November 15, 2024 • 36 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: direct home sales, content to rent, defund the HOA, affordable manufactured homes, mi casa es su casa, $50 million in TGI Friday bucks, 1900% in BTC gains, flood-damaged cars, and ripped jeans for a premium.
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Transcript
Episode Transcript
Available transcripts are automatically generated. Complete accuracy is not guaranteed.
Speaker 1 (00:00):
Welcome to How to Money. I'm Joel Matt and today
we're talking about people being content to rent, we're going
to offer a gift card caution, and we're gonna talk
about bitcoin bowls.
Speaker 2 (00:28):
That's right, buddy. This is our Friday Flights, our weekly
roundup of personal finance news out there, specifically how we
think it's going to impact your money. But should we
go ahead and tell folks about this news site that
we came across that launched recently, Gallion.
Speaker 1 (00:43):
It's a I don't even know where I saw it,
but I was like, oh, this is really interesting and
just kind of allows people to list their own home
for sale, and they're kind of trying to create their
own marketplace, avoiding the National Association of Realtor stranglehold the
mls US, which has been kind of the lynchpin to
where people can buy and sell homes and how homes
(01:06):
get kind of thrown out there into the ether when
they're for sale. And matt Zilla used to have this feature.
I don't know if they still do make me move.
Is that still on the site.
Speaker 2 (01:13):
Oh, I definitely remember it. Yeah, I'll be honest, I
haven't spent as much time on Zilla which is probably
a good thing for mental health.
Speaker 1 (01:20):
Well, I used to love that feature because I think
at some point there is a price that I'm willing
to accept right for a home, even the home I'm
living in, even if I love it. Well, if someone
wants to come off me like two million dollars tomorrow.
Speaker 2 (01:33):
Okay, sure as well just stick up there for five
million if someone's willing to pay that.
Speaker 1 (01:38):
No one would have paid me five million for it.
But like, I like that kind of idea that you
can at least kind of name a price if somebody says,
I'm desperate enough for the place that you live in
that I'll pay it. Boom, Like you're able to find
a place where buyer and seller are willing to meet.
And it seems like Gallion is kind of trying to
create that marketplace and I think it's neat.
Speaker 2 (01:56):
Yeah, searched our area. There's a couple dozen homes where.
It's actually kind of funny too, because you can see
how it's like there's little pockets of listings and it's
like someone learns about it and then they tell a
couple of their friends and they also get their house
up there as well. I mean, bottom line the more
competitors there are in the space, the more people are
a going to be talking about it. But then just
there's just more competition, and I think more folks are
(02:18):
going to be willing to go out there quote unquote,
go out on a limb, as opposed to kind of
going with the more traditional model of going with a
listing agent, having an agent who's looking for a home
on your behalf, because let's be honest, I don't know
about I mean I do know actually about you, Like
you are not only looking at the homes that your
realtor sends you. You are getting out there yourself, right,
(02:38):
and so like the model has completely changed, at least
when it comes to the work that's being provided, but
the commission hasn't changed. And that's what that's the biggest
sticking point. It's not that we don't think that realtors
are providing value, it's just that maybe the way that
they should be compensated should change. I still think that
there is going to be a space a market for realtors.
(02:59):
It's still the most of item most people are ever
going to purchase. But I think there's a lot of
room in between four folks who maybe are looking at
like a first time home purchase where they're not spending
a ton of money, where they are going to be
a little more engaged in the home search process.
Speaker 1 (03:13):
But I think this site, at least what it's trying
to do is go to the complete opposite and end
of those spectruments and just line up buyers and sellers
together through online listings on Gallion's website specifically, and maybe
at least for some people they'll be able to find
their perfect match. They'll be able to avoid paying any
real circ commission. And if this does reach critical mass
(03:35):
where enough people are listing properties and searching for properties,
this could be like a new way forward.
Speaker 2 (03:39):
Yeah, and again, even the fact that it exists, I
think it can be promising and hopefully can open up
the housing market as things have slowed down significantly. Let's
keep talking about housing, Joel. Sixty percent of people thought
it was smart to buy a home four years ago, right,
so sixty percent. Then only twenty percent think it's a
smart move today, and man, rightly so. Starter homes they
(04:00):
cost more than a million dollars in a ton of
different cities around the country. That's crazy to think, right,
It's like, yeah, what kind of job you have to
be able to afford a million dollar, million dollar starter home.
Sticky high rates, they actually taken the wind out of
the sales of a lot of folks as well, meaning
they are becoming more content to rent for the time being.
(04:21):
There's your I like the rhyming better than the alliteration personally,
but the truth is, in most markets around the country,
you can rent the home that's equivalent to what you
could buy and pay far less every single month, and
by doing that, you retain that flexibility because you can
always opt to buy if marketing conditions change. And of
course you don't have you don't have the maintenance, you
(04:43):
don't have the repairs to worry about. So if you
are in the twenty percent camp of folks who want
to own a home, I totally get it. But renting
maybe a little bit longer in order to juice your
savings and hopes that barring rates, they you know, hoping
that they'll take down or maybe if supply tacks up,
or actually both would ideally happen at the same time.
(05:04):
That could still be the best financial move right now
for a lot of folks.
Speaker 1 (05:07):
Yeah, I hate them, maybe dismay that people feel like,
all right, I guess I'm gonna take buying off the table.
But I also think in a lot of ways it's
smart because the market is pretty ridiculous. As someone who's
especially for first time home buy it's if you're selling
one home buying another one, I think it's like, oh, well,
at least I'm making out like a bandit on the
(05:27):
sale potentially, and even though I'm paying out the nose
for the next house. But it makes us a whole
lot of sense financially speaking, for a lot of folks
to say, you know what, I'm gonna wait to buy
for the time being. Another reason I think to be
dubious of buying a home these days is rising home owners'
association fees. Some homeowners Matt they're seeing just ridiculous increases
(05:47):
in their HOA dues. And this again, this kind of
makes sense too. It jives with what's going on. The
cost of insurance has risen significantly, so is the cost
of repairs and maintenance and so up keep for the pool,
the tennis court, it's all that kind of the common areas.
It's not as cheap as it used to be. And
you know, for associations that weren't good at planning. Some
are really good at planning. They've got money banked and
(06:09):
they've been, you know, just raising hoadus steadily over the years. Well,
those year over year bumps might not be too bad,
but for a lot of other associations who weren't good
at planning, those bumps can be significant or worse. Maybe
there's some sort of special assessment that gets levied that
can be thousands and thousands of dollars. Those can be considerable.
(06:29):
And then you know, I know, some folks prefer to
live in neighborhoods that have in HOA. They like the
well maintained public spaces. They like the idea that their
neighbor can't paint their door hot pink or something like that.
But it's called self expression, I know. But in hoa's
you're not allowed to have that self expression. So I
think a warning here, just be careful before buying a
(06:50):
home in a neighborhood that has an HOA, or buying
a condo right where there's a homeowner's association, which are
typically is in condo communities. It's harder to do these
days with I think a third of homes are a
part of an HOA, and when we're talking about new builds,
the vast majority are. But if you're going to do that,
if you are going to buy a home that does
have a homeowners association, dig into the financials of the
(07:13):
HOA before you buy, because you might be like, oh,
this is a reasonably priced monthly fee. Well, it might
not stay there for long. There was a local example,
Matt of a twenty nine thousand dollars assessment per person
in the community to fix a dam that was owned
by the community. And that's just shocking. I mean, we've
(07:33):
seen what happened has happened in Florida too, homeowners associations
jacking up rates significantly. So hoa's they can be good
and they can help protect your home value, but they
can also be quite expensive.
Speaker 2 (07:43):
Yeah. So what do you think about manufactured homes as
being a potential solution. Prefab manufactured homes they get hauled
on site, you know, normally they're like split down the middle, yeah,
and then they I guess get bolted together.
Speaker 1 (07:53):
I think those have come a long way actually in
recent years, and maybe twenty years ago, it wasn't, as
you know, worthwhile a solution. But no, I guess I
think they could be part of the solution to high
housing costs.
Speaker 2 (08:03):
Yeah, it makes me so. We on the show, we've
talked before about the problems with nimbiism, you know, where
folks who are like not in my backyard. We've talked
about zoning laws that prevent building new homes in much
of the country without a lengthy process, and those remain
hurdles to increased building. And if we as a country
incentivize adding more supply, I think that would reduce prices
(08:23):
over time. But manufactured homes, I think that could actually
be a part of the solution as well. It's funny
how things have changed over like one hundred years, because
like the Seers catalog where you could buy the home kits,
like our old neighborhood that we used to live in,
I think like half of the homes, half of the
bungalows in that neighborhood were essentially you could look at
some of the old Seers kits and see your home
(08:43):
an illustrated version that was one hundred years old, yeah,
drawn in there.
Speaker 1 (08:46):
And those kits what used to cost like one thousand bucks.
I mean those insane to think about how cheap and
how cool those homes actually are.
Speaker 2 (08:53):
They look really cool. But those days are seeing a resurgence.
You can buy a manufactured home on Amazon. You can
even buy one on Facebook, although you know they I
don't think they hold a candle to the old bungalows
of your But zoning laws all right, So it comes
full circle here. Zoning laws often prevent folks from putting
(09:14):
up manufactured homes on their property. So if you are
living in a community, I can understand why some folks
are wanting something that's not like cookie cutter homes, but
something that feels a little more uniform and where you
can't just stick whatever you want on that property.
