2/18/25 From Crypto Tax Compliance to Carbon Capture: A Full Energy Discussion with Chad Hathaway

The Moneywise Radio Show and Podcast Tuesday, February 18th 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: Chad Hathaway, President/CEO of Hathaway LLC. www.hathawayllc.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 S E F Securities, Inc., member FINRA, SIPC. Investment advisory services offered through S E F Investment Advisors, Inc., S E F 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 to the Money Wise Show. We are live from the Garo Ellis padded radio room off Stockdale Highway on ESPN Bakersfield, 1230 a.m., 101.1 FM, and always streaming at MoneyWiseGuys.com. You can text into the show 24 hours a day at 661-396-1000. Today, we're your hosts. I'm Sharad Waite and?

• 1:04Speaker 04

  Dustin Weaver.

• 1:04Speaker 03

  Dustin Weaver, thanks for being here, man.

• 1:06Speaker 04

  It's good to be here, man. Looking forward to today. We got Chad coming here in a little bit.

• 1:10Speaker 03

  Yeah, we do. Looking forward to talking to Chad. Before we do that, though, I want to answer a couple of listener messages and really appreciate our listeners out there. First message says, "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?" So, the similar question, I think, that came on last week. We've had a few questions about the city's potential purchase of the Crystal Palace.

• 1:46Speaker 04

  Yeah, a lot of buzz there.

• 1:47Speaker 03

  We had Andre Gonzalez on, the city council member, last week, kind of talking about this. I thought he did a good job of addressing some of the concerns that I would have as a citizen, which is? Uh, you know, hey, we're using tax dollars like use our tax dollars to go buy like an entertainment venue?

• 2:05Speaker 04

  Is the answer yes?

• 2:06Speaker 03

  He, no, well, not really, because his suggestion is that the city uses the money from the profits that they're getting from Mechanics Bank Arena, which they manage, well, they own.

• 2:19Speaker 04

  Which is not Mechanics Bank Arena.

• 2:21Speaker 03

  Right, was it dignity?

• 2:23Speaker 04

  Dignity Health.

• 2:24Speaker 03

  Have they already changed it? It's like it's official now?

• 2:25Speaker 04

  I believe so.

• 2:26Speaker 03

  That's fast. Um, so that is property which is owned by the city, but they don't manage it. And I think that's the, that's the important distinction. They hire, I can't remember the name of the company that manages it. Do you remember, Stephen?

• 2:42Speaker 04

  I do not.

• 2:42Speaker 03

  Well, it's, it's a professional like management company that manages those types of venues.

• 2:47Speaker 04

  Yeah.

• 2:48Speaker 03

  And they've turned a decent, they've been turning a decent profit the last few years.

• 2:52Speaker 04

  Well, that's good.

• 2:52Speaker 03

  Several million dollars. And so, uh, you know, the idea is that we use profits from those types of properties that the city owns and they've been successful at it.

• 3:03Speaker 04

  Yeah.

• 3:04Speaker 03

  You know, come, come to this question, well, it, it, you know, about the city, you know, could the city really manage? Uh, you know, a, a, a historical building like this, an event place? And I, I would think, well, I mean, they wouldn't be managing it, but they're doing a good job of hiring somebody to manage the properties that they have. So.

• 3:23Speaker 04

  Much like that arena.

• 3:25Speaker 03

  Like the arena. Yeah.

• 3:26Speaker 04

  That makes sense.

• 3:26Speaker 03

  So, you know, I wouldn't have any concerns about it. I did hear though, just recently that one of the issues with the Crystal Palace, I was always under the impression that it had state of the art sound system, like this is, you know, top notch. And it turns out that it maybe was back in the day when Buck Owens built it, but there's been no upgrades.

• 3:49Speaker 04

  Oh.

• 3:50Speaker 03

  And it's not good.

• 3:51Speaker 04

  Technology's changed for sure.

• 3:53Speaker 03

  Yeah, like the speaker system, the, the console is dated to the point that they don't get some of the big acts coming through because of their rider list that they have, like what they require to be able to perform. They don't meet those standards. So they're not getting. Acts, which is maybe another reason why somebody isn't buying a private buyer because they're gonna have to put in a lot of money to upgrade the sound system. And, you know, it begs the question, what would the city do that? You know, how much money would need to go into it to make it?

• 4:25Speaker 04

  Right.

• 4:25Speaker 03

  Or keep it as a, as a world-class event space? You know, I don't know.

• 4:31Speaker 04

  It's a good point, though. I mean, you put yourself in the shoes of the artist. You want to sound your best.

• 4:34Speaker 03

  Yeah.

• 4:35Speaker 04

  Right?

• 4:35Speaker 03

  And it can.

• 4:36Speaker 04

  The newest and latest and greatest.

• 4:38Speaker 03

  Yeah.

• 4:38Speaker 00

  And some of these new artists, you know, have, you know, with like that topic is those things are always changing. And when did the Crystal Palace open? 20 something years ago?

• 4:49Speaker 03

  Right.

• 4:49Speaker 00

  At least.

• 4:50Speaker 03

  Right.

• 4:50Speaker 00

  And you know, the world in music and, and entertainment, it's all digital.

• 4:55Speaker 03

  Yep.

• 4:55Speaker 00

  So a lot of those things have been updated just recently in the last few years. So it's, it's crazy.

• 5:01Speaker 03

  It is crazy.

• 5:02Speaker 00

  And that's a lot of money.

• 5:03Speaker 03

  Yeah. Oh, tell me about it. Tell me about it.

• 5:05Speaker 00

  I was gonna say, we can call Emily right now if you want.

• 5:08Speaker 03

  Yeah, we're, we're kind of going through this, not kind of. We are going through this with the, with the Woolworths. You know, down in the basement, we have a space there, not only for our MoneyWise events and client events, but, you know, we want to have it also public events there and which requires a lot of investment into equipment.

• 5:26Speaker 04

  Right.

• 5:27Speaker 03

  So we, you know, we've, we're going through our bids and, and, and, and working that through now. And so I, you know, I know firsthand, it's very expensive to buy the speaker system.

• 5:37Speaker 00

  Sitting down when you get the bid, right?

• 5:39Speaker 03

  Yeah. Oh, yeah. Oh, yeah. Still, still trying to stand up.

