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Is Gen Z going to ensure malls across America don't die? · The Financial Exchange Show

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  Speaker 1: Zada and Mike Armstrong, Chuck.
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  Speaker 2: Mike and Tucker kicking off the second hour here, and
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  Speaker 2: we got markets down.
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  Speaker 3: We Pikenyo today only a little bit.
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  Speaker 2: The Dow is off seventeen points right now, the SMP's
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  Speaker 2: down five, the Nasdaq is down eighteen, so very very
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  Speaker 2: modest downward move. At one point earlier today, actually I
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  Speaker 2: think the S and P five hundred was down. It's
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  Speaker 2: something the ballpark twenty two, maybe twenty three points, but
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  Speaker 2: has subsequently rallied back closer to flat on the day.
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  Speaker 2: Tenure US Treasury is selling off just a touch, down
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  Speaker 2: one point eight basis points to four point two eight
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  Speaker 2: nine percent.
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  Speaker 3: Right now.
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  Speaker 2: We've got oil West Text Intermediate DIANT down ninety six
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  Speaker 2: cents a barrel to sixty nine to thirty three, and
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  Speaker 2: the TRIPAA national average for gas prices moving back a
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  Speaker 2: little bit still two days in a row now back
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  Speaker 2: up another six tenths of a cent to three zero
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  Speaker 2: two and six tens. So we still can't get below
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  Speaker 2: three dollars nationally according to Triple A. And we've got
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  Speaker 2: gold today down fifty four dollars and ninety cents per
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  Speaker 2: ounce to twenty seven oh one and eighty cents. Mike,
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  Speaker 2: anything catching your eye before we get into some labor
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  Speaker 2: market discussion.
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  Speaker 3: No, let's talk jobs all right. Piece here from Pew Research.
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  Speaker 2: It's actually a study that they did, uh, And the
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  Speaker 2: headline in the study is most Americans feel good about
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  Speaker 2: their job security, but not about their pay. And so
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  Speaker 2: when you look at overall job satisfaction, first thing that
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  Speaker 2: they study, they say, Hey, they basically ask you, are
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  Speaker 2: you satisfied with your job?
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  Speaker 3: Overall?
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  Speaker 2: Fifty percent of employees say satisfied to extremely or very satisfied,
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  Speaker 2: thirty eight percent say uh, somewhat satisfied, and percent overall
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  Speaker 2: say not too satisfied or not at all satisfied. So
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  Speaker 2: in general I read that and again you have to
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  Speaker 2: kind of, you know, figure out what it means when
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  Speaker 2: someone says they're like somewhat satisfied but overall I read
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  Speaker 2: that as saying, hey, most people, even though they might have,
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  Speaker 2: you know, some problems with their job.
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  Speaker 3: They're generally okay with it.
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  Speaker 2: And the fact that fifty percent fall into extremely or
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  Speaker 2: very satisfied, I find that to be pretty darn good yep.
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  Speaker 4: Yeah, that's a pretty big chunk. I do find it
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  Speaker 4: interesting but unsurprising that such a large share of workers
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  Speaker 4: are dissatisfied with pay, finding it's not keeping pace with
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  Speaker 4: paying their bills, especially on that lower income side. I
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  Speaker 4: feel as though that's been a pretty consistent and persistent
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  Speaker 4: feature of lower income Americans, in spite of the fact
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  Speaker 4: that pretty much all studies showed that lower income Americans
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  Speaker 4: are the key demographic whose pay actually exceeded the pace
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  Speaker 4: of inflation the last few years.
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  Speaker 3: It might just speak to how badly they were paid
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  Speaker 3: before that.
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  Speaker 4: Right, Yeah, I mean I don't think that I can
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  Speaker 4: two things at once can be true. One, your pay
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  Speaker 4: may have exceeded the pace of inflation. Two that may
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  Speaker 4: still leave you in a place where you can't pay
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  Speaker 4: most of your bills demographically.
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  Speaker 2: Just some interesting things from an age perspective, And I'm
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  Speaker 2: just getting back to the overall satisfaction before we get
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  Speaker 2: more into the pay side of things. The age at
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  Speaker 2: which people are most likely to report being satisfied with
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  Speaker 2: their job sixty five plus and sixty seven percent of
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  Speaker 2: the sixty five plus respondence to this survey said they
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  Speaker 2: were extremely to very satisfied with their job, and it
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  Speaker 2: basically then decreases across every major demographic. Fifty six percent
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  Speaker 2: of people age fifty to sixty four said they were
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  Speaker 2: forty eight percent of people aged thirty to thirty nine,
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  Speaker 2: and only forty three percent of age eighteen to twenty
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  Speaker 2: nine people said they were extremely or very satisfied.
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  Speaker 3: With their job.
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  Speaker 2: What do you suppose that is, Well, when you start out,
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  Speaker 2: you do all the stuff no one else wants to do,
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  Speaker 2: and they pay you crap.
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  Speaker 3: Yeah, that seems reasonable.
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  Speaker 2: That's kind of what it is, you know, and we
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  Speaker 2: all go through it like we all do. Like it's
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  Speaker 2: everyone has gone through that. I think that's the big
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  Speaker 2: thing about is there anything else?
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  Speaker 4: I guess if I'm sixty five plus, I'm more likely
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  Speaker 4: to be there because I want to be, not because
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  Speaker 4: I have to be.
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  Speaker 3: It's true even though.
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  Speaker 2: In you know, you had the twenty tens where that
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  Speaker 2: wasn't necessarily the case, but so many pre retirees had
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  Speaker 2: their retirements ruined by the financial crisis. Yeah, and so
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  Speaker 2: I wish that I had access because they do this
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  Speaker 2: survey every year. I just haven't looked for like the
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  Speaker 2: twenty twelve version of it. Maybe I can see if
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  Speaker 2: I can dig it up somewhere. But yeah, I'd be
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  Speaker 2: curious to see how that might have evolved over the
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  Speaker 2: last twelve to fifteen years, because you know, in twenty
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  Speaker 2: twelve or twenty thirteen, there were a lot of sixty
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  Speaker 2: five plus people working who are like I have to
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  Speaker 2: I thought I was gonna be able to retire, but
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  Speaker 2: I can't. Yeah, So I think that's interesting. The reason
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  Speaker 2: why people said that they're not satisfied with their pay,
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  Speaker 2: as you noted, Mike, the biggest one pay hasn't kept
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  Speaker 2: up with increase in the cost of living. Eighty percent
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  Speaker 2: of people who were dissatisfied with their pay said that
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  Speaker 2: seventy one percent said that the pay is.
