← How to Money
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- [00:00]
A
This is an iHeart podcast. Guaranteed Human.
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Tonight, kick off the Winter Olympics in style with the opening ceremony from Italy, featuring a special performance by Mariah Carey. Celebrate the greatest athletes from around the globe as they come together to go for gold. Lipsy for sensational, the opening ceremony of the Winter Olympics. Ilya Malin redefining this sport tonight at 8 Eastern, 7 Central. Central on NBC. And Peacock.
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C
Welcome to how to Money. I'm Joel.
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I'm Matt.
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C
Today we're talking about the lipstick, cheap Chinese EVs and DIY solar.
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A
You know what, buddy? Hey, this is episode 1090, which is a nice little reminder out there to make sure you're gathering your 1098s in order to submit for mortgage interest.
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C
Yeah, that's a good point.
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A
This is a tax return update. Joel, in the past week. Was it last Friday? We talked about how you haven't started yet.
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C
Still gathering. You can see some documents actually sitting on my desk over there underneath my sunflower seeds.
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A
Wait, why do you have physical documents?
- [01:27]
C
Well, some people mail you documents.
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A
You can get them all digitally now.
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C
Yeah, but I don't know. I got my wife's 1099 in the mail and stuff like that. Like, that's.
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A
They don't send a digital.
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C
I guess not. Oh, yes. They're old school like that.
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A
Oh, no. They need to get with the times, man.
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C
I know.
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A
Okay, maybe.
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C
But I have some physical ones. Most of them are stored digitally in a folder on my computer, but I've got some physical ones I need to take pictures of and upload.
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A
Just snap a little photo, make it happen. Get after it. But yeah. This is our Friday flight where we're gonna talk about the stories that we came across from this past week, specifically how they pertain to your personal finances. Normally we. A lot of times we like to start off with a quick tip. This is like an anti tip. This is a warning. I saw that Mr. Beast is launching the new meme coin, Joel, and he's looking to promote it during the upcoming Super Bowl.
- [02:11]
C
Say it ain't so, Jimmy.
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A
It's like we didn't learn anything from a few. Is it 2022? I know you remember the Larry David commercial. Yes, and Matt Damon. Fortune favors the brave, Joel.
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C
That's the height of crypto insanity.
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A
Fortune favors Mr. Beast. We'll see how well he does.
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C
It's been interesting to see crypto prices dropping dramatically. Right, so if you're a bitcoin believer.
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A
Is it 2022 again? Actually, it is. If you are a holder of bitcoin.
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C
Crypto winter number two is upon us. But, yeah, I just like the fact that he's going to. That he created this meme coin and that he's going to pump it during the Super Bowl. Just. Yeah, it feels like echoes from a time that's not too far in the past. And I think people are going to be tempted. It's a very speculative endeavor. Right. All these meme co the same with the Trump coin and the Melania coin and like, the hundreds or thousands of.
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A
Is there a Baron coin?
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C
Not that I know there should be, but I think Trump coins down, like 90% from its top, and Melania coins down 98% from the top.
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A
It's dumb.
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C
A few insiders going to make a lot of money, and my guess is, like, Mr. Beast himself is going to make some money on this at the expense of his followers.
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A
That's the thing. I don't get it. Like, like, do you. Do you think the. Like, has he put enough. Good enough entertainment out there in the world? It's one thing, I guess. Do you feel a little more swarmy if you kind of come in and immediately try to pump and dump as opposed to, like, oh, I've been doing this thing for a while. I'm providing value out in the world. Maybe you can internally justify it, but ultimately, like, we're not here to say you shouldn't own any cryptocurrency at all, but you don't own it because of the fact that it's been marketed, especially via some sort of spectacle that might arise during the Super Bowl.
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C
And there's a chance, right, that he mentioned in that ad. And a lot of sheep go and buy the meme coin real quick and the price jumps up. And if you were in on the ground floor and you sell at the right time, you might be able to do okay, but really, it's an insider play. And the, you know, Mr. Beast and his. His buddies, I think, are probably going to make good money on this. And then most people sitting on their couch watching the commercials are going to get screwed in the process.
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A
Totally agree, man.
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C
Yeah. You want to talk, at least.
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A
You want to talk about spending. You want to talk about high prices?
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C
Let's do it. All right, so a recent Economist article highlighted a boom, essentially, in the beauty space. Matt, your skin's looking great. I'm guessing your skincare regimen is on fleek. Yeah. On point. I'm using terms from 10 years ago on purpose. I like to sound old.
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A
I've got oily skin, so I actually use Zero product.
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C
Okay.
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It haunted me when I was a middle schooler, but actually, it's.
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C
It's working out now.
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A
Yeah, yeah, yeah. Thirty years later, it's actually coming around. So.
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C
Dude. Oh, gosh. Middle school skin. Let's not. Let's not even go back to those days. But beauty spending on, like, skin, hair, makeup, fragrances, it's. It's outpacing retail spending in a big way. Okay.
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A
I spent a little bit of money on. On some fragrance.
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C
Okay. I don't wear. I don't wear fragrances. My.
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A
I like to smell decent.
