January 12, 2026 • 38 mins
Chuck Zodda and Mike Armstrong discuss Trump calling for a 10% cap on credit card interest rates. The dream of Florida retirement is fading for the middle-class. Retiring early is looking more difficult. What is the FIRE movement? The great millennial career crisis. Walmart teams up with Google Gemini on shopping tool.
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Episode Transcript
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Speaker 1 (00:00):
The Financial Exchange is produced by Money Matters Radio and
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(00:21):
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Exchange with Chuck Zada and Mike Armstrong, your exclusive look
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(00:43):
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(01:06):
Zada and Mike Armstrong.
Speaker 2 (01:10):
Chuck, Mike and Chucker with you. And we've got markets
not really doing.
Speaker 3 (01:14):
Much of anything, quite honestly, they're selling off in early
trading this morning, and we admit it this very minute.
Speaker 2 (01:20):
Yeah, you know, like the SMP is literally flat on
the day. Yeah, Dow was off eighty six points, the
Naazak composites up twenty three. So it's like everything's within
like a tenth or two tenths of a percent of
where it closed. Tenure Treasury selling off again like one
point four basis points almost nothing, four point one eighty
five percent. Dollar Index down zero point three six percent
(01:42):
to ninety eight point five to three five.
Speaker 3 (01:44):
The one place you are seeing a fair bit of volatility.
Speaker 2 (01:47):
Metals, same place you've been seeing it for the last
few months.
Speaker 3 (01:50):
Over up six bucks an ounce to up seven and
three quarters percent, and gold up one hundred and thirty
bucks two point nine percent on the day. Thank you
to and no gold what's his name? Goldbem Yeah, yeah, yeah,
make sure.
Speaker 2 (02:08):
And then we've got crude oil West Text Intermediate down
four cents a barrel to fifty nine oh seven, the
Triple A National avatur gas prices up one tenth of
a cent to two seventy nine and six tenths, so
market's pretty quiet. This despite the announcement from the Federal
Reserve late last night that Jerome Powell is now subject
(02:28):
to criminal proceedings in a grand jury based out of
the DC area. We don't know anything more on the specifics,
but Powell did release a pretty combative for him statement
last night that's about two minutes long, in which he said, uh,
(02:48):
this is obstensibly about the renovation and my testimony to Congress,
but make no mistake, this is actually about the fact
that I'm not cutting interest rates as fast as the
White House wants me to remember.
Speaker 3 (03:00):
So I think the important thing is to consider with this.
We have talked at length on this program about the
importance of central bank independence and not allowing the president
to direct interest rates setting policy. It can have some
pretty ugly effects, and we've seen that in other countries.
The what I've been thinking through the second and third
(03:20):
order implications for all of this, I think what becomes
clear is it sets up the Federal Reserve and the
White House on a collision course that's pretty unavoidable at
this point, and that's in spite of the fact that
Ja Powell is going to be out of his role
in May.
Speaker 2 (03:34):
I think it's potentially avoidable. I think they like, here's
the thing. I'm not saying that this will or won't happen,
But when it comes to the FED, we've been seeing
this game of cat and mouse for the last year now,
and to this point nothing's actually happened. I'm not saying
that it will or won't. I'm just saying, I don't know.
(03:58):
The White House likes to float rile balloons on the
FED left and right, Like I can count at least
three or four separate instances where this has been the case.
And if the market doesn't move the way that they
want it too based on it, they tend to go
in the other direction. And I think they're fine with
it either way.
Speaker 3 (04:13):
Yeah, I think where I see maybe collision course is
too strong a phrasing. Then let's say this is all
dismissed by the Grand Jury and nothing moves on it,
and we move along here. I just think that at
this stage now there is this implied threat from the
White House that hey, if you don't follow along with
my suggestions, this is what can result. And so Therefore,
(04:38):
you never know how the board members are going to react,
but my guess would be that several of them might
dig in further here, and the next Federal Reserve chair
could be met by a pretty hostile voting board, I
think is what is a very likely possible outcome. I
guess would be a board of members who don't seem
to have much of a problem with j. Powell and
(05:00):
probably have clearly worked well with him over the years,
and are looking at this and saying, are we going
to stand for it? Are we going to fight for
in our independence? And my guests would be they're going
to fight for their independence just like Jay Powell is currently.
So my senses be this makes the next chair's job
significantly harder to direct. Whatever their policy looks like, presumably
(05:24):
lower interest rates. It's going to make the job tougher
given this implied threat.
Speaker 2 (05:29):
Wall Street Journal report actually not a report, I guess.
This was a post by the President on truth social
on It was late Friday afternoon or Friday evening, I believe,
where he basically said, I'll read some of the quotes,
please be informed that we will no longer let the
American public be ripped off by credit card companies that
are charging rates of interest, of interest rates of twenty
(05:50):
to thirty percent and even more. He then said that
there will be a ten percent cap that is put
in place beginning on January twentieth. Now it's unclear what
authority the White House has to actually do this, but
the fact is, whenever you try, and we've talked about
this with rent control, Yeah, whenever you try to control
(06:14):
the price of something, what you end up doing is
restricting the supply of it. It's why whenever rent control
gets proposed by someone running for the mayor of Boston,
New York City or San Francisco, we sit there and
we say, guys, this isn't actually going to solve the
housing problem. It's going to end up, you know, with
fewer units being constructed and available.
Speaker 3 (06:33):
So I am very suspicious that this will ever pass
or go into effect. But I take your point that. Look,
banks reserve the right to crancel your credit card at
their discretion. Pretty much at their discretion. They can use
any number of reasons to do so, and so.
Speaker 2 (06:49):
The likely one they can't is that they don't like you.
Speaker 3 (06:51):
Yeah, I mean, you know, they even do it figure
based on protected classes and things like that, but very
easy for them to say, Okay, while previously we were
willing to extend credit cards to anyone with a credit
score of X, now, given these new caps, we're going
to be canceling credit cards for anyone with a credit
score under six hundred and fifty, well within their rights
(07:13):
to do so. And so what is the likely outcome
of a cap on interest rates? Fewer extensions of credit
and a problem with a bunch of Americans being able
to borrow money?
Speaker 2 (07:21):
Or I'll put the other piece out there, or Okay,
you're gonna cap how much we can make on credit
card interest rates? Great? How would you like hire mortgage rates?
Or how would you like to be paying more in
checking account.
Speaker 3 (07:36):
Fees or land account fees?
Speaker 2 (07:37):
On your head? It's any time that you try to
micro manage one part of the economy, you end up
with it's playing whack a mole, except the moles get
like they coming out of unexpected places, not just the
thing that you're trying to whack. California says, hey, the
fast food minimum wage can be this, but the rest
(07:59):
of the minimum wages that well, okay, we don't really
know what the ramifications of that are going to be. Likewise,
if you do find a way to cap credit card
interest rates at ten percent, which again it's unclear that
the White House possesses the ability to do so.
Speaker 3 (08:14):
It's actually pretty clear that they don't because when President
Biden tried to cap credit card late visa at eight bucks,
Texas court shut it down. Okay, I think that it's
unlikely to pass, but yeah, the likely effects would probably
not be great for consumers, would be my guest.
Speaker 2 (08:29):
You likely have a significant contraction in available credit for Americans,
which then probably means, based on what I know about
Americans and their spending habits, I'm one of them, we
tend to spend up to the level that the banks
allow us to, and I think it would probably have
some pretty nasty repercussions for the American economy if tens
(08:52):
of millions of people suddenly had their credit cards canceled.
Speaker 3 (08:54):
By the way, we didn't have to go think about
this for a while, because this is not a new idea.
Senator Bernie Sanders proposed this and put forward a bill
in February of twenty twenty five proposing exactly this ten
percent credit card interest rates. He co sponsored it with
Senator Josh Holly. So this is not a new idea.
This is something that has been proposed by many populists
(09:18):
over the course of the last few years, and we
have thought about it and kind of considered what the
ramifications would be here. And so A, unless Congress is
going to pass the law, I don't think it's going
to happen. B If it did, I'm not sure it
would result in the things that the President actually wants.
