Money Monday with Brian James

Episode Transcript

Speaker 1 (00:00):
It gets me ready for the day at all day
in fault and check in throughout the day.

Speaker 2 (00:04):
Fifty five krs The talk station.

Speaker 3 (00:10):
Eight o five. Here a fifty five PRCD talk station.
Happy Monday Time to learn stuff and things about money.
It is money Monday Time. Every Monday at eight o five.
Can talk to Brian James all Worth financially. He's a
financial planner and follows these matters very closely because his
job depends upon it. Welcome back, Brian James. Happy Monday
to you.

Speaker 1 (00:29):
Happy Monday, right back at you. And it is just
a great time of year to get out there and
enjoy that sunny, gray weather, isn't it.

Speaker 3 (00:35):
Oh jeez, yeah, I'm at least we're kind of get
some sunnies guys today. It's you know, when it's been
so cold, you look outside and the sun's barren dawn
and you think, oh, it looks great out there, and
you walk out and you're hit with this arctic blast.
That's just it's so deceiving and depressed, I know, I know. Anyway,
moving over to I see the across the board, all

(00:55):
the futures are down, and some pretty significantly A couple
points down s and p five hunter Nasdaq's down three
point seventy four futures trading, and any hint or understanding
as to why that might be the case currently.

Speaker 1 (01:07):
Brian James, Well, I think we're sort of getting to
the getting past the honeymoon stage of we've elected a
business friendly administration. We've had a little bump from that
over the past several weeks, and now we're just getting
to a point where realizing that it's not going to
be as easy as electing somebody and then just moves

(01:28):
sailing from there on out. We've got some other things
we'll talk about here this morning that are going to
be coming out just a little bit on the less
than happy side as far as business goes.

Speaker 3 (01:36):
I started out the show this morning, or at least
at some point, talking about this S and P Global
Flash Purchasing Managers Index, which reports that the optimism among
business people is really really high and they're expecting factory
output and hiring it. It actually has risen over the
past six months, and really a dramatic increase going all
the way back to May of twenty twenty two. So

(01:58):
I kind of thought that might be parla aid into
an increase in the stock market.

Speaker 1 (02:02):
But anyway, Yeah, well, and I think when things like
that happen, the headline and the article you're reading, the
market reacted to that a week or two ago, so
it's just now getting written up by journalists, and so
the market is now looking at the pendulum swings back
and forth. So then market now is looking at I
think things that might be not quite so rosy out.

Speaker 3 (02:21):
There, fair enough, and pivoting over to Donald Trump's tax plan.
I saw the tax Foundation dot org article. Some of
it's good and some of it not so good. Most
notably they don't like the idea of these tariffs and
suggests that we'll really negate any of the benefits of
keeping the tax the current tax rates in place.

Speaker 2 (02:41):
Yeah.

Speaker 1 (02:41):
So we've got an administration, of course, that wants to
stamp its put its own stamp on things, and that
as we've seen before, that relates to the relationships we
have with other countries and the trade agreements that we
have in place. And unfortunately, we've been through it before,
so we've seen what the impact can be. But I
think the the main concern right now is that there's

(03:02):
nothing One of the big things that Trump ran on
was the price of eggs and getting things down and
making things easier for American families and businesses and so
on and so forth. But right alongside that, he was
just as vociferous about raising tariffs on companies that we
do business with to affect different things he wants from
each of these relationships. And there's really nothing about a
tariff at all that will help lower costs. You're simply

(03:25):
increasing the cost of supply and you're tacking money onto
the front end of things, and that has to trickle
down to ultimately to the consumer. So that's what the
market is now starting to see in terms of the
impact coming down the stream.

Speaker 3 (03:37):
Well, yeah, I mean to the extent they don't capitulate
to what Donald Trump wants. And I use the Colombians. Yes,
the other day, their president Gustavo Patris said no, you
will not repatriate my fellow Colombians in these flights and
denied access to the country to these military flights, only
to turn around after Trump threatened him with sanctions, So

(03:59):
twenty five or sense sanctions he threatened. He said, they're
going to go up to fifty percent if you don't
hurry up and start allowing these folks and he did
change his tunes almost immediately yesterday.

Speaker 1 (04:08):
Yeah, and it was pretty quiet too. He didn't really
say exactly what had changed his mind. It was just
all of a sudden, the problem went away and there
was really nothing standing in the way. So my best
guess is that someone internally got to him and said,
if we stick on this path, ultimately, you're going to
piss off all the voters because you've just literally raised
the cost of them getting out of bed and trying
to live their lives on a daily basis. So that's

(04:30):
just Columbia. We have yet to get to the big ones. Yeah,
but you know, I guess, I guess we can declare
that that went the United States way.