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C
You smell great. Yeah, thanks. I can't smell you, which is why I'm saying that. So if you smelled bad, I would know. But it's up something like 7% year over year each of the past couple of years. And I think either Matt, we're becoming more beauty obsessed as a society, which I think is probably likely. I think that's true in some ways. Or we're falling prey to what's known as the lipstick effect. And it's essentially the fact that, like, it can feel nice to buy a little splurge when money is tight. Why not grab a tiny tube of lipstick that cost nine buc. Or. And you know, it's called the lipstick effect. But it can obviously translate into other purchases like a Starbucks coffee or something like that, which.
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A
Yeah, spending's up at Starbucks as well. They come back, reported higher earnings. But yeah, by the way, I don't know when the last time you've been into like a Sephora or something like that, but it's not just like. It's not $9, man. It's like $30 for a small tube.
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C
For just one lipstick.
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A
I don't know about lipstick, but I.
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C
Bought my wife some nail polish for Christmas, and I want to say 2 for 14.
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A
Nail polish is less because it's. But like, people, I feel like folks are spending less on the nail polish and more on the skin stuff. It's like the glow screen ladies. Know what I'm talking about? Oh, yeah. It's like that.
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C
The red light therapy thing or the.
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A
No, that's goop. That's like a gloop product.
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C
Oh, okay.
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A
Gwyneth. Gwyneth brand. It's like that kind of stuff. It's like the apothecary looking glass vials, like the serums. Serums, whatever. I don't know. I don't even know how to say that.
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C
Doesn't Kate make her own serum?
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A
She has. She's made her own oil in the past, but Also again, like at Christmas, you know, that's like a good stocking stuffer. All the fellas out there just show up Sephora and just like buy some small little stuff and some eye patches, like some serums. It's like number one. Yeah. Store this tip for next year.
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C
Yeah. Oh, my wife does the under eye patches that you, that you leave on for like 20 minutes or something in the morning. Great. She loves those.
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A
It's fun.
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C
Yeah.
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A
What I'm pointing out though is it, it seems like the $9 cheap tube of lipstick feels like that's pre pan prices. Okay.
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C
Okay. All right. So I'm not even in the know on how much lipstick cost me.
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A
Like 30, 40 bucks just for a little splurge.
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C
I think part of this is also marketing, right? Like celebrities are creating their own lines and we're being sold stuff right and left. And if you want to, if you want to look like your favorite singer or influencer, then you got to buy that line. And of course there's a lot of extra markup on, on a lot of those products. So I guess it's just, it's a good like reminder to check our reasons, check our priors before shelling out. Even what seems like a relatively small sum, like a treat yourself splurge on $20 lipstick, I guess is what it. I don't know. And just realizing too that no skin cream is gonna make me look like Brad Pitt. Like he looks better than I do and he's like 25 years older than I am. And that small purchases still add up. Like, which can detract from money that we're gonna have for our future or from money that we can spend in the here and now on our craft beer equivalent when we're spending in other ways and dribs and drabs to try to like bring a little joy into our lives.
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A
A little bit of brightness.
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It can backfire.
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I get it.
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C
Yeah.
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A
Another area of spending that appears to be a non negotiable for Americans is spending on travel. So 51% of folks have cut meaningfully in other areas of their lives in order to keep their, their travel budget intact. This was according to a USA Today poll. And funny enough, I won't get into the legit or the, the metrics by which they conducted the poll. They use survey monkey, which was really funny to me because I'm like, oh yeah, like the polls I participate in.
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C
Or if I was going to create one, that's what I would use. Exactly. And it'd be a little Jankity Yeah.
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A
But I'm just highlighting that unlike the impulse like behavior of the lipstick effect, young folks seem to be purposefully reining in their spending in other areas in order to funnel more money towards their travel, which I love to see that sort of in that proactivity. And so after, dude, for us, like not traveling much at all, our kids are old enough to finally start making travel a bigger part of the budget, which is a ton of fun. But I will say, if things were tight for us personally, travel is one of those areas where we are willing to cut back on in order because it's such a. I am looking forward to it. But as I read this, I thought, man, that's so funny because the way we construct our budget, that's one of the things that we are like, oh, yeah, we won't go on the big trip. We won't be taking all six of us to go fly somewhere that costs a whole lot of money.
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C
Instead of Paris, France, we want to Paris, Texas or something like that, right?
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A
Sure, yeah. Paris, Alabama does that. Even more affordable. But one downside though, is that more folks are considering paying for travel in installments. So, yeah, we're talking about the paying for the buy now, pay later. So we want folks to cut back so you have the cash on hand to be able to spend. Don't fall into that trap of buy not pay later. It's a slippery slope and before you know it, you're. You're putting your, your lipstick, you're putting your glow screen on, buy not pay later as well, which we don't want to see.
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C
For real, man. And I saw this too. There's another survey, Matt, that said that employees appreciate the gift of travel or time off essentially more than a monetary bonus. And they said it makes them feel more human instead of like a cog in a machine. Oh, I got a, I got a $6,000 bonus at the, at the end of the year. At the end of the quarter. Like a week off actually would mean more to me. And I think that's probably a younger generation thing as well. Yeah. But it's funny, the best of both worlds. I had a boss that would take us on a trip.
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A
Yeah, I was gonna say, was it travel like that where it's like a company paid for trip and everybody goes, or is it time off?
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C
I think it's typically time off to go do your own thing. But I love this idea too, especially if you like who you work with. Where. If more employers would. Would consider this how instead of paying more Money. Sometimes giving it might cost you less as an employer and it might show more gratitude to basically give. Either give some time off or take some sort of fun little trek together as a crew. That.
