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This episode is brought to you by Navy Federal Credit Union. They can help you dominate Debt with a 0% intro APR on credit card balance transfers for 12 months and $250 when you spend $2,500 on a cash rewards or cash rewards plus card.
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Visit navy federal.org Navy Federal Credit Union members are the mission. Navy Federal is insured by NCUA. After the intra rate expires, variable APRs are 15.15% to 18% based on creditworthiness. Rates are subject to change. ATM fees for cash advances are up to $1 at non Navy Federal ATMs.
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Welcome to how to money. I'm Joel.
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I'm Matt.
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And today we're talking awful AI advice, booming BNPL and frittering on fit.
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B
You know I like to explain the acronyms bnpl, Buy now, pay later. I think most of our listeners probably know that this is what we're talking about, but I never like leading with the acronyms without a little explanation. I don't want to be, I don't want this to be a jargon zone. But yeah, maybe by this point everyone does know what we're talking about.
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A
Your affirms, your klarna's. That's what we're talking about here.
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B
Yep, exactly man. Our heart continues to go out to all the folks out there in California, folks who have been impacted in a crazy way with all the fires that are out there. Hopefully there's a little bit of optimism now given the Fact that seems like winds have died down some and firefighters may have started to gain control of all the different fires out there. But it's terrible.
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A
Yeah, so many people impacted and then so many first responders going out there to help mitigate the impacts and try to tame those fires. And yeah, the interesting thing though, is, Matt, I think for people who want to give money to organizations that are helping in light of what's happened, there are great places to give, but there are also scammers attempting to try and part people from their money on the giving front. And so Charity Navigator has compiled a list of charities that they vetted. Go to charitynavigator.org we'll link to that in the show notes to the specific URL where you can find vetted charities to give to. The other thing, Matt, is people who have like, from families or individuals who were displaced by the fire. They're launching GoFundMes, which makes sense. Like, I would do the same if I was in their shoes in an attempt to kind of get by in the here and now. And one thing I noticed though, Matt, and GoFundMe is a solid platform. They don't, quote, unquote, charge platform fees, aside from the general swipe fees that Visa and MasterCard charge them. But did you notice that they have this tipping thing on there?
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B
I'm not big on the GoFundMe. So is it like the screen at the coffee shop where you can only tip 15, 20, or 25?
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A
You can bring it down to 0%, but the suggested tip that GoFundMe wants you to give is really high. It's typically in that 15 to 20% range. So if you don't notice or you're like, wait a second, is this mandatory? You might end up giving a lot more and just giving a lot to the funders of GoFundMe and the people who operate it.
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B
Sure. So does that typically go on top of the dollar amount or does it deduct from.
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A
No, it goes on top. So. So let's say you're given 500 bucks.
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B
I don't know which one is worse, seeing that additional charge hit or knowing that not all of your dollars went towards the cause that you're trying to support.
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A
Yeah, it's kind of.
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B
Again, I get a little sneaky.
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A
I get the GoFundMe itself is not a nonprofit and they need to have funds to operate as well. But it's kind of weird when you're on there and you're like, let me donate 500 bucks to this Nonprofit. That makes sense.
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B
So, so used to the 15%. It's one thing if there's somebody standing there and they're crafting a beverage for you as opposed to being like, oh yeah, here's this giant organization that's looking to make a profit should they also deserve 15% of what I'm looking to donate to somebody to help them to get by. I don't know about that.
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A
They've kind of come under fire, come under some criticism for that.
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B
I get it.
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A
I. I think it's deserved just because. And maybe they should be better at spelling it out and saying, hey, here's, you know, what we need to operate and.
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B
But guess what? I bet there's going to be better communication about it now.
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A
Yeah.
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B
Moving forward after stories have spread around on the Internet. But.
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A
And maybe just a lower suggested tip amount. GoFundMe. Because, yeah, the 90 bucks on 500 seems a little over the top.
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B
Yeah. Okay. So we recently mentioned Robinhood's plan to infuse some AI advice into its app for customers in the future. We're curious to see what that's going to end up looking like. We're also skeptical about its ability to effectively help folks make smart money and investing decisions. Well, there's a recent piece in Wired about AI financial advisors that are currently in existence and that only exacerbated our concerns about. About what's to come. So for folks out there who want financial advice, but they're loathe to spend hundreds or even thousands of dollars sometimes to speak to a human. Well, you've got an AI chat bot that might seem like a good place to turn frugal or cheap. Man, I would say. I think. You know what my answer is going to be. Clio, AI and Bright, they are two of the biggest free ones out there at the top of the charts on Apple. And you connect your account to. To these apps. So get it. So these are standalone apps. The AI, it peruses your particulars, your different transactions, and then it offers you advice based on what it sees. Guess what I don't like about this whole scenario, Joel? All of it, basically. But they're trying to sell it. You know, like, it sounds so good in the marketing materials, but in reality, you know, especially when the product is free, you gotta watch your back.
