Latest / Mic Drop Comedy / Beth Kobliner - Helping Young People _Get a Financial Life_ _ The Daily Show

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Beth Kobliner - Helping Young People _Get a Financial Life_ _ The Daily Show · Mic Drop Comedy

• 0:00
  Speaker 1: I told you. These people love financial literacy.
• 0:04
  Speaker 2: Right?
• 0:09
  Speaker 1: Fifth edition.
• 0:10
  Speaker 3: Yeah.
• 0:11
  Speaker 1: 30 years.
• 0:11
  Speaker 3: Yeah. Long time.
• 0:13
  Speaker 1: Are we not learning? Are we not getting something? How
• 0:18
  Speaker 1: are we as a financial nation?
• 0:21
  Speaker 3: Not so good.
• 0:22
  Speaker 1: Okay. Not so good.
• 0:22
  Speaker 4: No.
• 0:25
  Speaker 2: The problem is that most people have never taken a
• 0:28
  Speaker 2: personal finance class. And 10 years ago, five states had
• 0:33
  Speaker 2: a requirement that you needed one personal finance class to
• 0:36
  Speaker 2: graduate high school. And now more states are required to
• 0:40
  Speaker 2: do that. It's actually 26 states. But you need a
• 0:42
  Speaker 2: while to get the quality programs in place. And the
• 0:45
  Speaker 2: crazy thing is we know if you teach personal finance right,
• 0:50
  Speaker 2: It can improve credit scores. It can improve the way
• 0:53
  Speaker 2: people handle their debt. So it's very important.
• 0:57
  Speaker 4: It sounds like 25 states, 26 states have financial literacy.
• 1:02
  Speaker 1: It sounds about right. I mean, I would say half
• 1:04
  Speaker 1: this country. Correct.
• 1:09
  Speaker 3: I guess that's right.
• 1:10
  Speaker 1: Could you submit?
• 1:10
  Speaker 4: No, but I mean, just by taking a class doesn't
• 1:12
  Speaker 4: mean you're financially literate, but you can go through life
• 1:15
  Speaker 4: with an idea.
• 1:16
  Speaker 3: So I wrote a curriculum.
• 1:18
  Speaker 2: This organization called the Heckscher Foundation came to me and said,
• 1:21
  Speaker 2: could you write a curriculum for New York City students?
• 1:23
  Speaker 2: And it's 10 lessons of what you need to know
• 1:26
  Speaker 2: for young people in New York City.
• 1:28
  Speaker 3: And I've been going to Queens. I'm from Queens. And
• 1:31
  Speaker 3: the Bronx.
• 1:31
  Speaker 4: Thank you.
• 1:33
  Speaker 3: And the Bronx and all over, all five boroughs.
• 1:36
  Speaker 2: And what I've seen is young people are so enthusiastic
• 1:40
  Speaker 2: to learn about money.
• 1:41
  Speaker 3: And they're smart. And they're engaged.
• 1:44
  Speaker 2: And we just have to give them the tools to
• 1:46
  Speaker 2: get their finances in order.
• 1:48
  Speaker 4: Yeah, I mean, this book is geared towards 20s and 30s.
• 1:52
  Speaker 4: That's right. Why those years in particular?
• 1:55
  Speaker 2: Well, you know, I've been doing it for so many
• 1:57
  Speaker 2: different generations, but I have to say that in 30 years,
• 2:00
  Speaker 2: this generation, these people today in their 20s, Gen Z,
• 2:04
  Speaker 2: has it harder than any other generation in their 20s.
• 2:08
  Speaker 1: Or is it that they're just annoying.
• 2:09
  Speaker 4: As * * * *?
• 2:12
  Speaker 1: Now, why is it harder?
• 2:13
  Speaker 2: It's harder because unemployment rates are higher for this generation
• 2:17
  Speaker 2: than in the past. And there's been a lot of
• 2:20
  Speaker 2: talk about, oh, if you go to college, you're not
• 2:22
  Speaker 2: getting the job. Well, if you didn't go to college,
• 2:24
  Speaker 2: it's even worse. And it's buying a home, home affordability.
• 2:29
  Speaker 2: You know, back in my day, the average age or
• 2:33
  Speaker 2: the median age for someone to buy a home was
• 2:35
  Speaker 2: 28 years old.
• 2:35
  Speaker 3: Today, it's 40 years old. So there's a lot of.
• 2:39
  Speaker 2: obstacles young people face and I'm afraid sometimes they think
• 2:43
  Speaker 2: it's futile and it's not worth it. Like what could
• 2:45
  Speaker 2: these small things do? But these small things do make
• 2:48
  Speaker 2: a difference and it's important.
