Pod Insights The Moneywise Guys 4/20/26 From Free Money to Financial Security: 401(k)s, Trusts & Market Uncertainty About this episode The Moneywise Radio Show and Podcast Monday, April 20th BE MONEYWISE. Moneywise Wealth Management I "The Moneywise Radio Show & Podcast" call: 661-847-1000 text in anytime: 661-396-1000 website: www. MoneywiseGuys.com facebook: Moneywise_Wealth_Management LinkedIn: Moneywise_Wealth_Management Guests: Catherine Anspach, Director of Development for CAPK & Savannah Oates, Advocacy & Public Relations Manager for CAPK website: https://www.capk.org/ The opinions voiced in this podcast are for general information only and are not intended to provide specific advice or recommendations for any individual. To determine which strategies or investments may be suitable for you, consult the appropriate qualified professional prior to making a decision. Savannah Oates, Catherine Anspach & The Community Action Partnership of Kern are not affiliated with nor endorsed by LPL Financial or Moneywise Wealth Management].
Transcript 0:00 Speaker 00 Live from the basement inside the historic Woolworths Building in downtown Bakersfield. Call or text in at 661-396-1000.
0:29 Speaker 01 Securities offered through LPL Financial, member FINRA/SIPC. Investment advisory services offered through LPL Financial. LPL Financial and MoneyWise Wealth Management are independently owned and operated.
0:37 Speaker 00 Now, let's start the MoneyWise Show.
0:40 Speaker 02 Welcome to the MoneyWise Show. We are live from the basement of the historic Woolworths Building in downtown Bakersfield. For the next hour, you are on News Talk 96.1 and 1230 AM KERN, streaming live at MoneyWiseGuys.com. You can call or text into the show 24 hours a day at 661-396-1000. We are your hosts. I'm Sharad Waite and...
1:04 Speaker 00 Sammy Aviyawi.
1:05 Speaker 02 Sammy A.
1:07 Speaker 00 Sammy A.'s back.
1:08 Speaker 02 You are back, man. You've been working your tail off up in the luncheonette.
1:12 Speaker 00 Yes, yes.
1:13 Speaker 02 Last few weeks.
1:13 Speaker 00 It's been a lot of fun. It's been a lot of fun. It's been a lot of fun seeing clients and putting smiles on peoples that walk in through those doors, through food, which is something I'm very passionate about. But I do miss the radio, though.
1:25 Speaker 02 Well, I'm glad you're back on.
1:27 Speaker 00 Yeah.
1:27 Speaker 02 Glad you're on today. You'll be on tomorrow as well.
1:29 Speaker 00 That's correct, yes.
1:30 Speaker 02 And we have a couple of good guests coming up from CAPK, a couple of representatives there from CAPK. We're excited to talk to them about what's going on with the war on poverty here in Kern County. And then we have a few listener messages. Why don't we start there?
1:45 Speaker 00 Yeah, yeah. If my company does the match, but I can't afford to put in as much as I would really want to... What's the minimum I should do so I'm not leaving money on the table?
1:57 Speaker 02 Great question, and this is, this is something that a lot of people need to understand is how to avoid leaving free money on the table. Like, it's like, one of the worst money decisions we can make is when somebody's handing you money, like, free money. Your employer will do this in the form of that match, and it, I think, I think it's, it's counterintuitive because you have to pay money to get that money. But it's a little bit like, Sammy, if I, if I, if, if, if you give me, if I ask for you for $20, but I'm gonna give you $40 back, you, you would do that all day long.
2:34 Speaker 00 Oh, yes.
2:34 Speaker 02 But when it's in the form of a 401K, for whatever reason, some people, I think that it doesn't register because the 401K is viewed as money that you don't touch. And, you know, it's, it's like, long-term retirement money. And I would push back on that thought and let, and tell you that it's still free money. Even if you are gonna pull the money out of the 401K and pay the early withdrawal penalty and pay the taxes on it, you're still getting free money back to you. So like, it should be an opportunity that nobody should pass up.
3:06 Speaker 00 I, I, I 100% agree with you, and I think part of the problem we have is our education as far as money savings. As a society, we do not believe in saving money. Like, the average American family has very, very little savings compared to generations before, where you won't be able to buy something unless you had saved money for it.
