1/14/26 Long-Term Thinking in a Short-Term World: Buffett, QE, and Mortgage Rates

The Moneywise Radio Show and Podcast Wednesday, January 14th BE MONEYWISE. Moneywise Wealth Management I "The Moneywise Radio Show & Podcast" call: 661-847-1000 text in anytime: 661-396-1000 website: www. MoneywiseGuys.com facebook: Moneywise_Wealth_Management LinkedIn: Moneywise_Wealth_Management Guest: Allyn Medeiros, Agape Mortgage website: https://allynmedeiros.com/ The opinions voiced in this podcast are for general information only and are not intended to provide specific advice or recommendations for any individual. To determine which strategies or investments may be suitable for you, consult the appropriate qualified professional prior to making a decision. Allyn Medeiros and their company are not affiliated with nor endorsed by LPL Financial or Moneywise Wealth Management].

• 0:00Speaker 00

  Live from the basement inside the historic Woolworths Building in downtown Bakersfield.

• 0:05Speaker 01

  Call or text in at 661-396-1000.

• 0:09Speaker 02

  I need a dollar, dollar, dollar, that's what I need. Hey, hey. Well, I need a dollar, dollar, dollar, that's what I need. Hey, hey. Said I need a dollar, dollar, dollar, that's what I need. And if I share with you my story, would you share your dollar with me? Securities offered through LPL Financial, member FINRA/SIPC. Investment advisory services offered through LPL Financial. LPL Financial and MoneyWise Wealth Management are independently owned and operated.

• 0:37Speaker 00

  Now, let's start the MoneyWise Show.

• 0:41Speaker 03

  Let's start it. Let's do it. Here we are, January 14th. This is the first Chris Pelster and...

• 0:50Speaker 04

  Seth Perry.

• 0:51Speaker 03

  Seth Perry Show in the new and improved, finally open, uh... What do we call it here? The basement. The basement studio at the Woolworths. So, you guys have been with us through this ride for a few months now. It might have sounded a little bit different as we did the show from our offices and through Zoom and some different things, and we made it happen. But we are excited to be in our new studio. Uh, so kudos to Steven and everyone who's worked very, very hard, Emily, and everyone else who's just worked very hard.

• 1:22Speaker 04

  And John, and Kyle, and Phillip.

• 1:24Speaker 03

  Throw them out there.

• 1:25Speaker 04

  Get them in there.

• 1:26Speaker 03

  All you guys. All you guys, thank you very much for making this, uh, studio a reality. It is, it is very, uh, chic and cool and, uh, definitely, uh, gonna take...

• 1:36Speaker 04

  Vibing is the word the kids say, man. This place is vibing.

• 1:40Speaker 03

  Fire? No, is fire old?

• 1:43Speaker 04

  Is fire good, Steven? No, no.

• 1:45Speaker 03

  Okay, I'm out. I'm old.

• 1:47Speaker 04

  Yep.

• 1:49Speaker 03

  So, anyway, I mean, when you, when you, uh, it's no dad jokes anymore when you're grandpa, when you're pop over here, you know what I mean?

• 1:54Speaker 04

  I'm not gonna lie, this is weird, cuz I'm looking over and looking in your eyes now instead of looking at your eyes on a, on a Zoom camera, and, and it's, uh, it's nostalgic. It's kinda cool. Yeah.

• 2:04Speaker 03

  Yeah, we're glad to be back. And we're actually already joined in studio by Mr. Alan Maderos, who is... is going to be the guest today. So Alan, how you doing? You're already there? You're already on?

• 2:13Speaker 05

  I don't know. Am I live?

• 2:14Speaker 03

  You're live.

• 2:15Speaker 05

  Awesome. Happy New Year, gentlemen.

• 2:17Speaker 03

  So he, like always.

• 2:18Speaker 05

  In person.

• 2:19Speaker 03

  Yeah, he's here. He's ready to rock and roll. He's going to talk about local real estate, interest rates, different things. So looking forward to that conversation. Always ready, always prepared like he is for our listeners and for his clients too. I know personally of this about him. So thanks for being here early and being ready to rock and roll. But we are going to do what we do before we get into there. We do have a couple of questions that came in, so hopefully we can get to those. Go over the markets just a little bit. So if you've been paying attention, the markets have kind of steadily climbed. It's been the theme since going back to when we've basically had some turbulence in 2022 where stocks and bonds, like we've mentioned, Mr. Dustin Weaver here in the office, there was nowhere to hide. Both were down.

• 3:04Speaker 03

  We've had a little bit of fluctuations when Trump first announced tariffs back going into the second quarter of last year, but they were temporary little pullbacks in the market. Major recoveries, positive year last year, positive trend up since 2022. And lo and behold, today, the markets took a breather. The markets pulled back. Still in positive territory so far on the year. The S and P 500 specifically we'll talk about right now was down about half a percent on the day. So not huge, huge, but still a pretty big move. Year to date, it's still up about 0.7%. Look back over a 12-month period, the S and P 500 is up almost 19%, about 18.6% there on the S and P 500.

• 3:50Speaker 03

  So hopefully you are invested appropriately for your situation, your stock-focused portfolio or bucket, or whatever you want to call it, is somewhere in that realm. And then you have some other bonds and some other investments, maybe some cash equivalents, depending on what your situation is. And so maybe your performance wasn't 18% over the last year. But hopefully you're participating appropriately for your situation. And if you don't know what that should look like, talk to a trusted financial advisor. I know a couple right here at Money Wise. 847 1,000. Give us a call. But on the other indexes, the Dow was also down about 0.8%. Remember, we call that the dumb Dow because it's only 30 stocks and it's price weighted.

• 4:31Speaker 03

  And so sometimes it's not the best look, but it is a long lasting index that many people like to look at. Has big components like Caterpillar and so the earth movers, the dirt mover company. And people like seeing what's going on with some of those bigger pillars of our long lasting economy. The NASDAQ is down 1%, 1 full percent on the nose. The NASDAQ obviously is tech heavy, been the best performer over the last couple of years. But today, you know, pulled back pretty significantly for a one day move. 1% pullback there on the NASDAQ. So there you go.

• 5:14Speaker 03

  That's kind of what the markets are doing. I don't know if you want to talk about any specifics about what's going on there.

• 5:20Speaker 03

  You know, some of the things that came out, bank earnings and economic data is all hitting the tape. Investors are reacting to that mixed results from major banks and lingering macro uncertainty.

• 5:31Speaker 04

  Oil's up a little bit. Gold and silver, of course, hitting new, new record highs, you know, reflecting

• 5:38Speaker 04

  a risk off move as investors seek safety. Oil is climbing and we were on a call this morning, Chris, you and I, like an annual outlook call. And one of the things that stuck out to me was there's a lot of talk about Venezuela and oil and what's going to happen. And nothing I don't think is going to happen really quickly. They have to completely rebuild the infrastructure over there before, I mean, it, we're years out from seeing the real long-term impact of what's going on over there. But oil is climbing because there's some global supply concerns, some geopolitical factors. I always rest assured, almost knowing that even these experts in the field, they don't know exactly what's going to happen. That's the value and the benefit of just being well-rounded, having a well-rounded, professionally managed portfolio.

