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Markets Drift Higher, Diesel Nears Records, and Why Everything Feels Expensive · The Financial Exchange Show

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Speaker 1: donation today. This is the Financial Exchange with Chuck Zada,
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Speaker 1: and Mike Armstrong.
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Speaker 2: Chuck, Mike, and Tucker with you as we start the
1:15
Speaker 2: first full trading week of April, and where things stand
1:20
Speaker 2: right now. We've got all three major US indices drifting
1:24
Speaker 2: up modestly today. Dow is currently up about seventy points,
1:29
Speaker 2: the SMP is up fifteen, NASDAC up ninety two, So
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Speaker 2: anywhere from about a tenth of a percent to four
1:34
Speaker 2: tenths of a percent move in your equisity equity indices.
1:39
Speaker 2: On the bond side of things, a little bit of
1:41
Speaker 2: a sell off, and bond is nothing big again, pretty
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Speaker 2: modest by all measures. Ten year is off about two
1:49
Speaker 2: point two basis points to four point three three five percent.
1:52
Speaker 2: We've kind of been hanging out in that range on
1:55
Speaker 2: the ten year for the last week or so now,
1:58
Speaker 2: a little bit of consolidation. After bumping up close to
2:01
Speaker 2: four and a half percent, we've now spent about five
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Speaker 2: days hanging out between four three and four four So uh,
2:08
Speaker 2: tenure finding a new range after bouncing from the three
2:12
Speaker 2: point nine percent range at the end of February. If
2:15
Speaker 2: we take a look at mortgage rates, they're holding right
2:18
Speaker 2: around six and a half percent as well. Six four
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Speaker 2: five was the latest from Mortgage News Daily last Friday,
2:23
Speaker 2: and we'll see where those evolve over the course of
2:26
Speaker 2: the week. Dollar Index down point one one percent to
2:30
Speaker 2: ninety nine to seventy four, No major moves there. Gold
2:33
Speaker 2: is up thirty two seventy and ounce to forty seven
2:35
Speaker 2: to twelve. And we've got West Texas Intermediate down half
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Speaker 2: a percent to one ten ninety one, so no major
2:43
Speaker 2: moves there. Triple A national average for gas prices has
2:46
Speaker 2: also moved up another nine tenths of aercent to four
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Speaker 2: eleven and nine tenths. Diesel is now at five sixty
2:53
Speaker 2: one and eight tenths nationally. That's twenty cents away now
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Speaker 2: from an all time record. If we don't see some
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Speaker 2: kind of improvement struck in the next couple of days
3:05
Speaker 2: on the Middle East situation, Diesel's likely heading four all
3:09
Speaker 2: time highs within the next week to ten days based
3:12
Speaker 2: on most analysts that I have read. So that's what's
3:17
Speaker 2: going on in markets most broadly. Hear anything else that
3:20
Speaker 2: you want to add, Michael.
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Speaker 3: Now, just shaping up to be a disappointing spring housing
3:24
Speaker 3: season here as we enter into April in force. Here,
3:28
Speaker 3: we've got the you know like you said, thirty year
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Speaker 3: mortgage has been creeping up. We were up at six
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Speaker 3: and two thirds a couple of weeks or just a
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Speaker 3: week ago. We're now sitting at around six four five
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Speaker 3: on that thirty year fixed rate mortgage and likely eating
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Speaker 3: away at purchasing power and also probably eating away at
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Speaker 3: confidence for those that might want to list their homes
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Speaker 3: this spring. So we'll see what it all shapes out to,
3:50
Speaker 3: but so far, inventory increases have been somewhat limited on
3:54
Speaker 3: the national level.
3:56
Speaker 2: Piece that is sure to just make everyone really angry today,
4:00
Speaker 2: despite you know what should be you know, actually a
4:03
Speaker 2: hopeful headline, More Americans are breaking into the upper middle class.
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Speaker 2: Made me angry and everyone's upset about it. And like
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Speaker 2: you think that I'm joking when I say this, but
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Speaker 2: I'm not. So here's the deal. The American Enterprise Institute
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Speaker 2: did a bunch of research on this, and what they
4:21
Speaker 2: have found is that when if you divide Americans into
4:26
Speaker 2: five groups, not by income quintiles, but just by basically
4:33
Speaker 2: what you are earning based on your family size more or.
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Speaker 3: Less at a national level, no regionality built in here, correct, So.
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Speaker 2: They've got five groups, They've got poor or near poor,
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Speaker 2: lower middle class, core, middle class, upper middle class, and rich.
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Speaker 2: I'm really disappointed they didn't do extra middle class for core.
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Speaker 2: I thought that would have been a nice little hat tip.
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Speaker 2: But hey, it is what it is. In any case,
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Speaker 2: what we see here is that the group upper middle
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Speaker 2: class has gone from representing about twelve percent of Americans
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Speaker 2: back in the late nineteen seventies early nineteen eighties to
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Speaker 2: around thirty percent of Americans today. So it has you know,
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Speaker 2: more than doubled almost you know, two and a half xed.
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Speaker 2: And in my opinion, this and I've been harping on
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Speaker 2: this for like a year now, this is actually why
5:29
Speaker 2: everyone hates the world today. It's not actually because of
5:33
Speaker 2: the top one percent, because, quite honestly, here's the deal, Mike,
5:38
Speaker 2: none of us interact with or compete with the top
5:40
Speaker 2: one percent for anything. It's true, we don't.
5:44
Speaker 3: The places that like now, Beze and I play pick
5:48
Speaker 3: a ball every weekend.
