12/18/25 From Pennies to Portfolios: Markets, AI, and Compound Growth

The Moneywise Radio Show and Podcast Thursday, December 18th 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

• 0:00Speaker 00

  From the second floor of the historic Woolworths Building in downtown Bakersfield, here is Money Wise. Call or text into the show 661-396-1000.

• 0:10Speaker 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 02

  Securities offered through LPL Financial, member FINRA, SIPC. Investment advisory services offered through LPL Financial. LPL Financial and Money Wise Wealth Management are independently owned and operated.

• 0:39Speaker 00

  Here is Money Wise.

• 0:42Speaker 03

  That's right. This is the Money Wise radio show, running into the office to make this happen, closing out 2025 in the new two-story. Well, actually, we're on the second story, but it's actually four stories altogether. This historic Woolworths Building is just packed with all kinds of stuff. But I'm your host today, Chris Pelster. Join with who's who's

• 1:09Speaker 04

  Dustin Weaver.

• 1:10Speaker 03

  Who's over there?

• 1:11Speaker 04

  Yeah, Dustin Weaver.

• 1:12Speaker 03

  Mr. Dustin Weaver.

• 1:13Speaker 04

  Yes, sir. Good afternoon.

• 1:14Speaker 03

  How are you doing?

• 1:15Speaker 04

  You know, it's turning out to be a good day. I feel like we got a little more sunlight out there today.

• 1:19Speaker 03

  Yeah, yeah. The sun, I actually wore sunglasses today. So sunglasses are these things that you put over your eyeballs when the sun is out. And yeah, so it was nice to wear sunglasses driving down the road today. And so, and then on the other end of the the old microphone, Mr. Mr. Steven, how are you doing, sir?

• 1:40Speaker 00

  I'm good. How are you?

• 1:42Speaker 03

  Good, man. Good. I miss you.

• 1:45Speaker 00

  I miss you.

• 1:46Speaker 03

  Yeah, we used to hang out and stuff. We used to work in the same office more often.

• 1:50Speaker 00

  We're very, we're very close.

• 1:53Speaker 03

  Yeah, we are very close. We have a, we have a functional elevator. It just needs a licensing or tag or whatever you call it. So

• 2:02Speaker 04

  Yeah, I think there's a few different people have to sign off in an elevator. That was news to us, wasn't it?

• 2:07Speaker 03

  Yeah, yeah. So

• 2:09Speaker 04

  Several inspectors.

• 2:10Speaker 03

  Yeah, with all that being said today, we are going to piece together a wonderful show for you listeners. Your questions are always what what make it great?

• 2:26Speaker 03

  Let me get this information over here. So your questions, we have a couple of questions we'll jump into. We don't have any guests today, but we are going to go into your listener questions. And so if you do have any questions, we would love to hear from you. All you have to do is call or text 396-1000, 661-396-1000. Remember, you can send messages or questions all hours of the day, and we will get to them at the next radio show. And so we'll get into those questions a little bit. Before we do what we do, before we get into the radio show and some of these questions and stuff, we are going to go over the market, though, a little bit. The, I do see green on the screen. It looks like the major indexes all moved in

• 3:09Speaker 03

  positive territory. We saw volatility come down a little bit. The indicator that kind of measures volatility, or how much the markets are moving, or what some call an uncertainty index is the VIX. It was down 4% over 4% today. So it looks like things steadied out a little bit. Gold was down just a little bit to 4,362, probably because the markets moved in positive territory. S and P 500 is at 6,774, up about 8 tenths of a percent. The dumb Dow, we call it, is just barely positive. It's at 47,951. The NASDAQ is

• 3:47Speaker 03

  up 1.4%. So tech-heavy, looks like tech data was doing good today. The Russell 2000, we don't talk about a whole lot, but it was also in positive territory. About 6 tenths of a percent move there today to 2,005.07. So stocks are rebounding. Investors are kind of digesting all the inflation protectors, I'm sorry, pressures, reading the consumer reports, and kind of, you know, trying to see what the expectations are going to be for the path forward of interest rates. We've come off of, what do we have, three or four interest rate decreases this year?

• 4:25Speaker 04

  Yeah, of 0.25% each time.

• 4:28Speaker 03

  Yep. And so people think that's going to continue. I don't know if they'll ramp that up, but people are just kind of anticipating that's going to continue as they kind of slow the interest rates down. Obviously, you know, some of the indicators, jobs data, some different things. The one thing is, is it seems like inflation continues to

• 4:50Speaker 03

  Not necessarily go backwards, but slow down at the rate it's going up. And so sometimes that can be confusing to talk about because everybody's talking about how expensive things are. But remember, when we say inflation is coming down, it doesn't mean that it's going backwards. It just means that it's going up slower.