• 6:23Speaker 04

  Eyes are always on it for you.

• 6:25Speaker 03

  Yeah. And when you talked about some of the bigwigs and this and that, it made me think of Mr. Warren Buffett. Has, has it been announced, Stephen? Have they talked about it at all on the radio show the last couple of days?

• 6:35Speaker 00

  No.

• 6:36Speaker 04

  They kind of teased it a little bit, but we got busy with, uh, with the guests.

• 6:39Speaker 03

  Yeah. So, so man, if you've listened to the radio show, Warren Buffett's name has been mentioned multiple times, obviously an icon in, in the whole investment world.

• 6:49Speaker 04

  Best investor of all time, wouldn't you say?

• 6:50Speaker 03

  I mean.

• 6:51Speaker 04

  Who's better or more popular or more successful?

• 6:53Speaker 03

  I, I sent a little meme to, to Seth and Dustin in the office here that kind of had his stats of what his performance has been versus the S and P 500, which by the way, the S and P 500 performance, the top 500 companies in our economy for the last 15, 20 years, phenomenal. And he blew it out of the water.

• 7:11Speaker 04

  Smoked it.

• 7:12Speaker 03

  I mean, just, I think it was like 6,000% compared to 18,000%.

• 7:18Speaker 04

  Yeah.

• 7:18Speaker 03

  Was, was Warren Buffett's overall portfolio and picks and different things. And, um, I think he bought a, the first company he bought was a failing, what'd it say? A mercantile or tactile company of some sort. Um, and then one of his, his later acquisitions was a little company called GEICO, which was a government insurance company.

• 7:37Speaker 04

  Yep. Rebranded it.

• 7:39Speaker 03

  Rebranded it.

• 7:40Speaker 04

  Threw the Gecko in there.

• 7:40Speaker 03

  Yep. And then that gave, a lot of people don't realize how kind of insurance works is they're able to use all the insurance money behind the scenes within the rules of that industry. And you can invest that money, just like the banks, when they take your money on deposit, they don't leave it sitting there in a safe for you and go get it when you need it. They loan it out, they do different business with it. It's all within the regulations of the industries. But anyways, so Mr. Warren Buffett started to take GEICO's money and make some purchases of some other companies and, and obviously just did very, very well. So he has officially announced that he was stepping back and a new CEO is taking over. Uh, so definitely wanted to, to say kudos. Cause when you said, uh, you know, sometimes even the, and, and actually I think Warren Buffett would agree with what you just said 100%.

• 8:26Speaker 03

  Uh, you don't always know some of the factors, some of the things that are going to push the market up or down or left or right. And, and the short term, you know, those kinds of things. And that's where it's Warren Buffett has stuck to contrarian investing, uh, which is basically, you know, you, you want to get in when everybody else is wanting out.

• 8:43Speaker 04

  Yep.

• 8:43Speaker 03

  You get out when everybody else is wanting in and you're just looking for value. You're looking for the right company and that you're not going to care about in the short term. And I think that that's what we should all be focusing on as investors. And sometimes that can be hard to do. If you're doing it on your own, it can be hard to divorce your emotions. If you're doing it even with an advisor. You want to make sure that you're working with an advisor that you're really trusting is doing what's in your best interest and that you understand the plan so that you can stick with it because if you have a solid plan in place, you don't have to freak out every time the market hiccups and that can give you a lot of peace of mind and that you can have a solid plan and I mean that's it's in the namesake which you know, kudos to Mr. Gero Ellis for giving Money Wise its name. We want people to be money wise, which

• 9:27Speaker 03

  it doesn't mean hot stock picks. It doesn't mean timing the market. It means having a good mix, you know, an allocation and an investment mix that makes sense for your situation, as aggressive as you're comfortable with and makes sense for your situation and you ride it out. You have a strategy on how you navigate through the ups and the downs and you don't freak out, you don't get too emotional. And I know it sounds easy, but hopefully, you know, that's what you're doing. And if you're not working with a trusted advisor, give us a call and let's talk about some things.

• 9:55Speaker 04

  We are here for you. Keep sending in the questions. Yeah, that's one of the best ways to learn. If you're stuck on anything, instead of, you know, just shoot in the question, we're going to give you a straightforward, honest answer. One of my favorite Warren Buffett quotes is, "Be fearful when others are greedy and be greedy when others are fearful."

• 10:14Speaker 03

  That's right.

• 10:14Speaker 04

  And what he's saying there is, is when the, the stock market tanks, when it drops, essentially, the price of all of the stocks has gone down. This is when you want to potentially buy more, more, more into the company.

• 10:27Speaker 03

  And I don't even know the specifics of his comment, but I love the one that you don't know who's swimming without their shorts on until the tide goes out or something like that. Everything seems like a good investment until the tide goes out and then you go, oh, he doesn't have swim trunks on. Anyways, hey, that does lead into one of our messages. We'll at least get to that one that says, "Hey, guys, is selling during a correction usually a mistake? I'm a bit concerned or confused or both lol." So it depends. I would say emotional selling during a, a correction or a panic sell, absolutely. It could make you reevaluate what you are holding or what you're invested in and really, you know, like I, like I just said, like you may realize like, hey, I thought this was a good investment. The overall market is correcting.

• 11:12Speaker 03

  My account is down and I don't even know what I'm holding and it may be a good time to sell it. And then reinvest in a way that makes much more sense moving forward. So it, I would say that it's, it's hard to give an absolute answer to that. Would you kind of agree with that?

• 11:26Speaker 04

  Absolutely. Yeah. Yeah, for sure. I can tell you just looking at recent history when we had the pullback. Late March, early April of 2025 last year. Had you panicked and gotten out of the market as far as the S and P goes, it's gone up, I think 35% since then.

• 11:42Speaker 03

  Right.

• 11:43Speaker 04

  And you and I were in with some clients pretty recently and he was talking about, you know, he's, he's with a, a major company here in Bakersfield. And he was talking about during the 2008. Crash, you know, the, the. Real estate and everything else that crashed in 08. A lot of his friends, they got scared and they, they put their money on the sidelines and he stayed invested and now without giving specific figures, it has absolutely paid off for him and. And it's a good, I remember I was working at Halliburton when it happened. And I remember looking at my 401k, it wasn't a whole lot at the time, but for me back then it was a lot of money. And just got to write it out.