Speaker 1 (09:29):
But especially if you are.
Speaker 2 (09:30):
Further out, the ability to spend significantly less on a
manufactured home, I think that could be just an awesome
way to consider saving a ton of money. Just make
sure to check local rules. But new building methods as
well as manufactured homes, I think could if done in
conjunction with zoning reform, it could provide a lot of
relief on the home buying front as folks are looking
(09:50):
to especially if for folks who are looking to get
their first place.
Speaker 1 (09:53):
Yeah, it's like we have to look into all of
those areas. Let's keep talking about real estate, Matt. There's
something that people are doing in order to combat the
high cost of real estate where they live, and this
is actually something that I think is ill advised, and
it is buying a home with friends. So people are
pulling their assets together. They're saying, hey, Sarah, hey Steve,
(10:15):
whatever your best friend's name is, and they say, I
can't afford a home on my own. I know you
want to buy a home too. Why don't we, with
the money that we've both been able to save, put
this down payment on a single family home and we'll
both we'll co own it.
Speaker 2 (10:31):
What could go wrong?
Speaker 1 (10:32):
What could go wrong? Right? And when you look at
the stats, there's a lot more people who are actually
opting to do this. This is kind of it's a
trend these days, I think, Matt. Part of that has
to do with people getting married later in life, and
so they're like, I don't know, sure, I'm in my
late twenties. Why not buy a home with a friend,
since maybe I'm punting marriage until my mid thirties. And
(10:54):
the next thing you know, you're making offers together, but
getting into that purchase is actually fairly easy if you
have the funds and you have the desire. The tough
thing is getting out of the purchase, right. It's so
much harder to get out than it is to get in.
And so if living together with the person you have
bought this home with isn't working out, or even if
(11:14):
you just want a portion of the equity because you're
moving for a job, or that you do decide to
get married, your co owner or co owners, if you're
doing this with multiple people and not just one other
person might not be in the financial position to oblige
your whim. They might say, oh, sorry, I can't actually
by this portion of the home out, or we'd have
to do a cash out refinance, which is also a
(11:36):
tough move to do. Even if they want to help
you out, oftentimes they can't. So the Wall Street Journal
had a profile of people who are combining assets to
buy homes and just like how sticky and how difficult
it can be, and how it can lead to hurt relationships.
You might be the person who gets lucky in is
able to make it work, but this kind of arrangement
can hurt your personal finances, and it can hurt your
(11:57):
relationships too. So I think our advice typical would be
a stay clear, don't buy real estate. Well, these are
the people most of the time.
Speaker 2 (12:04):
Well, it's different too, if like you are doing this
with your spouse, because you that's a very different kind
of relationship than yes, like even to your bestie, but
let alone. Definitely just like your buddy, right Like, when
you are married, you've literally taken vows, there are witnesses.
Maybe you even threw a big party afterwards called a reception.
Speaker 1 (12:21):
Yeah, the like stakes are ramped up.
Speaker 2 (12:23):
It's a stickier relationship, you are more committed, and so
it makes sense that, oh, yeah, we are going to
buy a house together. It's a lot different to do
that with a friend. And a much better solution, I think,
would be for there to be a single buyer and
then hey, maybe you'll rint out that extra room or
rent out two rooms or rent out three rooms. But
the ability for a single individual to go in there
and make that purchase, and chances are if you're the
(12:45):
one listening to the Personal Finance Money podcast here, that
person is probably you. Yeah, and so just to think
creatively about this. Typically on the show, we call this
house hacking, but back in the day, it was just
called roommates, and that's just certainly a way to get
your housing costs down. Why still being able to purchase that.
Speaker 1 (13:02):
House, and you might even be able to provide your
friends like a slightly below market rent. Say you're gouging there, right, Hey,
I'm buying this place, and yes, I know your rent's
pretty expensive. And once you move into the bedroom of
the place I'm buying, and hey, then but then it
just it creates less of that you're not commingling your
finances to this overwhelming extent. And you're right, man, it's
(13:25):
not overwhelming if you're married, but it can be overwhelming
if you're just friends. And then both of you want
to go separate.
Speaker 2 (13:30):
Ways, and you can like wade into those waters. It's
so easy to wait in those waters. Like you can
just say, hey, let's just try this out for three months,
Like you don't have to even sign it, like create
a lease, and hey, this is up to you, by
the way, as the landlord, and as the owner of
the property, you get to decide how long you want
them to be there. So you could say, hey, let's
try this out for three months. We only met last year,
so I'm not totally sure how this is going to
work out. And three months in it's like, hey, let's
(13:51):
do this. This is working out really well. We literally
that's what we did here with our office, the studio
that we rent. It's a carriage house and they'd never
done that before, and so we're like, let's just try
it out. Let's just give it a few months. We
came back to the table, talked about it, and we've
been here for like, we're on our third year now
at this point, Joel, and we've only had one rent increase.
I think it's just because we're great tenants. Thanks Andrew. Joe,
(14:14):
you want to talk about I know you're not a
fan of gift cards. Do you have some evidence? Do
you want to you want to talk about gift cards
especially I guess this time of year.
Speaker 1 (14:21):
Feel like this is something we debate at least once
a year, typically right around this.
Speaker 2 (14:25):
Time, the bi annual conversation that we have because well,
this is this is the time of year where people
are most enticed to buying gift cards. They're an incredibly
popular purchase this time of year, which makes sense, and
they I've always understood why people are attracted to buying
gift cards. I feel like they they seem like they're
are an incredibly thoughtful gift. They're seen as more intentional
(14:46):
than giving just cash, which some people think of is
is ghost uncouth. Yeah, say right, And that might or
might not be true. I think it depends in the
eye of the beholder. But when you buy a gift card,
you're I've always said this, I made this argument. You're
trading US dollars that can be spent anywhere in the world,
essentially definitely anywhere in the United States, into a plastic card.
(15:07):
They can only be spent at one retailer. So it
doesn't really make a whole lot of mental sense for
me to do that. That's not my favorite thing in
the world. But making matters worse, Matt And this is
the this is going to help prove my point. Hope,
I hope you listen to me.
Speaker 1 (15:22):
Here. What happens if the retailer that you buy the
gift card from experiences financial trouble. Right, So, for instance,
TGI Fridays, which I know is your favorite restaurant, go
there every Thursday. Right, They're not doing so hot right now.
They've shut down dozens of locations and we just don't
know how long the company as a whole is going
to be around. And if you have a TGI Friday's
(15:44):
gift card, and there's fifty million dollars worth of unspent
gift cards that are earmarked for TGI Friday's use, that
a lot of those people are going to be completely
out of luck. They're not going to be able to
find their gift cards in time. They've already misplaced them.
Some of these gift cards are twenty years old, They've
been in an underwear drawer, or they got tossed in
the trash. So I think that's what happens with a
(16:04):
lot of gift cards. When you look at the overall
amount of unspent gift cards, a lot of it is
just misplaced forgotten. Oh I got this gift card to
a retailer I don't like or I don't go to,
and so I just didn't spend it. And that to
me is the worst part of gift cards. So people
don't usually forget to spend one hundred dollars it shows
up in their hands, but they do forget to spend
(16:24):
gift cards.
Speaker 2 (16:25):
I totally agree with the fact that getting a gift
card that it limits your options, But like, I wonder
if for you, if it's less about that you don't
like the concept of a gift card as opposed to
you not liking the biggest retailers out there that tend
to benefit from gift cards, right, So, like, I don't
think you're a huge fan of Starbucks, but they've got Starbucks.
I've heard this is like an airline, an urban Legends
(16:47):
stat or something like that. But they're like Starbucks is
like the third largest bank in America. I think it's
true when you consider the amount of outstanding dollars that
are out there on Starbucks gift cards. And so is
it like for you, is it more or that's and
maybe to prove my point, like, would you rather have
somebody give you a Huckberry gift card? So Huckberry it's
(17:07):
like one of your favorite men's clothing retailers, online retailers.
Would you rather get a Huckberry gift card? Or would
you rather have someone get you something from Huckberry that
you may or may not be able to take.
Speaker 1 (17:19):
I'd rather have the gift card, yeah, than a clothing one.
And because you're right, like, maybe it doesn't size is
not the right size, or maybe it's not the right.
Speaker 2 (17:27):
And you don't want to have to go to the
hassle of making the return, but even better give me cash.
But then, like in that case, like for you and
your wife, are you y'all gonna say, okay, let's just
both give each other one hundred dollars? Then what it's happened?
Speaker 1 (17:38):
Like literally, I'm gonna buy her something I know she'll
like because that's how I roll, and I know her
well enough to do that. But I guess I think
some people think, oh, well, I'm going to get the
teacher a gift, or I'm gonna go get I'm gonna
get a friend, you know that. I kind of sort
of know we're gonna swap. Guess I'm gonna get them
a gift card because it feels like, oh, there's some
element of thought in it. But really, do you know
(17:59):
if that person actually likes that store or not?
Speaker 2 (18:01):
Yeah, I think there's somewhere in between, like because like,
like you can envision you giving a great gift to
your wife, but then on the like far other extreme,
you can envision someone not giving any thought to a
gift to a teacher and getting them a tgif right
as a gift card, and like there's somewhere in between
where it's just like, Okay, I know that they I'm
pretty sure are a big fan of the local coffee
shop that's got this killer cute interior that everyone falls over.
