Speaker 1: The voices of reason, a voice in the dark, heard daily.
Speaker 2: Exactly the things that needs to be said.
Speaker 1: Fifty five KRC.
Speaker 3: The talk station should have eight O five I fifty
Speaker 3: five KR see the talk station. Brian Thomas fishing everyone
Speaker 3: a very happy Monday. And it is Monday. It is
Speaker 3: eight oh five. It is time for Monday Monday with
Speaker 3: Brian James from All with Financial Brian James, Welcome back
Speaker 3: to the program, my friend, good to talk to you.
Speaker 4: Good morning, good morning, glad to be here. Thanks once
Speaker 4: again for the opportunity to talk to you and your listeners. Well,
Speaker 4: the first topic's got me a little worried. Now, just
Speaker 4: because someone thinks it may happen doesn't necessarily mean that
Speaker 4: they're relying on car you know, concrete facts and information.
Speaker 4: But I'm a little frightened by fifty one percent of
Speaker 4: Americans worrying about a stock market crash, you know, as
Speaker 4: opposed to like a correction or a downturn or something.
Speaker 4: But I mean a crash is a significant, like massive
Speaker 4: life changing ruining phenomenon.
Speaker 1: Yeah, it all depends on how you to these things too.
Speaker 4: Now, no, I would point out that none of these things,
Speaker 4: none of these forecasts are ever based on factual information,
Speaker 4: which is what makes them forecast. We never know what's coming.
Speaker 4: That's just these are just measurements of what mood are
Speaker 4: we in. So one of this is that a new
Speaker 4: study is out showing that fifty one percent of people
Speaker 4: are expecting a market crash. I also would remind everyone
Speaker 4: that the same percentage of people were expecting the second
Speaker 4: leg down from the recession, the brief recession that occurred
Speaker 4: during the COVID period. Uh that was five years ago,
Speaker 4: and they spent probably two or three years waiting for
Speaker 4: that to kick in, and it never did. Thank We
Speaker 4: just talk about things until they happen or don't happen.
Speaker 1: Thank you change that way.
Speaker 3: You see, because you know there always is going to
Speaker 3: be some kind of downturn at some point. So if
Speaker 3: we keep the conversation going on for enough years that
Speaker 3: at some point you can say, see, I told you
Speaker 3: so exactly.
Speaker 4: I've been talking about rain for the better part of
Speaker 4: a week, Brian, and look, lo and behold, I was
Speaker 4: right last night.
Speaker 1: Go pick this all up. I'm no sure damas you
Speaker 1: kept this all up.
Speaker 3: But some of the this, this expression of concern, I
Speaker 3: guess is predicated on the tariff situation, which I know
Speaker 3: we're going to be talking a little bit more about.
Speaker 3: But tariffs have got people a little spooked and jittery.
Speaker 3: I mean, I've saw some really frightening statistics about the
Speaker 3: impact on car buying and how much it may increase
Speaker 3: the price of cars, which I know is on your
Speaker 3: short list of talk about today, maybe ten thousand dollars more,
Speaker 3: depending But it's you know, when you looked at the
Speaker 3: breakdown of what's in an American car, you know, American
Speaker 3: car made in Detroit, and you're like, actually, no, it's not.
Speaker 3: It's like forty to sixty percent imported stuff.
Speaker 4: Just because the CEO's rear end sits in an office
Speaker 4: that is within the bounds of the United States doesn't
Speaker 4: mean that that particular company's cars are exempt. For example,
Speaker 4: teriff exposure for GM's about forty five percent, twenty five
Speaker 4: percent for Stalantis the artist formerly known as Chrysler, and
Speaker 4: about twenty percent for four. So even in US made cars,
Speaker 4: about thirty five percent of parts are not compliant. With
Speaker 4: the US Mexico Canada agreement from a few years ago
Speaker 4: that Trump put in place but doesn't seem to like anymore.
Speaker 4: So the estimates rise from you know, anywhere around twenty
Speaker 4: seven hundred to five thousand dollars, maybe in some extreme
Speaker 4: scenarios like you mentioned, ten thousand dollars in the added
Speaker 4: costs of paying for these arguments. Now, the thing to
Speaker 4: look at though, is these aren't supposed to kick in
Speaker 4: for a couple of weeks. These are still negotiating tactics.
