12/30/24 Wrapping Up 2024: Tax Tips, Social Security Steps & A Year in Review

The Moneywise Radio Show and Podcast Monday, December 30th 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

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• 0:29Speaker 02

  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.

• 0:39Speaker 00

  Now, let's start the Money Wise Show.

• 0:42Speaker 03

  Welcome to the Money Wise Show. We are live from the padded radio room off Stockdale Highway on ESPN Bakersfield, 1230 AM, 101.1 FM, and always, as always, streaming at MoneyWiseGuys.com. You can call or text into the show 24 hours a day at 661-396-1000. I'm Sharad Waite, and sitting here with me is...

• 1:03Speaker 04

  Sammy Abiyawie.

• 1:04Speaker 03

  Sammy Abiyawie, happy Monday.

• 1:06Speaker 04

  Happy Monday and Happy New Year.

• 1:08Speaker 03

  Happy New Year. This is the last trading day of the year. Today is December 30th. Yeah, today's December 30th. This is the... We're going to get to some of the headlines later in the show, but there's a thing called a Santa Claus rally.

• 1:25Speaker 04

  Santa Claus rally.

• 1:26Speaker 03

  It's a really...

• 1:27Speaker 04

  I want to know about that.

• 1:28Speaker 03

  ...Santa Claus rally, the stock market indicator.

• 1:29Speaker 04

  I want to know about that.

• 1:30Speaker 03

  Definitely want to talk to you about that. But before we do that, we got several questions from our listeners over the break, over Christmas break, so I'd like to get right to it.

• 1:41Speaker 04

  Okay, I'll read the first one. I think the first one was truly just a comment.

• 1:45Speaker 03

  Yeah.

• 1:46Speaker 04

  "Thank you for doing the episode with the Woolworths update. Glad to hear that it'll be open for dinner hours, too, but I was wondering, will there be extra seating when it opens, or will it be the same size as before? Thank you very much for keeping it classy."

• 2:00Speaker 03

  Thanks, appreciate that, listener, asking about the Woolworths update. So we talked about this. Were you on the show? Yeah, Sammy, we were on this together.

• 2:08Speaker 04

  Yeah, with Emily.

• 2:09Speaker 03

  So go back and look a couple of episodes previous from here, wherever you're streaming your, this podcast. And there we talked about the Woolworths, which is opening up downtown, middle of next year, middle of 2025. I could say next year for one more day.

• 2:22Speaker 04

  Yes.

• 2:23Speaker 03

  But 2025, it'll be opening up. And yes, the restaurant, the lunch counter will be coming back. It will be this, the original lunch counter, which was, which has the bar and that floor seating will, will still be there. In addition to the original flooring for the lunch counter and the, and the, the lunch bar, there's, there'll be additional floor space that will be dedicated for seating. So it's actually expanding out. So the, the restaurant will be even larger than it was before. Now, behind the scenes, we're expanding the back of house for the, for the restaurant. And therefore, we can sort of down the road, expand the menu and do other things. But in the meantime, we're bringing back all

• 3:05Speaker 03

  the original equipment, the original grill, all of that, with that has the hood that's right there by the, by the bar where, where people will, will sit. That's all coming back. So yeah.

• 3:18Speaker 04

  Extra seating. And we're going to have seating outside, too.

• 3:20Speaker 03

  That's right. We'll have outside seating. And, you know, there's a lot of stuff happening on 19th Street downtown. Not just where we're building there on, on Woolworths, at Woolworths at 19th and K. But you go further east, and there's a lot of things happening in development downtown, especially East Chester area. So we're really excited about that. So thanks for asking. Got another question, Sammy?

• 3:42Speaker 04

  Hey, guys. What, what impact could the Fed's expected rate cut have on consumers and investors, especially in areas like housing, auto sales, and savings account? Thank you and hope you had a great Christmas.

• 3:52Speaker 03

  This is a, this is a really smart question here, Sammy. And I'm, it's perfect for you and I to talk about, because we were talking about the yield curve before the show. And I know this listener isn't asking about the yield curve, but the, basically, asking about the Fed's expected rate cuts, what, what effect does that have on people?

• 4:10Speaker 04

  So the, the, the short-term rates change when, when the rates adjust the rates downwards. In this case, our prime rate, I think today is at 7.75%, went down from

• 4:25Speaker 04

  Mid eights before the rate cuts. Right, the two fifty bips rate cuts that the feds did last, well, this year. We're not in twenty twenty five yet. But that's going to affect our prime rate. The prime rate is the rate that is used by banks for short term borrowing, either intra-banks or to consumers. Construction loans, lines of credit, which are both drivers of the economy. In the case of construction loans, that's what a lot of the developers use in order for them to get financing from banks for either lot development or housing development. And it's also used by, for lines of credit. Lines of credits that are used by a lot of business owners,

• 5:10Speaker 04

  either small, medium or large, for either manufacturing, financing of account receivables, sometimes inventory or sometimes both at the same time. So a reduction of that will reduce interest expense for a lot of people. It also affects mortgage rates. So a lot of the time when rates, when the feds move, the mortgage rates move along with it. We've seen a slight decline whenever the feds reduce the rates. However, they're still holding. You know, the longer gone the days that where we had two point, two, two five, two five rates that are fixed.

