← Money Rehab with Nicole Lapin
Money Rehab with Nicole Lapin
Wall Street News Roundup: Taylor's Banner Weekend, Charlie Javice Goes to Prison and Government Shutdown Watch
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I'm Nicole Lapin, the only financial expert. You don't need a dictionary to understand. It's time for some money rehab. All right. It is time for a roundup of the biggest stories on Wall street and how they're gonna affect you and your wallet. With the government shutdown absolutely dominating the news cycle, it's easy for other stories to get glossed over. I will give you an update on what's going on in Washington, but I'll also tell you what else you need to know. Charlie Javis is headed to prison, why the SEC is suing Tai Lopez's company, and the real reason that you're not gonna pay tariffs on Life of a showgirl. But first, a quick message from our sponsors. I am so excited to head up to Big Sur with my husband this fall. We are celebrating our anniversary, and while I will miss the little mush so much, we are also really excited to have a little parents time. We deserve that. But you know, it got me thinking about this feeling when you walk out of the door for a trip and you wonder what your Blaze is doing while you're go. Well, it turns out it could be working for you. I've been hosting on Airbnb for forever now, and I tell all of my friends to do the same because it's an amazing way to make passive income from an asset. You already have your home. But some of my friends who are super busy worry that hosting on Airbnb would feel like having a second job. And that's when I tell them about Airbnb's co host network. Anything you don't have the bandwidth to do a co host can handle for you. They can create your listing, manage reservations, manage guests, provide on site support, even handle design and styling. So whether you're traveling for work or you're escaping the winter, or if you have a second place that just sits empty way too often, your home doesn't have to sit on the sidelines. Instead, you can earn a little extra cash without adding another job to your plate. Find a co host@airbnb.com host. What is your bank doing for you and how much is it costing you? That's a serious question. Because if they're charging you $8 a month with zero extra services, I've got to stage an intervention here. What are you paying them for anyway? To hold your money for you. You deserve better. That's what I love about Chime. There are no monthly fees, no maintenance fees. My younger self would have definitely benefited from this. It's not just the no fees thing. It's what they have to offer you too. If you set up direct deposit, you can get paid up to two days early automatically. And with qualifying direct deposits, you're eligible for free overdraft up to $200 debit card purchases and cash withdrawals. Plus they have over 47,000 fee free ATMs. So seriously, ask yourself, what is your bank doing for you and just how much are they charging you to do it? And if the math isn't mathing, think about making a change. Work on your financial goals through Chime today. Open an account in just two minutes at chime.com mnn Chime feels like progress.
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- [03:03]
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Okay, now for the headlines. I'll get the government shutdown update over with because there's not a lot of there there yet. Unfortunately, the government shutdown is barreling toward its eighth day with no off ramp on site. On Monday, the Senate rejected two proposals to fund the government, one from the Democrats and one from the Republicans, marking the fifth failed vote to end the impasse. At the heart of the standoff here is health care. Democrats want to tie any funding bill to the extension of enhanced Obamacare subsidies, while Republicans argue that that debate should wait until the end of the year. And when that time comes, they will probably say no again anyway. President Trump has publicly framed the shutdown as a political win for the gop, but behind closed doors, concerns are reportedly mounting within his camp over the potential fallout, especially as he threatens more federal layoffs if the deadlock drags on. While President Trump momentarily floated the idea of negotiations, he quickly walked it back and said that Democr Democrats must first agree to reopen the government before any health care deal is on the table. As of now, there is no clear path forward. Not a big, big update there, but there is a lot of movement going on elsewhere in the financial world, like the verdict on the Frank scandal. Remember that one? I actually talked about this on the show around the time that I started these weekly updates about two years ago, but if you need a refresher, A woman named Charlie Javis founded a company called Frank, a paid service to help students fill out their Free Application for Federal Student Aid, also known as fafsa. Now I haven't fil filled out one of these things in a very, very, very long time, but I do remember how stressful it was back in the day. The FAFSA was completely nerve wracking because everything around funding really tied back to that and they require a lot of information. I know I'm not alone on this one. I had to put in a lot of information from a number of sources, but most of them came down to writing zero in a lot of places. Nonetheless, these days the forms are directly linked with the irs, so they basically are autocomplete themselves. In other words, the service Frank offered was unnecessary at best and at worst manipulative. Javice was arrested in 2023 and was just sentenced to seven years in prison. Why, you might ask, was it for charging people who could least afford it low income students and families up to $500 for useless service? No, it wasn't that. She is going to prison because she sold JP Morgan 4.25 million email addresses of college students so that the bank could spam their inbo boxes. And of those four and a quarter million, fewer than 300,000 were real. So JP Morgan got scammed by a woman selling a scammy service. So the fact that fewer