• 5:09Speaker 04

  Yeah, I've talked about this with a lot of folks before and you know, you get the idea of a car on a freeway, you know, you're in the fast lane going 100 miles an hour. You know, want to slow down a little bit, go to the middle lane, you're going, you know, 60, 70 more average kind of speed. You're still moving forward in the direction you're going. It's just not moving quite as fast.

• 5:32Speaker 03

  Yeah, so, uh, you know, I mentioned earlier, the NASDAQ had had kind of the biggest day. There was a lot of strong earnings reports from different companies. Um, one of the ones being Micron, uh, it saw its shares jump over 10% today. Um, the AI trade worries, uh, you know, that that there could be a little bruising um, in the trading sessions to come, but uh, it's just one of those things where, you know, like I said, they're digesting through all the data and everything that's coming out. Um, S and P 500 and the Dow, like I said, just slightly positive. Um, no major headwinds or anything right now. So there is a Tuesday jobs report.

• 6:13Speaker 03

  Um, it noted that the inflation data was a little less reliable, uh, because of the old government shutdown. So, um, it's kind of one of the reasons why they're, they're probably really picking through that because it's hard to get a real accurate look at the jobs report. Because for a while, the, uh, agencies that do the reporting were not.

• 6:33Speaker 04

  Not around, not working. That's right.

• 6:36Speaker 03

  So, uh, so there you go. Um, anything else that you saw in the markets or anything caught your eye?

• 6:43Speaker 04

  You know, nothing top of mind right now, but I do know that we had a listener question that caught my eye a little bit. And what that is, is came in and said, hey, do you guys know what the process is or what parents need to do to be able to get the $1,000 for their child with this new Trump account deal? I have some family that is struggling with their own children and this would really help. You know, I was looking at this a little, just, we don't have the full guidelines yet, but it appears that there is an IRS form 4547 that's on the actual IRS website. And there was a draft recently released this month, but the final version is pending.

• 7:26Speaker 04

  And so it's a little bit of a wait and see, but it looks like there's going to be a form to fill out that you do through either your own tax prep or working with your accountant or CPA.

• 7:36Speaker 03

  There you go. Yeah, some of the nuts and bolts haven't fully come out from some of these, these new opportunities. You know, Dustin, you and I had an opportunity to do some workshops with a wonderful local CPA firm that was doing some education on the big beautiful bill. And it was like in between each one that was a couple of weeks apart was stuff was still unfolding, the actual nuts and bolts and guidance is the, is the word that's used. Because you know, the IRS throws out these new rules and then it's like, okay, wait, what does that actually mean? And what about this situation and what about that situation? And you can imagine that, you know, there's a lot of people that are like, okay, like, how do I open up this account or what do I do?

• 8:18Speaker 03

  And so there's still some of those nuts and bolts information that's not available. But I did hear the other day that, you know, because the 4547 is, is the, the presidency terms of Trump. And so that form is, is, you know, it's, it's near and dear to Trump's heart. But yeah, and as far as the interesting thing about the comment though, is, is I don't know what the rules and restrictions are going to be too, in the sense of like, when you say that they're struggling with their own children, I don't think this is a thousand bucks that you can take and spend. It's an account that's going to be opened up for the child. And so I'm curious on what the rules and restrictions are going to be on what the parents are going to be able to do or not do with the account if it's opened up for

• 9:03Speaker 03

  the child because. Um, it's kind of like a custodial account. A custodial account is money that is basically in the possession of a, of a child or underage, or possibly even um, a, an individual with special needs or something like that. And the custodial account means you're just taking care of it for somebody else's benefit. And so, um, you know, I'm not sure how the rules and restrictions are going to work because I imagine that there's a lot of families out there that if they have six kids and you put $6,000 in six different accounts, um, they could probably all find reasons why it could be spent somewhere else, uh, better, or, or what seemed would be more important. But when they did kind of crunch the numbers on these thousand dollar accounts,

• 9:46Speaker 03

  um, you know, they were kind of throwing out the numbers that if it goes into a, an individual's account, a, a, a young person born right now, and if the S and P 500 continues to do what it's done for a long, long time, the economy continues to trudge along and the 500 largest companies that are trudging along in our economy, um, you know, these accounts would be well over $600,000 by the time those individuals, uh, start to reach, um, retirement age. Um, so it is-

• 10:13Speaker 04

  I think this account is supposed to be a retirement type account, isn't it?

