12/4/24 Tech and Finance: Navigating Apps, Credit, and Tesla’s Legacy

The Moneywise Radio Show and Podcast Wednesday, December 4th 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

  (singing) 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?

• 0:29Speaker 02

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

• 0:39Speaker 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 a.m., 101.1 FM, and always streaming at MoneyWiseGuys.com. You can call or text into the show 24 hours a day at 661-396-1000. Today, I'm Sharad Waite, and sitting here with me is...

• 1:04Speaker 04

  Frank Lee.

• 1:05Speaker 03

  Hey, Frank Lee.

• 1:06Speaker 04

  Hey.

• 1:07Speaker 03

  Happy Tuesday.

• 1:08Speaker 04

  It's Wednesday.

• 1:09Speaker 03

  Wednesday. Feels like Tuesday. I've been out...

• 1:12Speaker 00

  It's the third Monday.

• 1:13Speaker 03

  Yeah. Been out for the last couple of days, taking care of my health and...

• 1:18Speaker 00

  And Matt, you've done well.

• 1:19Speaker 03

  Thank you, thank you. I'll go ahead and say it, I had a colonoscopy, just a regular, old, good, old-fashioned checkup. There's nothing wrong, but my doctor suggested it because of my age. And so, make this public service announcement, if you are over the age of 45, it is recommended that you go get checked, go get a colonoscopy. It's one of the biggest killers in our age group. I'll be 50 next year. It's one of the top killers.

• 1:45Speaker 04

  Yeah. I mean, we've talked about this too, briefly, that there's a lot of other cases showing up, younger individuals showing up with colon cancers and discovering them at later stages.

• 1:59Speaker 03

  Yeah.

• 2:00Speaker 04

  So, if anyone is noticing any irregularities with bowel movements, then definitely, definitely talk to your provider.

• 2:07Speaker 03

  Go get checked out. Don't delay it.

• 2:09Speaker 04

  Don't wait.

• 2:09Speaker 03

  The problem is, like, you and I were just... Talking about this because if your medical background is really interesting, but the problem is when you're young and healthy. Yeah, exactly. You might be totally healthy, except for that one thing that's going on in your intestines or in your colon, you know, which is super common in our age group. And so it's so important to go get screened. When it's time to get screened, get checked up. And fortunately, I'm in good shape, but man, I was a ball of rat. I was a wreck for a couple of days just because I'd never gone through it.

• 2:37Speaker 00

  Can you mention Frank's background, just so it doesn't sound like a bunch of financial advisors talking about that?

• 2:45Speaker 03

  Frank?

• 2:45Speaker 04

  No, this is just my hobby. You know, I like to, you know, think about bowel movements and everything.

• 2:50Speaker 03

  Frank's legitimate nurse has a nursing degree, and so that's why we're talking about that.

• 2:55Speaker 04

  Yeah, that was a while back.

• 2:56Speaker 03

  Yeah, but you know, you still, you get the, you get the gist.

• 3:00Speaker 04

  Yeah.

• 3:01Speaker 03

  I want to go right to our message board. We've got a great comment, or actually, it's a question here. I want to talk about it. And it will lead us right into today's discussion. It's such a big part of our show. If you're listening, feel free to shoot us any comments or questions that you may have. You can text us 24 hours a day, 661-396-1000. So here's the message, Frank, and I want to get your opinion on this because you have some experience. It says, "Good afternoon, guys. Wanted to see if you've heard or ever used an app called Affirm or Klarna? If so, can you please let me know if they're a good app for a small loan? What I've seen is they'll let me borrow up to $1,500 and I can pay back monthly up to six to nine months with no big interest, but figured it'd be best to ask since I've heard you talk about bank loans recently.

• 3:46Speaker 03

  And I'd rather just do this once to get through the holidays. Thanks so much and be money wise." Thank you, Troy, for that comment. Great, great question there. And so I had to look this up because I was not familiar with these particular apps. We're not going to endorse any apps on this show, just because you just never know. But, but these apps that were mentioned here are part of a broader available service for people that are essentially buy now, pay later. It's companies that specialize this. They're primarily financial tech companies. BNPL, buy now, pay later services.

• 4:26Speaker 04

  This whole like fintech.

• 4:27Speaker 03

  Yeah, it's like, it's like a alternative to.

• 4:32Speaker 03

  You know, I guess payday loans slash credit card advance.

• 4:37Speaker 04

  Ebay, like all that, yeah.

• 4:38Speaker 03

  Yeah, PayPal, kind of. In fact, one of the companies that was mentioned, Affirm was founded in 2012 by the co-founder of PayPal and it was, it's essentially a, they have about 20 million users and they process over 26 billion in annual payments. And again, as the listener has mentioned, there are, they say no interest or low interest.

• 5:10Speaker 04

  Yeah, I think there's some interest, but it's not in the form of interest. Cause I have used Affirm back like maybe four years ago, five years ago. I was trying to buy a PC.

• 5:24Speaker 04

  You know, holidays are coming around, just like this time. I was like, oh, you know, like, yeah, let's see.

• 5:30Speaker 04

  I used it. I think what, what happened with me is that it was a 12-month payment process. Let's say if the PC costs like 2,000, they would charge me 2,200 instead and then just divide it up into 12 months.

