are ways to avoid the extra fees
that airlines are trying to stick us with. And whether
it's having the right credit card or just being more
(03:23):
flexible or paying more attention, Like we're still living in
the Golden age of travel. Yeah, you got to jump
through the right hoops to take advantage to avoid the
annoying fees and paying for a better seat on your flight.
It's a voluntary choice for most people.
Speaker 3 (03:36):
Yeah.
Speaker 4 (03:36):
So, actually, during that congressional grilling, the Frontier CEO which,
by the way.
Speaker 3 (03:42):
His name, did you catch his name? Well, his things
Barry Biffel. Wow.
Speaker 4 (03:49):
Like, honestly, I think it's just a pr nightmare because
he just sounds like a bully, Like literally that's the
biff you know, like back to the future. And so
I think I think that's why it probably had a
lot of coverages, because he just looks like somebody that.
Speaker 3 (04:02):
You just want to want to hate, completely destroyed.
Speaker 4 (04:05):
But he called passengers who try and avoid bag fees
shoplifters and thiefs.
Speaker 3 (04:10):
Which which seems so antagonistic and so like.
Speaker 4 (04:13):
I get the fact that, like, these are the rules,
and these are the rules that Frontier has implemented, and
by following these rules you get one of.
Speaker 3 (04:22):
The lowest fares out there.
Speaker 4 (04:23):
I totally get that, which we took advantage of earlier
this year, Like we're all for it, and we saved
big money flying Frontier to our destination. So you just
have to know the rules, right, Like, them's the rules,
you gotta follow them. But folks get their painties all
up in a wid because, especially when it comes out
that so I actually didn't know this that the gate
agents receive a commission for every bag that they check
(04:44):
or not check.
Speaker 3 (04:44):
Well, yeah, every bag that they are able.
Speaker 4 (04:47):
To snag and are like, hey put that in the
little box yep, and they get like a ten dollars commission.
Speaker 3 (04:53):
They're calling it like a commission or a bounty.
Speaker 4 (04:55):
Yes, which feels again that feels not deceptive, but it
feels like dirty, little dirty, a little antagonistic. But I
think they tens of millions of dollars have been paid
out to gate agents.
Speaker 3 (05:05):
Over the past few years, who because.
Speaker 4 (05:08):
They're like that was the most surprising part of that
it's like their version of a tip.
Speaker 3 (05:12):
Here, it's look amazing.
Speaker 4 (05:14):
Here's the thing though, that bothers me less because as
soon as you show up at an airport, like at
the ticketing office or a ticketing booth or whatever, like
they've got the metal structures and it's like, hey, check
your bag.
Speaker 3 (05:24):
Like if it doesn't fit.
Speaker 4 (05:25):
If you are thinking, you know what, I'm going to
try to try to get by with it this time
and avoid it all together, well, yeah, like you are
most likely going to be paying.
Speaker 3 (05:33):
I mean you are paying way more.
Speaker 4 (05:34):
Yeah, when you gate check it as opposed to prepaying,
it's so much less expensive by prepaying it. To me,
it's the seat selection because and I've you know again,
we got to experience this firsthand. But with Frontier, you know,
they guide you along the process of buying your tickets,
and in order to do that, you have to click
continue and they're like, Okay, now it's.
Speaker 3 (05:51):
Time to pick your seats. And unless you.
Speaker 4 (05:54):
Scroll all the way down to the bottom and see
the small, little barely marked link that says skip seats selection, yeah,
you are paying those additional fees. And so I don't
mind the rules. I just want the rules to be
more transparent, and when they are trying to guide you
into spending more money with them, that's a whole lot
different than somebody rolling the dice saying, I bet they're
(06:14):
not going to check my bag. It doesn't look that
much bigger than the twelve y fourteen by eighteen whatever.
Speaker 3 (06:19):
It depends on. It depends on the game agent, because
some of them don't care.
Speaker 1 (06:22):
On our way to our destination, the agents weren't nearly
as intent on checking the size of my bag on
the way back, Oh man, like they mine. It was
the same bag, but I had to shove it. I
guess I had had a couple of souvenirs I was
bringing back or something, and it was a little bigger.