• 12:16Speaker 03

  Yeah. So sometimes people will take this thought process though, and they maybe have, you know, 10 random stocks that they picked by like throwing a dart at the wall or something and be like. I can't sell now. The market pulled back. Well, it's like, well, hold on. You don't necessarily maybe have a really appropriate mix or you, you didn't really put a lot of thought into what stocks you were holding now. If you have a defined plan and you have really done some research and you're holding a mix of stocks that you really feel confident about and. You have a plan and you shouldn't panic. But if you're somebody who just randomly chose some stocks random, you know, like there's some different things you need to think about. And a correction may be actually a good time to get rid of some things to put it in a better mix and to recover. But you don't want to sit on the sidelines and miss the recovery.

• 13:00Speaker 03

  But just to, just to kind of make sure our listeners, a market correction is typically defined as. When the markets, when the indexes that we always talk about always drop or, or drop more than 10%. Which actually I believe the market dropped more than 10% going, going into the second quarter of last year. So most years there is a correction and most people don't even realize it. So. A lot of times, the fear of loss or the fear of a crash or whatever, um, sometimes i- it's much bigger in our minds than it really truly is because they happen a lot. And if you stick with your strategy, you're going to be okay. Now, we all remember 2008, 2009, and then that was kind of definitely more profound. Even 2020 was pretty more profound, but then there was stimulus and some things that

• 13:45Speaker 04

  Brought it right back.

• 13:46Speaker 03

  That brought it right, right back. And so you have to remember that some of those things will add to how the market recovers, but, um, you know, have a plan, make sure you're confident with your investment mix and then don't panic, don't panic sell. But yes, um, it could be during a correction that you do a little deep dive and go, you know what? I don't really know how I'm invested and maybe I should sell some things. Maybe I should make sure I'm invested appropriately and maybe it's a good time to even buy because that's actually like we just mentioned about Mr. Warren Buffett. When everybody else is selling, he's wanting to be buying and when everybody else is buying, he wants to be selling. Um, not that he does that completely, but, uh, that's obviously the contrarian point of view. So, market doesn't move in a straight line. It's always fluctuating. Remember that.

• 14:29Speaker 03

  Uh, the danger is, uh, not the decline. The danger is selling after the decline has already happened. That locks in your losses. Just remember some of these concepts. Um, but remember that doesn't mean that if you hold random bad stocks, you should keep holding them. Uh, you have to use, uh, some, some real true, uh, thought process on whether or not you're holding a good mix that you want to keep holding on to. Um, so some of the strongest days in the market usually happen right after the worst days. So you, unfortunately, sometimes people participate in the worst days and then they don't, they don't return the favor and they sell out of their investments and they don't, uh, catch the best days.

• 15:06Speaker 04

  One of the most powerful statistics is if you, it's a, it's either 15 or 20 year period. If you miss the 10 best days, just 10 days over a 10 or 20 year period, your overall returns go from like nine and a half to five and a half percent.

• 15:21Speaker 03

  Right.

• 15:21Speaker 04

  That is huge, huge difference, right?

• 15:24Speaker 03

  Yep, and that's why the sometimes, you know, they'll talk about the cost of working with an advisor or somebody if they're going to keep you invested appropriately and you're going to be able to sit down and feel like you're confident about the plan, then sometimes a little bit of added expense is more than worth it, especially hopefully an advisor who's adding some other benefits and education and services for you and your wealth management journey. That kind of gets rid of our first little session here in the new padded rate. Well, it's not even really, it's like fancy padded.

• 15:54Speaker 04

  Fancy padded and boarded.

• 15:56Speaker 03

  Fancy padded room in the basement.

• 15:57Speaker 04

  You just can't tell. Interesting.

• 16:00Speaker 03

  Yeah, there you go. Well, here's what we're going to do. We're going to take a quick break. When we come back, we have Mr. Alan Maderos, who is going to educate us on all things real estate and interest rate.

• 16:12Speaker 00

  Need to get your financial fix on the go? If so, subscribe to the Money Wise Podcast and catch up on all past shows whenever.

• 16:24Speaker 03

  That's right. Welcome back. I'm your host today, Chris Pelster, joined with Mr. Seth Perry, and we are lucky to have Mr. Alan Maderos. Alan, how you doing?

• 16:33Speaker 05

  I am well. You know, I'm thinking that Billy owes us a little bit of royalties for using my name in his song.

• 16:40Speaker 03

  Is that what it is?

• 16:42Speaker 05

  I guess, yeah.

• 16:44Speaker 03

  Yeah. Well, we are really excited to have you educate us and our listeners on kind of what's going on here locally. You know, that is one of the things that I've loved about being part of this show and being able to bring this stuff. Cause I mean, everything is so national nowadays and we get to have some conversations about national news and stuff going on that affects us all. But then how does it affect our own backyard? So really appreciate you coming on. Did want to throw out there.

• 17:11Speaker 04

  Our own backyard. I see what you did, Chris.

• 17:13Speaker 03

  Yep. I just wanted to throw out there though, that for those that didn't know, Warren Buffett is 95 years old.

• 17:19Speaker 04

  Oh, my goodness.

• 17:20Speaker 03

  95. And they said that even up until the last like couple of weeks where he was going to retire, he was like still on the hunt on wanting to add like another awesome elephant into his portfolio. And when I say his portfolio, it's, you know, Berkshire Hathaway and the fund that they manage there. So there you go. And he's, he's, I don't think he's going to run out of money at 95. He has 147 billion dollars. A lot of it's been kind of pointed towards charitable inclinations and I'm sure he's got a plan all in place. So kudos, Mr. Warren Buffett to a phenomenal career. And when you love what you do, you don't work a day in your life. And I guess you work till 95.

• 17:59Speaker 04

  I'm gonna throw one more in from the listener before we move on from Buffett and it's a listener says, my favorite Warren thing was forecasts usually tell us more about the forecaster than of the future or something like that.

• 18:10Speaker 03

  Boom.

• 18:11Speaker 04

  Boom. Love it.

• 18:12Speaker 03

  Yeah. All right. Yeah, I got a couple more quotes we will bring out later, but we want to hear from Mr. Alan Durst. Alan, how are you doing? How's life?

• 18:19Speaker 05

  Good. Things are great. Happy to get the new year started. You know, the beautiful thing about the holidays is you get a chance to celebrate, obviously with family and church and all those things. But man, it's start, stop, start, stop. You know, working in banking, banks close noon, the days before the holiday, and then it's on skeleton crew because people taking all these, you know, holiday days off. And man, I just can't wait to get the new year started. So I'm happy we're back at it.

• 18:43Speaker 03

  Yeah. Yeah. Awesome. Well, why don't you share a little bit about what's going on, what you wanted to bring to the listeners? I know right now, Trump's kind of made the headlines here in just the last few days, kind of came out and made the, the 6% interest rate claim. And I think it created a little bit of a boom or people jumped off the fence. So why don't you talk from an actual lender perspective, what, what you saw and what's going on?