Speaker 3 (04:38):
So far, so so far well, and I think that's
an illustration of maybe they need us more than we
need them.

Speaker 1 (04:44):
I don't know what in that particular case. Yeah, that's
why I said, that's Columbia. We'll see what happens with
our other larger trading partner.

Speaker 3 (04:50):
Yeah, no doubt. It's most notably China.

Speaker 2 (04:54):
Correct.

Speaker 1 (04:54):
Yeah, well, we've been down that path before, and there's
more going on with China than just a trade and balance.
It's the way they do business that we're really trying
to adjust our relationship with them, and so we're playing
our own games with him. That's playing out as we
see in the headlines every single day with who's going
to buy TikTok. And first of all, I am not
an international business law expert. I still am fuzzy on

(05:16):
the idea that the United States can.

Speaker 2 (05:18):
Force TikTok to sell.

Speaker 1 (05:19):
I believe it's still TikTok's option to simply not deal
in the United States, except that's going to cost an
enormous amount of money.

Speaker 3 (05:25):
No, it is absolutely their prerogative. And you know, honestly,
I think the way the law was written, in the
way it was passed, Donald Trump doesn't even have the
authority to extend the band because there is no active
buyer in play. That was a contingency for the ninety day.
He had a ninety day extension provision in that bill.
So if there was someone sitting across the table from

(05:47):
TikTok and negotiating at the time the band went into effect,
then he could hold it off for up to ninety days. Well,
there isn't, and there wasn't yet He's still held it up.
So I mean, if they went into court and challenge
his order stopping the ban from kicking in. I think
whoever challenged it would win because there's no active buyer right.

Speaker 1 (06:08):
At some point it has to be it has to
go down the way. It's written in black and white
on a piece of paper, and there there is no
basis for how. We can't see how this is going
to come out yet, but it's not matching up with
the way the law was written. So but that's just
an example of what we're going to the kind of
battles we're going to see over the next four years
as this kind of global business order sorts itself out
over time.

Speaker 3 (06:27):
What's your take on the exempting overtime pay from income taxes.
I think I saw that in the rundown and I'm
just scratching my head, you know, because he wanted to
exempt taxes or rather tips from taxation, and as well
not exempt he's also exempt social Security benefits from income taxes.

(06:49):
You know, honestly, Brian James, I'm one of these people.
There shouldn't be any exemptions or anything. There shouldn't be
any carve outs or provisions in the tax co that
manipulate our behavior. I'm a flat tax guy, just pay
a percent and call it a day, and don't fill
out these massive forms and have to deal with a
fifteen gazillion page income tax code. That's part of the
problem of doing business. I mean, the tax laws are

(07:10):
almost impossible to navigate.

Speaker 1 (07:13):
Well, I'm getting a message here that the into It
people would like to have a word with Brian Thomas
about his opinions he's sharing on air because they really
like their turbo tax product that keeps people plenty confused
and stuck to the idea that things have to be
more complicated. Now, now I agree with you. I mean,
I'm a simplification person, and at this point things have
gotten so far beyond the ability to kind of control

(07:36):
and predict I would be very willing to try an
entirely new tax system just to see if that can
simplify things for people and make it more fair. Now
you asked my opinion of the idea of taxing this
and not taxing that. Those different headlines that are coming
down the plant. First off, those have to get approved, right,
these are these are still political promises at this point,

(07:56):
and I would say that my biggest frustration with this,
while the benefits to people who are receiving those things
are obvious. It doesn't do any good at all if
we don't offset with the spending side of things. Yeah,
we're simply reducing the amount of income we've got to
pay our bills. That's not going to help in the
long run. That's simply a campaign promise. So I really
want to see an adult version of how this is

(08:17):
all going to come out.

Speaker 2 (08:18):
Hey man.

Speaker 3 (08:19):
And look, someone wrote in big capital letters spending because
the conclusion from the tax Foundation article was that they
estimate their proposals would increase the ten year budget deficit
by three trillion dollars. And lord knows, we don't need
a bigger budget deficit. And three trillion dollars is a
lot of money last time I checked. And anything we
can do to stop that from happening should be done.

(08:41):
And that's where spending comes in. We can really cut
spending and curb that sizeable deficit.

Speaker 1 (08:48):
Right. One of the other impacts we just got done
talking about it is remember, tariffs are going to have
an effect here too. Tariffs and taxation are all somewhat
hand in hand when we're talking about making sure this
country has the ability to stay afloat. From a finance perspective,
tariffs are going to hurt are going to hurt people
at the bottom of the line here. And if we're again,
if we're simply running up more and more debt because

(09:08):
we don't we want to be able to have the
headline that we're not taxing groups who are struggling, then
we have absolutely got to find a way to not
spend those taxes in the first place. I haven't heard
a single peep yet about the things we are not
going to do anymore to kind of save on those
different items.

