9/29/26 Running on Empty: Gas Prices, Inflation & Consumer Confidence

The Moneywise Radio Show and Podcast Tuesday, September 29th BE MONEYWISE. Moneywise Wealth Management I "The Moneywise Radio Show & Podcast" call: 661-847-1000 text in anytime: 661-396-1000 website: www. MoneywiseGuys.com https://www.moneywiseguys.com/ facebook: Moneywise_Wealth_Management https://www.facebook.com/moneywiseguys/ LinkedIn: Moneywise_Wealth_Management https://www.linkedin.com/company/moneywise-wealth-management-bakersfield/ The opinions voiced in this podcast are for general information only and are not intended to provide specific advice or recommendations for any individual. To determine which strategies or investments may be suitable for you, consult the appropriate qualified professional prior to making a decision.

• 0:00Speaker 00

  Live from the basement inside the historic Woolworths Building in downtown Bakersfield. Call or text in at 661-396-1000.

• 0:09Speaker 01

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• 0:29Speaker 02

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

• 0:37Speaker 00

  Now, let's start the Money Wise Show.

• 0:40Speaker 03

  And welcome to the Money Wise Show. We are live from the basement of the historic Woolworths Building in downtown Bakersfield. For the next hour, you are on News Talk 96.1, 1230 a.m., K E R N, streaming live at MoneyWiseGuys.com. You can call or text into the show 24 hours a day at 661-396-1000. We are your hosts, I'm Sharad Wait and...

• 1:03Speaker 04

  Sammy Abiyawi.

• 1:04Speaker 03

  Good seeing you, man. It's been, it's been a while. Yeah, it's great to be back. Great to be back in the great country.

• 1:11Speaker 04

  Can you speak with Scottish accent now?

• 1:12Speaker 03

  No, I love the Scottish accent. It is probably my favorite accent out there. It's, I can't do it. Emily can do it.

• 1:21Speaker 04

  Yeah.

• 1:22Speaker 03

  She's much better at it than I am, but we had such a great time. You know, I mentioned this to our staff yesterday, but one of the best things about leaving the country is gaining that appreciation for what we have here. Yeah, it's just, I mean, as beautiful as Europe is, and we were in the UK, mostly in Scotland, but spent some time in London. And it was, it was beautiful. They've got a lot of great things over there, but there's just nothing like home.

• 1:49Speaker 04

  Nothing like home, man.

• 1:50Speaker 03

  Yeah, yeah.

• 1:52Speaker 04

  It happens to me too, whenever I travel and I'm coming down that grapevine.

• 1:56Speaker 03

  Yeah.

• 1:56Speaker 04

  And I see the lights of Bakersfield, I'm like, oh.

• 1:59Speaker 03

  Yeah, yeah, yeah, it's great.

• 2:01Speaker 04

  And then the smell of the cow poop hits you, I'm definitely home.

• 2:08Speaker 03

  My gosh, yeah, it is, we live in, I love this place. I just, you know, being, being from this, from this area, it's just, it's just something so comforting about, about the cow poop smell.

• 2:19Speaker 04

  Yep.

• 2:20Speaker 03

  That, you know, just everything.

• 2:21Speaker 04

  I've lived here now, I celebrated my 25th year anniversary in the United States, August 23rd of this year. And I'll tell you what, I've lived here longer than I've lived in Morocco, and definitely, this is home.

• 2:33Speaker 03

  Yeah.

• 2:33Speaker 04

  A lot of people ask me, why are you here? Why don't you go to live at the coast, Orange County? My sister has lived in Orange County. I'm like, dude, this is home now.

• 2:41Speaker 03

  Yeah.

• 2:42Speaker 04

  There's so many relations, so many, my kid was born and he's being raised here. He's got his friends here, so I, I'm with you.

• 2:49Speaker 03

  Yeah, yeah, it's wonderful. And it looks like we've got some listener questions. I think that's a great way to start the show out.

• 2:56Speaker 04

  Yeah, we do. We had Chad Hathaway on the show yesterday, and I think this is a follow-up question to that. With diesel prices in this, is this something that could eventually hit the rest of town? Like farming and trucking?

• 3:07Speaker 03

  Yeah, yeah, I'm sure you guys mentioned this yesterday. Diesel is, is very much like the, like the, the blood of the economy. It is, it runs through so many different aspects of our economy that when you have increased prices, it essentially is impacting everything. You have construction, agriculture, mining and energy production. I'm sure you talked about this with Chad yesterday, just how much more he's paying for, to produce energy, takes energy.

• 3:40Speaker 04

  Yeah, it's just from a year ago, just a simple, simple number, almost double. Cause he buys about 1,200 to 1,500 gallons a week for his operation. And it was at $5 and now it's almost 8 some.

• 3:56Speaker 03

  Yeah, I mean, it's, it's really one of the most important behind the scenes inputs that we have because so much machinery works off of diesel. It's not just the trucks, it's, it's the, the generators and the different machines that, that are involved in it. And of course, the transportation is a big deal. Shipping and logistics and manufacturing and warehouse, those are where we have a lot of the generators and yard tractors. These are, anything that's moving around, moving goods around is likely linked to diesel. And so, you know, with diesel going up the way that it is, diesel prices, you know, continuing to go up, then it's, it's definitely going to impact all of those different areas.

• 4:41Speaker 03

  You know, I think food is the best example because it can be explained a little bit easier because you, you have so many different machines that are involved in growing food and then harvesting it and then transporting it and then storing it and for sale. All of those things are, there's fuel all along.

• 5:05Speaker 04

  Correct, every aspect of the process you just described, yes.

• 5:08Speaker 03

  And, and so, you know, that's, that's where you, you certainly can get squeezed. Now, we want to be careful here. I want to be certainly careful because I definitely don't want to, you know, add more fuel to the, to the fire. So take it in, in perspective. Yes, fuel costs are higher, diesel costs are higher. But at the end of the day, you're talking about roughly 1% to 2% currently from the, from the increased prices in diesel. It translates to about a 1% or 2% increase in the food that you're buying. And I'm just talking about food. Obviously, there's, there's other areas, but I think because we all consume food and we're all buying groceries,

• 5:50Speaker 03

  that gives us some barometer about what, what this is costing us. That means if your, if your grocery bill is $150 a week, we're talking about $1.50 to $3 a week.