Speaker 4: Maybe something changes between now in April second or third
Speaker 4: whenever they's actually kick in, but remains to be seen.
Speaker 3: Yeah, I'm keeping my fingers crossed that the scenario does change,
Speaker 3: and maybe whoever he's asking for something from will capitulate
Speaker 3: and give it to some of Trump's terms and that
Speaker 3: we won't have to go through the tariff struggle because
Speaker 3: you know, I mean, you know it, I know it.
Speaker 3: They're going to make the price that things go up.
Speaker 3: There's just there's nothing you can get around that, whether
Speaker 3: they're fair or not, I mean reciprocal. I understand the
Speaker 3: fairness argument, because we're having our things subject to tariffs
Speaker 3: over on their side of the ledger of whatever country
Speaker 3: is receiving them and slapping the tariffs on. Why they're
Speaker 3: doing that, I don't know. The genesis or basis behind
Speaker 3: any of it. But you know, if this isn't trying
Speaker 3: to create an even playing field, that argument at least
Speaker 3: passes Mustard. But you can't get around the practical effect
Speaker 3: that they're going to make things more expensive. So and
Speaker 3: that's we don't need that right now, Brian.
Speaker 4: That is not helping, of course, no, But well I
Speaker 4: would throw out there though, if you one interesting thing
Speaker 4: I've noticed over the past couple months, because I've noticed
Speaker 4: my phones haven't ranged very much.
Speaker 1: People aren't too spooked by this.
Speaker 4: Some of it is because there's a decent amount of
Speaker 4: people out there who feel that the person in charge
Speaker 4: right now is exactly who they wanted and this is
Speaker 4: just the pain we have to go for we have
Speaker 4: to deal with. But other people are simply looking and
Speaker 4: I would say most people are simply looking at their
Speaker 4: investment statements. If you are sitting on a properly diversified portfolio,
Speaker 4: you're not down that much. Because where the United States
Speaker 4: is proactively making changes to present ourselves differently to the world,
Speaker 4: and the overall economic situation on this planet that is
Speaker 4: causing so some of this is pretty much self inflicted.
Speaker 4: We're gonna grumble about tariffs and all these well, then yeah,
Speaker 4: the stock market's going to get a little squirrely. That
Speaker 4: creates an opportunity for other places. So therefore, as we're
Speaker 4: sitting here right now, the S and P five hundred
Speaker 4: is down about five percent for the year. The Nasdaq
Speaker 4: is an official correction territory, down ten percent a year.
Speaker 1: Today.
Speaker 4: International stocks, which I've spent the last ten years trying
Speaker 4: to convince people not to dump, are up nine percent.
Speaker 4: Our merging market funds are up about four and a
Speaker 4: half percent. So if you have a diversified portfolio, you're
Speaker 4: probably about even for the year. Despite some of the scariest, craziest,
Speaker 4: most unsettling headlines we've seen, so mostly the market is quiet.
Speaker 3: Well, you know, it's interesting you put that in the
Speaker 3: context of your phone not ringing very much, because, as
Speaker 3: you pointed out so many times over the years, your
Speaker 3: phone will ring a lot when it hits the fan.
Speaker 3: In some way, you got a you know, precipitous drop
Speaker 3: and the S and P five hundred or something. People
Speaker 3: get all wigged out and like, should I sell? Should
Speaker 3: I sell? And that's what you're You're a counselor, as
Speaker 3: a financial planner, you're you're a talker off of a
Speaker 3: ledge kind of guy, exactly.
Speaker 4: And that's what we talk about. We talked about how
Speaker 4: are we going to deal with these things? And then
Speaker 4: we also put it in context of history. Something else
Speaker 4: I've been boning up on is what happens, what has
Speaker 4: happened during some of the scariest historical times we've had
Speaker 4: here and then the next closest one. And I don't
Speaker 4: mean to prognosticate anything here, but World War II obviously
Speaker 4: was a reshuffling of the deck in terms of how
Speaker 4: the world gets along with each other. Nineteen forty one,
Speaker 4: the S and P five hundred was down somewhere between
Speaker 4: ten and fifteen percent. That was when we first stepped
Speaker 4: into that fray, and the unknown became the talk.