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  Speaker 3: Too low for the quality of work that they do.
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  Speaker 2: That's interesting, and it dovetails into the next response, which
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  Speaker 2: seventy percent of respond said the pay is too low
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  Speaker 2: for the amount of work that they do. Now, Mike,
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  Speaker 2: you and I do not know one hundred and sixty
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  Speaker 2: million working Americans.
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  Speaker 3: I do not personally know.
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  Speaker 2: We know of them, but we don't actually know them personally.
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  Speaker 2: I think this is really interesting in terms of the
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  Speaker 2: quality side. To me is interesting. We hear all the
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  Speaker 2: time hey, I'm I'm getting paid this in my bosses,
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  Speaker 2: you know, sending me emails at nine o'clock on a Friday,
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  Speaker 2: and this and that.
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  Speaker 3: We hear that gripe quite often.
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  Speaker 4: The quiet quitting thing that took place over the last
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  Speaker 4: few years, a lot of griping about, you know, I
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  Speaker 4: do good work, I'm not paid enough.
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  Speaker 3: I'm being asked to do like more and more and more.
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  Speaker 2: I don't know that we hear that many people say, Hey,
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  Speaker 2: I'm the best at what I do and I'm not
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  Speaker 2: getting paid enough for it. As a result, like that,
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  Speaker 2: we don't hear that as much. And I wonder why
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  Speaker 2: that's the case. Any thoughts, No, I don't. You're right,
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  Speaker 2: this is unique. This is somewhat new of a concern
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  Speaker 2: or a complaint.
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  Speaker 3: The next one.
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  Speaker 4: You know, the amount of work that they do compared
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  Speaker 4: to the pay very common gripe.
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  Speaker 3: The quality of the work that speaks to some degree.
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  Speaker 4: Of pride that I don't feel as though I have
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  Speaker 4: seen in many other studies.
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  Speaker 2: Fair point, I get to the same place where I
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  Speaker 2: do think it's somewhat ego related. And again it's not
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  Speaker 2: to say that like all these people are doing bad work,
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  Speaker 2: but it's more. It's the same reason why even during
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  Speaker 2: the Great Financial Crisis.
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  Speaker 3: One of the things that has stuck with.
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  Speaker 2: Me when we look at any kind of a opinion
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  Speaker 2: polling on the economy, even during the Great Financial Crisis,
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  Speaker 2: when people were saying, yeah, they're like the the economy
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  Speaker 2: nationally is horrible, they'd be pulled, Hey, how's your personal
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  Speaker 2: financial financial situation?
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  Speaker 3: Oh, it's okay.
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  Speaker 2: Even with unemployment heading to you know, close to ten percent,
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  Speaker 2: you'd still get that response. And I think it's just
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  Speaker 2: we have as humans this this ego that tries to
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  Speaker 2: protect us. Sometimes it does sometimes it gets us into
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  Speaker 2: more trouble than we realize. But I kind of look
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  Speaker 2: at that when when they're asking people, hey, like, you know,
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  Speaker 2: what's your main dissatisfaction with your pay? For seventy one
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  Speaker 2: percent of respondents to say I do really good work
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  Speaker 2: and I'm not getting paid enough for it. Just statistically,
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  Speaker 2: it strikes me that improbable, it's probably improbable that that
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  Speaker 2: large of that subset is doing the quality of work
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  Speaker 2: that they think they are.
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  Speaker 4: Can I take something out of the study that I
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  Speaker 4: thought was positive, I'm not sure that you'll feel the
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  Speaker 4: same way. Yeah, I took it as a positive indication
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  Speaker 4: that currently half of workers they surveyed think of their
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  Speaker 4: current job as a career, and that's an important distinction.
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  Speaker 4: You know, another fifteen percent so they think it's just
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  Speaker 4: a stepping stone to get to a career. A third
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  Speaker 4: of them just said it's just a job to get by,
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  Speaker 4: and that is a large percentage. But for a full
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  Speaker 4: half of Americans in the labor force to say, no,
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  Speaker 4: I've got a job, I really do think of it
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  Speaker 4: as a long term career where I can make a living. Again,
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  Speaker 4: they didn't say that in so many words, but that's
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  Speaker 4: how I read that. And you know, sixty five percent,
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  Speaker 4: two thirds of them to say I'm either in a
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  Speaker 4: career path or I'm on my way to one.
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  Speaker 3: It's optimistic. I think.
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  Speaker 4: I look at that as an optimistic take from the
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  Speaker 4: American workforce.
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  Speaker 2: Well, it's not only optimistic. I think it's realistic because
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  Speaker 2: quite honestly, there are a lot of jobs that need
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  Speaker 2: to get done in America that aren't necessarily career path jobs.
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  Speaker 3: Like it's just this is what it is. And I
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  Speaker 3: think if if everyone was.
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  Speaker 2: Saying, yes, this is a job that leads to a career,
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  Speaker 2: I think you're setting people up for a lot of
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  Speaker 2: disappointment then, because there are jobs that just need to
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  Speaker 2: get done and that's like what it is.
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  Speaker 3: And so I think that this is again I agree
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  Speaker 3: with you.
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  Speaker 2: I think it's relatively optimistic, and I think it's relatively realistic.
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  Speaker 2: You know, they note that, hey, younger workers, those age
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  Speaker 2: eighteen to twenty nine, are less likely to see their
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  Speaker 2: job as a career, quite honestly. And again, as I
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  Speaker 2: get older, you start to realize, hey, maybe I should
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  Speaker 2: listen to the people that have gone before me, because
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  Speaker 2: they might know a thing or two, Like, you know,
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  Speaker 2: it's that they've been through this and they understand.