• 6:03Speaker 04

  Extra.

• 6:04Speaker 03

  Extra, that's your household, right? So that means on, on a monthly basis, it may be $12 to $15 a month extra. Just if we're talking about just diesel fuel. So does that really warrant, you know, us being super, you know, upset or angry, start pointing fingers? I don't think so, but I think what's happening is it's, it's one of many things that are going up. Everything is going up in price and it's not just related to fuel. Fuel is just adding more, more pressures to inflation.

• 6:36Speaker 04

  That's correct.

• 6:36Speaker 03

  But everything is going up, including what it costs us to buy, what, what lending is costing. So interest rates are going up. And I think that is, that is by far impacting the economy way more and the average individual way more than people realize. And it's just easy to point and you see the fuel prices as you're driving down the street. It's easy to point that and go, oh, you know, this is, this is bad, you know, this is, this is, this is whoever's fault. And when really there's, we've been dealing with inflation for, you know, several years and...

• 7:11Speaker 04

  Correct, and that's what, what these interest rates are, are signaling. I mean, this, the bond market, higher interest rates, that's what it signals. Potentially signals that the market is not, not afraid, I don't want to use that word, but just, just potentially there is risk of inflation.

• 7:32Speaker 03

  Yeah.

• 7:32Speaker 04

  Is, is what these bond market is signaling.

• 7:38Speaker 03

  Right.

• 7:39Speaker 04

  What does that mean for us as consumers? Well, I mean, we have, if you have a credit card debt, that means your interest rate might increase a little bit or it stays the same. That's why we always preach on the show, to limit your borrowing, especially on credit card debt.

• 7:55Speaker 03

  Yeah.

• 7:55Speaker 04

  As much as possible. You want to be the kind of consumer that pays that off hopefully at the end of every month. Use it for benefits or whatever, but do not keep adding on to it because that's just a bigger hole.

• 8:09Speaker 03

  Yeah.

• 8:09Speaker 04

  Being dug as the weeks go.

• 8:11Speaker 03

  And it's, it's especially interest rate sensitive, the, the consumer loans are. Versus there are healthy loans, there's healthy debt, buying a house, for example. That's a, that's a healthy way to go about, but you're locking in a rate for 30 years.

• 8:27Speaker 04

  Correct.

• 8:27Speaker 03

  In some cases, 15 to 30 years. And so that's more manageable than, you know, just a variable rate that you're getting on your credit card. I think where it's going to really impact society is, we're seeing it in the government and the government spending right now with the interest on its debt right now, surpassing the amount of money that we're paying for defense.

• 8:47Speaker 04

  Correct, trillion dollars.

• 8:49Speaker 03

  A trillion dollars in interest, like that's, that's just not sustainable. And so what, you know, you have pressures on the government to be able to continue to pay its debts. But then employers, this is, this is where, coming back to the diesel prices, also we have the, the primary impact of rising costs of, of diesel, but you have the secondary impact that can be much more costly, which is, you know, somebody who has to drive to work and has to pay more for their fuel to get to work is going to ask for their employer to get paid more.

• 9:27Speaker 04

  Correct.

• 9:28Speaker 03

  Where the employers are already withholding, maybe their margins are already low because they haven't passed on their increased cost for fuel to their consumer.

• 9:36Speaker 04

  That's true.

• 9:36Speaker 03

  So now they're, they're, they have to deal with that. They're dealing with less profits and now their employees asking for more pay. So you have this secondary inflationary issue when it comes to rising fuel prices. And, and that's where you can, now you can, you can see problems start to crack in the, in the economy.

• 9:56Speaker 04

  Correct, I mean, the, to me, the rising interest rates...

• 10:03Speaker 04

  I look at it from a positive impact, people that are saving money. If you are saver, then this is a positive for you because now your deposits or your interest on your deposits at the bank now is increasing potentially. Either CDs or, or money markets or your, your savings account carries a little bit more interest. So you're benefiting

• 10:27Speaker 03

  Right.

• 10:27Speaker 04

  Uh, from that.

• 10:28Speaker 03

  Yeah.

• 10:29Speaker 04

  So there are some benefits. Again, I always, or whenever we talk here on the show, the importance of saving, the importance of less usage of plastic.

• 10:39Speaker 03

  Yes.

• 10:41Speaker 04

  You know, if you can't, if you feel like you can't afford it, or if it's not a necessity, especially in times of uncertainty, don't, don't, just don't buy it.

• 10:49Speaker 03

  Right.

• 10:49Speaker 04

  Wait until you have the ability or the capacity to buy it versus using plastic, because that's just keeps that hole.

• 10:56Speaker 03

  Yeah.

• 10:57Speaker 04

  Like getting bigger and bigger and bigger.

• 10:58Speaker 03

  Yeah.

• 10:59Speaker 04

  Or, I mean, to, to your point about fuel, I mean, employees spending more money on fuel or some, some employees having teenagers that now are driving. And they, they, they have new girlfriends that they need to drive around and spend more money on that, on that fuel.

• 11:15Speaker 03

  Yeah.

• 11:15Speaker 04

  So it's, it's, it's, it's, it's, it's a real impact on the pocket at the end of the day.

• 11:20Speaker 03

  Yeah.

• 11:21Speaker 04

  You know, and, and, and I think some statistics are showing about a hundred fifty to $200 extra towards a, a, a tank.

• 11:29Speaker 03

  Yeah.

• 11:30Speaker 04

  Tanks of gas, but $200 to your point from earlier is maybe one week of groceries.

• 11:35Speaker 03

  Right. Yeah. The, the families right now, especially, especially here in, in the country, the latest statistics are somewhere around just over half, I believe, of the, of the population could not come up with an unexpected expense of $400. They'd have to borrow to pay for an unexpected $400 expense, which doesn't take much. That's, that's a tie, that's your tires, that's an AC going out in your house. Uh, these things that happen regularly immediately puts financial pressure on, on, uh, on families in the United States. And then you have, um, the, what you're talking about where you have increased fuel prices, 200, where are they going to come up with 200 bucks, you know? And, uh,

• 12:18Speaker 04

  That's right.

