Speaker 1: If anything Trump does, I think he knows is doing
Speaker 1: every day what we.
Speaker 2: Have to you know, fifty five KRC the Talk station.
Speaker 2: He five the fifty five KRC the Talk Station.
Speaker 1: Are very happy.
Speaker 3: Monday's always made extra special happy. We get to hear
Speaker 3: from Brian James Moor Financial on money matters. Brian James,
Speaker 3: hope you had a wonderful week and welcome back to
Speaker 3: the fifty five KRC Morning Show.
Speaker 1: Thank you and good morning to you as well.
Speaker 3: Not a lot of good news in the rundown of
Speaker 3: topics here, so let's talk about consumer sentiment. I know
Speaker 3: there's a couple of polls out Michigan University of Michigan
Speaker 3: poll and a CNN poll people not feeling real good
Speaker 3: about the economy at least in so far as concerns
Speaker 3: about inflation are concerned. Are they are are the those
Speaker 3: polled who are having these concerns and the sentiment dropping
Speaker 3: off accurate?
Speaker 1: Well, but any poll is only as accurate as the
Speaker 1: audience that they're talking to. Now, these do come from
Speaker 1: the University of Michigan, which is that that's who we're
Speaker 1: always talking about, right whenever you hear the words consumer sentiment. Yes,
Speaker 1: there are plenty of organizations, but the University of Michigan
Speaker 1: is the whopper that has been around for the longest time.
Speaker 1: So if you're going to trust any poll, it's the
Speaker 1: one with the largest reach in the most history. So
Speaker 1: University of Michigan latest survey is showing a significant decline
Speaker 1: in sentiment in February, dropping by about ten percent from January.
Speaker 1: This is not shocking if you've paid any attention at
Speaker 1: all to the headlines. I think there were plenty of
Speaker 1: people out there who thought all we had to do
Speaker 1: was was elect a really conservative administration and everything would
Speaker 1: get fixed with the push of a button, because it's
Speaker 1: just that simple. Well, we know that's not the case. Obviously.
Speaker 1: Egg prices are the thing that everybody's sick of hearing about.
Speaker 1: Tariffs are never ever ever going to be an immediate
Speaker 1: good thing. They are shot across the bow to start
Speaker 1: a little bit of a trade war and settle things
Speaker 1: out at a different point. But in the very short run,
Speaker 1: we're always going to have a negative downturn as business
Speaker 1: sorts itself out and countries figure how they're going to
Speaker 1: work together again with regard to these trade agreements. We've
Speaker 1: seen it before, though, so nothing to panic about yet. However, yes,
Speaker 1: obviously a lot of grumpy people out there at the moment.
Speaker 3: Well, and I found it a little ridiculous that Trump
Speaker 3: actually set on the campaign trail. Here at trail he
Speaker 3: promised to bring down prices starting day one. I think
Speaker 3: I may even comment about that on the air. How
Speaker 3: I mean this is inflation is very complicated and complex.
Speaker 3: You talk about egg prices, well, there's something called the
Speaker 3: bird flu out there. They're killing millions and millions and
Speaker 3: millions of chicken, obviously reducing the availability of the price
Speaker 3: of eggs. So there's one legitimate connection that has nothing
Speaker 3: to do whatsoever with any administration's policies. So you can't
Speaker 3: magically make bird flu go away or magically increase the
Speaker 3: number of laying chickens in the world. So we're gonna
Speaker 3: have to struggle with that problem for a while un
Speaker 3: till it gets you worked out. However it gets worked out.
Speaker 3: But insofar as tariffs are concerned, and you and I
Speaker 3: kind of share the same point on that, if you
Speaker 3: increase tariffs, the prices are going to necessarily increase by
Speaker 3: some percentage, maybe not a full twenty five percent, but
Speaker 3: that's going to get passed along to the consumer. Has
Speaker 3: that happened yet, I mean, we're feeling yet the impact
Speaker 3: of tariffs, because my understanding is it hasn't really settled
Speaker 3: in yet.
Speaker 1: Yeah, we're starting to see increases on prices on things
Speaker 1: laid on things that come out of China, for example, iPhones,
Speaker 1: MacBooks are starting to increase prices a little bit, the
Speaker 1: fast fashion types of things. These are names wh wouldn't
Speaker 1: have heard of ten years ago, Shine and Timu, and
Speaker 1: I think I'm pronouncing one of those incorrectly. But these
Speaker 1: are places where where people have used a lot in
Speaker 1: recent history to get really cheap clothing and things like that.