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  Speaker 3: The single biggest thing that I think.
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  Speaker 2: Reshapes your view of whether your job is a job
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  Speaker 2: or whether it's a career is when you start having
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  Speaker 2: a family, because it goes from ah, whatever, like I
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  Speaker 2: could take the you know, the month off and go
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  Speaker 2: do this too. Nope, gotta figure out how to feed
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  Speaker 2: the mouths. Yeah, you know, I think that that's I
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  Speaker 2: think there's something too that Whereas when you're twenty two
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  Speaker 2: and twenty three, no family, no kids, you're kind of like, well,
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  Speaker 2: even if I left here, I could always get another job.
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  Speaker 3: Like you're not viewing it the same way.
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  Speaker 4: That's a huge potential study and changing feelings towards work.
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  Speaker 4: Given the proportion of Americans not having kids.
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  Speaker 2: I would love to see someone study that, right, I
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  Speaker 2: would love to.
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  Speaker 4: You have to imagine that someone's attitude towards work and
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  Speaker 4: career and job security does change to some degree when
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  Speaker 4: you have the responsibility of raising children. And if few
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  Speaker 4: Americans are doing so, what are their attitudes towards work? Fascinating?
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  Speaker 3: Just take a quick break here.
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  Speaker 2: When we come back, we got trivia, and then we'll
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  Speaker 2: stick with a little bit of changing habits. We'll talk
• 11:53
  Speaker 2: about how gen Z is shopping for the holidays.
• 11:57
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  Speaker 5: Another day of Christmas trivia here on the show, taking
• 12:36
  Speaker 5: you up to the holiday. The highest grossing Christmas movie
• 12:40
  Speaker 5: in excuse me, the highest grossing Christmas movie is twenty
• 12:43
  Speaker 5: eighteen's The Grinch. The Grinch starred Benedict cumber Patch is
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  Speaker 5: the voice of the Grinch. The previous two actors to
• 12:50
  Speaker 5: portray the Grinch were Boris carol Off and Jim Carrey.
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  Speaker 5: So trivia question today, what is the name of the
• 12:58
  Speaker 5: Grinch's dog? Again? What is the name of the Grinch's dog?
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  Speaker 5: one seven three six, two thirteen eighty five with the
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  Speaker 5: shirt once again. Be the ninth correct response to text
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  Speaker 5: us at six one seven three six two thirteen eighty
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  Speaker 3: Mike.
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  Speaker 2: According to a survey by the International Council of Shopping Centers,
• 13:29
  Speaker 2: so full disclosure, this is a bunch of malls conducting
• 13:32
  Speaker 2: the survey, and you know a.
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  Speaker 3: Bit of a conflict of interest, perhaps a.
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  Speaker 2: Little bit, but according to this survey that they conducted, UH,
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  Speaker 2: they found that gen Z plans to shop more in
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  Speaker 2: stores than online this holiday season, with sixty three percent
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  Speaker 2: of gen Z responded saying they planned to make holiday
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  Speaker 2: purchases physical stores. Only fifty percent said they would make
• 13:52
  Speaker 2: purchases on retailers, websites and apps. That is lower than
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  Speaker 2: any other generation besides baby boomers. And so this survey
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  Speaker 2: at least is saying, hey, gen Z is trying to
• 14:05
  Speaker 2: do more stuff in person as far as shopping goes,
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  Speaker 2: I'm curious whether or not we think that's.
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  Speaker 3: Real or not. Yeah, I have a tough time buying it.
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  Speaker 4: I do buy that gen Z kids, after like three
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  Speaker 4: years of COVID restrictions, are probably itching to get out
• 14:25
  Speaker 4: and hopefully socialize with other gen z ers. And the
• 14:29
  Speaker 4: shopping mall was a key fixture in my youth, you know,
• 14:35
  Speaker 4: way to socialize with others and and get away from
• 14:38
  Speaker 4: parents for a little bit. Sixty three percent seems a
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  Speaker 4: lot to me. Sixty three percent just die. I don't
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  Speaker 4: know if I if I buy.
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  Speaker 2: It seems like a lot. The other thing, here's what
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  Speaker 2: I will say. There was a study that was done.
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  Speaker 2: I don't know who did it. It was a couple months
• 14:56
  Speaker 2: ago about uh gen Z and their technology happens, And
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  Speaker 2: it was like something close to like one hundred percent
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  Speaker 2: of them said they were like online on their phones
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  Speaker 2: like for the vast majority of their waking hours.
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  Speaker 3: Yep.
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  Speaker 2: They also as part of this where like, hey, do
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  Speaker 2: you want to like not use your phone as much,
• 15:17
  Speaker 2: to not be as connected through social media, and a
• 15:20
  Speaker 2: very high percentage of them where like, yes, I hate
• 15:24
  Speaker 2: what I'm doing, but I keep doing it.
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  Speaker 3: So they did a response yes, yeah.
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  Speaker 4: So maybe that's what this result is showing, is that
• 15:32
  Speaker 4: gen Z is displaying a desire to disconnect from their
• 15:35
  Speaker 4: phones and the Internet a little bit more. But it
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  Speaker 4: doesn't seem to be successful when you look at the numbers.
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  Speaker 2: No, and and look, there's a reason why if you
• 15:46
  Speaker 2: look at where all of the advertising and marketing dollars
• 15:48
  Speaker 2: are going, like they're going to online plant, like they're
• 15:52
  Speaker 2: going to TikTok, They're going to you know, Instagram and
• 15:54
  Speaker 2: stuff like that where you can buy stuff, you know,
• 15:56
  Speaker 2: with the click of a button online there.
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  Speaker 3: It's because it makes it easy.
