Sosh: The trustees for the massive retirement programs project that Social Security will be insolvent by 2035, and Medicare by 2036, which would force benefit cuts. Many young adults are convinced that Social Security won’t be around when they’re ready to collect, and seniors are concerned about a cut in their benefits. Why is SSI Broken?: The trustees for the massive retirement programs project that Social Security will be insolvent by 2035, and Medicare by 2036, which would force benefit cuts. Many young adults are convinced that Social Security won’t be around when they’re ready to collect, and seniors are concerned about a cut in their benefits. What To Do?: With cuts eminent in Social Security benefits, we have to start looking out for ourselves. Here’s what we can do. Grim Future: Saving/investing is the best way to look out for yourself. But, generationally, most aren’t doing it and that leaves a problem nationwide. Looking ahead, the youngest working generation, Z, is looking like it’s going to be a tough uphill climb.
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Transcript
Episode Transcript
Available transcripts are automatically generated. Complete accuracy is not guaranteed.
(00:00):
You're listening to KFI AM six fortyon demand. People can't see this,
but during the breaks, Andrew isworking on his nunciation and he you're pretty
good at this. Andrew. He'srecording himself. He's recording himself video recording
himself, and he's pretending that he'smoved to Colorado and that he is a
(00:21):
juror in rural Aurora or in ruralAurra. And he just keeps saying it
over and over again. Then hewatches his pronunciation make sure that he's doing
it correctly. I'll tell you,buddy, that's a little bit creepy,
a little creepy. Is it working? Uh? Yeah, yeah, yeah,
you know good. Hey do youever watch yourself speak? I mean,
(00:46):
you've you've been in media long enough, right, you've seen. I
hate the way I look when Ispeak. I'm like, my mouth isn't
right. Do you do that?Or are you like, man, I'm
a handsome guy. Well yeah there'sthat too, but you know most sexiest
news anchors of of LA. Butno, so when I'm when I'm photographed
(01:07):
or like I'm on camera, Iknow over the years that I have certain
ticks and I hate when I seethem because I see I don't think anyone
else sees them, but I seethem, and it bothers me, and
I can't get over that. Yeah, no, I'm the same way.
Uh and I there's one thing aboutbeing in radio that you're in it for
a while and you hear your voice, and your voice on the air is
different than the voice in your head. We all know that recorded voice sounds
(01:30):
different than you know, so youkind of get used to that, right
you're in the business long enough yougo, Okay, yeah that's my voice.
It doesn't sound like it does inmy head, but yeah, it's
different. Whatever. I just can'tget over seeing myself speak. I feel
like such a weirdo. And thenwhenever recording and I've got it doing the
selfie shot, yeah, I alwaysfind myself tensing my lips so that i'm
(01:52):
not because otherwise I just feel likethat's what I feel like I look like
whenever I speak. Usually i'm yournumber one hater, and I'm proud of
that. But when I watch youyou speak it, I don't. I
don't get a little I think youdon't. Oh, I just feel like
my lips are all over the place, and I know you're hating on yourself,
mate, I know this is whatI do. You know who has
(02:14):
an interesting tick? And I wonderhow she feels about it because I always
thought, oh, it's kind ofcute. She's had it since she was
a little girl. Is Drew Barrymore? Remember her in et? And she
always kind of had that finger sheshe spoke, and she had a little
bit of a lisp in here.Just the way she formed her words in
her mouth just looks a little bitfunny. And her jaw kind of shuffles
(02:35):
around the left and right. Youknow, Yeah, I've noticed. I
watched fifty first Dates the other night. Oh yeah, she definitely doesn't have
fifty her dates. It's adorable,it is, But I wonder when she
looks at herself, does she goes, man, I look weird or do
you think she looks at herself,Oh, I'm cute, I'm adorable.
Idea. She probably thinks she looksweird. We're all our number one,
I know, rat she probably doesn'tthink it's adorable. Although it is.
(03:00):
It totally is totally is. Letme see here, Robin. I think
we're gonna need to shift. Ithink I think we have to make a
shift here, Robin, I thinkwe're going to need to make a shift
here. Can we can we goto a break here a little early?
(03:20):
All right, let's do that,and then about your retirement. Why it's
it's going away. You're listening toKFI AM six forty on demand. You
may have heard the news this weekthat Social Security is going to be insolvent
by twenty thirty five. That's abummer. What does that even mean?
And a new report from the SocialSecurity Administration warrants full Social Security and Medicare
(03:45):
benefits will only last about twenty moreyears. The last Congress take steps to
preserve the funds the Social Security Trustwill run out in twenty thirty five.
After that, recipients would only bepaid eighty three percent of their benefits.
Medicare runs drying twenty thirty six later, and would then cover just eighty nine
percent of health care costs. Morethan seventy million Americans received Social Security benefits.
(04:06):
Okay, wait a minute, holdon Medicare. Reimbursement rates for care
providers is already crazy low. Partof the reason that we have high health
insurance is that health insurance is makingup for the operating loss that providers have
(04:26):
when they are seeing Medicare Medicaid patientsnotoriously low reimbursements. That's why a lot
of providers, by providers, Imean your doctors, your clinics, laboratories,
your therapists, not necessarily a psychiatrictherapy, but physical therapists. A
(04:46):
lot of these different place, hospitals, a lot of these different places stopped
accepting the government aid because they justthe reimbursement rates were just so low.
So to say, well, they'reonly going to be able to reimburse at
eighty nine percent, Well let's reimbursementat eighty nine percent of what is already
a very low reimbursement rate. Sothat's not great. But one of the
(05:08):
things that I've been hearing my entirelife, and maybe you've experienced the same
thing. One of the things thatI've been hearing my entire life is that
Social Security won't have any money leftin it by the time I get to
retirement. Right, you've heard it. I've heard it, and I'm looking
(05:29):
at that and I still have anothertwenty plus years to go, all right.
I think Andrew, you're a youngguy like me, so I don't
think we're supposed to retire until we'resixty seven or sixty eight. I was
planning on doing it in a coupleof years. I was just listening to
Larsgard there in the last segment hesaid that some people have a goal to
(05:50):
retire at forty four, and Ithought, ooh, missed it. So
I don't know, you've probably heardthe same thing I have. Is that
don't be any money for Social Security, Yeah, which I have to tell
you is kind of a motivator myentire life. I never I never thought
there would be money from Social Security. Never. I still don't. I
(06:12):
still operate under the auspices that therewill be no money. That I have
to make sure I've got retirement takencare of myself. And since I don't
have a government job and pensions aren'treally available in the private sector anymore,
there's not gonna be a pension,i'd better be saving. So I'll tell
you something that's interesting go on inmy generation. I don't think. I
don't think maybe in the last tenyears, I have ever had a conversation
(06:33):
with anyone my age or around myage about retirement pertaining to Social Security.
But you may have talked about II gotta put some money aside. I
gotta get my four oh one kup or something like that. No,
not really do just not even thinkingabout it at all. It's not a
thing like you know, like talkabout, oh yeah, putting money away
like in a savings or something.But there really has never been a conversation.
(06:56):
And I've talked to a lot ofpeople, you know, about retirements,
pecifically social security. I think Ithink my generation is under the impression
it's probably not going to be somethingwhen we get to our parents' age.
Yeah. Well, I'm gonna tellyou. I'm I'm late gen X,
or I'm what they call infant genX as opposed to geriatric millennial. Yeah,
so I'm infant gen X, whichmeans I was born in the late
(07:18):
seventies, and in my entire lifeI've been told it won't be there.