It looked a little swallow, and I'd just shove a
few things in my pockets in order to make it
fit in there. And they were serious about it. They
weren't going to let me go until it was all
the way in. So yeah, you got to be willing
(06:43):
to jump through those hoops in order to save It'll
be interesting to see what happens from this congressional grilling
and whether these airlines choose to change some of their
ways when it comes to baggage and seat fees because
they do frustrate customers, But I think the smart savvy
customers really there's never been a better time to fly. Yep,
and packing light packing light packing one of those Code
(07:05):
of PACs he twenty eight leater backpacks we talk about
could save your bacon and save you a lot of money. Alright,
let's talk about tariffs for a second, Matt. They've become
more popular over the past decade, and it's not just
one political party or one leader touting them. Although President
elect Trump he's a massive fan. Didn't he say it's
like the most beautiful word in the English language, most beautiful?
Speaker 3 (07:25):
Yeah, it's like better than love. I think that's like
really better than love.
Speaker 4 (07:28):
First done Trumpet press on the show. Yeah, I don't
think I've ever actually tried to do a Trump peppression.
Should We should probably work on.
Speaker 3 (07:35):
That consider and he's easy. We'll be talking about him more,
I'm sure ever yours.
Speaker 1 (07:39):
Yeah, Well, but you and I were not nearly as
big fans of tariffs as the current administration or the
upcoming Trump administration. And if tarif's come about in the
way that President Trump is suggested, they're gonna have implications
for all of our finances. And tariff's might have some
use from a like a geopolitical standpoint, but they act
(08:00):
as a sales tax on consumers, so we ultimately end
up paying more, raising the price of imported goods washing machines.
That's like the best example we can give from the
first Trump administration and how washing machine prices went up
quite a bit because of tariffs. And you know there
have been particular threats of tariffs to protect US auto
(08:22):
manufacturers this time around, for instance. So the question is
should you consider buying a car now before tariffs kick in, Well,
we would say to you, as an individual, you probably
shouldn't start pre stocking on stuff because ab utcoming tariffs.
I think the best projection I saw or is that
an overall price increase of two and a half percent
on new cars is likely to come about because of
(08:43):
these tariffs. It could be more, but we just don't know.
Unless you were already planning on buying a new car,
I think our advice would be to just stand pat.
If you were like, no, no, I'm probably planning on
doing that in February, well, then maybe go ahead and
buy that car now. Also, because end of the year
is a better time to buy, you'd be hitting the
sweet spot. The only exception to this would be electric
(09:04):
vehicles because the tax credits that currently exist for electric vehicles.
President Trump is threatened to eliminate those And think about that,
paying seventy five hundred bucks more for that vehicle, not
to mention potentially increase tariffs as well. So if you're like, no,
I'm planning on getting an EV anyway, well now it's
probably the time.
Speaker 3 (09:22):
That's right.
Speaker 4 (09:23):
I am six forty. You're listening to How to Money
on demand on the iHeartRadio app. If you are over
on Facebook and you want to join a group of
like minded folks who have money questions and insight, please
go ahead and join the how to Money Facebook group.
Speaker 1 (09:39):
All right, let's get to a question about rebo advising
for medium term savings goals.
Speaker 5 (09:43):
Hey, Matt Jeel, this is Dan from New York City.
I've been listening to the podcast for several years and
appreciate all you guys.
Speaker 3 (09:51):
Do I have a question for you.
Speaker 5 (09:52):
I have some money in a betterment account that's set
aside to be used just a couple of years from now.
Would be part of the home purchase. It's on auto
adjust and they keep reallocating more into bonds, currently thirty
four sixty six stocks to bonds.
Speaker 3 (10:08):
It hasn't got a great return.
Speaker 5 (10:10):
It's gotten about eight percent total return since March twenty twenty,
and so I'm wondering if I'd be better off just
moving into a savings account instead. Part of me has
felt that I should just trust the process and that
maybe most of the games would come as time goes
on it gets closer to the target date, but it
just seems like a very low return and I'm not
really sure if that's actually going to happen. So just
(10:33):
wondering what the best thing for the money in this
account would be from this point forward.
Speaker 3 (10:38):
Thanks Ooh, Joe.
Speaker 4 (10:39):
Eight percent since twenty twenty, I'm pretty sure what he's
saying there is eight percent total, so he's we're looking
at an average of two percent a year.
Speaker 3 (10:47):
Not the kind of position that I would want to
find myself in.