5:48
Speaker 2: Actually tough one in like that top point one percent.
5:53
Speaker 2: Je Jeff Bezos doesn't play pick a ball like he
5:56
Speaker 2: like you know, pays people to play for him.
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Speaker 4: He's that bald guy and pick a ball with then Jeff.
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Speaker 2: No, that's chef Bezos yeah, he's in any case, like
6:07
Speaker 2: the top one percent is not competing with the average
6:13
Speaker 2: person for most things, right, They're just not. What is
6:18
Speaker 2: the problem is that the stuff that the not just
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Speaker 2: upper middle class, but that core middle class group remembers
6:25
Speaker 2: doing when they were kids, that upper middle class group
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Speaker 2: is now so large that they are taking all the
6:32
Speaker 2: space at higher prices than most people can afford. And this,
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Speaker 2: in my opinion, is what makes people upset. It's the
6:38
Speaker 2: reason why when you're trying to book you know that
6:41
Speaker 2: that vacation to the beach for the summer, you know
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Speaker 2: you're you're weak off that you get every summer. You're
6:46
Speaker 2: looking around, You're like, the hotels are crazy expensive. I
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Speaker 2: can't get my family a four out of a restaurant
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Speaker 2: for less than like sixty dollars, Like even if I'm
6:54
Speaker 2: doing Chipotle, Like I can't figure out how to make
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Speaker 2: the math work. And the reason why is that that
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Speaker 2: beach that you used to go to. First of all,
7:04
Speaker 2: the population of America when you used to go to
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Speaker 2: that beach was like two hundred million, not three hundred
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Speaker 2: and forty million. So that's you know, issue number one
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Speaker 2: is there are just one hundred and forty million more
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Speaker 2: people trying to do the same stuff. The second problem
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Speaker 2: is that it used to be that out of that
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Speaker 2: two hundred million, you know, when you were a kid
7:21
Speaker 2: back in you know, the nineteen eighties, that two hundred million,
7:25
Speaker 2: there were twenty million people that were competing to go
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Speaker 2: to that beach. Now, because that demo has not just
7:31
Speaker 2: gotten bigger in terms of nominal size, but also as
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Speaker 2: a percentage, you know, you're talking thirty percent to three
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Speaker 2: hundred and forty million. Now you got one hundred million
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Speaker 2: people trying to go to that beach instead of twenty.
7:42
Speaker 2: You can't make more beach, Like, that's the fourth law
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Speaker 2: of thermodynamics is you can't make more beach. And so
7:50
Speaker 2: this is why the stuff that is you know, space
7:52
Speaker 2: constrained and hard limited, going to beaches, going to concerts,
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Speaker 2: going to National Park, all this stuff where you can't
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Speaker 2: make more of it feels inaccessible for people. And this
8:06
Speaker 2: is also like when we look at even just housing,
8:10
Speaker 2: We've talked about, look, we're not building fast enough. You
8:12
Speaker 2: can build more housing, we're just choosing not to. And
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Speaker 2: so it increasingly is a case where what really is
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Speaker 2: upsetting people like yeah, like I get that we don't
8:22
Speaker 2: like to see bezos with this five hundred million dollar
8:24
Speaker 2: yacht or whatever it is. Like, I get it, But
8:28
Speaker 2: we could deal with that if we could just go
8:29
Speaker 2: to the beach.
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Speaker 3: So here's my question, then, chick, it's tough for me
8:34
Speaker 3: to look at this report and say that this is
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Speaker 3: a bad news story for the average American because larger
8:39
Speaker 3: portions are finding themselves in those higher descriptions of categories. Right, Yes,
8:47
Speaker 3: if you are in that firm middle class, is life
8:52
Speaker 3: better or worse for you compared to thirty years ago?
8:55
Speaker 3: I still think it's better for you. I think your
8:57
Speaker 3: wealth has overall increased, your job safe in a whole
9:00
Speaker 3: bunch of other health outcomes have increased, but your ability
9:04
Speaker 3: to afford leisure spending has arguably declined.
9:13
Speaker 2: It's it's so here. Here's the thing. This is where
9:15
Speaker 2: I think it does get tough because yes, like so
9:20
Speaker 2: you're you're competing with more people for the same stuff now,
9:23
Speaker 2: which feels worse. It's also one thing. The other piece
9:29
Speaker 2: is that the way that this has largely happened has
9:34
Speaker 2: been through efficiency that is flowing up in terms of wealth,
9:41
Speaker 2: and that efficiency, when it when it spits down, comes
9:45
Speaker 2: in the form of less service and less help than
9:50
Speaker 2: you used to get for doing this, for like buying
9:53
Speaker 2: and doing the stuff that you used to the most
9:55
Speaker 2: annoying thing to like people, when you're trying to deal
9:57
Speaker 2: with customer service, it's one of those men use press
10:00
Speaker 2: seven for this, press eight for this. You're like, why
10:02
Speaker 2: can't I just talk to a person? And it's because
10:06
Speaker 2: that upper middle classes wealth is created by buy and
10:10
Speaker 2: large in a lot of cases finding ways to build
10:12
Speaker 2: more efficiency that is getting rid of service for the
10:15
Speaker 2: rest of people. You know, like labor is the biggest
10:20
Speaker 2: cost for most businesses, right, and so if you are,
10:24
Speaker 2: you know, building, if you're someone who's trying to build wealth,
10:27
Speaker 2: it generally has been again like when we're talking like,
10:32
Speaker 2: I know there's exceptions to all of this, but it
10:35
Speaker 2: generally is because you're able to find more efficient ways
10:38
Speaker 2: to do things. And in America, which is a service
10:40
Speaker 2: based economy, more efficient ways to do things is typically
10:44
Speaker 2: cutting out additional customer service for people that are buying
10:48
Speaker 2: your products. Like if you ever tried to talk to
10:50
Speaker 2: anyone at Facebook, Nope, no, don't think I became of
10:54
Speaker 2: doing so you ever try to talk to anyone at
10:56
Speaker 2: an airline I have. It takes a while, yeah, Like
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Speaker 2: the experience is awful. So I think this is the
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Speaker 2: combination of there are more people chasing the same few
11:07
Speaker 2: fixed goods that we used to goods and services that
11:10
Speaker 2: used to be those status symbols, and on top of that,
11:13
Speaker 2: the amount of service that you get for what you
11:16
Speaker 2: pay for for the vast majority of people has gone downhill.
