BHS – 8A – ‘How to Money’ with Joel Larsgaard | Earlier with Mo Kelly

Wayne Resnick fills in for Bill for Handel. Host of ‘How to Money’ on KFI Joel Larsgaard joins the show to talk about 401Ks and companies appealing to consumers with 'trust words.' The U.S agency in charge of ‘dad jokes.’ Host of ‘Later with Mo Kelly’ on KFI weekdays from 7pm-10pm wraps the show talking about the NEW upcoming Beverly Hills Cop movie.

Episode Transcript

(00:00):
You're listening to Bill Handle on Demandfrom KFI AM six forty. Happy fourth
of July to you all. It'sthe Bill Handles Show. He's off for
the holiday. I'm Wayne Resnick andit's our regular Thursday segment with Joel Larsgard,
the host of our own KFI showHow to Money, every Sunday from

(00:22):
noon to two pm. And honestly, Joel, I forget, does this
segment have a snappy name? No, we should. We need better marketing
team or Bill and I need tocome up with something better. But yeah,
I just call it. You know, we'll hang out with out of
Money Joel. All right, excellent. So let's get into this because it's
a huge headline and it is ahuge development in terms of ideally future proofing

(00:49):
our children from being like us whenit comes to finances. Tell us about
this law that Governor Newsom has signedfor the high school. Gosh, that's
just the baseline job of a parent. Hopefully they turn out better than you
do. Right, That's that's mygoal with mine. But that's kind of
the goal of this new law aswell. It is to basically institute a

(01:11):
personal finance class, a mandatory personalfinance class. For all high schoolers before
they graduate, and so whatever,they're probably going to lose an elective or
something like that. They could havetaken a class that they were interested in.
But I'm kind of a homer onthis as someone who cares about personal
finance as a subject deeply and seesthe basic lack of financial literacy in this

(01:34):
country. I'm pretty thrilled to seethe governor sign this bill and thrilled to
see that people are high schoolers acrossthe across the country, but specifically in
California now are going to be forcedto take away the classes, maybe against
their will, but it's going tobe good for him. All right now,
I want you you can get intosome of the specifics of what a
class like this may cover should cover. I just want to point out one

(01:57):
thing, because we think of Californiaas being on the vanguard of everything all
the time. As of March ofthis year, California was one of only
four states that had no financial literacyrequirements in high school. Yeah, a
bunch of states have the required course, others of them have requirements that the

(02:22):
school offer the course, and someof them put it in the hands of
the districts. But basically there wereonly four I guess now there's three.
Yeah, yeah, So it's niceto be not in that completely left behind.
And you're right, I think itwas. Now California becomes the twenty
fifth state to make it fully mandatory. Right, So, like you said,
some states offer these classes, butthey don't require you to take them,

(02:45):
and so this California is now Nowit's over half of states and something
like sixty plus percent of the populationof high school students have access to these
courses and are required to take thesecourses. And they're going to learn a
whole bunch of stuff and budgeting,investing, the beauty of compounding returns.
They're going to learn about debt,the pros and cons of debt, and
how just egregious debt can be.They're going to learn to calculate their net

(03:07):
worth or to think about the incomeand the perks that come along with various
job opportunities. They're going to learnabout how taxes work, which is the
subject that still confounds most adults.So there's going to be a whole lot
that you can learn over the courseof a full semester. And it's interesting.
There was a consulting firm, andthey kind of dug into the numbers

(03:28):
and they said that the person whograduates with high school with a personal finance
class under their belt versus another studentwho doesn't take a personal finance class,
the lifetime benefit to them in dollarscan be in the six figures, can
be one hundred and twenty seven thousanddollars on average, which is insane to
think about, insane to think about, but it makes sense when you think

(03:51):
about it, because like another thingthat they're going to learn, they're going
to learn about the credit and creditscores. And if your credit score,
the difference between a seven to sixtycredit score and a six ninety credit score
when you're talking about getting a loanon a mortgage, that alone can be
worth something like low six figures.So it makes sense that this course is
going to be dramatically improve people's financialprospects in life. All right, that