• 10:17Speaker 03

  Yes. Yep. And that's what I mean to say where I'm curious on, but there might be a lot of parents that are like, hey, I know it's a retirement account for my kid, but we can't buy milk. And so I'm curious on how they're going to, what the rules and restrictions are going to be. Like, how are they going to do this? Um, you know, it's just, it's some of those things that, that those guidances, those nuts and bolts realities of these accounts, um, it's still just big picture. Everybody born in 2025 gets a thousand dollar Trump account, they're calling it. Um, but some of the nuts and bolts have still not kind of unfolded. So, um-

• 10:53Speaker 04

  I think it's 2025 through 2028 is the current setup.

• 10:57Speaker 03

  Correct. And again, I, I'm a big fan of this in the sense that, um-

• 11:04Speaker 03

  You know, if, if these kids can, can, I still think this is the greatest country in the world, the greatest opportunity. There, there is problems, there is struggles, there is, uh, you know, some, some equity, different things that you can talk about and this and that, but this gives every single person born, no matter where they're at, this thousand dollar account. And if our economy continues to go along and all of us participate in this economy, all of us buy goods and services, all of us have subscriptions, all of us buy cars, all of us do all this stuff, and a lot of that money floats up to Wall Street, a lot of it being those 500 largest companies that is the S and P 500. I believe that's roughly how it's going to be invested is basically just

• 11:43Speaker 03

  in a low cost index fund. So it gives all these children, um, skin in the game in the sense of like, hey, even as they grow up, like, hey, you got this little account that if our economy keeps trudging along, we keep doing good as a country, uh, you know, by the time you're ready for retirement, even if you do nothing else, um, hopefully, uh, uh, social security will still be around in some way, shape or form. I think it will be as long as it's, because it's a pay as you go system. Um, so sometimes there's a, there's a confusion about social security completely going away. But, um, you know, there's going to be all these different ways that, that, uh, young people can, uh, work hard in the economy and hopefully build a life for themselves. And, uh, and this

• 12:26Speaker 03

  little thousand dollars account could one day be worth $600,000. And it's pretty, uh, pretty powerful tool to teach young ones about compounding interest.

• 12:35Speaker 04

  Exactly. My thought. I was just thinking this, this reminds us of the importance of compound interest. I was talking with somebody this week that had a 529 plan and this young lady had, um, a situation where she didn't need the money to pay for those higher education expenses like that 529 was initially intended for. And one of the recent rules is in that situation, you can actually now move that money into a Roth IRA or some of it, you know, you can, it can go towards contributions up to a certain amount. But in her case, at 20 years old, you know, this little nest egg that her grandfather set aside, as you mentioned, can turn into five, $600,000. When I showed her that math, she was like, wow, no way. Like, how is this even possible?

• 13:21Speaker 04

  It's that compound interest that we keep coming back to time and time again. It's just such a pivotal thing to understand and. A good reason to get started early when it comes to your investing.

• 13:31Speaker 03

  Yeah. And as a matter of fact, I have a little bit more to talk about that, but let's go ahead and take a quick break, Stephen. And when we come back, we'll talk a little bit more about compound interest. And we do have another comment that came in, so stick around.

• 13:42Speaker 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.

• 14:02Speaker 03

  Welcome back. This is Chris. I'm your host today, joined with Mr. Dustin Weaver.

• 14:07Speaker 04

  Yes, sir.

• 14:07Speaker 03

  Yeah, we left, we left before the break, talking a little bit about compound interest. And there, there's no doubt that it's a powerful, powerful tool. One of the things that I think happens a lot is people don't know how to understand their own journey with compound interest. And one of the things that, because as you really start to focus in on retirement and what you're wanting to grow your account to, we have a very, very fixated look at our account value. And the account value is obviously important, but investments, we all know fluctuate daily,

• 14:51Speaker 03

  hourly in, in reality of ETFs and stocks, you know, I mean, it's like minute by minute. It, it changes every single minute. But, but we as human beings, we get so fixated with just the account value. And there's not like, it's an important number. Don't get me wrong. But when you're talking about compound interest, when you're talking about seeing the power of what your account is doing, what you have to do is step back and think about your basis or what you have put into your account. And so many people have no clue how much they've put into their 401k through the years.

• 15:26Speaker 03

  Me being in this industry for, for such a long period of time and, and being a little bit of a nerd, or at least an Excel spreadsheet nerd. I literally going back to when I started to get serious about this in my early twenties, I have kept track every single year of every dollar I've put in every single account. Roth IRAs, traditional IRAs, 401Ks, how much was my money? How much was employer match? Um, a lot of 401K platforms keep track of this for you a little bit. So if you've been at an employer for a while, you might be able to simply look at your statement. But um, there's something uh, I guess like amazing with me when I'll go back and I like I I kind of do my own planning like I do with my clients.