(18:23):
Like that's the kind of gift card that would like
one get used. It's just I feel like there are
more gray areas when it comes to the gift card conversation,
which I feel like you tend to. I feel like
you embrace the gray typically, but when it comes to
the gift.
Speaker 1 (18:36):
Cards, I will add another element of gray.
Speaker 2 (18:37):
I think it's more the stats, the fact that they're
like US dollars. Yeah, and that's it's so it's less
the gift cards. It's more the behavior. And that comes
down to us as individuals to modify our behavior, not
necessarily to say that gift.
Speaker 1 (18:49):
Cards are from but I've done the same thing. They're
of the devil body. I think we are more apt
to do that with the gift cards than we are
with cash, Like we're not going to leave cash on spent,
but we will leave gift cards on spent. And so
I guess I just don't want to feed into that cycle.
But the one exception, and we do see more discounting
on gift cards this time of year. If there's a
discount for your favorite restaurant, for I mean, Costco sells
(19:11):
discount of gift cards. So much of the time you
spend seventy five or eighty dollars and you get one
hundred dollars worth of gift cards. If you're getting a
deal on gift cards, that's when I think it's I
think that's actually like a really smart move. Then just
make sure you actually use them.
Speaker 2 (19:24):
Yeah, especially if you do it for yourself, because if
you know, like that's the problem, not knowing whether or
not the thing's going to get redeemed. But as an individual,
if you're saying, hey, we on an annual basis, we
spend at least five hundred dollars at this local restaurant. Yeah,
well the ability to, like you said, get a twenty
percent off gift card, Well that's a slam dunk, no
brainer sort of decision. Joe, we got more to get.
(19:46):
So we're going to talk about flooded out cars, ripped
jeans and more right after this.
Speaker 1 (19:58):
All right, we're back to the break. Matt We will
get to some of those other topics here in just
a second, but you got to get to the ludicrous
headline of the week. This one comes from a publication
called coin Telegraph, and it reads Bitcoin gained nineteen percent
in Trump's first term. Will betc price hit one million
dollars this time? And I don't know if you've been
(20:21):
following Matt since the last week and a.
Speaker 2 (20:23):
Half, been following because I own some bitcoin? Okay?
Speaker 1 (20:26):
Well, A lot's happened in the political arena, and that
political arena has influenced the financial arena in some instances,
and cryptocurrency in general and bitcoin specifically, have been kind
of beneficiars. The prices on some of these coins, Bitcoin
particularly has been popping in a massive way, hitting all
time highs, even all time highs adjusted for inflation. Dogecoin,
(20:48):
which started out as a joke currency that has been
slamming as well. And Matt, what happens when prices are
soaring in the cryptocurrency space. A lot of people who
have been on the sidelines starting to come off the sidelines.
They start to invest in the cryptocurrency.
Speaker 2 (21:06):
They get drawn in by the fear of missing out.
Speaker 1 (21:08):
Yeah, exactly, it's the fomo and it just only fuels
the crypto resurgence. But this headline is is bigcoin going
to like ten x in the next four years? I
don't know, do.
Speaker 2 (21:19):
You know, Matt, Like no, I know, is it likely
to happen?
Speaker 1 (21:21):
I would say probably not, But I mean again, I
don't know, and I wouldn't stake a significant amount of
my wealth on it. And the truth is, like when
we look at history, we don't have very much data
when it comes to cryptocurrency, not nearly as much as
we do with the stock market. And so I guess
a word of caution if you're to put too many
eggs in the cryptocurrency basket. Yeah, maybe you get lucky,
(21:44):
maybe you find yourself sitting on massive gains because maybe
some of these predictions are right, but there's also significant
risk in going that route. The headlines, they're all about
crypto going to the moon again. But our yeah, our
advice is always is to invest for the long term,
and especially in the crypto space, only invest what you
can afford to lose.
Speaker 2 (22:03):
That's true, Yeah, And the reason that's been blown up
is largely because the crypto community sees Trump as being
sympathetic to their cause based on what he said, and
he says a whole lot so you know, maybe taking
as many things grain of salt, but they see fewer constraints,
fewer regulations within the crypto space just generally speaking. Moving forward,
(22:23):
he's even mentioned the possibility of a like this national
strategic Bitcoin reserve, sort of like what we have with oil,
like a just like a stockpile coin base. They've actually
even benefited handsomely from the election too, as more folks
are there's more interest in cryptocurrency.
Speaker 1 (22:39):
It's like all signs are pointing towards like crypto, less
crypto regulation, more interesting crypto, and more of like a
government support of cryptocurrency.
Speaker 2 (22:48):
There's a whole lot more excitement and trust. It's it's
continuing to build in bitcoin, in particular as the store
of value black rocks bitcoin ETF, it has more now
in assets then it's gold ETF like actual physical gold,
something that you can hold. And so how should you react, Well,
our advice hasn't changed crypto, especially when it comes to
(23:10):
the mean coins are incredibly speculative assets and having some
exposure to it, it can be a reasonable choice, but
still please keep it to five percent or less of
your overall portfolio if this is something that you are
interested in, and just take all market and financial predictions
with a grain of salt because we have no idea. Like, yes,
(23:32):
trust is growing, and a lot of that has to
do with the fact that it's even lasted this long.
I'll be honest. My perceptions of crypto, especially bitcoin, it's
slowly changing, slowly morphing over time, and that has in
large part to do with the there's a track record,
there's a history that you can look back at, and
what is the value of currency if not just the
(23:54):
mutual trust, Yeah, like the collective trust of everyone looking
at it and saying that this is something that we
believe in now and oftentime. That comes with time. So
that's an argument I guess for it or why I
still hold some bitcoin, But it's by no means a
recommendation to go out there and get you some of that.
Speaker 1 (24:10):
That's right, or unless you're keeping it to a minimal
portion of your overall portfolio. So yeah, I think that's
that's kind of what we've said for a long time,
and I think you and I have probably softened our
stance on bitcoin in particular over the past few years.
But we still don't want people to make it a
(24:30):
major holding in their retirement accounts or anything like.
Speaker 2 (24:32):
Sure, so I almost hate saying this, but like another
argument for it, I sound like a bitcoin bowl now,
but like like I feel like the first wave was
individual investors getting into bitcoin. But then what do we
see four years ago? We saw institutional investors, yeah, start
to step into the game. And I do wonder if
more countries start to come on board, especially the US,
(24:54):
because as the US goes, so does the rest of
the world, oftentimes when it comes to countries. But I
wonder if that's a part of frothy headlines that we
see regarding bitcoin this time around here. Maybe.
Speaker 1 (25:03):
So all right, let's talk about cars, Matt. We talked
about actually some of the repercussions of horrendous weather events
in the South recently, namely the severe damage in Florida, Georgia,
and North Carolina from Hurricanes Helene and Milton, and Matt,
my buddy was just in Asheville, like working on his property.
Like it's still so much clean up, so much devastation
(25:24):
from the flooding as a result of that hurricane. But
another result that could impact literally everyone listening to this show,
no matter where you live in the country. Is the
hundreds of thousands of cars that sustained flood damage in
those storms as well. And that's not an overstatement like that.
There's a ton of cars who experienced flood damage where
(25:45):
there was like some sort of insurance client made and
flood damaged cars are getting cleaned up. I put that
in quotation marks so cleaned up and then they're being
shipped to far reaching domestic destinations. But just because they
got cleaned up does mean they're actually in good condition.
The damage that happens from the flooding often leads to
(26:05):
like electrical issues, engine malfunctions, rust on the vehicle that
lead to just prolonged issues over the course of you
owning that vehicle. And those problem ridden cars, they often
get sold for less money to scammers who are trying
to flip those cars to unsuspecting consumers in other parts
of the country. So then maybe they're maybe they're shipping
(26:26):
them from areas in the southeast where they experience the flooding,
they're shipping them over to the southwest, to the northeast,
something like that, And people just don't assume that this
car had any sort of flooding history. And this doesn't
mean that you should buy new cars to avoid like
the potential for buying a flood damaged used car. But always, always,
(26:47):
always get a used car that you're looking to buy
inspected by a mechanic you trust, because they're going to
be able to pinpoint and point out, say, listen, actually,
here's why you probably shouldn't buy this one. They're gonna
be able to see flood damage and kind of help
point you away from buying a car that has it.
Speaker 2 (27:03):
Yeah, I mean, I think it's worth spending a minute
and talking about how much of a game changer it
is to buy a used vehicle as opposed to a
new vehicle. And so to argue our point, Joel, I've
got some numbers that I've crunched.
Speaker 1 (27:14):
You always pree the numbers.
Speaker 2 (27:15):
The average monthly payment on a new car today is
seven hundred and thirty four dollars. Now that wasn't the
case sixteen years ago, but let's just say it was.
And I'm going to say sixteen years ago because Kate
and I that's when we moved from a two car
family down to a one car family. Had we invested
that monthly payment for sixteen years up to today, we
would have around three hundred and sixteen thousand dollars. Dang,
(27:36):
that's that's pretty nice, right were we to continue to
invest that seven hundred and thirty four dollars, because guess what,
in the future, that new car payment, it's actually going
to be higher than it is right now. True another
ten years, we're looking at a million dollars just from
not having a new car. And I don't think that
that's some sort of straw man argument either, because a
lot of people do this. A lot of people kind
of get locked into this new car cycle. They're all
(28:00):
always making a payment on a vehicle, and we.