• 19:07Speaker 05

  So the market moved on some news that President Trump had made the mention that Fannie Mae and Freddie Mac, since they're in a conservative ship, had about $200 billion just laying around and that they were going to use those funds to reinvest in the mortgage backed securities. So this is the universal MBS. And we have this tool that the Fed uses and it's called quantitative easing. And it's basically another tool and tool belt to stimulate the market. It's investing in US mortgage backed securities. The reason why is because it's a safe rate of return, it has a duration, and when they pay out, they pay out. Plus dividends, right? So to reinvest this money is not a bad investment.

• 19:50Speaker 05

  But the reason why rates drop is because we have all this participation, which gives a lower yield to basically consumers. But the margin for profit for banks stays the same. So they're able to offer you better terms. And we saw that. And on the news, rates just dipped below 6%.

• 20:09Speaker 04

  How long's it been?

• 20:10Speaker 05

  Only four days.

• 20:11Speaker 04

  Oh.

• 20:12Speaker 05

  So the announcement was Friday and it literally just hit the wires. So.

• 20:16Speaker 03

  Well, thank you for coming on the show then.

• 20:18Speaker 05

  Yeah, timing wise.

• 20:19Speaker 03

  I figured you would have been working like 10 hours a day right now. Just application after application.

• 20:24Speaker 05

  Well, I can tell you that I'm sure our listeners are having their phones blow up from their loan servicers right now, getting phone calls, probably sending them the moon and then other things with it, right? So it is very important as you're considering options to, number one, get a second opinion because markets do move. And number two, as you're going through that process, make sure that the costs that you're paying to obtain that loan pencil out. Because let's be perfectly honest, there's nothing out there that is truly free and businesses cannot operate on zero margin. So the bank that's doing your loan, they have to make profit someplace. So it's not going to be a free loan. And if somebody sells it to you that way, you should probably ask more questions and get documentation

• 21:08Speaker 05

  to support what they define as free.

• 21:10Speaker 03

  Yeah.

• 21:11Speaker 05

  Okay.

• 21:11Speaker 04

  So like early 2023, is that around the time they've been consistently below 6%? So it's been a couple of years?

• 21:17Speaker 05

  Correct. And the reason why is because once we got taken off the dole, if you will, where we had this massive buying program by the Fed, buying mortgage-backed securities. We actually went in, I did a little bit of researching on this and I had a stat number in my head previously, but it's close to $1.7 trillion of mortgages that were purchased during that window of time. And the amazing thing about that is, is that they were purchasing between mid 2020 to the end of 2022, before they pulled off the gas, about $30 to $40 billion a month in mortgages. And that's why rates went from where they were in the mid fours to high fours down to 2.5%.

• 22:03Speaker 05

  Uh, many of you guys actually probably have rates because you refinanced during that time. Or you purchased a house between 2020 and 2022. And right now we call that the golden handcuffs.

• 22:13Speaker 03

  Right.

• 22:14Speaker 05

  But what we're finding is actually many people despite this. Got themselves back into some financial distress. And they have a ton of equity. So looking at the numbers, they're looking at refinancing to current rates. Paying off that low interest rate mortgage because they have higher interest rate debt. This includes auto loans, student loans, credit cards. You name it, they've probably pulled it. And lifestyle creep. I mean, things were cheap.

• 22:39Speaker 03

  Yeah.

• 22:40Speaker 05

  But insta- I mean, when inflation as it got worse. Started to cause more of the dollars going out the door, but people didn't change lifestyle.

• 22:48Speaker 03

  Yeah. So you, you, uh, shared a great article that was talking about how US home sales are stuck at 30 year low. So a lot of people probably could, could understand that or see that or sense that. So do you think a move like this will actually move the home sales needle? Or more so just people taking advantage of it like you're talking about, uh, more like debt servicing and, and refinancing to try to free up a little bit of monthly cash flow or something like that. Maybe even extending out, you know, back to a third, another 30 year freeing up a little bit of money each month. What do you?

• 23:21Speaker 05

  It's gonna be both. So here's the thing, if you see interest rates markedly lower, meaning they stay in the fives consistently. I think those people that were sitting on the fence are going to make a move. Because they've wanted to buy, they just felt the timing wasn't right. But as we talked just before the break, timing in the market is very, very difficult. And if anything, you need to have a longer term plan. Financially speaking, home, honing a home is one of the best investments you can have. So if you look at overall net worth across the country. Where is their net worth?

• 23:50Speaker 03

  Yeah.

• 23:51Speaker 05

  It's in real estate.

• 23:52Speaker 03

  Yeah.

• 23:52Speaker 05

  Okay, that's the bulk of their net worth and their asset base. So getting your foot in the door is important. Affordability, another story altogether.

• 24:00Speaker 03

  Yeah.

• 24:00Speaker 05

  So, but we will see, I believe, if interest rates drop, you're going to see again, an increase in potentially values of homes going up. We are currently in teetering towards more of a buyer's market versus a seller's market. And I'll do a quick definition of that. A seller's market would mean you have more sellers, okay, that can negotiate their terms because you have less buyers in the market. This happened during the COVID breakdown because technically speaking, we had homes come on and buyers had very low interest rates and they were making cash offers above the price and guaranteeing that cash. Where they got all this money, I don't know. But anyways, it was happening left and right. Well, it's flipped to be more balanced or more towards the buyer's market

• 24:45Speaker 05

  where inventory is sitting longer, they have more selection, they can take their time in negotiating the price. Now, if the house checks off of the boxes, it's moving ready, they're gonna get the sales price if it was priced appropriately. And that was evidence all through 2025. So, right now, if rates drop, I think it'll be more balanced and maybe teetering towards the seller's market again.

• 25:05Speaker 03

  Yep.

• 25:06Speaker 04

  I get asked a lot, do you think, in your personal opinion, you've been doing this a long time, do you think we'll ever see rates back in that 2.5, 2.8, 7.5 range?

• 25:14Speaker 05

  No. The only reason why I say that is because unless fabricated, we're going to have some major issue. I don't see the Fed buying mortgages to that tune anymore because there's so much on the balance sheet right now.

• 25:32Speaker 03

  Right.

• 25:32Speaker 05

  Right? Will they do some form of quantitative easing? I believe they will, especially if we entered into a full blown recession. Again, these are factors we don't know. There's just a lot of what ifs out there right now. But to hit that rate, I don't believe so.

• 25:47Speaker 03

  So one of the things, another great article that you shared was talking about an economist's warning to Trump. And what a lot of times we talk about on this radio show is that politicians a lot of times will talk about the positives of a solution or positives of what they're doing, but a lot of times not going to mention the negatives or what could be considered unintended consequences. So, you know, some people might listen to this and go, perfect, Trump's doing something and it's quantitative easing and it's lowering interest rates, it's going to do all these great things. What is some of the fallout or what would be an economist's concern with what's going on and how it could actually maybe do the opposite of what it's intended to do?

