2/14/25 Getting Down to Business with March Consulting

The Moneywise Radio Show and Podcast Friday, February 14th 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 Guest: Kat Clowes, Founder/CEO of March Consulting website: https://mymarchconsulting.com/

• 0:00Speaker 00

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

• 0:09Speaker 01

  I need a dollar, dollar, dollar, that's what I need. Hey, hey. Well, I need a dollar, dollar, dollar, that's what I need. Hey, hey. Said I need a dollar, dollar, dollar, that's what I need. And if I share with you my story, would you share your dollar with me?

• 0:29Speaker 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.

• 0:40Speaker 00

  Now, let's start the Money Wise Show.

• 0:43Speaker 03

  Welcome, welcome, welcome to the Money Wise Show. We're live from the Garo Ellis padded radio room off Stockdale Highway on ESPN Radio Bakersfield, 1230 AM, 101.1 FM.

• 0:56Speaker 00

  Happy Valentine's Day, Justin.

• 0:58Speaker 03

  Happy Valentine's Day, Steve Z.

• 1:01Speaker 00

  I've got something for you.

• 1:02Speaker 03

  Does anybody still listen to AM radio?

• 1:04Speaker 00

  Uh, I do sometimes when the FM is not as strong.

• 1:08Speaker 03

  Hmm.

• 1:09Speaker 00

  But very rare.

• 1:12Speaker 03

  But we're also streaming at MoneyWiseGuys.com.

• 1:14Speaker 00

  And it's also on FM, so that's where I listen to my sports.

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  101.1 FM.

• 1:18Speaker 04

  He's leaving me out here on the Valentine's Day.

• 1:21Speaker 00

  Oh, yes.

• 1:21Speaker 03

  Happy Valentine's Day.

• 1:23Speaker 04

  Happy Valentine's Day.

• 1:25Speaker 00

  I'm looking in Justin's eyes, so I didn't see you.

• 1:29Speaker 03

  Those beautiful hazels.

• 1:32Speaker 00

  Well, you, uh, you didn't get to pick out the music today, so you're gonna love what I have for you.

• 1:37Speaker 03

  Yes, I'm sure. I'm sure of it. Some bro country coming my way, huh?

• 1:43Speaker 00

  No, no, but it'll be definitely, uh, some heartwarming music, I promise.

• 1:50Speaker 03

  Oh, boy. You can text in the show anytime, 24 hours a day, 661-396-1000, 661-396-1000. Today, we are your hosts. I'm Justin Leland here with?

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  Dustin Weaver.

• 2:03Speaker 03

  It's the Ustin Show.

• 2:05Speaker 04

  Yet again.

• 2:06Speaker 03

  Yet again.

• 2:06Speaker 04

  Here we are.

• 2:07Speaker 00

  I'm gonna make some shirts out of that. I'm just saying. I had some guests say they appreciated being with the Ustin's. I said, okay, it's kicking in.

• 2:16Speaker 03

  It's kicking in.

• 2:18Speaker 04

  Well, it's good to be here.

• 2:20Speaker 03

  If you'd like to listen to the show on any of our past programs, please subscribe to the Money Wise Guys podcast. Commercial free, because nobody likes commercials. On all the platforms, iTunes, Spotify, Apple Podcasts, whatever. Wherever, all the things.

• 2:39Speaker 03

  We have a great show for you today. We have Kat Klaus, great friend of the show, March Consulting.

• 2:46Speaker 03

  You have a child or a grandchild or a nephew, a niece. Or just a next door neighbor that you want to send to college, you probably want to listen to the the second and third segments of the show.

• 3:02Speaker 04

  Certainly looking forward to it. My daughter actually went through her program. We can bring that up when she's here.

• 3:06Speaker 03

  Yeah, she's awesome. She, you know, she sends kids to school with some scholarships that are just. How did you find that school with that scholarship with that endowment?

• 3:19Speaker 04

  Right.

• 3:20Speaker 03

  She finds.

• 3:21Speaker 04

  It's what they focus on.

• 3:22Speaker 03

  They find nuggets everywhere. So stay tuned for Kat Klaus at in the next segment. But we're going to do what we do, what we do best. Dustin, what do we do with the numbers today? A bit of a mixed market.

• 3:37Speaker 04

  A little bit mixed. Yeah. The, uh, let's start with the positive. The NASDAQ was up 0.41. So the NASDAQ is.

• 3:43Speaker 03

  The techies.

• 3:44Speaker 04

  More tech, right? Technology. And then we've got S and P down a little bit, down 0.01% or.

• 3:50Speaker 03

  Basically flat.

• 3:51Speaker 04

  Right.

• 3:51Speaker 03

  Flatlined.

• 3:56Speaker 04

  It's almost what the chart looks like.

• 4:00Speaker 03

  And then the Dow is down a little bit as well, right? Yeah. And there he goes. Yeah. A little late on the pickup there.

• 4:09Speaker 04

  Yeah, I know. It's Friday.

• 4:11Speaker 03

  Yeah, Friday's a little sleepy over there.

• 4:16Speaker 03

  We have some news though, but President Trump has directed the economic team to kind of look and formulate some plans for some reciprocal tariffs on pretty much any and every country that imposes tariffs on US imports. So that's kind of what's going on through the economy and through the stock market right now is that we're kind of trying to figure out what that's going to do. The, you know, the PPI, which the producer price report came in and eased kind of the inflation concerns because earlier in the week, what was it Wednesday? We got the CPI number, which showed a 3% inflation, which was the first time we got

• 4:58Speaker 03

  above 3% in like the last, what, four months or so? Which kind of sparked some fears that maybe inflation was kind of.

