← How to Money
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- [00:00]
Joel
This is an iheart podcast.
- [00:04]
Matt
Where do you see your career in ten years what are you doing now to help you get there the sooner you start enhancing your skills the sooner you'll be ready that's why aarp has reskilling courses in a variety of categories like marketing and management to help your income live as long as you do that's right.
- [00:20]
Joel
Aarp has a bevy of free skill building courses for you to choose from because the steps that you choose to take today will help you to love what you do in the future and that's why the younger you are the more you need aarp learn more at aarp dot org skills hey it's joel.
- [00:37]
Matt
And matt from how to money i was just in seattle matt and honestly it's one of the greatest cities in the world particularly in the summer i went on this run by the water we hopped a ferry across puget sound just an unforgettable trip that's what struck.
- [00:50]
Joel
Me what seems normal to a homeowner it can be the thing that makes a guest trip really special which is.
- [00:55]
Matt
Why hosting your home on airbnb makes sense right travelers are looking for those authentic memorable spaces and if you don't have time to manage all that well airbnb's co host feature makes it easy a local co host can help with everything from creating the listing to keeping your place running smooth find a co.
- [01:11]
Joel
Host at airbnb dot com host degree.
- [01:15]
Matt
Advanced the world's number one antiperspirant provides up to seventy two hours of protection against sweat and odor that comes with life degree is the wake up workout antiperspirant the dashing darting carpool honking get the kids off to school antiperspirant the work from home and do the laundry grocery shop on your lunch hour never take a break antiperspirant so do what.
- [01:34]
Joel
You need to do work how you need to work sweat moves you forward degree is here to make sure that it doesn't hold you back degree here.
- [01:42]
Matt
For sweat welcome to how to money.
- [01:45]
Joel
I'M joel i am matt today we're.
- [01:48]
Matt
Talking refi revival delay pay disaster and landline love.
- [02:11]
Joel
Landlines baby yeah you know we're going to get nostalgic i'm not.
- [02:14]
Matt
Talking about loveline the doctor drew show i never watched that was it him and adam carolla didn't they have that it was i think they were on mtv back in the day yeah yeah i don't remember that one take it was it well that was a cultural moment i feel like well there are.
- [02:27]
Joel
Certain things hey i was just talking to a friend about i didn't really.
- [02:29]
Matt
Watch it but i knew it existed.
- [02:30]
Joel
About other shows on mtv like mtv unplugged like there are certain concerts certain sessions that stand out in my mind i don't remember the love line sorry.
- [02:39]
Matt
Man mtv was such a culture generator and it's not it was you think the celebrity death match exhibit show my.
- [02:46]
Joel
Ride road rules i think that's basically.
- [02:49]
Matt
What it's like the first reality tv.
- [02:51]
Joel
Fueled my desire to want to go see the world to a certain extent but no we will talk about ways to get in touch with other people but in an affordable way this is our friday flight we're going to cover the top stories the ones that impact your personal finances the most speaking of.
- [03:07]
Matt
Getting in touch with other people matt we got text messages this week you and i did from you can talk.
- [03:12]
Joel
About the coinbase scam i'm wondering if.
- [03:15]
Matt
Other listeners got this text because you and i both got it which is rare that you no i don't know you and i both get the same scam text message and it was like hey your coinbase account someone tried to log in from this android phone in sydney australia or something like that if this wasn't you call this number of course i don't have a coinbase account complete attempt to get me to call a number so you weren't at all concerned correct okay but i'm sure somebody well here's a coinbase account might be.
- [03:42]
Joel
Freaked out here's the deal so as you're saying that i i put my hand up and i pointed to myself because i've got a coinbase account i'm not that being said i wasn't too concerned because i have a smaller amount of money over there only a couple mil in just a few couple ten thousand dollars but okay so here okay so here's the real question then what if you had gotten a text from a company or brokerage that you do do business with let's say it was fidelity reaching out to you or vanguard these are two brokerages never call the.
- [04:12]
Matt
Number even if you have a relationship with that business never call the number go to the website in yourself but.
- [04:17]
Joel
Do you think you would have felt emotionally charged a little bit more because coinbase you're like okay that's like telling me that my payless credit card you know payless the shoe store it's like.
- [04:27]
Matt
That'S where i get all my shoes.
- [04:28]
Joel
Basically it was the equivalent of that for you because it's not even on your radar but for me i felt it a little bit i thought huh.
- [04:34]
Matt
But if it was like your huckberry account's been compromised you would have been.
- [04:39]
Joel
Like oh my bucks by the way if they don't call them huck bucks.
- [04:43]
Matt
They are missing out they're missing out we should be on their marketing team.