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A
Which totally makes sense. It makes sense.
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C
Make your employees feel more valuable.
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A
Yeah, it makes sense that that resonates more with people. Right. Because. Oh, is it. It shouldn't be a surprise, I guess, that we have more significant great memories of actual lived life as opposed to numbers on a spreadsheet. Your net worth. And not to say that you can't use the dollars that you receive as a bonus towards some of the things that are meaningful, like a vacation or like a down payment for a house or like the ability to pay off your student loans, but it just kind of gets absorbed into that machine as opposed to being like, oh, yeah, this is something that was directly from my employer, directly from my manager, my boss, that kind of thing. So, yeah. So a second ago, we're talking about higher prices. Let's touch on Goodwill here for a second. Because it's growing gangbusters right now. They're building more stores, foot traffic is ticking up. And dude, part of the fun of shopping is the thrill of the hunt. Right. Finding something for far less than you typically have to pay.
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It's just a good deal. Like is. Yeah. Brings joy to your heart sometimes. Yeah.
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I think shopping secondhand, it's always. I feel like it comes in ways. Like there's periods of time where a lot of people are talking about it, but then I don't know, the lived reality of actually showing up in the store, you're just like, man, this sucks.
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C
Yeah.
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A
But I'm here to say that shopping secondhand, it's always gonna save you a ton. As long as I will say, you know what my big pet peeve is at Goodwill is when they overload the shell, the racks. And if you can't, like, I'm there to look for a deal. I'm not there to, like for a workout where like my shoulders are strained because I'm like trying to shove the racks because they're so. They're on there so tight. In order to reveal the good looking shirt that actually has an embroidered rose on the front of it, which literally happened last time I was at Goodwill.
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C
Did you get it?
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A
No, because I didn't want that. I was just looking for a nice checked shirt and. Yeah. Anyway, wanted to highlight the secondhand option for a lot of folks there to keep prices down as well.
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C
It's just in our local Goodwill this week and Got my, my daughter needed some boots for play that she's in like coming up next week and like.
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Some swashbuckling kind of boots.
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C
Yeah. So yeah, like a pirate, like a pirate vibe. Yeah, for sure.
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A
What's the, what's the play?
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C
Peter Pan.
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Oh no way. Oh that's so funny. So okay we right on the money.
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C
So much cheaper than getting boots like buying some new boots.
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A
Right.
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C
That she would probably wouldn't wear outside of the play. So Goodwill rocks and I feel like I've been hitting it up more often like use sporting goods. Dude, my son's about to start playing baseball and got him a bat and a glove at Goodwill. Like it's just one of those. It's just one of those things I think you have to put in your consciousness again if you haven't gone in a while start hitting it up.
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A
Remember that it's an option. You lose the muscle. You're so used to whipping out the phone going to Amazon, wherever, Walmart+shopgoodwill.com is a good option too. Folks need to not forget about that.
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C
Kind of ebay version of Goodwill. Yeah.
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A
Which I do spend more of my time going to ebay because of there's just more a higher selection. But I still remember my first shop goodwill.com purchase those Sperry Topsiders.
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C
I wore those for quite a while. Yeah. Oh one more on the shopping used front that if you, if you're looking for something like slightly upgraded from Goodwill is Nuuly N U U L Y Emily has like it's like a rental service but you can actually buy the items that have been pre worn by somebody else on the rental service and own them for a fraction of what they cost. So like the other day we placed an order for M and the dresses are beautiful. They're probably worn once maybe twice I bet so incredible condition and they're like 20 bucks, 20, 25 bucks. It's. These are multi hundred dollar dresses. So if you're a lady and you like the finer things in life this is a great way to get the best of both worlds.
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A
So is she rent you said it's a renting website.
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C
Yeah. So somebody else rents it and then she buys it after it's been rented so it's like newly resale. I think it lives on the anthropology website. So if you're a lady who likes anthropology which like my wife it's a way to get that style but for less money.
- [14:37]
A
I was wondering if like it would be smart for Nuuly to say hey yeah we'll rent this to you. And then while you have it, within your period of rental, they should totally be sending messages to folks and say, hey, by the way, do you love this dress? We'll give it to you for this much.
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C
Which they do.
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A
Do they? So that makes so much sense.
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C
So she, we did, we did, we rented one time because she wanted a dress for a fancy event we had to go to. And she, they, they told her, oh, hey, you know, here's the price for each one of these dresses, if you want. And so she kept that one dress that she loved. She sent all the other ones back.
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A
Because obviously you kept it because you're like, oh yeah, this is the one. So why wouldn't you want to be able to do that again? Yes, that's smart.
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C
I love it. Exactly.
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A
Well, let's talk about investing, Joel, because Vanguard, one of our favorites, they continue to be awesome and they have slashed their fees again. 53 funds got a fee reduction on Monday. And for instance in the story we saw, total stock market index fund went from 0.14 to 0.06%, which is fantastic.
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C
Well done.
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A
It's actually, it was interesting because it's actually for a mutual fund that is no longer open to new investors, which.
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C
Is even more admirable because it's not attracting more people. Right.
