December 12, 2024 • 38 mins
Chuck Zodda and Mike Armstrong discuss a recent survey that showed most Americans feel good about their job but not about their pay. Gen Z wants to shop in person. Will they bring back the great American shopping mall? Home prices aren't the only thing stopping Millennials from buying real estate. New retirees should plan to spend less than 4% a year. Trump aims to slash government spending. But what about Social Security?
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Speaker 1 (00:00):
The Financial Exchange is produced by Money Matters Radio and
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(00:20):
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(00:43):
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(01:04):
Veterans Development Corporation. This is the financial exchange with Chuck
Zada and Mike Armstrong, Chuck.
Speaker 2 (01:13):
Mike and Tucker kicking off the second hour here, and
we got markets down.
Speaker 3 (01:17):
We Pikenyo today only a little bit.
Speaker 2 (01:19):
The Dow is off seventeen points right now, the SMP's
down five, the Nasdaq is down eighteen, so very very
modest downward move. At one point earlier today, actually I
think the S and P five hundred was down. It's
something the ballpark twenty two, maybe twenty three points, but
has subsequently rallied back closer to flat on the day.
(01:41):
Tenure US Treasury is selling off just a touch, down
one point eight basis points to four point two eight
nine percent.
Speaker 3 (01:48):
Right now.
Speaker 2 (01:49):
We've got oil West Text Intermediate DIANT down ninety six
cents a barrel to sixty nine to thirty three, and
the TRIPAA national average for gas prices moving back a
little bit still two days in a row now back
up another six tenths of a cent to three zero
two and six tens. So we still can't get below
three dollars nationally according to Triple A. And we've got
(02:12):
gold today down fifty four dollars and ninety cents per
ounce to twenty seven oh one and eighty cents. Mike,
anything catching your eye before we get into some labor
market discussion.
Speaker 3 (02:25):
No, let's talk jobs all right. Piece here from Pew Research.
Speaker 2 (02:29):
It's actually a study that they did, uh, And the
headline in the study is most Americans feel good about
their job security, but not about their pay. And so
when you look at overall job satisfaction, first thing that
they study, they say, Hey, they basically ask you, are
you satisfied with your job?
Speaker 3 (02:47):
Overall?
Speaker 2 (02:48):
Fifty percent of employees say satisfied to extremely or very satisfied,
thirty eight percent say uh, somewhat satisfied, and percent overall
say not too satisfied or not at all satisfied. So
in general I read that and again you have to
kind of, you know, figure out what it means when
(03:11):
someone says they're like somewhat satisfied but overall I read
that as saying, hey, most people, even though they might have,
you know, some problems with their job.
Speaker 3 (03:20):
They're generally okay with it.
Speaker 2 (03:23):
And the fact that fifty percent fall into extremely or
very satisfied, I find that to be pretty darn good yep.
Speaker 4 (03:30):
Yeah, that's a pretty big chunk. I do find it
interesting but unsurprising that such a large share of workers
are dissatisfied with pay, finding it's not keeping pace with
paying their bills, especially on that lower income side. I
feel as though that's been a pretty consistent and persistent
feature of lower income Americans, in spite of the fact
(03:53):
that pretty much all studies showed that lower income Americans
are the key demographic whose pay actually exceeded the pace
of inflation the last few years.
Speaker 3 (04:01):
It might just speak to how badly they were paid
before that.
Speaker 4 (04:03):
Right, Yeah, I mean I don't think that I can
two things at once can be true. One, your pay
may have exceeded the pace of inflation. Two that may
still leave you in a place where you can't pay
most of your bills demographically.
Speaker 2 (04:15):
Just some interesting things from an age perspective, And I'm
just getting back to the overall satisfaction before we get
more into the pay side of things. The age at
which people are most likely to report being satisfied with
their job sixty five plus and sixty seven percent of
the sixty five plus respondence to this survey said they
were extremely to very satisfied with their job, and it
(04:37):
basically then decreases across every major demographic. Fifty six percent
of people age fifty to sixty four said they were
forty eight percent of people aged thirty to thirty nine,
and only forty three percent of age eighteen to twenty
nine people said they were extremely or very satisfied.
Speaker 3 (04:52):
With their job.
Speaker 2 (04:53):
What do you suppose that is, Well, when you start out,
you do all the stuff no one else wants to do,
and they pay you crap.
Speaker 3 (05:00):
Yeah, that seems reasonable.
Speaker 2 (05:02):
That's kind of what it is, you know, and we
all go through it like we all do. Like it's
everyone has gone through that. I think that's the big
thing about is there anything else?
Speaker 4 (05:12):
I guess if I'm sixty five plus, I'm more likely
to be there because I want to be, not because
I have to be.
Speaker 3 (05:18):
It's true even though.
Speaker 2 (05:19):
In you know, you had the twenty tens where that
wasn't necessarily the case, but so many pre retirees had
their retirements ruined by the financial crisis. Yeah, and so
I wish that I had access because they do this
survey every year. I just haven't looked for like the
twenty twelve version of it. Maybe I can see if
I can dig it up somewhere. But yeah, I'd be
curious to see how that might have evolved over the
(05:41):
last twelve to fifteen years, because you know, in twenty
twelve or twenty thirteen, there were a lot of sixty
five plus people working who are like I have to
I thought I was gonna be able to retire, but
I can't. Yeah, So I think that's interesting. The reason
why people said that they're not satisfied with their pay,
as you noted, Mike, the biggest one pay hasn't kept
(06:02):
up with increase in the cost of living. Eighty percent
of people who were dissatisfied with their pay said that
seventy one percent said that the pay is.
Speaker 3 (06:10):
Too low for the quality of work that they do.
Speaker 2 (06:14):
That's interesting, and it dovetails into the next response, which
seventy percent of respond said the pay is too low
for the amount of work that they do. Now, Mike,
you and I do not know one hundred and sixty
million working Americans.
Speaker 3 (06:30):
I do not personally know.
Speaker 2 (06:31):
We know of them, but we don't actually know them personally.
I think this is really interesting in terms of the
quality side. To me is interesting. We hear all the
time hey, I'm I'm getting paid this in my bosses,
you know, sending me emails at nine o'clock on a Friday,
and this and that.
Speaker 3 (06:50):
We hear that gripe quite often.
Speaker 4 (06:53):
The quiet quitting thing that took place over the last
few years, a lot of griping about, you know, I
do good work, I'm not paid enough.
Speaker 3 (07:01):
I'm being asked to do like more and more and more.
Speaker 2 (07:04):
I don't know that we hear that many people say, Hey,
I'm the best at what I do and I'm not
getting paid enough for it. As a result, like that,
we don't hear that as much. And I wonder why
that's the case. Any thoughts, No, I don't. You're right,
this is unique. This is somewhat new of a concern
(07:27):
or a complaint.
Speaker 3 (07:28):
The next one.
Speaker 4 (07:28):
You know, the amount of work that they do compared
to the pay very common gripe.
Speaker 3 (07:32):
The quality of the work that speaks to some degree.
Speaker 4 (07:35):
Of pride that I don't feel as though I have
seen in many other studies.
Speaker 2 (07:40):
Fair point, I get to the same place where I
do think it's somewhat ego related. And again it's not
to say that like all these people are doing bad work,
but it's more. It's the same reason why even during
the Great Financial Crisis.
Speaker 3 (07:57):
One of the things that has stuck with.
Speaker 2 (07:58):
Me when we look at any kind of a opinion
polling on the economy, even during the Great Financial Crisis,
when people were saying, yeah, they're like the the economy
nationally is horrible, they'd be pulled, Hey, how's your personal
financial financial situation?
Speaker 3 (08:12):
Oh, it's okay.
Speaker 2 (08:14):
Even with unemployment heading to you know, close to ten percent,
you'd still get that response. And I think it's just
we have as humans this this ego that tries to
protect us. Sometimes it does sometimes it gets us into
more trouble than we realize. But I kind of look
at that when when they're asking people, hey, like, you know,
(08:36):
what's your main dissatisfaction with your pay? For seventy one
percent of respondents to say I do really good work
and I'm not getting paid enough for it. Just statistically,
it strikes me that improbable, it's probably improbable that that
large of that subset is doing the quality of work
that they think they are.
Speaker 4 (08:57):
Can I take something out of the study that I
thought was positive, I'm not sure that you'll feel the
same way. Yeah, I took it as a positive indication
that currently half of workers they surveyed think of their
current job as a career, and that's an important distinction.