Speaker 1: That's that's kind of ground zero for what we're really after.
Speaker 1: There are rules not not only the tariffs, but there
Speaker 1: are rules that were in place called the deminimous Exemptions
Speaker 1: that that basically allowed China to create extremely cheap items
Speaker 1: of apparel and things like that and ship them over here.
Speaker 1: Shipping is the big part, but the policy that were
Speaker 1: in place prior to this allowed them to do that
Speaker 1: very easily and very cheaply. Those rules have changed too.
Speaker 1: That's not a tar iff, that's simply the removal of
Speaker 1: a discount effectively, So things like that are going to
Speaker 1: get more expensive. We're also seeing produce fruits and vegetables
Speaker 1: from Mexico, avocados, tomatoes, strawberries, bell pepper, stuff like that.
Speaker 1: If you've been paying attention have seen noticeable price increases,
Speaker 1: they're not yet. Remember these are things that per unit
Speaker 1: don't cost that much to begin with. So unless you're
Speaker 1: truly paying attention, and you're one of those people with
Speaker 1: a spreadsheet and I've seen them in the grocery store
Speaker 1: lately tracking prices over time, you may not notice this,
Speaker 1: but you know something that costs fifty cents now that
Speaker 1: now costs fifty five cents, that's a nickel, But if
Speaker 1: you do the math, that's a ten percent increase. So
Speaker 1: these things were just at the beginning of this. They're
Speaker 1: going to sneak in. The price increases are going to
Speaker 1: sneak in kind of without us noticing unless you're paying
Speaker 1: close attention.
Speaker 3: Well, I know one of the things that was mentioned
Speaker 3: in the article fed share at Jerome Pala said last
Speaker 3: year to keynote address, you know, it was an inflation
Speaker 3: brought about by a number of factors. Again, all these
Speaker 3: different factors over which brand new administration can't really control
Speaker 3: but pent up demand, stimulative policies, pandemic changes in work
Speaker 3: and leisure policies, and the additional savings associated with constrained services.
Speaker 3: In other words, people weren't out spending the money. Finally,
Speaker 3: when the economy got opened back up again, it was
Speaker 3: a spending free for all, which contributed to a historic
Speaker 3: surgeon consumer spending on goods. If the demand goes down
Speaker 3: because people are feeling the heat of you know, the
Speaker 3: real estate tax is going up, or maybe some of
Speaker 3: the increase in pricing. Obviously, grocery store prices continue to
Speaker 3: go up. If demand goes down, then that might have
Speaker 3: an impact on lowering prices because the supply will increase.
Speaker 1: Correct, that's all part of the correction. But demand going
Speaker 1: down is usually going to result in some pain time,
Speaker 1: I know, because if demand goes down for a product
Speaker 1: that your company creates, guess who's in for a round
Speaker 1: of belt tightening. So that's all part of the process
Speaker 1: here of if we want to change the point at
Speaker 1: which we meet in the market, meaning what do we
Speaker 1: pay other countries for the goods and services that were
Speaker 1: buying for them? What do they pay us for ours.
Speaker 1: We want to change the point where we are on
Speaker 1: the playing field for that, but that's not going to
Speaker 1: happen without some pain and without some adjustment, and that
Speaker 1: you're seeing an awful lot of that, you know, just
Speaker 1: in the federal government with the cuts that like them
Speaker 1: or not, the cuts that are coming from the Doge Office,
Speaker 1: whether it's real or not, these things are actually happening,
Speaker 1: and that is the same thing. We just want to
Speaker 1: change how the money moves around. We want to change
Speaker 1: how business is done, good, bad and different. There can
Speaker 1: be good things that come out of that, there can
Speaker 1: be bad things, but no matter what, there's going to
Speaker 1: be disruption and it's going to be a bit of
Speaker 1: a bumpy ride. And we're already seeing that these last
Speaker 1: several weeks.
Speaker 3: Well, sort of a correlador to this discussion, I saw
Speaker 3: this article headlines in the front page at the Wall
Speaker 3: Street Journal, the US economy depends more than ever on
Speaker 3: rich people. The highest earning ten percent of Americans account
Speaker 3: for almost fifty percent of all consumer spending, and as
Speaker 3: the article points out, the number of lower income earners
Speaker 3: spending is dropping, but the rich people keep going out
Speaker 3: and spending heaploads of cash and all kinds of things,
Speaker 3: including travel and you know, stuff that's out of the
Speaker 3: reach of a lot of Americans.