• 5:53Speaker 04

  Now we're looking at in the mid sixes. And it depends really on your credit score.

• 6:02Speaker 03

  Right.

• 6:02Speaker 04

  A lot of, lot of the consumer lending, you really, really depend on your credit score.

• 6:08Speaker 03

  So essentially, the idea is the Fed, if the Fed does lower rates, the anticipation is next year, I think, two rate cuts. Does that sound right, Sammy?

• 6:18Speaker 04

  That is correct. They were expecting, or a lot of people were expecting or at least hoping for multiple, more than two.

• 6:25Speaker 03

  Right.

• 6:25Speaker 04

  Now, the feds during the December meeting decide, well, came out and said, we're gonna, we're considering two rate reductions in twenty twenty five, which affected the market substantially.

• 6:36Speaker 03

  Yeah, and because then all of a sudden, that's cheaper for a lot of people to borrow. Immediately becomes cheaper for some people to borrow, but it doesn't always affect some of the consumer loans like our listener may be talking about. So it takes a little while for the interest rate cuts that the Fed does to actually trickle down and impact car loans and home loans and things like that.

• 7:00Speaker 04

  So flooring lines for a lot of the automakers and people that are selling cars are tied to that short term rate that the Fed's. So, yes, there are rates for flooring lines, meaning the loans that they use to have cars on their lots.

• 7:16Speaker 03

  Oh, yeah.

• 7:17Speaker 04

  That's going to get reduced, or got reduced twice now since the move that the Fed's made. And eventually, the couple reductions they're going to have in 2025. So as an auto dealer, an auto dealership will have less interest expense.

• 7:35Speaker 03

  I've noticed, I don't know if you've noticed this, Sammy, but auto loans that are advertised through car manufacturers themselves are generally much lower than what you will find at a bank or a credit union. They're still offering 0% financing, which means these auto manufacturers have a few different levers that they can pull for consumers to try to get you to go into the car. And if they, car prices are coming down compared to where they were during COVID, we have more inventory.

• 8:07Speaker 03

  So prices have come down a little bit. So one way that manufacturers are, I think, trying to compensate for that is saying, okay, look, we're going to, we're going to eat the interest on, by giving these loans out, but we'll make it up by being able to push volume and, and sell more cars.

• 8:22Speaker 04

  And also factoring into the price of the car, that MSRP already includes, I can assure you, already includes the, the cost of that interest.

• 8:31Speaker 03

  Right.

• 8:32Speaker 04

  Differential that exists between what they're offering you and maybe what. And also, a lot of the time, a lot of car manufacturers, I should say, maybe they have certain reserves or certain things that they can deploy at 3%, which is a lot less than the car loan you're gonna get from your credit union at 5%, 6%, 7%.

• 8:53Speaker 03

  Right. It's tricky. I'm speaking now to the consumer that might be listening. Don't get tricked into thinking, "Well, I'm gonna buy that new car because it has a 0% interest loan. I'm gonna save money." No, you don't generally save money by buying a new car. If you really wanna save money by buying a car, buy a used car. It's gonna be way cheaper than a new car. Even if you have to pay a 6% or 7% car loan, you can get financing for a used car from a credit union or a bank. And you might be paying more in interest, it's true. But at the end of the day, you might be paying $20,000 less for the car. So, you're saving so much more.

• 9:32Speaker 04

  A car that's one year old with not high mileage, sometimes you can get.

• 9:37Speaker 03

  Oh, yeah. Even a car that's two or three years old, that has 20,000 or 30,000 miles on it or less, is still, these days, now, with the manufacturing process, cars are just lasting 200, 300,000 miles. So, you've got a lot of miles you can put on that car. Great questions. Let's go to the...

• 9:56Speaker 04

  Yeah, very good question.

• 9:57Speaker 03

  Should we hit the next one?

• 9:58Speaker 04

  Sure. What was the next one? What credit score do you need to buy a house in California? Ballpark?

• 10:05Speaker 03

  This was, I had to look this up because I was not sure what the credit score range was. Now, there is no official line for a credit score and being able to qualify that I could see.

• 10:21Speaker 04

  No. So, each bank has its own policy. Now, there's certain regulations. We cannot redline, we cannot decline a credit based on certain characteristics. I think there's like 6% or 7%.

• 10:34Speaker 03

  Protected classes.

• 10:36Speaker 04

  Correct. You know, your race, your religion.

• 10:38Speaker 03

  Age, even. Which is crazy. Isn't that kinda crazy? You can't deny somebody for a 30-year mortgage loan, even if they're 90 years old.

• 10:46Speaker 04

  You know, it is crazy. But also, look, I think you and I talked about this on the show before. I have an uncle who lives in France, and he's 62 years old at the time he wanted to borrow. And he's a surgeon in France.

• 11:00Speaker 04

  He applied for loan, they had to, he had to go and do a full physical to make sure that he's full, healthy.

• 11:05Speaker 03

  Oh wow.

• 11:06Speaker 04

  For him to get a, hey, watch this, not a twenty, not a twenty-five, not a fifteen, a ten-year mortgage.

• 11:14Speaker 03

  Wow.

• 11:14Speaker 04

  Because of the age, sixty-two-year-old he was.

• 11:17Speaker 03

  Yeah, so they do it under, they underwrite, like, the life insurance for

• 11:21Speaker 04

  For age.