Speaker 2 (09:39):
It's also a band aid that doesn't address the root cause.
The problem is not that too many Americans are paying
twenty five percent on a credit card bill. The problem
is why do they have that outstanding bill to begin with?
And until you can address the root causes trying to
lower the interest rate on that, it ain't gonna do
(10:01):
it anyways like that, that's not going to be the solution.
The question is why are there that many people that
have that much outstanding so so they're paying that interest.
Speaker 3 (10:13):
If rent is too high, you don't impose rent control.
If credit card payments are too high, you don't propose
caps on credit cards. And uh, what's another one that
we've toyed with over the last few years.
Speaker 2 (10:24):
That just groceries. We have the grocery thing.
Speaker 3 (10:27):
If home affordability doesn't work, you don't cap what banks
can charge in mortgage rates.
Speaker 2 (10:32):
Remember the Harris campaign was saying we're gonna like cap
you know, grocery rate increases it like exper Okay, shortages,
good luck getting your groceries there.
Speaker 3 (10:41):
So the same thing will apply here. You cap what
companies can charge and you will have shortages. So want
to break up the banks because they're too big and
there's too much you know, Visa holds too much power
over consumers. All on board, like.
Speaker 2 (10:55):
Brett, you want more competitions for credit card rates? Okay,
that like, how about it?
Speaker 3 (11:00):
That doesn't have to do with credit card rates, but
you know it's built in the transaction fees and stuff
like that. But yeah, that is not likely in my
view to solve the problem.
Speaker 2 (11:09):
Here's take a quick break. When we return, we've got
trivia right after this.
Speaker 1 (11:17):
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(11:37):
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Speaker 4 (11:57):
The Financial Exchange is incredibly proud to be a partner
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The event sold out in record time last year, so
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Time for trivia here in the Financial Exchange, and today
is Jeff Bezos's sixty second birthday. Bezos founded Amazon in
(12:45):
ninety four, originally as an online bookstore. As we all know,
at one point during Bezo's tenure as CEO, Amazon became
the world's most valuable company. So our trivia question today,
what year did Jeff Bezos step down as Amazon CEO?
Once again, what year did Jeff Bezos step down as
(13:08):
Amazon CEO? Be the fourth person today to text us
at six one seven three six two thirteen eighty five
with the correct answer you know whin a Financial Exchange
Show t shirt. Once again, the fourth correct response to
textas to the number six one seven three six two
thirteen eighty five, along with the keyword trivia, We'll win
(13:28):
that T shirt. See complete contest rules at Financial Exchange
Show dot com.
Speaker 2 (13:32):
I want to talk a little bit about Florida real estate.
There is a piece that's out in the Wall Street
Journal today and I'm going to quote from it here.
Although older people continue to arrive in greater numbers than
those who leave, that net migration is varied by income bracket.
In the past decade, In twenty twenty three, it grew
five percent from a decade earlier for households with inflation
(13:54):
adjusted incomes of at least one hundred and twenty five
thousand and headed by someone sixty five year old. By comparison,
the flow of similar households with inflated adjusted incomes of
seventy five thousand or less shrank by forty four percent. Again,
these are inflation adjusted incomes, so it's not just oh, like,
you know, inflation made this happen. So this is you know,
(14:16):
there's something going on here, and quite honestly, there something
going on is the insurance premiums for owning a house.
And the other piece, uh, is that if you look
at mobile home communities, as has been happening in just
about every other industry, there's been a ton of consolidation
(14:37):
and private equity money going in, and the new owners
are jacking up the rents of the land, making them
unaffordable for families who want to move down there. And
what are typically, you know, affordable places to live.
Speaker 3 (14:50):
I don't want to make this over the complicated. Florida
is not as cheap as it used to be. No, so,
I mean interestingly, I was taking a look. Nerd wallet
has a nice easy cost of living calculator that you
can compare different cities So when you compare to the
highest cost areas in the country, like Boston or New
York City, Yeah, Florida's still cheaper, right, I mean much
cheaper so Boston. I just chose two cities, Boston compared
(15:13):
to Tampa. Sure, if you have one hundred and fifty
thousand dollars income in Boston, you would need an income
of about one hundred thousand dollars to maintain that same
cost of living. According to NERD wallets, housing costs cheaper
sixty percent cheaper than Boston, healthcare costs thirty five percent cheaper,
food cost higher. But you know a lot of these
things are cheaper. But this article talks about a family
from Michigan. And so if we take a look at
(15:35):
Detroit compared to Tampa, it's about the same Florida's. Tampa
is about five percent cheaper than what you would experience
in Detroit. If you're listening from Portland, Maine right now,
you know there's only a fifteen percent cost of living
difference between going down to Florida. That gap used to
just be bigger. I think, plain and simple, that's the
(15:55):
story here is a bunch of people moved to Florida
it drove prices higher. There are other factors at work too,
but largely I think it's been a change in net migration,
and the cost of housing has gone up, not only
because more people are living there, also because of insurance
related issues that are unique to Florida and a few
other places.
Speaker 2 (16:15):
But the interesting thing to me and is this is
not just a Florida phenomenon. The twenty tens, In my opinion,
one of the defining features was people moving from high
cost of living areas to low cost of living areas.
For that for a massive delta in that cost it
(16:36):
civily retirees, no, not even retireees, Like think about think
about your friends, Mike, back when you were like twenty seven,
and think about the ones who are like, hey, I
moved out to Denver, and think about how, yeah, it's
it's so cheap out here, and all I do is
ski and I hike and it's so cheap. Denver is
(16:57):
freaking expensive. Now you go and you look at again,
like you can kind of like go down the list
of yuppie millennial cities. It's my defining characteristic Raleigh, Nashville, Nashville,
Like you can go through this Austin, Texas. Like these
are places that used to be cheap, that, for better
(17:18):
or for worse, have gotten overrun by our friends, and
we might have screwed them up a little bit in
doing so. But nature is healing.
Speaker 3 (17:25):
Okay, get made fun of wearing a cowboy hat in Austin.
Speaker 2 (17:29):
Listen, I've been to Austin a number of times. It's great,
but like tech Brozil, run you out of the bar, right,
it's different from what it was ten fifteen years ago.
So I guess where I'm going is nature's starting to
heal in some respects in that if you look at
what's going on with home prices in Austin, just as
(17:49):
an example, they're down like seventeen percent in the last
year and a half. Now.
Speaker 3 (17:53):
You know what's really interesting to me too, is I
don't know that gen X wants to retire to Florida
in Arizona. Again. I know we're talking about all these groups,
but I'm just I don't hear when I speak to
gen X clients. And you know, folks that what's the
oldest gen X are right now probably pushing sixty.
Speaker 2 (18:13):
Something like sixty one, sixty two probably.
Speaker 3 (18:15):
So do you hear that demo talking about relocating to
Florida and Arizona. I just don't. And you know what,
we talk about how these things are going to change,
and then they don't. So maybe they're just not that
stage of life yet. But I don't hear it as
this goal. In fact, I hear it mocked a little
bit from that generation.
Speaker 2 (18:32):
I don't know. I don't think I have enough talking
experience with that demo to be able to say yes,
like it's definitively different from before or the same as before.
Speaker 3 (18:43):
I also say, I hear a lot more people talking about, Hey,
if I really want to save on cost of living,
I'm going to go to Costa Rica or Portugal again,
something that wouldn't have been even considered by some previous generations. Again,
these are all just my own narratives that I'm hearing of. Oh,
you know, what does it look like to move abroad?
The dollar goes a long way, Florida is not as
(19:04):
cheap as it used to. I'll be very interest to see, hey,
does that next generation of retirees still find Florida and
Phoenix to be desirable.
Speaker 2 (19:12):
Part of me wonders how much of that is there's
a big swath of Baby boomers and Silent generation members
before them that owned those places as second properties even
before they retired. And that's different because of the affordability. Now, yeah,
quick break here, Wall Street Watch answer.
