1/16/25 What is FICO? Vikings, Mustangs & Wolfpack OH MY!

The Moneywise Radio Show and Podcast Wednesday, January 15th BE MONEYWISE. Moneywise Wealth Management I "The Moneywise Guys" podcast call: 661-847-1000 text in anytime: 661-396-1000 website: www. MoneywiseGuys.com facebook: Moneywise_Wealth_Management instagram: MoneywiseWealthManagement

• 0:00Speaker 00

  From the padded radio room off Stockdale Highway, here is Money Wise. Call or text in at 661-396-1000.

• 0:09Speaker 01

  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?

• 0:30Speaker 01

  Securities offered through SEF Securities, Inc., member FINRA/SIPC. Investment advisory services offered through SEF Investment Advisors, Inc. SEF Securities, Inc. and Money Wise Wealth Management are independently owned and operated.

• 0:40Speaker 00

  Now, let's start the Money Wise Show.

• 0:43Speaker 02

  That's right, let's start the Money Wise Radio Show. It is a very special day today. We have a little bit of a new crew here in the, what is now affectionately being referred to as the Gero Ellis Padded Radio Room off Stockdale Highway. We've done a lot of radio shows right off Stockdale Highway. Most of you guys probably drive by and don't even realize it, that there's a group of advisors and people that are sitting right next to the road in a padded radio room, making things happen here. And so, we thank you guys for listening, for making it what it is. It's been on the air for a long time. Obviously, a lot of things are shifting towards podcasts, but we love being live. We love sharing local news, local data.

• 1:25Speaker 02

  And now that this was always referred to as a padded radio room, it has been rebranded the Gero Ellis Padded Radio Room.

• 1:33Speaker 00

  Better name to put up there.

• 1:34Speaker 02

  Yeah, and I'm excited today because we have, we've done a couple of shows together. Joining me today, I'm Chris Pelster, I'm joined with?

• 1:41Speaker 00

  Dustin Weaver.

• 1:42Speaker 02

  And we also have a new to the team advisor here at Money Wise. We've been growing, we've been having to make some changes, obviously, because of some of the unfortunate circumstances and changes here at Money Wise. But we have brought some wonderful folks on the team to start stepping in, and we're excited about, you know, just building out an even better team and service for our clients. We love our community, we want to get out there and serve our community and be a part of the local voice, because everything nowadays on radio and this and that. It is syndicated, it's national and it's, it's important, but obviously like we always talk about just like investing in real estate. Uh, real estate is important where you're investing in real estate, right? I mean, you can talk about national averages and this and that, but it's most important where you live or where you're investing.

• 2:27Speaker 02

  And so, uh, so there it is. But today we have Mr. Seth Perry. Mr. Seth Perry. So he has joined the team here at Money Wise. This is his second show and we're excited. Uh, to have all three of us on here today. We're going to talk about some.

• 2:41Speaker 02

  Uh, some interesting things that a lot of folks might not know about FICA, FICO. FICO. FICO. You gotta, I say FICA a lot. There's not a FICA score?

• 2:49Speaker 03

  Yeah, no, there's a FICA tax.

• 2:51Speaker 02

  Oh, that's, that's the tax you pay up to a certain amount for Medicare, Medicaid and. Social Security and it's up, it's up a lot higher than I realized. A lot of people don't realize you only pay up into FICA taxes up to a certain amount. And every year it creeps up with inflation and I remember when I started in the industry, I think you only paid FICA taxes up to like 96 grand or. A hundred and $2,000 or something and it's all the way up, I believe to one. 172,000 am I, are you pulling, Google?

• 3:21Speaker 03

  So 176,000.

• 3:23Speaker 02

  170. 100 for this year for 2025. So sometimes people don't realize that if your income level's around there, you might get a little bit of extra bump on your December. Paycheck or whatever, because you are no longer paying that 6% into FICA if you are a W2 employee. If you're self-employed, it's actually 12% because you pay employer and employee. Here I am rattling off, um, but, uh, again, I'll go back to, you know, you guys can always join the show. You are what make the show great. So we have some questions that we are going to go over because that's what makes the show good is answering your questions. Going over anything that's interesting, uh, to you guys and that you guys want to learn about. Um, did want to talk a little bit about this week, the S and P 500 slipped on Thursday. Uh, so at, uh.

• 4:06Speaker 02

  Closed today, it ended a three day winning streak. Big tech pulled back. So big tech has obviously been. Um, on a rampage, uh, going all the way back to COVID and some of the COVID tech stocks that took off. Um, they've been on a little bit of a roller coaster, but definitely on an upward trend, trend over the last couple of years. Um, and so continued, you know, all of last year cooled down a little bit in the fourth quarter. Still had some positive weeks going into this. We just ended a three day streak on the S and P 500, which only, you know, there's a portion of the S and P 500 that's tech-based, but you know, like even if you look at the NASDAQ, the NASDAQ was, uh, is, is all basically tech-heavy. It's, it's mainly tech stocks because it was, uh,

• 4:49Speaker 02

  the electronic trading system that came out. So all the, the new techie companies jumped on that exchange. And, uh, Apple had a tough day. Uh, Apple was down 4% and just Apple being down 4% and how big Apple is actually made an impact there on the NASDAQ composite. It's down, um, about nine tenths of a percent to 19,338. S and P 500 I mentioned was, uh, down. It ended its three-day streak. It's down about 2, uh, 0.2% Yeah. Uh, to 5,0937. Yeah. Normal, normal volatility. Um, just kind of to be expected. When you hear about some of these, uh, we've talked about the FAANG stocks before and a handful of some of these stocks that have just made a major impact