• 5:48Speaker 03

  Yeah, you're just paying that back over that time. So it's kind of, they're not calling it interest, but obvious there's some charges that they have there.

• 5:56Speaker 04

  Cause then how else is the company making money?

• 5:58Speaker 03

  Right.

• 5:59Speaker 04

  It's like.

• 5:59Speaker 03

  Well, well, some of these companies, they're trying to make money of, I'm thinking of like Credit Karma, for example, which is, yeah, it's a free service, but they're just constantly advertising for, you know, credit, lines of credit, credit cards.

• 6:14Speaker 04

  Oh, yeah.

• 6:14Speaker 03

  You know, advertisements to try to get you to buy stuff. And I imagine a lot of these companies do the same thing.

• 6:21Speaker 04

  Yeah, Affirm is now in the credit card game.

• 6:24Speaker 03

  Yeah. And I also saw that Affirm is one of the companies that here recently partnered with Apple to be part, you know, essentially part of the Apple Pay ecosystem. And you know, Klarna, the other company's actually been around for almost 20 years. It started in Sweden and you know, again, billions of dollars. That go out, some of the, some of the benefits that are being advertised by these companies is that they do a, they don't do a hard credit check.

• 6:51Speaker 04

  No, no.

• 6:51Speaker 03

  It's a soft credit check.

• 6:53Speaker 04

  Yeah.

• 6:53Speaker 03

  And, which is interesting because that's good to not have a hard credit check because that can affect your credit score. If you, if you have a lot of hard credit checks, that's a bad sign for a bank. Cause they're thinking, what are you, what are you looking for, you know, like what, you're just, what, you're out there getting all these loans or opening up loans potentially. And that, that brings your score down temporarily, it hurts your credit score.

• 7:18Speaker 04

  Yep.

• 7:19Speaker 03

  But these companies, at least a lot of these buy now, pay later services, they do soft checks. But herein lies, let me, let's give some of the warnings and some of the downsides, because the upsides are pretty clear. You have ease of access to credit, it can happen very quickly. And in some cases inexpensively, if you do it responsibly. If you, if the downside to some of these is because it's a soft credit check, there's no credit that's really being built up. There's no, there's no, you know, you're not, you're not improving your credit by doing this. And you want to make sure that you do have some legitimate credit that can be built up.

• 8:03Speaker 03

  Now that doesn't mean that you ever have to borrow anything, it just means that you have to have the loans available to you. Which means you have a credit card, you don't ever have to use it, but having that credit card increases and can't, or can increase your credit score. Cause you have credit availability. And, you know, you're not, obviously never endorse people getting a credit card or opening up credit just to have credit. You know, it's not going to be worth it if you ever are borrowing and you're paying interest. But having credit available to you that you don't use is great for your credit score.

• 8:41Speaker 03

  And it's good overall because it's showing responsible behavior, financial behavior, that you're not using money that you could, even though it's like they're available for you. It, that's why it's a, it's a, it's a factor when it comes into your, your credit score.

• 8:56Speaker 04

  Speaking about credit cards, I actually just met someone that has over 30 different credit cards.

• 9:05Speaker 04

  And he's, he has, okay, like

• 9:07Speaker 03

  He uses them?

• 9:08Speaker 04

  He uses them. He takes advantage of those bonuses and uses them.

• 9:12Speaker 03

  Yeah, the points and stuff.

• 9:13Speaker 04

  And he's very meticulous about it. He has his whole spreadsheet written down to the T. I'm telling you, like, okay, I made payments here. This is how much I have here. Like, so if you're, obviously, we're not saying, go and open thirty, thirty, thirty lines of credit. But he, he is a enthusiast when it comes to that.

• 9:32Speaker 03

  And I was just like Is he ever, my guess is he doesn't carry balances that where he has any interest, he's paying any interest, right?

• 9:38Speaker 04

  No, no, exactly.

• 9:38Speaker 03

  It's all just really how to game it.

• 9:40Speaker 04

  Right, exactly. He's, he's like, he's learning, he's wanting to use this to play the game. So it's like, okay, how can I get the most out of it? Which is smart.

• 9:47Speaker 03

  Yeah.

• 9:47Speaker 04

  But it's like, again, not your average person to go spend.

• 9:51Speaker 03

  Cause literally it would take one messing up on one card. You forget about the annual fee.

• 9:55Speaker 04

  Exactly.

• 9:56Speaker 03

  Or you forget about something and it's like, what's all the point of all this? But yeah, you have, you have a nice spreadsheet and that's great.

• 10:01Speaker 04

  Yeah, exactly.

• 10:02Speaker 03

  Love that.

• 10:03Speaker 04

  He has like a little, little tracker. He's like, okay, like this is what we use. This is what I'm paying for. What am I gonna do next with this card? And it was like, oh my gosh.

• 10:11Speaker 03

  Oh, that's awesome.

• 10:12Speaker 04

  Yeah.

• 10:13Speaker 03

  Yeah, yeah, I was like Cause you can really game that system. We talked about it on the show many times. You're, you get the whatever bonuses that they give you for opening it up. Sometimes you get some free stuff. You get flyer miles or you get, you know, all kinds of discounts.