But the math doesn't quite work outthat way. So it's good for motivating
you to think there will be nosupport from all that money you paid into
the system for your entire life.That's good to think of, but because
then you start preparing how much amI going to need in retirement? How
(07:40):
much do I need to put aside? To get to that point based on
projected returns, blah blah blah,all those things that we do. So
it's not actually going to run outthough, So chances are pretty good that
there's still going to be some incarnationof Social Security for me, for Andrew,
for baby Klee. There will besome money there because you've been paying
(08:03):
into it your whole life. Andunless somebody comes through and says we're getting
rid of it, it'll be available. And let me tell you, nobody
is going to say we're going toget rid of it because it's been around
for almost a century and now peopledepend on it, right, And that's
kind of the point, not likein a bad way, like let's get
people dependent. I know, Irun into friends there, like that was
(08:24):
the goal the whole time, isto make people dependent on the government.
No, I think it was meantall along to make sure that people had
some revenue source when they weren't ableto work. The last thing we want
to do is see somebody that hasto go to work when they are physically
nearly unable. We want to seethe golden years be golden for people,
all those sorts of things, right, So it will be there, But
(08:48):
we probably won't get paid back atthe same amount. What it's going to
take those politicians who are willing toaddress it. And I'm already seeing ads
that are being run and the Republicansare pointing out the Democrats and saying,
this Democrat won to cut Social Secure, this Republican wants to cut Medicare.
We're already seeing that, So don'texpect that to go away anytime soon.
(09:11):
The politicians lobbing bombs back and forthat each other, which means if they're
not gonna make cuts to the benefits, they're probably going to have to increase
the contributions, which means it hasto come from either more payroll tax withholding,
or they're gonna have to shuffle moneyfrom another bucket somewhere. Now,
(09:33):
good luck getting them to say,oh, we're just gonna shift money from
the Defense Department to bolster social Security. Why would you shift it from the
defense department? Do you want usto get murdered. No, it's not
going to go away, not justbecause the politicians don't have the will.
(09:54):
It's not gonna go away because themath is gonna work out. Let's do
math on the radio. Everybody lovesmath. On the radio. Right,
Well, suppose you've got one hundredpeople that are collecting and eighty people are
putting in. That means that allthings being equal, which they aren't,
that if you were to drop benefitsto eighty percent for the people collecting,
that would be a wash, right, if you have one hundred people putting
in and one hundred people taking out. And again, simple math, don't
(10:16):
get too hung up on the details, because I already know what you're thinking.
Well, wait a minute, retirementyears a're only gonna last for about
twenty but you're paying time. Iget it. Just if we're taking a
look at pay in versus payout,it doesn't work that way because payouts are
a lot greater than the pay ins. One, because you've got a seventy
two year old it might be collectingthree grand a month, but you got
a twenty two year old that's payingin. It's only putting in three hundred,
(10:37):
right, right, And you don'thave more twenty two year olds than
you have necessarily people pulling out becausewe stopped having babies. Yeah, population
is declining, and this is agiant pyramid scheme. So payouts and pyramid
schemes are guaranteed by people paying inat younger ages. One of the requirements
(11:03):
of our social safety net and apyramid scheme and multi level marketing is that
the foundation of the pyramid has tobe has to be broader than the top
what we're having now because we hada boom after World War Two. Everybody
got home from World War Two andthey were like, let's make a baby,
because that's what we do. Iguess. So we had this population
(11:26):
boom, called them to the babyboomers, and now the baby boomers are
retiring. But things have gotten crazy, stupid expensive. So people are not
getting married in the early twenties andpopping out two or three kids by the
time they're thirty. Cal how manytimes you been married? Seven? Okay,
how many kids you got zero?Oh wait, you've been married seven
(11:48):
times? Yeah? Sure, No, I had not been married at all.
Now I'm married. No. Ilove that. Andrew believed it.
I mean, I could have createda whole podcast season off of your marriageess
that would have come on. Tellme that would have been in the top
the top ten podcast. That wouldbe great. I would have given on
all the show if that was true. Eliza and Elli Eat your Heart out.
(12:09):
We've got Kayla, she's only thirtythree and already ahead of you.
That's great. I love it.Uh. And obviously Andrew's been given an
assignment to make up a good podcast. Listen, I mean we're gonna need
a good podcast. We're gonna haveto cast your ex husbands. We'll find
them. Love that. No,Cala is a great example of just a
(12:31):
normal early thirties somebody who hasn't beenmarried, doesn't have kids, is focused
on her career, is focused onlife experiences, and that's become kind of
the trend. One of the issues, of course, is even if Cayla
were to find husband number eight,they probably would take a good look at
their finances and go, we canbarely afford to pay for ourselves. How
(12:52):
are we going to pay for akid? And I know that's always been
an issue, right, it's alwaysListen, if having a child, we're
a good financial investment, no onewould ever have children. But now it's
not only become incredibly difficult, evenmore so now than in the past,
it's also easier to not have achild now and still do baby boomer activities
(13:18):
than it ever has. It's alot easier. So the idea that our
pyramid is thicker at the base doesn'treally work out as we look to the
future because people aren't having kids.So twenty years from now, the base
of the pyramid is even narrower thanit was than it is today. So
(13:39):
social Security, Medicare, the socialsafety net is not going to grow as
a pyramid scheme needs for growth.In other it's going to shrink. So
the problems that we're seeing right nowwhen it comes to funding social Security and
medicare, those problems are only goingto get worse. So what can you
(14:03):
do? Well, you can adjustthe cost of living. Retirees have actually
seen their Social Security benefits lose thirtysix percent of their buying power from twenty
to twenty twenty three, according toresearch from the Senior Citizens League. So
that's that's even with that cost ofliving increase of almost nine percent last year.
(14:26):
This year they're going to incorporate acost of living increase of about three
point two percent, right, alittle over three percent. But as we
know, it's not like inflation iscompletely under control. I heard I did
hear somebody on one of those financialradio programs. I love week weekend radio.
By the way, just side note. I love weekend radio. I
(14:46):
do. I listened to a phishingshow, a car show, a real
estate show, a gardening show,a home improvement show, investing show,
tech show man. I love weekendradio. So I did hear somebody on
one of the financial shows though thatsaid, well, inflation isn't getting any
(15:07):
better. Well that's not true.Inflation is better. It is not giving
back to that two percent that theFeds want. We know that, and
we're still feeling it. We've stillgot we've still got residual pain from the
inflation that we felt since the pandemic. So that's one thing here. Inflation,
(15:28):
however, is getting a little bitbetter. But because we're still feeling
the pain, and because cost ofliving increases over the last twenty years haven't
kept up. We're talking about socialsecurity, they say the only way.
If we get ten years from now, social security will only be putting out
what it brings in eighty percent,roughly a little more, a little less,
(15:50):
depending, probably a little less.But if that's the case, we've
already seen social security benefits drop,not not on paper, but as far
as buying power goes, we've alreadyseen them lose more than a third of
their value. If you've got asocial Security check in two thousand for twenty
(16:12):
five hundred dollars, it went wayfarther than than it does now, and
went a third further in two thousandthan it does now. Right, so
we're already seeing the cost of livingis not keeping up, and they talk
about cutting on top of that.So why is it so broken? Part
(16:33):
of that has to do with,as I mentioned, the pyramid scheme,
But the math stop working when peoplestart living longer into retirement. So not
only are we not creating new babies, we're lasting longer after we retire.