• 26:27Speaker 05

  Ultimately, it's just affordability. If prices go up further from where they're at, even if rates drop, you're not going to buy any more home for the same dollars per month.

• 26:37Speaker 03

  Right.

• 26:37Speaker 05

  Right, because the rate dropped, but the payment went, or pardon me, the price went up. So your payment is only buying so much in the market. Now, one thing that I will point out is real estate is always local. I say that because there are parts of the United States right now that are struggling. And because of that, their housing prices have dropped. But just off air, you know, we were just talking about the fact that the stats showed that Kern County's median sales price is around 380,000, whereas the state average was over $800,000.

• 27:12Speaker 03

  Yeah, I like Kern County.

• 27:14Speaker 05

  Yep. So that in and of itself shows you that it's an affordable market, but it also is something that may not have as much swing.

• 27:25Speaker 03

  Right.

• 27:25Speaker 05

  As far as changes in value.

• 27:28Speaker 03

  Yeah.

• 27:28Speaker 05

  Which is somewhat of an insulator, you know. During the time that we saw a lot of shift, I think it had to do with the fact that we were losing oil and gas locally.

• 27:37Speaker 03

  Yeah.

• 27:38Speaker 05

  So we, that's pretty much gone. I hate to say that, but.

• 27:41Speaker 03

  And agriculture.

• 27:42Speaker 05

  And we've lost all of that. So we're still. We're still thriving and I there's not an industry I think that is major that would be exiting during this time. We're actually building more warehousing, more manufacturing, even the investment. I don't think that the Hard Rock Cafe would have even considered the base of the grapevine unless they saw future economic growth and just development. El Tahone, that whole, I mean, that's, it's crazy.

• 28:10Speaker 04

  I was just gonna add to, add to even more commuters who are moving in from the big cities. If you're paying, you have a $900 million home, you've got some equity, you come here and can basically pay cash for a house.

• 28:19Speaker 05

  Yes.

• 28:20Speaker 03

  So let's, uh, let's take a quick break. When we come back, we'll go maybe a little bit more into the Crabtree and local report. Make sure that we're answering any questions. If any listeners want to join the conversation, you absolutely can. You can always text or call in 661-396-1000. And I will, before we go out, say, somebody did mention, I had to stop answering my phone because I'm getting four to five, I didn't go with six to seven calls a day trying to get, uh, to refinance our homes. So thanks for that comment. Thanks for not using those, uh, those two letters. That, that was, that was 2025. So we're not doing that anymore.

• 28:54Speaker 04

  Fire. That's fire.

• 28:55Speaker 03

  We'll be right back after break.

• 28:57Speaker 00

  If you're a business owner who provides a retirement plan for your employees, contact Money Wise Wealth Management to see if you're maximizing your options and minimizing your liabilities. Money Wise 401k plans are customized to you and your company's needs. 661-847-1000. That's 661-847-1000.

• 29:23Speaker 03

  Welcome back. This is the old school song. This is taking it back to years and years and years of our radio show.

• 29:35Speaker 05

  That's a special mix that Stephen has made.

• 29:37Speaker 04

  Stephen, did you put this together?

• 29:38Speaker 03

  Is that you, Stephen?

• 29:40Speaker 04

  That's Stephen.

• 29:41Speaker 03

  Is that you on the mic?

• 29:41Speaker 04

  Guaranteed.

• 29:42Speaker 00

  No, that, that was not me doing Wu-Tang.

• 29:46Speaker 00

  But it was a, it was a mix a buddy sent to me.

• 29:49Speaker 03

  Nice, nice, cool. Good deal. I, uh, again, I'm Chris Pelster with Mr. Seth Perry. We have Alan Maderos joining us, talking about interest rates and what's going on in the lending world. And also talking a little bit about real estate and, and especially local with the Crabtree Report. So always appreciate his insights and experiences that he's dealing with, with his clients and the people in the community. So somebody did mention, or said, oh, you mentioned the casino, which was part of my question. Has homes out near Tahone skyrocketed since the casino opening? Good job, guys. And I think the consensus coming back in from the break was there wasn't a whole lot of homes out there to begin with.

• 30:30Speaker 03

  But now they're getting built. Um, there was a couple of hotels that are probably busting at the seams with all the construction and workers and different folks that are involved in that. Um, cause the, the casino does not have their hotel built yet, which I think is like a year out still at least, if not more. Um, but yeah, and there's a RV park that has been put in out there. So I don't know how close it is to the casino, but somewhere out there in that area. Uh, there's a higher end RV park that got put in place. So maybe some of the people that wanna, uh, stop on, on in route before they go up or down the, the old grapevine, uh, park their RV and go.

• 31:10Speaker 00

  Have you been out there? Checked it out at all?

• 31:12Speaker 03

  I haven't gone out there. I've driven by it.

• 31:14Speaker 00

  So I will say, you know, we haven't been out there. We had, you know, you, uh, Alan brought up all the holidays and stuff. And, uh, me and the wife just went for a drive on Christmas. Once we got away from the family, went for a drive and it was sprinkling. It was nice weather. We, we stopped by just kind of check out the guitars. I'm not a real gambler. I was just kind of seeing if they had a sports gambling book or something I would check out.

• 31:38Speaker 03

  What do they?

• 31:39Speaker 00

  They don't do sports gambling. So I was waiting for, uh, my wife to, uh, To get some food. So I threw in $10 in the slot machine. I was like, okay.

• 31:48Speaker 03

  So you just went and sat in the casino and got your phone out? Did your sports stuff?

• 31:53Speaker 00

  I was like, okay. It was Christmas Day. I figured it was gonna be empty. No. I was way, way off because that place was packed on Christmas Day. But I will say that $10 turned into $250 and I cashed out money wise. I'm out of here.

• 32:09Speaker 05

  Wow. Okay. So this is an interesting thing. I don't know the exact stats. So one of you gentlemen can probably chat G P D this. What is the increase in overall online betting in the last five years?

• 32:21Speaker 03

  Oh, it's humongous.

• 32:22Speaker 04

  It's massive. I'm gonna guess 600%.

• 32:25Speaker 05

  It is massive. And this is the crazy thing because I cannot tell you any sports, I guess,

• 32:33Speaker 05

  shows or anything that you don't see a commercial about online betting, whether it be DraftKings or it be, you know.

• 32:38Speaker 00

  Go to a baseball game.

• 32:39Speaker 05

  No, now they have, they have bets on like random things.

• 32:42Speaker 03

  Oh, yeah. Like who steps on the tee box first at a PGA tournament?

• 32:47Speaker 05

  Yes.

• 32:48Speaker 03

  Yeah.

• 32:48Speaker 05

  Or yeah, who makes it to the green first. I mean, it's just weird.