Speaker 1: Yeah, and that's what masks a lot of you know,
Speaker 1: the real life situation here in the United States, because
Speaker 1: those ten percent can really keep the economy cooking as
Speaker 1: they have for the last several years. But you also
Speaker 1: have a lot of people suffering out there, but that's
Speaker 1: hidden by the fact that we have a strong economy,
Speaker 1: economy keeps growing. The stock market the last couple of
Speaker 1: years has been strong. We tend to forget about twenty
Speaker 1: twenty two was a terrible year in the stock market,
Speaker 1: but it doesn't come with a story attached, really, so
Speaker 1: we don't really think about that. Nobody talks about it
Speaker 1: like we do two thousand and eight. However, there's a
Speaker 1: lot of people suffering out there, but that gets completely
Speaker 1: hidden by all the economic activity that that largest or
Speaker 1: richest ten percent is producing. And unfortunately, that's become the
Speaker 1: American way over the last century or so. That's not
Speaker 1: a new phenomenon. It's just getting the two groups are
Speaker 1: just getting further and further apart.
Speaker 3: All right, and pivoting over to something connected in some
Speaker 3: level market correction I keep hearing about we're going to
Speaker 3: we'd for a market correction good way. In other words,
Speaker 3: the market is overpriced and people are expecting it to
Speaker 3: drop off and valuations of stocks to drop off. And
Speaker 3: the question is, as some are have observed, are the
Speaker 3: Doge cuts bad for the economy? And will it empower?
Speaker 3: Will it cause perhaps a market correction?
Speaker 1: Good? Very well? So this This latest talking head is
Speaker 1: Steve Cohen. He's the CEO Ofer point seventy two Asset Management,
Speaker 1: and he says he is now bearished on the US
Speaker 1: economy for the first time in a while. He manages
Speaker 1: a hedge fund. He's a billionaire hedge fund type of
Speaker 1: a guy, obviously a very smart person who have gotten
Speaker 1: to this point. Certainly his opinion is worth something. But
Speaker 1: at the same time, you can go back through time,
Speaker 1: and I encourage people to do this when you start
Speaker 1: to feel attracted to this one talking head on some
Speaker 1: TV show says, here's what I think that is valuable. However,
Speaker 1: go back in time and go see what people said
Speaker 1: about early twenty two or early twenty three or twenty four.
Speaker 1: There is always at least one talking head out there
Speaker 1: who is not necessarily a stupid person. But there's always
Speaker 1: one talking head out there that is predicting a huge pullback.
Speaker 1: We never ever ever go back and see whether these
Speaker 1: people will write or not. So maybe Brian Thomas, you
Speaker 1: and I should mark our calendars or February whatever it is,
Speaker 1: twenty fourth of twenty six and see if mister Cohen
Speaker 1: was corrected.
Speaker 3: Yeah, let's hope he's not correct because a lot of
Speaker 3: people have a lot of money in four oh and
Speaker 3: ks and they're counting on that for the retirement. We
Speaker 3: don't want to see the market go in the toilet again.
Speaker 3: Does take a little bit while to get that money back,
Speaker 3: although the market has rebounded enough that most people have
Speaker 3: made up that money that we lost in twenty twenty two. Anyhow,
Speaker 3: Brian James, all with financials pause. We'll find out about
Speaker 3: home sales dropping in January and more Americans taking loans
Speaker 3: to pay for emergencies, but at what costs. Cash poor
Speaker 3: Americans are real problem eight fifteen fifty five kc DE
Speaker 3: Talk station, Don't go away, be.
Speaker 1: Right back fifty five KRC. If you're a.
Speaker 3: Claarmont County VET and a very happy Monday to you,
Speaker 3: try to find some happiness in these sad stories we're
Speaker 3: talking about with money Mondays Brian James, and in real estate,
Speaker 3: home sales have dropped January because prices are really high
Speaker 3: and people's perception of the interest rates for mortgages really high,
Speaker 3: in the combination of the two just really puts people
Speaker 3: out of the out of the market. I saw the
Speaker 3: medium price of a home in January three hundred and
Speaker 3: ninety six thousand, nine hundred dollars. That's up four percent
Speaker 3: or four point eight percent from the year before and
Speaker 3: the highest price ever for the month of January. That's
Speaker 3: a lot of money for medium price Brian James.