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A
And so the fact that they're just trying to cut expenses for their currency, current long standing investors just warms my heart even more because I was just like, oh, why not? Why wouldn't you? Just because it's essentially VT Sachs replaced. It was like VT smx, I think. But then for all the folks listening out there, like Admiral shares, where it's got like a certain amount of that you need to go in at VTI has an even lower expense ratio.03% and you don't have to show up with a ton of cash. Regardless, I still like that example in that story because of the fact that it didn't apply. It's not like they're trying to attract new customers. But the average fund fee now at Vanguard is 0.06%, which if you're doing the math, that means 60 cents on $1,000 invested, which is so cheap. That's a deal right there. And part of the reason Vanguard does this is because of its unique ownership structure. Vanguard is owned by their investors. It's a co op. It's not a for profit entity. It's like rei and it's one of the reasons we love Vanguard and we laud this move and Makes me think of this Jack Bogle quote. He's the founder of Vanguard and he perfectly summed it up decades ago. And he said, in investing, you get what you don't pay for. That's investing nerdery at the how to money level.
- [16:57]
C
And Vanguard, as we talked about back in the day with Robin Wigglesworth, who documented kind of the rise of Vanguard and just how, how much it's done for investors, I can't think of one company that has saved the average investor more money over the years than Vanguard. And they keep doing it. And it puts more pressure on everybody else in the industry. That's why fund fees are coming down. It's kind of like Aldi in the grocery store game because they're so hawkish about lowering prices for consumers. Every other grocery store has to get with the program because Aldi's so good at it. It's the same thing with Vanguard. And then Fidelity and Schwab, all these other guys, they feel the pressure. They're like, all right, we got to keep cost low too.
- [17:35]
A
See, if I had to pick, I would say that Vanguard was the Costco of, of investors because initially you did have to show up with a little more like, you kind of, you kind of have to go all. I mean, the quality is there, but it's also no frills. And that's what I think about when I log on to the Vanguard website. Oh, there's some things that you have to do that are a little backwards. I'll just say that.
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C
Yeah, yeah.
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A
And that's how it is when you show up at Costco. You're just like, all right. But I guess you could say the same for Aldi as well. Yeah. You're like, I gotta put my cart back. All right, that's weird.
- [18:01]
C
Well, speaking of Vanguard, they, they're starting to warn clients actually about a phenomen non diversification risk. And basically what they're saying is that investing in index funds is seen as in and of itself a diversification play because you're buying slices of hundreds or thousands of companies. One move, you set it and forget it. But with increasing concentration at the top, no brainer, index funds are now a little bit less diversified than they used to be, which increases risk a little bit. So Nvidia, Apple, Microsoft, Google, though just a handful of companies make up such a large percentage now of your index fund holdings that it does mean there's a little more risk concentration inside of something that was consistently over a long period of time viewed as widely diversified. And you didn't need to hold anything else. I think maybe this is especially true in light of the, the software stock apocalypse that happened this week. But Fidelity, other brokerage firms too are kind of changing, actually even going as far as to change the legal wording inside of their index fund descriptions, calling them non diversified funds, whereas before they had not called that out. Matt, you and I, we still like low cost index funds. We still think they're top notch and a good choice for a whole lot of investors. But I guess my question for you is, do you think this might be another reason, kind of like we talked about recently with Geopolitical Risks, is this non diversified, non diversification reality of index funds, does it lead you to think that maybe it makes sense to own other assets inside of your retirement accounts?
- [19:37]
A
I do think if you're looking for a reason, like if you're looking for a rationale.
- [19:40]
C
Sure.
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A
Right. Like if you are already like I'm feeling like I'm going to start moving more internationally, then this is, this helps to kind of bolster that argument.
- [19:48]
C
Or small caps too. That's another argument for small caps.
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A
Yeah. But at the same time the, so like you mentioned the like essentially you mentioned like the software service crash from earlier this week and the reason that those companies tanked was because of why, because of AI.
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C
Sure.
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A
And so also with even within like.
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C
Oh, AI can do our jobs and maybe we don't need to have jobs anymore.
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A
If you are invested even in AN S&P 500 fund, you are invested in all the AI companies. And so in that way it's sort of self balancing, it's self governing. There are, well.
- [20:18]
C
And you're invested in a bunch of other companies who are using AI to.
- [20:20]
A
Boost their bottom, boost their earnings. Yeah, yeah. But even like looking at it like the most direct outcome of the AI boom, okay. We see AI companies shooting up and we see software service going down and it's self correcting in that way. So I mean personally I'm not at all again, talk to me two years, what is 2026? Talk to me in 2028. And at 2028, if things are continuing that same direction, I'm a long term investor. Like I'm looking to invest until I'm 100 years old, man. When I sit down with Kate at the beginning of the year and I literally map this out and we look at how much we have in retirement, I'm like, okay, with our current burn rate once we enter. And it's also pre retirement years. Right. Like as you're trying to bridge to official retirement. But then once we're looking at our retirement years and looking outward like I'm literally doing it until I'm 100 years old. And this is our burn rate, this is what we can expect from the market. It's not guaranteed, but this is what we can expect. It's over a very, it's over decades and decades. So little ups and downs in the here and there don't. Don't faze me at all.
- [21:19]
C
I have a little more small cap and international exposure. Especially after we had Paul Merriman on the show who talked about, you know, the historical returns of small caps and I thought he made a compelling case.
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A
The two fund approach, small cap coupled with, with date target date funds. Which to me it was a great argument. But I'm also like why not even keep it even simpler with just the S and P which is more aggressive but also doesn't have the aggressiveness and potentially the growth as small cap.