11:19
Speaker 2: And so that's why even though when you look at
11:23
Speaker 2: the numbers in the aggregate and you say, yeah, this
11:26
Speaker 2: should be better, it feels worse.
11:30
Speaker 3: I'll also just throw out there that social media amplifies
11:33
Speaker 3: all of this and makes it all extremely worse because
11:36
Speaker 3: all that you see whenever you go on social media
11:39
Speaker 3: is people that you only quasi know and have no
11:43
Speaker 3: idea about their everyday life posting their best life moments.
11:47
Speaker 4: So there's that too.
11:49
Speaker 2: I'm gonna start posting my worst life moment I really
11:52
Speaker 2: like it on social media, just like the most embarrassing
11:54
Speaker 2: thing that happened to you that week, Posting about it
11:56
Speaker 2: on social Media's how we try, right, Like this is
11:58
Speaker 2: when I went out on a run and had to
12:00
Speaker 2: stop in the woods to go to the bathroom. Yeah yeah,
12:03
Speaker 2: you know, like stuff like that is what's gonna be.
12:06
Speaker 3: Hey, we's in the bathroom and toilet paper was still
12:08
Speaker 3: sticking out of my This is.
12:10
Speaker 2: When I backed my car into the side of the
12:13
Speaker 2: garage and had to pay four hundred dollars to get well. Actually,
12:16
Speaker 2: four hund dollars would do anything for a car these days.
12:19
Speaker 3: So accidentally wore two separate shoes. Yeah, two different color
12:24
Speaker 3: shoes exactly.
12:25
Speaker 2: You know, Hey, I started losing my hair at age
12:27
Speaker 2: twenty five, and you can too.
12:30
Speaker 3: Yeah, that's what we should post about on social media.
12:32
Speaker 3: Make everybody feel better, right, like you want to feel better?
12:35
Speaker 2: Look at this. Here's a short bald guy. Go have fun.
12:40
Speaker 2: Let's take a quick break and when we come back. Uh,
12:44
Speaker 2: let's see, we've got trivia, right, Tucker, That is correct.
12:47
Speaker 2: Let's do some trivia when we return.
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14:16
Speaker 2: Mike, before we go any further, last segment, we were
14:19
Speaker 2: talking about, you know, kind of why the current economy
14:22
Speaker 2: feels so not great to a lot of people. There's
14:25
Speaker 2: a companion piece that Tucker put in which I'll be honest,
14:29
Speaker 2: I only read the headline just because I it made
14:32
Speaker 2: me too upset to continue. What's an e shaped economy
14:36
Speaker 2: and where do you fit in it? Stop? You know
14:40
Speaker 2: my thoughts on like using letters to try to describe
14:44
Speaker 2: the economy, and I just I can't do it anymore.
14:46
Speaker 2: Did I make the right choice or not? In terms
14:49
Speaker 2: of not reading this, Yeah you did.
14:53
Speaker 3: We are done with K or E or other Pacman
14:58
Speaker 3: shaped economies. That none of these things adequately describe the
15:01
Speaker 3: American or global experience.
15:04
Speaker 4: Wow, you had that cute operady to go?
15:05
Speaker 2: Did you know?
15:05
Speaker 4: I was going to say, pac Man? Are you just
15:07
Speaker 4: Johnny on the.
15:08
Speaker 5: Spot was already Yeah.
15:10
Speaker 3: These are not adequate descriptions to describe the life experience
15:14
Speaker 3: or economic experience of people, So we just got to
15:16
Speaker 3: stop using them.
15:17
Speaker 4: Good done.
15:18
Speaker 2: Okay. Next, the typical US home is forty four years
15:22
Speaker 2: old and needs tons of work. Sounds like my body.
15:26
Speaker 2: You know what do we do about this?
15:28
Speaker 4: Michael one?
15:30
Speaker 3: We probably are dramatically underestimating how much this stuff is
15:35
Speaker 3: going to cost, especially if you need to do it
15:38
Speaker 3: in the next couple of years, So Chuck. When we're
15:42
Speaker 3: doing our day jobs of financial planning, we oftentimes will
15:46
Speaker 3: put in a placeholder of like one percent of a
15:49
Speaker 3: home's value it's fair market value as maintenance costs and
15:53
Speaker 3: you know, that's pretty standard, but frankly, for older homes
15:58
Speaker 3: it's probably inadequate, is the conclusion here, And I think
16:03
Speaker 3: certainly the experience for a lot of folks that yeah,
16:07
Speaker 3: if okay, yeah, if you own a multimillion dollar home
16:14
Speaker 3: in a community where it's just expensive because of the
16:17
Speaker 3: community you're in, maybe you can get away with that
16:19
Speaker 3: one percent number. But for a lot of folks that
16:22
Speaker 3: you know, have the average home that's forty years old,
16:25
Speaker 3: even just getting a paint job done is pretty darn expensive,
16:30
Speaker 3: and you might need to start bumping that up as
16:33
Speaker 3: the American housing stock continues to age and.
