October 11, 2024 • 33 mins
Time for a Friday Flight- our little sampling of the week’s financial news and what it means for your personal finances. There are a lot of headlines out there, but we boil them down to specific takeaways that will allow you to kick off the weekend informed and help you to get ahead with your money. In this episode we explain some relevant and helpful stories like: let’s go Tigers!, dumb debit, new credit card fees, targeted refund checks, everyone’s an entrepreneur, new healthcare stipends, job switchers retiring with less, asinine arbitration, Wall Street landlords, flood insurance, FEMA housing assistance, $ talk, and eccentric economic expectations.
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Transcript
Episode Transcript
Available transcripts are automatically generated. Complete accuracy is not guaranteed.
Speaker 1 (00:00):
Welcome to Out of Money.
Speaker 2 (00:01):
I'm Joel and I am Matt, and today we're talking
about dumb debit, asinine arbitration, and eccentric economic expectations.
Speaker 1 (00:28):
Yeah, Joe, let's make sure everyone heard you correctly.
Speaker 3 (00:30):
You said dumb debit. Everyone knows that debt is dumb.
Speaker 2 (00:34):
But where pronunciation skills are not the best always.
Speaker 3 (00:37):
Actually that's normally where I shine my quince and speaking
doesn't often shine through.
Speaker 2 (00:43):
I feel like my alliteration was especially strong today and
potentially over the centric economic expectations.
Speaker 1 (00:48):
That one was really strong. Yeah for sure.
Speaker 2 (00:50):
I don't mean that in a good way, like maybe
I ever did it.
Speaker 3 (00:54):
Hey, we haven't talked about the Brays recently. You bummed
that the Braves are out.
Speaker 2 (00:58):
Of the playoffs, some massive collapse, but we knew was
gonna happen. My hopes were low.
Speaker 3 (01:01):
But the cool thing, I'm surprised that we that the
Braves made it as far as they did, given given
the injuries.
Speaker 1 (01:07):
And yeah, star players who were out agreed.
Speaker 2 (01:10):
But one I think thing that needs to be talked about,
and we won't talk about sports long. Don't worry, but
the when you talk. My mom always told me growing
up Matt, you can't buy a team, and sometimes, you know,
the big spending teams, they always try, like to try
to get the star players who are incredibly expensive, and
then it was always fun to watch them collapse or
not performed merely as well as they were supposed to.
(01:31):
And I don't know if anybody out there is like
laughing when other people get hurt.
Speaker 1 (01:34):
So yeah, I.
Speaker 2 (01:36):
Point and I giggle. It's really fun to see what's
happening with the Detroit Tigers right now. Yeah. Their entire
payroll is half less than half of what one player
on the Yankees gets paid, and so their entire payroll
is eighteen million, eighteen million. Yeah, and I think crazy,
think about when the Dodgers paid Shoheo Tani seven hundred
(01:57):
million dollars, right, And so it's just.
Speaker 1 (01:59):
Over the course of how many years, like a decade, Yeah,
over the.
Speaker 2 (02:02):
Course of it's still still though, yeah, insane. So I'm
pulling for the Detroit Tigers at this point.
Speaker 3 (02:08):
Oh hey, yeah, Like who doesn't want to root for
an underdog? And especially given Detroit, I feel like that
city has experienced so much hardship, right like over the
like you look at history, like the past fifty years
with the collapse of the auto industry and unions and
all that, and like it makes me think about like
during the housing crisis during the Great Recession, Like I
had to get myself off of Instagram, Like I followed
(02:28):
this account that was called Cheap Old Houses and they
would feature so many beautiful turn of the century homes
in Detroit, and I would always show them to Kate
and be like, hey, babe, you want to move to
this place because they're basically giving these houses like twelve
thousand dollars. Yes, and it just needs a little bit
of work. And this doesn't mean that Detroit's like all
the problems are now fixed because housing was affordable there
(02:49):
and now the Tigers might make it to the World Series.
But I am happy for Detroit. Yeah, as a city.
Good to see when they've been crapped on for so long.
There's like a some silver linings.
Speaker 2 (02:58):
Perhaps it seems like Detroit is a rad place to hang.
I have never been. I would love to go, And
maybe we'll go see a Tigers game next year and
check out this awesome team that they've got. So let's
get to the Friday flight, Matt. Let's get to the
sampling of stories we found interesting this week. Let's talk
about debit cards. We don't really like them for the
most part. And the good folks over at Experience, Matt
(03:21):
the Credit Bureau Experience, And I say that with my
tongue firmly in my cheek. They're not great folks necessarily.
I mean, I'm sure there's some good people who worked there,
but the organization as a whole not one that we
really dig or have much fondness for. They launched a
debit card last year, and friend of the show, Ron Lieber,
he writes for The New York Times, he put out
this great article warning people to be wary of this
(03:44):
debit card product that Experience has.
Speaker 1 (03:47):
He can always count on, mister Lieber.
Speaker 2 (03:49):
Oh yeah, he's holding people's feet to the fire. And
why did he hate this thing? Why is he telling
us that we should avoid it. He's basically saying, Hey,
the perks are really lackluster, and they're going to make
it sound like it's this awesome thing, but it's really not.
And some of the promises that the long that they're
saying is is basically, this account can help you raise
your credit score. That's one of the major selling points
(04:10):
for Experience to say, instead of just relying on us
for your credit needs, you should also rely on us
for your banking needs because guess what if you bank
with us, which they're not really a bank, they're one
of those they've got one of those pass through banks
that they're working with. If you bank with us, well,
mate will help you raise your credit score. Well, you
can enroll in their Experience Boost program, which is like
(04:31):
their free credit building product without opening a bank account
with them.
Speaker 3 (04:36):
So I don't know why folks would actually trust this
company that has done such a poor job yeah at
protecting your personal.
Speaker 2 (04:41):
Data, not just Experience, all the credit bureaus, but oh
my gosh, Like why would I want to bank with
a company with this kind of reputation? And you and
I were not fans of debit cards in general, but
getting one from a credit bureau would be like a
double dose of dumb, I think. So it's called the
Experience Smart Money debit card, not so smart avoided people.
Speaker 3 (05:01):
I was trying to think of a parallel, like what
do we see in life, or like what's an example,
and it makes me think of Ticketmaster because everybody hates Ticketmaster, right,
but it would be as if I.
Speaker 2 (05:10):
Just had to hold my nose and buy tickets from
them recently, Yeah, all.
Speaker 3 (05:13):
This fees man, it would be as if you chose
to wear a Ticketmaster's shirt, because it's like, well, Ticketmaster
they are music industry adjacent, like they kind of are
involved with the bands that you love, and you love
wearing band t shirts stool of your favorite bands. But
it's like, but no, I actually hate Ticketmaster. I just
like the bands that they tend to showcase. That's what
(05:35):
I feel like experience is doing here. It's like they're
sort of like the thirty rock how do you do
fellow kids, Like they're trying to swoop in and get
a part of the action, when in reality they're not
able to provide anything of actual substance.
Speaker 2 (05:48):
Okay, now you're making you want to get a Ticketmaster
and an experience lower back tattoo.
Speaker 1 (05:54):
How much do tattoos cost?
Speaker 3 (05:55):
I've never I don't have a tattoo, but I would
pay for that for you to get given of this. Honestly,
we got a tap experience because they would probably they
probably would sponsor you. Yeah, we like credit cards a
whole lot more obviously, because well they have better protections.
They can be far more rewarding. But that being said,
there are new credit card fees that are coming down
the pike, largely in response to the CFPB's attempt to
(06:18):
cap late fees at eight dollars, which is by the way,
this is hung up in court. The outcome is unsure.
Speaker 2 (06:24):
Kind of like a student loan thing. It's like, what's
gonna happen here?
Speaker 3 (06:27):
We don't exactly know. Yeah, but the big credit card issuers,
the big banks, they're planning for the hammer to fall.
And like we said back when that announcement was made,
their credit card companies, they will find another way.
Speaker 1 (06:38):
To keep their profits elevated. They're crafty.
Speaker 3 (06:40):
They're gonna find a way to charge you some Some
of them are considering instituting new fees for let's say,
paper statements. Others are just raising their interest rates, even
as the FED is actually lowering the overnight lending rate.
Speaker 2 (06:53):
You're like, well, I thought my credit card interest rate
was gonna go down. Matt and Joel said that it's like, well,
there's this other thing happening over here, and.
Speaker 1 (06:59):
So big bank, so they got to find a way
to make a bug.
Speaker 3 (07:01):
It's actually going up. But bottom line, what this means though,
is that you should never run a balance regardless. That's
regardless of whether or not interest rates are going up
or not. Never carry a balance. If you have one,
pay it off as quickly as possible, of course, but
then just create a written plan, stick to it when
it comes to eliminating some of that credit card debt,
and then just make sure to pay attention to some
of the different hoops that the banks are going to
(07:22):
require us to jump through, and we'll make sure to
keep an eye on.
Speaker 1 (07:24):
That as well. Yeah, if there are any egregious examples
of that.