3:28 Speaker 02 Yes.
3:28 Speaker 00 Versus, versus now, we have, we swipe, it's easy to swipe, it's easy to do Klarna, it's easy to just go to the bank and borrow something. So our education as far as savings, which the 401K falls into that,
3:40 Speaker 02 Yes.
3:41 Speaker 00 is not being talked about, or we're not educating even our youth about that. So they feel like, hey, my paycheck is gonna be less by $200, $300, that $200, $300, I could use right now.
3:53 Speaker 02 Right.
3:54 Speaker 00 For to to to have a lifestyle or to buy a car or to do things versus no, you're actually leaving money on the table to your point shared that is being matched, even if you pull it early and pay the penalties and the taxes.
4:08 Speaker 02 Right, right. And so don't do that for our listeners. Like, take the match. So to answer our listener question, you know, how much do you need to contribute to the 401k so that you're not leaving money on the table? Well, you want to contribute at least all the way up to whatever the match is. If it's 3%, then you should contribute at least 3% of your paycheck so that you're getting the, you're, you're, you're vesting 100% into the match. And there is another aspect of this about 401ks that people have a hard time understanding. And that is if you are, if you are getting a tax deduction for the contribution into the 401k, and let's say you, you put a dollar into your 401k,
4:52 Speaker 02 but you pay, you're, you're in the 10% tax bracket. That means that you can put away, it doesn't cost you a dollar to save a dollar. It costs you 92 cents, let's call it, to save a dollar. So that 8 cents, or that 9 cents per dollar is real money that's going in your pocket. But again, I think people have the same perception. They think, well, this is, it's just, it's taxes and it's, it's stuff that I can't touch. And, and so they don't, they don't recognize that that is a true dollar benefit to you by Uncle Sam and take advantage of that as much as possible. So that way, really, you're always leaving money on the table
5:36 Speaker 02 if you're not contributing the maximum amount, whatever the IRS will allow you to contribute.
5:41 Speaker 00 Very good question, though. Very good question. Another comment, I don't know if it's a comment or question. I think it's a comment. I totally understand. And it's, and it's got to be a tough time running a diner. But I did mention that the evening hours had changed. But glad it's open for dinner on the weekends. The smash burgers are incredible.
6:00 Speaker 02 Yeah, burgers are so good. And yeah, we are open on Friday and Saturdays. We're open till eight. The luncheonette is open. And yeah, we're trying to try to adjust the numbers, trying to get or figure out our hours a little bit.
6:13 Speaker 00 Yeah, just to to to understand the traffic, understand where when people can come in downtown is kind of like a little bit weird in that sense. But but we're trying to just figure out when in the meantime, we're also trying to play with the menu and add some things that our people, we feel like they like like last week, we had a popular item. It was the barbecue pastrami sandwich.
6:34 Speaker 02 Oh, yeah. I never I never got to try it.
6:36 Speaker 00 We have it back because it was so popular.
6:38 Speaker 02 Oh, it's back on today?
6:39 Speaker 00 Yeah, we have. We have the we. It's popular and it's with barbecue sauce and some fried onions all within the sandwich. So you have the crunch, you have the sweetness. And then you have the pastrami. Our pastrami is cut in house. We don't, you know, buy cut pastrami. Everything is done in house. So yeah, try it.
6:58 Speaker 02 Yeah.
6:58 Speaker 00 I think I think I think it was incredible. I had it twice last week.
7:01 Speaker 02 Yeah.
7:02 Speaker 00 That's how incredible it is.
7:03 Speaker 02 Come on down. Come on down, listeners. Come to the Wolf's Luncheonette. It's the barbecue pastrami. Try it out.
7:08 Speaker 00 Yep.
7:08 Speaker 02 So it's got the shoestring onions.
7:10 Speaker 00 Yes. Is that what you call it?
7:11 Speaker 02 I think maybe, yeah, the crispy.
7:14 Speaker 00 Crispy, you know, we bred them and then we fry them and then we put them inside. Oh, man, it's good.
7:20 Speaker 02 That's good.
7:22 Speaker 02 All right, let's go to the next message.
7:24 Speaker 00 I own our home and have kids. What would the living trust actually do for my family that I'm not already doing? Does your office do trusts?