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  Speaker 2: So I I I'm sure that there are I'm not
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  Speaker 2: trying to poo poo this entirely, but I'm more saying, hey,
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  Speaker 2: you have you know a survey that's being conducted by
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  Speaker 2: malls where we've been talking about the demise of malls
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  Speaker 2: for a long time, and a lot of it has
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  Speaker 2: come to fruition. Unfortunately for them, it's not a disinterested
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  Speaker 2: third party that is surveying this, and I don't have
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  Speaker 2: access to the language to see how they worded it
• 16:28
  Speaker 2: in a way that might have, you know, ended up
• 16:29
  Speaker 2: making this seem better than they wanted in this case, right,
• 16:33
  Speaker 2: better than reality, I guess.
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  Speaker 4: Yeah, you know, there's plenty of data that gets collected
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  Speaker 4: on this. Co Star is one of them that looks
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  Speaker 4: at the total retail square footage per capita, and.
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  Speaker 3: I take this as a good sign.
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  Speaker 4: And it has been on a steady decline since nine,
• 16:51
  Speaker 4: where we had fifty six and a half square feet
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  Speaker 4: of retail space per capita in the United States. As
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  Speaker 4: of twenty twenty three, that was down to fifty four
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  Speaker 4: point three. It's not much of a decline, but we'll
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  Speaker 4: be able to check that. Right If gen Z is saying, hey,
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  Speaker 4: I'm gonna do a lot more shopping in stores, then
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  Speaker 4: guess what that decline is going to stop.
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  Speaker 3: We're going to see it. I don't think it's going
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  Speaker 3: to Yeah, I tend to agree.
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  Speaker 2: It's just companies are really good at getting people to
• 17:17
  Speaker 2: do stuff on their phone by minimizing barriers to whatever
• 17:21
  Speaker 2: action they want you to undertake.
• 17:23
  Speaker 3: Piece here today in barons.
• 17:25
  Speaker 2: Home prices aren't the only thing stopping millennials from buying
• 17:28
  Speaker 2: real estate? What's really worrying them? What what's worrying millennials
• 17:32
  Speaker 2: about buying real estate?
• 17:33
  Speaker 3: Michael?
• 17:33
  Speaker 4: Well, apparently the generation when Pold sees home ownership as
• 17:36
  Speaker 4: a speculative asset with wild price swings, which is just
• 17:41
  Speaker 4: so far away from almost every American's actual reality, right,
• 17:47
  Speaker 4: I mean, you know other than eight Tell me what
• 17:50
  Speaker 4: period of time has been defined by massive price swings
• 17:54
  Speaker 4: and real estate?
• 17:56
  Speaker 3: Two?
• 17:58
  Speaker 4: Well, but home ownership, And yeah, I guess just dramatically
• 18:01
  Speaker 4: to the upside in that case. But there's been very
• 18:04
  Speaker 4: few instances I can look at through the history of
• 18:06
  Speaker 4: American home ownership to say, oh, yeah, beware because this
• 18:10
  Speaker 4: is a really wild and volatile asset class.
• 18:13
  Speaker 2: No, and especially when we talk about like the lack
• 18:16
  Speaker 2: of construction that's going on on the single family home thing. Again,
• 18:20
  Speaker 2: this is not to say that home prices can never
• 18:22
  Speaker 2: go down. That's not what I'm saying. But it's much more. Hey,
• 18:26
  Speaker 2: without the kind of leverage that you saw in the
• 18:28
  Speaker 2: run up to the financial crisis, it's kind of hard
• 18:31
  Speaker 2: to see like the massive shift that you did, you
• 18:35
  Speaker 2: know then in prices nationally in the time span that
• 18:38
  Speaker 2: you did. Would I be surprised if the next decade
• 18:41
  Speaker 2: overall home price growth is much more moderate than the
• 18:44
  Speaker 2: last four or five years. No, Yeah, But there's a
• 18:48
  Speaker 2: difference in saying that from Hey, this is, you know,
• 18:52
  Speaker 2: a hugely volatile asset class. And the other part that
• 18:54
  Speaker 2: I always come back to is, look, ultimately, when you're
• 18:57
  Speaker 2: talking about your primary residence, I know oftentimes like we
• 19:02
  Speaker 2: tend to view it as an investment, and maybe that's
• 19:05
  Speaker 2: like a secondary function, but ultimately the goal is for
• 19:08
  Speaker 2: it to provide shelter for you. And so unless you're
• 19:12
  Speaker 2: planning on moving, you guys sit there and say, okay,
• 19:16
  Speaker 2: like do you check the price your house on Zillo
• 19:19
  Speaker 2: every day?
• 19:19
  Speaker 3: Well, no, I'm not worried about selling. Yeah.
• 19:22
  Speaker 4: Home ownership of the United States is massively subsidized by
• 19:24
  Speaker 4: the federal government. That too, and if you're not doing it,
• 19:27
  Speaker 4: you're saying no to a massive subsidy.
• 19:30
  Speaker 2: Take a quick break here, we get the trivia answer
• 19:31
  Speaker 2: coming up after this, and we'll also talk about how
• 19:35
  Speaker 2: much retirees should plan to spend in a normal year.
• 19:40
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• 19:45
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• 19:51
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• 19:59
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• 20:05
  Speaker 5: Sure of your question today was what's the name of
• 20:08
  Speaker 5: the grinches dog?
• 20:09
  Speaker 3: I'll be Max.
• 20:10
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• 20:15
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• 20:18
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• 20:22
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• 20:27
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• 20:28
  Speaker 2: Mike, we got a PC here in Barons. It's got
• 20:31
  Speaker 2: the title new retire research plan to spend less than
• 20:33
  Speaker 2: four percent a year from their portfolio. The market rally
• 20:37
  Speaker 2: is to blame? How's the market rally to blame for this?
• 20:41
  Speaker 2: And is it true?
• 20:43
  Speaker 4: I don't know that the market rally specifically is what's
• 20:46
  Speaker 4: to blame, but I think they are making a point
• 20:48
  Speaker 4: that we have made ourselves, Chuck, which is equity levels
• 20:52
  Speaker 4: and valuations are at such a high that realistically you
• 20:56
  Speaker 4: might want to consider being pessimistic about to returns for
• 21:00
  Speaker 4: the next twenty five years compared to where they've been
• 21:03
  Speaker 4: for the last twenty five years or ten years, or
• 21:06
  Speaker 4: whatever time period you want to take a look at.