16:37
Speaker 2: You know, starts to show its age in a lot
16:38
Speaker 2: of ways. So I'm trying to reconcile this with a
16:45
Speaker 2: lot of things.
16:46
Speaker 3: Okay, so this is being presented as if it's like
16:51
Speaker 3: a problem. Yeah, I'm not sure it's a problem outside
16:56
Speaker 3: of misunderstood assumptions about the cost of things. I think
17:02
Speaker 3: that's the only problem is that Americans probably think home
17:05
Speaker 3: maintenance is gonna cost X, and in fact, it's gonna
17:07
Speaker 3: cost why.
17:08
Speaker 2: Sure. The other piece that I'll say in reading this
17:11
Speaker 2: article is the people that are profiled in it. Sure,
17:16
Speaker 2: seem like they like to pay for really expensive stuff.
17:19
Speaker 2: And I'll quote here when replacing their copper gutters a
17:23
Speaker 2: few years ago, they considered switching to aluminum, which would
17:25
Speaker 2: have been cheaper, but ultimately stuck with copper to preserve
17:29
Speaker 2: the home's integrity. Yeah.
17:32
Speaker 5: Sure, look at those copper gutters.
17:36
Speaker 4: Gorgeous.
17:37
Speaker 2: So look, I'm not a construction person. Like again, I
17:40
Speaker 2: sit behind a computer all day. Do copper gutters do
17:44
Speaker 2: anything to improve the home's integrity?
17:47
Speaker 1: Sure?
17:48
Speaker 3: I would imagine what they mean by integrity is just
17:51
Speaker 3: that style and look that it's always had, so the.
17:54
Speaker 2: Home actually got it's got feelings. Now it's that type
17:57
Speaker 2: of integrity. Yeah, it's that type of inte The home
17:59
Speaker 2: needs dignity. Yes, And this is what we're talking We're
18:02
Speaker 2: not talking about structural integrity. We're talking to homes psychological
18:05
Speaker 2: integrity decrees to beed.
18:10
Speaker 3: So again, where I think this mismatch is like when
18:13
Speaker 3: you talk to people who either don't own homes or
18:18
Speaker 3: are just buying their first home and explain what they
18:20
Speaker 3: are looking at in terms of costs of maintenance, they're
18:23
Speaker 3: absolutely floored. Like, for example, I'm sure right now if
18:28
Speaker 3: I ask my younger brother to guess how much it
18:31
Speaker 3: would cost me to tear off my deck and redo
18:34
Speaker 3: my deck, he would underestimate it by five to ten times.
18:39
Speaker 4: Sure, because I'm guessing.
18:40
Speaker 3: That that project for a large sized deck in the
18:43
Speaker 3: New England region is running you close to six figures.
18:47
Speaker 3: And that is the piece that I think people dramatically underestimate,
18:51
Speaker 3: especially newer homeowners of Oh wow, this is what that costs.
18:55
Speaker 3: I've just been paying rent for the last five years.
18:57
Speaker 3: I didn't really understand what goes into that if I
19:01
Speaker 3: don't want the you know, good old landlord special paint job,
19:04
Speaker 3: for example.
19:07
Speaker 2: I just can't take this article seriously. I'm reading more. No,
19:12
Speaker 2: it's making me more and more upset that this is
19:14
Speaker 2: like being proposed as like the norm. To avoid surprises,
19:19
Speaker 2: they invest roughly twenty five hundred dollars annually in preventive
19:22
Speaker 2: maintenance for their Vermont Slate roof.
19:25
Speaker 4: Again not normal.
19:26
Speaker 2: Not normal. Let's take a quick break. When we come back,
19:30
Speaker 2: We've got the Trivia Answer and Wall Street.
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Speaker 5: Market's edging higher as Wall Street reacts to President Trump's
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20:37
Speaker 5: requires Seleno Therapeutics, which develops treatments of rare diseases, and
20:42
Speaker 5: a deal valued at about two point nine billion dollars.
20:45
Speaker 5: Seleno stock is surging thirty two percent higher. Meanwhile, Goldman
20:49
Speaker 5: Zac's upgraded streaming giant Netflix two buy from neutral, saying
20:53
Speaker 5: it sees Netflix as continuing to be the leader in
20:56
Speaker 5: content acquisition and development. Netflix shares are now down modestly
20:59
Speaker 5: after seeing earlier gains and sticking with the media space,
21:03
Speaker 5: where The Wall Street Journal reported that Paramount sky Dance
21:06
Speaker 5: secured signed equity commitments of close to twenty four billion
21:09
Speaker 5: dollars from three sovereign wealth funds led by Saudi Arabia
21:13
Speaker 5: to help back its takeover of Warner Brothers Discovery. Paramount
21:17
Speaker 5: stock is rising by three percent. I'm Tucker Silva and
21:22
Speaker 5: that is Wall Street Watching. In the previous segment, we
21:24
Speaker 5: asked you the trivia question, what is Mario in Luigi's
21:28
Speaker 5: last name? We'll be Mario. Creator Shiguru Maya Moto confirmed
21:34
Speaker 5: at the twenty fifteen Super Mario Brothers thirtieth Anniversary Festival
21:38
Speaker 5: that their full names are indeed Mario Mario and Luigi Mario.