• 5:44Speaker 03

  We got another question, and this I think is also very similar to a question that you and Justin answered, but I want to, I want to address it anyways. It says, "Good afternoon. How does the IRS track crypto transactions? Or do they? Have a wonderful day." Thank you, listener. You have a wonderful day, too. This is a really interesting question because I wasn't completely clear exactly what the IRS does aside from the fact that they are now required, and I say they, crypto exchanges like Coinbase or Binance, they're, they've been required since starting last year to re, to issue a 1099 to anybody who is. Account holder.

• 6:29Speaker 04

  And when you say starting last year, so for the tax year 2024, which means this year they're mailing them out?

• 6:35Speaker 03

  Yes. Yeah, that's right. So this will be the first year that they'll be mailed out. It started in 2024, but now 2025 tax filings, the exchanges must provide the Form 1099 DA. And that is essentially the form, people are familiar with 1099s, I'm sure. It's the, the information that's going to sit sent to you and a copy is sent to the IRS, which tracks all crypto sales, cost basis for capital gains. And therefore that's the, I think, the primary reporting. This is a new, a new thing. I'm a little, are you surprised that it's, it took that long to, to have even a 1099?

• 7:17Speaker 04

  Right. Especially with, you know, the IRS, yeah, they're in the business of making sure that they collect taxes on what's owed. And so with the crypto being an asset that can go up and down in value, they definitely want to track that and get paid when, when you make money.

• 7:32Speaker 03

  Right. And like we've, in our industry, we, we can't avoid 1099s. If you buy, have a stock or a bond or mutual fund and you receive income from it or you sell it, it's, it's reported. Like you can't do anything about that. And yet there are a lot of people making money like totally off the books. I mean, just because they weren't getting the 1099. Now, I think for, forever they've been required to report it. In fact, there is a section on your 1040 that asks, the specific question is at any time during the year, did you receive, sell, exchange or otherwise dispose of any financial interest in any virtual currency?

• 8:16Speaker 03

  That's actually been there since 2020 and.

• 8:20Speaker 03

  And but, you know, some people are looking at that and going, well, how are you gonna know IRS? Because you didn't get the report, you didn't get the 1099. So, you know, really, how are you going to know anyway?

• 8:37Speaker 03

  So, you know, that's the main, the main change, legal change that has happened is the requirement for the Form 1099 to be sent out. There's other aspects of this that I was not privy to. The IRS partners with blockchain analytic companies, like private companies like Chain Analysis and Cyphertrace. And these are companies that trace transactions on public blockchains, like Bitcoin and Ethereum. And they use these sophisticated tools to track wallet addresses, link transactions to individuals, and identify those who might be tax evading.

• 9:16Speaker 03

  And the IRS also issues what are called John Doe summons to exchanges like Coinbase, or Kraken, or Circle, and they demand user transaction data for individuals who may not have reported crypto transactions. So the IRS does go and actively look for, you know,

• 9:36Speaker 04

  You're saying John Doe summons?

• 9:37Speaker 03

  Yeah.

• 9:38Speaker 04

  Is that what they're calling it?

• 9:38Speaker 03

  A John Doe summons. Isn't that interesting? You know, there is also a whistleblower program that the IRS has had for many years that essentially will reward individuals who report tax evasion. So, you know, this is an effort to like, get the snitches out there, and pay the snitches some money. And if you don't report, failure to report a crypto transaction can result in an audit, further tax penalties and interest, and even criminal fraud charges in extreme cases. So...

• 10:15Speaker 04

  Sounds like the tax is better than trying to avoid the tax.

• 10:18Speaker 03

  Yeah, just pay the tax on it. But what's interesting is now you have, most people aren't really using cryptocurrency as a currency. They're using it as an investment. You know, but there's like a creed almost that if you have Bitcoin, you don't sell Bitcoin, you just hold it. So you have... A lot of these people who have a very low cost basis on their Bitcoin. And now they're, they're, this is, this is being reported. So it's going to make it difficult for, you know, some of these people to now, you know, pay taxes on, on this stuff.

• 10:59Speaker 03

  The other aspect to this is, you know, everybody's aware of the current administration's move to essentially try to make our government, the federal government, more efficient through Elon Musk's efforts and his Doge program. Just on the, just yesterday, the IRS has announced, or it's been made public that the IRS is going to lay out thousands of its probationary workers right in the middle of tax season. And this comes as the Trump administration is, is intensifying its efforts to shrink the federal workforce.

• 11:36Speaker 03

  And there's already been a move by Republicans to claw back the money that was part of Biden administration's investment into the IRS, $80 billion infusion of funds as part of the Inflation Reduction Act.

• 11:54Speaker 04

  Yeah, I know a few years ago, they had hired 70, 80,000, don't remember the number

• 11:59Speaker 03

  Yeah.

• 11:59Speaker 04

  of staff, maybe that's part of that.

• 12:01Speaker 03

  It's part of that. That, that money was going towards that, but that was and is being, that money's being pulled back. So, you know, that's tens of thousands of new employees that, that, especially those that are on probation. So the IRS already, I don't have the numbers in front of me, but I'm sure you've, you've, you've read how rare it is for somebody to be audited by the IRS.

• 12:29Speaker 04

  I've heard, yeah, I've talked to the CPAs about it, but I don't know the number.

• 12:32Speaker 03

  What did the CPAs say? Roughly, you know.

• 12:36Speaker 04

  You know, you hear about the threat of audit a lot, but like you're saying, you don't see it too often. I wish I knew the numbers.

• 12:41Speaker 03

  Yeah, I've talked to several CPAs too that say not only is it incredibly rare for there to be an audit by the IRS, but they, they can't get a hold of people. Like you call and a lot of CPAs have a hotline that's just for tax professionals. And it just, you can't ever get to anybody or you're on hold for hours. And so.

• 13:05Speaker 04

  And then the other hotline is even worse for you and I that are not.

• 13:08Speaker 03

  Oh, yeah.

• 13:09Speaker 04

  Tax professionals.

• 13:09Speaker 03

  Yeah, it's so much worse. And so it's because they are understaffed and they're also, the technology is, is old. And a part of that 80 billion was going to go towards updating their technologies. I don't know how far they got along with that, but the, the software that they're using is no longer, it's only the IRS uses it and there's nobody, no college that teaches any of this programming of how to, how to maintain and manage the software. And so they're having trouble being able to keep up with just maintaining this antiquated software that the system that they use.