• 16:10Speaker 03

  Once a year, the big hurrah, you know, we look back and I look back and I go, okay, this is how much money I've put into the accounts. This is how much money my employers have put into accounts through the years. And this is what my account balance is at. And it's I'm I'm on the grind, just like everybody else. It didn't grow overnight. Hundred percent. Out tricked the stock market. I'm not a day trader and and made some fantastic stock pick that that took me to the moon, even though many people think that's the only way to become successful. Mine has been tried and true, slow and steady, the money wise way. And uh, and there definitely is a is a timeframe in the first 10 to 15 years where you haven't really got to take advantage of compound interest and it's frustrating and annoying.

• 16:54Speaker 03

  And sometimes it feels like a dollar in and a dollar goes down in value and and it's frustrating. But as you stick with it, and if you have a good grasp of kind of how much money you've put into your account and what your account balance is is. I guess what I'm trying to tell people is as your account grows and you get closer to retirement, and maybe say you're able to to hit success and you build up 700, 800, maybe over a million dollars in your retirement accounts. It can be overwhelming watching that account balance bounce around. But if you have a good understanding that I've actually only put $680,000 in this account. Helps you realize how much these investments have helped you actually get ready for retirement,

• 17:40Speaker 03

  or get ready for financial independence. And it helps you understand that, okay, this market might fluctuate around a little bit, and I'm okay. And it gives you a better understanding kind of of how to navigate market fluctuations without getting too emotional, because once you get up to the bigger numbers, you know, and for you, whatever that number is, you know, maybe for you, $300,000 is a big number, and everybody's on their own journey. But when you very first start out, a 10% move might only be $9,000 in your 401K. As you build and grow, a 10% move now might be $35,000 or $85,000, and all of a sudden, it has a different emotional impact on you.

• 18:22Speaker 03

  So there are some ways that we can study our situation, know a little bit more about our portfolio and our financial journey that I think can give a lot of peace of mind, even if there is a quote-unquote "crash" or market pullback. If those things happen, which are normal, you can prepare yourself and have a better kind of understanding of everything. And I think it gives investors much more peace of mind with their plan, so they can sleep at night, so they can understand that they're taking on calculated risks that's actually really helping them get ready for retirement or for financial independence, or whatever goal that you might have for yourself. So I just kind of wanted to bring that up, because a lot of people have no clue what

• 19:07Speaker 03

  they've put into their 401K, and they just get so fixated on their account balance, and it goes up and up and up during the good times, and they don't realize kind of how much up it's gone, and how much has been their money going in. And then when it goes down, the minute it goes down, it can have too big of an emotional impact on us. And then you take in some of the political concerns and all these things, which are real. And I don't discount that people have these feelings, and they're real. But in being able to watch not only all of our clients do these types of decisions and long-term planning, and even in my Own journey, you know, I hope that as many people as possible, and that's what we talk about as far as being money wise, right?

• 19:49Speaker 03

  Like having a good view on it so that you're not fixated and overwhelmed about the economy and all these different things, but you're taking on calculated risks and navigating it appropriately. So just kind of wanted to throw that out there. Any other thoughts on that, Dustin?

• 20:05Speaker 04

  Yeah, as we were talking about the importance of

• 20:10Speaker 04

  the math on it, you know, I'm a bit of a math nerd and doing a little calculating over here. If the average person has, let's say, a 40 year career, right? Let's say it's you're working from around age 25 to around age 65, right? Looking at how much over the years, people could put even in a basic retirement plan, like a traditional or Roth IRA. Right? Let's just pick a quick little example. You got $500 a month going into any type of account for that 40 year period. 500 a month over 40 years, you know, that's 6,000 times 40 years is pretty fast math. That's only 240,000.

• 20:52Speaker 04

  And I say only because at an 8% return, you're talking about over 1.6 million dollars that can accumulate over that 40 year timeframe. And so here you're looking at your balance today, if you were able to save that much of a million, six million, seven. If you see a pullback in the markets, it feels like a lot of money and it is, right? Even a 10% drop, you're talking $160,000, but keeping that perspective of, well, as a reminder, you've only put in a couple hundred of this. What you've, that short term loss that you're experiencing, it stings, but you wouldn't have had that money had that money never been invested in the first place, right?

• 21:33Speaker 04

  Right. The importance of getting invested, staying invested and you only lose it if you sell it, right?

• 21:38Speaker 03

  Yeah, and a lot of times people think though that that's that's how you stay successful then is once you get it or once it goes up then you have to you have to pull it out and not not have any losses. And time in the market will still be your friend. Now, if you have a short term goal or if something changes with your situation where you're going to have to take a large distribution or you're going to have to sell a significant amount of your investments, the the the the conversation might change a little bit. But for most people, if you're taking a small distribution percentage of your account, you stick with your strategy and your distribution is not big enough to make a major impact.