- [04:45]
Joel
But yeah i think those are the instances they are hoping to find folks who actually do have those accounts and so yeah like do you think you would feel a little bit differently if you had received a text message saying hey your fidelity hey there is an outgoing wire from your fidelity account if that wasn't you call this number now to let us know that that is.
- [05:02]
Matt
Not legit i would have for a split second but then i would have no i know the rules because we do this for a living and we talk about it i would have known to go to my account to log in and to check and to not call a number that someone sends me on a text message and also realize that fidelity isn't sending these companies are not sending text typically they might send you a verification code via text when you're trying to log in but they're not going to send you a text with a phone number to call that's just not how it works that's true it's like the irs scams like very very very similar where the irs sends paper notices in the mail exactly right so if you're everybody deals with the.
- [05:36]
Joel
Irs so that's an instance where it might seem a little more plausible right yeah i was just trying to paint a situation because like if i'm i was like what if you were like out with your family eating dinner at a restaurant you got the kids you're having a great time and you happen to look down and you see a text and you don't have the ability to immediately hop on the computer or to log into your account i think that's the kind of situation that folks might find themselves in where they are a little tempted but like you said don't do it don't do it that's.
- [06:02]
Matt
Where they get people too with utility scams like small business owners and they're like hey we're going to shut your electricity off if you don't pay this fine and you have to do it with one of those gift cards prepaid gift cards and man your business like people people are going to come into lights out like your restaurant is shut down for the evening if you don't pay up and it feels like this like because they put a time limit on it and there's a necessity a quick necessity you don't have time to log in check your account and actually verify the details you're in an emotional.
- [06:32]
Joel
State yeah you're a heightened emotional state and you might do anything but don't actually call the number that you're texted but joel this is something that we haven't said in a long time a lot of the homeowners out there are refinancing there's been a pretty significant increase in refis new mortgage applications over the past year interest rates have ticked down slightly and folks who bought when rates were peaking above seven percent they are seeing rates now in the low sixes.
- [07:02]
Matt
They'Re ready to pounce even in this just last week or so we've seen a bunch more refis than we've had.
- [07:08]
Joel
In recent memory and adjustable rate mortgages so arms they are becoming even more popular as well percent of all refis right now are arms this is in part because i think they've lost their great recession stigma where back then it's just like well you'd be a fool to go with an arm when you're at historical lows we haven't been at.
- [07:31]
Matt
Historical lows these days like we've talked about there were a lot worse arm products back then and they've improved significantly and there are some arms we talked about our credit union has a fifteen year arm where the interest rate only changes one time and so for a lot of people giving that lower rate makes a lot of sense yeah well.
- [07:52]
Joel
And with rates likely to drop an r might you know might mean less need to refinance in the future as well that being said you are subject to greater levels of risk if they don't if we don't see see rates take down but still i think a question worth asking as folks are i don't know there's a lot of it seems like there's a whole lot of refinancing chum in the water so i think some folks might be saying well how often should i be refinancing because oftentimes it's not like a heloc a heloc is free that's a easy way.
- [08:22]
Matt
The rate's just going down if rates.
- [08:23]
Joel
Are going down yeah but when it comes to refinancing they cost some money.
- [08:27]
Matt
That'S exactly right so you know i think you and i matt we used to kind of say well you probably need to drop your interest rate by about a point to make it worth it but really that's a rule of thumb and it's hard to say that that's not like a hard and fast rule because it depends on a lot of things right you either might want to refi into a lower rate even if you can't quite save a full point or you might want to hold off even longer in hope in hopes that rates go down even further so that you're not refinancing multiple times because it costs money to refinance so much really depends even on how long you plan to stay in the home because if you're like oh i'm probably only going to be here for a few more years refinancing probably doesn't make much sense and the key i think is to figure out your break even point so will the refinance save you enough in monthly payments to pay for those closing costs in less than two years if so it might make sense even still you might want to chill for just a second and see if rates drop a little bit lower so that you're not you know kicking yourself wishing you'd waited four or five months to refinance and then if a refinance is right for you shop around that is super key because you can save maybe an extra eighth of a point quarter point compare apples to apples and see what other lenders are offering so that you get the best rate around not just a better rate yeah yeah i'm.
- [09:43]
Joel
With you i'll back you on the two years timeframe because i think outside of that so much of your life can change right like you're just guaranteeing yourself even less time or you're guaranteeing yourself that you've got to stay in the house for a longer period of time and like in two years man i don't know i think a lot of individuals can find their life situation changing pretty drastically within that sort of time period let's talk about investing because.
