Speaker 1: Warren Buffett is stepping down as CEO of Berkshire Hathaway,
Speaker 1: marking the end of an error for one of the
Speaker 1: most iconic investors in history. Not at the same time,
Speaker 1: we're seeing big shifts in the housing market from shrinking
Speaker 1: home sizes to a boom in home equity, and that
Speaker 1: is tempting for many people. Joining us to break it
Speaker 1: all down and explain what it means for your money
Speaker 1: is Joel Larsguard, host of Hoda Money. Good morning, morning, Heather.
Speaker 1: All right, let's talk about Warren Buffett. What a legend
Speaker 1: he's been guiding so many people for generations and investors.
Speaker 1: What do you think his biggest legacy is going to
Speaker 1: be for the average person who are trying to build wealth?
Speaker 2: Oh Man, Warren really is the goat, and he is
Speaker 2: so humble as well. I mean the way he talks
Speaker 2: about his longtime partner who passed away not too long ago,
Speaker 2: Charlie Munger, just he makes it sound like Charlie did everything.
Speaker 2: But Warren has been investing since he was eleven years old,
Speaker 2: and I think his biggest legacy is really all the
Speaker 2: wisdom he imparted over the years. This is something Warren
Speaker 2: did incredibly well for himself as investor, but the fact
Speaker 2: that he was so forthcoming with other people about what
Speaker 2: a successful investor needs to look like when we're talking
Speaker 2: about long term investing, we're talking about simplicity, prioritizing value,
Speaker 2: and patience, all of these things Warren has spoken so
Speaker 2: eloquently about over the years. And I just think if
Speaker 2: you're an individual investor, the goal is not to do
Speaker 2: what Warren Buffett did, because, as jason's Wig wrote in
Speaker 2: The Wall Street Journal, he says that he thinks Warren
Speaker 2: Buffett conservatively read over one hundred thousand financial statements of
Speaker 2: different companies over the years. Heather, I don't know about you.
Speaker 2: I'm not doing that. I think probably most people listening
Speaker 2: right now, that's not their idea of a good time.
Speaker 2: That's Warren's idea of a good time. And so for Warren,
Speaker 2: because that was his superpower, he was an incredible investor
Speaker 2: because he just he eat it, he ate it, he
Speaker 2: slept it, he breathed it like this was this was
Speaker 2: his lifebloodved he loved this stuff. Most people don't. And
Speaker 2: so what Warren says for most people I think is
Speaker 2: spot on, is hey investing in low cost index funds
Speaker 2: is the way to go. You don't have to think
Speaker 2: like me, You don't have to do all the hard
Speaker 2: work that I do, and you can still enjoy awesome
Speaker 2: returns in your investing lifetime.
Speaker 1: I mean, it's truly a great story of someone who
Speaker 1: has found their passion in life and really pursued it
Speaker 1: and built an entire career and life out of it.
Speaker 1: And it's very inspirational. Okay, let's shift gears just a
Speaker 1: little bit. We're seeing a trend towards smaller homes. What's
Speaker 1: something we should keep in mind when it comes to
Speaker 1: home equity.
Speaker 2: So okay, yeah, I love this trend in so many ways.
Speaker 2: And let's talk about home equity in a second. But first,
Speaker 2: when it comes to us home sizes and apartments that
Speaker 2: are being built right now, we're seeing them actually go
Speaker 2: down in size. And so for something like forty years,
Speaker 2: we saw the average square footage of new homes go
Speaker 2: up and up and up. And so when people say, hey,
Speaker 2: it's more expensive, it's harder to buy a home, well,
Speaker 2: part of that is because what we consider a home
Speaker 2: has changed, and it's been HGTV right. It's fancier than
Speaker 2: it was thirty years ago, new homes are and so
Speaker 2: our aspirations have grown alongside alongside the square footage of
Speaker 2: these homes, and so we're finally starting to see part
Speaker 2: of it's the cost of materials, part of it's just
Speaker 2: an attempt to build more supply because there is so
Speaker 2: much demand still, so much pent up demand still that
Speaker 2: US home sizes are finally shrinking, and same with apartment sizes.
Speaker 2: And I think this is a good thing because we've
Speaker 2: gotten used to bigger is better, and the truth is
Speaker 2: like the bigger your home, the higher your maintenance costs
Speaker 2: are going to be, the higher your utility bills are
Speaker 2: going to be. Yeah, exactly, So be thoughtful about the
Speaker 2: size of home your mind. And overall this is a
Speaker 2: good trend as well. And you mentioned home equity. That
Speaker 2: is a really interesting thing too, because the average person
Speaker 2: who has bought a home over the past decade fifteen
Speaker 2: years has seen a substantial rise in their home equity.
Speaker 2: So we're talking about collectively as a country, over thirty
Speaker 2: five trillion dollars in home equity, which is cool. The
Speaker 2: problem is with that is it's hard to tap and
Speaker 2: a lot of people are saying ooh times are tough.
Speaker 2: I want to go in there and snag some of
Speaker 2: that home equity that I have a mast over the years,
Speaker 2: and there's homes are a liquid for a reason, like
Speaker 2: it's good that you've saved money essentially by owning a
Speaker 2: home and paying your mortgage every month, but using it,
Speaker 2: that's where things get tricky, and I want most people
Speaker 2: to leave their home equity b.
Speaker 1: I would be lying if I said I haven't caught
Speaker 1: myself watching tiny homes on HGTV and thinking could I
Speaker 1: live in a three hundred square foot home. I don't
Speaker 1: know I'm at that point yet, but I certainly see
Speaker 1: the appeal from a financial standpoint.
Speaker 2: So Yeah, in California, accessory dwelling units ADUs have caught
Speaker 2: on like wildfire, and more and more people are building
Speaker 2: little units in their backyard. They're running it out, they're
Speaker 2: making some extra cash, and they're providing another place for
Speaker 2: people to live. I think ADUs are one, at least
Speaker 2: one of the solutions to the housing problem that we face.
Speaker 2: But yeah, it's going to require more people to say
Speaker 2: I'm okay living in four hundred.
Speaker 1: To our feet right right, Well, we'll see. I'm not
Speaker 1: there yet, but maybe someday, Joel, thank you so much. Everybody.
Speaker 1: Make sure you listen to How the Money every Sunday
Speaker 1: right here on KFI from noon to two.
Speaker 2: Have a great rest of your day you too, Thanks Heather,