Speaker 3 (19:34):
I'm sorry.
Speaker 2 (19:34):
Wall Street Watch is next with the trivia answer as well.
Speaker 1 (19:41):
Bringing the latest financial news straight to your radio. Every day.
It's the Financial Exchange on the Financial Exchange Radio Network.
Time now for Wall Street Watch. A complete look at
what's moving markets so far today right here on the
Financial Exchange Radio netw work well.
Speaker 4 (20:01):
Market started the day in solif mode, but have since
evened out as traders prepare for a busy week ahead,
including a fresh look at inflation tomorrow morning, in addition
to retail sales and bank earnings this week. But the
big story today surrounds the FED after news that US
prosecutors are investigating FED shair Jerome Powell over his testimony
about the Central Banks building renovation project. Right now, the
(20:24):
Dow is down by over tenth of a percent, or
seventy eight points lower. SMP five hundred is up only
one point, Nasdaq is up two tenths of a percent
or fifty two points higher. RUSTED two thousand is completely flat.
Tenure Treasure reeled up one basis point a four point
one point eight nine percent, and crude oil up about
four tenths of a percent, rating a fifty nine dollars
(20:45):
and thirty five cents a barrel. Several bank stocks seeing
losses on the day after President Trump called for credit
card rates to be capped at ten percent for one year.
Trump did not provide additional details on how it would work.
JP Morgan, Visa Master Carter down anywhere between one and
two percent. Meanwhile, according to CNBC, Apple is joining forces
(21:05):
with Google to power its AI features for products such
as Siri later this year. Alphabet shares are up about
a quarter percent. Alphabet also hit four trillion dollars in
market cap this morning. In more developments on the Warner
Brothers Discovery front, Paramount said this morning it plans to
launch a proxy fight four board seats at Warner Brothers
Discovery as it continues pushing its hostile bid for the company.
(21:28):
Paramount also filed a lawsuit seeking to force Warner to
release more information about its merger agreement with Netflix. Warner
stock is off about two percent. I'm Tucker Silvan, that
is Wall Street watching. On the previous segment, we asked
you to the trivia question what year did Jeff Bezo
step down as Amazon CEO? Well, that would be twenty
twenty one. Dan from Brinfield, Mass is our winner today
(21:51):
taking on my Financial Exchange Show T shirt. Congrats to Dan.
If we play trivia every day here in the Financial
Exchange see complete contest rules at Financial Exchange Show dot com.
Speaker 2 (22:02):
Peace in Baron's retiring early is looking more difficult the
new game plans. What are we talking about here.
Speaker 3 (22:09):
Michael Well, There's been this movement for better part of
decade and finally, Well more recently has adopted the acronym
FIRE for financially Independent retire early. And the FIRE movement
was kind of extreme. It was the idea of, hey,
save fifty to seventy percent of your income, live really conservatively,
and if you do, you might be able to pull
off retirement at.
Speaker 2 (22:30):
Like forty eight one being a day. It was, you know,
like a very it was a very aggressive movement to
cut expenses and maximize savings. Often, I think oftentimes in
the early days of it, like very much at the
expensive quality of life, right.
Speaker 3 (22:47):
And so they make the argument that that's tougher to
do now. I think the one area where I would
agree would be we've had much more inflation over the
course of the last ten years than we did the
previous ten or the previous twenty, or really any time
period since the seventies or eighties, and if we continue
to then it will make it more difficult in the
future as well. Everything else that they talk about in here, though,
(23:10):
sequence of return risk, inflation risk, those aren't more. Sorry,
the inflation risk might be more pronounced now than it
was before, but the sequence of return risk to me
is not any more pronounced and more of an issue
now than it was a decade ago. I think the
only thing that you know you have to be thinking
about now, if you're thinking about it, is markets are
(23:32):
extremely expensive right now. So will I have that disastrous
sequence of return early on in my retirement plan?
Speaker 2 (23:39):
Yeah, And I think that ultimately all of these Even
you mentioned you know, the inflation risk being higher now,
I don't know that it is higher. It's just hey,
in the recent history, that inflation risk had turned into
realized inflation in the way that it hadn't for the
last forty years. But that risk is always out there
and always present, and so so I think the big
(24:01):
thing is if you're talking about in early retirement, whether
that's a retirement at sixty two or retirement at forty two,
like however you wanted to find you know, early like
if you mean different things to different people.
Speaker 3 (24:13):
Hint, the forty two one is gonna be tougher than
the sixty two one.
Speaker 2 (24:17):
Ultimately it boils down to the same two things. How
much do you spend and how much do you save? Yeah,
and the it's the interplay between those.
Speaker 3 (24:27):
That sequence of return thing. I just want to point
it out as because all the you know, investment or
financial advisor people listening right now understand this and have
studied it. But if you are planning on let's call
it a fifty year retirement, sequence of return is what
it's really talking about here is if you average a
(24:49):
seven percent investment return throughout the course of your forty years,
the results to whether or not you have enough money
to retire can vary dramatically depending on how you get
that average seven percent. Yes, largely if you have a
big market crash the day you retire, the likelihood of
you getting there is dramatically decapped. If that sequence of
(25:12):
return hits you early on, and so that's what they're
talking about with this. But I think the key messages
a lot of people love the idea of retiring early.
I think all of us love the idea of retiring
or slowing down in our work earlier than anticipated. And
I think the message that I have is it is
tough enough to retire on time. It requires a lot
(25:34):
of dissipated If you're going to do so early, then
you need to have a plan in place well ahead
of time, and you have to be considering these things
like sequence of return risk. You have to be testing
the idea of what if inflation runs a percentage point
higher than what I am anticipating. Because when you retire early,
that's years and year. It's not only the missed out
income and savings that you won't have, it is the
(25:56):
extra years of taking money out of your savings that
you have to play for, not to mention all the
other complexities. When is my social security going to start?
How am I going to get health insurance? If I
have kids, you know what stage of life are they
going to be and are they going to need financial
assistance that I've planned for? There are a ton of
questions that come along with the idea of retiring early.
(26:17):
They are not insurmountable. I know plenty of people that
retire before sixty five and make do without Medicare for
a period of time. Sure, you just have to do
the planning. If you could use some assistance on that
planning piece, call Armstrong Advisory Group. It's what we do
for hundreds of clients. We would love to do it
for you too. You know, talk to us about what
those plans really are and how you might be able
to achieve them. The numbers eight hundred three nine three
(26:41):
for zero zero one. You can book your time for
us to call you as well at Armstrong Advisory dot com.
But that number is eight hundred three nine three for
zero zero one.
Speaker 1 (26:50):
The proceeding was paid for by Armstrong Advisory Group, a
registered investment advisor. Nothing in the ad or in any
Armstrong guide a specific financial, legal or tax advice. Consult
your own financial tax, send a state planning advisors before
making any investment decisions. Armstrong make contact you to offer
investment advisory services.
Speaker 2 (27:06):
I want to talk a little bit about this market
Watch piece on millennials, because.
Speaker 3 (27:13):
Really still allowed to whine millennials, I do it.
Speaker 2 (27:17):
All the time. Yeah, I guess I actually don't. My
daughter does, but she's five.
Speaker 3 (27:22):
I win all the time.
Speaker 4 (27:23):
I did twenty minutes ago in the break.
Speaker 2 (27:25):
You didn't really whine, though.
Speaker 3 (27:27):
It's more of a heavy cry with bouts of laughing
in between silence afterwards from the studio.
Speaker 2 (27:36):
So there's this piece here. It's it's titled There's nothing
we can do. The Great Millennial career crisis has workers
giving up on ever owning homes or paying off their
student loans. So two things are true at the same time.
The first is there are millennials that are in positions where,
because of the decisions they made on how to pay
(27:59):
for coledge, most notably when they were younger, they're basically
screwed unless their financial situation changes dramatically.
Speaker 3 (28:07):
Agreed, And I agree that that sucks because I don't
think as a sixteen or seventeen year old you had
the qualifications to be able to make that decision. But nonetheless,
there you are.