Speaker 2 (07:28):
Right, if there really is. If you get hit with
a paper statement fee, stop getting paper statements and the
need to offer the digital ones. And if you feel
like you need to keep the records of all your
credit card statements, do that. But you can save the
PDF of those and keep them on hand digitally. I mean,
do people actually save their credit card statements anyway if
they keep the paper ones. Yeah, so find a way
(07:49):
to reduce those fees. It's you're right, Matt. The credit
card companies, we knew this. If you tamp them down
in one area, they're going to find another way to
keep their profits up. Let's make the case for a
second for technology though, and against checks. We've done this before.
We hate checks, but it's not because even in this instance,
retailers aren't accepting them anymore. We talked about how Target
(08:10):
has basically said, no, we're not taking checks at checkout anymore.
It's because scammers can actually easily use checks to commit
fraud or theft. And there was a recent example of
this map. They can steal the check right out of
your mailbox and take your money. And so this is
happening to people who have opted to get their tax
refund by mail instead of getting their refund via direct deposit.
(08:32):
And so if you're one of those people, you are
a target to have your tax refunds stolen. Fortunately, ninety
percent of folks have opted for direct deposit these days,
but that's to lease a lot of people. Think about
ten percent of Americans Matt, getting their tax refundsent to
their mailbox. That's a sizeable number of folks who are
taking the old school route. And then if the check
gets stolen, it's a massive pain of the button, Matt.
(08:54):
There are examples of people who have said, hey, my
checkout stolen. I didn't come in the mail, and a
thief stole the funds, and then the IRS sends another
check it also gets stolen. This is a significant problem.
You're out, Yeah, and eventually the IRS is going to
send you the money that you're owed, but you're out
the refund for even longer. For a lot of people
(09:15):
met the refund can be you know, multiple thousands of dollars.
Speaker 1 (09:18):
A lot of folks are counting on that refund. Yeah.
Speaker 2 (09:20):
I mean, I think most Town of Money listeners know this,
especially given the demographics of the people who listen. But
direct deposit offer that it's easier, it has fewer pitfalls,
And so in the spring when you file your taxes,
make sure to elect for a direct deposit because if
you opt for a check to come, one it could
get stolen. And two, even when you're asking for a replacement,
you can't switch to direct deposit. They have to. The
(09:42):
IRS basically says no, we're going to send you another check,
and you can't change the method of payment.
Speaker 1 (09:48):
Yeah.
Speaker 3 (09:48):
So at the very least, maybe you know somebody so,
like you said, Jill, I think a lot of our
listeners probably aren't opting for the paper check, but maybe
there might be somebody in your family, for instance, who
is opting for that, and make sure.
Speaker 1 (09:58):
That this is a discussion that you have with them. Jill.
Speaker 3 (10:01):
Let's talk about entrepreneurship. There's a spike in small business
formation back when COVID hit, But the thing is is
that is continuing strong and many of the companies that
were formed during that COVID induced economic downturn, they have
been crushing it. And it turns out it wasn't just
that you know, stemy check phenomenon that we're causing folks
(10:22):
to reconsider their you know how, it is that they
spend their time they're nine to five, and that's good news.
It's happening all across the country and in big cities
and small cities, in metropolitan areas as well as rural
locations as well. And the rise of remote work, which
it is I will admit it is seeing a bit
of a pullback in corporate America, but it is allowing,
(10:43):
it is aiding the ability of individuals to start their
own thing when they have a little more time, They
got a little more flexibility to take on some of
that additional works.
Speaker 2 (10:51):
You're connected. It's so much easier to connect, and you
mentioned rural America, Matt, think about something like starlink and
how it's easier to get good internet service in almost
any part of the country guardless of.
Speaker 1 (11:01):
Where you are.
Speaker 3 (11:02):
Even if you're off grid somewhere else, you can still
have internet access. It's easier than ever to start working
for yourself, even if it's like only part time for
a while. Something like eighty percent of businesses are solopreneur businesses,
and we are personally big fans of starting your own thing,
and so if you are considering hanging your own shingle,
we would recommend for you to listen back to episode
(11:24):
eight eight four week.
Speaker 1 (11:25):
You know, we tied some of the benefits.
Speaker 3 (11:26):
We talked with guests Laura Adams about maybe why it
is that you should consider.
Speaker 1 (11:30):
Working for yourself.
Speaker 2 (11:31):
Yeah, and she gave a lot of great insights for
how to go about launching that business and then specifically
as a small business owner too as this wholopreneur kind
of some of the things you need to know. So
that's definitely worth listening to, Matt. One of the reasons
people often choose to not go work for themselves is
because their healthcare is tied to their job. Right, A
lot of people continue working for the man because they're like,
(11:54):
how am I going to pay this twenty five thousand
dollars healthcare premium annual premium for my family if I
go out and work for myself, and it is that
is I will admit, one of the toughest hurdles to
jump when we're talking about going out and starting your
own thing. It's a terrible economic reality in this country
that reduces entrepreneurship and it inhibits economic dynamism, and it's
(12:17):
one of the reasons I think that health care costs
are rising much faster than almost everything else, the employer
involvement in individual and family health care in this country,
and as everyone knows, buying healthcare as a self employed
person is tough. Is so much of how much it
costs depends on your income because of subsidies on the
healthcare exchange. A lot of people, including you and I Maatt,
(12:37):
have opted for health sharing companies because they're not traditional insurance.
But because of that they can save you a bundle
with some pitfalls as well that you have to be
aware of. But some employers have actually started taking a
different approach and so instead of providing actual healthcare and saying, hey,
here's the plan that we offer once you sign up,
and we're an open enrollment season right now for a
(12:59):
lot of people, well, they're offering you money instead to
get your own plan on the private market. I like
this so much more. You know, more employees are interested
essentially in lessening their own financial burden because how much
premiums have gone up, And it does give employees more
choice over the type of coverage and the type of
plan that they choose to have. But I will say
this too, where it's happening, it could be end up
(13:22):
being a financial loser for some folks. Depending on how
generous the healthcare stipend is, you might find that you're
not able to buy as nice of a health care
policy that maybe doesn't cover quite as much with the
new stipend. It's good for employers. I think it can
help you make wise decisions when you're shopping for insurance,
but you also might find that there's a gap there
between the coverage you used to get and the coverage
(13:43):
you can now afford. So ultimately, wouldn't it be nice
if we were able to disentangle healthcare from employment altogether.
I think it'd be good for our country. It'd be
good for small businesses, but good for the dynasism. Yeah,
that's dynamism.
Speaker 3 (13:58):
It was like combining cynicism and I guess a dynamic
labor market perhaps. But something else that is at least
partially connected to your job is your retirement account. We're
talking about four to one ks here. Well, changing jobs
can also have adverse effects on your retirement and the
reason for that is because there is some new research
from Vanguard and they find that when people switch jobs,
(14:21):
and even if it's to snack a bigger paycheck, they
often end up forgetting to sign up for the new.
Speaker 1 (14:25):
Four to one K plan rookie fail or. A lot of.
Speaker 3 (14:28):
Employers are auto enrolling their newer employees, but sometimes the
default rate is only three percent. And let's say you're
at your previous employeer, maybe you're up to I don't know,
six seven, eight percent perhaps maybe more, maybe even more. Yeah,
And because of that, Vanguard says that this could be
easily this could be a six figure mistake, costing folks
massive money and compounding over the coming decades because of
(14:50):
that reduced contribution amount, because of subsequent inertia bias as well.
You just kind of stick with what it is that
was the default option, and you're missing out. Future you
is missing out. And so if you're changing jobs, just
make sure that you pay close attention to what your
prior contribution percentage was. And what we would suggest is
just try to mirror that at your new employer, right,
(15:10):
just carry over some of those good habits or even
consider raising it, especially if you are making more money,
because it's like, hey.
Speaker 2 (15:16):
It's a perfect time.
Speaker 3 (15:17):
It's a perfect time for you to sort of trick
yourself into thinking that, oh, well, it's not actually painful
at all for me to increase how much I'm saving
because my paycheck it's staying the same, and so you're
able to save more or you know what, a lot
of folks with the raise, they're able to do both.
You experience a slightly fatter paycheck but not over the top, yeah,
while at the same time experiencing higher amounts of saving
(15:38):
as it's going towards your Form one K.
Speaker 1 (15:40):
This was something I like, the both and approach.
Speaker 2 (15:41):
Yeah, it's funny, this is something I hadn't really thought about, Like, oh,
over the years, you've been increasing your four one K
contribution percentage. You started out at five. Let's say by
the time you left that job, you got it up
to twelve or thirteen percent. Amazing. But then you get
the new job, you're auto enrolled at three and you
just let it be. I just never thought that was
a problem. Vanguard points out that it's a meaningful problem.
So if you're switching jobs, definitely pay attention to this, because, yeah,
(16:04):
if you're reducing your contribution amount by that much, we
are talking about a potential six figure deficit when it
comes to your future retirement.
Speaker 1 (16:12):
But Joe, we got more to get to. We're gonna
talk about the types of landlords who are the worst.