Speaker 1 (10:50):
And not the position, to be honest and not to
rub salt in the woundstand that many people find themselves
in given kind of what's happened even with just basic
savings straight So this that's really tough to.
Speaker 4 (10:58):
Adore, that is true unless I trust Betterment first. As
far as we can tell, it's the best one out
there on the market in our opinion. And they've sort
of changed the game right like they have given DIY
investors a middle of the road choice that isn't either
just like a low cost brokerage firm like one of
our favorites like Fidelity or Vanguard, where you are completely
on your own, you're flying solo. That's one option, but
(11:21):
then the other option is, okay, I got to hire
a fully fledged financial advisor. Well, Betterment is offering that
sort of middle of the road path, all for fairly
reasonable price and with other bells and whistles that can
help you to stay the course when it comes to
your investing. And actually it was a couple of weeks
ago we talked with Dan Egan who is over there
at Betterment. He's a behavioral psychologist on the team. We'd
(11:42):
recommend for folks to listen to that episode if you
missed it.
Speaker 1 (11:45):
Yeah, it gives you kind of some inside baseball onto
how Betterment system is run and how it's kind of
set up to help people make better decisions with their
investments and Dan. These medium term money goal questions are
often the hardest to tackle, right We talked about those
regularly on the show. Depending on what your timeline is
and what your risk tolerance is, it can be really
hard to figure out exactly what you should be doing
(12:06):
if you have a money goal that's two, three, four
or five years down the road, and you are, of
course disappointed with your returns because the stock market has
been crushing it and you've had your money in more
conservative investment choices, and the returns have been even below
that of a savings account these days, although Matt, I
think what savings rates ticked up in twenty twenty two
(12:27):
significantly back in twenty twenty twenty twenty one, they're still
pretty paltry, and I totally get that you'll be bummed
out by that, But I also have to say that
that's the nature of target date funds that start out
with a decent chunk of bond exposure and bonds have
not done so well over the past five years, and
then those accounts get adjusted to have more and more
bonds that closer you get to the target date, and
(12:49):
when you look at the performance of total bond dtfs
like Vanguard's B and D. It's actually had a negative
return since March of twenty twenty, minus ten percent, to
be exact, more heavily. It's not something you could have predicted.
This is one of those things that happens though, when
you're investing in the stock market and in the bond market,
and the more heavily towards bonds your portfolio has been allocated. Unfortunately,
(13:12):
the worst it's performed for you. Yeah, and Dan said,
should I just trust the process?
Speaker 4 (13:16):
And this is an instance where we would say, well, no,
you don't actually want to trust the process. You trust
the process if you're invested in the stock market when
you've got rolling time, rolling returns. Well, and it's not
just about time, it's the fact that literally his portfolio
is literally changing to be more conservative, which means likely
that it's going to continue to underperform. Right, So as
you gain more bond exposure, you're looking for preservation of capital,
(13:40):
you're looking for most folks are looking for a more
stable portfolio, which means that you're not going to see
like a rebound. I guess Dan, on the returns that
you've seen so far, Unfortunately, like you basically have seen
like the you've experienced the worst four year period when
it comes to bonds since like the Great Recession, and
that is just again that's the nature of investing in
(14:01):
the market. It's not necessarily guaranteed, but it is what
bonds seek to do, which is to provide stability to portfolios.
And I you know, it's tough to miss out on
a bowl market like this when you are looking at
the stock market, but hopefully you have experienced some of
those gains in other accounts like a four h one
K or within an IRA that you have.
Speaker 3 (14:20):
That's a good point.
Speaker 4 (14:21):
I mean, maybe it's cold comfort, but those dollars are
designated for decades down the road and they should be
invested mostly in the stock market, so you haven't completely
missed the glory years. Just this important portion of your
money for a down payment. But it's for a good reason, right,
Like what if the market, let's say you're invested fully
in the stock market and the market were down thirty
percent this year instead of it being up well, your
(14:42):
goal of buying a home would likely need to be
punted much further down the road.
Speaker 3 (14:48):
Rather than not having the most.
Speaker 4 (14:49):
Optimal returns you possibly would have even lost money. So
that's important to keep in mind, because once you know
why you're making the decision, and you have a good
why for not invest seeing those dollars fully in the market,
I think we would recommend for you to kind of
get zen with whatever results come your way, knowing that
you did the right thing.