You know, another fifteen percent so they think it's just
a stepping stone to get to a career. A third
of them just said it's just a job to get by,
(09:18):
and that is a large percentage. But for a full
half of Americans in the labor force to say, no,
I've got a job, I really do think of it
as a long term career where I can make a living. Again,
they didn't say that in so many words, but that's
how I read that. And you know, sixty five percent,
two thirds of them to say I'm either in a
career path or I'm on my way to one.
Speaker 3 (09:39):
It's optimistic. I think.
Speaker 4 (09:40):
I look at that as an optimistic take from the
American workforce.
Speaker 2 (09:43):
Well, it's not only optimistic. I think it's realistic because
quite honestly, there are a lot of jobs that need
to get done in America that aren't necessarily career path jobs.
Speaker 3 (09:54):
Like it's just this is what it is. And I
think if if everyone was.
Speaker 2 (10:00):
Saying, yes, this is a job that leads to a career,
I think you're setting people up for a lot of
disappointment then, because there are jobs that just need to
get done and that's like what it is.
Speaker 3 (10:12):
And so I think that this is again I agree
with you.
Speaker 2 (10:16):
I think it's relatively optimistic, and I think it's relatively realistic.
You know, they note that, hey, younger workers, those age
eighteen to twenty nine, are less likely to see their
job as a career, quite honestly. And again, as I
get older, you start to realize, hey, maybe I should
(10:37):
listen to the people that have gone before me, because
they might know a thing or two, Like, you know,
it's that they've been through this and they understand.
Speaker 3 (10:45):
The single biggest thing that I think.
Speaker 2 (10:47):
Reshapes your view of whether your job is a job
or whether it's a career is when you start having
a family, because it goes from ah, whatever, like I
could take the you know, the month off and go
do this too. Nope, gotta figure out how to feed
the mouths. Yeah, you know, I think that that's I
(11:08):
think there's something too that Whereas when you're twenty two
and twenty three, no family, no kids, you're kind of like, well,
even if I left here, I could always get another job.
Speaker 3 (11:19):
Like you're not viewing it the same way.
Speaker 4 (11:21):
That's a huge potential study and changing feelings towards work.
Given the proportion of Americans not having kids.
Speaker 2 (11:28):
I would love to see someone study that, right, I
would love to.
Speaker 4 (11:33):
You have to imagine that someone's attitude towards work and
career and job security does change to some degree when
you have the responsibility of raising children. And if few
Americans are doing so, what are their attitudes towards work? Fascinating?
Speaker 3 (11:47):
Just take a quick break here.
Speaker 2 (11:48):
When we come back, we got trivia, and then we'll
stick with a little bit of changing habits. We'll talk
about how gen Z is shopping for the holidays.
Speaker 1 (11:57):
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Speaker 5 (12:32):
Another day of Christmas trivia here on the show, taking
you up to the holiday. The highest grossing Christmas movie
in excuse me, the highest grossing Christmas movie is twenty
eighteen's The Grinch. The Grinch starred Benedict cumber Patch is
the voice of the Grinch. The previous two actors to
portray the Grinch were Boris carol Off and Jim Carrey.
(12:55):
So trivia question today, what is the name of the
Grinch's dog? Again? What is the name of the Grinch's dog?
Be the ninth person today to text us at six
one seven three six, two thirteen eighty five with the
correct answer, and you win a financial Machine showed t
shirt once again. Be the ninth correct response to text
us at six one seven three six two thirteen eighty
(13:17):
five to get that financial ex Shane showed t shirt.
See complete contest rules at Financialoxchanine show dot com.
Speaker 3 (13:24):
Mike.
Speaker 2 (13:24):
According to a survey by the International Council of Shopping Centers,
so full disclosure, this is a bunch of malls conducting
the survey, and you know a.
Speaker 3 (13:34):
Bit of a conflict of interest, perhaps a.
Speaker 2 (13:36):
Little bit, but according to this survey that they conducted, UH,
they found that gen Z plans to shop more in
stores than online this holiday season, with sixty three percent
of gen Z responded saying they planned to make holiday
purchases physical stores. Only fifty percent said they would make
purchases on retailers, websites and apps. That is lower than
any other generation besides baby boomers. And so this survey
(14:00):
at least is saying, hey, gen Z is trying to
do more stuff in person as far as shopping goes,
I'm curious whether or not we think that's.
Speaker 3 (14:13):
Real or not. Yeah, I have a tough time buying it.
Speaker 4 (14:17):
I do buy that gen Z kids, after like three
years of COVID restrictions, are probably itching to get out
and hopefully socialize with other gen z ers. And the
shopping mall was a key fixture in my youth, you know,
way to socialize with others and and get away from
(14:38):
parents for a little bit. Sixty three percent seems a
lot to me. Sixty three percent just die. I don't
know if I if I buy.
Speaker 2 (14:48):
It seems like a lot. The other thing, here's what
I will say. There was a study that was done.
I don't know who did it. It was a couple months
ago about uh gen Z and their technology happens, And
it was like something close to like one hundred percent
of them said they were like online on their phones
like for the vast majority of their waking hours.
Speaker 3 (15:10):
Yep.
Speaker 2 (15:12):
They also as part of this where like, hey, do
you want to like not use your phone as much,
to not be as connected through social media, and a
very high percentage of them where like, yes, I hate
what I'm doing, but I keep doing it.
Speaker 3 (15:27):
So they did a response yes, yeah.
Speaker 4 (15:29):
So maybe that's what this result is showing, is that
gen Z is displaying a desire to disconnect from their
phones and the Internet a little bit more. But it
doesn't seem to be successful when you look at the numbers.
Speaker 2 (15:43):
No, and and look, there's a reason why if you
look at where all of the advertising and marketing dollars
are going, like they're going to online plant, like they're
going to TikTok, They're going to you know, Instagram and
stuff like that where you can buy stuff, you know,
with the click of a button online there.
Speaker 3 (15:58):
It's because it makes it easy.
Speaker 2 (16:00):
So I I I'm sure that there are I'm not
trying to poo poo this entirely, but I'm more saying, hey,
you have you know a survey that's being conducted by
malls where we've been talking about the demise of malls
for a long time, and a lot of it has
come to fruition. Unfortunately for them, it's not a disinterested
(16:22):
third party that is surveying this, and I don't have
access to the language to see how they worded it
in a way that might have, you know, ended up
making this seem better than they wanted in this case, right,
better than reality, I guess.
Speaker 4 (16:35):
Yeah, you know, there's plenty of data that gets collected
on this. Co Star is one of them that looks
at the total retail square footage per capita, and.
Speaker 3 (16:48):
I take this as a good sign.
Speaker 4 (16:49):
And it has been on a steady decline since nine,
where we had fifty six and a half square feet
of retail space per capita in the United States. As
of twenty twenty three, that was down to fifty four
point three. It's not much of a decline, but we'll
be able to check that. Right If gen Z is saying, hey,
I'm gonna do a lot more shopping in stores, then
guess what that decline is going to stop.
Speaker 3 (17:08):
We're going to see it. I don't think it's going
to Yeah, I tend to agree.
Speaker 2 (17:13):
It's just companies are really good at getting people to
do stuff on their phone by minimizing barriers to whatever
action they want you to undertake.
Speaker 3 (17:23):
Piece here today in barons.
Speaker 2 (17:25):
Home prices aren't the only thing stopping millennials from buying
real estate? What's really worrying them? What what's worrying millennials
about buying real estate?
Speaker 3 (17:33):
Michael?
Speaker 4 (17:33):
Well, apparently the generation when Pold sees home ownership as
a speculative asset with wild price swings, which is just
so far away from almost every American's actual reality, right,
I mean, you know other than eight Tell me what
period of time has been defined by massive price swings
(17:54):
and real estate?
Speaker 3 (17:56):
Two?
Speaker 4 (17:58):
Well, but home ownership, And yeah, I guess just dramatically
to the upside in that case. But there's been very
few instances I can look at through the history of
American home ownership to say, oh, yeah, beware because this
is a really wild and volatile asset class.
Speaker 2 (18:13):
No, and especially when we talk about like the lack
of construction that's going on on the single family home thing. Again,
this is not to say that home prices can never
go down. That's not what I'm saying. But it's much more. Hey,
without the kind of leverage that you saw in the
run up to the financial crisis, it's kind of hard
to see like the massive shift that you did, you
(18:35):
know then in prices nationally in the time span that
you did. Would I be surprised if the next decade
overall home price growth is much more moderate than the
last four or five years. No, Yeah, But there's a
difference in saying that from Hey, this is, you know,
a hugely volatile asset class. And the other part that
I always come back to is, look, ultimately, when you're
(18:57):
talking about your primary residence, I know oftentimes like we
tend to view it as an investment, and maybe that's
like a secondary function, but ultimately the goal is for
it to provide shelter for you. And so unless you're
planning on moving, you guys sit there and say, okay,
like do you check the price your house on Zillo
(19:19):
every day?