We're not bringing in future workers quicklyenough to contribute to the system. In
(16:57):
fact, some immigration experts have arguedthat the solution to the social security problem
is to bring in more workers becausethey can start working now today. If
we were to put in some sortof a Chinese baby incentive where we say,
listen, we want everyone to havemore kids, and if you have
(17:17):
more kids, will lower your taxesbecause you'd be thinking in twenty years those
kids will be or twenty five years, those kids will be paying in to
the social programs, and we canrefund this thing. But what if you
could just get twenty five year oldsnow to start paying in a lot of
immigration experts will say the way todo that is through immigration. But what
do we do, What do wedo as individuals? Well, Andrew was
(17:42):
talking about it a little bit ago. I don't know how well he's doing,
but I can tell you how I'mdoing, and I don't feel great.
That's next. You're listening to KFIAM six forty on demand. I
was talking about Social Security. Youmay have seen the report this week that
said that Social Security is going tobe insolvent by twenty thirty five. Insolvent
(18:04):
doesn't mean broke. Insolvent means kindof like remember when we had the housing
crisis and the banks were insolvent meansthat they didn't have enough money to pay
all of their obligations, right,there wasn't enough cash on hand. That's
insolvency. So social Security may becomeinsolvent. They can't really happen with the
(18:25):
government because the government could borrow moremoney in order to pay Social Security.
And a friend say, well,why don't they just print more money?
Got to be careful doing that.I gotta be careful borrowing more money to
pay off Social Security too, becauseyou don't want to what are we experiencing
right now? You'd want to pushinflation too high. It's kind of a
double edged sword. If you justprint more money, now you've got more
money in circulation, and you dovalue how much money there is out there,
(18:48):
right, and then inflation skyrockets.So we don't want to see that
happen. What's another great way,Well, if people could die faster.
That would be very helpful to thepro although it's been difficult to find volunteers.
The Washington Post talks about Social Securityhas to be fixed. First line
says social Security isn't broke, butit's badly broken. There there's enough money
(19:15):
currently coming into the retirement program topay benefit recipients. However, without intervention,
like many struggling Americans, will beunable to pay everyone the full amount
due each month. And so thestory goes on. Michelle Singletary wrote it
there for the Post, and storygoes on. Continues to say, you
gotta save money, right, allright? So how do we do that?
(19:37):
You gotta save like a lifeguard.You gotta think of your nest egg
like a child, and you gottaprotect it. You gotta nurture it.
You gotta help it grow, andyou don't want it to get underwater.
See how I made my silly lifegot analogy work. One thing that I
can recommend is don't go crazy checkingthat four to one k every day.
(19:57):
Don't look at that. I mean, I don't ignore it, but don't
look at it every day. You'regonna go nuts if you do that.
You don't want that. Uh,Contribute as much as you can and plan
for the worst. I don't knowwhat the future politicians are gonna do.
It's entirely possible. We have apolitician come forward and say I'm not touching
(20:18):
the social programs and then get electedand then touch the social programs. I
mean, I remember a president whosaid, read my lips, no new
taxes and then raise taxes. Imean, it can happen, right,
So think of it as not justsaving because uh oh, maybe the politicians
aren't gonna get their stuff in order. Think of it like I'm setting money
(20:40):
aside for my kids and my grandkidsand then you're in. You're gonna end
up starting that generational wealth. Andhere's one thing I do want to point
out. One of the great differencesbetween pensions and four to one case.
Now, obviously the four and oneK you gotta pay into, and the
pension is something that the employer isgonna provide. But with social Security and
(21:02):
pensions alike, once you croak,that's it. It's gone. Right.
If if you kick the bucket,you and you're where whoever gets your survivor
benefits? Right Whoever, if you'vegot a spouse, they get them for
a little while, but then theykick it, They're done. But if
(21:22):
you have money in a retirement account, then when you when you go,
it gets passed on. And ifyou start thinking about your beneficiaries, you
(21:42):
you are actually saying I don't trustthat future politicians are going to figure this
out either. And listen, ifyou trust politicians to figure it out,
raise your hand and don't save anymoney. Great idea for the rest of
the ninety nine point nine percent ofAmerica. We're going to go ahead.
I didn't start looking out for NumeroUno. Now how do we save?
(22:03):
Wow? Mare, I'm gonna haveenough money to pay my rent right now?
Am I gonna save? This isthe hard part because the American culture
is built on bigger, better,faster, stronger, shinier, right,
So you got to cut like alumberjack. And I'm as guilty as anybody
for wanting. And I want thelatest, I want the greatest, I
(22:26):
want the newest, I want theshiniest. But really, how long does
the gratification last? And I wasrealizing this this week. I had a
stressful week, and to be honest, I put the stress on myself.
I was imagining scenarios. Do youever do that? You just start imagining
the worst of things all the time. Yeah. My boss came to me
(22:47):
this week and she said, hey, can we talk? And I went,
sure, what you want to talkabout? She says, no,
let's go ahead and let's put iton the calendar. Let's set up a
meeting. Oh. I run theconversations in my head until then I did.
Oh my gosh, I had theworst week. And I thought,
Oh, she's mad at me.I said something I shouldn't have on the
air. I said something I shouldn'thave off the air. She doesn't like
(23:10):
my vision. She thinks I'm youknow, she thinks I'm the wrong choice
for the job. I'm in thissort of thing. And I got in
the meeting and she she closed thedoor, and she says, I just
wanted to check in and see howthings were going for you, and uh,
because you sound great and we wantyou to keep getting better and what
can we do to make that happen? Right? I was like, Oh,
this is so cool, this isgreat. But like you guys like
(23:33):
Andrew, I ran the My god, I was meeting with people and I
was talking to my partner and Isaid, listen, if she says this,
I'm gonna say this. And ifshe does this, watch, We're
gonna do this, and I'm gonnahave my back on this, right.
I mean I was playing the wholething out like there was a Cold war
going on, and unfortunately the conversationwas not one of the scenarios. No.
I was completely unprepared for. Hey, it's great, what else can
(23:57):
we do to make it even better? Ugh? So, yeah, I
had a really stressful week, right, And what do I do when I
have a stressful week? I goto Amazon. Oh my gosh, I
go to Amazon. Oh. Ithink Amazon wants us to all be stressed
out because of retail therapy. AndI hate parking, I hate driving,
(24:18):
So Amazon fixes all that for me. So I'm just on Amazon all time.
We're sitting here talking right now onmy computer, I have a new
laptop bag open. You know whatI have for a laptop bag. I
have a hand me down Louis Vatonlaptop bag right now. Yeah, right,
Kayla, I have a Louis laptopbag. You were so cool today.
(24:38):
Why am I on Amazon looking forfifty dollars replacements for my Louis laptop
bag? Hmm, yeah, No, it's a hand me down. My
wife's boss gave it to her yearsago. No, I should not be
looking for anything to replace it.It's fully functional, it looks fine.
Get a little crecenter where he keepsfolding over. But generally speaking, it's
a Louis. But I love retailtherapy. You know what that does for
(25:04):
my savings terrible. So I'm withyou. I'm with you. I got
to cut back. It doesn't meanthat we have to that we have to
go on a beans and rice diet, but probably should pick and choose when
we go to grab some Randi's andbring them into the whole office. Right,
(25:26):
If there's a way for you tocreate passive income, that's a great
way to save as well. AndI struggle with that one and My wife
is one of these opportunities. She'salways looking for a way to hustle.