• 11:22Speaker 03

  People who are older in France.

• 11:23Speaker 04

  Here in America, we get, in a bank, we'll get sued.

• 11:26Speaker 03

  It's discrimination.

• 11:27Speaker 04

  It's discrimination.

• 11:28Speaker 03

  Yeah, you're just, because I'm older, you're not gonna give me a loan.

• 11:31Speaker 04

  That's right.

• 11:31Speaker 03

  And yet, I guess the bank has other ways that they deny somebody in their nineties, which would be income, you know, you could be denied based off of, if your only income is social security, for example.

• 11:42Speaker 04

  You can't, see, you cannot deny somebody a loan because their only income is social security. Now, you can deny them based on a ratio, but not because, you cannot say, hey, you're only getting social security, you're denied, automatically lawsuit.

• 11:58Speaker 03

  Right, right. You'd have to say, your income level is, does not meet this ratio.

• 12:04Speaker 04

  That's correct.

• 12:04Speaker 03

  Criteria, so basically.

• 12:05Speaker 04

  It's all about ratios that are already included in their policy and procedures. As long as they're meeting that, that's what the regulators regulate them on.

• 12:13Speaker 03

  Yeah.

• 12:14Speaker 04

  As long as they're not redlining, or they're doing something that's, you know, outrageously bad, you know?

• 12:20Speaker 03

  So for, for the listener here, to answer the question, what we're saying is, each bank is gonna have their own criteria.

• 12:27Speaker 04

  That's right.

• 12:27Speaker 03

  Sometimes a bank would, wouldn't care what your, they won't even look at your credit score, potentially.

• 12:32Speaker 04

  Yeah, commercial banks. Yeah, commercial banks typically don't look for a credit score, not, when I was a banker, we did not look at scores. We looked at the credit history, as long as you don't have liens, bankruptcies, or what have you, we, we're okay. We look at the credit payment history, and then we look at your, as a commercial bank, we look at financial statements, tax returns, and depending on the credit, is it, is it, what type of property you're buying, or what type of facility you're needing, is it a line of credit for inventory or receivables or whatever, then we look at your ability, and your cash flow ability to service the debt over the period of time you're asking for. That's the criteria. Now, for consumer loans, credit score comes in handy, because it's a quick, because there's millions of consumers.

• 13:17Speaker 03

  Mm-hmm.

• 13:18Speaker 04

  So, having a formula where you can just plug in numbers, makes it a lot easier for, for a loan officer to make a quick decision. So. Conventional loans, 620 score is your typical minimum that you would you would need in order for you to qualify. FHA loan, 500 with a 10% down. If you have 580, you can qualify for a 3.5% down payment. VA loans, same as conventional loans, typically 620 or higher. When it comes to jumbo loans, those are loans for larger amounts. I think 417,000, last time I looked into this.

• 14:00Speaker 03

  Yeah, it's in the 400s. Yeah.

• 14:02Speaker 04

  417,000, I think, is what I look, I remember, but it might be a little bit higher now because of inflation and what have you. You need a 700 score or above in order for you to qualify for a jumbo loan.

• 14:15Speaker 03

  Does that, so 700 seems higher for jumbo loans, but for a conventional loan, or let's just take FHA, because most people go FHA when they buy their first house. A 580 with a 3.5% down, the 580, does that seem like a reasonable threshold to you?

• 14:34Speaker 04

  No.

• 14:35Speaker 03

  It seems low, right?

• 14:36Speaker 04

  It seems low.

• 14:37Speaker 03

  Which kind of tells me, I think the banks are looking, mortgage lenders are looking at many other things than just your credit score. For example, you could have a 580 or even even higher, but still not qualified because of other issues like your debt to income ratio or your down payment size, right?

• 14:56Speaker 04

  Correct. And also, these loans are eventually going to be backed by the Freddie.

• 15:04Speaker 03

  Oh, yeah, Freddie or Fannie.

• 15:06Speaker 04

  That's the reason why you have this relaxed scores.

• 15:10Speaker 03

  Speaking of Freddie and Fannie, going into a little bit of a headline, just today, Freddie and Fannie Max stock up 30% in trading in one day, based off of the news of just one institutional investor who spoke up and Bill Ackman, who was the, Bill Ackman posted on his social media. A post that essentially giving the news that there is through President Trump, a credible pathway from removing Freddie and Fannie from conservatorship, which I was like, oh, I forgot they were under conservatorship because of the

• 15:53Speaker 04

  2008?

• 15:54Speaker 03

  Yeah, 2008 fiasco where we essentially had to bail out Freddie and Fannie because they were backing all of these crazy mortgages. And so apparently there is a pathway in the next couple of years to take off of, take off this conservative, remove the conservatorship.

• 16:13Speaker 04

  They've been under this MOU or conservative for a long time. I mean, frankly, commercial banks, Wells Fargo made some horrible loans. Bank of America made some horrible loans during the 2004, 2008 era. They got bailed out and they're no longer, or maybe Wells Fargo is, or maybe Bank of America is, but they were not under the same restrictions as Freddie and Fannie, in my opinion.