• 12:18Speaker 03

  And so, you know, also, I, I, I, I'm glad you brought up the fact that interest, it's not all bad with interest rates going up. It's great if you're a lender, it's just terrible if you're a borrower. The good news is for, if you, if you plan your retirement right and your long-term savings, right, you are bar, you are lending out money more than you are buying into equity. Generally speaking, for most of us, as we get older, you're moving away from the stock market.

• 12:45Speaker 04

  Correct.

• 12:45Speaker 03

  And you're moving more towards the income because you're using it for income. And so bonds is, is where most of your money goes for most of us. Especially when you're in a situation where you're relying on your retirement funds, just, that's it. That's all you have is that, maybe a little social security.

• 13:01Speaker 04

  Yep.

• 13:01Speaker 03

  Well, the good news is if you, if you're doing that right, now you have, we have, right now, the 10-year treasury, for example, is about five and a quarter percent. That's the highest it's been in almost 20 years, it's since 2007. So 19 years, we haven't had a 10-year where the government is willing to pay you five and a quarter percent for 10 years guaranteed. I mean, that sounds like a, a few years ago, when we were in the ultra-low interest rate period, five, five, six years ago, you'd been, what? Everybody would take that deal. You give me guaranteed five and a quarter percent for 10 years? I'll take it, you know?

• 13:39Speaker 04

  That's a very, very good point, actually, especially about the history of interest rates. Because to, again, to your point, this low interest rate that lasted maybe 10, maybe 12 years, a lot of people think that that's normalcy. But if you go back in history, the rates we have today, that's what normalcy looked like.

• 14:02Speaker 03

  Yes. Right. Right.

• 14:04Speaker 04

  But, but we are measuring based on these low, very, very low interest rates that lasted maybe a decade, maybe a little bit over a decade.

• 14:12Speaker 03

  Yes.

• 14:14Speaker 04

  But, but that's, we, we can't, we, I don't think we can do that. We have to look at 50 years of history about interest rates, where the economy was.

• 14:23Speaker 03

  Yeah.

• 14:23Speaker 04

  And compare things apples to apples.

• 14:25Speaker 03

  Yeah. There's this bias, I, I can't remember the exact name for it, but it's essentially uh, where consumers will anchor to a specific price or a, a specific rate. And then it's just hard for them to get off of that. And that, it will lead them down, generally it will lead people down, making poor choices. And we're seeing it now with mortgage rates, for example, where, you know, 30-year mortgages, let's call it roughly 7%. You people up, you know, I can't believe that. My, my, my grandma's got a, you know, a 30-year at 3%. Why am I paying 7%? Or they're in a home that is, that where their mortgage is, is in, you know, 4% or 5%. And they're like, well, I can't move because now I gotta pay 7%.

• 15:09Speaker 03

  It's like, that's, that's just part of the, of the, of the, of the calculation into making that financial decision, but people are still stuck on what it was and thinking that we're out of normal. And you're right, we're actually in much more normal scenario. Now, what's happening, and this is the problem with inflation or deflation, is that you're, you're feeling it, you're feeling it o- over time, you're not, it's not, um, it, it's, it's compounding on top of the, the, on top of numbers that, that, that we're already used to. And so there's like this weird psychological impact where people are like, they just, they don't, like, when it comes down, they don't recognize the benefit of it

• 15:53Speaker 03

  coming down. They still are just feeling the pain of it not being what it was. But the, like, even if we go into a deflationary period, you're not, we're not going to be paying $1 a gallon. Get over it. Like, we're not in high school anymore. You're not going to pay, it's not going to be a dollar a gallon. We're not going to go back to $2 or $3 a gallon, you know? And, and

• 16:11Speaker 04

  Yeah, I, I agree with you. And I think that's a very good point to, to bring up because first, the demand is higher, a lot, a lot higher than, than when we had 20 years ago, or 25 years ago, uh, when the, when the gallon was $1.50 or whatever. I agree with you. And we, and I think that's what, I think we're all, and me included, having a problem with is that normalcy in my head, what's normal? What is it? Is it a $2 a gallon? Is it $5 a gallon? Or is it now $7 a gallon for diesel?

• 16:41Speaker 03

  Mm-hmm.

• 16:42Speaker 04

  Is that the new normal for us? And so I can start, and, and, and what we think suffer from, or we need to have is certainty as consumers. Like, if you don't have certainty, then you start panicking.

• 16:55Speaker 03

  Right.

• 16:56Speaker 04

  And that's, I think, what happened. I, me included again, and I'm, I'm, I'm an ex-banker. I know how to create a budget. I know how to keep it budgeted and balanced. But I also want to know that, hey, what's, what's going to happen in the next 12 months? What's going to happen in the next three years or five years? So I can plan accordingly. And, and people, you're right, I think there are statistics too, that people are not selling their homes and moving, even if though they're cramped in a smaller home, they don't lose that 3%.

• 17:23Speaker 03

  Yes.

• 17:23Speaker 04

  And replace it with the 7%.

• 17:25Speaker 03

  Right. Right. And that's, that, that impacts the economy. It's, that, that, and that is the, uh, that, that is the challenge that we're facing. It's not just you and I anecdotally, you know, saying, oh my gosh, it just feels so much worse. There's evidence, there's data out there to prove it. Today is a good example where the conference board, there's, there's, there's a whole system of economists out there that are polling consumers and getting a feeling what their sentiment is. How are you feeling? And then they rank it. And they've been tracking this for decades. So we can go back and we can look, how are consumers feeling just before a recession or during a recession or after recession? How are, how are consumers feeling in expansionary period or retraction period?

• 18:07Speaker 03

  So you can kind of, the, the, the sentiment of the consumer can oftentimes tell you a lot about what's going on in the economy, even though us consumers are pretty dumb. Oh, we're pretty, pretty short-sighted, but it's still what we're feeling now, you know? And right now, the conference board, Consumer Confidence Index is down, slid in September, fell to its lowest level since 2014. We're essentially at a, was that a, a 12-year, almost 13-year low of consumer confidence? And the sentiment of consumers out there, uh, it's not any better when you look at the conference board's reading for, um, the University of Michigan does a similar consumer survey,

• 18:52Speaker 03

  and it showed that sentiment fell 7% in September, which is its lowest reading on record ever that they've ever had, uh, meaning it's, it's the worst that the consumer's ever felt.