• 5:08Speaker 04

  Rearing its ugly head again?

• 5:10Speaker 03

  Bingo, right? But the PPI number, the producer price report, that is the number that is maybe a bit more telling about where inflation is truly going. And that's the number that the Fed pays a little bit more attention to than the CPI. And that report actually kind of eased some of the inflation concerns that we've been having over the past couple of days.

• 5:37Speaker 04

  Shows that it's going to be a little softer.

• 5:39Speaker 03

  A little bit softer. So, you know, but then we have the news that, you know, we're going to be implementing some of these tariffs. Now, these tariffs are not going to be implemented immediately. That's the, that's the, the good part about this is that we're going to have a few weeks of the economic team looking at all of these tariffs that are being imposed on US goods around the world. And there's obviously going to be some negotiations going on. Hey, you know, you're imposing a 6% tariff on this and a 12% tariff on that. And well, guess what?

• 6:15Speaker 03

  Bring them down or take them to zero or else.

• 6:17Speaker 04

  Right.

• 6:17Speaker 03

  Kind of.

• 6:17Speaker 04

  So these reciprocal tariffs, was that a step back from the previous percentages we saw?

• 6:22Speaker 03

  I think that was, this is in addition to, because that's, this is literally every country. He's saying literally, it doesn't, it's not Canada, Mexico, China, every country.

• 6:34Speaker 04

  Whoever has a tariff, I'm going to match it on this end.

• 6:36Speaker 03

  Bingo. Right. And so, yeah, so that's a little bit of a little, a little bit ambiguous. And so there's a little bit of Wall Street kind of saying, oh, let's kind of.

• 6:50Speaker 04

  Wait and see.

• 6:51Speaker 03

  Wait and see what's going to happen.

• 6:53Speaker 04

  Flush out, right?

• 6:53Speaker 03

  What's going to happen over the next two, three weeks and which countries play ball, which ones don't? And yeah, that's going to be kind of the thing for, to pay attention to over the next couple of weeks. You know, each year we wind up having kind of a, a different theme for the year. I think this year's theme is going to be tariffs. Right? In, in 2022, the word of the year was what? Steve Z? Transitory? The Fed was saying, oh, inflation, it's transitory. It'll be, it'll be down again. Right? And 23, it was, uh, what was it? It was the, uh, the magnificent seven, right?

• 7:36Speaker 03

  So, I mean, this year it's going to, I think it's going to be tariffs. I mean, we're only what, six weeks into the year? And I think that that's the, we've said tariffs every single day on the show. And I think that's going to be the theme for the year.

• 7:47Speaker 04

  You know, tariffs make me think of taxes. We got, actually got a good question about.

• 7:50Speaker 03

  Yeah.

• 7:51Speaker 04

  Taxes and identity theft. Let me read it to you.

• 7:52Speaker 03

  Here we go.

• 7:53Speaker 04

  It says, how does tax related identity theft impact credit scores and financial security? And what long-term recovery strategies should victims follow? Thank you guys. Have a great weekend.

• 8:03Speaker 03

  Great question. Great question. Now, tax related identity theft, uh, for people that don't know is when you file your tax return, like through a TurboTax or one of the free e-filing kind of platforms. If that gets hacked or something like that and somebody steals your social security number and all your information.

• 8:29Speaker 03

  That.

• 8:31Speaker 03

  That person can then go out and open up credit cards and things like that in your name because they have all your, at that point, they have all your information.

• 8:39Speaker 04

  You know, the other thing I heard was sometimes they could even file a return and try and get the deposit that their own account.

• 8:44Speaker 03

  That is true as well. Yeah, that's, yeah. Go ahead, file for me. Go ahead and, oh, pay my, pay my taxes for me, please.

• 8:52Speaker 04

  Pay the bill.

• 8:53Speaker 03

  Pay the bill for me, too. Go ahead. So that is, that is one of the most, that is the, one of the quickest growing forms of identity theft is through this tax-related identity theft. One of the easiest ways to thwart that is literally to basically shut down your, your social security number.

• 9:22Speaker 04

  Yeah, put a credit freeze.

• 9:23Speaker 03

  Put a credit freeze, right? Shut it down. So nobody can open any credit in your name without basically, you know, unfreezing your social security number.

• 9:32Speaker 04

  Right. I've seen a credit freeze and sometimes they use the term fraud alert.

• 9:36Speaker 03

  Yeah.

• 9:37Speaker 04

  But Experian, Equifax, TransUnion, you could do it with all three.

• 9:40Speaker 03

  You, you call all three of them and say, nobody's opening any credit under this credit card or this social security number until you hear from me.

• 9:49Speaker 04

  Cam alert.

• 9:50Speaker 03

  Cam alert.

• 9:52Speaker 04

  Was that Carol?

• 9:53Speaker 03

  That would be Stevie. Yeah.

• 9:59Speaker 03

  So it doesn't have, it doesn't have a direct effect on credit scores or financial security, but quite frankly, it, once they start opening up accounts in your name, that's when it's going to hurt.

• 10:10Speaker 04

  Certainly.

• 10:10Speaker 03

  Right?

• 10:11Speaker 04

  So the credit freeze and the fraud alert, you could also go to the Federal Trade Commission, identitytheft.gov, fill out a report so that they're aware. And then the IRS also has an identity theft affidavit that you could fill out. There's a form number 14039. But talk to your tax advisor, obviously. Anytime you're getting tax-related advice, definitely want that CPA, accountant, enrolled agent, somebody that is familiar with these things.

• 10:39Speaker 03

  Correct. Correct.

• 10:43Speaker 03

  You have another one there. This one's interesting. Um, Happy Valentine's Day.