We'll get to that more right after this.
Speaker 2 (16:26):
All right, Matt, we're back. We've got more to get to.
We will talk about preming landlords and no, it's not
gonna be a self owned Okay, we're decent landlords people.
But now let's get to the ludacrous headline of the week.
This one comes from CNN and the headline reads, couple
in severe uber crash can't sue because of an uber
eats order, And that sounds really frustrating, Matt, and basically
(16:48):
My takeaway from this article is Uber sucks, but they're
also not alone and sucking. They're acting like most other companies.
And what do most other companies do. They stick arbitration
agreements in the terms of service that we all sign
but that none of us actually read. And the couple
in this attempted lawsuit was severely injured, including spinal fractures,
(17:11):
which sounds terrible, after the uber they were riding in
was in an accident. And then Uber's response essentially is
tough luck. You got to go through the system we've
set up that's essentially designed to screw you. So what's
so bad about arbitration, you might be wondering, Well, the
deck is stacked against the individual in the case of arbitration,
(17:32):
the arbitrator. This is The New York Times did this
investigation a few years back, Matt. The New York Times
essentially found that arbitration finds in favor of the company
eighty plus percent of the time. So you, as an individual,
you could be spending a lot of money in arbitration
and you're not getting a fair shake here. You're not
getting a fair hearing. Companies avoid paying out billions of
(17:53):
dollars to consumers by using the arbitration system to their advantage.
So this is one of those clauses that's in the
fine print of every terms of service that we all
automatically ascribe to. I think it's important to point that out,
and I think it's also important for us to highlight
when companies are using it in a way that's improper.
And part of this was the couple said that what
(18:14):
was their daughter who signed up and made that order
through Uber eys It wasn't even them, and Uber saying nope, sorry,
it was under the household or whatever. We're holding you
to this.
Speaker 3 (18:22):
Yeah, the terms of service agreements that we have to
accept in order to use certain software and different apps
and different services, it's kind of ridiculous, get out of control,
because I think someone who is following more of the
letter of the law would say, well, you shouldn't agree
to those terms.
Speaker 1 (18:34):
Of service, but like, it would truly take a part time.
Speaker 3 (18:37):
Job to be able to read through all of the
different agreements that you scroll down and clickach so you
don't even have to scroll down anymore, because it's like
it's hyperlinked.
Speaker 2 (18:45):
Rumpel Stiltskin ask man, I feel like I probably owe
my firstborn children to one of these companies.
Speaker 1 (18:49):
It's ridiculous.
Speaker 3 (18:50):
But the reason we're pointing this out is because there's
a certain amount of hassle that we expect to deal
with when it comes to being able to use some
of these different services. But when there is a company
that isn't doing the right thing, I mean technically, Joe, well,
like we're media and so our ability to kind of
shine a light on this and hopefully to encourage companies
out there to do a better job we were doing.
Speaker 2 (19:09):
Are we the mainstream corporate media mat or are we
the independent media?
Speaker 3 (19:12):
I feel like we're a little more alternative, independent type
of guys. But it makes me think back to Disney.
Remember when they there's a lady that died because of
that severe allergic reaction.
Speaker 1 (19:22):
Yeah, that was just not longer.
Speaker 3 (19:23):
At least they back down when they realized that they were,
you know, treating their customers in a way that was
just beyond the pale. But Uber they're not budging. So yeah,
we want folks to know that these arbitration agreements they're
kind of par for the course and they do limit
your legal recourse and hopefully, yeah, hopefully Uber ends up
doing the right thing. I will say it wasn't just
an accident that the car was involved with the driver
(19:45):
did run a red light, and so part of me,
I'm just advocating slightly on behalf of Uber, like I'm
going to play devil's advocate here and say, maybe we
don't have all the facts, because typically you would sue
the driver because they have auto insurance. But I'm curious
us if the couple is looking for a bigger potential
payoff from a giant company as opposed to just the
meager offerings that they might receive from somebody who has
(20:08):
auto insurance. Of course, but that having said, if that's
the case, then Uber needs to communicate that clearly, because
you know, this is a pr issue. If that's the case,
then they need to make it clear that like no, no, no,
like they're going to be taken care of.
Speaker 1 (20:20):
It's just this is the mean. Yeah.
Speaker 3 (20:24):
So either way, it doesn't seem like that there's a
whole lot of clarity or transparency in how it is
that they're handling this.
Speaker 2 (20:30):
But speaking of the companies being unkind, how that's not
rare at all, isn't that?
Speaker 1 (20:34):
Well?
Speaker 3 (20:35):
On that note, we would recommend to maybe don't rent
a home from Invitation Homes. The FTC they actually issued
a warning about unnecessary fees that Invitation Homes has been
charging tenants. They've got this worry free way of renting
a home, and the worry free marketing it didn't quite
line up with the real life tenant treatment that folks
(20:55):
were receiving.
Speaker 2 (20:56):
There's been some horror stories, yeah, they've come out over
the years about Invitation Home.
Speaker 3 (21:00):
Yeah, and they're going to be forced to refund forty
eight million dollars to folks who have rented with them,
and these two stories with it, you know, with invitation
Homes and Uber, I think the takeaway is just to
know your rights, and in this case, I would say
do your best to avoid Wall Street landlords or phase
of the mama pop style landlords.
Speaker 2 (21:18):
It's not like all mom and pop landlords are great.
I'm sure there's a lot that is true. There's a
number of them that are bad. But the number of
stories that have come out about invitation Homes across a
number of years are so harrowing. The lack of response
to issues that tenants are having. And then this lawsuit
from the FTC about the excessive fees that are being charged,
(21:40):
the non refunding of security deposits when they were clearly
gidden fees.
Speaker 3 (21:45):
Yeah, I don't like that either. Yeah, the ability for
a company to be transparent in this way as to
what it is you're actually going to charge your customer.
Speaker 2 (21:50):
They say, oh, it's going to be worried for your renting,
it turns out it's it's not worry free and it's
going to cost you. And I think this is also
really important to mention, Matt to whether you're renting from
a corporate land or whether you're running from an individual.
It's always important to take photos and videos when you
move in to note the condition of the home. Typically
there's like a walk through inspection with the landlord, but
(22:11):
they don't always do that, and so what I would
do is I would document thoroughly, Hey, this is what
the home looks like. If there are little issues, and
then you can point them out to the landlord and say, hey,
these things could be fixed. If they're minor things, you
don't need to necessarily push it, but at least you
have that in your back pocket for when you're moving out,
and you can document take photos and videos then too,
and say, hey, it looks pretty much the same, or
actually there is this gouge in the paint here or whatever.
(22:34):
But if you have photos and videos, that can be
your protection if there is some sort of legal recourse
that you have to see totally, Matt, let's talk about
insurance for a second, and specifically insurance in the light
of what's been happening recently. As far as the weather,
it's probably an understatement, just horrific weather events essentially happening
in the southeast. The destruction from Hurricane Helene was rampant,
(22:58):
specifically in western North Caro Line. We talked about that,
and then Hurricane Milton pummeled Florida earlier this week too.
It seems like it wasn't as bad as it could
have been, fortunately, but it's been an awful couple of
weeks on the natural disaster front. I was talking to
my neighbor who's got a place in Florida, and he's
basically saying, I don't know, man, I think I might
be ready to get out, like this is just too
much to bear. And I totally understand that. Like, if
(23:19):
you live in Florida, it's been your life has been
caught up in horrific hurricanes. So our hearts go out
to everyone who's lost family or friends who's had to
evacuate and met their estimates. Property damage could cost owners
forty seven billion dollars. It's kind of hard to fathom.
That's a big number. And it also has highlighted issues
that FEMA has been dealing with perpetually and continues to
(23:42):
deal with, in how they respond to disasters and how
people are how quickly people are helped, and how quickly
money gets into their hands. It's also highlighted the gap
between what people think they're coverages and then the lack
thereof when it comes down to it. A lot of
folks thought, hey, my homeowner's insurance it's going to cover
the damage that I've sustained, and they're often sorely mistaken.
That's because these policies don't typically cover damage from flooding.
(24:06):
That's right, you need a separate policy for that. And Matt,
especially in North Carolina, fewer than one percent of folks
in the places they get like the worst flooding damage
have that kind of coverage, which adds insult to injury.
And so yeah, if damage you are a loved one
sustained is called flood damage, but you think it isn't.
It's important to fight back because that's happening too, because
(24:28):
some insurance companies are saying, hey, listen, no, this damage
was due to flooding, and you're saying, no, wait, this
it wasn't. There was a hole in the roof, that's
how the water got it, like a tree smashed through
the There was no flooding that happened. You have to
be willing and able to document and push back on that.
Speaker 3 (24:43):
Yeah, they're standing there pointing fingers at each other right
where the Hormeter's insurance is saying no, no, this is
due to flooding, and then the spider man means is
exactly it's pointing, be like, no, that's actually when damage
that's not covered under flood insurance. And so there's Yeah,
there's a whole lot of advocating for yourself that's going
to have to take place here.
