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This is an iHeart podcast.
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Learn more at aarp.org skills welcome to how to Money. I'm Joel.
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I'm Matt and today we're talking about.
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Taco Trading, Pointless points, and Millionaire Renters.
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Taco Cat Goat Cheese Pizza. Joel, is that a game that y' all play?
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Oh yeah, that's fun game for all.
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The folks with kids out there. If you have not yet tried the card game, Taco Cat Goat Cheese pizza, I would highly recommend it. It's a ton of fun.
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A
They have like a holiday themed one that's like.
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Do they.
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A
I forget what it's like Santa Elf, something. Yeah but those are fun to play with the kids.
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B
Yeah but in fact this is our Friday flight where we're going to talk about the best headlines from this past week. How they pertain to your personal finances Joel, real quick, man. I was talking to a family member about getting a cpap. This is something that was put on his radar by his doctors, talking about how much of a hassle it is.
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Also by his wife, probably. Yeah, you snore, man. Why don't you fix that?
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But what's the latest with you? Because I know that's something that you looked into, you know, getting some of that oxygen flowing at night so you don't want to have your breathing interrupted.
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Actually, that's what the CPAP's all about, right? Listener Seth just sent us an email this week, and he was asking like, hey, whatever happened with that? And how did you. Because I'm facing down a many thousand dollars bill to get the sleep test and to get the equipment. I think you said you did it for cheaper. And I was like, oh, yeah, yeah. Let me mention that on the podcast. I'll give the details. So basically, my friend Garrett had done this and he tipped me off. He said, hey, you can actually do an at home sleep test now. By the way, this is not medical advice. I'm not a medical practitioner here, but there's a site called Lofta, and I think there's like two points of contact. One's on the finger and then one's around your chest, if I remember correctly. It's been a minute. So then they record you, the way you sleep during the night, and they say, hey, you either have sleep apnea or you don't. I did. I pretty much knew that I did.
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B
You're like, yeah, yeah, I figured that was the case.
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Yeah. And then LAFTA will also sell you the equipment. But the at home sleep test is super cheap, less than 200 bucks. And when you're talking about going into a hospital facility overnight to do that.
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B
That seems like the big advantage. I remember when you mentioned that, because this was something that you'd done previously, right? I guess. Like when you were a kid.
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A
When I was like a young adult, basically.
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B
Yeah. Not a kid. When you had benefits provided by the man. And that's not something that we. We don't have that we have here, being self employed. But that sounded like a nightmare scenario. It's like, it sounds like some of these, like, university studies where you're in this cold laboratory and you're like, okay, sleep on the steel table.
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You feel like a guinea pig for sure. It's terrible.
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B
That's not gonna. I'm not gonna be able to sleep.
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Well, it was much nicer to have it done in your bed at home. And Then literally just, you know, you upload the results of your sleep and then they tell you, yeah, you do you need this or whatever. And you can pay them more for kind of more guided help along the way in choosing your CPAP machine. And I think there are other companies out there that do this, by the way. This is just the company I use that my friend used.
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B
By the way, it's worth mentioning, we don't have any affiliation with Lofta.
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Not at all.
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B
Which do they. Is there a company called Lofta that also makes mattresses or something?
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Probably something very similar.
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B
They sound like a mattress company, like mattress in a box. Lofta.
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Well, and then you can buy your CPAP equipment from Lofta because they're essentially you a prescription, but you can also take that prescription and shop elsewhere, which is what I did. I shopped around on the open market for that CPAP machine and I was able to save a lot of money buying it from an Internet company. There were like some great sales going on. So I would just say, yeah, get that home, sleep, study and then look around for the machine that is going to work for you and you should be able to do this instead of for many, many thousands of dollars for less than $1,000 total.
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B
You didn't get your equipment from TEMU or anything? No. Joel wakes up in the middle of the night and his equipment is strangling him. I can't breathe.
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Just breathing in straight lead.
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No. I do think. I love that this is an option, that there are other options out there for folks where you don't necessarily have to spend thousands of dollars and hopefully. Have you been wearing it like consistently?
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That's the thing, man. It's.
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It's tough. You got the kind that's like the pigtail at the top of your head so that you could roll around.