• 2:50
  Speaker 4: Well let's talk about some specifics because one of the
• 2:52
  Speaker 4: first things you talk about in here is getting rid
• 2:54
  Speaker 4: of your debt.
• 2:55
  Speaker 3: Right.
• 2:57
  Speaker 1: Why is debt such a bitch? But what really is
• 3:02
  Speaker 1: it about debt?
• 3:02
  Speaker 2: That's like a really good name for my chapter next time.
• 3:07
  Speaker 3: But basically, when you say have a credit card, right?
• 3:11
  Speaker 2: The average credit card interest rate now is 22%. That's
• 3:15
  Speaker 2: the highest that it's ever been.
• 3:16
  Speaker 3: That's crazy.
• 3:17
  Speaker 2: Again, 10 years ago, it was 10%. If you had
• 3:19
  Speaker 2: good credit, you can get 8%. This is so expensive.
• 3:22
  Speaker 2: So if you say charge something on a credit card,
• 3:25
  Speaker 2: say an iPhone for $ 1, 000, right? If you paid it
• 3:29
  Speaker 2: off in full at the end of the month, you
• 3:31
  Speaker 2: wouldn't pay any interest. But what most young people do
• 3:35
  Speaker 2: is pay those minimum monthly payments. And so maybe it's $ 35,
• 3:40
  Speaker 2: whatever it is, and you're being charged 22% on all
• 3:43
  Speaker 2: the rest that's still there. It would take you, for
• 3:45
  Speaker 2: a $ 1, 000 iPhone, it would take you 16 years and
• 3:49
  Speaker 2: more than $ 2, 000 in interest if you only made those
• 3:52
  Speaker 2: minimum payments.
• 3:53
  Speaker 4: That's such a good point to make, and I want
• 3:55
  Speaker 4: every young person to know that when the credit card
• 3:58
  Speaker 4: bill comes, they put in bold, in a box, minimum payment.
• 4:03
  Speaker 1: Right, right.
• 4:04
  Speaker 3: It sounds so great.
• 4:05
  Speaker 1: You don't have to do the minimum payment. Right, right.
• 4:07
  Speaker 1: In fact, you shouldn't do the minimum payment.
• 4:08
  Speaker 2: You should not do the minimum payment. You should pay
• 4:11
  Speaker 2: off the full bill if you can. If you don't
• 4:12
  Speaker 2: have the cash for it. Even if you pay just
• 4:15
  Speaker 2: $ 10 more than the minimum per month, it would only
• 4:18
  Speaker 2: take you, instead of 16 years, it would take you
• 4:20
  Speaker 2: five years to pay it off quickly.
• 4:21
  Speaker 1: But how about you just pay it?
• 4:23
  Speaker 3: You just pay it.
• 4:24
  Speaker 1: Yeah, how about that?
• 4:25
  Speaker 3: Or how about even you don't charge what you can't afford?
• 4:27
  Speaker 3: I mean, that's the trick.
• 4:33
  Speaker 4: Easier said than done, obviously, but it wasn't until I
• 4:35
  Speaker 4: was 32 and I got a credit card bill that
• 4:38
  Speaker 4: I really thought, well, how does a credit card company
• 4:40
  Speaker 4: make money?
• 4:41
  Speaker 2: Right.
• 4:41
  Speaker 4: Can you just tell me at 32 how a credit
• 4:43
  Speaker 4: card company makes money?
• 4:44
  Speaker 3: Yes.
• 4:45
  Speaker 1: Anyone else that's listening?
• 4:46
  Speaker 2: Basically, it's just that they charge you interest on the
• 4:49
  Speaker 2: amount you're not paying back. And they're paying such, they're
• 4:52
  Speaker 2: charging such high interest right now. There are also these
• 4:55
  Speaker 2: new deals where they say, oh, we're not going to
• 4:57
  Speaker 2: charge you interest at the checkout line. And the problem
• 5:02
  Speaker 2: is they don't charge you interest, but they know young
• 5:04
  Speaker 2: people are always late. You know, the vast majority of
• 5:07
  Speaker 2: young people who do those kind of plans, they say
• 5:09
  Speaker 2: something costs $ 100, you only put down $ 25 today, and
• 5:13
  Speaker 2: then you pay us off later. But young people are late,
• 5:15
  Speaker 2: and it forces people, not forces, but it encourages people
• 5:20
  Speaker 2: to buy more than they actually can afford.
• 5:22
  Speaker 4: You talk, you know, you have a great beginning chapter
• 5:26
  Speaker 4: where it's like, hey, if you don't want to read
• 5:27
  Speaker 4: the whole book, just read this. But then you get
• 5:29
  Speaker 4: into great detail about how the system is making it
• 5:33
  Speaker 4: more challenging for young people.