• 10:26Speaker 04

  Yep.

• 10:27Speaker 03

  That, here's the danger, though, coming back to buy now, pay later services that, that, that our listener was talking. Some of the pitfalls would be overspending. And that's where, I don't know if your friend is probably, you know, smarter than this, but you can ease, if, if deferred payments are so easy and access to loans is, you know, that seamless, you might start justifying expenses. Like, it's similar to if you go to any of these retail stores and they always ask you at the register, would you like a credit card? And we'll discount 10% right now. Well, you, you might think that that's a great deal and it might be a great deal, except then you realize, oh, you don't, you forget to pay it off. Or there's an annual charge or, you know, something

• 11:11Speaker 03

  that it, it is not worth it. Even though you might get that upfront discount.

• 11:16Speaker 04

  Yeah.

• 11:17Speaker 03

  Or if you end up buying something just because you think you're gonna get a discount, you're not really in the end saving anything. That would be, that would be some of my I guess my only really concerns, it could impact on your credit score of some of these buy now pay later services.

• 11:32Speaker 04

  Well, with what you said, like, make sure you can afford it. Don't go out and just spend on all these different, you know, items and get yourself in debt. You know, be, be methodical, be meticulous about it. Like, like my friend.

• 11:46Speaker 03

  You know, your friend, the, the credit card game, your friend that's, I want to, you tell me who your friend is out off the air. I want to get him on the show. Get him on the show.

• 11:53Speaker 04

  Yeah, yeah, yeah. And the, the crazy part is, he's not even in finance.

• 11:58Speaker 03

  Yeah, he's just into that.

• 12:00Speaker 04

  Like, this is, yeah, this is like my little hobby. I'm like.

• 12:03Speaker 03

  I had, I had a, one of my brothers was into that. Right when he turned 18, he was just so excited and going out and apply for all these credit cards. And he went and applied for a bunch of credit cards and thought it was this, you know, it was like a, a fun, you know, hobby for him to do. And I don't know how many he got, you know, just stacked up, you know, a bunch of credit cards as an 18 year old just for fun.

• 12:22Speaker 04

  Yeah.

• 12:23Speaker 03

  Um, but, you know, doing it responsibly, that's, that's pretty cool.

• 12:27Speaker 04

  Yeah.

• 12:27Speaker 03

  Uh, one thing about the credit cards that we've talked about, the benefit, if you are disciplined like your friend, that's uber disciplined. But if you're just normal disciplined with credit cards, it doesn't take much to beat the game because you can take advantage of not only the points, but there are extended warranties. There are also refund, extended sort of refund, um, benefits that you get with credit cards. Not debit cards, not all debit cards, but a lot of credit cards. One thing you don't get though, with these, these quick, uh, buy now pay later services like Affirm is you don't get generally those,

• 13:06Speaker 03

  um, those return policies like you do on, on credit cards. And so it can be a more complex refund process, basically. And you don't have all of the consumer protections that a lot of the credit cards offer for disputes on, uh, dispute resolution on, you know, faulty goods or, or issues that you're having. Which is why they're sort of trying to create another market there that's like direct to consumer loans that just make it. You know, just easier.

• 13:37Speaker 04

  Yeah, easy to accessible.

• 13:40Speaker 03

  Yeah, yeah. So that's, that's a great question and I'm glad that we covered that. Let's do this. We're going to take our first break of the day. We come back, I want to continue on with the headlines. There's been some really crazy things happening in today's world, not just in finance, but lots of things. So we're going to cover that. We're Money Wise and we'll be right back.

• 14:01Speaker 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 and wherever you want.

• 14:16Speaker 03

  Thanks for tuning in. We're Money Wise. I am Sharad Waite. I am here with Frank Lee.

• 14:22Speaker 03

  We're talking about what's going on in headlines, what's going on in finances, taking your questions and comments, 661-396-1000. Frank, the largest, one of the largest financial frauds in history and definitely the world's largest bank fraud. This is something that I'm sure a lot of people aren't familiar with. I guess that's because it happened halfway across the world over in Vietnam. And I'm not talking about the war. I'm talking about property tycoon Trong Mai Lan. Have you heard this?

• 14:51Speaker 04

  I have briefly. I haven't really followed up on it, but I've heard that it was a substantial amount of money that she has or been involved in.

• 15:02Speaker 03

  Misappropriating essentially. And so this is, this person, Trong Mai Lan, 68-year-old woman. She is, she was born in Vietnam, Ho Chi Minh City, and started as a market stall vendor, selling cosmetics with her mom. And soon after that, accumulated enough money selling little, little, you know, cosmetics at this stall. She started by little pieces of land and that grew to different properties, which grew to businesses, which grew to hotels and restaurants and ultimately banks and financial institutions. She essentially had

• 15:46Speaker 03

  amassed enormous amount of wealth, over $60 billion worth of wealth that she had accumulated up until it all caught up to her. And it turns out that she was essentially running a Ponzi scheme and a fraudulent and fraud fraudulent activities and much of the money, about 27 billion of that of her money was misappropriated. And the judge that she was, you know, accused, prosecuted, tried, found guilty.