- [21:47]
C
And simplicity is one of the main reasons right. Where picking one fund, setting it and forgetting it, not worrying about it. I still think for the vast majority of investors like that, even though there are these small concerns, like there are these blips on the radar where you should at least be paying attention to that, I don't think it means that people should be making a dramatically different choice. And I think investing in low cost, even if they're called non diversified Now S&P 500 index funds or total stock.
- [22:13]
A
Market index funds, it's still pretty dang diversified.
- [22:15]
C
Yeah. Still going to do well for you over a long period of time as a long term investor. Sure. Let's talk about gold and silver though. The, they felt like this immovable force. It's just been going up. Right. And everybody wanted to get in. When you look at like the, the activity, the trading happening in some of those gold and silver and precious metals ETFs, Matt, it was like meme stock activity going on in the last couple of weeks. And then like what? Precious metals plunged double digits in a single day last week. Silver was down by 36% in one day.
- [22:45]
A
That's steep, man.
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C
That's a lot. And so it's I think for a while there people as when the price goes up, everyone starts to. The chatter becomes about those particular commodities or those asset classes. And we've always said we haven't changed our tune. Gold, silver, really anything that's outside of the bucket of your massive stock holdings, it should be 5% of your portfolio at most. And gold and silver. They're different than meme stocks, they're different than crypto. I wouldn't place them in the same category, but we also tend in your.
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A
Opinion, do they get more or less?
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C
I think gold has more credence than meme stocks or than most cryptocurrencies just because of its long standing view as a store of value.
- [23:41]
A
Does it change the actual application of the amount of gold or silver, do you think? In like the average listener's portfolio though?
- [23:47]
C
No, I think 5% is the max. Even though I would say I would rather hold gold or silver in that 5% than I would meme stocks. Right. Or cryptocurrency. But yeah, I think it's always, it's easy to look really dumb right when an asset's going up really quickly and you and I Matt, are advocating like a bland portfolio of widely diversified stocks. People are like give it the times boys. Like why aren't recommend going to hear.
- [24:09]
A
Them talking about VOO and VTI again.
- [24:11]
C
Right? Lame, boring. And it's hard I think as an investor not to feel FOMO when you're seeing the headlines and you're seeing the up into the right activity. But I think this is just another reason to know what you're doing and why it makes it easier to resist the trends. Right. And you know, especially as something like as bitcoin has again like we addressed at the beginning, experiencing this kind of crypto winter number two or I don't even know how many times it's declined in value to this extent. But why are you investing? What's your conviction behind that investment? And it makes it easier at least to stomach a decline if you have thoughtful reasoning behind why you're investing the way you are.
- [24:50]
A
That's right buddy. But we've got more to get to. We got more to get to on this Friday flight. Specifically I'm really excited about what insurance company is doing how they're treating EVs specifically Teslas with full self driving. We'll get to that more right after this.
- [25:10]
B
Tonight kick off the Winter Olympics in style with the opening ceremony from Italy featuring a special performance by Mariah Carey. Celebrate the greatest athletes from around the globe as they come together to go for gold.
- [25:26]
C
Lindsey Vaughn Sensational.
- [25:28]
B
The opening ceremony of the Winter Olympics. Ilia Malinin redefining tonight at 8 Eastern, 7 Central on NBC.
- [25:37]
A
And Peacock Joel Single function tools out there, they just don't cut it. In today's fast paced work environment it's time consuming to context switch between sites, apps and tools Just for one project. Well, luckily for our listeners, Grammarly has features that are tailor made for working professionals so you can get all your writing done from start to finish, all in one place. Bring more polish and impact to your emails, your presentations and proposals without switching between tabs and windows, all while amplifying your voice and moving your ideas forward.
- [26:06]
C
Yeah. Grammarly is designed to help professionals with real time writing support on any project, email and more. And 90% of professionals say Grammarly has saved them time writing and editing their work. Grammarly leads to less hassle and more focus no matter what you're writing.
- [26:22]
A
So sign up for Grammarly free and get your professional writing from draft to done. Visit Grammarly.com that's Grammarly.com.
- [26:34]
C
All right, we're back. The Friday flight continues. It's time for the ludicrous headline of the week. Matt. This comes from Sherwood, which is the, the, the content arm of Robinhood. And they actually do a pretty good.
- [26:45]
A
Job on that site, I'm willing to call it. Journalism.
- [26:47]
C
Yeah, I think so. I like, I, I think they, they put out a lot of great insightful investing content. The title of this article was the Rise of In car Ads, Automakers now view infotainment screens as huge possible source of ad revenue. I don't know what you thought when you saw this, but expected. Yeah, yeah, that's what I thought.
- [27:09]
A
I was just like, oh yeah, we.
- [27:10]
C
Talked about it with what, like Jeep doing that not too long ago, but this. I remember when the, I talked about.
- [27:15]
A
It when the was. It wasn't G. I thought it was like it was one of the makers that was ending the partnership with Apple Play specifically.
- [27:23]
C
Oh, with GM. GMs doing that.
- [27:24]
A
GM.
- [27:25]
C
Yeah. Yeah.
- [27:25]
A
They're like, they're like, oh yeah, it's no longer gonna work. Which is like the best part of being able to rent a car and seeing that. Doing the Apple Play, everybody's going back to proprietary software because of the control that they have over the. Well, specifically the user data. Right. Because when you set up CarPlay, where is all your data going? It's going straight to Apple.