• 16:41Speaker 03

  Right. No, they weren't. It's a, it, America has this, part of the American dream has been homeownership. And part of the way that our elected officials have tried to bring that is by the creation of these institutions, these financial institutions that can essentially back up the mortgages for the everyday person. However, the qualifications that were, were, were super loose before the great financial crisis was, you know.

• 17:13Speaker 04

  I qualified for my first mortgage having, I didn't have the down payment. So the bank gave me first and second.

• 17:19Speaker 03

  Yeah. Yeah. How about that?

• 17:21Speaker 04

  Yeah. I think I put down three and a half percent. I had a 700 score, but I put on my first house, I put.

• 17:26Speaker 03

  Well, you probably had a legitimate job. I mean, there were those who didn't even have a job.

• 17:31Speaker 04

  I did have a job.

• 17:32Speaker 03

  All right. Well, let's take our, let's take our first break of the day. We have a few more messages. Keep the message and questions coming our way. 661-396-1000. That's the number you can call or text anytime. We're Money Wise. We'll be right back.

• 17:44Speaker 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 of your investment.

• 18:08Speaker 03

  Money Wise, thanks so much for tuning in. 661-396-1000, that's the number you can call or text. Got some messages right here, Sammy.

• 18:16Speaker 04

  Yep. Is there two different Medicare enrollment periods? Not sure you'd be the best to ask, but figured you may know. Thank you.

• 18:24Speaker 03

  We're not the best to ask, but we know. Let's give the answer, Sammy. There are, there's technically two different enrollment periods for Medicare that I'm aware of, but there's only one annual enrollment period. You have an initial enrollment period. That is the time where you initially apply for Medicare.

• 18:44Speaker 04

  After the age of what? When you turn 65?

• 18:47Speaker 03

  65, yeah. And you want to start that three months before the month that you turn 65, which includes the month that you turn 65. And it ends three months after the month you turn 65. This is a deadline you never, ever want to miss. There's actually a penalty for you to, by missing, to sign up for your entitled benefits through Medicare if you forget or miss it. So you don't want to forget. Three months before the month you turn 65 is the initial enrollment period, or IEP. So that might be what our listeners are thinking of, Sammy, is that, that initial enrollment period? Because the only other enrollment period is the annual enrollment period, which just

• 19:30Speaker 03

  ended on December 7th, which I remember when we had, Paul Sheldon used to come on the show regularly, talking about Medicare. December 7th is the day that we celebrate the, celebrate, we remember Pearl Harbor, the Pearl Harbor attack. And so between October 15th and December 7th of every year, that is the Medicare open enrollment or the annual enrollment period. And that is a time period when you can switch from the original Medicare to a Medicare Advantage plan. So this is where, I was just sitting down yesterday, watching football, a little bit

• 20:10Speaker 03

  of football with my son, and a Medicare commercial came on, and my son was like, "Why is this guy selling Medicare? Like, why would somebody go to them versus can they just do it on their own?" And I explained to him, we have an interesting thing here in America and the way that we administer Medicare. You can actually, you can actually sign up for Medicare, yes, on your own, but you can also do it through a salesperson. It's the same cost.

• 20:37Speaker 04

  Yeah.

• 20:37Speaker 03

  And the government just pays the salespeople, but it's the same thing to you. It doesn't really matter. They get paid by Medicare enrollment. People get paid a flat rate, no matter where you, who you sign up with. And so it's, they're just looking at, you know, signing up as many people as you can, but anybody can just go up and sign it.

• 20:56Speaker 04

  Make sure that your application is correct, all the data is entered correctly, so.

• 21:01Speaker 03

  Yeah, I like using an expert when it comes to insurance because especially with the Part D, which is your prescription drug plan, there can be some difficulty in not getting the right plan that covers a prescription that you must take that could be extremely expensive. Whereas if you just change your Part D, you could have coverage for that. So a lot of people don't realize that they can every year just, you know, switch or change their Part D plan because something's changed in their, in their physical.

• 21:36Speaker 04

  When can they do that? Is there a specific period?

• 21:38Speaker 03

  Yes, it's between October 15th and December 7th of every year.

• 21:42Speaker 04

  Okay.

• 21:42Speaker 03

  Right, it's during that Medicare open enrollment period or annual enrollment period. So it's really confusing. Most times, you know, you have your general enrollment period. This is for people who didn't sign up for Medicare Part B when they were first eligible and don't have a qualifying reason for a special enrollment period. So there's some other exceptions, but generally those are the, those are the enrollment periods. So great question.

• 22:11Speaker 04

  Yeah, very good question. Keep them coming.

• 22:13Speaker 03

  Today's headlines, Sammy, well, actually, the first thing I want to talk about is this, is the Santa Claus rally. And this is, this is something that's really interesting. It's one of the most statistically consistent measures that we have in the, for the S and P 500 at least. And let me explain what it is. The Santa Claus rally is. Is a phrase that was coined in, I don't remember what year it was, but several years back in the 50s or 60s, in the Stock Traders Almanac by Yale Hirsch, economist. And essentially, what he found was that the last five trading days of the year, and then the first two trading days of the following year, so you have those seven day trading period.

• 22:59Speaker 03

  It is a time where if the stock market is up during those seven days, then generally speaking, you have a very, you have a positive year. That January will be positive. The stock market in January will be positive. But furthermore, what you have is that is the second best seven day combo of the year. Meaning if you just took a seven day period of the stock market, going back to 1950, and you're looking for the highest performing period on average, this is the second best combo. I don't know what the first combo is, but I can't remember what time of the year it is. But the second best stretch in the stock market, historically speaking,

• 23:44Speaker 03

  is the last five days of the year.

