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Virtual prepaid card allow 15 days qualifying.
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Unlock device credit service port in 90.
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Plus days with device and eligible carrier and timely redemption required.
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Card has no cash access and expires in six months.
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Welcome to How To Money. I'm Joel.
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I'm Matt.
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A
Today we're talking cheap Chinese AI. Free tax filing and outpacing infl.
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B
It's hard for you to say cheap Chinese AI when you immediately think of like food. Let me just. Let's just run out and grab some cheap Chinese food. No, we are going to talk about Nvidia. They're still not doing great but how.
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A
About Kung Pao chicken instead, which is.
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B
That your go to Kung Pao. A little bit of sesame chicken.
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A
Oh I like the sesame chicken typically.
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B
Okay, so there's a place nearby where it's a Chinese place, but you get like a dry crispy beef I think is what it's called on the menu. Oh my goodness. So good. Skip over the lo mein noodles and everything else on the menu. Dudes, forget the orange glazed General Sal's. The crispy beef and the tingle that you get on the lips with the Szechuan. Oh, so good.
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A
If only this were a food podcast.
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B
It's been forever since Kate and I have been there, but we need to add that back to our date night list.
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A
Yeah. Okay, so we got a lot to get to. But real quick, Matt, I just wanted to mention something. A personal note. And we talk about this. Sometimes people will ask us about canceling a credit card. Hey, does it make sense? Is it going to negatively impact my credit score? Too much. And our thoughts are often, hey, try not to cancel it if you can avoid it. I mean, if you don't have need for a great credit score in the near future, who cares? You can probably cancel it. No big deal. It'll rebound.
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B
But if not, just stick the card in the drawer and just don't spend on it.
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A
That's right. But if it's got an annual fee.
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B
Then the you don't want it costing you.
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A
The stakes are higher. Right. And so I actually recently canceled or didn't cancel. I downgraded my Amex Blue Cash preferred card to the no fee kind.
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B
The 6% groceries.
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A
6% groceries? Yeah, because I wasn't getting enough value out of it. Because you know why I do most of my grocery shopping at Costco now?
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B
Spending all your money. Costco's more expensive, you know, but I'm.
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A
Doing the instacart hack that I told you about and it's saving.
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B
So you're spending way more money.
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A
No, I'm spending the exact same amount of money and actually probably less because of fewer impulse purchases at Costco.
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B
Track your spending, get it all together. We'll look at it at the end of the year if you want.
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A
I'll let you know how it shakes out.
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B
Costco's expensive. I mean, compared to Aldi. At least you're not spending at least because the threshold, I'm pretty sure it's like 300 bucks. If you're spending 300 bucks at Aldi or Lidl or something like that, you're not, you're not even spending that much at Lidl every month.
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A
No, I'm not, to be honest.
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B
Cause I think because It's a like $100 or $95 annual fee and the additional 3. So you get 3% cash back with your everyday card and you're paying nothing with annual fees on that card, but paying that basically a hundred bucks gets you that additional 3% cash back. So you got it. There's a threshold, and I'm pretty sure it's like 300.
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A
I'm just not hitting it right now.
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B
50. 300.
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A
Yeah. Just not hitting it.
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B
So I was like, it's time we spend that much in, like, one visit when we go to.
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A
You got a lot of people feed.
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B
Well, and we just. I mean, we also do spend less at Costco, which brings up an interesting point, because it's limited to. There's an annual cap, and I'm pretty sure it's at $500. It's a $6,000 limit because it's like, hey, you can earn 6%. I know, on the Blue Cash preferred card, up to $6,000, but beyond that, you only earn 1%. And I just realized I don't think I've ever tracked our spending from the standpoint. Have you gone over that? Yes, I bet we have, because I know that we've always at least spent $300@ Aldi Lidl and other random spots like Kroger Republic's, but, man, I bet there's a good chance we've actually gone over that, where we're only earning 1% on every charge. Who knows? Maybe by the time we hit, like, October or something like that. And I've never tracked.
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A
You gotta pivot.
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B
I've never tracked my spending from the standpoint of how much or how many annual dollars have I put on this preferred card. And I'm about to add a new cell to my spreadsheet buddy.
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A
Yeah, you might have to get a little more granular with it, which sounds like something you'd be into.
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B
I love this kind of stuff. Then I'll tell Kate, beyond a certain point, that's when we switch to double cash card. At least get 2%.
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Yeah. Word of the wise out there. If there's a card that you have an annual fee on that you're not getting enough value out of, you could cancel or you could just reach out. I literally did a quick chat on the American Express website, and I was like, can you downgrade me to the Blue Cash that doesn't have the annual fee? They're like, sure, we'll send it out. It took almost no time. Going to save me 95 bucks a year.