• 19:03Speaker 04

  Yeah.

• 19:03Speaker 03

  And the problem with that is that the consumer is driving, two-thirds of the economy is just the consumer. It's not, it's not, uh, the government, uh, or other organizations. It's, it's you and I going out there and filling up our tank and buying groceries. And then whatever things that we're buying.

• 19:22Speaker 04

  Correct.

• 19:23Speaker 03

  That's, that's most of the economy. So if people are feeling like you just described, where like, oh, I can't move, interest rates are high, I can't afford this. Uh, if this is the new norm of $7 a gallon, then what does that mean? And that uncertainty drives people to not spending. And then that's when they, that's when the economy starts to contract.

• 19:42Speaker 04

  Yeah. And, and, and I think the, the other thing too is just the, the, the job market and how stable is the job market? A lot of white collar jobs with the advance of, of AI could be at risk. And a lot of people perceive that as a risk to their careers, to their jobs, especially in the last six months, a lot of advance has been made in AI.

• 20:04Speaker 03

  Huge advances.

• 20:05Speaker 04

  Like, I mean, I'm, attorneys are, are using it, CPAs are using it, bankers now are using it, and they're creating their own AI systems to handle underwriting. Um, insurance companies use it. We use it in the financial advisor industry just to, I mean, to take notes. We have certain softwares that we use. So I think coupled with what you said about the uncertainty and, and, and that's what creates this feeling of, well, yeah, I'm not confident in my spending, short-term or long-term for the time being.

• 20:40Speaker 03

  Yep.

• 20:41Speaker 04

  Something's got to give. And that's what Chad said yesterday. He said, Sammy, this is not sustainable. $8 a gallon for diesel is not sustainable for anybody. Us as consumers that we pay at the pump, me as a business owner that drills, the ag person that you talked about earlier. Or the transporter guy, logistically.

• 21:01Speaker 03

  Yeah.

• 21:01Speaker 04

  Like, I mean, if, if, if, if it costs me $5,000 to drive between LA and New York, but now it, it costs me seven or $8,000 based on the new prices of, of diesel, is that gonna be passed on? How is that? That's the confidence that I think is lacking right now, and people are feeling it.

• 21:22Speaker 03

  Yeah, yeah, there is. I don't know if you saw it. I think it came out just today. Governor, Governor's Office in California is going to speed up the switch to the winter blend. So in California, we've got a summer blend and a win, and a winter blend, and it's more expensive to do the summer blend. And it usually ends in October, the end of October. So November 1st would be the first time that you can buy the, the winter blend. It's, it's cheaper. It's estimated 20, 30 cents a gallon should save us, you know, roughly. If that happens, if, if this is actually gonna happen, they're from Sacramento, that they're gonna, you know, go ahead and switch now and allow the, the refiners

• 22:06Speaker 03

  to go ahead and just go, go, go with the, the winter blend now. That, that could help. But I mean, that, that to me, I read this, and that's a pretty drastic measure, you know, for, for the state to do this. But it's still, we're talking about 30 cents off of, what are we paying? Over $6 a gallon for, you know.

• 22:24Speaker 04

  Just regular.

• 22:26Speaker 03

  And so how is that like, how is that gonna really help us here? It's like, there's clearly, the other thing is this, this talk about diesel. There's some, there's some mention of President Trump wanting to stop exports of diesel. Like, on the surface, it seems to, oh yeah, perfect, you know, we gotta just keep our diesel here. And, you know, in our country where we need it. So you, initially on the surface, you think this would make sense, when in reality, it does the, it has the impact of doing the exact opposite. Because people don't realize that, that fuel is a, is a global commodity that's traded globally. And, and it's not traded just in the United States.

• 23:09Speaker 03

  It's traded across all these multinational corporations that are buying these huge contracts. You talked about with Chad yesterday, he's just, he buys a ton of fuel, but this is just a little guy. This is a, this is a tiny mom and pop compared to these multinational corporations that are buying these huge fuel contracts. And, and so you have, you have this, this now, this, this scenario where, you know, we, we, you can't, there's no simple fix to this, but we're definitely in a global problem here.

• 23:42Speaker 04

  Yes, definitely a global problem, especially, I mean, look, to your, we have fuel coming from the Middle East, we have fuel coming, the largest exporter of diesel is Russia, with all the sanctions that we have on Russia. Plus the attacks that have been happening between Ukraine and Russia has affected that, the production.

• 24:01Speaker 03

  Right.

• 24:01Speaker 04

  So it's not just, to your point, it's not just us. So it's, it's a global problem. And until we fix the, the two, the Hormuz, the Bablin, the Russian problem and the Ukraine problem, that's, that's, we have some work to do.

• 24:14Speaker 03

  We, we export, Europe gets half of their diesel from the United States. Half of Europe, not all of Europe, half of their diesel comes from the United States. You know, so if you, us withholding our, our diesel and just keeping it here, all it does is drive up the price.

• 24:30Speaker 04

  Correct.

• 24:31Speaker 03

  It drives, and drives up all the, all the stuff that we're buying, everybody else is buying from Europe and European countries. And so, yeah, we got, we got a real mess on our hand, for sure. I've got hope, though. Stay tuned. We'll be right back after the break. A lot more to talk about. We're MoneyWise.

• 24:53Speaker 03

  Welcome to the MoneyWise Show. I'm Sharad, that's Sammy. We're your hosts today. Keep your comments and questions coming our way. 661-396-1000. That's the number you can call or text. Got a few comments here. Let's get to them, Sammy.

• 25:05Speaker 04

  Yeah, yeah. This one is, is, is good. When it comes to, no, this is not it. Where's the one with the Techron? Oh, what, that's a good question. What is Techron? If all gas is the same, how do they use that Techron name?