21:44
Speaker 5: Tom from Mason, New Hampshire is our winner today taking
21:47
Speaker 5: on the Financial Exshange Show T shirt. Congrats to Tom
21:50
Speaker 5: and we play trivia every day here on the Financial Exchange.
21:53
Speaker 5: See complete contest rules at Financial Exchange Show dot com.
21:56
Speaker 3: That's up there for best. Do you have any really
22:00
Speaker 3: good real I knew twins that were named Francis and
22:06
Speaker 3: Francis one with an ees one with an.
22:09
Speaker 5: I like first name, last name Francis f so.
22:12
Speaker 3: Male Francis and female Francis, twin boys and girls.
22:17
Speaker 2: I played football in college with a Peter Peterman.
22:20
Speaker 4: Peter Peterman's pretty solid. Yeah, yeah, so that.
22:24
Speaker 2: Was you know, like that that I thought was pretty good.
22:27
Speaker 2: But big Chicaro Miamoto fan by the way, Uh, if
22:30
Speaker 2: you're not familiar with him, pretty much like the father
22:34
Speaker 2: of modern modern video gaming. He's the guy who not
22:37
Speaker 2: only invented Mario, uh, he did most of the Zelda games.
22:41
Speaker 2: Donkey Kong was was him as well, So like he's
22:46
Speaker 2: like the father of modern video gaming. Uh. In my
22:51
Speaker 2: opinion before yeah, I'd say like he basically turned it
22:57
Speaker 2: into what it is today, brought it from Pong to
23:01
Speaker 2: Mario got it. Yeah, and then like from there you
23:04
Speaker 2: can make a case that Hideo Kajima, who did the
23:07
Speaker 2: Metal Gear Solid franchise, he kind of brought it the
23:11
Speaker 2: next level. So now you've learned a little bit about
23:15
Speaker 2: some jo appreciatio game legends. Yeah, so there's that. Let's
23:19
Speaker 2: talk a little bit about this CMBC piece. As four
23:22
Speaker 2: to one k balances, Swell Financial Advisors warn of retirement
23:26
Speaker 2: planning pitfalls.
23:28
Speaker 3: They do exist. This story is definitely self serving for
23:32
Speaker 3: financial advisors.
23:33
Speaker 2: It is very much like it's much better to have
23:36
Speaker 2: like a four million dollar retirement account than a zero
23:39
Speaker 2: million dollar retirement.
23:41
Speaker 4: Yeah, we can all say that.
23:42
Speaker 3: And four to one K balances are hitting all time
23:44
Speaker 3: records because stock markets are hitting all time records.
23:48
Speaker 4: In my tell me if.
23:49
Speaker 3: I'm wrong, Jop, But in my experience, I think most
23:52
Speaker 3: people as they get to their fifties and sixties are
23:57
Speaker 3: generally aware of potential pitfall when it comes to their
24:01
Speaker 3: four to one K down the road. They might not
24:04
Speaker 3: be able to articulate articulate exactly how it's going to work,
24:09
Speaker 3: but I think most people are aware of it, and
24:11
Speaker 3: especially now with the tools that are out there, like
24:13
Speaker 3: a Wroth four oh one K that was pretty rare
24:16
Speaker 3: a decade ago and now is pretty much everywhere, are
24:19
Speaker 3: starting to kind of comprehend how it works. But here's
24:23
Speaker 3: an example I will give. I was meeting with the
24:26
Speaker 3: utility worker. Actually funny we're talking about utility companies earlier.
24:29
Speaker 3: He's a utility worker and his and his wife's goal
24:33
Speaker 3: is to retire at fifty five years old, which you know,
24:36
Speaker 3: amazing for those that can pull it off. It's you know,
24:38
Speaker 3: ten years before full retirement age. But given both of
24:41
Speaker 3: their work, they have some benefits that may allow them
24:44
Speaker 3: to do it, and they have really big four oh
24:46
Speaker 3: one case. The the tricky part here is, yeah, they
24:53
Speaker 3: do have really big four oh one k's.
24:54
Speaker 4: There could be a pitfall.
24:55
Speaker 3: Down the road, but given that they are going to
24:58
Speaker 3: retire twenty years prior to required minimum distribution, not really
25:03
Speaker 3: a problem, right, Like not sure they're not likely to
25:06
Speaker 3: fall into that pitfall. So assuming they do some very
25:09
Speaker 3: basic plan and what we're talking about here are required
25:12
Speaker 3: minimum distributions, that's the main pitfall that you have to
25:15
Speaker 3: beware of is that, yeah, at some point the IRS
25:18
Speaker 3: is going to start telling you you have no choice.
25:20
Speaker 3: You have to start spend, not spending, but taking this
25:22
Speaker 3: money out of the retirement plan, and if you're not careful,
25:25
Speaker 3: that can knock you into a much higher tax bracket
25:27
Speaker 3: than you've ever sat in. There are other pitfalls too,
25:30
Speaker 3: though in this specific case, somebody had stock within their
25:35
Speaker 3: four oh one K plan. So companies stock of their
25:37
Speaker 3: employer within their four oh one K, and there's this
25:39
Speaker 3: huge planning opportunity you get when you have something like that,
25:42
Speaker 3: And so I think, like I said, most people are
25:45
Speaker 3: becoming more aware as they get to their fifties and
25:48
Speaker 3: sixties that hey, this could be a problem for me
25:51
Speaker 3: in terms of a tax Again, is it a problem? Well,
25:56
Speaker 3: you might end up paying more taxes than you otherwise would.
25:59
Speaker 3: You're only going to get there if you saved way
26:01
Speaker 3: more in your retirement plan than most other people, and
26:04
Speaker 3: so good problem to have.
