Speaker 1: You're listening to Bill Handle on demand from KFI AM
Speaker 1: six forty.
Speaker 2: KFI AM six forty live everywhere on the iHeartRadio app.
Speaker 1: Good Morning, It's the Bill Handle Show.
Speaker 2: He is on vacation, Wayne resnick in And normally we
Speaker 2: love to talk to Joel Larsgard, who hosts How to
Speaker 2: Money right here on KFI on a Thursday, and we
Speaker 2: will talk to him on a Thursday, but he was
Speaker 2: kind enough to come on today because it's the last
Speaker 2: shopping day before Christmas, and you betcha there's a lot
Speaker 2: of financial considerations.
Speaker 1: So Joel, welcome two days early.
Speaker 3: Hey, thanks for having me. Wayne.
Speaker 1: So I guess let's get into this.
Speaker 2: This is the last shopping day before Christmas, and what
Speaker 2: do you know about the consumer feelings this year in
Speaker 2: terms of how their finances are and therefore how much
Speaker 2: they might be spending on presents and compare that to
Speaker 2: the reality of the economic situation in this country.
Speaker 4: Yeah, I mean, I think the stakes are high when
Speaker 4: it comes to how people feel about what they need
Speaker 4: to spend in order to have a good Christmas. And
Speaker 4: I think it's important for when you look at the statistics,
Speaker 4: it's kind of unnerving the amount of people that are
Speaker 4: still paying off what they bought last Christmas, like they
Speaker 4: still haven't caught up to their overspending from last year,
Speaker 4: and maybe they're doing the same this year. Something I
Speaker 4: get a third of people are still paying off credit
Speaker 4: card debt from twenty twenty three, and NERDWHILET just did
Speaker 4: a recent survey and they found that ten percent of
Speaker 4: consumers are planning on taking money out of their emergency
Speaker 4: fund to buy gifts, and that they even more like
Speaker 4: something more people are going to instead of paying bills
Speaker 4: that they have due, they're going to spend that on
Speaker 4: Christmas presents. And so I think we're in a tough situation,
Speaker 4: or at least some people find themselves in a tough situation.
Speaker 4: Instead of of having the hard conversation which probably should
Speaker 4: have been had weeks ago, it's tough to have that
Speaker 4: conversation now. But instead of doing that with friends and
Speaker 4: family and talking about financial limitations, people are spending money
Speaker 4: they don't have.
Speaker 2: So the thing we're used to and hearing about, we've
Speaker 2: been hearing about for years and years and years are
Speaker 2: people who run up their credit cards to buy things
Speaker 2: that maybe they can't afford to buy otherwise. And now
Speaker 2: they have big credit card debt, But you're talking about
Speaker 2: something different now these people are not necessarily adding to
Speaker 2: their debt load. Instead they are taking from, or possibly
Speaker 2: wiping out, any contingency fund for an emergency.
Speaker 3: Yeah, it's a bit of both, right.
Speaker 4: And the other thing is now they're even more unique
Speaker 4: ways to pay for the items you want. There's buy now,
Speaker 4: pay later, which I think people are more reliant on
Speaker 4: this year than ever before. It's kind of become we've
Speaker 4: normalized it so and people are instead of buying something
Speaker 4: put on a credit card and not paying it off,
Speaker 4: they're buying more things than they otherwise would because it
Speaker 4: just seems less egregious to do it via buy now,
Speaker 4: pay later, to just pay it in installments. But the
Speaker 4: truth is then you spend even more than the otherwise would.
Speaker 4: There's data about that about how big the shopping carts
Speaker 4: balloon when you don't have to pay for it all
Speaker 4: in one lump sum. So people are more reliant on
Speaker 4: that than ever before too. And the more reliant you
Speaker 4: become on future funds to pay for current purchases, the
Speaker 4: worse of a financial position you're putting yourself, and you're
Speaker 4: putting yourself behind the eight ball. So I guess yeah,
Speaker 4: since we're basically at we're almost to Christmas, I just
Speaker 4: want people to realize and to note you don't feel
Speaker 4: like you have to go out and overdo it and overspend,
Speaker 4: and in fact, if you feel like you have done that,
Speaker 4: you might want to save some of those presents, hold
Speaker 4: them back, make some returns.
Speaker 3: And I swear it's not going to ruin your Christmas.
Speaker 4: The Christmas season is about so much more, even though
Speaker 4: in this country we've made it incredibly consumeristic, there's so
Speaker 4: many other beautiful things about this season. And I know
Speaker 4: it can feel demoralizing, or it can make you maybe
Speaker 4: feel like you're not enough, you're not living up to
Speaker 4: expectations of your kids, or your spouse or the rest
Speaker 4: of your family. But I think it's really important to
Speaker 4: not harm your finances for years to come based on
Speaker 4: one special day.