• 22:20Speaker 03

  Even if the market crashes, even if your account has a temporary loss, you stick with your strategy. So it just takes a little bit of learning and and and being able to really understand, uh, you know, kind of some of these concepts and hopefully it just gives more and more peace of mind. The one thing I was going to tell you is, uh, there's an article that came out that was talking about that more and more Americans are cashing out their 401k balances after they're quitting their job. So unfortunately, the economy does have some struggles. People are quitting their jobs or maybe leaving their jobs. And a third of Americans are just cashing out their 401k. The reason why I have said this forever, i- i- it's such a scary trend to me is because of the exact thing that we're talking about right now.

• 23:04Speaker 03

  This is the money that you have put away in your young years or your younger years that would sit in there and have the most powerful uh, uh, behavior when it comes to compounding interest. And many times, I get it, you've lost your job or you're switching jobs and it's a very scary time possibly, but people then will just cash it out. And then the problem is is you have to pay cash or you have to pay taxes on it most of the time. You have to pay a 10% penalty usually if you're not 59 and a half because we're talking about usually younger workers. Um, but this trend is what keeps so many people from really truly experiencing compounding interest in their

• 23:48Speaker 03

  In their situation, because if they quit three jobs in their twenties and thirties, then basically they're not getting really serious about retirement until their late forties or even early fifties. So you're not going to have compounding interest really, really doing what it should be doing for you, because you've cashed out your account two and three times. And I'm not here to heap guilt on anybody. I mean, we've all been through tough times and a job change or quitting a job or losing a job can be a very scary situation. But as much as possible, if you understand why a lot of people get frustrated with investments is because the trend right now is a third of people who quit their job, they just cash out their 401k and they don't keep that money invested for their future, which means you're going to have less investments, less

• 24:34Speaker 03

  funds for you to be able to take advantage of compounding interest over time. So as much as possible, try to navigate that with, with not having depleting your 401k account, paying those penalties. Taxes are always going to be a part of taking the money out of those accounts, but that's an extra 10% that you're going to give to the government to get access to those funds. So again, 37% of workers are choosing to do that. So if you can, try to navigate that. We're going to take another break. When we come back, we have another comment to jump into.

• 25:04Speaker 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.

• 25:20Speaker 03

  That's right. Welcome back to Money Wise. I'm your host today, Chris Pelster, joined with Dustin Weaver. We have been talking about compounding interest and the impact that can have, the unfortunate situation where a study done by Vanguard, looking at 401ks on Vanguard's platform. And when people are leaving their jobs, instead of rolling out those 401ks or reinvesting those funds, I believe 37% in the, in the last couple of years had been just cashed out, which means taxes are owed, penalties are owed for early distribution. And, and so we were talking about just Sometimes it can seem like, oh, well, it's just $10,000 or, you know, or it's just whatever.

• 26:03Speaker 03

  And it's, it's like, um, people don't understand that that $10,000 now, um, could be $60,000 in retirement. If you do that three times through your early career, um, that's an extra $200,000 that would be towards your retirement that you had to put very little into, um, because of that compounding interest that we were talking about. So as much as possible, try to stick with your plan. If, if you're leaving jobs or switching jobs, um, you know, try to stick with that plan. And I understand the, uh, the, the, the scary times of, um, losing your job and some of those different things. But, but hopefully you can find a way to navigate through, um, with that.

• 26:43Speaker 03

  The other comment that came in, um, was, I heard your show earlier this week. I was wondering if the AI spending is controlling the current markets. Um, interesting comment, um, AI is, uh, I don't, I don't know if it's controlling the markets, but the one thing I was going to say is it's, it's obviously it's a major influence on the markets. Uh, and what I mean when I say that is, is there's a lot of enthusiasm and investments going into AI focused stocks, uh, AI, you know, businesses, um,

• 27:21Speaker 04

  Data centers.

• 27:22Speaker 03

  Yeah, yeah. So, so it is influencing the stock market, but it's not controlling the market. So I, I, I don't know if you're actually meaning like, do you think AI is, you know, AI spending, like, I don't, I don't know what you mean when you say AI, AI spending, but there is AI spending in the sense that, um, people are like, hey, I'm willing to put big bucks towards AI companies. So there's investments going into these stock companies, um, that are AI focused.

• 27:53Speaker 04

  Yeah, there's big companies like, you know, companies like Nvidia, Microsoft, Google, Amazon, Facebook or Meta, they're, they're spending a ton of money on both hardware and software. And that money gets back into the people they're buying those products from, right? And so investors, I think, are seeing this as a huge future profit engine in a way. And so that, that profit is what drives up the valuation in the stocks as people buy more of them.

• 28:25Speaker 03

  Yeah.