• 25:22Speaker 03

  Yeah. What I interpret from this question is, and I have, I have this question to myself. Like, growing up in, in high school, it was always at like, the discount, like gasoline stations, like AMPM or whoever. It was like, oh no, my friends were, I don't, I wouldn't put that garbage in my car. It's dirty gas. I'm like, no, come on. Dirty smirny dude.

• 25:46Speaker 04

  Let me bust this bubble here.

• 25:48Speaker 03

  I know. Good.

• 25:49Speaker 04

  All gas come from the same pipe.

• 25:51Speaker 03

  Yeah, exactly. Yeah.

• 25:52Speaker 04

  Same pipe, same refinery, it's standard. Now, it's, the terminal is different. So Chevron have their own terminals, okay? At the refineries, whatever.

• 26:00Speaker 03

  Yeah.

• 26:00Speaker 04

  And guess what do they do? What they do? At that terminal, they add this thing called Techron. So what is Techron? It's an additive that's a detergent, basically. And it's a help keeps carbon deposits of fuel injectors to a very, a lower level than, than other, other brands, or brands that don't use or add any detergent.

• 26:22Speaker 03

  Yeah.

• 26:22Speaker 04

  Right? Now, if you're going to Chevron and spending 50 cents, 79 cents, 75 cents more than, let's say, my favorite, Costco. And believe me, I have a lot of friends that have gas stations. Right?

• 26:36Speaker 03

  And you still go to Costco?

• 26:38Speaker 04

  I still go to Costco. Hey, dude, they don't pay for my gas, you know? So I'm gonna go with the cheaper option, but also Costco, guess what? They have their own detergent.

• 26:48Speaker 03

  I see.

• 26:49Speaker 04

  If you know the Kirkland brand.

• 26:51Speaker 03

  Yeah.

• 26:51Speaker 04

  They take the, whatever, and they add on this Kirkland brand. But typically, a lot of it is very, very similar from a quality standpoint, if not the same.

• 27:00Speaker 03

  Right.

• 27:01Speaker 04

  Right? So if you're very loyal to Chevron, for instance, with Techron, yeah, good for you. But you're paying 75 cents more for the same product. Because everything gets pulled out of the ground, process in the same refinery, and then it goes to a Shell terminal, Chevron terminal, and then they add their own detergent. That's basically what happens in this process. And then they add a little bit more because of the, because of the brand. Now Chevron, the 90s, early 2000s, they focused on the Techron. But also, if you're a traveler, Chevron's bathrooms and stores were really, really clean.

• 27:39Speaker 04

  That's why they, they have this, customers or loyal clients that are coming back to, to, to the stores. But if you're looking for a, a deal, well, guess what? Costco has it, and I, and I've been putting gas in my cars for the last 15 years from Costco. I've never had a fuel injector problem because of the gas I put or I buy from Costco.

• 28:07Speaker 03

  Yeah, I mean, I'm way out of my wheelhouse here. I'm not a mechanic. But it just seems like it is not worth paying more money for what you perceive as a top-tier gas station versus a generic Kirkland brand.

• 28:21Speaker 04

  So, so, so I had, like I said, I had a lot of gas station, both friends, but also clients.

• 28:27Speaker 03

  Yes.

• 28:27Speaker 04

  That leased some really, really expensive cars.

• 28:30Speaker 03

  Yeah.

• 28:31Speaker 04

  That require the premium.

• 28:34Speaker 03

  Oh, yeah.

• 28:34Speaker 04

  Right?

• 28:35Speaker 03

  Yeah, the high octane.

• 28:36Speaker 04

  And these guys were operating non-branded gas stations or very, like the lower-tier gas stations. And guess what they put in their cars? They put just.

• 28:45Speaker 03

  The cheap stuff?

• 28:46Speaker 04

  The cheap stuff. They never had a problem.

• 28:48Speaker 03

  Yeah, yeah.

• 28:49Speaker 04

  A lot of them told me this. I'm like, hey dude, I'm leasing the car. I'm just gonna put whatever.

• 28:53Speaker 03

  Yeah, yeah.

• 28:54Speaker 04

  I don't care.

• 28:55Speaker 03

  Right.

• 28:55Speaker 04

  And they never had a problem.

• 28:57Speaker 03

  Right.

• 28:57Speaker 04

  So, I mean, it's, it's truly a marketing thing, and Chevron is really good at it. And they've been doing it for more than 100 years, so.

• 29:04Speaker 03

  Yeah, yeah, yeah. It just, it, it, it's one of those, the same thing with the mid-tier, the mid-octane tier, you know, you have these three levels.

• 29:13Speaker 04

  Correct.

• 29:13Speaker 03

  There has been some, some push in the past by consumer advocates to say, get, why are we, like, get rid of it, you know, you don't, who needs that mid-tier?

• 29:22Speaker 04

  That's right.

• 29:22Speaker 03

  I guess you do get better, slightly better fuel mileage when you do it, but it doesn't, it doesn't outweigh the extra cost.

• 29:29Speaker 04

  One of my best friends is a gas station operator, and he swears, he swears by, by, by Chevron. Even though he might, he'd only operate a couple of Chevrons, and the rest of them are other brands. He'll swear, but no, Chevron gives me better mileage. And look, do you even pay attention to it?

• 29:44Speaker 03

  Yeah.

• 29:45Speaker 04

  I mean, you get into your 150,000 dollar car, do you even pay attention to it? He starts laughing. I'm like, come on, man.

• 29:52Speaker 03

  We gotta get one of your gas station friends on the show. I'd, I'd be, I mean, if they'd be willing to do the ask. Because there's so much, I think, misinformation about that. People think, like, like what was said yesterday, that the, that the, the gas stations are at fault. You know, that they're colluding in the pricing and all that.

• 30:08Speaker 04

  What, what Chad said yesterday, and there's some truth to it, is that gas station owners, operators, they don't have a body that, or some type of a commission, or some type of, that regulates their prices. Right? They can price whatever they want.

• 30:22Speaker 03

  Yeah.

• 30:23Speaker 04

  Well, that's true. They can price whatever they want. But a lot of the time. The price is dictated by the brand you're that you're carrying. Chevron is going to ask for a minimum, right? And then you can add on to that, and that's your decision as the retailer. But if you're in a corner that has three gas stations and you add 30 cents on the top of that, guess what? People are not going to come to your station.