• 32:51Speaker 04

  This is crazy. By 2025, about 20% of US adults placed a sports bet. Americans wager, back in 2018, it was looking at under 5 billion and Americans wagered last year approximately 150 billion.

• 33:07Speaker 03

  It's just a good thing that gambling doesn't create devastating.

• 33:11Speaker 05

  No.

• 33:11Speaker 03

  You know, consequences for people and their finances or anything.

• 33:14Speaker 04

  And let the record be stated that we are not endorsing. By any means, we are communicating.

• 33:21Speaker 03

  The one thing I will say is, so in the world of gambling, because it's all, it all kind of tickles the same part of our brains as humans. Sports betting, I would think would be the most dangerous because you can benefit from some of your research and some of your knowledge. Like to whereas if you're on a slot machine, good luck. Like there's no talent to it. Like I don't care how many little dances or. You know.

• 33:48Speaker 04

  I didn't even understand it.

• 33:49Speaker 03

  You could try whatever you want to do.

• 33:50Speaker 04

  Just pull it.

• 33:51Speaker 03

  Yeah, you do like it's just random, but with with sports betting, there there is, there can be kind of a science to it and you can kind of be good at it, but it's like it's still the same behavior that's going to make you go too far, go further than you wanted to go, you're going to wager too much, you're going to lose everything you gained, uh, uh, bet, um, the house doesn't lose.

• 34:13Speaker 04

  Can you think of anyone who can sit here and tell you, or have you heard a story of someone who's gotten into sports gambling and it had been a happy ending? I truly can't think of anybody. I can think of pretty big disasters.

• 34:24Speaker 03

  Yeah.

• 34:24Speaker 04

  But.

• 34:25Speaker 03

  Yeah, it's it's dude, I mean, like I, there was a psychologist that was talking about it that he has, uh, he has clients that literally can't take a shower without reaching out from the shower and grabbing their phone and checking or even wagering a bet or two during a shower.

• 34:41Speaker 04

  That's like me during fantasy football, Stephen. That's why I'm not playing next year, buddy. Anyone else, any listeners out there?

• 34:48Speaker 03

  It's Stephen's fault. Stephen's the dope.

• 34:49Speaker 04

  Get hooked on it.

• 34:50Speaker 03

  He's a dope dealer. He's the, he's the fantasy football guy.

• 34:53Speaker 04

  I know, man.

• 34:53Speaker 03

  He's the commissioner over there. Uh, but anyways, I think our unfortunately or fortunately, or however you look at it, our fantasy football league doesn't have, uh, too much attention going into it, actually. Yeah. But congratulations, Seth. I think you brought that up because you wanted to.

• 35:08Speaker 04

  Ah, maybe.

• 35:09Speaker 03

  Want to throw it out that you were the champion?

• 35:11Speaker 04

  And you could have beaten me when you weren't even, I don't even think your quarterback was healthy. I think he'd passed away or something and he was still on your roster.

• 35:18Speaker 03

  And I didn't even take him off and I almost still beat you.

• 35:20Speaker 04

  And I get a text from Saturday, you tell him I'm going to slap you.

• 35:23Speaker 03

  Yeah. You, I did one time it was, we talked about on the radio show and I made one change like blew my score out the, the, the next day, like, dude, that weekend, like, I was like, thanks for talking about fantasy football on the radio show.

• 35:36Speaker 04

  Imagine if you would have actually played, but anyway.

• 35:38Speaker 03

  Just too busy. Clients, definitely numero uno, family, uh, all that stuff way down there and definitely, please don't gamble, please don't gamble with your finances and all that stuff. If you think it's entertainment, just be very careful because Vegas was not built on, uh, entertaining and putting people, uh, putting money in people's.

• 35:57Speaker 04

  Back to, back to pulling out money out of home, pulling, pulling equity out of houses.

• 36:02Speaker 05

  Nice segue. I like that one.

• 36:04Speaker 04

  I, I think it's a gamble and something I'm very concerned about is that, okay, so if people exchange their low interest rate for a slightly higher one so that they can pay off higher debt, if they don't change the behavior.

• 36:15Speaker 05

  That's right.

• 36:16Speaker 04

  They're gonna jam up their credit cards. They're gonna go out and get another new car here in two years because they're not happy with their now paid off car. And they're gonna find themselves in a worse place because now their, their house payment has gone up 500,000, right?

• 36:29Speaker 05

  Yes.

• 36:30Speaker 04

  What do you think?

• 36:32Speaker 05

  Part of the, the plan, when I talk to clients is actually talk about your finances, where they are, where they can be, and how to manage that debt. Meaning, let's get this paid off. I know it sounds scary, but you know, there's over 40% of Americans that own their home free and clear in the United States.

• 36:51Speaker 04

  Beautiful. 40%?

• 36:52Speaker 05

  40%.

• 36:53Speaker 04

  Wow.

• 36:53Speaker 05

  So, wouldn't that be just beautiful for you to be able to get out of all of your debt? Well, you can do it. It's a plan. It's a consistent plan. So, I was told, I think it was Monday, was National Quitters Day, for all those people that had resolutions, and they were gonna go to the gym.

• 37:12Speaker 04

  Yeah.

• 37:12Speaker 05

  And they stopped going over the weekend.

• 37:14Speaker 04

  Yeah.

• 37:15Speaker 05

  So, the, the whole message was because they had no plan. They just decided to go and, "I'm gonna jump on the elliptical. I'm gonna go on the treadmill. I'm gonna go pump these weights." And they got home and they're tired and they're sore and they're like, "I don't know if I want to go back."

• 37:29Speaker 04

  It's cold.

• 37:30Speaker 05

  It's cold.

• 37:30Speaker 04

  Cold in the morning's van.

• 37:31Speaker 05

  So, again, lasting change happens through habits and, you know, James Clear tells you this, obviously.

• 37:37Speaker 04

  Atomic habits, baby.

• 37:38Speaker 05

  Small changes done consistently over time will have lasting change. So, financially speaking, there's a great quote in the very beginning of The Incredibles where Mr. Incredible says, I just cleaned up this place. Can we just keep it clean for a little while? Right? So I talk to clients and as much as I want to have them come back and do it alone, if they come back in a year, I'm like, wait, what happened? We just talked about this.

• 38:04Speaker 03

  Yeah.

• 38:05Speaker 05

  I mean, yes, they would put food on my table, but were you really paying attention? We want to get you into a better financial situation. Bottom line.

• 38:14Speaker 03

  Yep.

• 38:14Speaker 05

  So.

• 38:15Speaker 03

  Somebody joined the conversation that we were just leaving. Isn't sports gambling banned in California? I think you're right. You probably have to go over to Vegas.

• 38:22Speaker 04

  Traditional sports.