- [10:06]
Matt
Even better if you can make it pay off in a shorter time oh.
- [10:09]
Joel
Yeah even sooner yeah it makes it even more of a slam dunk decision but the irs man they have released updated retirement account contribution limits for twenty twenty six cue the air horns i'm all about this man next year we're going to be able to stick more money into our workplace retirement accounts four hundred one ks if we're so inclined four hundred one k and four hundred and three contribution limits have been bumped up by one thousand bucks so it's going from twenty three thousand five hundred dollars to twenty four thousand five hundred dollars so traditional and roth ira max contributions have gone up from seven thousand dollars bumped up five hundred bucks to seven thousand five hundred dollars hsa limits went up as well by a couple hundred bucks for couples and this is great news and so i think one of the reasons i'm so excited about this is because i think what this demonstrates to me is that there is a shift in our culture and the expectations surrounding retirement right so back in the day there were many more workplace workplace sponsored retirement plans government sponsored pensions right so like you're talking about more defined benefit plans as opposed to defined contribution plans and by seeing this uptick it shifts the responsibility slightly to individuals and companies as well right because we are seeing the uptick when it comes to four hundred one ks as well but you might say well it also has to do with inflation and i got curious and dug into the numbers a little bit and i was super shocked to see that the limits back in nineteen seventy five let's say on an ira was fifteen hundred bucks it took twenty five years to get from nineteen seventy five the one thousand five hundred dollars limit there to the year two thousand where the limit increased only.
- [12:00]
Matt
By yes one thousand dollars five hundred.
- [12:03]
Joel
Bucks wow it was only two thousand dollars in the year two thousand and then between two thousand and twenty twenty five it increased from two thousand to seven thousand dollars a massive uptick right yeah and if you're only looking at inflation you might say well wait a minute guess what we had a lot of between nineteen seventy five and the year two thousand we had a ton of inflation and very little inflation between the year twenty twenty i'm sorry between two thousand and twenty twenty five so.
- [12:30]
Matt
My hypothesis is that with COVID blip.
- [12:33]
Joel
In there yeah but what took place more within that period of time was just an expectation as to who was a little bit more responsible for their retirement dollars which is something i can totally get excited and be appreciative of.
- [12:47]
Matt
So if you're looking to figure out how much you should contribute to your ira every single month in order to max that puppy out matt the math says six hundred twenty five dollars a.
- [12:56]
Joel
Month ooh i like it yeah so nice nice and even start setting that.
- [13:00]
Matt
Junk on autopilot come january and then you'll you'll max it out by the end of the year so we would love ideally everyone listening to the sound of our voices to max out their roth every single year the other thing they got updated because everything's getting updated by the irs this time of year we was the capital gains taxes and at what levels you pay zero fifteen and twenty percent oh i didn't see that you can make almost one hundred thousand dollars a year now and pay zero in capital gains taxes it used.
- [13:28]
Joel
To be like was it ninety two.
- [13:29]
Matt
Thousand and i think it's like ninety eight nine hundred all right i should have written the number down still glad to see that increase as well for.
- [13:37]
Joel
All the frugal early retirees out there they're fist pumping you your taxable brokerage.
- [13:42]
Matt
Account can be a way to you might be able to avoid the fifty fifteen percent capital gains tax if you're smart if you're savvy so should you stick more in a low cost s and p five hundred etf because you have the ability to stock more into those workplace retirement accounts historically it's been a pretty fantastic choice even recent history has proven it to be a super smart bet returns this year are actually set to crush every projection from wall street firms for the third year in a row matt those projections continue to fail consistently often on the underside sometimes on the over but the experts in this cnbc article experts i should probably put that in quotation marks they're saying that this strategy is not looking as smart moving forward it's not diversified enough they say and to be honest i think these these experts make some reasonable points like one is that while you own five hundred companies in an s and p five hundred fund your eggs are in fewer baskets to a certain extent because or at least maybe like a couple of your eggs are gargantuan and a lot of the other ones are super duper tiny but because of the massive market cap that ai companies like microsoft and nvidia hold so just a few stocks really make up something like twenty percent of your s and p five hundred fund which those max.
- [14:53]
Joel
Seven eggs are quite large right the rest of them are like little jelly.
- [14:56]
Matt
Bean eggs it feels a little risky it does feel a little risky so i get that and then you know when returns have been significantly higher than average for many years now a reversion to the mean is likely like when you've seen outsized gains in the historical average is something closer to ten percent well what should you expect in coming years well you should probably expect the average to level out at some point so should you change your strategy this is something we talk about regularly here on the show we talked about it with a nick magiulli article that was written not too long ago i think so much depends on your goals and it depends on your risk tolerance those are the things you have to assess so for some people out there they might say i am too nervous i can't stomach the potential volatility coming down the pike i should make some changes you should know yourself emotionally there are other solid approaches but i think a to to investing but a knee jerk response to articles like this that's the thing we want people to avoid that.