• 5:32Speaker 02

  on what the overall markets have done. Um, it makes sense. They've been on a rampage. Tesla tumbled more than 3%. Nvidia slid 2%. Alphabet, which is Google, lost about 1%. So when you have these heavy hitters, uh, big, big, um,

• 5:50Speaker 02

  market share, right? You know, uh, have a little bit of an off day. It's going to, uh, impact the different indexes and, and what we see there. So, uh, you know, kind of normal market activity, you know, we always try to talk about it a little bit, but it's funny how, you know, like the, uh, finance websites and stuff try to boil it down to like, this is the one, the one reason this is what the stock market did today. There's Yeah. millions of reasons. There's such a diverse, uh, reality of what's going on in the markets and why certain stocks are up and down and news that comes out that really impacts one stock, even in the same sector. You know, one stock could be heavily, uh, you know, have a situation and it's not necessarily going to even invest, uh, adjust the whole sector, uh, alone. So

• 6:34Speaker 02

  that's kind of what went on over the markets. Um, I did want to jump into a couple of the questions that came in. So Dustin, can you read one of those?

• 6:47Speaker 03

  Yes, I can. So I got a long time listener here. First off, please share my prayers for Gero and his family. My question is, is medical debt going to be removed from credit reports? And if so, when do you think that will happen? So do you know what they're talking about here?

• 7:07Speaker 02

  Yeah. Yeah. So this was on the docket. So you said you looked up a little bit of information about medical records on credit reports?

• 7:14Speaker 03

  Yeah. So the CFPB, which is the Consumer Financial Protection Bureau, is a government entity that protects consumers. They enforce laws, they educate consumers, they oversee mortgages, credit cards, student loans, payday loans, that kind of thing. So that group finalized a rule that is going to remove about $49 billion in medical bills from credit reports of about 15 million Americans. So what it is, it's a ban on medical bills on credit reports when you go to apply for a loan. So it's prohibiting lenders from using any medical information in their lending decision at all. So.

• 7:58Speaker 02

  Interesting. Thoughts on that? I mean, interesting. Do you think, do you think people offering loans should be able to know like medical situations, debts?

• 8:12Speaker 03

  You know, it's hard because they're making a decision on, all right, money in, money out, what is money going towards? So from that side of it, it is helpful to know, right? What, how is this balancing out?

• 8:22Speaker 02

  Yeah. Right. Did you talk about overall numbers that they think that that might impact?

• 8:27Speaker 03

  Yeah. What was it? 19 million?

• 8:29Speaker 02

  No, $49 billion in medical bills that are reported on credit reports for about 15 million Americans.

• 8:36Speaker 03

  Right.

• 8:36Speaker 02

  So pretty substantial numbers. We're talking about lots of Americans with medical debts on their credit reports. Um, you know, it just, I mean, it's like, I have a hard time feeling bad for credit card companies or people giving loans because you know, some of them are making 20 to 29% interest in this and that, but yet at the same time, you know, they're offering credit to folks to be able to use that money. And if somebody has a major substantial medical bill or debt on their credit report, uh, man, that's, that's an interesting concept. You know what I mean?

• 9:10Speaker 03

  Yeah. And you know, on that topic in particular, right? I was talking to a guy that worked for a big bank and he said, on the credit cards and personal loans, the rates are so high because the risk is so high on whether or not they're going to get paid back. And a lot of times they have so many losses on the books with that, but the reason they do it, it's what they call a loss leader. As in they get a new client, they have your information and they can sell you other products. So you get the credit card with them, but really they're more excited about talking to you about a home equity line or refinance or a purchase for a new home.

• 9:45Speaker 02

  Right.

• 9:45Speaker 03

  You know?

• 9:46Speaker 02

  Yeah. Interesting concept. I mean, those poor, those poor creditors, you know, they're only make, you know, I mean, it is, it's true. Cause we've, we've had before, uh, you know, they, a lot of people will refer to same day loan, you know, cash or check here.

• 10:00Speaker 03

  Oh, yeah.

• 10:00Speaker 02

  Folks, uh, people who don't have traditional banks, their only option is those same day loans, same as cash type places. And, and I think some of their rates are up as high as 40 and 50%. I don't know what the allowable limit is, but they are always at the highest limit. And we've had people talk about it before and we've, we've, we've had discussions and it almost seems full on predatory, but they talk about the risks that it poses.

• 10:26Speaker 03

  So it's actually can be as high as four to 600%.

• 10:31Speaker 02

  Four.

• 10:31Speaker 03

  For payday loans.

• 10:32Speaker 02

  Because they're very short term in nature.

• 10:34Speaker 03

  They're short term, but even still, it's a dangerous game to play. Did you know there's more payday lenders?

• 10:40Speaker 04

  In the US than there are McDonald's.

• 10:42Speaker 02

  Right.

• 10:43Speaker 04

  McDonald's locations.

• 10:44Speaker 02

  Seriously?

• 10:44Speaker 04

  Fact check it. Look, look it up.

• 10:47Speaker 02

  Yeah, well, it's, I mean, it's a super profitable business venture and, and we've talked to a few folks. We've had them on the radio show before, not in a while, but that was their whole thing is like, look, you know, if you don't think it's, if you think it's a crazy amount of interest, open it up and start taking risks on people that don't have traditional banks and don't kind of handle their money in a traditional financial way. And you're taking on the risk of whether or not they're going to give your, you give you your money back. You know what I mean? So, uh, yeah, I mean, that is the, that is the good thing about the free market. Like if you think that it's a ridiculous amount of interest, go open up a little shop and start handing out money to people and seeing, uh, seeing how it goes. So.