• 16:25Speaker 03

  And the judge said that she essentially needed to return 75% of the money that she embezzled or she's gonna get the death penalty, which is, yeah, you believe it. There are countries that will invoke the death penalty for white collar crime. It's even rare in Vietnam and it's especially rare for a female in Vietnam to be convicted of a death penalty over a white collar crime. But there was a change of leadership in Vietnam where they wanted to make a, an example out of her and, and to essentially scare the rest of the population out of doing anything like this. It was a major, this is, I mean, in the, in the United States, you can blow off, you

• 17:09Speaker 03

  know, you can blow off 60 or 44 billion dollars. But in, in Vietnam, it had had the potential of essentially sinking the economy or the, the banking system. So the central bank of Vietnam had to jump in and help capitalize the banks that were losing their money from the fraudulent activity of this, of this woman. So here's the crazy thing though, is that just the other day on Tuesday, just yesterday, the court said that there, there's, there's no appeal. She appealed and they are not going to overturn the death sentence. However, they said that she can avoid the death sentence if she can come up with $9 billion. Oh, I see. And it's a, which is about three quarters of the 12 billion that she embezzled.

• 17:53Speaker 03

  There's a lot more that she, that she took and it was, but. They're just narrowing it down to embezzlement. So now it's, I guess it's a race for her to try to raise the funds to be able to escape a death penalty and just get life in prison if she can come up with the extra money. Such an interesting way to sort of deal with this. When you look at how, you know, we have our examples here in the United States. Bernie Madoff being the most prominent one. That was in 2008. Total claims was about 65 billion, by the way, with Bernie Madoff. And he was sentenced to 150 years in prison for his fraudulent activities.

• 18:28Speaker 04

  No death penalty there?

• 18:29Speaker 03

  No death penalties. We don't do death penalty in the United States for white collar crime. But boy, this is, this is, you know, such a fascinating story of rags to riches to prison to now potentially death.

• 18:43Speaker 04

  Yeah, yeah, yeah. I mean, when you're talking about, what is it? What does that equate to? Like almost three, so it says here, 340 trillion dollars in Vietnamese dong, which is approximately 12, 12 billion.

• 18:58Speaker 03

  12 billion, yes.

• 18:59Speaker 04

  And so I wonder how much of that is comparison to Vietnam's overall.

• 19:04Speaker 03

  Economy.

• 19:05Speaker 04

  Economy, yeah.

• 19:07Speaker 03

  I mean, yeah, it's gotta be, it's gotta be, I mean, this is not, not a good thing for any country. Countries often will take it, use, you know, celebrities or find people to essentially make an example of them. Here in the United States, we've had some major scandals. Looking and listing some of our major financial scandals. Enron in 2001, that was about a 74 billion dollar loss to investors, which that was still on a lot of people's mind. That crazy experience of Enron in 2001. I mentioned Bernie Madoff. There's other, you know, sort of smaller examples, like the Stanford Financial Group in 2009.

• 19:48Speaker 03

  I remember Alan Stanford orchestrated that big Ponzi scheme using the bank in Antigua. That was 7 billion dollars. He was sentenced to 110 years in prison for that scandal. And of course, this kind of leads to, you know, I think a.

• 20:06Speaker 03

  A discussion on just, you know, there's not a whole lot that you can do as an investor or as a citizen if you get taken advantage of and you get swept up into like a national scheme or, you know, something that involves multi, you know, multiple banks and, you know, legitimate, you know, financial institutions. It's pretty dang rare. I mean, it's the, it's the beauty that we have in our country is that we have a fairly, we have a fairly stable economic financial system where you, you know, you don't have as much of that happening, but certainly happens more. I see it happening on individual levels like what happened to Baker Mayfield. Have you heard about what Baker Mayfield's going through?

• 20:48Speaker 00

  He's suing his dad or something, right?

• 20:49Speaker 03

  Yeah, his brother and his dad who were running a, a capital management group. He's suing them for nearly $12 million for breach of settlement agreement. You know, this is, this is a, another common theme. You see this with professional athletes is that you have athletes come into a lot of wealth suddenly and then that spurs all of, you know, the people that are around you, around them to being available to do something with that money that you just came into as a professional athlete. And a lot of the family

• 21:30Speaker 03

  members get into management like Baker Mayfield and his, his brother, you know, were doing. But it often leads to, you know, a lot of, a lot of these problems.

• 21:43Speaker 04

  Yeah. I'll have to read up on that.

• 21:45Speaker 03

  You stole like $12 million or something like that. It was, it was intense. Yeah, it was, yeah, $12 million is what the, is what the claim is from Baker Mayfield alleging that his, you know, his father and his brother's companies took millions of dollars without him knowing and failed to meet the repayment agreements. And so they had to file a civil lawsuit. This was in November 22nd and.

• 22:13Speaker 00

  Yeah, the suit alleges that from 2018 to 2021.

• 22:18Speaker 00

  This capital management group that his father was running transferred more than $12 million without his authorization. That is...

• 22:29Speaker 03

  Yeah.

• 22:29Speaker 00

  Wow.

• 22:30Speaker 03

  Like, it's just, you know, it's always heartbreaking when you see an athlete or somebody who just, you know, comes on a bunch of wealth and then just blows it. But it's even more heartbreaking when it's, you know, family.

