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Why is China the reason for the Honda-Nissan merger? · The Financial Exchange Show

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  Speaker 2: Our two of the financial exchange is underway, and we're
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  Speaker 2: continuing to get closer to Signor Powell telling us what
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  Speaker 2: the Fed is going to do on the FED funds rate.
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  Speaker 3: Today at two pm.
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  Speaker 2: We'll have plenty of time to recap that as we
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  Speaker 2: as we get into tomorrow, but the expectation is that
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  Speaker 2: we are going to see a quarter percentage point cut
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  Speaker 2: and your policy in twenty twenty five, taking a look
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  Speaker 2: at markets as we head towards well, we're actually past
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  Speaker 3: We're just kicking this one off.
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  Speaker 2: The Dow is up one hundred and ninety points, so
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  Speaker 2: potentially breaking that nine day losing streak, looking to avoid
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  Speaker 2: ten days in a row of losses. I don't know
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  Speaker 2: when the last time is that the Dow saw ten
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  Speaker 2: days Actually no, I do see it here. The last
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  Speaker 2: time that the Dow saw ten days innar row in
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  Speaker 2: you know, the red was an eleven day slide in
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  Speaker 2: nineteen seventy four, so you got to go back fifty
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  Speaker 2: years to get there. The nine day losing streak, by
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  Speaker 2: the way, is the longest since nineteen seventy eight. So
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  Speaker 2: we'll see, we'll see where this puppy goes after Powell speaks.
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  Speaker 2: SP five hundred also up a quarter percent sixteen points
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  Speaker 2: and the Nasdaq up sixty four, so a little bit of.
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  Speaker 3: A bounce back happening today.
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  Speaker 2: I know that the last you know, a couple of weeks,
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  Speaker 2: it's been like, hey, you know, Tesla's up another twenty percent,
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  Speaker 2: and broad Calms up forty and everything else is down.
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  Speaker 2: Is kind of how it feels like. The S and
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  Speaker 2: P as a whole has been so boring for the
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  Speaker 2: month of December. It opened the month of December at
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  Speaker 2: six thousand and forty, It reached a high of six
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  Speaker 2: ninety nine, less than one percent above that open, and
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  Speaker 2: has bounced in between for the entire time. The range
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  Speaker 2: is less than a one percentage point on the S
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  Speaker 2: and P five hundred for the month it's been really
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  Speaker 2: but it's been thirty points up one day, thirty points down.
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  Speaker 2: So this is kind of half a percent in either direction.
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  Speaker 2: Is what we've been seeing for equities, at least for
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  Speaker 2: the S and P. The Nasdaq, which is heavier and
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  Speaker 2: broad common in Tesla, has done well, and things like
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  Speaker 2: the Russell two thousand and Dow have done horribly.
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  Speaker 3: Uh.
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  Speaker 2: If we take a look at the tenure US Treasury
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  Speaker 2: up one point four basis points to four point three
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  Speaker 2: nine nine percent, oil making a little bit of a
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  Speaker 2: rebound today at a dollar and four cents to seventy
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  Speaker 2: one to twelve a barrel on West Texas intermediate triple
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  Speaker 2: A national averageur gas prices up another four tenths of
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  Speaker 2: ascent overnight to three zho three and four tenths. And
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  Speaker 2: we've got gold today down seven to fifteen ounce to
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  Speaker 2: twenty six fifty four and fifty cents. Some big news
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  Speaker 2: making waves out of Japan, though, and what we are
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  Speaker 2: seeing here is a potential merger between Honda and Nissan.
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  Speaker 2: Give us the lay of the land pull.
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  Speaker 4: So what we're looking at here, Chuck, This would be
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  Speaker 4: a proposed merger like you mentioned of Nissan and Honda.
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  Speaker 4: It's also been rumored that Nissan would bring in Mitsubisi
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  Speaker 4: Motors as well, as Nissan is the top shareholder of
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  Speaker 4: that company that would create the third If they were
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  Speaker 4: to merge, this would create the third largest auto manufacturer,
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  Speaker 4: behind only Toyota and Volkswagen, and annually that would be
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  Speaker 4: equivalent to about eight million sales in terms of what
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  Speaker 4: we're looking at from a vehicle perspective. Why is this
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  Speaker 4: being proposed? They're really just getting their lunch taken from
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  Speaker 4: byd in China and we know largely a it's rumored.
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  Speaker 4: Is it rumored or even do we know that they're
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  Speaker 4: fully subsidizing the Chinese government is heavily subsidizing BYD as
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  Speaker 4: an EV maker.
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  Speaker 3: Well, let me ask you this, Paul, do you think
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  Speaker 3: that you can make a long range EV for ten grand?
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  Speaker 5: Do you think you.
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  Speaker 4: Could buy a plug in hybrid for seven thousand dollars?
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  Speaker 5: Likely? Not so.
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  Speaker 4: Anyway, you get the gist of where I'm going with that.
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  Speaker 4: They're trying to make inroads in those markets, which it's
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  Speaker 4: just astounding, Chuck. If you look at the numbers of
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  Speaker 4: sales that Nissan and Honda had in China just five
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  Speaker 4: years ago, So five years ago, one third of their
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  Speaker 4: global vehicle sales were going to China, one of the
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  Speaker 4: largest automate markets out there. Since then, you're half of
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  Speaker 4: where they were five years ago. In terms of the
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  Speaker 4: sales that they've seen in companies like Nissan and Honda,
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  Speaker 4: three of five cars in China that are purchased are domestic.
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  Speaker 5: That's the highest it's ever been.
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  Speaker 4: And also if you look at what the Chinese are
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  Speaker 4: buying in terms of car half of the more than
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  Speaker 4: half of their new cars are either electric or plug
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  Speaker 4: at hybrid. So Nissan and Honda find themselves in a
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  Speaker 4: really difficult place where they're competing in the electrical vehicle
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  Speaker 4: market and the hybrid for what was a third of
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  Speaker 4: their market share, but it's just being totally absorbed by
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  Speaker 4: China and byd in terms of the subsidized offerings that
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  Speaker 4: they have. So they find themselves in a place where strategically,
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  Speaker 4: this looks like the best bet. Now you have many
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  Speaker 4: hurdles to clear to even try and get this through.