• 5:35
  Speaker 1: And it really is a great guide. I really hope
• 5:37
  Speaker 1: everyone in the 20s and 30s reads it. Besides just debt,
• 5:41
  Speaker 1: you need to be saving money.
• 5:42
  Speaker 3: Right.
• 5:43
  Speaker 1: How do you save money?
• 5:44
  Speaker 3: Well, Automatic savings is the thing to do.
• 5:47
  Speaker 1: Booyah, Beth. What does that mean, automatic savings? Almost like
• 5:52
  Speaker 1: you're going to tell me.
• 5:53
  Speaker 3: Right.
• 5:53
  Speaker 2: Every time you put money into it, say you get
• 5:56
  Speaker 2: a paycheck or you get a gift or whatever it is,
• 5:59
  Speaker 2: people put it into their checking account so they can
• 6:01
  Speaker 2: get at it quickly. But you want to automatically have
• 6:05
  Speaker 2: 10% of the money you put in transfer to a
• 6:07
  Speaker 2: high-yield savings account. You can find these high-yield savings accounts
• 6:11
  Speaker 2: on their websites, nerdwallet.com or bankrate.com. And that will pay
• 6:18
  Speaker 2: you closer to 3% or 4% rather than 1 tenth
• 6:21
  Speaker 2: of 1%.
• 6:22
  Speaker 4: And why is it work to set it up automatically? Obviously,
• 6:26
  Speaker 4: it's because you don't think Exactly.
• 6:29
  Speaker 1: It's gone. Right.
• 6:30
  Speaker 2: You set it and forget it is what we've been
• 6:32
  Speaker 2: saying for 30 years. And the idea is that if
• 6:35
  Speaker 2: it's done automatically, you barely even.
• 6:38
  Speaker 3: Notice that it's happening. And, you know, because.
• 6:41
  Speaker 2: I've been doing this for 35 years, I meet people
• 6:43
  Speaker 2: now in their like 50s and 60s and even early 70s.
• 6:47
  Speaker 2: And they come over to me and they said, you
• 6:49
  Speaker 2: know what, I read your book.
• 6:50
  Speaker 3: You talked, when I was.
• 6:51
  Speaker 2: In my 20s, you talked about putting money a small
• 6:54
  Speaker 2: amount away. I did it, and now I have hundreds
• 6:56
  Speaker 2: of thousands of dollars I wouldn't have had otherwise.
• 6:58
  Speaker 1: Okay, so, do you hear that, 20s and 30s?
• 7:02
  Speaker 4: If you put a little bit away, and we'll get
• 7:05
  Speaker 4: into exactly investing.
• 7:07
  Speaker 1: Right. But you could potentially have hundreds of thousands of dollars.
• 7:10
  Speaker 1: Do you know how many party drugs that buys?
• 7:11
  Speaker 4: LAUGHTER All right, so you're putting away money, just a
• 7:17
  Speaker 4: little bit, even 10%.
• 7:18
  Speaker 1: It's not that much. Where do you put it?
• 7:21
  Speaker 4: You talk about one of the secrets is S &
• 7:25
  Speaker 4: P 500 or the stock market.
• 7:27
  Speaker 3: Exactly.
• 7:28
  Speaker 1: I don't know how to do that. How do I
• 7:30
  Speaker 1: access that? What do I do?
• 7:31
  Speaker 2: So once you save about three to six months worth
• 7:34
  Speaker 2: in that high-yield savings account and stick with an FDIC-insured bank,
• 7:38
  Speaker 2: that's an important thing to do. Once you do that,
• 7:41
  Speaker 2: then you're- Not your uncle.
• 7:42
  Speaker 3: Not your uncle, not your cousin's broker's friend.
• 7:45
  Speaker 1: Not Venmo's credit card. Correct. FDIC-insured. Right.
• 7:49
  Speaker 2: That money sitting near a Venmo account isn't getting interest.
• 7:52
  Speaker 1: Right.
• 7:52
  Speaker 2: So what you want to do is put that next amount,
• 7:55
  Speaker 2: once you have that savings cushion, put it into an
• 7:58
  Speaker 2: S & P 500 index fund, a low-cost one. Even
• 8:01
  Speaker 2: Warren Buffett has come out and saying, this is the
• 8:03
  Speaker 2: place to put your money. Because over long periods of time,
• 8:07
  Speaker 2: it's been shown that these index funds, S & P
• 8:10
  Speaker 2: 500 index funds, do better than the highly compensated private.
