Friday Flight - AI Toys, Homeowners Held Hostage, & Impoverished Americans

Summary

Podcast Summary: How to Money

Episode: Friday Flight – AI Toys, Homeowners Held Hostage, & Impoverished Americans
Date: December 5, 2025
Hosts: Joel & Matt

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Overview

In this lively Friday Flight episode, Joel and Matt review the week’s top personal finance stories—ranging from the latest on AI-powered toys and tighter retail return policies, to government-backed kids’ investment accounts, the real state of poverty in America, and the growing number of “handcuffed” homeowners. With their signature friendly banter and practical insights, the hosts break down how these headlines affect everyday folks’ money and offer plenty of actionable advice along the way.

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Key Discussion Points & Insights

1. Listener Generosity & Daffy Voices for Good Challenge

(02:32 - 04:21)

• Joel and Matt thank listeners for their overwhelming generosity during the Daffy Voices for Good Challenge, noting they finished second out of seven podcasts.
• Matt (03:18): “I was also super stoked to see that the next six podcasts … raised only half as much combined as we were able to raise with our listeners, which just demonstrates such an incredible generous spirit, man.”
• They share enthusiasm for donor advised funds, especially through Daffy, and look forward to future giving challenges.

2. Black Friday/Cyber Monday – Spending Trends & The Role of AI

(05:08 - 07:22)

• Shopping saw a 4% increase in sales year over year, with online sales jumping 9%.
• Gen Z shoppers are scaling back due to tighter budgets.
• “The head of consumer insights at Salesforce credited the rise in spending this year to artificial intelligence ... she called it, ‘the ultimate purchase accelerator’.” (Joel, 06:09)
• The guys caution that AI’s ability to encourage more spending could be a budget pitfall for many.

3. The Rise of AI Toys for Kids

(07:22 - 08:35)

• AI-powered toys are being marketed for children as young as two—prompting concern from advocacy groups.
• Matt shares, “I actually asked Chat whether we should give our kids AI toys, Joel, and guess what, gave me a pretty stern warning against it. This is AI itself!” (08:08)
• Both hosts advise caution, preferring that young kids stay away from AI toys for now.

4. Retail Return Policy Crackdowns

(08:36 - 10:52)

• Stores like Sephora and Ulta have cut return windows from 60 to 30 days, partly due to increased return costs.
• Retailers are nudging shoppers toward return methods that save them money (e.g., Amazon prefers Whole Foods drop-offs over UPS).
• “Sometimes … it’s worth paying a tiny bit extra, knowing that you’re buying from a place that has a good return policy.” (Joel, 10:10)
• Staying on top of return windows and policies gives peace of mind, especially during the holidays.

5. Unused Gift Cards: The Hidden Money Drain

(11:23 - 13:54)

• Americans hold nearly $250 in unused gift cards on average; a third have lost that value due to expiration or misplaced cards.
• Joel’s annual diatribe: “You’re turning cash money that you can use at any location … into something that can only be used at one retailer? Why would you do that to yourself?” (12:06)
• Suggestions: Start using those old cards, give them away, sell them at a discount, or donate the value to charity—especially if you don’t plan to use them.

6. Child Wealth Accounts: “Trump Accounts” and Philanthropic Boost

(14:36 - 19:56)

• Congress passed a program to provide “Trump Accounts”—investment accounts for kids under 18, with $1,000 freely available for children born between 2025 and 2028 (with some restrictions).
• Joel quips, “I’m so stoked that babies can now save money, invest and get rich!” (14:51)
• Matt notes, “I think it’s a cool idea, although it does have a limited time frame and … the actual impact of these accounts might be limited.” (17:12)
• Michael Dell pledges billions to top up accounts for children aged 10 and under who are otherwise ineligible.
• Key warning: Outside the initial free money, additional contributions may have unfavorable tax treatment; traditional accounts (529s, UTMAs) are generally better for broader savings goals.

7. Homeowners “Held Hostage” by Their Mortgages

(26:09 - 33:29)

• Some pandemic-era homebuyers now feel “trapped” in starter homes or undesired locations, unwilling to give up their low 3% interest rates.
• “It’s hard to feel sad for folks who bought a home … they’ve got some equity, they’ve got a locked-in low rate … I feel bad for folks out there who actually want to buy a home but can’t afford to.” (Matt, 27:14)
• Renting is gaining favor: apartment rents are dropping, vacancies are up, and power is shifting toward renters—making renting a more attractive option in many markets.
• Ownership has benefits (equity, control), but the “cult of homeownership” is not always the optimal wealth-building route, and not everyone should feel pressured to buy.

8. What Does “Poverty” in America Really Mean?

(33:29 - 38:41)

• Viral Free Press article claimed US poverty lines underestimate how many Americans are impoverished, citing high thresholds (like $140k for a family of 4).
• Joel and Matt strongly disagree, suggesting the article cherry-picked data and ignored improvements in average quality of life, technology, square footage per person, longevity, and declining food costs.
• “There are other statistics … like a lot more families are making $150,000 now than were 50 years ago—that’s adjusted for inflation.” (Joel, 38:01)
• They acknowledge inflation’s real pain but caution against “doom and gloom” narratives that contradict broader economic improvements.

9. Geoarbitrage & Moving Abroad for Cost Savings

(38:41 - 40:39)

• Stats show more Americans—especially retirees—are moving abroad (Portugal, Panama, Thailand) to stretch their dollars.
• Matt: “This route could completely change your financial independence path and what your life looks like.” (39:50)
• Not for everyone, but a valid option for those looking to retire earlier or with less savings.