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  Speaker 4: Both being Japanese companies, they're very concerned that this would
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  Speaker 4: lead to substantial job cuts if these two companies were
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  Speaker 4: to emerge. And there's just been a lot of impacts
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  Speaker 4: and waves made from China and its presence in the
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  Speaker 4: EV market that bleeds over to GM as well as
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  Speaker 4: here in Japan.
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  Speaker 2: So I think the China issue is part of it.
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  Speaker 2: I think the other part is, quite honestly, Nissan is
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  Speaker 2: dying in the US. Nissan reached and this is from
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  Speaker 2: Nissan's own data, They reached one point six million vehicles
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  Speaker 2: sold back in twenty seventeen in the United States. The
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  Speaker 2: most popular models were the Nissan Rogue. Like the Rogue
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  Speaker 2: was kind of the I don't want to say the original,
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  Speaker 2: but like it was basically the RAF four and CRV
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  Speaker 2: before the Raft four and CRV turned into what they are.
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  Speaker 2: I mean, the Raft wour and CRV used to be
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  Speaker 2: a lot smaller than they are today and the Rogue
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  Speaker 2: kind of paved the way for them. Since then, And
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  Speaker 2: the only data that I have is through twenty twenty two.
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  Speaker 2: I don't have twenty three full year Nissan sales in
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  Speaker 2: the US, but they went from one point five to
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  Speaker 2: nine million vehicles in the US in twenty seventeen to
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  Speaker 2: seven hundred and thirty thousand. It's a fifty four percent
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  Speaker 2: decline in a five year period. So Nissan is absolutely
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  Speaker 2: getting its lunch eaten in the US, not by byd
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  Speaker 2: or like SAIC from China, because.
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  Speaker 5: We don't have to worry about that.
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  Speaker 2: Here they're not being sold in the US at this point,
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  Speaker 2: but rather they're getting their lunch eaten by every other
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  Speaker 2: manufacturer in that suv space, specifically the small suv space,
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  Speaker 2: and they've had a litany of quality problems in recent years,
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  Speaker 2: and so that I think is another problem where they're
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  Speaker 2: just they're not competitive at this point on their own,
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  Speaker 2: and they can't get to the scale that they need
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  Speaker 2: to get to in order to in order to basically
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  Speaker 2: be able to survive. I think given the capital demands
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  Speaker 2: of the auto industry, the other company that's probably that
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  Speaker 2: I wouldn't be surprised if they end up heading this
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  Speaker 2: way as well once it's near and dear to my heart,
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  Speaker 2: which is super U. They're just not that big of
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  Speaker 2: a brand, but you know, they've already got some integrations
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  Speaker 2: with Toyota. They're licensing some technology from them and working
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  Speaker 2: on co developing some platforms. So it kind of feels
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  Speaker 2: like it's almost a matter of time before super Wu
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  Speaker 2: ends up getting absorbed into Toyota. It feels like it's
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  Speaker 2: heading in that direction as well. In terms of the
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  Speaker 2: large brands worldwide, Toyota in twenty twenty three, you mentioned
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  Speaker 2: them in Volkswagen Toyota did ten point three million vehicles.
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  Speaker 2: Last year, Volkswagen did nine point two. Hyundai is currently
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  Speaker 2: third at seven point three. Stilantis is at six point four,
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  Speaker 2: General Motors six ' two, Sai C from China at
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  Speaker 2: five million, Ford at four point four, Honda Nissan four
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  Speaker 2: point one, and three point three. You do the math, Okay,
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  Speaker 2: that gets you to the third biggest. As you mentioned
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  Speaker 2: Suzuki from Japan. I know that no one really thinks
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  Speaker 2: about Suzuki here in the United States.
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  Speaker 3: It's too bad.
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  Speaker 2: Do you guys remember the uh probably like mid to
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  Speaker 2: late nineties. They had that little runabout vehicle that was
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  Speaker 2: kind of like the RAV four or.
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  Speaker 3: The g Tangler.
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  Speaker 1: Yep.
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  Speaker 3: It was like I just remember the colors were wild.
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  Speaker 2: It would be like white and then it would have
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  Speaker 2: like bright blue and pink racing stripes on the side
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  Speaker 2: of it. Or it would say like four by four
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  Speaker 2: but just absolutely wild X ninety. I don't even know
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  Speaker 2: looks like it.
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  Speaker 3: Is that what it was called in the nineties, right,
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  Speaker 3: This is what you're talking about. Yeah, see them all
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  Speaker 3: the time.
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  Speaker 2: Uh No, the Suzuki sidekick is the one I'm thinking of.
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  Speaker 2: The sidekick, I think, is it? And what's this one here?
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  Speaker 2: Hang on, there's there's another one that I'm looking at
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  Speaker 2: right now. Oh no, this is another one. Wow, there's
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  Speaker 2: so many great there's so many great ones from ninties.
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  Speaker 2: Do you guys remember the Asuzu Amigo. Oh yeah, it's
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  Speaker 2: another one that's kind of in the same boat there,
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  Speaker 2: like really tiny, kind of boxy little suv.
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  Speaker 3: That's another one that. Yeah, you're right.
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  Speaker 5: They all do look very similar in terms of model.
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  Speaker 3: They all do.
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  Speaker 2: Actually, I was I was skiing out in Utah when
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  Speaker 2: I was like twenty four twenty five, and we didn't
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  Speaker 2: really have a ton of money beyond the lift tickets,
• 10:53
  Speaker 2: and so there were five of us, and so we
• 10:55
  Speaker 2: had to rent a car in order to get to
• 10:56
  Speaker 2: and from the mountain because didn't have enough money to
• 10:59
  Speaker 2: stay anywhere to the mountain.
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  Speaker 3: We rented.
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  Speaker 2: It ended up being it was the cheapest car we
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  Speaker 2: could find at the Salt Lake Airport. It was one
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  Speaker 2: of these Suzuki things from like nineteen nine. It wasn't
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  Speaker 2: that old, but we somehow crammed like five guys into
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  Speaker 2: this with ski gear in order to make it work.