(04:14):
sounds really good. Now. Thatwhole the whole theory of these financial literacy
courses in high school is you canyou can improve your financial position later in
life with some information. Yeah,now there's another thing that you want to
talk about with us, And I'mglad that you do, and it's apparently

(04:36):
a way that you can better yourfuture financial position with just some automatic habits.
Yeah. So of the one ofthe subjects in economics that's kind of
taken off over the past few decadesis something known as behavioral economics. And
what we've realized is it's not enoughto learn the nuts and bolts, the

(05:00):
dollars and cents. It's not enoughjust to have calculator skills. Right.
Part of the reason that we're notawesome with money so much at the time,
and I hope this is something that'scovered in that high school personal finance
course as well is our own humanfoibles and flaws. And so there are
a lot of things that we cando as a society, as employers,

(05:20):
as individuals to kind of help overcomesome of those flaws that are just endemic
to being human. So when youthink about lots of times it's not a
lack of desire to do something,it can be a lack of discipline or
a lack of automating something. Automationis one of the best ways to overcome
some of those human difficulties. Andthere was this specifically, what's happening in

(05:44):
retirement accounts across the country is peopleare being essentially automatically enrolled into a four
h one K plan and that's becomethe law now as the Secure Act two
point zero requires companies to do thatstarting next year. But companies are already
starting to do that, and it'smaking a massive difference in what people are
saving for their future. And notonly are they automatically enrolling you. The
default rate used to be like threepercent, and now most companies are making

(06:08):
the default rate six percent, andso savings rates in four to one k's
are skyrocketing, not necessarily because peoplehave all this financial literacy on hand or
they've gotten so much smarter when itcomes to their money, but just because
of the default choice that they makewhen they start to get employed by a
company, when they take on anew job. So what you're talking about
with this requirement is okay. WhenI started working at iHeart, actually when

(06:30):
I started working here, it wasthree or four companies ago. But iHeart
offers a four to oh one Kplan, and when I was ready to
set it up, I had todo it. It was already there.
I know this sounds vague, Letme try and explain it better. They
create apparently they create an actual accountfor you with an account number and everything.

(06:58):
Yep, but they don't. Butthey didn't enroll me. I had
to call a prudential and not PrudentialFidelity and say, hey, I want
to, you know, start thisplan that my company has and they're like,
oh, yeah, here you are. Here it is and it was
very easy to activate. What you'resaying now is they would automatically activate that
account. That's that's right, theywould start. So the first paycheck you

(07:23):
get comes with three or six percent, six percent now being the default for
a lot of companies because of sixpercent fewer dollars in your first paycheck,
but because of the because of thefact that they're taking a portion of your
paycheck and you're investing, but theymade the choice on your behalf, which
sounds kind of weird, but ultimatelyit's the best thing for you. And
most people they're not going to proactivelychoose to invest six percent of their pay

(07:46):
when they get that first paycheck,they're used to it and they realize,
oh, I thought I was goingto get paid more than this. I
guess, I guess this is whatI should expect every two weeks moving forward,
and then what they don't realize thatdown the line, years and years
and years down the line, they'regoing to have, you know, thousand,
it's potentially hundreds of thousands of dollarssaved up for their retirement because of
just that one choice that they didn'teven have to have to make on their

(08:07):
behalf, that this this law andthen employers are doing for them. All
right, that sounds really good.That's sort of like if I'm too lazy
to start it, I'll be toolazy to stop it. Exactly. Yes,
most of these people you can becauseit's just an automatic thing. You
can go in there and say no, no, no, I don't want
to contribute six percent. I wantto contribute zero percent. I don't like
this four to one k thing atall. You have that right, that

(08:28):
ability, but the fact that it'sthe automatic choice, most people aren't going
to go do something different. AndI would encourage people to potentially save even
more than that. That's a greatgoal, but definitely don't take it underneath
of that base savings rate of sixpercent in your four o one k Joel.
So, apparently research has been doneto determine whether companies that make a
big deal out of telling you howmuch you should trust them, Maybe should

(08:54):
find another way. Yeah, maybethey're thrusting it out there in our faces
so much because maybe they're not quiteas trustworthy as they want us to believe.
And yeah, it's kind of thisweird thing to research, but yeah,
I feel like it makes intuitive sense. The more someone tells you,
oh, no, no, no, trust me. I mean, like
Wayne, if I slid across thetable to you, like a viscous red

(09:16):
liquid and I say I drink this, trust me, you'd want to smell
it. You want to you wantto know beforehand what was in it,
unless we were like, you know, you knew me so well that you
could trust everything I said. Well, a lot of companies that's part of
their marketing shtick is to say no, no, no, no, trust
us, or we're keeping your familysafe. It's those sorts of things.