- [27:42]
C
Yep.
- [27:42]
A
But of course, all the car companies want a piece of the pie. They want to cut all of that valuable data.
- [27:47]
C
They want full control. Yeah. And in some ways, like, maybe it'll be a better experience, but I think for most car buyers, that's actually a deal breaker. Right. They're like, oh, GM cars don't have CarPlay. Not interested. I'll go, I'll go elsewhere. So. But the truth is like the cars are getting more impressive by the day. I still remember the first time I saw a Tesla Model 3 and I saw that giant screen in that minimalist interior and I was like, that's dope. That's cool. Like that's. That sounds like something I'm interested in. I feel like I'm actually far less interested in it now. Especially when you read stories like this because like, you know Ford. Actually this article documented how Ford has even patented a system that will serve you relevant ads based on conversations you're having in the car, hanging with your homies, like riding along and whatever you talk about, maybe you're talking about your favorite new rum that you're drinking or something. You're gonna get served ads for the stuff that you're talking about, which is crazy.
- [28:42]
A
While you're driving, which is even worse.
- [28:44]
C
Right? Yes. I can't imbibe Captain Morgan right now.
- [28:48]
A
Don't tempt me now, Ford. This seems like such a Ford thing to do because all companies do that.
- [28:55]
C
Right.
- [28:55]
A
But the fact that they've overstepped or maybe they didn't present this into in a way that was PR friendly. Yeah, they're just getting hammered for it. Right? Like that. Like this is why you get ads for all the things you get ads for after you talk about them. Because you've got your microphone on. This is why I don't have an Alexa. Because of the, like, I don't want it. Listening to all the stuff, man. Yeah, you have to take proactive steps if you want to eliminate that from your life.
- [29:15]
C
I think I'm just kind of viscerally against paying 70,000 plus dollars for a new vehicle and then being served ads inside of that vehicle. It's. It feels like you don't. The lines of ownership are getting more and more blurred with tech heavy gadgets including and especially cars now it just makes me even more content to own an older vehicle that isn't constantly connected to everything.
- [29:38]
A
And 70,000 actually, I mean, maybe there might be some folks who are longtime frugal or is it cheap listeners and they're just like, dude, come on, there's not cars out. People aren't buying $70,000 cars. I'm surprised. More and more I talk to folks and they're talking about like, oh, because.
- [29:53]
C
We'Ll talk about the average is 50 now. Then clearly there are a lot of cars that cost 70,000.
- [29:57]
A
Like we're talking to a. I mean there's a lot of young families in our lives and they've got bunch of kids and maybe they don't want to go down the path of the minivan, which evidently. Minivan's back. Minivan's on the rise. I didn't know so many folks were buying Chrysler Pacificos, but I'm seeing more and more folks driving the new Expeditions, which evidently got some stamp of approval from some mommy blogger. From a safety standpoint, from a features. But that thing starts at $65,000, which means most people are spending much more than that. Like, you are easily getting up the past $70,000 if you're wanting the fancier features, the safety. Safety features. It's got the tilting seats, it's got all the different seat anchors. But I'm like, oh, my goodness, the amount of money that you're putting towards a depreciating asset like that, as opposed to imagine what that would do for you had you invested that in the market. I guess this is just old man Matt just not being used to what it is that folks are spending on vehicles these days.
- [30:49]
C
Well, that. And then if there's just constant ads displayed on your screen, especially ones that are invasive, you're like, I spent $70,000.
- [30:56]
A
And I'm getting hit with this.
- [30:58]
C
And they're still finding a way to, like, get into my brain.
- [31:01]
A
I don't like it.
- [31:02]
C
It sounds terrible.
- [31:03]
A
Even on our stupid little 2012 Honda Odyssey display, there's different features. And the display that I've selected is. I think it's called, like, minimum, but it's just black.
- [31:11]
C
Yeah.
- [31:12]
A
Like, all it does is have the time in the top left corner. Because I don't. I don't want to see it, man. Don't want to see it. Speaking of big screens, do you see that Tesla said they're going to stop manufacturing the S, which I'm fine with. That's like the original luxury sedan or. But then also the X, which I'm totally bummed about, because surprising that was gonna be. I mean, that's the one with the actual legit third row. And, you know, obviously it's got the gold wings or whatever that go up like a Lambo or something. But, yeah, I was kind of bummed because I was thinking, okay, if we got one, we could fit the entire family in an X. But this is part of Tesla's move to. Towards cutting how many cars they're making. Instead, they want to focus on robots. So we'll see how that plays out for shareholders of Tesla.
- [31:55]
C
And Tesla's always been valued less as a car company and more as a tec. But this just shows that they really are a tech company and less a car company because you're cutting literally two different vehicles that you make out of a line of what, five?
- [32:09]
A
Yeah.
- [32:09]
C
So two out of five. 40% of your vehicles.
- [32:12]
A
If you count on the cybertruck.
- [32:13]
C
Yeah. Which I think you have to. Even though I don't think it's selling in meaningful numbers or anything like that.
- [32:18]
A
Yeah. Let's keep moving. I was going to ask about the robo taxi, but yeah, let's. We'll say that for the next time.
- [32:23]
C
Let's talk about. Continue talking about EVs. Let's talk about Chinese EVs because those are in the spotlight light more and more these days. And Marquis Brownlee. MKBHD. Matt, the dude on YouTube, is it Marcus Mark? I thought it was. Yeah.