Speaker 1: Of the day. We have no idea what's coming out
Speaker 1: of this.
Speaker 4: Nineteen forty two, forty three, forty four, and forty five
Speaker 4: were each up a minimum of fifteen to twenty percent.
Speaker 4: So if you own stocks through that entire period, you
Speaker 4: did just fine. You weren't comfortable, you weren't happy, but
Speaker 4: you didn't lose money.
Speaker 1: I did not know that. That's interesting.
Speaker 4: It's kind of mind Bob and think about it, because
Speaker 4: all that means when wherever we have craziness, we don't
Speaker 4: root for this stuff. But generally speaking, American companies historically
Speaker 4: have been the best ever at figuring out about how
Speaker 4: to profit off of something. So remember the stories from
Speaker 4: World War Two about how factories pivoted to making instead
Speaker 4: of cars, they were making tanks. Instead of creating tires,
Speaker 4: they were making treads for the equipment we needed overseas.
Speaker 4: It's just a catalyst the market will pivot to wherever
Speaker 4: the profits can be made. We saw the same thing
Speaker 4: when COVID kicked in and everybody had to go out
Speaker 4: by a second set of computers to take home so
Speaker 4: we can all work from home. We all never heard
Speaker 4: of zoom before. Now zoom is pretty much ubiquito us.
Speaker 4: I'm looking at you on it right now. These are
Speaker 4: just catalysts that create an opportunity for somebody to make money.
Speaker 3: Yeah, And I guess the other component is when Trump
Speaker 3: announced these tariffs. And I'm not sure there's a direct
Speaker 3: straight line you can draw, but a lot of very
Speaker 3: major businesses, you know, large, you know, multi billion dollar companies,
Speaker 3: including autobile manufacturers. So they're going to start moving some
Speaker 3: production here, and that's exactly the point Trump was trying
Speaker 3: to accomplish the return of American manufacturing jobs. And maybe
Speaker 3: it'll it'll bear I guess the question is when you
Speaker 3: look at the component parts of these American automobiles, as
Speaker 3: we just talked about, can we get those component parts
Speaker 3: to return or be manufactured here, and if so, how
Speaker 3: long would something like that take.
Speaker 1: And how long will it or how much will it cost?
Speaker 4: As you always point out that we are an expensive
Speaker 4: place to produce anything because we've got an awful lot
Speaker 4: of rules and things in place.
Speaker 1: Some of that is being dismantled right now. You know.
Speaker 4: There were some announcements made over the weekend about some
Speaker 4: steps he's taken to weakened unions, some first shots fired
Speaker 4: across the valle at the labor market here in the
Speaker 4: United States.
Speaker 1: That's not necessarily going to.
Speaker 4: Go well because a lot of those people were his
Speaker 4: supporters and they're having some of the rugs pulled out
Speaker 4: from under them. But if we're going to manufacture parts here,
Speaker 4: and this is all about making the United States more profitable,
Speaker 4: he's got to look at the cost of good soul.
Speaker 1: What does it cost to produce this stuff?
Speaker 4: I just bringing the jobs back on shore isn't the
Speaker 4: only step that's true. That is true, and we know
Speaker 4: all day long it's impossible to eat even the playing
Speaker 4: field from a production cost standpoint when you are dealing
Speaker 4: with countries that have just practically dictatorial control over the
Speaker 4: working conditions, and quite often they're poor and the people
Speaker 4: do not get paid very much. So that in and
Speaker 4: of itself is kind of a it's it's a drag
Speaker 4: on doing business in the United States. That's why everybody
Speaker 4: moved over to China for so long we can give
Speaker 4: you embraced China as a trading partner. They have inexpensive labor,
Speaker 4: and they're welcoming. They're happy to open manufacturing facilities and
Speaker 4: get that the skids greased for that. And then next thing,
Speaker 4: you know, we find that we're not making anything here.
Speaker 4: When it all hits a fan, like during the pandemic
Speaker 4: that was a frightened the cold water does to reality,
Speaker 4: I think I'd rather pay more for something knowing that
Speaker 4: it was made here and that we have a steady
Speaker 4: supply of it. You know, then I have to rely
Speaker 4: on what might very well be our arch enemy in
Speaker 4: a conflict to make it yeah, I think philosophically you'd
Speaker 4: have a lot of people agreeing with that. But on
Speaker 4: the other hand, the market and the price of any
Speaker 4: given stop is based off of how profitable can that company.