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  Speaker 2: And it was kind of kind of comical making it work.
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  Speaker 2: But I digress this merger between Honda and Nissan.
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  Speaker 3: I think you're gonna be seeing more consolidation in the
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  Speaker 3: auto space because I don't think.
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  Speaker 2: Unless the China issue is a big one, just because
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  Speaker 2: so many of the sales from these, you know, other automakers,
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  Speaker 2: we're going into China, and now China is basically saying, Okay,
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  Speaker 2: we've taken all the technology we want. Now we're going
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  Speaker 2: to kind of run things ourselves. So thanks for playing.
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  Speaker 2: But unless companies want, unless countries want to push back
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  Speaker 2: on Chinese exports of vehicles to other countries, this is
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  Speaker 2: gonna be a problem that comes for everyone, and the
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  Speaker 2: only way to potentially deal with it on that side
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  Speaker 2: is more mergers potentially, So it's something I think you
• 12:09
  Speaker 2: might see more of quick break here. We got trivia
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  Speaker 2: coming up right after this.
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  Speaker 3: Is it Timothy Shallomy Let me check No, No wasn't
• 13:52
  Speaker 3: even born yet.
• 13:53
  Speaker 5: I believe no.
• 13:54
  Speaker 2: I think he was born in like the mid nineties,
• 13:56
  Speaker 2: so probably not on that UH piece in the New
• 14:00
  Speaker 2: York Times the economy is finally stable? Is that about
• 14:03
  Speaker 2: to change? So let's let me just take exception to
• 14:06
  Speaker 2: the UH the headline here. Economies are never stable, and
• 14:12
  Speaker 2: they're like they never like reach everything being good and
• 14:16
  Speaker 2: then just stay there. They might get there briefly and
• 14:19
  Speaker 2: then they destabilize, and then they get back there and
• 14:22
  Speaker 2: then they destable. It's it's kind of how they're always moving,
• 14:26
  Speaker 2: and it's it's not so much that they're always heading
• 14:28
  Speaker 2: into recession or not, but it's just something where, Hey, like,
• 14:32
  Speaker 2: the economies are always in motion. They never get to
• 14:36
  Speaker 2: a place where they're just comfortable and resting. They're always evolving.
• 14:40
  Speaker 2: And so I think that the first premise of Hey,
• 14:43
  Speaker 2: the economy is stable, I don't think matches with with
• 14:46
  Speaker 2: my lived experience your thoughts, Paul.
• 14:49
  Speaker 5: No, it's constantly evolving.
• 14:52
  Speaker 4: I guess the argument probably a better word than stable
• 14:55
  Speaker 4: is an iteration of one hundred pieces that we've read
• 14:59
  Speaker 4: and covered on the show over the last month or so, like, Hey,
• 15:02
  Speaker 4: the economy is in a pretty good place at this
• 15:04
  Speaker 4: point statistically, looking at some measure.
• 15:06
  Speaker 3: It's been that way for a year now.
• 15:08
  Speaker 4: But it's really about the crux of this piece is
• 15:12
  Speaker 4: the same stuff that we've covered a million times as
• 15:14
  Speaker 4: oh Goo, who knows what the impact is going to
• 15:16
  Speaker 4: be because of Tariff's immigration and deregulation with Trump's presidency.
• 15:21
  Speaker 5: I think that's really the peaceful it.
• 15:23
  Speaker 4: But I can understand the pushback on the stability apart,
• 15:26
  Speaker 4: because it's never you're never done, and you're never fully
• 15:31
  Speaker 4: out of the woods on inflation, you know, all these
• 15:33
  Speaker 4: other things out here. It's just at a point in
• 15:35
  Speaker 4: time you like to see it trending in the right direction,
• 15:37
  Speaker 4: but it's ultimately constantly evolving.
• 15:40
  Speaker 5: I would agree with that.
• 15:41
  Speaker 3: By my math, we now have.
• 15:45
  Speaker 2: Thirty three days until the inauguration, so only thirty three
• 15:49
  Speaker 2: more days of endless speculation of will it be this policy?
• 15:54
  Speaker 2: Will be that policy? I'm telling you if actually, let's
• 16:00
  Speaker 2: move ahead to the next piece, because it dovetails nicely.
• 16:05
  Speaker 2: Should we make daylight savings time permanent? And and this
• 16:10
  Speaker 2: is being brought up here because President elect Trump has
• 16:14
  Speaker 2: said that he wants to eliminate daylight savings time. Elon Muskin,
• 16:18
  Speaker 2: Vivic Revaswami have said they want to make daylight saving
• 16:21
  Speaker 2: time permanent.
• 16:22
  Speaker 3: Here's the thing. I think I've actually.
• 16:24
  Speaker 2: Figured out why people have trouble with daylight saving time,
• 16:28
  Speaker 2: and there's two reasons. The first is, no one knows
• 16:31
  Speaker 2: whether it's the fall, whether it's like the fallback of
• 16:34
  Speaker 2: the spring forward. Hint, it's the spring forward. That the
• 16:37
  Speaker 2: summer is daylight savings time, not what we're in now.
• 16:41
  Speaker 2: So the better time, it's better because the sun stays
• 16:46
  Speaker 2: out or during the day. The reason why people get
• 16:50
  Speaker 2: upset is because they're like, oh, like I drive to
• 16:51
  Speaker 2: work and it's dark. That's not because of daylight savings time.
• 16:54
  Speaker 2: That's because if you're in the Northeast, it's only actually
• 16:57
  Speaker 2: light out for about nine hours a day day in
• 17:00
  Speaker 2: the winter. And that's not caused by shifting the cocks.
• 17:04
  Speaker 2: That just determines like where it's going to fall, like
• 17:07
  Speaker 2: or is it gonna be really dark dark starting at
• 17:10
  Speaker 2: you know, five pm until I don't know, eight am,
• 17:15
  Speaker 2: or is it gonna be dark from four pm until
• 17:17
  Speaker 2: seven am? That's all you're determining, Like, you can't increase
• 17:21
  Speaker 2: the hours of daylight in the day. That's caused by
• 17:25
  Speaker 2: the fact that the earth is tilted relative to the sun.