• 22:41Speaker 04

  Yeah, your own family.

• 22:43Speaker 03

  There's, you know, professional athletes, Warren Sapp, his career earnings $40 million, and he declared bankruptcy in 2012 and had debts that exceeded $6.7 million. So he had almost $7 million of debt and had declared bankruptcy in 2012 after earning in his career about $40 million. Vince Young, he earned $35 million and struggled with financial problems. He had to, he apparently spent $5,000 a week at the Cheesecake Factory.

• 23:18Speaker 00

  Trying to get everything on that menu?

• 23:20Speaker 03

  Trying to get everything on it.

• 23:21Speaker 00

  All 46 pages on it?

• 23:24Speaker 03

  And he was taking out high-interest loans to cover his debts. So Terrell Owens, one of the bigger examples, his career earnings $80 million, and he faced bankruptcy due to child support obligations, bad investments, and of course, spending too much on luxury items. Allen Iverson is one of the kings, though, $200 million, including his endorsements, was his career earnings. And again, his issues really came down to lavish spending and bad management of debt. And...

• 23:59Speaker 00

  What about Tyson was in there somewhere, I'm sure?

• 24:02Speaker 03

  Yeah.

• 24:03Speaker 00

  Because I remember the Tyson back in the day was going through, he was buying tigers and lions and bears, oh my.

• 24:09Speaker 03

  He declared, he filed for bankruptcy, Tyson did, in 2003 citing $23 million in debt. And again, like lavish spending. You know how much he had earned up to that point?

• 24:22Speaker 00

  How much?

• 24:23Speaker 03

  $400 million Tyson had, had earned, and in 2003 declared bankruptcy.

• 24:31Speaker 00

  Wow.

• 24:31Speaker 03

  $23 million of debt. It just goes to show, it's such a mindset and a mind frame for... Your own financial security, there's a, you know, there are people who don't make a whole lot of money, but they also don't have any debt. And so if you compare somebody who's very, let's say, minimum wage, but no debt versus somebody who makes $200 million a year, but they're sitting on, you know, they're accumulating debt every year, and they're spending more than they're earning even with interest, and they're spending beyond their means, even they'll get themselves in trouble because

• 25:15Speaker 03

  it's the same, it's the same problem with the mindset that gets anybody in trouble is you're not track, you're not keeping track of it. And you can easily blow through millions, hundreds of millions of dollars when you're just sort of like not, nobody's watching it. Nobody's watching the ship.

• 25:33Speaker 04

  Also with, especially with athletes, they don't really have a lot of the education really to, or financial literacy was never really something that was ingrained in them. You know, as, as a child, they're probably just focused on training, whatever it's baseball, football, basketball, whatever it is, and just had no idea about financial literacy. And once they get signed on with a team, they get this huge paycheck. It's like, well, what do you do with this?

• 26:03Speaker 03

  Right.

• 26:03Speaker 04

  You know, just spend it.

• 26:04Speaker 03

  Right. If that paycheck, let's say, is $100,000, or let's say it's $1 million, and it's your first like bonus or your first paycheck, well, what, it's what, yeah, like you say, if you don't have the financial experience or literacy, a million dollars just feels like infinity. Like, well, I'll never, I'll never run out of that. I can spend $100,000 on a car, and I still have, I still have $900,000 left. Well, I could buy, I'll buy four, $500,000 cars, you know?

• 26:33Speaker 00

  It always goes back to that story of Shaq when his rookie contract.

• 26:37Speaker 03

  Yes.

• 26:37Speaker 00

  Where he bought, you know, a house for his mom and a car for his dad and had all this, you know, spent before he even really got his check. And then he was like, what is? Taxes like what what is this luckily he he learned that early because now he's one of the you know most rich athletes just by doing you know he's got a little percentage of sim so many different businesses and now he's I mean he he he learned very young because he was one of those first players that came out you know really young to uh to be a professional athlete

• 27:16Speaker 00

  and that he he's got a podcast episode that he talks about his his money like how he goes traded to phoenix and had nowhere to live had nothing in the house and spent I believe the most money ever spent at a walmart

• 27:31Speaker 03

  yeah like walked in and dropped like a hundred thousand dollars

• 27:34Speaker 00

  I need TVs I need everything

• 27:36Speaker 04

  we should try to get him on the show

• 27:37Speaker 00

  I'm working on it

• 27:39Speaker 03

  yeah please do get shack on here he's awesome another person that was talking about this here I heard recently was snoop dogg talking about his business he's involved in all kinds of businesses as well and he he was mentioning how he wished he learned early on how they could have gotten paid for promoting some of the like uh like he was talking about gin uh and his you know gin his songs that he talks about you know drinking gin he's like we could have made making so much money back in the day for promoting all these alcohols but we didn't know it at the time so then it did they finally turned you know they they learned these rap artists learned I don't 15 years ago oh we just need to create our own labels and you started seeing a lot of these artists these

• 28:23Speaker 00

  now he has his own gin and juice drinks

• 28:25Speaker 03

  yeah exactly yeah he's got his own gin and juice like well yeah I mean you have a song about it

• 28:29Speaker 04

  yeah Ryan Reynolds has his own gin what was it Kevin R has his own

• 28:33Speaker 00

  yeah the what's the MMA fighter the

• 28:37Speaker 04

  oh um

• 28:40Speaker 00

  I am horrible at names, but uh

• 28:42Speaker 04

  Connor.