• 10:48Speaker 00

  Here's a fun discussion starter and helpful for me. How do you see, uh, financial planning evolving, especially with the new digital tools and AI driven financial management? That is a good one.

• 11:03Speaker 03

  That is a tough one. Uh, so.

• 11:07Speaker 03

  I don't know. How do you see it, Dustin? How do you see?

• 11:09Speaker 04

  Oh, you're gonna throw me on that one.

• 11:10Speaker 03

  Yeah. I want to hear what you say first before I throw my, my two cents in there.

• 11:15Speaker 04

  As it sits today, it's definitely not a good financial advisor. I've been trying lots and lots of questions. And let me tell you, it gets a lot of them wrong.

• 11:22Speaker 03

  Yeah.

• 11:23Speaker 04

  And there are so many different facets, as you know, to a financial plan that there's a lot of variables. So I'm not saying it can't get there. It can't be a tool. I'm not saying it can't become a tool that might be helpful in some ways. Certainly with math calculations.

• 11:37Speaker 03

  Yeah.

• 11:38Speaker 04

  You know, it can help, but a, a personal financial plan is just that. It's very personal. That's the key word, word, right? There's so many variables that it's just not gonna be good with or be able to ask.

• 11:51Speaker 03

  I will, so I will say this is that I have actually tested, and so the thing with chat GPT or any of these open AI kind of, uh, you know, these are large language models, right? And they're good for web searches and, um, you know, language type things. I've put in some pretty complex formulas and, and math that it needs to figure out. Uh, it, it's wrong. It can't figure out percentages. It can't figure like it's, it has a hard time with relatively rudimentary like, you know, algebra two type stuff.

• 12:31Speaker 03

  Right? So it has a lot to do to catch up. Um, so I wouldn't really trust it much with numbers at this point. Um, but.

• 12:43Speaker 03

  We, you know, I've gone to a couple of conferences in the last year and we've, we have had these breakout sessions where we've talked about AI. And how it can, how, how financial firms like MoneyWise can use, can use AI in a productive way.

• 13:01Speaker 04

  Oh, certainly.

• 13:03Speaker 03

  For certain aspects of their business.

• 13:06Speaker 04

  Like note taking?

• 13:07Speaker 03

  Note taking or certain processes that they do, that they're not financially, you know, based, but. Yeah, certain things that can be done that, that speed up certain processes.

• 13:22Speaker 03

  That's fine. I think all businesses are doing that.

• 13:26Speaker 04

  Certainly.

• 13:27Speaker 03

  And that is going to be something that drives efficiency and allows businesses to be more nimble and quicker and faster. In providing services to their customers. That's what I see going forward. I don't see. The, the financial planning industry going away because of AI.

• 13:49Speaker 04

  Well, no, and I mean, we heard this 10 years ago when the first robo advisor was coming on the scene and they. They said, oh, we're going to take all your financial advisor jobs here in the next five years. And that didn't happen. People want personalized individual service.

• 14:03Speaker 03

  Y2K was a bust. Yep.

• 14:08Speaker 03

  So yeah, yeah, it's just, you know, I don't think that, yeah, technology is great, but it has its limitations, like Dustin said. So that's kind of where we're at with that. But hey, we're going to take a break right now. When we come back. The one, the only, the great Cat Klaus from March Consulting.

• 14:29Speaker 00

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

• 15:03Speaker 03

  See, I can do Motown. I can do this.

• 15:05Speaker 00

  That's a Valentine's Day song, for sure.

• 15:08Speaker 03

  This isn't too bad.

• 15:11Speaker 00

  I can make it worse if you want.

• 15:12Speaker 03

  No, please don't.

• 15:15Speaker 00

  But our guest Kat just gave me a good idea, so I'm gonna change it up before the show's over.

• 15:19Speaker 03

  Okay.

• 15:20Speaker 00

  All right.

• 15:21Speaker 03

  All right.

• 15:24Speaker 03

  Welcome back to the Money Wise Show.

• 15:27Speaker 04

  And welcome, Kat.

• 15:28Speaker 03

  Welcome, Kat.

• 15:29Speaker 05

  Thanks for having me.

• 15:30Speaker 03

  We did get a question that came in during the break here real quick. Why does the IRS want to know if I bought cryptocurrency?

• 15:38Speaker 04

  Because they want to know if you sold cryptocurrency, right?

• 15:41Speaker 03

  Yes, exactly. They need to know. They need to know if you made a profit because they got to get theirs.

• 15:46Speaker 04

  That's right.

• 15:47Speaker 03

  It's called capital gains. They want to know.

• 15:50Speaker 04

  It is taxed as an asset, a capital asset, though. So just like real estate, or if you buy a stock.

• 15:55Speaker 03

  Yeah.

• 15:55Speaker 04

  It's not taxed as a currency, which has a higher rate.

• 15:58Speaker 03

  Yeah, it is taxed. It's a security. It's taxed. So you do have to pay the capital gains tax on the growth of that. So.

• 16:06Speaker 04

  That's right.

• 16:06Speaker 03

  Yes.

• 16:08Speaker 03

  Hi, Kat.

• 16:09Speaker 05

  Hi.

• 16:09Speaker 03

  How are you?

• 16:10Speaker 05

  I'm good. A lot of changes in education, but.

• 16:13Speaker 03

  No. I thought that.

• 16:16Speaker 05

  A lot going on.

• 16:16Speaker 03

  I thought education was completely stagnant and there's nothing that changes.

• 16:21Speaker 05

  If I could just have one boring admissions year, I'd be so happy. So happy. It's been a constant change for five years going.

• 16:30Speaker 03

  So what's the latest on the FAFSA fiasco?