Speaker 2: So you already brought up one thing I wanted to
Speaker 2: ask you about. I'm fascinated with the psychology of this phenomenon,
Speaker 2: and what I can't tell is this. You just talked
Speaker 2: about people feeling pressure in essence, performance anxiety. If you will,
Speaker 2: it's about giving enough presence Okay, so I thought, well,
Speaker 2: one reason you would drain your emergency fund to buy
Speaker 2: presence is because you feel a big obligation to do it,
Speaker 2: which would mean and this is where I need you
Speaker 2: as the reality test. That way of thinking is basically,
Speaker 2: these are people who who know that they're doing something
Speaker 2: financially irresponsible. They know it, They are well aware there
Speaker 2: will be consequences, or at least it's likely there will
Speaker 2: be consequences, but they do it anyway because of the
Speaker 2: pressure that they feel.
Speaker 1: Is that the idea.
Speaker 4: I definitely think there are a lot of people that
Speaker 4: fall into that camp where they're doing it because it
Speaker 4: feels like, well, that's how you show people that you
Speaker 4: love them on the holidays, or they normalize a certain
Speaker 4: amount of spending for the holidays, they see other people
Speaker 4: do it. The commercialization of Christmas has kind of gotten
Speaker 4: to them, and they bought into it, and I totally
Speaker 4: understand that. In fact, there was another article I read
Speaker 4: the other day just about how people feel there's a
Speaker 4: higher percentage of Americans now been shopping and they feel
Speaker 4: like they're addicted to shopping, and that's disconcerting. Also, I
Speaker 4: think all of the technological tools and the algorithms at
Speaker 4: the disposal of TikTok and Instagram and Amazon are kind
Speaker 4: of fueling us towards spending more and normalizing it, and
Speaker 4: so we feel compelled to spend more, even if we
Speaker 4: deep down we know that it's it's not best for
Speaker 4: us and that we're digging ourselves a deeper hole.
Speaker 1: So that's one aspect.
Speaker 2: But here's a different kind of person who might be
Speaker 2: taking all the money out of their emergency fund and
Speaker 2: buying presents. And this would be the person who doesn't
Speaker 2: think they're doing anything financially irresponsible because they have such
Speaker 2: optimism about how they will be able to replace that
Speaker 2: money soon enough. That would that be the rose the
Speaker 2: rose colored glasses people who are saying, look, I can
Speaker 2: afford to do it now, because I don't know what
Speaker 2: they're thinking specifically, I'm going to get a raise, I'm
Speaker 2: going to get a better job, inflation's going to go away,
Speaker 2: whatever it is, but I'm going to just replace that
Speaker 2: money and three months from now we'll be back to
Speaker 2: where we were anyway.
Speaker 4: Yeah, I definitely think there's some of that as well,
Speaker 4: and that's why you see people in January oftentimes try
Speaker 4: to cut back and push more money towards paying off
Speaker 4: that debt that they accrued. But I also think that
Speaker 4: that's probably not a great way to go, is to
Speaker 4: dig yourself in a hole and hope that you can
Speaker 4: fill that hole in in the coming months. I guess
Speaker 4: that would be because you just never know what other
Speaker 4: emergencies are going to come along. And that's really what
Speaker 4: like when I talk about people tapping their emergency fund
Speaker 4: to pay for gifts, that the emergency fund is not
Speaker 4: for that, right, it is for the unforeseen unexpected. And
Speaker 4: that's why, at least for like twenty twenty five Christmas,
Speaker 4: I want people to start to think about starting something
Speaker 4: called a sinking fund, where you're funneling money in every
Speaker 4: single month. Let's say you're like, I want to spend
Speaker 4: you know, eight hundred dollars next Christmas on gifts for
Speaker 4: my friends and family. Then I'm going to start setting
Speaker 4: aside seventy bucks a month, every single month.
Speaker 3: In preparation for that.
Speaker 4: These are things that it's I know it's not easy
Speaker 4: to have that foresight, like, but it's really crucial if
Speaker 4: you want to have if you don't want to, if
Speaker 4: you want to kind of avoid that future come next
Speaker 4: year to start planning about that for that early. But yeah,
Speaker 4: I think there are some people who basically just like
Speaker 4: don't think it's as bad as it actually is, or
Speaker 4: maybe they're assuming that everything is going to go just
Speaker 4: fine in the first few months of the year and
Speaker 4: they'll dig themselves out quickly. But that just might not
Speaker 4: be the case because you never know what's coming down
Speaker 4: the pike.
Speaker 1: All right, Joel, thank you so much.
Speaker 2: We're going to talk to you again Thursday at the
Speaker 2: normal time about some other personal finance stuff, and in
Speaker 2: the meantime, check out the podcasts of your show How
Speaker 2: to Money and listen to it live when it airs.