• 17:29
  Speaker 3: Not only should look into that.
• 17:30
  Speaker 2: It's called the angle of insulation if you want to
• 17:32
  Speaker 2: go and google that and put it into your Wikipedia.
• 17:35
  Speaker 2: And that's why we have shorter days, so you can't
• 17:39
  Speaker 2: legislate out the suck of it getting dark for fifteen
• 17:46
  Speaker 2: hours a day in the northeast, like that's that's just
• 17:49
  Speaker 2: how it's gonna be. And I can't believe that this
• 17:53
  Speaker 2: is something that we're actually talking about in terms of
• 17:59
  Speaker 2: wasting like legislative time on or doze time on or
• 18:03
  Speaker 2: like what are we doing here? Of all the problems
• 18:09
  Speaker 2: in the world.
• 18:10
  Speaker 3: Daylight savings time really top of the list.
• 18:15
  Speaker 2: I don't care what it is. But if you want
• 18:17
  Speaker 2: more time in the sun, move towards the equator the
• 18:23
  Speaker 2: only way to do it, or you to collapse on air.
• 18:28
  Speaker 1: No.
• 18:28
  Speaker 2: I was I was eating I was eating some nuts
• 18:31
  Speaker 2: during the break and I got a nuts stuck in
• 18:33
  Speaker 2: the throat. And so anyways, I just can't believe that
• 18:40
  Speaker 2: there's an actual Bloomberg column now about like, hey, the
• 18:44
  Speaker 2: US economy says that we should make daylight savings permanent.
• 18:47
  Speaker 3: It doesn't matter matters to me, which would you prefer,
• 18:52
  Speaker 3: Tucker whatever, this is not so you'd rather have it
• 18:55
  Speaker 3: not be light until like eight am? Yeah, yeah, I
• 18:58
  Speaker 3: don't care. I'm up early. It's dark either way from me,
• 19:01
  Speaker 3: so I don't care. Screw the rest of you rational
• 19:06
  Speaker 3: self interest, Thank you, Tucker.
• 19:07
  Speaker 5: At least I'm honest, Paul.
• 19:09
  Speaker 3: What would you prefer in the winter.
• 19:11
  Speaker 4: I'm fine with the way that it's structured right now.
• 19:15
  Speaker 4: You know what, Now, having young kids, I'm gonna say
• 19:18
  Speaker 4: I'm with Tucker because that afternoon window post nap for
• 19:21
  Speaker 4: us is very difficult, having very little daylight time.
• 19:24
  Speaker 2: I say, if you're gonna do this, go bold. Make
• 19:27
  Speaker 2: it stay light three hours, make it always light at
• 19:30
  Speaker 2: seven pm. Figure out how to make the sun go
• 19:32
  Speaker 2: down at seven pm every day. Good for us work,
• 19:35
  Speaker 2: and we'll be there quick break. More Financial Exchange Next.
• 19:41
  Speaker 7: Bringing the latest financial news straight to your radio every day.
• 19:45
  Speaker 7: It's the Financial Exchange on the Financial Exchange Radio Network.
• 19:51
  Speaker 7: Find daily interviews and full shows of the Financial Exchange
• 19:54
  Speaker 7: on how Are YouTube page. Get cut up on anything
• 19:56
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• 19:59
  Speaker 7: li Change Radio Network.
• 20:05
  Speaker 6: Sure of your question today was who was the first
• 20:07
  Speaker 6: actor to turn down the starring role in Die Hard?
• 20:11
  Speaker 3: I'll be Nick Nolty. Some of the other stars who.
• 20:14
  Speaker 6: Turned down die Hard were Al Pacino, Robert de Niro,
• 20:18
  Speaker 6: Don Johnson, Harrison Ford, Arnold Schwarzenegger, and Mel Gibson. Winner
• 20:24
  Speaker 6: today of the Financial Looks Shade and Showed T shirt
• 20:26
  Speaker 6: was Ray from East Greenwich, Rhode Island.
• 20:28
  Speaker 3: Congrats to Ray.
• 20:30
  Speaker 5: We played trivia every day here on.
• 20:31
  Speaker 3: The Financial Exchange.
• 20:33
  Speaker 6: See complete contest rules at Financial Exchange show dot com.
• 20:38
  Speaker 2: Paul, we got a piece here in MarketWatch to forget
• 20:42
  Speaker 2: the four percent rule. Considered this new magic number for
• 20:45
  Speaker 2: retirement withdrawals instead. Paul, what's the magic number for retirement withdrawals?
• 20:52
  Speaker 4: The magic number, according to a morning Star new research
• 20:56
  Speaker 4: report is three point seven percent.
• 20:59
  Speaker 5: They said that.
• 20:59
  Speaker 3: It's three point seven percent rule.
• 21:01
  Speaker 5: Now it's been modified slightly. Oh, this share that.
• 21:04
  Speaker 4: Gives them a ninety percent probability that they'll have some
• 21:07
  Speaker 4: money remaining at the end of a thirty year retirement.
• 21:09
  Speaker 4: So basically projecting it out from age sixty five to
• 21:12
  Speaker 4: ninety five. If you are to withdraw three point seven
• 21:15
  Speaker 4: percent from your portfolio, so million dollar portfolio, you're pulling
• 21:19
  Speaker 4: thirty seven grand a year that will last you all
• 21:22
  Speaker 4: the way out for a thirty year period. Why has
• 21:25
  Speaker 4: it changed from the four percent rule? The four percent
• 21:27
  Speaker 4: rule became popularized back in a study done in nineteen
• 21:31
  Speaker 4: ninety four by William Bengin. It appeared in the journal
• 21:33
  Speaker 4: Financial Planning. Just basically this idea of what is the
• 21:37
  Speaker 4: rate that you could withdraw from your portfolio over a
• 21:39
  Speaker 4: period of time and not deplete it? Why is it
• 21:42
  Speaker 4: lower this year because morning Star is using lesser assumed
• 21:46
  Speaker 4: rates of returns going forward, Because we sit at a
• 21:49
  Speaker 4: period in time, as Chuck and I talked about on
• 21:51
  Speaker 4: the show yesterday, where equity valuations are really high at
• 21:54
  Speaker 4: this point, So they're utilizing lower assumptions for the rate
• 21:58
  Speaker 4: of return in the future than they had in the past,
• 22:01
  Speaker 4: and that's why you've seen the decline in the rate
• 22:05
  Speaker 4: through what morning Star had done from its recommended survey here.