Speaker 3 (19:19):
Well, no, I'm not worried about selling. Yeah.
Speaker 4 (19:22):
Home ownership of the United States is massively subsidized by
the federal government. That too, and if you're not doing it,
you're saying no to a massive subsidy.
Speaker 2 (19:30):
Take a quick break here, we get the trivia answer
coming up after this, and we'll also talk about how
much retirees should plan to spend in a normal year.
Speaker 6 (19:40):
Bringing the latest financial news straight to your radio every day.
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Speaker 5 (20:05):
Sure of your question today was what's the name of
the grinches dog?
Speaker 3 (20:09):
I'll be Max.
Speaker 5 (20:10):
Of course, Ron from Holyoak, Mass is our winner today,
taking home a Financial Exchange Show T shirt. Congrats to
Ron today. We play trivia every day here on the
Financial Exchange. C complete contest rules at Financial Exchange Show
dot com.
Speaker 2 (20:28):
Mike, we got a PC here in Barons. It's got
the title new retire research plan to spend less than
four percent a year from their portfolio. The market rally
is to blame? How's the market rally to blame for this?
And is it true?
Speaker 4 (20:43):
I don't know that the market rally specifically is what's
to blame, but I think they are making a point
that we have made ourselves, Chuck, which is equity levels
and valuations are at such a high that realistically you
might want to consider being pessimistic about to returns for
the next twenty five years compared to where they've been
for the last twenty five years or ten years, or
(21:06):
whatever time period you want to take a look at.
I think twenty five years, quite honestly, is pretty difficult
to put any sort of certainty around, So I think
ten is a little bit easier. But nonetheless, if you're
a retiree today, your portfolio should be, you know, a
fair bit larger than just a few years ago based
on how markets have returned. And I do think it
is incredibly reasonable to sit here today and say I'm
(21:28):
going to use a lower assumed growth rate for the
growth portion of my portfolio than I was using five
just five years ago.
Speaker 2 (21:38):
So Morning Star says, okay, like you spend three point
seven percent, Mike. In terms of how someone should evaluate
how much they should be spending out of their portfolio
on a percentage basis, what are some of the different
factors that play into that, and how often should someone
be looking to make, you know, that kind of reassessment.
Speaker 4 (21:58):
Yeah, there's a ton of them, And I don't think
that this is a great rule of thumb, but it's
it's the best starting point I think you can have
if you're not going to do any of the actual legwork.
Is to say, hey, if I'm focusing on retiring in
the next few years, when I factor in all my
other stuff like social Security, pensions, work income, that I'm
(22:19):
going to have in retirement, can I make do on
four percent or less of my portfolio? That is at
least a good starting point rule of thumb for how
you should look at all these things. Now, if during
the first five years of your retirement you need to
pull six or seven percent out because you're not filing
(22:39):
for Social Security yet and there's some big expenses that
you're incurring, that might just be totally fine, so long
as those things are going to kick in later and
then you are going to lower your expenses because you're
anticipating this, that or the other. But this can be
a usable and useful starting point rule of thumb for folks.
(23:00):
But the fact of the matter, as you know, Chuck,
it just doesn't It doesn't end there. You can't just
put this up in the air and say, well, yeah,
I'm good at under four percent and I should be fine.
There's so many other considerations to take into place here,
and reality is nobody's lives just proceed like this, where
oh yeah, I can just take three and a half
percent with no surprises whatsoever in retirement and I'll be
(23:22):
just fine. Sure your roof blows off, you have a
septic issue, you face long term care concerns that are
very costly, all of those things can change it. But
I think the key point here, Chuck, for me at least,
is investors have been given a tremendous stock market over
the last few years, and if they're facing down retirement,
(23:43):
it hopefully has positioned them a little bit better than
they were a few years ago. If they've had a
four oh one K or another bucket of savings that
has been invested somewhat in US equities, you're better off
than just a few years ago. The time to evaluate
all of that and figure out what it actually means
for your plan, and figure out if I am too
aggressive for my spending strategy in terms of investments and
(24:05):
too conservative, if inflation or market risk is my bigger
risk heading into retirement. The time was yesterday, So you know,
it's really important to evaluate all this and understand that
expectations have changed. Expectations for what equities will do in
the future have changed by almost every expert out there,
(24:25):
and so if you're not factoring that in right, I
mean we talk about it a life Goldman's expecting only
three percent a year for the next decade from stocks.
Expectations need to change for what your portfolio is going
to do in the future, and if you're not factoring
that into your personal retirement plan.
Speaker 3 (24:41):
You should.
Speaker 4 (24:42):
If all this is great too, or if you could
use a refresh or just a check in on where
your strategy is and where your plans for the future lie,
call the Armstrong Advisory Group at eight hundred three nine
three four zero zero one. We have a team of
financial advisors that work on this with their clients all day,
every day, and they'd be happy to sit down you too.
That number for the Armstrong Advisory Group again is eight
(25:04):
hundred three nine three four zero zero one.
Speaker 1 (25:07):
The proceeding was paid for by Armstrong Advisory Group, a
registered investment advisor. Nothing in the ad or in any
Armstrong guide a specific financial, legal or tax advice. Consult
your own financial tax into state planning advisors before making
any investment decisions. Armstrong may contact you to offer investment
advisory services.
Speaker 3 (25:23):
Mike.
Speaker 2 (25:23):
We've got a piece here from this from Barons as well,
and it's talking about the incoming administration looking to cut
federal spending and specifically the Department of Government Efficiency, which
is not actually part of the government and as such
has no actual power to well really direct you know,
(25:46):
it affect federal spending directly in any way, shape or form,
but it's you know, this piece is asking, hey, what
does the Department of Government Efficiency mean for Social Security?
Speaker 3 (25:57):
And my answer is nothing. Is that wrong? It seems
about right to me. Certainly.
Speaker 4 (26:06):
Donald Trump has made very clear campaign pledges to not
touch your Social Security benefits. Is there a bill that
could come forward that would cut Social Security staff, the
people that work in the Social Security office or in
the back office responding to phone calls, which could lead
to longer wait times and more confusion around Social Security.
Speaker 3 (26:26):
I guess maybe.
Speaker 4 (26:28):
I mean I would put that as a firm maybe,
but I don't think it's going to impact your income benefits.
I'd also say, like anyone going and running for office,
should be careful about making cuts to some of the
most popular government programs in existence, Medicare and Social Security
ranking among them.
Speaker 2 (26:47):
Well, I think the other piece is, Mike, do you
know what when people work at Social Security?
Speaker 3 (26:51):
I was looking at the numbers on this now.
Speaker 2 (26:54):
This is according to the Social Security Administration in their payroll. Actually,
they publish it every year because every government agency has to.
There's sixty thousand people working for the Social Security Administration
right now. Do you know how many there were thirty
years ago in nineteen ninety five? I do not sixty
two thousand, So they've gotten prett efficient over there.
Speaker 3 (27:13):
Huh. Well, here's the next place I'm going.
Speaker 2 (27:15):
Do you know how many people were on Social Security
benefits in nineteen ninety five.
Speaker 3 (27:20):
Fewer than today?
Speaker 2 (27:21):
Forty three million. Today it's sixty seven million. So you
have fifty percent more people on Social Security today, and
you have about four percent fewer workers at Social Security.
So they've they've kind of figured out how to do
the work. Now, let's say that you said, look, there's
still too many people there. I want to get rid
of half of them. Big number, and again probably unrealistic
(27:45):
because the work needs to get done. But you say, okay,
I want to get rid of half of them, Mike,
do you know what the average salary is for someone
who works at the Social Security Administration? Let's go seventy
two thousand, ninety one thousand, So higher than you thought.
Speaker 3 (27:58):
Yea.
Speaker 2 (27:59):
Even if you got rid of all those people, not
all of them, but half of them, you end up
saving about two point seven billion dollars for the year. Mike,
do you know what percentage of the US budget two
point seven billion dollars is?
Speaker 3 (28:12):
Just do the math for me. Point zero zero five. Okay,
here's the deal.
Speaker 2 (28:19):
Unless you actually want to cut Social Security benefits, Medicare benefits,
and the DoD, it's impossible to make a meaningful dent
in the federal budget. You can do stuff around the edges,
like it's not to say that like you can't do
some things here and there, but those are the places,
along with the interest on the national debt, those are
(28:42):
the places that you have the bulk of the actual spending.