• 30:46Speaker 03

  Yeah.

• 30:46Speaker 04

  So a good operator is not going to do that.

• 30:48Speaker 03

  But yet it still happens. I am shocked at how often this happens. There's a this happened here recently at the the gas stations over off of Lost Hills. You know, like when you're going to the beach and you get off on I five, right? There in Lost Hills, there's all those gas stations. There's one that was like, literally was like 75 cents more a gallon. It's right next door to Love's or whatever AMP or whatever. It's 75 cents more per gallon.

• 31:14Speaker 04

  Was it a Chevron?

• 31:15Speaker 03

  I think it was.

• 31:16Speaker 04

  Yeah, it had a Tecron.

• 31:17Speaker 03

  Either Chevron, pay for that Tecron.

• 31:19Speaker 04

  Seriously.

• 31:20Speaker 03

  Chevron or Shell.

• 31:21Speaker 04

  Yeah, Chevron, Shell, they're they're very comparable from a tier standpoint.

• 31:25Speaker 03

  Yeah.

• 31:26Speaker 04

  And then you have the rest, like the the Buc-Ee's, you have the Loves and

• 31:31Speaker 03

  Yeah, like Flying J.

• 31:32Speaker 04

  Flying J. They are their client is different.

• 31:36Speaker 03

  Yeah.

• 31:36Speaker 04

  What Chevron is trying to attract.

• 31:38Speaker 03

  Yeah.

• 31:38Speaker 04

  It's like Walmart and Target. They carry the same product, but Target is slightly higher prices.

• 31:43Speaker 03

  Yeah.

• 31:44Speaker 04

  It's just the branding and the type of client you want to attract.

• 31:47Speaker 03

  I can't imagine that's working out for them because why? Why would somebody like literally just go into the next parking lot next door? That like the the station right next door?

• 31:56Speaker 04

  I can assure you, there are loyal clients to the Chevron brand that don't go anywhere else but Chevron.

• 32:01Speaker 03

  Yeah, it's always just Chevron.

• 32:02Speaker 04

  Always Chevron, because they they know that the bathroom is going to be clean. I worked at a Chevron as a clerk, like the bathroom, you have to clean it every 30 minutes or 45 minutes, especially when you're on the freeway.

• 32:12Speaker 03

  Yeah.

• 32:13Speaker 04

  You know, you have like, you have to always keep it clean. The fridge is always full. The hot food is always turned around. The coffee is fresh. Every 20, 25 minutes, you have to throw away the coffee and make a new one. So there's, there's all that.

• 32:26Speaker 03

  They have a higher standard.

• 32:26Speaker 04

  Higher standard than, you know.

• 32:29Speaker 03

  Other, other places. So here's the other question. Well, we're still on this since you I love that you had this experience in the in the gas station.

• 32:36Speaker 00

  Say, we don't need no gas.

• 32:37Speaker 03

  I know.

• 32:38Speaker 00

  Sammy.

• 32:39Speaker 03

  So, you know, when when gas was, let's say, let's say $3 a gallon, it the difference between the the the low, mid and high tier was always 10 cents more a gallon, right? So you're paying 10 cents more if you want the middle tier. You're paying 20 cents more if you want the higher tier. Now that gas is $6 a gallon, it's still just 10 cents more a gallon. To me, that tells me that we were getting ripped off. For all of those years, we were getting ripped off because we were paying whatever percentage that is. Call it whatever. We're paying a 10, whatever 10% premium for that higher octane versus now

• 33:20Speaker 03

  you're only paying like a 4% or 3% more for that higher octane. It's like, well, how was what? Well, so is this is this another thing where it's the gas station owner that's deciding that?

• 33:33Speaker 04

  No, so so the the difference in in levels, the 10 cents.

• 33:37Speaker 03

  Yeah.

• 33:38Speaker 04

  Again, is it just a marketing strategy? And to your point from earlier, the mid tier in my mind is just something that's just we need to get rid of because it does not make sense. So if you have Tecron on this, on the, on all of them, actually, have Tecron.

• 33:51Speaker 03

  Yeah.

• 33:52Speaker 04

  Right?

• 33:52Speaker 03

  Yeah.

• 33:52Speaker 04

  It's just, I guess, the top tier has additional detergent to make it cleaner, right? And it does not affect your engine, gives you better mileage. That's a myth I would love to bust personally.

• 34:05Speaker 03

  Yeah.

• 34:06Speaker 04

  Because I don't do that in my own cars now. I have both just regular gas operated cars and diesel. And I I just do the regular stuff, right? And I have yet to see the difference in mileage or whatever.

• 34:22Speaker 03

  Yeah.

• 34:22Speaker 04

  My diesel truck gives me better mileage than my gas guzzler that I had. They're, you know.

• 34:27Speaker 03

  Well, yeah.

• 34:28Speaker 04

  The red truck I had before this one.

• 34:30Speaker 03

  Right.

• 34:30Speaker 04

  So to your point, definitely, it was. It's it's not a rip off. I'm not going to call it a rip off, but your percentage from 10% to now maybe 2 or 3%.

• 34:42Speaker 03

  Right.

• 34:43Speaker 04

  It's it's it's it's a marketing strategy, right?

• 34:47Speaker 03

  Yeah.

• 34:47Speaker 04

  To to to attract multiple levels of buyers into your store.

• 34:52Speaker 03

  Yeah. Well, it's bugs me. It's so annoying to me.

• 34:55Speaker 04

  And it should, as as you paying 75 cents extra to go to a Chevron.

• 35:01Speaker 03

  Right.

• 35:02Speaker 04

  Right?

• 35:03Speaker 03

  Yeah, right. I mean, yeah, you could do that, but the the fact that it now to get the higher octane gas is a far lower percentage of the cost going into each gallon makes me think, well, what, what? Why were we being? Why have we always been so overcharged?

• 35:21Speaker 04

  Correct.