7:33 Speaker 02 This is another great question. Trusts are recommended for anybody who has kids or a home or or other real estate because there is there the other methods to transferring ownership or responsibility of either your home or your children to who you want them to go to. Are you don't want the courts just to be allowed to make those decisions? You can actually create a trust document or documents within your trust. That spells out what your wishes are for your children. So who is going to take over guardianship if something were to happen to you and your partner? And then there's also the ability to put your assets inside that trust.
8:18 Speaker 02 So the trust owns those assets so that the trust then has to distribute and and give the instructions to the distribution of those assets when you pass away. It's really the only way to do it or the is that otherwise you're going to leave it to the courts. You're going to go through probate.
8:34 Speaker 00 Yeah, 12 to 18 months. I mean, probate takes over a year.
8:39 Speaker 02 Takes forever and it's expensive.
8:41 Speaker 00 It's expensive. It's expensive and and sometimes in my opinion, it slows down the process where you still have a mortgage to be paid. So now who's who's making that mortgage payment? Who's taking care of the maintenance of this house, whatever asset that is? A trust spells all that stuff out. So you don't have to go through the court in order for you to distribute to your point again, shared and you you you're in control. Your kids are in control or whoever the beneficiary or the executor of the trust is, they are in control of taking the assets and making sure that they go to where you as the trust creator want them to go versus taking more than a year.
9:26 Speaker 02 Yeah, and letting some judge decide that.
9:28 Speaker 00 Yeah.
9:29 Speaker 02 You don't want that and kids is a really, a really sensitive one. I mean, you know, it's a horrible situation it could come into where you and your your husband or your wife are both, you know, pass away at the same time and you've got minor children. Sometimes it's logical where that goes, you know, where the who's going to take care of the kids, but you want to have something in writing to be able to prove it to the courts and to facilitate that process as quickly as possible and as smoothly as possible. So it's anytime you're talking about trusts or life insurance, it's always an icky subject because nobody likes to deal with it. Something that you just kind of have to deal with. And once you do, you don't have to think about it. Then you know you're done.
10:10 Speaker 00 I'll tell you, so trust is a process that exists here in the United States. So I come from Morocco and they don't have the process. You cannot build, you can have a will, but the trust is not something that's predominant in countries like Morocco, for instance, which creates a lot of headache. Like back there, inheritance and now there's sometimes even fights or disagreements. The trust just spells all that stuff out in my head. And I don't think, like a lot of people think you have to be very wealthy to have a trust. No, if you have a house, put that into trust.
10:44 Speaker 02 Yes.
10:45 Speaker 00 It just facilitates the process, especially during times where of passing, where a lot of people are just emotionally, just not there.
10:55 Speaker 02 Yeah. Yeah, and now you're putting the burden on your kid or whoever's going to take over your estate to make those decisions. It's just, it's just don't, don't do that. So if you've got a home, if you have children, then you definitely need to have a trust. And the other part of the trust that is overlooked is the power of attorney. The power of attorneys are the documents that allow you, somebody else to make decisions for you or sign financial documents for you in the event that you're incapacitated. So maybe you're not dead, but you've been in an accident or you've had a stroke and you need somebody to take over your matters. That's what that power of attorney would be for. So trust is highly recommended. We don't do them in office because we're financial advisors.
11:38 Speaker 02 We are not attorneys, but we do refer that out to, we have a handful of attorneys that we use locally that are really great. And depending on the complexity and your budget, we can definitely recommend or refer you to an attorney that can help you with that trust. So, good question.
11:56 Speaker 00 Very good question.
11:56 Speaker 02 We're going to take our first break of the day and bring in our guest Catherine and Savannah from Cap K. We're going to talk about poverty in Kern County. We're Money Wise.
12:11 Speaker 02 Welcome to Money Wise. We're your hosts. I'm Sharad here with Sammy. We're joined by our guest from CAP-K, Catherine Anspach. She's the Director of Development for the Community Action Partnership of Kern and Savannah Oates, Advocacy and Public Relations Manager for CAP-K. Welcome back to the show, you two.
12:30 Speaker 03 Thanks for having us.
12:31 Speaker 04 Great to be back.
12:31 Speaker 02 So I'm a little surprised that CAP-K is still around. I thought we fixed poverty just a few years ago.
12:39 Speaker 04 Yeah, we've still got some work to do.