Speaker 4 (28:45):
Yeah, And that's been my point all along is it's
not that this type of work is unimportant. I do
think that you should look at areas to make the
government more efficient and cut but approaching it in the
way that they have and making promises like we're going
to cut spending is purely disingenuous, that's all it is.
(29:06):
It's disingenuous unless you're gonna get serious about cutting benefits
to Social Security and Medicare and Medicaid.
Speaker 3 (29:12):
Well or DoD.
Speaker 2 (29:13):
And by the way, there is a National Defense Authorization
Act built that just passed the House yesterday nine hundred
billion dollars for next year. So we're not serious about
cutting DoD and I'm not suggesting like we should make
some massive cut there. But ultimately it's something where this
is where the money actually goes, the stuff that like
(29:35):
we you know that everyone talks about it's it's pennies
on the dollar and and so if you really want
to make the big impact on things. Nine of federal
spending is not related to employment at federal agencies. It's
(29:56):
related to money that we've spent in the past, or
money that we're spending on people now, or related to defense.
I don't really count the US Army as like a
federal agency. It's right, and I've said this before. Also, Look,
we can talk about like procurement issues in the military
until the cows come home.
Speaker 3 (30:14):
I'm all ears for that.
Speaker 2 (30:15):
I'm like, why we might overspend when we're you know,
developing new weapons systems and this and that. But ultimately,
you do not want the US military to be efficient.
Speaker 3 (30:26):
It's not the main goal.
Speaker 2 (30:29):
The main goal of the US military is to be effective,
and those are two different things. You do not want
to compromise effectiveness in the name of efficiency, because you're
not running a business. With the US military, it is
serving a different role, and so I think we have
to be careful with that. Now, again, those listening you
might be like, well, Chuck's just you know, enabling the
military industrial complex, and maybe I am very possible.
Speaker 4 (30:51):
Yeah, but Chuck's got Raytheon tattooed on his forehead.
Speaker 3 (30:54):
Actually it's I had that removed. Okay, at great cost.
Speaker 2 (31:00):
But my point is with the military, you have different goals,
and with some of these other programs even you have
different goals than simply maximizing efficiency. You want to maximize
the effectiveness of them. Or look, if you don't, then
you say, okay, like get rid of the program. Fine,
that's a perfectly viable view to have. But I'm not
(31:20):
saying like I would agree with it in every case.
But let's call a spade a spade. There's a difference
between efficiency and effectiveness, and for certain programs like the
military and even like Social Security, you want them to
be effective, not necessarily efficient.
Speaker 3 (31:37):
We can agree there.
Speaker 2 (31:38):
It's kind of that's all I have. That's all I
have to say about that. Take a quick break. When
we come back, Let's do a little bit of stack roulette.
Speaker 1 (31:47):
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Speaker 3 (32:06):
This is your home for.
Speaker 1 (32:07):
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Speaker 3 (32:57):
Mike, what do you got for me? For stack Roulette?
Speaker 4 (33:00):
The Wall Street Journal with a piece on what must
be the least pitiable group that you can find? Or
up there maybe the people who refuse to go back
to the office and then subsequently lost their jobs. We
have covered at length the stories of companies calling their
employees back to the office threatening layoffs or not playoffs
(33:21):
firings if they do not return and meet those in
office requirements. And while it's still pretty rare for it
to happen, there have been several in The Wall Street
Journal spoke to a number of them, and like I said,
I just I can have zero pity for any of
the people that you know, thought they wouldn't get their
(33:42):
job taken away because they disobeyed a direct order from
their bosses, and then got a pity for them. I don't, well,
I don't.
Speaker 2 (33:54):
It's not for the disobeying the direct order. Yeah, it's more.
Speaker 3 (33:58):
Hey, they were hired under the guys that this was
a full time remote position, right, and then the company
decided to change that on one hundred percent.
Speaker 4 (34:06):
And if that's not fair and and you feel not
great about that, I think you have a reasonable grievance.
But once the company says we changed our mind and
you're back in the office and you say that's not fair,
I'm not coming back, then you should expect to be fired.
Speaker 3 (34:21):
Right.
Speaker 2 (34:21):
And Look, ultimately, anyone who works anywhere is at the
mercy of their employer as far as the terms of
their employment. And I know that like return to office
is the one that we're seeing, you know now in
terms of where there's you know, what kind of a
crux there, but or a difference of opinion there you
go back fifteen years, you know, it's you know, two
(34:44):
thousand and nine, it's you know, eight months after the
S and P five hundred bottoms, and the arguments then
would be, look, you know, how come you're only getting
me for you know, twenty five hours this week? Why
can't I do forty? And it was Hey, like I
thought I was going to be able to get forty hours.
Well they're just isn't enough demand? Like that was the
issue that employees and employers were fighting over fifteen years
(35:05):
ago in a very different economy, and so that they're
always going to be these these things that come up
the what I do find it And look, there there
are different reasons why companies are doing this. There are
some where they're saying, look, we want to go through
a round of layoffs, but we don't want.
Speaker 3 (35:24):
To call it a layoff boom.
Speaker 2 (35:26):
We're going to force return to office and if you
don't comply, great, that's how we're getting rid of head count.
Speaker 4 (35:30):
And guess what I get to fire you for cause
without paying severance.
Speaker 2 (35:32):
Correct, I'm not saying this is good. I'm saying like,
this is, this is bad.
Speaker 3 (35:37):
This is probably can't even collect for unemployment then I'm
sure you can. Yeah you probably can.
Speaker 2 (35:41):
I'm sure you can, and I would hope you can
quite honestly. Yeah, So like that, there's situations like that,
there's others, and this is what I suspect of some
of Amazon's return to work plans. Hey Amazon, remember what
remember all of the ink that was spilled over Amazon
HQ two. Yes, Well, look they got deals with was
(36:02):
it DC? And uh did they end up pulling out
of doing anything in New York?
Speaker 3 (36:06):
No?
Speaker 4 (36:06):
I think I think they have that dual to But yeah,
to your point, there are superployments tax cuts that they
receive contingent upon having people actually working there.
Speaker 2 (36:16):
Right, So with Amazon, it might be yeah, if we
don't get you back to office, we're not getting the
you know, millions or billions of dollars that we were
promised by these metro areas in order to move our
headquarters there. So there's all different reasons why companies do this.
Some of them are just you know, managers who don't
like remote employees. Like, I'm not saying this is wrong
(36:36):
or right, I'm just saying these are the possibilities out there.
But ultimately remote work, I think that the problem is
it was something that people assumed was a baseline condition
of their employment and employers are viewing it much more
as a bargaining chip for various different reasons.
Speaker 4 (36:54):
Yeah, and so like, do I totally understand the person
who bought a home in Washington State while working for
a company based out of San Francisco, and then decided, Hey,
I'm not gonna sell this house because I've got a
three percent mortgage rate, so I'm not coming back, and
then got fired. I can understand it, but now that
person's been unemployed for something like nine months and might
(37:16):
be relocating anyway now out of force because he can't
find the job in his field that pays anything like
what he earned previously.
Speaker 2 (37:25):
I want to talk about this piece from the New
York Times. CEOs are doing a bunch of mind altering
drugs trying to make themselves happier.
Speaker 3 (37:32):
Is this good or bad? I don't know.
Speaker 4 (37:39):
I don't do mind altering drugs, so I don't really
have much of an opinion on it. I also don't
really care what somebody does in the privacy of their
own home.
Speaker 2 (37:46):
It's kind of interesting that this is making like a
full story in the New York Times, because I don't know,
hasn't like Steve Jobs, who's kind of lionized as like
the golden child of CEOs all time? Yeah, didn't he
spend like most of the eighties wandering not most, but
like a couple of years wandering around doing LSD. And
(38:07):
he's written and talked about it like how it transformed
his life.
Speaker 4 (38:10):
Maybe this is more of an applause for that type
of behavior rather than a discrediting I don't know.
Speaker 3 (38:16):
Maybe I don't know.
Speaker 2 (38:17):
I just find it interesting that, like you're making a
whole story about it now when it's not really a
new news.
Speaker 3 (38:21):
I don't think. Let's take a quick break here for
the rest of the day.
Speaker 2 (38:24):
We'll see it tomorrow to wrap up the week on
the Financial Exchange,
The Financial Exchange is produced by Money Matters Radio and
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the hosts. Do not reflect the opinions of Armstrong Advisory
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(00:20):
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(01:04):
Veterans Development Corporation. This is the financial exchange with Chuck
Zada and Mike Armstrong, Chuck.