Speaker 1 (28:03):
Just normalized it so much.
Speaker 2 (28:04):
It's normalized and it's just seen as a lifestyle up
not an upgrade, but it's just something that people are
used to and if you can afford it, if you've
got the money on hand, if you have the money
on hand, you should be buying that vehicle new first
of all. But secondly, I think some people see it
as like, hey, this is something this is like my
one thing that I like to spend money on if
you can afford it, I think that's that. That can
(28:25):
be okay, that can be a decent argument, but it's
at least worth running the numbers occasionally and just facing
the facts and how much this is actually going to
cost you over the long haul, were you to instead
go with something that's used and something that you pay
cash for as opposed to paying out the nose for
a new vehicle every single year.
Speaker 1 (28:43):
I mean, trade offs are the ultimate reality of personal finance,
and at least know with eyes wide open the trade
off you're making. And that, to me is kind of
a shocking statistic to think that just investing what you
would have spent every single month on a car payment,
assuming you had won every single month for all those years,
for less than three decades, that becomes a million dollars
twenty six years. Yeah, that's pretty crazy to think about,
(29:05):
and at least it should make you, I don't know,
I you're the car sitting in your driveway a little
more warrely be like, wait a second, you know how
much money you're costing me? Think about that?
Speaker 2 (29:13):
Like if you are able to look at it through
a different lens, like you're putting on Like I don't
want you to always be wearing the money lens, the
money goggles, like you know, as you're looking at expenses
in your house, like you shouldn't instinctively see like dollars
side it's like.
Speaker 1 (29:25):
Look at your child, Look at that much food you're eating. Expensive.
Speaker 2 (29:28):
Augmented reality where like you've got a program that automatically
tallies how much something's costing you. That would actually be pretty.
Speaker 1 (29:34):
Dope, like the meta glasses or something. There's kind of yeah,
exact software that could they could put in their virtual reality.
Speaker 2 (29:40):
I've never been a fan of, but augmented reality I
feel like actually has potential, the ability to marry the
digital world and like the actual reality that we're in.
I see that being Ah, that maybe a useful uh
useful application.
Speaker 1 (29:51):
Perhaps, all right, let's talk about fashion for a second.
Speaker 2 (29:54):
Matt.
Speaker 1 (29:55):
At the risk of sounding like an old man, I'm
willing to dip my toes in this. Why are people
still buying ripped jeans?
Speaker 2 (30:01):
Here's joll over here shaking his fist at the sky.
Speaker 1 (30:04):
Get off my lawn. People. Well, and this was actually
this was the title of a recent New York Times
article Why are people still buying rip jeans? And I
just agree with this question because I've never really understood
why people do this. I've never been a fan of
the rip jeans phenomenon. I think I have a pair
of jeans that have a rip in it, but only
because they're like fourteen years old. You rip the whole
(30:26):
them because.
Speaker 2 (30:26):
I earned that rip.
Speaker 1 (30:27):
Yes, insane buying.
Speaker 2 (30:29):
That's such a better way of thinking about it. Is
like my living created that rip. Like me getting down
on my knees to pick up my kid for the
umpteenth time. Is what caused that? Where that threadbare patch
there on the knee right, which eventually leads to a
beautiful rip?
Speaker 1 (30:42):
Well, And as The New York Times highlights in this article,
it's the funny thing is that it's luxury brands. Those
are the ones that are specializing in creating these these
these coveted pairs of ripped pants that people are into.
So not only are people paying for jeans with rips,
which doesn't make sense to me at all, they're also
not getting them at a reasonable price because they're buying
(31:05):
them from luxury retailers who charge more for ripped jeans.
So it's not like, oh, let me go get this
pair of rib jeans from Walmart because they're eighteen dollars.
It's like, let me get the Balenciaga rip jeans that
are seven hundred and ninety five dollars.
Speaker 2 (31:18):
Yeah, if it was like, hey, you're gonna get a
discount because these genes are ripped, it's like buying ugly
food or dented produce at the grocery store. That's like,
it's still good, but we'll give you a discount. Yeah,
if you take this off our hands.
Speaker 1 (31:28):
I might be willing to partake if it was exactly discounted,
but it's not right. So I don't know that you
or I are icons of style anything like that. Speak
for yourself, but forking over big bucks to the fancy
brands to buy rib jeans doesn't make really much sense
to me at all.
Speaker 2 (31:45):
And I don't even like the distressed. It makes me
think back to the eighties. Like the eighties is is
that when like acid wash came in or stonewashed. That's
what it was called stone washed, and it was to
make the genes look like they were somewhat broken in
because as a kid, I remember the absolute worst thing
was getting a pair of like brand new genes that
were like dark blue. Like that was lame and so
(32:06):
I kind of understand from a kid's perspective, but now
as an adult man, like those like those are the
nice genes, right, Like this Japanese salvage dark blue raw denim.
I love getting a pair of those because it's almost
like a blank canvas. And like you said, you have
to earn those wear lines. Yeah, you earned that whiskery.
Speaker 1 (32:25):
It's coming about naturally over time.
Speaker 2 (32:26):
Yeah, yeah, that's a and you're paying more in that
case though, on those kinds of genes because they're salvage
and so it's a it's a nicer denim. I don't
know all everything that goes into it, but it's a
nicer fabric. It's a it's heavier, it's like the heavyweight.
However many ounces I don't.
Speaker 1 (32:41):
I'm not like a.
Speaker 2 (32:42):
Denim head or anything like that. But like you are
literally getting more. There's a utilitarian.
Speaker 1 (32:46):
You're getting something that's higher quality and will last longer,
as opposed to getting something that is an attempt at
at being trendy exactly.
Speaker 2 (32:53):
Okay, So, speaking of spending money on crap, maybe try
and avoid Amazon's new line, Amazon Haul. This is Amazon's
effort to compete with the cheap Chinese sites like Timu
over there nothing is priced more than twenty dollars. And
you may be listening to the show and thinking that, man,
these money saving hosts of the podcast, they'd be all
(33:15):
about Amazon Hall, but we're actually not. Because these quote
unquote affordable products are they're often made incredibly poorly. That
means they're gonna break quickly. If it's a fashion item,
it means it's gonna unravel quickly or fade, or it's
gonna pill and you're gonna start seeing more prompts to
check out Amazon Hall over on their site or on
(33:36):
the app, especially here around the holidays. But avoiding it
is likely the best policy. We like getting a deal,
we like the prices, but we are certainly down to
pay a little bit more for quality for something that
we think is gonna last the actual long haul. I
don't know, I didn't really wrap that up cleanly, but
you know what I'm saying. Yeah, So the reason it's
called Amazon Hall too is it because it's because they
(33:58):
want you to They have to send it directly from
China right to avoid the it's likely going to take
multiple weeks to get your stuff, just because yeah, it
is this direct from direct from China sort of to
avoid the teriffs?
Speaker 1 (34:09):
Yeah?
Speaker 2 (34:09):
Literally, I guess like when you are when they're shipping
it directly from China, like.
Speaker 1 (34:13):
They're in Amazon much much much less. They know, Hey,
we're maybe competitive with a lot of American retailers, but
we're not as competitive with Timu Sheian like those kind
of companies. And so this is their attempt to be
competitive on that front. But that in their attempts to
be competitive with some of those Chinese retailers, they are
going to have to reduce the quality of the product.
(34:34):
They're reducing the price. Yeah, but a lot of these
things are just going to be cheap chot keys that
you should avoid because they're not gonna last very long,
especially man, some of those clothing items. Think about how
I've never bought anything from any of those Chinese sites. Man,
I kind of I refuse to, Like, I'm not interested.
And I know some people like are addicted to them
and they get stuff for super duper cheap, but I
(34:54):
just don't think the deep discounts are worth.
Speaker 2 (34:57):
The price we pay. Joel's buy an American made only,
Joel's a Patriot.
Speaker 1 (35:00):
I'm American made only but like my goodness.
Speaker 2 (35:03):
Avoiding the absolutely cheapest crap out there.
Speaker 1 (35:05):
Yeah yeah, I mean everything I read about the especially
the clothing items, but like think about like the all
the plastic junkin stuff. It's a lot of it's like
completely needless stuff. And word, we're just wowed by the price,
and so we buy. But how long does that thing
actually last? And is it something that we use for
longer than a few days?
Speaker 2 (35:19):
I know. Yeah, we are literally in the midst of
having conversations with family right now as we're trying to
figure out what gifts are going to look like around
the holidays in Christmas in order to keep you know,
just all that stuff that's gonna end up breaking or
that we're not going to find a whole lot of
value in to a minimum.
Speaker 1 (35:32):
Yeah, those are important conversations to have right now.
Speaker 2 (35:34):
Yeah, man, let's do a quick newsletter referral shout out
to Brittany Ka. Brittany, thank you so much for being
a how to Money newsletter reader as well as disseminator.
You've sent it out to some of your most loved
friends and family, so thank you for spreading the word.