• 23:47Speaker 04

  Plus the first two days of January. And it's called what?

• 23:50Speaker 03

  The Santa Claus Rally. And the average gain of the stock market between those seven days, going back to 1950, 1.33%. Which is pretty interesting, right? Meaning if you just wanted to play the law of averages, you would say that if you just wanted to invest those seven days in the market, on average, you're going to get 1.33% for trading, for buying and holding during that seven day period. It's a pretty good track record.

• 24:18Speaker 04

  Yeah, it is. I'm trying to have it make sense in my head, why? Is it optimism for the new year? Is it just clean up at the year end? That people are doing rebalancing their portfolios before the year ends and prepping for the new year? Those are all reasons that come to my mind.

• 24:36Speaker 03

  That's exactly what it is.

• 24:38Speaker 04

  Okay.

• 24:39Speaker 03

  I think it's that. I think the...

• 24:43Speaker 03

  Certainly squaring up their books, institutions squaring up their books, not just corporations, but financial institutions like money, like money managers and mutual funds and all of that. But you also have then trading, a lot of traders on vacation. And then more importantly, I think is the upcoming new year and the optimism that comes with the holiday spending and the consumer's spirit. So the Santa Claus spirit.

• 25:10Speaker 04

  Sounds like, like, you know, you go to the gym on January 1st.

• 25:14Speaker 03

  Right. That's what it is. Yeah. It's like the, it's like the consumer's period equivalent of the gym for

• 25:21Speaker 04

  The first couple of days of January.

• 25:22Speaker 03

  Yeah, that's exactly right. Well, good stuff. We're going to take another break here, Sammy. For all the listeners, if you've got any questions or comments, keep them coming our way, 661-396-1000. We're Money Wise and we'll be right back.

• 25:35Speaker 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.

• 25:56Speaker 03

  I like your Bob Marley impersonation. We're Money Wise.

• 26:01Speaker 04

  A rasta without rasta.

• 26:02Speaker 03

  A rasta, yeah. Got a little, all have a little rasta in us.

• 26:06Speaker 00

  The rasta-less rasta.

• 26:08Speaker 03

  That's right.

• 26:11Speaker 04

  Thanks, Stephen. Thanks for the reminder.

• 26:15Speaker 03

  We've got some headlines here, Sammy. First of all, I'm sure most people have heard by now, former President Jimmy Carter passed away yesterday.

• 26:25Speaker 04

  At the age of 100.

• 26:27Speaker 03

  100. Oldest American president, oldest president that has ever lived, basically. Like passed away just yesterday. And also announced today in market news, the New York Stock Exchange and the NASDAQ announced that they are going to be closed coming up on Thursday, January 9th for a day of mourning for President Former President Jimmy Carter. And I thought, wow, this is, this is interesting. I, you know, led me down a path of both you and I kind of looking into a little bit. What was Jimmy Carter's legacy in terms of finance and economics?

• 27:08Speaker 03

  The first thing that came to my mind with Jimmy Carter was the fact that knowing he was a one-term president, but also knowing that he served during a time of, of super high inflation. The annual inflation rate reached double digits by the end of his presidency. And created what we call stagnation, which is high inflation, but no economic growth. Remember, we had high inflation here in America over the last several years, but we also had high economic growth. So, yeah, it felt painful to buy those goods for so much more money, but people were still making more money, even though they weren't, you know, equal.

• 27:51Speaker 03

  President Carter didn't have that benefit. Therefore, he was hit with the impression that, by voters at least, that he was at fault. And he was also facing energy, the country was facing energy shortages. There were embargoes that were going on around the world.

• 28:10Speaker 04

  So he served between 1977 and 1981.

• 28:16Speaker 04

  A period of a lot of trouble, both here, when you talk about economy, but also overseas. The Israel-Arab war was at its peak. And he was the first president to actually broker a treaty between Egypt as the first Arab country to sign a peace treaty with Israel in 1979.

• 28:37Speaker 03

  Right, which that, that treaty between Israel and Egypt still stands today.

• 28:41Speaker 04

  I told today, I think that's the blueprint that got followed by Trump for the Abraham Accord. Between a bunch of Arab countries and Israel, including Morocco.

• 28:51Speaker 03

  Right, which is pretty impressive. Consider how volatile that is.

• 28:55Speaker 04

  Yes, especially during an era where we had the embargo, the oil embargo. If you remember, 1970.

• 29:05Speaker 04

  Or in the seventies, he maneuvered through that. We also had the Iran crisis.

• 29:10Speaker 03

  Right. That's that's sort of what start that was that caused the embargo or it was linked to the embargo.

• 29:18Speaker 04

  Yeah.

• 29:18Speaker 03

  The hostage crisis?

• 29:20Speaker 04

  The war, the war between the Arab countries and Israel is what caused the first oil embargo. That opened his eyes for energy independence here in the United States and and ways for us to achieve that. Through just, I think, drilling more, but also creating new renewable energies. Wind, solar was the first president to put solar panels on the White House.

• 29:43Speaker 03

  That's right.