Speaker 1: That really is and then we may maybe maybe seeing
Speaker 1: a peak in all this. So sales are previously owned
Speaker 1: homes fell by almost five percent in January compared to December.
Speaker 1: One point one eight million homes for sale at the
Speaker 1: end of January. That was an increase of three and
Speaker 1: a half percent and up seventeen percent from January twenty
Speaker 1: four So interestingly, we are seeing more homes than the
Speaker 1: number of homes hitting the sale block has increased percentage wise,
Speaker 1: but the actual closed sales are starting to drop, So
Speaker 1: that's a sign of a peak here. And as you
Speaker 1: mentioned that the medium price of a home three hundred
Speaker 1: ninety six thousand dollars. That's up five percent itself. That's
Speaker 1: the highest we've ever had on that particular measure. In
Speaker 1: Cincinnati is not exempted from this anymore like we used
Speaker 1: to be. The secret is out that this is a
Speaker 1: wonderful place to live, and at least up until now,
Speaker 1: has been very reasonably priced with regard to real estate.
Speaker 1: Still is, of course regarding the compared to the richest
Speaker 1: places out there in New York City, San Francisco, and
Speaker 1: so forth. But at the same time, we are not
Speaker 1: the bargain that we used to be, so we're look,
Speaker 1: this isn't too much of a surprise. The analyst. We're
Speaker 1: expecting about a two point six percent decline in sales. However,
Speaker 1: the actual decline was about five percent, So these you know,
Speaker 1: we might be getting to that point where we're going
Speaker 1: to start to see a correction, bit of correction on
Speaker 1: the housing market.
Speaker 3: Well, I guess if you want to sell your home
Speaker 3: and it sits out there for a long time and
Speaker 3: people aren't coming to see it, maybe you've overpriced the
Speaker 3: home and asking too much, which obviously, if you're going
Speaker 3: to sell the house, you're going to have to lower
Speaker 3: the price to a point where someone's going to even
Speaker 3: show up to take a look at it, which apparently
Speaker 3: they're not right now. Well, so yeah, there's a market
Speaker 3: correction that might benefit everybody, just lower expectations on the
Speaker 3: value of your home.
Speaker 1: Yeah, and that's where it starts. I mean that there
Speaker 1: are house is always worth something. Houses are never absolutely
Speaker 1: completely worthless and let it unless it's you know, completely
Speaker 1: run down and about to fall apart. It's always the
Speaker 1: price that's the issue. So if the if the buying
Speaker 1: market has shied away from the neighborhood you happen to
Speaker 1: be in, well you can correct that by lowering the price.
Speaker 1: It's not wonderful, but it doesn't mean you cannot sell
Speaker 1: your house at the same time. So there's also an
Speaker 1: issue right now with there there are arguably fewer buyers
Speaker 1: out there than there would be in a normal market,
Speaker 1: because there are people out there who want to change
Speaker 1: their neighborhood or downsize, or they want to sell their
Speaker 1: home for some reason, but they're currently sitting on a
Speaker 1: mortgage it's less than four percent. Well, those folks are
Speaker 1: going to say, you know what, we're not really in
Speaker 1: a hurry that the problems we've identified here are not immediate.
Speaker 1: Let's wait until it's better and enjoy our four percent
Speaker 1: mortgage a little more. So That means sellers are really
Speaker 1: only dealing with people who are forced to move because
Speaker 1: of a or maybe they have to have a bigger
Speaker 1: house or something like that. That just means there are
Speaker 1: fewer buyers out there now because the ones who have
Speaker 1: flexibility are exercising that flexibility and going to hold off
Speaker 1: a little bit.
Speaker 3: And we've had conversations before about you know, paying off
Speaker 3: your home and actually owning it. And I know that's
Speaker 3: not always within the reach of a lot of people,
Speaker 3: but my wife and I you know, did a little
Speaker 3: belt tightening over the years when we had that lower,
Speaker 3: just just slightly under three percent mortgage because we refinanced
Speaker 3: to a much lower level. That's the right thing to do,
Speaker 3: but we use the extra money to make extra payments
Speaker 3: every month and ended up being able to buy the
Speaker 3: home a lot earlier. Now, is that, from a financial
Speaker 3: planning standpoint, a good thing to do when it is
Speaker 3: that low or where we have been better served had
Speaker 3: we taken that extra revenue and maybe put it into
Speaker 3: the market or something.