Speaker 3 (09:26):
Stop funding shrimp on treadmill research. That can be number
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Speaker 2 (10:50):
Fifty five KRC dot com.

Speaker 3 (10:52):
When the Wildfires eight nineteen fifty five KRC detalk station.
It's Monday Money Monday. That's what we're doing right now
with Brian James will allwor Financial moving over and you know,
everybody's looking around for the day when mortgage rates are
going to drop so people can afford to own homes.
And I guess we're looking at what roughly seven percent
current mortgage rates.

Speaker 1 (11:12):
Yeah, so seven percent current mortgage rates. And that's been
that way since about mid twenty three. So mortgage rates
in this recent cycle. The average peaked around seven point
eight percent in October of twenty twenty three, and we
fluctuated around that ever since then. We've right now, we're
kind of we've hit a plateau, right about seven percent
or so, is what I'm hearing, and it's it's having
impacts on, of course, people's decisions of whether to buy

(11:35):
that bigger house or move to the next neighborhood. And
you know, the things that we used to take for granted,
we had low interest rates for so long that people
would make decisions for their lives and their families without
regard for what these uncontrollable numbers. What the impact was.
Now I'm hearing about people making decisions to well we
have to stay put a few more years. We just

(11:55):
we can't give up this three percent four percent interest
rate on our mortgage. Sure, So I'm not going to
take this job opportunity, or we're going to stay in
the smaller house. You know, I've been doing this for
thirty years, and I have not had conversations like this
because we've been so spoiled for so many decades.

Speaker 3 (12:10):
Yeah, I imagine so, and you know, I'm sorry. I
lived through super high mortgage rates. You know, my wife
and I bought our first home. I've pointed out before
we got a seven to twenty three balloon and had
to do We paid three points to get it down
to eight and an eighth. So it seems to me
that the interest rate is not the thing that's the
big problem, more so than the cost of homes went

(12:32):
through the blanking roof. There's not an available supply of
decent homes in an affordable realm, and COVID of course
caused that as well. People were buying up real estate
left and right, and so in inventory is not sufficient
to meet demand. So I think we need more affordable
sized homes, and I think more people could still buy
in spite of the fact the interest rates currently seven percent, right, And.

Speaker 1 (12:56):
I think but another factor here, comparing those two time
frames too. When you bought your house, we had just
come out of you're speaking in the early eighties there,
I believe, in oh nineties, okay, all right, so well
similar points. We had just come out of a recession,
uh in the but the eighties were fairly strong economically speaking,
and we, like you said, we didn't have the high

(13:17):
prices of houses that we do now. And so the math,
the metrics are just completely different in terms of how
you're going to make that decision. But I think I
think we've just come out of a period where, again,
people were so spoiled. We we I think kind of
became a little convinced that three percent mortgages are normal,
not the absolute bottom rate we've ever seen in history.

(13:39):
And I think that's causing a bit of hesitation with
people thinking we're going to get right back down there
pretty quickly. But as long as inflation is hanging around,
I don't I don't see that coming really anytime soon,
simply for the fact that we have to keep an
eye on inflation and we've done everything we can to
get rates back down from you know, intrace themselves back
down from the eight nine percent range, speaking of the

(14:00):
the federal reserve rates back down to the close to
three percent rate. But that still is leaving mortgages because
there's still a component of demand that drives where mortgage.

Speaker 2 (14:10):
Rates sit as well.

Speaker 1 (14:10):
So we got little ways to go there, and I
think maybe some people are hanging on a little bit
too long to the idea that it has to get
back down to three percent before I can make a
decision to affect my family.

Speaker 3 (14:20):
Well, do you recommend or is there a suggestion that
people not pursue like an adjustable rate mortgage. I mean,
if you think the interest rates have maxed out and
are going to ultimately drop, I know that might be
a dangling care for some people to consider, but it's
like me, going with the seven to twenty three. We
figured the rates would be down by the time we
had to refinance or lock it in after seven years,

(14:41):
and of course that's in fact what happened. So what's
your thoughts on adjustable rate mortgages?