• 11:25Speaker 04

  This is a little dated here, but from 2014, uh, NBC News, pretty legit says, yep, there are more payday lenders in the US than McDonald's.

• 11:32Speaker 02

  How about that? He Googled it. It's gotta be real. It's gotta be.

• 11:35Speaker 04

  20,000 of them.

• 11:36Speaker 02

  I'm not loving it.

• 11:37Speaker 04

  20,000 payday lenders.

• 11:39Speaker 02

  Well, yeah. And, and you know what's funny is, uh, you may not even, you may not even notice those things, but there are, there are a group of folks that don't have a traditional bank. And so when, if they ever get a check or money from anybody, it's like, they don't have any way to, you know, to, to get cash. And so, and even folks that I've known that would be considered pretty successful. Um, I still have seen people in pretty high levels of different careers, still are playing the, the, the payday loan thing and getting money out and paying this off and doing this. And sometimes, you know, oh, well, it's a lot, but if I pay, you know, this credit card off, it's charging me this much and I get the money back over there by this date and they play that game. And, uh, it's kind of like playing in Vegas.

• 12:24Speaker 04

  Right.

• 12:24Speaker 02

  That I would definitely put in the same vein as Vegas. The house usually wins, um, or else there wouldn't be more payday loan places than McDonald's.

• 12:32Speaker 04

  It's a tool.

• 12:33Speaker 02

  Yeah.

• 12:33Speaker 04

  Life throws, throws curveballs. Sometimes you need to use those tools, right? So when you dig into the numbers, it says the typical borrower makes 22,476 a year. So, and then they, but they pay $458 a year in fees.

• 12:47Speaker 02

  Right.

• 12:47Speaker 04

  On average.

• 12:48Speaker 02

  Which is substantial.

• 12:49Speaker 04

  So many of, so many of them.

• 12:51Speaker 02

  And that's what we've talked about. It seems predatory because you're taking advantage of, uh, you know, lower income level folks that, you know, don't have a lot of money to give up anyways. And, uh, and so, but like they said, hey, you're taking on risk. If you feel like it's ridiculous, then offer it for less and make it happen. But we're gonna, uh, we're, we'll be right back after this, uh, short break on ESPN Bakersfield 1230 AM 101.1 FM.

• 13:15Speaker 00

  Are you curious to learn more about how you can be money wise? Check out the money wise website at moneywiseguys.com to get more info about what we do.

• 13:30Speaker 02

  I don't know if Stephen put this on because it's a bunch of old dudes in the padded radio room. But there you go. The Gero Ellis.

• 13:38Speaker 04

  Gero's padded radio room.

• 13:39Speaker 02

  Yeah, that's right. Gero Ellis padded radio room.

• 13:41Speaker 04

  Who are you calling old?

• 13:43Speaker 02

  We're just not as good as we once was, boys, I guess is what Stephen is saying. Welcome back to the Money Wise Show. We just finished a great discussion on, uh, medical debt being wiped off of credit reports, uh, for many, many Americans.

• 13:57Speaker 04

  Yeah, 15 million.

• 13:59Speaker 02

  Seventy.

• 14:00Speaker 04

  Oh, 70 million?

• 14:01Speaker 02

  No, billion dollars.

• 14:03Speaker 04

  No, no, no. I was saying for 15 million people.

• 14:05Speaker 02

  Correct. Yeah, we're just talking all over the place. Um, so one of the other comments or questions that came in was, uh, can one get an SBA disaster loan forgiven? Is there certain steps you would know I should take? Um, so disaster loans, I don't even know. Do, does it, did it say where exactly they started? Um, so what that basically is, it's called an economic injury disaster loan. Um, EIDL it's referred to. They're generally not forgivable. Like some people may know about the paycheck protection program. Um, loans that were available back when COVID hit and some of the money that was flowing around.

• 14:50Speaker 02

  Some of those were forgivable, uh, under certain circumstances. But it looks like the SBA disaster loans like the EIDL are not forgivable. So unfortunately, it's just one of those things where i- if that was the loan that you ended up getting. They were loans that were designed for working capital. They're not forgivable, but offer long-term repayment terms up to 30 years. I've heard some of them can be and low interest rates. Anywhere from 3.75 to 2.75 for nonprofits, 3.75 for businesses. So right now with knowing what's going on with current interest rates with inflation and everything else. If you do have to hold on to a loan because you had to get a economic injury disaster loan.

• 15:34Speaker 02

  Not a horrible interest rate and hopefully the lower payments, longer duration of repayment. Uh, situation can can help you make it through and keep moving forward, even though unfortunately it's not forgivable. Like some of the PPP programs were the PPP loans from uh.

• 15:51Speaker 03

  During COVID time.

• 15:52Speaker 02

  Yeah, during COVID. So yeah, you might be able to if like if things have gotten even worse. It does say that you can uh reach out to the SBA for deferment or even modification. So depending on your loan or your situation, you might be able to um to go over that with uh with the SBA. Um, office and and look at what your options are there. Um, so yeah, just review your loan agreements. Try to understand what your interest rates are and your timetable is for repayment. And then like I said, there may be, you may be able to contact the SBA and go over that. You can seek financial guidance, financial advisors or account, your accountant might know a little bit of information about that. Um, you know, so I'm trying to share as much information I as I can as a financial advisor.