• 21:08
  Speaker 4: I think twenty five years, quite honestly, is pretty difficult
• 21:10
  Speaker 4: to put any sort of certainty around, So I think
• 21:13
  Speaker 4: ten is a little bit easier. But nonetheless, if you're
• 21:15
  Speaker 4: a retiree today, your portfolio should be, you know, a
• 21:19
  Speaker 4: fair bit larger than just a few years ago based
• 21:22
  Speaker 4: on how markets have returned. And I do think it
• 21:24
  Speaker 4: is incredibly reasonable to sit here today and say I'm
• 21:28
  Speaker 4: going to use a lower assumed growth rate for the
• 21:33
  Speaker 4: growth portion of my portfolio than I was using five
• 21:36
  Speaker 4: just five years ago.
• 21:38
  Speaker 2: So Morning Star says, okay, like you spend three point
• 21:42
  Speaker 2: seven percent, Mike. In terms of how someone should evaluate
• 21:46
  Speaker 2: how much they should be spending out of their portfolio
• 21:49
  Speaker 2: on a percentage basis, what are some of the different
• 21:51
  Speaker 2: factors that play into that, and how often should someone
• 21:54
  Speaker 2: be looking to make, you know, that kind of reassessment.
• 21:58
  Speaker 4: Yeah, there's a ton of them, And I don't think
• 22:01
  Speaker 4: that this is a great rule of thumb, but it's
• 22:05
  Speaker 4: it's the best starting point I think you can have
• 22:07
  Speaker 4: if you're not going to do any of the actual legwork.
• 22:10
  Speaker 4: Is to say, hey, if I'm focusing on retiring in
• 22:12
  Speaker 4: the next few years, when I factor in all my
• 22:15
  Speaker 4: other stuff like social Security, pensions, work income, that I'm
• 22:19
  Speaker 4: going to have in retirement, can I make do on
• 22:23
  Speaker 4: four percent or less of my portfolio? That is at
• 22:26
  Speaker 4: least a good starting point rule of thumb for how
• 22:30
  Speaker 4: you should look at all these things. Now, if during
• 22:33
  Speaker 4: the first five years of your retirement you need to
• 22:35
  Speaker 4: pull six or seven percent out because you're not filing
• 22:39
  Speaker 4: for Social Security yet and there's some big expenses that
• 22:42
  Speaker 4: you're incurring, that might just be totally fine, so long
• 22:45
  Speaker 4: as those things are going to kick in later and
• 22:48
  Speaker 4: then you are going to lower your expenses because you're
• 22:51
  Speaker 4: anticipating this, that or the other. But this can be
• 22:54
  Speaker 4: a usable and useful starting point rule of thumb for folks.
• 23:00
  Speaker 4: But the fact of the matter, as you know, Chuck,
• 23:02
  Speaker 4: it just doesn't It doesn't end there. You can't just
• 23:06
  Speaker 4: put this up in the air and say, well, yeah,
• 23:07
  Speaker 4: I'm good at under four percent and I should be fine.
• 23:10
  Speaker 4: There's so many other considerations to take into place here,
• 23:12
  Speaker 4: and reality is nobody's lives just proceed like this, where
• 23:16
  Speaker 4: oh yeah, I can just take three and a half
• 23:18
  Speaker 4: percent with no surprises whatsoever in retirement and I'll be
• 23:22
  Speaker 4: just fine. Sure your roof blows off, you have a
• 23:25
  Speaker 4: septic issue, you face long term care concerns that are
• 23:28
  Speaker 4: very costly, all of those things can change it. But
• 23:31
  Speaker 4: I think the key point here, Chuck, for me at least,
• 23:33
  Speaker 4: is investors have been given a tremendous stock market over
• 23:39
  Speaker 4: the last few years, and if they're facing down retirement,
• 23:43
  Speaker 4: it hopefully has positioned them a little bit better than
• 23:46
  Speaker 4: they were a few years ago. If they've had a
• 23:47
  Speaker 4: four oh one K or another bucket of savings that
• 23:50
  Speaker 4: has been invested somewhat in US equities, you're better off
• 23:54
  Speaker 4: than just a few years ago. The time to evaluate
• 23:57
  Speaker 4: all of that and figure out what it actually means
• 23:59
  Speaker 4: for your plan, and figure out if I am too
• 24:02
  Speaker 4: aggressive for my spending strategy in terms of investments and
• 24:05
  Speaker 4: too conservative, if inflation or market risk is my bigger
• 24:09
  Speaker 4: risk heading into retirement. The time was yesterday, So you know,
• 24:13
  Speaker 4: it's really important to evaluate all this and understand that
• 24:17
  Speaker 4: expectations have changed. Expectations for what equities will do in
• 24:21
  Speaker 4: the future have changed by almost every expert out there,
• 24:25
  Speaker 4: and so if you're not factoring that in right, I
• 24:27
  Speaker 4: mean we talk about it a life Goldman's expecting only
• 24:29
  Speaker 4: three percent a year for the next decade from stocks.
• 24:33
  Speaker 4: Expectations need to change for what your portfolio is going
• 24:36
  Speaker 4: to do in the future, and if you're not factoring
• 24:38
  Speaker 4: that into your personal retirement plan.
• 24:41
  Speaker 3: You should.
• 24:42
  Speaker 4: If all this is great too, or if you could
• 24:44
  Speaker 4: use a refresh or just a check in on where
• 24:47
  Speaker 4: your strategy is and where your plans for the future lie,
• 24:49
  Speaker 4: call the Armstrong Advisory Group at eight hundred three nine
• 24:52
  Speaker 4: three four zero zero one. We have a team of
• 24:55
  Speaker 4: financial advisors that work on this with their clients all day,
• 24:58
  Speaker 4: every day, and they'd be happy to sit down you too.
• 25:00
  Speaker 4: That number for the Armstrong Advisory Group again is eight
• 25:04
  Speaker 4: hundred three nine three four zero zero one.