12:41 Speaker 02 We've still got some work to do. Maybe give our listeners just a quick review of what CAP-K is.
12:49 Speaker 03 Yeah, so CAP-K is Community Action Partnership of Kern. It's the official anti-poverty agency for Kern County, but we span outside of Kern County with some of our service lines in San Joaquin County. We have offices by needles, but we do everything from utility assistance, Head Start programming, we operate the food bank here, tax assistance with tax, you know, tax season ending, and we were really, really popular during that time period, our youth centers and our family resource centers all throughout East Kern.
13:19 Speaker 02 So many programs, 22 or 23?
13:21 Speaker 03 It's roughly 20.
13:22 Speaker 02 Roughly 20. There's always some that are coming and going. So CAP-K's mission is to address underlying causes of poverty, alleviate the effects and promote dignity and self-sufficiency in communities that you serve. One of my favorite statistics is globally, world poverty has been cut in half in the last 20 years globally, which is a phenomenal statistic that, you know, most people are not aware of. The problem is, is that most of that has happened in third world countries where the undeveloped countries. So, you know, there's a lot more work to do there and impact that can happen, but we're not a third world
14:07 Speaker 02 country. However, I've been in parts of Kern County where I look around and it sure does feel like a third world country. So how are we doing in terms of addressing poverty in the county?
14:21 Speaker 03 Yeah, so we're, we're working. Um, Catherine likes to say we have, um, big issues we solve. They're not small issues. So we're seeing, you know, lines at our food banks still grow. To be honest, here in Kern County, we're such an ag-based community, but our food assistance lines are so long. We are making a dent, you know, with our youth mentoring programs. We're seeing our students really flourish. You know, outside of, you know, graduating, they're going into different career paths or technical training. And they're really lining up for being self-sufficient and breaking some of those, those generational lines of poverty that they've always had. Um, so we're seeing movement there. We're seeing movement with people re-establishing themselves after their tax returns.
15:03 Speaker 03 Um, cause that kind of gives them a leg up to learn by following natural literacy, you know, spend their money wisely, not go on a big trip. Um, so we're moving the needle there, but you know, like you mentioned, there's still a lot of work to do.
15:16 Speaker 04 Yeah, we're also showing, um, some great success with our M Street Navigation Center, our shelter. Um, they've actually just piloting, they're piloting a program, a workforce program called the Good Neighbor Policy. And they're offering, um, our homeless clients, there's a group of them that are going out into the community and helping businesses clean up their area. And we're actually, the foundation, the Cap K Foundation is, uh, paying for that stipend to pay for them to go out and get experience. Um, and in turn, we're working with partners in the community. So that, that's really exciting. We're seeing some, uh, some movement with that too as well.
15:51 Speaker 02 Those types of programs seem like the biggest win-win. There's, it's similar to the, I don't know who runs it, but I want to say it's Caltrans. And they partner with a local nonprofit and they do the highway cleanups.
16:03 Speaker 03 Yes.
16:03 Speaker 02 That's a different program than what you're doing, but it's similar where you're taking unhoused people, you're giving them a job. Um, and, and they're, and they're helping out the community. It's fantastic.
16:14 Speaker 04 Yeah. In fact, we're going to be segue, segueing, I know, into our, our big fundraiser. It's coming up Gourmet for Good. But at that, we're going to be telling stories like that. We do have a client that's going to be helping us share his story and it's bring your tissues.
16:29 Speaker 02 Uh.
16:30 Speaker 04 Because it's, it's. Going to be impactful. I think I'm so excited really to share some personal stories of successes at Cap K. Because sometimes they go Cap K, it was Cap K, you know, and but really it's it's impactful what we're doing and it's it's taken the partnerships in the community to to to have these stories come to light, you know, so I'm really excited about that.
16:53 Speaker 02 Yeah, speaking of partnerships, there've been food banks across the country have struggled with
17:01 Speaker 02 funding, yeah, cuts and government cuts and that. So how has our local food bank and and Cap K handled that?