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Yeah. When the product is free, you're the product. Which means, like, they're going to try to sell you stuff. Right. These apps, Matthew. Kind of funny in one regard, because you can even ask the artificial intelligence to roast your personal finance moves. Or to I don't give you a pat on the back for maybe some of the good things you've done. And it's kind of funny some of the things that it'll tell you that doesn't mean, like, whoa, a lot of.
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B
Money now last month, huh, Joel?
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How do you know? Have you been looking at my. My budget map? Well, I think it's goofy, but I don't know that it's terribly helpful. And on the actual money management front, these apps, they end up providing advice at times, at least, that attempts to part you from your money. So if, for instance, in conversation with the AI bot, you maybe sound a little cash strapped, a little cash poor, it will recommend applying for a cash advance granted to you by Clio. Right. By the app itself.
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B
Right.
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Hey, I'm here to help you solve your problem that I just identified.
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And honestly, this is one of the issues we have with some of the neobanks out there as well. It's like, it's not that they're not providing a service. Yes. Do they offer a competitive interest rate? Yes. But what else are they also trying to sneak in the door with you downloading that app and opening an account with them?
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A
And with Clio, what they'll say is, well, if it's a really small cash infusion, we're not going to charge any interest. Right. But if you want money of any meaningful amount, you will pay Clio handsomely for that ability. And if you want the money immediately, which is what most people will want if they're in that situation, you're going to pay an extra fee for that, too. It's kind of like on Venmo, I guess, where you can choose to send money back to your account the slow way or the quick way. You're going to pay for the quick way. And the cash infusion that Clio suggests, it might only compound your financial trouble. So maybe they think you need cash, but maybe the truth is that's not the best thing for you and you're.
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B
Compounding your problem because they're not addressing the underlying issue.
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A
Yeah.
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And neither are you.
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They might try to sell you a premium membership as well. And I think the app developers, they didn't create this AI financial advice bot for purely altruistic reasons. Right. They want to get paid. They want to develop an app that makes them rich. And we're not against people's ability to build a business that helps people and makes them money. But we've also seen no evidence that these sorts of apps are the smart way for you to get money advice. And if the advice giver also benefits from selling you financial products that enrich them, I guess our advice is just to beware. It might be kind of funny and novel, but I just don't think that these apps are in people's best interest.
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B
And I think eventually the novelty will wear off as folks are getting used to what it is that these AI bot chatbots can do. And like, that's the thing, they're not all bad because, like, like, literally we're in this, like, AI brave new world, and I think it is up to us to decipher and to figure out which of these applications are there to help us and which ones are there to hurt us. Because if you think about it, from like a. Like, if you log into your credit card account, they've oftentimes got, like, little chatbots there, and you can use those to your advantage. I actually recently did this with my. The mortgage holder of our house. I had it on my calendar to log in and cancel pmi, which, this is a whole nother thing. I actually accepted PMI and didn't put down 20% back when we got the house because I got a lender credit, and I knew that that credit was. Would offset the monthly amount of that PMI for two or three years. In short, we don't want people to have PMI on their homes. But in this case, it financially made sense for me anyway. I had it on my calendar to go in and cancel that. And I was dreading it, dude, because I'm like, ugh, it's gonna be such a pain in the butt. I've never done this before. And so because of the fact that it's the fear of the unknown, I'm thinking about it and I'm just, like, dreading it. And it's just gonna be a huge hassle. I logged in, saw a chat box prompt there, and I thought, how do I drop pmi? And it told me and it took me directly to the page, which was of course buried.
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A
Like, it's a page that you would have never found.
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B
It would not have been able to find it. And by the way, PMI automatically drops off of your mortgage once you hit 78%, but you can get it dropped once you hit 80. I was at 80% and I clicked one button, boom, it's gone. And it's gone.
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A
There you go.
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B
And so this is an instance where in this case, a loan servicer, and there's other products out there too, like I mentioned, with credit cards that where you can use that to your advantage and it's there to serve you right. It's an AI customer service. But be careful when it's set up like this, in this case, which is more like an AI salesman and they're trying to sell you on the different products that they're offering.
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A
Yeah, it's not that AI is bad. It's a certain implementations of AI can be harmful. All right, let's talk about the aftermath of the holiday shopping season. Matt. I always worry seeing these stats on the back end of how much people spent and how much debt was accrued. And the numbers are just never heartening. And I think in the United States of America, we just consume, we spend, and it shows up in, especially around the holidays, and we get the data in January. Well, and Buy Now Pay later has been the hot new spending method of the moment, especially over just the past couple of years. Like the rise in BNPL has been astounding. And that continued to be the case this Christmas season as more retailers embedded Buy Now Pay later options at checkout and more consumers said, yes, please, I don't have the money or I'm not interested in paying the full price for this item right now. I'd like to pay for this, I don't know, until March instead. And so because of that, we saw Buy Now Pay later obligations increase by more than 10%. This is according to data from Adobe. And obviously, like, I don't like this. You and I, we're not huge fans of Buy Now Pay later in general because we would rather people actually feel the pain when they're making the purchase.
