March 21, 2025 • 36 mins
Time for a Friday Flight- our little sampling of the week’s financial news and what it means for your personal finances. There are a lot of headlines out there, but we boil them down to specific takeaways that will allow you to kick off the weekend informed and help you to get ahead with your money. In this episode we explain some relevant and helpful stories like: tariffs as a hard sale, appealing ARMS, building booms = rent declines, stagnant realtor commissions, iterating investments, future you and crap sandwiches, exclusive social clubs, skipping to the front of the line, college cost cuts, free degrees, T-Mobile raising rates, the most affordable cell phone plan, and buy once cry once.
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Transcript
Episode Transcript
Available transcripts are automatically generated. Complete accuracy is not guaranteed.
Speaker 1 (00:00):
Welcome to Hat of Money.
Speaker 2 (00:01):
I'm Joel, I'm Matt, and today we're talking about appealing arms,
iterating investments, and colleges cutting costs.
Speaker 1 (00:27):
And by arms, Joel, you are not referring to your
incredible physique, they got health. No, we are going to
talk about adjustable rate mortgages and this is our Friday Flight,
the roundup of different news stories we came across this
week and specifically how we think they're going to impact
your bottom line your money. This might be the first
week and a few weeks, Joel that we don't talk
(00:48):
about tariffs here on the show and the crazy impacts
that it may. I appreciate you saying that on our economy,
I think we're going to for just one quick scurry, Okay,
but no, we won't go deep into tariffs because there
hasn't really been much going on this week on the
tariff front, fortunately. But my mom received a text message
from a company. She was looking to get some new
blinds in the house for a couple of windows, and
(01:12):
the blind company considered like, is it blinds dot com?
I don't remember. I'm pretty sure that actually is a company,
but I literally just kind of made that up.
Speaker 2 (01:19):
Because I feel like I've heard of them. Yeah, but
I think she was going through a provider that she
sourced through Costco and they came out and they measured
and they'd given her a quote. This was like, I
don't know, a month and a half ago, something like that.
And they sent her a follow up text message to say, hey,
we know that you haven't purchased blinds yet from us,
just to let you know. Prices are going up twenty
(01:40):
percent next week because of tariffs. So but hey, we're
going to honor that price for now. You just gotta
less way.
Speaker 1 (01:49):
So the question is are they really going to hike
the price now or is it just a hard Yeah,
that's what I was wondering herd selling her.
Speaker 2 (01:55):
I think they're gonna get a lot of people to
book just to say like, okay, gool, I'll sign on
the dotted lines. I don't want to pay twenty percent more.
My mom was like, yeah, the quote was kind of
expensive anyway, so I'm not doing it, okay, But just does.
Speaker 1 (02:06):
She already have some blinds up as? I don't know
what they're talking about it.
Speaker 2 (02:10):
I think they're blinds.
Speaker 1 (02:10):
I don't know.
Speaker 2 (02:11):
I don't know what a roman change or something like that. Oh,
I'm not sure, but you know what I think are overrated?
Sorry total Sorry you finish your thought now. I'm just
saying I think this is a tactic that more companies
are going to use. Yeah, and I think some people
are going to be like, it's going to accelerate a
purchase that people might otherwise not have made it. I'm
not saying that the tariffs won't make things cost more.
Speaker 1 (02:30):
I think they will. But whether or not this terriffs
come to be I think that's the real question.
Speaker 2 (02:35):
Yeah, and how badly do you need this thing? And
can you just say, ah, no, I'm not interested, thank you,
but no, thank you.
Speaker 1 (02:40):
Yeah. Well, you know what else is pricey? Joel homes
Buying a house today is an expensive endeavor. I think
that's the understatement of the century, not the century, maybe
understatement of the past decade. I'll say, as we mean,
house prices rise, they remain elevated, and interest rates are
still near seven percent on thirty your mortgages. And one
(03:01):
way to reduce your monthly obligation is to opt for
an arm instead of a thirty year mortgage. There is
a recent Bloomberg article and they pointed out to the
potential rise of arms and how that could help grease
the wheels of the housing market a little bit.
Speaker 2 (03:16):
Yeah, you have more people opted for them that hey,
we might we might see more listings and exactly houses
going in a contract.
Speaker 1 (03:22):
Things might be flowing a little bit more and it's
going to get you a lower rate, but it won't
be locked in for forever or you know, for the
life of that loan. This means that you'd you know,
you're living yourself financially exposed at the end of that
fixed term. So oftentimes we're talking about like a five
year term, like a five to one ARM. But they
can be a reasonable choice for some folks out there,
especially if you're not planning on being in that home
(03:44):
you know too much past the initial fixed term, or
if you understand the trade offfs if you're willing to
endure a potentially higher interest rate down the line. But man,
you got to be careful. You got to weigh the
trade offs. You need to choose carefully where you planning
to share how how you opted to go with an ARM.
I did what I mean, it's I think it can
be a It used to not be a smart decision.
(04:07):
Right like ten years ago, why would you opt for
an ARM? Interest rates were at like rock bottom lows
and the ability to opt for an eighth of a
percent discount over the thirty year fix. That was dumb.
But now it's like, Okay, there's a more of an
ability to save and just given the fact that there's
a higher likelihood of rates going down in the future.
Speaker 2 (04:26):
It's not guaranteed, ye, but yeah, but it's interesting. Rates
did continue to drop until just a few years ago,
and so some people who did, let's say, take out
an ARM ten years ago, and then five years in
they were like, my rates looking sweeter now, I'm kind
of glad I went for the ARM and then they
sell the like they were just paying a lower interest
rate the whole time, even though a thirty year fix
would have been better, I opted for a ten to
one ARM, Matt, So I like that like greater security,
(04:48):
like a decade instead of just five years, because.
Speaker 1 (04:50):
But only because like the rider time period too, Yeah,
because like like when you're closer to five it's like, well,
we don't want you buying and only staying there for
five years anyway, Like you need to get past that
five year I like that, like the tend and I.
Speaker 2 (05:01):
Didn't know if I was going to be in the
house for ten years or thirty. But I can cross
that bridge when I come to it, and I can
pay down the mortgage more quickly if I want to,
or I can also refinance into another type of loan.
I think I used to be kind of like blinders
on thirty year mortgage. Thirty or fixes the only way
to go, and I think for most people that's probably
(05:21):
still the smartest move. But so much depends on the
discrepancy in rates. And if you can get a significantly
lower rate by opting for an ARM, and let's say
you're at least banking ahead, you're planning ahead for potentially
higher rates down the line as that mortgage rate adjusts.
I think it's an okay move. You just have to
go into it with eyes wide open. So that's what
(05:42):
I did. It's worked out well so far. We'll see,
We'll see how it goes seven and a half years
from now. But let's talk about good political money news, Matt.
A recent move from the Trump administration could bring down
costs on housing using federal land, specifically to build board units.
That was a proposal that was made this week.
Speaker 1 (06:00):
I've always wanted to live in Yosemite Valley a jol.
Wouldn't they be nice and be nice just set of
right their next to Curry Village.
Speaker 2 (06:06):
We'll see if they make that land avail little unlikely,
probably not, but it does look like the Interior Department
and HUD are set to work together to an attempt
to increase housing supply by allowing building on federal land
that's underutilized. Right, And the truth is, we need more supply.
We've talked about this for years, how we are millions
of homes shy in this country, what we actually need.
(06:27):
I was just in Austin, matt and it was fascinating
to hear from folks how much cheaper it's become to
live in Austin over just a short period of time. Really,
in just the last like year, rents have declined by
twenty two percent. I think something like that from from
peak Austin thanks to this boom and building. Like I
was driving around, I'm seeing unfinished apartment complexes everywhere. They're
continuing to build. And now the incentive is, I don't know,
(06:49):
it's it's it's.
Speaker 1 (06:50):
Quite there for the builders yeah.
Speaker 2 (06:52):
So you know, Austin renters now have more negotiation power,
and you know a lot of apartment complexes are offering
months of free rent to entice people to come over.
It's interesting, though, California is taking the opposite approach. Some
people are saying that in the aftermath of the wildfires,
it's a great time to prioritize building some density, like
adding more units. But the NIMMI movement, the not in
(07:15):
my backyard movement, is doing what they can to prevent that.
And so a lot of folks in California say, well,
we want more housing affordability, but we don't want to
do what it takes to get there. We don't want
more units because it might reduce the value of my house.
Speaker 1 (07:28):
You don't want to kill those expensive California vibes, right, Yeah,
And they're not trust me, And so I don't know.
I was in Austin and I saw this poster mat
it said twenty five percent of housing costs are due
to government red tape. I think it was from like
realtor dot com or something like that, and I think
it's likely much more than that in California. I would
love love to see California take a page from Texas
on this. I think a lot of young folks in
(07:49):
particular would benefit. Think about when you bring down the
cost of housing, you bring down that barrier to entry,
and you reduce that line item in people's budget, especially
for young folks. It's a massive way, totally. Yeah, And
until then we will continue to most likely we will
continue to see population declines from California and increases in
states like Texas where there is where there has been
increased supply.
Speaker 2 (08:10):
It's so much of that is like government regulation. And
if you just dial back some of the building codes
and stuff like that and make it easier for builders
to create new supply, they'll do it.