26:06
Speaker 4: But nobody likes.
26:07
Speaker 3: Paying more in taxes than they would normally otherwise have to.
26:11
Speaker 3: There's a lot of other complexities in this too. I
26:14
Speaker 3: think of another example here where I was working with
26:16
Speaker 3: a couple from California who plans to move to Arizona shortly. Okay,
26:20
Speaker 3: I'm gonna be facing far different tax rates one state
26:24
Speaker 3: versus the other. How do I plan my retirement so
26:27
Speaker 3: that I can take account and make sure I don't
26:30
Speaker 3: pay California a bunch of revenue that I otherwise wouldn't
26:33
Speaker 3: owe to the state of Arizona. It gets really tricky,
26:35
Speaker 3: especially when you're talking about state to state moves. If
26:38
Speaker 3: you have questions about your retirement plan, maybe you are
26:42
Speaker 3: already retired, maybe you're still a decade out. In either case,
26:46
Speaker 3: there are a lot of techniques that you can use
26:48
Speaker 3: to lower your tax bill over the long term, and
26:50
Speaker 3: if you'd like to learn about them, we'd love to
26:52
Speaker 3: chat with you at Armstrong Advisory Group. The numbers eight
26:55
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26:58
Speaker 3: tons of different strategies you can use to better position
27:01
Speaker 3: your portfolio for the future. Eight hundred three nine three
27:05
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27:06
Speaker 1: The proceeding was paid for by Armstrong Advisory Group, a
27:08
Speaker 1: registered investment advisor. Nothing in the ad or in any
27:11
Speaker 1: Armstrong guide a specific financial, legal or tax advice. Consult
27:14
Speaker 1: your own financial tax into state planning advisors before making
27:17
Speaker 1: any investment decisions. Armstrong make contact you to offer investment
27:20
Speaker 1: advisory services.
27:21
Speaker 2: Mike, anything else that you want to talk about retirement wise,
27:24
Speaker 2: you want to move on to some of these IPOs
27:27
Speaker 2: that let's.
27:27
Speaker 3: Talk IPOs, because I think that could be the either
27:31
Speaker 3: a big catalyst or a big disappointment for investors this year.
27:34
Speaker 2: Well, look, here's the thing. You know, when we talk
27:36
Speaker 2: about IPOs. You can have you know, your small little
27:39
Speaker 2: ones that no one really pays attention to, or you
27:42
Speaker 2: can have you know, the big very sexy ones, you
27:44
Speaker 2: know the well in this case, SpaceX, Open AI, and
27:48
Speaker 2: Thropic and everyone is all excited about these and I
27:54
Speaker 2: don't know if it's for good reason or not. Again,
27:58
Speaker 2: I've seen big IPOs that have gone on to do
28:00
Speaker 2: tremendous things. I've seen big IPOs that have fallen flat
28:04
Speaker 2: on their face and never gotten, you know, past their
28:07
Speaker 2: initial hype. The more common one is the latter. But
28:12
Speaker 2: these companies are so big and so well known that
28:14
Speaker 2: you look at them and you know, you kind of think, okay,
28:16
Speaker 2: is it different here? And the answer is, well, we
28:19
Speaker 2: don't really know. Ultimately, when you look at these three
28:25
Speaker 2: companies that are talking about ipoing. The piece that I
28:29
Speaker 2: always think about that that makes me really wonder when
28:34
Speaker 2: you talk about giant ones is what's the downstream impact
28:38
Speaker 2: on the rest of the market. And you know, people
28:40
Speaker 2: might be wondering, like, Chuck, what do you mean by that?
28:42
Speaker 2: And I'll tell you what I mean. If you are
28:46
Speaker 2: going to see SpaceX doing a seventy five billion dollar IPO,
28:50
Speaker 2: meaning they're raising seventy five billion dollars in cash, and
28:53
Speaker 2: if you're gonna see again, we don't know the numbers yet,
28:56
Speaker 2: but let's say that open Ai and Anthropic do something similar.
29:00
Speaker 2: So you're talking one hundred and fifty billion dollars in
29:03
Speaker 2: cash that these companies are raising. The question that I
29:06
Speaker 2: like to ask is where's the money gonna come from?
29:09
Speaker 2: Because one of the things that we do tend to
29:11
Speaker 2: see around big IPOs is typically what investors do in
29:15
Speaker 2: order to move into new IPOs is they sell old
29:18
Speaker 2: IPOs that they owned or just other stocks and stuff.
29:21
Speaker 2: It's not just like someone's not just sitting on like
29:24
Speaker 2: millions of dollars and it's like, well, I've been sitting
29:27
Speaker 2: just waiting for SpaceX to IPO and now I'm going
29:30
Speaker 2: to put No, It's typically coming from another risk asset.
29:33
Speaker 2: And so the interesting thing is that sometimes large IPOs
29:36
Speaker 2: and the short term you can have a little bit
29:39
Speaker 2: of a destabilizing impact on markets. Not anything huge, but
29:42
Speaker 2: just you know, something to watch for in light of
29:45
Speaker 2: you know, everything else that's going on, because when you're
29:47
Speaker 2: talking about this much money trying to move from one
29:50
Speaker 2: place to another, it can have an impact. Especially if
29:54
Speaker 2: you're like, hey, great, I'm you know, gonna invest in
29:56
Speaker 2: you know, open Ai. I'm gonna move my money from
29:59
Speaker 2: other tech stocks to do so that can have, you know,
30:02
Speaker 2: an impact on broader markets.
