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<v Speaker 1>Warren Buffett is stepping down as CEO of Berkshire Hathaway,

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<v Speaker 1>marking the end of an error for one of the

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<v Speaker 1>most iconic investors in history. Not at the same time,

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<v Speaker 1>we're seeing big shifts in the housing market from shrinking

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<v Speaker 1>home sizes to a boom in home equity, and that

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<v Speaker 1>is tempting for many people. Joining us to break it

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<v Speaker 1>all down and explain what it means for your money

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<v Speaker 1>is Joel Larsguard, host of Hoda Money. Good morning, morning, Heather.

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<v Speaker 1>All right, let's talk about Warren Buffett. What a legend

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<v Speaker 1>he's been guiding so many people for generations and investors.

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<v Speaker 1>What do you think his biggest legacy is going to

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<v Speaker 1>be for the average person who are trying to build wealth?

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<v Speaker 2>Oh Man, Warren really is the goat, and he is

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<v Speaker 2>so humble as well. I mean the way he talks

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<v Speaker 2>about his longtime partner who passed away not too long ago,

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<v Speaker 2>Charlie Munger, just he makes it sound like Charlie did everything.

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<v Speaker 2>But Warren has been investing since he was eleven years old,

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<v Speaker 2>and I think his biggest legacy is really all the

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<v Speaker 2>wisdom he imparted over the years. This is something Warren

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<v Speaker 2>did incredibly well for himself as investor, but the fact

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<v Speaker 2>that he was so forthcoming with other people about what

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<v Speaker 2>a successful investor needs to look like when we're talking

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<v Speaker 2>about long term investing, we're talking about simplicity, prioritizing value,

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<v Speaker 2>and patience, all of these things Warren has spoken so

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<v Speaker 2>eloquently about over the years. And I just think if

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<v Speaker 2>you're an individual investor, the goal is not to do

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<v Speaker 2>what Warren Buffett did, because, as jason's Wig wrote in

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<v Speaker 2>The Wall Street Journal, he says that he thinks Warren

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<v Speaker 2>Buffett conservatively read over one hundred thousand financial statements of

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<v Speaker 2>different companies over the years. Heather, I don't know about you.

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<v Speaker 2>I'm not doing that. I think probably most people listening

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<v Speaker 2>right now, that's not their idea of a good time.

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<v Speaker 2>That's Warren's idea of a good time. And so for Warren,

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<v Speaker 2>because that was his superpower, he was an incredible investor

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<v Speaker 2>because he just he eat it, he ate it, he

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<v Speaker 2>slept it, he breathed it like this was this was

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<v Speaker 2>his lifebloodved he loved this stuff. Most people don't. And

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<v Speaker 2>so what Warren says for most people I think is

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<v Speaker 2>spot on, is hey investing in low cost index funds

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<v Speaker 2>is the way to go. You don't have to think

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<v Speaker 2>like me, You don't have to do all the hard

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<v Speaker 2>work that I do, and you can still enjoy awesome

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<v Speaker 2>returns in your investing lifetime.

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<v Speaker 1>I mean, it's truly a great story of someone who

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<v Speaker 1>has found their passion in life and really pursued it

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<v Speaker 1>and built an entire career and life out of it.

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<v Speaker 1>And it's very inspirational. Okay, let's shift gears just a

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<v Speaker 1>little bit. We're seeing a trend towards smaller homes. What's

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<v Speaker 1>something we should keep in mind when it comes to

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<v Speaker 1>home equity.

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<v Speaker 2>So okay, yeah, I love this trend in so many ways.

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<v Speaker 2>And let's talk about home equity in a second. But first,

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<v Speaker 2>when it comes to us home sizes and apartments that

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<v Speaker 2>are being built right now, we're seeing them actually go

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<v Speaker 2>down in size. And so for something like forty years,

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<v Speaker 2>we saw the average square footage of new homes go

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<v Speaker 2>up and up and up. And so when people say, hey,

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<v Speaker 2>it's more expensive, it's harder to buy a home, well,

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<v Speaker 2>part of that is because what we consider a home

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<v Speaker 2>has changed, and it's been HGTV right. It's fancier than

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<v Speaker 2>it was thirty years ago, new homes are and so

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<v Speaker 2>our aspirations have grown alongside alongside the square footage of

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<v Speaker 2>these homes, and so we're finally starting to see part

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<v Speaker 2>of it's the cost of materials, part of it's just

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<v Speaker 2>an attempt to build more supply because there is so

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<v Speaker 2>much demand still, so much pent up demand still that

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<v Speaker 2>US home sizes are finally shrinking, and same with apartment sizes.

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<v Speaker 2>And I think this is a good thing because we've

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<v Speaker 2>gotten used to bigger is better, and the truth is

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<v Speaker 2>like the bigger your home, the higher your maintenance costs

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<v Speaker 2>are going to be, the higher your utility bills are

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<v Speaker 2>going to be. Yeah, exactly, So be thoughtful about the

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<v Speaker 2>size of home your mind. And overall this is a

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<v Speaker 2>good trend as well. And you mentioned home equity. That

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<v Speaker 2>is a really interesting thing too, because the average person

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<v Speaker 2>who has bought a home over the past decade fifteen

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<v Speaker 2>years has seen a substantial rise in their home equity.

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<v Speaker 2>So we're talking about collectively as a country, over thirty

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<v Speaker 2>five trillion dollars in home equity, which is cool. The

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<v Speaker 2>problem is with that is it's hard to tap and

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<v Speaker 2>a lot of people are saying ooh times are tough.

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<v Speaker 2>I want to go in there and snag some of

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<v Speaker 2>that home equity that I have a mast over the years,

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<v Speaker 2>and there's homes are a liquid for a reason, like

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<v Speaker 2>it's good that you've saved money essentially by owning a

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<v Speaker 2>home and paying your mortgage every month, but using it,

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<v Speaker 2>that's where things get tricky, and I want most people

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<v Speaker 2>to leave their home equity b.

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<v Speaker 1>I would be lying if I said I haven't caught

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<v Speaker 1>myself watching tiny homes on HGTV and thinking could I

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<v Speaker 1>live in a three hundred square foot home. I don't

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<v Speaker 1>know I'm at that point yet, but I certainly see

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<v Speaker 1>the appeal from a financial standpoint.

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<v Speaker 2>So Yeah, in California, accessory dwelling units ADUs have caught

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<v Speaker 2>on like wildfire, and more and more people are building

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<v Speaker 2>little units in their backyard. They're running it out, they're

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<v Speaker 2>making some extra cash, and they're providing another place for

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<v Speaker 2>people to live. I think ADUs are one, at least

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<v Speaker 2>one of the solutions to the housing problem that we face.

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<v Speaker 2>But yeah, it's going to require more people to say

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<v Speaker 2>I'm okay living in four hundred.

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<v Speaker 1>To our feet right right, Well, we'll see. I'm not

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<v Speaker 1>there yet, but maybe someday, Joel, thank you so much. Everybody.

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<v Speaker 1>Make sure you listen to How the Money every Sunday

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<v Speaker 1>right here on KFI from noon to two.

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<v Speaker 2>Have a great rest of your day you too, Thanks Heather,