Speaker 1 (35:48):
No doubt we appreciate you Brittany. All right, Matt, that's
gonna do it for this episode. We'll put links in
the show notes to some of the stuff that we mentioned,
and there's always more money saving information about how toomoney
dot com. But until next time, best Friends Out, Best
Friends Out,
Welcome to How to Money. I'm Joel Matt and today
we're talking about people being content to rent, we're going
to offer a gift card caution, and we're gonna talk
about bitcoin bowls.
Speaker 2 (00:28):
That's right, buddy. This is our Friday Flights, our weekly
roundup of personal finance news out there, specifically how we
think it's going to impact your money. But should we
go ahead and tell folks about this news site that
we came across that launched recently, Gallion.
Speaker 1 (00:43):
It's a I don't even know where I saw it,
but I was like, oh, this is really interesting and
just kind of allows people to list their own home
for sale, and they're kind of trying to create their
own marketplace, avoiding the National Association of Realtor stranglehold the
mls US, which has been kind of the lynchpin to
where people can buy and sell homes and how homes
(01:06):
get kind of thrown out there into the ether when
they're for sale. And matt Zilla used to have this feature.
I don't know if they still do make me move.
Is that still on the site.
Speaker 2 (01:13):
Oh, I definitely remember it. Yeah, I'll be honest, I
haven't spent as much time on Zilla which is probably
a good thing for mental health.
Speaker 1 (01:20):
Well, I used to love that feature because I think
at some point there is a price that I'm willing
to accept right for a home, even the home I'm
living in, even if I love it. Well, if someone
wants to come off me like two million dollars tomorrow.
Speaker 2 (01:33):
Okay, sure as well just stick up there for five
million if someone's willing to pay that.
Speaker 1 (01:38):
No one would have paid me five million for it.
But like, I like that kind of idea that you
can at least kind of name a price if somebody says,
I'm desperate enough for the place that you live in
that I'll pay it. Boom, Like you're able to find
a place where buyer and seller are willing to meet.
And it seems like Gallion is kind of trying to
create that marketplace and I think it's neat.
Speaker 2 (01:56):
Yeah, searched our area. There's a couple dozen homes where.
It's actually kind of funny too, because you can see
how it's like there's little pockets of listings and it's
like someone learns about it and then they tell a
couple of their friends and they also get their house
up there as well. I mean, bottom line the more
competitors there are in the space, the more people are
a going to be talking about it. But then just
there's just more competition, and I think more folks are
(02:18):
going to be willing to go out there quote unquote,
go out on a limb, as opposed to kind of
going with the more traditional model of going with a
listing agent, having an agent who's looking for a home
on your behalf, because let's be honest, I don't know
about I mean I do know actually about you, Like
you are not only looking at the homes that your
realtor sends you. You are getting out there yourself, right,
(02:38):
and so like the model has completely changed, at least
when it comes to the work that's being provided, but
the commission hasn't changed. And that's what that's the biggest
sticking point. It's not that we don't think that realtors
are providing value, it's just that maybe the way that
they should be compensated should change. I still think that
there is going to be a space a market for realtors.
(02:59):
It's still the most of item most people are ever
going to purchase. But I think there's a lot of
room in between four folks who maybe are looking at
like a first time home purchase where they're not spending
a ton of money, where they are going to be
a little more engaged in the home search process.
Speaker 1 (03:13):
But I think this site, at least what it's trying
to do is go to the complete opposite and end
of those spectruments and just line up buyers and sellers
together through online listings on Gallion's website specifically, and maybe
at least for some people they'll be able to find
their perfect match. They'll be able to avoid paying any
real circ commission. And if this does reach critical mass
(03:35):
where enough people are listing properties and searching for properties,
this could be like a new way forward.
Speaker 2 (03:39):
Yeah, and again, even the fact that it exists, I
think it can be promising and hopefully can open up
the housing market as things have slowed down significantly. Let's
keep talking about housing, Joel. Sixty percent of people thought
it was smart to buy a home four years ago, right,
so sixty percent. Then only twenty percent think it's a
smart move today, and man, rightly so. Starter homes they
(04:00):
cost more than a million dollars in a ton of
different cities around the country. That's crazy to think, right,
It's like, yeah, what kind of job you have to
be able to afford a million dollar, million dollar starter home.
Sticky high rates, they actually taken the wind out of
the sales of a lot of folks as well, meaning
they are becoming more content to rent for the time being.
(04:21):
There's your I like the rhyming better than the alliteration personally,
but the truth is, in most markets around the country,
you can rent the home that's equivalent to what you
could buy and pay far less every single month, and
by doing that, you retain that flexibility because you can
always opt to buy if marketing conditions change. And of
course you don't have you don't have the maintenance, you
(04:43):
don't have the repairs to worry about. So if you
are in the twenty percent camp of folks who want
to own a home, I totally get it. But renting
maybe a little bit longer in order to juice your
savings and hopes that barring rates, they you know, hoping
that they'll take down or maybe if supply tacks up,
or actually both would ideally happen at the same time.
(05:04):
That could still be the best financial move right now
for a lot of folks.
Speaker 1 (05:07):
Yeah, I hate them, maybe dismay that people feel like,
all right, I guess I'm gonna take buying off the table.
But I also think in a lot of ways it's
smart because the market is pretty ridiculous. As someone who's
especially for first time home buy it's if you're selling
one home buying another one, I think it's like, oh, well,
at least I'm making out like a bandit on the
(05:27):
sale potentially, and even though I'm paying out the nose
for the next house. But it makes us a whole
lot of sense financially speaking, for a lot of folks
to say, you know what, I'm gonna wait to buy
for the time being. Another reason I think to be
dubious of buying a home these days is rising home owners'
association fees. Some homeowners Matt they're seeing just ridiculous increases
(05:47):
in their HOA dues. And this again, this kind of
makes sense too. It jives with what's going on. The
cost of insurance has risen significantly, so is the cost
of repairs and maintenance and so up keep for the pool,
the tennis court, it's all that kind of the common areas.
It's not as cheap as it used to be. And
you know, for associations that weren't good at planning. Some
are really good at planning. They've got money banked and
(06:09):
they've been, you know, just raising hoadus steadily over the years. Well,
those year over year bumps might not be too bad,
but for a lot of other associations who weren't good
at planning, those bumps can be significant or worse. Maybe
there's some sort of special assessment that gets levied that
can be thousands and thousands of dollars. Those can be considerable.
(06:29):
And then you know, I know, some folks prefer to
live in neighborhoods that have in HOA. They like the
well maintained public spaces. They like the idea that their
neighbor can't paint their door hot pink or something like that.
But it's called self expression, I know. But in hoa's
you're not allowed to have that self expression. So I
think a warning here, just be careful before buying a
(06:50):
home in a neighborhood that has an HOA, or buying
a condo right where there's a homeowner's association, which are
typically is in condo communities. It's harder to do these
days with I think a third of homes are a
part of an HOA, and when we're talking about new builds,
the vast majority are. But if you're going to do that,
if you are going to buy a home that does
have a homeowners association, dig into the financials of the
(07:13):
HOA before you buy, because you might be like, oh,
this is a reasonably priced monthly fee. Well, it might
not stay there for long. There was a local example,
Matt of a twenty nine thousand dollars assessment per person
in the community to fix a dam that was owned
by the community. And that's just shocking. I mean, we've
(07:33):
seen what happened has happened in Florida too, homeowners associations
jacking up rates significantly. So hoa's they can be good
and they can help protect your home value, but they
can also be quite expensive.
Speaker 2 (07:43):
Yeah. So what do you think about manufactured homes as
being a potential solution. Prefab manufactured homes they get hauled
on site, you know, normally they're like split down the middle, yeah,
and then they I guess get bolted together.
Speaker 1 (07:53):
I think those have come a long way actually in
recent years, and maybe twenty years ago, it wasn't, as
you know, worthwhile a solution. But no, I guess I
think they could be part of the solution to high
housing costs.
Speaker 2 (08:03):
Yeah, it makes me so. We on the show, we've
talked before about the problems with nimbiism, you know, where
folks who are like not in my backyard. We've talked
about zoning laws that prevent building new homes in much
of the country without a lengthy process, and those remain
hurdles to increased building. And if we as a country
incentivize adding more supply, I think that would reduce prices
(08:23):
over time. But manufactured homes, I think that could actually
be a part of the solution as well. It's funny
how things have changed over like one hundred years, because
like the Seers catalog where you could buy the home kits,
like our old neighborhood that we used to live in,
I think like half of the homes, half of the
bungalows in that neighborhood were essentially you could look at
some of the old Seers kits and see your home
(08:43):
an illustrated version that was one hundred years old, yeah,
drawn in there.
Speaker 1 (08:46):
And those kits what used to cost like one thousand bucks.
I mean those insane to think about how cheap and
how cool those homes actually are.
Speaker 2 (08:53):
They look really cool. But those days are seeing a resurgence.
You can buy a manufactured home on Amazon. You can
even buy one on Facebook, although you know they I
don't think they hold a candle to the old bungalows
of your But zoning laws all right, So it comes
full circle here. Zoning laws often prevent folks from putting
(09:14):
up manufactured homes on their property. So if you are
living in a community, I can understand why some folks
are wanting something that's not like cookie cutter homes, but
something that feels a little more uniform and where you
can't just stick whatever you want on that property.
Speaker 1 (09:29):
But especially if you are.