30:04
Speaker 3: Here that said, Chuck, I'm looking through the last decade
30:08
Speaker 3: of IPOs. Yeah, I don't see any that have more
30:12
Speaker 3: name recognition than any of these three.
30:16
Speaker 2: No, but here's the thing.
30:17
Speaker 4: I know, that's not the only thing that matters.
30:19
Speaker 3: Uber would be the only one that I think comes
30:21
Speaker 3: close to the iPod back in twenty nineteen. Name recognition
30:26
Speaker 3: is not the only important thing. These are capital intensive businesses.
30:30
Speaker 3: But in terms of excitement, I I you know, I'm
30:32
Speaker 3: looking through this. We've got Saudi a Ramco, We've got
30:35
Speaker 3: soft Bank.
30:37
Speaker 2: Like, people get excited about all kinds of dumb stuff
30:39
Speaker 2: that doesn't pan out, Like do you remember all the
30:41
Speaker 2: do you remember how many times we had beyond Meat?
30:43
Speaker 4: Yeah, yep, you know, Like.
30:45
Speaker 2: Do you remember how many times we had to cover
30:48
Speaker 2: uh like Rivian and Lucid yep.
30:51
Speaker 4: True.
30:51
Speaker 2: You know, like people get excited about all kinds of stuff.
30:53
Speaker 2: They're like, ooh, this is gonna be the one. And
30:56
Speaker 2: I'm not saying that like this turns into any of those.
30:58
Speaker 2: But there's a reason why IPOs, you know, can be
31:02
Speaker 2: like very dangerous. It's because a lot of them don't
31:05
Speaker 2: work out the big like the giant ones typically have
31:12
Speaker 2: a higher margin of safety, but they're also typically in
31:16
Speaker 2: more established businesses. Like there's a convincing case that you
31:22
Speaker 2: can make that Open AI could it ten years from
31:26
Speaker 2: now be the biggest company in the world or no
31:28
Speaker 2: longer in business? Right you compare that to like some
31:32
Speaker 2: of the big IPOs like Saudi a Ramco you mentioned.
31:36
Speaker 2: Is there any case at Saudi Aramco's IPO that they
31:39
Speaker 2: wouldn't exist ten years from now, uh.
31:43
Speaker 3: Barring all out like nuclear war in the Middle East now,
31:46
Speaker 3: But that's that's for any company. Yeah, you know, like, yeah,
31:48
Speaker 3: so the end of the world type stuff is the
31:50
Speaker 3: only thing would do it. When Visa ipiod I remember
31:53
Speaker 3: I was working in New York at the time when
31:54
Speaker 3: they iPod. Was there any convincing case ten years from
31:58
Speaker 3: then that Visa was going to be out of business?
32:00
Speaker 1: No?
32:01
Speaker 2: No, But with open AI and Anthropic you could make
32:05
Speaker 2: that case. With SpaceX, you could make that case. And
32:09
Speaker 2: I'm not saying that it's like the most likely one.
32:12
Speaker 2: But these are some of the highest risk giant IPOs
32:16
Speaker 2: that I've ever seen, And I don't know what to
32:18
Speaker 2: do with that information. I'm not saying that they will
32:22
Speaker 2: or won't work out. I'm just saying they're fundamentally different.
32:24
Speaker 2: The only one that I think you could point to
32:27
Speaker 2: where you have a same the same level of concern
32:30
Speaker 2: for like the big giant ones. When Facebook went public,
32:33
Speaker 2: there were all kinds of questions there, you know, first
32:35
Speaker 2: major major social media company going public. Can they pivot
32:39
Speaker 2: to mobile like you know what's Yeah, there were questions. Now,
32:42
Speaker 2: they've obviously turned into a behemoth since then. But you know,
32:47
Speaker 2: the big ones typically have a little more, you know,
32:51
Speaker 2: a little more of their footing under them than than
32:53
Speaker 2: what we see here, because these are companies where they're
32:58
Speaker 2: they're on the cutting edge, they're on the lines, but
33:00
Speaker 2: you don't know how that business is going to evolve
33:03
Speaker 2: and whether these ones are the Googles of the world
33:07
Speaker 2: or are they the Alta Vistas and Licoses of the world?
33:10
Speaker 2: Fair question? Quick break? Here we got Wall Street, No,
33:13
Speaker 2: we don't. We have what do we call this stack? Let? Yeah,
33:17
Speaker 2: let's do that.
33:17
Speaker 1: After this, the Financial Exchange streams live on x stay
33:22
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33:24
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33:30
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33:32
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33:38
Speaker 1: the Financial Exchange.
33:48
Speaker 2: All right, Mike, what do you got for me? For
33:49
Speaker 2: stack Roulette?
33:50
Speaker 4: Kids?
33:50
Speaker 3: They're discovering the joys and pains of the landline and
33:53
Speaker 3: I'm living this one firsthand right now, and it is
33:56
Speaker 3: nostalgic and enjoyable all at the same time. We did
34:01
Speaker 3: not have a landline phone for the first five Frankly,
34:06
Speaker 3: since I've.
34:06
Speaker 4: Been a homeowner, I haven't had a landline phone of
34:08
Speaker 4: any source.
34:09
Speaker 3: But the kids are finally getting to an age where
34:11
Speaker 3: they want to talk to their friends, and we have
34:13
Speaker 3: no interest in getting them a computer with video capabilities
34:16
Speaker 3: or a cell phone, and so they've got a piece
34:19
Speaker 3: of paper with all of their friends home phone lines,
34:21
Speaker 3: and they call each other relentlessly and they have no
34:24
Speaker 3: idea how to do it, which is really entertaining. We
34:26
Speaker 3: had to explain to them what a dial tone was
34:29
Speaker 3: and that that's normal. We had to explain to them
34:32
Speaker 3: how to hold the phone because they kept trying to
34:34
Speaker 3: talk into it like a iPhone on speaker or you know.