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B
We don't want you to soften the blow. Like, how can we make this feel even more poignant?
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A
It's not because we're masochists and we love pain and we're just like, sweet, punch me in the face. But when you feel the punch in the face of a purchase, it makes you think twice before you actually make the purchase. And it makes you question whether you have the funds to cover that purchase or not. And I'm also worried that it's not just people opting for Buy Now Pay later instead of a credit card. I think more people are choosing D all the above.
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B
Yeah.
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A
And they're saying, wait, well, I'm kind of like, I don't know, got a lot of credit card debt, so maybe Buy Now Pay later is my only option. And so they're just adding fuel to the fire, heaping on debt levels. This could, you know, result in more delinquencies it already is, it seems like. And rising buy now, pay later, on top of rising credit card payments and interest rates, it could create this nasty headache for millions of individuals and it really could harm the economy as a whole. The more you pay for today stuff tomorrow, the more precarious your finances to come. You're just like punting it down line and saying, oh, yeah, I'll pay for.
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B
That someday in the future can down the road, man. That's the. That's the American way. As opposed to doing the exact opposite. Like, that is the path to financial independence. Paying for today's goods yesterday. Yeah, because you've been saving up for it.
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A
That's right. It's like paying for your auto insurance six months or a year at a time instead of you pay it in advance, you typically get a break for doing that too, right?
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Yeah. You literally financially get rewarded for that. And just generally speaking, I think we're bucking up against the limits of consumerism in our country right now. And like, not just the financial limitations, the inability to keep spending without restraint, but also just its inability to impact our actual happiness levels. But I mean, we keep launching new creative payment products. Keep launching. There are different ways for people to get into debt in an attempt to fuel spending, but that spending can't outpace wages forever. And the system isn't set up to help you to make wise choices. But that is why the show exists and this is why we talk about what it is that we talk about. And so that's from a financial lens, but going back to the happiness point of view as well, it's not just a lack of dollars and cents that are gonna keep us from being able to continue to spend in this way. But like, how long are we going to continue to like common sense as well? We continue. Or just Americans, broadly speaking, if we continue to make these same purchases, slash mistakes, thinking that it's going to continue to sort of boost our happiness levels as opposed to the things that we oftentimes will point to. When we get a little more philosophical here on the show. The things that truly do bring happiness, like social connections, deep relationships, feeling like you are a part of something bigger. These are the things that folks should be looking to, as opposed to maxing out their credit cards, maxing out the number of items that they can cram into their house, or even like on the more financially savvy and literate thing to do, which is like maxing out your retirement accounts. That is something we do want people to do. And that's a Healthy step to take towards financial independence. But that's not necessarily gonna bring about happiness, which is I think, what a lot of folks are after. You know, like, what does it mean to lead a rewarding life? Like what does it mean to be human? Well, yeah, you know, like these higher level questions are what I'm pointing folks towards here.
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A
Going back to something a little lower level, it makes me think of the release or the announcement of the release of the new Nintendo Switch. Right. Nintendo Switch 2 coming out this spring. And just thinking about the limitations of improvement to some of the products that we're interested in buying. We talk about this when it comes to cell phones, right? How the, oh, now you can get AI in your, in your iPhone.
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B
But just like how, hey, this one's got another button.
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A
Yeah. How incremental the improvements are. I think the same thing is true for the Nintendo Switch. You and I were just like reminiscing about how groundbreaking the N64 was when it came out. And it was a cool system. I mean, GoldenEye, what a classic game, right?
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B
Amazing.
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A
But I just think that we're at this point where the marketing mechanism has to kick into full gear to try to convince us that we need this thing. That when we actually compare the things side by side, we're like, wait a second, what am I actually getting for the money I'm spending? Because it feels like what you're getting.
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B
Is the shiny new. Yeah, you're getting the novelty. Right. I think this is a part of the reason why just kind of going back to AI, why that's so appealing is because it's novel, it's new, it's shiny, it's different. It's not that it provides like that much utility necessarily unless you are able to utilize it in I think, the proper way. But like that's what people are paying for as opposed to actually looking at. Is there a legitimate benefit that this new Switch is going to provide? To me, I think for some folks out there, like the hardcore gamers, they'll say, yeah, but I think for the vast majority of folks, what they might see themselves getting sucked up into is that marketing machine and the hype.
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A
Another reason that people spend, Matt, is and sometimes they do this without realizing it. They spend to please others, to make other people happy. The New York Times had an interesting article about that actually this week. And I think sometimes we spend money we don't have because it's been normalized. It's like, well, yeah, this going out for drinks after work, even though I can't actually afford the drinks. It's what people do is what everyone does. And so I can't buck the system.
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B
And it kind of. It feels a little less selfish if you're doing it because, like, what I just kind of pointed to relationship. And if you're thinking, well, oh, here's a way I can kind of help to grow those relationships and those social connections.