• 16:37Speaker 02

  Um, but sometimes it depends on the paperwork and what you have in place and a discussion with the SBA. But then uh also just stay tuned to what the SBA has to say because they may make announcements.

• 16:47Speaker 03

  And stay in communication with them too, because if you're running into trouble with it, you know. If you're worried about it being paid back, you're probably running into trouble. You can uh talk to them about deferment or loan modifications.

• 16:59Speaker 02

  Right. Yeah.

• 17:02Speaker 03

  Yeah, there's usually other options in the event that you run into trouble there.

• 17:06Speaker 02

  Yep. Yeah. So thanks for the question. Again, you guys are what make the show great. So if you want to join us, you can definitely call the show or send us a message 661-396-1000, 661-396-1000. One of the topics that we did want to jump in together as a team was we wanted to go over FICO scores, not FICA, like we talked about earlier, which is Medicare, Medicaid, Social Security, stuff like that. But we want to talk about FICO. So let's talk a little bit.

• 17:35Speaker 04

  Not to be confused with Ficus. That's what I was, I was researching it when you guys were talking.

• 17:40Speaker 02

  And you just found yourself looking at pictures of plants?

• 17:43Speaker 04

  Ficay, Ficay, yes.

• 17:44Speaker 02

  Okay.

• 17:45Speaker 03

  Been there, done that.

• 17:46Speaker 02

  So, so Mr. Seth Perry brought, brought the topic to tune. You know, I want to toot his horn a little bit. He has been in the industry for a long time. He did spend a little time in education. As you guys have heard my story, I spent some time in special education and, and love all my students and families I got to work with and serve back in the day. I, I love the fact because being an educator, I feel like it helps me be a better advisor. And I want to educate as many folks as we can, you know, because not all Bakersfield residents or people that listen to this podcast will become clients. But everybody can become more money wise. The better we all do with money, the better our communities do, the more generous we can be as a community. So that's the goal. Seth has extensive background.

• 18:28Speaker 02

  He actually taught kind of math and personal finance and develop your own curriculum in this space. So that's why you have some neat stories to talk about some of these topics like FICO.

• 18:39Speaker 04

  Yeah. So I was teaching over at West High School for four or five years. And it was, it was kind of a, it was a great job. It was teaching personal finance to mostly juniors and seniors who, well, mostly seniors who were the, I call them mid to low flyers. They needed the education more probably than a lot of students who may not, you know, be going on to college or starting their own businesses, that, that kind of thing. But I learned a tremendous amount. You know, I went into the class thinking, well, I'm going to, you know, teach these kids and I learned so much. One example of that is with FICO. So if you ask the average person, what is, what is FICO? Where, where does that number come from? Like, most people don't know. So I'm gonna give a quick history.

• 19:23Speaker 04

  Um, basically, you had William Fair, who was an engineer, and Robert Isaac. These were, is it okay to call them nerds? They, they were pretty much nerds, but super smart guys. Uh, William was an engineer and Robert was a mathematician, and they met at Stanford University. And basically, they started the company called Fair, Isaac and Company in 1956. Each one only had $400 to their name. It was one of those, uh, true American stories where they started in their apartment. But basically, they put their heads together and they were looking to identify a problem. And what they found was at the time, in order to get a, a bank loan

• 20:05Speaker 04

  or a credit card, it was mounds of paperwork. And again, this was late 50s, early 60s that they really got kicked off. So they're like, how can we make this faster? So if somebody went in to get a loan, they're filling out all this paperwork, and then it was days, if not weeks, to get a, a decision because the bank wanted to do their due diligence. So these guys said, I'll bet we can, uh, mathematize, if that's a word, we can mathematize this using, uh, algorithms. And so that's what they did. They put together an idea, why don't we standardize how people's credit history is viewed? And so what they did was they, uh, wrote a letter. After they figured out the process, they wrote a letter to 150 banks. Guess how many responded?

• 20:50Speaker 03

  Half of them.

• 20:51Speaker 04

  What do you think, Chris?

• 20:52Speaker 02

  10%.

• 20:53Speaker 04

  One.

• 20:54Speaker 02

  One.

• 20:54Speaker 04

  It's literally like not a made up story, and I verified on their website today. But anyway, one bank responded, gave them a chance, and that's where it grew. Uh, throughout the 60s and 70s, it just grew one lender at a time. Um, and, you know, everyone now uses FICO.

• 21:11Speaker 03

  Yeah, what's your FICO score, right?

• 21:13Speaker 02

  Yeah, can we jump back one minute? I was just gonna tell you, by the way, uh, mathematize is a word because that's what I do with my clients. I mathematize their finances. So that's, I, I use it all the time.

• 21:24Speaker 04

  Okay.

• 21:24Speaker 02

  So don't be afraid to make up stuff.

• 21:26Speaker 04

  All right, I got you.

• 21:26Speaker 02

  Okay.

• 21:27Speaker 04

  And just in case it was missed, William Fair.

• 21:30Speaker 02

  Mm-hmm.

• 21:31Speaker 04

  Robert Isaac. And Company. That was the name of their company. Fair, Isaac, and Company. That is where FICO comes from.

• 21:39Speaker 02

  Wow.

• 21:40Speaker 04

  In case no one caught it.

• 21:41Speaker 02

  Yeah, that's crazy. I love those stories because it's funny too, like, I mean, I've talked about FICO for 20 years and on the radio show and this and that, and I never knew the complete historical information about it. Even we've had Insommo Moreno on has talked about, you know, he used to be a debt collector and he moved into the side of more helping consumers. Deal with fighting against them instead of being on the other side. And so he's always an interesting topic. We'll have to have him on again one day, but I love bringing this kind of stuff to the table. So what else did you find?