Speaker 2 (28:14):
Quite honestly, like, no one tells you what it means
to borrow one hundred thousand dollars. They just say, hey,
here's the money, Like it's it's pretty unethical what we
do to people to have them make those decisions that
I just I don't think we give them enough information
to make an informed decision. I do think millennial parents
(28:37):
who have gone through this now we're not going to
make the same decisions with their kids, though.
Speaker 3 (28:40):
Agree.
Speaker 2 (28:41):
But the other piece that I will say is this
piece is all about, you know, these millennials that are
in these these difficult situations. Financially, basically, every metric out
there that compares on an inflation adjusted basis millennial home
ownership rates, investment savings rates, portfolio sizes everything with prior generations.
(29:05):
We're right there shows that they're pretty much in line
with prior generations, and so there is no meaningful difference
in the aggregate amount of you know, wealth saved and
generated and earned by millennials.
Speaker 3 (29:20):
So I'm looking at a chart right now just to
this is data from First American, which is a title
services company who obviously cares about home ownership rates because
that's how they make all their money. Millennials did trail
behind just about every other generation in terms of home
ownership for quite a period of time. It took us
longer to get into those homes.
Speaker 2 (29:39):
Yeah.
Speaker 3 (29:39):
Today. However, with the oldest millennials I think being forty
one or forty two years old, we have surpassed now
Gen X home ownership rates at that same age, Yes,
and we're closing in on Boomers and the Silent generation
and all of those. It was like a couple percentage points.
Now we are right there and we're past again. We
(30:00):
are past Gen X in terms of home ownership rates
by early forties, so we're delayed. But again, every generation
has different challenges. Gen Z is staring a bunch of
them right staring at a bunch of them right now.
Like home owner affordability for gen Z in their twenties
(30:20):
is a lot worse than it was for millennials.
Speaker 2 (30:23):
And if you want to go back and like look
at other financial issues, I mean take gen X just
as an example. So gen X again, you were kind
of coming of age in you know, nineteen eighty. Like
Gen X, prime earning years got whacked one to two
by tech bubble and financial crisis. You go back and
you look at the Boomers. Okay, your prime earning years
(30:45):
you get whacked by inflation for a decade. Go back
and look at the style generation Okay, maybe you had
things fine economically, you had to fight World War two,
Like that's worse than any of us have had to
deal with just in terms of you know, like and
boomers had that.
Speaker 3 (30:59):
Too of a different way war. So you know, like, yes,
I want to acknowledge that that the last two generations
have not had millennials.
Speaker 2 (31:08):
That Global War on Terror, yes, admittedly liked did some
real damage to a large number of people. But again, like,
no generation gets out without dealing with something going on financially.
You know, you go what was before? The style of
generation now don't even know? They the Great Depression, like
(31:29):
it there's no free lunch. There's a reason why they
say that is because there is actually no free lunch.
They say there's free lunch, but there is none, Like
we all got to pay for lunch somehow.
Speaker 3 (31:41):
So which one is the worst generation? Though?
Speaker 2 (31:44):
Like that we disliked the most interpreted however you want. Well,
gen X will always say that no one talks about them,
so they're just happy that we're mentioning them today. That's true,
So there's that. We love you, gen X. Let's take
a quick break here and when we return, Stack rule.
Speaker 1 (32:00):
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Speaker 2 (33:10):
Mike, what do you got for stack roulettes?
Speaker 3 (33:12):
Walmart is teaming up with Google's Gemini to try and
make it easier for shoppers to find and buy products,
and I have no real semblance of an idea of
how successful or unsuccessful this is gonna be. This is
not how I use artificial intelligence in any way today.
It's also pretty reminiscent of the arguments I remember hearing
about the amount of money that Amazon was pouring into
(33:34):
Alexa during its early stages. Sorry for everyone who's homespeaker
just beaped, but the argument there was, Hey, if we
roll out this really intelligent home device that you can
speak to, then people are gonna order more stuff from Amazon.
And it didn't happen. Just playing example, there's no evidence
(33:54):
of support that those devices resulted in bigger purchases. And
so I guess my question is, what about this tie
up is going to make it so that people will
spend more at Walmart? And you know, again, maybe this
is different this time. I just don't. I don't really
see why it would be. Like, again, they're pretty good
at I can see how they might be good at saying, hey,
(34:16):
summarize customer reviews for me of this type of product
and this that or the other. But is it going
to result in me clicking purchase more frequently? Yeah? I
don't see a lot of evidence.
Speaker 2 (34:27):
We'll see it's gonna be wild when the only mass
market uses of AI are to sell ads. Yeah, you know,
it's it's where we're going. It's here's the thing. I
hold two thoughts in my head at the same time
on this. The first is every single person I know
(34:49):
that works in tech development is like, this is game
changing stuff because it lets them code completely differently than
they did previously. Yep. But there's also a shocking lack
of understanding that three hundred and thirty million Americans do
(35:10):
not work in coding like the for I'm guessing it's
probably like a couple million, like two to three million
Americans do. And you get these pieces that are like
and not for long by the way, this is transformed
like the way that I work, because it can do
like iterations on this in the background to do this
and that, And I read these things and I'm like, wow,
like that's really cool, and then I think about like
(35:31):
what the like what everyone else does for work which
is not coding, and hey, like I've actually heard now
instead of two companies where leaders have banned their teams
from using chat GPT to write emails because they're just
getting sick of seeing them, they're like, I know that.
(35:55):
They're like, I know that this is a fifty seven
year old guy who's worked with me for thirty years.
His emails are usually all lower case, like spelling errors
and everything, but I know it's him writing it. And
now I'm just getting crap that's being fed to me
and so what teen par and it's it's it's not him,
and I don't like that. So I have people that
are getting that. I have other ones that are like, no,
(36:15):
this is making up, you know, fake stuff. So the
two thoughts of that holder look for certain jobs. I
think that this is absolutely transformative stuff for the vast
majority of Americans. I don't know if they actually want
anything to do with AI. I just don't think they do,
(36:36):
or at least not enough to make it as interesting
financially as it's priced right now. And yeah, we're gonna
find out in the next couple of years. I want
to talk about beans, go for it. Did you know
that there is a quarterly bean.
Speaker 3 (36:53):
Club like the Jelly of the Month club.
Speaker 2 (36:57):
Rancho Gordo Okay found it in twenty nineteen. They're now
selling two point five million pounds of beans a year.
I don't know if that's a lot or little. I mean,
sounds like it's a lot, but it's probably a little.
In the broad scheme of beans.
Speaker 3 (37:07):
These are not coffee beans. These are bean beans, bean beans.
Speaker 2 (37:10):
So they've got all different kinds. They've got black, white,
navy red, King City, pink, green, baby lime, a yellow
split pee. They got their eye of the goat beans
that are out there.
Speaker 3 (37:22):
So why is this special? Because I walk down to
the grocery aisle and I see giant bags of beans
for days.
Speaker 2 (37:29):
I guess these taste better for some reason, I guess,
and I don't really know, And I say this, look,
I'm as pro bean as you get. They've got a
wait list, I literally. So yesterday, daughter wakes up from
her nap. What do you want for a snack? Beans?
Speaker 3 (37:46):
We had a bean snack to get eating straight out
of the canvas, straight out of the well.
Speaker 2 (37:50):
You rinse them first, you know, you gotta get the
slime off them. But like literally sitting there, she goes, Daddy,
will you come over and have these beans with me.
And how could I say no to that?
Speaker 3 (38:02):
Right?
Speaker 2 (38:02):
I had to have the beans with her. They were
dark red kidney beans.
Speaker 3 (38:07):
Yesterday hopefully, well, this company's got a wait list for
their beans. They must be pretty special. It must be.
Speaker 2 (38:13):
Waitless for beans. Markets remain broadly flat. We're done for
the day. Back at it tomorrow. We'll see you then.