Speaker 2 (24:57):
Yeah, a couple of things too. Won't file a claim
if the damage you sustained was minor, if it's something
you feel like you can fix fairly easily. And there
are a lot of people in that situation too, where
it's it's just minor damage. Fortunately, you probably don't want
to get insurance involved because you could see your rate
skyrocket and it wouldn't be worth it. The other thing is,
if you feel like you are being treated unfairly by
an insurance company, you know, I want to contact a
(25:18):
public adjuster. My parents are literally in this process right
now because they sustained some roof damage and oh yeah,
and the insurance company basically said, hey, listen, we don't
think you need a whole roof replacement. And they're saying,
we're pretty sure there's enough damage that the whole roof
needs to be replaced, and so they're an impass and
so what you do then on your own dime, but
you got to hire a public adjuster who can help
(25:39):
mediate that. But oftentimes public adjusters can help you get
paid in a way that you advocating for yourself cannot.
Speaker 1 (25:45):
That's true.
Speaker 3 (25:45):
Yeah, And I like what you said too about considering
not even going through insurance if it's a minor enough incident.
I actually have a neighbor who this is actually before
all the storms, but it.
Speaker 1 (25:54):
Was a.
Speaker 3 (25:56):
Local storm and a tree went down damage like they're siding,
took out part of the fence, and I talked to
him like the very next day, and I was just like, hey,
actually doesn't look all that bad, huh. But he had
already reached out and already filed a claim. And I'm
looking at this as someone who schedules work at homes
fairly often, and I'm thinking, man, you could probably take
care of all of this for a few thousand dollars.
(26:17):
And he's already got the insurance company involved, which could
have a negative impact on his premiums.
Speaker 2 (26:23):
Sit down on the road, my deductibles one thousand bucks.
This is going to cost three. I'm coming out two
grand in the green. Ultimately, that's that's not what happened.
Speaker 3 (26:31):
You are perpetually and definitely even sometimes paying more in
premiums every single year.
Speaker 2 (26:36):
That's going to go on your clue report when you
trying to switch insurance companies.
Speaker 3 (26:38):
So that it happened, y'all. So it might be worth
crunching some numbers in that case. Also for the future,
for folks who have been impacted by these major storms,
check out floodsmart dot gov and that's where you can
determine your risk level, where you can shop for a
flood insurance policy if it turns out that you are
in need of one, and if you are, like the
vast majority of folks without coverage for flood damage, you're
(26:59):
probably need to get help from FEMA. So make sure
to apply for assistance over at FEMA dot gov or
link to where there is where you can apply for
housing assistance essentially, but then just document everything along the way,
because a lot of folks aren't going to necessarily want
to wait to get their life back on track to
hear like a lot of folk aren't gonna wait to
hear from a government organization who is probably completely up
(27:23):
to their neck in trying to help folks. But take pictures,
take video to highlight the extent of the damage, and
keep all your receipts. But we wish everyone out there
the best of luck, and we you know, last week
we talked about ways to donate if you are so inclined,
and we'll make sure to include those links to some
of those different vetted organizations again, but especially too when
it comes to FEMA. I think I saw only something
(27:45):
like three percent of folks who are denied, So folks
who apply for FEMA only something like three percent of
folks who get denied and are told no, actually appeal
And man, I know that there's a whole lot going on,
but when we're talking about a big ticket item like this,
like your home, this is something that's worth appealing. So
don't be like ninety seven percent of folks. We want
(28:05):
you to be a part of that three percent.
Speaker 2 (28:07):
Yeah, this squeaky wheel gets the grease. And if you
get turned down or something, it could be just because
you didn't feel something out properly on the application. Like
there's all sorts of potential explanations. So if you're first,
the first word you get from FEMA is no, go,
don't go, like keep barking barking at that door.
Speaker 1 (28:24):
That's right, all right.
Speaker 2 (28:25):
In another sign, Matt, that money is still a taboo
topic in this country, Americans, as it turns out, a
recent survey shows would rather talk about politics than money.
They would rather talk about who they're voting for from
the heart of belief with their fellow human There's I
don't want to talk about that with almost anybody right now,
exactly close trusted friends who get me. But this is
(28:46):
according to a new US Bank survey. I wish we'd
talked about politics less and talk about money more. And
if we're able to accomplish one thing with this show,
it would hopefully be to prod people to not only
handle their own money better, but to feel like they
can talk about money more freely in their lives with
their friends and their family, not in some sort of
braggedocious way. Look at how I'm croshing it. I'm doing awesome.
(29:08):
I'm on money Gear seven, whatever it is. But it's
certainly not to be able to do that to make
yourself look awesome. But money, confusion, money shame are just
these powerful things. They hold people back, oftentimes from making progress,
and I think so much of that. The reason that
is the case is because we have made it a
topic that people are essentially not allowed to discuss. And
(29:30):
you know who better to start some of those combos
than people who listen to the show How to Money.
You don't need to know it all, You just need
to be willing to start a conversation and to allow
for a little bit of awkwardness in the beginning. Matter
You might start that conversation start feeling a little weird
and self conscious that you're doing it. But I think
there are ways to go about being a little more
open about this topic without freaking your friends out. And
(29:53):
I think the more we talk about it, the more
we normalize this as a topic of conversation, the better
off we're all going to be, because then I guarantee
your friends and your family have questions they don't know
what they're doing with their money, or if they do,
they love to talk about it too. They just feel
uncomfortable as well. So starts slow, starts small, But I
think having those conversations it's going to be way better
than talk about politics, talk about money instead of Thanksgiving
(30:14):
table this year?
Speaker 1 (30:15):
Really agree?
Speaker 3 (30:16):
Okay, So on the note of conversations, something that economists
have essentially stopped talking about. It's the possibility of a recession.
Goldman sacks they just reduced their projected likelihood of a
recession in the next year to fifteen percent. And Jully,
remember it wasn't all that long ago that I think
Bloomberg said that we had a one hundred percent chance
of experiencing a recession.
Speaker 2 (30:36):
This was almost exactly two years ago, Matt. It was
October twenty twenty two.
Speaker 3 (30:40):
Yes, the end of twenty two, and even early into
beginning of twenty three. It was like, oh, it's going
to happen. It's going to happen. When's it going to hit?
Speaker 2 (30:47):
So much humility coming from Bloomberg, the one hundred percent
call that didn't come to pass.
Speaker 1 (30:52):
It never hit.
Speaker 3 (30:53):
Economists are now saying that everything's going to be fine
and dandy, there's no clouds on the horizon. And we
say that, like, I'm not poking fun at economists, I'm
not mad at them, but I do tend not to
trust these sorts of predictions because, like a one hand,
the economy, it certainly looks solid right now, markets at
all time highs is great. But I also wouldn't assume
(31:14):
that events out of our control couldn't negatively.
Speaker 1 (31:17):
Impact the status quo. We would always.
Speaker 3 (31:19):
Recommend for folks like basically, anytime there's good news, we
want you to think, hey, something bad could happen. And
when everyone is like freaking out and running for the
hills and saying that like the world's about to end,
look for opportunity because the herd mentality, I think oftentimes
works against our own ability to get ahead with our
personal finances. And so what that means for right now
for you practically speaking, is just to not get too
far over your skis. When it comes to your spending,
(31:41):
it means living on less than you make. It means
living within your means having a solid emergency fund in place,
having life insurance, all the things that we talk about
day in and day out here on the show. I
mentioned the stock market a second ago. It means not
getting overly excited that, oh my gosh, I'm wealthier than
I've ever been in my entire life.
Speaker 1 (31:59):
Well for most people.
Speaker 3 (32:01):
That's for like retired you, and it shouldn't have an
impact on how it is that you're spending money today. Yeah,
And so if you're tempted to check your balances, don't
do that. Just keep investing like you always have them.
And these predictors might be right. There might not be
a recession over the next incoming over the next year.
Speaker 1 (32:17):
We don't know.
Speaker 2 (32:18):
They don't know. And just like the Bloomberg people didn't
know two years ago because they were dead wrong. They
were almost the exact opposite.
Speaker 1 (32:24):
Everybody was dead right.
Speaker 2 (32:25):
Yes, So just yeah, don't believe the talking heads economists
have correctly predicted predicted like nine out of the last
two recessions. Matt, that is a common thing. And I
also want to say this too, that despite whether or
not we have a macro recession that kind of like
impacts our country as a whole, there's always the possibility
for a micro recession, like a personal recession in your
(32:45):
own way, whether it's just your specific industry, your employer,
something that happens in your own family. So like kind
of what you're talking to about, personal preparedness that matters.
Speaker 1 (32:55):
That's what's all about.
Speaker 2 (32:56):
Yeah, and you might see, oh, things are rosy with
the economy, but actually things aren't great in my life
right now. We want you to be prepared for that eventuality,
despite what the goons at Golden Sacks or Bloomberger are saying.
Speaker 1 (33:07):
That's right, all.
Speaker 3 (33:08):
Right, Well, we hope everyone has a great weekend, Hug
the ones you love, and we will see everyone back
here on Monday. You can find links up on our
website at howtomoney dot com.