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There's all sorts of different kinds of masks that you can choose from. Not that I watch you while you.
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Sleep, but you told me. You told me about it.
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Yeah. Some that are more invasive than others. And that is. Has been the best kind that I've. That I've tried as they go.
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That has been the most successful. But unit.
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It's really hard not to get used to it. And so do I find myself ripping it off? Yes. Have I found myself not putting it on at all many nights? Yes.
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B
Also, I get it.
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So is the CPAP that you bought that you got a much better price on still a good deal if you don't use it? That's. That's. That might be a philosophical Question. I would rather know the answer to it.
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Even still, I'd rather spend a few hundred dollars than a few thousand dollars when the potential outcome might be the same, which is you not necessarily wearing it, but. All right, man, let's keep moving, buddy. Let's talk about travel and vacationing because Southwest has officially made their change. Paying for checked bags started on Wednesday, much to our chagrin. That being said, if you bought a ticket before that deadline, you will get to enjoy free checked bags one more time.
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A
That was me. That was me.
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Yeah, but mo going to cost you $35 for that first bag, $45 for the next. Sounds like typical airline. Sounds like fee structure right here, man. Everybody else, it's certainly going to make. That was like our favorite reason, one of the reasons to go with Southwest, specifically the free check bag. That's. That's how you get the nice beer haul. That's right when you are flying from. From other cities, which was something that you got to do one last time from Texas.
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And I'm not usually a huge checked bag guy. I don't like to check bags unless I'm checking for beer or I'm going on my annual backpacking trip, in which case I'm bringing a lot more than I normally do. My giant backpacking bag. And so in that case, why can't.
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B
You fit all everything you need in the tiny little bags?
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I wish.
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Like a real man living off of the. Off the land at that point.
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There's more you need for that.
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In addition to that, though, basic economy fares are going to be implemented, which will replace the want to get away option that you've gotten used to seeing. It's really hard for me to hear the want to get away. Every time I would see it, I would think of that Lenny Kravitz song, the I want to get away.
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I get that. I get why.
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From the 90s. But then to twist the knife even further, flight credits are going to expire within six months before they actually never expired. You could just hang on to that. So what that means if you cancel a trip, this is something you got. You got to basically add it to the calendar that, hey, we need to make sure that we use utilize those credits in order to not lose those credits.
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That was one of the greatest perks of being a Southwest customer, was, hey, you know what? I canceled that, that trip, and I can use those points anytime into the future. The six month thing is real drag. All these things are a big drag. And it should, I think, reduce the loyalty you feel if you've been someone who's like, I fly Southwest because they're great, and I'm sure they'll still be great in some ways. There's a lot of reasons to be less loyal and just shop for the lowest fare. And South Wales was pretty competitive on fares, although not always the lowest, of course. But I think this just should push all of us more in the direction of shopping and being less loyal to any airline in particular. And I think that's just been more and more the case in general, too, especially as airlines are saying it's less about how frequently you travel on us, it's more about how much money you're spending. So if you're the kind of normal person who flies a few times a year, then shopping around makes even more sense than being loyal, because you're not going to get rewarded for your loyalty at airlines nearly as much these days. And then pack light, too, because I think I would love to see more folks avoid checking bags altogether. I know it's not always possible, especially like on my backpacking trip. Right. But I think it is more possible than most folks think to avoid checking a bag. So whatever airline you're on, Southwest included now, think about the added costs that checking a bag is going to add to your life and hopefully you can travel lighter.
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B
That's right, buddy. And as is usual on our Friday flight, we have our standing tariff updates. Heavy tariffs against the EU were threatened and then pulled back.
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What we didn't talk about before tariffs.
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By the way, we talked about shrinkflation and how much money the government was going to infuse into our bank accounts via the Stimmi. The Stimmy money.
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A
Egg prices.