17:08 Speaker 03 Yeah, so I can say we definitely rely, you know, on all our elected officials. We have great relationships with all of them. So when we see incidences instances of, you know, funding cuts, they're able to advocate for us in spaces that we're not able to be in. But we get all of our 22 and a half million pounds of food out a year through our 150 partner locations. So if you're seeing food at any local church or school or B C or Cal State, 95 to 96% of the food in Kern County is coming through the Cap K Food Bank. So we're we're pushing it out as quick as we can, but we really do rely on our partners and our volunteers to build food boxes. Because you guys have been there, you see it's a huge facility, it's 60,000 square feet.
17:51 Speaker 03 To operate the size of that food bank, you typically need about 50 people to be on a normal rotation 40 hours a week. But we run off of 21. So we really rely on volunteers to come in, help us build those food boxes, help us get it out to the community, help us get it to our partners, and then our partners are also extending it out through their volunteers and their networks as well.
18:12 Speaker 02 Yeah, a lot of people don't realize that Cap K is sort of the mothership of all food banks. It helps support the gleaners, it helps support your all the churches, not all, but so many of the churches. And so there, you know, it's it's one of those things that that I know we're very generous county, we're very generous city. People always want to help those who need help, but it's kind of hard to know where to go and how people can help.
18:40 Speaker 02 Which leads us right into. Gourmet for Good. Maybe there's a way that the community can help here.
18:46 Speaker 04 Well, Gourmet for Good is an important event because although I know there's a lot of events in town, this is really a way for us to bring everybody together and highlight what CAP-K is doing and how you can get involved and how you can become an advocate for CAP-K. So it really is kind of our flagship event that really helps us connect to people in the community. So we encourage new people. You can go to capkfoundation.org and it'll pop up right there for you to buy tickets to Gourmet for Good. It's on June 6th, Saturday, June 6th. It's at the beautiful Nirvana Estate. And so it is a wonderful event. Yes, the food is always amazing. But more than that, I think you'll learn more about CAP-K.
19:28 Speaker 04 And we do need, we need the volunteers, we need the advocates, and we need individual donors and other partners to help us fund and fill in those funding gaps to our programs that really could not survive without them. It kind of takes a village. So the line that Savannah was saying is, "Yeah, CAP-K is big. We're the largest nonprofit in Kern County, but we're tackling really big issues." In fact, when the government shutdown happened, who did they turn to? It was expected that CAP-K would step in and the food bank would step in. And Savannah, if you want to talk just a second on that, it was pretty amazing what they did in a short amount of time.
20:09 Speaker 03 Yeah, so that happened, you know, out of the blue. And we really kind of got to the drawing board and within 48 hours, we put together a coalition of partners, elected officials, the trucking companies. You know, literally everybody in this community was asking how they can partner with us and help. And we got a website up. Within two days, we had trucks getting the food out. And in five days, on top of our normal caseload of serving hundreds of thousands of families a week, we distributed an extra million pounds in five days in four different locations at the same time, you know, which is a lot of work. And we were, you know, "Hey, we need volunteers." And people were showing up in the masses. We had the California Volunteers Group come.
20:51 Speaker 03 We had Kern Family Healthcare come and serve lunch to the volunteers. Mr. Dimples came. You know, we really relied on everybody to get it out because things happen and CAP-K has looked at as that nimble organization to get something done so quickly. So events like Gourmet for Good makes it possible for us to do stuff like that.
21:11 Speaker 02 Amazing work. Thank you so much for taking the time to come on the show. Again, for our listeners, if you're interested, there's so many ways to help out and volunteer at CAP-K. Besides the Gourmet for Good that's coming up on June 6th, there's still tickets. You can buy tickets or donate there. You can go to capk.org, find out ways that you can donate time, money, volunteer. Thank you too so much for coming on the show. Appreciate it.
21:36 Speaker 04 Thanks for having us.
21:37 Speaker 03 Thank you.
21:37 Speaker 02 It's Catherine Anspach and Savannah Oates from CAP-K of Kern County. We are Money Wise and we are going to take a quick break.
21:57 Speaker 02 We're Money Wise. That's Sammy Abiawi. I'm Sherrod Wade. Thanks for tuning in. K E R N. Great to be back home.
22:04 Speaker 00 K E R N, huh?
22:05 Speaker 02 Yeah. K E R N. We're back.
22:08 Speaker 00 I need to get used to that.