• 25:07
  Speaker 1: The proceeding was paid for by Armstrong Advisory Group, a
• 25:10
  Speaker 1: registered investment advisor. Nothing in the ad or in any
• 25:12
  Speaker 1: Armstrong guide a specific financial, legal or tax advice. Consult
• 25:15
  Speaker 1: your own financial tax into state planning advisors before making
• 25:18
  Speaker 1: any investment decisions. Armstrong may contact you to offer investment
• 25:21
  Speaker 1: advisory services.
• 25:23
  Speaker 3: Mike.
• 25:23
  Speaker 2: We've got a piece here from this from Barons as well,
• 25:28
  Speaker 2: and it's talking about the incoming administration looking to cut
• 25:32
  Speaker 2: federal spending and specifically the Department of Government Efficiency, which
• 25:37
  Speaker 2: is not actually part of the government and as such
• 25:41
  Speaker 2: has no actual power to well really direct you know,
• 25:46
  Speaker 2: it affect federal spending directly in any way, shape or form,
• 25:50
  Speaker 2: but it's you know, this piece is asking, hey, what
• 25:53
  Speaker 2: does the Department of Government Efficiency mean for Social Security?
• 25:57
  Speaker 3: And my answer is nothing. Is that wrong? It seems
• 26:04
  Speaker 3: about right to me. Certainly.
• 26:06
  Speaker 4: Donald Trump has made very clear campaign pledges to not
• 26:10
  Speaker 4: touch your Social Security benefits. Is there a bill that
• 26:14
  Speaker 4: could come forward that would cut Social Security staff, the
• 26:17
  Speaker 4: people that work in the Social Security office or in
• 26:20
  Speaker 4: the back office responding to phone calls, which could lead
• 26:22
  Speaker 4: to longer wait times and more confusion around Social Security.
• 26:26
  Speaker 3: I guess maybe.
• 26:28
  Speaker 4: I mean I would put that as a firm maybe,
• 26:32
  Speaker 4: but I don't think it's going to impact your income benefits.
• 26:35
  Speaker 4: I'd also say, like anyone going and running for office,
• 26:39
  Speaker 4: should be careful about making cuts to some of the
• 26:42
  Speaker 4: most popular government programs in existence, Medicare and Social Security
• 26:46
  Speaker 4: ranking among them.
• 26:47
  Speaker 2: Well, I think the other piece is, Mike, do you
• 26:50
  Speaker 2: know what when people work at Social Security?
• 26:51
  Speaker 3: I was looking at the numbers on this now.
• 26:54
  Speaker 2: This is according to the Social Security Administration in their payroll. Actually,
• 26:57
  Speaker 2: they publish it every year because every government agency has to.
• 27:01
  Speaker 2: There's sixty thousand people working for the Social Security Administration
• 27:05
  Speaker 2: right now. Do you know how many there were thirty
• 27:07
  Speaker 2: years ago in nineteen ninety five? I do not sixty
• 27:10
  Speaker 2: two thousand, So they've gotten prett efficient over there.
• 27:13
  Speaker 3: Huh. Well, here's the next place I'm going.
• 27:15
  Speaker 2: Do you know how many people were on Social Security
• 27:18
  Speaker 2: benefits in nineteen ninety five.
• 27:20
  Speaker 3: Fewer than today?
• 27:21
  Speaker 2: Forty three million. Today it's sixty seven million. So you
• 27:24
  Speaker 2: have fifty percent more people on Social Security today, and
• 27:29
  Speaker 2: you have about four percent fewer workers at Social Security.
• 27:33
  Speaker 2: So they've they've kind of figured out how to do
• 27:36
  Speaker 2: the work. Now, let's say that you said, look, there's
• 27:38
  Speaker 2: still too many people there. I want to get rid
• 27:40
  Speaker 2: of half of them. Big number, and again probably unrealistic
• 27:45
  Speaker 2: because the work needs to get done. But you say, okay,
• 27:48
  Speaker 2: I want to get rid of half of them, Mike,
• 27:50
  Speaker 2: do you know what the average salary is for someone
• 27:52
  Speaker 2: who works at the Social Security Administration? Let's go seventy
• 27:56
  Speaker 2: two thousand, ninety one thousand, So higher than you thought.
• 27:58
  Speaker 3: Yea.
• 27:59
  Speaker 2: Even if you got rid of all those people, not
• 28:01
  Speaker 2: all of them, but half of them, you end up
• 28:03
  Speaker 2: saving about two point seven billion dollars for the year. Mike,
• 28:06
  Speaker 2: do you know what percentage of the US budget two
• 28:09
  Speaker 2: point seven billion dollars is?
• 28:12
  Speaker 3: Just do the math for me. Point zero zero five. Okay,
• 28:18
  Speaker 3: here's the deal.
• 28:19
  Speaker 2: Unless you actually want to cut Social Security benefits, Medicare benefits,
• 28:24
  Speaker 2: and the DoD, it's impossible to make a meaningful dent
• 28:31
  Speaker 2: in the federal budget. You can do stuff around the edges,
• 28:33
  Speaker 2: like it's not to say that like you can't do
• 28:35
  Speaker 2: some things here and there, but those are the places,
• 28:38
  Speaker 2: along with the interest on the national debt, those are
• 28:42
  Speaker 2: the places that you have the bulk of the actual spending.
• 28:45
  Speaker 4: Yeah, And that's been my point all along is it's
• 28:47
  Speaker 4: not that this type of work is unimportant. I do
• 28:50
  Speaker 4: think that you should look at areas to make the
• 28:52
  Speaker 4: government more efficient and cut but approaching it in the
• 28:57
  Speaker 4: way that they have and making promises like we're going
• 28:59
  Speaker 4: to cut spending is purely disingenuous, that's all it is.
• 29:06
  Speaker 4: It's disingenuous unless you're gonna get serious about cutting benefits
• 29:09
  Speaker 4: to Social Security and Medicare and Medicaid.
• 29:12
  Speaker 3: Well or DoD.