Speaker 1: Great. Question comes up all the time here at this table,
Speaker 1: and I'm sure it's a quiz it important question. So yeah,
Speaker 1: I can show I can show you in a spreadsheet, Brian,
Speaker 1: that the best thing we should all do is borrow
Speaker 1: money against everything and always invested, and by the time
Speaker 1: we're one hundred years old, we have a gigantic pile
Speaker 1: of money. That's the mathematical answer, but it's obviously not
Speaker 1: the human answer. So when you have this situation, yeah,
Speaker 1: it always makes sense to invest as much as you can.
Speaker 1: What I would encourage people to do is truly learn
Speaker 1: how an amortized mortgage works. And that simply means go
Speaker 1: look at understand the relationship between your payment and the
Speaker 1: interest rate and how much goes to principle early in
Speaker 1: the mortgage versus how much goes late. If you're ten
Speaker 1: years into a fifteen year mortgage, you are paying very
Speaker 1: very very very very little no matter what the interest
Speaker 1: rate is. You are paying very little interest because you're
Speaker 1: mostly paying principle, because you pay the interest and amortization exactly. Yes,
Speaker 1: you paid it up front. Your first payment was ninety
Speaker 1: nine percent interest. Your last payment is going to be
Speaker 1: ninety nine percent principle. Everything else is somewhere in between.
Speaker 1: So I am a big believer, and of course come
Speaker 1: up with a financial plan, and first of all, see
Speaker 1: what you need to do, and then once you've got
Speaker 1: the basics covered, make these decisions based off of what
Speaker 1: will make you feel most confident. If you feel like
Speaker 1: my nest egg is a little low, I need more money,
Speaker 1: that's fine, and your interest, your mortgage rate is reasonable,
Speaker 1: then focus on the four one k. Put those extra
Speaker 1: dollars a four one k and grown. Or if you
Speaker 1: feel the opposite, you know what, I think, We're okay,
Speaker 1: we got a good pile of money. I really want
Speaker 1: to get this mortgage monkey off my back. That's fine,
Speaker 1: pay it down more quickly. That's an emotional decision, not
Speaker 1: so much a mathematical one, right.
Speaker 3: And you know, I really really understood that when we
Speaker 3: did it. But we were able to do the extra
Speaker 3: payments because we were in a comfortable position. And I
Speaker 3: got to think about being in debt, Brian, I really do.
Speaker 1: I hate it.
Speaker 3: I don't know if it's because of my Westside genetics,
Speaker 3: but if I owe a human being a dollar, I
Speaker 3: want to discharge that asap and that and just you know,
Speaker 3: the idea of owning something outright just makes me feel
Speaker 3: very comfortable, you know what I mean. It's a psychological thing.
Speaker 1: It absolutely is. And here's a common situation that drives
Speaker 1: us question. So when people are in their late fifties,
Speaker 1: early maybe mid sixties and they still have a mortgage,
Speaker 1: that's you usually about the age that if there's an
Speaker 1: inheritance coming, then that's about when it's going to happen.
Speaker 1: So oftentimes people will have a wind fall. Now I've
Speaker 1: now got one hundred grand available that I don't have
Speaker 1: it doesn't have a job. Should I invest it? Should
Speaker 1: I pay off the mortgage or whatever? So, yes, those
Speaker 1: wind falls tend to drive that decision. And again there's
Speaker 1: a mathematical component to it. And I always let's start
Speaker 1: with the math. Here's the impact of investing it versus
Speaker 1: here's the impact of paying off all of your debt,
Speaker 1: And then we can start to see here's the mathematical
Speaker 1: impact that is known, it's black and white, it's in stone.
Speaker 1: Let's talk about how you will feel emotionally and psychologically
Speaker 1: doing one versus the other. That is usually the answer.
Speaker 1: As long as those basics are covered right.
Speaker 3: And another a shout out for financial planners who are
Speaker 3: working for you and have a fiduciary obligation. They will
Speaker 3: break this down for you. You don't have to do it yourself.
Speaker 3: And I think it's a critical thing for your future
Speaker 3: to have a financial planner so you can have these
Speaker 3: conversations and make informed decisions to maximize your investment opportunities.
Speaker 3: Brian James pause from them, and we're going to find
Speaker 3: out with a problem we're facing here in America.
Speaker 1: People are apparently pretty cash poor.