• 13:51Speaker 03

  So, you know, I, I, this is, this is going, I, this is like a, it's a, it's a tricky thing for us to, to sort of talk about because nobody likes paying taxes. I don't like paying taxes. I don't like writing that check, but you know, I also recognize that it's our primary institution that we have to collect revenues.

• 14:13Speaker 04

  Right.

• 14:13Speaker 03

  And it's an unfair system where it, you know, the, the audits aren't, aren't consistent and you don't really know. And so you're just, it, it forces people to kind of play a game of chance. And then it's like, I don't know, it just.

• 14:35Speaker 04

  Yeah, it'll be interesting to see how this all flushes out and what kind of impact it has for sure.

• 14:39Speaker 03

  Yeah.

• 14:39Speaker 00

  Well, I do have a question because I know last week I was looking over the messages and we had one that said, you know, why does the IRS want to know if I bought crypto? Which was kind of similar to the question we just got. Is that something, I, I believe that's the third or fourth question regarding crypto and taxes that we've had in probably the last month or so.

• 14:58Speaker 03

  Yeah.

• 14:59Speaker 00

  I mean, is that something that would, I mean, I know it's probably close to tax season. Is that, is that something that is just recent, something recently happened or that is triggering these types of questions? Cause as the person that gets the messages, I was just wondering if that's something that uh.

• 15:17Speaker 04

  Yeah, I think being close to tax time, it's, it's more on people's mind, but then folks are talking about crypto more in general too. So probably a combination of things.

• 15:27Speaker 03

  Yeah, I, I think so too. It's the, it's the, the fact that we're in tax season now and, and it, I, I believe that it has, there's been some back, like backtracking a little bit on implementing some of these laws, like the, the, the recent change with PayPal, if you use PayPal or Venmo and how that is now reported. And if you've noticed, but within the last couple of years, when you make a, when you send a, a payment via any of these, these, these services like PayPal, you have to, you know, you have to say whether this is personal or business and those companies also are required to report certain transactions. And just like anybody, like any, any sort of banking transaction, if it's above a certain

• 16:12Speaker 03

  amount, then it's reported. So, um, you know, there is, um, there are these, these protections essentially, uh, that are enforced by the government that will, um, you know, they're just trying to crack down mostly on fraud and crime, organized crime, you know, money laundering, uh, even terrorism is, has been found to be funded through some of these methods. So, I mean, it's in our best interest. So ultimately, but it just doesn't, it never sits well when you've got big brother there that's, you know, following all this stuff. Great questions though. Good stuff. We're going to take a break right now. We come back. We're going to be joined by Chad Hathaway's president, CEO of Hathaway LLC. We'll be right back.

• 16:57Speaker 00

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

• 17:10Speaker 03

  We're the Money Wise Show. Thanks for tuning in. I'm Sharad Waite here with Dustin Weaver. Joined by our guest, our regular guest, Chad Hathaway from Hathaway LLC. Chad, thanks for coming back.

• 17:21Speaker 05

  Thanks.

• 17:22Speaker 03

  Good having you here. Let's talk oil prices. What's going on?

• 17:29Speaker 05

  You know, it's been kind of flat since last month. We haven't had a lot of change, really. It's been up and down a little bit, but nothing major. It's been relatively flat. And then, you know, the latest geopolitical, political thing that's affecting the market is the, you know, Biden administration imposed stricter sanctions on Russian crude on January 10th. And that, you know, there was a lot of black market Russian crude, just like there was a lot of black market Iranian crude rolling around. Well, they really put the screws down to it on the 10th on the way out.

• 18:00Speaker 03

  Yeah, was it, was that what they, when they, essentially they're trying to get rid of these, what do they call them, like dark ships or whatever?

• 18:08Speaker 05

  Yeah, China, China and India were capitalizing on that. So now the Chinese and the Indian markets have been, you know, struggling and there's a lot of stranded oil out at sea right now, which I'm sure will find a way home somewhere, but.

• 18:19Speaker 03

  Strand, oh, because of.

• 18:21Speaker 05

  The tankers, yeah, the tankers have either were deported, left port and didn't make it to port because of the increased sanctions. Sanctions can be really very dangerous or not dangerous, but very expensive if you get caught and have huge ramifications. So there's actually an article I read yesterday about an amount of oil that's just stuck at sea right now. And it's also caused the cost of shipping oil to go up as well. And then last couple of days, people watch that very closely.

• 18:48Speaker 03

  Yeah.

• 18:48Speaker 05

  And what it costs for these super tankers, you know, some of these tankers are, you know, several hundred thousand dollars a day and those prices go up and down based on demand.

• 18:57Speaker 03

  Holy cow, like several, several hundred thousand dollars for like diesel to like run.

• 19:02Speaker 05

  No, just cost per day to charter or use. Like for example, like an offshore drilling rig, the cost could be anywhere between, you know, 30, 40,000 dollars a day, four or 500,000 dollars a day because of the cost to run that kind of equipment. These things are holding most, a super tankers over a million barrels of oil that it holds.

• 19:17Speaker 03

  Have you ever been on one?

• 19:18Speaker 05

  No, I haven't. I've been in a tugboat before out in and around them and it's like.

• 19:23Speaker 03

  That's cool.

• 19:23Speaker 05

  Holy, I mean, that's one thing in my bucket list is, I've never been to offshore oil rig before.

• 19:29Speaker 03

  Oh yeah, I was gonna ask that too.

• 19:30Speaker 05

  Everybody asks me like, you know, everybody I ask who I know is in that world says, you don't wanna go. I'm like, yeah, I do. I wanna go. I wanna sit out there and they go, you don't wanna go.

• 19:41Speaker 03

  Because it's just so rough?

• 19:42Speaker 05

  No, because they're burned out and they've been, lived out there for years or on and off. And I think, I'm like, well, you know what? Yeah, I'm sure it sucked, you know, after you're out there for two weeks on and then have to come home. And like, I took a guy down to Mexico and we took a helicopter and I was like, you know, I always look at people when they get on a helicopter. And he's like, you know, I'm like, have you been on a helicopter? He's like, yeah, I used to get to work on a helicopter. I'm like, really? He's like, yeah, I just spent all years, like 20 years taking a helicopter in the Gulf of Mexico. I'm like,

• 20:09Speaker 03

  Gulf of America.