• 28:27Speaker 03

  So yeah, it is, it's, I mean, AI spending is influencing volatility, you know, AI infrastructure costs, um, you know, like you said, like, companies are spending tons of money building data centers and different things as, as far as how they're trying to, to, to be ahead of the curve as far as what's going to be needed, um, for AI and all these things. So it's, it's, it's definitely influencing the markets. It's definitely, um, you know, just, just like if you think, you know, years ago, when there was oil and there was oil drilling, like all the money that was being poured into these companies, who could get the, who could get there first? Who could dig down first? And all this infrastructure and stuff that was having to go in for, you know, when there was an oil boom, in the same way, that, that, that's kind of the same thing that's going on in the AI world.

• 29:12Speaker 03

  And probably for most of us, it's, it's definitely above our pay grade as far as the energy that's going to be needed to, to, to do a lot of these AI computing systems, the, the memory systems, the power banks and the different things, but, but kind of the same thing. So it is definitely influencing, um, the markets, um, but I don't think controlling the markets. I don't know if you meant anything by that, but I would definitely say that. Um, so, uh, the other thing, another comment came in that said, not to get political since you guys deal with money side, but do you think the tariffs are doing the intended job it was there to do? Um, so it's kind of hard to not get political and talk about that necessarily. But the thing that I will say is, uh, in just my two cents, so this

• 29:57Speaker 03

  is, uh, just kind of my opinion, um, I think it's, it's too soon to even really tell. Um, you know, when, when you have something like tariffs go in place, there is many, many unintended consequences, uh, that, that start to take place. And I don't think we fully felt the impact of, of the tariffs as far as some of the different industries and sectors. Um, I mean, we're only five or six months into this. And so for me to be able to say, oh yeah, five months into this, they're doing their job. Um, now I will say, I, I think- I think the, I actually think the intended realities of the tariffs was to renegotiate

• 30:42Speaker 03

  some things as part of Trump's tactics with global commerce and global economy. And so in that sense, it definitely shook things up. Now, as far as the tariffs that were in place and the impact that it's going to have on our economy and our global trade and who's going to be the winners and who's going to be the losers, it's very, very complicated. It's very convoluted and it's very difficult to say it's a good thing or a bad thing because depending on what sector you're in or where you work, it could be a great thing for your company or your, your, your, your, your industry, um, while another industry could, could really like be impacted by it. Uh, and I can never, I, I remember when, when some things went back a few years later,

• 31:26Speaker 03

  I had a wonderful client that had a little side hustle, is making some beautiful jewelry and the tariffs went in place and it basically shut down completely, um, her side hustle. So some people were loving the new tariffs and how it was helping them, but her little business and her little side business that she was doing and really enjoyed doing, uh, it made it almost impossible to squeak out, um, profits. Um, so again, it's one of those things where it's such a complicated reality. And I think that we're only five or six months into this reality that we really can't, um, start to dive through kind of some of the economic data. And remember for a month of it, we had a lot of our reporting systems shut down with the, the longest, uh, government shutdown ever.

• 32:10Speaker 03

  Um, so it's going to take some time to kind of unfold. I mean, would you kind of agree Dustin or what would you think?

• 32:15Speaker 04

  Oh, a hundred percent. Everything that you just said from, uh, it's too soon to tell to it's complicated to there are, you know, it, if you listen to different sides, they all have a different perspective, right? You talk to people from different industries like that small business owner you talk to, and it's not a good thing. And you talk to others that in certain manufacturing or things like steel and aluminum, you know, it's helping some of those US companies. Um, they're not getting undercut by cheaper foreign imports. Um, there, there is some help there, right? There's some supply chain and reshoring kind of activities that can come from this, um, you know, which is.

• 32:58Speaker 04

  Different than offshoring where you're sending it away. There's some bargaining leverage, like you said, you know, Trump was looking for some negotiations or helping with his arguments on other things that are not tariff related. So there's a political aspect to it as well. So, you know, and then there's the anti tariff side that has some good, you know, points that they can make there too, you know, like in some ways it could be a hidden, a hidden tax.

• 33:25Speaker 03

  Yeah.

• 33:26Speaker 04

  Consumers and businesses end up paying more for certain items, so.