Speaker 3: Maybe some financial planning advice additional coming up next eight
Speaker 3: twenty six, fifty five KERC DE.
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Speaker 3: A twenty nine if fifty gout KRCD talk station doing
Speaker 3: that money Monday thing with all the financials, Brian James.
Speaker 3: He is a financial planner, and maybe he can help
Speaker 3: out some of the folks who are dealing with these struggles.
Speaker 3: And it's kind of heartbreaking, Brian, when you read how
Speaker 3: many folks do not have money to cover, you know,
Speaker 3: an expense that might pop up. A lot of people
Speaker 3: live in paycheck to paycheck and even as the article
Speaker 3: points out folks making six figures. I mean that sounds
Speaker 3: to me like they maybe need to speak with someone
Speaker 3: like you in financial planning. I don't know. I'm not
Speaker 3: living in these circumstances. But when you see it broken down,
Speaker 3: you know somebody has a car repair, or medical bills
Speaker 3: or a big one surprise expenses, which happened to literally
Speaker 3: every human being. They're put in a bad place, and
Speaker 3: quite often that's going to end up on a high
Speaker 3: interest credit card.
Speaker 1: Exactly. This is a real life example of fins to
Speaker 1: the left. Fins to the right were surrounded by sharks.
Speaker 1: And as you pointed out, it affects not only people
Speaker 1: who just don't have a lot to put together, it
Speaker 1: affects people who weren't paying attention. So here's two quick
Speaker 1: examples that a client does. It's probably twenty five years ago. Well,
Speaker 1: when I was young and just getting started, client would
Speaker 1: would pull out money from their IRA to pay there
Speaker 1: I forget with cash to go or whatever. Well, their
Speaker 1: payday lender, they just treated their monthly payday lender like
Speaker 1: a credit card. Every month they would go get money
Speaker 1: out and pay a ridiculous interest rate, and then they
Speaker 1: would have to take money out of the IRA to
Speaker 1: pay it off. So it took months to get them
Speaker 1: to catch up and stop that process. Now, shortly after that,
Speaker 1: I had a client that came to me from the
Speaker 1: private client group of a bank I was working for,
Speaker 1: and he was a doctor with an enormous amount millions
Speaker 1: of dollars worth of cash flow, and he was paying
Speaker 1: thirty some thousand dollars in overdraft fees just because he
Speaker 1: never sat down to catch up on his own cash flow.
Speaker 1: And when the rules changed the CFPB. That's a whole
Speaker 1: other topic, but the CFPB came in and said the
Speaker 1: banks can't do this anymore. The bank that I was
Speaker 1: employed by was concerned about the revenue we were going
Speaker 1: to lose because we couldn't do that to him anymore.
Speaker 1: Fins to the left, fins to the right. If there's
Speaker 1: a need out there, there will be somebody out there
Speaker 1: to fill it. But yes, you're right, this concern among
Speaker 1: a lot of people is resulting in these these payday
Speaker 1: lenders and these subprime credit cards where fees are sometimes
Speaker 1: go up to ninety percent of the principle payday loans
Speaker 1: average cost of about thirty five percent. Yeah, there's abuse
Speaker 1: out there, but people are still falling for it.
Speaker 3: So in terms of a payday loan, they're gonna if
Speaker 3: you know, you borrow us one thousand dollars, the payday
Speaker 3: lender is going to get thirty five percent of that.
Speaker 1: Yeah, because if you are somebody who is forced into
Speaker 1: the situation of going to a payday lender, then that
Speaker 1: means you don't have anything else. You don't have anything
Speaker 1: else you could use as collateral other than your next payday,
Speaker 1: your next paycheck. So you walk into one of these
Speaker 1: places and they have bulletproof glass for a reason, and
Speaker 1: you want to and you basically provide proof of employment
Speaker 1: with your past pay stubs, and you just basically tell
Speaker 1: them you're gonna get my next paycheck it's gonna come
Speaker 1: on this day. And they say, cool, here's a thousand bucks.
Speaker 1: By the way, it's going to be thirteen fifty to
Speaker 1: pay us back because that's the average cost of the
Speaker 1: payday loan. But again, remember these are people who don't
Speaker 1: have any other choice and feel forced into these situations.
Speaker 1: There's always going to be somebody willing to bankroll that.
Speaker 1: But it's not much different than paying the mafia protection money. Wow.