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A
Yeah.
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B
And so I think that that might be. I don't know, I can see that being an excuse for folks to maybe spend money that they don't have.
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A
But the truth is it is an excuse because there are other ways to grow your relationships without spending money. And I think if you struggle with people pleasing or going with the flow and it's costing you money, it's worth taking some time to, like, dig deeper and find out why. I don't think there's like a quick fix for this necessarily, but becoming more comfortable with discomfort, more comfortable with saying no or being left out of something, that could be the key. Maybe for some people at least listening to this, to saving more in 2025 and, you know, money success, it might just look like having harder conversations and growing more individually this year. For some folks, Matt, it might even mean talking to a money therapist. I think about our friend Asia Evans, who we had on the show. Maybe a money therapist is like the right person for you to talk to and that's actually gonna help you fix some of those leaks. And those leaks are coming from the fact that you feel compelled to spend because other people are doing it or because it has become normalized in our culture.
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B
Totally. And of course, like we always do on our Friday flights, we'll link to some, to these different stories because this one in particular, I think can be helpful for folks. I will say one thing, like one complaint I had is that a lot of the different things that they said that you could do to kind of push back on spending money were like, they would qualify the behaviors. Like, they would say that it's okay to say that you can't do this if it's financially stymieing your progress or if you are in financial debt. But like, I would even take that a step further and say, no, no, ifs necessary. If you are able to sort of self analyze and think about this for a second and you realize that these expenses, these expenditures aren't getting you closer to whatever your personal goals are, then then you can say no, no matter what. Like, I don't like. It doesn't have to be.
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A
You don't have to have a good reason.
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B
Yes.
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A
To other people.
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B
It doesn't have to be something that you can point to aside from you just saying, well, that doesn't. I don't value that or that doesn't fit within my story. I think the ability for folks to do like that, to me is the more uncomfortable part. Like, I like that you. What you said about, like, kind of leaning into the uncomfort a little bit. And oftentimes folks will put the blame on their financial situation and their circumstances and they'll say, well, I can't afford that. Right. And I think it's easier to place the blame on that for sure. But what that does then is it kind of perpetuates that narrative of saying, oh, well, if you have money, you spend it and you spend, spend, spend until you don't have any money anymore. And it sort of normalizes that narrative as opposed to more the path and more. The approach that we try to take here on the show is making sure that your spending aligns with your values. And sometimes what that looks like is financial health. And you just don't want to spend your money in this way because it just doesn't resonate with you.
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A
That's almost like a negative response versus a positive response.
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B
Right.
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A
And the negative is like, I can't do this because. How about I can't do this because. Because I got this other awesome thing that I'm working towards. And I think that's just a better way to respond. I think it's encouraging, actually, to the people around you and it helps them understand. Maybe they feel less, like depressed on your behalf and they feel more excited for you because. And you're able to kind of convey something like that's deeper and more personal with your quote unquote excuse.
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B
There's more depth.
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A
Yeah, yeah.
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B
And there's more depth there as opposed to kind of like, well, run out of money.
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A
Yeah, yeah, exactly. We've got more to get to on this episode, including, we're going to talk about getting fit in 2025. And one pitfall. I think that could cost you money if you don't play your cards right. We'll get to that and more right after this.
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Debt payoff is the number one financial goal that Americans have for 2025. I love seeing that because, Deb, consumer debt, it can be such a bummer. It not only puts you in a precarious financial situation, the stress that it creates, it can be overwhelming. It impacts every other aspect of your life. That's why Navy Federal Credit Union is here to help you. They have all the financial tools and resources you need to dominate debt Right now. They offer a 0% intro APR on credit card balance transfers for 12 months.
- [21:11]
A
That's a pretty sweet offer. You can also get $250 when you spend $2,500 in your first 90 days on a cash rewards or cash rewards plus credit card. Visit Navy federal.org to start dominating debt. Navy Federal Credit Union members are the mission. Navy Federal is insured by NCUA. After the insure rate expires. Variable APRs are 15.15% to 18% based on creditworthiness. Rates are subject to change. ATM fees for cash advances are up to $1 at non Navy Federal ATMs.
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A good suit it can make you feel like a million bucks, but it doesn't have to cost you an arm and a leg. From tying the knot to leading meetings at the office, look and feel your best this year with a suit made just for you at an unbeatable price. With Indochino, you can customize every detail. I'm talking about the lining of your jacket, the lapel shape, buttons. Put together your best look yet@indochino.com and use code howtomoney for 20% off orders of $499 or more.
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Matt we were able to get customized Indochino suits and we love them. Getting to customize everything, it kind of endears you to the final product in a different way, including the best friends out embroidering on the inside of the jacket. Takes a couple of weeks for your custom suit to arrive. The fit and the fabric though, they're second to none. I feel like a total stud when I hit up a wedding in my Indochino suit. My next one though, it's going to be tweed.