• 22:13Speaker 04

  Well, one interesting thing I found, just, you know, preparing a few notes that I didn't know is I'm 79. I was born in 1979, right? So I didn't live through a lot of the cultural, serious cultural and racial changes that were taking place in our country. But this is one thing that they did that actually proved race is not a predictor of creditworthiness. And so that kind of leveled the playing field for everyone to go out and borrow money. But then it was a double edged sword. They now used FICO and it was working so well that that's kind of when credit cards really exploded in the 70s. And just a couple more nerd facts here. So they were the first to automate applications.

• 22:52Speaker 04

  They were also, FICO Company was also the first credit account management system for all the credit accounts, credit companies we see out there. That's then, now, they serve 100% of the top US banks.

• 23:08Speaker 02

  Wow.

• 23:09Speaker 04

  Manager, uh, let's see, they manage more than 65% of all the credit decisions in the world. And so those are just a couple more nerd facts.

• 23:21Speaker 02

  So are they connected to one of the big three? Equifax, Aspirian, TransUnion?

• 23:25Speaker 04

  So basically, um, how does it work? I think FICO, so they're the only ones that know their own algorithm. And what goes into the FICO score, there's five things and I don't have it off the top of my head. See, I learned this teaching Dave Ramsey's content to these high schoolers is how I learned all this. But there's five things that go into it, you know, how long you've had credit, um, how much credit you have, and they're all related to debt.

• 23:50Speaker 03

  So.

• 23:52Speaker 02

  Yeah, it's one of the things that we've talked about it nonstop. It's one of the things that as individuals in this country, like, we have been so trained to think about that number, which it's important for sure, especially if you're going to be borrowing money for any reason. But the thing that we've always said is, is FICO has nothing to do with your financial health, where all of us have a hard time not thinking of it that way. Because it's like, you know, we want to go to the doctor and get some sort of score on like, where our health is, or whatever. And so, we always want to equate FICO with our financial health. And I'm like, you can have a horrible FICO score and be like, a multimillionaire, and never have to worry about money another day in your life, because you don't spend much,

• 24:36Speaker 02

  you don't need much, you got tons of money sitting in the bank, but because you don't take loans, or have loans on the books, FICO looks at you as a risk, right? That your score will look like it's a risky, because they don't have a history of you, they don't know your track record of making your payments. And so, I mean, it is funny that a lot of times, you know, sometimes as wealth managers, we talk about the investments in the stock market and all this stuff, but even some of these basics that we don't remember, that like, all of us probably have a little misunderstanding of what FICO actually is, and how to use it in our thought process. I mean, people are very proud if they have an 820 credit score, or whatever. And a lot of times, it's, you know, Dave Ramsey's thing, which I went through that with my wife a long time ago, it was very pivotal and foundational in us starting on the right path.

• 25:20Speaker 03

  Yeah, us too.

• 25:21Speaker 02

  Yeah, I don't necessarily, you know, we've said it, I don't agree 100% with a lot of stuff that he says, but there by no means would I not say that it's a bad thing. It gives you some real basics of how to handle money in a right way. And he always says, you know, FICO basically tells you how good of a customer.

• 25:39Speaker 03

  It's an I love debt score.

• 25:41Speaker 02

  That's what he says. That's right. Yeah, so.

• 25:43Speaker 03

  You know what, while we're on this topic, I just thought of something we didn't prepare for, but do we ever plug the annualcreditreport.com?

• 25:49Speaker 02

  Well, let's, let's, let's take a, take a quick break real quick. So, thanks for tuning in. We'll be right back. We'll follow up with that.

• 25:55Speaker 00

  Are you an employee with a company-sponsored retirement plan? Do you fully understand how you're invested, and whether or not you are maximizing your retirement plan's options? For more information on a free assessment, contact MoneyWise's 401K specialist, Justin Leland, at 661-847-1000.

• 26:19Speaker 02

  It's like Steven Sassy. Welcome back to the Money Wise Show. Again, we are in the Gero Ellis padded radio room off Stockton Highway. We are trying to have a good time in this office, talking about some great fundamentals, or the history of FICO. A lot of people don't know some of that story, even me that's been in the industry forever, didn't know some of those dynamics. But yeah, and before we jump back in there, we were talking about it, that you kind of wonder like, well, what happened to that company? Well, that company, what was it, File and?

• 26:46Speaker 03

  Fair Isaac and Company.

• 26:48Speaker 02

  And Company that became FICO was public, was a private company for a while, went public, I think at some point in the 80s. So a lot of times, we make the stock market and investing in the stock market some, you know, kind of weird thing, but it's like, FICO is one of the S and P 500 companies. And so it's obviously grown through the years as there's more banks and more creditors. You know, this company has done huge numbers. It's a billion dollar plus company in revenue. And you get to participate with what that company's done since the 80s when it went public. So

• 27:22Speaker 03

  If you own that index.