Speaker 1 (33:17):
That's why we've.
Speaker 3 (33:18):
Got all the different resources for you and your personal
finance journeys, so many resources. Man, But Joe, I think
it's gonna be it for this episode. So until next time,
best Friends Out and best Friends Out
Welcome to Out of Money.
Speaker 2 (00:01):
I'm Joel and I am Matt, and today we're talking
about dumb debit, asinine arbitration, and eccentric economic expectations.
Speaker 1 (00:28):
Yeah, Joe, let's make sure everyone heard you correctly.
Speaker 3 (00:30):
You said dumb debit. Everyone knows that debt is dumb.
Speaker 2 (00:34):
But where pronunciation skills are not the best always.
Speaker 3 (00:37):
Actually that's normally where I shine my quince and speaking
doesn't often shine through.
Speaker 2 (00:43):
I feel like my alliteration was especially strong today and
potentially over the centric economic expectations.
Speaker 1 (00:48):
That one was really strong. Yeah for sure.
Speaker 2 (00:50):
I don't mean that in a good way, like maybe
I ever did it.
Speaker 3 (00:54):
Hey, we haven't talked about the Brays recently. You bummed
that the Braves are out.
Speaker 2 (00:58):
Of the playoffs, some massive collapse, but we knew was
gonna happen. My hopes were low.
Speaker 3 (01:01):
But the cool thing, I'm surprised that we that the
Braves made it as far as they did, given given
the injuries.
Speaker 1 (01:07):
And yeah, star players who were out agreed.
Speaker 2 (01:10):
But one I think thing that needs to be talked about,
and we won't talk about sports long. Don't worry, but
the when you talk. My mom always told me growing
up Matt, you can't buy a team, and sometimes, you know,
the big spending teams, they always try, like to try
to get the star players who are incredibly expensive, and
then it was always fun to watch them collapse or
not performed merely as well as they were supposed to.
(01:31):
And I don't know if anybody out there is like
laughing when other people get hurt.
Speaker 1 (01:34):
So yeah, I.
Speaker 2 (01:36):
Point and I giggle. It's really fun to see what's
happening with the Detroit Tigers right now. Yeah. Their entire
payroll is half less than half of what one player
on the Yankees gets paid, and so their entire payroll
is eighteen million, eighteen million. Yeah, and I think crazy,
think about when the Dodgers paid Shoheo Tani seven hundred
(01:57):
million dollars, right, And so it's just.
Speaker 1 (01:59):
Over the course of how many years, like a decade, Yeah,
over the.
Speaker 2 (02:02):
Course of it's still still though, yeah, insane. So I'm
pulling for the Detroit Tigers at this point.
Speaker 3 (02:08):
Oh hey, yeah, Like who doesn't want to root for
an underdog? And especially given Detroit, I feel like that
city has experienced so much hardship, right like over the
like you look at history, like the past fifty years
with the collapse of the auto industry and unions and
all that, and like it makes me think about like
during the housing crisis during the Great Recession, Like I
had to get myself off of Instagram, Like I followed
(02:28):
this account that was called Cheap Old Houses and they
would feature so many beautiful turn of the century homes
in Detroit, and I would always show them to Kate
and be like, hey, babe, you want to move to
this place because they're basically giving these houses like twelve
thousand dollars. Yes, and it just needs a little bit
of work. And this doesn't mean that Detroit's like all
the problems are now fixed because housing was affordable there
(02:49):
and now the Tigers might make it to the World Series.
But I am happy for Detroit. Yeah, as a city.
Good to see when they've been crapped on for so long.
There's like a some silver linings.
Speaker 2 (02:58):
Perhaps it seems like Detroit is a rad place to hang.
I have never been. I would love to go, And
maybe we'll go see a Tigers game next year and
check out this awesome team that they've got. So let's
get to the Friday flight, Matt. Let's get to the
sampling of stories we found interesting this week. Let's talk
about debit cards. We don't really like them for the
most part. And the good folks over at Experience, Matt
(03:21):
the Credit Bureau Experience, And I say that with my
tongue firmly in my cheek. They're not great folks necessarily.
I mean, I'm sure there's some good people who worked there,
but the organization as a whole not one that we
really dig or have much fondness for. They launched a
debit card last year, and friend of the show, Ron Lieber,
he writes for The New York Times, he put out
this great article warning people to be wary of this
(03:44):
debit card product that Experience has.
Speaker 1 (03:47):
He can always count on, mister Lieber.
Speaker 2 (03:49):
Oh yeah, he's holding people's feet to the fire. And
why did he hate this thing? Why is he telling
us that we should avoid it. He's basically saying, Hey,
the perks are really lackluster, and they're going to make
it sound like it's this awesome thing, but it's really not.
And some of the promises that the long that they're
saying is is basically, this account can help you raise
your credit score. That's one of the major selling points
(04:10):
for Experience to say, instead of just relying on us
for your credit needs, you should also rely on us
for your banking needs because guess what if you bank
with us, which they're not really a bank, they're one
of those they've got one of those pass through banks
that they're working with. If you bank with us, well,
mate will help you raise your credit score. Well, you
can enroll in their Experience Boost program, which is like
(04:31):
their free credit building product without opening a bank account
with them.
Speaker 3 (04:36):
So I don't know why folks would actually trust this
company that has done such a poor job yeah at
protecting your personal.
Speaker 2 (04:41):
Data, not just Experience, all the credit bureaus, but oh
my gosh, Like why would I want to bank with
a company with this kind of reputation? And you and
I were not fans of debit cards in general, but
getting one from a credit bureau would be like a
double dose of dumb, I think. So it's called the
Experience Smart Money debit card, not so smart avoided people.
Speaker 3 (05:01):
I was trying to think of a parallel, like what
do we see in life, or like what's an example,
and it makes me think of Ticketmaster because everybody hates Ticketmaster, right,
but it would be as if I.
Speaker 2 (05:10):
Just had to hold my nose and buy tickets from
them recently, Yeah, all.
Speaker 3 (05:13):
This fees man, it would be as if you chose
to wear a Ticketmaster's shirt, because it's like, well, Ticketmaster
they are music industry adjacent, like they kind of are
involved with the bands that you love, and you love
wearing band t shirts stool of your favorite bands. But
it's like, but no, I actually hate Ticketmaster. I just
like the bands that they tend to showcase. That's what
(05:35):
I feel like experience is doing here. It's like they're
sort of like the thirty rock how do you do
fellow kids, Like they're trying to swoop in and get
a part of the action, when in reality they're not
able to provide anything of actual substance.
Speaker 2 (05:48):
Okay, now you're making you want to get a Ticketmaster
and an experience lower back tattoo.
Speaker 1 (05:54):
How much do tattoos cost?
Speaker 3 (05:55):
I've never I don't have a tattoo, but I would
pay for that for you to get given of this. Honestly,
we got a tap experience because they would probably they
probably would sponsor you. Yeah, we like credit cards a
whole lot more obviously, because well they have better protections.
They can be far more rewarding. But that being said,
there are new credit card fees that are coming down
the pike, largely in response to the CFPB's attempt to
(06:18):
cap late fees at eight dollars, which is by the way,
this is hung up in court. The outcome is unsure.
Speaker 2 (06:24):
Kind of like a student loan thing. It's like, what's
gonna happen here?
Speaker 3 (06:27):
We don't exactly know. Yeah, but the big credit card issuers,
the big banks, they're planning for the hammer to fall.
And like we said back when that announcement was made,
their credit card companies, they will find another way.
Speaker 1 (06:38):
To keep their profits elevated. They're crafty.
Speaker 3 (06:40):
They're gonna find a way to charge you some Some
of them are considering instituting new fees for let's say,
paper statements. Others are just raising their interest rates, even
as the FED is actually lowering the overnight lending rate.
Speaker 2 (06:53):
You're like, well, I thought my credit card interest rate
was gonna go down. Matt and Joel said that it's like, well,
there's this other thing happening over here, and.
Speaker 1 (06:59):
So big bank, so they got to find a way
to make a bug.
Speaker 3 (07:01):
It's actually going up. But bottom line, what this means though,
is that you should never run a balance regardless. That's
regardless of whether or not interest rates are going up
or not. Never carry a balance. If you have one,
pay it off as quickly as possible, of course, but
then just create a written plan, stick to it when
it comes to eliminating some of that credit card debt,
and then just make sure to pay attention to some
of the different hoops that the banks are going to
(07:22):
require us to jump through, and we'll make sure to
keep an eye on.
Speaker 1 (07:24):
That as well. Yeah, if there are any egregious examples
of that.
Speaker 2 (07:28):
Right, if there really is. If you get hit with
a paper statement fee, stop getting paper statements and the
need to offer the digital ones. And if you feel
like you need to keep the records of all your
credit card statements, do that. But you can save the
PDF of those and keep them on hand digitally. I mean,
do people actually save their credit card statements anyway if
they keep the paper ones. Yeah, so find a way
(07:49):
to reduce those fees. It's you're right, Matt. The credit
card companies, we knew this. If you tamp them down
in one area, they're going to find another way to
keep their profits up. Let's make the case for a
second for technology though, and against checks. We've done this before.