Speaker 3: Now is there a best case option for folks who
Speaker 3: find themselves in this position like, oh my god, you
Speaker 3: know I got this three thousand dollars bill that I
Speaker 3: had to pay was a medical expense or they needed
Speaker 3: their roof repaired or car repaired? Is there an option
Speaker 3: that it represents the best option for folks rather than
Speaker 3: obviously something like a payday loan.
Speaker 1: Sure, So what I what I look at in situations
Speaker 1: like this is you know what else could we borrow
Speaker 1: it against? Is there? First off, maybe there's a credit
Speaker 1: card out there that you've got in your arsenal that
Speaker 1: doesn't have a ridiculous interest rate. Maybe you have something
Speaker 1: that's on a on one of those bonus upfront offering rates,
Speaker 1: or maybe you're getting those envelopes in your mailbox. Nobody
Speaker 1: wants to have more credit cards than we have to.
Speaker 1: But if somebody is offering you zero percent for six
Speaker 1: months or twelve months or whatever it is, then that
Speaker 1: can be an opportunity to deal with this kind of thing.
Speaker 1: If that's not a choice, then maybe a home equity line.
Speaker 3: I just wrote that down home equity can be yeah,
Speaker 3: because it's a great way. Interest rates are currently running
Speaker 3: seven percent or whatever, so you figure home equity loans
Speaker 3: probably going to fall into that lower single digit category.
Speaker 3: If you've got equity in your home and you can
Speaker 3: get your bank to could give you a home equity loan,
Speaker 3: at least you're not paying thirty percent interest.
Speaker 1: Correct Now, debt is debt. We don't want it. But
Speaker 1: remember this shouldn't be a permanent situation anyway. If you
Speaker 1: find yourself in this permanent situation of just always being behind,
Speaker 1: then it's time for a ground to ceiling Florida ceiling
Speaker 1: redo of all your finances. This is more like the
Speaker 1: engine fell out at the bottom of the car and
Speaker 1: I can't afford to buy a new one. I'm just
Speaker 1: going to have to pay the five grand or whatever
Speaker 1: it is to put an engine back in the car.
Speaker 1: That's something that makes perfect sense for a home equity
Speaker 1: line of credit. And because yes, you should be able
Speaker 1: to keep that interest rate within the single digit the
Speaker 1: single digit range, which is helpful. But the other thing
Speaker 1: I'd throw out is if you have one out there
Speaker 1: and I've had this conversation recently with clients and you
Speaker 1: want to pay it off, do so. Don't necessarily close
Speaker 1: it because you never know how you're going to need
Speaker 1: a pile of cash in the short run, and if
Speaker 1: you are about to retire, keep that line open even
Speaker 1: if it's paid off. It can be at zero even
Speaker 1: just pay an annual fee or something, because it will
Speaker 1: be harder to get one after you no longer have
Speaker 1: w two income.
Speaker 3: Yeah, you get basically like a checkbook that draws against
Speaker 3: your home equity.
Speaker 1: Line of credit so correct or even a debit card
Speaker 1: as well. It's very easy to use once you've got
Speaker 1: it set up and then making the payments back. It
Speaker 1: works like a credit card, look and feel like our
Speaker 1: credit card. It's just you're borrowing against your house. If
Speaker 1: you're gonna borrow five thousand bucks against two hundred thousand
Speaker 1: dollars house, you're okay. If you're gonna borrow one hundred
Speaker 1: grand against your two hundred thousand dollars house, maybe we
Speaker 1: need to sit down and talk about what the real
Speaker 1: problem is.
Speaker 3: Yeah, you might want to hold off on that new
Speaker 3: edition remodeling project at that particular time. Brian James appreciate
Speaker 3: your sound financial advice and the suggestions you offer folks,
Speaker 3: and for coming on the program every morning to talk
Speaker 3: about every Monday to talk about it and I'll look
Speaker 3: forward to next Money, another edition of Money Monday. And thanks,
Speaker 3: as always to all with Financial for loading you out.
Speaker 3: I appreciate the opportunity. We'll talk to you in a week.
Speaker 3: Take care of Brian. It's a thirty five right now,
Speaker 3: fifty five Krcity Talk station. Joking the opening up the
Speaker 3: phone lines of the something specific you want to talk about.
Speaker 3: Happy to do that, but anyway, don't go well, I'll
Speaker 3: be right back.
Speaker 1: This is fifty five karc an iHeartRadio station. Man, this
Speaker 1: is Jeff