• 20:10Speaker 05

  Yeah, America. And I'm like, he's all landing out down, I go, cause I was saying that we have power lines by this pad and it's in between. It's kind of a tight spot. And he just looks at me like, that's not a tight spot. And the wind's not blowing and it's not raining sideways. And, and you know, and we've, you know, no. So it's crazy. Offshore is like, it's got a little city, and especially in the Gulf of Mexico, there's big gigantic platforms. It's like a city out there with their own, I mean, you're out there, you're stuck there for however long your shift works. And it's, I think it's an incredible feat of engineering.

• 20:44Speaker 03

  Yeah.

• 20:45Speaker 05

  Gene Vaughn, my partner, his son actually builds platforms.

• 20:49Speaker 03

  Oh, wow.

• 20:49Speaker 05

  He's a leading engineer at a firm that builds these platforms. They build them in, in Korea, South Korea. And then they bring them over and then they, he follows the platform all the way till they commission it.

• 20:59Speaker 03

  Wow.

• 21:00Speaker 05

  And it's home, it's final home.

• 21:02Speaker 03

  That's hardcore.

• 21:02Speaker 05

  But it's several years worth of work. That's why we talk about oil and gas industry. You can't just flip the switch on. It's infrastructure takes years and time and millions, if not billions of dollars of capital to get set up for.

• 21:14Speaker 03

  I remember a few years ago, you were talking about our offshore drilling that we have in California.

• 21:19Speaker 05

  We're not drilling, but we have offshore platforms.

• 21:21Speaker 03

  Offshore platforms, which they, that's not drilling?

• 21:25Speaker 05

  No, they stopped drilling, you know, we've had, new platform bans stopped a long time ago, but they really drilled up offshore California. Cause it's been since 1969, I think that they have banned any more new platforms.

• 21:36Speaker 03

  Anywhere off the coast?

• 21:37Speaker 05

  Off the coastal waters of California. Waters, it technically is allowed, but then it's been banned through previous administrations. But it, we have a significant, significant amount of oil off the California coast. It's shocking.

• 21:50Speaker 03

  I mean, I was at, I can't remember what beach I was at last year, but like I couldn't stop walking on it.

• 21:55Speaker 05

  Yeah, it seeps, it seeps from the ocean floor, especially around Santa Barbara and between Carpinteria and like sunny, Sunnyside Beach, I think is one of them that's got really bad.

• 22:04Speaker 03

  Yeah.

• 22:05Speaker 05

  All those look, Rincon, all the way up and down that whole area, if you don't have, you'll step in oil.

• 22:10Speaker 03

  Yeah.

• 22:11Speaker 05

  It happens.

• 22:11Speaker 03

  And that's from seepage, that's not a previous leak or anything?

• 22:14Speaker 05

  Oh, no, it's all seepage. We leak, we talked about this a couple of years ago, it was like it was astronomical amount of oil we leak every day. Like more than we spill over a decade, you know, it's just a tremendous amount of oil is leaking, it's seeping up out of the ocean.

• 22:27Speaker 03

  Out of the ocean floor?

• 22:28Speaker 05

  Right, yeah.

• 22:29Speaker 03

  So like, is there, is there an argument that if we could pump it out, it wouldn't leak out?

• 22:35Speaker 05

  It depressurizes it, yeah, I mean, yeah, I mean, there is an argument, there's actually a group of people in the Santa Barbara area that formed a bipartisan coalition that said, hey, offshore drilling or offshore oil extraction is actually reduces the seepage because you're reducing the reservoir pressure. Because all it is, is oil is trying to find its way to the surface and it's getting trapped. That's what every single oil field is on the face of the planet. It's trapped by some sort of stratigraphic trap, whether it be impermeable clay, impermeable rock, you know, in a structure, whether it be an anticline, a monocline, a syncline, there's all these types of structures where we find oil. But it's all this is a trap, it's a geological trap, and there's nothing there and that trap finds fissures and ways to get around it.

• 23:19Speaker 05

  It eventually makes its way to surface.

• 23:21Speaker 03

  Yeah.

• 23:21Speaker 05

  And offshore, that's what's happening.

• 23:23Speaker 03

  So you don't see, I mean, now let's, we're kind of talking about the state of California and its stance, there's just, is there, there's no way that's coming back. We're going to be able to do that again?

• 23:35Speaker 05

  No, it's just the politics here, it's impossible. I mean, it's hard enough to operate the existing platforms that we do have, much less even consider a new one. I mean, it wouldn't even happen. It takes so many years of laws to undo and lawsuits would be monumental.

• 23:51Speaker 03

  And then the money that it would take, you'd have to have a company that's got, is so, is brave enough to, you know, put so much money into that high regulatory risk.

• 24:03Speaker 05

  Offshore, anywhere is high regulatory risk. I mean, when you're even in the Gulf of America and you're down there, anywhere you're at in the world, offshore is the highest exposure place you could ever be in our world. I mean, North Sea, same thing. I mean, you have no room for failure at all. Not just from an environmental standpoint, but from a safety standpoint. You have to have ultimate control of your well because you're dealing with high, high pressures, deep, deep, deep depths, depths of 20, 30,000 feet in some cases. And sometimes you're in 5,000 foot of water, too. I mean, engineering feats that are accomplished by our industry are staggering.

• 24:37Speaker 03

  Yeah.

• 24:38Speaker 05

  I mean, it's way, way above my podunk oil world that I live in.

• 24:43Speaker 03

  Oh, come on. There's some pretty cool tech. I've seen, I've seen some of the stuff you have.

• 24:48Speaker 05

  It's not like that. That is the coolest.

• 24:51Speaker 03

  That's another level.

• 24:52Speaker 05

  That's where I want to go. That's where I want to go.

• 24:53Speaker 03

  Yeah.

• 24:54Speaker 05

  It's a bucket list.

• 24:55Speaker 03

  I'll go with you. Hey, let's take a break. When we come back, I want to talk about this LA Times article about California government considering getting into the oil refinery, taking over the oil refinery business here in the state. So many questions about this. This is Chad Hathaway. He's joined us here at Money Wise. We'll be right back.