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B
If you're not taking advantage of what they're offering, there's no sense in paying for it, man.
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A
That's right. Let's get to the Friday flight, sampling the stories we found interesting this week. Matt, let's start with the big one. It happened on Monday. Sent the stock market into a tizzy. Do you know what we're going to talk about right now? Of course I do. Okay, so the Deep Seq AI, the Chinese AI system that impacted tech stocks to a significant degree. Nvidia, which has been the high flying stock of the last couple of years, shed $600 billion of value in one day, which I think was the largest dollar amount dropped for any stock in history at any point in history. Which makes sense, right? All because of this Chinese app, this, this upstart app called DeepSeek, which hit the App Store, the Apple App Store. And so Deep Seq is a Chinese artificial intelligence company and it created what some are calling a superior AI product that it's at least as good, if not better than many of the American made artificial intelligence products currently on the market. But the big news is that they were able to do it at least apparently for a fraction of the cost, like 6 million bucks, using a whole lot less of those super fancy, incredibly expensive chips that a company like Nvidia would make, which is why it impacted them. And then Marc Andreessen, who's, you know, big time tech nerd, founder of many startups, he called it AI's Sputnik moment. Matt, I wasn't alive back then when Sputnik launched, but the space race, when you read about US history, that was a big moment in US history, essentially propelling us towards greater heights and towards beating the Russians into space. And since we live in a globally connected world, that impacts American artificial intelligence and tech companies. But as the news I think has been digested, this is actually maybe not as bad as it initially seemed. It could be actually good news for a whole lot of tech companies because it means they're going to be able to get more bang for their buck on AI spending. That got incredibly expensive really fast. And this, Matt, what this made me think of was Moore's Law, which is essentially the fact that chips, that the silicon chips, they get twice as good roughly every two years. And actually that's happening at a faster rate than what Moore's Law would state right now. I believe it, that increased efficiency reduces energy needs for artificial intelligence, which has been a problem, something that's been talked about quite a lot, how much energy artificial intelligence is siphoning and it should lower the costs meaningfully. I think ultimately this is probably a good thing. American companies, they're not going to be left in the dust for long. I guess some people might be wondering, oh man, should this change how I invest? I saw the stock market just get slammed on Monday. I get maybe that impulse. But our answer, as always, Is no, but it is why you should have a diversified portfolio.
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B
Absolutely. This is why you do not invest in single companies. Makes me think about the burgeoning narrative about stocks overall, like the wide stock market being overvalued. And that might be true, particularly in certain segments of the tech sector. But even if stocks in general and some particular ones are overvalued, there's not much that you can do besides just continuing to invest. We still like dollar cost averaging because honestly, what's the alternative? Investors, I will say, who are, let's say, getting closer to needing their money. If you are getting closer to your retirement years and you're a little more in the wealth preservation stage of your, I think it might be worth considering a more conservative approach. For instance, Vanguard, they're suggesting these days the 4060 balance instead of the often touted 6040 allocated portfolio. So more of a 40% exposure to stocks, 60% bonds. And this is largely because of their view that stocks come with a higher volatility. But don't let these stock market stories, these blips, the ever shifting narratives change your approach. And you mentioned the how deep Seek, the Chinese company was able to do it more efficiently. There's like investigations now as to whether or not they were actually cribbing open AI notes a little bit. Essentially, I think they're calling it distillation, where it's like, wait a minute, this other large language model owned by the Chinese was actually learning from OpenAI ChatGPT essentially, without doing all the hard work, which makes sense.
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A
I mean, Joanna Stern in the Wall Street Journal had a really funny article, basically lightened ChatGPT and Sam Altman on fire about that, say, hey, you basically stole all this information from creators across the Internet.
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B
Sam Altman would say, well, I'm doing the hard work though of creating the actual large language model. Whereas Deep seq, they're just. I almost think of it as like a. Almost like a white label, you know, like you buy products and it's like, okay, you just slap the label on there and all of a sudden it's a new product. It's like, oh no, no. Other companies still actually did the hard work of the initial lift, I guess.