But I don't think that way.Probably your individual retirement account, not the
Irish Republic Army is probably the bestpassive income. I don't think that the
(25:48):
Irish Republic Army pays returns on investment, but you might want to look into
that. It is the easiest thingto do. Your employer probably offers that
you put money in the power ofcompound interest, you take money out at
the end boom, easiest way todo it. And then if there's a
way that you can drive your beatera little longer, drive that car a
little bit longer, because if youthink about the average car payment right now,
(26:15):
how many times have you done this? You take your car in and
the mechanics says, ooh you gotyou got a bad uh turn signal timer
on that, and you go,oh that sounds bad, Like yeah,
it's really causing poor combustion, andthe transmission you're like roll. You're listening
to KFI AM six forty on demand. By then, Chris Merril can if
(26:37):
I AM six forty more stimulating talkfor gen Z. I feel bad because
unless you marry rich. It doesn'tlook good, cane you see a coach.
Yeah, it is time, myfriends, if you're in gen Z
(27:00):
to take a good hard look atyour finances. And that's not even fair.
My god, you're just starting out. How can we already be telling
you that you're doing it wrong.Well, one, it's the job of
the previous generations to always tell thecurrent generations every little thing that they do
wrong. And you also have theadded benefit of having influencers in your generation
who will then make tiktoks telling everybodyabout how you're doing it wrong. Because
(27:25):
Bloomers love when gen Zers make tiktokssaying that tiktoks are doing or that the
gen Zers are doing something wrong.They love it. Look at the self
doubt in the current generation. Wedidn't have that kind of doubt and we
were kids. What Yeah we did, gen X. You think we didn't
(27:45):
have self doubt. We had alternativeand grunge. Our entire persona was self
deprecation and loathing. Yeah, don'tthink that this is a new phenomenon.
So gen Z is crazy stupid indebt. We haven't set a great example
for these young Americans deeper into debt. Gen z is starting out with more
(28:07):
credit card debt than any other generationbefore them. What you would think that
the credit card companies would want todo something to try to make sure that
people aren't giving them too much.Moll that's right. A TransUnion report shows
the average young American has a creditcard balance of nearly three thousand dollars,
a twenty six percent jump from adecade ago. Wow, just a decade
(28:32):
ago. So Caleb, when yougraduated college, did you have credit card
debt when you got out of school? Yes? Yeah, me too,
Yeah I did. I went tocollections. Really yeah, I went to
collections. I had like and itwasn't This is embarrassing. Remember, value
of a dollars changed a lot sinceI was a wee lad. But I
(28:53):
only had six hundred dollars in creditcard debt. And then the late feet
now they've changed it legally, they'vechanges. Then I would have late payment
fees, and then I would haveover like I had six hundred dollars and
then I didn't make the payment,and then they would be like, oh,
there's a late payment, and thatlate payment counts as another charge,
So we're gonna hit you with awith a an over the limit charge.
(29:15):
So kind of like you write abad check and you get hit with that
what a thirty forty five dollars whateverit is for a insufficient funds check.
So imagine you write a Imagine ifyou had a late payment fee that also
gave you an insufficient funds fee,and that just started compounding and I couldn't
get ahead of it, and Igot sent to collections on it. And
(29:36):
I had a guy call me upcollections, dude who obviously hated his life,
and he said, you need topay this. I go. I
said, listen, I'm trying.I'm trying to pay this. I'm really
working it. He says, well, if you cut us a check for
fifteen hundred dollars right now, we'llcall it even. And I went,
it's a six hundred dollars bill andhe said, yeah, but your your
your fees are up over two thousand. If you just give us fifteen hundred
(29:59):
right now, we'll call it even. I said, if I had fifteen
hundred dollars, don't you think Iwould have paid the six hundred dollars?
And the guy says, well,what are you gonna do? I go,
buddy, you keep pushing me,I'm going to claim bankruptcy. He
goes, well do it, then, just do it, And I thought
that's terrible collections etiquette. But Ithought, what does he got to lose.
He's a collections guy. He doesn'tcare. He doesn't care. But
(30:22):
I do feel like the early twenties, in like college years, as those
are the days to make those kindsof mistakes and learn from them. Yeah,
yeah, I certainly did. Yeah, that's not to say I didn't
get into debt. Again. Idid get into some bad credit card debt,
but it was never more than Icould handle between my wife and I,
but it was more than we wanted, that's for sure. And so
now we do the whole stay ontop of it, paid off every month,
(30:47):
which is good, but then wealways have to have this conversation about
what the credit card debt was everymonth, and then she says, you
need to stop spending, and Istart taking a look at it, and
I'm like, you're right, Ineed to stop spending. Let's take a
look at that bill. Let's seewhat do we got on here. Let's
see Michael's hobby lobby juice shop.Huh. I don't remember going into any
(31:08):
of those things, that's weird.So obviously I'm sleepwalking. So gen Z,
it keeps getting worse. And asmuch as it was bad for me
and it was bad for Kayla,gen Z has got it even worse than
we did. They're really dealing withthe issue of the rent to income ratio.
It's out of control. Rent istoo expensive for them, and so
(31:30):
the thing that they've got to realizeis they can't depend on credit cards.
Right they're being marketed to, they'reseeing on social media, this is the
life that you should have. Youngerpeople with larger debt, falling behind quicker
on credit card payments, with somelying on their family members for help if
they can't make ends meet. Wewant Americans, if they have debt,
we want you to focus all ofyour extra income on that debt so you
(31:52):
can clear it out as quickly aspossible. And then when that debt entered,
you'll have freedop income so that you'regoing to actually be able to invest
far more than what you were investingbefore. Through It's so easy and exciting
to say out loud, it isso hard and boring to do in life.
(32:13):
What's the number that they keep using, right, Now, when they
try to calculate whether or not youcan afford to be middle class, they
say, fifty percent of your incomesshould be spent on bills and rent and
all that kind of stuff. Right, so, your mortgage, your car
payment, your utilities, this sortof thing, right, well, school
(32:34):
lunches, tuitions, whatever, Right, fifty percent should be spent on life's
necessities. Twenty percent should be spenton paying off debt and investing. Now,
if you can do both at thesame time, that's great. The
easiest way to do it is toget out of debt and then spend that,
you know, keep living a littlebit below your means and sock them
(32:57):
away. But if you can putaway in your four while you're also paying
off your credit card debt or yourcar payment or your mortgage or whatever else,
that's great. Although your mortgage fallsunder that first category unless you're renting.
The other thirty percent is supposed tobe discretion spending, means I want
to go out to eat tonight,I want to buy myself a new iPhone,
whatever it might be. The problemis for gen Z is that they
(33:24):
want more discretionary spending because they're youngand they want to live their lives,
and that fifty percent thing, it'salmost impossible to do when you've got student
loan payments that are getting out ofhand, when more and more of their
paycheck is going toward paying the increasingcost of health insurance just to have it
(33:45):
in the first place. Any medicaldebt is crushing, and then of course
rent is higher than it's ever been, so that fifty percent gets you a
lot less than it did before.Gen Zers want to live their lives,
and so the discretionary spending is theywant to use more than thirty percent for
discretionary spending. And so what dothey do. They start dipping into that
other part, that investment, andthen they start going into debt. And
(34:09):
let me tell you something, genZ, I did it. We all
go through it, and it's harderfor you than it was for us.