We hate checks, but it's not because even in this instance,
retailers aren't accepting them anymore. We talked about how Target
(08:10):
has basically said, no, we're not taking checks at checkout anymore.
It's because scammers can actually easily use checks to commit
fraud or theft. And there was a recent example of
this map. They can steal the check right out of
your mailbox and take your money. And so this is
happening to people who have opted to get their tax
refund by mail instead of getting their refund via direct deposit.
(08:32):
And so if you're one of those people, you are
a target to have your tax refunds stolen. Fortunately, ninety
percent of folks have opted for direct deposit these days,
but that's to lease a lot of people. Think about
ten percent of Americans Matt, getting their tax refundsent to
their mailbox. That's a sizeable number of folks who are
taking the old school route. And then if the check
gets stolen, it's a massive pain of the button, Matt.
(08:54):
There are examples of people who have said, hey, my
checkout stolen. I didn't come in the mail, and a
thief stole the funds, and then the IRS sends another
check it also gets stolen. This is a significant problem.
You're out, Yeah, and eventually the IRS is going to
send you the money that you're owed, but you're out
the refund for even longer. For a lot of people
(09:15):
met the refund can be you know, multiple thousands of dollars.
Speaker 1 (09:18):
A lot of folks are counting on that refund. Yeah.
Speaker 2 (09:20):
I mean, I think most Town of Money listeners know this,
especially given the demographics of the people who listen. But
direct deposit offer that it's easier, it has fewer pitfalls,
And so in the spring when you file your taxes,
make sure to elect for a direct deposit because if
you opt for a check to come, one it could
get stolen. And two, even when you're asking for a replacement,
you can't switch to direct deposit. They have to. The
(09:42):
IRS basically says no, we're going to send you another check,
and you can't change the method of payment.
Speaker 1 (09:48):
Yeah.
Speaker 3 (09:48):
So at the very least, maybe you know somebody so,
like you said, Jill, I think a lot of our
listeners probably aren't opting for the paper check, but maybe
there might be somebody in your family, for instance, who
is opting for that, and make sure.
Speaker 1 (09:58):
That this is a discussion that you have with them. Jill.
Speaker 3 (10:01):
Let's talk about entrepreneurship. There's a spike in small business
formation back when COVID hit, But the thing is is
that is continuing strong and many of the companies that
were formed during that COVID induced economic downturn, they have
been crushing it. And it turns out it wasn't just
that you know, stemy check phenomenon that we're causing folks
(10:22):
to reconsider their you know how, it is that they
spend their time they're nine to five, and that's good news.
It's happening all across the country and in big cities
and small cities, in metropolitan areas as well as rural
locations as well. And the rise of remote work, which
it is I will admit it is seeing a bit
of a pullback in corporate America, but it is allowing,
(10:43):
it is aiding the ability of individuals to start their
own thing when they have a little more time, They
got a little more flexibility to take on some of
that additional works.
Speaker 2 (10:51):
You're connected. It's so much easier to connect, and you
mentioned rural America, Matt, think about something like starlink and
how it's easier to get good internet service in almost
any part of the country guardless of.
Speaker 1 (11:01):
Where you are.
Speaker 3 (11:02):
Even if you're off grid somewhere else, you can still
have internet access. It's easier than ever to start working
for yourself, even if it's like only part time for
a while. Something like eighty percent of businesses are solopreneur businesses,
and we are personally big fans of starting your own thing,
and so if you are considering hanging your own shingle,
we would recommend for you to listen back to episode
(11:24):
eight eight four week.
Speaker 1 (11:25):
You know, we tied some of the benefits.
Speaker 3 (11:26):
We talked with guests Laura Adams about maybe why it
is that you should consider.
Speaker 1 (11:30):
Working for yourself.
Speaker 2 (11:31):
Yeah, and she gave a lot of great insights for
how to go about launching that business and then specifically
as a small business owner too as this wholopreneur kind
of some of the things you need to know. So
that's definitely worth listening to, Matt. One of the reasons
people often choose to not go work for themselves is
because their healthcare is tied to their job. Right, A
lot of people continue working for the man because they're like,
(11:54):
how am I going to pay this twenty five thousand
dollars healthcare premium annual premium for my family if I
go out and work for myself, and it is that
is I will admit, one of the toughest hurdles to
jump when we're talking about going out and starting your
own thing. It's a terrible economic reality in this country
that reduces entrepreneurship and it inhibits economic dynamism, and it's
(12:17):
one of the reasons I think that health care costs
are rising much faster than almost everything else, the employer
involvement in individual and family health care in this country,
and as everyone knows, buying healthcare as a self employed
person is tough. Is so much of how much it
costs depends on your income because of subsidies on the
healthcare exchange. A lot of people, including you and I Maatt,
(12:37):
have opted for health sharing companies because they're not traditional insurance.
But because of that they can save you a bundle
with some pitfalls as well that you have to be
aware of. But some employers have actually started taking a
different approach and so instead of providing actual healthcare and saying, hey,
here's the plan that we offer once you sign up,
and we're an open enrollment season right now for a
(12:59):
lot of people, well, they're offering you money instead to
get your own plan on the private market. I like
this so much more. You know, more employees are interested
essentially in lessening their own financial burden because how much
premiums have gone up, And it does give employees more
choice over the type of coverage and the type of
plan that they choose to have. But I will say
this too, where it's happening, it could be end up
(13:22):
being a financial loser for some folks. Depending on how
generous the healthcare stipend is, you might find that you're
not able to buy as nice of a health care
policy that maybe doesn't cover quite as much with the
new stipend. It's good for employers. I think it can
help you make wise decisions when you're shopping for insurance,
but you also might find that there's a gap there
between the coverage you used to get and the coverage
(13:43):
you can now afford. So ultimately, wouldn't it be nice
if we were able to disentangle healthcare from employment altogether.
I think it'd be good for our country. It'd be
good for small businesses, but good for the dynasism. Yeah,
that's dynamism.
Speaker 3 (13:58):
It was like combining cynicism and I guess a dynamic
labor market perhaps. But something else that is at least
partially connected to your job is your retirement account. We're
talking about four to one ks here. Well, changing jobs
can also have adverse effects on your retirement and the
reason for that is because there is some new research
from Vanguard and they find that when people switch jobs,
(14:21):
and even if it's to snack a bigger paycheck, they
often end up forgetting to sign up for the new.
Speaker 1 (14:25):
Four to one K plan rookie fail or. A lot of.
Speaker 3 (14:28):
Employers are auto enrolling their newer employees, but sometimes the
default rate is only three percent. And let's say you're
at your previous employeer, maybe you're up to I don't know,
six seven, eight percent perhaps maybe more, maybe even more. Yeah,
And because of that, Vanguard says that this could be
easily this could be a six figure mistake, costing folks
massive money and compounding over the coming decades because of
(14:50):
that reduced contribution amount, because of subsequent inertia bias as well.
You just kind of stick with what it is that
was the default option, and you're missing out. Future you
is missing out. And so if you're changing jobs, just
make sure that you pay close attention to what your
prior contribution percentage was. And what we would suggest is
just try to mirror that at your new employer, right,
(15:10):
just carry over some of those good habits or even
consider raising it, especially if you are making more money,
because it's like, hey.
Speaker 2 (15:16):
It's a perfect time.
Speaker 3 (15:17):
It's a perfect time for you to sort of trick
yourself into thinking that, oh, well, it's not actually painful
at all for me to increase how much I'm saving
because my paycheck it's staying the same, and so you're
able to save more or you know what, a lot
of folks with the raise, they're able to do both.
You experience a slightly fatter paycheck but not over the top, yeah,
while at the same time experiencing higher amounts of saving
(15:38):
as it's going towards your Form one K.
Speaker 1 (15:40):
This was something I like, the both and approach.
Speaker 2 (15:41):
Yeah, it's funny, this is something I hadn't really thought about, Like, oh,
over the years, you've been increasing your four one K
contribution percentage. You started out at five. Let's say by
the time you left that job, you got it up
to twelve or thirteen percent. Amazing. But then you get
the new job, you're auto enrolled at three and you
just let it be. I just never thought that was
a problem. Vanguard points out that it's a meaningful problem.
So if you're switching jobs, definitely pay attention to this, because, yeah,
(16:04):
if you're reducing your contribution amount by that much, we
are talking about a potential six figure deficit when it
comes to your future retirement.
Speaker 1 (16:12):
But Joe, we got more to get to. We're gonna
talk about the types of landlords who are the worst.
We'll get to that more right after this.
Speaker 2 (16:26):
All right, Matt, we're back. We've got more to get to.
We will talk about preming landlords and no, it's not
gonna be a self owned Okay, we're decent landlords people.
But now let's get to the ludacrous headline of the week.