• 25:12Speaker 00

  If you're a business owner who provides a retirement plan for your employees, contact Money Wise Wealth Management to see if you're maximizing your options and minimizing your liabilities. Money Wise 401K plans are customized to you and your company's needs. 661-847-1000. That's 661-847-1000.

• 25:41Speaker 03

  Welcome to the Money Wise Show. Thanks for tuning in. I'm Sharon Waite, your host, along with Dustin Weaver, joined by one of our favorite guests, Chad Hathaway. Chad, the LA Times article talking about the state of California privatizing, not privatizing, but what do they call it? Regulating, the over-regulating and taking charge of our gas refineries in California. This is, this is really a scary position that the state of California, I guess it's all spurred by Governor Newsom's charge. He's created a commission.

• 26:20Speaker 03

  It's not the first time, but created a commission to figure out a way to, I guess, regulate the... Gas refineries in our state, we're down to eight, right? Eight of them?

• 26:32Speaker 05

  One's closing into this year, correct?

• 26:34Speaker 03

  Yeah, and so that will leave us with eight. There used to be over a dozen.

• 26:37Speaker 05

  There used to be, twenty plus years ago, there's thirty refineries in California.

• 26:41Speaker 03

  Holy cow.

• 26:42Speaker 05

  Yeah.

• 26:42Speaker 03

  We're down to eight.

• 26:43Speaker 05

  Mm-hmm.

• 26:44Speaker 03

  And so the, the state is exploring the idea of taking these refineries over. This is, this seems like complete insanity.

• 26:56Speaker 05

  It is complete insanity. I mean, California does realize that there's a, they see more people leaving. And, but to think that the state of California is going to operate a refinery. And look, I, I look at a refinery and I, that's one of the most complex things that I've ever, the amount of products that come out of a refinery are not just gasoline, not just diesel, not just aviation fuels. There's a whole myriad of mixes. And then you bring in or don't manage that properly, one, one is gonna blow up. I mean, that's the, that's the one thing too, that this is probably, the biggest, scariest thing of this whole thing is to think that a state would try to run something this complex. And you've got multinational, multi-billion dollar corporations.

• 27:38Speaker 05

  And even here locally, the very, very successful corporations have been doing this for decades upon decades upon decades. It's a safety issue, one, number one. Number two, it's insane because there's no way a state of California can run a refinery. There, it's like being a sovereign nation, right? Of course, see, let me compare this to a sovereign nation because people in this article have compared it or in previous articles have compared it to a sovereign nation or sovereign. Like, for example, Saudi Arabia, Saudi Ramco, that's a multinational company. Or just say Venezuela, you have all different phases of production that go into the refinery. You have the production yourself, you have what's called the midstream, you have the upstream and you have the upstream, the midstream and the downstream. Refineries are the downstream, midstream are the pipelines, upstream is the production. You have all three working with you and you have your own balance.

• 28:23Speaker 05

  So even local refinery here in town like San Joaquin, they have their own upstream production that feeds the refinery. They have their own midstream that supplies them a product, pipelines.

• 28:33Speaker 03

  Mm-hmm.

• 28:33Speaker 05

  And then they have their own downstream, which is the refinery itself and the products that they sell. So it's, it's, it's insane to think a state of California. We consider this. The other thing I like about this article is that they've misrepresented the drop in demand for fuel. It's a complete misrepresentation of the facts. Fuel is consumption. They've quoted this article as decreasing as 1.2% in the last 18 or so years.

• 28:59Speaker 03

  Well, they said, I read 15. It's down 15% since 2005.

• 29:03Speaker 05

  15%, 15%, but they didn't factor in the 20 to 30% drop that happened in 2020.

• 29:10Speaker 03

  From COVID.

• 29:11Speaker 05

  Several million. COVID was a significant gigantic drop in consumption.

• 29:16Speaker 03

  Almost 3 billion gallons less were sold that year. That is a huge drop.

• 29:22Speaker 05

  Barrels.

• 29:23Speaker 03

  Oh, barrels. Oh, oh, my gosh.

• 29:27Speaker 05

  I'm sorry, gallons and billions. Yeah, you're right. You're right. You're right. 14 billion. You're right. I'm sorry. I just put the chart in here. I forgot. That was EIA. So you look at the averages. It's not, our consumption isn't going down. And there's a big part of that that they quietly mentioned this article is due to better consumption. Your cars have become more fuel efficient. We have hybrids. We have all different kinds of things, but electric vehicles aren't taking that big of a chunk out of it.

• 29:52Speaker 03

  It's 20% of all new car sales.

• 29:55Speaker 05

  25% of all new car sales, which I haven't verified, but it seems right. California is represents, if you look at the market share of the United States, California vastly outperforms the rest of the country when it comes to new electric vehicle on takes and purchases. It's significantly higher here.

• 30:10Speaker 03

  Well, I'm not following you quite yet.

• 30:13Speaker 05

  Sure.

• 30:14Speaker 03

  So we had in 2005, almost 16 billion gallons were sold. And then last year, or in 2023, 13.6 billion. So I mean, there's been a drop in the last 20 years.

• 30:30Speaker 05

  And let me repeat what I said. There has been a huge increase in fuel efficiency miles per gallon in vehicles in the United States over that same time period.

• 30:41Speaker 03

  Yeah.

• 30:41Speaker 05

  A huge increase. So I don't know what is correlated exactly to electric vehicles, or what is correlated to the increase in MPG in your car.

• 30:51Speaker 03

  But you have, you have, I'm actually shocked that we've had a drop in gross production of gasoline. Like, it's a pretty significant.

• 31:02Speaker 03

  Decrease.

• 31:03Speaker 05

  Fifteen percent.

• 31:04Speaker 03

  Last 20 years.

• 31:05Speaker 05

  Well, it's 15. Is it 15 years or let me go back and look.

• 31:07Speaker 03

  Yeah, since 2005, which one?

• 31:09Speaker 05

  2005, so.

• 31:11Speaker 03

  We peaked at nearly 16 billion gallons in 2005 and now we're at 13 and a half billion roughly. But it, you know, and then the state of California has, we have 10 years unless something changes. The state is putting a ban on, on gas engines. I, I, I just don't, I don't know why the state would want to get into.