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A
All I know is there's a lot of creators out there who didn't give any permission to Sam Altman to crib their writings, the things that they've created. And yet they got taken anyway. So maybe a little bit of karmic justice. But Matt, it's not just artificial intelligence. That space being upended by Change. Diamonds that you dig out of the earth are also being upstaged by lab grown diamonds. This is something we've talked about in the past. But this sea changes accelerating more quickly. Natural diamond prices have gone down in price by 8% recently, largely because lab grown diamonds are becoming more popular and cheaper. Lab grown diamond prices have actually plummeted by 75%. So it's no wonder that people are saying, yeah, I'll choose that option instead. If you're like, proposing to your sweetheart or something like that. Right. They're essentially equal stones. Like, the naked eye can't really perceive a difference between lab grown diamonds and diamonds that are dug up out of the ground. And so, you know, brides and grooms, they're taking notice. And now more than half of engagement rings are being sold with lab grown diamonds. You can. You can. For real.
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B
I like it.
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A
Same size, same look, everything. You can save 80% and the naked eye can't detect any difference. I'm all for this kind of shakeup.
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B
Yeah.
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A
Maybe we should propose to our wives again, Matt. Start buying them some bling. What do you think?
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B
There's a part of me that's tempted. Like, what I wish was that this would have been available to us when we were younger. But, like, there's a part of me that gets excited. Like, when I think about it for a minute, I get, like, pretty stoked. I'm like, oh, sweet. I could buy a Kate. Just some serious bling. And I. It sounds fun for like a second. But then I'm like, well, why would I want to do that? And I immediately talk myself out of it.
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A
Like, I don't think she don't really care about that.
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B
They don't. No, they don't. And they'd rather get a bunch of other guys. She loves her old ring. Even if it was just like, pennies. It's just like, well, why do I want to wear, like, this giant, gaudy piece of jewelry? And oftentimes I think it comes down to what other people think. And, dude, we don't care what anybody thinks.
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A
We're trying to project anything.
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B
I don't even wear my. I feel bad because the ring that Kate got me.
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A
Those ladies are hitting on you.
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B
Is a. It's like a family heirloom kind of ring, and it means a lot. And I actually stopped wearing it when I started lifting more often because I didn't want to damage it. You wear the silicone? Yeah, I hate those. I'm not a fan.
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A
Yeah.
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B
Not comfortable.
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A
Doesn't bother me. But it's cool to see. And I'd be curious to know, too, if any how to Money listeners have gone the lab growing, and maybe they were debating going with a real diamond dug out of the ground, and then they were like, wait a second.
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B
No, man, no.
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A
I'm just going to save a ton of money.
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B
Synthetic. That's huge.
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A
Let us know how it went, by the way.
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B
I don't care. But, dude, for all the folks out there who are single or thinking about proposing, oh, 100% a game changer for them.
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A
And I think I read something about now the status symbol is brown diamonds. I don't know how hard those are to come by, but I guess maybe you can't manufacture brown diamonds in the same way. So that's how you're now letting people know I've got the real thing, and I spent a lot more money for it.
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B
So instead of calling it bling, they call it blung.
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A
Humans will always find a way to try to show their status externally. Matt, let's talk about taxes. As of Monday, you can start filing your taxes. Hooray. I know. Everyone's so excited for tax season. It's so much fun. And there are some ways that you can file for free. You don't have to pay a dime to file taxes, which is really the way it should be. And the IRS's direct file system is up and running for the second year in a row and is now available in 25 states. There actually are some rumors that the current administration might try to do away with this direct file system. We will see. And there are income limitations, by the way, filing direct file through the irs, if it's available in your state, single folks can't make more than 200,000 bucks. Married folks can't make more than 250. Sorry, Matt, you're out. Because I know I'm out. You're loaded.
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B
Not because of that, but because of how complicated our tax bets are.
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A
Yeah, that's true, too.
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B
It's about the real estate, man.
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A
Well, we haven't used it ourselves, not because we're making millions, but we haven't heard any ringing endorsements either from anyone. I haven't heard anyone say this was so great, but I guess still free is free. And I think it's worth pointing out, Matt, that there are other free options as well. TurboTax has a free option for people with basic tax situations, and they're available to people who file on the TurboTax app before February 18th. Apparently, that's their deadline for some reason. But if you do file before then, it's legit free this year. And the Cash app still the best free tax software that we're aware of with zero hoops to jump through, free federal, free state. So I don't know why that doesn't get more press. But Cash App taxes, everyone should know about that.
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B
It's pretty solid. Yeah. I will say today is the deadline for. So I got to send out some 1099 out to the folks who help us here with the podcast and on the website. Today's January 31st. Last, last day to make that happen. I hate waiting to the last minute. But going back to what I, what I mentioned though, as far as the complexity of your tax situation, I think it's worth highlighting that because I think for some folks, free filing, it might be a cheap move, not a frugal move. And it's worth paying up. If you have a more complicated scenario, it would be worth it to do that. The savings that a seasoned tax professional would be able to find for you, that's actually the frugal move.