This one comes from CNN and the headline reads, couple
in severe uber crash can't sue because of an uber
eats order, And that sounds really frustrating, Matt, and basically
(16:48):
My takeaway from this article is Uber sucks, but they're
also not alone and sucking. They're acting like most other companies.
And what do most other companies do. They stick arbitration
agreements in the terms of service that we all sign
but that none of us actually read. And the couple
in this attempted lawsuit was severely injured, including spinal fractures,
(17:11):
which sounds terrible, after the uber they were riding in
was in an accident. And then Uber's response essentially is
tough luck. You got to go through the system we've
set up that's essentially designed to screw you. So what's
so bad about arbitration, you might be wondering, Well, the
deck is stacked against the individual in the case of arbitration,
(17:32):
the arbitrator. This is The New York Times did this
investigation a few years back, Matt. The New York Times
essentially found that arbitration finds in favor of the company
eighty plus percent of the time. So you, as an individual,
you could be spending a lot of money in arbitration
and you're not getting a fair shake here. You're not
getting a fair hearing. Companies avoid paying out billions of
(17:53):
dollars to consumers by using the arbitration system to their advantage.
So this is one of those clauses that's in the
fine print of every terms of service that we all
automatically ascribe to. I think it's important to point that out,
and I think it's also important for us to highlight
when companies are using it in a way that's improper.
And part of this was the couple said that what
(18:14):
was their daughter who signed up and made that order
through Uber eys It wasn't even them, and Uber saying nope, sorry,
it was under the household or whatever. We're holding you
to this.
Speaker 3 (18:22):
Yeah, the terms of service agreements that we have to
accept in order to use certain software and different apps
and different services, it's kind of ridiculous, get out of control,
because I think someone who is following more of the
letter of the law would say, well, you shouldn't agree
to those terms.
Speaker 1 (18:34):
Of service, but like, it would truly take a part time.
Speaker 3 (18:37):
Job to be able to read through all of the
different agreements that you scroll down and clickach so you
don't even have to scroll down anymore, because it's like
it's hyperlinked.
Speaker 2 (18:45):
Rumpel Stiltskin ask man, I feel like I probably owe
my firstborn children to one of these companies.
Speaker 1 (18:49):
It's ridiculous.
Speaker 3 (18:50):
But the reason we're pointing this out is because there's
a certain amount of hassle that we expect to deal
with when it comes to being able to use some
of these different services. But when there is a company
that isn't doing the right thing, I mean technically, Joe, well,
like we're media and so our ability to kind of
shine a light on this and hopefully to encourage companies
out there to do a better job we were doing.
Speaker 2 (19:09):
Are we the mainstream corporate media mat or are we
the independent media?
Speaker 3 (19:12):
I feel like we're a little more alternative, independent type
of guys. But it makes me think back to Disney.
Remember when they there's a lady that died because of
that severe allergic reaction.
Speaker 1 (19:22):
Yeah, that was just not longer.
Speaker 3 (19:23):
At least they back down when they realized that they were,
you know, treating their customers in a way that was
just beyond the pale. But Uber they're not budging. So yeah,
we want folks to know that these arbitration agreements they're
kind of par for the course and they do limit
your legal recourse and hopefully, yeah, hopefully Uber ends up
doing the right thing. I will say it wasn't just
an accident that the car was involved with the driver
(19:45):
did run a red light, and so part of me,
I'm just advocating slightly on behalf of Uber, like I'm
going to play devil's advocate here and say, maybe we
don't have all the facts, because typically you would sue
the driver because they have auto insurance. But I'm curious
us if the couple is looking for a bigger potential
payoff from a giant company as opposed to just the
meager offerings that they might receive from somebody who has
(20:08):
auto insurance. Of course, but that having said, if that's
the case, then Uber needs to communicate that clearly, because
you know, this is a pr issue. If that's the case,
then they need to make it clear that like no, no, no,
like they're going to be taken care of.
Speaker 1 (20:20):
It's just this is the mean. Yeah.
Speaker 3 (20:24):
So either way, it doesn't seem like that there's a
whole lot of clarity or transparency in how it is
that they're handling this.
Speaker 2 (20:30):
But speaking of the companies being unkind, how that's not
rare at all, isn't that?
Speaker 1 (20:34):
Well?
Speaker 3 (20:35):
On that note, we would recommend to maybe don't rent
a home from Invitation Homes. The FTC they actually issued
a warning about unnecessary fees that Invitation Homes has been
charging tenants. They've got this worry free way of renting
a home, and the worry free marketing it didn't quite
line up with the real life tenant treatment that folks
(20:55):
were receiving.
Speaker 2 (20:56):
There's been some horror stories, yeah, they've come out over
the years about Invitation Home.
Speaker 3 (21:00):
Yeah, and they're going to be forced to refund forty
eight million dollars to folks who have rented with them,
and these two stories with it, you know, with invitation
Homes and Uber, I think the takeaway is just to
know your rights, and in this case, I would say
do your best to avoid Wall Street landlords or phase
of the mama pop style landlords.
Speaker 2 (21:18):
It's not like all mom and pop landlords are great.
I'm sure there's a lot that is true. There's a
number of them that are bad. But the number of
stories that have come out about invitation Homes across a
number of years are so harrowing. The lack of response
to issues that tenants are having. And then this lawsuit
from the FTC about the excessive fees that are being charged,
(21:40):
the non refunding of security deposits when they were clearly
gidden fees.
Speaker 3 (21:45):
Yeah, I don't like that either. Yeah, the ability for
a company to be transparent in this way as to
what it is you're actually going to charge your customer.
Speaker 2 (21:50):
They say, oh, it's going to be worried for your renting,
it turns out it's it's not worry free and it's
going to cost you. And I think this is also
really important to mention, Matt to whether you're renting from
a corporate land or whether you're running from an individual.
It's always important to take photos and videos when you
move in to note the condition of the home. Typically
there's like a walk through inspection with the landlord, but
(22:11):
they don't always do that, and so what I would
do is I would document thoroughly, Hey, this is what
the home looks like. If there are little issues, and
then you can point them out to the landlord and say, hey,
these things could be fixed. If they're minor things, you
don't need to necessarily push it, but at least you
have that in your back pocket for when you're moving out,
and you can document take photos and videos then too,
and say, hey, it looks pretty much the same, or
actually there is this gouge in the paint here or whatever.
(22:34):
But if you have photos and videos, that can be
your protection if there is some sort of legal recourse
that you have to see totally, Matt, let's talk about
insurance for a second, and specifically insurance in the light
of what's been happening recently. As far as the weather,
it's probably an understatement, just horrific weather events essentially happening
in the southeast. The destruction from Hurricane Helene was rampant,
(22:58):
specifically in western North Caro Line. We talked about that,
and then Hurricane Milton pummeled Florida earlier this week too.
It seems like it wasn't as bad as it could
have been, fortunately, but it's been an awful couple of
weeks on the natural disaster front. I was talking to
my neighbor who's got a place in Florida, and he's
basically saying, I don't know, man, I think I might
be ready to get out, like this is just too
much to bear. And I totally understand that. Like, if
(23:19):
you live in Florida, it's been your life has been
caught up in horrific hurricanes. So our hearts go out
to everyone who's lost family or friends who's had to
evacuate and met their estimates. Property damage could cost owners
forty seven billion dollars. It's kind of hard to fathom.
That's a big number. And it also has highlighted issues
that FEMA has been dealing with perpetually and continues to
(23:42):
deal with, in how they respond to disasters and how
people are how quickly people are helped, and how quickly
money gets into their hands. It's also highlighted the gap
between what people think they're coverages and then the lack
thereof when it comes down to it. A lot of
folks thought, hey, my homeowner's insurance it's going to cover
the damage that I've sustained, and they're often sorely mistaken.
That's because these policies don't typically cover damage from flooding.
(24:06):
That's right, you need a separate policy for that. And Matt,
especially in North Carolina, fewer than one percent of folks
in the places they get like the worst flooding damage
have that kind of coverage, which adds insult to injury.
And so yeah, if damage you are a loved one
sustained is called flood damage, but you think it isn't.
It's important to fight back because that's happening too, because
(24:28):
some insurance companies are saying, hey, listen, no, this damage
was due to flooding, and you're saying, no, wait, this
it wasn't. There was a hole in the roof, that's
how the water got it, like a tree smashed through
the There was no flooding that happened. You have to
be willing and able to document and push back on that.
Speaker 3 (24:43):
Yeah, they're standing there pointing fingers at each other right
where the Hormeter's insurance is saying no, no, this is
due to flooding, and then the spider man means is
exactly it's pointing, be like, no, that's actually when damage
that's not covered under flood insurance. And so there's Yeah,
there's a whole lot of advocating for yourself that's going
to have to take place here.