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Egg prices. That was a little bit more recent, which, by the way, I feel like we've seen those prices come back down, actually. But this rebounding nature of Trump's tariffs has been true of essentially, I mean, honestly, every trade policy threat that the Trump administration has made, where he says that tariffs are God's gift to the world, but then in reality, that they only seem to be used as, like, this blunt instrument in order to force other countries to negotiate. Whether or not it's working is debatable, but it's working for some investors who are participating in taco trading. And so the acronym stands for Trump always chickens out. Thus the Taco. And, Joel, some investors are making their investment decisions based on terror threats that don't actually materialize. They're making money. This is something that I feel like we were alluding to this when it came to terrorists the first time around when it's just like, you know what, there's a whole lot of talk, but let's actually see if this pans out as something that gets implemented. By the way, we would not recommend for folks to participate in taco trading. This is a pure speculative, casino gambling like mentality. It is not how you grow your wealth over the long run.
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A
Yeah, but that being said, I mean, do you remember, I think when President Trump truthed out, hey, now's a good time to buy, and he was spot on because he controls the lever essentially of what's going to happen with the economy with a lot of these tariffs. And so if you listened to the truth and you bought at that very moment in time, you would have done quite well for yourself. We've seen like a 20 plus percent run up in the stock market since then. So I get why people are saying I'm going to trade on this because it sure looks like I'm seeing a trend here which is threatened tariffs that don't actually come to pass, at least not in any significant manner. So when the stock market freaks because of the proposal, then I buy in at the low side and I am richer because of the comeback that that stock or specific industry experiences. But also on the tariff talk, Matt, tariffs might not just be rolled back by Trump himself. Right. That has become a pattern. But the courts are now weighing in and they have said that the President lacks the legal authority to institute widespread tariffs as he's been doing. Yep, it's kind of a one man wrecking ball.
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B
And they said, stop it sounds familiar.
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You're not allowed to do that. And the stock market was pleased when they, when they saw that ruling. But a federal trade court basically said that this big chunk of tariffs that have been levied by the executive branch is an overreach of that branch of government. And that their, I guess, legal footing is substandard. But, but also, like, will this ruling stick around? What happens with appeals? We don't know. But for the time being, that's kind of where things stand. And it makes me think back to when the Biden administration tried to eliminate and forgive student loan debt. The courts basically said, hey, you guys don't have the legal authority to do this. And so they attempted to find other legal means, like a different basically legal footing to get the, to pass what they wanted to pass. Well, President Trump is likely to do the same here. He might say, actually the statute I was using to try to institute tariffs on other countries, well, I'm going to use this other statute over here now. It's okay, right? As usual, it would be great if Congress would do their job. This is kind of one of a role that was specially built for them that they seem to be abandoning. But for the time being, tariff rates have been rolled back. Where things go from here is anybody's guess. We will continue in all likelihood next week on how to money tariff talk.
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B
I'm sure that's right, man. All right, so we briefly mentioned the MAGA accounts element of the big beautiful bill that barely passed the House last week. The reason, I would say one of the reasons there's so much focus on this is because the Tax Cuts and Jobs act will sunset at the end of this year. That in addition to the fact that the GOP has rolled all of their they've put all their eggs in one.
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Basket, all the hopes and dreams.
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This one basket is the bbb. But let's discuss a few of the other potential changes that would impact your personal finances if it were to pass the Senate and get signed into law, one of which is that HSAs could get even better, doubling the allowed annual contribution. If that remains, that's going to mean you can funnel even more money into that triple tax advantage account, which is fantastic.
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A
And I think there was a change in the law that basically said, oh, use your HSA for more things, including a gym membership, which is kind of cool. So HSA could be getting a heck of a lot better soon.
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B
Then it begs the question, okay, well what if you decide to implement your own gym at your own house and therefore buy equipment? Maybe child tax credits would be bumped from 2000 to $2500 per child, which.
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Is going to have more children.
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B
Yeah, there's a higher standard deduction for folks who are 65 and older. And the EV tax credit would be repealed at the end of the year as well. And there's of course plenty more that's included. But we will continue to cover this as things move along or not move along. Maybe as it gets sent back after the Senate, perhaps make some changes for sure. But we'll keep folks posted.
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A
Well, taxing different types of earnings differently is a big part of the proposal, too.
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B
That's right.