• 16:35Speaker 05

  It has calmed down.

• 16:36Speaker 03

  Okay.

• 16:37Speaker 05

  So last year was a bit of a dumpster fire. There was a lot of navigating glitches and things not going through and things not connecting properly. Colleges.

• 16:47Speaker 03

  Before we get to that, tell us what happened and why it was such a dumpster fire in the first place, and then we'll get to why it's fixed.

• 16:55Speaker 05

  So the FAFSA, which stands for the Free Application for Federal Student Aid, updated last year. And of course, probably the system they were running this on was 1992 DOS.

• 17:09Speaker 03

  Right.

• 17:09Speaker 05

  Right? And so they wanted to update it. There was an update to the calculations that they made. Unfortunately, there were some unfortunate updates, like if you have two kids in college.

• 17:23Speaker 05

  It used to be that what the government said you could quote unquote pay for college would be split in half if you had two students.

• 17:31Speaker 03

  Is it not now?

• 17:32Speaker 05

  It is not like that anymore.

• 17:34Speaker 03

  Such good news for those of us with a second kid.

• 17:36Speaker 05

  Uh huh. That was probably my least favorite update that Congress made. But they completely and utterly updated the application to quote unquote simplify it. I don't necessarily think that it's more simple. And when they updated it, they were by law, they had to open it by December 31st. They did a soft launch that was a disaster on the 31st.

• 18:03Speaker 03

  Oh, boy.

• 18:04Speaker 05

  And it pushed everything back. Colleges didn't get applications until April, May, and had to push back.

• 18:13Speaker 03

  Admissions.

• 18:14Speaker 05

  Your intent to enroll deadline and all these other things. A lot of families got a lot of surprises on the updates to their financial aid packages for kids that are in college. And then just getting your application submitted was mostly the dumpster fire. It was very challenging. Not my favorite.

• 18:34Speaker 03

  Well, I mean, it's just it. One government issue, throwing a pebble into the lake, and all of a sudden the ripple effect of all of the one decision causes a ripple effect for hundreds of thousands of students.

• 18:49Speaker 05

  It was, they didn't give us any training on it until the week it opened.

• 18:54Speaker 03

  Yeah.

• 18:54Speaker 05

  Because they didn't really know what was gonna happen. It was, it was interesting.

• 18:58Speaker 03

  Yeah.

• 18:59Speaker 05

  Well, everybody got through it.

• 19:00Speaker 03

  Got through it. So now it's, it's calmer now.

• 19:03Speaker 05

  Mm hmm.

• 19:04Speaker 03

  Okay, so what's the next dumpster fire that's headed down the, the path, the primrose path of education?

• 19:08Speaker 05

  Ooh, well, uh, we're not quite sure what department student loans and federal grants are gonna run to if the Department of Education's eliminated. The CSU system just announced a huge budget, uh, cut to their systems on top of announcing a couple of weeks ago that they were fully embracing AI without, uh, from my understanding, faculty input on that.

• 19:38Speaker 05

  The UCs are looking at the same short in the budget. And amongst all of this, of course, we had the Supreme Court update for not considering certain aspects of a student in the admissions process, which wasn't happening for the CSU or UC system and hasn't since 1996.

• 19:58Speaker 03

  Yeah.

• 19:59Speaker 05

  The UC system's now getting sued by a group that claims that they are using a student's race in the consideration. It's just, it's been, there's a lot of things going on.

• 20:13Speaker 04

  You used the word interesting.

• 20:14Speaker 05

  It keeps me on my toes, I tell you, I tell you what. And, and that's just on top of regular admissions updates and, you know, Texas A&M announced that they're going to be accepting less students the next couple of years because they need to build more housing. UT Austin, record-breaking applications. They are also cutting the amount of students they're accepting, particularly out of state. A lot of people don't know that for some of these bigger flagships, if you are an out-of-state applicant, they're only accepting 20% of those applicants. So you're competing against everybody else.

• 20:51Speaker 04

  Wow.

• 20:52Speaker 05

  USC just announced yesterday, record-breaking applications. It's, it seems like-

• 20:58Speaker 03

  What is USC now per, per year? Is it 100,000 now per, like?

• 21:01Speaker 05

  They're at 92,000 a year.

• 21:05Speaker 03

  Yeah, I was figuring, when are they going to click over the six figures?

• 21:08Speaker 04

  I'm impressed you knew that off the top of your head. It's pretty good.

• 21:11Speaker 05

  Cause it's such a crazy number.

• 21:13Speaker 03

  Yeah.

• 21:14Speaker 05

  Like, how?

• 21:14Speaker 03

  How is that possible?

• 21:16Speaker 05

  Vanderbilt's 98,000.

• 21:18Speaker 04

  Wow.

• 21:19Speaker 05

  And if you look at any of the Ivy Leagues, they're in competition to see who's going to break 100.

• 21:24Speaker 04

  Wow.

• 21:24Speaker 03

  Yeah.

• 21:25Speaker 05

  It's crazy.

• 21:27Speaker 03

  It's nuts. Absolutely nuts.

• 21:28Speaker 04

  And that's just undergrad.

• 21:29Speaker 05

  And that's only undergrad.

• 21:30Speaker 04

  Wow.

• 21:31Speaker 03

  Can you imagine paying near, you know, $400,000 for a four-year degree? And that's just for the tuition, not including books and room and board?

• 21:39Speaker 05

  Oh, it does include.

• 21:40Speaker 03

  Oh, okay, okay. So at least that's.

• 21:42Speaker 05

  That's everything.

• 21:42Speaker 03

  That's covered.

• 21:43Speaker 05

  Right.