• 8:15
  Speaker 3: Managers who manage money. So it's important to do this.
• 8:19
  Speaker 3: And it's very.
• 8:21
  Speaker 2: It's counterintuitive because what often is the case is.
• 8:24
  Speaker 3: People say, no, you should do your research, do your homework,
• 8:27
  Speaker 3: find the best stock.
• 8:29
  Speaker 2: But that's actually risky to put your money into one stock.
• 8:32
  Speaker 2: These S & P 500, this S & P 500 fund,
• 8:35
  Speaker 2: it has 500 stocks.
• 8:37
  Speaker 3: So if some do poorly, others will do well.
• 8:40
  Speaker 2: And the track record is over long periods of time,
• 8:43
  Speaker 2: it has beaten some professionally managed funds.
• 8:46
  Speaker 1: How do you even get access to those? Where do
• 8:48
  Speaker 1: you go?
• 8:49
  Speaker 4: And I believe it's pronounced Warren Buffet. She wrote a book,
• 8:56
  Speaker 4: but she missed that one. How do you, how does someone.
• 9:02
  Speaker 1: Get access to those funds?
• 9:03
  Speaker 2: There are companies, and by the way, I don't get
• 9:05
  Speaker 2: any kickbacks or money from anything that I recommend. Vanguard
• 9:10
  Speaker 2: and Fidelity and Schwab offer great low-cost S & P
• 9:14
  Speaker 2: 500 index funds. And by the way, just saying that,
• 9:18
  Speaker 2: you know, 75% of young people get their financial advice
• 9:22
  Speaker 2: from social media.
• 9:23
  Speaker 1: Don't say that.
• 9:24
  Speaker 2: We're talking Instagram and TikTok.
• 9:26
  Speaker 3: Oh my God.
• 9:27
  Speaker 2: And, you know, there's some good people out there giving decent,
• 9:30
  Speaker 2: you know, good financial advice, but a lot of it
• 9:33
  Speaker 2: is paid, sponsored, you know, and it's biased information and
• 9:37
  Speaker 2: they're telling you something that will enrich them and not
• 9:40
  Speaker 2: enrich you. So it's very important to pay attention to that.
• 9:43
  Speaker 4: Can you get into one of these with 100 bucks,
• 9:46
  Speaker 4: 500 bucks?
• 9:47
  Speaker 1: You don't need millions of dollars?
• 9:48
  Speaker 3: No, you could actually go into some of them with
• 9:50
  Speaker 3: as little as a dollar.
• 9:51
  Speaker 1: There are these things called.
• 9:52
  Speaker 2: ETFs, but they're S & P 500 index Yes, so
• 9:56
  Speaker 2: it's very easy to start. And again, doing it automatically,
• 9:59
  Speaker 2: having it come out of your paycheck, before you know it,
• 10:03
  Speaker 2: it does add up.
• 10:04
  Speaker 1: Yep. Pay off your debt. Right. Automatically save some money. Right.
• 10:09
  Speaker 1: Put it into investments.
• 10:11
  Speaker 3: Right.
• 10:11
  Speaker 1: If you can. And then what's kind of the last
• 10:16
  Speaker 1: magic part of the recipe? Right. Waiting?
• 10:19
  Speaker 3: Uh, no retirement accounts.
• 10:21
  Speaker 2: Now, when you're a young person, you're like retirement, I
• 10:24
  Speaker 2: have no money to, you know, pay my bills. How
• 10:26
  Speaker 2: can I, but if you start a job and they
• 10:29
  Speaker 2: have a 401k or you open a Roth IRA and
• 10:33
  Speaker 2: one of those index funds we just talked about that
• 10:37
  Speaker 2: offers you tax favored growth. And those plans grow exponentially quickly.
• 10:43
  Speaker 2: It's like bad marketing. It shouldn't be called retirement accounts.
• 10:46
  Speaker 2: They should be super smart investing accounts.
• 10:49
  Speaker 1: I like that. Or like young men, get on the
• 10:52
  Speaker 1: big dick account. Perhaps. I mean, that would have got me.
• 10:59
  Speaker 1: Not that I needed to be in that account.
• 11:03
  Speaker 4: Right, but it is, the terminology is intimidating.
• 11:09
  Speaker 1: And that's on purpose. What's helpful is there's a need
• 11:11
  Speaker 1: to be this intimidating.
• 11:12
  Speaker 2: It's so interesting because again, doing this for so many years, banks,
• 11:17
  Speaker 2: investment companies, I am convinced that the jargon and they
• 11:20
  Speaker 2: make it so complicated that you're like, well, I guess
• 11:22
  Speaker 2: I need you to help manage my money.