Speaker 1 (08:20):
Yeah. Well, the lawsuit against the NAAR like that looked
like it might have had a meaningful implication on closing
costs and realtor commissions, specifically talking about grease and the
wheels of housing, but that hasn't panned out, at least
not yet. It's been about six months since those rules
have changed, and the average buyer commission has gone from
two point three seven percent too drum roll, two point
(08:41):
three six percent. He has it's barely budged, so not many,
which is great news. For worried realtors out there, but
bad news again for all the buyers who are looking
for ways to reduce some of these transaction costs associated
with buying a house. But know that as an individual,
you have the power to push back, to discuss the
commission structure with a potential agent. You don't just have
(09:04):
to fork over three percent of the purchase price by
default just because that's the way it's always been done. Yeah.
And I think this is an area too where I
think just the technology that's associated with the transaction, the
transaction costs, and just the buying and selling of homes,
that's an area where I'm hopeful. And man, I just
think of it feels like such an antiquated old model,
(09:25):
the old way of doing things, And given the pressure,
given the fact that there is an entire generation wanting
to purchase a home, where that they're finding that harder
and harder to do, I feel like something's got to change. Yeah. No,
I agree.
Speaker 2 (09:37):
And it's interesting when you look at the where the
commissions are coming down the most, it's on higher end homes,
so those I'm not sure if it's just that those
buyers are more informed and they're like no, no, no, I
know what happened in that legal ruling, and I'm gonna
I'm gonna ask for a discount here, or if it's
just because the commission is steeper on that and so
realtors are more willing to offer a price cut I
(09:59):
kind of thing. So that's it's got maybe a little
bit of both.
Speaker 1 (10:01):
Yeah, they're like, Okay, I know it's a four million
dollar house, but well, let's do commissions like it's a
two million dollars house. Yeah, Like, either way, that's.
Speaker 2 (10:07):
A that check right, Yeah, the agent's still making good
money on that, Matt. Let's talk about investing investors. They're
shaking things up right now given the economic actions of
the Trump administration recent stock market volatility. The Wall Street
Journal just profiled some folks who are making meaningful changes
to their investment portfolio in light of recent volatility. They're
(10:29):
saying like that. Yeah, they're like, I'm not sure. This
doesn't look so good. I might need to do something different.
And it doesn't seem like, based on their investigation, that
this activity is widespread. I don't think people are knee
jerk selling right and left, but that doesn't mean it's
not concerning gold and cash in particular have been garnering
more interest as stocks have kind of sort of I'm
(10:50):
not going to say free fall, but they've been going down, right,
stock price themen going down or there at least they've
been more volatile. I guess we're back down to essentially
where we were at least in the S and P
five hundred about six months to go. International markets those
are also receiving more interest from people who are more
US centric focused in their investments too, And it does
seem like this, at least to some extent, does fall
(11:12):
along party lines. But I think no matter where you
land politically, the goal is it should be to tune
out the noise and to not make knee jerk changes.
I guess I'm just worried about people seeing something like
a ten percent drop, which feels existential, but especially for
somebody had a money listeners who are in the wealth
building phase of their life. They're early on like it's
a bad idea to make any changes right now.
Speaker 1 (11:33):
And I also hate too that that it does seem
to be following along party lines. And this is where
I unfortunately I think folks politics can get in the
way of their investing because it's like, on one hand,
we'll say, oh, no, no, the volatility, it's par for
the course. But I understand when there are when there's
a subset of half of the population who looks at
this and say, well, no, this is this is volatility
(11:54):
that is not necessary. It feels like an own goal,
like within the current administration, if you are not optimistic
about where things are going. I totally understand a lot
of folks hesitant behavior when it comes to investing in
the market, but I think zooming out and gaining a
better just a better perspective is so important when it
comes to times like these. I think back to like,
(12:15):
we might have a lot of listeners and they weren't
even alive during the dot com bubble bust or whatever,
but that was like the end of the world. And
then not too long after Y two K was literally
the end of the world, right, Yeah, there's a whole
lot happening about, like satellite's gonna be falling out of the sky,
crushing us in sleep, and then the Great Recession. Like
these were like literally end of the world, the sky
is falling type of scenarios. But then what happened things
(12:37):
rebounded the problem though, is that you can't look ahead
to see what's You can't see what's coming down the pike, right,
and so but like when we invest, we are inherently
optimistic about what's going to happen and then and so
now because of what has happened over the past fifteen years,
we got to the market and where the economy has gone.
Like you look back to y two k, you look
back to the two thousands, dot com bust, you look
to the Great Recession, and they look like tiny little
(12:58):
speed bumps. Yeah, compared to where the market has gone
since then. And like even COVID, like that was creating
more uncertainty than you know, the skeettershot terrorists that were
currently currently been threatened. At least the stock market was
thinking much faster. The future was highly uncertain, but folks
who made reactionary moves back then ended up being proved
(13:19):
wrong fairly quickly. So ultimately, the key to a brighter
financial future is to invest more. And that's the thing.
These days, your dollar cost average purchase of an index
fund is better than it was a few weeks ago.
You are getting wealthier ultimately by staying the course. And uh,
just know that you're buying, buying at a discount. Yeah,
remember that.
Speaker 2 (13:39):
What it makes me think, Matt, is that we live
in such a society that we talk about politics a
lot more. Thinking even about late night comedians that used
to be the Yeah, they used to like tell jokes
about you know, daily life, and they used to have
on entertainers and stuff like that, And now there's so
much discussion of politics in what feels like every realm
of our lives for.
Speaker 1 (14:00):
Seven news cycle. I think that has a lot to
do with it as well, the fact that folks are
so glued to the headlines and every and gosh, we
talked about the democrazation of investing and so the ability
to just to pull out you you whip out your
phone and you can make a trade or you know what,
I was thinking about buying, but now I'm not going
to actually I'm thinking about selling. Just that knee jerk
response to what happens to be tweeted or truth or
(14:23):
just whatever. But like that day is a terrible way
to invest your money, and it can always feel like
this guy is falling. Yeah, if you're paying attention to
the headlines on the rig and we're here to say
that it's not, and that, yeah, you want to have
a plan for your money and for your investments so
that you're not making kind of moves on the fly.
Speaker 2 (14:41):
You know where you're going and you know why you're
doing it.
Speaker 1 (14:44):
Matt.
Speaker 2 (14:44):
There was this old Fidelity study that you and I
have referenced over time as well on investing, and it
showed that seeing essentially like a digital rendering of what
you would look like in thirty to forty years, how
it could impact your willingness to invest.
Speaker 1 (14:57):
Now.
Speaker 2 (14:58):
I believe you and I took a picture on on
that app and we we should like, yeah, repost that
on Instagram, but we goot older. I think I was
happy with it. We're gonna be hot Grandpa's someday. But
the reality was like seeing what old you was going
to look like, it was going to create more empathy,
and it was going to cause a realization right that
(15:19):
you're actually going to be old someday, because there's something
about being in your twenties and you're like, yeah, I'm
gonna live forever, Hey, Grandpa, get out of here. It's
like I'm never going to be that, but you are like,
that's just how the world works, and Now there's new
data that essentially reinforces this fidelity survey from a long
time ago. There's a study from Sweden and it found
that people with low balanced savings accounts were fourteen percent
(15:42):
more likely to invest in a long term savings product
when they received a notification with a language prompting them
to think about the future first, just a notification map, like, hey,
just a prompt. Guess what little prompt? A minor prompt.
And I think it makes sense, right, Like, let's let's
use this sort of information to our advantage, realizing that
(16:03):
we have a hard time thinking about the future and
empathizing with our future selves. I think it's important for
how to money listeners to find a way to keep
their why behind investing top of mind. And I think
visuals can help. Whether that's literally doing the was it
the old OFFI app or whatever it was called, and
taking a picture and making yourself look old and then posting.
Speaker 1 (16:24):
That somewhere in your room.
Speaker 2 (16:25):
I don't know what you need to do. Make it
the wallpaper on your phone, yeah, or like sending a
monthly alert, Hey you're going to die someday, right, or
we're keeping some sort of like faux metal skull on
your dresser. I don't know what it is for you
that's going to help remind you that you are going
to get older over time, but I do think that
that sort of visualization and connection to that truth can
(16:48):
help you stay the course and potentially even bump up
your investing percentage.
Speaker 1 (16:52):
Totally man, And this makes me. This reminds me of
something that I'm pretty sure mister money Mustache wrote. It's
a visual that has stuck with me ever since, and
it was something along the lines of that if you
spend money on just dumb stuff today, how essentially what
you're doing is you're taking a crap sandwich and you're
placing it on this conveyor belt, and it's going to
go off on his journey and then at some point
off in the future it comes back to future you
(17:14):
and this is something that you need it. Yeah, basically,
it's something that you have delivered to yourself as opposed
to instead investing your money and instead well, like what
that is is a delightful, thoughtful, generous gift to your
future self. It goes off on the conveyor belt and
then way off in the future, it's this nice present,
this nice gift that you get to receive. Think about
(17:36):
it that way. Just whatever it is, like you said,
that allows you to connect with your future self. Those
are the strategies to implement.
Speaker 2 (17:42):
Okay, brief story my dad one time, I guess you
can swich instead of going instead of going to get
a colonoscopy, you could you could do what you needed
to do at home and then mail it in no way.