• 38:23Speaker 03

  Which is strange, but I'm sure that's why there isn't a sports book there. Sorry, Steve. Casino is really nice. My brothers go there a few times a week. They are gold members.

• 38:33Speaker 04

  Hmm.

• 38:34Speaker 03

  Yep.

• 38:34Speaker 05

  That status there.

• 38:36Speaker 03

  I don't know how that works with sports gambling though, on your phone though, because there's all kinds of bets I think you could do on your phone. Or am I tripping, Steven? Do you know?

• 38:44Speaker 00

  I know you can't, like DraftKings and stuff like that, you can't, you can't do, but I believe you could only do prop bets, which is the silly bets Alan brought up earlier.

• 38:54Speaker 03

  So because it knows you're in California?

• 38:57Speaker 00

  Yep.

• 38:57Speaker 04

  Yeah.

• 38:58Speaker 00

  Yeah, it checks your address and your banking and all that.

• 39:01Speaker 03

  What about if you get a VPN and you say that you're?

• 39:04Speaker 05

  Wait, what? So this guy's trying to circumvent the system.

• 39:07Speaker 03

  No, I didn't.

• 39:08Speaker 04

  I gotta bring him back again. I gotta bring him back again.

• 39:10Speaker 03

  I was a.

• 39:11Speaker 05

  Seth, bring him, bring him back.

• 39:12Speaker 00

  Who's the dope killer now?

• 39:14Speaker 03

  Excuse me a second. I have to take care of something on my phone real quick. No, no, I'm not into that kind of stuff. And I, I could, I would basically, I should probably just walk in. If I was going to go to a sports betting place in Vegas, I should just walk in, hand the lady behind the counter like 50 bucks and say, thank you, and then leave.

• 39:31Speaker 04

  Yeah, exactly.

• 39:32Speaker 03

  Be like, here you go. Thanks. But anyways, it was crazy. Yeah, we did a little bit of that when the kiddos were playing volleyball in Vegas. And it was cracking me up.

• 39:42Speaker 04

  Betting on your own kid's volleyball, Chris? That is intense.

• 39:45Speaker 03

  You can't do that, I don't think. Maybe. But they would have these parlays. Some of the dads would come back and they're like, if this happens and then that happens, and then that happens, and then that happens, my 25 cents will become like $400. And it's like, well, I hope it happens for you.

• 40:00Speaker 05

  I don't think there's very high odds.

• 40:02Speaker 04

  Alan, what do you say to the first time home buyer, potential first time home buyer? They have great income, they've saved up enough for a down payment, but they're just scared. What are some other things they can do or the ones that aren't quite there, but need to be there? What are some, some, uh, some credit advice you can give them? What should they clean up? How much should they have? Are people still doing three and a half percent on?

• 40:23Speaker 05

  Yeah, so there's down payment assistance available pretty regularly. Actually, you can have an income up to like a hundred and fifty seven thousand dollars as, as a maximum. I think it's actually one eighty two. They moved it. Don't quote me on this. I don't have the reference in front of me, but I know one fifty seven is a good number from twenty twenty five. It's probably higher than that, but they will allow you to finance the down payment of three and a half percent or three percent, depending on if it's a conventional loan or FHA and potentially borrow a portion of the closing cost. But you're pretty much financing tax tag, license, the car, the, the whole experience. So we do recommend that you have at minimum about three percent of the sales price. If you're going to even try to use a program like that.

• 41:07Speaker 05

  And the reason why is you need to have money for an earnest money deposit and inspections. But then you may have some money left over if you're able to negotiate some credits. But the advice is if you're in that looking zone where you want to get ready, it's best to talk with a mortgage professional early. And the reason why is we can put together a customized plan for you and have milestone check ins to see if you're hitting your goals. One of the best things that I have seen work time and time again are when you see your current rent payment and you see what a potential mortgage payment would be, and let's just say that differential is five hundred dollars. It's a stretch. When we look at your bank accounts, we're looking to see, do you have five hundred dollars left every month after you pay all your bills? And if you don't, then that's not a good decision because you don't have the margin of error.

• 41:53Speaker 05

  But if you do. I recommend for the next six months, pay yourself that $500 that you are going to pay in a mortgage, put it into an account that you don't see. Like training wheels. Exactly right. It's benefiting you in the sense that you're putting more money away for a down payment or closing costs, but it's also proving to yourself that you can do so without a hardship. There's nothing worse than the stress of financial obligation and having to figure out a way.

• 42:21Speaker 03

  Right.

• 42:22Speaker 05

  So that's the best advice I have for people. I always advise people, just go in early. Even if you're not quite ready, let's put a plan together because at the end of the day, it's not about me. It's about the family and as much as your real estate agent loves you and your lender loves you, they're never going to make a payment for you.

• 42:39Speaker 03

  Yeah, it's true. So through the years, you've been a great asset to the show and the listeners and everything. And we've talked about different things through the years and sometimes, you know, the conversation comes up rent versus buy. And maybe there's a short-term situation where you might be moving, you know, in the shorter term. Could be three years to five years to seven years. And it's kind of always been thought of like you're going to stay somewhere for usually kind of thought of around five years that it still could really make sense to buy. You do have some expenses, you have financing costs, you have ownership could be a little more expensive and taking care of something for five years versus renting. Because of all these changes that have gone changed in the last couple of years, higher interest rates,

• 43:22Speaker 03

  prices where they're at and stuff like that, has something changed with that? Have you kind of calculated that or gone over that with clients?

• 43:27Speaker 05

  Is it still the same? Yeah, we are seeing that because wages have not really kept up with inflation or because of lifestyle not being changed. There are some landlords that are lowering rents in order to attract more renters. So is there a housing shortage? Depends on what you define as a housing shortage. It means we just don't have enough homes. Well, people are finding ways to make it work. Now, as far as affordability goes, at this time, the truth is, is that it's more expensive to buy. than it is to rent. However, when you do buy, you are buying equity over time and you have the long-term appreciation aspect. So just for simple numbers, a thousand dollars

• 44:12Speaker 05

  a month, three years down the road, you're at $36,000. Whereas that same thousand dollars, your payment for your mortgage might be higher, but that same thousand dollars invested into a mortgage will probably yield $50,000 over the three-year timeframe. So it's not $50,000 gain, it's the 36,000 from the 50, but that's still appreciation. That's time. And you're also paying the balance down on a loan.

• 44:39Speaker 04

  Are you selling any of these 50-year mortgages?

• 44:41Speaker 05

  No, they're not even available. To be perfectly honest with you, as an idea, there's not a market for it. Meaning mortgage-backed securities are not selling that. It's just not something being sold. So as a result, there's no appetite in the market for it. Now, if it comes out, I don't know.

• 44:58Speaker 03

  Can I get 10 of them for rentals?

• 45:01Speaker 05

  I don't think so, but I don't know.

• 45:03Speaker 04

  With, with nothing down?