• 35:22Speaker 03

  For the higher octane? Like, you're not passing on the the exact cost for that higher octane. It's like you said, it's just all marketing. It's all just like how how pricing is done. You see this, this bugs me also with just food and groceries. The food manufacturers have figured this out way long ago. They got it down perfectly. We're going to give you, they they'll show on the box of cereal that it's much bigger. 80, you know, what 80% more volume for this. Well, all they did, all they did was just increase the size of the box, right? It's like, there's, there's more vault, there's, there's, they're just, they're just figuring out ways to make people feel like they're getting a deal when they're not getting a deal. They're getting taken advantage of.

• 36:07Speaker 04

  It is, and and I'll tell you, I mean, in my experience, living in America and living overseas, we have, we do a really, really good job at that here in America from a marketing standpoint.

• 36:18Speaker 03

  Oh, yeah.

• 36:19Speaker 04

  Like, we are really, really good at it.

• 36:20Speaker 03

  Yeah.

• 36:21Speaker 04

  Like, the way we do marketing, the way we advertise and all that, we are really good. I would say we're number one in the world when it comes to that.

• 36:27Speaker 03

  Oh, 100%. And it's not just like marketing products. It's like, we are good at like distributing and marketing our our culture.

• 36:37Speaker 04

  Yes.

• 36:37Speaker 03

  Hollywood, I mean, Hollywood's here. It's right down the street, you know, and how much influence Hollywood has.

• 36:44Speaker 04

  No, there's Black Friday now in Morocco.

• 36:46Speaker 03

  Oh, no.

• 36:47Speaker 04

  There's Black Friday in Morocco now.

• 36:48Speaker 03

  Come on.

• 36:48Speaker 04

  I'm not kidding you.

• 36:49Speaker 03

  So there's, so is there Thanksgiving?

• 36:51Speaker 00

  Black Friday in Morocco.

• 36:52Speaker 03

  They have Thanksgiving there?

• 36:53Speaker 04

  I guess. They call it something else.

• 36:57Speaker 03

  Gosh.

• 36:57Speaker 04

  But there is shopping sprees and stuff on on Black Friday.

• 37:01Speaker 03

  Oh, yeah, it's Black Friday.

• 37:02Speaker 00

  And and and now Morocco. Amazon.

• 37:05Speaker 03

  Yeah.

• 37:05Speaker 04

  But see, the thing with Morocco, a lot of countries in Africa, a lot of countries in in the Middle East, the mall culture that's dying here in America is just now taking off in those developing countries.

• 37:16Speaker 03

  Oh, right.

• 37:18Speaker 04

  Like, the mall in Morocco is full. You go to the mall here and it's not, right? Some of them are closed even. Some of them are just shut down.

• 37:26Speaker 00

  Ours is getting better.

• 37:27Speaker 03

  Yeah.

• 37:28Speaker 00

  They're they're putting some new stuff. There's like a big jungle gym going in, but

• 37:34Speaker 03

  A jungle gym?

• 37:35Speaker 00

  Yeah, a big, a big like indoor, it's crazy.

• 37:39Speaker 03

  Like in one of the?

• 37:40Speaker 00

  In the Valley Plaza, it's like taking over four or five stores.

• 37:43Speaker 03

  Oh, my gosh.

• 37:44Speaker 00

  Yeah, it's supposed to be some big thing for the children, but it's getting busier. But yeah, it is nothing like it used to be when I was growing up.

• 37:53Speaker 03

  Yeah, that was the place to go.

• 37:54Speaker 00

  Yeah, and the marketplace is finally getting back to, you know, business.

• 37:59Speaker 03

  Oh, that's good.

• 38:00Speaker 00

  I mean, we we talked to the the ladies from Golden Spoon last week.

• 38:04Speaker 03

  Oh, nice.

• 38:05Speaker 00

  And, you know, with three or four new shops opening, you know, it's starting to get busy again.

• 38:10Speaker 04

  85 degrees, 85 degrees opened and the Golden Spoon.

• 38:15Speaker 00

  Golden Spoon.

• 38:16Speaker 04

  So a lot of food.

• 38:17Speaker 00

  A ton of money into Edward Cinema.

• 38:19Speaker 04

  Yes.

• 38:19Speaker 00

  Now a a different name. And what what really makes me scratch my head is everybody is hurting check to check and all that. I took my son to the fair Friday and that place was booming.

• 38:31Speaker 03

  Oh, yeah.

• 38:32Speaker 00

  And I'm like, $35 turkey legs and it's like Disneyland prices right here in our backyard.

• 38:39Speaker 03

  How about that?

• 38:39Speaker 04

  Well, I'll I'll tell you what, man, if you don't want to go to the dusty fair, come to the Woolworths and get an $11.99 burger without getting an asthma attack.

• 38:48Speaker 00

  Yes, I'm the same way.

• 38:49Speaker 04

  Seriously, or spending $22 on a hot dog.

• 38:53Speaker 03

  Yeah.

• 38:54Speaker 04

  I mean, Jody was showing me a picture of the hot dog and like, Jody, we have hot dogs at the Woolworths. But it's the fair, Sammy, it's the fair.

• 39:02Speaker 03

  I like the fair. I don't like what the fair does to small businesses around town, but I it does help a lot of businesses, helps a lot of nonprofits and it's a great, you know, thing, tradition.

• 39:12Speaker 00

  It's good for the kids that are doing. We heard some stories about, you know, the the farm side, you know, they adopt an animal or something like that. It is very, very cool for the nonprofits.

• 39:23Speaker 03

  Yeah, yeah, the FAA stuff is really good or FFA, was it? FFA?

• 39:27Speaker 00

  FFA?

• 39:28Speaker 03

  Yeah.

• 39:28Speaker 00

  Future Farmers of America.

• 39:29Speaker 03

  Yeah, that's amazing, amazing program. All right, we're going to take a quick break. We come back, got more listener questions. Keep them coming our way, 661-396-1000. We're Money Wise.

• 39:50Speaker 03

  Welcome to Money Wise. I'm Sharad here with Sammy. We're your hosts today, 661-396-1000. Let's give these last comments we have here, Sammy.

• 39:58Speaker 04

  Yeah. This one, this one is funny. Do they have a El Nino blend?