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A
Yeah. If you're prioritizing, I don't want to pay that person four or five hundred bucks to do something I could do myself or I could use the inexpensive software for. But then you're not getting all the tax credits or deductions that are available to you.
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B
Yeah. And keeping up with all those forms potentially. That's true. That's true. I wanted to mention so 1099ks, don't forget those. They might start showing up in your mailbox if you use StubHub, eBay or Etsy regularly. For some, for some side hustle income, you might be getting a 1099 K. $5,000 in sales is the threshold for this past year for your 2024 taxes. And basically millions of Americans who have Never received a 1099k will be getting one this year. You were already supposed to report this income, but honestly, many folks don't do that.
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A
Oh, it's kind of like you remember when the advent of the Internet and you could buy stuff on am, you didn't have to pay sales tax.
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B
Oh yeah. It's like this, that golden era. There's like a period of time.
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A
But you were supposed to self report, but nobody did.
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B
Oh, really?
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A
Yeah.
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B
I don't remember that. Just like voluntary sales tax. Wow. So we bring this up because even more folks are going to get these forms next year and even more the following year in 2026 as the reporting thresholds drop for 1099 K income. And one more wrench to throw in the gears is crypto sales. If you are a regular trader of the cryptocurrenc, don't forget to account for capital gains taxes. I think this is more something that folks were dealing with back in 2020 and 2021. When there's a little more cash sloshing around, there's still a lot of cash investing in crypto. There is cash.
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A
You saw the Trump coin, the Melania coin, you saw bitcoin.
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B
When folks file their 25 taxes, they're only going to be reporting losses when.
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A
It comes to those coins. Yeah, exactly. Let's talk about tax refunds for just a second. Matt friend of the show, Michelle Singletary, she just wrote in the Washington Post about why she really dislikes tax refunds and I think you and I, we mostly agree with her on this. You get a tax refund because you have too much money withheld and essentially you're giving the government an interest free loan. Some folks though use this methodology as like a forced method of savings. I think it's important to think about what that refund money could have done for you throughout the year instead of getting into one lump sum right the following year. So if you had, let's say, not gotten a big tax refund, you could have had more money in every single paycheck, putting it into a high yield savings account or into the stock market in 2024. What if you'd been doing that the whole time? You'd been dollar cost averaging, throwing more money into the market instead of waiting essentially 14, 15 months to get that money back in a lump sum, you could have been more optimized, more efficient. But I think the reason too, Matt, that I said maybe, I mostly agree with Michelle here, but not all the way, is because you could have also done stupid stuff with that money.
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B
That's true.
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A
And for some people who aren't as buttoned up like this really is one of the best opportunities that comes along to jumpstart a financial goal that you have. Like the average tax refund's like 3,100 bucks.
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B
It's like a little launch pad for.
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A
Saving up that E fund for paying off a big debt that you've got that you've been working towards getting rid of. And so I get the interest free loan thing. But I also think that if this is the best way for you to disallow yourself from just frittering that money away, getting that big tax refund, if it is this chance to do something big and great. If you use that as an opportunity to do something epic to supercharge where you're going with your money, I think that's fine too.
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B
Yeah. And I thought what you were going to complain about was the fact that you're only talking if you're talking about a tax return of $3,000 while earning 4%, you're only talking about 120 bucks in interest. So from a financial standpoint, yes, it's not optimized. And I'm not saying that 120 is nothing that could pay for your annual membership on your Amex Cash Preferred that you just covered. But it's also not the end of the world to miss out on that as well. But Joel, we got more to get to during our Friday flight today, our roundup of the headlines and how they impact your personal finances. We'll get to electric vehicles and more right after this. Debt payoff is the number one financial goal that Americans have for 2025. I love seeing that because debt, especially 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.
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B
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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A
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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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 howtomoney to get 20% off any purchase of $499 or more. That's 20% off at ind o C-H-I-N o.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 HouseOfMoney that's right, I created my will.
- [23:19]
A
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.
- [23:58]
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.
- [24:53]
A
Matt I just double checked our life insurance policies to make sure we're adequately covered. We are thankful for that. It's a good idea for everyone out there to do that, particularly if your family needs have changed recently.
- [25:06]
B
Right.
- [25:06]
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.
- [25:16]
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.
- [25:29]
A
All right, Matt, we're back with the Friday flight. Continue. Now it's time to get to the ludicrous headline of the week. This one comes from Axios and the headline reads, why the rich love digital shoplifting. Oh man.