10. Travel Update: REAL ID Deadline Approaches

(40:39 - 42:24)

• As of February 1st, flyers lacking a REAL ID will face a $45 fee and additional TSA security hassles.
• Check for a star on your driver’s license; if not present, update it soon to avoid airport headaches.
• “You’re gonna punch yourself if you go to the airport without one … not just the additional money, but it’s the additional hassle.” (Joel, 41:35)

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Notable Quotes

• “I am all for keeping AI toys at a nice distance from our kids.” (Matt, 08:28)
• “If you overdid it [on Black Friday], that’s okay. … Return it, you might be able to mitigate some of the damage.” (Joel, 06:52)
• “You’re not stuck. The truth is you’re not stuck … you’ve got options.” (Joel, 27:22)
• “Renting is not the lifestyle that folks want, but it’s the lifestyle that more people are having to accept … and it can be a great way to build financial stability.” (Matt, paraphrased from 29:11–29:28)
• “It just feels like a band-aid … let’s throw the people a bone, but not address the underlying issues.” (Matt, 20:07)
• “Articles like this seem to want modern economic reality to be more negative than it actually is … they’re cherry-picking statistics to reveal their worldview.” (Joel, 38:04)

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Timestamps for Key Segments

• 02:32 — Listener fundraising challenge & Daffy appreciation
• 05:08 — Black Friday/Cyber Monday spending & AI’s role
• 07:22 — AI toys and kids’ safety concerns
• 08:36 — Retail returns & shortening windows
• 11:23 — Gift cards: problems & tips
• 14:36 — Trump Accounts, child investing, Michael Dell’s pledge
• 26:09 — “Homeowners Held Hostage” by low mortgage rates
• 33:29 — The poverty debate: viral article, real facts
• 38:41 — Geoarbitrage: retiring or living overseas to save
• 40:39 — REAL ID: upcoming deadline and travel tips

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Overall Tone & Takeaways

Joel and Matt approach serious financial topics with wit, warmth, and practicality. They balance skepticism with hope—calling out hype (around AI or articles overhyping poverty) but also highlighting genuine opportunities (like free government money, new options for lowering living costs, and maximizing gift card value). As always, they champion actionable steps: “Take the free money,” “Know your return policies,” “Update your REAL ID,” and “Don’t let gift cards go to waste.”

The episode is packed with useful info, a healthy dose of skepticism toward fads and viral claims, and plenty of relatable humor—making even complex financial topics both accessible and fun.

Transcript

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[Matt]

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[Joel]

Welcome to how to money. I'm Joel.

[Matt]

I'm Matt.

[Joel]

Today we're talking AI Toys, homeowners held hostage, and impoverished Americans.

[Matt]

That's right, buddy. This is Friday Flight, the collection of stories of news articles that we came across and the ones that we think you need to pay attention to because they impact your finances the most.

[Joel]

We think you need to pay attention so much we're going to force you to listen to us for the next 30 something minutes.

[Matt]

Yeah, speaking of folks held hostage, we'll get to that homeowners held hostage story here in a second. But before we kick things off, let's give a Massive. Massive. Thanks to all of the how to money listeners out there who participated in the Daffy Voices for Good challenge. We went up against, like six or no, seven other podcasts.

[Joel]

Yes.

[Matt]

And the reason I know this specific number was because there was one podcast that beat us. But I was so happy.

[Joel]

Should we name them by name or.

[Matt]

Should we build them more? I want to. It's all relative here. Because what I calculated was the fact.

[Joel]

That something like Pinching Pennies, I forget what it's called. I don't know. I don't remember what they call their podcast.

[Matt]

So we came in second and we were only a few thousand dollars short of taking that first place spot. So I'm really proud of the generosity of our listeners.

[Joel]

100%.

[Matt]

But I was also super stoked to see that the next six podcasts that competed in this challenge raised only half as much combined that we were able to raise with our listeners, which just demonstrates such an incredible generous spirit, man.

[Joel]

And that not only are how to Money listening at heart. Yeah. Trying to build wealth, they want to do good things with that and they want to.

[Matt]

They're serious givers. Yeah. And honestly, I hope that a lot of folks are checking out donor advised funds specifically with Daffy because we, again, we have been such big fans of Daffy. What it is they do. We've been with them for a long time and they finally reached out and we're like, hey, maybe we'll start advertising with you guys.

[Joel]

Like, great.

[Matt]

A little bit. Which is something we started. Wait, did we do that last? Did we start end of last year?

[Joel]

I think it was maybe. I think it was the beginning of last year, maybe.

[Matt]

Okay.

[Joel]

And yeah, Daffy was a such a great partner. If it's a company we already use and love, it's like the perfect slam dunk partnership.

[Matt]

So. Yeah.

[Joel]

And really fun to participate in this challenge next year. Hopefully we do this again next year. We're going to crush Pinching pennies or.

[Matt]

Whatever that podcast take the number one spot.

[Joel]

Yeah, we'll. We'll beat them because our listeners are awesome. And maybe, I don't know, maybe Matt, you'll. We'll match even more next year. Yeah, let's do it. Let's go. Okay. Oh, one last thing. I'm seeing all the Spotify wraps coming out now, and it's really fun to see. It's amazing how much some people listen to specific podcasts. And just to see people like, I listened to how to money for 15,000 minutes last year, and I'm like, oh, my God. Goodness. I have so much time listening to our voices. I hope you haven't gone insane, but.

[Matt]

Time for me to do my once a month social media login and I'll repost a bunch of those if folks tag us over on Instagram specifically.

[Joel]

You kind of run the Instagram? I kind of run the Facebook group. People have been posting the Facebook group, so I'm sure you'll be able to find some on Instagram to share. But thank you for listening.

[Matt]

Give us a follow if you don't. HowtoMoneyPod.

[Joel]

All right, let's get to the Friday flight sampling stories we found interesting this week. Let's talk about Black Friday, Cyber Monday. Did you participate the shopping holiday?