• 29:13
  Speaker 2: And by the way, there is a National Defense Authorization
• 29:16
  Speaker 2: Act built that just passed the House yesterday nine hundred
• 29:19
  Speaker 2: billion dollars for next year. So we're not serious about
• 29:21
  Speaker 2: cutting DoD and I'm not suggesting like we should make
• 29:24
  Speaker 2: some massive cut there. But ultimately it's something where this
• 29:30
  Speaker 2: is where the money actually goes, the stuff that like
• 29:35
  Speaker 2: we you know that everyone talks about it's it's pennies
• 29:39
  Speaker 2: on the dollar and and so if you really want
• 29:43
  Speaker 2: to make the big impact on things. Nine of federal
• 29:50
  Speaker 2: spending is not related to employment at federal agencies. It's
• 29:56
  Speaker 2: related to money that we've spent in the past, or
• 30:00
  Speaker 2: money that we're spending on people now, or related to defense.
• 30:04
  Speaker 2: I don't really count the US Army as like a
• 30:06
  Speaker 2: federal agency. It's right, and I've said this before. Also, Look,
• 30:11
  Speaker 2: we can talk about like procurement issues in the military
• 30:13
  Speaker 2: until the cows come home.
• 30:14
  Speaker 3: I'm all ears for that.
• 30:15
  Speaker 2: I'm like, why we might overspend when we're you know,
• 30:18
  Speaker 2: developing new weapons systems and this and that. But ultimately,
• 30:22
  Speaker 2: you do not want the US military to be efficient.
• 30:26
  Speaker 3: It's not the main goal.
• 30:29
  Speaker 2: The main goal of the US military is to be effective,
• 30:31
  Speaker 2: and those are two different things. You do not want
• 30:34
  Speaker 2: to compromise effectiveness in the name of efficiency, because you're
• 30:37
  Speaker 2: not running a business. With the US military, it is
• 30:41
  Speaker 2: serving a different role, and so I think we have
• 30:44
  Speaker 2: to be careful with that. Now, again, those listening you
• 30:46
  Speaker 2: might be like, well, Chuck's just you know, enabling the
• 30:48
  Speaker 2: military industrial complex, and maybe I am very possible.
• 30:51
  Speaker 4: Yeah, but Chuck's got Raytheon tattooed on his forehead.
• 30:54
  Speaker 3: Actually it's I had that removed. Okay, at great cost.
• 31:00
  Speaker 2: But my point is with the military, you have different goals,
• 31:04
  Speaker 2: and with some of these other programs even you have
• 31:07
  Speaker 2: different goals than simply maximizing efficiency. You want to maximize
• 31:11
  Speaker 2: the effectiveness of them. Or look, if you don't, then
• 31:15
  Speaker 2: you say, okay, like get rid of the program. Fine,
• 31:17
  Speaker 2: that's a perfectly viable view to have. But I'm not
• 31:20
  Speaker 2: saying like I would agree with it in every case.
• 31:22
  Speaker 2: But let's call a spade a spade. There's a difference
• 31:25
  Speaker 2: between efficiency and effectiveness, and for certain programs like the
• 31:29
  Speaker 2: military and even like Social Security, you want them to
• 31:33
  Speaker 2: be effective, not necessarily efficient.
• 31:37
  Speaker 3: We can agree there.
• 31:38
  Speaker 2: It's kind of that's all I have. That's all I
• 31:41
  Speaker 2: have to say about that. Take a quick break. When
• 31:43
  Speaker 2: we come back, Let's do a little bit of stack roulette.
• 31:47
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• 31:50
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• 31:53
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• 31:56
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• 31:59
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• 32:10
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• 32:57
  Speaker 3: Mike, what do you got for me? For stack Roulette?
• 33:00
  Speaker 4: The Wall Street Journal with a piece on what must
• 33:03
  Speaker 4: be the least pitiable group that you can find? Or
• 33:06
  Speaker 4: up there maybe the people who refuse to go back
• 33:09
  Speaker 4: to the office and then subsequently lost their jobs. We
• 33:13
  Speaker 4: have covered at length the stories of companies calling their
• 33:16
  Speaker 4: employees back to the office threatening layoffs or not playoffs
• 33:21
  Speaker 4: firings if they do not return and meet those in
• 33:24
  Speaker 4: office requirements. And while it's still pretty rare for it
• 33:28
  Speaker 4: to happen, there have been several in The Wall Street
• 33:31
  Speaker 4: Journal spoke to a number of them, and like I said,
• 33:35
  Speaker 4: I just I can have zero pity for any of
• 33:39
  Speaker 4: the people that you know, thought they wouldn't get their
• 33:42
  Speaker 4: job taken away because they disobeyed a direct order from
• 33:47
  Speaker 4: their bosses, and then got a pity for them. I don't, well,
• 33:54
  Speaker 4: I don't.
• 33:54
  Speaker 2: It's not for the disobeying the direct order. Yeah, it's more.
• 33:58
  Speaker 3: Hey, they were hired under the guys that this was
• 34:00
  Speaker 3: a full time remote position, right, and then the company
• 34:03
  Speaker 3: decided to change that on one hundred percent.
• 34:06
  Speaker 4: And if that's not fair and and you feel not
• 34:08
  Speaker 4: great about that, I think you have a reasonable grievance.
• 34:13
  Speaker 4: But once the company says we changed our mind and
• 34:15
  Speaker 4: you're back in the office and you say that's not fair,
• 34:18
  Speaker 4: I'm not coming back, then you should expect to be fired.
• 34:21
  Speaker 3: Right.
• 34:21
  Speaker 2: And Look, ultimately, anyone who works anywhere is at the
• 34:26
  Speaker 2: mercy of their employer as far as the terms of
• 34:29
  Speaker 2: their employment. And I know that like return to office
• 34:34
  Speaker 2: is the one that we're seeing, you know now in
• 34:35
  Speaker 2: terms of where there's you know, what kind of a
• 34:38
  Speaker 2: crux there, but or a difference of opinion there you
• 34:41
  Speaker 2: go back fifteen years, you know, it's you know, two
• 34:44
  Speaker 2: thousand and nine, it's you know, eight months after the
• 34:46
  Speaker 2: S and P five hundred bottoms, and the arguments then
• 34:50
  Speaker 2: would be, look, you know, how come you're only getting
• 34:52
  Speaker 2: me for you know, twenty five hours this week? Why
• 34:55
  Speaker 2: can't I do forty? And it was Hey, like I
• 34:58
  Speaker 2: thought I was going to be able to get forty hours.