- [15:49]
Joel
Would be unwise yeah and in addition to that it's been a glorious time to be a diversified investor but it could get a little harder in the coming years and also sort of like you're saying just don't expect these incredible returns in perpetuity but i wanted to talk about target date funds because they can be a really good choice for many folks there if you are looking for more bond exposure if you're looking for more international exposure the ability you.
- [16:13]
Matt
Don'T want to be so us heavy and yeah i get that desire there's.
- [16:17]
Joel
A decent argument to be made there but one of the things we might be seeing is private equity it might be forcing its way into target date funds soon which is no bueno and so instead of just having the option to invest in alternative assets you would now be forced to own them in various target date funds that you might own if companies like blackstone and apollo have their way there's conversations evidently that are happening on wall street about including those in some of these target date.
- [16:46]
Matt
Funds you and i we've kind of talked about how we don't like the idea of even alternative assets being widely available in retirement accounts gives people maybe too much choice and choice that's not even really helpful for the average investor i think it feels even more nefarious to have them inside of a target date fund because target date funds feel like this set it and forget it strategy for a lot of people yeah and to have who don't those the average investor doesn't need exposure to alternatives if they end up in target date funds i think they actually could ruin something that serves a lot of people.
- [17:17]
Joel
Pretty well sure yeah i don't know if i would agree with you and say there's too much freedom i think if you you can you should be allowed to invest the paradox of choice whatever anti aldi sure but that being said if you want the choice there is still another store that you can go to it's not forcing everybody i don't want to force everyone to go to aldi because i think that they should limit their choices but you should have the option to but i do agree with you one hundred percent the fact that if there's private equity getting sort of like shoved into this pork sausage but they're still maintaining the target date fund that's where it feels just backwards you know like this feels like an instance to where like like oil and water doesn't mix and it feels like they're trying to mix the two things like target date funds are known for being affordable relatively affordable private equity.
- [17:58]
Matt
Isn'T you can see the expense ratios ticking up on some of those funds.
- [18:01]
Joel
Yeah yeah it does not seem like it's a good match and so that's an instance it's just something that we're going to keep an eye on because hopefully this is an instance where we see some of the better brokerages out there like vanguard and fidelity holding the line but if they don't we're going to call them out on it we will talk about it and it just feels like another way for private equity to get their hands on your dollars it used to be the rock star fund managers it's like oh that's how we can garner more in expenses now it feels like private equity it's like oh you need to pay more for access to this opportunity to potentially experience outsized returns just a higher level of.
- [18:39]
Matt
Risk or at least they had to go court accredited investors people who had enough income or enough net worth and say and sell them on investing in their scheme and now if they're inside of target date funds they're getting everyday people to invest in their schemes instead of having to sell the people who really do have the investing knowledge and ability because i don't feel bad for accredited i mean i feel bad sometimes but like i don't feel too bad for accredited investors who lose money because they invested in alternative investments that's something that got into with eyes wide open play at your own risk the everyday investors who kind of unwittingly are investing in alternative assets that feels a little different to me let's talk about the comeback of student loan payments matt those have been widely documented and they have put many americans between what i would call maybe a rock and a hard place choosing between paying your student loans and your credit cards it's not easy right if you have limited funds and so there was this new transunion survey which found that borrowers are ranking their student loan payment ahead of their credit card payment which makes sense because the stakes are higher with that student loan especially given the wage garnishment threats that are likely to come about the administration has said we're even going to hey take money out of your tax refund if you're not paying your student loans so the money's going to come out and find its way to pay off your student loan servicer either way it sounds like i guess if you find yourself in the position where you can't pay your debts it's crucial to talk to a professional at like a nonprofit we would suggest a place like money management international they have the power to help where other folks truly can't there are a lot of people purporting saying that they can help you if you are in debt that's over your head most of them will take your money and not do much help but the nonprofits are the way to go yeah and actually matt i heard from the folks at mmi recently and they told me that ai so many of those ai systems like chatgpt are recommending mmi so hey chatgpt is getting it right mmi people are going there in droves because they're turning to ai for some of these questions yeah i'm proud of.