He accidentally mailed it to his to himself. So so
(18:02):
when he opened up that box at home, are you kidding?
And I came back like two days later and he's like, wait, oh,
what's this for me? And then he opened it, He's like,
oh gosh, what I do?
Speaker 1 (18:11):
So speaking of crap sandwiches, that's what you want to avoid,
that's what you want to write there.
Speaker 2 (18:15):
Yeah, all right, nice visual for everyone there, Matt. Are
we got more money saving information we got to get to,
including a price hike at one of the cell phone
companies and what you can do about it. We'll talk
about that and more right after this.
Speaker 1 (18:35):
All right, buddy, we are back from the break. Still
can't get that visual out of your head? Can you?
I cannot? Now though, it is time for the ludicrous
headline of the week, which is from Bloomberg. The headline reads,
private clubs with fifty five thousand dollars memberships are taken
off in my Miami. Man, I thought folks who I
(18:55):
knew that were joining golf clubs this summer, your joel
that they were getting. I don't want to say take
an advantage of, because you know what it is that
you're signing up for, but it's so much money and
makes me think that just Miami is a completely different
place to live if there are clubs that cost you
that much money.
Speaker 2 (19:10):
It's amazing too when people around you start to do
things and you would have thought were asinine or too expensive,
before all of a sudden you start to rationalizing.
Speaker 1 (19:18):
It slowly starts seeming more and more normal. Yeah, so
you want to join the elite, You got to fork
over eight nine thousand dollars joining fee, and then of
course many thousands in fees every single year as well.
There are other clubs springing up in Miami also other
cities around the world as well, around food or wine specifically,
So not only do you have the honor of paying
(19:40):
for your meal, but you got to pay an annual
fee just to be able to get into the door.
Speaker 2 (19:44):
It's an exclusive eating and drinking club. But what'm saying
his brother in law actually just opened up a wine
bar that is exclusive, and it's like you pay the
same prices that you would pay out at another fancy place.
But I guess because of the exclusion and the clientele
that are there kind of people man an annual or
a monthly fee.
Speaker 1 (20:04):
On top of it, there's I mean, no shame, no shade, throne,
no hate if you're the kind of person who likes
ritzy clubs, But just make sure that you've got deep
enough pockets to handle something like this, Like don't, like
you said, don't get carried away thinking that like, well
this is this is just part of the course. This
is what has to be done now. And on top
of that, I would say for most of how the
money listeners, if you are craving those connections, just know
(20:25):
you don't have to fork over a thousands of dollars
to make it happen. There are lots of ways to
feel connected, not only to your community, your neighborhood, to
the town you live in. Like it makes me think
about we just last weekend, we ran a race and
by the way. Congrats to Joel. Joel's new nickname is
mister Bronze, having one third place in our age group.
Speaker 2 (20:45):
Yeah, the old man age group.
Speaker 1 (20:46):
Guess what, they don't give medals to the fourth place finishers, Joel,
that would be me right behind you for not running much.
You did well, thank you, you did even better. But
I would say there was I was in line getting
my bid number and I was just struck up a
conversation with dad and his daughter, had a nice little
chat there, wished them well did the race. I saw
them after the fact at the coffee shop and we
(21:08):
kind of like it reignited the conversations like, oh man,
you know, plus you have that post race running high
a little bit, kind of talked about how we did
just I don't know. It was just a great moment
of feeling connected to your community. And oftentimes I think
we chalk it up to it being this this like
massive undertaking, but it's these small things it makes me
think about, like like in the parenting community and circles,
(21:30):
they and Seinfeld talk about this. Actually he calls it
garbage time. And we think that what we need is
quality time like the big events, but what we need
to pay more attention to is garbage time. It's the
time that typically falls through the cracks that where a
lot of times we're not engaged and we're not willing
to talk to the people around us. We think it's
just throwaway time. But that garbage time is like the glue.
(21:50):
It's the things that hold things, that hold especially individuals together.
Speaker 2 (21:54):
It's a random conversations that you get into with the
neighbor while you're on your walk.
Speaker 1 (21:57):
Yes, and so just keep that in mind, like oftentimes
we are chalking up to these massive boulders, when in reality,
oftentimes it's like the it's the sand that forms the cements,
the mortar that holds us together. Here you go. I
like it.
Speaker 2 (22:08):
I like that, and I think lots of times it
can be around physical activity, but I think the other Yeah.
The other thing to prioritize is serving volunteering. That's just
another way. It's amazing how when you give your time
in an effort toward to help a local organization, that
you'll find other people who have a similar sort of
heart and mindset, and that creates really deep connections. So
(22:30):
if you're feeling like, man, my connections aren't as deep
as I want to maybe I should join this expensive
club over here. There's probably a better way to go
that's going to cost you less money. It's probably going
to like make you feel like a healthy or more
well rounded person too. Totally yeah, totally agree, instead of
just drinking the fancy wine.
Speaker 1 (22:45):
So we just want to push folks in the direction
of not signing up and spending incredible amounts of money
for something that feels a bit like conspicuous consumption.
Speaker 2 (22:53):
And must be honest, I'm not a guest a fancy
wine it every now and again, even though I'm more
like correctly signature wine dude. But still, what about spending
money on a smaller scale, maybe to hire people to
wait in line for you. There was an article about
that this week, and it just kind of struck me
in an interesting way because initionally enough, now you can
hire someone to wait in line to help you get
a seat at a restaurant you're interested in. I was
(23:15):
thinking about that when I was at Franklin's Barbecue and
Austin recently. Fortunately it was a slow line, but I
guarantee you people pay someone else to wait in line
to get their brisket for them, or let's say, to
snag tickets to a popular show that to hang out
at the box office. When those tickets go on sale,
more people seem to be willing to pay. I would
say a not insignificant sum to have someone else wait
(23:37):
in line for them. You can use sites like task,
grab it or skip the line. I'm curious from your
point of view, man, would you pay for that?
Speaker 1 (23:45):
I know, no, you wouldn't. I mean, well, I haven't,
And I'm trying to invent either scenario where I might
would want to do something like that, and I can't
really think of a scenario.
Speaker 2 (23:54):
Okay, I was thinking. My initial knee jerk reaction was like,
no way would I pay someone to wait in line
for me? But is it all that dissimilar from using Instacart.
I've been I don't use either, so it's a slippery slope.
You over there paying for your luxury services. Well, and
I don't know if I've revealed this on the show.
Somebody posted in the how to Money Facebook group, but
Costco has stopped selling the discounted Instacart gift card.
Speaker 1 (24:15):
Oh no, which means they found you.
Speaker 2 (24:17):
Out getting my and they're like he told everybody, and
now they're doing it too. We got we gotta put
the kibosh on this, so you can't get them in
my local store or on the Costco website anymore, which
means if I want to keep doing that, it just
means my grocery bill is going to inflate. And I
got outside whether or not I'm going to go do
my own grocery shopping or not.
Speaker 1 (24:36):
Now they bait and switched to dude they did.
Speaker 2 (24:38):
I have a feeling I'm gonna be doing my own
grocery shopping because I won't be able to stomach it
without the discount. But I think it's okay at times
to value your time more than you value your money.
I think this just all goes in under the fancy
club and the weight that paying people to wait in
lines for you don't get accustomed to paying for perks
you can't afford. It's kind of like once you let
(24:58):
the genie out of the box, matt or bottle or
whatever it is you once you rubbed that lamp, once
you rubbed that box, and the cat comes flying out,
genie pops out, and you can't get the genie back in.
It's I think most people just wait longer till you
go in for let's say you're like, oh, I'm going
to hire someone to clean my house, make sure you
(25:20):
can sustain that for many years to come, because the
likelihood that you're gonna dial that back and start cleaning
your own house again, it goes down significantly.
Speaker 1 (25:27):
I will say that was one of my biggest not complaints,
but the thing one of the things I was worried
about when it came to so for two summers now,
and maybe I'm jumping the gun on this, but we
stayed out of a really fancy beach house we went
to together with our families at the beach, and I
remember my biggest hang up was thinking, we're locked into this.
There is no way that we're going to be coming
(25:48):
back from it, because it was just so nice.
Speaker 2 (25:50):
But it was a far cry from the nineteen sixties
the other places that we would pay on the you
know how to been to before exactly.
Speaker 1 (25:58):
But we did pull back. So, I mean, this coming summer,
we've were planning on going to a spot that's much
much more affordable, and in large part that was because
the price of that fancy spot kept going up. We
found it right when it was listed cross checked it
with an actual realtor website. It was a legit place.
They just didn't have their reviews on when we booked
it on like Verbo or something like that, and so
basically they're just waiting to get a solid arsenal of
(26:21):
reviews before they like double the price now, which, uh, yeah, prices,
we can't. We can't do this, dude.
Speaker 2 (26:26):
The price on that skyrocketed, but you know, we were
price sensitive and we said listen, when it was reasonable,
we did it. And now we're not going to be
in nearly as fancy accommodations this year.
Speaker 1 (26:36):
But it wasn't easy to do that. Well, it wasn't
It was not easy for us to have, Like it
was a conversation that we had, really all right, what
do y'all think, Like this is a lot more expensive,
and it was really tempting to continue to pay out
the nose for this thing. But in the end, maybe
because of the fact that we knew the kind of
podcast that we host, we were talking about personal finance,
We're just like, we can't let ourselves do this.