34:38
Speaker 3: The only time they use one of our cell phones
34:41
Speaker 3: is when they're doing a video call with a family member,
34:43
Speaker 3: so we're like holding it out in front of them
34:45
Speaker 3: and they're just talking normally. They tried that with a
34:47
Speaker 3: landline phone and couldn't hear what the other person was saying.
34:51
Speaker 3: But families all over are doing this mainly, I think
34:53
Speaker 3: in revolt to cell phones. One of my daughter's classmates,
34:59
Speaker 3: who it commutes to their school from Boston, does have
35:04
Speaker 3: a cell phone and tried calling her an ast her
35:05
Speaker 3: to switch over to video, which was this whole explanation
35:08
Speaker 3: thing of like, no, your phone does not do that.
35:11
Speaker 3: But they are finally going and connecting these things, and
35:14
Speaker 3: one company is making a killing on it. It's called
35:18
Speaker 3: the tin Can phone, which is basically just a nineteen
35:22
Speaker 3: eighties or nineteen nineties landline phone with a curly cord,
35:25
Speaker 3: and the difference is it runs entirely over Wi Fi
35:29
Speaker 3: because getting the copper cable landlines into homes is not
35:33
Speaker 3: all that common these days. But yeah, these things are
35:37
Speaker 3: selling like crazy, and I'm all for it. Yeah, I
35:40
Speaker 3: think this is the direction that it's one hundred. I'm
35:43
Speaker 3: happy we're going. Yeah, the tin Can phone, we don't
35:46
Speaker 3: have one of those. We did have a landline in
35:48
Speaker 3: our house, so we've just turned it on and bought
35:51
Speaker 3: a regular landline phone. But these tin can things are
35:54
Speaker 3: one hundred bucks plus a monthly membership.
35:56
Speaker 2: So what does a regular landline phone cost these days?
36:00
Speaker 4: No, the hardware itself is incredibly cheap.
36:03
Speaker 3: And then I think, whoever your provider is just charges
36:07
Speaker 3: a boatload of money.
36:08
Speaker 5: So I'm seeing anywhere. I mean, this is pretty wide,
36:11
Speaker 5: but it says anywhere between twenty and sixty bucks a month.
36:13
Speaker 3: Yeah, I think we're firmly in the middle there at
36:15
Speaker 3: like forty to fifty bucks a month in land line costs.
36:19
Speaker 2: Oh.
36:20
Speaker 4: The other thing that they don't know how to do.
36:22
Speaker 4: The kids have no idea that.
36:24
Speaker 3: It is inappropriate to call your landline fifteen times in
36:26
Speaker 3: a row.
36:28
Speaker 4: They didn't pick up, so I just kept calling.
36:30
Speaker 3: Have they done any prank calls yet? No, we haven't
36:33
Speaker 3: gotten there yet. Okay, I'm sure that's coming. I'm sure
36:37
Speaker 3: that's coming.
36:38
Speaker 4: Oh wait, yes they did. They prank called my wife
36:39
Speaker 4: the other day.
36:40
Speaker 2: Oh that's good. Yep, Yeah, that's that's fun. I want
36:43
Speaker 2: to talk a little bit about Chrysler. Tucker put this
36:46
Speaker 2: story in the stack, and I didn't realize this was
36:48
Speaker 2: the case until just now that so Chrysler, remember, originally
36:53
Speaker 2: had you know, a whole bunch of different brands under it.
36:56
Speaker 2: They've subsequently been merged into Stilantis and now Chrysler is
37:00
Speaker 2: just a brand under Stillantis. Thank you. I've I've been
37:03
Speaker 2: battling it for weeks now. I didn't realize until I
37:07
Speaker 2: actually went to the Chrysler website to confirm this.
37:11
Speaker 4: It don't sell anything.
37:13
Speaker 2: They only sell one minivan model right now, Like technically
37:17
Speaker 2: they say it's two. They've got the PACIFICA and the
37:19
Speaker 2: Voyager both under their their brand, but they're now a
37:24
Speaker 2: car company that only sells minivans and one of them. Yes, now,
37:31
Speaker 2: a couple of years ago, they still had the Chrysler
37:33
Speaker 2: three hundred. They discontinued that back in twenty twenty three
37:36
Speaker 2: and said they were gonna roll out like an entirely
37:38
Speaker 2: new line of vehicles focused on EV's. Well, obviously the
37:43
Speaker 2: ev wins have changed in the last several years, and
37:45
Speaker 2: so that's not the case. So I think it's a
37:49
Speaker 2: valid question as to like what happens with Chrysler from
37:54
Speaker 2: here at this point?
37:56
Speaker 3: Would you buy a car from a company that only
37:58
Speaker 3: produces one car, because I'd be pretty hesitant, Like, I
38:02
Speaker 3: recognize they have the ownership of a bigger organization, but yeah,
38:06
Speaker 3: I don't know.
38:07
Speaker 4: I don't think I would.
38:09
Speaker 2: It's, uh, it's a problem. So I don't know what
38:12
Speaker 2: to make of this. The Dodge brand is really struggling
38:15
Speaker 2: as well now that RAM has been spun off. So
38:17
Speaker 2: some issues quick break for the rest of the day.
38:19
Speaker 2: We'll see it tomorrow on the Financial Exchange