- [20:44]
Joel
Chatgpt on that one ai is not all bad joel right although i've got a story here that actually points to ai used in a more nefarious way we're sadly seeing a rise in debt collection lawsuits right now there's some experts who were interviewed by the times and they suggest that ai has made it easier for companies out there to file a large number of these suits in courts around the country there's not hard evidence but they're pointing certainly pointing to correlation and they're hoping the research will follow soon but debt collectors are often able to buy past due debt for pennies on the dollar they file a suit and they get a judgment and this is why it is so crucial to respond to any legal notice that comes your way even if you don't think you've ever done business with that company that particular company because guess what well it's already been sold it's been what's it called when they when a creditor where they market as something that is not collectible or they think it's they write it off basically they sell.
- [21:37]
Matt
It for yeah and the company contacting you could be the it's likely the debt collection agency and yeah you didn't do business with them you did business with a hospital group who sold this debt to them and that's why they're in possession of that debt now that's why they're reaching out to you each even though you haven't heard their name yeah which makes it yeah i get.
- [21:51]
Joel
It'S weird as it could be could be totally legit though but if you don't even show up to defend yourself though you may lose by default if you do show up even just being there the debt collectors they can easily lose they had an example of that just because they don't have the right paperwork they can't support because they're not.
- [22:10]
Matt
Organized enough and this happens regularly they don't have the documentation and they don't have a case because they don't have any evidence you win and you didn't.
- [22:18]
Joel
Have to do much yeah you just have to know your rights and a lot of this comes down to what the laws are in the state where it is that you reside because let's say this does go to court you're not showing i mean they could garnish your wages in some states they if you're a no show in some states you can even be arrested and i don't think that's likely and this isn't legal advice because i don't think that they would do that because then you're even less likely to be able to pay that debt put them in a.
- [22:45]
Matt
Higher order we don't have debtors prisons.
- [22:46]
Joel
In the united states fortunately but that is a possibility so you need to know the laws of your state yeah.
- [22:52]
Matt
We'Re actually going to talk a little bit more about ai and chatbots in just a bit but matt there was a new story about buy now pay later let's talk about that one when we get back from the break.
- [23:07]
Joel
You probably think it's too soon to join aarp right well let's take a minute to talk about it where do you see yourself in fifteen years more specifically your career your health your social life what are you doing now to help you to get there well there are tons of ways for you to start preparing today for your future with aarp.
- [23:26]
Matt
What about that dream job you've dreamt about sign up for aarp reskilling courses to help make it a reality how about that active lifestyle you've only spoken about from the couch aarp has health tips and wellness tools to keep you moving for years to come but none of these experiences are without making friends along the way connect with your community through aarp volunteer events so it's safe.
- [23:47]
Joel
To say it's never too soon to join aarp they're here to help your money your health and happiness live as long as you do that's why the younger you are the more you need aarp learn more at aarp dot org wisefriend hey y' all it's joel and matt from how to money joel you were just out in seattle recently weren't.
- [24:08]
Matt
You yeah man it was amazing i went for one of the most glorious runs of my life along the waterfront it had everything you could ask for crisp air mountain views fairies gliding across.
- [24:17]
Joel
The water beautiful i love it man yeah for us our road trip through charlottesville was a highlight we actually splurged on a custom built airbnb and it was well worth it the house had these unique touches like a poured concrete counter there in the kitchen with a built in drying rack super functional it even inspired some ideas for our house.
- [24:35]
Matt
Plus with a kitchen like that you save money eating out yes exactly that's.
- [24:39]
Joel
What struck me what seems normal to a homeowner it can be the thing that makes a guest trip really special.
- [24:45]
Matt
Which is why hosting makes sense right travelers are looking for those authentic memorable spaces and if you don't have time to manage all that well airbnb's co host feature makes it easy a local co host can help with everything from creating the listing to keeping your place running smooth yeah so while you are.
- [25:00]
Joel
Off making your travel memories your home could be helping someone else make theirs find a co host at airbnb dot com host.
- [25:09]
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- [26:11]
Joel
All right buddy we are back from the break and everyone knows that this is typically what if we switched it up and decided to move the ludicrous headline of the week from our friday flight people would revolt would they that's exactly what i was gonna.
- [26:22]
Matt
Say what if we instituted a new segment that was more happy and shiny you think like what were those websites back in the day and they only had good published good news i don't.
- [26:31]
Joel
Know they probably did they fold because yeah unfortunately yes yeah if it doesn't bleed it doesn't lead that's right no the ludicrous of the ludicrous headline of the week came from the times and listener dan he actually sent this one our way i think he said he was getting just stressed out just reading it oh god and so much of.
- [26:50]
Matt
It it was tough man these individual lives ruined because of buy now pay.