Speaker 2 (26:55):
And once you allow yourself to get that caveaart taste,
it's hard.
Speaker 1 (26:57):
To go back to eating hot dogs. It's kind of
like one you get the automatic sliding doors. It's just
like that's what I'm just gonna drive forever, right right,
all right, man, let's talk about higher education. The decision
to get a college degree is less clear cut than
it used to be, Like it made so much economic
sense decades ago, right like fifty years ago, it was
the no brainer path to a middle class life for
(27:20):
our parents. The cost was reasonable. Today twenty twenty five,
making the wrong decision about what degree you choose, where
you go to school.
Speaker 2 (27:29):
How much debt you're willing to take on, Like this
is a high stakes gamble, Like you mess it up
one one false move, one false step, and it's going
to hamper your future for decades to come. Yeah, well
it's not very forgiving if you make the wrong take there.
Speaker 1 (27:42):
College attendance has been declining since COVID, basically the tide
is turning. And Harvard they just announced that tuition is
going to be free for students coming from families that
make less than two hundred thousand dollars a year. That
threshold used to be set at eighty five thousand dollars.
So it's a a massive increase.
Speaker 2 (28:01):
Of joining what MIT and a couple of other Ivy
League schools have already done that.
Speaker 1 (28:05):
It's a great trend that a lot of schools are
are headed in. Other data has found that while the
sticker price of college continues to rise, that the post
discount rate has been falling thanks to more generous financial
aid packages. This is exactly what we talked about with
Ron Lieber back in the day. College costs are still
opaque and they can appear outrageously expensive on the surface.
(28:26):
Everybody wants to have that super high sticker price, super
high MSRP. But to the diligit it is totally possible
to get that degree for less. And I'm also happy
to see someone like Harvard with a fifty billion dollars
plus endowment like using some of that perhaps to be
more welcoming to a lot of the different folks who
are interested in going to school but can't afford it.
Speaker 2 (28:45):
Yeah, it's almost as if they think of themselves as
a luxury brand, some of these colleges, and if they
have to reduce their sticker price, then it reflects poorly
on the branding of that college or university. But the
truth is most applicants can if they take the right tact,
pay less than they might have otherwise paid five, six,
seven years ago and the Wall Street Journal Matt they
(29:06):
profiled a tenacious student who really wanted to go to NYU,
but she wanted to go for free because it was
so darn expensive.
Speaker 1 (29:12):
To go to NYU.
Speaker 2 (29:13):
She was like, the only way I'm gonna be able
to do this is if I don't have to fork
over any money. And this was such a fascinating article.
The woman's name was Sierra Billy. She made it happen
by applying for financial aid and scholarships, and then she
like locked horns with the financial aid department. She started
negotiating with them, pushing back on what they were offering
(29:33):
her like it, and she was able to attend NYU
for all those years for free. Now she's trying to
go to law school for free. So I'm like, she's
just saying like there's no end to the free education
that I want, which I think is awesome. I think
more power to her makes me want to get her
on the show to talk about all the strategies that
she used. But it's also possible to get a degree
(29:54):
for free. You don't even have to be quite as
tenacious as Sierra was, and not just into Ivy League schools,
because let's be honest, Matt, the admission rate at some
of the most of those Ivy League schools is pitifully small.
So even if you're like, oh, free school, well, do
you have like straight a's in a fifteen hundred SAT
or I don't know. I think the SAT works on
(30:15):
a different scale now. But yeah, if you're not going
to commit to full time scholarship hunting, how are you
going to get that free education? Well, this website, appily,
we'll link to this in the show notes just came
out with a list of colleges offering free degrees and
they spell out what it takes to qualify for that
one hundred percent discount. I think it's just nice to
know ahead of time what it takes to qualify, what
(30:36):
it takes to get that free education, and it's more available.
Whether it's like whether certain states offer incentives like our
home state, Matt, or whether it's just a college that says, hey,
if you make under this amount or if you meet
these certain metrics, you get to come here for free.
That could easily sway your decision from saying I really
want to go to this dream school. Man, it's going
to cost so much. But wait a second, this other
(30:57):
school looks like a great option. I didn't realize I
could go for essentially nothing.
Speaker 1 (31:01):
Yeah. Going back to Sierra, though, do you know the
real secret to her success though? You do tell it
was the fact that she had a color coded Excel
file that she kept up with all of her different
student aid packet offers that she was receiving. I had
different scholarships and grants.
Speaker 2 (31:15):
That's how you do it. Boy, I definitely thought of
you when I read that line. I was like, Oh,
she is also a stickler for the details.
Speaker 1 (31:22):
You got to get after it. Man, Let's talk about
cell phones because T Mobile announced that it is raising
prices starting in early April, increasing rates by as much
as five dollars a line. And I think what's going
on here is that they're hoping that you won't notice,
or that you'll be like the frog in the pot
of warming water. You're gonna be attempted to chalk it
up to you know, oh, it's inflation, or maybe it's terrorists.
(31:44):
But the truth is cell phone service has been on
a deflationary trend. There's so much competition in the space,
and the folks who are losing out on the savings
are the ones who stay put instead of jumping out
of the water before it gets boiling. So if you
received a text about your your cell phone plant increasing
in price, don't put up with it. Man, You're right,
it's one of these things that has been going down
and down in price, and so it's but many people
(32:06):
have not partaken in the benefits. There are just so
many better choices than just going with the big companies
who advertise like who have all the commercials and are
sponsoring your favorite sports teams. Cable companies, for instance, surprisingly
have launched decent cell phone service products, like Comcast and
Charter Comcasts. Some people are like, I'll never doing business
with them again because of what they did to me.
A lot of people feel that way about that company.
(32:28):
But those companies have actually launched cell phone services that
are pretty decent. They've offered discount plans. Their plans, I think,
still don't provide the best value, even though they've been
gaining market share mid mobile. That's what we've talked about
for a long time. Day rock Boost is another solid
cheap option so is visible, but then US Mobile. It's
our current favorites and it's who we use right now.
(32:48):
Seventeen dollars and fifty cents a month matt for unlimited
cell phone service is pretty great. Look into the details
see whether or not it's going to work for you.
But when the big cell phone providers say, hey, prices
are going up, it's so easy to say not for me,
they're not. Yeah. The great thing about switching cell phone providers, too,
is that you save a ton of money, but you're
not downgrading in a serious way. And that's not the
(33:09):
case with most things that we buy, like especially when
it comes to things in the physical world, like if
you are going to spend less on a pair of shoes,
you're often going to get a cheaper pair, like it's
an inferior product. Basically, unless you're getting them massively on
sale like you tend to do.
Speaker 2 (33:22):
You get your shoes at Walmart or pay Less versus
one of the name brands, it's not the same. You're
probably they're not gonna last as long, or maybe if
you're running in them you can hurt your feet.
Speaker 1 (33:30):
Or even like going with Spirit Airlines over Delta. Sure
you're saving money, but there are trade offs. You need
to make sure you're aware of the trade offs. New
York Magazine they had an article about the difference between
a thirty dollars pair and a three hundred dollars pair
of Jeens. The materials that they use to make these
genes are meaningfully different, the craftsmanship, the design, they're typically
(33:51):
superior when you pay a lot more. So we're sharing
this not as a blanket statement to always go for
the cheaper item or the cheaper service out there, because
sometimes it might be worth it to pay more for
specific items. I mean especially items that you love and
just certain items that you use frequently, right, Like, if
it's something that you're going to be interacting with on
a regular basis. We talked about this in a recent
(34:12):
and the recent newsletter Buy once, cry once. If it's
especially if it's something that if you're constantly reminding yourself
of how cheap something is, I don't know, maybe it's
worth it to up right.
Speaker 2 (34:22):
Well, yeah, I think that's the downside of Shean and Timu.
The sights of people have been gravitating towards to save
money on clothing, and I've just heard so many people
say I didn't it lasted like two wears. It ripped
or it was it didn't fit the way I thought
it was going to. And that's like the complaint in
the cheaper jans world is the way they're manufactured. That
(34:42):
you buy one pair of Genes and you buy the
same pair in a different color, and the fit's completely
different just because the material that's used and the craftmanship
isn't there.
Speaker 1 (34:50):
So I'm made in a different factory.
Speaker 2 (34:52):
Dude, I think about the jeans I wear. I've had
the same pair of Genes. I know, you have two
for like seven or eight years. I mean wearing them
over and over and over for a longeriod of time, and.
Speaker 1 (35:00):
They weren't even the three hundred dollars pair of Gens.
Yeah no, no, mean you said that quickly, but like
somewhere in somewhere in between, you know, it's just a
one hundred hundred bucks is about what I am the
top end of what I'm willing to pay for a
pair of jeans. But then they're just they're better crafted,
they look good, they fit good, and I'm gonna hold
on to him for a long time. And that's where
like the price per weear comes in. I think It's
a really good metric for people to use when they're
(35:22):
thinking about what they're buying. Hey, am I willing to
pay a little more upfront because I know it's gonna
last longer. I'm gonna wear it a whole lot more
than the cheaper item that I might have to discard
in a whole lot less time. Totally. All right, that's
gonna be it for their Friday flight. Have a great weekend.