Speaker 1: Be going forward.
Speaker 4: Philosophically, we can say, yeah, I want to buy stuff
Speaker 4: from here, but that's going to have an impact on
Speaker 4: the price as well.
Speaker 3: All right, well we'll stop contemplating our navels. We'll bring
Speaker 3: and Brien James back talk a little bit about futures
Speaker 3: dropping among the tariff hears and people. I guess from
Speaker 3: a good stand thing they're adding to their rainy day fund,
Speaker 3: which I'm going to guess Brian James thinks is a
Speaker 3: good idea. More with Money Monday's Brian James, after I
Speaker 3: mentioned my dear friends at Budd Herbert Motors, get in
Speaker 3: touch with Bud Herbert for all the lawn equipment you need.
Speaker 3: They have the best. They only carry world class brands
Speaker 3: John Deere. They got x Mark mower, Steel handa power equipment.
Speaker 3: That's where I got my professional level Honda push mower.
Speaker 3: Last one will ever have to buy. It's built that well,
Speaker 3: said the Herbert family. You will be working with a
Speaker 3: Herbert family member so they're going to make sure you
Speaker 3: get the right piece of lawn equipment that you're looking for.
Speaker 3: There know everything there is to know about the equipment
Speaker 3: that they sell, delivered to your door, and they service
Speaker 3: what they sell. You can't get that kind of service
Speaker 3: from a box store. And I had a terrible box
Speaker 3: store experience, which is why I'm so pleased that good
Speaker 3: friend of mine steer me to Bud Herbert Motors, and
Speaker 3: that's why I'm blessed to be in a position to
Speaker 3: steer you to Bud Herbert Motors. Tell the Herbert family.
Speaker 3: Brian said, Hi, when you get in touch with him,
Speaker 3: you can do it two ways. Go to Bud Herbert
Speaker 3: Mootors dot com. Budherbertmotors dot com five four one thirty
Speaker 3: two ninety one Fifth Generation Family and An operated five
Speaker 3: one three five four one thirty two ninety.
Speaker 1: One fifty five KRC are your nineteenth fifty five per
Speaker 1: CD talk station.
Speaker 3: Brian Thomas Swift All Work Financials Brian James doing Monday Monday,
Speaker 3: continuing our discussion a little bit about futures here. I
Speaker 3: just pulled up the Wall Street Journal's web page and
Speaker 3: DALs down about zero point sixty seven. Future wise, it
Speaker 3: looks like one point down for SMP five hundred NASDAK
Speaker 3: about almost a point and a half. And the headline
Speaker 3: upper left hand corner global stocks slump as concerns mount
Speaker 3: over US tariffs.
Speaker 1: Brian was he not there anymore?
Speaker 3: I don't see his little photograph in the in the
Speaker 3: pickup or the box there, Joe, Okay, he's not there.
Speaker 3: He disappeared, Brian James went running and hiding. I don't
Speaker 3: know what happened to him anyway. Apparently US savings rates
Speaker 3: wrote in Rose in February, for the second straight month,
Speaker 3: Americans rebuilding their rainy day funds after the holiday shopping season.
Speaker 3: It's the article that he provided me for my insight
Speaker 3: in your edification. Savings rates jumped four point six percent
Speaker 3: last month from four point three in January and only
Speaker 3: three point three in December. They say a low savings
Speaker 3: rate usually means consumers would have to reduce spending at
Speaker 3: some point to rebuild their savings, which slows the economy.
Speaker 3: So the current savings rate below normal, but not excessively.
Speaker 3: So arranged from about five to six percent in a
Speaker 3: decade before the pandemic. So and I've always heard that
Speaker 3: you know, from a financial standing plan point, you know,
Speaker 3: try to sock away some money to cover you for
Speaker 3: the rainy day. You never know when it's going to hit.