[Matt]

You snag yourself a deal?

[Joel]

A little. Not much. Okay. The main thing I bought, I talked about buying tires. There's like an early Black Friday sale or whatever.

[Matt]

Nice.

[Joel]

But running shoes. I stocked up on cheap but good running shoes. So solid. Like the high end Adidas for 50 bucks. All right. Yeah.

[Matt]

Way to go, dude.

[Joel]

Happy to get those.

[Matt]

You. Are you brand loyal now? You have a lot.

[Joel]

I only get the Adidas shoes.

[Matt]

Yeah, you have a lot of Adidas when you know your.

[Joel]

Because they have the best sales, to be honest.

[Matt]

You know the sizing and like you kind of know what brand or not brand, what models they go for as well.

[Joel]

Well. And you are like an ultra person. I have like, I know ultra people and if Ultra had shoes that were like in that price range, I would totally consider it. But they're a lot more expensive.

[Matt]

Well, you're also cranking through the shoes.

[Joel]

That's true. I do. Okay, so, but like a lot of people bought stuff on Black Friday and Cyber Monday. Sales were up something like 4% year over year. Online sales in particular were up 9% year over year. But because of inflation and tariffs and higher prices in general, those numbers could be slightly more inflated than they seem. So maybe actually people weren't buying a lot more. It's just that things cost more money. And by the way, Costco has even sued for a refund of the tariffs they've been forced to pay, which I kind of love to see that, like Costco sticking up for themselves. We always stay with Costco, Matt. Here on how to money. Gen Z shoppers appear to be feeling the biggest pinch and they're dialing back spending accordingly. I want to say this, if you overdid it, that's okay on Black Friday and Cyber Monday, but it's crucial to know the return policy so you can get your Money back before it's too late. If you're like, all these packages are starting to arrive. I forgot I even got that thing. Wait, I don't need that thing. Return it. You might maybe be able to mitigate some of the damage that you did if you overspent. The head of Consumer Insights over at Salesforce, that person credited their spending rise this year to artificial intelligence. And uh, I think it was, I think it was a she, she called it the ultimate purchase accelerator. AI. We're not anti AI, but I just think caution is warranted for your budget when you're using AI. It worries me to think that people are like using that to facilitate even more buying habits, which I think is true.

[Matt]

Yeah, yeah. So on the note of AI, actually we're, we're going to see more AI toys on the market this year. The problem though is that some are being marketed for kids as young as two years old, which then leads advocacy groups out there like Fair Play to issue some stark warnings, and rightly so. And it makes me think of some of the more educational devices or at least that's maybe what we tell ourselves. Because like I think a typical response might be, well, you know, these toys, they're, they're educational, this is going to help them to learn. But man, it's so. It seems obvious to me though that 2 year olds are pretty ill equipped to deal with AI and I don't know just the, the proper way to interact with it. I actually asked Chat whether we should give our kids AI toys, Joel, and guess what, gave me a pretty stern warning against it. This is AI itself. You would think it would be a bit more self.

[Joel]

I know.

[Matt]

Propagating none. Unlike Pluribus.

[Joel]

It's oh, I watched it yet.

[Matt]

Biological mandate. I'm only a couple episodes in and the verdict is out. I'll keep you posted. But just even like myself as an adult, I'm still trying to figure out how much and to what capacity that I should have in my life.

[Joel]

100%.

[Matt]

And so with that in mind, I don't know. You don't have to take this advice, but I am all for keeping AI toys at a nice distance from our kids.

[Joel]

I think there's just so much they.

[Matt]

Should get out there and touch some grass.

[Joel]

Yeah, there's a lot of risk when you're putting those into your kids hands because of the nature of AI and large language learning models. What are they going to encounter? You don't know. And we've seen some really sad stories about teens, young people and What a relationship with AI has done to them. I think we're still tread lightly, especially in the early innings. And let's talk about returns for just another second, Matt. As shoppers make more returns and the cost of accepting those returns has risen, some retailers have quietly been shortening their return window. They're saying, hey, more people are making returns, and it just. It really harms our bottom line. So we want to make it maybe a little more difficult to actually follow through. Sephora and Ulta, those are. Those are makeup shops, Matt. I'm not sure if you've been in them.

[Matt]

Oh, yeah, I've been Sephora.

[Joel]

Your daughter, she's getting into makeup, right? Like, a little bit.

[Matt]

But I. Yeah, I took her there not too long ago. A little daddy daughter date. Well, they got to learn what's going.

[Joel]

On next time you go there. Next time they get some makeup if they want to return it. They only have 30 days. They don't have 60 days anymore. So note that.

[Matt]

Can you take. Can you take makeup back if it's been used? Like, if you try it out?

[Joel]

I don't know. That's a good question.

[Matt]

I don't know.

[Joel]

I would. I would think probably not.

[Matt]

These are unchartered waters for me that we'll look at.

[Joel]

We'll look that up. But we're also seeing retailers attempting to steer you towards their preferred method of making a return that costs them less money. Like Amazon, they want to get you to return stuff to Whole Foods because they own Whole Foods instead of a UPS location that's potentially much closer to you, and you're like, ah, Whole foods is like, 20 minutes out of the way. I don't really want to go there. It makes the return a much bigger pain. And not to tout Costco's greatness too much on this podcast already, but there's just a lot of peace of mind when you buy from a retailer who has a really great return policy where you're just not quite as worried. Uh, it might even be, I think sometimes at times worth paying a tiny bit extra, knowing that you're buying from a place that has a good return policy. You can also, by the way, finagle extra return time at a place like Target by having their credit card. So just know what the return policy is before you buy and be prepared to jump through the hoops and stay organized to make those returns in a timely manner, because returns are definitely a part of, like, the holiday shopping reality.