We'll see back here on Monday with a fresh ask
how to money? Until next time, Buddy, best friends out,
Best friends out?
Speaker 2 (35:54):
Yeah, I think he like, Yeah, No, I think he.
I don't remember which one it was, but it was
something like that where yeah, yeah, you're excited about the
packages to show up at your house.
Speaker 1 (36:07):
Man
Welcome to Hat of Money.
Speaker 2 (00:01):
I'm Joel, I'm Matt, and today we're talking about appealing arms,
iterating investments, and colleges cutting costs.
Speaker 1 (00:27):
And by arms, Joel, you are not referring to your
incredible physique, they got health. No, we are going to
talk about adjustable rate mortgages and this is our Friday Flight,
the roundup of different news stories we came across this
week and specifically how we think they're going to impact
your bottom line your money. This might be the first
week and a few weeks, Joel that we don't talk
(00:48):
about tariffs here on the show and the crazy impacts
that it may. I appreciate you saying that on our economy,
I think we're going to for just one quick scurry, Okay,
but no, we won't go deep into tariffs because there
hasn't really been much going on this week on the
tariff front, fortunately. But my mom received a text message
from a company. She was looking to get some new
blinds in the house for a couple of windows, and
(01:12):
the blind company considered like, is it blinds dot com?
I don't remember. I'm pretty sure that actually is a company,
but I literally just kind of made that up.
Speaker 2 (01:19):
Because I feel like I've heard of them. Yeah, but
I think she was going through a provider that she
sourced through Costco and they came out and they measured
and they'd given her a quote. This was like, I
don't know, a month and a half ago, something like that.
And they sent her a follow up text message to say, hey,
we know that you haven't purchased blinds yet from us,
just to let you know. Prices are going up twenty
(01:40):
percent next week because of tariffs. So but hey, we're
going to honor that price for now. You just gotta
less way.
Speaker 1 (01:49):
So the question is are they really going to hike
the price now or is it just a hard Yeah,
that's what I was wondering herd selling her.
Speaker 2 (01:55):
I think they're gonna get a lot of people to
book just to say like, okay, gool, I'll sign on
the dotted lines. I don't want to pay twenty percent more.
My mom was like, yeah, the quote was kind of
expensive anyway, so I'm not doing it, okay, But just does.
Speaker 1 (02:06):
She already have some blinds up as? I don't know
what they're talking about it.
Speaker 2 (02:10):
I think they're blinds.
Speaker 1 (02:10):
I don't know.
Speaker 2 (02:11):
I don't know what a roman change or something like that. Oh,
I'm not sure, but you know what I think are overrated?
Sorry total Sorry you finish your thought now. I'm just
saying I think this is a tactic that more companies
are going to use. Yeah, and I think some people
are going to be like, it's going to accelerate a
purchase that people might otherwise not have made it. I'm
not saying that the tariffs won't make things cost more.
Speaker 1 (02:30):
I think they will. But whether or not this terriffs
come to be I think that's the real question.
Speaker 2 (02:35):
Yeah, and how badly do you need this thing? And
can you just say, ah, no, I'm not interested, thank you,
but no, thank you.
Speaker 1 (02:40):
Yeah. Well, you know what else is pricey? Joel homes
Buying a house today is an expensive endeavor. I think
that's the understatement of the century, not the century, maybe
understatement of the past decade. I'll say, as we mean,
house prices rise, they remain elevated, and interest rates are
still near seven percent on thirty your mortgages. And one
(03:01):
way to reduce your monthly obligation is to opt for
an arm instead of a thirty year mortgage. There is
a recent Bloomberg article and they pointed out to the
potential rise of arms and how that could help grease
the wheels of the housing market a little bit.
Speaker 2 (03:16):
Yeah, you have more people opted for them that hey,
we might we might see more listings and exactly houses
going in a contract.
Speaker 1 (03:22):
Things might be flowing a little bit more and it's
going to get you a lower rate, but it won't
be locked in for forever or you know, for the
life of that loan. This means that you'd you know,
you're living yourself financially exposed at the end of that
fixed term. So oftentimes we're talking about like a five
year term, like a five to one ARM. But they
can be a reasonable choice for some folks out there,
especially if you're not planning on being in that home
(03:44):
you know too much past the initial fixed term, or
if you understand the trade offfs if you're willing to
endure a potentially higher interest rate down the line. But man,
you got to be careful. You got to weigh the
trade offs. You need to choose carefully where you planning
to share how how you opted to go with an ARM.
I did what I mean, it's I think it can
be a It used to not be a smart decision.
(04:07):
Right like ten years ago, why would you opt for
an ARM? Interest rates were at like rock bottom lows
and the ability to opt for an eighth of a
percent discount over the thirty year fix. That was dumb.
But now it's like, Okay, there's a more of an
ability to save and just given the fact that there's
a higher likelihood of rates going down in the future.
Speaker 2 (04:26):
It's not guaranteed, ye, but yeah, but it's interesting. Rates
did continue to drop until just a few years ago,
and so some people who did, let's say, take out
an ARM ten years ago, and then five years in
they were like, my rates looking sweeter now, I'm kind
of glad I went for the ARM and then they
sell the like they were just paying a lower interest
rate the whole time, even though a thirty year fix
would have been better, I opted for a ten to
one ARM, Matt, So I like that like greater security,
(04:48):
like a decade instead of just five years, because.
Speaker 1 (04:50):
But only because like the rider time period too, Yeah,
because like like when you're closer to five it's like, well,
we don't want you buying and only staying there for
five years anyway, Like you need to get past that
five year I like that, like the tend and I.
Speaker 2 (05:01):
Didn't know if I was going to be in the
house for ten years or thirty. But I can cross
that bridge when I come to it, and I can
pay down the mortgage more quickly if I want to,
or I can also refinance into another type of loan.
I think I used to be kind of like blinders
on thirty year mortgage. Thirty or fixes the only way
to go, and I think for most people that's probably
(05:21):
still the smartest move. But so much depends on the
discrepancy in rates. And if you can get a significantly
lower rate by opting for an ARM, and let's say
you're at least banking ahead, you're planning ahead for potentially
higher rates down the line as that mortgage rate adjusts.
I think it's an okay move. You just have to
go into it with eyes wide open. So that's what
(05:42):
I did. It's worked out well so far. We'll see,
We'll see how it goes seven and a half years
from now. But let's talk about good political money news, Matt.
A recent move from the Trump administration could bring down
costs on housing using federal land, specifically to build board units.
That was a proposal that was made this week.
Speaker 1 (06:00):
I've always wanted to live in Yosemite Valley a jol.
Wouldn't they be nice and be nice just set of
right their next to Curry Village.
Speaker 2 (06:06):
We'll see if they make that land avail little unlikely,
probably not, but it does look like the Interior Department
and HUD are set to work together to an attempt
to increase housing supply by allowing building on federal land
that's underutilized. Right, And the truth is, we need more supply.
We've talked about this for years, how we are millions
of homes shy in this country, what we actually need.
(06:27):
I was just in Austin, matt and it was fascinating
to hear from folks how much cheaper it's become to
live in Austin over just a short period of time. Really,
in just the last like year, rents have declined by
twenty two percent. I think something like that from from
peak Austin thanks to this boom and building. Like I
was driving around, I'm seeing unfinished apartment complexes everywhere. They're
continuing to build. And now the incentive is, I don't know,
(06:49):
it's it's it's.
Speaker 1 (06:50):
Quite there for the builders yeah.
Speaker 2 (06:52):
So you know, Austin renters now have more negotiation power,
and you know a lot of apartment complexes are offering
months of free rent to entice people to come over.
It's interesting, though, California is taking the opposite approach. Some
people are saying that in the aftermath of the wildfires,
it's a great time to prioritize building some density, like
adding more units. But the NIMMI movement, the not in
(07:15):
my backyard movement, is doing what they can to prevent that.
And so a lot of folks in California say, well,
we want more housing affordability, but we don't want to
do what it takes to get there. We don't want
more units because it might reduce the value of my house.
Speaker 1 (07:28):
You don't want to kill those expensive California vibes, right, Yeah,
And they're not trust me, And so I don't know.
I was in Austin and I saw this poster mat
it said twenty five percent of housing costs are due
to government red tape. I think it was from like
realtor dot com or something like that, and I think
it's likely much more than that in California. I would
love love to see California take a page from Texas
on this. I think a lot of young folks in
(07:49):
particular would benefit. Think about when you bring down the
cost of housing, you bring down that barrier to entry,
and you reduce that line item in people's budget, especially
for young folks. It's a massive way, totally. Yeah, And
until then we will continue to most likely we will
continue to see population declines from California and increases in
states like Texas where there is where there has been
increased supply.
Speaker 2 (08:10):
It's so much of that is like government regulation. And
if you just dial back some of the building codes
and stuff like that and make it easier for builders
to create new supply, they'll do it.
Speaker 1 (08:20):
Yeah. Well, the lawsuit against the NAAR like that looked
like it might have had a meaningful implication on closing
costs and realtor commissions, specifically talking about grease and the
wheels of housing, but that hasn't panned out, at least
not yet. It's been about six months since those rules
have changed, and the average buyer commission has gone from
two point three seven percent too drum roll, two point
(08:41):
three six percent. He has it's barely budged, so not many,
which is great news. For worried realtors out there, but
bad news again for all the buyers who are looking
for ways to reduce some of these transaction costs associated
with buying a house. But know that as an individual,
you have the power to push back, to discuss the
commission structure with a potential agent. You don't just have
(09:04):
to fork over three percent of the purchase price by
default just because that's the way it's always been done. Yeah.