Speaker 1 (14:49):
So, yeah, I mean I think they can be I think,
by the way, what you're referring to is these are
called arms adjustable rate mortgages. There can be a five
year ARM, you can have a ten year ARM. Seven
year basically means that you lock in your rate now
and it's going to be somewhere in the ballpark of
a market rate, but it will adjust to whatever that
market rate is after that period has ended. So if
we are sitting at a period which we kind of

(15:10):
are right now, where we feel like rates will be
lower in the future, Again, we're not talking six months
from now, We're talking several years by an ARMED, then
you can benefit by putting a mortgage in place that
will drop if rates have dropped at that time. And yeah,
I'm a fan of that. It's a little bit of
a different thought process. I didn't want anybody to do
an ARM. You know, three four years ago, we were
sitting in the opposite situation where rates were extremely low

(15:32):
and your adjustable rate was going to go up on
you in five years, yep, And we had people kind
of in a bit of a panic making sure they
got it paid off or refinanced before that ARM came due.
This is a little bit of the opposite where it
can be. There are tools out there if you're thinking
differently than three four years ago. There are tools out
there that can help you, and I think it's a
good thing to do as long as it works within

(15:52):
your overall financial plan, which sometimes has more to do
than just money.

Speaker 3 (15:57):
Indeed, we'll pause R and I'm bring Brian back to
talk brief. I'm sure about the thirty two hour work week,
and then also apparently looking at your phone may cost
you opportunities at work. Don't do that one more with
Brian James this Monday. Monday, I'll be right back after
these brief words.

Speaker 2 (16:13):
Fifty five KRC the talk station.

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We'll have a sunny day to day, a high thirty
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Sunny skies tomorrow with a higher forty four during the day,
partly cloudy overnight down to thirty two, and on Wednesday
it's going to be partly cloudy and going up to
forty four twenty degrees.

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forty seven. King Ramont fifty five krs. The talk station.

Speaker 3 (17:04):
A twenty eight fifty five caracity talk station Brian Thomas
and Brian James doing money Monday. Buddy Levy with the
book Realm of Ice and Skies up next. He's into
Arctic exploration history and that's what that's about.

Speaker 2 (17:16):
Brian James.

Speaker 3 (17:16):
Real quick, before we get away from the real estate topic.
It's just I saw an article about real estate insurance
has just really gone through the roof. We apparently had
two consecutive years of double digit increases in premiums and
it just sort of it just brings into focus. Just
because you can afford the mortgage payment, you got to
remember maintenance upkeep insurance, which is a variable that it's

(17:39):
going to you know, maybe go through the roof.

Speaker 2 (17:41):
Energy bills.

Speaker 3 (17:42):
I mean, who knows how much the price of energy
is going to be, but you got to pay the
heating and air conditioning bill every month, keep your electricity on.
I mean, it's just so much more than I think
people perceive you as a financial planner. Is this the
type of thing you walk through your soon to be
maybe a home purchasing client. It's through to analyze this
what it's all going to cost on a monthly basis

(18:04):
or an annual basis.

Speaker 1 (18:06):
Yeah, absolutely, And I would say we also talk about
that with our current home owning clients because we're in
an environment we haven't seen before. So you know, it's
one thing to look at what is the cost of
me living my life right now? But the whole point
of a financial plan is to have a feel for
what it's going to look like in the future. And
one of those elements is the fact that homeowners insurance
and things like that are going to get more and

(18:27):
more expensive.

Speaker 2 (18:29):
Property tax.

Speaker 1 (18:30):
Oh yeah, that's another one, right, You got a one.

Speaker 3 (18:32):
Third increase in your property tax. Can you manage that?

Speaker 2 (18:35):
Oh, it's just.

Speaker 1 (18:37):
It's it's just a spiral as the value of things
go up. Right that the value of your house as
a whole has gone up, but so has the value
of the plywood and the two by fours and all
the other stuff in there. So your insurance company is
looking to ensure not what you paid for your home,
they're ensuring the replacement cost. So if something happens to
your house, it gets wiped off the face of the earth,
what would it cost to put that house back in place,

(18:58):
which is going to be a heck of a lot
more than what you actually paid for it. Therefore, that
trickles all the way down into the premium. So that's
something to pay attention to to make sure you have
a handle on what those expenses might be in the future.

Speaker 3 (19:08):
Hey man, one of the reasons get a financial planner,
all right. I saw Bernie Sanders proposed it and I
think it got laughed out of the room as a suggestion.
But a couple of weeks ago, or a week or
so ago, some progressive senators were pushing for the federal
thirty two hour work week. I know there's lots of
articles around about bringing them back into the office to work,
and a lot of federal workers are really angry about

(19:30):
that and maybe just going to quit their jobs because
they don't want to show up to work. But thirty
two hours, as opposed to a full forty hour work week.