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A
Specifically, no tax on tips and overtime pay. That's not something that we love, though. And I think the domino effect of this getting baked into tax policy could have annoying cascading consequences, including more requests for tips. Think about if you are an industry that thrives on tips, you're going to want to find a Way to get customers to funnel even more money in tips your way because they're tax free dollars coming into your bank account. And so I think it's just interesting that we're prioritizing or saying that different ways you earn income will be taxed differently. We already say that to a small extent, but we'd be making that an even wider gap. And I just, I don't love the precedent that sets. And on the tipping, tipping thing, Americans are already frustrated by the frequency of tip requests that we experience in modern day, modern days. Right. And so how people are going to react individually to being asked for more tips and then for bigger tips, that's going to be interesting to watch because I feel like we're already experiencing a bit of a tipping rebellion happening right now, Matt. I mean, I was buying a pizza the other night and I was going to go pick it up. They're not delivering it. And at checkout they're like, hey, do you want to do like a 15, 20 or 25% tip? And I was just shocked. That felt pretty uncouth to even ask that when I'm going to pick the pizza up. It's different if you're delivering it to me. I think those are the kind of things that a lot of Americans are kind of frustrated by with tipping culture right now. It's like everybody's asking for a tip. That might only get worse if the no tax on tips becomes a reality.
- [16:55]
B
Yeah. The big beautiful bill also is going to have an impact on student loans as well. The new plan would be to take the Alphabet soup of repayment plans down to just two, which I would say would make it easier to understand, but also it's going to make it a bit less generous. And so essentially, the more you borrow, the longer that you're going to have to pay it back up to 25 years. For folks who are borrowing over $100,000, which we would not recommend, by the way, the income based plan ties your payment to a percentage of your income. So basically a sliding scale that requires you to pay a lot less if you make less. And the bill would also eliminate subsidized student loans as well as forbearance and deferments, which actually might not be necessary given the way the income based plan is structured. So it's not necessarily perfect, but student loan plans will be easier to understand. And the way that they're structured, it could help tamp down tuition inflation. Again, whether or not this remains as it is currently written, after the Senate takes a look at it, that's of course going to have an impact as to the implementation of the new student loan rules moving forward, where the kind.
- [18:02]
A
Of state and local deduction thing will end. That's another thing that's, that's like a really important piece of this legislation that's kind of being battled right now as well. So, yeah, we'll keep our eyes on this. And it is just fascinating to see that there's a lot of changes that could really impact your finances and your taxes in particular moving forward. So I'm sure we'll have more discussions on this soon. Matt, We've got more to get to. On today's show though. We're going to talk about the devaluation of credit card points and then we're also going to talk about house swapping, how that could make your vacation a whole lot cheaper. We'll get to that and more right after this. What does the future hold for business? Ask nine experts and you'll get 10 answers. Will we have another bull market in 2025 or we're going to get a bear market? What about inflation? Will it continue to calm or will higher prices remain sticky? Wouldn't it be cool if someone could invent a crystal ball that would give us some foresight?
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B
Well, until then, Joel over 41,000 businesses have future proof their business with NetSuite by Oracle, the number one Cloud ERP bringing accounting, financial management, inventory, HR into one fluid platform with one unified business management suite. There's one source of truth giving you the visibility and control you need to make quick decisions. With real time insights and forecasting, you're peering into the future with actionable data. When you're closing the books out in days, not weeks, you are spending less time looking backwards and more time on what is next. Our business is really small, but if we needed netsuite, we would be pumped about the time the cost savings that it provides. Whether your company is earning millions or even hundreds of millions of dollars, NetSuite helps you to respond to immediate challenges and seize your biggest opportunities.
- [19:45]
A
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- [19:58]
B
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- [20:31]
A
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- [20:45]
B
Nice.
- [20:46]
A
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- [20:57]
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- [21:13]
A
Matt, you remember that time we forgot to hit the record button when we started an interview? Yeah, I do. Didn't feel great, but at least we recognized our mistake. Fifteen minutes in and not completely after the fact.
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B
It wasn't super painful. Just only. Yeah, no, it was still painful.