And I think this is an area too where I
think just the technology that's associated with the transaction, the
transaction costs, and just the buying and selling of homes,
that's an area where I'm hopeful. And man, I just
think of it feels like such an antiquated old model,
(09:25):
the old way of doing things, And given the pressure,
given the fact that there is an entire generation wanting
to purchase a home, where that they're finding that harder
and harder to do, I feel like something's got to change. Yeah. No,
I agree.
Speaker 2 (09:37):
And it's interesting when you look at the where the
commissions are coming down the most, it's on higher end homes,
so those I'm not sure if it's just that those
buyers are more informed and they're like no, no, no, I
know what happened in that legal ruling, and I'm gonna
I'm gonna ask for a discount here, or if it's
just because the commission is steeper on that and so
realtors are more willing to offer a price cut I
(09:59):
kind of thing. So that's it's got maybe a little
bit of both.
Speaker 1 (10:01):
Yeah, they're like, Okay, I know it's a four million
dollar house, but well, let's do commissions like it's a
two million dollars house. Yeah, Like, either way, that's.
Speaker 2 (10:07):
A that check right, Yeah, the agent's still making good
money on that, Matt. Let's talk about investing investors. They're
shaking things up right now given the economic actions of
the Trump administration recent stock market volatility. The Wall Street
Journal just profiled some folks who are making meaningful changes
to their investment portfolio in light of recent volatility. They're
(10:29):
saying like that. Yeah, they're like, I'm not sure. This
doesn't look so good. I might need to do something different.
And it doesn't seem like, based on their investigation, that
this activity is widespread. I don't think people are knee
jerk selling right and left, but that doesn't mean it's
not concerning gold and cash in particular have been garnering
more interest as stocks have kind of sort of I'm
(10:50):
not going to say free fall, but they've been going down, right,
stock price themen going down or there at least they've
been more volatile. I guess we're back down to essentially
where we were at least in the S and P
five hundred about six months to go. International markets those
are also receiving more interest from people who are more
US centric focused in their investments too, And it does
seem like this, at least to some extent, does fall
(11:12):
along party lines. But I think no matter where you
land politically, the goal is it should be to tune
out the noise and to not make knee jerk changes.
I guess I'm just worried about people seeing something like
a ten percent drop, which feels existential, but especially for
somebody had a money listeners who are in the wealth
building phase of their life. They're early on like it's
a bad idea to make any changes right now.
Speaker 1 (11:33):
And I also hate too that that it does seem
to be following along party lines. And this is where
I unfortunately I think folks politics can get in the
way of their investing because it's like, on one hand,
we'll say, oh, no, no, the volatility, it's par for
the course. But I understand when there are when there's
a subset of half of the population who looks at
this and say, well, no, this is this is volatility
(11:54):
that is not necessary. It feels like an own goal,
like within the current administration, if you are not optimistic
about where things are going. I totally understand a lot
of folks hesitant behavior when it comes to investing in
the market, but I think zooming out and gaining a
better just a better perspective is so important when it
comes to times like these. I think back to like,
(12:15):
we might have a lot of listeners and they weren't
even alive during the dot com bubble bust or whatever,
but that was like the end of the world. And
then not too long after Y two K was literally
the end of the world, right, Yeah, there's a whole
lot happening about, like satellite's gonna be falling out of the sky,
crushing us in sleep, and then the Great Recession. Like
these were like literally end of the world, the sky
is falling type of scenarios. But then what happened things
(12:37):
rebounded the problem though, is that you can't look ahead
to see what's You can't see what's coming down the pike, right,
and so but like when we invest, we are inherently
optimistic about what's going to happen and then and so
now because of what has happened over the past fifteen years,
we got to the market and where the economy has gone.
Like you look back to y two k, you look
back to the two thousands, dot com bust, you look
to the Great Recession, and they look like tiny little
(12:58):
speed bumps. Yeah, compared to where the market has gone
since then. And like even COVID, like that was creating
more uncertainty than you know, the skeettershot terrorists that were
currently currently been threatened. At least the stock market was
thinking much faster. The future was highly uncertain, but folks
who made reactionary moves back then ended up being proved
(13:19):
wrong fairly quickly. So ultimately, the key to a brighter
financial future is to invest more. And that's the thing.
These days, your dollar cost average purchase of an index
fund is better than it was a few weeks ago.
You are getting wealthier ultimately by staying the course. And uh,
just know that you're buying, buying at a discount. Yeah,
remember that.
Speaker 2 (13:39):
What it makes me think, Matt, is that we live
in such a society that we talk about politics a
lot more. Thinking even about late night comedians that used
to be the Yeah, they used to like tell jokes
about you know, daily life, and they used to have
on entertainers and stuff like that, And now there's so
much discussion of politics in what feels like every realm
of our lives for.
Speaker 1 (14:00):
Seven news cycle. I think that has a lot to
do with it as well, the fact that folks are
so glued to the headlines and every and gosh, we
talked about the democrazation of investing and so the ability
to just to pull out you you whip out your
phone and you can make a trade or you know what,
I was thinking about buying, but now I'm not going
to actually I'm thinking about selling. Just that knee jerk
response to what happens to be tweeted or truth or
(14:23):
just whatever. But like that day is a terrible way
to invest your money, and it can always feel like
this guy is falling. Yeah, if you're paying attention to
the headlines on the rig and we're here to say
that it's not, and that, yeah, you want to have
a plan for your money and for your investments so
that you're not making kind of moves on the fly.
Speaker 2 (14:41):
You know where you're going and you know why you're
doing it.
Speaker 1 (14:44):
Matt.
Speaker 2 (14:44):
There was this old Fidelity study that you and I
have referenced over time as well on investing, and it
showed that seeing essentially like a digital rendering of what
you would look like in thirty to forty years, how
it could impact your willingness to invest.
Speaker 1 (14:57):
Now.
Speaker 2 (14:58):
I believe you and I took a picture on on
that app and we we should like, yeah, repost that
on Instagram, but we goot older. I think I was
happy with it. We're gonna be hot Grandpa's someday. But
the reality was like seeing what old you was going
to look like, it was going to create more empathy,
and it was going to cause a realization right that
(15:19):
you're actually going to be old someday, because there's something
about being in your twenties and you're like, yeah, I'm
gonna live forever, Hey, Grandpa, get out of here. It's
like I'm never going to be that, but you are like,
that's just how the world works, and Now there's new
data that essentially reinforces this fidelity survey from a long
time ago. There's a study from Sweden and it found
that people with low balanced savings accounts were fourteen percent
(15:42):
more likely to invest in a long term savings product
when they received a notification with a language prompting them
to think about the future first, just a notification map, like, hey,
just a prompt. Guess what little prompt? A minor prompt.
And I think it makes sense, right, Like, let's let's
use this sort of information to our advantage, realizing that
(16:03):
we have a hard time thinking about the future and
empathizing with our future selves. I think it's important for
how to money listeners to find a way to keep
their why behind investing top of mind. And I think
visuals can help. Whether that's literally doing the was it
the old OFFI app or whatever it was called, and
taking a picture and making yourself look old and then posting.
Speaker 1 (16:24):
That somewhere in your room.
Speaker 2 (16:25):
I don't know what you need to do. Make it
the wallpaper on your phone, yeah, or like sending a
monthly alert, Hey you're going to die someday, right, or
we're keeping some sort of like faux metal skull on
your dresser. I don't know what it is for you
that's going to help remind you that you are going
to get older over time, but I do think that
that sort of visualization and connection to that truth can
(16:48):
help you stay the course and potentially even bump up
your investing percentage.
Speaker 1 (16:52):
Totally man, And this makes me. This reminds me of
something that I'm pretty sure mister money Mustache wrote. It's
a visual that has stuck with me ever since, and
it was something along the lines of that if you
spend money on just dumb stuff today, how essentially what
you're doing is you're taking a crap sandwich and you're
placing it on this conveyor belt, and it's going to
go off on his journey and then at some point
off in the future it comes back to future you
(17:14):
and this is something that you need it. Yeah, basically,
it's something that you have delivered to yourself as opposed
to instead investing your money and instead well, like what
that is is a delightful, thoughtful, generous gift to your
future self. It goes off on the conveyor belt and
then way off in the future, it's this nice present,
this nice gift that you get to receive. Think about
(17:36):
it that way. Just whatever it is, like you said,
that allows you to connect with your future self. Those
are the strategies to implement.
Speaker 2 (17:42):
Okay, brief story my dad one time, I guess you
can swich instead of going instead of going to get
a colonoscopy, you could you could do what you needed
to do at home and then mail it in no way.
He accidentally mailed it to his to himself. So so
(18:02):
when he opened up that box at home, are you kidding?
And I came back like two days later and he's like, wait, oh,
what's this for me? And then he opened it, He's like,
oh gosh, what I do?
Speaker 1 (18:11):
So speaking of crap sandwiches, that's what you want to avoid,
that's what you want to write there.