• 28:42Speaker 00

  Conor McGregor's got his own.

• 28:43Speaker 04

  Oh, oh, yeah.

• 28:45Speaker 00

  It's crazy.

• 28:45Speaker 04

  Yeah, yeah, yeah.

• 28:46Speaker 03

  Yeah, I mean, it's, it's, it's fun to see these athletes turn into business people.

• 28:50Speaker 04

  Yeah.

• 28:50Speaker 03

  It's great if it can work out.

• 28:51Speaker 04

  No, it can. I, I think the other athlete to, that I know of is LeBron, right? I mean, he's, he's, he has some businesses.

• 28:59Speaker 03

  Yeah. LeBron has been, been very savvy, I think, from the get go. Uh, he's also part of a management group that's just been knocking it out of the park.

• 29:08Speaker 04

  Yeah.

• 29:08Speaker 03

  Um, you know, hanging around with billionaires will do that, I guess. All right, we're gonna take another break right now. Don't go anywhere.

• 29:14Speaker 00

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

• 29:27Speaker 03

  We stay up late watching late night movies. I stay up late 'cause I like it when you hold me. Welcome to the Money Wise Show. I'm Sherwood Wait. I'm sitting here with Frank Lee. We're your hosts today. Got some great questions and comments. Thank you. Please keep sending them our way. First question here, as soon as I can pull it up. Says, is Tesla a good long-term investment stock? Overall, what are your thoughts on Tesla as a stock? Congrats on the procedure. I have to do it next year. Not looking forward to it at all. That procedure is what is a colonoscopy. That's what I was just talking about earlier.

• 30:10Speaker 03

  Congratulations on doing that next year. Uh, if you're over 45, you should be doing that every 10 years. And, uh, yeah, good luck. Good luck with that.

• 30:20Speaker 04

  It's not bad. It's not bad.

• 30:21Speaker 03

  It's not bad.

• 30:22Speaker 04

  Yeah.

• 30:22Speaker 03

  It was, I was, I'm a baby with when it comes to these types of procedures and medical stuff, needles, you know, all that stuff is not good.

• 30:32Speaker 03

  For me, I'm, I'm just, uh, I guess I have a phobia for that stuff, so I tend to put it off. But I'm glad that I did it and you should do it too. But the bulk of the question here is about Tesla's stock, Frank.

• 30:46Speaker 04

  Yep.

• 30:47Speaker 03

  So I, I, you know, this is interesting. Uh, Tesla is, is one of those companies that's been in the, gosh, Tesla's been around for a long time now. Their, their, their stock has been publicly trading since.

• 30:59Speaker 03

  What 2010, July of 2010, when the stock debuted at a whopping $1.28. But get this Tesla's stock price, it peaked in price and December of, let's see, it was, it was around December of 20, November of 2021, at about $407 a share. I don't know if you remember, there was a controversy that Elon Musk had, who was before then, or around this time, where he tweeted 420 Tesla stock is 420.

• 31:41Speaker 03

  This is right around the time he was smoking a joint on, on Joe Rogan's show. I mean, he's just kind of getting himself in trouble.

• 31:49Speaker 04

  Well, also, I think he tweeted that he was going to take the company private.

• 31:54Speaker 03

  Oh, yeah. And like funding secured.

• 31:56Speaker 04

  Yeah, funding secured. So everyone bought in.

• 31:59Speaker 03

  It's, I mean, if you just look at the share price, so it, you know, as I mentioned, it opened up, you know, it was a penny stock up until the, you know, 2020s. And then share price just shot way up. It peaked in November of 2021 at 407. But today it's trading at about $360. So actually, since 2022, 20, uh, since its peak of November of 2021 until today, it's down about 12%. The stock is down 12%. However, you know, if you would have bought it when it, when it had its recent low back in, in December of 2022, until now, now it's almost a 200%

• 32:43Speaker 03

  gain. So if you had, if you had have bought it, you know, just at that, at that time, then, you know, but that's, this is, we're talking about all very short-term periods. Anything less than five years is very short-term play. And when you have a stock that is this volatile, it's like, well, who knows what's, who knows where this is going to go and how much it could continue to go up. And it's, it's one. It's one company in one of many sectors that should be a part of your portfolio. That doesn't mean that you should own just Tesla stock, but it's a wise idea to own lots of stocks, including other companies like Tesla that are also creating a product.

• 33:27Speaker 03

  But maybe they're creating a product in a different state or in a different country even, or they've got a different model. So it's a way that you can diversify from that. Now, you always, with, with high risk, you should require a high reward. And that's why it could be a high reward if you are risking a lot in one company. And Tesla is considered a growth company. Their, their goal is to continue to grow. The question is, well, what is it valued at? And what is the company actually valued at versus what the share price is? And then what's the expectation on growth? What's the expectation on profits? And, and, um, and so, you know, this is just one of those,

• 34:10Speaker 03

  this is just one of the, one of those very popular companies that's just in the, in the media and in a lot of people's view right now. Um, and so, yeah, what are your thoughts?