- [21:29]
A
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B
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- [22:36]
B
All right, buddy, we are back from the break, and now it is time for the ludicrous headline of the week. And this one is from the site milestomemories. The headline reads, citi. Thank you. Points will soon be worth 25% less. Joel. The credit card companies, they giveth and they taketh away. Yes, they do. Citi points are being devalued by 25% beginning in August, which will likely come as a big shock to folks who have been accruing points via their Citi credit cards. So, first of all, it's okay to be frustrated. This isn't something that I like. I don't think. Like, for instance, like, when you're at the grocery store store and you experience some shrinkflation, it feels less egregious because you have a choice to buy something else. Right. You've got options, but deflating the actual value of your points that you've accrued by a meaningful amount feels a bit more like robbery. It's not like you have some other option of being like, okay, well, you stay with us and maybe we'll only devalue it by 15% or 10. No, no, no. Just a 25% cut across the board. But just know that you have a small window to use those points at the current full value before that value gets slashed. That's going to be August 24th. Yet another date to put on the calendar. It reminds me of subscriptions. Right? Like, put it on the calendar. Know that this is something you need to, because right now you're listening. Maybe you're sitting at a stoplight. Right? Brittany? Chris, I know you're listening, but you're not going to dive into figuring all of this out. Right there, Sam, you know, but add it to your calendar. Make sure this is something that you pay attention to, because I would hate for folks to miss out on some of the value that they are entitled to overnight just because they miss it by a couple of days.
- [24:05]
A
Yeah. And you might have been using that card in hopes of booking travel in the future. And you're, like, just stashing the points, stashing the points so you can plan an epic vacation. And then for Citi to come out and pull the rug from under you and be like, I mean, you're gonna have to have a lot more points now to get the vacation you'd hoped for. That's just a frustrating thing to experience. So booking sooner rather than later is a good Idea. And by the way, Citi is not the only company doing this. I mean, Hyatt earlier this year they shifted hotel tiers to make it more expensive to book with points at some of their properties. And these point devaluations are becoming normalized. The cfpb, the Consumer Financial Protection Bureau, I believe they're on life support. They were poised to do something about this at the end of 2024. They were basically saying, hey, shot across the bow. Credit card companies, you can't devalue points like this or we're going to come after you. Well, that's unlikely to continue now because like I said, the cfpb, they are barely breathing, they're barely holding on, so they're probably not going to actually see that through. I think it's important for folks to not overestimate the value of their points and to just get about using them. The more you hoard them, the less valuable valuable they become over time. So, yeah, plan your fun trip asap. Let this be an excuse to start using the points instead of just holding onto them. And I think too, Matt, this is actually maybe another change that people might want to consider making is if travel rewards points are becoming less valuable, it makes straight up 2% cash back cards more attractive.
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B
Yeah.
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A
Because you don't really have to think about it. And so yeah, if you're like, oh yeah, the travel points game playing, that has got me some sick deals. Well, the d. If the deals are less sick, then cash back credit cards just seem to make a little bit more sense these days.
- [25:51]
B
Yeah, I think folks might be less interested in jumping through all the different hoops in order to like the 5% rotating category spend is it discover? But it kind of comes down to I guess what phase of life you're in. Because if you are in the phase of life where you're looking to simplify your finances and streamline some things, like I'm all about finding ways to optimize and get the best bang for your buck. But beyond a certain point, it just feels like too much, you know, like if you were the kind of person who wants to squeeze every last bit of toothpaste out of the tube, I'm gonna squeeze it a little bit, you know, but like, you know what I've never done? Have you ever cut the end of it off and then like scraped out the toothpaste?
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A
I haven't.
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B
You've seen people do that?
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A
I have hyper frugal friends who do that. Yeah.
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B
Yeah. And I'm just like, okay, maybe you can get like, what, two more days of. I don't know. I guess it depends on how often.
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A
You brush your teeth, how much toothpaste you use, I guess.
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B
But I'm like, I'm willing to give it a little bit of a squeeze, but I'm not willing to, like, go through the steps of cutting it. And that's what it feels like. Some of these different requirements and hoops that we have to jump through in order to garner the most benefit from these different banks that the asking of us. Speaking of, actually Discover, I saw that they're now a part of Capital One. I didn't realize that, but someone in the how to Money Facebook group mentioned that the only credit card that they have are both Discover and Capital One.
- [27:06]
A
Cards, which are now essentially going to become the same institution. We don't know how it's exactly going to shake.