• 22:10
  Speaker 2: Paul, do you do you think this is something? And
• 22:12
  Speaker 2: I know that morning Stars doing this saying, hey, like
• 22:15
  Speaker 2: we're looking at a thirty year period that begins now.
• 22:19
  Speaker 2: But for someone who's you know, either thinking about retiring
• 22:22
  Speaker 2: or you know, might already be retired, do you think
• 22:26
  Speaker 2: they need to be like looking at their withdrawal rate
• 22:29
  Speaker 2: each year and being like, what's the long term sustainable
• 22:32
  Speaker 2: one or is it more adjusting just based on Hey,
• 22:37
  Speaker 2: here's what things look like for you know, next year,
• 22:40
  Speaker 2: and maybe I make some changes for that. But do
• 22:42
  Speaker 2: do I make any long term changes based on it?
• 22:45
  Speaker 5: Yeah?
• 22:45
  Speaker 4: For us, when we're working with clients, typically it's more,
• 22:48
  Speaker 4: let's monitor the trend of your withdrawal patten over a
• 22:51
  Speaker 4: series of years, because it is just inaccurate to think
• 22:56
  Speaker 4: that you're gonna be able to stick rigidly to the
• 22:59
  Speaker 4: same percentage every single year. There's gonna be years where
• 23:02
  Speaker 4: more expenses come up than others, whether it needs to
• 23:05
  Speaker 4: be you know, work done around your house or a
• 23:07
  Speaker 4: car or things like that that's going to make the
• 23:11
  Speaker 4: withdrawal rate change. So what I tend to focus on
• 23:14
  Speaker 4: more so is sticking to an overall average that hey,
• 23:18
  Speaker 4: perhaps not every single year are you gonna hit the
• 23:20
  Speaker 4: four percent. Maybe some years it will be six, maybe
• 23:23
  Speaker 4: some years it will be three. But you want to
• 23:25
  Speaker 4: see that average coming close to, you know, between four
• 23:29
  Speaker 4: and five percent. Depending on the client and objectives matter too.
• 23:32
  Speaker 4: If you have no airs that you're looking to leave
• 23:34
  Speaker 4: assets to, some people might want to lean on a
• 23:37
  Speaker 4: heavier way to rate a withdrawal.
• 23:38
  Speaker 2: Folks, if you're either retired or thinking about retiring in
• 23:42
  Speaker 2: the next year or two, these are the questions that
• 23:45
  Speaker 2: the Armstrong Advisory Group addresses each and every day with
• 23:50
  Speaker 2: our clients. How do you make your money work for retirement?
• 23:56
  Speaker 2: Number to call to schedule an appointment is eight hundred
• 23:59
  Speaker 2: three nine for zero zero one. We have offices all
• 24:03
  Speaker 2: throughout the New England region, so again that number is
• 24:07
  Speaker 2: eight hundred three nine three for zero zero one. If
• 24:11
  Speaker 2: you're trying to figure out what retirement looks like for you,
• 24:15
  Speaker 2: call someone who could take a look and walk you
• 24:16
  Speaker 2: through some of the options that are out there. Again
• 24:19
  Speaker 2: eight hundred three nine three for zero zero one.
• 24:24
  Speaker 1: The proceeding was paid for by Armstrong Advisory Group, a
• 24:26
  Speaker 1: registered investment advisor. Nothing in the ad or in any
• 24:29
  Speaker 1: Armstrong guide a specific financial, legal or tax advice. Consult
• 24:32
  Speaker 1: your own financial tax into state planning advisors before making
• 24:35
  Speaker 1: any investment decisions. Armstrong may contact you to offer investment
• 24:38
  Speaker 1: advisory services.
• 24:39
  Speaker 2: FTC out with a new rule that was made final
• 24:43
  Speaker 2: yesterday specifically related to service fees and other mandatory fees
• 24:50
  Speaker 2: included in concerts, hotels, things, along those lines. So think
• 24:53
  Speaker 2: about when you go on stub Hub or ticket master
• 24:57
  Speaker 2: and they tell you, oh, like your ticket's going to
• 24:59
  Speaker 2: be sixty dollars and you're like great, then you cook
• 25:01
  Speaker 2: on it, it's like, no, it's ninety dollars because you
• 25:03
  Speaker 2: got to pay a fifty percent fee on the thing.
• 25:06
  Speaker 2: Or you're booking a hotel and it says it's two
• 25:09
  Speaker 2: hundred dollars a night, and then you click on it
• 25:11
  Speaker 2: and it says plus a forty five dollars a night.
• 25:13
  Speaker 2: What is it an amenity fee or a venue what
• 25:17
  Speaker 2: do they even call it?
• 25:18
  Speaker 5: Like a hotel hotel booking fee?
• 25:20
  Speaker 3: No, it's it's a specific word. It's a resort fee.
• 25:24
  Speaker 5: Resulte.
• 25:24
  Speaker 3: Yeah, it's like, well what do you mean.
• 25:26
  Speaker 2: It's like, oh, well, that's for use of you know,
• 25:28
  Speaker 2: the pool and towels and this and that. It's like, well,
• 25:30
  Speaker 2: what if I don't want to use those, you still
• 25:32
  Speaker 2: have to pay to the resort. Okay, So so it's
• 25:34
  Speaker 2: the price of the room. So look in terms of
• 25:38
  Speaker 2: how big of a problem this is. Again, by the
• 25:41
  Speaker 2: time you finally get to make your purchase, your like
• 25:44
  Speaker 2: three screens later, so I think no one's really by
• 25:47
  Speaker 2: the time you're actually putting in your credit card information,
• 25:50
  Speaker 2: you know how much the full thing is going to cost.