- [26:53]
Joel
Later also whoever did the photography for the story too like they're showing people with all the stuff that they purchased this is a this is a buy now pay later story but they're just surrounded by all their stuff and even just being surrounded by that much stuff that you know is financed i think maybe i started to feel it too started getting a little sweaty yeah but the headline it read they got to live a life of luxury then came the fine print more folks are they're facing the music after embracing buy now pay later full on klarna afterpay their ilk they are more than happy to oblige with limits that far surpass what most credit card issuers will give you and what seems like a harmless way to buy stuff that you want man it can be far worse if you can't pay the bill you know it seems like such an easy innocent way to do the pay in four it's free and so easy so chill what.
- [27:45]
Matt
Could go wrong it's such a slippery.
- [27:46]
Joel
Slope because the interest fees are much worse than credit cards up to thirty six percent they can accrue if you can't make the payments on time and then the late fees they can pile up as well and i don't want to be those guys joel but we've been warning folks about buy now pay later basically since they came on the scene and it feels like we're this is a case of i told you so but i think a lot of it just has to do with the fact that there are folks who just haven't learned their lessons yet when it comes to buy now pay later because it's novel it's new you know like.
- [28:17]
Matt
It makes sense it was attractive and that people were like yeah i'll give it a shot whereas like credit cards.
- [28:23]
Joel
They don't feel as attractive anymore like people who have used credit cards they i think maybe they've learned their lesson they've gotten a they've gotten burned right and so you got like i'm thinking.
- [28:31]
Matt
Of the stories have been around for.
- [28:32]
Joel
Decades gen x credit card abuse millennials older millennials and they're like okay if they've gotten burned they know to shy away from that or they've learned that they can handle it well that's my hope yeah at least and it seems like gen z in particular they maybe haven't learned that lesson quite as much and there's more folks flocking to the.
- [28:50]
Matt
Buy now payment and i hope i hope that they can learn the lesson the easy way by hearing us rail against the buy now pay later companies and how nefarious they are and even though it seems it seems like they're trying to be trying to be helpful it's a behavioral nightmare for people so in a world where you can delay paying for anything human behavior to consume is like kicking into another gear just causing people to be like give me.
- [29:15]
Joel
My stuff yeah i'll take it and.
- [29:16]
Matt
Layaway back in the day at least you used to have to like wait to get your item so you paid the money or you paid in installments and then finally you got your item at the end of it but but when you get your item first and then you're like oh that was easy i didn't even have to pay for the full price yet let me go do that again and it just creates a sick cycle at least for a lot of people where they buy so much stuff that they can't afford that's true it's tough to watch i think part of it feels like fake money that's what it feels like when you use buy now pay later and you just keep buying but not in the nick maggiuli just keep buying sense of the phrase and that can wreck your finances that spending hangover can leave this emotional and financial scars for people and at the end of the day you limit your choices because you spent money that you don't have it flies in the face of personal finance one hundred one and not to be too drastic matt but this to me kind of feels like we're creating a generation of alcoholics but binge buyers instead which is like less stigmatized i want to add more stigma to the binge buying thing because it's so detrimental to human flourishing and to your ability to have money in the bank account we've even seen people make it seem like it's empowering but i think the opposite is true buy now pay later is disempowering to.
- [30:31]
Joel
Individuals yeah and here's some basic old school advice just don't buy it if you can't afford it because unfortunately we've got one more story that we want to get to where buy now pay later has found its way into paying.
- [30:42]
Matt
For travel the many tentacles of buy.
- [30:44]
Joel
Now pay later nerd wallet they found that one in five travelers are planning to use buy now pay later to spread out their payments for the next trip the next vacation that they're looking to take and almost half of travel providers offer that ability now see it.
- [31:00]
Matt
On your friendly airline website it's everywhere it truly is everywhere airline credit card you can also pay in easy installments.
- [31:07]
Joel
Yeah but of course buying travel via buy not pay later it creates even more problems because if there are issues with your travel itinerary you're going to have far less recourse and you know we were just talking about credit cards this is an instance where credit cards actually shine because the rewards and the benefits that you receive the protections that you receive if that just mentioned trip gets canceled or delayed you can get rental car insurance you can get travel insurance there are all of these different travel benefits that you receive if you use the right card especially when it comes to travel that's one of the still one of the silver linings of credit cards in the travel space specifically if you have a travel card and you are using it for a whole lot of travel and that is not the case with buy now pay later all you're getting there is just the ability to not pay for it like right then and there like you just have the ability to pay for it in the four easy installments just a.