- [27:11]
B
I don't think it's necessarily going to impact anyone's credit per se. But I think more importantly, it just raises the question of just, oh, what kind of cards have you been using? Have you been garnering the kind of benefit from those cards as opposed to just not questioning it? I think there are just some simple changes that you can make that will allow you to get the most bang for your buck. Right?
- [27:29]
A
Yeah. I think one of those things is, do I are the only credit cards I have? Do they come from one issuer? Because let's say you only use Citi cards, right? Well, now you're like, well, man, Citi just did this thing to my points and they're worth less, man, I should have been banking points with somebody else, too. And the same thing is true. If you only have Discover and Capital One cards, you might want to say, oh, maybe I should get an amex card or a Chase card in addition so that I'm not wholly exposed to one credit card issue. Or I think that would be a wise move for the person in the Pound Money Facebook group that had. That had that issue and for anybody else out there listening who has a similar issue.
- [28:03]
B
Yeah, but no, I don't want folks to hear me say, like, throw some shade at Discover and say that, like, we don't like Discover. Like, they're.
- [28:09]
A
They're a great company, specifically both of those banks. So I'm curious to see what it looks like for them to merge because they don't even really fully know yet. But.
- [28:17]
B
Right, right. My. My longest standing credit card that I've ever had, I'm talking like 20 or 25 years, is with Discover and recently Joel. I was playing with some tools with, I don't know if it was with one of the credit bureaus or with one of the scores that are provided by one of the credit card companies, but they've got like this estimator and it's just like, hey, what happens if you, were you to get rid of this card or were you to pay off some, reduce the amount of spending or add an. Of course they're wanting you to add a card to your mix. That way you can increase your overall amount. But I was crazy shock to see, and this was just a simulator, but I was really surprised to see that my longest standing card where I didn't nix that, they were estimating that my score was only gonna drop by like two points.
- [28:53]
A
Oh wow.
- [28:54]
B
Which I would have expected like at least 10 times that. At least like 20 points or something.
- [28:58]
A
But yeah, probably because you have so many other credit cards you've had for a long time too, maybe.
- [29:02]
B
I guess so. But even still in my mind, that one Discover card, I'm like, oh yeah, that's the one I have had since.
- [29:07]
A
Discover Capital One Discover. Okay.
- [29:09]
B
Since I've had that I've had since I was a teenager. But evidently wouldn't be, wouldn't be that big of a disruptor to the overall credit score. Just take that with a grain of salt though.
- [29:17]
A
Very interesting.
- [29:18]
B
Yeah.
- [29:18]
A
All right, let's, let's talk housing. Matt. There was a recent Redfin report and it highlighted just how much more expensive it is to buy a home than it is to rent these days. And this is something that we've been documenting over the past few years in particular as housing prices have just gone through the roof. But it's, it's fascinating. I love seeing the data like, okay, how bad is it actually? Well, buying a home now requires $50,000 more in salary than renting. So essentially you need an annual income of around $116,000 to afford a mid priced home. That's roughly 82% more than the $64,000 you'd need to be able to afford a mid priced apartment.
- [30:02]
B
Quite the disparity.
- [30:02]
A
Dramatic difference. Right. And a bank rate study also found that it's cheaper to rent than buy in all 50 of the largest metro areas. So there's like not one metro area they found of the largest ones where it would be cheaper for you to buy than rent. And that was not the case 10 years ago. That was not the case 10 years ago. Which makes renting look pretty good. Makes it look a whole lot better. Than it did a decade ago. And more folks who would have bought a home in the past, they're just kind of getting zen with renting. Rich households in particular, they're choosing to rent more than ever. This was according to Rent Cafe. You and I, we own our homes. We're happy with our choice. We're also real estate investors. But the case for renting, especially in today's economy, is a strong one. And the old adage that you're just throwing away money, it's just not true. That is like one of those ingrained beliefs. For a lot of people, renting equals throwing away money. And if there's one thing that we can say, like we're not telling any individual, renting is right for you or buying is right for you, it can be very circumstantial. But I just want to dispel the notion that people instinctively feel about renting being a really dumb financial move. That's just not true. And it's especially not true right now.