(09:37):
But the truth is, the companiesthat engender the most trust don't have to
tell you that. They don't haveto say that. And I do think
that that is a problem for consumers, though, is when they're being told,
hey, you should trust us,I think the initial h the initial
pushback should be, well, whywhat makes you trustworthy instead of just taking
them at their word. So tome, is the psychology of this.

(10:01):
It shouldn't be difficult to understand thatif you make a point of telling people
how honest you are, or thatyou have great ethics, or that you
operate your company with a high degreeof character. And those are three of
twenty one trust words that were partof this study they looked at. They

(10:24):
singled out specific words associated with tryingto get people to trust you. So
but it seems to me obvious thatthat's going to raise a red flag for
anybody you say it to, becausewhy why are you making I haven't expressed
anything about not trusting you. Whyare you bringing this up? Why don't

(10:45):
you just tell me in your earningscall or your earning statement what you made
and give me the numbers. Sowhy do they do it? I guess
what I'm saying is why do theydo it? I think they think it's
a baseline appeal. It's a peopleare going to react to and kneede your
way to say, oh, theysaid the word trust, they must be
trustworthy. But when when you lookat some of the data from that study,

(11:07):
the companies that do this, thatcheck that they use some of those
words in their marketing materials, theyreceive more letters from the SEC asking for
marketing clarity, so they're pushing inon that. Their their stock performance more
poorly. They pay more in auditingfees, which is not a great sign.
And so it's always been a redflag for me, and I think
it should be a red flag forothers. And hopefully brands will figure out

(11:30):
that the thing that matters most toconsumers is whether or not they are trustworthy,
not whether or not they say thatthey are. I think we all
know this. In relationships, interpersonalfriendships, with relationship with your significant other,
the trust is earned. You can'tjust say it like Abe Lincoln.
You know this July fourth. Here, let's talk about a US president.
Yea, he didn't come up withhis own nickname on his dabe, right,

(11:52):
that was that was something that wasgiven to him, that that was
earned from so many years of beingsuch an upstanding leader. Yeah. I
also noticed that these companies that usemore of these trust words have lower corporate
social responsibility scores. Yep. Now, so here's the thing, the way
that you described it, I said, why do they do it? And
you said the things you said mademe think, Oh, what he's saying

(12:15):
in a nice way is they thinkwe're stupid. But I think there's some
truth to that. I think thereis some truth to that. I think
there is a lowest common denominator sortof approach here, and it's like,
well, some folks who will justtake us out our word, and the
skeptical ones, well maybe we don'twant them as customers anyway. So I

(12:35):
do think there is some of that, an attempt to appeal to maybe people
they think are easier to hoodwink.And I'm never gonna I'm never going to
nay say anyone who suggests corporations thinkwe're stupid. But it could be this.
It could be that they don't thinkwe're stupid, but they know that

(12:56):
we're biased. And the reason Isay that is one of the things this
study that really caught my eye isthat the companies that used more of these
trust words had a lower value relevanceof earnings in their reports, which and
you can help me with this ifI understand this. What it means is

(13:18):
people looking at the reports for thesecompanies that are throwing trust words at your
face put less weight onto what theearnings of the company were. It was
less important what the earnings were.It's it's less investors see this, right,

(13:39):
So maybe the customers, some customerssee this as a way that engenders
trust. Most customers do not.But then investors see this sort of approach
to the marketing and then what thecompanies are able to ultimately pull off when
it comes to earnings, and theysay, ah, I'm not trusting what
I'm seeing here, and and soit the stock or poorly because of that.