Speaker 2 (09:30):
Further out, the ability to spend significantly less on a
manufactured home, I think that could be just an awesome
way to consider saving a ton of money. Just make
sure to check local rules. But new building methods as
well as manufactured homes, I think could if done in
conjunction with zoning reform, it could provide a lot of
relief on the home buying front as folks are looking
(09:50):
to especially if for folks who are looking to get
their first place.
Speaker 1 (09:53):
Yeah, it's like we have to look into all of
those areas. Let's keep talking about real estate, Matt. There's
something that people are doing in order to combat the
high cost of real estate where they live, and this
is actually something that I think is ill advised, and
it is buying a home with friends. So people are
pulling their assets together. They're saying, hey, Sarah, hey Steve,
(10:15):
whatever your best friend's name is, and they say, I
can't afford a home on my own. I know you
want to buy a home too. Why don't we, with
the money that we've both been able to save, put
this down payment on a single family home and we'll
both we'll co own it.
Speaker 2 (10:31):
What could go wrong?
Speaker 1 (10:32):
What could go wrong? Right? And when you look at
the stats, there's a lot more people who are actually
opting to do this. This is kind of it's a
trend these days, I think, Matt. Part of that has
to do with people getting married later in life, and
so they're like, I don't know, sure, I'm in my
late twenties. Why not buy a home with a friend,
since maybe I'm punting marriage until my mid thirties. And
(10:54):
the next thing you know, you're making offers together, but
getting into that purchase is actually fairly easy if you
have the funds and you have the desire. The tough
thing is getting out of the purchase, right. It's so
much harder to get out than it is to get in.
And so if living together with the person you have
bought this home with isn't working out, or even if
(11:14):
you just want a portion of the equity because you're
moving for a job, or that you do decide to
get married, your co owner or co owners, if you're
doing this with multiple people and not just one other
person might not be in the financial position to oblige
your whim. They might say, oh, sorry, I can't actually
by this portion of the home out, or we'd have
to do a cash out refinance, which is also a
(11:36):
tough move to do. Even if they want to help
you out, oftentimes they can't. So the Wall Street Journal
had a profile of people who are combining assets to
buy homes and just like how sticky and how difficult
it can be, and how it can lead to hurt relationships.
You might be the person who gets lucky in is
able to make it work, but this kind of arrangement
can hurt your personal finances, and it can hurt your
(11:57):
relationships too. So I think our advice typical would be
a stay clear, don't buy real estate. Well, these are
the people most of the time.
Speaker 2 (12:04):
Well, it's different too, if like you are doing this
with your spouse, because you that's a very different kind
of relationship than yes, like even to your bestie, but
let alone. Definitely just like your buddy, right Like, when
you are married, you've literally taken vows, there are witnesses.
Maybe you even threw a big party afterwards called a reception.
Speaker 1 (12:21):
Yeah, the like stakes are ramped up.
Speaker 2 (12:23):
It's a stickier relationship, you are more committed, and so
it makes sense that, oh, yeah, we are going to
buy a house together. It's a lot different to do
that with a friend. And a much better solution, I think,
would be for there to be a single buyer and
then hey, maybe you'll rint out that extra room or
rent out two rooms or rent out three rooms. But
the ability for a single individual to go in there
and make that purchase, and chances are if you're the
(12:45):
one listening to the Personal Finance Money podcast here, that
person is probably you. Yeah, and so just to think
creatively about this. Typically on the show, we call this
house hacking, but back in the day, it was just
called roommates, and that's just certainly a way to get
your housing costs down. Why still being able to purchase that.
Speaker 1 (13:02):
House, and you might even be able to provide your
friends like a slightly below market rent. Say you're gouging there, right, Hey,
I'm buying this place, and yes, I know your rent's
pretty expensive. And once you move into the bedroom of
the place I'm buying, and hey, then but then it
just it creates less of that you're not commingling your
finances to this overwhelming extent. And you're right, man, it's
(13:25):
not overwhelming if you're married, but it can be overwhelming
if you're just friends. And then both of you want
to go separate.
Speaker 2 (13:30):
Ways, and you can like wade into those waters. It's
so easy to wait in those waters. Like you can
just say, hey, let's just try this out for three months,
Like you don't have to even sign it, like create
a lease, and hey, this is up to you, by
the way, as the landlord, and as the owner of
the property, you get to decide how long you want
them to be there. So you could say, hey, let's
try this out for three months. We only met last year,
so I'm not totally sure how this is going to
work out. And three months in it's like, hey, let's
(13:51):
do this. This is working out really well. We literally
that's what we did here with our office, the studio
that we rent. It's a carriage house and they'd never
done that before, and so we're like, let's just try
it out. Let's just give it a few months. We
came back to the table, talked about it, and we've
been here for like, we're on our third year now
at this point, Joel, and we've only had one rent increase.
I think it's just because we're great tenants. Thanks Andrew. Joe,
(14:14):
you want to talk about I know you're not a
fan of gift cards. Do you have some evidence? Do
you want to you want to talk about gift cards
especially I guess this time of year.
Speaker 1 (14:21):
Feel like this is something we debate at least once
a year, typically right around this.
Speaker 2 (14:25):
Time, the bi annual conversation that we have because well,
this is this is the time of year where people
are most enticed to buying gift cards. They're an incredibly
popular purchase this time of year, which makes sense, and
they I've always understood why people are attracted to buying
gift cards. I feel like they they seem like they're
are an incredibly thoughtful gift. They're seen as more intentional
(14:46):
than giving just cash, which some people think of is
is ghost uncouth. Yeah, say right, And that might or
might not be true. I think it depends in the
eye of the beholder. But when you buy a gift card,
you're I've always said this, I made this argument. You're
trading US dollars that can be spent anywhere in the world,
essentially definitely anywhere in the United States, into a plastic card.
(15:07):
They can only be spent at one retailer. So it
doesn't really make a whole lot of mental sense for
me to do that. That's not my favorite thing in
the world. But making matters worse, Matt And this is
the this is going to help prove my point. Hope,
I hope you listen to me.
Speaker 1 (15:22):
Here. What happens if the retailer that you buy the
gift card from experiences financial trouble. Right, So, for instance,
TGI Fridays, which I know is your favorite restaurant, go
there every Thursday. Right, They're not doing so hot right now.
They've shut down dozens of locations and we just don't
know how long the company as a whole is going
to be around. And if you have a TGI Friday's
(15:44):
gift card, and there's fifty million dollars worth of unspent
gift cards that are earmarked for TGI Friday's use, that
a lot of those people are going to be completely
out of luck. They're not going to be able to
find their gift cards in time. They've already misplaced them.
Some of these gift cards are twenty years old, They've
been in an underwear drawer, or they got tossed in
the trash. So I think that's what happens with a
(16:04):
lot of gift cards. When you look at the overall
amount of unspent gift cards, a lot of it is
just misplaced forgotten. Oh I got this gift card to
a retailer I don't like or I don't go to,
and so I just didn't spend it. And that to
me is the worst part of gift cards. So people
don't usually forget to spend one hundred dollars it shows
up in their hands, but they do forget to spend
(16:24):
gift cards.
Speaker 2 (16:25):
I totally agree with the fact that getting a gift
card that it limits your options, But like, I wonder
if for you, if it's less about that you don't
like the concept of a gift card as opposed to
you not liking the biggest retailers out there that tend
to benefit from gift cards, right, So, like, I don't
think you're a huge fan of Starbucks, but they've got Starbucks.
I've heard this is like an airline, an urban Legends
(16:47):
stat or something like that. But they're like Starbucks is
like the third largest bank in America. I think it's
true when you consider the amount of outstanding dollars that
are out there on Starbucks gift cards. And so is
it like for you, is it more or that's and
maybe to prove my point, like, would you rather have
somebody give you a Huckberry gift card? So Huckberry it's
(17:07):
like one of your favorite men's clothing retailers, online retailers.
Would you rather get a Huckberry gift card? Or would
you rather have someone get you something from Huckberry that
you may or may not be able to take.
Speaker 1 (17:19):
I'd rather have the gift card, yeah, than a clothing one.
And because you're right, like, maybe it doesn't size is
not the right size, or maybe it's not the right.
Speaker 2 (17:27):
And you don't want to have to go to the
hassle of making the return, but even better give me cash.
But then, like in that case, like for you and
your wife, are you y'all gonna say, okay, let's just
both give each other one hundred dollars? Then what it's happened?
Speaker 1 (17:38):
Like literally, I'm gonna buy her something I know she'll
like because that's how I roll, and I know her
well enough to do that. But I guess I think
some people think, oh, well, I'm going to get the
teacher a gift, or I'm gonna go get I'm gonna
get a friend, you know that. I kind of sort
of know we're gonna swap. Guess I'm gonna get them
a gift card because it feels like, oh, there's some
element of thought in it. But really, do you know
(17:59):
if that person actually likes that store or not?
Speaker 2 (18:01):
Yeah, I think there's somewhere in between, like because like,
like you can envision you giving a great gift to
your wife, but then on the like far other extreme,
you can envision someone not giving any thought to a
gift to a teacher and getting them a tgif right
as a gift card, and like there's somewhere in between
where it's just like, Okay, I know that they I'm
pretty sure are a big fan of the local coffee
shop that's got this killer cute interior that everyone falls over.