[Matt]

Yeah, most def. Yeah. My dad actually just purchased a Blackstone Griddle and he was at Costco, and it. It was on sale, and he's like, should I go for it? And I said, absolutely. Because I've been preaching the gospel of the outdoor griddle for, like, seven years now. Like, everybody I come in contact with, I tell them just how this has revolutionized how we cook our meals. Specifically the proteins outside, but not even the proteins. Like, dude, a big Saturday morning breakfast. Like, 24 pancakes on there. It's insane.

[Joel]

Everybody who converts, they never want to go back.

[Matt]

I know. And I told them. I was just like, you are going to love this, but if you don't, Costco. So, yes, rest assured that he would be able to take that back. Joel, I've got a stat here for you that I think you're going to be able to vamp on for a minute. The average American has almost $250 in unused gift cards. A third of those Americans have admitted to losing some of that money due to the fact that the cards either expire soon, the retailer has closed, or they straight up lost the gift card.

[Joel]

And my insides are turning right now. Go for it. I wish you could see. I know. This is like the hill I die on. I don't know.

[Matt]

I know you don't like gift cards.

[Joel]

I don't love gift cards.

[Matt]

I don't mind them, but I figured this would give you something to play with.

[Joel]

Okay, I'm gonna go into the diatribe I go on every year, which is that you're turning cash money that you can use at any location across the United States and in other parts of the world, too, into something that is used, usable at really only one retailer? And why would you do that to yourself? Why would you take money that you can use anywhere and, like, turn it into money you can only use in one place?

[Matt]

I think most people are doing it for other people, not themselves.

[Joel]

And they are. They are so much of the time. But that's why we have this problem where people leave their gift cards in their underwear drawer or forget that they have them or that the retailer that they have a gift card to does go out of business, and then they're kind of out of luck. So just be careful when buying gift cards. This season, if you have gift cards you. You haven't used, gather them up and start using them. Consider giving them away if you don't care about that retailer or you can sell them, you're not going to make as much money as the face value of the gift card. But you can sell them on a site like cardcash.com. There's also a cool site that we'll link to in the show Notes where you can donate unused gift card dollars. So if you find yourself in that vein where like I got some random ones, slider, I don't know what to do with them. Well, you can donate them, which is cool. That's pretty cool. And the, there's actually the only time I'm down with gift cards where I think they actually make sense from a purchasing perspective is when you're getting a discount. So Costco has the discounted gift card section, like 70 or 80 bucks for 100 bucks worth of gift cards. If you're going to use them, why not get a discount and like make some money on that. Target this weekend is doing their 10% off gift cards. They do it every single year. That's like one of those super popular retailers. So if you're like, I want to get a gift card for somebody, I want them to have a wide range of options for what they can buy with them. And I also don't want to pay full price. That could be a good option.

[Matt]

Do you all shop at Target frequently?

[Joel]

I would say frequently enough. Where the discounted gift cards would make sense for us.

[Matt]

The last time I went in there, I don't know, maybe it's just online shopping has just ruined it for me. But just walking through there and being inundated with the smells and the stuff.

[Joel]

Just what does Target smell like?

[Matt]

Like a combination of crappy coffee drinks and popcorn.

[Joel]

They have the Starbucks, they have the popcorn. Yeah, that makes sense.

[Matt]

Like that's the first thing you smell like right when you open the door. What's worse? Walking into a Target and the smell there or the smell at Sephora where there's all these tweens who are spraying perfume everywhere.

[Joel]

I think the perfume smell, I can't handle that. But when I shop at Target, usually it's online. I try to avoid. I don't know, I'm just not much for going in store shopping.

[Matt]

I get it. Hey, let's talk about some policy implications, some things that are happening at a very high level and how that's impacting folks ability to save. Specifically because we're going to talk about the Trump accounts for babies.

[Joel]

I'm so stoked that babies can now save money, invest and get rich.

[Matt]

Yeah, the, the one big beautiful bill act, because it officially passed, that made these Trump accounts a reality. But it has taken some time to get them off the ground. As far as like, what are the, what are the particulars? What are the details. It can be a bit confusing, but there is more coming to light. These accounts are available to kids 18 and under.

[Indeed Representative]

But.

[Matt]

And this is the headline thing that I think drew a lot of the eyeballs in initially there is that they're dangling that carrot right. Of the free thousand dollars that, though, is only available to children who are born between like, January 1, 2025 or the very end of 2028. You also have to be a US citizen with a Social Security number. And so if you are, you know, if you've already had a kid this year or congratulations. If you had a kid this year off, congrats.

[Joel]

Yeah.

[Matt]

Oh, man.

[Joel]

We.

[Matt]

Every time we have a listener question who mentions if it's a kid, like.

[Joel]

We should be talking about that, it.

[Matt]

Hasn'T even popped into my mind.

[Joel]

You know what else we should do? We have how to money socks for adults. We should get baby how to money socks, and then we should ship those how to money socks every time a listener has a baby.

[Matt]

Instead of how to money baby socks, how about how to money onesies? That sounds even cuter because the baby.

[Joel]

Socks would be like kind of tiny. You wouldn't be able to see the. Yeah, good point.

[Matt]

And. But onesies. Onesies are where it's at. Might have to actually look into that. Is there a sock fancy? But for onesies, probably onesie fancy got to exist. But we're mentioning this because if you, if that is you and you've got a kid or think you might certainly grab that free money for your child, if you are eligible, there's a specific form you're going to need to keep an eye out for. IRS form 4547. That's what you're going to want to fill out if you do have a child this year. Or you know what if you had a child this year.

[Joel]

Is that reference to Trump being the 45th and 47th president?

[Matt]

Oh, my gosh.

[Joel]

I didn't even think about that until just now. Are you serious? That's crazy.