• 27:23Speaker 02

  If you own that index, yes. Yeah. So, you know, you don't have to necessarily be a day trader, or try to dive in there too deep. But sometimes when you don't know even some of the basics of what you're investing in, it's hard to stay disciplined with your strategy because you think there's just too much funny business. But I always go back to my clients and I'm like, half the stuff, the car you drove in here on, what's in your pocket right now? You go home, you get on a computer, these are all publicly traded companies. They're companies with revenues and employees and assets like real estate and different things, like they have an income stream and a revenue flow, like they are valuable companies. And yes, there can be some scary times and some fluctuations, but it's like, we're sitting here talking about the start of FICO, and it's literally one

• 28:07Speaker 02

  of the options, or one of the investments that's in the S and P 500, because it's a, it's a big part of illustrating kind of what's going on in our economy. Obviously, FICO is doing good. People are using credit and banks are making money and

• 28:20Speaker 03

  Yeah, so they help with the scores a lot, but we were talking about credit reports too, so.

• 28:26Speaker 03

  I think we were starting to talk about that, annualcreditreport.com.

• 28:29Speaker 04

  Yeah, so a lot of people just don't know the difference. They use the terms interchangeably. They'll say, oh, my credit report. But they're talking about their credit score or vice versa. So I just want to let our listeners know. I'm sure most of them do know. You guys have done such a good job, but if they don't. Annualcreditreport.com. Annualcreditreport.com. And you have to be very careful typing it in because there's so many, not scams, but other companies trying-

• 28:55Speaker 02

  They'll charge you.

• 28:56Speaker 04

  Trying to, that will charge you that are using as close to that address as they can. So I'm going to say it a third time, annualcreditreport.com. I always know I'm on the right one because they have a blue and red logo in the upper left. But basically, a credit report, by law, the three major credit reporting agencies, Equifax, TransUnion, and what's the other?

• 29:17Speaker 02

  Experian.

• 29:18Speaker 04

  Experian. By law, they have to give consumers at least one per year.

• 29:24Speaker 02

  For free.

• 29:24Speaker 04

  And so I always tell my clients and my students, right, for that matter, I was like, guys, here's what you have to do. You have to log in. Because that's how I found out my, uh, my credit had been stolen. This was early 2000s. But I got on there and there was an address, because what you want to look for, you want to make sure the addresses are all the same. Your social security is the same, and obviously, look at the accounts. But there was a, a random account in New York for like 5,600 bucks, something like that, Bank of America. And it wasn't mine, but I was Bank of America, so I was, I was skeptical. But anyway, I, I called the bank, and they were able to get that taken off of my credit report. Again, credit score, the FICO, is a measure of do you pay your debt or not. A report shows everything that's on there.

• 30:08Speaker 02

  Right.

• 30:09Speaker 04

  And it's free.

• 30:10Speaker 02

  And it's, you can get one from each bureau one time a year. And so what I was, you know, kind of suggested is every quarter or so, go in and get one of them. So you're kind of looking at your report throughout the year. So if something pops up, you know, you're not just looking at all at once. And then there's 10 months that goes by, 11 months, before you check it again. So sometimes that's what I would suggest. Um, but yeah, it's, it's a great reminder. There are a lot of tools now. A lot of banks are offering your credit score, like you can- See it just in your so like some of this stuff is becoming more normal. But just because you're seeing your credit score in your bank or your bank's login and they're doing a free service for you. It's still good to go in and check to make sure that there's no lines that have been open like you mentioned.

• 30:52Speaker 02

  And try to stay on top of that. There's a lot to do sometimes and it seems overwhelming. But you can kind of put it into a process and once every quarter or so you go in and check one of the different bureaus. And it's free. Every time you go in though, they are very tricky because they ask you if you want to just look at all three or something like that. And it's like they want to charge you, but then you you click the button down below that and it's like, no, continue to my free. Look. And so

• 31:17Speaker 03

  I think you can pay for the score. So that's kind of like an upcharge. As an option, but you don't have to do that. You can get the report without looking at the score.

• 31:24Speaker 02

  Yeah, a lot of your banks nowadays and even credit cards and stuff are giving that as a free service to keep you around. So yeah, great, great stuff. Really, really appreciate that. We did have a couple of comments come in again. You can always join 661 396 1000. We'll jump into these. One great one that came in said, should I adjust my strategy now that I'm approaching retirement? I know it's kind of a broad question. But do usually have people, do you usually have people close to retirement not be as aggressive? Question mark? Go West High Vikings. So So I will have full transparency here. Me and Seth are actually Mustangs.

• 32:03Speaker 04

  But did you know I was a Viking prior? Did you know that?

• 32:06Speaker 02

  I did know that.

• 32:06Speaker 04

  That's where I came from.

• 32:07Speaker 02

  I did know that.

• 32:07Speaker 04

  Yeah, I was a West High for freshman sophomore, then I transferred.

• 32:10Speaker 02

  Mr. Maderos, Alan Maderos? He's a little bit older than us, but

• 32:13Speaker 04

  I had, I was in elementary class with his brother Billy.

• 32:16Speaker 02

  There you go. There you go. He's a regular on the show talking about loans and what's going on with interest rates.

• 32:21Speaker 03

  Go Wolf Pack, by the way.

• 32:22Speaker 02

  Yeah, huh?

• 32:23Speaker 03

  Go Wolf Pack, right, Stephen?

• 32:25Speaker 02

  Oh, yeah. Oh, we got Mustangs. Look at this rivalry.

• 32:30Speaker 04

  My wife's part of the Wolf Pack.

• 32:31Speaker 02

  Yeah. And he's on the dial, so he can probably bring your guys alma mater song in.

• 32:36Speaker 03

  He married up.

• 32:37Speaker 02

  Anyways, great.