• 21:44Speaker 04

  Closer to worth it, I guess. Right? Maybe?

• 21:47Speaker 03

  Maybe.

• 21:48Speaker 05

  Just buy a house or an education.

• 21:49Speaker 03

  Oh, maybe I could flip burgers and put myself through school. Not.

• 21:53Speaker 04

  Okay, so you work in education. Are you buying a network at that level? Is that what it is? You're buying a network of folks that are gonna help you get a better job is the idea?

• 22:00Speaker 05

  That is the myth out there. And I know that there's a whole bunch of UT Austin grads right now and A&M grads that are clutching the steering wheel as they're listening like, no, that's, that is what we, what we're buying. To some degree, yes. But really, you need to look at the fit of the school for the student because that's what you want. You want to make sure that the program is everything that you want it to be, that the environment is somewhere your student can grow.

• 22:32Speaker 03

  The culture.

• 22:33Speaker 05

  The culture. I, I went to the number one soccer school in the world and I went to one soccer game. That didn't mean anything to me, but everything else was a great fit.

• 22:43Speaker 04

  As a soccer player, that hurts.

• 22:45Speaker 05

  Sorry.

• 22:46Speaker 03

  Hurt gets you right here, huh?

• 22:47Speaker 04

  It does.

• 22:48Speaker 03

  Right in the middle of the heart.

• 22:49Speaker 05

  They have great.

• 22:49Speaker 04

  No, but it makes sense what you're saying.

• 22:50Speaker 05

  Santa Clara. It was, it was good.

• 22:53Speaker 03

  So, um, it's just, it's amazing to me just how quickly some of these things change when it comes to, um, just the education and, and

• 23:05Speaker 03

  the, the cost of education, not just here locally, but just around the country. And to hear from, here, here we're talking about the Department of Education and how funding is gonna be, uh, either changed, not either, either eliminated or drastically changed. I'm gonna, I'm gonna ask you, when we come back from the break, what is that gonna look like? Or what are you gonna, what are you seeing? Or what is the fears that you have about what exactly college is going to look like? What is university gonna look like if, you know, um, student loans, subsidized loans, those types of things are gonna be?

• 23:49Speaker 03

  A thing of the past and now they're privatized. Like, what is that gonna look like if, if that's gonna be the new norm when we come back?

• 23:56Speaker 00

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

• 24:22Speaker 03

  Welcome back.

• 24:28Speaker 03

  It's like my prom.

• 24:30Speaker 05

  We got to go see Weezer, my husband and I.

• 24:32Speaker 03

  Yeah.

• 24:33Speaker 05

  In October of this year, this past year. It was amazing.

• 24:36Speaker 03

  Oh, wow. Good concert?

• 24:38Speaker 05

  In concert.

• 24:39Speaker 03

  Yeah.

• 24:39Speaker 05

  With the, uh, uh, oh, there's two other bands and I'm not gonna remember the name because I'm on the radio.

• 24:47Speaker 05

  But it was in San Francisco.

• 24:49Speaker 03

  Uh huh.

• 24:50Speaker 05

  It was the most amazing concert. My 14-year-old self was so happy to see River up there singing his heart out.

• 24:57Speaker 03

  Nice.

• 24:58Speaker 05

  They still jam.

• 24:59Speaker 03

  Did they?

• 24:59Speaker 05

  It was great.

• 25:00Speaker 03

  Sounded good.

• 25:01Speaker 05

  It was one of the best concerts I've ever been to.

• 25:02Speaker 03

  Oh, wow. It's great. Nice.

• 25:03Speaker 00

  Is it Fall Out Boy?

• 25:05Speaker 05

  No, it was, uh, they sing, um...

• 25:09Speaker 00

  For a little while. I've always wanted to see Weezer. Oh, right on. That'd been cool.

• 25:13Speaker 05

  Like the Red Hot Lips or something like that?

• 25:15Speaker 03

  Yeah, Flaming Lips?

• 25:16Speaker 05

  Flaming Lips. Thank you.

• 25:18Speaker 00

  See, we got it.

• 25:19Speaker 05

  Yeah.

• 25:20Speaker 00

  Good one, Justin.

• 25:20Speaker 03

  Yeah.

• 25:21Speaker 00

  Teamwork.

• 25:22Speaker 03

  Good pull. Right. Well, okay. Um, so we know with the, the, the new administration, one of the things that is being, uh, discussed is the Department of Education. Um, whether we keep it, whether we mothball it, whether we drastically reduce it, change it, there's obviously something that's going to happen within the Department of Education. We don't fully know what that's gonna hap- what's gonna happen yet. There's been talk of, hey, an executive order and we're just gonna mothball it or, or whatever. Um, but what happens in...

• 26:07Speaker 03

  In the case of the Department of Education ceasing to exist, like to walk us through what that looks like in terms of not just, we're talking not, not K through 12, right? But for, for college admissions, student loan processing, subsidized loans, unsubsidized loans, what does this mean for, you know, cost of college for John Q taxpayer?

• 26:41Speaker 05

  So there's a lot of speculation and we don't really know what's going to happen yet, but there's a couple of things that could happen. Right now, we've seen tuition increase for families because of cutbacks in state funding and that's been happening since the 1960s. A lot of people will assume that you can still work a burger flipping job over the summer to pay for the whole year of college because that's how it was in the 50s and 60s.

• 27:11Speaker 03

  You can't do that anymore.

• 27:12Speaker 05

  You can't do that anymore.

• 27:14Speaker 03

  Yeah.