[Matt]

This is so stupid. Gosh, it's like we're living in a real life meme. But I think you're probably right.

[Joel]

Probably is. Gosh.

[Matt]

An online portal is going to open this coming summer to make it easier as well. The good news, though, is that you can invest the dollars in low cost ETFs, which is certainly the way to go to help that nest egg grow for your little one. I think it's a cool idea, although it does have a limited time frame and it certainly has A limited.

Ability as to what you can do with that account. Right. Like the functionality is limited, which means that long term, I do think the actual impact of these accounts might be limited.

[Joel]

It's a seed of a good idea and it will help some kids and some families and. But is it going to have this wide ranging, major impact on their future lives? I think it's overstated, probably.

[Matt]

And by the way, I'm willing to be open to it. Right. Because I'm sure when they created like the 401k, they're like, what's this dumb 401, you know, like, or this thing that they named after the senator, Senator Roth. But like, look at, look at what those have turned into. And so I'm willing to be open minded, but I am a bit skeptical. Yeah.

[Joel]

And I think it's really important to look at the details of this account because some people might be drawn to putting more money in these accounts beyond the free thousand dollars. And that might not be the smartest move because even though you can contribute even more to these accounts, it makes very little sense to utilize them past the free money because the taxes can be complicated or excessive if the money isn't used for a home down payment or for education.

[Matt]

So that's just how it's taxed is pretty complicated. It's like, okay, a portion of it is taxed at this rate. It gets pretty Funky.

[Joel]

So the 529 account is probably a better way to save for your kids. Or even like the UTMA accounts, like, are likely better than these Trump accounts. We're putting more money into take the free money, but, but after that, probably look elsewhere. And interestingly enough, Matt, the Dell Computers entrepreneur, Michael Dell, he announced this week that he's offering an additional $250 for kids 10 and younger who would have otherwise been left out of this Trump account. Goodness. And at first when I saw that, I was like, oh man, the public private partnership, sometimes it like makes me a little squeamy. But man, it seems like this is just like of philanthropic good deed that Michael Dell is doing for the children. And even some of our kids are gonna be eligible for this. So not only if you just had a newborn, but if you have a kid who's elementary school age, you might be, your kids might qualify. He's donating, I think, what, like six and a half billion dollars to make this a reality.

[Matt]

Tremendous amount of money.

[Joel]

Yeah. So that's a perk I didn't see coming. And I think maybe the best part of this, the silver Lining could be that more kids are gonna be made aware of compounding returns and investing and how the market works from an earlier age. Because they're like, I got this account. Like you might start telling your kid about it at age 6 or 7.

[Matt]

That's the upside.

[Joel]

And then they kind of.

[Matt]

They get to learn.

[Joel]

Exactly. Maybe that's like the most underrated part of these accounts.

[Matt]

I wish instead I could just roll that Dell money just straight into their 529. You know, like, I don't want to have to open up another account, but I'm probably going to because 250 bucks. I mean, I think I want to get my hands on that.

[Joel]

Don't want to leave free money behind.

[Matt]

Yeah. And it's. I'm also like, I kind of gave like the, the I'm open minded, like this could lead somewhere kind of argument. But it's hard not to be cynical, especially when they're called Trump accounts.

[Joel]

Right.

[Matt]

Like, because what do you think of when you hear Trump accounts? I think of like Trump Hotels or I think of like Trump Stakes, Trump Rx, like any. It just seems like another opportunity for him to throw his name on something. And I'm not trying to be Trump coin overly political here or anything, but like it feels like a band aid on something of like rising prices. And they're like, oh, let's throw the people a bone. Let's find a way to get money back into their. Back into their hands. And not addressing underlying issues. Right. Not addressing inflation initially started by the government injecting ridiculous amounts of money into our economy, but then kept alive with tariffs. Yes, but then. So it's both sides of the aisle who are at fault here. And we talked about this, what a couple of weeks ago that he basically admitted that, yeah, terrorists do cause prices to rise. Because you know what? We're gonna get breakfast to be more affordable for you again with your banana and your beef and coffee. And so it's so, so they know, the administration knows that this rise raises prices, which you know, then can. There's an argument to be made that like, oh, okay, well, it's just a negotiating tactic. Right?

[Joel]

Like that.

[Matt]

Oh, just hang on. And we're gonna negotiate better trade deals. And who knows, man? Again, it just feels like a giant meme sort of environment that we're currently living in.

[Joel]

We are living in interesting times. But just I think practical takeaway for everybody out there is at least take advantage of free money, even though it means opening up a new account and having something else to track and take care of.

[Matt]

Even if it seems silly. Go ahead, go for it. You don't have to agree with everything, but it's available there for you.

[Joel]

Yeah, agreed. All right, we've got more to get to, including people feeling like they're handcuffed to their home. We'll talk about that. And then what actually constitutes poverty in the United States? There's been a warring war of arguments in the past week. We'll talk about that and more right after this.

[Matt]

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[Joel]

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[Matt]

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[Joel]

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[Joel]

2025. It's going to be gone before we know it. But before it's gone, there's a lot of life to live right, including a lot of kid activities, the holiday get togethers and a whole lot more. All this activity though, it can cause us to put off tasks on our to do list. But juggling a million plans shouldn't mean your future doesn't make your to do list. Trust and Will turns estate planning from a when I have time task into a quick, straightforward process ensuring you're protecting your family's future today. Go to trustandwill.com howtomoney to get 20% off their simple, secure and expert backed estate planning services. That's right.

[Matt]

It makes me think you mentioned kids. Joel I might be done having kids at this point, but my friends, my neighbors, they aren't. I've got family members who have a fresh baby at home as well and it is such an amazing season of life. But those changes should also bring about a reassessment of whether or not you've got your estate planning ducks all in a row. Trust and Will makes it simple and straightforward. Their easy to use website is simple to navigate and plus all your information, all your documents, they are securely stored with bank level encryption.