(18:23):
Like that's the kind of gift card that would like
one get used. It's just I feel like there are
more gray areas when it comes to the gift card conversation,
which I feel like you tend to. I feel like
you embrace the gray typically, but when it comes to
the gift.
Speaker 1 (18:36):
Cards, I will add another element of gray.
Speaker 2 (18:37):
I think it's more the stats, the fact that they're
like US dollars. Yeah, and that's it's so it's less
the gift cards. It's more the behavior. And that comes
down to us as individuals to modify our behavior, not
necessarily to say that gift.
Speaker 1 (18:49):
Cards are from but I've done the same thing. They're
of the devil body. I think we are more apt
to do that with the gift cards than we are
with cash, Like we're not going to leave cash on spent,
but we will leave gift cards on spent. And so
I guess I just don't want to feed into that cycle.
But the one exception, and we do see more discounting
on gift cards this time of year. If there's a
discount for your favorite restaurant, for I mean, Costco sells
(19:11):
discount of gift cards. So much of the time you
spend seventy five or eighty dollars and you get one
hundred dollars worth of gift cards. If you're getting a
deal on gift cards, that's when I think it's I
think that's actually like a really smart move. Then just
make sure you actually use them.
Speaker 2 (19:24):
Yeah, especially if you do it for yourself, because if
you know, like that's the problem, not knowing whether or
not the thing's going to get redeemed. But as an individual,
if you're saying, hey, we on an annual basis, we
spend at least five hundred dollars at this local restaurant. Yeah,
well the ability to, like you said, get a twenty
percent off gift card, Well that's a slam dunk, no
brainer sort of decision. Joe, we got more to get.
(19:46):
So we're going to talk about flooded out cars, ripped
jeans and more right after this.
Speaker 1 (19:58):
All right, we're back to the break. Matt We will
get to some of those other topics here in just
a second, but you got to get to the ludicrous
headline of the week. This one comes from a publication
called coin Telegraph, and it reads Bitcoin gained nineteen percent
in Trump's first term. Will betc price hit one million
dollars this time? And I don't know if you've been
(20:21):
following Matt since the last week and a.
Speaker 2 (20:23):
Half, been following because I own some bitcoin? Okay?
Speaker 1 (20:26):
Well, A lot's happened in the political arena, and that
political arena has influenced the financial arena in some instances,
and cryptocurrency in general and bitcoin specifically, have been kind
of beneficiars. The prices on some of these coins, Bitcoin
particularly has been popping in a massive way, hitting all
time highs, even all time highs adjusted for inflation. Dogecoin,
(20:48):
which started out as a joke currency that has been
slamming as well. And Matt, what happens when prices are
soaring in the cryptocurrency space. A lot of people who
have been on the sidelines starting to come off the sidelines.
They start to invest in the cryptocurrency.
Speaker 2 (21:06):
They get drawn in by the fear of missing out.
Speaker 1 (21:08):
Yeah, exactly, it's the fomo and it just only fuels
the crypto resurgence. But this headline is is bigcoin going
to like ten x in the next four years? I
don't know, do.
Speaker 2 (21:19):
You know, Matt, Like no, I know, is it likely
to happen?
Speaker 1 (21:21):
I would say probably not, But I mean again, I
don't know, and I wouldn't stake a significant amount of
my wealth on it. And the truth is, like when
we look at history, we don't have very much data
when it comes to cryptocurrency, not nearly as much as
we do with the stock market. And so I guess
a word of caution if you're to put too many
eggs in the cryptocurrency basket. Yeah, maybe you get lucky,
(21:44):
maybe you find yourself sitting on massive gains because maybe
some of these predictions are right, but there's also significant
risk in going that route. The headlines, they're all about
crypto going to the moon again. But our yeah, our
advice is always is to invest for the long term,
and especially in the crypto space, only invest what you
can afford to lose.
Speaker 2 (22:03):
That's true, Yeah, And the reason that's been blown up
is largely because the crypto community sees Trump as being
sympathetic to their cause based on what he said, and
he says a whole lot so you know, maybe taking
as many things grain of salt, but they see fewer constraints,
fewer regulations within the crypto space just generally speaking. Moving forward,
(22:23):
he's even mentioned the possibility of a like this national
strategic Bitcoin reserve, sort of like what we have with oil,
like a just like a stockpile coin base. They've actually
even benefited handsomely from the election too, as more folks
are there's more interest in cryptocurrency.
Speaker 1 (22:39):
It's like all signs are pointing towards like crypto, less
crypto regulation, more interesting crypto, and more of like a
government support of cryptocurrency.
Speaker 2 (22:48):
There's a whole lot more excitement and trust. It's it's
continuing to build in bitcoin, in particular as the store
of value black rocks bitcoin ETF, it has more now
in assets then it's gold ETF like actual physical gold,
something that you can hold. And so how should you react, Well,
our advice hasn't changed crypto, especially when it comes to
(23:10):
the mean coins are incredibly speculative assets and having some
exposure to it, it can be a reasonable choice, but
still please keep it to five percent or less of
your overall portfolio if this is something that you are
interested in, and just take all market and financial predictions
with a grain of salt because we have no idea. Like, yes,
(23:32):
trust is growing, and a lot of that has to
do with the fact that it's even lasted this long.
I'll be honest. My perceptions of crypto, especially bitcoin, it's
slowly changing, slowly morphing over time, and that has in
large part to do with the there's a track record,
there's a history that you can look back at, and
what is the value of currency if not just the
(23:54):
mutual trust, Yeah, like the collective trust of everyone looking
at it and saying that this is something that we
believe in now and oftentime. That comes with time. So
that's an argument I guess for it or why I
still hold some bitcoin, But it's by no means a
recommendation to go out there and get you some of that.
Speaker 1 (24:10):
That's right, or unless you're keeping it to a minimal
portion of your overall portfolio. So yeah, I think that's
that's kind of what we've said for a long time,
and I think you and I have probably softened our
stance on bitcoin in particular over the past few years.
But we still don't want people to make it a
(24:30):
major holding in their retirement accounts or anything like.
Speaker 2 (24:32):
Sure, so I almost hate saying this, but like another
argument for it, I sound like a bitcoin bowl now,
but like like I feel like the first wave was
individual investors getting into bitcoin. But then what do we
see four years ago? We saw institutional investors, yeah, start
to step into the game. And I do wonder if
more countries start to come on board, especially the US,
(24:54):
because as the US goes, so does the rest of
the world, oftentimes when it comes to countries. But I
wonder if that's a part of frothy headlines that we
see regarding bitcoin this time around here. Maybe.
Speaker 1 (25:03):
So all right, let's talk about cars, Matt. We talked
about actually some of the repercussions of horrendous weather events
in the South recently, namely the severe damage in Florida, Georgia,
and North Carolina from Hurricanes Helene and Milton, and Matt,
my buddy was just in Asheville, like working on his property.
Like it's still so much clean up, so much devastation
(25:24):
from the flooding as a result of that hurricane. But
another result that could impact literally everyone listening to this show,
no matter where you live in the country. Is the
hundreds of thousands of cars that sustained flood damage in
those storms as well. And that's not an overstatement like that.
There's a ton of cars who experienced flood damage where
(25:45):
there was like some sort of insurance client made and
flood damaged cars are getting cleaned up. I put that
in quotation marks so cleaned up and then they're being
shipped to far reaching domestic destinations. But just because they
got cleaned up does mean they're actually in good condition.
The damage that happens from the flooding often leads to
(26:05):
like electrical issues, engine malfunctions, rust on the vehicle that
lead to just prolonged issues over the course of you
owning that vehicle. And those problem ridden cars, they often
get sold for less money to scammers who are trying
to flip those cars to unsuspecting consumers in other parts
of the country. So then maybe they're maybe they're shipping
(26:26):
them from areas in the southeast where they experience the flooding,
they're shipping them over to the southwest, to the northeast,
something like that, And people just don't assume that this
car had any sort of flooding history. And this doesn't
mean that you should buy new cars to avoid like
the potential for buying a flood damaged used car. But always, always,
(26:47):
always get a used car that you're looking to buy
inspected by a mechanic you trust, because they're going to
be able to pinpoint and point out, say, listen, actually,
here's why you probably shouldn't buy this one. They're gonna
be able to see flood damage and kind of help
point you away from buying a car that has it.
Speaker 2 (27:03):
Yeah, I mean, I think it's worth spending a minute
and talking about how much of a game changer it
is to buy a used vehicle as opposed to a
new vehicle. And so to argue our point, Joel, I've
got some numbers that I've crunched.
Speaker 1 (27:14):
You always pree the numbers.
Speaker 2 (27:15):
The average monthly payment on a new car today is
seven hundred and thirty four dollars. Now that wasn't the
case sixteen years ago, but let's just say it was.
And I'm going to say sixteen years ago because Kate
and I that's when we moved from a two car
family down to a one car family. Had we invested
that monthly payment for sixteen years up to today, we
would have around three hundred and sixteen thousand dollars. Dang,
(27:36):
that's that's pretty nice, right were we to continue to
invest that seven hundred and thirty four dollars, because guess what,
in the future, that new car payment, it's actually going
to be higher than it is right now. True another
ten years, we're looking at a million dollars just from
not having a new car. And I don't think that
that's some sort of straw man argument either, because a
lot of people do this. A lot of people kind
of get locked into this new car cycle. They're all
(28:00):
always making a payment on a vehicle, and we.