Speaker 2: You're on Sunday noon to too.
Speaker 3: Sounds good, Thanks Wayne.
Speaker 2: There was there was an implied question mark at the
Speaker 2: end of that sentence, even though it didn't sound like it.
Speaker 1: Yes, and of course you're on social media at How
Speaker 1: to Money, Joel, Joel.
Speaker 2: Lars Guard, everybody, Thank you sir, talk to you on Thursday.
Speaker 3: Of course. Sounds good, looking forward to it, all right.
Speaker 2: Do you know about Nike ID. This is where you
Speaker 2: can completely customize the shoe and you get a personal
Speaker 2: ID for the shoe that can be any combination of
Speaker 2: letters and numbers when that had when Nike came out
Speaker 2: with that. This is not an ad for Nike. When
Speaker 2: they came out with Nike ID. Some people will buy shoes,
Speaker 2: make them for themselves, and others will customize a shoe.
Speaker 1: As a present.
Speaker 2: Now, nobody thought when they came out with this that
Speaker 2: it would reveal deep insights about human psychology and gift giving.
Speaker 2: But here comes a study from the journal Psychology and Marketing,
Speaker 2: and it doesn't have to do specifically with Nike shoes.
Speaker 2: It has to do with giving somebody any kind of
Speaker 2: personalized gift and what that does in their brain. And
Speaker 2: the bottom line, I'll just flip all the cards and
Speaker 2: then I'll tell you how they found out. When you
Speaker 2: give somebody a personalized gift, this could be a journal
Speaker 2: with their name inscribed on it. It could be a
Speaker 2: chocolate bar. There are places where you can have a
Speaker 2: chocolate bar made with the exact combination of flavors that
Speaker 2: you specify. Anything like that, they appreciate it more and specifically,
Speaker 2: it causes something called simulation.
Speaker 1: Emotional simulation.
Speaker 2: Simulation theory is that people can recreate mentally other people's
Speaker 2: experiences and emotions. You know, how your uncle the sports
Speaker 2: fan and when his team wins, he acts like he
Speaker 2: was in the game because he can mirror how the
Speaker 2: team must feel. Or you've seen the parent and their
Speaker 2: kid was in the school play, and oh my god,
Speaker 2: they pride about the kid in the school play because
Speaker 2: they are mirroring how the kid feels about doing a
Speaker 2: good job in the school play. So when you give
Speaker 2: somebody a personalized gifts, you usually feel really.
Speaker 3: Good about it.
Speaker 2: You feel a sense of accomplishment that you made a
Speaker 2: specialized gift or bought I mean, you didn't necessarily make it.
Speaker 2: And then the receiver taps into your sense of pride
Speaker 2: about how you handled giving them the gift. And they
Speaker 2: did four different studies. One of them they took they
Speaker 2: had people give people a piece of personalized clothing, and
Speaker 2: they also had people given regular clothing. And then they go, hey,
Speaker 2: look at all this stuff you have. You have this shirt,
Speaker 2: you have this shirt that's got your name on it.
Speaker 2: Tell us what you would change about all these things.
Speaker 2: And sure enough, they had very few ideas for what
Speaker 2: they would change about the personalized gift. They had a
Speaker 2: lot more ideas about what they would change on the
Speaker 2: non personalized gift. That was one of the experiments they did.
Speaker 2: The next thing is they compared They showed videos to people.
Speaker 2: One of them is making a custom T shirt and
Speaker 2: the other one is a video.
Speaker 1: This talk about a boring video.
Speaker 2: It's a video of somebody going online and browsing for
Speaker 2: a T shirt and just selecting a generic T shirt
Speaker 2: to buy. And even when they took into account how
Speaker 2: long was spent doing these things customized presence more appreciation. See,
Speaker 2: it used to be the amount of time that you
Speaker 2: spent selecting the gift. We thought, oh, that really shows
Speaker 2: you care. If you spent an hour thinking about what
Speaker 2: could I get this person, that meant you really cared.
Speaker 2: But now it turns out you don't have to spend
Speaker 2: a lot of time. You can just go to things
Speaker 2: remembered and go give me that and put that on it.
Speaker 2: You didn't spend any time at all. But it's personalized
Speaker 2: and the person that you've given to it's gonna love it.
Speaker 1: So that should reshape.
Speaker 2: I guess if you're looking to get maximum response and
Speaker 2: maximum good feels from your gifts, really, I guess think
Speaker 2: about personalizing or customizing the gift, which they expect to
Speaker 2: grow to a thirteen billion dollar industry in the next
Speaker 2: three years, the customized gift market. So that's probably the
Speaker 2: way it goes. Now for me, here's the way I
Speaker 2: consider it. Give me cash, and I feel like it's
Speaker 2: already personalized because each bill has a unique serial number
Speaker 2: on it.
