How to Money - Episode #1023: Friday Flight - Housing Boom Busts, AI-Induced Outrage, & Infinite Workdays

In episode #1023 of How to Money, co-hosts Joel and Matt tackle a trio of hot-button issues impacting personal finance and everyday life: the fluctuating housing market, the unintended consequences of artificial intelligence in customer service, and the pervasive nature of modern workdays. Their engaging conversation offers valuable insights, practical advice, and thoughtful reflections aimed at helping listeners navigate these complex topics.

1. Personal Investments and Consumer Advocacy

Joel and Matt kick off the episode by sharing personal anecdotes about enhancing their living spaces and fitness routines. Joel discusses purchasing a used Peloton bike from Facebook Marketplace to utilize their sunroom more effectively. However, he encounters an unexpected hurdle:

Joel (06:38): "It's utterly ridiculous."

Joel criticizes Peloton for imposing a hefty $100 activation fee when transferring a used bike to a new account. After persistent efforts, he successfully has the fee waived, underscoring the importance of advocating for oneself as a consumer.

2. Housing Market Trends: Is a Boom-Bust Cycle Looming?

The conversation shifts to the housing market, where Joel and Matt analyze whether the current surge in housing prices indicates a sustainable trend or an impending bubble.

Matt (08:35): "It seems more like a slow leak as opposed to just like a sudden popping."

They delve into historical price trends, noting the significant increase from 2020 to 2022 driven largely by the COVID-19 pandemic. Matt advises potential homebuyers:

Matt (10:10): "I think now is the time to strike personally to buy."

Joel concurs, suggesting that prolonged ownership may mitigate risks associated with market fluctuations:

Joel (12:05): "Have a plan to own longer because it's really hard to know where the housing market goes from here."

3. Evolution of Real Estate Agent Fees and Technological Disruption

Addressing listener feedback, the hosts discuss the stagnation of real estate agent commissions despite regulatory changes:

Matt: "Agent compensation hasn't really changed much since that ruling."

They highlight emerging startups like Turbo Home, Shop Prop, and Areva that aim to reduce transaction costs in real estate. Joel emphasizes the potential savings:

Joel (14:35): "You could be talking about $10,000 or more in savings."

4. Credit Scores and the Influence of Social Environment

Joel and Matt explore a Harvard study involving 25 million individuals, revealing that financial habits are heavily influenced by one's immediate social environment. Joel reflects on the challenges of personal finance education:

Joel (17:15): "There are some people who are going to be more difficult to help."

They also reference a USAA report highlighting that many Gen Z individuals lack knowledge about their credit scores:

Matt (18:56): "Half of Gen Zers don't even know what their credit score is or even what constitutes their credit score."

5. Expanding Investment Options in Retirement Accounts: Opportunities and Risks

The hosts examine a recent executive order aimed at broadening investment choices within workplace retirement accounts to include alternative assets like cryptocurrency. Joel voices skepticism:

Joel (22:01): "I don't necessarily think that people need access to alternative investments and more cryptocurrency inside of their 401ks."

Matt acknowledges potential benefits but cautions against the volatility associated with crypto:

Matt (23:00): "If you were the next renter, right? And like that... owning some crypto can actually help you to get a mortgage."

6. AI-Induced Customer Outrage: The Hertz Incident

A significant portion of the episode is dedicated to the unintended consequences of deploying AI in customer service, focusing on Hertz's introduction of AI-powered damage scanners. Joel recounts a customer’s frustrating experience:

Joel (30:18): "One customer was charged $195 for a dent that looked like it crashed into an ant."

They discuss how AI can lead to erroneous charges and damage customer trust, ultimately affecting a company's reputation and financial health. Joel advises listeners to protect themselves by documenting vehicle conditions meticulously:

Joel (31:33): "Take a 360 video as you're walking around the car... that way you can at least have a fighting chance."

7. The Era of Infinite Workdays: Balancing Productivity and Well-being

Joel and Matt address the Microsoft Work Trend Index report, which highlights the rise of "infinite workdays" where employees are overwhelmed by constant communications and extended work hours. Joel references Cal Newport’s concept of "Deep Work":

Joel (39:25): "How do you actually get deep work done when it feels like you can't?"

Matt suggests practical strategies to mitigate distractions and maintain productivity:

Matt (41:04): "Set dedicated time to the project at hand... or maybe you can just leave all the notifications on, Joel, but just put earplugs in."

Joel adds personal tactics for maintaining focus:

Joel (42:03): "If I see the number popping up, I'm tempted to go over there and get in and I get distracted pretty quickly."

8. Conclusion: Navigating Modern Financial and Lifestyle Challenges

Throughout the episode, Joel and Matt provide a balanced perspective on navigating the intertwined challenges of personal finance, technological advancements, and evolving work dynamics. Their candid discussions encourage listeners to stay informed, advocate for themselves, and adopt strategies that align with their financial and personal well-being.

Key Takeaways:

• Consumer Advocacy: Don't hesitate to challenge unfair fees and advocate for better terms.
• Housing Market: Consider long-term ownership strategies amidst a stabilizing but unpredictable market.
• Real Estate Technology: Explore new platforms to reduce transaction costs in real estate dealings.
• Financial Education: Emphasize the importance of understanding credit scores and financial literacy from a young age.
• Retirement Investments: Approach expanded investment options with caution, particularly concerning volatile assets like cryptocurrency.
• AI in Customer Service: Be vigilant and document interactions to protect against potential AI-induced errors.
• Work-life Balance: Implement personal strategies to manage distractions and maintain productivity in an ever-connected work environment.

For more detailed discussions and practical tips, tune into How to Money every Monday with Joel and Matt.