Speaker 3 (15:07):
In this way, you have sort of trusted the process.
Speaker 4 (15:10):
But I guess he's asking what to do now, and
there is an action that he can take from this
point moving forward.
Speaker 1 (15:16):
And I get why you would say the results didn't
pan out as well as I'd hoped, or as well
as I could have had I just been in like
a straight up savings account. But that doesn't mean that
you did the wrong thing, right. I think that's what
you're saying, Matt, is like you might have still you
still made the decision for the right reason, and it's
important to highlight that because you don't want to brace
yourself for this.
Speaker 3 (15:35):
Move when you really shouldn't.
Speaker 4 (15:37):
And so he did the right thing at the time,
knowing what he knew exactly in hindsight, it's like, well, yeah,
of course I should have just stuck my money in
savings accounts and at least gotten that but well, you know, the.
Speaker 1 (15:46):
Savings account right sucked when he was doing this in
twenty twenty two. So it's like, you can't beat yourself
up over this, and you can't cry over spilled milk.
Speaker 3 (15:53):
So what do you do with that that account? Now?
Speaker 1 (15:55):
What do you do with the money in that account?
I would personally want those dollars in savings unless you're
willing to expand your timeline, like two years down the
road just really isn't that far at this point, and
it would be an absolute shame to expose yourself to
too much risk when you're getting closer and closer to
your goal. And you know, we've discussed this on the
show before, but CDs are the perfect vehicle for a
home down payment. These days, rates on hyol save these accounts.
(16:18):
They are starting to fall, although they're not terrible, and
you can lock in a CD rate that can protect
you against further rate drops. So I see that as
like a solid happy medium. Yeah, to kind of preserve
this capital and grow it without taking on undue risk
and potentially underperforming that savings. Like your savings might underperformed
the bond market in the coming two years. But I
(16:38):
think it's it's given the timeframe that you have left
until this really important purchase, that's the route I would
want to take. This is Joel Larscard and Matt Altmis
and you're listening to KFI AM six forty how to
Money on Demand on the iHeartRadio app. By the way,
if you're looking for the right credit card for your wallet,
well you want to be able to use it responsibly.
(16:59):
But if you do that, if you pay your credit
card on time and in full every single month, well
check out our credit card tool. You can find that
up on the website at howtomoney dot com. All right,
let's talk about jobs for a second, Matt. New research
from Burning Glass Institute finds that folks who avoid college
can still prosper. And we've talked about this on the
(17:19):
show a lot over the years, and not some people
should go to college and other people shouldn't. Right, it's
not necessarily a cut and dry everyone should go in
this path or not. But they highlighted what they called
launch pad jobs for high school students. They're going to
help propel them to hire earnings in the coming years.
And basically what they're highlighting is that, well, yeah, the
(17:41):
initial job itself might not be incredibly lucrative, but the
skills and the connections that you can get at these
launch pad jobs can be instrumental for future career success.
And so a few of the jobs they highlighted are
being a bank teller, being a telemarketer.
Speaker 4 (17:56):
Interesting enough, I bank teller mayn that guy's taking home
ten thousand dollars a day.
Speaker 3 (18:01):
How's he do it?
Speaker 1 (18:03):
Yeah, I don't know how the telemarketer I think fits
in there, though, flight attendants, pharmacy aids, and restaurant hosts. Like,
if you're any of those jobs, these are launch pad
jobs that are going to, even though they might not
pay very much right now, lead you to better opportunities
in the future.
Speaker 4 (18:15):
I think the telemarketer might be similar to restaurant hosts.
It's like, maybe more about the interpersonal communications. Yeah, maybe
it's the ability to talk to any but like it's
especially a telemarketer, Like, that's a sales job. So if
you can, dude, if you crush as a telemarketer, can
you imagine if you're selling I don't know, some crappy
financial products working for a Wall Street.
Speaker 3 (18:33):
Company, you probably could make a lot of money.
Speaker 1 (18:35):
It's like if you sold vacuums door to door back
in the day, like and you did it. You had
so many reps, you learned how to talk to people.
You're in a sales right, So that makes sense. And
so what they're trying to highlight here is that two
jobs with the same starting salary are not necessarily going.
Speaker 3 (18:49):
To lead to equal outcomes.