[Joel]

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[Matt]

All right buddy, we are back from the break and it is now time for what did.

[Joel]

We do during that break? Matt the people want to know.

[Matt]

I lean back and I stretch. Take a sip. Do you see me over here drinking my hot water?

[Joel]

I do. It's steaming.

[Matt]

At the very beginning I put it down without taking a sip Because I was afraid it was going to burn my mouth. I think I got it a little.

[Joel]

Don't do it right before you have to speak.

[Matt]

Got it a little too hot right before we sat down to record. But our ludicrous headline of the week comes from the New York Times and the headline reads, they rushed to buy a home during the pandemic. Now some feel trapped and I'm going to save everyone the time and having to go read this article.

[Joel]

Can I just say, it makes me think of the Dr. R. Kelly song like Trapped in a Closet. Isn't that. Remember when that album came out?

[Matt]

I more remember the Aziz joke about R. Kelly. But basically, some folks, you know, who bought a home back during the pandemic a few years ago, they found that the home, it's a little tight for them right now. It's not quite accommodating. They're growing family, it's not quite to their liking as their circumstances have changed. But of course they've got that sweet low rate and they are loathe to give it up. So with no easy way to make a change, they are, quote unquote, trapped.

[Joel]

Trapped.

[Matt]

Yeah.

[Joel]

Not in just the closet.

[Matt]

But don't you feel bad for him, Joel? I'll be honest. It's hard to feel sad for folks who bought a home. They've got some equity. They've got a locked in low rate like the folks. I feel bad for the folks out there who actually want to buy a home but can't afford to because their, their wages haven't kept up with home price increases. And yeah, affordability is out of reach.

[Joel]

I don't know if your mom ever said this to you growing up, but my mom would be like, I've got the world's tiniest violin here. I don't know where that came from, but she would, she would say that to me. She'd rub her fingers together, rubber fingers together. And that's how I feel for these people. You're locked in your home that you have equity in. Like I'm so, so saying the 3% rate. I'm so sorry for you. It just felt like such a self indulgent article from the New York Times. I don't even know why they felt like they needed to print those stories of people who are like, I've got $200,000 in equity, but I'm, I'm stuck. Because you're not stuck. The truth is you're not stuck. If you're in that case and you can totally make a difference, you've got options. You've got options. This is also by the way, if you feel like you are stuck in a home that you, that you have bought, that you're paying down that mortgage regularly, well, you could have opted for renting instead. And that's in particular a good idea if you're planning to or you're not thinking you're going to stay in a home for at least five years. Better off seven or more years. That's typically what makes buying a home make sense. And stats from just this week, Matt, show that apartment rents are down and vacancies are up, continuing to put more power back in the hands of renters and just lower costs. I don't think you have experienced this because you're a better landlord than I am, but I've experienced like decreases in what I'm able to get for my properties in the last year, year and a half.

[Matt]

Well, only because I have taken these opportunities to do some slight upgrading in order to keep that rent line.

[Joel]

So you haven't put more into it in order to be able to keep that rent or.

[Matt]

Yes, I would also be be offering those places for less as well.

[Joel]

Yeah. So most likely that's, that's where I'm at. Which, which is I, you know, I'm not mad about it. I think this is a great thing overall because rents became excessively expensive. It's, it's good news after pandemic years of rapid price increases that people experience.

[Matt]

So and let's say too especially in multifamily so like apartment complexes in particular have seen the most because of the, it's just a lot easier for developers to build those types of units as opposed to single family rents. I think we actually talked about this a few weeks ago as well. There isn't clear data on that. But yeah, it seems that those are not dropping as much as kind of holding steady at least nationwide. Obviously it depends on your specific market.

[Joel]

I think you and I would both agree that owning a home, it can be a lovely endeavor, it can be a smart choice and it can be a great long term move for a whole lot of folks. It's just not for everyone and it's not always better from a wealth building perspective. And I think that kind of cult of home ownership mentality is something that has been developed over many decades in this country and it's led people to believe that like the way to live the American dream and to build some sort of financial future for myself is to own a home and that just doesn't have to be the case.

[Matt]

That's how it used to be. But you don't have to follow that same playbook. And I think there's the folks who are talking the loudest about that are trying to encourage folks to follow the same playbook that they have taken, because they have, you know, and I understand it, because they have seen how well that's done for them, but that you don't have to follow that playbook. There are plenty of other great ways to invest. It's more accessible to. For folks to invest in the market just while you're sitting on the couch. In some ways, that's not great. But, I mean, I want to talk about even just the lifestyle. Like you were saying that homeownership is not for everyone. And I think that's something that I need to get more used to, because I love homeownership, and specifically, I even love spending money on my house and, like, the expenses that go into, like, making little changes and making upgrades. Have we talked about my dishwasher?

[Joel]

Oh, I think we did.

[Matt]

Yeah. Do we? On the show.

[Joel]

You got the fancy one, didn't you?

[Matt]

Yeah. Okay. So, yeah, but, like, on one hand, I'm bummed because I'm like, this is gonna cost, you know, was an unexpected cost that we didn't budget for. Cause the old one should have been good, but it crapped out. But of course, I'm going to end up getting a Bosch. Well, I shouldn't say of course. I wanted to prioritize to recommer reports.

[Joel]

You're getting a Bosch.

[Matt]

You're getting a Bosch. So I've got. And I got the more expensive Bosch. The one that pops open so that, you know, it's so great. Come down in the morning. The plate. Not only are the plates dry, Joel, the plastics dry.

[Joel]

Does it. Does it read a story to you at night?