• 27:15Speaker 05

  It's hard to even getting close to that. And so student loans have filled that gap for a large amount of families as have Pell Grants, federal Pell Grants. Those don't cover as much as we wish they would. Here in California, we also have Cal Grants that help students out as well. Again, does not cover as much as I wish they would.

• 27:40Speaker 03

  Yeah.

• 27:40Speaker 04

  And those last two, those are income qualified type plans?

• 27:43Speaker 05

  Those are income qualified, so there are, there's a certain ceiling that you can, you know, make.

• 27:50Speaker 03

  Thresholds that you have to meet.

• 27:51Speaker 05

  And it's family specific.

• 27:53Speaker 03

  Yeah.

• 27:54Speaker 05

  So I imagine that if federal student loans, I don't believe that they're going to go away, I would speculate that they would be privatized. And the private student loan market is in my eyes, a little bit of the wild, wild west.

• 28:13Speaker 03

  A little bit of a wolf's den.

• 28:15Speaker 05

  They can charge whatever interest. There were variable interest rates, student loans from, from private agencies at one time. I don't see those as much. But when you're starting out in life, and I did this because I had to cover the gap and I even got scholarships for my grades. And we were more strategic about that, not as strategic as I would have liked, which is why I do what I do now. But I had to fill that gap in 2002 with student loans. And I'm still paying those off and they were federal loans at a lower interest rate.

• 28:54Speaker 03

  Right.

• 28:54Speaker 05

  So I anticipate that those would go privatized. And there could be no limit to what you borrow. But then also those interest rates are going to be nine, 10, 12%.

• 29:06Speaker 03

  Or higher.

• 29:07Speaker 04

  It's gonna be higher. They could be variable at a time when, since you took those loans back in 02. I mean, the rate of inflation in the college world is what, 5% or 6%?

• 29:18Speaker 03

  If not more.

• 29:18Speaker 05

  Oh, it's not to call out Santa Clara University, my alma mater, loved it there. When I went there, I remember distinctly it was $34,000 a year to go there. And I remember that because we were $1,000 more than Stanford and that made me angry.

• 29:36Speaker 04

  Wow.

• 29:37Speaker 05

  How, how is that? They have a 600 acre campus. So that was for everything that's your room and board and everything else.

• 29:43Speaker 03

  34,000.

• 29:44Speaker 05

  34,000. I was able to save more money because I lived off campus and I worked three on campus jobs during the year. So now Santa Clara is at about $80,000 a year.

• 29:58Speaker 04

  Yeah.

• 29:59Speaker 03

  A little more than double.

• 30:00Speaker 05

  A little more than double. When I started helping families in 2010, most schools were around the 20 to 30,000 dollar mark. Now it's a huge difference. If you're looking at Texas A&M, you're looking as an out of state student at about $64,000 a year. Even if you're looking at UCLA, you're looking at $42,000 a year.

• 30:31Speaker 05

  And so that rate of tuition inflation has drastically changed. There's been a lot of talk about whether that is legitimate, whether because of student loans and the availability of grants, if they just raise their their prices. I do think it has a lot to do with the building that they did on campus in the early 2000s. And, you know, they're paying all that off. But I don't know what the answer is, and I don't think it's going to get any better.

• 31:03Speaker 03

  Right, right. And, you know, the taking away some of the funding, though, is also going to be something that's going to, like you said, with the with the funding from state institutions being reduced, that the the funding still needs to be there. The school needs to run. And so if you're cutting the funding from state funding, they've got to get that money from somewhere to be able to run the institution. It's going to be coming from the tuition.

• 31:30Speaker 05

  Right.

• 31:31Speaker 03

  Right. So if we cut more funding, where who's going to be paying for it? It's going to be the student, you know, by definition, right? So.

• 31:41Speaker 04

  We got a comment with a follow up question that's appropriate here. It says, wow, my child is in second grade. And this is already scaring me. Around what grade do you usually start planning with high school kids or parents of the children?

• 31:53Speaker 05

  Seventh grade is ideal. And I know that there's a lot of people like, seventh grade? Oh, my gosh.

• 31:58Speaker 03

  That's so soon.

• 31:59Speaker 05

  It's so soon. I have a seventh grader. And I'm not saying that you should start talking about the college list and writing your essays and things like that. Seventh grade is ideal because the classes that you take in high school can make a bigger difference on the programs that you qualify for and the schools you qualify for. So if you're looking at UT Austin as an engineering major, there is a calculus readiness requirement you have to pass before even applying. So you need to be in the highest math class possible.

• 32:36Speaker 03

  In seventh and eighth grade.

• 32:38Speaker 05

  In seventh and eighth grade so that you can at least start out with geometry freshman year of high school. So math is very important. And I've seen that students that have more of an idea of what they want to pursue as they start high school are far more successful in being strategic with their time and their summers and their classes. Now, I tell students, I want you to plan the next 84 years of your life right now, right? But as an example, with my daughter, she's going to be 13 next month. We've been talking about college costs and how grades are a direct correlation with scholarships that are going to be available,

• 33:20Speaker 05

  honors college programs, specialty programs that will provide those full and half tuition scholarships. And now we are fixing those time management issues, that there's no late work, things like that, that I would say since the pandemic, the schools, they'll allow late work. They'll allow you to turn everything in the day before the quarter and get full credit, which is not serving them well. Now, I'm not going to blame the schools because they've gotten a lot of parent pushback for that.

• 33:49Speaker 03

  Certainly.

• 33:49Speaker 05

  In terms of, why don't you just let Johnny turn this in late? I don't understand.

• 33:54Speaker 03

  Yeah.

• 33:55Speaker 05

  But building those skills up in junior high, so that when they get to high school, they're earning the best grades possible. We're looking at different career fields now, not to determine what she wants to be right now and then follow that, but trying things out. So.