- [32:35]
A
Maybe he spells it like fancy Marcus.
- [32:37]
C
Yeah.
- [32:37]
A
But dude, he's also Marcus.
- [32:38]
C
He does such a good job reviewing tech stuff. I love his videos. And then Joanna Stern of the Wall Street Journal, who's the tech writer there, they both, in the last like month or so talked at length about how stoked they are about Chinese EVs that they've tested. In particular the Show Me sports car, which is like $40,000 in China. Apparently they rave about it and they're not able to keep it and drive it on US roads long term. But even just their multi day test drive, they were in heaven. And they said it's basically better than any US made ev, even ones that cost twice as much. I'm curious. I would love to test out one of these Chinese EVs and it seems like they're phenomenal products, but it also seems like there's not this even playing field. A lot of people assume that if there were no tariffs against these Chinese EVs that they'd come in, they'd flood the market and we'd all be driving fancier, cheaper cars.
- [33:32]
A
Joel's ready to get political talking about the terrorists. So you just want to, you want to say no tariffs to China so that you can get your hands on a Show Me or Xiaomi?
- [33:41]
C
I don't know. Pronunciation fails me. No, I'm not saying that at all.
- [33:45]
A
Or byd. You know, like you want to get your hands on one of those.
- [33:48]
C
I think it's a tough call because you're talking about the fact, the reason these EBs are so much cheaper is not because the Chinese manufacturers, I think they have done really well from a tech and building perspective, a couple of them, but it's because of the subsidiation factor.
- [34:02]
A
And the tech that they've stolen from.
- [34:04]
C
The U.S. some of that too. But when you look at those factories, you and I have talked about it before. So many workers getting paid far less money than American workers living on the campus working 60 hours a week to build these cars. That's why they're cheaper and the government's helping build these factories. It's no wonder that they're less expensive than a Rivian or a Tesla.
- [34:22]
A
Yep, absolutely. And it's also, it also points to a future that I don't think can hold for China because they're, they're basically. It doesn't seem like a sustainable system where folks are happy. And I don't see a whole lot of people who are just like, oh man, I totally want to immigrate, you know, head over to China because of the living conditions. Like, yes, they are making something pretty incredible. Tech for sure. And when you have a centralized communist style government, there's a whole lot that you can get done and it's really impressive. But I, I don't think the center will hold.
- [34:47]
C
There's trade offs.
- [34:48]
A
There are massive trade offs.
- [34:49]
C
And I wouldn't want to be one of the people working at the Xiaomi or BYD factory.
- [34:54]
A
Absolutely not. So before we move on, I want to get to the car insurance story. So we were talking about Tesla. Forget byd, forget Xiaomi. The full self driving option that's now available on Tesla, which costs a lot of money. Did we talk about that?
- [35:10]
C
Well, are they bringing it down to a monthly fee now?
- [35:12]
A
Right. It's a subscription. It's no longer a one time thing. I think maybe we mentioned that, that a few weeks back. But if you have a Tesla with full self driving, lemonade recognizes the fact that you are going to get in fewer accidents per miles driven and they're going to cut your insurance rates by 50% when it's engaged, which I just love. I feel like Tesla went from this pariah because of the fact that car cars that were involved in accidents, or Tesla specifically, it cost a whole lot of money to repair them. And, and understandably.
- [35:44]
C
Right.
- [35:44]
A
Like if you damage the battery pack or something like that. But those cars are also less likely to get in an accident if you look at the raw stats.
- [35:52]
C
Yes, that's a good point.
- [35:53]
A
Based on full self driving. So on one hand I know it's really. Yeah, it feels dystopian and futuristic and there's not a whole lot of comfort maybe when you look over and the thing's driving itself, but when you actually look at the stats. I like that there's an insurance company that's looking at the bottom line perhaps as opposed to maybe more the attitudes towards full self driving.
- [36:15]
C
Yeah, agreed. I thought that was, that was cool. It's a reflection of the reality that insurance companies taking on less risk when the car is in full self driving mode. Because guess what, self driving is just much safer than humans looking at their phones while they're driving.
- [36:32]
A
I see it every single morning. Yeah, dude, full self driving, they're seven times less likely to get into an accident per miles driven compared to a human driven vehicle.
- [36:42]
C
Which makes me think 50% might not be enough savings.
- [36:44]
A
This is something that could be seven times more affordable.
- [36:48]
C
This could really escalate a reduction in insurance costs for people who drive vehicles with full self driving. And that's just over the next decade. I think we're just going to see so much more of that. All right. Is your income keeping up with price hikes? Well, so much of that depends on where you live. Actually, the Bureau of Labor Statistics reports that the average income rose something like 18% from 2020 to 2024, while costs rose 21% which at least in that short time span, four years, means less purchasing power for Americans. But whether that was the case for you or if you in particular were able to outpace inflation depends on a whole bunch of factors. Right. Maybe you jumped ship and found another job when the, when the job market was popping. But it also depends on exactly where you live. Folks in Idaho, Florida, Washington, Montana, Wyoming and South Carolina in particular, Matt, outpaced inflation on average. And then there were folks in other states who on average got beaten up by inflation and their wages didn't keep pace. That was Rhode Island, New Jersey, Maryland, Massachusetts and New York were some of the worst, worst culprits. In some of those states you might feel 5 to 7% poorer because yeah, you got raises, but that's a paper raise because prices were going up faster than your wages. I think also that timeframe, it's hard to look at just those four years because 2022 was such, such a crap show in regards to inflation. The overall trend appears to be shifting as inflation is cooling. But it is also just interesting to see and to note that where you live live matters for how much you experience inflation and how much of a raise you're likely to get.