Speaker 1 (18:51):
And you and I, we've always said we believe that
a college degree can be good. You and I both
have college degrees, but it's also of course less of
a necessity now, especially depending on what you want your
future career, your future work life to look like. But
knowing which jobs offer the highest chance for long term
success is really crucial. So we'll put a link to
(19:11):
that report in the show notes up on how tomoney
dot com so you can see for yourself what the
range of jobs are that are more likely to have
a higher payoff for you if you opt to not
take the college out totally.
Speaker 4 (19:24):
Yeah, And one way to make a college degree payoff
more fully is to get work experience while going to school.
Speaker 3 (19:31):
Internships is what we're talking about here.
Speaker 4 (19:32):
They can provide a meaningful pathway to a great job
after graduation.
Speaker 3 (19:36):
There's an article about schools.
Speaker 4 (19:38):
Like Drexel that prioritize this real life work experience for students.
Ninety four percent of young adults there take a six
month break to work in a job in their perspective field.
Speaker 3 (19:50):
I love it.
Speaker 4 (19:51):
I remember the first time hearing about this literally when
I was in college a lifetime ago, but hearing about
friends who were going to Georgia Tech and the co
op model where basically you go to school for a semester,
you work for a semester, rinse, and repeat. But this
model often leads to employment upon graduation. It often leads
to higher starting salaries. Could you get some work experience? Yeah,
(20:12):
that makes sense because as a young adult oftentimes that's
what you're looking for if you are looking to launch
your careers right out of college, like this is likely
going to be the past, and it's not only for
tech schools. Like if you were in engineering, I mean
I had friends and focusing on liberal arts degrees and
even still taking internships over the summer.
Speaker 3 (20:28):
Yeah, can be invaluable. Whereas I I.
Speaker 1 (20:31):
Credit my internship to Yeah, a huge part of the
early career success that I had.
Speaker 4 (20:35):
Whereas me I was just like off in the Mountains
working at a boys outdoor camp, which meant that, like
I can accurately report that my starting salary at my
first job upon a graduation was less than that of
my friends who were interning literally in New York City.
But that being said, what we're talking about here is
having the right information, because jobs and careers not all
(20:56):
about the money, but you need to know, you need
to be an informed decision maker. And for folks who
are looking to get their career started on the right foot,
don't forget that co ops and internships are a great
way to make that happen.
Speaker 1 (21:07):
It's also incredible to think that you might not even
have to apply for jobs because you intern somewhere, and
if you do a good job and they're hiring, like
you're like right in the pipeline, so you might not
even have to like create a resume.
Speaker 3 (21:20):
It's just a fun way to try out the industry
the field as well.
Speaker 4 (21:23):
Like again, my brother in law he co opted with
a boat maker. They made like these nice yacht not
like full on yachts, but like, I don't know, somewhere
in between expensive boats and yachts.
Speaker 3 (21:33):
I don't know what you call that.
Speaker 4 (21:35):
No idea but like, these are really nice boats, and it
was a great exposure to that industry, and I think
he had a lot of fun. But I think that
helped him to realize, Yeah, that was cool, but it's
not what I want to focus on when I actually
do graduate from Clemson. In his case, he was focusing
on an engineering degree.
Speaker 3 (21:51):
There, that's a good point.
Speaker 1 (21:51):
You might have more of an idea of what you
want to do by trying out things that you don't
want to do. You decide you don't want to do
after doing it, doing it for six months or something.
Little test drive.
Speaker 4 (21:59):
Yeah, this is Matt Almix and joelars Guard and you
are listening to kf I am six forty the Money
on demand on the iHeartRadio app. It is now time
for the Facebook Question of the Week, which is from
Justin and he wrote, can anyone recommend a savings challenge?
I'm looking to participate in one or two, but I
am interested in those that offer savings advice in ways
to minimize spending.
Speaker 3 (22:20):
A Google search showed an overwhelming number of them, so
I wasn't sure where to start.
Speaker 4 (22:24):
Any that you would recommend Joel, you personally, what would
you recommend.
Speaker 3 (22:28):
That's a good question, Matt, and I think people feel
do you like savings challenges at all? Like, what's the
what's what are your thoughts of them? Do you like
savings challenge?
Speaker 1 (22:35):
I feel like last time we talked about this, we
got some flak from some listeners and they're like, it's
just moving deck chairs around on the Titanic or something.