Speaker 2 (01:13):
Mike and Tucker kicking off the second hour here, and
we got markets down.
Speaker 3 (01:17):
We Pikenyo today only a little bit.
Speaker 2 (01:19):
The Dow is off seventeen points right now, the SMP's
down five, the Nasdaq is down eighteen, so very very
modest downward move. At one point earlier today, actually I
think the S and P five hundred was down. It's
something the ballpark twenty two, maybe twenty three points, but
has subsequently rallied back closer to flat on the day.
(01:41):
Tenure US Treasury is selling off just a touch, down
one point eight basis points to four point two eight
nine percent.
Speaker 3 (01:48):
Right now.
Speaker 2 (01:49):
We've got oil West Text Intermediate DIANT down ninety six
cents a barrel to sixty nine to thirty three, and
the TRIPAA national average for gas prices moving back a
little bit still two days in a row now back
up another six tenths of a cent to three zero
two and six tens. So we still can't get below
three dollars nationally according to Triple A. And we've got
(02:12):
gold today down fifty four dollars and ninety cents per
ounce to twenty seven oh one and eighty cents. Mike,
anything catching your eye before we get into some labor
market discussion.
Speaker 3 (02:25):
No, let's talk jobs all right. Piece here from Pew Research.
Speaker 2 (02:29):
It's actually a study that they did, uh, And the
headline in the study is most Americans feel good about
their job security, but not about their pay. And so
when you look at overall job satisfaction, first thing that
they study, they say, Hey, they basically ask you, are
you satisfied with your job?
Speaker 3 (02:47):
Overall?
Speaker 2 (02:48):
Fifty percent of employees say satisfied to extremely or very satisfied,
thirty eight percent say uh, somewhat satisfied, and percent overall
say not too satisfied or not at all satisfied. So
in general I read that and again you have to
kind of, you know, figure out what it means when
(03:11):
someone says they're like somewhat satisfied but overall I read
that as saying, hey, most people, even though they might have,
you know, some problems with their job.
Speaker 3 (03:20):
They're generally okay with it.
Speaker 2 (03:23):
And the fact that fifty percent fall into extremely or
very satisfied, I find that to be pretty darn good yep.
Speaker 4 (03:30):
Yeah, that's a pretty big chunk. I do find it
interesting but unsurprising that such a large share of workers
are dissatisfied with pay, finding it's not keeping pace with
paying their bills, especially on that lower income side. I
feel as though that's been a pretty consistent and persistent
feature of lower income Americans, in spite of the fact
(03:53):
that pretty much all studies showed that lower income Americans
are the key demographic whose pay actually exceeded the pace
of inflation the last few years.
Speaker 3 (04:01):
It might just speak to how badly they were paid
before that.
Speaker 4 (04:03):
Right, Yeah, I mean I don't think that I can
two things at once can be true. One, your pay
may have exceeded the pace of inflation. Two that may
still leave you in a place where you can't pay
most of your bills demographically.
Speaker 2 (04:15):
Just some interesting things from an age perspective, And I'm
just getting back to the overall satisfaction before we get
more into the pay side of things. The age at
which people are most likely to report being satisfied with
their job sixty five plus and sixty seven percent of
the sixty five plus respondence to this survey said they
were extremely to very satisfied with their job, and it
(04:37):
basically then decreases across every major demographic. Fifty six percent
of people age fifty to sixty four said they were
forty eight percent of people aged thirty to thirty nine,
and only forty three percent of age eighteen to twenty
nine people said they were extremely or very satisfied.
Speaker 3 (04:52):
With their job.
Speaker 2 (04:53):
What do you suppose that is, Well, when you start out,
you do all the stuff no one else wants to do,
and they pay you crap.
Speaker 3 (05:00):
Yeah, that seems reasonable.
Speaker 2 (05:02):
That's kind of what it is, you know, and we
all go through it like we all do. Like it's
everyone has gone through that. I think that's the big
thing about is there anything else?
Speaker 4 (05:12):
I guess if I'm sixty five plus, I'm more likely
to be there because I want to be, not because
I have to be.
Speaker 3 (05:18):
It's true even though.
Speaker 2 (05:19):
In you know, you had the twenty tens where that
wasn't necessarily the case, but so many pre retirees had
their retirements ruined by the financial crisis. Yeah, and so
I wish that I had access because they do this
survey every year. I just haven't looked for like the
twenty twelve version of it. Maybe I can see if
I can dig it up somewhere. But yeah, I'd be
curious to see how that might have evolved over the
(05:41):
last twelve to fifteen years, because you know, in twenty
twelve or twenty thirteen, there were a lot of sixty
five plus people working who are like I have to
I thought I was gonna be able to retire, but
I can't. Yeah, So I think that's interesting. The reason
why people said that they're not satisfied with their pay,
as you noted, Mike, the biggest one pay hasn't kept
(06:02):
up with increase in the cost of living. Eighty percent
of people who were dissatisfied with their pay said that
seventy one percent said that the pay is.
Speaker 3 (06:10):
Too low for the quality of work that they do.
Speaker 2 (06:14):
That's interesting, and it dovetails into the next response, which
seventy percent of respond said the pay is too low
for the amount of work that they do. Now, Mike,
you and I do not know one hundred and sixty
million working Americans.
Speaker 3 (06:30):
I do not personally know.
Speaker 2 (06:31):
We know of them, but we don't actually know them personally.
I think this is really interesting in terms of the
quality side. To me is interesting. We hear all the
time hey, I'm I'm getting paid this in my bosses,
you know, sending me emails at nine o'clock on a Friday,
and this and that.
Speaker 3 (06:50):
We hear that gripe quite often.
Speaker 4 (06:53):
The quiet quitting thing that took place over the last
few years, a lot of griping about, you know, I
do good work, I'm not paid enough.
Speaker 3 (07:01):
I'm being asked to do like more and more and more.
Speaker 2 (07:04):
I don't know that we hear that many people say, Hey,
I'm the best at what I do and I'm not
getting paid enough for it. As a result, like that,
we don't hear that as much. And I wonder why
that's the case. Any thoughts, No, I don't. You're right,
this is unique. This is somewhat new of a concern
(07:27):
or a complaint.
Speaker 3 (07:28):
The next one.
Speaker 4 (07:28):
You know, the amount of work that they do compared
to the pay very common gripe.
Speaker 3 (07:32):
The quality of the work that speaks to some degree.
Speaker 4 (07:35):
Of pride that I don't feel as though I have
seen in many other studies.
Speaker 2 (07:40):
Fair point, I get to the same place where I
do think it's somewhat ego related. And again it's not
to say that like all these people are doing bad work,
but it's more. It's the same reason why even during
the Great Financial Crisis.
Speaker 3 (07:57):
One of the things that has stuck with.
Speaker 2 (07:58):
Me when we look at any kind of a opinion
polling on the economy, even during the Great Financial Crisis,
when people were saying, yeah, they're like the the economy
nationally is horrible, they'd be pulled, Hey, how's your personal
financial financial situation?
Speaker 3 (08:12):
Oh, it's okay.
Speaker 2 (08:14):
Even with unemployment heading to you know, close to ten percent,
you'd still get that response. And I think it's just
we have as humans this this ego that tries to
protect us. Sometimes it does sometimes it gets us into
more trouble than we realize. But I kind of look
at that when when they're asking people, hey, like, you know,
(08:36):
what's your main dissatisfaction with your pay? For seventy one
percent of respondents to say I do really good work
and I'm not getting paid enough for it. Just statistically,
it strikes me that improbable, it's probably improbable that that
large of that subset is doing the quality of work
that they think they are.
Speaker 4 (08:57):
Can I take something out of the study that I
thought was positive, I'm not sure that you'll feel the
same way. Yeah, I took it as a positive indication
that currently half of workers they surveyed think of their
current job as a career, and that's an important distinction.
You know, another fifteen percent so they think it's just
a stepping stone to get to a career. A third
of them just said it's just a job to get by,
(09:18):
and that is a large percentage. But for a full
half of Americans in the labor force to say, no,
I've got a job, I really do think of it
as a long term career where I can make a living. Again,
they didn't say that in so many words, but that's
how I read that. And you know, sixty five percent,
two thirds of them to say I'm either in a
career path or I'm on my way to one.
Speaker 3 (09:39):
It's optimistic. I think.
Speaker 4 (09:40):
I look at that as an optimistic take from the
American workforce.
Speaker 2 (09:43):
Well, it's not only optimistic. I think it's realistic because
quite honestly, there are a lot of jobs that need
to get done in America that aren't necessarily career path jobs.