• 34:14Speaker 03

  So, for those that are listening right now that have a child, grandchild, nephew, niece, that are listening to this and recognize the, just the, the knowledge that is coming out of Kat's face.

• 34:32Speaker 03

  Right now, she is an amazing resource, right? It's it, this is, she's not using the laptop that she's like, this is numbers coming straight off the top of her head. I'm not kidding you. If you have a loved one or a child or somebody that you're looking at as far as trying to get some knowledge on what to do about getting your kids through school, getting them into the right college or the college that you want to get them to. Kat, tell them how to get in touch with you. Tell them what March Consulting does for students. And when is the ideal time to to get them to to get in touch with you?

• 35:09Speaker 05

  So they can call our office at 661-747-4514. They can also schedule a free consultation through our website at mymarchconsulting.com. They can email us, [email protected]. We have a lot of free content on all the social medias. So any social media that you use, except TikTok. I haven't broken TikTok yet. Sorry, guys. And I'm not a big Snapchat chatter, but everything else.

• 35:41Speaker 05

  Ideally, junior high to start talking about what students like, don't like, and exposing them to career paths.

• 35:49Speaker 03

  Right.

• 35:50Speaker 05

  High school, our junior class right now is already writing admissions essays. They are finalizing their college lists. We are planning out what scholarship programs they're going to be applying for at the schools. And we're really strategic with finding schools that are going to give students money. And it's not the same 50 schools that everybody else is applying to. If they do want to go to a Cal Poly or a UCLA, part of what makes us unique is we teach students this process. How are you being evaluated? How do you answer those essay questions? What activities do you need to spend your time on that are going to make a bigger difference?

• 36:31Speaker 03

  That brag sheet.

• 36:33Speaker 05

  It's that brag sheet.

• 36:34Speaker 03

  Yeah.

• 36:34Speaker 05

  You don't have to be in 17.25 activities. You don't have to be in a sport all four years. And please, please, don't let your student do 25 different half hour, random community service events because quote unquote, you have to have community service for college.

• 36:52Speaker 03

  Right.

• 36:53Speaker 05

  Do one thing deeper that they're actually passionate about. Uh, and it's hard to say that anybody 17 has a passion because they're 17 years old, but something that they're interested in. Right?

• 37:04Speaker 04

  Well, my daughter went through the program. We're very grateful for it. Got great feedback from her as well. Uh, but I didn't ask you, where'd the name come from? March Consulting?

• 37:13Speaker 05

  So March is usually when acceptance letters come out for all the schools. It's also a forward motion. You can't, I mean, I guess you could march without a plan, but you wouldn't want to, you know, any, any military marching has a plan.

• 37:27Speaker 03

  You don't really march backwards.

• 37:28Speaker 05

  You don't march backwards. Yeah. You march forward.

• 37:33Speaker 05

  And I'm a big fan of the color green. It was my competition colors when I, when I rode horses and March is a green month.

• 37:40Speaker 04

  Well, there you go. There you go.

• 37:42Speaker 03

  Well, there we go. Uh, we're going to get all that information onto the notes for the podcast, right, Steve Z?

• 37:48Speaker 00

  Yes.

• 37:49Speaker 03

  Yeah, absolutely. Kat Klaus from March Consulting. Thank you so much for joining us today. Thank you for all of the great information. And, uh, like I said, if you have a student that's, uh, ready to go to college or getting ready to start looking for college, you need to go to, to March Consulting. Uh, seriously, you gotta go. Um, we'll be right back.

• 38:08Speaker 00

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

• 38:39Speaker 03

  Welcome back.

• 38:45Speaker 03

  The Red Hot Chili Peppers did it better.

• 38:47Speaker 04

  No. Can't be better than the original.

• 38:52Speaker 04

  But you're lucky that Kat brought up Weezer because I had some Shania Twain ready for you.

• 39:00Speaker 00

  You don't like Shania?

• 39:01Speaker 03

  Nope, can't do it.

• 39:04Speaker 03

  That or the, uh, what is it?

• 39:07Speaker 00

  Yeah, I wasn't lying. I had it ready.

• 39:09Speaker 03

  You had it ready.

• 39:12Speaker 03

  That or the Forrester sisters or any of that kind of stuff. Can't do it. Can't do it.

• 39:19Speaker 03

  All right. Hey, we got a message came in. Um, given that running an entertainment venue is quite different from typical city operations, what specific measures would the city take to ensure the Crystal Palace maintains its quality of entertainment programming and historical significance while under municipal management?

• 39:38Speaker 04

  Not it.

• 39:39Speaker 03

  Not it.

• 39:41Speaker 00

  They must have, uh, went back and listened to our conversation with Andre Gonzalez a couple of days ago.

• 39:46Speaker 03

  Yeah. Was he, he was on what Tuesday?

• 39:48Speaker 00

  Yeah.

• 39:49Speaker 03

  Yeah.

• 39:49Speaker 00

  And he had brought up that he wasn't for it.

• 39:53Speaker 00

  But there was discussion that they were talking about.

• 39:56Speaker 03

  Yeah. And I know that

• 40:00Speaker 03

  the city is not in the restaurant business. Let's put it that way.

• 40:03Speaker 00

  Exactly what he said.

• 40:04Speaker 04

  Yeah.

• 40:04Speaker 03

  Right? And

• 40:08Speaker 03

  the city honestly shouldn't really be in the entertainment business either.

• 40:16Speaker 03

  So I don't know if this really fits the bill. I don't know. We'll see what the city council does, but not it.

• 40:23Speaker 00

  Something that Mechanics Bank changed their name again?