• 29:44Speaker 04

  They were taken down, by the way, by Reagan as soon as he took office.

• 29:46Speaker 03

  Yeah, they were. They weren't super efficient back then. But, yeah, he was ahead of his time.

• 29:52Speaker 04

  I think so.

• 29:53Speaker 03

  The other thing that he did in nineteen seventy nine, President Carter appointed Paul Volcker to lead the Federal Reserve. He was the president of Federal Reserve, which he needed a real MVP to come in. Because for the first time in in generations, the country was facing high inflation. And how do you treat high inflation? By the most unpopular method possible, make it more expensive for people to borrow money. It seems counterintuitive, but that's exactly what Paul Volcker had to do. Which was why in nineteen eighty, for example, you your mortgage was eighteen percent. But guess what? You could also get a CD for eighteen percent, you know, a one year CD.

• 30:38Speaker 04

  What was your mortgage, though?

• 30:39Speaker 03

  Eighteen percent. So you're like, you know, you're paying all this. But it, you know, you had this this unpopular method to deal with inflation, which now we look back in history and say it worked. It took a little while.

• 30:53Speaker 04

  So so he appointed.

• 30:56Speaker 04

  What was the name?

• 30:56Speaker 03

  Volcker, Paul Volcker, yeah.

• 30:58Speaker 04

  So who was reappointed again by Reagan during Reagan's presidency?

• 31:02Speaker 03

  Yes, yeah, as the, I don't know if he was the Federal Reserve President, oh, he just stayed in as the Federal Reserve. He's still to this day considered one of the greatest Fed Chair Presidents.

• 31:13Speaker 04

  Maneuvering through this, that, the high of inflation, yes.

• 31:16Speaker 03

  And even a rule called the Volcker Rule, which we still talk about the Volcker Rule now, which is, you know this from your banking experiences, is that essentially stopping banks from, from leveraging, over leveraging their deposits and...

• 31:32Speaker 04

  To protect the depositors.

• 31:33Speaker 03

  To protect, yeah, exactly. So, yeah, we're talking again about Jimmy Carter and some of the legacy he brought, at least financially and economically.

• 31:44Speaker 04

  One last thing on him, just from my end, and I know this for you because I know you like hiking and the nature, and he extended, um, United States acreage for preserve, preserve a hundred, I think, million acres in Alaska.

• 32:01Speaker 03

  Oh, like on the National Park?

• 32:05Speaker 04

  That's right.

• 32:05Speaker 03

  Yeah, yeah, he was definitely an environmentalist, also a peanut farmer. He became president, when he became president, he set an example for future presidents by placing his family's peanut farm in a blind trust. Cause he didn't want, he didn't want to have conflicts of interest. And this is a practice that has been followed by some of the presidents, not all of them, but some of the, I think now even President Trump, at least in this term, is, is using more of a blind trust for some of his assets, because he's got foreign assets.

• 32:39Speaker 04

  Yeah, foreign holdings, yeah.

• 32:40Speaker 03

  Horrible holdings, and, but Jimmy Carter setting that example, I mean, you can imagine his peanut farm not providing too many of conflicts of interest, but he wanted to avoid any appearance of a conflict of interest. And so, you know, setting that example of placing his, his assets in, in a, a blind trust, I, I think is, is worth mentioning. So, R.I.P. Jimmy Carter.

• 33:04Speaker 03

  Way to go. He was also a great example, and we're going to talk one more thing about him, is philanthropy, and how much he gave after, really, his legacy came after as a president, showing that he was still driven to give back and to, you know, contribute to humanitarian efforts across the world.

• 33:28Speaker 04

  I think that's the reason why he won the Nobel Prize for 2002, I believe.

• 33:32Speaker 03

  That's right, that's right, he did win a Nobel Prize. You know, 25 years after serving as president?

• 33:39Speaker 04

  Yeah.

• 33:40Speaker 03

  It's remarkable.

• 33:41Speaker 04

  Yep.

• 33:42Speaker 03

  Really remarkable, and, you know, again, it's, we just went through a presidential election where a lot of people were told that whoever is elected is going to be able to pull some levers and move the economy one way or another. Jimmy Carter is an example of somebody who, if that was the case, he would have done it, and he did do it, but it took time for Volcker's policies to trickle down and for inflation to come down, and by then, then voters had made up their mind, and he was a one, that's why he was a one-term president. But the president doesn't have that.

• 34:14Speaker 04

  It's unfortunate, certain things that happen, especially the Iran crisis. I think surviving that, surviving a vote on that would have been very difficult, in my opinion.

• 34:25Speaker 03

  Right.

• 34:26Speaker 04

  So I think that's one of the things that helped or didn't help get him re-elected. I mean, people got killed, and so it was unfortunate.

• 34:35Speaker 03

  Super unfortunate, you know, these battles continue on. Sammy, we're talking about, you know, economic war, economic battles that are happening across the globe, you know, between us and other world powers.

• 34:51Speaker 04

  Hidden stuff, yeah, hidden stuff. I mean, we're at war, maybe a Cold War, a new one. I think or I believe with China. You told me about the hack?

• 35:02Speaker 03

  Just today, Chinese state-sponsored actor broke into the United States Treasury Department earlier this month. This was just announced today that earlier this month, Chinese state-sponsored hackers essentially broke into the US Treasury Department's workstation, some of their computers, and stole unclassified documents and information from some of these computers.