Speaker 3 (22:42):
That was kind of the general response for people.
Speaker 4 (22:44):
Your personal finances are going down, don't even try.
Speaker 1 (22:47):
Well, or it's just you're just shuffling dollars around, and
so a savings challenge isn't actually doing anything meaningful for you.
Speaker 3 (22:53):
But I disagree. I totally disagree.
Speaker 1 (22:55):
Some people find them gimmicky, and I do think past
a certain point in your financial journey they become unnecessary.
But for a whole lot of folks who aren't inherently
frugal or on the front end of the money gears,
money challenges can make a real difference I think in
your mindset, kind of in how you just approach your
personal finances in general. They can start to shift you
towards greater levels of frugality and just intentionality with your money.
(23:18):
And it could also actually make a difference in your
trajectory towards building wealth too.
Speaker 3 (23:23):
Yeah.
Speaker 4 (23:23):
Yeah, you will literally hopefully see more in your savings,
but it can just provide a framework, I think for
folks when you are just looking at your general personal finances,
like you've got a savings account or whatever, and there's
no there's no like guardrails, there's no parameters there, and
you don't even know what goals to set out for yourself.
Not having a savings challenge can give you something very
achievable that can I think provide some movement for.
Speaker 1 (23:44):
Folks, especially especially if you're like I'm in the e
fund phase, whether it's in the very first money gear
of establishing that twenty four hundred and sixty seven dollars
emergency fund, or if you're in the money gear where
you're trying to mass that three to six months, like
if you're just trying to stop file that these savings
challenges can help like get.
Speaker 3 (24:02):
You there quicker.
Speaker 4 (24:03):
Absolutely, and so we would recommend for you to head
over to our website. We actually have the few over
there for you to check out. But one that comes
to mind is the paintry challenge. This is a food
related challenge, right, This is a way to try and
cut your grocery bill significantly over the course of a month.
Speaker 1 (24:17):
I thought you were going to say, this is where
you rent out your pantry on Airbnb for someone to
stay in.
Speaker 3 (24:21):
Yeah, that's a form of extreme house house.
Speaker 4 (24:23):
Yeah right, No, you literally just like empty your freezer,
empty your pantry, make do with what you've got on hand.
Maybe only head to the grocery store for like fresh
veggies and milk, but otherwise we are going to make
meals based on what we have on hand. But you
can also challenge yourself not to eat out for a
full month, right Like you are packing your lunch, you're
meal planning, you are making bulk meals on Sundays. We've
(24:44):
got friends who do like the breakfast burritos and they
freeze them, they stick them in the freezer and then
they take them to work and they throw them in
the microwave.
Speaker 3 (24:50):
That kind of thing.
Speaker 4 (24:51):
But I think that's another challenge than not eating out
for a month.
Speaker 3 (24:54):
Challenge.
Speaker 4 (24:55):
That's another one that can help you to cut down
on that food spending specifically.
Speaker 1 (24:58):
Yeah, and those are the kind of things where normally
we just go with the flow and our food bill
remains elevated. Because we're not making significant changes, or maybe
we're just kind of like nibbling around the edges. And
the more extreme you can make it, the truth is
you'll realize, oh, wait, I've actually got a lot of
food randomly hanging out in my pantry or in my freezer.
That and I you know, it might not be the
(25:20):
most appetizing meal by like day twenty eight of the month,
but you're able to do it. You're able to pull
it off. And just to prove yourself that it can
be done, and to see how much money you might
be able to not funnel towards grocery stores there for
a hot minute, it can be pretty impressive. And yeah,
I think it can be confidence building when it comes
to your personal financial progress.
Speaker 4 (25:39):
I think more than anything, that's what these challenges do.
They prove to yourself that in fact can be done. Yeah,
that you have more control and agency of your life
than you thought otherwise.