And I'm sorry for that because alot of the people in my generation are
making money off of you right nowbecause of it. Yeah, they just
are. They go listen, thisis an easy target. But keep this
(34:30):
in mind. The time will comeyou get to do that to the next
generation because it happened to us.My god, do you know why I
got into such a credit card debtbecause some guy said he was going to
give me a T shirt and atwo liter of Mountain Dew if I signed
up for a credit card and itworked. That was the most expensive Mountain
(34:50):
Dew I ever had my entire life. Good news though, as a California
voter, we are going to havean opportunity to vote on one of those
referendum to mandate a personal finance requirementin high school. Great, let's hope
the curriculum holds up to what weneed it to do. But for Jen
Alpha, you may have a headstart just because the knowledge will be drilled
(35:14):
into your head harder than it everwas into ours. Gen Z, you're
still screwed. You can just movealong here, all right, it is
it's that time, Kelly ready,all right? Right after we take a
look at news with Andrew Caravella.We've got our special segment. There's no
business like show business. It's next. It's KFI AM six forty. We're
(35:35):
live everywhere in the iHeartRadio app KFIAM six forty on demand
You're listening to KFI AM six fortyon demand. People can't see this,
but during the breaks, Andrew isworking on his nunciation and he you're pretty
good at this. Andrew. He'srecording himself. He's recording himself video recording
himself, and he's pretending that he'smoved to Colorado and that he is a
(00:21):
juror in rural Aurora or in ruralAurra. And he just keeps saying it
over and over again. Then hewatches his pronunciation make sure that he's doing
it correctly. I'll tell you,buddy, that's a little bit creepy,
a little creepy. Is it working? Uh? Yeah, yeah, yeah,
you know good. Hey do youever watch yourself speak? I mean,
(00:46):
you've you've been in media long enough, right, you've seen. I
hate the way I look when Ispeak. I'm like, my mouth isn't
right. Do you do that?Or are you like, man, I'm
a handsome guy. Well yeah there'sthat too, but you know most sexiest
news anchors of of LA. Butno, so when I'm when I'm photographed
(01:07):
or like I'm on camera, Iknow over the years that I have certain
ticks and I hate when I seethem because I see I don't think anyone
else sees them, but I seethem, and it bothers me, and
I can't get over that. Yeah, no, I'm the same way.
Uh and I there's one thing aboutbeing in radio that you're in it for
a while and you hear your voice, and your voice on the air is
different than the voice in your head. We all know that recorded voice sounds
(01:30):
different than you know, so youkind of get used to that, right
you're in the business long enough yougo, Okay, yeah that's my voice.
It doesn't sound like it does inmy head, but yeah, it's
different. Whatever. I just can'tget over seeing myself speak. I feel
like such a weirdo. And thenwhenever recording and I've got it doing the
selfie shot, yeah, I alwaysfind myself tensing my lips so that i'm
(01:52):
not because otherwise I just feel likethat's what I feel like I look like
whenever I speak. Usually i'm yournumber one hater, and I'm proud of
that. But when I watch youyou speak it, I don't. I
don't get a little I think youdon't. Oh, I just feel like
my lips are all over the place, and I know you're hating on yourself,
mate, I know this is whatI do. You know who has
(02:14):
an interesting tick? And I wonderhow she feels about it because I always
thought, oh, it's kind ofcute. She's had it since she was
a little girl. Is Drew Barrymore? Remember her in et? And she
always kind of had that finger sheshe spoke, and she had a little
bit of a lisp in here.Just the way she formed her words in
her mouth just looks a little bitfunny. And her jaw kind of shuffles
(02:35):
around the left and right. Youknow, Yeah, I've noticed. I
watched fifty first Dates the other night. Oh yeah, she definitely doesn't have
fifty her dates. It's adorable,it is, But I wonder when she
looks at herself, does she goes, man, I look weird or do
you think she looks at herself,Oh, I'm cute, I'm adorable.
Idea. She probably thinks she looksweird. We're all our number one,
I know, rat she probably doesn'tthink it's adorable. Although it is.
(03:00):
It totally is totally is. Letme see here, Robin. I think
we're gonna need to shift. Ithink I think we have to make a
shift here, Robin, I thinkwe're going to need to make a shift
here. Can we can we goto a break here a little early?
(03:20):
All right, let's do that,and then about your retirement. Why it's
it's going away. You're listening toKFI AM six forty on demand. You
may have heard the news this weekthat Social Security is going to be insolvent
by twenty thirty five. That's abummer. What does that even mean?
And a new report from the SocialSecurity Administration warrants full Social Security and Medicare
(03:45):
benefits will only last about twenty moreyears. The last Congress take steps to
preserve the funds the Social Security Trustwill run out in twenty thirty five.
After that, recipients would only bepaid eighty three percent of their benefits.
Medicare runs drying twenty thirty six later, and would then cover just eighty nine
percent of health care costs. Morethan seventy million Americans received Social Security benefits.
(04:06):
Okay, wait a minute, holdon Medicare. Reimbursement rates for care
providers is already crazy low. Partof the reason that we have high health
insurance is that health insurance is makingup for the operating loss that providers have
(04:26):
when they are seeing Medicare Medicaid patientsnotoriously low reimbursements. That's why a lot
of providers, by providers, Imean your doctors, your clinics, laboratories,
your therapists, not necessarily a psychiatrictherapy, but physical therapists. A
(04:46):
lot of these different place, hospitals, a lot of these different places stopped
accepting the government aid because they justthe reimbursement rates were just so low.
So to say, well, they'reonly going to be able to reimburse at
eighty nine percent, Well let's reimbursementat eighty nine percent of what is already
a very low reimbursement rate. Sothat's not great. But one of the
(05:08):
things that I've been hearing my entirelife, and maybe you've experienced the same
thing. One of the things thatI've been hearing my entire life is that
Social Security won't have any money leftin it by the time I get to
retirement. Right, you've heard it. I've heard it, and I'm looking
(05:29):
at that and I still have anothertwenty plus years to go, all right.
I think Andrew, you're a youngguy like me, so I don't
think we're supposed to retire until we'resixty seven or sixty eight. I was
planning on doing it in a coupleof years. I was just listening to
Larsgard there in the last segment hesaid that some people have a goal to
(05:50):
retire at forty four, and Ithought, ooh, missed it. So
I don't know, you've probably heardthe same thing I have. Is that
don't be any money for Social Security, Yeah, which I have to tell
you is kind of a motivator myentire life. I never I never thought
there would be money from Social Security. Never. I still don't. I
(06:12):
still operate under the auspices that therewill be no money. That I have
to make sure I've got retirement takencare of myself. And since I don't
have a government job and pensions aren'treally available in the private sector anymore,
there's not gonna be a pension,i'd better be saving. So I'll tell
you something that's interesting go on inmy generation. I don't think. I
don't think maybe in the last tenyears, I have ever had a conversation
(06:33):
with anyone my age or around myage about retirement pertaining to Social Security.
But you may have talked about II gotta put some money aside. I
gotta get my four oh one kup or something like that. No,
not really do just not even thinkingabout it at all. It's not a
thing like you know, like talkabout, oh yeah, putting money away
like in a savings or something.But there really has never been a conversation.
(06:56):
And I've talked to a lot ofpeople, you know, about retirements,
pecifically social security. I think Ithink my generation is under the impression
it's probably not going to be somethingwhen we get to our parents' age.
Yeah. Well, I'm gonna tellyou. I'm I'm late gen X,
or I'm what they call infant genX as opposed to geriatric millennial. Yeah,
so I'm infant gen X, whichmeans I was born in the late
(07:18):
seventies, and in my entire lifeI've been told it won't be there.
But the math doesn't quite work outthat way. So it's good for motivating
you to think there will be nosupport from all that money you paid into
the system for your entire life.That's good to think of, but because
then you start preparing how much amI going to need in retirement? How
(07:40):
much do I need to put aside? To get to that point based on
projected returns, blah blah blah,all those things that we do. So
it's not actually going to run outthough, So chances are pretty good that
there's still going to be some incarnationof Social Security for me, for Andrew,
for baby Klee. There will besome money there because you've been paying
(08:03):
into it your whole life. Andunless somebody comes through and says we're getting
rid of it, it'll be available. And let me tell you, nobody
is going to say we're going toget rid of it because it's been around
for almost a century and now peopledepend on it, right, And that's
kind of the point, not likein a bad way, like let's get
people dependent. I know, Irun into friends there, like that was
(08:24):
the goal the whole time, isto make people dependent on the government.