- [25:42]
B
Not digital shopping. Digital shoplifting.
- [25:45]
A
Stealing stuff. Have you ever stolen anything, Matt, when you were like a kid or anything?
- [25:49]
B
Yeah, I got in trouble.
- [25:50]
A
Okay. I remember like those stands in the middle of the mall. I stole something from there one time. I feel really bad about it still. Like a necklace, like with like a shark tooth on it or something like that.
- [25:59]
B
Oh, so you were older. This sounds like middle school.
- [26:01]
A
Joel it was. I was probably like 11.
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B
Yeah, I remember when I was younger so the things like going to a hardware store, like there's like little nuts, you know, like bolts and nuts. Not like peanuts or cashews, like random pieces of metal and debris on the ground. And I used to always pick those up. But I always saw those as like, like floor fines, you know, like because it's like they sweep them up and throw them in the trap. And I guess if it's like big enough, they're like, oh, well, this one's worth a little bit more but, yeah.
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A
You know, what's the statute of limitations on.
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B
I don't know.
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A
Your thievery. You think they're gonna come out?
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B
You're the one that got the special.
- [26:35]
A
That's true.
- [26:35]
B
Shark necklace or whatever.
- [26:36]
A
That. Maybe it was like the puka shells. Whatever they were.
- [26:39]
B
I was gonna try to say that, but I couldn't remember the word puka shell.
- [26:42]
A
I feel bad, but I still do. Okay, so let's talk about this story, Matt, because for real, shoplifting used to be going into a physical store, literally nabbing something off the shelf and trying to get out without being noticed. And depending on how big it was, stick it in your jacket or whatever, literally. My high school principal got arrested. For what? Stealing. I want to say it was a rotisserie chicken. What? Yeah, from the grocery store.
- [27:06]
B
Is this while you were in high school?
- [27:07]
A
No, it was after post high school.
- [27:09]
B
But things went downhill after you left.
- [27:11]
A
They did. They did.
- [27:12]
B
They needed you around to uphold the honesty and morality of the high school.
- [27:16]
A
I think we've already estab my shortcomings to here, Matt, but theft has become a bigger problem in recent years for retailers, and it. It harms their bottom line.
- [27:24]
B
No, it does.
- [27:25]
A
Some retailers in certain cities have literally shut down because of theft problems. And, Matt, think about the drugstores, Walgreens and cvs, and everything is essentially being put behind lock and key because of crime problems.
- [27:38]
B
They're shutting down so many stores because theft. Because. What's it called? Shrinkage. Shrinkage is. Is such a problem. I hope folks don't hear us making light of this.
- [27:45]
A
Like, this is a serious problem. A nice word for something that's like a terrible problem. Literally people stealing. But folks have found that it's more possible to steal from online retailers, and they're taking advantage of that ability. Basically, they're claiming that the package was stolen, never got delivered, and they're hoping that the company will give them a refund, or if that doesn't work out, they'll file a charge back with their credit card company for a legitimate purchase, that they made a product that they got to keep. The goods were actually delivered, but they're saying. Telling the credit card company that it wasn't. So they're lying. They're hoping to get their money back for something that they actually wanted to purchase. That's obviously unethical, and it's. Yeah, rich folks, too. I think they said, what folks make it 100k plus. That was.
- [28:28]
B
They were twice as likely to take this route. And I'll push back A little bit on that, because I think to advocate for the rich folks who are making more than 100k, like, when you make more, you tend to order more online. And I think that has a lot to do with it as well. There's a higher frequency of online ordering, online purchasing. It's not like I dove into their data collection procedures, but I think there's got to be something there, too. Like when you are making, you know, if you're just getting by, you're not making a whole lot of online orders. You're not paying for prime shipping, you're going in person to where it's the most affordable, like to.
- [29:00]
A
Aldi, do you think there's something about the impersonal nature of online shopping that makes people feel like a little more.
- [29:07]
B
Not having to look someone in the face? Yeah, I think that. I think that probably makes a lot of folks feel like it's less of a crime, but I would disagree. You know, like, you might be able to get away with doing that, but that doesn't necessarily. That does not make it right. And actually, in the. In the article, some folks even categorize their theft as what they call consumer advocacy, which is pretty ridiculous. I think you'd have to believe that, like, all businesses are evil in order to take that stance. I think they're thinking, oh, it's like a faceless crime, you know, Like, I'm not taken from the small business that I like to frequent in my local community. This is. This is from Bezos. And they include this in their shrinkage numbers. Yeah, but it's not. This is. This is totally theft. It's unethical. And I think a lot of it probably, dude. I think it also has to do with laziness. I think there are a lot of folks and they are doing the easy thing by ordering online. They get the thing, they don't totally love it, and they kind of want to send it back. They don't want to have to pay for it. And so they say, oh, you know that thing you sent me, I didn't really like it, but it never showed up. And hoping to get it for free, essentially, because they don't want to have to package it back up and say, drop it off at the Whole Foods or take it to the UPS store. Ugh, that's so not online shopping.