(14:01):
Oh man, I'm glad that.Okay, God, I'm glad I
ran this by you because I hadit wrong. What I was I was
thinking is there's a certain kind ofinvestor or person who just really thinks the
use of these words is more importantthan whether the company makes money, just
like you would pay more for agreen product, for example, because it
aligns with your values. But nowI get what you're saying. Oh,

(14:22):
it's just more a part of thedestroying of their trust. It's that you're
telling me how trustworthy you are.That makes me generally think maybe you're not,
and specifically skeptical about any numbers thatyou tell me. Think about the

(14:43):
best companies, the companies that peopleare most attached to, and that they
will visit regardless of the marketing.And in fact, oftentimes some of the
best companies don't have to use muchmarketing at all. It's word of mouth
oriented. Because they're trustworthy companies,they don't have to tell you to trust
them. A place like Costco,people understand the value proposition there and they
realize they're they're thrilled to go shopthere. Or a brand like Arii,

(15:05):
it's it's the fact that they havean incredibly generous return policy, like one
year from the date of purchase,no questions asked, you get to return
it. So it's not that they'rebuilding themselves as trustworthy. It's just that
they are, and that the policiesthey have in place and the value proposition
they're making the customers is such agood one that people will not only continue
to shop there, they'll tell theirfriends and family and they'll have they have

(15:28):
because they have a good experience.And that's the best marketing. And guess
what, when that marketing costs thosecompanies less, they're going to be more
profitable. The more you have tojust spew out some of those trust words
and try to force people into thinkingthat doing business with you makes sense the
editor, the more reticent we get, and that's why Joel, you host
how to Money Sundays from noon totwo on KFI, and I only listen

(15:52):
to it. That's what we've establishedhere. Jiell, thank you so much
for talking to us on this holiday, and have a good one, all
right you two Wayne. Thanks.It is the July fourth holiday, the
founding of our nation, and overthe years of this fine nation, the
government has at various times been highlyrespected and admired, and hated and derided

(16:18):
as full of pork and crap.So what I thought I would do is
very quickly here today tell you abouttwo different government agencies that I'm guessing you've
never heard of, one of whichis amazing and the other of which we'll
see what we think about it.The first one, I'm telling you right

(16:41):
now, this government agency is awesome, and it is called the Bureau of
Intelligence and Research, and it isthe intelligence arm of the State Department.
The Big three of intelligence I reallyare. I mean, somebody might want
to argue with me, but Iwould say you got the CIA, and

(17:03):
you've got the Defense Intelligence Agency,the DA, and then way way lesser
known the INR. Here's the thingabout the INR. So it's part of
the State Department, so it servesprimarily diplomats. It is way the heck

(17:25):
smaller than the CIA or THEDIA.It has less than five hundred employees.
The budget is nothing. I thinkit's eighty three and a half million dollars,
or last year it was eighty threeand a half million dollars. Which
is this guy Tom Fingar who usedto lead the INR. Once he referred

(17:48):
to their budget as decimal dust.They have no spies, they have no
satellites, they don't plant bugs anywhere. They do get to see the same
raw intel as these other agencies thatare way bigger. I mean, we're
not allowed to know. Technically,we're not supposed to know how big the

(18:11):
CIA is. But remember when EdwardSnowden leaked a bunch of information. We
found out that in twenty thirteen,the CIA had over twenty one thousand EMPLOYEESINR
has less than five hundred. Allright, so they do get to read
the same material. They don't havethe same amount of people, they don't

(18:32):
have the same resources. But checkthis out. Let's go back to nineteen
sixty one. Vietnam conflict going onthe South versus the North. We were
with the South. We didn't likethe North. And while the CIA and
the Defense Department insisted that we couldwin this battle against the North and the

(18:56):
Viet Cong, the INR in eighteensixty one said, no, you won't,
you will not. You will fail. And the main reason that you
will fail is that the Viet Konghave the support of people in the South,
the people that you're getting with tofight the North, and they turned

(19:19):
out to be right. Let's fastforward a little bit. Remember when everybody
said a Saddam Hussein was trying tobuild a nuclear bomb. The CIA said
it, the DIA said it,but the i NR said no, he's
not, No, he's not.And guess what they were right again.
And then just a couple of yearsago, remember when Russia invaded Ukraine.