• 11:24
  Speaker 3: And the fact is, you don't need to be a
• 11:26
  Speaker 3: brain surgeon to do this. It's so basic.
• 11:29
  Speaker 2: Just get out of debt, start to save, begin to invest.
• 11:33
  Speaker 2: And it really can make a difference in your life.
• 11:36
  Speaker 2: Even if you're facing tough times right now, I do
• 11:39
  Speaker 2: feel like these steps have helped people and they will
• 11:42
  Speaker 2: continue to help people.
• 11:43
  Speaker 4: There is a confidence and a deep breath that you
• 11:47
  Speaker 4: can walk through life with if you know that you
• 11:51
  Speaker 4: are going to be okay if there's a little something saved.
• 11:55
  Speaker 3: Absolutely.
• 11:56
  Speaker 2: And I think it's important to get over the hurdle
• 11:59
  Speaker 2: of I can't do this. And you know, I mean,
• 12:02
  Speaker 2: I have a cousin, I asked my husband if it's
• 12:04
  Speaker 2: okay to say that, I have a cousin who has.
• 12:06
  Speaker 3: A PhD in biochemistry. And I asked her about her mortgage, whatever.
• 12:11
  Speaker 3: I asked her about her mortgage and she didn't know
• 12:13
  Speaker 3: what the interest rate was.
• 12:14
  Speaker 2: So really, really smart people often don't know much about
• 12:19
  Speaker 2: their own money and it shouldn't be intimidating and I
• 12:23
  Speaker 2: think if we teach it more in schools and then
• 12:25
  Speaker 2: we reinforce it and people understand it's not that difficult,
• 12:28
  Speaker 2: I think that goes a long way.
• 12:29
  Speaker 4: And to talk about it, you know, I remember my
• 12:33
  Speaker 4: then girlfriend and I, we were going away, we were
• 12:36
  Speaker 4: boarding our dog and the application on the dog boarder said,
• 12:40
  Speaker 4: how much can we spend on your credit card before
• 12:43
  Speaker 4: we call you in case of an emergency?
• 12:45
  Speaker 3: Right.
• 12:45
  Speaker 4: So I was like, well, I'm curious what her answer
• 12:48
  Speaker 4: is going to be. I know what my answer is
• 12:49
  Speaker 4: going to be. So we both wrote it down.
• 12:51
  Speaker 3: Oh, wow.
• 12:52
  Speaker 1: I was at 80 bucks.
• 12:53
  Speaker 4: You can spend $ 79 on my dog until you call me.
• 12:57
  Speaker 3: Right.
• 12:58
  Speaker 4: My wife now was like $ 3, 000, you know? And I'm like, oh,
• 13:01
  Speaker 4: we need to talk about this.
• 13:02
  Speaker 3: Yeah, yeah.
• 13:03
  Speaker 2: I mean, people don't, you know, spenders marry savers. There's
• 13:06
  Speaker 2: all kinds of.
• 13:07
  Speaker 1: Right, right, right.
• 13:08
  Speaker 3: Information that you want to talk about with someone. And
• 13:11
  Speaker 3: it's still very awkward. I mean, young people are better
• 13:13
  Speaker 3: about talking about it. And frankly, young people, the one
• 13:15
  Speaker 3: thing I want to say is.
• 13:16
  Speaker 2: They're quite good at saving in retirement accounts, these investment accounts.
• 13:20
  Speaker 2: Partly because now when you start a company, often you're
• 13:24
  Speaker 2: automatically enrolled in that 401k, which is great. But building
• 13:28
  Speaker 2: awareness and demystifying it, I think is so important.
• 13:33
  Speaker 4: One last thing that I want to mention before we
• 13:35
  Speaker 4: take some staff questions, but I forgot about health insurance.
• 13:42
  Speaker 4: Unfortunately in this country, it can really you up if
• 13:46
  Speaker 4: you have a health problem and you.
• 13:47
  Speaker 1: Don't have money saved.
• 13:49
  Speaker 3: Absolutely.
• 13:50
  Speaker 4: Literally the first thing you say in here is you
• 13:52
  Speaker 4: got to get health insurance.
• 13:54
  Speaker 2: I mean, it can surprise people, especially young people. You're like,
• 13:57
  Speaker 2: I'm in my twenties, I'm young, I'm healthy. I'm not
• 14:00
  Speaker 2: even that risky, and I probably.
• 14:04
  Speaker 3: Could go without it.
• 14:04
  Speaker 2: But you can't go without it because it's one of
• 14:07
  Speaker 2: the major causes of financial bankruptcy. And if you have
• 14:16
  Speaker 2: some serious health issue or some accident, you will not
• 14:20
  Speaker 2: only potentially bankrupt yourself, but possibly your family.