Speaker 1 (28:03):
Just normalized it so much.
Speaker 2 (28:04):
It's normalized and it's just seen as a lifestyle up
not an upgrade, but it's just something that people are
used to and if you can afford it, if you've
got the money on hand, if you have the money
on hand, you should be buying that vehicle new first
of all. But secondly, I think some people see it
as like, hey, this is something this is like my
one thing that I like to spend money on if
you can afford it, I think that's that. That can
(28:25):
be okay, that can be a decent argument, but it's
at least worth running the numbers occasionally and just facing
the facts and how much this is actually going to
cost you over the long haul, were you to instead
go with something that's used and something that you pay
cash for as opposed to paying out the nose for
a new vehicle every single year.
Speaker 1 (28:43):
I mean, trade offs are the ultimate reality of personal finance,
and at least know with eyes wide open the trade
off you're making. And that, to me is kind of
a shocking statistic to think that just investing what you
would have spent every single month on a car payment,
assuming you had won every single month for all those years,
for less than three decades, that becomes a million dollars
twenty six years. Yeah, that's pretty crazy to think about,
(29:05):
and at least it should make you, I don't know,
I you're the car sitting in your driveway a little
more warrely be like, wait a second, you know how
much money you're costing me? Think about that?
Speaker 2 (29:13):
Like if you are able to look at it through
a different lens, like you're putting on Like I don't
want you to always be wearing the money lens, the
money goggles, like you know, as you're looking at expenses
in your house, like you shouldn't instinctively see like dollars
side it's like.
Speaker 1 (29:25):
Look at your child, Look at that much food you're eating. Expensive.
Speaker 2 (29:28):
Augmented reality where like you've got a program that automatically
tallies how much something's costing you. That would actually be pretty.
Speaker 1 (29:34):
Dope, like the meta glasses or something. There's kind of yeah,
exact software that could they could put in their virtual reality.
Speaker 2 (29:40):
I've never been a fan of, but augmented reality I
feel like actually has potential, the ability to marry the
digital world and like the actual reality that we're in.
I see that being Ah, that maybe a useful uh
useful application.
Speaker 1 (29:51):
Perhaps, all right, let's talk about fashion for a second.
Speaker 2 (29:54):
Matt.
Speaker 1 (29:55):
At the risk of sounding like an old man, I'm
willing to dip my toes in this. Why are people
still buying ripped jeans?
Speaker 2 (30:01):
Here's joll over here shaking his fist at the sky.
Speaker 1 (30:04):
Get off my lawn. People. Well, and this was actually
this was the title of a recent New York Times
article Why are people still buying rip jeans? And I
just agree with this question because I've never really understood
why people do this. I've never been a fan of
the rip jeans phenomenon. I think I have a pair
of jeans that have a rip in it, but only
because they're like fourteen years old. You rip the whole
(30:26):
them because.
Speaker 2 (30:26):
I earned that rip.
Speaker 1 (30:27):
Yes, insane buying.
Speaker 2 (30:29):
That's such a better way of thinking about it. Is
like my living created that rip. Like me getting down
on my knees to pick up my kid for the
umpteenth time. Is what caused that? Where that threadbare patch
there on the knee right, which eventually leads to a
beautiful rip?
Speaker 1 (30:42):
Well, And as The New York Times highlights in this article,
it's the funny thing is that it's luxury brands. Those
are the ones that are specializing in creating these these
these coveted pairs of ripped pants that people are into.
So not only are people paying for jeans with rips,
which doesn't make sense to me at all, they're also
not getting them at a reasonable price because they're buying
(31:05):
them from luxury retailers who charge more for ripped jeans.
So it's not like, oh, let me go get this
pair of rib jeans from Walmart because they're eighteen dollars.
It's like, let me get the Balenciaga rip jeans that
are seven hundred and ninety five dollars.
Speaker 2 (31:18):
Yeah, if it was like, hey, you're gonna get a
discount because these genes are ripped, it's like buying ugly
food or dented produce at the grocery store. That's like,
it's still good, but we'll give you a discount. Yeah,
if you take this off our hands.
Speaker 1 (31:28):
I might be willing to partake if it was exactly discounted,
but it's not right. So I don't know that you
or I are icons of style anything like that. Speak
for yourself, but forking over big bucks to the fancy
brands to buy rib jeans doesn't make really much sense
to me at all.
Speaker 2 (31:45):
And I don't even like the distressed. It makes me
think back to the eighties. Like the eighties is is
that when like acid wash came in or stonewashed. That's
what it was called stone washed, and it was to
make the genes look like they were somewhat broken in
because as a kid, I remember the absolute worst thing
was getting a pair of like brand new genes that
were like dark blue. Like that was lame and so
(32:06):
I kind of understand from a kid's perspective, but now
as an adult man, like those like those are the
nice genes, right, Like this Japanese salvage dark blue raw denim.
I love getting a pair of those because it's almost
like a blank canvas. And like you said, you have
to earn those wear lines. Yeah, you earned that whiskery.
Speaker 1 (32:25):
It's coming about naturally over time.
Speaker 2 (32:26):
Yeah, yeah, that's a and you're paying more in that
case though, on those kinds of genes because they're salvage
and so it's a it's a nicer denim. I don't
know all everything that goes into it, but it's a
nicer fabric. It's a it's heavier, it's like the heavyweight.
However many ounces I don't.
Speaker 1 (32:41):
I'm not like a.
Speaker 2 (32:42):
Denim head or anything like that. But like you are
literally getting more. There's a utilitarian.
Speaker 1 (32:46):
You're getting something that's higher quality and will last longer,
as opposed to getting something that is an attempt at
at being trendy exactly.
Speaker 2 (32:53):
Okay, So, speaking of spending money on crap, maybe try
and avoid Amazon's new line, Amazon Haul. This is Amazon's
effort to compete with the cheap Chinese sites like Timu
over there nothing is priced more than twenty dollars. And
you may be listening to the show and thinking that, man,
these money saving hosts of the podcast, they'd be all
(33:15):
about Amazon Hall, but we're actually not. Because these quote
unquote affordable products are they're often made incredibly poorly. That
means they're gonna break quickly. If it's a fashion item,
it means it's gonna unravel quickly or fade, or it's
gonna pill and you're gonna start seeing more prompts to
check out Amazon Hall over on their site or on
(33:36):
the app, especially here around the holidays. But avoiding it
is likely the best policy. We like getting a deal,
we like the prices, but we are certainly down to
pay a little bit more for quality for something that
we think is gonna last the actual long haul. I
don't know, I didn't really wrap that up cleanly, but
you know what I'm saying. Yeah, So the reason it's
called Amazon Hall too is it because it's because they
(33:58):
want you to They have to send it directly from
China right to avoid the it's likely going to take
multiple weeks to get your stuff, just because yeah, it
is this direct from direct from China sort of to
avoid the teriffs?
Speaker 1 (34:09):
Yeah?
Speaker 2 (34:09):
Literally, I guess like when you are when they're shipping
it directly from China, like.
Speaker 1 (34:13):
They're in Amazon much much much less. They know, Hey,
we're maybe competitive with a lot of American retailers, but
we're not as competitive with Timu Sheian like those kind
of companies. And so this is their attempt to be
competitive on that front. But that in their attempts to
be competitive with some of those Chinese retailers, they are
going to have to reduce the quality of the product.
(34:34):
They're reducing the price. Yeah, but a lot of these
things are just going to be cheap chot keys that
you should avoid because they're not gonna last very long,
especially man, some of those clothing items. Think about how
I've never bought anything from any of those Chinese sites. Man,
I kind of I refuse to, Like, I'm not interested.
And I know some people like are addicted to them
and they get stuff for super duper cheap, but I
(34:54):
just don't think the deep discounts are worth.
Speaker 2 (34:57):
The price we pay. Joel's buy an American made only,
Joel's a Patriot.
Speaker 1 (35:00):
I'm American made only but like my goodness.
Speaker 2 (35:03):
Avoiding the absolutely cheapest crap out there.
Speaker 1 (35:05):
Yeah yeah, I mean everything I read about the especially
the clothing items, but like think about like the all
the plastic junkin stuff. It's a lot of it's like
completely needless stuff. And word, we're just wowed by the price,
and so we buy. But how long does that thing
actually last? And is it something that we use for
longer than a few days?
Speaker 2 (35:19):
I know. Yeah, we are literally in the midst of
having conversations with family right now as we're trying to
figure out what gifts are going to look like around
the holidays in Christmas in order to keep you know,
just all that stuff that's gonna end up breaking or
that we're not going to find a whole lot of
value in to a minimum.
Speaker 1 (35:32):
Yeah, those are important conversations to have right now.
Speaker 2 (35:34):
Yeah, man, let's do a quick newsletter referral shout out
to Brittany Ka. Brittany, thank you so much for being
a how to Money newsletter reader as well as disseminator.
You've sent it out to some of your most loved
friends and family, so thank you for spreading the word.
Speaker 1 (35:48):
No doubt we appreciate you Brittany. All right, Matt, that's
gonna do it for this episode. We'll put links in
the show notes to some of the stuff that we mentioned,
and there's always more money saving information about how toomoney
dot com. But until next time, best Friends Out, Best
Friends Out,
Hosts And Creators
Joel Larsgaard
Matthew Altmix
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