Speaker 2 (18:15):
Yeah, all right, nice visual for everyone there, Matt. Are
we got more money saving information we got to get to,
including a price hike at one of the cell phone
companies and what you can do about it. We'll talk
about that and more right after this.
Speaker 1 (18:35):
All right, buddy, we are back from the break. Still
can't get that visual out of your head? Can you?
I cannot? Now though, it is time for the ludicrous
headline of the week, which is from Bloomberg. The headline reads,
private clubs with fifty five thousand dollars memberships are taken
off in my Miami. Man, I thought folks who I
(18:55):
knew that were joining golf clubs this summer, your joel
that they were getting. I don't want to say take
an advantage of, because you know what it is that
you're signing up for, but it's so much money and
makes me think that just Miami is a completely different
place to live if there are clubs that cost you
that much money.
Speaker 2 (19:10):
It's amazing too when people around you start to do
things and you would have thought were asinine or too expensive,
before all of a sudden you start to rationalizing.
Speaker 1 (19:18):
It slowly starts seeming more and more normal. Yeah, so
you want to join the elite, You got to fork
over eight nine thousand dollars joining fee, and then of
course many thousands in fees every single year as well.
There are other clubs springing up in Miami also other
cities around the world as well, around food or wine specifically,
So not only do you have the honor of paying
(19:40):
for your meal, but you got to pay an annual
fee just to be able to get into the door.
Speaker 2 (19:44):
It's an exclusive eating and drinking club. But what'm saying
his brother in law actually just opened up a wine
bar that is exclusive, and it's like you pay the
same prices that you would pay out at another fancy place.
But I guess because of the exclusion and the clientele
that are there kind of people man an annual or
a monthly fee.
Speaker 1 (20:04):
On top of it, there's I mean, no shame, no shade, throne,
no hate if you're the kind of person who likes
ritzy clubs, But just make sure that you've got deep
enough pockets to handle something like this, Like don't, like
you said, don't get carried away thinking that like, well
this is this is just part of the course. This
is what has to be done now. And on top
of that, I would say for most of how the
money listeners, if you are craving those connections, just know
(20:25):
you don't have to fork over a thousands of dollars
to make it happen. There are lots of ways to
feel connected, not only to your community, your neighborhood, to
the town you live in. Like it makes me think
about we just last weekend, we ran a race and
by the way. Congrats to Joel. Joel's new nickname is
mister Bronze, having one third place in our age group.
Speaker 2 (20:45):
Yeah, the old man age group.
Speaker 1 (20:46):
Guess what, they don't give medals to the fourth place finishers, Joel,
that would be me right behind you for not running much.
You did well, thank you, you did even better. But
I would say there was I was in line getting
my bid number and I was just struck up a
conversation with dad and his daughter, had a nice little
chat there, wished them well did the race. I saw
them after the fact at the coffee shop and we
(21:08):
kind of like it reignited the conversations like, oh man,
you know, plus you have that post race running high
a little bit, kind of talked about how we did
just I don't know. It was just a great moment
of feeling connected to your community. And oftentimes I think
we chalk it up to it being this this like
massive undertaking, but it's these small things it makes me
think about, like like in the parenting community and circles,
(21:30):
they and Seinfeld talk about this. Actually he calls it
garbage time. And we think that what we need is
quality time like the big events, but what we need
to pay more attention to is garbage time. It's the
time that typically falls through the cracks that where a
lot of times we're not engaged and we're not willing
to talk to the people around us. We think it's
just throwaway time. But that garbage time is like the glue.
(21:50):
It's the things that hold things, that hold especially individuals together.
Speaker 2 (21:54):
It's a random conversations that you get into with the
neighbor while you're on your walk.
Speaker 1 (21:57):
Yes, and so just keep that in mind, like oftentimes
we are chalking up to these massive boulders, when in reality,
oftentimes it's like the it's the sand that forms the cements,
the mortar that holds us together. Here you go. I
like it.
Speaker 2 (22:08):
I like that, and I think lots of times it
can be around physical activity, but I think the other Yeah.
The other thing to prioritize is serving volunteering. That's just
another way. It's amazing how when you give your time
in an effort toward to help a local organization, that
you'll find other people who have a similar sort of
heart and mindset, and that creates really deep connections. So
(22:30):
if you're feeling like, man, my connections aren't as deep
as I want to maybe I should join this expensive
club over here. There's probably a better way to go
that's going to cost you less money. It's probably going
to like make you feel like a healthy or more
well rounded person too. Totally yeah, totally agree, instead of
just drinking the fancy wine.
Speaker 1 (22:45):
So we just want to push folks in the direction
of not signing up and spending incredible amounts of money
for something that feels a bit like conspicuous consumption.
Speaker 2 (22:53):
And must be honest, I'm not a guest a fancy
wine it every now and again, even though I'm more
like correctly signature wine dude. But still, what about spending
money on a smaller scale, maybe to hire people to
wait in line for you. There was an article about
that this week, and it just kind of struck me
in an interesting way because initionally enough, now you can
hire someone to wait in line to help you get
a seat at a restaurant you're interested in. I was
(23:15):
thinking about that when I was at Franklin's Barbecue and
Austin recently. Fortunately it was a slow line, but I
guarantee you people pay someone else to wait in line
to get their brisket for them, or let's say, to
snag tickets to a popular show that to hang out
at the box office. When those tickets go on sale,
more people seem to be willing to pay. I would
say a not insignificant sum to have someone else wait
(23:37):
in line for them. You can use sites like task,
grab it or skip the line. I'm curious from your
point of view, man, would you pay for that?
Speaker 1 (23:45):
I know, no, you wouldn't. I mean, well, I haven't,
And I'm trying to invent either scenario where I might
would want to do something like that, and I can't
really think of a scenario.
Speaker 2 (23:54):
Okay, I was thinking. My initial knee jerk reaction was like,
no way would I pay someone to wait in line
for me? But is it all that dissimilar from using Instacart.
I've been I don't use either, so it's a slippery slope.
You over there paying for your luxury services. Well, and
I don't know if I've revealed this on the show.
Somebody posted in the how to Money Facebook group, but
Costco has stopped selling the discounted Instacart gift card.
Speaker 1 (24:15):
Oh no, which means they found you.
Speaker 2 (24:17):
Out getting my and they're like he told everybody, and
now they're doing it too. We got we gotta put
the kibosh on this, so you can't get them in
my local store or on the Costco website anymore, which
means if I want to keep doing that, it just
means my grocery bill is going to inflate. And I
got outside whether or not I'm going to go do
my own grocery shopping or not.
Speaker 1 (24:36):
Now they bait and switched to dude they did.
Speaker 2 (24:38):
I have a feeling I'm gonna be doing my own
grocery shopping because I won't be able to stomach it
without the discount. But I think it's okay at times
to value your time more than you value your money.
I think this just all goes in under the fancy
club and the weight that paying people to wait in
lines for you don't get accustomed to paying for perks
you can't afford. It's kind of like once you let
(24:58):
the genie out of the box, matt or bottle or
whatever it is you once you rubbed that lamp, once
you rubbed that box, and the cat comes flying out,
genie pops out, and you can't get the genie back in.
It's I think most people just wait longer till you
go in for let's say you're like, oh, I'm going
to hire someone to clean my house, make sure you
(25:20):
can sustain that for many years to come, because the
likelihood that you're gonna dial that back and start cleaning
your own house again, it goes down significantly.
Speaker 1 (25:27):
I will say that was one of my biggest not complaints,
but the thing one of the things I was worried
about when it came to so for two summers now,
and maybe I'm jumping the gun on this, but we
stayed out of a really fancy beach house we went
to together with our families at the beach, and I
remember my biggest hang up was thinking, we're locked into this.
There is no way that we're going to be coming
(25:48):
back from it, because it was just so nice.
Speaker 2 (25:50):
But it was a far cry from the nineteen sixties
the other places that we would pay on the you
know how to been to before exactly.
Speaker 1 (25:58):
But we did pull back. So, I mean, this coming summer,
we've were planning on going to a spot that's much
much more affordable, and in large part that was because
the price of that fancy spot kept going up. We
found it right when it was listed cross checked it
with an actual realtor website. It was a legit place.
They just didn't have their reviews on when we booked
it on like Verbo or something like that, and so
basically they're just waiting to get a solid arsenal of
(26:21):
reviews before they like double the price now, which, uh, yeah, prices,
we can't. We can't do this, dude.
Speaker 2 (26:26):
The price on that skyrocketed, but you know, we were
price sensitive and we said listen, when it was reasonable,
we did it. And now we're not going to be
in nearly as fancy accommodations this year.
Speaker 1 (26:36):
But it wasn't easy to do that. Well, it wasn't
It was not easy for us to have, Like it
was a conversation that we had, really all right, what
do y'all think, Like this is a lot more expensive,
and it was really tempting to continue to pay out
the nose for this thing. But in the end, maybe
because of the fact that we knew the kind of
podcast that we host, we were talking about personal finance,
We're just like, we can't let ourselves do this.
Speaker 2 (26:55):
And once you allow yourself to get that caveaart taste,
it's hard.