• 32:40Speaker 02

  Let's, let's go back to our great question here. So thanks for bringing that in there. So yes, I mean, obviously. It's a case by case basis. It really truly is what your appetite for risk is as an investor. You don't invest until retirement. You invest to and through retirement. So, one of the things that I do see, a mistake I do see is sometimes people will like slam on the brakes as they get close to retirement. Which depending on the season, the scenario, the market fluctuations of the time can have some devastating impacts. Because then you're having to put money back to work for you and it can be a stressful time and that kind of a thing, but.

• 33:21Speaker 03

  You're exactly right. I mean, I talk about this all the time with retirement is not a finish line. Right? It's just a starting line of a new season. You're going from the accumulation phase to distribution mode where it's the most of the time. Right? You're no longer creating that large nest egg. It's you're spending it, right? So, we talk a lot about having different buckets of money too. And what I've found, most people are looking for some combination of income, right? They need some growth because what is that? That's future income. Yeah. And then almost most importantly is that capital preservation or hey, let's keep this money safe.

• 33:58Speaker 02

  Yeah.

• 33:59Speaker 03

  Because I don't want to have to go back to work and earn it again.

• 34:01Speaker 02

  You know, and you threw it out there that is a broad question, but I mean, that's, that's the discussion we're having with our clients. What's your situation? Now, if you're somebody that has $200,000 in a retirement account and your plan is to spend all of that in the first five years of retirement because you have a really great pension and everything's going to be paid off and your pension takes care of all your lifestyle and your goal is to spend that all in five years. Well, now your time horizon is five years. That would warrant more conservative investments, less volatility, short time horizon of putting that money to work for you for whatever your goal or your plan is. So, it just kind of depends. If you're going to use a traditional kind of distribution of money plan where I'm taking out four or 5% of my account,

• 34:43Speaker 02

  you're okay with market fluctuations because you're only impacting that 5% that you're pulling out. The other 96% or 95% stays invested and keeps working for you.

• 34:56Speaker 02

  To actually make your money last longer and work harder for you, even though it's scary. But you know, it's, it's you gotta do it. I mean, I've been watching folks retired now for 20 years. And I'm telling you, tried and true methods are maybe boring. Maybe there's new shinier things that people are starting to look at. But it is consistently really helped folks make their money last and enjoy their retirement.

• 35:18Speaker 04

  And to the point you made earlier, there's, there's just, I think the media doesn't help. But there's this big, you know, the scary stock market, like it's just something floating for only the rich people. But I'm going to read to you the top, uh, just a few names off this top 10 or 50 list of what is in the S and P 500, which you explained earlier. Apple, Microsoft, Amazon, Nvidia, the big, uh, you know, they make all the processors for the AI stuff. Um, Alphabet, which is Google, Tesla, uh, Meta, Exxon Mobil, JP Morgan Chase, Eli Lilly. So these are things like you, you put your contacts in in the morning and you use saline, right?

• 35:57Speaker 02

  Right.

• 35:57Speaker 04

  You hop in your cars, Toyota, you, uh, or Prius maybe for some. But anyway, Home Depot, you know, I went to, I just got a key made at Home Depot a couple nights ago. You know, that's, that's the stock market.

• 36:10Speaker 02

  I'm sure their revenue for the quarter shot through the roof.

• 36:12Speaker 04

  You know what? I've been looking at the numbers. I've been look, you really keyed in on that, didn't you?

• 36:19Speaker 02

  Dude, second show, he's already dropping dad joke bombs.

• 36:21Speaker 04

  We told him to get ready for those dad jokes.

• 36:23Speaker 02

  All right, real quick, it says, is this the page you were saying is good to use? It is www.annualcreditreport.com appears to be the one.

• 36:31Speaker 04

  I'm gonna look because it's got the slash index after it. I just want to double check.

• 36:35Speaker 02

  Double check.

• 36:35Speaker 04

  Yes, that's the one.

• 36:36Speaker 02

  Yep, that's it. And the guy, uh, did throw out there, thanks guys and sorry, but go drillers. So we have a full on local high school, uh, uh, just a, just a fight going on in here.

• 36:47Speaker 04

  Yeah, I have two sisters, both of them are drillers.

• 36:49Speaker 02

  There you go. You, you changed it up. So, uh, one more comment came in a little bit ago, says, uh, so will some people that didn't get the COVID stimulus check be receiving one soon? Not hearing much about it. Thank you. And what is the new Money Wise guy's name? That would be Seth Perry. And he continued to say, it's great to see good people like Money Wise grow over all these years. So thanks for those. Again, Seth Perry is new advisor here in the office, second show here with us. So does, do you guys know a little bit about the COVID stimulus check? Is there another one coming out?

• 37:23Speaker 04

  I haven't heard, but I mean, there just appears to be a buzz, uh, last couple of days. Uh, IRS is sending out automatic stimulus payments. That's definitely something we can

• 37:32Speaker 02

  Yeah.

• 37:32Speaker 04

  look into.

• 37:33Speaker 02

  Well, we can, as a matter of fact, can we take a little early break, Stephen? So we'll take a little quick break. We'll look into that and we'll see if there is any new COVID stimulus check stuff coming out. So thanks for the comment.

• 37:43Speaker 00

  Are you nearing retirement and currently working with a financial advisor? Are you not sure if you're invested appropriately? Call our offices at 661-847-1000 to sit down with a Money Wise financial advisor for a no obligation assessment.

• 38:04Speaker 02

  I think this was because Seth, Seth, Seth, Seth throughout the birth year of 1979.

• 38:12Speaker 04

  It's good, based on what Dustin just did, that dance move. It's, it's good that this is a padded radio room because stuff could have gotten broken.