• 34:22Speaker 04

  I mean, like, like you said, diversifying, you want to make sure that you don't want to be holding just solely Tesla. Cause I've, I've gotten that question a lot too from, not just from friends, but family members. It's like, oh, like, I want to buy a Tesla. It's like, okay, like, let's take a step back and look at the broad view of your whole portfolio. Like, we can include Tesla in your portfolio if you're okay with, if you're okay with the volatility that comes with it, you know? But I think people get sidetracked with any type of headline news of a certain company or, you know, whoever's in the news, whether it's Musk himself or whatnot, tend to get lost in it and be like, oh, you know, I should just invest

• 35:05Speaker 04

  a good portion of my portfolio in it because this person did or that person did.

• 35:09Speaker 03

  Or because I drive a Tesla, or I want to drive a Tesla. And there is some value to investing in things that you are familiar with. Like you can actually see this as a company that is producing a product. And it's a good product. The reviews are great and they're actually have revenues. The company is actually making money. That's that makes me feel a lot better than investing in a company. That has a share price, is publicly traded, but they don't have any revenues. They don't have any expected future revenues. They're just hoping on being able to have some revenues because they mostly just have an idea. This has been more popularized with the SPACs, the blank check.

• 35:51Speaker 03

  Ways that companies can have a, it's basically a blank check, public offering, initial public offering.

• 35:59Speaker 04

  I'm not too familiar with that.

• 36:00Speaker 03

  Yeah, it's, it's, it's, it's not a, it's not a super fun thing to go through, but essentially. It's another way to create a publicly traded company, but you can raise the money first. You open up sort of this. This, the idea of the, this company, which is going to then buy or fund another company. And, and it's good, that's how it will become publicly traded. This is, this was made popular here recently with DJT. Trump Media's. Company that went public and it, and it's so you can sort of, people can get. You know, very excited about.

• 36:39Speaker 03

  You know, whether it's your, your favorite celebrity or your favorite, you know, product that you think is going to come out into the future. And that's a very different thing than a company that has been around for a while. It's that has. You know, has, you know, cash flow, has a product that it's actually selling. I know, has, you know, earnings.

• 36:58Speaker 04

  Yeah, I think I've heard about a SPAC way before, like before the pandemic. That's when it was really, or was it after?

• 37:05Speaker 03

  Yeah, it was before.

• 37:06Speaker 04

  Popular, right? That's, that's very different from the traditional IPO of when companies come out, like they go through the whole. Checking with the underwriter and, and everything before they hit the market.

• 37:21Speaker 03

  Right, which, which is very, very difficult and expensive and hard for some companies due to it, but a SPAC, which is a. Special purpose acquisition company is essentially a publicly traded company that's created to acquire or merge with an existing company. So like we're creating this company with the with the intent of it then just merging with another company and whatever company we merge with, guess what? Now that company is publicly traded and now we have access to the capital, you know, through the through the Okay, I see why it was popular. Yeah, so it's a way that you can get out your, you know, get fundraising essentially for your company. Yeah. And, you know, I don't know how we got to that from Tesla, but there it's it.

• 38:03Speaker 03

  There are a lot of these companies out there that don't even have an earnings. Like generally, when you're looking and you're evaluating a company, you're comparing, you want to look at its P E ratio. Your price and the price of the of the of the of the share versus the earnings that the company is going in. And one, you know, red, one of many red flags is when there is no P E ratio or there's a, you know, there's no earnings or negative earnings. And or or in if in this case, in Tesla's case, the P E ratio is very high. It's at 98. So when you're looking at the overall market is, let's say, I don't know, 20. That's like, okay, well, why is it trading at such a high ratio?

• 38:46Speaker 03

  Is it? Is it because it's expecting to have a bunch of revenues? Well, what's that? You know, is that because it's, you know, that the next, the Cybertruck is really going to knock it out of the park? Or whatever, you know, new car that they think they're going to have, which is this is the CEO's role is to drum up excitement and bring attention to the share price so that people buy it, so that it it props it up. And meme stock, those meme stocks, that's all they're doing, right? There you have just a bunch of Redditors that are propping up certain stocks, not because necessarily the company has value, but because it's it's drawing investment interest into the company.

• 39:25Speaker 03

  And then in those cases, it's usually who's left holding the bag are the ones who get in trouble, like the ones who get out too late, because eventually if it doesn't come back down to fundamentals. And the share price doesn't come back down to some level of fundamental value, then you might find investors go, what the heck is this? This is, you mean, this is a company that doesn't even make anything? And then they start bailing out, share price goes down. Yeah, and then, you know, by the time you've maybe learned that, you've already lost all your money or whatever. So that's what makes me nervous about, you know, just these one offs of somebody just go, you know, what is this? You know, yeah, there's so many factors that you're looking into.

• 40:09Speaker 03

  If you're looking at a long-term investment, then, you know, that now you're looking at the advantages of working with an investment advisor. Right, because you have somebody there that can take on that responsibility, that fiduciary responsibility to make sure that the companies are being evaluated, for example, or that you're holding companies that meet your certain goal, that you're, you know, whatever objective, your investment objective is. And that you're, you know, you're working with professionals, making sure that your investment portfolio is being managed, that you don't end up, you know, you can reduce the amount of risk that you take by working with a professional, essentially, and having them do the screening and monitor your investments so that you don't have to.