No, I think it was meantall along to make sure that people had
some revenue source when they weren't ableto work. The last thing we want
to do is see somebody that hasto go to work when they are physically
nearly unable. We want to seethe golden years be golden for people,
all those sorts of things, right, So it will be there, But
(08:48):
we probably won't get paid back atthe same amount. What it's going to
take those politicians who are willing toaddress it. And I'm already seeing ads
that are being run and the Republicansare pointing out the Democrats and saying,
this Democrat won to cut Social Secure, this Republican wants to cut Medicare.
We're already seeing that, So don'texpect that to go away anytime soon.
(09:11):
The politicians lobbing bombs back and forthat each other, which means if they're
not gonna make cuts to the benefits, they're probably going to have to increase
the contributions, which means it hasto come from either more payroll tax withholding,
or they're gonna have to shuffle moneyfrom another bucket somewhere. Now,
(09:33):
good luck getting them to say,oh, we're just gonna shift money from
the Defense Department to bolster social Security. Why would you shift it from the
defense department? Do you want usto get murdered. No, it's not
going to go away, not justbecause the politicians don't have the will.
(09:54):
It's not gonna go away because themath is gonna work out. Let's do
math on the radio. Everybody lovesmath. On the radio. Right,
Well, suppose you've got one hundredpeople that are collecting and eighty people are
putting in. That means that allthings being equal, which they aren't,
that if you were to drop benefitsto eighty percent for the people collecting,
that would be a wash, right, if you have one hundred people putting
in and one hundred people taking out. And again, simple math, don't
(10:16):
get too hung up on the details, because I already know what you're thinking.
Well, wait a minute, retirementyears a're only gonna last for about
twenty but you're paying time. Iget it. Just if we're taking a
look at pay in versus payout,it doesn't work that way because payouts are
a lot greater than the pay ins. One, because you've got a seventy
two year old it might be collectingthree grand a month, but you got
a twenty two year old that's payingin. It's only putting in three hundred,
(10:37):
right, right, And you don'thave more twenty two year olds than
you have necessarily people pulling out becausewe stopped having babies. Yeah, population
is declining, and this is agiant pyramid scheme. So payouts and pyramid
schemes are guaranteed by people paying inat younger ages. One of the requirements
(11:03):
of our social safety net and apyramid scheme and multi level marketing is that
the foundation of the pyramid has tobe has to be broader than the top
what we're having now because we hada boom after World War Two. Everybody
got home from World War Two andthey were like, let's make a baby,
because that's what we do. Iguess. So we had this population
(11:26):
boom, called them to the babyboomers, and now the baby boomers are
retiring. But things have gotten crazy, stupid expensive. So people are not
getting married in the early twenties andpopping out two or three kids by the
time they're thirty. Cal how manytimes you been married? Seven? Okay,
how many kids you got zero?Oh wait, you've been married seven
(11:48):
times? Yeah? Sure, No, I had not been married at all.
Now I'm married. No. Ilove that. Andrew believed it.
I mean, I could have createda whole podcast season off of your marriageess
that would have come on. Tellme that would have been in the top
the top ten podcast. That wouldbe great. I would have given on
all the show if that was true. Eliza and Elli Eat your Heart out.
(12:09):
We've got Kayla, she's only thirtythree and already ahead of you.
That's great. I love it.Uh. And obviously Andrew's been given an
assignment to make up a good podcast. Listen, I mean we're gonna need
a good podcast. We're gonna haveto cast your ex husbands. We'll find
them. Love that. No,Cala is a great example of just a
(12:31):
normal early thirties somebody who hasn't beenmarried, doesn't have kids, is focused
on her career, is focused onlife experiences, and that's become kind of
the trend. One of the issues, of course, is even if Cayla
were to find husband number eight,they probably would take a good look at
their finances and go, we canbarely afford to pay for ourselves. How
(12:52):
are we going to pay for akid? And I know that's always been
an issue, right, it's alwaysListen, if having a child, we're
a good financial investment, no onewould ever have children. But now it's
not only become incredibly difficult, evenmore so now than in the past,
it's also easier to not have achild now and still do baby boomer activities
(13:18):
than it ever has. It's alot easier. So the idea that our
pyramid is thicker at the base doesn'treally work out as we look to the
future because people aren't having kids.So twenty years from now, the base
of the pyramid is even narrower thanit was than it is today. So
(13:39):
social Security, Medicare, the socialsafety net is not going to grow as
a pyramid scheme needs for growth.In other it's going to shrink. So
the problems that we're seeing right nowwhen it comes to funding social Security and
medicare, those problems are only goingto get worse. So what can you
(14:03):
do? Well, you can adjustthe cost of living. Retirees have actually
seen their Social Security benefits lose thirtysix percent of their buying power from twenty
to twenty twenty three, according toresearch from the Senior Citizens League. So
that's that's even with that cost ofliving increase of almost nine percent last year.
(14:26):
This year they're going to incorporate acost of living increase of about three
point two percent, right, alittle over three percent. But as we
know, it's not like inflation iscompletely under control. I heard I did
hear somebody on one of those financialradio programs. I love week weekend radio.
By the way, just side note. I love weekend radio. I
(14:46):
do. I listened to a phishingshow, a car show, a real
estate show, a gardening show,a home improvement show, investing show,
tech show man. I love weekendradio. So I did hear somebody on
one of the financial shows though thatsaid, well, inflation isn't getting any
(15:07):
better. Well that's not true.Inflation is better. It is not giving
back to that two percent that theFeds want. We know that, and
we're still feeling it. We've stillgot we've still got residual pain from the
inflation that we felt since the pandemic. So that's one thing here. Inflation,
(15:28):
however, is getting a little bitbetter. But because we're still feeling
the pain, and because cost ofliving increases over the last twenty years haven't
kept up. We're talking about socialsecurity, they say the only way.
If we get ten years from now, social security will only be putting out
what it brings in eighty percent,roughly a little more, a little less,
(15:50):
depending, probably a little less.But if that's the case, we've
already seen social security benefits drop,not not on paper, but as far
as buying power goes, we've alreadyseen them lose more than a third of
their value. If you've got asocial Security check in two thousand for twenty
(16:12):
five hundred dollars, it went wayfarther than than it does now, and
went a third further in two thousandthan it does now. Right, so
we're already seeing the cost of livingis not keeping up, and they talk
about cutting on top of that.So why is it so broken? Part
(16:33):
of that has to do with,as I mentioned, the pyramid scheme,
But the math stop working when peoplestart living longer into retirement. So not
only are we not creating new babies, we're lasting longer after we retire.
We're not bringing in future workers quicklyenough to contribute to the system. In
(16:57):
fact, some immigration experts have arguedthat the solution to the social security problem
is to bring in more workers becausethey can start working now today. If
we were to put in some sortof a Chinese baby incentive where we say,
listen, we want everyone to havemore kids, and if you have
(17:17):
more kids, will lower your taxesbecause you'd be thinking in twenty years those
kids will be or twenty five years, those kids will be paying in to
the social programs, and we canrefund this thing. But what if you
could just get twenty five year oldsnow to start paying in a lot of
immigration experts will say the way todo that is through immigration. But what
do we do, What do wedo as individuals? Well, Andrew was
(17:42):
talking about it a little bit ago. I don't know how well he's doing,
but I can tell you how I'mdoing, and I don't feel great.