• 25:53
  Speaker 2: It still is kind of shady, slimy behavior that it's
• 25:55
  Speaker 2: just being hidden from you in terms of look, you're
• 25:59
  Speaker 2: no one walks into seven to eleven and sees a
• 26:04
  Speaker 2: hot dog there that says it's two dollars and then says, yeah,
• 26:07
  Speaker 2: I'm gonna buy that, and then you get hit with
• 26:08
  Speaker 2: a fifty percent service fee for you know, someone taking
• 26:11
  Speaker 2: the hot dog out. Like, sure, you can tip if
• 26:13
  Speaker 2: you want to, but like, that's that's different. This to
• 26:17
  Speaker 2: me is an example of slimy, shady pricing, and I
• 26:22
  Speaker 2: think it's exactly what the FTC is built to deal with.
• 26:24
  Speaker 2: Is it like the biggest problem in the world. No,
• 26:28
  Speaker 2: But it's not like any legislative effort was spent doing this.
• 26:30
  Speaker 2: You didn't have people running around legislating it. The FTC
• 26:33
  Speaker 2: is an agency that specifically is built to weed out
• 26:36
  Speaker 2: unfair trade practices. And this is kind of kind of slimy,
• 26:41
  Speaker 2: shady stuff. And I don't know why anyone would be
• 26:45
  Speaker 2: like no, like businesses should be able to hide fees
• 26:48
  Speaker 2: like this is the question. If you think this is
• 26:51
  Speaker 2: government overreach. What's the pro to what's the upside to
• 26:56
  Speaker 2: a business being able to hide fees until the very
• 26:58
  Speaker 2: last minute on you like, well, why is that a
• 27:01
  Speaker 2: good thing?
• 27:02
  Speaker 4: I would be hard pressed to find anyone to you
• 27:06
  Speaker 4: to make that argument.
• 27:07
  Speaker 2: You know, with some of the other stuff you can say, okay,
• 27:09
  Speaker 2: like here's the one that we were talking about a
• 27:12
  Speaker 2: couple of weeks ago with airlines, where senators were like, hey,
• 27:15
  Speaker 2: you're you know, making all these add ons for you know,
• 27:18
  Speaker 2: if you want this seat or if you want a
• 27:22
  Speaker 2: bag to be checked.
• 27:23
  Speaker 3: Okay, well that's alacarte.
• 27:24
  Speaker 2: Pricing, and ultimately you can still choose what you want,
• 27:28
  Speaker 2: and it's just how do you want to end up
• 27:30
  Speaker 2: paying for that this? It's no, you need to pay it,
• 27:33
  Speaker 2: and we're gonna hide the price until the very last minute.
• 27:36
  Speaker 2: That I understand the positive to alacarte pricing, which is
• 27:40
  Speaker 2: if I don't need to check a bag and don't
• 27:41
  Speaker 2: care where I sit, I get a cheaper seat. That's
• 27:44
  Speaker 2: the benefit to that, right. What's the benefit to Ticketmaster
• 27:48
  Speaker 2: hiding a fifty percent fee until I go?
• 27:50
  Speaker 4: And like, no, there's bot They're psychologically manipulating you to
• 27:54
  Speaker 4: get far alout, far down the process to where your
• 27:57
  Speaker 4: pot committed at that point, yes, and it.
• 27:59
  Speaker 3: Beats you up.
• 28:00
  Speaker 5: It's happened.
• 28:01
  Speaker 4: I mean everyone's had it happen before, where you're all right,
• 28:04
  Speaker 4: me and but me and a group buddies are gonna
• 28:06
  Speaker 4: go to this game, or I'm gonna get concert tickets
• 28:08
  Speaker 4: for me and my wife, and this is what's gonna cost.
• 28:10
  Speaker 4: It's one hundred and fifty bucks. And then you just
• 28:12
  Speaker 4: have that in your head like, Okay, I'm fine spending that,
• 28:15
  Speaker 4: But then it jumps to that next year and maybe
• 28:17
  Speaker 4: it's on the higher end of your price intier, like
• 28:18
  Speaker 4: one hundred and fifty that's as far as I'll go.
• 28:20
  Speaker 4: And then you're like, oh crap, it's two hundred dollars
• 28:23
  Speaker 4: dollars now when it comes to total. But you're already visualizing, oh,
• 28:27
  Speaker 4: we'll get a babysitter whatever. Yeah, we're gonna get dinner
• 28:30
  Speaker 4: at this restaurant, whatever. And they have you, and it's
• 28:33
  Speaker 4: just psychologic. Is not the right thing to do. They
• 28:36
  Speaker 4: know they have you, so they try to stick a
• 28:38
  Speaker 4: little extra margin in the end. Better to be upfront
• 28:40
  Speaker 4: and transparent. It's hard to argue against not having transparency,
• 28:44
  Speaker 4: and the counter.
• 28:46
  Speaker 3: To it is last week.
• 28:48
  Speaker 2: So I'm a big better call sol fan Bob Odenkirk.
• 28:53
  Speaker 2: He's gonna be down in New York for I think
• 28:55
  Speaker 2: a bunch of three months next years tickets. When I
• 29:00
  Speaker 2: sale like a week or so ago, and I was like, okay,
• 29:02
  Speaker 2: like I really.
• 29:03
  Speaker 3: Want to see him.
• 29:04
  Speaker 2: Yeah, and this it's also got Karen Culkin from a
• 29:06
  Speaker 2: succession that's gonna be in it.
• 29:08
  Speaker 3: And I was like, okay, I need to do this.
• 29:09
  Speaker 2: So I'm looking around at the ticket price and I'm like, oh,
• 29:11
  Speaker 2: these are like a little higher than I wanted to spend.
• 29:14
  Speaker 3: What are we talking? Uh, that's gonna be like four
• 29:17
  Speaker 3: hundred bucks. No, So I got in for I think
• 29:20
  Speaker 3: it was like one hundred and thirty hundred and forty.
• 29:23
  Speaker 3: It's bad again.
• 29:24
  Speaker 2: It is like, yeah, if you want to be like
• 29:26
  Speaker 2: first ten rows, you're paying like five hundred plus.
• 29:28
  Speaker 3: But as you go back, even in like the orchestra section,
• 29:31
  Speaker 3: Bill Burrs in that too, Bill Burs and it also
• 29:33
  Speaker 3: Michael McKeon.