• 35:26Speaker 04

  How is this not economic war?

• 35:29Speaker 03

  Right, right. Right at our Treasury, you know, the Treasury Department's like, what information? I mean, China's looking for any information they possibly can. There's already evidence of China stealing information from publicly traded companies and using-

• 35:46Speaker 04

  Manufacturers in their territory.

• 35:48Speaker 03

  Yeah.

• 35:49Speaker 04

  Flying balloons in the Midwest.

• 35:50Speaker 03

  Right.

• 35:51Speaker 04

  And now this.

• 35:52Speaker 03

  Right. It's not good. It's not good. I mean, in one way, it's our version, our generation's Cold War. It's not necessarily, we're not doing nuclear drills, practice drills, you know, in our schools, but we are certainly under threat of this type of stuff, cybersecurity, unknown practices that-

• 36:20Speaker 04

  It's an axis. China, Russia, North Korea. I mean, most of the hacks that we get, the major ones, are from these three countries. Now, there are others that do this, maybe we don't hear about, but the major ones are coming from these three countries, Russia, China, and North Korea.

• 36:36Speaker 03

  Yeah, it's insane. And then you have the other rogue institutions like Anonymous, I don't know what they call themselves anymore, but there's other online hackers, like, they don't claim to be owned by any government, and they just go after who they believe are bad actors, which so far, some of them actually are bad actors. You're thinking, oh, wow.

• 36:57Speaker 04

  The new Robin Hood.

• 36:58Speaker 03

  The new, yeah, that's what it is. It's the new Robin Hood.

• 37:01Speaker 04

  That's what they think of themselves as the new, as the new Robin Hood.

• 37:05Speaker 03

  Man, it's scary.

• 37:07Speaker 04

  It is.

• 37:08Speaker 03

  We had, here locally in Bakersfield, there was a major school district here in town that was hacked and totally messed up the schools.

• 37:17Speaker 03

  Programs for quite a while.

• 37:20Speaker 04

  We had, we had something else here too, where they held the company hostage until they paid.

• 37:26Speaker 03

  I think this might have been the school districts or ransomware.

• 37:28Speaker 04

  Yeah, ransomware, yeah.

• 37:30Speaker 03

  Where, you know, essentially they, you get threatened to.

• 37:34Speaker 00

  That's the Panama Buena Vista School District. I remember that.

• 37:37Speaker 03

  Yeah, ended up caught.

• 37:39Speaker 00

  A couple of years ago?

• 37:40Speaker 03

  Yeah, just here recently. It's insane.

• 37:44Speaker 04

  It is insane. In a world where technology, AI, now they can copy your voice, by the way.

• 37:51Speaker 03

  Yeah.

• 37:52Speaker 00

  You need a voice.

• 37:53Speaker 04

  And call, and call, as you, if it's shared weight, requesting certain things, and if they have your information, then.

• 38:01Speaker 03

  That's it. I know. I know. I haven't had a robo call to me, but I have a friend receive a robo. It wasn't a robo call. It was an AI call. And it sounds like a normal person, like just a stranger that's, that's asked, just talking to you. Except there's a tiny slight delay sometimes. And my friend asked, he was, I think this is, I think, are you AI? And they answered, yes, I am. I am a program. Like they had to, had to write into the program. They can't lie. So it's like, what? If you wouldn't have asked, you would have just thought it was just some other person, salesperson on the other end of the line.

• 38:41Speaker 04

  You got to be extra cautious.

• 38:42Speaker 03

  That's a new.

• 38:43Speaker 04

  The texts that we've received during the holiday season, my wife and I got a text same day, almost same time from the toll roads. We don't have any toll roads in current county.

• 38:52Speaker 03

  Oh, yeah, yeah.

• 38:54Speaker 04

  Yeah, you need to clear your account to sign into this website. Bam bam. I'm like.

• 38:58Speaker 03

  No, it's even worse. There's a new scam that came out a couple of weeks ago where you get an Amazon package. And you don't know who it's from. And it says a QR code to scan to see where it's from. And then that's how they just, you scan the QR code and it just seals all your information. Oh, man, that's terrible.

• 39:15Speaker 04

  It is terrible, especially during the holiday season.

• 39:17Speaker 03

  Yeah. Well, let's take our final break of the day. We have a couple of messages. We're going to answer those right.

• 39:23Speaker 00

  Of the year.

• 39:24Speaker 03

  The last messages of the year, unless you've got a few minutes, if you want to send them our way, we'll be happy to answer them. 661-396-1000. We'll be right back.

• 39:32Speaker 00

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

• 39:43Speaker 03

  Happy New Year. Almost. We're Money Wise. I'm Sharad Wade here with Sammy Abiyawi.

• 39:50Speaker 04

  We have a question.

• 39:52Speaker 03

  Let's hear it.

• 39:53Speaker 04

  I'll start with just a comment. Rest in peace, President Carter. One of the greats, from one of our listeners. Thank you. Keep them coming. The question here, "I worked 25 years for a family business that was, and I was paid under the table, and now I'm going to be 60 years old and a bit worried that all of my years of hard work won't mean a thing. At what age can I collect 100% of my social security, great show, and be money wise?"