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B
Matt Ooh, I like it man. Yeah. You can even set up your measurement profile on Indochino's website and you can choose customizations without even leaving the house. Or sign up for a premium in person experience just by booking an appointment at a showroom near you and let an Indochino style guide walk you through every step for your 2025 plans. Look your best in Indochino. Visit Indochino.com and use code how2money to get 20% off any purchase of $499 or more. That's 20% off at Indochino.com promo code howtomoney. A new year often feels like it offers a chance to spark real change, but resolutions can feel daunting, especially when they're important Joel like creating a will or a trust. It may feel overwhelming, but you know it's about time you did it. Well. Trust and Will they make creating your will easy like lounging on the couch easy. And you can get 10% off now@trustandwill.com howtomoney that's right.
- [23:28]
A
I created my will with Trust and Will. A task that sounds painstaking was actually quite pain free thanks to Trust and Will. The website is intuitive, it's easy to use, plus the peace of mind from getting this done. It's invaluable. The other cool thing is that Trust and Will is designed by attorneys, but it's customized by you. Each will or trust is state specific, legally valid and customized to your needs. Ensure your family and loved ones avoid lengthy, expensive legal proceedings or the state deciding what happens to your assets. Their simple step by step process guides you from start to finish. One question at a time. You can save your loved ones time and stress by having all your documents in one place with bank level encryption.
- [24:08]
B
Check one of your goals off early this year with Trust and Will. Protect what matters most in minutes@trustandwill.com HowToMoney and get 10% off plus free shipping. That's 10% off and free shipping@trustandwill.com HowtoMoney so here on the podcast I know listeners have heard me talk about how I like to always have a big annual finance meeting with Kate right as we've wrapped up a great year as we are kicking off a new one. We are nerdy like that and each year is an opportunity to reflect and to plan for the future like setting career goals or making financial moves and most importantly, ensuring your family is always taken care of no matter what happens. Make this the year that you check life insurance off your list and protect your family's future. With policygenius you can find life insurance policies that start at just $292 per year for $1 million of coverage. Some options are 100% online and let you avoid unnecessary medical exams.
- [25:03]
A
Matt I just double checked our life insurance policies to make sure we're adequately covered. We are thankful for that.
- [25:10]
B
Nice.
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A
It's a good idea for everyone out there to do that, particularly if your family needs have changed recently.
- [25:15]
B
Right?
- [25:16]
A
You want to ensure that you have life insurance to cover loved ones expenses if something happens to you and policygenius makes a potentially onerous task easy as pie.
- [25:26]
B
Secure your families tomorrow so you can have peace of mind today. Head to policygenius.com to get your free life insurance Quotes see how much you could save. That's policygenius.com we are back from the break and Joel, we're not talking about getting financially fit, we're talking about getting yoked. But before we get to that, it is now time for the ludicrous headline of the week, which is from the Journal. The headline reads, more men are addicted to the crack cocaine of the stock market.
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A
That's a clickable headline.
- [25:58]
B
And it's easier than ever to of course get addicted to pretty much anything under the sun. You know, we've talked about shopping addictions recently. We've talked about the rise of sports gambling. But this article was all about the allure of something that we hold up as a wonderful thing. And of course that is investing. And they kind of specifically were targeting options as like the actual crack cocaine. But just, I mean, generally speaking, when it comes to investing, if you approach it the wrong way, not only can you hamper your returns, you can find yourself with a debilitating addiction that's going to harm relationships that can oftentimes take years to recover from. And I think this is another reason to avoid investing in individual stocks or speculative meme coins. You know, like, initially it might seem fun at the outset. And I think if you have the discipline and the wisdom to be able to keep things in check. If you're like Brian Ferraldi, we had him on the show, he invests in single stocks. Yeah, you might outperform, but the downsides are significant. I think, like, it makes me think about, like I just mentioned shopping addictions. You gotta go to the store. There are certain things you gotta buy no matter what. They're necessities. And in a similar way, that's how I think about investing. It's like you gotta wade into the waters. Like, no, if you want to grow your wealth, you have to invest your money. But like it is, it's so important though to just know thyself. If this is going to be a slippery slope for you, there are ways for you to set it and forget it. There are ways for you to not download the apps onto your phone to where you're going to be tempted to make some of those late night trades when maybe you're not in the best state of mind to be making those large purchases or sales.
- [27:30]
A
In that poll, I think for risky behavior is more prevalent than it's ever before. And I think when I say more prevalent, I mean you used to have to like jump through hoops to, to do some of this risky behavior. And now there's essentially no social stigma because you can do it from the privacy of your own home. And nobody knows maybe some of the nefarious things you've been doing, no matter what it is that you're doing online. And there's more anonymity. And it's just the wheels have been greased, Matt, for us to.
- [27:59]
B
Stabilization of it.