That's next. You're listening to KFIAM six forty on demand. I
was talking about Social Security. Youmay have seen the report this week that
said that Social Security is going tobe insolvent by twenty thirty five. Insolvent
(18:04):
doesn't mean broke. Insolvent means kindof like remember when we had the housing
crisis and the banks were insolvent meansthat they didn't have enough money to pay
all of their obligations, right,there wasn't enough cash on hand. That's
insolvency. So social Security may becomeinsolvent. They can't really happen with the
(18:25):
government because the government could borrow moremoney in order to pay Social Security.
And a friend say, well,why don't they just print more money?
Got to be careful doing that.I gotta be careful borrowing more money to
pay off Social Security too, becauseyou don't want to what are we experiencing
right now? You'd want to pushinflation too high. It's kind of a
double edged sword. If you justprint more money, now you've got more
money in circulation, and you dovalue how much money there is out there,
(18:48):
right, and then inflation skyrockets.So we don't want to see that
happen. What's another great way,Well, if people could die faster.
That would be very helpful to thepro although it's been difficult to find volunteers.
The Washington Post talks about Social Securityhas to be fixed. First line
says social Security isn't broke, butit's badly broken. There there's enough money
(19:15):
currently coming into the retirement program topay benefit recipients. However, without intervention,
like many struggling Americans, will beunable to pay everyone the full amount
due each month. And so thestory goes on. Michelle Singletary wrote it
there for the Post, and storygoes on. Continues to say, you
gotta save money, right, allright? So how do we do that?
(19:37):
You gotta save like a lifeguard.You gotta think of your nest egg
like a child, and you gottaprotect it. You gotta nurture it.
You gotta help it grow, andyou don't want it to get underwater.
See how I made my silly lifegot analogy work. One thing that I
can recommend is don't go crazy checkingthat four to one k every day.
(19:57):
Don't look at that. I mean, I don't ignore it, but don't
look at it every day. You'regonna go nuts if you do that.
You don't want that. Uh,Contribute as much as you can and plan
for the worst. I don't knowwhat the future politicians are gonna do.
It's entirely possible. We have apolitician come forward and say I'm not touching
(20:18):
the social programs and then get electedand then touch the social programs. I
mean, I remember a president whosaid, read my lips, no new
taxes and then raise taxes. Imean, it can happen, right,
So think of it as not justsaving because uh oh, maybe the politicians
aren't gonna get their stuff in order. Think of it like I'm setting money
(20:40):
aside for my kids and my grandkidsand then you're in. You're gonna end
up starting that generational wealth. Andhere's one thing I do want to point
out. One of the great differencesbetween pensions and four to one case.
Now, obviously the four and oneK you gotta pay into, and the
pension is something that the employer isgonna provide. But with social Security and
(21:02):
pensions alike, once you croak,that's it. It's gone. Right.
If if you kick the bucket,you and you're where whoever gets your survivor
benefits? Right Whoever, if you'vegot a spouse, they get them for
a little while, but then theykick it, They're done. But if
(21:22):
you have money in a retirement account, then when you when you go,
it gets passed on. And ifyou start thinking about your beneficiaries, you
(21:42):
you are actually saying I don't trustthat future politicians are going to figure this
out either. And listen, ifyou trust politicians to figure it out,
raise your hand and don't save anymoney. Great idea for the rest of
the ninety nine point nine percent ofAmerica. We're going to go ahead.
I didn't start looking out for NumeroUno. Now how do we save?
(22:03):
Wow? Mare, I'm gonna haveenough money to pay my rent right now?
Am I gonna save? This isthe hard part because the American culture
is built on bigger, better,faster, stronger, shinier, right,
So you got to cut like alumberjack. And I'm as guilty as anybody
for wanting. And I want thelatest, I want the greatest, I
(22:26):
want the newest, I want theshiniest. But really, how long does
the gratification last? And I wasrealizing this this week. I had a
stressful week, and to be honest, I put the stress on myself.
I was imagining scenarios. Do youever do that? You just start imagining
the worst of things all the time. Yeah. My boss came to me
(22:47):
this week and she said, hey, can we talk? And I went,
sure, what you want to talkabout? She says, no,
let's go ahead and let's put iton the calendar. Let's set up a
meeting. Oh. I run theconversations in my head until then I did.
Oh my gosh, I had theworst week. And I thought,
Oh, she's mad at me.I said something I shouldn't have on the
air. I said something I shouldn'thave off the air. She doesn't like
(23:10):
my vision. She thinks I'm youknow, she thinks I'm the wrong choice
for the job. I'm in thissort of thing. And I got in
the meeting and she she closed thedoor, and she says, I just
wanted to check in and see howthings were going for you, and uh,
because you sound great and we wantyou to keep getting better and what
can we do to make that happen? Right? I was like, Oh,
this is so cool, this isgreat. But like you guys like
(23:33):
Andrew, I ran the My god, I was meeting with people and I
was talking to my partner and Isaid, listen, if she says this,
I'm gonna say this. And ifshe does this, watch, We're
gonna do this, and I'm gonnahave my back on this, right.
I mean I was playing the wholething out like there was a Cold war
going on, and unfortunately the conversationwas not one of the scenarios. No.
I was completely unprepared for. Hey, it's great, what else can
(23:57):
we do to make it even better? Ugh? So, yeah, I
had a really stressful week, right, And what do I do when I
have a stressful week? I goto Amazon. Oh my gosh, I
go to Amazon. Oh. Ithink Amazon wants us to all be stressed
out because of retail therapy. AndI hate parking, I hate driving,
(24:18):
So Amazon fixes all that for me. So I'm just on Amazon all time.
We're sitting here talking right now onmy computer, I have a new
laptop bag open. You know whatI have for a laptop bag. I
have a hand me down Louis Vatonlaptop bag right now. Yeah, right,
Kayla, I have a Louis laptopbag. You were so cool today.
(24:38):
Why am I on Amazon looking forfifty dollars replacements for my Louis laptop
bag? Hmm, yeah, No, it's a hand me down. My
wife's boss gave it to her yearsago. No, I should not be
looking for anything to replace it.It's fully functional, it looks fine.
Get a little crecenter where he keepsfolding over. But generally speaking, it's
a Louis. But I love retailtherapy. You know what that does for
(25:04):
my savings terrible. So I'm withyou. I'm with you. I got
to cut back. It doesn't meanthat we have to that we have to
go on a beans and rice diet, but probably should pick and choose when
we go to grab some Randi's andbring them into the whole office. Right,
(25:26):
If there's a way for you tocreate passive income, that's a great
way to save as well. AndI struggle with that one and My wife
is one of these opportunities. She'salways looking for a way to hustle.
But I don't think that way.Probably your individual retirement account, not the
Irish Republic Army is probably the bestpassive income. I don't think that the
(25:48):
Irish Republic Army pays returns on investment, but you might want to look into
that. It is the easiest thingto do. Your employer probably offers that
you put money in the power ofcompound interest, you take money out at
the end boom, easiest way todo it. And then if there's a
way that you can drive your beatera little longer, drive that car a
little bit longer, because if youthink about the average car payment right now,
(26:15):
how many times have you done this? You take your car in and
the mechanics says, ooh you gotyou got a bad uh turn signal timer
on that, and you go,oh that sounds bad, Like yeah,
it's really causing poor combustion, andthe transmission you're like roll. You're listening
to KFI AM six forty on demand. By then, Chris Merril can if
(26:37):
I AM six forty more stimulating talkfor gen Z. I feel bad because
unless you marry rich. It doesn'tlook good, cane you see a coach.