Speaker 1 (25:46):
I Mean, we talk about the barebones budget sometimes, Matt,
and that's not like a money challenge per se, but
I think everyone should create a barebones budget, and that
is just to say, well, what if I did get unemployed,
what are the bear essentials I need to be spending
money on every single month, and it's like the roof
of the head and it is the groceries on the
table right. But then there it proves to you that
there are so many other things you actually could live
without and maybe all of the fluff that actually is
(26:08):
in outgoing every month. And it's not that you want
to eliminate all those things from your life and just
live a menastic existence or something like that, but just
by actually doing the step of creating the bare bones budget,
it can be enlivening, I think, to realize that there
are a lot of changes you could make if you
needed to, and that you can make just because you
want to. If you want to make quicker progress. You
(26:29):
could also, I think, challenge yourself to cut out all
of your recurring subscriptions for an entire month, and you
might end up leaving some of those subscriptions behind for good.
You can always, of course, go back to the ones
that you love and sign up again. You can say
I really miss Netflix or whatever it is and then
jump back, but I don't know for a whole month
to be like no streaming, what's this look like for
our family? And what's this look like for our budget.
(26:51):
There are other good ones on the list on our
website as well at how tomoney dot com. There's the
Sell your Stuff Challenge or the roth Ira challenge. And
you know, we like the sellings because you're decluttering and
you're bringing money into your life, and then you can
use that money to fund the roth Ira that do
both at the same time. Maybe, yeah, make the selling
your stuff thing be the funding the roth Ira challenge,
and then yeah, I think while these challenges can act
(27:14):
like a financial stimulus of sorts, the goal is to
keep some of these habits up. But maybe with a
little more moderation than an extreme month long savings challenge
would encourage people to do.
Speaker 4 (27:25):
That's right, And again you can find this up on
the website at howdomoney dot com a list of those
different challenges.
Speaker 3 (27:30):
Joe, Let's take another one from John.
Speaker 4 (27:31):
He wrote, We're concerned about where the US is headed
and might see a lot of unrest or even a
civil war, which.
Speaker 3 (27:38):
Would possibly collapse the dollar.
Speaker 4 (27:40):
I'm considering investing ten percent of our assets in gold
as a hedge. What are your thoughts? First off, what's
your personal opinion on gold? I think politics has got
a whole lot of people on edge right now, Matt.
I think that's to me what this question highlights is
that there's this kind of general reticence that people have
about what's happening in our culture and what's happening in
(28:00):
our political sphere. And I know that John is not
alone in feeling this way, But he's also not alone
in the context of human history, which I think it's
important to point out. It's not that truly consequential things
that alter our existence and our future don't happen. Like
we've all lived through COVID, a that was a true
life changing experience for a whole lot of people, for
(28:22):
almost everyone listening to the show. But it's also hard
to know in advance which events are going to make
a significant impact and what the fallout is going to be,
right Like, I think in twenty nineteen, a lot of
us thought we knew what the future was going to hold,
and then as COVID came about, there were a lot
of predictions about what the future was going to entail, like, Hey,
this is what COVID is going to change in our lives.
(28:43):
Business travel is dead, New York City never coming back.
Speaker 3 (28:46):
No one's going to want to live there anymore.
Speaker 1 (28:48):
On top of each other, because the pandemic has proved
that large cities and.
Speaker 4 (28:52):
Most the point of living in a city when there's
no entertainment to be had, right, no Broadway.
Speaker 1 (28:56):
Right, the millennials are moving to rural America, and this
is going to change the face of the country for
the Yeah, it didn't happen, right, even work from home,
which was like lauded as this is going to change everything,
and it has in some respects, but in other ways
we're talking about where.
Speaker 4 (29:11):
Every single week there's another company or another government agency
that yes, like, oh now we're going we're going to
go back to four, if not five days a week.
Speaker 1 (29:18):
So none of those things that we all thought were
going to be true indefinitely moving forward turned out to
be true. So I guess my first piece of advice
to John here is just to not overreact.
Speaker 4 (29:29):
Yeah, you're going one hundred percent in on zoom Stock
didn't pan out either, did it? Joel Thin didn't that?
Uh what no one meane you and Kathy would No.
It's it's not that I think that the US dollar
is going to be the world's reserve currency for forever.
But there's also not a clear there's not a better
alternative rising up to take its place, and so John,
I mean, you could certainly invest a portion of your
(29:49):
portfolio in gold, but then that raises other questions like, uh,
what does that look like? Do you buy a gold fund,
do you buy gold bullion, do you buy physical gold?
And if things actually really do the fan like a
civil war, do you think that a gold fund or
even gold bars would make you and your family more
secure personally? Even though I find myself getting pulled more
(30:10):
and more in the direction of being able to live
off of the grid, I am not some like doomsday prepper.