Speaker 1: Good enough. Should cops be able to lie? Okay? Yes?
Speaker 1: But also no, here's the yes.
Speaker 2: Let's get this out of the way as an example
Speaker 2: of how cops absolutely one hundred percent should be able
Speaker 2: to lie and must be able to lie. And that
Speaker 2: is the classic are you a cop? You have to
Speaker 2: tell me if you are. First of all, that is
Speaker 2: not true, and it's a good thing it's not true
Speaker 2: because there are all kinds of investigations that could never, ever,
Speaker 2: never happen if it was as simple as saying, are
Speaker 2: you a cop?
Speaker 1: And that's the end of the investigation.
Speaker 2: Into your drug dealing or your sex trafficking, or you're
Speaker 2: anything odometer rolling back, or you're dumping of illegal chemicals
Speaker 2: into the river or anything. So that's an example of yes,
Speaker 2: of course, cops should not have to tell you their
Speaker 2: cops if they're working under cover.
Speaker 1: But what about.
Speaker 2: This, This is the story of time Thomas Perez times two,
Speaker 2: Thomas Perez and Thomas Perez J. Thomas Perez went missing
Speaker 2: and for some reason, the Fontana police decided that Thomas
Speaker 2: Perez J. Was a was a suspect into possible bad behavior.
Speaker 2: And even they decided for themselves that he had killed
Speaker 2: his father. So they bring him in for an interrogation
Speaker 2: for hours hours, and of course he said, I didn't
Speaker 2: do anything, and cops don't believe that. And then they
Speaker 2: told him that his father was dead. They told him
Speaker 2: about his father's body on the slab in the morgue,
Speaker 2: and then they kept interrogating him for hours and hours,
Speaker 2: and finally he admitted that he had killed his father.
Speaker 2: Then he tried to hang himself. Luckily it was not successful.
Speaker 2: But guess what, he didn't kill his father. Guess what,
Speaker 2: nobody killed his father. His father was alive. His father
Speaker 2: was found alive and well. Several hours after this young
Speaker 2: man tried to hang himself after being coerced into falsely
Speaker 2: confessing to killing his father, probably honestly to a great extent,
Speaker 2: just because they had him there for hours and hours
Speaker 2: and they wouldn't let up. But telling him his dad
Speaker 2: was dead definitely pushed him over the edge. Now, that's
Speaker 2: perfectly legal for cops to tell you your father's dead
Speaker 2: when they have no reason to think he's dead, and
Speaker 2: in fact he's not dead, and it is allowed, and
Speaker 2: it is allowed as part of a technique that has
Speaker 2: been in place for quite some time called the Read technique.
Speaker 2: And the Read technique of interrogation was put together by
Speaker 2: a guy named John Reid, who was a Chicago cop
Speaker 2: and a polygraph expert, which is now we now know
Speaker 2: being a polygraph expert is like being an expert in astrology.
Speaker 2: But he was, and another guy, fred Enbow I believe
Speaker 2: his name was, he was a criminologist. Anyway, they put
Speaker 2: together this the Read technique where.
Speaker 1: And it's not as bad.
Speaker 2: Well, hold on, I'll tell you what it's not as
Speaker 2: bad as in a second. So it has three steps.
Speaker 2: The first two are totally good, gather evidence, talk to
Speaker 2: the people involved in a non confrontational interview designed only
Speaker 2: to get information. But then step three, anyone you think
Speaker 2: is guilty, boom, get them, interrogate the but Jesus out
Speaker 2: of them. And one of the things you're allowed to
Speaker 2: do is lie. Now, you can't lie about anything you want.
Speaker 2: You can't lie. For example, if you say we have
Speaker 2: your DNA on the body, you can and you don't.
Speaker 2: You can't say that. But this kind of thing like
Speaker 2: your father's dead, your friend has already said that you
Speaker 2: did it totally fine. And therefore the read technique causes
Speaker 2: quite constantly false confessions.
Speaker 1: Now I said it wasn't as bad as something I
Speaker 1: guess it's not as bad as what it replaced. You know, the.
Speaker 2: Phrase give them the third degree, they gave them the
Speaker 2: third degree, or don't give me the third degree? That
Speaker 2: actually comes from a police tactic. In the early parts
Speaker 2: of the twentieth century. Police officers would routinely beat the
Speaker 2: hell out of suspects, not let them have food, water
Speaker 2: the bathroom, not let them sleep, keep them in confinement
Speaker 2: for days at a time.
Speaker 1: It was illegal.
Speaker 2: It was illegal, but it happened a lot, and as
Speaker 2: you might imagine, a lot of people confessed to things
Speaker 2: just to make it stopf I Am six forty Live
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