• 34:59
  Speaker 2: Well they're just isn't enough demand? Like that was the
• 35:01
  Speaker 2: issue that employees and employers were fighting over fifteen years
• 35:05
  Speaker 2: ago in a very different economy, and so that they're
• 35:08
  Speaker 2: always going to be these these things that come up
• 35:11
  Speaker 2: the what I do find it And look, there there
• 35:16
  Speaker 2: are different reasons why companies are doing this. There are
• 35:20
  Speaker 2: some where they're saying, look, we want to go through
• 35:23
  Speaker 2: a round of layoffs, but we don't want.
• 35:24
  Speaker 3: To call it a layoff boom.
• 35:26
  Speaker 2: We're going to force return to office and if you
• 35:28
  Speaker 2: don't comply, great, that's how we're getting rid of head count.
• 35:30
  Speaker 4: And guess what I get to fire you for cause
• 35:31
  Speaker 4: without paying severance.
• 35:32
  Speaker 2: Correct, I'm not saying this is good. I'm saying like,
• 35:36
  Speaker 2: this is, this is bad.
• 35:37
  Speaker 3: This is probably can't even collect for unemployment then I'm
• 35:40
  Speaker 3: sure you can. Yeah you probably can.
• 35:41
  Speaker 2: I'm sure you can, and I would hope you can
• 35:44
  Speaker 2: quite honestly. Yeah, So like that, there's situations like that,
• 35:49
  Speaker 2: there's others, and this is what I suspect of some
• 35:51
  Speaker 2: of Amazon's return to work plans. Hey Amazon, remember what
• 35:55
  Speaker 2: remember all of the ink that was spilled over Amazon
• 35:58
  Speaker 2: HQ two. Yes, Well, look they got deals with was
• 36:02
  Speaker 2: it DC? And uh did they end up pulling out
• 36:05
  Speaker 2: of doing anything in New York?
• 36:06
  Speaker 3: No?
• 36:06
  Speaker 4: I think I think they have that dual to But yeah,
• 36:10
  Speaker 4: to your point, there are superployments tax cuts that they
• 36:13
  Speaker 4: receive contingent upon having people actually working there.
• 36:16
  Speaker 2: Right, So with Amazon, it might be yeah, if we
• 36:18
  Speaker 2: don't get you back to office, we're not getting the
• 36:21
  Speaker 2: you know, millions or billions of dollars that we were
• 36:23
  Speaker 2: promised by these metro areas in order to move our
• 36:26
  Speaker 2: headquarters there. So there's all different reasons why companies do this.
• 36:31
  Speaker 2: Some of them are just you know, managers who don't
• 36:34
  Speaker 2: like remote employees. Like, I'm not saying this is wrong
• 36:36
  Speaker 2: or right, I'm just saying these are the possibilities out there.
• 36:39
  Speaker 2: But ultimately remote work, I think that the problem is
• 36:44
  Speaker 2: it was something that people assumed was a baseline condition
• 36:48
  Speaker 2: of their employment and employers are viewing it much more
• 36:51
  Speaker 2: as a bargaining chip for various different reasons.
• 36:54
  Speaker 4: Yeah, and so like, do I totally understand the person
• 36:57
  Speaker 4: who bought a home in Washington State while working for
• 37:00
  Speaker 4: a company based out of San Francisco, and then decided, Hey,
• 37:04
  Speaker 4: I'm not gonna sell this house because I've got a
• 37:05
  Speaker 4: three percent mortgage rate, so I'm not coming back, and
• 37:08
  Speaker 4: then got fired. I can understand it, but now that
• 37:13
  Speaker 4: person's been unemployed for something like nine months and might
• 37:16
  Speaker 4: be relocating anyway now out of force because he can't
• 37:21
  Speaker 4: find the job in his field that pays anything like
• 37:23
  Speaker 4: what he earned previously.
• 37:25
  Speaker 2: I want to talk about this piece from the New
• 37:26
  Speaker 2: York Times. CEOs are doing a bunch of mind altering
• 37:30
  Speaker 2: drugs trying to make themselves happier.
• 37:32
  Speaker 3: Is this good or bad? I don't know.
• 37:39
  Speaker 4: I don't do mind altering drugs, so I don't really
• 37:41
  Speaker 4: have much of an opinion on it. I also don't
• 37:43
  Speaker 4: really care what somebody does in the privacy of their
• 37:45
  Speaker 4: own home.
• 37:46
  Speaker 2: It's kind of interesting that this is making like a
• 37:50
  Speaker 2: full story in the New York Times, because I don't know,
• 37:54
  Speaker 2: hasn't like Steve Jobs, who's kind of lionized as like
• 37:57
  Speaker 2: the golden child of CEOs all time? Yeah, didn't he
• 38:01
  Speaker 2: spend like most of the eighties wandering not most, but
• 38:04
  Speaker 2: like a couple of years wandering around doing LSD. And
• 38:07
  Speaker 2: he's written and talked about it like how it transformed
• 38:09
  Speaker 2: his life.
• 38:10
  Speaker 4: Maybe this is more of an applause for that type
• 38:12
  Speaker 4: of behavior rather than a discrediting I don't know.
• 38:16
  Speaker 3: Maybe I don't know.
• 38:17
  Speaker 2: I just find it interesting that, like you're making a
• 38:18
  Speaker 2: whole story about it now when it's not really a
• 38:21
  Speaker 2: new news.
• 38:21
  Speaker 3: I don't think. Let's take a quick break here for
• 38:24
  Speaker 3: the rest of the day.
• 38:24
  Speaker 2: We'll see it tomorrow to wrap up the week on
• 38:26
  Speaker 2: the Financial Exchange,