Speaker 3 (09:54):
Like it's just this is what it is. And I
think if if everyone was.
Speaker 2 (10:00):
Saying, yes, this is a job that leads to a career,
I think you're setting people up for a lot of
disappointment then, because there are jobs that just need to
get done and that's like what it is.
Speaker 3 (10:12):
And so I think that this is again I agree
with you.
Speaker 2 (10:16):
I think it's relatively optimistic, and I think it's relatively realistic.
You know, they note that, hey, younger workers, those age
eighteen to twenty nine, are less likely to see their
job as a career, quite honestly. And again, as I
get older, you start to realize, hey, maybe I should
(10:37):
listen to the people that have gone before me, because
they might know a thing or two, Like, you know,
it's that they've been through this and they understand.
Speaker 3 (10:45):
The single biggest thing that I think.
Speaker 2 (10:47):
Reshapes your view of whether your job is a job
or whether it's a career is when you start having
a family, because it goes from ah, whatever, like I
could take the you know, the month off and go
do this too. Nope, gotta figure out how to feed
the mouths. Yeah, you know, I think that that's I
(11:08):
think there's something too that Whereas when you're twenty two
and twenty three, no family, no kids, you're kind of like, well,
even if I left here, I could always get another job.
Speaker 3 (11:19):
Like you're not viewing it the same way.
Speaker 4 (11:21):
That's a huge potential study and changing feelings towards work.
Given the proportion of Americans not having kids.
Speaker 2 (11:28):
I would love to see someone study that, right, I
would love to.
Speaker 4 (11:33):
You have to imagine that someone's attitude towards work and
career and job security does change to some degree when
you have the responsibility of raising children. And if few
Americans are doing so, what are their attitudes towards work? Fascinating?
Speaker 3 (11:47):
Just take a quick break here.
Speaker 2 (11:48):
When we come back, we got trivia, and then we'll
stick with a little bit of changing habits. We'll talk
about how gen Z is shopping for the holidays.
Speaker 1 (11:57):
Miss any of the show. The Financial Extreme Show podcast
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(12:18):
YouTube dot com and search for the Financial Exchange. This
is your home for breaking business and financial news. This
is the Financial Exchange Radio Network.
Speaker 5 (12:32):
Another day of Christmas trivia here on the show, taking
you up to the holiday. The highest grossing Christmas movie
in excuse me, the highest grossing Christmas movie is twenty
eighteen's The Grinch. The Grinch starred Benedict cumber Patch is
the voice of the Grinch. The previous two actors to
portray the Grinch were Boris carol Off and Jim Carrey.
(12:55):
So trivia question today, what is the name of the
Grinch's dog? Again? What is the name of the Grinch's dog?
Be the ninth person today to text us at six
one seven three six, two thirteen eighty five with the
correct answer, and you win a financial Machine showed t
shirt once again. Be the ninth correct response to text
us at six one seven three six two thirteen eighty
(13:17):
five to get that financial ex Shane showed t shirt.
See complete contest rules at Financialoxchanine show dot com.
Speaker 3 (13:24):
Mike.
Speaker 2 (13:24):
According to a survey by the International Council of Shopping Centers,
so full disclosure, this is a bunch of malls conducting
the survey, and you know a.
Speaker 3 (13:34):
Bit of a conflict of interest, perhaps a.
Speaker 2 (13:36):
Little bit, but according to this survey that they conducted, UH,
they found that gen Z plans to shop more in
stores than online this holiday season, with sixty three percent
of gen Z responded saying they planned to make holiday
purchases physical stores. Only fifty percent said they would make
purchases on retailers, websites and apps. That is lower than
any other generation besides baby boomers. And so this survey
(14:00):
at least is saying, hey, gen Z is trying to
do more stuff in person as far as shopping goes,
I'm curious whether or not we think that's.
Speaker 3 (14:13):
Real or not. Yeah, I have a tough time buying it.
Speaker 4 (14:17):
I do buy that gen Z kids, after like three
years of COVID restrictions, are probably itching to get out
and hopefully socialize with other gen z ers. And the
shopping mall was a key fixture in my youth, you know,
way to socialize with others and and get away from
(14:38):
parents for a little bit. Sixty three percent seems a
lot to me. Sixty three percent just die. I don't
know if I if I buy.
Speaker 2 (14:48):
It seems like a lot. The other thing, here's what
I will say. There was a study that was done.
I don't know who did it. It was a couple months
ago about uh gen Z and their technology happens, And
it was like something close to like one hundred percent
of them said they were like online on their phones
like for the vast majority of their waking hours.
Speaker 3 (15:10):
Yep.
Speaker 2 (15:12):
They also as part of this where like, hey, do
you want to like not use your phone as much,
to not be as connected through social media, and a
very high percentage of them where like, yes, I hate
what I'm doing, but I keep doing it.
Speaker 3 (15:27):
So they did a response yes, yeah.
Speaker 4 (15:29):
So maybe that's what this result is showing, is that
gen Z is displaying a desire to disconnect from their
phones and the Internet a little bit more. But it
doesn't seem to be successful when you look at the numbers.
Speaker 2 (15:43):
No, and and look, there's a reason why if you
look at where all of the advertising and marketing dollars
are going, like they're going to online plant, like they're
going to TikTok, They're going to you know, Instagram and
stuff like that where you can buy stuff, you know,
with the click of a button online there.
Speaker 3 (15:58):
It's because it makes it easy.
Speaker 2 (16:00):
So I I I'm sure that there are I'm not
trying to poo poo this entirely, but I'm more saying, hey,
you have you know a survey that's being conducted by
malls where we've been talking about the demise of malls
for a long time, and a lot of it has
come to fruition. Unfortunately for them, it's not a disinterested
(16:22):
third party that is surveying this, and I don't have
access to the language to see how they worded it
in a way that might have, you know, ended up
making this seem better than they wanted in this case, right,
better than reality, I guess.
Speaker 4 (16:35):
Yeah, you know, there's plenty of data that gets collected
on this. Co Star is one of them that looks
at the total retail square footage per capita, and.
Speaker 3 (16:48):
I take this as a good sign.
Speaker 4 (16:49):
And it has been on a steady decline since nine,
where we had fifty six and a half square feet
of retail space per capita in the United States. As
of twenty twenty three, that was down to fifty four
point three. It's not much of a decline, but we'll
be able to check that. Right If gen Z is saying, hey,
I'm gonna do a lot more shopping in stores, then
guess what that decline is going to stop.
Speaker 3 (17:08):
We're going to see it. I don't think it's going
to Yeah, I tend to agree.
Speaker 2 (17:13):
It's just companies are really good at getting people to
do stuff on their phone by minimizing barriers to whatever
action they want you to undertake.
Speaker 3 (17:23):
Piece here today in barons.
Speaker 2 (17:25):
Home prices aren't the only thing stopping millennials from buying
real estate? What's really worrying them? What what's worrying millennials
about buying real estate?
Speaker 3 (17:33):
Michael?
Speaker 4 (17:33):
Well, apparently the generation when Pold sees home ownership as
a speculative asset with wild price swings, which is just
so far away from almost every American's actual reality, right,
I mean, you know other than eight Tell me what
period of time has been defined by massive price swings
(17:54):
and real estate?
Speaker 3 (17:56):
Two?
Speaker 4 (17:58):
Well, but home ownership, And yeah, I guess just dramatically
to the upside in that case. But there's been very
few instances I can look at through the history of
American home ownership to say, oh, yeah, beware because this
is a really wild and volatile asset class.
Speaker 2 (18:13):
No, and especially when we talk about like the lack
of construction that's going on on the single family home thing. Again,
this is not to say that home prices can never
go down. That's not what I'm saying. But it's much more. Hey,
without the kind of leverage that you saw in the
run up to the financial crisis, it's kind of hard
to see like the massive shift that you did, you
(18:35):
know then in prices nationally in the time span that
you did. Would I be surprised if the next decade
overall home price growth is much more moderate than the
last four or five years. No, Yeah, But there's a
difference in saying that from Hey, this is, you know,
a hugely volatile asset class. And the other part that
I always come back to is, look, ultimately, when you're
(18:57):
talking about your primary residence, I know oftentimes like we
tend to view it as an investment, and maybe that's
like a secondary function, but ultimately the goal is for
it to provide shelter for you. And so unless you're
planning on moving, you guys sit there and say, okay,
like do you check the price your house on Zillo
(19:19):
every day?
Speaker 3 (19:19):
Well, no, I'm not worried about selling. Yeah.