- [38:27]
A
Yeah, it's fascinating to see the dichotomy between the states that are doing well, the ones that seem to be lagging behind. And it seems like the biggest factor Is growth.
- [38:34]
C
Right.
- [38:35]
A
States with surging populations, they just mean more job creation. While states with declining populations, they're gonna be a bit more stagnant. They're not gonna be able to innovate, they're not attracting business. So of course, the mix of industries was an important factor. Housing, that was a, a pretty serious variable as well. States where more supply came online, of course saw less housing inflation. This goes back to basic economic supply and demand. Housing makes up something like 35% of the CPI, so it's quite significant. This does not mean, though that if you're listening, that you should just uproot your life, go rent a U haul. But when we are talking about cost of living, we're talking about inflation and opportunity, where you live impacts all of these things. And this is especially true, I think, for younger folks who are in a stage of life where they feel you might feel actually that you do have strong ties wherever you are. But I'm just letting you know now that as you get older, I want to say like every five years or something like that, your ties to wherever you live are probably going to like double. So, like, you think it's hard right now, it's going to be even harder in five years. It's going to be even harder in 10 years. And if you have an opportunity to move somewhere, given the profession that you want to pursue, given the kind of industry that you want to get into, I want to encourage folks to kind of take the. Joel, Fortune favors the brave, remember. Yeah, I just want young folks to be brave and to look long term and the impacts that is going to have on your ability to live the kind of life that you want to live.
- [40:01]
C
When you look to the history of the country, Americans migrated for opportunity in far greater numbers than we do today. And in some ways I think that's totally fine, stay put. But if you're looking like, if you love your community, like you've got family close by and you love where you live, great, like, stay put. But also know that moving for opportunity is like, it's in the American DNA or it was. Yeah, yeah.
- [40:26]
A
And.
- [40:26]
C
But we can tap into that again. And I think for a lot of people, they might find that they find a great new place to live that has just more opportunity for them from a job perspective and from a cost of living perspective. That's right. So one way you might try and get your cost of living down is by considering making your own electricity.
- [40:47]
A
I've made my own sourdough, Joel, but I've not made My own electricity.
- [40:50]
C
Come on, give it the times, brother.
- [40:52]
A
No, I take that back. We used to have this little hand crank flashlight that we got from IKEA that the kids. It was the coolest thing. I wonder whatever happened to that thing. It had like a little dyno.
- [41:00]
C
I don't remember those.
- [41:01]
A
Remember that? There's like a little red flashlight that.
- [41:04]
C
We had and then you would like, like be pointing the light and it would dim if you didn't crank it.
- [41:08]
A
Yeah, it wouldn't last very long, but.
- [41:09]
C
It'S just pretty cool. It wasn't that great.
- [41:10]
A
This isn't what you're talking about though.
- [41:12]
C
No, I'm talking about the. The DIY solar panels and solar tax credits obviously have disappeared. It makes getting a traditional solar system less appealing because it's super expensive and the payoff timeframe just went up in a big way by. By installing whole house solar. Which is why I think DIY solar is finding having its moment. Because a lot of homeowners and even renters are opting for these DIY panels that you plug into a wall outlet and they even come with like these like battery backup systems. If you bought electronics on Amazon, you probably bought something by Anchor at one point. Anchor is one of these companies that's making these DIY solar panel kits and you don't have to like stick them on top of your roof and you can move them around and stuff like that. I mean, I think some homeowners associations are cracking down all these things. But the problem right now is that most states are behind the times. They haven't made these systems available without authorization from your utility company. So people are just like going rogue and putting them in anyway. California is apparently considering legislation. I think Utah has already created friendly legislation for these. And I think that legislation along with like technological improvement on this front would be a game changer. And for people who want. I was looking up Matt, asking ChatGPT, well, how much is this likely to save me in a multi thousand dollar system? Still might only save you 15, 20 bucks a month in electricity costs, but.
- [42:36]
A
Not enough panels to generate the juice.
- [42:38]
C
That's right. I mean, yeah, you're talking about small potatoes here, but I think also for folks who are into that, who want to be on that bleeding edge, costs have come down on these and it's just something worth exploring considering.
- [42:50]
A
Yeah, it seems more attainable than having to do the giant install on the roof. It almost feels like I've seen pictures of them and. And you set them up in your backyard. Yes, it almost makes it seem like a chicken coop. You got it back. Then next to the garden. This is just like one more tool in the toolkit.
- [43:05]
C
That's right.
- [43:05]
A
That helps you to live your DIY life if you're so inclined.
- [43:08]
C
And I get part of it depends on where you live, how much sun you get. But I'd be curious to know, too, if any listeners have tried out one of these DIY solar setups, I guarantee they have. How much is it saving you? How's it doing for you? Let me know.
- [43:20]
A
You know it, buddy. But that's going to be it for this Friday flight. We hope everyone has a fantastic weekend. You can find the stories we reference up on the website@howtomoney.com and that's gonna be it, buddy.
- [43:31]
C
So until next time, best friends out.
- [43:33]
A
Best friends out. This is an I heart podcast. Guaranteed human.