The Financial Exchange is produced by Money Matters Radio and
is hosted by employees of the Armstrong Advisory Group, a
registered investment advisor. All opinions expressed are solely those of
the hosts. Do not reflect the opinions of Armstrong Advisory
or anyone else. Investments can lose money. This program does
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(00:21):
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(00:43):
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(01:06):
Zada and Mike Armstrong.
Speaker 2 (01:10):
Chuck, Mike and Chucker with you. And we've got markets
not really doing.
Speaker 3 (01:14):
Much of anything, quite honestly, they're selling off in early
trading this morning, and we admit it this very minute.
Speaker 2 (01:20):
Yeah, you know, like the SMP is literally flat on
the day. Yeah, Dow was off eighty six points, the
Naazak composites up twenty three. So it's like everything's within
like a tenth or two tenths of a percent of
where it closed. Tenure Treasury selling off again like one
point four basis points almost nothing, four point one eighty
five percent. Dollar Index down zero point three six percent
(01:42):
to ninety eight point five to three five.
Speaker 3 (01:44):
The one place you are seeing a fair bit of volatility.
Speaker 2 (01:47):
Metals, same place you've been seeing it for the last
few months.
Speaker 3 (01:50):
Over up six bucks an ounce to up seven and
three quarters percent, and gold up one hundred and thirty
bucks two point nine percent on the day. Thank you
to and no gold what's his name? Goldbem Yeah, yeah, yeah,
make sure.
Speaker 2 (02:08):
And then we've got crude oil West Text Intermediate down
four cents a barrel to fifty nine oh seven, the
Triple A National avatur gas prices up one tenth of
a cent to two seventy nine and six tenths, so
market's pretty quiet. This despite the announcement from the Federal
Reserve late last night that Jerome Powell is now subject
(02:28):
to criminal proceedings in a grand jury based out of
the DC area. We don't know anything more on the specifics,
but Powell did release a pretty combative for him statement
last night that's about two minutes long, in which he said, uh,
(02:48):
this is obstensibly about the renovation and my testimony to Congress,
but make no mistake, this is actually about the fact
that I'm not cutting interest rates as fast as the
White House wants me to remember.
Speaker 3 (03:00):
So I think the important thing is to consider with this.
We have talked at length on this program about the
importance of central bank independence and not allowing the president
to direct interest rates setting policy. It can have some
pretty ugly effects, and we've seen that in other countries.
The what I've been thinking through the second and third
(03:20):
order implications for all of this, I think what becomes
clear is it sets up the Federal Reserve and the
White House on a collision course that's pretty unavoidable at
this point, and that's in spite of the fact that
Ja Powell is going to be out of his role
in May.
Speaker 2 (03:34):
I think it's potentially avoidable. I think they like, here's
the thing. I'm not saying that this will or won't happen,
But when it comes to the FED, we've been seeing
this game of cat and mouse for the last year now,
and to this point nothing's actually happened. I'm not saying
that it will or won't. I'm just saying, I don't know.
(03:58):
The White House likes to float rile balloons on the
FED left and right, Like I can count at least
three or four separate instances where this has been the case.
And if the market doesn't move the way that they
want it too based on it, they tend to go
in the other direction. And I think they're fine with
it either way.
Speaker 3 (04:13):
Yeah, I think where I see maybe collision course is
too strong a phrasing. Then let's say this is all
dismissed by the Grand Jury and nothing moves on it,
and we move along here. I just think that at
this stage now there is this implied threat from the
White House that hey, if you don't follow along with
my suggestions, this is what can result. And so Therefore,
(04:38):
you never know how the board members are going to react,
but my guess would be that several of them might
dig in further here, and the next Federal Reserve chair
could be met by a pretty hostile voting board, I
think is what is a very likely possible outcome. I
guess would be a board of members who don't seem
to have much of a problem with j. Powell and
(05:00):
probably have clearly worked well with him over the years,
and are looking at this and saying, are we going
to stand for it? Are we going to fight for
in our independence? And my guests would be they're going
to fight for their independence just like Jay Powell is currently.
So my senses be this makes the next chair's job
significantly harder to direct. Whatever their policy looks like, presumably
(05:24):
lower interest rates. It's going to make the job tougher
given this implied threat.
Speaker 2 (05:29):
Wall Street Journal report actually not a report, I guess.
This was a post by the President on truth social
on It was late Friday afternoon or Friday evening, I believe,
where he basically said, I'll read some of the quotes,
please be informed that we will no longer let the
American public be ripped off by credit card companies that
are charging rates of interest, of interest rates of twenty
(05:50):
to thirty percent and even more. He then said that
there will be a ten percent cap that is put
in place beginning on January twentieth. Now it's unclear what
authority the White House has to actually do this, but
the fact is, whenever you try, and we've talked about
this with rent control, Yeah, whenever you try to control
(06:14):
the price of something, what you end up doing is
restricting the supply of it. It's why whenever rent control
gets proposed by someone running for the mayor of Boston,
New York City or San Francisco, we sit there and
we say, guys, this isn't actually going to solve the
housing problem. It's going to end up, you know, with
fewer units being constructed and available.
Speaker 3 (06:33):
So I am very suspicious that this will ever pass
or go into effect. But I take your point that. Look,
banks reserve the right to crancel your credit card at
their discretion. Pretty much at their discretion. They can use
any number of reasons to do so, and so.
Speaker 2 (06:49):
The likely one they can't is that they don't like you.
Speaker 3 (06:51):
Yeah, I mean, you know, they even do it figure
based on protected classes and things like that, but very
easy for them to say, Okay, while previously we were
willing to extend credit cards to anyone with a credit
score of X, now, given these new caps, we're going
to be canceling credit cards for anyone with a credit
score under six hundred and fifty, well within their rights
(07:13):
to do so. And so what is the likely outcome
of a cap on interest rates? Fewer extensions of credit
and a problem with a bunch of Americans being able
to borrow money?
Speaker 2 (07:21):
Or I'll put the other piece out there, or Okay,
you're gonna cap how much we can make on credit
card interest rates? Great? How would you like hire mortgage rates?
Or how would you like to be paying more in
checking account.
Speaker 3 (07:36):
Fees or land account fees?
Speaker 2 (07:37):
On your head? It's any time that you try to
micro manage one part of the economy, you end up
with it's playing whack a mole, except the moles get
like they coming out of unexpected places, not just the
thing that you're trying to whack. California says, hey, the
fast food minimum wage can be this, but the rest
(07:59):
of the minimum wages that well, okay, we don't really
know what the ramifications of that are going to be. Likewise,
if you do find a way to cap credit card
interest rates at ten percent, which again it's unclear that
the White House possesses the ability to do so.
Speaker 3 (08:14):
It's actually pretty clear that they don't because when President
Biden tried to cap credit card late visa at eight bucks,
Texas court shut it down. Okay, I think that it's
unlikely to pass, but yeah, the likely effects would probably
not be great for consumers, would be my guest.
Speaker 2 (08:29):
You likely have a significant contraction in available credit for Americans,
which then probably means, based on what I know about
Americans and their spending habits, I'm one of them, we
tend to spend up to the level that the banks
allow us to, and I think it would probably have
some pretty nasty repercussions for the American economy if tens
(08:52):
of millions of people suddenly had their credit cards canceled.
Speaker 3 (08:54):
By the way, we didn't have to go think about
this for a while, because this is not a new idea.
Senator Bernie Sanders proposed this and put forward a bill
in February of twenty twenty five proposing exactly this ten
percent credit card interest rates. He co sponsored it with
Senator Josh Holly. So this is not a new idea.
This is something that has been proposed by many populists
(09:18):
over the course of the last few years, and we
have thought about it and kind of considered what the
ramifications would be here. And so A, unless Congress is
going to pass the law, I don't think it's going
to happen. B If it did, I'm not sure it
would result in the things that the President actually wants.
Speaker 2 (09:39):
It's also a band aid that doesn't address the root cause.
The problem is not that too many Americans are paying
twenty five percent on a credit card bill. The problem
is why do they have that outstanding bill to begin with?