Speaker 3: I had a friend of mine just lost his job
Speaker 3: the other day. I think it was unanticipated, but it
Speaker 3: does happen. So making sure you have some money socked away,
Speaker 3: and I'm not sure the amount. One of the things
Speaker 3: I wanted to ask Brian was how many months worth
Speaker 3: of daily savings or our money you should have socked
Speaker 3: away in that savings account. Anyhow is that him back again, Joe,
Speaker 3: you're trying to get a hold of him, all right, Well,
Speaker 3: you kind of got me off guard. I know it's
Speaker 3: not your fault, Joe, because he just kind of disappeared
Speaker 3: but left me without a topic. So I thought we'd
Speaker 3: be filling up this half of an hour anyway. One
Speaker 3: thing I did when I get to since we were
Speaker 3: talking about Democrats and their policies and not seem to
Speaker 3: be able to articulate any strategy to deal with Republicans
Speaker 3: other than scream and yell and pull their hair out
Speaker 3: over really things that don't make any sense. Kind of
Speaker 3: a theme this morning. On the heels of that ridiculous
Speaker 3: Tesla protest. Elon Musk isn't a fascist, it's definitionally, he's
Speaker 3: the polar opposite of it. Brian was talking about that
Speaker 3: reducing rules and regulations. That's what stagnates an economy. It
Speaker 3: slows it down. And those rules and regulations are telling
Speaker 3: you how to run your business. That's what fascists do.
Speaker 3: So when you've got an administration that's in there that's
Speaker 3: doing its best to get rid of the burden of
Speaker 3: ridiculous regulations, you are dealing with an administration that is
Speaker 3: the polar opposite of fascism. So get your definition straight
Speaker 3: and try to make some sense of why going after
Speaker 3: Elon Musk and Tesla's makes any sense whatsoever. I Brian
Speaker 3: you there.
Speaker 2: I was looking at you and hearing you the whole time,
Speaker 2: and we just got done talking about how great Zoom
Speaker 2: was and what a catalyst it was, and then here
Speaker 2: we go. So I think that I'll take the faulter jinxing.
Speaker 1: Then I go, that's okay, I'm glad he came back.
Speaker 3: I just getting rid of launch into another discussion about
Speaker 3: the politics where we find ourselves. But as I was mentioned,
Speaker 3: thinking we were going to be talking about the global
Speaker 3: stock slump, concerns mount over US tariff. Just an update
Speaker 3: on the Wall Street Journal. Across the board, you know,
Speaker 3: futures are down. The worst down right now is NASDAC
Speaker 3: at one and a half, but the rest of them
Speaker 3: are down about a point, maybe a little bit under
Speaker 3: dal Jones Industrials this point seventy three.
Speaker 1: So this is just.
Speaker 3: Didn't they factor in the market already that these these
Speaker 3: terrifts are going to kick in?
Speaker 1: Brian, Yeah, and that's.
Speaker 2: Why we've seen the volatility. Remember, we get we're having lately,
Speaker 2: we're having about two days of down one percent, you know,
Speaker 2: down one one and a half percent, and then we'll
Speaker 2: be down three percent, and then we get a chunk
Speaker 2: of it back because the market will decide that there's
Speaker 2: something out there, some shiny object that it likes, and
Speaker 2: it'll bring it back. So we are anticipating these these
Speaker 2: tariffs kicking in, and then we are celebrating what it
Speaker 2: looks like they're not going to kick in tomorrow. At
Speaker 2: some level of this, Brian is going to be saber
Speaker 2: rattling because it is a negotiation tactic. Remember what Donald
Speaker 2: Trump thinks, he's the best in the world. At that's
Speaker 2: making a deal. So a lot of this is I'm
Speaker 2: going to do something terrible to you in a month
Speaker 2: unless you act the way that I want you to act.
Speaker 2: And in some cases he's getting some concessions there. Remember
Speaker 2: our first, very first discussion about this, probably a month
Speaker 2: and a half ago, where the tariffs that they were
Speaker 2: going to levy against Canada that went away overnight, became
Speaker 2: something else as the negotiation continued. But the way he
Speaker 2: stated it at the very outset of the discussion is
Speaker 2: very different from what's happening now. So some of this
Speaker 2: is savior rattling by both sides. No country on the
Speaker 2: face of the earth can afford to completely seclude itself
Speaker 2: from the rest of the world. Now that every every
Speaker 2: company's customer base is the entire planet, So there won't
Speaker 2: be any endgame of we are just going to take
Speaker 2: our ball and go home and only sell to American customers.
Speaker 2: That is not possible.