• 40:54Speaker 03

  So, there you go. Great question, great comment. And we are going to take our final break of the day, and we will be right back.

• 41:02Speaker 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 401(k) Specialist, Justin Leland, at 661-847-1000. That's 661-847-1000.

• 41:29Speaker 03

  For MoneyWise, I'm Sherwood Wade. I'm here with Frank Lee. We're talking about everything finance today. I have a message here that says, LOL, I just saw gin and juice at the grocery store and had no idea. Also saw Metallica has their own whiskey. Wow, I didn't know Metallica has their own whiskey. Do you know that, Stephen?

• 41:46Speaker 00

  I did, actually Kyle told me.

• 41:48Speaker 03

  Oh, is it any good?

• 41:50Speaker 00

  I'm not sure, I haven't tried it.

• 41:51Speaker 04

  Does it taste metal?

• 41:52Speaker 00

  Yeah. I hope not.

• 41:56Speaker 03

  Another message here, earlier we were talking about the, we had some listener question asking about the apps that are available that can give you loans essentially, like quick loans, like a firm. And it says, so you guys haven't used either of the apps? Are these apps almost like the old school checks cashed places that'll pay you before your check deposits for a fee? So, yeah, we actually, some of us here have used that. You mentioned you had some experience with a firm.

• 42:25Speaker 04

  Yeah, I've used it once to buy the PC.

• 42:28Speaker 03

  Years ago, didn't have any problems, it was fine. They're legitimate companies. I don't think there's an issue with them, you know, like it being fraud or that. It's essentially just a loan that you just want to read the fine print, make sure that you know what you're getting. There can be some advantages over a credit card, certainly. And it could be some favorable, you know, payments.

• 42:53Speaker 04

  Yeah. I just opened up the app again.

• 42:55Speaker 03

  Oh, you still have it?

• 42:56Speaker 04

  Yeah, I still have it. So I'm just like trying to read through and see exactly like what's new about it. But yeah, they, you know, like a firm partners with multiple companies like Amazon, Expedia, Lululemon, maybe I can get something for the wife.

• 43:12Speaker 03

  So they have like direct agreements with certain merchants?

• 43:15Speaker 04

  Yeah, with certain merchants. And you can, you know, buy it now and then pay it, pay it as you go. I just realized this purchasing power.

• 43:25Speaker 03

  Which is like the loan?

• 43:27Speaker 04

  I don't know, actually. This is interesting. We'll have to look at it.

• 43:31Speaker 03

  This is part of fintech, which is constantly evolving. I think there's a lot of good things that are coming our way that should be a little bit more consumer friendly. But with everything, there can be, the companies aren't doing it because they like you.

• 43:41Speaker 04

  They don't like us?

• 43:43Speaker 03

  I mean, I'm not, they don't dislike you, but they're, they're doing it for- I thought they loved us. I can almost guarantee you that they're doing it for their shareholders. And the share, they, they have a corporate obligation that mandates shareholder value, which means making profit and making money. And that usually involves you paying them something. So if it's all free, it might be a case where you can win that game like you can with a credit card deal. Can win that game as long as you you know what you're doing and you don't cross the line, then you're fine. But that's how payday loans, for example, make their money because not from people paying it off as quickly as possible and not paying any interest.

• 44:29Speaker 03

  They make it because there are enough people, just like people who use credit cards. There's enough people who don't know how to use credit cards responsibly that supplement the those who do. And and so you just want to you kind of want to just know what the rules are and you can win that game.

• 44:47Speaker 04

  And always spend within your means.

• 44:50Speaker 03

  Yeah, that's the key. Don't spending within your means. There are there is a new pick that will be announced or is just announced Trump's pick for to run the SEC was just announced today. Of course, we don't know how this will go. But President-elect Donald Trump has picked Paul Atkins to serve as the Chair of the SEC, the Securities and Exchange Commission. This is a commission that we bow to here at MoneyWise. SEC is one of our regulators. They do a lot of good for consumers. He is is known as a pro-business conservative. He was a former regulator and has run agencies in the past. He's worked under both Republican and Democratic administrations since the early

• 45:35Speaker 03

  1990s. And he's also a strong advocate for looser regulation on crypto assets. So similar theme that President Trump has been pushing, which is more leniency and acceptance of the crypto world, the crypto asset world. So here we go, Frank.

• 45:54Speaker 04

  Yeah, it's gonna be one bumpy ride.

• 45:56Speaker 03

  It could be. It could be. People just need to be money wise. Just hit your Cybertruck.

• 46:04Speaker 03

  Yeah, yeah, there you go. Just get your Cybertruck. A great show today. We will be back tomorrow. We have a guest on tomorrow, so you won't want to miss that. And we want to remind everybody, if you've missed any of these episodes, you can always go and find wherever you listen to your podcasts, commercial free, wherever that is, whether it's Spotify or Apple, we are there. For now, though, be smart, be safe, and always be money wise.

• 46:35Speaker 02

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