Summary of "How to Money" Podcast - Episode #948: "Friday Flight - Federal Layoffs, Renting Roosters, & VOO FTW!"

Release Date: February 21, 2025
Hosts: Joel and Matt
Podcast: How to Money by iHeartPodcasts

In Episode #948 of "How to Money," hosts Joel and Matt navigate through a range of pressing financial topics, offering listeners insightful discussions, practical advice, and candid reflections on current economic trends. This summary encapsulates the episode's key points, notable quotes, and actionable takeaways.

1. Coping with Extreme Cold: Joel's Portable Steam Sauna

Joel kicks off the episode by sharing his experience with a portable steam sauna he purchased from Costco amidst a severe polar vortex gripping much of the nation.

• Joel (03:36): "It's an $120 portable steam sauna currently sitting in my bedroom. I've used it every night since I got it, and I love it."

He elaborates on negotiating the price despite initial stock shortages, highlighting the health benefits and the comfort it brings during extreme cold.

• Matt (05:04): "This is daddy's health zone."

Both hosts joke about upgrading to a more permanent, dry sauna setup in the future, emphasizing the value of investing in personal well-being.

2. Real Estate Market Trends

Joel and Matt delve into the cooling real estate market, noting significant shifts that impact both buyers and sellers.

• Matt (06:32): "We're seeing more price flexibility in the market right now. Buyers can ask for discounts or repairs that they couldn't a couple years ago."

Key Points:

• Increased Listings: A 64% year-over-year rise in homes being pulled off the market as sellers lose patience with unmet price expectations.

• Longer Listing Times: Homes are lingering longer before selling, leading to greater negotiation flexibility.

• Renovation Boom: With high lending costs, homeowners are investing in renovations to enhance their property's value instead of moving.

• HOA Concerns: Rising HOA fees and the potential for unexpected special assessments. Joel advises scrutinizing reserve studies before purchasing homes within HOA communities.

• Joel (09:02): "HOA fees could go up significantly at any time. Special assessments could cost thousands."

Advice for Buyers:

• Patience is Key: Continue saving and remain patient in the market.
• Consider Non-HOA Homes: To avoid unpredictable fees and regulations.

3. Federal Layoffs and Financial Resilience

The discussion shifts to the alarming trend of federal layoffs affecting various departments, including Veterans Affairs, CDC, Department of Education, and National Parks.

• Joel (10:59): "If you're a federal employee with fewer than two years of service, pay attention to your emergency fund."

Key Points:

• Generous Buyouts: Some federal employees are receiving buyouts with eight months' pay, offering a cushion for career transitions.
• Impact on New Hires: Newer employees face higher risks of layoffs without adequate severance.
• Emotional and Financial Toll: Layoffs are not just financial setbacks but also emotional challenges.

Advice for Affected Employees:

• Build an Emergency Fund: Essential for unforeseen job losses.

• Maintain a Bare-Bones Budget: Prepare to implement it if necessary.

• Apply for Unemployment Benefits Promptly: To ensure financial support.

• Leverage Networks: Reach out to contacts for new job opportunities.

• Focus on Financial Resilience: Prioritize building financial buffers to withstand economic shocks.

• Matt (14:22): "One of the main goals of this show isn't just to help you build wealth. It's to help you be financially resilient."

4. Consumer Electronics: Apple's New iPhone 16e

The hosts analyze Apple's introduction of the iPhone 16e, positioning it as a more affordable alternative to the flagship models.

• Matt (15:00): "At $599, it's $200 less than the regular iPhone 16, but it's not as affordable as the predecessor SE models."

Key Points:

• Price Point: Positioned at $599, making it $200 cheaper than the standard iPhone 16 but still more expensive than previous SE models.

• Features: Includes upgrades like Apple's latest AI tools, but Joel expresses skepticism about the necessity of these features.

• Joel (16:06): "It's just I'm kind of running away from AI as actively as possible."

Advice for Consumers:

• Consider Refurbished Models: Joel and Matt recommend opting for refurbished iPhones or older models like the iPhone 14 Pro for better value and higher-end features.

• Avoid Upgrade Cycle Madness: Focus on purchasing phones that fit financial plans rather than succumbing to frequent upgrades.

• Matt (18:02): "The biggest carriers tend to incentivize that. They're like, 'Oh, you want to trade in your old phone? Great, we'll make it so easy on you.'"

5. Tariffs and Their Economic Impacts

Joel and Matt discuss the potential implementation of reciprocal tariffs by President Trump and their broad implications on various industries.

• Joel (32:24): "Tariffs are the antithesis of what we should be doing to reduce prices. They impact everything from craft beer to car insurance costs."

Key Points:

• Impact on Craft Beer: Increased costs for brewing equipment and beer cans due to tariffs on steel and aluminum, leading to higher consumer prices.
• Automobile Industry: Rising costs for car parts made of metals could result in higher car insurance premiums.
• Business Adjustments: Companies may pivot to alternative materials or methods to mitigate tariff impacts, such as Coca-Cola possibly increasing plastic bottle usage.

Broader Economic Concerns:

• Inflation: Tariffs could exacerbate inflation by increasing the cost of goods and services.
• Consumer Costs: Higher prices across various sectors directly affect consumer spending power.

Advice for Consumers:

• Investing as a Hedge Against Inflation: Joel emphasizes investing in the stock market, particularly in companies providing essential goods and services, to combat the erosive effects of inflation.