- [31:59]
Matt
Delay just a delay that's all but yeah you're right when you use the credit card there's a whole lot else you get with it yeah we still want you to use it wisely and we only want you to use it if you have the money in the bank account we don't want you to go into debt for a trip whether it's with buy now pay later or a credit card but the credit card is at least an understandable way to purchase something and buy now pay later to me is not matt the washington post had an article about landlines making a comeback and at first i was like what please say it partly because landlines can be expensive like something like thirty to forty bucks a month if you get a landline through the local phone company i just didn't realize people did that anymore and if you are if you do still pay for a landline strongly reconsider it but they talked about actually a new startup that was really interesting called tin can which is offering eighties looking telephones that run over wi fi they cost ten bucks a month which sounds reasonable it's got the.
- [32:52]
Joel
Curly cord and everything yes it does oh my gosh it's so cool the real question is can you can you get an aftermarket super long curly cord that can stretch all the way across the kitchen yes that's the eighties i'm.
- [33:05]
Matt
Sure some people who are listening to this still know what we're talking about so you should go to that website and check it out we'll link to.
- [33:10]
Joel
It they know they've watched movies have they even if they haven't experienced it.
- [33:13]
Matt
Themselves you're probably right and and so but tin cans kind of cool like i get what people are going after they're what they're trying to do is to break the smartphone addiction and so if your kid if you've got a kid who you want to be able to like talk to their friends and stuff like that after school but you're not ready for them to have a smartphone and not even from a cost perspective because matt you and i we've talked about how cheap it can be like us mobile has eight dollars a month plans for like unlimited talk and text and two gigs of data that's cheaper than tin can but it doesn't matter because for a lot of parents it's more about it's a protectionary mechanism to not bring the smartphone into their lives and i think something like this could make a lot of sense allow your kid to feel like they kind of like we were able to do back in the day in middle school call our friends and chit chat and stuff but without some of the downsides of full on smartphone exposure yeah for.
- [34:07]
Joel
That reason this is an argument i can get behind this is the case that jonathan haidt's making in the anxious generation if you have a child and you have not yet read that book i think we would both would you recommend it as well i haven't read.
- [34:22]
Matt
It actually oh you haven't no well i've listened to him interviewed but you know the principles i know the principles and i am pretty darn aligned exactly.
- [34:29]
Joel
But it's also hard for me to face the idea because the phone even though it's retro and cool looking it was still seventy five bucks yeah which i'm like come on like i would still rather just put that seventy five bucks towards me upgrading my iphone and letting one of the kids you know be able to use that like to have their own phone that they can do a wifi based call but i think there is something what is here is the fact that you're kind of encouraging or i guess in this case you're not giving your kid another option to communicate with their friends other than to talk which is something that i can totally get behind i've not thought about that i've not thought about how when we were literally talking with our friends there weren't texting there weren't emojis that we were dropping into the text or dropping the dookie emoji on someone's head like on the like in the video chat all these dumb things that can just undermine the quality of the conversation and it really does make me want to say to our seventh grader the next time that she says hey can i get on the phone because we've got a little dumbed down cell phone that we keep in the kitchen when she says hey can i get on there because she normally gets on there to check messages i think i'm gonna encourage her and say hey you can get on there but only if you are looking to call one of your friends to talk with them and maybe this is the conversation i can have with other parents too because i want the kids to be doing that more more of that because one of the things jonathan haye talks about is asynchronous communication and so there's something that you lose when you send a message and then you don't have to respond in real time as opposed to the like what you and i are having right here just the ability to in real time sorry what'd you say communicate to each other is so important that.
- [36:07]
Matt
Was a joke i don't know well it makes me i think especially for girls in this age in this age range too that are oldest where our oldest are the those group texts can feel like almost like an at home form of bullying it can be a really tough thing to experience they're some of those girl group chats i just know from hearing my daughter talk about it and hearing some of the other parents sure some of them suck yeah it can be really tough and so having a one on one conversation with a friend feels very different you're not going to get dunked on in the.
- [36:36]
Joel
Same way doesn't it feel humanizing like just even talking about it it just sounds so much more relatable more humanizing and that's i think what we're looking for when it comes to our technology.
- [36:45]
Matt
You know what i love the meta thing we're doing right now which is talking about talking talking about talking my son asked me the other day about he literally prompted a conversation about conversations and i thought it was like i loved having that i love having that chat all right buddy we're about to go deep he was like dad tell me more about conversations and let's talk about that and it was like it was super fun just like what gives a conversation meaning he's six and he's asking questions about this that's fun maybe we should offer one more morning matt because like for parents with kids depending on your kids ages you might want to also rethink how much access and how much access they have to a laptop and a computer as well because there are a million ways to get in trouble online i will not tell you what my child googled at school the principal reached out to us was like she misspelled it which is funny and it is a body part tell.