- [28:00]
A
Yeah. For us to partake in some of this antisocial or addiction prone behavior. And even like it's been glorified in some ways. I think about just all the ads for sports gambling now that are all over the place or just those investing apps. It's like they make it sound like you're being empowered to take control of your own future, but really what's happening and what they're incentivizing you to do is to trade frequently so they make money instead of you building wealth over the long term. And Vox just wrote a piece called Sports Gambling should have Stayed in Vegas. And you know, those ads are all about free money for your first bet. It sounds so great. But then so many people end up getting hooked and then there are so many games to bet on and, you know, I don't know, whatever we want is at our fingertips in a moment on these smartphones. In some ways that's cool, like all the information in the entire world. But how are we actually using our access to that information in the case of a YouTube conversation or a podcast, like, that's really neat. The access that you have to certain conversations that you never would have been privy to, never would have existed before. But, you know, I think the lack of friction often causes us to not think twice before doing something that's not going to be good for us.
- [29:11]
B
Yeah, we're already doing it before we've even realized it. If you were a gambling addict before and all your neighbors saw your car at the casino all the time, like, that says something. As opposed to, like, you on your phone, which honestly can look like productivity. That can look like, oh, man, that guy is like, he's really getting after it. Look at him over there, emailing.
- [29:28]
A
Yeah.
- [29:29]
B
Getting back to his bosses or his boss or, you know, leading other folks on his team, that sort of thing.
- [29:34]
A
I randomly met somebody recently and she told me that she was telling me how her husband switched jobs and his new job is day trading from home. And I had so many questions. But I was also just a little. I didn't want to pass judgment or be a jerk or anything like that. Yeah.
- [29:47]
B
You're like, oh, that's interesting.
- [29:49]
A
Tell Me more, tell me more. But I just, it made me nervous to think that that's his new job right now. And there's just a lot of potential downside. I think if you're making trading your number one thing.
- [30:01]
B
Did you see that the CFPB that they went after Capital One this past week?
- [30:05]
A
Oh, yeah.
- [30:06]
B
What do you think about that?
- [30:07]
A
Well, one, the CFPB has been incredibly active. Cfpb, Consumer Financial Protection Bureau.
- [30:12]
B
They've been like yet another acronym, tossing.
- [30:15]
A
Lawsuits out right and left. Right. I think that what they're saying about Capital One is that, hey, Capital One cheated customers out of interest and. Well, why, why are they saying that? Well, Capital1 had two different savings accounts that they had on offer. One of which paid a non competitive interest rate like 0.3% and then the other one, their performance savings account paid what? Like, you know, competitive rates, 4.5 to 5%, whatever. And I feel two ways about this lawsuit, Matt. I think one, I don't love the deliberate confusion that Capital One was kind of partaking in. Like, why have the two savings accounts? I don't necessarily get it, but so.
- [30:50]
B
Here, I guess, here's my pushback on that point, which is that a lot of banks do this.
- [30:53]
A
Yeah.
- [30:53]
B
And so like even our favorite online bank, cit, they've got like a regular old crusty savings account that pays 1%. But then they've got the one that we talk about all the time, which is the Platinum Savings. I don't even. Platinum Savings Connect or something like that. Actually. No, not the Connect one. That's another one that has a low, that has a lower rate, but the Platinum account, which is like still like four and a quarter.
- [31:14]
A
Yeah.
- [31:15]
B
And so I guess that's the part of it where like I'm not like an investigative journalist. I don't know necessarily why banks have these multiple savings accounts, but like choose the one that is offering the higher rate.
- [31:26]
A
I'm guessing it's because they're assuming that some people aren't going to pay attention. And that's the thing, you have to pay attention.
- [31:31]
B
Yes. But it's interesting why it falls to us as individuals.
- [31:34]
A
It's interesting to me though that the CFPB is going after Capital One for the two savings account thing, one of which doesn't pay very much. When the big banks are paying nothing at all on savings consistently on anything, they're like, hey, we don't offer any good savings accounts at all for anyone ever. And Capital One, even their crappy savings account was better than what the big banks offer. So I guess I'm kind of shocked and surprised that the CFPB thought this was worth going after.
- [32:01]
B
More than anything to me is just annoying because like it just seems like there's like a flurry of activity that looks like it may not have any teeth, may not stick at all. Yeah, but Joe, let's talk about some frugal living. There is this profile. Did you see the profile of the shoe brand Skechers? Oh yeah, in the Journal.
- [32:17]
A
You've got a pair, right? Do you have the kind with like the wheel in the back?
- [32:20]
B
That's not Skechers. Those are wheelies.
- [32:21]
A
Oh, are they or Heelys?
- [32:23]
B
Heelys, I think they're called Heely.
- [32:24]
A
Is that a completely different shoe brand?
- [32:25]
B
I think so.
- [32:26]
A
Okay.