• 31:33Speaker 05

  But what about the existing ones?

• 31:35Speaker 03

  Yeah, I mean, they're gonna, they're gonna stick around for a long time, I'm guessing.

• 31:39Speaker 05

  Yeah.

• 31:40Speaker 03

  But, but this is, I don't understand why the state would want to get into this.

• 31:47Speaker 05

  I don't either.

• 31:49Speaker 03

  It's crazy.

• 31:50Speaker 05

  I don't either.

• 31:51Speaker 03

  And, and then, you know, the other thing, I know for years we've talked about the regulations and the, the, the tight restrictions that the state is putting on oil and gas producers and refiners. And I know you and I have kept thinking, okay, we're, we're gonna, we're gonna see prices. We're gonna see $8 a gallon, we're gonna see $10 a gallon and it, prices have stayed under $5 a gallon, pretty much. We haven't, we haven't seen that.

• 32:17Speaker 05

  I think it just illustrates the state's concern that they do, it recognizes, it validates that they know that a supply crunch is coming. I think it validates it. You can't, and that's the biggest thing that I walk away with this saying is you guys are admitting you have a problem. You're trying to find a way to solve it, but.

• 32:36Speaker 03

  Well, as soon as the market does go sideways, then I, I mean, that would, that's what would happen. That's, that's what would get Newsom out of office, you know, when you, when you're paying eight bucks a gallon, unless that changes.

• 32:51Speaker 05

  He's really good. So Diablo Canyon is a good example.

• 32:54Speaker 03

  Yeah.

• 32:54Speaker 05

  Right? We had a Diablo Canyon, we call it the Diablo Canyon moment in Sacramento where when, when it was time to decommission it, all of a sudden.

• 33:02Speaker 03

  They were like, oh, wait.

• 33:03Speaker 05

  Wait, rules changed a little bit and, and extensions got guaranteed and things all of a sudden quietly got done, very quietly. And then all of a sudden Diablo Canyon's got another new lease on life for a few more years.

• 33:14Speaker 03

  Right.

• 33:15Speaker 05

  Because he knows, he knew that we would have a serious problem.

• 33:19Speaker 03

  Right.

• 33:19Speaker 05

  Took Diablo Canyon off. It's what, eight, nine percent of the power in California, stable, clean. Power.

• 33:25Speaker 03

  Yeah.

• 33:25Speaker 05

  Take that away when we're already importing significant amount of power from other states. I mean, yeah, it's a, it's, this could be a Diablo Canyon moment in the refining world.

• 33:33Speaker 03

  So maybe there's a scenario where there's only a few companies that are left in the state of California that are doing this. As soon as a couple of these pull out, we're down to two or three refineries.

• 33:44Speaker 05

  Well, yeah, you've got PBF, you've got Valero, you've got Chevron still here. And you've got smaller independents like Kern Refining and you've got San Joaquin Refining and you've got, I said Phillips, right?

• 33:57Speaker 03

  Yeah.

• 33:58Speaker 05

  Phillips has shut down some too. So there's, there's a very small handful left. That Chevron stopped posting pricing for California crude market January 1.

• 34:08Speaker 03

  What? What does that mean?

• 34:10Speaker 05

  That means that they don't, they're not buying as much California crude. They're buying more crude on Brent.

• 34:15Speaker 03

  Ah.

• 34:16Speaker 05

  Because there's not, the production in California has dropped so dramatically in the last five years, 10 years, that they're basing the price posting on Brent now versus Midway Sunset, which was our posting for years.

• 34:28Speaker 03

  Right. Wow.

• 34:29Speaker 05

  So that's changed too.

• 34:30Speaker 03

  And I mean, they could easily just pull out of refining here.

• 34:34Speaker 05

  I don't, Chevron's a company that doesn't do anything overnight. They, they're probably one of the strategic, long-term focused companies that I've ever come across. I'm, I'm a huge fan. I've always said that. I'm a huge fan of Chevron. They, they're a well thought out, well planned company. People say I'm crazy because I don't work there, but watching them from a distance and seeing their performance and their balance sheet, and they just do great, they do great things.

• 34:58Speaker 03

  They really have. Their stock has been amazingly resilient. I'm always surprised at how well, yeah, the yields.

• 35:08Speaker 05

  Yields are great. And then they take, you know, you probably see a lot of people walk in this office that worked at Chevron. They take good care of their people.

• 35:14Speaker 03

  Yeah, they do.

• 35:15Speaker 05

  Very good care of their people.

• 35:16Speaker 03

  Especially if their people are working overseas.

• 35:19Speaker 05

  Yeah.

• 35:19Speaker 03

  Holy smoke.

• 35:20Speaker 05

  Oh, yeah.

• 35:21Speaker 03

  It's really, really nice.

• 35:23Speaker 05

  I've seen some guys retire there and I'm thinking like, man, you're not even 55 yet. I mean, some of these guys have done that.

• 35:30Speaker 03

  Yeah, no kidding.

• 35:32Speaker 05

  They're consulting now, which is, I like that. So anyways.

• 35:35Speaker 03

  So you think California could become a national security issue? That this this could become a national security issue?

• 35:42Speaker 05

  I think there's a lot of discussions about that right now. I guess the biggest thing is that unfortunately, the link doesn't work here to read it. But a couple of things I took away from this article was that, you know, the the fact that we operate the, you know, the three, some three of the largest ports on the west coast are in California. The fact that our refining situation is just what we talked about could create a major crisis. Like if you potentially impact any of these major ports, it's a it's a national security issue. So, yeah, I think it's something that I definitely think this current administration and this current Congress and is definitely looking at this. In fact, I know people that are talking about this right now at that level. So we'll see. We'll see what happens. I think it's legitimate argument. I think it's valid.

• 36:24Speaker 05

  I think that if we don't address some of these things, they will become a national security issue.

• 36:30Speaker 03

  Yeah, again, it just, the political, the, I guess, the political, the only thing that I could see changing the political attitudes on this is if there is just a bigger outcry by the population in in the state. And, you know, we're we're a left-leaning state. But I guarantee that would change dramatically if the prices start going through the roof.