Speaker 4 (19:22):
Home ownership of the United States is massively subsidized by
the federal government. That too, and if you're not doing it,
you're saying no to a massive subsidy.
Speaker 2 (19:30):
Take a quick break here, we get the trivia answer
coming up after this, and we'll also talk about how
much retirees should plan to spend in a normal year.
Speaker 6 (19:40):
Bringing the latest financial news straight to your radio every day.
It's the Financial Exchange on the Financial Exchange Radio Network.
Find daily interviews and full shows of the Financial Exchange
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and everything you might have missed. This is the Financial
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Speaker 5 (20:05):
Sure of your question today was what's the name of
the grinches dog?
Speaker 3 (20:09):
I'll be Max.
Speaker 5 (20:10):
Of course, Ron from Holyoak, Mass is our winner today,
taking home a Financial Exchange Show T shirt. Congrats to
Ron today. We play trivia every day here on the
Financial Exchange. C complete contest rules at Financial Exchange Show
dot com.
Speaker 2 (20:28):
Mike, we got a PC here in Barons. It's got
the title new retire research plan to spend less than
four percent a year from their portfolio. The market rally
is to blame? How's the market rally to blame for this?
And is it true?
Speaker 4 (20:43):
I don't know that the market rally specifically is what's
to blame, but I think they are making a point
that we have made ourselves, Chuck, which is equity levels
and valuations are at such a high that realistically you
might want to consider being pessimistic about to returns for
the next twenty five years compared to where they've been
for the last twenty five years or ten years, or
(21:06):
whatever time period you want to take a look at.
I think twenty five years, quite honestly, is pretty difficult
to put any sort of certainty around, So I think
ten is a little bit easier. But nonetheless, if you're
a retiree today, your portfolio should be, you know, a
fair bit larger than just a few years ago based
on how markets have returned. And I do think it
is incredibly reasonable to sit here today and say I'm
(21:28):
going to use a lower assumed growth rate for the
growth portion of my portfolio than I was using five
just five years ago.
Speaker 2 (21:38):
So Morning Star says, okay, like you spend three point
seven percent, Mike. In terms of how someone should evaluate
how much they should be spending out of their portfolio
on a percentage basis, what are some of the different
factors that play into that, and how often should someone
be looking to make, you know, that kind of reassessment.
Speaker 4 (21:58):
Yeah, there's a ton of them, And I don't think
that this is a great rule of thumb, but it's
it's the best starting point I think you can have
if you're not going to do any of the actual legwork.
Is to say, hey, if I'm focusing on retiring in
the next few years, when I factor in all my
other stuff like social Security, pensions, work income, that I'm
(22:19):
going to have in retirement, can I make do on
four percent or less of my portfolio? That is at
least a good starting point rule of thumb for how
you should look at all these things. Now, if during
the first five years of your retirement you need to
pull six or seven percent out because you're not filing
(22:39):
for Social Security yet and there's some big expenses that
you're incurring, that might just be totally fine, so long
as those things are going to kick in later and
then you are going to lower your expenses because you're
anticipating this, that or the other. But this can be
a usable and useful starting point rule of thumb for folks.
(23:00):
But the fact of the matter, as you know, Chuck,
it just doesn't It doesn't end there. You can't just
put this up in the air and say, well, yeah,
I'm good at under four percent and I should be fine.
There's so many other considerations to take into place here,
and reality is nobody's lives just proceed like this, where
oh yeah, I can just take three and a half
percent with no surprises whatsoever in retirement and I'll be
(23:22):
just fine. Sure your roof blows off, you have a
septic issue, you face long term care concerns that are
very costly, all of those things can change it. But
I think the key point here, Chuck, for me at least,
is investors have been given a tremendous stock market over
the last few years, and if they're facing down retirement,
(23:43):
it hopefully has positioned them a little bit better than
they were a few years ago. If they've had a
four oh one K or another bucket of savings that
has been invested somewhat in US equities, you're better off
than just a few years ago. The time to evaluate
all of that and figure out what it actually means
for your plan, and figure out if I am too
aggressive for my spending strategy in terms of investments and
(24:05):
too conservative, if inflation or market risk is my bigger
risk heading into retirement. The time was yesterday, So you know,
it's really important to evaluate all this and understand that
expectations have changed. Expectations for what equities will do in
the future have changed by almost every expert out there,
(24:25):
and so if you're not factoring that in right, I
mean we talk about it a life Goldman's expecting only
three percent a year for the next decade from stocks.
Expectations need to change for what your portfolio is going
to do in the future, and if you're not factoring
that into your personal retirement plan.
Speaker 3 (24:41):
You should.
Speaker 4 (24:42):
If all this is great too, or if you could
use a refresh or just a check in on where
your strategy is and where your plans for the future lie,
call the Armstrong Advisory Group at eight hundred three nine
three four zero zero one. We have a team of
financial advisors that work on this with their clients all day,
every day, and they'd be happy to sit down you too.
That number for the Armstrong Advisory Group again is eight
(25:04):
hundred three nine three four zero zero one.
Speaker 1 (25:07):
The proceeding was paid for by Armstrong Advisory Group, a
registered investment advisor. Nothing in the ad or in any
Armstrong guide a specific financial, legal or tax advice. Consult
your own financial tax into state planning advisors before making
any investment decisions. Armstrong may contact you to offer investment
advisory services.
Speaker 3 (25:23):
Mike.
Speaker 2 (25:23):
We've got a piece here from this from Barons as well,
and it's talking about the incoming administration looking to cut
federal spending and specifically the Department of Government Efficiency, which
is not actually part of the government and as such
has no actual power to well really direct you know,
(25:46):
it affect federal spending directly in any way, shape or form,
but it's you know, this piece is asking, hey, what
does the Department of Government Efficiency mean for Social Security?
Speaker 3 (25:57):
And my answer is nothing. Is that wrong? It seems
about right to me. Certainly.
Speaker 4 (26:06):
Donald Trump has made very clear campaign pledges to not
touch your Social Security benefits. Is there a bill that
could come forward that would cut Social Security staff, the
people that work in the Social Security office or in
the back office responding to phone calls, which could lead
to longer wait times and more confusion around Social Security.
Speaker 3 (26:26):
I guess maybe.
Speaker 4 (26:28):
I mean I would put that as a firm maybe,
but I don't think it's going to impact your income benefits.
I'd also say, like anyone going and running for office,
should be careful about making cuts to some of the
most popular government programs in existence, Medicare and Social Security
ranking among them.
Speaker 2 (26:47):
Well, I think the other piece is, Mike, do you
know what when people work at Social Security?
Speaker 3 (26:51):
I was looking at the numbers on this now.
Speaker 2 (26:54):
This is according to the Social Security Administration in their payroll. Actually,
they publish it every year because every government agency has to.
There's sixty thousand people working for the Social Security Administration
right now. Do you know how many there were thirty
years ago in nineteen ninety five? I do not sixty
two thousand, So they've gotten prett efficient over there.
Speaker 3 (27:13):
Huh. Well, here's the next place I'm going.
Speaker 2 (27:15):
Do you know how many people were on Social Security
benefits in nineteen ninety five.
Speaker 3 (27:20):
Fewer than today?
Speaker 2 (27:21):
Forty three million. Today it's sixty seven million. So you
have fifty percent more people on Social Security today, and
you have about four percent fewer workers at Social Security.
So they've they've kind of figured out how to do
the work. Now, let's say that you said, look, there's
still too many people there. I want to get rid
of half of them. Big number, and again probably unrealistic
(27:45):
because the work needs to get done. But you say, okay,
I want to get rid of half of them, Mike,
do you know what the average salary is for someone
who works at the Social Security Administration? Let's go seventy
two thousand, ninety one thousand, So higher than you thought.
Speaker 3 (27:58):
Yea.
Speaker 2 (27:59):
Even if you got rid of all those people, not
all of them, but half of them, you end up
saving about two point seven billion dollars for the year. Mike,
do you know what percentage of the US budget two
point seven billion dollars is?
Speaker 3 (28:12):
Just do the math for me. Point zero zero five. Okay,
here's the deal.
Speaker 2 (28:19):
Unless you actually want to cut Social Security benefits, Medicare benefits,
and the DoD, it's impossible to make a meaningful dent
in the federal budget. You can do stuff around the edges,
like it's not to say that like you can't do
some things here and there, but those are the places,
along with the interest on the national debt, those are
(28:42):
the places that you have the bulk of the actual spending.
Speaker 4 (28:45):
Yeah, And that's been my point all along is it's
not that this type of work is unimportant. I do
think that you should look at areas to make the
government more efficient and cut but approaching it in the
way that they have and making promises like we're going
to cut spending is purely disingenuous, that's all it is.