(19:41):
Of course you do. And wewere being told when it first happened that,
oh, in a few days,it's going to be a few days
and Russia is gonna hit Kiev andthat's going to be the end of Ukraine
and this is going to be ashort and brutal victory for Russia. But
the INR said it's not going tobe that easy. Also turned out to

(20:03):
be right. So here's a smallgovernment agency that does apparently, I don't
want to say they do a betterjob, but they have been right more
often in areas where it really mattered, doing more with less. It has

(20:23):
partly to do with the fact thatall of their analysts are true experts in
their field. They write their ownanalysis. You don't have a bunch of
editors and managers and sending it upthe chain and back down the chain.
And they talk more frequently with thepeople that they are serving, the people

(20:45):
who make policy in the state department. So yay for the INR. Now,
I don't know what to say aboutthis agency. I'm not mad at
this agency, but I want totell you something. Did you hear the
one about the world's greatest watch thiefhe stole all the time? Where did

(21:07):
I get that dumb joke? Igot it from a government agency that maintains,
in essence, a library, arepository if you will, of dad
jokes. It's called the National ResponsibleFatherhood Clearinghouse the NRFC. It's part of

(21:30):
the Department of Health and Human Services. It also has an unbelievably teeny tiny
budget. And while yes it ispart of their job to maintain a list
of dad jokes, that's not themain thing that it does. This was
created back in two thousand and fivepart of the Deficit Reduction Act, and

(21:52):
the idea was there are various grantsavailable to fathers and they so they created
this to coordinate all those So itwas a one stop place for fathers to
go to see what kind of assistancemight be available to them throughout all the
different federal agencies. And then theykind of expanded a little bit to have

(22:12):
other information and resources for fathers andone of the things they have you can
go to their website and see itis the dad joke area in case you
know you've got your kid for theweekend and you don't know what to say
to them. All right. MoKelly joins us every Thursday, host of

(22:34):
The mo Kelly Show. Later withMo Kelly seven to ten pm every weeknight
right here on KFI. Hello,sir, how are you? Good morning?
Happy in PENDUS Day, Happy birthdayAmerica. How you doing Wayne?
Good good? You didn't answer myquestion though, how am I doing?
Oh yeah, I'm I'm ecstatic.Ooh now, are you? Are you?

(22:56):
Are you? I'll play along.Are you ecstatic? Because the new
Beverly Hills Cop movie, the longawaited, hotly anticipated Beverly Hills Cop movie,
is so damn good. Yes,as a matter of fact, oh
my gosh, without reservation. Andthis is how I recommend that you see

(23:18):
it. Don't worry about Beverly HillsCop two or three trying to review.
Go back and watch the original.Watch it right before you watch this Beverly
Hills Cop axel F. Because axelF takes a lot from the original movie.
There are some scenes just updated beatby beat. Its intentional and this

(23:38):
is not a spoiler. When theyopen up axel F, they're using the
original soundtrack. There are a lotof music cues from the original movie.
They're trying to let you know thatthis is supposed to be in direct comparison
with the very first movie. Nowthere is some suspension of disbelief if you
want to do the math. Theoriginal Beverly Hills Cop was forty years ago.

(24:02):
Why axel Folly is still on theforce forty years after his original trip
to Beverly Hills, in which hewas already a detective and presumably on the
force for about fifteen years. Nobody'strying to be a cop for fifty five
years. But that aside, itis a great return to the roots of

(24:23):
this franchise. You get to findout just about everything about everyone who was
in the original. Not everyone,but just about is. Now You're gonna
have to help me here, becauseI have seen the original Beverly Hills Cop
a couple times. I don't necessarilyremember every character name or unfortunately, actor

(24:44):
name, but you've got the twoBeverly Hills police officers you know, who
were the focus of the original,with Judge Reinhold and that other guy.
I'm so sorry, sir. Arethey back? Yes, Judge Ryndholds,
Billy Rosewood, he is back.John Ashton as Taggart, he is back
and central to the story. Andhere's one thing, if I could digress.