• 29:34
  Speaker 1: There you go.
• 29:34
  Speaker 3: Yeah.
• 29:34
  Speaker 1: Sorry.
• 29:36
  Speaker 2: But so I was like, okay, like you know, where's
• 29:38
  Speaker 2: it gonna be like? And I'm hovering over the seats
• 29:41
  Speaker 2: and I realize, oh, like the price is here. All
• 29:45
  Speaker 2: it says, you know, eighty dollars plus forty dollars service fee,
• 29:49
  Speaker 2: and I'm like, okay, yeah, the service fee is fifty percent,
• 29:51
  Speaker 2: but it's already included in the price I'm looking at.
• 29:53
  Speaker 3: This is great. I don't have to plan for something after,
• 29:56
  Speaker 3: which is nice.
• 29:58
  Speaker 2: So I am all in favor of Hey, if a
• 30:00
  Speaker 2: fees mandatory, no, you shouldn't be able to hide it
• 30:03
  Speaker 2: until later. If you're doing something all a cart, like airlines,
• 30:06
  Speaker 2: I might not like it if I need to buy
• 30:08
  Speaker 2: all those things after, but there are plenty of people
• 30:10
  Speaker 2: who don't, and they get cheaper prices because of it.
• 30:12
  Speaker 2: So there's an actual plus to the ala cart. There
• 30:15
  Speaker 2: is no plus to just hiding a fee that you're
• 30:17
  Speaker 2: gonna have to pay anyways.
• 30:19
  Speaker 3: Quick break, we got uh what do we call it?
• 30:22
  Speaker 3: Stack Roulette?
• 30:23
  Speaker 1: After this miss any of the show, catch up at
• 30:27
  Speaker 1: your convenience by visiting Financial Exchange Show dot com and
• 30:30
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• 30:33
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• 30:44
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• 30:47
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• 30:54
  Speaker 6: This segment of the Financial Exchange is brought to you
• 30:57
  Speaker 6: imparted by the US Virgin Islands Department of Tourism. The
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• 31:29
  Speaker 3: Paul, what do you got for me?
• 31:30
  Speaker 5: With sports gambling? Surgey?
• 31:32
  Speaker 4: The federal regulation is being discussed as the piece out
• 31:35
  Speaker 4: of the New York Times. So back in twenty eighteen,
• 31:38
  Speaker 4: the Supreme Court overturned a federal law that banned sports
• 31:42
  Speaker 4: betting outside of Nevada. It now is legal in thirty
• 31:46
  Speaker 4: eight states, and we're gonna have the District of Columbia
• 31:49
  Speaker 4: and Missouri also joining that in twenty twenty five. It
• 31:53
  Speaker 4: is now the Senate has gotten together to discuss the
• 31:57
  Speaker 4: possibility of national regulations on the sport betting industry. It
• 32:01
  Speaker 4: is estimated that thirty billion dollars were gambled on sports
• 32:06
  Speaker 4: last quarter. It's become a really huge industry and has
• 32:10
  Speaker 4: kind of surpassed any expectations for even those in the
• 32:13
  Speaker 4: gambling space in terms of the estimates of gambling out there.
• 32:17
  Speaker 4: And the comment that I just want to throw in
• 32:19
  Speaker 4: on this is that I do feel as if there's
• 32:21
  Speaker 4: probably regulation due on the advertising side of things, where
• 32:25
  Speaker 4: I believe it's it's sort of been the wild wild
• 32:27
  Speaker 4: West in terms of prop bets and other things in
• 32:30
  Speaker 4: nature that are really like lottery tickets when you try
• 32:32
  Speaker 4: to string together five or six outcomes and they're promoted
• 32:36
  Speaker 4: by the biggest stars, Gronk or you know, whoever else
• 32:39
  Speaker 4: out there, there probably does need to be some legislation.
• 32:43
  Speaker 4: I've heard anecdotal stories of just people going beyond their
• 32:47
  Speaker 4: means on these type of endeavors, and that's typically the
• 32:51
  Speaker 4: way it works in this country. Is you know, an
• 32:53
  Speaker 4: industry gets open and then regulation falls, and it seems
• 32:56
  Speaker 4: like that is going to be the case here.
• 32:58
  Speaker 5: Again, this is just discs.
• 33:00
  Speaker 4: Charlie Baker was actually part of this hearing where he's
• 33:04
  Speaker 4: at the head of the NCAA, and he's focused significantly
• 33:07
  Speaker 4: on not having prop bets attached to individual players. So
• 33:11
  Speaker 4: if you think about this, you have an individual college
• 33:14
  Speaker 4: athlete where someone can gamble on, you know, how many
• 33:16
  Speaker 4: points do they score in a basketball game like Cooper
• 33:19
  Speaker 4: flag at Dupe for example. The hatred and sort of
• 33:22
  Speaker 4: vitriol that they can receive on the ends of those
• 33:25
  Speaker 4: type of player prop bets make it not as tenable
• 33:28
  Speaker 4: for what were formerly amateur athletes. I guess you could
• 33:31
  Speaker 4: kind of debate that today with the nil money, but
• 33:33
  Speaker 4: still you know, young athletes.
• 33:35
  Speaker 2: Yeah, So a couple things first, A statistic. This is
• 33:40
  Speaker 2: from sportsbookadvisor dot com. I guess did this study and
• 33:46
  Speaker 2: they found that in a two year study of online betters,
• 33:50
  Speaker 2: eleven percent of them ended up with a profit and
• 33:53
  Speaker 2: the average winnings were less than one hundred and fifty dollars.
• 33:56
  Speaker 2: So generally, if you're betting on sports, you're you're you're
• 33:59
  Speaker 2: losing and worse, eighty percent of the revenue came from
• 34:04
  Speaker 2: ten percent of the gamblers who just kept losing over
• 34:08
  Speaker 2: and over, and those are the ones that keep getting like, hey,
• 34:11
  Speaker 2: do another free better? Hey, you know, we'll copy it
• 34:14
  Speaker 2: at you know, one of our in person locations or
• 34:17
  Speaker 2: something like that. So I'm I'm not opposed to sports betting.