• 40:20Speaker 03

  Okay, so Sammy, this is a really great question. I'll summarize for all of our listeners. There are some people who, the question is, what if I'm paid under the table? I'm just paid cash, which means I'm not, I'm not contributing to social security and Medicare and paying taxes on that. What, what can I do, you know, for retirement? Now I'm getting 60, 60 years old, you know, I'm coming up on retirement age. What, you know, what, what can I do? So let's first talk about the, generally speaking, there, it's very common for people to be self-employed. Maybe it's a family business, or it's just you, and you've got a side gig or whatever, but your side gig or your own job sometimes could be substantial enough that, you know, you've essentially, you're, you're running your own business, even if

• 41:05Speaker 03

  it's just you or you and a few people. And it can be real tempting to not

• 41:12Speaker 03

  claim all of that income, because all the income that you claim has consequences.

• 41:16Speaker 04

  Yeah, tax consequences.

• 41:18Speaker 03

  Taxes, or now, social security and Medicare. And so it can be real tempting, especially in the beginning, when you're struggling to not contribute to that. However, if you don't contribute to social security or Medicare, then guess what? You're not in

• 41:34Speaker 03

  Entitled to it. And so it's a catch 22. And to qualify for social security retirement, you have to contribute what they call at least 40 quarters. You can do, that's a year. So there's four quarters in a year. So essentially, you have to work, if you worked for 10 years, and every quarter over those 10 years, and there's a minimum, a very small, minimal amount of money that you have to earn during that time. But let's say you make, just work a little bit each quarter for 10 years. You qualify then for your retirement, your social security retirement benefit.

• 42:16Speaker 04

  But if you do not contribute, or you've ever contributed, you basically don't have any social security benefits when you retire.

• 42:24Speaker 03

  That's right. And so if somebody who's, in this case, a listener who is 60, there's a couple of options here for you. It's not all over. You can start now. In theory, if you start now at 60, by the time you're age 70, then you can have enough quarters that it would be worth the whatever taxes you'd have to pay, because now you've got that guaranteed pension at age 70 that could pay out for the rest of your life and the rest of your spouse's life.

• 42:51Speaker 04

  Yep.

• 42:52Speaker 03

  So let's give some, some things that maybe consider here, Sammy, because maybe our listener hasn't thought of some of these things. The first is, maybe your spouse did contribute. So if your spouse contributed, even though you didn't, you are still entitled to social security retirement benefits based off of your spouse's working, working life. Which means if you didn't work any, but your spouse did and contributed to social security, you still get social security, and it's roughly half of what your working spouse benefit is, even if you didn't work at all. So there may be something there. Also, you may have worked before you started working in the family business. So you may have some quarters that you've contributed to, and you don't realize that they're there credited to you. So go and look on your social security online account,

• 43:37Speaker 03

  where you can get that report that used to be mailed out every five years. Now they just...

• 43:42Speaker 04

  It's available online.

• 43:43Speaker 03

  It's online available, but you can go and see maybe when you were a teenager, you had a job. Even if it was a minimum wage job that you worked for, you know, a few years, you could have some credits there. So you might be able to still contribute those credits to get that social security retirement benefit. So definitely think about those. If you don't qualify for social security retirement benefits, you could still qualify for SSI, Social Supplemental Security Income, which is a needs-based program that's also administered by the Social Security Administration.

• 44:17Speaker 04

  That's right.

• 44:17Speaker 03

  But it's a needs-based, so it's a poverty-based program. It's different than the retirement program for those who were contributing to social security retirement. So, you know, anything else there, Sammy?

• 44:32Speaker 04

  No, it's just, just, just at 60, there's some decisions here to make for this person or this listener. But time is still, I mean, hopefully this person is healthy and they can put in- President Carter just lived for a hundred years. That's right. That's true.

• 44:46Speaker 03

  It's not, it's never too late. You know, 60 is the new 50. You can still contribute to social security. You may have some credits there. And so it's not all is lost. You can still save yourself, even besides social security. It's not too late for you to also just start saving-

• 45:01Speaker 04

  That's right.

• 45:01Speaker 03

  -your own retirement savings.

• 45:03Speaker 04

  Yep.

• 45:04Speaker 03

  And, um, yeah, it kind of reminds me a little bit, Sammy, I know with borrowing from banks, especially business loans and that, it's really tricky for people to qualify for loans because they're balancing how much income they want to report, how many taxes they want to pay.

• 45:19Speaker 04

  Especially businesses.

• 45:20Speaker 03

  Yeah.

• 45:21Speaker 04

  Hey, if you're on a growth path, guess what?

• 45:24Speaker 03

  Pay some taxes.

• 45:25Speaker 04

  Pay some taxes because that's how you're going to use leverage to keep growing your business.

• 45:29Speaker 03

  Yeah, and that's why banks look at tax returns, right? They want to see, want to see you're contributing to these things and you're actually paying, you know, reporting some legitimate income. So hopefully that helps. Our listeners want to thank everybody who tuned in. This, not just this show, but all of this year, we really, really appreciate it. Uh, want to thank all of our listeners and remind you, if you missed any of this, wherever you stream your podcasts, you can go back and listen to all of these, commercial-free. Remember these three things: be smart, be safe, and always be money wise.

• 46:01Speaker 02

  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.