Speaker 3: Right of one of my favorite movies, Casablanca, one of
Speaker 3: the lines isolationism is no longer a practical foreign policy,
Speaker 3: and I think that's certainly the case in matters of business,
Speaker 3: international business, and real quick I read the article in
Speaker 3: the savings rates have gone, people are like putting, you know,
Speaker 3: replenishing their savings accounts. As a financial planner, is there
Speaker 3: a certain and I don't mean a dollar figure, but
Speaker 3: based up on one's earnings and one's living expenses, is
Speaker 3: there a certain number of months worth of money that
Speaker 3: is recommended to sock away just in case?
Speaker 2: Yeah, And I think that's a great important discussion to have,
Speaker 2: And for people who are who lead really really simple
Speaker 2: lives and there's not a whole lot going on at
Speaker 2: the moment, I would a minimum of three months. I
Speaker 2: would say more like six months. If you've got kids
Speaker 2: and a mortgage in the mix, and you have two jobs,
Speaker 2: you know, two high paying jobs, that kind of thing,
Speaker 2: you might want to look at more like twelve months,
Speaker 2: because something crazy like that could have a significant amount
Speaker 2: of impact on your situation. One thought I would throw
Speaker 2: out there. I believe personally the ideal savings rate is
Speaker 2: zero percent. The reason I say that is because it
Speaker 2: should have been planned for a long time ago, and
Speaker 2: if you've got that kind of money socked aside, you
Speaker 2: don't need to be putting more into it. So I
Speaker 2: have not changed my savings rate in probably two decades
Speaker 2: because we solved the emergency prone problem a while ago,
Speaker 2: and ever since then I focused on getting kids through
Speaker 2: college and our retirement and so forth. I don't believe
Speaker 2: you need to put cash into your savings account every
Speaker 2: single month. If you're already there, it's just piling more money.
Speaker 3: Aside, and it's not invested, I mean, other than bank
Speaker 3: interest rate, which we all know doesn't pay very much
Speaker 3: compared to what your yields might be in the market investment.
Speaker 2: Exactly. I want to make sure people didn't hear me,
Speaker 2: did not just hear me say that you don't need
Speaker 2: an emergency point us to know what you need and
Speaker 2: then know when you've accomplished a goal so that you
Speaker 2: can move on to the next goal.
Speaker 3: But that's if first order of business in terms of
Speaker 3: establishing a financial plan is to get that base amount
Speaker 3: socked away so you can then invest cam I write on.
Speaker 2: That that is the oil in the engine, because we
Speaker 2: can do magic with the long term investments. But when
Speaker 2: the ship goes sideways, is it occasionally will you lose
Speaker 2: your job or you know, the stock market takes a
Speaker 2: chunk away A lot of times. Some of those that
Speaker 2: happen all at the same time, you have to have
Speaker 2: something to keep you afloat, or you'll have to dip
Speaker 2: into your long term savings, which probably are taking a
Speaker 2: bit of a hit at the moment. That what I'm
Speaker 2: describing is pretty much happening right now. People are getting
Speaker 2: laid on and they're having to sell at a loss
Speaker 2: to cover the bills because they didn't have an emergency fund.
Speaker 3: And then there's you know the danger of having to
Speaker 3: pay you know, the taxes and the penalties and things
Speaker 3: like that by tapping into your four toh one k.
Speaker 3: So try to avoid that, get that savings padded really well,
Speaker 3: and then you can exhale and just watch your investments grow.
Speaker 3: Brian James, Monday, Monday, I appreciate all worth the financial
Speaker 3: loaning you out. Sorry for the glitch there, but we
Speaker 3: got back on track and got the information out for
Speaker 3: my listeners. I'll look forward to talking to you again
Speaker 3: next week. I hope you have a wonderful a week, my.
Speaker 2: Friend, have a good week talking next Monday.
Speaker 3: Eight twenty seven fifty five KRC the Talk station, don't
Speaker 3: go away, Local stories. Maybe take a couple of phone
Speaker 3: calls before we get too Ira Melman, who's going to
Speaker 3: do a Borders and Immigration empower youse seminar. He's joining
Speaker 3: the program at eight forty. Looking forward to him and
Speaker 3: him on the show.
Speaker 1: Be Right Back fifty five KRC