• 34:22
  Speaker 2: I never have been, but I do think with with
• 34:29
  Speaker 2: the mobile apps for it and the lack of guardrails there,
• 34:35
  Speaker 2: it really creates a problem for people that end up
• 34:38
  Speaker 2: addicted to it in that it's just like it's it's
• 34:42
  Speaker 2: too easy. I'm I think where I've kind of landed,
• 34:45
  Speaker 2: And Tucker, you're more involved in this world than I am. Look,
• 34:51
  Speaker 2: if you want to have an actual sports book in
• 34:55
  Speaker 2: every town, I'd probably be okay with it, Like I
• 34:59
  Speaker 2: might not love it, and I wouldn't go there myself
• 35:01
  Speaker 2: just because I'm horrible at it.
• 35:03
  Speaker 3: Like I tried putting like a hundred dollars in. Yeah,
• 35:06
  Speaker 3: it gets to a sports book and not gamble.
• 35:09
  Speaker 5: You know, it's I don't the game, order.
• 35:11
  Speaker 3: A bunch of food or something, you know whatever, right, But.
• 35:16
  Speaker 2: I really am not sure that having it on everyone's
• 35:21
  Speaker 2: phone is something that we should be allowing.
• 35:25
  Speaker 3: I just don't know.
• 35:27
  Speaker 4: I love the convenience that is on the phone, but
• 35:29
  Speaker 4: I think you could find a middle ground, a poach
• 35:31
  Speaker 4: of putting guardrails specific to their online accounts where they
• 35:36
  Speaker 4: kind of do that.
• 35:37
  Speaker 2: Well, here's the problem is if the other thing. I
• 35:39
  Speaker 2: know a couple of people who are professional gamblers. It
• 35:42
  Speaker 2: is what they do, and the online sportsbooks have basically
• 35:46
  Speaker 2: cut them off from making money because they're too good.
• 35:48
  Speaker 3: Yeah, they cap them.
• 35:49
  Speaker 2: Right, like they can't make any meaningful money because they're
• 35:53
  Speaker 2: too good.
• 35:53
  Speaker 6: I know, I know somebody in that same camp check
• 35:56
  Speaker 6: where they couldn't make like it got to a point
• 35:58
  Speaker 6: where they couldn't make a hundred dollars beat. Yeah, they
• 36:02
  Speaker 6: they can't do it.
• 36:04
  Speaker 2: And and the casinos are really like you can't get
• 36:07
  Speaker 2: the spoof accounts and that you can't do it, like
• 36:10
  Speaker 2: you can't get around them.
• 36:11
  Speaker 3: And so I guess what, it's a rigged game?
• 36:16
  Speaker 5: Is the point?
• 36:18
  Speaker 3: Like it is?
• 36:19
  Speaker 4: I mean, no, yeah, you have to view it as
• 36:21
  Speaker 4: a source of entertainment. If you're going into it, it's
• 36:24
  Speaker 4: an entertainment thing.
• 36:24
  Speaker 5: It's not.
• 36:25
  Speaker 4: You shouldn't be going out there thinking you're gonna make
• 36:27
  Speaker 4: a profit, you know, make a substantial profit. It's for fun.
• 36:31
  Speaker 2: And there's also something and this is this is popping
• 36:35
  Speaker 2: up more and more. I mean, this idea of just
• 36:37
  Speaker 2: kind of financial nihilism, which is, hey, I'm screwed financially,
• 36:43
  Speaker 2: so I'm just gonna throw it at this or that,
• 36:45
  Speaker 2: whether it's you know, some stock that I'm being crazy
• 36:47
  Speaker 2: with or you know, all my money on you know,
• 36:49
  Speaker 2: some athlete making X number of shots in a forty
• 36:53
  Speaker 2: two way parlay or something like that. You got some
• 36:57
  Speaker 2: of that going on, and it's kind of ugly. And again,
• 37:01
  Speaker 2: I don't think that sports gambling should be banned because hey,
• 37:04
  Speaker 2: like it's still gonna go on anyways, like talk to
• 37:07
  Speaker 2: anyone was going on even when it wasn't banned.
• 37:09
  Speaker 3: Like it's not like that's a thing.
• 37:11
  Speaker 2: But we need to find a better way to do it,
• 37:16
  Speaker 2: and we're not there right now. It just we got
• 37:20
  Speaker 2: to figure something out on this because it's getting kind
• 37:23
  Speaker 2: of ugly. Uh.
• 37:25
  Speaker 3: Speaking of the opposite of ugly, the Oscar Meyer hot
• 37:28
  Speaker 3: dog driver.
• 37:30
  Speaker 5: That time of year, it's that time of years I've
• 37:34
  Speaker 5: seen this.
• 37:34
  Speaker 2: If you want to be a hot dogger for Oscar Meyer,
• 37:36
  Speaker 2: you can be driving the Wienermobile. So now through January
• 37:39
  Speaker 2: thirty first, they're giving you the chance to apply to
• 37:43
  Speaker 2: be the Wienermobile driver for the thirty eighth class of
• 37:47
  Speaker 2: Hot Doggers. It's a twenty seven foot long hot dog
• 37:50
  Speaker 2: on wheels and listen, you get to drive it all
• 37:54
  Speaker 2: around the country. No one ever gets upset when they
• 37:56
  Speaker 2: see a giant hot dog coming down the road.
• 37:58
  Speaker 3: That's all I know.
• 37:58
  Speaker 2: So, yeah, this is something where if you're interested, they're
• 38:02
  Speaker 2: gonna have twelve applicants who end up making the cut,
• 38:06
  Speaker 2: and they got their stuff all over the place on
• 38:09
  Speaker 2: their Instagram and TikTok. So if you know a kid
• 38:11
  Speaker 2: looking for you know, a little bit of summer fun, Hey,
• 38:14
  Speaker 2: you could drive the Winnermobile next summer. Applications open through
• 38:17
  Speaker 2: January thirty first. We're done for the day. Back at
• 38:20
  Speaker 2: tomorrow will recap what the Fed does and we'll see
• 38:23
  Speaker 2: you then