• 14:24
  Speaker 1: Your family.
• 14:25
  Speaker 2: So you need to get the good news is if
• 14:27
  Speaker 2: you're under age 26, you can be on your parents
• 14:29
  Speaker 2: plan if they have health insurance. And in some states
• 14:33
  Speaker 2: like New York, up to age 30, you can be
• 14:35
  Speaker 2: on your parents plan if you don't get it from
• 14:37
  Speaker 2: work and you're single.
• 14:41
  Speaker 4: You know, for all the 20 year olds out there,
• 14:43
  Speaker 4: I know you have a perfect body now, but things change.
• 14:53
  Speaker 4: Thank you for coming to talk with us. This is
• 14:55
  Speaker 4: a great book. It's everybody who's 20 and 30. Put
• 14:58
  Speaker 4: it in your backpack.
• 14:59
  Speaker 1: Read it on the train. Read two pages at a time.
• 15:02
  Speaker 1: It'll help you. It'll help you in life.
• 15:05
  Speaker 4: I was so excited to have you on, and I
• 15:07
  Speaker 4: believe financial literacy is undertaught, misunderstood, and I was so
• 15:12
  Speaker 4: excited that I said to our staff, what are your
• 15:15
  Speaker 4: questions about finance and money?
• 15:17
  Speaker 1: And look at all these that we got. Now, this is...
• 15:21
  Speaker 1: This is broke Daily Show staff questions. Here's one.
• 15:30
  Speaker 4: Beth, I'm worried that AI is a giant stock market
• 15:34
  Speaker 4: bubble that is getting ready to pop. How can I
• 15:37
  Speaker 4: protect my investments when they're mostly in basic funds?
• 15:41
  Speaker 1: Right.
• 15:41
  Speaker 3: Well, it's a great question.
• 15:43
  Speaker 1: You can say it's a stupid question.
• 15:45
  Speaker 2: No, it's a great question and it's something we all know,
• 15:47
  Speaker 2: but no one knows the answer to it.
• 15:49
  Speaker 3: So basically the point is, you wanna not pay attention
• 15:53
  Speaker 3: to that, honestly.
• 15:55
  Speaker 2: When you start with your investments, you have your savings,
• 15:57
  Speaker 2: you have your index funds that we talked about, let
• 16:00
  Speaker 2: it keep growing because people sometimes panic and they say, oh,
• 16:03
  Speaker 2: this terrible thing is gonna happen and nobody knows for
• 16:06
  Speaker 2: sure and then you miss out on.
• 16:08
  Speaker 3: The growth of the market.
• 16:09
  Speaker 2: So I would say, and also we know from research
• 16:12
  Speaker 2: that people who try to time the market do worse.
• 16:15
  Speaker 4: So, basically, that is what she's, so often you're saying, like,
• 16:18
  Speaker 4: set up the systems and.
• 16:20
  Speaker 1: Then get, and then leave it alone. Leave it alone. Great.
• 16:22
  Speaker 1: Love it.
• 16:24
  Speaker 4: Beth, is it true that paying your credit card bills
• 16:26
  Speaker 4: on the due date increases your credit score?
• 16:29
  Speaker 1: Is it better to pay earlier or closer to the
• 16:32
  Speaker 1: due date?
• 16:32
  Speaker 3: It doesn't matter, just pay on time.
• 16:34
  Speaker 1: Pay on time.
• 16:35
  Speaker 3: Pay by the due date.
• 16:36
  Speaker 1: Yeah.
• 16:37
  Speaker 2: And that's a great question because there's a myth swirling
• 16:39
  Speaker 2: around that, oh, if you pay off your bill in full.
• 16:43
  Speaker 3: That it hurts your credit score. That is not true.
• 16:46
  Speaker 2: The best way to improve your credit score is pay
• 16:48
  Speaker 2: off your bill in full every single month. You will
• 16:52
  Speaker 2: not pay thousands of dollars in interest and you will
• 16:54
  Speaker 2: have a good credit score.
• 16:55
  Speaker 1: Love it. Love it, love it, love it.
• 16:58
  Speaker 4: Is it better to keep the bulk of your savings
• 17:00
  Speaker 4: in a high yield?
• 17:01
  Speaker 1: Wow, this staff is smart, huh?
• 17:03
  Speaker 4: Is it better to keep the bulk of your savings
• 17:06
  Speaker 4: in a high yield savings account or should you invest
• 17:09
  Speaker 4: in an index fund?
• 17:10
  Speaker 1: Which is safer and will it help grow more? And
• 17:13
  Speaker 1: talk a little bit about the magic that is compound interest. Right.