(29:06):
It's disingenuous unless you're gonna get serious about cutting benefits
to Social Security and Medicare and Medicaid.
Speaker 3 (29:12):
Well or DoD.
Speaker 2 (29:13):
And by the way, there is a National Defense Authorization
Act built that just passed the House yesterday nine hundred
billion dollars for next year. So we're not serious about
cutting DoD and I'm not suggesting like we should make
some massive cut there. But ultimately it's something where this
is where the money actually goes, the stuff that like
(29:35):
we you know that everyone talks about it's it's pennies
on the dollar and and so if you really want
to make the big impact on things. Nine of federal
spending is not related to employment at federal agencies. It's
(29:56):
related to money that we've spent in the past, or
money that we're spending on people now, or related to defense.
I don't really count the US Army as like a
federal agency. It's right, and I've said this before. Also, Look,
we can talk about like procurement issues in the military
until the cows come home.
Speaker 3 (30:14):
I'm all ears for that.
Speaker 2 (30:15):
I'm like, why we might overspend when we're you know,
developing new weapons systems and this and that. But ultimately,
you do not want the US military to be efficient.
Speaker 3 (30:26):
It's not the main goal.
Speaker 2 (30:29):
The main goal of the US military is to be effective,
and those are two different things. You do not want
to compromise effectiveness in the name of efficiency, because you're
not running a business. With the US military, it is
serving a different role, and so I think we have
to be careful with that. Now, again, those listening you
might be like, well, Chuck's just you know, enabling the
military industrial complex, and maybe I am very possible.
Speaker 4 (30:51):
Yeah, but Chuck's got Raytheon tattooed on his forehead.
Speaker 3 (30:54):
Actually it's I had that removed. Okay, at great cost.
Speaker 2 (31:00):
But my point is with the military, you have different goals,
and with some of these other programs even you have
different goals than simply maximizing efficiency. You want to maximize
the effectiveness of them. Or look, if you don't, then
you say, okay, like get rid of the program. Fine,
that's a perfectly viable view to have. But I'm not
(31:20):
saying like I would agree with it in every case.
But let's call a spade a spade. There's a difference
between efficiency and effectiveness, and for certain programs like the
military and even like Social Security, you want them to
be effective, not necessarily efficient.
Speaker 3 (31:37):
We can agree there.
Speaker 2 (31:38):
It's kind of that's all I have. That's all I
have to say about that. Take a quick break. When
we come back, Let's do a little bit of stack roulette.
Speaker 1 (31:47):
Miss any of the show. Catch up in your convenience
by visiting Financial Exchange Show dot com and clicking the
on demand icon, where you'll find all of our interviews
and full shows. FACE is your home for the latest
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This is the Financial Exchange Radio Network.
Speaker 3 (32:06):
This is your home for.
Speaker 1 (32:07):
The most comprehensive coverage of the economy and the trends
on Wall Street. This is the Financial Exchange Radio Network.
Speaker 5 (32:21):
This segment of The Financial Exchange is brought to you
in part by the US Virgin Islands Department of Tourism.
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Saint John. With winter on the horizon, now's the time
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Speaker 3 (32:57):
Mike, what do you got for me? For stack Roulette?
Speaker 4 (33:00):
The Wall Street Journal with a piece on what must
be the least pitiable group that you can find? Or
up there maybe the people who refuse to go back
to the office and then subsequently lost their jobs. We
have covered at length the stories of companies calling their
employees back to the office threatening layoffs or not playoffs
(33:21):
firings if they do not return and meet those in
office requirements. And while it's still pretty rare for it
to happen, there have been several in The Wall Street
Journal spoke to a number of them, and like I said,
I just I can have zero pity for any of
the people that you know, thought they wouldn't get their
(33:42):
job taken away because they disobeyed a direct order from
their bosses, and then got a pity for them. I don't, well,
I don't.
Speaker 2 (33:54):
It's not for the disobeying the direct order. Yeah, it's more.
Speaker 3 (33:58):
Hey, they were hired under the guys that this was
a full time remote position, right, and then the company
decided to change that on one hundred percent.
Speaker 4 (34:06):
And if that's not fair and and you feel not
great about that, I think you have a reasonable grievance.
But once the company says we changed our mind and
you're back in the office and you say that's not fair,
I'm not coming back, then you should expect to be fired.
Speaker 3 (34:21):
Right.
Speaker 2 (34:21):
And Look, ultimately, anyone who works anywhere is at the
mercy of their employer as far as the terms of
their employment. And I know that like return to office
is the one that we're seeing, you know now in
terms of where there's you know, what kind of a
crux there, but or a difference of opinion there you
go back fifteen years, you know, it's you know, two
(34:44):
thousand and nine, it's you know, eight months after the
S and P five hundred bottoms, and the arguments then
would be, look, you know, how come you're only getting
me for you know, twenty five hours this week? Why
can't I do forty? And it was Hey, like I
thought I was going to be able to get forty hours.
Well they're just isn't enough demand? Like that was the
issue that employees and employers were fighting over fifteen years
(35:05):
ago in a very different economy, and so that they're
always going to be these these things that come up
the what I do find it And look, there there
are different reasons why companies are doing this. There are
some where they're saying, look, we want to go through
a round of layoffs, but we don't want.
Speaker 3 (35:24):
To call it a layoff boom.
Speaker 2 (35:26):
We're going to force return to office and if you
don't comply, great, that's how we're getting rid of head count.
Speaker 4 (35:30):
And guess what I get to fire you for cause
without paying severance.
Speaker 2 (35:32):
Correct, I'm not saying this is good. I'm saying like,
this is, this is bad.
Speaker 3 (35:37):
This is probably can't even collect for unemployment then I'm
sure you can. Yeah you probably can.
Speaker 2 (35:41):
I'm sure you can, and I would hope you can
quite honestly. Yeah, So like that, there's situations like that,
there's others, and this is what I suspect of some
of Amazon's return to work plans. Hey Amazon, remember what
remember all of the ink that was spilled over Amazon
HQ two. Yes, Well, look they got deals with was
(36:02):
it DC? And uh did they end up pulling out
of doing anything in New York?
Speaker 3 (36:06):
No?
Speaker 4 (36:06):
I think I think they have that dual to But yeah,
to your point, there are superployments tax cuts that they
receive contingent upon having people actually working there.
Speaker 2 (36:16):
Right, So with Amazon, it might be yeah, if we
don't get you back to office, we're not getting the
you know, millions or billions of dollars that we were
promised by these metro areas in order to move our
headquarters there. So there's all different reasons why companies do this.
Some of them are just you know, managers who don't
like remote employees. Like, I'm not saying this is wrong
(36:36):
or right, I'm just saying these are the possibilities out there.
But ultimately remote work, I think that the problem is
it was something that people assumed was a baseline condition
of their employment and employers are viewing it much more
as a bargaining chip for various different reasons.
Speaker 4 (36:54):
Yeah, and so like, do I totally understand the person
who bought a home in Washington State while working for
a company based out of San Francisco, and then decided, Hey,
I'm not gonna sell this house because I've got a
three percent mortgage rate, so I'm not coming back, and
then got fired. I can understand it, but now that
person's been unemployed for something like nine months and might
(37:16):
be relocating anyway now out of force because he can't
find the job in his field that pays anything like
what he earned previously.
Speaker 2 (37:25):
I want to talk about this piece from the New
York Times. CEOs are doing a bunch of mind altering
drugs trying to make themselves happier.
Speaker 3 (37:32):
Is this good or bad? I don't know.
Speaker 4 (37:39):
I don't do mind altering drugs, so I don't really
have much of an opinion on it. I also don't
really care what somebody does in the privacy of their
own home.
Speaker 2 (37:46):
It's kind of interesting that this is making like a
full story in the New York Times, because I don't know,
hasn't like Steve Jobs, who's kind of lionized as like
the golden child of CEOs all time? Yeah, didn't he
spend like most of the eighties wandering not most, but
like a couple of years wandering around doing LSD. And
(38:07):
he's written and talked about it like how it transformed
his life.
Speaker 4 (38:10):
Maybe this is more of an applause for that type
of behavior rather than a discrediting I don't know.
Speaker 3 (38:16):
Maybe I don't know.
Speaker 2 (38:17):
I just find it interesting that, like you're making a
whole story about it now when it's not really a
new news.
Speaker 3 (38:21):
I don't think. Let's take a quick break here for
the rest of the day.
Speaker 2 (38:24):
We'll see it tomorrow to wrap up the week on
the Financial Exchange,
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