Speaker 1 (26:57):
To go back to eating hot dogs. It's kind of
like one you get the automatic sliding doors. It's just
like that's what I'm just gonna drive forever, right right,
all right, man, let's talk about higher education. The decision
to get a college degree is less clear cut than
it used to be, Like it made so much economic
sense decades ago, right like fifty years ago, it was
the no brainer path to a middle class life for
(27:20):
our parents. The cost was reasonable. Today twenty twenty five,
making the wrong decision about what degree you choose, where
you go to school.
Speaker 2 (27:29):
How much debt you're willing to take on, Like this
is a high stakes gamble, Like you mess it up
one one false move, one false step, and it's going
to hamper your future for decades to come. Yeah, well
it's not very forgiving if you make the wrong take there.
Speaker 1 (27:42):
College attendance has been declining since COVID, basically the tide
is turning. And Harvard they just announced that tuition is
going to be free for students coming from families that
make less than two hundred thousand dollars a year. That
threshold used to be set at eighty five thousand dollars.
So it's a a massive increase.
Speaker 2 (28:01):
Of joining what MIT and a couple of other Ivy
League schools have already done that.
Speaker 1 (28:05):
It's a great trend that a lot of schools are
are headed in. Other data has found that while the
sticker price of college continues to rise, that the post
discount rate has been falling thanks to more generous financial
aid packages. This is exactly what we talked about with
Ron Lieber back in the day. College costs are still
opaque and they can appear outrageously expensive on the surface.
(28:26):
Everybody wants to have that super high sticker price, super
high MSRP. But to the diligit it is totally possible
to get that degree for less. And I'm also happy
to see someone like Harvard with a fifty billion dollars
plus endowment like using some of that perhaps to be
more welcoming to a lot of the different folks who
are interested in going to school but can't afford it.
Speaker 2 (28:45):
Yeah, it's almost as if they think of themselves as
a luxury brand, some of these colleges, and if they
have to reduce their sticker price, then it reflects poorly
on the branding of that college or university. But the
truth is most applicants can if they take the right tact,
pay less than they might have otherwise paid five, six,
seven years ago and the Wall Street Journal Matt they
(29:06):
profiled a tenacious student who really wanted to go to NYU,
but she wanted to go for free because it was
so darn expensive.
Speaker 1 (29:12):
To go to NYU.
Speaker 2 (29:13):
She was like, the only way I'm gonna be able
to do this is if I don't have to fork
over any money. And this was such a fascinating article.
The woman's name was Sierra Billy. She made it happen
by applying for financial aid and scholarships, and then she
like locked horns with the financial aid department. She started
negotiating with them, pushing back on what they were offering
(29:33):
her like it, and she was able to attend NYU
for all those years for free. Now she's trying to
go to law school for free. So I'm like, she's
just saying like there's no end to the free education
that I want, which I think is awesome. I think
more power to her makes me want to get her
on the show to talk about all the strategies that
she used. But it's also possible to get a degree
(29:54):
for free. You don't even have to be quite as
tenacious as Sierra was, and not just into Ivy League schools,
because let's be honest, Matt, the admission rate at some
of the most of those Ivy League schools is pitifully small.
So even if you're like, oh, free school, well, do
you have like straight a's in a fifteen hundred SAT
or I don't know. I think the SAT works on
(30:15):
a different scale now. But yeah, if you're not going
to commit to full time scholarship hunting, how are you
going to get that free education? Well, this website, appily,
we'll link to this in the show notes just came
out with a list of colleges offering free degrees and
they spell out what it takes to qualify for that
one hundred percent discount. I think it's just nice to
know ahead of time what it takes to qualify, what
(30:36):
it takes to get that free education, and it's more available.
Whether it's like whether certain states offer incentives like our
home state, Matt, or whether it's just a college that says, hey,
if you make under this amount or if you meet
these certain metrics, you get to come here for free.
That could easily sway your decision from saying I really
want to go to this dream school. Man, it's going
to cost so much. But wait a second, this other
(30:57):
school looks like a great option. I didn't realize I
could go for essentially nothing.
Speaker 1 (31:01):
Yeah. Going back to Sierra, though, do you know the
real secret to her success though? You do tell it
was the fact that she had a color coded Excel
file that she kept up with all of her different
student aid packet offers that she was receiving. I had
different scholarships and grants.
Speaker 2 (31:15):
That's how you do it. Boy, I definitely thought of
you when I read that line. I was like, Oh,
she is also a stickler for the details.
Speaker 1 (31:22):
You got to get after it. Man, Let's talk about
cell phones because T Mobile announced that it is raising
prices starting in early April, increasing rates by as much
as five dollars a line. And I think what's going
on here is that they're hoping that you won't notice,
or that you'll be like the frog in the pot
of warming water. You're gonna be attempted to chalk it
up to you know, oh, it's inflation, or maybe it's terrorists.
(31:44):
But the truth is cell phone service has been on
a deflationary trend. There's so much competition in the space,
and the folks who are losing out on the savings
are the ones who stay put instead of jumping out
of the water before it gets boiling. So if you
received a text about your your cell phone plant increasing
in price, don't put up with it. Man, You're right,
it's one of these things that has been going down
and down in price, and so it's but many people
(32:06):
have not partaken in the benefits. There are just so
many better choices than just going with the big companies
who advertise like who have all the commercials and are
sponsoring your favorite sports teams. Cable companies, for instance, surprisingly
have launched decent cell phone service products, like Comcast and
Charter Comcasts. Some people are like, I'll never doing business
with them again because of what they did to me.
A lot of people feel that way about that company.
(32:28):
But those companies have actually launched cell phone services that
are pretty decent. They've offered discount plans. Their plans, I think,
still don't provide the best value, even though they've been
gaining market share mid mobile. That's what we've talked about
for a long time. Day rock Boost is another solid
cheap option so is visible, but then US Mobile. It's
our current favorites and it's who we use right now.
(32:48):
Seventeen dollars and fifty cents a month matt for unlimited
cell phone service is pretty great. Look into the details
see whether or not it's going to work for you.
But when the big cell phone providers say, hey, prices
are going up, it's so easy to say not for me,
they're not. Yeah. The great thing about switching cell phone providers, too,
is that you save a ton of money, but you're
not downgrading in a serious way. And that's not the
(33:09):
case with most things that we buy, like especially when
it comes to things in the physical world, like if
you are going to spend less on a pair of shoes,
you're often going to get a cheaper pair, like it's
an inferior product. Basically, unless you're getting them massively on
sale like you tend to do.
Speaker 2 (33:22):
You get your shoes at Walmart or pay Less versus
one of the name brands, it's not the same. You're
probably they're not gonna last as long, or maybe if
you're running in them you can hurt your feet.
Speaker 1 (33:30):
Or even like going with Spirit Airlines over Delta. Sure
you're saving money, but there are trade offs. You need
to make sure you're aware of the trade offs. New
York Magazine they had an article about the difference between
a thirty dollars pair and a three hundred dollars pair
of Jeens. The materials that they use to make these
genes are meaningfully different, the craftsmanship, the design, they're typically
(33:51):
superior when you pay a lot more. So we're sharing
this not as a blanket statement to always go for
the cheaper item or the cheaper service out there, because
sometimes it might be worth it to pay more for
specific items. I mean especially items that you love and
just certain items that you use frequently, right, Like, if
it's something that you're going to be interacting with on
a regular basis. We talked about this in a recent
(34:12):
and the recent newsletter Buy once, cry once. If it's
especially if it's something that if you're constantly reminding yourself
of how cheap something is, I don't know, maybe it's
worth it to up right.
Speaker 2 (34:22):
Well, yeah, I think that's the downside of Shean and Timu.
The sights of people have been gravitating towards to save
money on clothing, and I've just heard so many people
say I didn't it lasted like two wears. It ripped
or it was it didn't fit the way I thought
it was going to. And that's like the complaint in
the cheaper jans world is the way they're manufactured. That
(34:42):
you buy one pair of Genes and you buy the
same pair in a different color, and the fit's completely
different just because the material that's used and the craftmanship
isn't there.
Speaker 1 (34:50):
So I'm made in a different factory.
Speaker 2 (34:52):
Dude, I think about the jeans I wear. I've had
the same pair of Genes. I know, you have two
for like seven or eight years. I mean wearing them
over and over and over for a longeriod of time, and.
Speaker 1 (35:00):
They weren't even the three hundred dollars pair of Gens.
Yeah no, no, mean you said that quickly, but like
somewhere in somewhere in between, you know, it's just a
one hundred hundred bucks is about what I am the
top end of what I'm willing to pay for a
pair of jeans. But then they're just they're better crafted,
they look good, they fit good, and I'm gonna hold
on to him for a long time. And that's where
like the price per weear comes in. I think It's
a really good metric for people to use when they're
(35:22):
thinking about what they're buying. Hey, am I willing to
pay a little more upfront because I know it's gonna
last longer. I'm gonna wear it a whole lot more
than the cheaper item that I might have to discard
in a whole lot less time. Totally. All right, that's
gonna be it for their Friday flight. Have a great weekend.
We'll see back here on Monday with a fresh ask
how to money? Until next time, Buddy, best friends out,
Best friends out?
Speaker 2 (35:54):
Yeah, I think he like, Yeah, No, I think he.
I don't remember which one it was, but it was
something like that where yeah, yeah, you're excited about the
packages to show up at your house.
Speaker 1 (36:07):
Man
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Joel Larsgaard
Matthew Altmix
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