[Matt]

It plays a little song. But I like. I enjoy doing that. But guess what? Those are additional expenses that you have to be willing to. To pony up and to part with your dollars in order to cover some of these expenses. When you are a renter, you ain't got to worry about that when something craps out. I mean, unless you. I actually had a renter who wanted to upgrade the dishwasher. But when something breaks, you call up your landlord.

[Joel]

That's right.

[Matt]

Speaking of another comic. Makes me like the Mitch Hedberg joke. It's like, I went to Home Depot yesterday, which was totally unnecessary. I need to go to Apartment Depot. Just a bunch of people standing around saying, we don't have to fix Jack.

[Joel]

But like that, it's one of the biggest benefits.

[Matt]

It's one of the biggest benefits. And you just got to keep in mind that that is what you're signing up for with homeownership. But of course, the folks who, they're not happy with living in an apartment, the folks out there who want to purchase a home, those are the folks.

[Joel]

That we feel for.

[Matt]

And those are the folks who feel a bit locked out of the market today.

[Joel]

And the folks in this article in particular, if you want to move, you can still do that. Like you just have to pay a bit of a price for it. But and think about people who bought at the peak of the market where like home prices have receded a little bit, those people are in a tougher spot because if your home is now worth 5% less than what you paid for it a year, 18 months ago, something like that, and you're like, I really feel like I need to do something different. You got to bring potentially a load of cash to the closing table in order to make a different decision. But if you, if you bought a home three or four years ago and it's appreciated and you don't want to sell it because you don't want to give up the low mortgage interest rate, you still have that opportunity, though. You still have that ability without losing money in the process.

[Matt]

Yeah, it just comes out of trade offs. What are you willing to value?

[Joel]

All right, let's talk about a really interesting debate that happened really over the past week.

[Matt]

This is like one of those, one of those Internet things when there's something that just blows up and everyone's talking about it. I'm a little loathe to even talk.

[Joel]

About it, but there was responses everywhere, like the Washington Post and some of our favorites responded.

[Matt]

Everyone latched on.

[Joel]

Yeah.

[Matt]

So I was like, everyone had a take.

[Joel]

It's in the water. We should, we should talk about it. So there was this viral article in the Free Press last week attempting to make the case that Americans are just so much poorer than we, than we think. And the case was essentially that the way that the US Poverty line is calculated, well, that doesn't work anymore, not in today's economy. But it was wrong, I think on a lot of levels. The author made it sound like a family of four making $140,000. They can barely make it. They're barely scraping by. It's kind of like, I don't know, some of the social media people making 250K and they're like, I don't even have any money left over at the end of the month. And you're like, how is that possible? Let's look at your budget. Oh, that's how. Well, Tyler Cowen, who's like one of my favorite economists, he wrote a response in the same publication, and it's well worth reading. He highlighted some of the realities of modern prosperity, including, like, tech advancements and bigger homes. Like, we've all got more square footage per person, fewer kids living in the same. In the same room. Food cost declines. You might have seen, you know, food costs go up recently, but over the course of decades, we've seen food costs go down in many ways.

[Matt]

We spend much less of our disposable income feeding ourselves than our grandparents did.

[Joel]

And then so much of the rest of the world, healthcare improvements. He documented so many things. The world is just not as bad as some folks want you to believe. I think that's maybe the heart of the response we want to get out.

[Matt]

Yeah, no, well, and specifically some of the standards. So the original. The original author, Green. I forget his first name.

[Joel]

Michael Green.

[Matt]

Michael Green. But it's just ridiculous. Like, these are luxuries that he's assuming that people not only want, but essentially are entitled to. And that's the part that rubs me the wrong way. The fact that, like, oh, yeah, there's a wide range of vehicles that are gonna get you to and from work. Like, you don't have to go with, like, the average or median price of a brand new vehicle today. And those, again, those are the sacrifices we make. Those are the. The trade offs that we make, as opposed to saying, oh, the new poverty line should be four times higher than four or five times higher than what it currently is right now. It's like, it makes me think of, like, if you're playing a game and you're just complaining, like, we've got. Man. Did we ever give a shout out to a listener who sent us the upgraded version of Acquire.

[Joel]

We'll link to it.

[Matt]

I'm not going to dig into that right now, but I'm thinking about the board game Acquire. You start off with a certain amount of money, and it's sort of like if I just sat there the whole time and complained that, dude, we should start out the game playing, like, with five times as much money. It would make it so much easier. But, like, guess what? That would also do? Make the game. It would ruin the game. Like, there would be no incentive to be strategic and everyone would just round after round, you would just be buying things. Except that when it comes to real life there is a response which is that supply and demand, well, okay, those units of supply are going to go up in value because there are more dollars chasing those limited goods. I was not happy with the analysis of the original author.

[Joel]

Yeah, it wasn't great. And there are other statistics I think that could really combat his point of view too. Like we highlighted recently in the how to Money newsletter that a lot more families are making $150,000 now than were 50 years ago. That's adjusted for inflation. But it's a significant difference in the number of families who have mid six figures or not mid six, not 500k but like $150,000 is really is quite a bit of money in a lot of ways. And this is also not to say that everything's great for everyone. We don't want to sound completely dense and not understand and realize that there are a lot of people living out there close to the actual poverty line who are having a tough time and who feel those grocery prices rises more than your. Your middle class family. Right. And it's, it's true. Yeah. Inflation has attacked our wallets more in recent years, really more than any other time we've seen in our adult lives and homes. Health care have gotten more expensive. But I think articles like this seem to want modern economic reality to be more negative than it actually is. They're highlighting.

[Matt]

Sure.

[Joel]

Just cherry picking statistics.

[Matt]

That's the negative, negative news.

[Joel]

Yet to reveal their worldview instead of kind of coming at it honestly.