than 300,000 people signed up means that most students saw Frank's pitch and didn't sign up. Now the case has produced some very memeable moments. At one point, an employee who questions Javice over the fake email addresses testified that Javice told her not to worry because, quote, I do not want to end up wearing an orange jumpsuit. Well, that didn't age well. And then last April, during deliberations about her bail terms, Javice's legal team argued that she shouldn't have to wear an ankle monitor while out on bail because it would interfere with her job teaching Pilates. I mean, you literally cannot make this stuff up. And by the way, we all saw fake heiress Anna Delvey wear a bedazzled ankle monitor on Dancing with the Stars. So we know that that excuse doesn't even hold up. Anyway, it's moot because Charlie's ankle monitor days are over. Onto the prison rapture. And in other scam type news, retail E Commerce Ventures or Rev, is being sued by the SEC for defrauding investors out of $112 million. Founders include Tai Lopez, famous for his YouTube videos that always started with Here in my garage with some self promotional financial guru content featuring Lamborghinis and spammy ads across social media. Rev's business strategy hatched in 2020 was pretty simple. Buy distressed companies with big name recognition, so that included Radio shack and Pier 1 Imports. Rev that they would revive these brands online and turn them into e commerce darlings. Unfortunately, they failed, which means real people put real dollars into the business and lost their investment. So why did smart investors buy in? Well, insiders tell me that the pitch worked because Tai's partner had a track record. He had helped turn Dress Barn around and investors thought he could do the same thing again. It is sad, but it is not illegal. Businesses fail. Investments are not guaranteed. But here's where Rev did break the law. They used money from New Invest to pay off older investors and lied about it, which is the textbook definition of a Ponzi scheme. The rise and fall of Rev, and specifically Tai Lopez, is less about one man and more about a cultural formula that keeps repeating. Sell the lifestyle first, promise the business later. From crypto influencers to TikTok CEOs, the esthetic of wealth has almost always become the product itself. That model works. Until it doesn't. At some point, investors realized the Lamborghini was rented, the brands were failing, and the business plan was smoke. So the takeaway is not just to be skeptical of Lopez. It is to recognize when the promise of wealth is built on the performance of wealth. Real businesses don't need to prove success with cars or jets. They prove it with real cash flow. This case is just getting started, but it does promise some juicy tidbits. Though probably nobody will be teaching Pilates while wearing an ankle monitor here. That still blows my mind. Anyway, let's talk about Taylor. I know there's a lot of talk of cringe online, but whether or not you love or hate the life a showgirl, she has had a banner weekend like she's done with past albums. Swift has been selling multiple versions of the same vinyl in different colors with different titles. The vinyls are manufactured overseas, which might make you wonder, do we have to pay tariffs on those? Taylor's vinyls are exempt from tariffs thanks to a Cold War era loophole called the Brennan Amendment. The rule keeps informational materials like books and music tariff free. This helps keep the price of albums stable. If they were subject to the same tariffs as other products, prices could jump to 40 or $50, which would definitely put a damper on fans buying multiple copies of the same album in different colors. Which people are definitely doing. The album sold 2.7 million copies in its first day in the US alone, that number includes physical and digital formats. And within the physical format umbrella, there's a ton of different variations. Taylor is selling CDs, cassettes and vinyls in every color you could possibly think of. But let's try to put a number on these sales, shall we? Let's conservatively say that each album is $14.99. That's how much it costs to get the target bundle, which includes the Showgirl CD and a poster. This is a conservative estimate because again, the 2.7 million figure includes all copies like vinyl, which is 30 bucks. And if people bought the box set with a crew neck, they paid 65 bucks. Anyway, you get the idea. If we choose the 1499 price as a rough estimate at 2.7 in sales, the album earned over $40 million on its first day. And then there's the movie. AMC hosted screenings of the documentary Taylor Swift, the official release party of a showgirl for just three days. And in that time, the movie pulled in over $45 million. So add on merchants streaming and I think it's safe to say that it was another $100 million weekend for our favorite showgirl to close. Let's pick out some advice from Ms. Swift herself for today's tip. You can take straight to the bank. Taylor's version products that are technically the same but very slightly like different colored vinyls can turn one customer into five. It's called versioning. And when it's done right, it creates super fans and super margins. So if you are a small business owner or if you have a side hustle or freelance gig, think about what your hero product is and then think about whether or not you could use versioning to cultivate repeat sales from your favorite customers. Customers. Money Rehab is a production of Money News Network. I'm your host, Nicole Lapin. Money Rehab's executive producer is Morgan Lavoy. Our researcher is Emily Holmes. Do you need some Money Rehab? And let's be honest, we all do. So email us your money questions moneyrehaboneynewsnetwork.com to potentially have your questions answered on the show or even have a one on one intervention with me. And follow us on Instagram at Money News and TikTokoney News Network for exclusive video content. And lastly, thank you. No, seriously, thank you. Thank you for listening and for investing in yourself, which is the most important investment you can make.