Speaker 1 (19:37):
Yeah, and I think that the important detail there. It's
a thirty two hour work week proposal, but the important
thing is without loss of pay. So, in other words,
we're going to reduce output by twenty percent, but we're
not going to reduce the income that these folks make. Now,
this is not super popular. I don't see it seeing
the light of day anytime soon. Even Elizabeth Warren came out,
who's usually relatively in line with Bernie Sanders, she came

(19:59):
out and thinks it's a terrible idea. She said, it's
she thought it was an insult to the work that
her staff puts in. So I don't think there's gonna
be a whole lot of popular And it was never
going to see the light of day anyway. But even
among the progressive side, I don't think it's going to
be all that popular. The last thing the progressive side
can afford to do is to work less. If they
truly believe then the different things they're trying to push more.

Speaker 3 (20:19):
Which was just a general reaction, like what nerve you
have to even suggest this at this moment in time?
All right, pivoting over to our final topic today with
Brian James from All words financial. Looking at your phone
too much your work could cost you opportunities. Saw this
Washington Post article.

Speaker 1 (20:36):
Yeah, this used to be a thing we worried about
with our kids, right, So now it has snuck into
the adult world, of course, and I don't think it's
gonna be too much of a surprise. But about fifty
eight percent of US adults say they now realize that
they use their smartphones too much, up from thirty nine
percent in twenty fifteen, and some other surveys indicate that
people are acknowledging. About two thirds of people acknowledged that

(20:57):
they use their phones multiple times during the work day.
And I would have to point out, ironically, some of
them probably answered the survey that had nothing to do
with work, but it popped up while they were looking
at it. Now I know one thing that happens, but
I do have important notifications that hit my phone as
our staff communicates with each other to help our clients
and so forth. What I have to be careful of
is when that notification hits. I know it's an important
one because of the way I've set my phone up,

(21:19):
but I have to make sure that I ignore all
the stuff that might be there. But is not important,
because that's how we get sucked into the vortex of
getting distracted and I'll deal with the issue at hand
and then oh, look, there's better check what's coming out
of Washington right now. Got to know that right at
this exact moment. So it can be very tempting to
especially when we're in the news cycle that we're in now,
where there's information coming fast and furious that does have

(21:41):
an impact on us, but we can't do anything about.
So my suggestion would be the use the built in tools.
Whether you're an Android user or an iPhone user, Android
offers something called digital well Being that will help you
manage as often as your phone distracts you, and will
help you keep an eye on how much you're spent,
how much time you're spending. iOS has screen time apps,
all these things have built in tools to help you

(22:02):
keep track of it. But it's discipline. It's like anything else.
Brian Thomas. You have to pay attention. You have to
be willing to make the sacrifice. It will help you
in your career. The last thing you want to do
is have your boss catch you snoozing on your phone,
or heaven forbid, one of the other headlines in here.
It's now happening during job interviews. Your interview is just
about over. If you're hiring manager, Seese, you check your

(22:23):
phone for no good reason.

Speaker 3 (22:26):
I can't believe someone would actually do that. See, you
know my family. You need permission bastly from my wife
if you plan on bringing your cell phone out at
the dinner table, and you better damn will have a
compelling reason to do it. It has to be extraordinarily important.
Otherwise you keep your phone in your pocket, you don't
use it at the dinner table. And yeah, we go

(22:46):
out to dinner and it's just it's room full of
people that aren't talking with each other. They're staring at
their cell phones. I think we all need to engage
in a sense of self awareness. I like the idea
of the app. You said that the tracks the amount
of time you spend on it, because I think people
realize how much time they spent on their phones and
sort of stepped out them out of side of themselves
and looked at themselves staring at their phone all the time,

(23:07):
they probably would cut down on the amount of screen time.

Speaker 1 (23:11):
Yeah, I think that if we use these tools for
the right purposes, you can get a better picture of
how you look from an arm's length away. You know,
no different than if I start tracking my calories with
an app on my phone. I will definitely at least
acknowledge that I need to be a better adult than I.

Speaker 2 (23:24):
Have to.

Speaker 3 (23:28):
Brian James. I appreciate our conversations every Monday. Monday, Money Monday,
Money Monday with Brian James. Thank you to you and
the folks that all Worth Financial for loading you out
every Monday. Good to hear from you, Brian. I hope
you have a wonderful week. We'll talk next Monday.

Speaker 4 (23:42):
We got one.

Speaker 1 (23:42):
We'll talk to you in February.

Speaker 3 (23:43):
I take care. Buddy Levy or the book Ram of
Ice and Sky. He'll be on the program next. We'll
learn all about the Arctic exploration. I'll be right back.

Speaker 2 (23:51):
This is fifty five KRC, an iHeartRadio station. In Today's
Marketers Report, Kate Cronin