• 17:17
  Speaker 1: And what it is.
• 17:18
  Speaker 2: Compound interest is when you have an investment and you
• 17:21
  Speaker 2: get interest at the end of the year and then
• 17:24
  Speaker 2: the next year that interest grows interest and then the
• 17:27
  Speaker 2: interest grows interest on top of the interest and basically
• 17:30
  Speaker 2: grows exponentially quickly.
• 17:32
  Speaker 3: So here's probably- It's like mold. It's like mold.
• 17:35
  Speaker 1: But it's money.
• 17:36
  Speaker 3: But it's money. It's much better than molds in that way.
• 17:38
  Speaker 3: And what I love about it is that say you're
• 17:43
  Speaker 3: 25 years old and you save.
• 17:44
  Speaker 2: $ 1, 000 a year.
• 17:46
  Speaker 3: You start at age 25. That's not that much money.
• 17:48
  Speaker 1: You can do that.
• 17:49
  Speaker 3: That's not a lot. You stop at age 34. So
• 17:52
  Speaker 3: you save for 10 years.
• 17:53
  Speaker 2: $ 1, 000 a year. And you never invest again. You just
• 17:56
  Speaker 2: let it sit there.
• 17:57
  Speaker 1: It earns 8%.
• 17:57
  Speaker 2: By the time you're 65, close to my age, you'd
• 18:02
  Speaker 2: have $ 160, 000. But wait, listen to.
• 18:06
  Speaker 1: This.
• 18:07
  Speaker 2: If you wait until you're 35, so you don't save
• 18:10
  Speaker 2: in your 20s, and you do that for your 30s,
• 18:12
  Speaker 2: you save $ 1, 000 a year through your 30s, 40s, 50s,
• 18:13
  Speaker 2: so you're saving for 30 years, you'd have less money.
• 18:15
  Speaker 3: You'd only have $ 120, 000.
• 18:15
  Speaker 2: Because those early years and having money compound for 40
• 18:18
  Speaker 2: years is really, really powerful.
• 18:26
  Speaker 4: This is great news for 20-year-olds because right now it's
• 18:29
  Speaker 4: this doom and gloom.
• 18:30
  Speaker 1: The world is doomed. What's jobs?
• 18:32
  Speaker 4: But if they can start saving now, they have a
• 18:34
  Speaker 4: foot up.
• 18:35
  Speaker 1: I love it.
• 18:35
  Speaker 3: They have time on their side. That's the thing about
• 18:37
  Speaker 3: being young. You have time on your side. You have time.
• 18:39
  Speaker 1: Yep. Time. Yep. Will I ever own a house?
• 18:43
  Speaker 3: LAUGHTER Is that your question?
• 18:47
  Speaker 1: It wasn't my question.
• 18:47
  Speaker 3: LAUGHTER LAUGHTER.
• 18:53
  Speaker 1: There's a lot of housing anxiety, understandably. There's a lot of.
• 18:56
  Speaker 3: Housing affordability, understandably.
• 18:58
  Speaker 2: I mean, the typical house right now costs $ 430, 000, and
• 19:04
  Speaker 2: in big cities, it's much more than that.
• 19:06
  Speaker 1: That's what my coffee order was this morning.
• 19:09
  Speaker 2: The key is, first of all, you have to save
• 19:12
  Speaker 2: up for a down payment. So for a $ 400, 000 house,
• 19:15
  Speaker 2: we're talking you have to save $ 40, 000 to $ 80, 000 because
• 19:18
  Speaker 2: it's a 10% to 20% down payment.
• 19:20
  Speaker 3: But again, doing it automatically.
• 19:23
  Speaker 2: Thinking about it as this is a priority for me.
• 19:26
  Speaker 2: I'm going to set up an account in a high-yield
• 19:28
  Speaker 2: savings account. I know it'll be safe, and that will
• 19:31
  Speaker 2: be my housing account. It will take time, but it
• 19:35
  Speaker 2: is something that is doable.
• 19:37
  Speaker 3: And I think... again, I have a lot of hope
• 19:40
  Speaker 3: for this.
• 19:40
  Speaker 2: Generation because I feel like because there's so much attention
• 19:43
  Speaker 2: to it, that they're gonna realize that there's things they
• 19:46
  Speaker 2: can do to get to.
• 19:47
  Speaker 3: Where they want to be.
• 19:48
  Speaker 4: And one thing I like about your book and like
• 19:50
  Speaker 4: talking to you is it does sound like you often
• 19:52
  Speaker 4: are repeating yourself because it actually isn't as complicated as
• 19:56
  Speaker 4: it's meant to be.