- [32:26]
B
I don't, I never had those as a kid. This write up though, the summary was that all the other shoe brands out there that they were essentially gunning for expensive clientele, they were forgetting about cost conscious customers like us. So you got like Adidas, Nike, Hoka, even on the on air shoes or whatever going after the, the brand that goes after the tech bros. They've been throwing punches at each other while all the while Skechers, they've been above the fray. There's essentially been this race to create like a multi hundred dollar super sneaker. And yet Skechers is succeeding wildly. They've had a great past five years. But I just love the fact that they are still appealing to customers out there who are cost price conscious. Personally, I like to buy my shoes on ebay. I don't know, I kind of see them almost like vehicles. Like you buy a brand new pair of shoes. Some folks like the, they're like, oh yeah, that fresh sneaker. You get the toilet paper, you know, the branded paper that you're pulling out of the shoe and it's all wrapped up. I don't care about any of that. Like I don't care about the new car smell. Let somebody else take that depreciation.
- [33:30]
A
Are you buying used sneakers or new but discounted?
- [33:33]
B
Both. Like I'm not gonna buy a pair of shoes that are like worn down or whatever, but sometimes like they don't have the box, but you can tell that they're basically brand new. Or maybe somebody wore them for like, I don't know, a week before they decided that, oh, this shoe isn't for me. But the ability to get great shoes drastically discounted, man, that's the way I like to roll.
- [33:50]
A
I've noticed that shoes are kind of going the way of cell phones, like they're being upgraded and it's the new. Instead of the number six version, it's the number seven, number eight version. And they're just changing every year, ever so slightly.
- [34:05]
B
You're on the upgrade cycle and I'm.
- [34:06]
A
Guessing that the improvements are negligible. So I'm all about buying the previous year's version or multiple years.
- [34:13]
B
I mean literally, like what is it? My ultras, Lone peak. Yeah, they're on like Lone Peak 9, maybe even 10 by now. But like, you know, I'm a big fan of the sixes and the sevens, which there are a lot of folks still selling them. Yeah.
- [34:25]
A
If you can find some still around, you're gonna save a whole lot of.
- [34:27]
B
Money, especially once you know your size and you can just. Maybe this is more of a old dad kind of move, like going back to the same shoe and just being like, I know the shoe fits, I know the exact size, I even know what color I like. Let's see if I can find a pair.
- [34:38]
A
Well, again, I mean they make it sound like there's all these improvements that are done year over year.
- [34:42]
B
It's a tennis shoe, it's a sneaker.
- [34:43]
A
Man, how many improvements can you really make? Not that there aren't some.
- [34:47]
B
Right. But, but I do like the fact that Skechers, that they've kind of been under the radar and while all these, while all these other big names are duking it out, they're able to swoop in and take a whole lot of market share.
- [34:58]
A
Yeah. And consumers, Matt, they want lower cost options, it seems like on everything these days. And so it's really interesting to see a brand like Skechers taking advantage of that reality when everyone else is literally fighting for the expensive high end consumer. That and there's just fewer of those people to fight between, which means Skechers is succeeding. And if the name brands aren't going to give us the discounts, well, somebody else is waiting out there to try and win our dollars. And this is evidenced too by the fact that store brands are thriving right now at the grocery store retailers like Walmart and Target. They're expanding and they're improving their store brand offerings. I noticed Walmart like has this new line of store brands. They look kind of cool like, yeah, like almost like Trader Joe's esque in like the flavors they're putting in there and just kind of the higher quality store brand items where it's not the great value brand. Like they're trying to distinguish and say no no, we're going. We're going to something that we got.
- [35:50]
B
To drop the great value, just like they dropped the skinny logo. Did you see the new logo?
- [35:53]
A
The beefier logo?
- [35:54]
B
So now they're offering beefier store.
- [35:56]
A
They're obviously not dropping great value because that's like bargain basement prices for a bunch of stuff that people want every day. But if you're looking for something a little more inventive, Walmart has your back with a new store brand. And the price gap between name brands and store brands has grown, which means trading down will save you even more than it did years ago. And there was this article in Sherwood News and there was a quote on the rise of store brands. And it said, the pricing that's built into a branded product is 99% of the time not driven by higher quality. It's driven by the fact that branded company has to pay for the marketing to maintain their brand position. So I think there's a lot of truth there, Matt.
- [36:34]
B
Totally believe it.
- [36:35]
A
It's those super bowl ads that Doritos has to pay for or whatever to kind of keep them in the forefront of your mind. And I just think this is a good reminder to not neglect store brands. And think about the fact that at Lidl and Aldi, they come with a fantastic money back guarantee. If you try it and you're like, this sucks. This is not as good as what I'm used to. You take it back and you get your money back. Right. And the best store brand, in my opinion is Kirkland Signature. Still, like when you get a Kirkland Signature product, typically it is as good or better than the name brand equivalent. Although I will say it doesn't come with quite as much money savings. It's high quality, but not quite as much savings as you're going to get with like Lidl or Aldi store brands.
- [37:13]
B
Totally get it, man. Yeah. The last time the. Was it like a Pinot Noir that we cracked open at our last pizza movie night? It was really good.