[Matt]

Yeah. And I mean it honestly reveals their, like you said, their worldview and what they expect everyone should have been. There's plenty of people who aren't, you know, and gosh, I'm going to sound like such a media type person but like who are like the coastal elites who are very happy not having all of these amenities.

[Joel]

Are we coastal elites?

[Matt]

No, I don't. I feel like we're like right in the middle.

[Joel]

We're heartlanders.

[Matt]

We live like near ish, a major city. But we're also approaching life with common sense and grit. Like.

Anyway, let's talk about building wealth. And potentially a way that you can at least make your dollar go further is moving overseas in order to stretch your dollar. So folks who have kept up with like the fire movement know about this. It's called geographic arbitrage. But there are new stats from the Defense Department and they find that there is a significant uptick in people who are taking the strategy. And we're not talking about just like being nomadic. Like we're talking about permanently moving to an international location that has a much cheaper cost of living. And like think Portugal, Thailand always comes to mind. Even Panama down in Central America.

[Joel]

I had an old neighbor who moved down to Panama to retire and like pretty sure she's living the high life because love it, sold her house. And it's just your dollar goes a lot further down there.

[Matt]

It does, yeah. And in some thriving expat commun, I think you can also, you can find a solid community there along with these lower costs and some, you know, pretty decent healthcare options too. This isn't for everyone. I actually talked about this with my father in law recently because a buddy of his was seriously thinking about moving down, I think to Costa Rica.

[Joel]

Were you trying to get him further away from you?

[Matt]

No, no.

[Joel]

Hey, if you move down to Chile.

[Matt]

Do not have that kind of relationship with the in laws. The, the classic in law relationship. No, I love them. They're great. This isn't for everyone but I think it's worth considering, it's worth putting out there because this route could completely change your financial independence path and what your life looks like.

[Joel]

Yeah, I'm not like currently interested in moving abroad, but I'm always like a little interested.

[Matt]

Yeah.

[Joel]

So maybe someday, I'm not going to say never, but.

There are all these sort of things I've said that I would never do that I ended up doing later in life and so, but, but it does seem like one of those things where especially if you are like, I haven't saved as much as I thought I would or wanted to. How can I retire at the age I want to?

[Matt]

This is how.

[Joel]

This is a way to do that. Right. Because you're stretching your dollar so much further. You need less to be able to live that retired lifestyle that you want. On the note of travel, the REAL ID rollout, Matt has been bonkers. We've covered this a little bit over the years. They keep pushing back the implementation date.

[Matt]

Basically every nine months we provide an update for why it's not like it's supposed to be.

[Joel]

Yeah. And so yeah, this switch has just taken a really long time and there are still millions of Americans who don't have an updated REAL id. Although the numbers have gotten a lot better, a lot more people do have this in their wallet already. If you haven't updated yours, well, you're going to punch yourself. I think if you go to the airport without one because it's about to get a lot more frustrating and expensive starting February 1st, you're going to have to pay 45 bucks and go through additional TSA vetting as you go through security. If you have not upgraded to the real id, and if you're not sure whether your ID is updated, look for a star in the upper right hand corner of your driver's license. The star can look different depending on the state. I think in California, it's like inside of a bear.

[Matt]

Yep.

[Joel]

Which makes sense. And if yours isn't compliant, update your id, especially. Especially before you make your next trip to the airport. Because, yeah, not just the additional money, but it's the additional hassle. Can you imagine Matt trying to. The TSA line is already the bane of my existence. When I go, do they just hit.

[Matt]

You up for 45 bucks, like right then and there? How does it work?

[Joel]

Yeah, they probably have one of those, like, machines.

[Matt]

They got a square reader right there. They're just like, tap here to pay. And you're like, pay for what? For non compliance, sir. Right, that's what for.

[Joel]

I mean, I have a feeling it's just going to be a complete mess for people who aren't real ID compliant. So, yeah, make sure you get that done. Look out for your loved ones, too. Maybe help them make sure they have the right ID too.

[Matt]

Also doing it. That's right. Before we go, let's do a quick newsletter referral. Shout out to Louis L. And Kathleen B. Thank you for not only reading the how to Money newsletter, but sharing it with friends. And if you're listening and you've never even heard of the how to Money newsletter, head to how to money.com forward slash, you guessed it. Newsletter now.

[Joel]

Packed with all the vitamins and minerals you need to live a healthy lifestyle.

[Matt]

That's right, buddy, but that's gonna be it. So until next time, best friends out. Best friends.

[Sophie Cunningham]

This is Sophie Cunningham from Show Me Something. Do you know the symptoms of moderate to severe obstructive sleep apnea, or OSA in adults with obesity? They may be happening to you without you knowing. If anyone has ever said you snore loudly, or if you spend your days fighting off excessive tiredness, irritability, and concentration issues, it may be due to osa. OSA is a serious condition where your airway partially or completely collapses during sleep, which may cause breathing interruptions and oxygen deprivation. Learn more at don'tsleep on OSA.com this information is provided by Lilly, A Medicine company.

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[Stephen Curry]

Greatness doesn't just show up. It's built. One shot, one choice, one moment at a time. From NBA champion Stephen Curry comes Shot Ready, a powerful, never before seen look at the mindset that changed the game.

[Matt]

I fell in love with the grind. You have to find joy in the work you do when no one else is around.

Success is not an accident. I'm passing the ball to you. Let's go.

[Stephen Curry]

Steph Curry redefined basketball. Now he's rewriting what it means to succeed. Shot Ready isn't just a memoir, it's a playbook for anyone chasing their potential. Discover stories, strategies and over 100 never before seen photos. Order shot ready now at stephencurrybook.com don't miss Stephen Curry's New York Times bestseller Shot Ready available now.

[Sophie Cunningham]

This is an iHeart podcast.

[Matt]

Guaranteed Human.