• 19:57
  Speaker 1: I mean.
• 19:58
  Speaker 4: Pay off your debt, save some money, shut the up,
• 20:00
  Speaker 4: don't check it.
• 20:02
  Speaker 3: Exactly.
• 20:03
  Speaker 1: All right, let's do a few more. This is fun.
• 20:05
  Speaker 1: You guys enjoying this?
• 20:06
  Speaker 3: Of course you are.
• 20:11
  Speaker 1: Oof, my parents are getting older.
• 20:14
  Speaker 4: What are the important things to prepare for in terms
• 20:16
  Speaker 4: of both long-term care, you're not a physician or a doctor,
• 20:19
  Speaker 4: you don't have to answer that, and financial planning?
• 20:23
  Speaker 3: It's a tough one, you know?
• 20:24
  Speaker 2: And it's interesting, because I'm hearing that question so much
• 20:28
  Speaker 2: more from young people, much more than I did 20
• 20:30
  Speaker 2: or 30 years ago.
• 20:31
  Speaker 1: That's such a more conscientious generation.
• 20:34
  Speaker 3: Yes, they are.
• 20:34
  Speaker 1: I never once thought about my parents' health when I
• 20:36
  Speaker 1: was 25 years old. It really is a sweet thing.
• 20:38
  Speaker 3: It's very interesting.
• 20:40
  Speaker 2: And I think broaching the topic, particularly if your parents
• 20:43
  Speaker 2: are still in pretty good health and they're working, you know,
• 20:46
  Speaker 2: asking questions.
• 20:47
  Speaker 3: Well, how long? Do you think you'll stay in the
• 20:49
  Speaker 3: house forever? Do you think you want to move?
• 20:51
  Speaker 2: Or that kind of thing, doing it gently and trying
• 20:54
  Speaker 2: not to be judgmental as they maybe were when you
• 20:57
  Speaker 2: were in high school. You know, trying to bring it
• 20:59
  Speaker 2: to a level where let's just have this conversation.
• 21:01
  Speaker 3: I think that.
• 21:03
  Speaker 2: More often than not, the parents might be thinking they
• 21:05
  Speaker 2: want to have this conversation too. So it's something that
• 21:09
  Speaker 2: is important to do and.
• 21:10
  Speaker 3: Ask a lot of questions.
• 21:11
  Speaker 1: Talk about it. Okay, last one. Here we go. Okay.
• 21:14
  Speaker 1: There's one in particular that I want. Yes, it is. Okay.
• 21:18
  Speaker 4: Is the only way to have enough money for retirement
• 21:20
  Speaker 4: to rob a bank? If so, are there banks with
• 21:25
  Speaker 4: less security than others?
• 21:26
  Speaker 3: Yes.
• 21:28
  Speaker 4: Maybe TD or Wells Fargo. Any particular branches in the
• 21:32
  Speaker 4: tri-state area you know of that may have obvious vulnerabilities.
• 21:37
  Speaker 4: I prefer not to travel too far.
• 21:39
  Speaker 1: That's a joke, but are some banks better than others?
• 21:43
  Speaker 1: We talked a little bit about FDIC.
• 21:45
  Speaker 2: Right, FDIC insurance is really important. I mean, the answer,
• 21:49
  Speaker 2: that's a great question, which bank. I mean, I generally
• 21:52
  Speaker 2: recommend robbing a bank from home, doing it online.
• 21:54
  Speaker 1: Right.
• 21:57
  Speaker 2: But I think that you want to have your bank,
• 22:01
  Speaker 2: you know, usually it's convenient for you or you have
• 22:05
  Speaker 2: your money automatically put into this checking account, but then
• 22:07
  Speaker 2: look for that high yield savings account.
• 22:10
  Speaker 3: Often online banks have the best high yield rates.
• 22:12
  Speaker 1: What kind of numbers are we talking about for a
• 22:14
  Speaker 1: high yield savings?
• 22:14
  Speaker 2: 3%, maybe 4%. And over years, that makes a difference.
• 22:19
  Speaker 2: You know, getting paid one-tenth of 1% in a bank
• 22:24
  Speaker 2: savings account is ridiculous. So try to have it automatically
• 22:27
  Speaker 2: transferred to a high-yield savings account.
• 22:29
  Speaker 1: Awesome. All right, staff, thank you for the questions. Staff,
• 22:31
  Speaker 1: thank you for paying attention.
• 22:32
  Speaker 4: Thank you.
• 22:35
  Speaker 1: So much for talking with us. I so appreciate it.
• 22:40
  Speaker 1: Get A Financial Life. It's available now. Beth Koblener.