• 37:00Speaker 05

  I think not just that, but let's just think about, let's talk about the national security aspect of this. Think about what if what do you what happens if you impact or impede the port of Long Beach or Los Angeles? What's the impact on the United States?

• 37:12Speaker 03

  Huge. It's huge.

• 37:14Speaker 05

  That that's what I'm talking about here. Like if you you have a lack of fuel supply, you have a extremely high cost of fuel supply, that reverberates.

• 37:23Speaker 03

  You can't even function the ports. You can't.

• 37:26Speaker 05

  It reverberates across the country.

• 37:27Speaker 03

  Right.

• 37:28Speaker 05

  And so there's lots, and I don't know how many other examples you could pull into that for the state of California. This article had a lot of good things that unfortunately I can't remember, like a lot of things in my life. But it's a very legitimate argument that I think, you know, the previous article that we talked about is admitting that state coverage, I mean, we see a supply issue, we see something coming. And what's scary is the solutions that are coming out of their mouths, the CEC, which is the people that talked about this, all at the behest of the Newsom administration, calling people back to legislature to set up this committee, and saying we should run a refinery.

• 38:09Speaker 03

  Yeah.

• 38:10Speaker 05

  It's terrifying.

• 38:11Speaker 03

  It's so terrifying.

• 38:12Speaker 04

  Can none of these Newsom decisions be overridden at a federal level? I mean, could this administration?

• 38:17Speaker 05

  I think the national security, there is a national security deal, there's some discussion. I had a really good discussion with a judge, a former judge I really respect, who had an interesting angle from the 14th Amendment that addressed drilling and supply issues in California, that was used successfully in the past, not necessarily with energy, but with other federal actions. It would take Congress to do something. Congress has to do something. It's a congressional answer. It's not a presidential deal. It's Congress. Congress has to act. The only way something can happen like that, like you're just mentioning, is that Congress has to do it. So our local congressmen are the people that need to be discussing this and talking about this and bringing that back. And I think there'd be

• 39:02Speaker 05

  a lot of willing and open ears right now to this situation, given who we have in office.

• 39:08Speaker 03

  Yeah, and we're not even talking about the impact that's had on our local tax revenues. Like, you know, with Chevron leaving or left, but also continuing to decline, they announced last week, I believe, the mass layoffs that they're going to have, was it 5% or 10% of their workforce that they're going to be globally?

• 39:30Speaker 05

  Globally, yeah.

• 39:31Speaker 03

  And this is, you know, Chevron has a history of contributing an enormous amount of money to local nonprofits and schools and, you know, healthcare initiatives.

• 39:41Speaker 05

  Tax revenue.

• 39:42Speaker 03

  Huge tax revenue and the jobs that are there. It's just... It's always a, you know, we have, we have you on here regularly and it's, it's, I just keep waiting that one of these days we're gonna have you on and we're gonna be like, hey, finally, you know, the, the, the chains have come off and we're, we're thinking more logically through this. And we've talked about carbon capture before. I know you're not a, not a big fan and.

• 40:06Speaker 05

  I'm not, whoa, whoa.

• 40:08Speaker 03

  I mean, not a.

• 40:11Speaker 03

  You're, I, you're not a fan of, I get, you're not a fan of, of, of, um, the, so much investment going into it.

• 40:19Speaker 05

  I would, I would say that I'm a fan of innovation and I think some local companies here have innovated substantially.

• 40:29Speaker 05

  And I just know what's gonna happen to carbon capture. I can see it being outlined in these type of thought bases, basically saying that,

• 40:40Speaker 05

  carbon capture encourages more fossil fuel use and the people that are shutting us down will shut them down through the court system.

• 40:48Speaker 03

  Yeah.

• 40:49Speaker 05

  That's what I see happening. I see, unless there's some way I'm missing here, I just see the Center for Biological Diversity, the Sierra Club, Clean Air Now, Earth Fund, all these people that sue and sue and sue to stop anything fossil fuel related are gonna find a thousand different ways to stab this thing.

• 41:09Speaker 03

  Cause there's so much carbon produced to go into capturing the carbon.

• 41:14Speaker 05

  No, it's just encouraged, they're saying, well, if, if you're capturing carbon, that means you're gonna use more carbon or not reduce carbon. We should just get rid of it all together and it's better if we just get rid of it all together, then we don't have to capture it. That's the argument.

• 41:27Speaker 03

  Yeah, well, we, it's, it's economically, again, it has to make sense and the range of, of cost per ton of CO, of carbon is, is close to a hundred bucks per ton of carbon. I know we've talked about the social cost of carbon is.

• 41:43Speaker 05

  That's what I really wanna talk to you today about, cause we talk about the social cost of carbon.

• 41:47Speaker 03

  Yeah.

• 41:48Speaker 05

  And, and whenever you wanna talk about that, I'm ready. I'm here to retrain you.

• 41:51Speaker 03

  Oh, I agree. And I, I think there's a strong argument of what's the net benefit, right? Of course, there's, there's a, there is a, a price, but there's also a benefit that we get from it.

• 42:00Speaker 05

  Let me just, let me just fundamentally blow this argument out of the water for you.

• 42:04Speaker 03

  Okay.

• 42:04Speaker 05

  What's the ranking of the things that have the highest social cost to society? Look it up. What is it?

• 42:11Speaker 03

  Probably healthcare, heart disease.

• 42:14Speaker 05

  There is no ranking. There is no ranking. What is more discernible? There are certain things, there are certain common knowledge things we talked about, but there's no... So, like sodas, for example, drinking sodas has this much of a social cost. But what's the highest and most discernible social cost to society? The highest cost, my negative cost, I would say, to society?

• 42:36Speaker 03

  Disease?

• 42:36Speaker 05

  Poverty. Poverty is. It's easily calculated, easily looked at, easily measured. Climate change is not easily measured. It's very, very debatable on each one of the topics that attribute to its social cost. So, what is the greatest thing that negates poverty in our society?

• 42:56Speaker 05

  What is one of the biggest contributors

• 42:58Speaker 03

  That, that-

• 42:59Speaker 05

  To eliminate poverty?

• 43:00Speaker 03

  Energy.

• 43:01Speaker 05

  Energy. Cheap, affordable, abundant energy.

• 43:05Speaker 03

  Yes.

• 43:05Speaker 05

  So, you're gonna destroy one and make the other one worse?