- [31:15]
B
Yeah, it's definitely not true. Like, it's not true that you have to be, oh, if you are renting an apartment, you're broke. Because there's actually been a rise in millionaire renters and there's a reason for that, right? Yeah. So this is another article we came across this week. We're seeing more luxury rentals that offer these fancy amenities drawing and folks who have high net worths who are renting. That coupled with the flexibility and the convenience that renting offers, as well as the fact that you don't have to save up a massive down payment. Dude, this means you can invest more in the overall stock market instead of funneling it towards higher housing costs, as well as maintenance and repairs that are oftentimes vastly underrated, underestimated, under saved for, But a lot of intentional renters. And that's the key part, man, you got to be intentional about this. You can achieve greater levels of financial success than your home owning peers by pouring money into the market as opposed to pouring money into your housing. Owning a home, it can certainly be a great goal, but it's just not for everyone out there. And honestly, on the flip side, it's not a guaranteed thing to continue. We're actually seeing signs of softening in the real estate market. The big real estate sites, they've been predicting a housing market swoon, which actually seems to be materializing. So if you're a hopeful buyer, this is actually good news out there. Small little anecdote. Joel, Just received my property tax bill assessment and I opened it expecting the worst, which, I mean, let's be honest, over the past few years we've only seen housing prices increase, which means paying more when it comes to property taxes. And I did a little woohoo because I saw our home value actually decrease.
- [32:48]
A
Oh, nice.
- [32:49]
B
Which I'm sure there's a lot of folks stay the same who are listening and they're just like, wait, Matt's taking crazy pills. Like, what is going on? But when you see an increase in the what the city estimates your property to be, like, these are just paper gains, right? Like that is not an increase that you get to realize until it comes time for you to sell your house or unless you're trying to pull some equity out of your home. But guess what? You realize on a month by month basis the amount going towards escrow in order to save up for your tax bill. So this is again, that is a.
- [33:19]
A
Silver lining for homeowners.
- [33:20]
B
It's a small silver lining and this is anecdotal, but we are seeing this in more metros across the country.
- [33:25]
A
I was just talking to my sister who is moving to another city and she was looking. They're looking at places to rent. They've been renters, they're happy being renters. And there was a condo that they actually ended up settling on and the price they're paying for the condo was like a lot less than what they would pay to buy a similar size unit in that complex. So it's just fascinating to see the person who's renting it out, they bought it not that long ago. And I'm like, they're going to be losing money every single month by renting this apartment to them. They must have no other choice. It's just interesting that renters can make out like bandits here. Say, I don't even know what the HOA fee would be, but like that's included in the rent that they pay. So there's like substantial savings to be a renter. And then they can do a lot with that excess cash, right? Do smart stuff with that money, investing for their future instead of putting more and more money. Because, well, buying is the only way you build, you know, you build a high net worth. Well, that's just not true. And it's less true than it was 10 years ago too. Like buying a house can make sense based on your specific circumstances, your specific goals, but you just have to run the numbers and you have to know the trade offs. Because for most people right now, continuing to rent can make a lot of financial Sense.
- [34:39]
B
Yeah. I do think, though, the trick is being intentional about it. And folks who by default have kept their savings rate pretty minimal, whether it's just, you know, a 401k at work or investing in addition to what it is that their workplace is offering, realizing that they don't have a default amount, going towards the building up of home equity. Right. Like, there's almost. There's like a mental switch that maybe has been taking place. Right. Just with the. Given the democratization of investing, the ability for folks to do that more on their own, on their own terms, where it feels a little more accessible as opposed to it feeling like something that was kind of out of their reach when it's like the things have switched, essentially. Right. Like. Like back in the day, it felt like homeownership was a bit more attainable and investing aggressively in the market felt like something that. That really only the 1% did. But now it's almost like the opposite where. Where it's like, oh, no, no, everybody can invest, even just with like the spare change in your. In your pocket.
- [35:26]
A
But you bought a home, like. Exactly. You must be independently that.
- [35:30]
B
Exactly.
- [35:31]
A
But I do think that those tides are going to turn. This isn't. This disparity, Will.