- [30:16]
A
What a waste of my time having.
- [30:17]
B
To go in person. And so I think so much of it comes down to laziness as well.
- [30:21]
A
You're probably right, Matt. Many Americans have a pessimistic view of how their savings are performing right now. There's a survey from WalletHub that found that 65% of Americans said they did not think that their savings was outpacing inflation. Basically, hey, my savings sucks and inflation is rocking me and I feel like I'm falling further and further behind. I think this is a couple things. One, it might be a bit of an emotional response, right? Well, you might feel like, well, I'm certainly not outpacing the price increase of eggs at the grocery store, which you're not. The avian flu has driven egg prices. I was talking to somebody the other day, Matt. They were trying to buy the fancy eggs. A dozen. A dozen eggs of whatever the premium fancy eggs were. Guess how much he told me they cost.
- [31:03]
B
It's a banana, Michael. What's it cost? $10 or $17? What?
- [31:08]
A
I was like, where are you buying your eggs? This was in California specifically, but I was shocked to think that I was like, these protect your eggs like you protect your gold bars. I guess that's insane to pay that much for eggs. But yes, eggs have gotten more expensive. So I get maybe that kind of emotional response. But I think the other reality is that this is accurate for a whole bunch of people. But it doesn't have to be. So if you look at the actual rate of inflation, what banks are paying, our favorite banks are paying is above and beyond the rate of inflation. So you actually are outpacing inflation with savings. If you're with one of our favorite online banks. Inflation does not have to kick your butt if you don't want it to. So your returns are not going to be astronomical. That's not the goal of savings. But your money isn't going to be subject to the ever eroding reality of inflation either. So it's interesting, Matt, that 2/3 of people think that inflation is kicking their butt. The truth is, for most of them, it doesn't have to.
- [32:01]
B
It's more of an emotional response. The fact that you do see those higher price tags when you do go to the grocery store. So it feels like it's eating into your savings and how much you're spending every single month. And honestly, higher interest rates, they have been great for savers over the past few years, but it has been bad for folks with floating rate debt. Let's talk about HELOCs here because, you know, they look great a few years ago. Well, they've created a stressful financial burden. It's almost. It's like a time bomb that folks are now experiencing.
- [32:28]
A
Yeah, when People took it out with a 3.5% rate and now it's 8%.
- [32:31]
B
It's much higher, like, oh, this sucks. Anyone with credit card debt knows the problem has only gotten worse as well. Roughly half of folks have recurring credit card debt and a record 1 in 10 are out there only paying the minimum. Balance figures from NerdWallet show that with average credit card balances at $10,563, it would take 22 years and it would cost you $18,000 in interest when just paying the minimum, which is incredibly sobering. Basically, if you don't want to be in credit card debt for the rest of your life, you have got to come up with a plan and stick to it. If you are only paying the minimum, if you're carrying a balance, you are doing credit cards wrong. And I will say something that stood out to me. I was looking at the chart of the revolving, the revolving balance that Americans are holding per quarter. And it's in stark contrast to where it was like four years ago or so. And so if you only look at that period of time, you think, oh my gosh, what is going on here in America? But if you look at the chart more carefully, if you zoom out a little bit, a little bit of a silver lining, I guess, is what this is going to be right here, the little silver, silver lining news. Part of the credit card debt that's out there, it's. We're actually on track to where things were going pre pan. Right. So if you look back, let's be.
- [33:40]
A
Honest, the status quo back then wasn't great.
- [33:41]
B
It wasn't great either, but I guess it's not. It has accelerated incredibly fast over the past three to four years. But if you zoom out even further and you look at where things were in 2019, and if you were to say to somebody, hey, where do you think revolving balances are going to be in 2025? They'd be like, yep, around 600 billion. And that's where we are now. It's just if, if you erased all the data that we have between 2019 and today, you honestly wouldn't see much difference in the average balance. But like you said, it'd feel less stark. Yes. It kind of feels like a hair on fire kind of moment right now. But I honestly think things are going to level out. But just kind of getting back on that, just to think about typical American.