- [37:34]
Joel
Me the spelling after we stop recording.
- [37:37]
Matt
I will but so this happened at school under supervision and she didn't get into too much trouble and the filter blocked it out but this like kids are curious about stuff i don't even think it was a nefarious thing she was trying to do she's just curious because kids are curious so obviously she.
- [37:50]
Joel
Didn'T what does that trouble what does.
- [37:51]
Matt
That look like she didn't get in trouble but we had to we had to have a chat but let's add maybe something else that you want your kids to avoid which is chatbots and not just because we don't want your kid to have fake digital friends although i still put that in the weird camp i don't i personally don't want any fake digital friends but also because you're delivering more personal information into the hands of advertisers when you strike up more conversations with chatbots online the verge had an article documenting how meta is going to use your ai chats to personalize your feed serving you of advertisements based on your interactions with those said chatbots you cannot opt out of this and matt this is just another kind of check in the brave new world camp what have we entered into i am it makes me want to stay away because i don't want to deliver any information that the the chatbots are going to recognize and then every facebook esque product they own whatsapp to is going to serve me up ads based on personal interactions i've had with the chatbot where i kind of thought they were off limits to advertisers but no of course they're not you didn't you.
- [39:01]
Joel
Weren'T expecting all the chatbot to go squealing hey people are using chatbots for.
- [39:05]
Matt
Relational purposes more for therapy purposes more they're giving away more personal information on these things and i think you just have to be wary from the get go about how much it's different to ask a question about a research paper you're writing right that seems like less potentially harmful to you but if you are using it for some of those other more highly relational purposes you you might find it super creepy what you get served up in the aftermath okay.
- [39:30]
Joel
So on that note our last related story here did you see the story about verb dot verb ai oh yeah which is a basically a data harvester you download it it puts a tracker on your device and you get paid for letting them track you thoughts what.
- [39:48]
Matt
Do you think for letting them watch everything you do on your smartphone what.
- [39:51]
Joel
You search where you go your browsing habits i mean how long you stay.
- [39:55]
Matt
On certain apps literally everything yeah i guess the only thing they're not supposedly scraping is what's happening with your bank.
- [40:01]
Joel
Information exactly bank information i don't know.
- [40:03]
Matt
Man that creeps me out too and it feels really different than going to donate plasma for money that feels okay.
- [40:11]
Joel
So yeah they actually yeah you read the story they've actually got that there in the story and that's an instance where it feels like the equivalent isn't that you are going to donate plasma it's almost as if the equivalent would be that our current data scraping industry is sort of like you going to your doctor and them running a check on you you're there for your annual physical and they say oh we need to actually sample some of your blood and you're sitting there and you're hooked up for like thirty minutes and you're like what are you guys doing yeah and they're like oh nothing and they're like secretly harvesting your blood that's what it feels like now versus going to a plasma center where you are knowingly sitting down doing on purpose yes where it feels intentional and so me personally am i gonna do this am i gonna download this app and you know they're calling it like a new gen z side gig where you can make fifty bucks a month i don't think i'm gonna do it but i think there's a younger matt that would have seriously considered it maybe checked it out and seeing to see how it would have interfered because it feels like it just is bringing that selling of personal information out into the open i think and that's the kind of transparency that i can get behind i think it's a great point especially if you're already if you're using social media apps and you're not asking it to track you they've already got your information and you're.
- [41:27]
Matt
Just not getting paid for it right when the product that you're using is free then you're the product and you just kind of don't know all the ways they're accessing your personal data this is a voluntary exchange and you're getting paid for your data still this is something i wouldn't participate in because i don't want some app sitting in the background of my phone checking out every single thing i do and you know i don't know what percentage of the profits i'm getting as the as the product that they're mining but it doesn't seem like it's enough to compel me.
- [41:54]
Joel
To sign up yeah i'm with you i'm not going to do it but it's interesting to know that there is an option there's somebody out there who thinks that this could be something that.
- [42:02]
Matt
Would succeed no doubt all right that's gonna do it we'll put links to in the show notes to some of the websites and resources we mentioned the website of course as you all know is howtomoney dot com if you want to get in touch with us if you want to send matt an email howtomoneypodmail dot com tell matt how call.
- [42:19]
Joel
Me out i'll get back to you.
- [42:20]
Matt
Excellent you think he is or if you said something dumb that you didn't.
- [42:23]
Joel
Agree with today let me know that.
- [42:24]
Matt
Too don't holler at me though just kidding you can email me too all right have a great weekend until next time best friends out best friends out.
- [42:45]
Joel
This is an i heart podcast.