- [37:20]
A
Yeah.
- [37:20]
B
Really enjoyed it. It's like, pick up a bottle of that. Yeah. Next time we're there at Costco, $12.
- [37:24]
A
Bottle of wine, which is about as much as I'm willing to spend.
- [37:27]
B
It tasted more like a $20 bottle. I'll be honest. While we're talking about what different companies are out there doing, Planet Fitness is growing like crazy. There are now over 2700 locations around the country. And Planet Fitness says that it wants to grow to 5,000 locations in the coming years. It's a pretty rapid Growth plan.
- [37:46]
A
Everywhere you look, it's gonna be like Starbucks now.
- [37:48]
B
Well, it's just a ton of gyms to imagine as well. It's like there's gonna be a Planet Fitness on every corner.
- [37:55]
A
Like Walgreens now. Planet Fitness.
- [37:57]
B
Yeah. Can they make their closing stores right?
- [37:59]
A
Yeah.
- [37:59]
B
I mean, fascinating. But here's what's really interesting. The average Planet Fitness gym has more than 7,200 members, which is a ton of people. Can you imagine that many people in the gym maybe, like, at the beginning of the year? So, yes, you can imagine it, but.
- [38:13]
A
The first week you saw it.
- [38:14]
B
What that means, though, is that there is not actually enough room for everyone to work out, but that. That makes it kind of sound like that the growing gym count is a necessity, which maybe it's true for the company, for them to expand their locations, but it also reflects the fact that too many people are paying Planet Fitness without actually going to the gym at all. So keep this as just a reminder for folks who might be falling into the subscription trap. If fitness is One of your 20, 25 goals, that's great. But don't pay a gym month after month with hopes that maybe you'll get the gumption to go one random morning. I think it is cool that Planet Fitness is inexpensive. It's pretty dang affordable. It was only recently that they changed the pricing from $10 a month to. I think they upgraded it to 15. But it only matters if you actually do the dang thing. And so doesn't matter how cheap it is. Yeah, exactly. Otherwise, you're just. You are actually frittering those fitness dollars away.
- [39:07]
A
Yeah. And, I mean, I think the gym membership for some people might be the best investment they ever made. Yes. But I think it's actually interesting. Planet Fitness is at that price point where some people continue to pay and they'll say, yeah, it's. It's 10 bucks a month, 15 bucks a month.
- [39:20]
B
You can stomach it.
- [39:21]
A
It's not that much.
- [39:22]
B
Yeah, but if it was CrossFit.
- [39:23]
A
If it was CrossFit, it was 180. You cancel because you feel that junk if you're not going, Right.
- [39:28]
B
Yeah. Do what works for you. Like Emily. She goes to a fancy workout class situation, but she's going five days a week like clockwork. Freaking amazing. I love that. And I also love that there is an option out there for folks who are looking to only spend $15 a month. But on the note of paying top dollar, make sure you also know how to cancel your membership, because that's maybe this is something I've. That I experienced firsthand.
- [39:51]
A
I think you shared that. Didn't you say it?
- [39:53]
B
I talked around it because I didn't want to talk badly. But make sure you know what the fine print is when it comes to canceling the membership and how much of a window, how much of a heads up you might need to give a gym. Again, you're talking about one of these big box places like a Crunch Fitness or Planet Fitness or whatever. And it's not that big of a deal if you get stuck with one more month. But especially for some of the more specialized gyms that have the nice classes where maybe you are paying closer to $200 a month. Well, that's definitely enough money to notice and maybe something that is still ruffling my feathers.
- [40:25]
A
Yeah. And they might require 15 or 30 days advance notice, which I mean. Yeah, it's just in the fine print. It's how they roll, even though it's a little uncouth. So you just have to know what the rules are. So you cancel so you don't pay that extra month that you're not going to use. All right, that's going to do it. For this episode, Matt, we'll put links to some of the articles that we mentioned up in the show notes on our website@howtomoney.com tons of resources up there including the how to Money newsletter. If you haven't subscribed to that, please do sign up@howtomoney.com newsletter. It's free and shows up in your inbox every Tuesday. We promise no spam.
- [40:58]
B
You know it. We hope everyone has a fantastic weekend. We'll see you back here on Monday. Oh, by the way, everyone have a fantastic Martin Luther King Jr. Holiday. Federal holiday off. But we will still have a fresh episode here waiting for you, no doubt. So until next time, buddy.
- [41:12]
A
Best friends out.
- [41:13]
B
Best friends out.
- [41:29]
A
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Do you want to understand an invisible force that's shaping your life? Do you want to experience the frontiers of what makes us human? On tech stuff we travel from the mines of Congo to the surface of Mars, from conversations with Nobel Prize winners to the depths of TikTok to ask burning questions about technology, from high tech to low culture, and everywhere in between. Join us Listen to tech stuff on the iHeartRadio app, Apple Podcasts, or wherever you get your podcasts.