- [34:18]
A
Track, 10% of people. And granted, there was a. I think it was the card act many, many years ago that required credit card companies to essentially put in black and white on your statement how long it would take you to pay off your debt if you were to just pay the minimum payments. So it shouldn't come as a surprise to anybody who has a credit card and actually looks at their statement just how long it's going to take and how, how much of an uphill battle it's going to be if you, if you continue to pay just the minimums. It is one of the worst things you can do for your finances is to have credit card debt and to just pay the minimum every single month. But I would hope that once you kind of here that you're going to be in debt for multiple decades, that you will take, you know, significant action to try to pay off that debt more quickly. Whether it's like bare bones budget, whether it is going to undebt it, and whether maybe Money Management International is where you need to turn. If you're in up to your eyeballs and you don't feel like you can get out on your own.
- [35:11]
B
I feel like that would be a piece of data that would be helpful for folks. Just like when you sign a 30 year mortgage, they tell you, okay, this is the total interest amount that you're going to pay over the course of the loan. And it's just this like jaw dropping, staggering number. But like in that case, this is for an asset that's going to appreciate. The exact opposite is the case when it comes to credit card.
- [35:28]
A
30 years to pay that much in interest too.
- [35:30]
B
Indeed. Okay, so last week the future of EVs begin to look a bit more uncertain. Joel. President Trump, he froze funding that was allocated for charging infrastructure via a new executive order. I don't know if you heard there's an executive order, an EO or two that was signed.
- [35:46]
A
Yeah, there were some. I think he ran out of the Sharpies. Dried out.
- [35:49]
B
Matt, I will say this is not a shock. And to be fair, a lot of money had been allocated to boosting the charging infrastructure with very little to show for it. So little in fact, that the average cost of the new EVs that the federal government was able to.
- [36:05]
A
The charging stations.
- [36:06]
B
Yeah, what'd I say? New EVs, not actual EVs. Actual charging stations. So $7.5 billion was how much cash was set aside.
- [36:14]
A
And how many chargers did we make? Seven.
- [36:16]
B
Eight.
- [36:16]
A
Eight.
- [36:17]
B
Okay, eight chargers. You know, here on the show when we talk about going to the grocery store, we like to break it down to the cost per unit. All right, this is an Easy one, folks. $1 billion per charging station. Come on. This is insane. So how this actual executive order shakes out in reality is going to be hard to decipher. But that EO specifically outlines the administration's desire to not give electric vehicles a leg up with federal subsidies. And that means that, you know, if Trump has his druthers, the federal tax credit for buying an ev, it may not be long for this world. This won't necessarily crush EV sales, I think, but it will slow them. And it's definitely going to force EV manufacturers to figure out the, the economics essentially of producing EVs that actually turn a profit, as opposed to counting on the government to sort of underwrite this new industry.
- [37:08]
A
Yeah, I think some predictions, not so.
- [37:10]
B
New industry, I guess at this point.
- [37:11]
A
Yeah, EV sales would drop roughly 20% if the federal EV tax credit went away. But when you. And when you look at some of the EV specific companies, many of them lose money with every EV they sell, even with the federal tax credit currently in existence. So if that's gone, I mean, it feels like Tesla seems like they're the only electric vehicle manufacturer that makes a profit when they sell electric vehicles. I still love EVs, and I do think they're the future. Yeah. It's just they're going to. The future's coming more slowly now, and.
- [37:39]
B
They'Re, I think, well, or efficient EV manufacturing might be actually coming faster. It just depends. I mean, it just depends on how you're looking at it.
- [37:47]
A
All right. Well, Matt, we typically frown on the idea of leasing a car, but there are occasional exceptions to that rule, and that's especially true right now in the electric vehicle space because cheap EV leases abound, at least for the time being. We'll see how the, you know, federal tax credit that could impact this. But this means that leasing in an EV can actually make financial sense, at least, you know, in this case, because of the way the tax credit impacts the lease amount versus monthly payments. And so Volkswagen, for instance, I saw this on their website, Matt. They're offering the ID4, I want to say, for $1,000 down and $149 a month in some markets.
- [38:24]
B
You brought this up a couple weeks ago and you're like, kind of borderline even considering it.
- [38:28]
A
Oh, I was totally thinking about it. Yeah. And this is something that Emily and I talked about, and I'm like, I don't know, maybe, but we just.
- [38:33]
B
How long is that Acura going to be exactly?
- [38:35]
A
Do I sell the old Acura and just like, you know, roll with an EV for 24 months.