Yeah, it is time, myfriends, if you're in gen Z
(27:00):
to take a good hard look atyour finances. And that's not even fair.
My god, you're just starting out. How can we already be telling
you that you're doing it wrong.Well, one, it's the job of
the previous generations to always tell thecurrent generations every little thing that they do
wrong. And you also have theadded benefit of having influencers in your generation
who will then make tiktoks telling everybodyabout how you're doing it wrong. Because
(27:25):
Bloomers love when gen Zers make tiktokssaying that tiktoks are doing or that the
gen Zers are doing something wrong.They love it. Look at the self
doubt in the current generation. Wedidn't have that kind of doubt and we
were kids. What Yeah we did, gen X. You think we didn't
(27:45):
have self doubt. We had alternativeand grunge. Our entire persona was self
deprecation and loathing. Yeah, don'tthink that this is a new phenomenon.
So gen Z is crazy stupid indebt. We haven't set a great example
for these young Americans deeper into debt. Gen z is starting out with more
(28:07):
credit card debt than any other generationbefore them. What you would think that
the credit card companies would want todo something to try to make sure that
people aren't giving them too much.Moll that's right. A TransUnion report shows
the average young American has a creditcard balance of nearly three thousand dollars,
a twenty six percent jump from adecade ago. Wow, just a decade
(28:32):
ago. So Caleb, when yougraduated college, did you have credit card
debt when you got out of school? Yes? Yeah, me too,
Yeah I did. I went tocollections. Really yeah, I went to
collections. I had like and itwasn't This is embarrassing. Remember, value
of a dollars changed a lot sinceI was a wee lad. But I
(28:53):
only had six hundred dollars in creditcard debt. And then the late feet
now they've changed it legally, they'vechanges. Then I would have late payment
fees, and then I would haveover like I had six hundred dollars and
then I didn't make the payment,and then they would be like, oh,
there's a late payment, and thatlate payment counts as another charge,
So we're gonna hit you with awith a an over the limit charge.
(29:15):
So kind of like you write abad check and you get hit with that
what a thirty forty five dollars whateverit is for a insufficient funds check.
So imagine you write a Imagine ifyou had a late payment fee that also
gave you an insufficient funds fee,and that just started compounding and I couldn't
get ahead of it, and Igot sent to collections on it. And
(29:36):
I had a guy call me upcollections, dude who obviously hated his life,
and he said, you need topay this. I go. I
said, listen, I'm trying.I'm trying to pay this. I'm really
working it. He says, well, if you cut us a check for
fifteen hundred dollars right now, we'llcall it even. And I went,
it's a six hundred dollars bill andhe said, yeah, but your your
your fees are up over two thousand. If you just give us fifteen hundred
(29:59):
right now, we'll call it even. I said, if I had fifteen
hundred dollars, don't you think Iwould have paid the six hundred dollars?
And the guy says, well,what are you gonna do? I go,
buddy, you keep pushing me,I'm going to claim bankruptcy. He
goes, well do it, then, just do it, And I thought
that's terrible collections etiquette. But Ithought, what does he got to lose.
He's a collections guy. He doesn'tcare. He doesn't care. But
(30:22):
I do feel like the early twenties, in like college years, as those
are the days to make those kindsof mistakes and learn from them. Yeah,
yeah, I certainly did. Yeah, that's not to say I didn't
get into debt. Again. Idid get into some bad credit card debt,
but it was never more than Icould handle between my wife and I,
but it was more than we wanted, that's for sure. And so
now we do the whole stay ontop of it, paid off every month,
(30:47):
which is good, but then wealways have to have this conversation about
what the credit card debt was everymonth, and then she says, you
need to stop spending, and Istart taking a look at it, and
I'm like, you're right, Ineed to stop spending. Let's take a
look at that bill. Let's seewhat do we got on here. Let's
see Michael's hobby lobby juice shop.Huh. I don't remember going into any
(31:08):
of those things, that's weird.So obviously I'm sleepwalking. So gen Z,
it keeps getting worse. And asmuch as it was bad for me
and it was bad for Kayla,gen Z has got it even worse than
we did. They're really dealing withthe issue of the rent to income ratio.
It's out of control. Rent istoo expensive for them, and so
(31:30):
the thing that they've got to realizeis they can't depend on credit cards.
Right they're being marketed to, they'reseeing on social media, this is the
life that you should have. Youngerpeople with larger debt, falling behind quicker
on credit card payments, with somelying on their family members for help if
they can't make ends meet. Wewant Americans, if they have debt,
we want you to focus all ofyour extra income on that debt so you
(31:52):
can clear it out as quickly aspossible. And then when that debt entered,
you'll have freedop income so that you'regoing to actually be able to invest
far more than what you were investingbefore. Through It's so easy and exciting
to say out loud, it isso hard and boring to do in life.
(32:13):
What's the number that they keep using, right, Now, when they
try to calculate whether or not youcan afford to be middle class, they
say, fifty percent of your incomesshould be spent on bills and rent and
all that kind of stuff. Right, so, your mortgage, your car
payment, your utilities, this sortof thing, right, well, school
(32:34):
lunches, tuitions, whatever, Right, fifty percent should be spent on life's
necessities. Twenty percent should be spenton paying off debt and investing. Now,
if you can do both at thesame time, that's great. The
easiest way to do it is toget out of debt and then spend that,
you know, keep living a littlebit below your means and sock them
(32:57):
away. But if you can putaway in your four while you're also paying
off your credit card debt or yourcar payment or your mortgage or whatever else,
that's great. Although your mortgage fallsunder that first category unless you're renting.
The other thirty percent is supposed tobe discretion spending, means I want
to go out to eat tonight,I want to buy myself a new iPhone,
whatever it might be. The problemis for gen Z is that they
(33:24):
want more discretionary spending because they're youngand they want to live their lives,
and that fifty percent thing, it'salmost impossible to do when you've got student
loan payments that are getting out ofhand, when more and more of their
paycheck is going toward paying the increasingcost of health insurance just to have it
(33:45):
in the first place. Any medicaldebt is crushing, and then of course
rent is higher than it's ever been, so that fifty percent gets you a
lot less than it did before.Gen Zers want to live their lives,
and so the discretionary spending is theywant to use more than thirty percent for
discretionary spending. And so what dothey do. They start dipping into that
other part, that investment, andthen they start going into debt. And
(34:09):
let me tell you something, genZ, I did it. We all
go through it, and it's harderfor you than it was for us.
And I'm sorry for that because alot of the people in my generation are
making money off of you right nowbecause of it. Yeah, they just
are. They go listen, thisis an easy target. But keep this
(34:30):
in mind. The time will comeyou get to do that to the next
generation because it happened to us.My god, do you know why I
got into such a credit card debtbecause some guy said he was going to
give me a T shirt and atwo liter of Mountain Dew if I signed
up for a credit card and itworked. That was the most expensive Mountain
(34:50):
Dew I ever had my entire life. Good news though, as a California
voter, we are going to havean opportunity to vote on one of those
referendum to mandate a personal finance requirementin high school. Great, let's hope
the curriculum holds up to what weneed it to do. But for Jen
Alpha, you may have a headstart just because the knowledge will be drilled
(35:14):
into your head harder than it everwas into ours. Gen Z, you're
still screwed. You can just movealong here, all right, it is
it's that time, Kelly ready,all right? Right after we take a
look at news with Andrew Caravella.We've got our special segment. There's no
business like show business. It's next. It's KFI AM six forty. We're
(35:35):
live everywhere in the iHeartRadio app KFIAM six forty on demand
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