- [35:35]
B
I totally agree. Yeah. I don't think this is a permanent change. Joel. While we're talking about housing, we are certainly fans of using Airbnb while you were traveling, but there are other ways to get a cool place when you are taking a big trip, and that is by partaking in a house swap a la the Holiday With Jack Black. Oh, yeah, I did Cameron Diaz.
- [35:57]
A
This is, for some reason making me think of, I think it was a Fox TV show, wife Swap, which one mom would go to another house and vice versa, and then you would see how the family acted. And that's reality TV at its finest.
- [36:09]
B
Sounds like it was one of your favorites that you were tivoing.
- [36:11]
A
I. I can't describe it accurately, but just go look up king Curtis on YouTube. I think that it's one of my favorite clips from television history.
- [36:19]
B
Is that an actual.
- [36:21]
A
I think it was from Wipeswap. And this young kid did not like the new mom who was in his house for that week. And the way he reacted was television gold.
- [36:31]
B
I might have to look it up, but we're talking about house swapping. Yeah. Not wire swapping. Sorry about that. These platforms are growing as a way to allow folks to travel for less. So obviously, instead of buying nights, you are essentially bartering. You're exchanging nights at Your own place. And the different sites out there, of course, you got the kind of hip sounding ones like Kindred, which sounds super bougie when I was reading about that one. But Swap House is one home exchange, that's another one. These platforms, these sites, they allow you to offer your place up when you are out of town to earn nights that you can use on the platform in the future. On one hand, I don't like it, Joel, because it is an inefficient exchange of value. Right. Like it's an inefficient market. It kind of makes me think of gift cards, like, why would you do this intermediary sort of step? It makes me think of timeshares almost. Right. Like, like you are handcuffed to this thing. But I do think it makes more sense in different markets where they're starting to crack down more on Airbnbs, where they are imposing more strict regulations, like up in New York City, Spain even as well.
- [37:31]
A
Banned them all together, didn't they?
- [37:33]
B
I don't know if they banned them all completely outright, but they are really cracking down because they're wanting, because, and I get it, like these towns, they're starting to lose the charm that made them what they were when they're just inundated by tourists. And so from that standpoint, it makes sense as a creative workaround. But I don't know, man, the Dollar cash, the universal exchange store of value, the ability to, to use that. I'm still more of a fan of.
- [37:55]
A
I don't know, I still, I like bartering, renting, I like bartering. So I like the way these sites, what these sites are trying to do. And one of the other things that they note on there is that they're not reducing housing supply in local places because you're just swapping. Right. And so there isn't like this unit that's being taken offline to be fully dedicated to full time, short rental use. Which is interesting. But there are other sites too, Matt. There's made me think of this one called Trusted House Sitters, which has been around for a long time too.
- [38:25]
B
Yeah. Go walk a dog, right?
- [38:26]
A
Yeah. If you're a pet lover and you don't necessarily want to give up your home, you can just go stay at somebody's home for free if you agree to take care of their pets. I have done this before, not via this website, but I remember doing this like when I was a pretty young fellow for a family, when they were out of town, their rabbit died. I felt really bad about it. I didn't get paid afterwards, but so, yeah, make sure check your home insurance to make sure you're covered before you do a home swap like this. But those sites can be a cool way to, to maybe like, help you find an interesting location you weren't planning on visiting or to find a free or cheap way to go abroad while keeping your budget like within reason. Right? When, when at this point it feels like airfare is one of the is is less obtrusive, less of a cost than where you go stay. Like that's a more, that's the biggest cost now of most trips, I think.
- [39:20]
B
Yeah, man, I like it.
- [39:21]
A
All right, Matty, that's going to do it. For this episode, we will link to some of the resources we mentioned in the show Notes up on our website@howtomoney.com but until next time, best friends out.
- [39:31]
B
Best friends out.
- [39:49]
A
In a world of economic uncertainty and.
- [39:51]
B
Workplace transformation, learn to lead by example from visionary C suite executives like Shannon Schuyler of PwC and Will Pearson of iHeartMedia. The good teacher explains the great teacher inspires. Don't always leave your team to do the work. That's been the most important part of how to lead by example. Listen to leading by Example executives making an impact on the iHeartRadio app, Apple Podcasts, or wherever you get your podcasts.
- [40:22]
A
This is an iHeart podcast.