• 33:30Speaker 03

  And, and I, and I will say, like, so coming from the, the school of, like, like the comment said, like to not get political. I think when you look at the body of research and studies and, and ideas that are out there, most economists don't believe that tariffs are the best way to really build up a, an economy, you know, so without quote names or picking sides or being political, I would say that if you go into the school of like really studying economies and, and history and, and just kind of the thought patterns and some of the studies that have been done,

• 34:09Speaker 03

  overarching, most economists don't, don't, they're not fans of, of tariffs or, or kind of think that there's a lot more negatives that can come out of it. And, and so that's a lot of people that are maybe, maybe even a fan of Trump, but then say at the same time, the tariff talk is interesting because, you know, studies have been done, you know, well-known economists, you know, have, have done research and, and really thought through the unintended consequences and some of the bad things that can come out of tariffs. And I think overall, you know, it, it's pretty well understood that tariffs can be a bad thing, but like I said, there's also good things that come out of it. There's been some negotiations and some things that have come out of it.

• 34:53Speaker 03

  It might help bring some jobs back to, back to America or keep some industries a little bit stronger in America. So just kind of depending on what you look at, and that's where I say it's so complicated because, and then what, what, what our media will do is, is. Depending on which news outlet you're looking at and what side they're wanting you to be a fan of or hate, they're going to bring up the three positive things or the three negative things and all that stuff. And, and I still think we're just so fresh into this that we really haven't truly felt some of the impacts of the tariffs and how that's going to play out. So.

• 35:28Speaker 04

  I like that this question came right after the AI spending on the AI spending controlling the current markets. Because whether it's AI, whether it's tariffs, at the end of the day, these different, different things. So like tariffs have an impact more at like the sector or company level and not necessarily the whole market. Same thing with AI, right? And it's important to remember that any one of these things is not going to be the, the, the ball that drops or the straw that breaks the camel's back, right? There's, the markets are complicated and they're trying to take into account everything. It's not really about whether it's good or bad, especially politically.

• 36:11Speaker 04

  It's like, you know, which of these companies can pass along the cost? Which one can protect their margins? They're all going to have to adapt. You know, US markets and global markets are always doing that. They have to adapt.

• 36:25Speaker 03

  Yeah, yeah. Yep. But great question. Thank you for bringing that in. And, uh, you know, hopefully that, that helped you think through that. And I had another message that came in. It said, million dollar idea, money wise calculators and money wise thesaurus. Great stocking stuffers. Merry Christmas, guys. Well, Merry Christmas to you too.

• 36:43Speaker 04

  Christmas and thank you.

• 36:44Speaker 03

  Steven, Steven, I guess you gotta make some money wise calculators or something. And we'll just throw that in the, uh, throw that in the idea tank.

• 36:51Speaker 04

  What's interesting about that thesaurus comment though, I mean, we do have, it's not a thesaurus, but gosh, we've got 150 or so of these different little one sheeters that answer specific questions.

• 37:06Speaker 04

  Right, we've got a whole data database, well, that we use here internally, but that we can share with clients.

• 37:12Speaker 03

  Yep.

• 37:13Speaker 04

  So, anyway, we've got the source of sorts and you get it or get access to it by calling us and just giving us a chat.

• 37:20Speaker 03

  There you go. There you go.

• 37:23Speaker 00

  We have a one hour.

• 37:23Speaker 03

  So why don't we go ahead and take a little early.

• 37:24Speaker 00

  Every day.

• 37:25Speaker 03

  What's that?

• 37:26Speaker 00

  I said, this show is a one hour the source every day.

• 37:29Speaker 03

  Yeah, yeah, hopefully, hopefully, we can ask those, answer those questions. Like I said, so much of it is, you know, so robust, you know, talking about the economy, you know, and we're, we've been trained into going to the media outlets and, and then, you know, you break down, what did the markets do today based on, you know, the, the three or four headlines that we can kind of remember? It's, it's very, very diverse, you know, it's, it's, there's so many things going on every single day. There's huge pension programs that are managing money across the country. I mean, for all you know, there's a bunch of pension managers that, that chose to reallocate the portfolio. And if enough money real allocates their portfolio across the country, it's going to move the markets.

• 38:11Speaker 03

  But then they're going to come up with some headline and maybe, you know, pin it to something that Trump did or Trump, some Trump didn't do. And it had nothing to do with any of that. It had to do with money in motion in portfolios. Um, you know, day traders and, and most small people's accounts is not going to push around the markets, but, but big money managers are, but obviously, uh, when, when investors get nervous or investors start going into their accounts and selling off, that can make a major impact too. But uh, that's why we try to tell people as much as possible to stay money wise and to stay with their strategy. Uh, and if you don't really feel like you have confidence around your strategy, that's, that's number one is making sure that you're invested in a way that you're comfortable with.

• 38:53Speaker 03

  That if something changes, regardless of what the headlines are, it's, it's the same thing over and over and over and over. Uh, stick with your strategy if it's right for you and right for your situation. And if you don't know, well, sit down with a financial advisor here at Money Wise. Ask some questions with free consultations and, and definitely would love to go over things and see if, uh, see if you're doing things right. And especially if you're, you know, three. Three to five years of retirement. You got retirement around the corner. Make sure there's no major red flags and see if you're on on track for what you're thinking. Retirement's gonna look like. We've been doing this for years and years and years and talked to hundreds of different people and seen people that have done it right. And are enjoying a wonderful retirement. And so if we can help more people do that, we'd love to sit down with you and have a chat. So.