• 40:26Speaker 03

  Yeah, they're going to change it to dignity, dignity, health, uh,

• 40:28Speaker 00

  Okay. So this is what number three or four?

• 40:31Speaker 03

  Yeah.

• 40:32Speaker 04

  Well, maybe that, are they just leasing it for a period of time? Is that what it is?

• 40:35Speaker 03

  Well, it's just the naming rights, right? It's just like the Staples Center became crypto.com because Staples ran out of money.

• 40:40Speaker 00

  Yeah, like the Superdome was just the Superdome.

• 40:44Speaker 03

  Yeah.

• 40:44Speaker 00

  And now that the Super Bowl, was it?

• 40:46Speaker 03

  The Lexus?

• 40:47Speaker 00

  Caesars?

• 40:48Speaker 03

  Yeah. Yeah.

• 40:50Speaker 00

  Got to get a little money. But yeah, I remember when it was, uh, first coming out was with the Centennial Garden.

• 40:56Speaker 03

  Yeah. Centennial Garden and it, and it was Roble Bank.

• 40:59Speaker 00

  And then it was Roble Bank.

• 41:00Speaker 03

  And then it was Mechanics Bank and now it's going to be dignity health.

• 41:03Speaker 00

  Okay.

• 41:04Speaker 03

  Right?

• 41:05Speaker 04

  All right.

• 41:06Speaker 03

  All right.

• 41:07Speaker 04

  Well, maybe Mechanics can go over to Crystal Palace and make it the Mechanics.

• 41:12Speaker 00

  And get a mechanic bowl.

• 41:14Speaker 03

  Yeah.

• 41:15Speaker 00

  There you go.

• 41:15Speaker 03

  There you go.

• 41:16Speaker 00

  Now you're thinking.

• 41:16Speaker 03

  Now we're, they're, they're thinking with our thinking caps.

• 41:21Speaker 03

  So we got a couple of minutes left and one of the things that the administration's looking at doing is realizing, hey, interest rates are pretty high, right? And especially high when we're talking about trying to go out and buy a home. Interest rates right now, if we'd look, you know, call Alan Maderos right now, he'd probably be saying, we're looking at what, six and three quarters or seven, somewhere in there? Six and a half to seven?

• 41:48Speaker 04

  He'll be here Wednesday.

• 41:49Speaker 03

  He'll be here Wednesday? But they've been, you know, hovering in that 7% range, six and a half and up. And that's kind of keeping home sales kind of stagnant, right? Not, not necessarily stopping home sales, but not necessarily helping them either. Right? So the administration's trying to figure out a way to help to, in their way, help to try to reduce the mortgage rates. Well, the mortgage rate is really very closely tied to the 10-year treasury, the 10-year bond.

• 42:29Speaker 03

  And right now, the 10-year bond is trading at what, 4.4, 4.5? And so it basically winds up being about two points higher than that, two to three points higher than that.

• 42:39Speaker 04

  Yeah, a lot of people ask about the Fed. It's less.

• 42:42Speaker 03

  It's less tied to the federal funds rate than it is to the 10-year bond.

• 42:45Speaker 04

  Yep.

• 42:47Speaker 03

  And a lot of things go into the 10-year bond yield. It's, it's usually two real things. It's like, what is, what does the investor think is going to happen with inflation over the next 10 years? And what do they think the US growth potential is going to be over the next 10 years? And you kind of take both of those in, in concert with each other and that kind of becomes your, your 10-year bond yield. So the administration's looking at this and saying, hey, wait, how do we, how do we try to influence the 10-year bond yield to get it lower so that we can get the, they're not, they're not going to artificially go and it's like, oh, we're going to, we're going to lower the interest rates. But.

• 43:24Speaker 03

  Three things that they're going to try and do. Okay, we're trying to see about looking at, you know, supplementary leverage ratio, which is basically revising a regulation that requires large banks to hold additional capital. So by easing that requirement, banks would have more cap, more capacity to hold treasuries and thereby increasing the demand. And if you increase the demand in buying treasury, you lower the yields, right? So that's one way to do it. The second is the secretary of treasury, Treasury Secretary, Scott Besant, the 333 Plan, 3% GDP growth, 3%, the budget deficit being 3% of GDP,

• 44:08Speaker 03

  and increasing oil production by 3 million barrels a day. So by doing that, they're seeking to stimulate non-inflationary growth and reduce energy costs, which would, if we lower energy costs, potentially could lower long-term interest rates. Okay, so that helps too.

• 44:26Speaker 04

  So we're watching the 10-year.

• 44:28Speaker 03

  Yeah.

• 44:29Speaker 04

  Hoping that comes down.

• 44:30Speaker 03

  Yeah.

• 44:31Speaker 04

  Because that could help mortgage rates.

• 44:32Speaker 03

  Right. And so a couple of these things that they're trying to do is if they can lower those, that 10-year bond yield down a little bit, then we might start seeing that mortgage rate come down. And if we see the mortgage rate come down, you're going to see more houses being sold. So that's really kind of what they're trying to do. Hey, not necessarily bad economic policy.

• 44:51Speaker 04

  Well, let's see how it plays out.

• 44:53Speaker 03

  See how it plays out.

• 44:54Speaker 04

  Yep.

• 44:55Speaker 03

  We'll see where that goes. Hey, we are off on Monday. It's a holiday. So we'll really be back on Tuesday.

• 45:01Speaker 04

  All right.

• 45:02Speaker 03

  With a wonderful show. We'll see you then. And when we come, we'll be back, but Tuesday, that's right. Thanks for being in my ear, Steve Z. Be smart, be safe, be money wise. We'll see you Tuesday.