And until you can address the root causes trying to
lower the interest rate on that, it ain't gonna do
(10:01):
it anyways like that, that's not going to be the solution.
The question is why are there that many people that
have that much outstanding so so they're paying that interest.
Speaker 3 (10:13):
If rent is too high, you don't impose rent control.
If credit card payments are too high, you don't propose
caps on credit cards. And uh, what's another one that
we've toyed with over the last few years.
Speaker 2 (10:24):
That just groceries. We have the grocery thing.
Speaker 3 (10:27):
If home affordability doesn't work, you don't cap what banks
can charge in mortgage rates.
Speaker 2 (10:32):
Remember the Harris campaign was saying we're gonna like cap
you know, grocery rate increases it like exper Okay, shortages,
good luck getting your groceries there.
Speaker 3 (10:41):
So the same thing will apply here. You cap what
companies can charge and you will have shortages. So want
to break up the banks because they're too big and
there's too much you know, Visa holds too much power
over consumers. All on board, like.
Speaker 2 (10:55):
Brett, you want more competitions for credit card rates? Okay,
that like, how about it?
Speaker 3 (11:00):
That doesn't have to do with credit card rates, but
you know it's built in the transaction fees and stuff
like that. But yeah, that is not likely in my
view to solve the problem.
Speaker 2 (11:09):
Here's take a quick break. When we return, we've got
trivia right after this.
Speaker 1 (11:17):
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(11:37):
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Speaker 4 (11:57):
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Time for trivia here in the Financial Exchange, and today
is Jeff Bezos's sixty second birthday. Bezos founded Amazon in
(12:45):
ninety four, originally as an online bookstore. As we all know,
at one point during Bezo's tenure as CEO, Amazon became
the world's most valuable company. So our trivia question today,
what year did Jeff Bezos step down as Amazon CEO?
Once again, what year did Jeff Bezos step down as
(13:08):
Amazon CEO? Be the fourth person today to text us
at six one seven three six two thirteen eighty five
with the correct answer you know whin a Financial Exchange
Show t shirt. Once again, the fourth correct response to
textas to the number six one seven three six two
thirteen eighty five, along with the keyword trivia, We'll win
(13:28):
that T shirt. See complete contest rules at Financial Exchange
Show dot com.
Speaker 2 (13:32):
I want to talk a little bit about Florida real estate.
There is a piece that's out in the Wall Street
Journal today and I'm going to quote from it here.
Although older people continue to arrive in greater numbers than
those who leave, that net migration is varied by income bracket.
In the past decade, In twenty twenty three, it grew
five percent from a decade earlier for households with inflation
(13:54):
adjusted incomes of at least one hundred and twenty five
thousand and headed by someone sixty five year old. By comparison,
the flow of similar households with inflated adjusted incomes of
seventy five thousand or less shrank by forty four percent. Again,
these are inflation adjusted incomes, so it's not just oh, like,
you know, inflation made this happen. So this is you know,
(14:16):
there's something going on here, and quite honestly, there something
going on is the insurance premiums for owning a house.
And the other piece, uh, is that if you look
at mobile home communities, as has been happening in just
about every other industry, there's been a ton of consolidation
(14:37):
and private equity money going in, and the new owners
are jacking up the rents of the land, making them
unaffordable for families who want to move down there. And
what are typically, you know, affordable places to live.
Speaker 3 (14:50):
I don't want to make this over the complicated. Florida
is not as cheap as it used to be. No, so,
I mean interestingly, I was taking a look. Nerd wallet
has a nice easy cost of living calculator that you
can compare different cities So when you compare to the
highest cost areas in the country, like Boston or New
York City, Yeah, Florida's still cheaper, right, I mean much
cheaper so Boston. I just chose two cities, Boston compared
(15:13):
to Tampa. Sure, if you have one hundred and fifty
thousand dollars income in Boston, you would need an income
of about one hundred thousand dollars to maintain that same
cost of living. According to NERD wallets, housing costs cheaper
sixty percent cheaper than Boston, healthcare costs thirty five percent cheaper,
food cost higher. But you know a lot of these
things are cheaper. But this article talks about a family
from Michigan. And so if we take a look at
(15:35):
Detroit compared to Tampa, it's about the same Florida's. Tampa
is about five percent cheaper than what you would experience
in Detroit. If you're listening from Portland, Maine right now,
you know there's only a fifteen percent cost of living
difference between going down to Florida. That gap used to
just be bigger. I think, plain and simple, that's the
(15:55):
story here is a bunch of people moved to Florida
it drove prices higher. There are other factors at work too,
but largely I think it's been a change in net migration,
and the cost of housing has gone up, not only
because more people are living there, also because of insurance
related issues that are unique to Florida and a few
other places.
Speaker 2 (16:15):
But the interesting thing to me and is this is
not just a Florida phenomenon. The twenty tens, In my opinion,
one of the defining features was people moving from high
cost of living areas to low cost of living areas.
For that for a massive delta in that cost it
(16:36):
civily retirees, no, not even retireees, Like think about think
about your friends, Mike, back when you were like twenty seven,
and think about the ones who are like, hey, I
moved out to Denver, and think about how, yeah, it's
it's so cheap out here, and all I do is
ski and I hike and it's so cheap. Denver is
(16:57):
freaking expensive. Now you go and you look at again,
like you can kind of like go down the list
of yuppie millennial cities. It's my defining characteristic Raleigh, Nashville, Nashville,
Like you can go through this Austin, Texas. Like these
are places that used to be cheap, that, for better
(17:18):
or for worse, have gotten overrun by our friends, and
we might have screwed them up a little bit in
doing so. But nature is healing.
Speaker 3 (17:25):
Okay, get made fun of wearing a cowboy hat in Austin.
Speaker 2 (17:29):
Listen, I've been to Austin a number of times. It's great,
but like tech Brozil, run you out of the bar, right,
it's different from what it was ten fifteen years ago.
So I guess where I'm going is nature's starting to
heal in some respects in that if you look at
what's going on with home prices in Austin, just as
(17:49):
an example, they're down like seventeen percent in the last
year and a half. Now.
Speaker 3 (17:53):
You know what's really interesting to me too, is I
don't know that gen X wants to retire to Florida
in Arizona. Again. I know we're talking about all these groups,
but I'm just I don't hear when I speak to
gen X clients. And you know, folks that what's the
oldest gen X are right now probably pushing sixty.
Speaker 2 (18:13):
Something like sixty one, sixty two probably.
Speaker 3 (18:15):
So do you hear that demo talking about relocating to
Florida and Arizona. I just don't. And you know what,
we talk about how these things are going to change,
and then they don't. So maybe they're just not that
stage of life yet. But I don't hear it as
this goal. In fact, I hear it mocked a little
bit from that generation.
Speaker 2 (18:32):
I don't know. I don't think I have enough talking
experience with that demo to be able to say yes,
like it's definitively different from before or the same as before.
Speaker 3 (18:43):
I also say, I hear a lot more people talking about, Hey,
if I really want to save on cost of living,
I'm going to go to Costa Rica or Portugal again,
something that wouldn't have been even considered by some previous generations. Again,
these are all just my own narratives that I'm hearing of. Oh,
you know, what does it look like to move abroad?
The dollar goes a long way, Florida is not as
(19:04):
cheap as it used to. I'll be very interest to see, hey,
does that next generation of retirees still find Florida and
Phoenix to be desirable.
Speaker 2 (19:12):
Part of me wonders how much of that is there's
a big swath of Baby boomers and Silent generation members
before them that owned those places as second properties even
before they retired. And that's different because of the affordability. Now, yeah,
quick break here, Wall Street Watch answer.
Speaker 3 (19:34):
I'm sorry.
Speaker 2 (19:34):
Wall Street Watch is next with the trivia answer as well.
Speaker 1 (19:41):
Bringing the latest financial news straight to your radio. Every day.
It's the Financial Exchange on the Financial Exchange Radio Network.