• 39:38Speaker 03

  Let's go ahead and take a quick break and be back for the last segment.

• 39:41Speaker 00

  Don't forget, Money Wise is more than a radio show. We're an independently owned local wealth management firm with 60 plus years of collective experience. Our financial advisors are here to help you, Kern County. Together, let's be smart, be safe, be money wise.

• 40:00Speaker 03

  Welcome back. This is Money Wise, finishing out this beautiful Thursday where we finally got to see sunshine again. So hopefully you're enjoying the sunshine, get a little vitamin D. And and enjoy your your your trip into Christmas just around the corner. So. I had some good discussions today on compounding interest, AI spending and its impact on the markets.

• 40:29Speaker 03

  Kind of encouraged folks, if you are switching jobs or going from job to job. Definitely don't don't think it's just a small amount of money and cash out the clan if possible. If you can, as much as possible, leave as much of that working for you in your future because compounding interest is the magical portion of saving for your future. So. Anyways, one of the things I was gonna talk about, I don't know if you saw, I put that article in there, Dustin.

• 40:59Speaker 03

  So the last pennies have have crossed the finish line. And so many of you guys have heard about this, Trump. Trump said, we're gonna quit making pennies after 2026. So so the the production has basically come to the end. And coin experts estimated that the last pennies, as they were being produced, could bring as much as $5 million when they hit the auction block. Well.

• 41:27Speaker 04

  But did that happen?

• 41:28Speaker 03

  No, no, nowhere near, nowhere near 5 million.

• 41:32Speaker 04

  No, was it a lot less or a lot more?

• 41:35Speaker 03

  Sixteen, almost seventeen million dollars.

• 41:38Speaker 04

  For how many pennies?

• 41:40Speaker 03

  I don't even know, but they were anticipating it was sixteen point seven six million dollars. The very last, uh, two hundred and thirty second set containing the very last pennies ever made, sold for an eye-watering eight hundred thousand dollars. It doesn't say how many coins that was though, but I mean, it wasn't a lot. It was pennies, dude.

• 42:02Speaker 04

  Yeah, it looks like his, yeah.

• 42:05Speaker 03

  Yeah, so there you go.

• 42:06Speaker 04

  The five million apiece. Wow.

• 42:08Speaker 03

  So they, uh, you know, just the history of it, they started making, um, let's see, they started making pennies in seventeen ninety-three when Philadelphia served as the nation's capital. Uh, they were minting pennies, uh, so obviously for, uh, a long, long time and, uh, because of inflation, um, and the fact that our dollar loses value, uh, it just doesn't make sense to make pennies anymore. And I know that we've talked about it in the past, um, it actually costs us more money to make the pennies than what the pennies are worth. Uh, but there are many.

• 42:42Speaker 04

  In material and time and labor and distribution and all that.

• 42:46Speaker 03

  But there are a lot of charities, uh, that, that, you know, bank on pennies, uh, you know, March of Dimes and different things. I mean, they, they were, you know, the, the, and then even like throwing pennies into, uh, ponds. Um, you know, they pay people to go in there and get the pennies and then they, uh, actually split the money with the people that go in there and collect all the pennies. And that actually a lot of times helps take care of some of those water features in some of the cities that maybe we visit or love. So it's kind of funny because now those cities are, are going to be left to, um, raising money. Well, maybe people will start throwing in dimes and quarters or.

• 43:22Speaker 04

  There you go.

• 43:22Speaker 03

  Uh, and, and no more pennies. So, so unfortunately that's the cost of, uh, inflation. Um, and it's just not worth making those anymore. So, um, so there you go. The penny is no more. And it fetched sixteen point seven six million dollars for the last pennies. So I guarantee you, if Trump comes out and says, we're going to make another special set after this, I'd be really mad if I paid eight hundred thousand dollars for a couple of pennies.

• 43:49Speaker 04

  You'd also be mad if he spent sixteen million.

• 43:52Speaker 03

  There you go. There you go. All right, well, thank you guys for making Money Wise, you know, what it is. And we really, really appreciate you guys and the listeners. Hopefully, you guys can make it through the holidays being money wise and enjoy the things that don't cost any money, which that's time with friends and family and the things that matter the most. And so hopefully, you guys have a wonderful Christmas and enjoy all the wonderful things in your guys' life. Be smart, be safe, be money wise.

• 44:43Speaker 02

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