• 40:10Speaker 04

  All the tropical storms must bow before El Nino. A super Nino this year is what we're having.

• 40:19Speaker 03

  Oh, my gosh.

• 40:20Speaker 04

  Super Nino. State of California declared state of emergency.

• 40:24Speaker 03

  Right, they're really trying to get ahead of this.

• 40:27Speaker 04

  I think that's a good that they're trying to get ahead of it.

• 40:29Speaker 03

  Yeah.

• 40:29Speaker 04

  You know, a couple of years back, we were expecting a lot of rain and El Nino didn't deliver.

• 40:35Speaker 03

  Right.

• 40:35Speaker 04

  We had this atmospheric rivers that delivered a lot more rain than what we expected. So I'm just hoping for some rain.

• 40:43Speaker 03

  Yeah, no kidding. Rain would be great, but not too much rain, but the snow would be great, not too much snow. I mean, that's the, that's the problem we're here in California is that we have, you know, we're, what is it? Something like two thirds of our, of our water needs is produced by the top third of the state.

• 41:03Speaker 04

  That's correct.

• 41:03Speaker 03

  And now we've got this problem trying to, you know,

• 41:06Speaker 04

  Pump it down here.

• 41:06Speaker 03

  Pumping it down here and getting it, getting it here and, and, and so, but then hopefully we've, I, I've read some things about the, the state's move to make it easier to recharge the groundwater and allow, you know, flooding to happen in, in certain areas. We were forced into it a few years ago, a few years ago when we had the, the big, the big lake, the, was it Tulare Lake? That appeared out of nowhere, the ghost lake. And we saw it where just every canal was full and, and the current river was just, you know, totally maxed out. And it was just before the, the dam was completed at Lake Isabella or just after the dam was completed. Thank goodness. So that could have been a total disaster.

• 41:50Speaker 03

  So it definitely, it'll be interesting. I hope that we can avoid some of the, the financial impacts that are being anticipated by the state. I mean, I'm assuming that's part of the, part of the reason to declare this state of emergency ahead of time is to be able to open up federal dollars and open up.

• 42:07Speaker 04

  Also just readiness in my mind. I think a lot of the agencies are just getting ready. And I think training their, their people, response time and all of that is, is what I think the state of emergency calls for. It is not a financial, there's not, there's no financial impact to like business owners as of yet.

• 42:26Speaker 03

  Yeah.

• 42:27Speaker 04

  Eventually, if an area is declared in, as an emergency area, then the Federal Reserve or the federal government gets involved. For instance, we see it at the SBA level where they can say, hey, you don't have to make payments for three months. If you have an SBA loan, just because you're in a state of emergency and things like that. So.

• 42:49Speaker 03

  Yeah.

• 42:49Speaker 04

  To your point, we just want, you know, good rain, but not a lot.

• 42:55Speaker 03

  Yeah, yeah. Just, just enough.

• 42:58Speaker 04

  Just enough.

• 42:58Speaker 03

  We've got some good news coming in. We've talked about this act before. It looks like it just passed Congress and is going to go now to President Trump's table, desk for signature. The Common Sense Act, this is essentially Congress formally ending the era of pennies. And we've talked about pennies where already stopped, they stopped making pennies last year in 2025. That, that makes a lot of sense to stop the, the production of the penny. It was costing five or six cents to make a cent. That doesn't make sense.

• 43:31Speaker 04

  Any sense at all, right?

• 43:33Speaker 03

  That's like terrible move. The nickel is just only slightly better and the nickel will probably be next to, in fact, the nickel was addressed in this Common Sense Act and for the, the goal, the primary goal of this Common Sense Act wasn't just to address the nickel, but it was really to address, how do we as a nation deal with rounding up or rounding down now? If you can't give pennies, if you can't give that three or four cents and you only have a nickel that you can give, who, when, when do you decide? You know, when do you round up and when do you round down to that nickel? So that everything is at least that you're paying cash for has to, you know, has to land on, on that five,

• 44:18Speaker 03

  on a, on a, on a five cent denomination. It doesn't impact anything that is still electronic. So if it's electronic, then it doesn't matter. We don't care about pennies, about that. But when you're doing cash transactions, now it's sort of up to the each state and each retailer to decide how much they're going to give back to you because they don't have pennies. So they can't give you the pennies back. They've either, they have to round down or they have to round up. So this is, this is, I think, a good move and getting some sense into like, how do you round up and when do you round down?

• 44:54Speaker 04

  It's a very good move, in my opinion. Pennies are pain in the butt.

• 44:57Speaker 03

  Yeah.

• 44:58Speaker 04

  To store at the bank in the vault. It's just, it takes a lot of boxes.

• 45:02Speaker 03

  Yeah.

• 45:02Speaker 04

  You know, it takes a lot of space and they're heavy.

• 45:05Speaker 03

  Yeah.

• 45:06Speaker 04

  You know, I hated carrying those things, especially when somebody's asking, coming in and asking for a, a change order at the bank. And you need like, oh, I need five boxes of pennies. I'm like, oh my God.

• 45:16Speaker 03

  How much is a box?

• 45:19Speaker 03

  A box of pennies? So roughly what does it weigh?

• 45:22Speaker 04

  Oh, at least, at least I would say 15 pounds.

• 45:25Speaker 03

  15 pounds and it's, and 15 pounds of pennies is worth how much? Remember how much is in a box?

• 45:32Speaker 04

  I forgot. It's, it's, it's very little. You know, a couple of dollars, but they're heavy.

• 45:38Speaker 03

  The, the nickel is getting some attention too. Nickels currently, as I mentioned, cost way more than five cents to manufacture. So this legislation is going to give the Treasury Authority to make a cheaper metal composition, potentially including zinc with a nickel outer layers. Right now, the way that nickels are being produced is way, way too expensive. So good, good news. You know, there's some, not all things that, that Congress does is stupid. This is some.

• 46:06Speaker 04

  $25.

• 46:07Speaker 03

  Oh, there you go. 25 bucks for 15 pounds. We remind all the listeners, you can find us wherever you stream your podcasts. Remember be smart, be safe and always be.

• 46:16Speaker 04

  Be money wise.

• 46:18Speaker 02

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