Time now for Wall Street Watch. A complete look at
what's moving markets so far today right here on the
Financial Exchange Radio netw work well.
Speaker 4 (20:01):
Market started the day in solif mode, but have since
evened out as traders prepare for a busy week ahead,
including a fresh look at inflation tomorrow morning, in addition
to retail sales and bank earnings this week. But the
big story today surrounds the FED after news that US
prosecutors are investigating FED shair Jerome Powell over his testimony
about the Central Banks building renovation project. Right now, the
(20:24):
Dow is down by over tenth of a percent, or
seventy eight points lower. SMP five hundred is up only
one point, Nasdaq is up two tenths of a percent
or fifty two points higher. RUSTED two thousand is completely flat.
Tenure Treasure reeled up one basis point a four point
one point eight nine percent, and crude oil up about
four tenths of a percent, rating a fifty nine dollars
(20:45):
and thirty five cents a barrel. Several bank stocks seeing
losses on the day after President Trump called for credit
card rates to be capped at ten percent for one year.
Trump did not provide additional details on how it would work.
JP Morgan, Visa Master Carter down anywhere between one and
two percent. Meanwhile, according to CNBC, Apple is joining forces
(21:05):
with Google to power its AI features for products such
as Siri later this year. Alphabet shares are up about
a quarter percent. Alphabet also hit four trillion dollars in
market cap this morning. In more developments on the Warner
Brothers Discovery front, Paramount said this morning it plans to
launch a proxy fight four board seats at Warner Brothers
Discovery as it continues pushing its hostile bid for the company.
(21:28):
Paramount also filed a lawsuit seeking to force Warner to
release more information about its merger agreement with Netflix. Warner
stock is off about two percent. I'm Tucker Silvan, that
is Wall Street watching. On the previous segment, we asked
you to the trivia question what year did Jeff Bezo
step down as Amazon CEO? Well, that would be twenty
twenty one. Dan from Brinfield, Mass is our winner today
(21:51):
taking on my Financial Exchange Show T shirt. Congrats to Dan.
If we play trivia every day here in the Financial
Exchange see complete contest rules at Financial Exchange Show dot com.
Speaker 2 (22:02):
Peace in Baron's retiring early is looking more difficult the
new game plans. What are we talking about here.
Speaker 3 (22:09):
Michael Well, There's been this movement for better part of
decade and finally, Well more recently has adopted the acronym
FIRE for financially Independent retire early. And the FIRE movement
was kind of extreme. It was the idea of, hey,
save fifty to seventy percent of your income, live really conservatively,
and if you do, you might be able to pull
off retirement at.
Speaker 2 (22:30):
Like forty eight one being a day. It was, you know,
like a very it was a very aggressive movement to
cut expenses and maximize savings. Often, I think oftentimes in
the early days of it, like very much at the
expensive quality of life, right.
Speaker 3 (22:47):
And so they make the argument that that's tougher to
do now. I think the one area where I would
agree would be we've had much more inflation over the
course of the last ten years than we did the
previous ten or the previous twenty, or really any time
period since the seventies or eighties, and if we continue
to then it will make it more difficult in the
future as well. Everything else that they talk about in here, though,
(23:10):
sequence of return risk, inflation risk, those aren't more. Sorry,
the inflation risk might be more pronounced now than it
was before, but the sequence of return risk to me
is not any more pronounced and more of an issue
now than it was a decade ago. I think the
only thing that you know you have to be thinking
about now, if you're thinking about it, is markets are
(23:32):
extremely expensive right now. So will I have that disastrous
sequence of return early on in my retirement plan?
Speaker 2 (23:39):
Yeah, And I think that ultimately all of these Even
you mentioned you know, the inflation risk being higher now,
I don't know that it is higher. It's just hey,
in the recent history, that inflation risk had turned into
realized inflation in the way that it hadn't for the
last forty years. But that risk is always out there
and always present, and so so I think the big
(24:01):
thing is if you're talking about in early retirement, whether
that's a retirement at sixty two or retirement at forty two,
like however you wanted to find you know, early like
if you mean different things to different people.
Speaker 3 (24:13):
Hint, the forty two one is gonna be tougher than
the sixty two one.
Speaker 2 (24:17):
Ultimately it boils down to the same two things. How
much do you spend and how much do you save? Yeah,
and the it's the interplay between those.
Speaker 3 (24:27):
That sequence of return thing. I just want to point
it out as because all the you know, investment or
financial advisor people listening right now understand this and have
studied it. But if you are planning on let's call
it a fifty year retirement, sequence of return is what
it's really talking about here is if you average a
(24:49):
seven percent investment return throughout the course of your forty years,
the results to whether or not you have enough money
to retire can vary dramatically depending on how you get
that average seven percent. Yes, largely if you have a
big market crash the day you retire, the likelihood of
you getting there is dramatically decapped. If that sequence of
(25:12):
return hits you early on, and so that's what they're
talking about with this. But I think the key messages
a lot of people love the idea of retiring early.
I think all of us love the idea of retiring
or slowing down in our work earlier than anticipated. And
I think the message that I have is it is
tough enough to retire on time. It requires a lot
(25:34):
of dissipated If you're going to do so early, then
you need to have a plan in place well ahead
of time, and you have to be considering these things
like sequence of return risk. You have to be testing
the idea of what if inflation runs a percentage point
higher than what I am anticipating. Because when you retire early,
that's years and year. It's not only the missed out
income and savings that you won't have, it is the
(25:56):
extra years of taking money out of your savings that
you have to play for, not to mention all the
other complexities. When is my social security going to start?
How am I going to get health insurance? If I
have kids, you know what stage of life are they
going to be and are they going to need financial
assistance that I've planned for? There are a ton of
questions that come along with the idea of retiring early.
(26:17):
They are not insurmountable. I know plenty of people that
retire before sixty five and make do without Medicare for
a period of time. Sure, you just have to do
the planning. If you could use some assistance on that
planning piece, call Armstrong Advisory Group. It's what we do
for hundreds of clients. We would love to do it
for you too. You know, talk to us about what
those plans really are and how you might be able
to achieve them. The numbers eight hundred three nine three
(26:41):
for zero zero one. You can book your time for
us to call you as well at Armstrong Advisory dot com.
But that number is eight hundred three nine three for
zero zero one.
Speaker 1 (26:50):
The proceeding was paid for by Armstrong Advisory Group, a
registered investment advisor. Nothing in the ad or in any
Armstrong guide a specific financial, legal or tax advice. Consult
your own financial tax, send a state planning advisors before
making any investment decisions. Armstrong make contact you to offer
investment advisory services.
Speaker 2 (27:06):
I want to talk a little bit about this market
Watch piece on millennials, because.
Speaker 3 (27:13):
Really still allowed to whine millennials, I do it.
Speaker 2 (27:17):
All the time. Yeah, I guess I actually don't. My
daughter does, but she's five.
Speaker 3 (27:22):
I win all the time.
Speaker 4 (27:23):
I did twenty minutes ago in the break.
Speaker 2 (27:25):
You didn't really whine, though.
Speaker 3 (27:27):
It's more of a heavy cry with bouts of laughing
in between silence afterwards from the studio.
Speaker 2 (27:36):
So there's this piece here. It's it's titled There's nothing
we can do. The Great Millennial career crisis has workers
giving up on ever owning homes or paying off their
student loans. So two things are true at the same time.
The first is there are millennials that are in positions where,
because of the decisions they made on how to pay
(27:59):
for coledge, most notably when they were younger, they're basically
screwed unless their financial situation changes dramatically.
Speaker 3 (28:07):
Agreed, And I agree that that sucks because I don't
think as a sixteen or seventeen year old you had
the qualifications to be able to make that decision. But nonetheless,
there you are.
Speaker 2 (28:14):
Quite honestly, like, no one tells you what it means
to borrow one hundred thousand dollars. They just say, hey,
here's the money, Like it's it's pretty unethical what we
do to people to have them make those decisions that
I just I don't think we give them enough information
to make an informed decision. I do think millennial parents
(28:37):
who have gone through this now we're not going to
make the same decisions with their kids, though.