• 45:05Speaker 03

  Yeah, with nothing down. I want 10 50-year mortgages and then I'll just cash flow them all.

• 45:11Speaker 05

  You know what the crazy part is, is that-

• 45:13Speaker 04

  That's how Dave Ramsey went broke. That's how he went broke the first time and then turned it into a, a dream come true for him, but yeah.

• 45:20Speaker 05

  We, we always think about-

• 45:22Speaker 03

  Who's that?

• 45:23Speaker 05

  Dave Ramsey, you said. Dave Ramsey, that guy?

• 45:25Speaker 04

  He does finance or something.

• 45:26Speaker 05

  Yeah, I don't know who that guy is.

• 45:27Speaker 03

  Never heard of him.

• 45:28Speaker 05

  Yeah, that, that guy-

• 45:29Speaker 03

  Just kidding, guys.

• 45:29Speaker 05

  When we were talking about just terms, in Japan, they've had a 100-year mortgage for many, many, many years. It's a generational mortgage because it's so expensive in like Tokyo, right? So expanding the term just means more interest over time. And it's not one individual banker collecting the money, it's a collective of finance banks. So they're happy to take your money for as long as you're willing to pay it. So if you can afford a shorter term, go for it. You'll pay less interest and you'll own faster.

• 45:56Speaker 04

  I just got a text that says, "Hey Seth, you are so crazy funny. Ha ha. You know, I listen to your show every day. 6767." That's from, uh, from Dave, Dave Ramsey. Crazy. That guy. Yeah, he listens. I think he pulls a lot of our content. Yeah, he has to.

• 46:15Speaker 03

  Yeah, he has to listen to this to get ideas for his, uh, his.

• 46:18Speaker 04

  Shout out to Dave.

• 46:19Speaker 03

  Tiny little company there in Tennessee, which, by the way, uh, so, uh, Jamie's entire family's all moved to Tennessee. So first time I go to visit them, you know, we land, you get out of the airport, you're driving down the road. You look over and you see this humongous campus.

• 46:34Speaker 04

  Is it his?

• 46:34Speaker 03

  Ramsey Solutions.

• 46:35Speaker 04

  Nice.

• 46:36Speaker 03

  I'm like, oh.

• 46:37Speaker 04

  Could do the dead free scream and stuff. Hey, we, we followed his, his stuff.

• 46:41Speaker 03

  Good stuff. It's, it's good stuff. It has a lot of good stuff with it. I don't, you know, I'm not lockstep with everything, but absolutely got us started. It was what got me interested in, in budgeting and financial planning and all that stuff and started my career to an extent. And got me and my wife started in the right direction way back in the day in the early 2000s. And so I am thankful for, for Dave Ramsey, but, uh, Alan, you can join us for this last little listener question I want to get to. So we have time for it. Uh, somebody did, uh, uh, reach out and say, are TVs really going to get more expensive because of memory chip shortages? Or is that just a scare tactic? Why does everything keep getting more expensive? Well, I would definitely feel your pain, uh, as far as things getting more expensive. I will say TV has been the little.

• 47:26Speaker 04

  The opposite.

• 47:27Speaker 03

  The, the beacon of golden light.

• 47:29Speaker 04

  Yeah.

• 47:30Speaker 03

  That they've just gotten cheaper and cheaper and cheaper. And unfortunately, what you're talking about there is memory chip shortages. Uh, it, it goes back to supply and demand. And so if there is a memory chip shortage, which a lot of the manufacturers have began to say, so Nvidia and some of these companies, they're not able to keep up with demand. So if that happens, it, it goes back to the supply chain. If there's not memory chips out there, people are going to have to pay more to get the memory chips. It's going to become, you know, fighting for those memory chips. People are going to be willing to pay more, which means, uh, TVs could technically go up a little bit more in price.

• 48:09Speaker 03

  Or we might see something happen where people don't have 14 TVs in their house because they've gotten so incredibly cheap.

• 48:17Speaker 04

  Five inch high cents right now, 280 bucks.

• 48:20Speaker 03

  Yeah, my joke, my joke was when, when we read this question was, oh, man, my 100 inch TV now is going to be like 1,100 dollars instead of 950, which is insane because uh, my, my dad has been planning his, um, his, his like little movie studio where when he was originally going to put in a projector, like there's projectors that are 15 and 20,000 dollars, you know, for the high end projectors, they've come down a little bit in price, but not like TVs have, I'm like, dad, at this point, go down and buy 115 inch TV for like a thousand, 1,500 dollars, you know, and be done with it. It is insane how cheap they've gotten through the years and uh,

• 48:59Speaker 04

  How big can you get one in, in California now? What's the, cause I know they've keep increasing it.

• 49:03Speaker 03

  I think there's 115, 115?

• 49:05Speaker 04

  Yeah, a 115.

• 49:07Speaker 03

  Uh, yeah, I think it's gone up to like 120, 125 now.

• 49:11Speaker 04

  Wow.

• 49:11Speaker 03

  I just, my wife says, uh, when we go to Costco, just keep to the right, keep to the right.

• 49:18Speaker 03

  Yeah, but I mean, this goes back to, to basic economics, right? So supply and demand, supply chains are an issue. When you're not able to get the chips that are needed, they're not able to pump them out as fast. So uh,

• 49:29Speaker 04

  Someone's gonna step in though. I predict there might be a slight price in this, uh, spike in the price, but someone's gonna step in there and start banging out these chips and.

• 49:38Speaker 03

  Yeah, I, I would, I would think.

• 49:40Speaker 04

  Could be raw materials too, could be a shortage.

• 49:41Speaker 03

  Curious to see though, cause at some point it seems like manufacturers can be like, okay, there's just no, uh, there's no profit margin in TVs anymore. Like, like, and, and people are staring at their screens more and people have other screen alternatives and there has to be some sort of breaking point where it's like, we're just not going to pump out so many of them because we're making, I mean, it's, it's gotten to the point where TVs are like pizzas, you know, like, have you ever looked at the profit margin on pizzas?

• 50:06Speaker 04

  It's crazy.

• 50:07Speaker 03

  Like you have to have a national company and make 12 cents per pizza and sell them all across America to make any kind of profit as a company. The profit margin on pizza is very, very small.

• 50:17Speaker 04

  That makes, uh, that makes high sense to me.

• 50:20Speaker 03

  There you go. Alan, anything else more for the listeners? We're running out of time here. Thank you so much for joining us and.

• 50:24Speaker 05

  Just keep listening to Money Wise. These guys do a great job and they're not going to steer you in the wrong direction.

• 50:30Speaker 03

  There you go. Thank you, Alan. Thank you, listeners for making the Money Wise show what it is. Thank you, Stephen, for our first show down here in the basement at the Woolsworth buildings. Be smart, be safe, be money wise.

• 50:55Speaker 02

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