- [38:40]
B
The numbers actually make sense when you consider some of the benefit that these dealerships are experiencing because of the tax credit. And it starts getting a lot more financially palatable to consumers.
- [38:50]
A
The other thing too is with, you know, rapid progression in EV technology, you're, you're also not buying when, I don't know, maybe in a couple years that, that EV feels pretty antiquated. Kind of like when I bought my Nissan Leaf and it was like, oh man, in like just a time, it felt like a piece of junk compared to everything else that had been put out on the road.
- [39:09]
B
I could barely drive the Costco one back.
- [39:10]
A
Now people are selling used Nissan Leafs that have like 40 miles worth of range. It's like a glorified golf cart. Wow. Yeah, that's crazy. It's pretty pathetic. But I would just encourage people to run the numbers. It's still worth maybe considering leasing an ev, especially as this EV technology changes quickly. But I don't know, holding onto your old ride might still make the most sense. I think that's probably where I'm going to land, Matt.
- [39:32]
B
Oh yeah.
- [39:33]
A
Plus I just don't want to go through like all the hoops to get another car. I like my super old Acura.
- [39:39]
B
There's nothing wrong with that, man.
- [39:40]
A
Yeah. So probably for most folks that makes a lot of sense, but for others, they might want to consider it.
- [39:44]
B
I will say so. We had the electricians at our house this past week and I had them install a 240 outlet in the garage.
- [39:51]
A
Preparing for the future.
- [39:52]
B
Sounds like something an EV owner would do. Specifically it's for Kate for her electric kiln. But also one of the reasons we made sure to stick in the garage is for the ability to future proof our ability to perhaps charge an EV in the future. You never know. But While we love EVs, that being said, you might want to stick with your old gas powered car. And this is for a few reasons. One, because it's cheaper. Even with the potential gas savings factored in having a car that you already own, something that is already depreciated. But on top of that, newer cars especially, I would say newer EVs, they're doing more snooping. Similar to like your favorite search engine, your car, it knows a lot about you. There is a CNN article and they detail just how much information modern cars that they can pull about your habits. It's pretty scary. We talked about how some car makers have not just been collecting that data, but also selling it, even to insurance companies buried there in the fine print pretty buried the car wired. They just had a story about how a Subaru security flaw, how it allowed hackers to remotely unlock and start your vehicle. They could also see your last 12 months of location history. And I'm pretty sure the dealership still can see where it is that you've traveled to. So it's just another reason to Joel, be happy with your 2013 Honda Odyssey in your, what is it, 2505Acura MDX. There's nothing wrong with that, man. Yeah, if you got getting snooped on.
- [41:16]
A
Old Honda Civic whatever it is that you're driving, maybe that sort of privacy desire for privacy desire at least not to have thieves be able to think about how connected some of these vehicles are. Matt Always connect and it's cool in one way that Tesla can send updates over the Internet. But then the flip side of that is if there is a security flaw, hackers can break in and who knows? Like I don't know, man, it is the future of fully connected automobiles all the time is a little worrisome, at least from a personal privacy.
- [41:45]
B
I think there's a trade off. I think there's a trade off, right, because like if you are driving a Rivian or a Tesla, like you were receiving this technological benefits of also your car knowing exactly where you are. Right. But I think the thing that gets me the most are the kind of fancier gas powered cars where like there isn't much additional benefit that you're receiving. It's sort of like there's not like, let's be honest, there's is. Was there some sort of revolution between like a 2012 Honda Odyssey versus like the the newest Honda Odyssey? Not really. But there's a whole lot more spying going on. And to me that's where the biggest breakdown takes place, where you're not receiving any benefit because there's benefits to having cookies that are tracking your movement on the Internet. It's like, okay, now you can serve me up an ad of something I already actually was interested in. Sweet. But when it feels like there's no upside, that bothers me even more.
- [42:32]
A
That's disappointing. That's going to do it though. For this episode, Matt, we'll link to some of the stories we mentioned in the show, Notes up on our website@howtomoney.com as well as some of the resources we talked about in this episode. But all right, man. Until next time, best friends out.
- [42:45]
B
Best friends out.
- [43:02]
A
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B
Demers, Jason Demers here, And after playing 700 NHL games, I got a lot of dirty laundry to air out. Hey, I got a lot to say here too, okay?
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A
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B
Tons of guests are going to join in too, but we're not just going to be talking hockey, folks. We're talking movies, we're talking tv, food, and Adnan's favorite wrestling. It's all on le Table. Listen to NHL Unscripted with Virk and demers, the iHeartRadio app, Apple Podcasts, or.
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A
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