Speaker 3 (28:40):
Agree.
Speaker 2 (28:41):
But the other piece that I will say is this
piece is all about, you know, these millennials that are
in these these difficult situations. Financially, basically, every metric out
there that compares on an inflation adjusted basis millennial home
ownership rates, investment savings rates, portfolio sizes everything with prior generations.
(29:05):
We're right there shows that they're pretty much in line
with prior generations, and so there is no meaningful difference
in the aggregate amount of you know, wealth saved and
generated and earned by millennials.
Speaker 3 (29:20):
So I'm looking at a chart right now just to
this is data from First American, which is a title
services company who obviously cares about home ownership rates because
that's how they make all their money. Millennials did trail
behind just about every other generation in terms of home
ownership for quite a period of time. It took us
longer to get into those homes.
Speaker 2 (29:39):
Yeah.
Speaker 3 (29:39):
Today. However, with the oldest millennials I think being forty
one or forty two years old, we have surpassed now
Gen X home ownership rates at that same age, Yes,
and we're closing in on Boomers and the Silent generation
and all of those. It was like a couple percentage points.
Now we are right there and we're past again. We
(30:00):
are past Gen X in terms of home ownership rates
by early forties, so we're delayed. But again, every generation
has different challenges. Gen Z is staring a bunch of
them right staring at a bunch of them right now.
Like home owner affordability for gen Z in their twenties
(30:20):
is a lot worse than it was for millennials.
Speaker 2 (30:23):
And if you want to go back and like look
at other financial issues, I mean take gen X just
as an example. So gen X again, you were kind
of coming of age in you know, nineteen eighty. Like
Gen X, prime earning years got whacked one to two
by tech bubble and financial crisis. You go back and
you look at the Boomers. Okay, your prime earning years
(30:45):
you get whacked by inflation for a decade. Go back
and look at the style generation Okay, maybe you had
things fine economically, you had to fight World War two,
Like that's worse than any of us have had to
deal with just in terms of you know, like and
boomers had that.
Speaker 3 (30:59):
Too of a different way war. So you know, like, yes,
I want to acknowledge that that the last two generations
have not had millennials.
Speaker 2 (31:08):
That Global War on Terror, yes, admittedly liked did some
real damage to a large number of people. But again, like,
no generation gets out without dealing with something going on financially.
You know, you go what was before? The style of
generation now don't even know? They the Great Depression, like
(31:29):
it there's no free lunch. There's a reason why they
say that is because there is actually no free lunch.
They say there's free lunch, but there is none, Like
we all got to pay for lunch somehow.
Speaker 3 (31:41):
So which one is the worst generation? Though?
Speaker 2 (31:44):
Like that we disliked the most interpreted however you want. Well,
gen X will always say that no one talks about them,
so they're just happy that we're mentioning them today. That's true,
So there's that. We love you, gen X. Let's take
a quick break here and when we return, Stack rule.
Speaker 1 (32:00):
The financial Exchange streams live on YouTube. Subscribe to our
page and stay up to date on breaking business news
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The Financial Exchange is now available every day from eleven
to noon non Serious XM's Business Radio Channel one thirty two.
Stay informed about the latest from Wall Street, fiscal policy,
(32:21):
and breaking business news every day. The Financial Exchange is
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This is the Financial Exchange Radio Network.
Speaker 4 (32:33):
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(32:54):
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Speaker 2 (33:10):
Mike, what do you got for stack roulettes?
Speaker 3 (33:12):
Walmart is teaming up with Google's Gemini to try and
make it easier for shoppers to find and buy products,
and I have no real semblance of an idea of
how successful or unsuccessful this is gonna be. This is
not how I use artificial intelligence in any way today.
It's also pretty reminiscent of the arguments I remember hearing
about the amount of money that Amazon was pouring into
(33:34):
Alexa during its early stages. Sorry for everyone who's homespeaker
just beaped, but the argument there was, Hey, if we
roll out this really intelligent home device that you can
speak to, then people are gonna order more stuff from Amazon.
And it didn't happen. Just playing example, there's no evidence
(33:54):
of support that those devices resulted in bigger purchases. And
so I guess my question is, what about this tie
up is going to make it so that people will
spend more at Walmart? And you know, again, maybe this
is different this time. I just don't. I don't really
see why it would be. Like, again, they're pretty good
at I can see how they might be good at saying, hey,
(34:16):
summarize customer reviews for me of this type of product
and this that or the other. But is it going
to result in me clicking purchase more frequently? Yeah? I
don't see a lot of evidence.
Speaker 2 (34:27):
We'll see it's gonna be wild when the only mass
market uses of AI are to sell ads. Yeah, you know,
it's it's where we're going. It's here's the thing. I
hold two thoughts in my head at the same time
on this. The first is every single person I know
(34:49):
that works in tech development is like, this is game
changing stuff because it lets them code completely differently than
they did previously. Yep. But there's also a shocking lack
of understanding that three hundred and thirty million Americans do
(35:10):
not work in coding like the for I'm guessing it's
probably like a couple million, like two to three million
Americans do. And you get these pieces that are like
and not for long by the way, this is transformed
like the way that I work, because it can do
like iterations on this in the background to do this
and that, And I read these things and I'm like, wow,
like that's really cool, and then I think about like
(35:31):
what the like what everyone else does for work which
is not coding, and hey, like I've actually heard now
instead of two companies where leaders have banned their teams
from using chat GPT to write emails because they're just
getting sick of seeing them, they're like, I know that.
(35:55):
They're like, I know that this is a fifty seven
year old guy who's worked with me for thirty years.
His emails are usually all lower case, like spelling errors
and everything, but I know it's him writing it. And
now I'm just getting crap that's being fed to me
and so what teen par and it's it's it's not him,
and I don't like that. So I have people that
are getting that. I have other ones that are like, no,
(36:15):
this is making up, you know, fake stuff. So the
two thoughts of that holder look for certain jobs. I
think that this is absolutely transformative stuff for the vast
majority of Americans. I don't know if they actually want
anything to do with AI. I just don't think they do,
(36:36):
or at least not enough to make it as interesting
financially as it's priced right now. And yeah, we're gonna
find out in the next couple of years. I want
to talk about beans, go for it. Did you know
that there is a quarterly bean.
Speaker 3 (36:53):
Club like the Jelly of the Month club.
Speaker 2 (36:57):
Rancho Gordo Okay found it in twenty nineteen. They're now
selling two point five million pounds of beans a year.
I don't know if that's a lot or little. I mean,
sounds like it's a lot, but it's probably a little.
In the broad scheme of beans.
Speaker 3 (37:07):
These are not coffee beans. These are bean beans, bean beans.
Speaker 2 (37:10):
So they've got all different kinds. They've got black, white,
navy red, King City, pink, green, baby lime, a yellow
split pee. They got their eye of the goat beans
that are out there.
Speaker 3 (37:22):
So why is this special? Because I walk down to
the grocery aisle and I see giant bags of beans
for days.
Speaker 2 (37:29):
I guess these taste better for some reason, I guess,
and I don't really know, And I say this, look,
I'm as pro bean as you get. They've got a
wait list, I literally. So yesterday, daughter wakes up from
her nap. What do you want for a snack? Beans?
Speaker 3 (37:46):
We had a bean snack to get eating straight out
of the canvas, straight out of the well.
Speaker 2 (37:50):
You rinse them first, you know, you gotta get the
slime off them. But like literally sitting there, she goes, Daddy,
will you come over and have these beans with me.
And how could I say no to that?
Speaker 3 (38:02):
Right?
Speaker 2 (38:02):
I had to have the beans with her. They were
dark red kidney beans.
Speaker 3 (38:07):
Yesterday hopefully, well, this company's got a wait list for
their beans. They must be pretty special. It must be.
Speaker 2 (38:13):
Waitless for beans. Markets remain broadly flat. We're done for
the day. Back at it tomorrow. We'll see you then.
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