• 43:09Speaker 03

  Well, they're not-

• 43:10Speaker 05

  Based on a social cost argument, it's a cherry picking argument. It's a cherry picking argument, Jared. You cannot use it with carbon anymore. It's a cherry picking argument because we don't have a scale of social costs in society. I don't know if carcinogenic materials is number one, or PM10 is number one, or what, because PM10 due to other things, dust and... What is, there's no ranking. I call in my business, I'm not, I'm not looking at paperclip costs. I call it a Pareto chart. A Pareto chart is the biggest cost we look at first. And then we work our way down. So cherry picking social costs as an argument for climate change is wrong.

• 43:50Speaker 03

  Well, I, I think there's some false logic here because you, you, you're saying, under that logic, you're saying, we don't need to do anything about it, right? There's no, let's just address poverty, or whatever the highest social cost is. So, if that's not the case then, then you have to try to figure out what the social cost is and try to do something. Now, you may-

• 44:14Speaker 05

  For other things that have a high social cost.

• 44:16Speaker 03

  Yeah, you do have it for other things.

• 44:18Speaker 05

  You have a handful of things, like poverty being the one I named. There's only two or three things that have substantial research into their social cost.

• 44:24Speaker 03

  And poverty's been, global poverty's been cut in half in the last 10 years.

• 44:27Speaker 05

  Why?

• 44:29Speaker 03

  Well, for lots of reasons. Birth rate's probably the biggest thing, the drop in birth rates.

• 44:34Speaker 05

  What's the biggest, what is directly attributable to longer life, less poverty?

• 44:39Speaker 03

  Birth rate's probably been the number one.

• 44:41Speaker 05

  Access to energy, access to energy.

• 44:44Speaker 03

  I think it's a little more complicated than that.

• 44:47Speaker 05

  It's a big part of it. I'm not saying it's just strictly energy alone, but energy enables them to do, people to do so many different things they wouldn't be normally able to do.

• 44:55Speaker 03

  Sure.

• 44:56Speaker 05

  That's exactly, if you go to our Chris Wright, who's our new Secretary of Energy, you know, spent a lot of his time trying to promote access to energy in Africa. That's a big part of his plight because he knows the direct correlation between energy and quality of life and longer life, longer living, more life. It's all due to cheaper, affordable, abundant energy. So I get, nobody ever said we have to eliminate the analysis of this or not work on it. But I would just ask you, in your business, do you focus on the paper clips? Or maybe not the paper clips in this case, or maybe it's the cost for refuge here at Money Wise every month? Or do you focus on the number one thing that's impacting your business from an efficiency standpoint?

• 45:37Speaker 03

  Both of them, all of them. Yeah, you have, you have to consider all of it. You know, you can't just ignore the cost of housing or, you know, our office. There's, there's other things.

• 45:47Speaker 05

  But the line item cost to your business, in society, like for example, I mean, it brings me back to the refinery question, right? The refinery, California considering running a refinery. California came and solved the homelessness crisis.

• 46:03Speaker 05

  We can't even, where's, where's, in my mind homelessness, homelessness is a social cost.

• 46:09Speaker 03

  Yeah.

• 46:10Speaker 05

  Is up there on list, but I don't know what that social cost is. I know there's probably some studies that have shown the overall impact of homelessness.

• 46:17Speaker 03

  This is, this is, this is a classic kind of straw man argument.

• 46:21Speaker 05

  It's not a straw man, it's a very legitimate, logical, reasonable argument. If you don't know what the highest social cost issue or the biggest impact or negative impact to humans is, if we're talking about humans, right?

• 46:31Speaker 03

  Yeah.

• 46:32Speaker 05

  We are a part of the environment. We should, we deserve to be listed there.

• 46:35Speaker 03

  Yeah, but I, I think it is known. I, I think we have, we have a general idea of what the, what societal costs are generally.

• 46:44Speaker 05

  I challenge you to come back next month and I'll, I'll bring my list.

• 46:48Speaker 03

  Yes.

• 46:48Speaker 05

  Which I can't find anywhere, by the way, of social costs.

• 46:52Speaker 03

  It's a little.

• 46:52Speaker 05

  And you bring yours.

• 46:53Speaker 03

  Yeah, that, that sounds, that, that sounds fair, but it, it, you have.

• 46:57Speaker 05

  And you're gonna buy me a beer.

• 46:58Speaker 03

  I'll buy, I'll buy you two beers.

• 46:59Speaker 05

  Buy you a beer too. I will gladly concede, but if you can find a, a good, solid list, unbiased list.

• 47:07Speaker 03

  I think what's a fair argument is that there, there, there's a hyper focus, at least in the state of California, on carbon fuels and carbon production over, say, homelessness or poverty or, or other things. But those two, like, we, we can't just tackle one of them. We can't just, you know, we have to try to address all of it.

• 47:27Speaker 05

  I get it, but if you're looking at especially the social costs of, of, of, of carbon, eliminate carbon use, the, the certainty, uncertainty in climate models is definitely something that's debatable. The economic costs of carbon are debatable. Uh, the ability for humans to adapt to live through is a big part of that. That's definitely debatable. And mitigation versus what we spend to try to shut it down versus why don't we use that money to mitigate? Those are all things that can reduce the social cost.

• 47:54Speaker 03

  Yes, I agree, but we, we can't ignore that there is a social cost.

• 47:58Speaker 05

  Nobody's saying ignore it.

• 47:59Speaker 03

  And, and, and therefore.

• 48:01Speaker 05

  Alarming, alarming of pollution. I don't, I want to ignore, I'm sorry, didn't interrupt you. This is your show.

• 48:05Speaker 03

  No, go ahead.

• 48:06Speaker 05

  No, but pollution is a part of it that we can't ignore. I agree. We agree on a lot of things when it comes to this.

• 48:11Speaker 03

  Yeah.

• 48:12Speaker 05

  I agree with you a hundred percent.

• 48:13Speaker 03

  Well, I'm looking forward to you coming back and we're going to talk about more about the social costs. What, what, what really is out there? Chad, thanks so much for doing the show.

• 48:21Speaker 05

  Love you guys.

• 48:21Speaker 03

  Thanks everyone for tuning in. Remember these three things. Be smart, be safe, and always be money wise.