• 38:23Speaker 02

  Yeah.

• 38:25Speaker 02

  That's the bummer part about radio. Nobody got to see the dance moves. Maybe one of these days we'll have a camera in here.

• 38:30Speaker 04

  Oh, yeah.

• 38:31Speaker 02

  Like YouTube. Oh, excellent. Yeah, you gotta save that dance move for that, Justin, or Dustin. So, um, what we were going to talk about was a question about COVID relief. Um, uh, COVID stimulus check, we'll be receiving one soon. And so we did look up a little bit of information about that. There is, uh, they did find out that there was, there was here. There was about, how many was it? A million?

• 38:56Speaker 04

  A million.

• 38:57Speaker 02

  Yeah, around a million taxpayers are set to receive an automatic payment from the IRS. So, um, you know, fortunately, unfortunately, if you think that this is you, like, there's nothing you can do necessarily. Um, they Did an audit of some of this stuff and realized that there were about a million taxpayers that did not receive a check that should have. And so they have simplified the process. If you should have got it, they're automatically going to be mailing out checks. It's $1,400 per individual, could be $2,800 per married couple. We are talking about 2.4 billion dollars. That's going to automatically be floating out of the IRS's balance sheet here in the near future. A family of four, including a married couple, two qualifying dependents,

• 39:41Speaker 02

  could receive up to $5,600. Man, that's, they're just making it rain, right? That's just great that there's just billion dollars just sitting there, 2.4 billion dollars, ready to just

• 39:55Speaker 03

  Drop in the bucket.

• 39:55Speaker 02

  Toss out. You know what? If you've been impacted by COVID, you know, I, I do apologize for making wind of that because they, they were trying to help folks out in one of the craziest times of my life, for sure. As far as some of the, uh, just the not knowing what was going to happen and COVID was so nuts and so many companies were shutting down and what was allowed, not allowed. It was really, really a wild time. So, um, I think it did say that individual taxpayers up to $75,000 in adjusted gross income. Married couples who filed jointly with up to 150,000 back in 2021. So if you were, uh, under those amounts, let me say that again.

• 40:34Speaker 02

  If you're an individual filer at 75,000 annual or a joint couple filing jointly 150,000 or less in 2021, you may be getting a little surprised.

• 40:48Speaker 03

  When you said something about a pile of money, changing the subject here, um, the Home Alone mansion sold.

• 40:54Speaker 00

  Yeah, for a nice pile.

• 40:56Speaker 02

  5.5 million dollars. Wow. It's probably going to be an Airbnb, dude. That's what I would do.

• 41:02Speaker 00

  You would think, right?

• 41:03Speaker 02

  If I had money, like you Airbnb that thing, who doesn't want to go stay in Kevin McCallister's house? Order pizza, talking to that little walkie talkie thing with the microphone, the talk boy.

• 41:12Speaker 00

  I always wanted one. I could never go one.

• 41:14Speaker 02

  You're a filthy animal.

• 41:15Speaker 00

  Yeah, filthy animal.

• 41:16Speaker 04

  Buzz's girlfriend.

• 41:19Speaker 04

  That's become a family favorite.

• 41:21Speaker 03

  That movie's made 476 million.

• 41:23Speaker 02

  We are showing our ages right here. We got, we got the Ridgeview Wolf back and the Mustang. You know, just, just talking, uh, Kevin McCallister here. So, um, anyways, any other thoughts on any of the things we talked about today? We've talked about a lot. Strategies as you go into retirement. FICO scores. What are the ways to protect yourself with FICA and credit?

• 41:46Speaker 04

  Well, again, number one is go in and check your credit report. If you missed it and you're on the live show, go in and check your report for any errors, any mistakes, and then it's just basics, man. Stay out of debt. Dave Ramsey, I had heard of him, but I didn't know anything about him until our close friends, I think it was 2014, said, "You need to read this book, Total Money Makeover." My wife and I read it. It was like, whoa, we couldn't put it down. We literally read it and just a couple of nights changed everything we were doing. I was working at Halliburton at the time and changed everything we were doing. She was able to quit her job. She was working with Gunlax, a local heating and air company, and then she was able to get in to finish up at B.C. and then become a nurse, and the rest is history, all because of that book. Stay out of debt.

• 42:29Speaker 02

  Yeah, and I will say, like I said, there's lots of great tools out there. There are some cautions I throw with the Ramsey thing, but I would never say, "Don't do it," because it really is, it does help people in America, because what ends up happening in America is you begin to climb up the income ladder is lifestyle creep, and it's very hard to put the feet down, put the brakes on, and go, "Okay." As income is going up, there's a million things that you can find to spend money on, and a lot of them seem like very important or necessary things, and Ramsey does help you understand the importance of why you need to pump the brakes on some spending, put things in place, automate savings, know where every dollar's gonna go.

• 43:10Speaker 02

  So I do appreciate my foundation that I did get from Mr. Dave Ramsey's book and study at our church.

• 43:17Speaker 04

  Me, too.

• 43:18Speaker 02

  So, hey, thank you, guys. It's been a fun day. Hopefully, the listeners had a good time, and you guys are what make the show great. You can always still send in a message after hours, 661-396-1000. Send in a question, a comment, whatever you want, and most importantly, just like Stephen always is, be smart, be safe, and be money wise.

• 43:48Speaker 01

  Securities offered through SCF Securities, Inc., member FINRA/SIPC. Investment advisory services offered through SCF Investment Advisors, Inc. SCF Securities, Inc. and Money Wise Wealth Management are independently owned and operated.