Speaker 2 (24:57):
Yeah, a couple of things too. Won't file a claim
if the damage you sustained was minor, if it's something
you feel like you can fix fairly easily. And there
are a lot of people in that situation too, where
it's it's just minor damage. Fortunately, you probably don't want
to get insurance involved because you could see your rate
skyrocket and it wouldn't be worth it. The other thing is,
if you feel like you are being treated unfairly by
an insurance company, you know, I want to contact a
(25:18):
public adjuster. My parents are literally in this process right
now because they sustained some roof damage and oh yeah,
and the insurance company basically said, hey, listen, we don't
think you need a whole roof replacement. And they're saying,
we're pretty sure there's enough damage that the whole roof
needs to be replaced, and so they're an impass and
so what you do then on your own dime, but
you got to hire a public adjuster who can help
(25:39):
mediate that. But oftentimes public adjusters can help you get
paid in a way that you advocating for yourself cannot.
Speaker 1 (25:45):
That's true.
Speaker 3 (25:45):
Yeah, And I like what you said too about considering
not even going through insurance if it's a minor enough incident.
I actually have a neighbor who this is actually before
all the storms, but it.
Speaker 1 (25:54):
Was a.
Speaker 3 (25:56):
Local storm and a tree went down damage like they're siding,
took out part of the fence, and I talked to
him like the very next day, and I was just like, hey,
actually doesn't look all that bad, huh. But he had
already reached out and already filed a claim. And I'm
looking at this as someone who schedules work at homes
fairly often, and I'm thinking, man, you could probably take
care of all of this for a few thousand dollars.
(26:17):
And he's already got the insurance company involved, which could
have a negative impact on his premiums.
Speaker 2 (26:23):
Sit down on the road, my deductibles one thousand bucks.
This is going to cost three. I'm coming out two
grand in the green. Ultimately, that's that's not what happened.
Speaker 3 (26:31):
You are perpetually and definitely even sometimes paying more in
premiums every single year.
Speaker 2 (26:36):
That's going to go on your clue report when you
trying to switch insurance companies.
Speaker 3 (26:38):
So that it happened, y'all. So it might be worth
crunching some numbers in that case. Also for the future,
for folks who have been impacted by these major storms,
check out floodsmart dot gov and that's where you can
determine your risk level, where you can shop for a
flood insurance policy if it turns out that you are
in need of one, and if you are, like the
vast majority of folks without coverage for flood damage, you're
(26:59):
probably need to get help from FEMA. So make sure
to apply for assistance over at FEMA dot gov or
link to where there is where you can apply for
housing assistance essentially, but then just document everything along the way,
because a lot of folks aren't going to necessarily want
to wait to get their life back on track to
hear like a lot of folk aren't gonna wait to
hear from a government organization who is probably completely up
(27:23):
to their neck in trying to help folks. But take pictures,
take video to highlight the extent of the damage, and
keep all your receipts. But we wish everyone out there
the best of luck, and we you know, last week
we talked about ways to donate if you are so inclined,
and we'll make sure to include those links to some
of those different vetted organizations again, but especially too when
it comes to FEMA. I think I saw only something
(27:45):
like three percent of folks who are denied, So folks
who apply for FEMA only something like three percent of
folks who get denied and are told no, actually appeal
And man, I know that there's a whole lot going on,
but when we're talking about a big ticket item like this,
like your home, this is something that's worth appealing. So
don't be like ninety seven percent of folks. We want
(28:05):
you to be a part of that three percent.
Speaker 2 (28:07):
Yeah, this squeaky wheel gets the grease. And if you
get turned down or something, it could be just because
you didn't feel something out properly on the application. Like
there's all sorts of potential explanations. So if you're first,
the first word you get from FEMA is no, go,
don't go, like keep barking barking at that door.
Speaker 1 (28:24):
That's right, all right.
Speaker 2 (28:25):
In another sign, Matt, that money is still a taboo
topic in this country, Americans, as it turns out, a
recent survey shows would rather talk about politics than money.
They would rather talk about who they're voting for from
the heart of belief with their fellow human There's I
don't want to talk about that with almost anybody right now,
exactly close trusted friends who get me. But this is
(28:46):
according to a new US Bank survey. I wish we'd
talked about politics less and talk about money more. And
if we're able to accomplish one thing with this show,
it would hopefully be to prod people to not only
handle their own money better, but to feel like they
can talk about money more freely in their lives with
their friends and their family, not in some sort of
braggedocious way. Look at how I'm croshing it. I'm doing awesome.
(29:08):
I'm on money Gear seven, whatever it is. But it's
certainly not to be able to do that to make
yourself look awesome. But money, confusion, money shame are just
these powerful things. They hold people back, oftentimes from making progress,
and I think so much of that. The reason that
is the case is because we have made it a
topic that people are essentially not allowed to discuss. And
(29:30):
you know who better to start some of those combos
than people who listen to the show How to Money.
You don't need to know it all, You just need
to be willing to start a conversation and to allow
for a little bit of awkwardness in the beginning. Matter
You might start that conversation start feeling a little weird
and self conscious that you're doing it. But I think
there are ways to go about being a little more
open about this topic without freaking your friends out. And
(29:53):
I think the more we talk about it, the more
we normalize this as a topic of conversation, the better
off we're all going to be, because then I guarantee
your friends and your family have questions they don't know
what they're doing with their money, or if they do,
they love to talk about it too. They just feel
uncomfortable as well. So starts slow, starts small, But I
think having those conversations it's going to be way better
than talk about politics, talk about money instead of Thanksgiving
(30:14):
table this year?
Speaker 1 (30:15):
Really agree?
Speaker 3 (30:16):
Okay, So on the note of conversations, something that economists
have essentially stopped talking about. It's the possibility of a recession.
Goldman sacks they just reduced their projected likelihood of a
recession in the next year to fifteen percent. And Jully,
remember it wasn't all that long ago that I think
Bloomberg said that we had a one hundred percent chance
of experiencing a recession.
Speaker 2 (30:36):
This was almost exactly two years ago, Matt. It was
October twenty twenty two.
Speaker 3 (30:40):
Yes, the end of twenty two, and even early into
beginning of twenty three. It was like, oh, it's going
to happen. It's going to happen. When's it going to hit?
Speaker 2 (30:47):
So much humility coming from Bloomberg, the one hundred percent
call that didn't come to pass.
Speaker 1 (30:52):
It never hit.
Speaker 3 (30:53):
Economists are now saying that everything's going to be fine
and dandy, there's no clouds on the horizon. And we
say that, like, I'm not poking fun at economists, I'm
not mad at them, but I do tend not to
trust these sorts of predictions because, like a one hand,
the economy, it certainly looks solid right now, markets at
all time highs is great. But I also wouldn't assume
(31:14):
that events out of our control couldn't negatively.
Speaker 1 (31:17):
Impact the status quo. We would always.
Speaker 3 (31:19):
Recommend for folks like basically, anytime there's good news, we
want you to think, hey, something bad could happen. And
when everyone is like freaking out and running for the
hills and saying that like the world's about to end,
look for opportunity because the herd mentality, I think oftentimes
works against our own ability to get ahead with our
personal finances. And so what that means for right now
for you practically speaking, is just to not get too
far over your skis. When it comes to your spending,
(31:41):
it means living on less than you make. It means
living within your means having a solid emergency fund in place,
having life insurance, all the things that we talk about
day in and day out here on the show. I
mentioned the stock market a second ago. It means not
getting overly excited that, oh my gosh, I'm wealthier than
I've ever been in my entire life.
Speaker 1 (31:59):
Well for most people.
Speaker 3 (32:01):
That's for like retired you, and it shouldn't have an
impact on how it is that you're spending money today. Yeah,
And so if you're tempted to check your balances, don't
do that. Just keep investing like you always have them.
And these predictors might be right. There might not be
a recession over the next incoming over the next year.
Speaker 1 (32:17):
We don't know.
Speaker 2 (32:18):
They don't know. And just like the Bloomberg people didn't
know two years ago because they were dead wrong. They
were almost the exact opposite.
Speaker 1 (32:24):
Everybody was dead right.
Speaker 2 (32:25):
Yes, So just yeah, don't believe the talking heads economists
have correctly predicted predicted like nine out of the last
two recessions. Matt, that is a common thing. And I
also want to say this too, that despite whether or
not we have a macro recession that kind of like
impacts our country as a whole, there's always the possibility
for a micro recession, like a personal recession in your
(32:45):
own way, whether it's just your specific industry, your employer,
something that happens in your own family. So like kind
of what you're talking to about, personal preparedness that matters.
Speaker 1 (32:55):
That's what's all about.
Speaker 2 (32:56):
Yeah, and you might see, oh, things are rosy with
the economy, but actually things aren't great in my life
right now. We want you to be prepared for that eventuality,
despite what the goons at Golden Sacks or Bloomberger are saying.
Speaker 1 (33:07):
That's right, all.
Speaker 3 (33:08):
Right, Well, we hope everyone has a great weekend, Hug
the ones you love, and we will see everyone back
here on Monday. You can find links up on our
website at howtomoney dot com.
Speaker 1 (33:17):
That's why we've.
Speaker 3 (33:18):
Got all the different resources for you and your personal
finance journeys, so many resources. Man, But Joe, I think
it's gonna be it for this episode. So until next time,
best Friends Out and best Friends Out
Hosts And Creators
Joel Larsgaard
Matthew Altmix
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