(25:07):
The problem with the Star Wars sequelsis the common complaint was there was
never a moment where all the gamegets back together and does one last ride
of glory in the Millennium Falcon.Uh. That mistake is not made in
this movie. Does this? Isit as funny as the first one?
I don't know if you can beas funny because that was the debut movie

(25:32):
real, I should say, theone that shot of Eddie Murphy, the
superstarredom. It wasn't his debut,but it was. It was a huge,
huge international hit. And I don'tknow if he can be as funny,
but Eddie Murphy is still very damnfunny. He's very profane and he
it's a return to his glory,but it doesn't seem cheap. It's genuine

(25:52):
and it showcases that Eddie still gotit. Are they are there? Is
there a bad guy? Oh?Absolute is absolutely is the bad guy as
bad? Because the thing about thefirst Beverly Hills cop that I remember is
the funny parts were really funny,Yes, but the parts with the bad
guy and menace, you know,where there was danger in all of that

(26:15):
seemed to be very real and veryeffective in that regard. Is that the
same here, where when it's dangerous, you really do feel like it's dangerous,
But then when it's funny, it'sfunny. No, there's real danger.
Let me just give you some tentpoles as far as how the story
is set up. He is goingback to La, not necessarily Beverly Hills,
but La to reconnect with his daughter, who's introduced in this movie.

(26:38):
She's an attorney in La, andin going back to La, finds out
that she's involved in a dangerous situation. And from that you get to see
who this villain is. It's slowlyrevealed, and I don't want to give
it away, but yes, everyoneis in real danger. Is Bronson ping

(26:59):
show go back? Yes? Whatwas his name? The character? Yes?
And all of his glory. Man, I will tell you this,
and you're the expert, and Ihaven't seen it, and I'm cynical about
movies. It seems like this easilyyour especially bringing back a character like that,

(27:21):
a very broadly comic character, thatthis kind of attempt to redo,
if you will, a lot ofthe same characters and dynamics really should have
failed given the nature of Hollywood today, and that therefore, if you're telling

(27:44):
me, it's actually very good thatthis is almost a miracle. It's self
aware, and that's why I thinkit works. There are moments where Axel
Foley realizes that he's too damn oldfor this. There are moments where you
realize that people are trying to stillbe the same person they were forty years
ago, and it does not workin various and subtle ways, and it

(28:07):
is not trying to be an unrealisticaddition to the franchise. It's self aware
where people have moved on, grownin their careers, in their lives and
they said, we can't do whatwe used to do forty years ago,
even though they try to. AndI think that's why it works. And
also it's rated in for Netflix.It's on Netflix. You're not asking people

(28:29):
to spend an extra twenty dollars andgo to the movies and sacrifice two hours.
No, you can do it athome. I watched it last night
actually this morning, from like attwelve thirty at night. Yeah, it
was worth the time. Do youthink it's good enough and can get enough
non Netflix discussion going to actually drivepeople to subscribe to Netflix? I think

(28:52):
so if they can keep churning outproperties like this which have an established fan
base. It's a quality offering.There's a lot of action in it.
It could have been released in theaters, but I think it's better served by
not being released in theaters. Itdoesn't have the pressure of delivering like seventy
to one hundred million dollars in itsfirst weekend or pulled from theaters. But

(29:14):
it's a nice fitting. I wouldn'tsay conclusion, but it does round out
the story of whatever happened to whatare they doing now? And you don't
feel the need where we have torevisit this universe and see what the character
is going to be doing in anotherten to fifteen years, they'll all be
retired in real life and in BeverlyHills cop life. All right, mo,
thank you. Now. I'm assumingyou're back tonight for your regular show

(29:36):
from seven to ten, although Imust confess I deleted the email that had
the schedule in it. I amlive today from Chateau le mo As.
We have our annual July fourth IndependenceDay soire. We'll have fourk reporter in
the house, other KFI personalities,food, family fund, fireworks, all
today on July fourth. Awesome,all right, thank you, sir,

(30:00):
talk soon, mission later. Allright, buddy, thank you everybody on
the show today and Gary Shannon arecoming up next right here on KF.
I am six forty live everywhere onthe iHeartRadio app. You've been listening to
the Bill Handle Show. Catch myshow Monday through Friday six am to nine
am, and anytime on demand onthe iHeartRadio app,