• Joel (33:07): "Investing in the stock market... is a surefire way to build your wealth that helps to combat inflation."

6. Investing Strategies: Emphasizing Index Funds and VOO

A significant portion of the episode is dedicated to investment advice, particularly advocating for low-cost index funds.

• Joel (36:24): "Why would you pay 0.09% when you could be paying 0.03% for the exact same thing? VOO is a no-brainer option."

Key Points:

• Vanguard's VOO vs. SPY: Both track the S&P 500, but VOO offers a lower expense ratio (0.03% vs. 0.09%).
• Consistency in Investment: Encouraging listeners to adopt dollar-cost averaging and regular contributions to index funds.
• Matt's Personal Strategy: Shares his portfolio adjustments, moving between VOO and VTI to manage tax implications and harvest losses.

Advice for Investors:

• Opt for Lower Expense Ratios: Choose funds like VOO for better cost efficiency.

• Stay Committed: Maintain regular investments regardless of market conditions to build long-term wealth.

• Joel (37:28): "VOO is a no-brainer option for when people ask, 'What fund should I invest in?'"

7. Renting Chickens vs. Backyard Chickens

Responding to a USA Today headline, Joel and Matt explore the feasibility of renting chickens to mitigate high egg prices.

• Matt (23:57): "It's almost predatory. You pay $500 for two chickens when you could buy eggs for $130 over six months."

Key Points:

• Cost Inefficiency: Renting chickens at $500 for two over six months yields only a dozen eggs per week, insufficient for a typical family.
• Alternative Recommendation: Investing in personal chicken coops and sourcing chickens from local suppliers or mail-order, despite the responsibilities involved.

Advice for Consumers:

• DIY Approach: Building and maintaining your own chicken coop is more cost-effective and rewarding than renting chickens.

• Joel (25:08): "Get your own coop, go to Tractor Supply or whatever and get your own chickens."

8. Commute Times and Fast Food Consumption

The hosts examine a study linking longer commutes to increased fast food consumption, highlighting the hidden costs of daily travel.

• Matt (26:26): "For every 30 seconds of traffic delay, there's a 1% increase in visits to fast food restaurants."

Key Points:

• Health and Financial Impact: Extended commutes not only affect mental and physical well-being but also lead to higher expenses through increased fast food purchases.
• Practical Solutions: Packing healthy snacks, such as homemade biltong or pre-shelled pistachios, to reduce reliance on fast food during delays.

Advice for Commuters:

• Prepare Snacks: Keep non-messy, healthy snacks in the car to avoid impulsive fast food stops.

• Optimize Commute: Explore options to reduce commute times where possible for better health and financial savings.

• Joel (27:59): "Trying to commute less in general is going to be good for your life."

9. Travel Recommendations and Airbnb Hosting

Joel and Matt offer travel suggestions and discuss the benefits of using Airbnb for family trips and additional income streams.

• Joel (22:35): "We'll definitely be checking out the local Airbnbs wherever we end up. It gives us flexibility and incredible options for a place to stay while we're away from home."

Key Points:

• National Parks Recommendation: Yosemite is highlighted as an ideal destination for hiking and family bonding.
• Airbnb Benefits: Flexibility in accommodations and the potential to host guests for additional income using Airbnb's co-host feature.

10. Closing Thoughts and Future Topics

As the episode draws to a close, Joel and Matt reiterate their commitment to helping listeners build financial resilience. They encourage audience engagement by inviting questions, especially from those experiencing job losses or financial uncertainties.

• Joel (38:47): "Keep investing, stay resilient, and don't hesitate to reach out with your financial questions."

Upcoming Topics:

• Tariffs Impacting Craft Beer and Car Insurance
• Landmark Numbers in the Investing World

Notable Quotes with Timestamps

1. Joel (03:36): "It's an $120 portable steam sauna currently sitting in my bedroom. I've used it every night since I got it, and I love it."
2. Matt (06:32): "We're seeing more price flexibility in the market right now. Buyers can ask for discounts or repairs that they couldn't a couple years ago."
3. Joel (09:02): "HOA fees could go up significantly at any time. Special assessments could cost thousands."
4. Joel (10:59): "If you're a federal employee with fewer than two years of service, pay attention to your emergency fund."
5. Matt (15:00): "At $599, it's $200 less than the regular iPhone 16, but it's not as affordable as the predecessor SE models."
6. Joel (32:24): "Tariffs are the antithesis of what we should be doing to reduce prices. They impact everything from craft beer to car insurance costs."
7. Joel (36:24): "Why would you pay 0.09% when you could be paying 0.03% for the exact same thing? VOO is a no-brainer option."
8. Matt (23:57): "It's almost predatory. You pay $500 for two chickens when you could buy eggs for $130 over six months."
9. Matt (26:26): "For every 30 seconds of traffic delay, there's a 1% increase in visits to fast food restaurants."
10. Joel (38:47): "Keep investing, stay resilient, and don't hesitate to reach out with your financial questions."

Conclusion

Episode #948 of "How to Money" offers a comprehensive exploration of current financial challenges and opportunities. From navigating a shifting real estate market and coping with federal layoffs to making informed investment choices and optimizing daily habits, Joel and Matt provide valuable guidance to help listeners thrive financially. Their balanced approach combines practical advice with relatable anecdotes, making complex financial topics accessible to a broad audience.