I do not have what do you call it, like
a reseller, a bunker lined with leads for like nuclear
filout or anything like that. But like honestly stocking up
on food and living a more sustainable lifestyle, they probably
are better ways to prepare for whatever might end up
(30:32):
happening off in the future, even if you are assuming
the worst, even if you are taking a more pessimistic sort.
Speaker 3 (30:36):
Of point of view.
Speaker 1 (30:37):
It's interesting that people always turn towards like gold is
going to protect me, but then when you talk about
their fears, like the actual solution to their fears is
probably better planning and changing their lifestyle a little bit
so that they can be more self sustaining instead of
like just having a slightly slightly more of their investments
targeted towards a gold rock. And I think ultimately, when
(30:59):
it comes down to it, you and I'm we would
be we'd be fine with people having gold precious metals
allocation of roughly five percent of their portfolio, sure, preferably
through a low cost fund like gld's. That's a good
one if you're so inclined. And gold actually has done
really well over the past two decades, but we just
don't feel the need to have it ourselves, although we
(31:19):
understand why you do and why some people do, and
we don't want to minimize those feelings either.
Speaker 4 (31:23):
So it's done well over the past twenty years, but
it hasn't done well over the past forty years.
Speaker 3 (31:27):
Yeah you look at the past, Yeah, just.
Speaker 4 (31:29):
Care zooming out and you're like, oh, I guess we're
back to where we were when Joel Mett were born.
Speaker 1 (31:34):
That's right, And this was true leading up to the election.
This is true post election. Do not let your political
feelings run the investing ship. That you're steering and maybe
read some US history too, like, there have been so
many other times of extreme turbulence in our nation, and
there have been so many unforeseen black swan events. And
it's often the things that we are pointing to as
(31:54):
that's the thing that we're really nervous about. Something else
comes out of the woodwork, and it's far scarier and
is far more determined of our future than the thing
that seems most clear in the moment. So it's true,
and maybe consider bitcoin instead and humans we just live
in a perpetual state of chaos to a certain degree,
and it's really easy. It's always easy to identify the
(32:16):
massive threats to our financial security and to our lives.
But what's far more difficult, I think, to see is
the eternal march of human progress and the ways that
we have all been able to benefit from that just
as human beings, but also from a financial perspective. And
so I would maybe refocus on that. And that's the
reason why we invest, is because we're investing in companies
who are doing good for us and for humanity, and
(32:38):
we all stand a profit from investing in those companies.
You've been listening to how to Money with Joel arscard
and and you can always hear us live on kf
I am six forty twelve to two pm on Sunday
and anytime on the iHeartRadio app
Popular Podcasts
Boysober
Have you ever wondered what life might be like if you stopped worrying about being wanted, and focused on understanding what you actually want? That was the question Hope Woodard asked herself after a string of situationships inspired her to take a break from sex and dating. She went "boysober," a personal concept that sparked a global movement among women looking to prioritize themselves over men. Now, Hope is looking to expand the ways we explore our relationship to relationships. Taking a bold, unfiltered look into modern love, romance, and self-discovery, Boysober will dive into messy stories about dating, sex, love, friendship, and breaking generational patterns—all with humor, vulnerability, and a fresh perspective.
On Purpose with Jay Shetty
I’m Jay Shetty host of On Purpose the worlds #1 Mental Health podcast and I’m so grateful you found us. I started this podcast 5 years ago to invite you into conversations and workshops that are designed to help make you happier, healthier and more healed. I believe that when you (yes you) feel seen, heard and understood you’re able to deal with relationship struggles, work challenges and life’s ups and downs with more ease and grace. I interview experts, celebrities, thought leaders and athletes so that we can grow our mindset, build better habits and uncover a side of them we’ve never seen before. New episodes every Monday and Friday. Your support means the world to me and I don’t take it for granted — click the follow button and leave a review to help us spread the love with On Purpose. I can’t wait for you to listen to your first or 500th episode!
Dateline NBC
Current and classic episodes, featuring compelling true-crime mysteries, powerful documentaries and in-depth investigations. Follow now to get the latest episodes of Dateline NBC completely free, or subscribe to Dateline Premium for ad-free listening and exclusive bonus content: DatelinePremium.com