22:09 Speaker 02 Yeah, you'll get used to it. We'll get used to it eventually. 661-396-1000, that's the number you can call or text 24/7. We're happy to take your questions or comments at any time. There is a lot going on in the news today. You know, markets are down right now as we speak. Of course, we've got about 25 minutes before markets close. Surprisingly, there was some, I guess, saber rattling in the Strait of Hormuz. We've had an attack. Iran attacked a ship and the United States is trying to enforce their blockade. Normally, this would send shockwaves throughout the stock market, yet today we are seeing
22:52 Speaker 02 just slight drops in the market and just a slight increase in oil prices. I'm still surprised. We're below 100 bucks a barrel in oil. It's just still surprising to me. I think investors don't know how to really sift through all of this geopolitical noise and chatter that's out there. It's hard to know how much this is going to continue to impact consumers.
23:16 Speaker 00 Yeah, I look at what's happening right now. It's now political more than economical, in my opinion. So Iran is trying to save face, of course, and make sure that in front of their population they're winning the war. So they can tell their people, hey, we're winning the war. So the regime does not change.
23:36 Speaker 02 Right.
23:36 Speaker 00 And then we have here at home us saying, we are, we want the war. We've got the blockade. We can, we can do whatever we want in the Strait of Hormuz. Because again, we have elections coming up in November. So it's more now of just a political game, in my opinion, versus just let, let, let things flow. Because if they do, and there's losses, political losses on both end, the Iranian side and here, whoever is basically running the country, but also because of the elections that are coming. It's a huge message. I mean, a lot of politicians are focusing on that message.
24:14 Speaker 02 And it's, it's, it's really frustrating for us, for Americans here, because it's, it's the concept of the, of the, of the global oil trade is, is kind of hard to put our, wrap our heads around it. You know, we have to pay the same price for oil that wherever it's being traded. Even though it's in dollars, it's being traded in dollars, it's still, it's a global market. So we're all being impacted here, even though it's really not, it's not like we're, we're not importing a lot of oil or gas from the Strait of Hormuz. We're just, but we're subject to the market.
24:47 Speaker 00 I, I'll, I'll tell you why it's frustrating for me. So here are statistics or numbers. $2 billion a day on the war in Iran shared, right? And we just, we just, we just had two ladies from Caprica talking about food insecurity. You know, the SNAP program runs out about 267 million a day. So we can feed 40 million people.
25:12 Speaker 02 Wow.
25:12 Speaker 00 Two billion to have a war, two hundred sixty seven million to feed forty million people here in America.
25:19 Speaker 02 Right.
25:19 Speaker 00 Those are the some of the things that just are frustrating.
25:24 Speaker 02 Yeah.
25:25 Speaker 00 I went, I went shopping for the, I haven't been going to the store to tell the truth. And I went to do some groceries, my wife and I. An eye opener.
25:35 Speaker 02 Yeah.
25:36 Speaker 00 We are a two income household.
25:38 Speaker 02 Right.
25:39 Speaker 00 We walked away from Winko about two hundred fifty dollars of groceries. But it was almost fifty percent of what we used to have in the cart.
25:50 Speaker 02 Yeah.
25:51 Speaker 00 This is us with two incomes in the household.
25:54 Speaker 02 Right.
25:55 Speaker 00 Can you imagine one single income household or single mom or single dad? I mean, this, this, and the impact of this, in my opinion, gets seen at the, at, at that grocery, grocery store level.
26:10 Speaker 02 Right, yeah, one hundred percent because that's where oil, oil and gases being, you know, impacting grocery prices because of all the transportation that's involved and, and.
26:21 Speaker 00 Have you bought tomatoes lately?
26:22 Speaker 02 Uh, yes.
26:24 Speaker 00 Two dollars seventy nine cents a pound.
26:26 Speaker 02 Oh, really?
26:27 Speaker 00 Two dollars and seventy nine cents a pound. I had, I had about three, I went to the Asian store, three pounds were fifteen dollars. And Mary Ann was like, I ain't buying that from here, I'm going to Winko.
26:38 Speaker 02 Oh, man.
26:38 Speaker 00 We had to waste gas to go to Winko because we were hard headed and we don't want to spend fifteen dollars. But we spent it in gas instead.
26:44 Speaker 02 Uh, tomatoes are so easy to grow and it makes me appreciate, I've got, I'm growing some tomatoes, you grow tomatoes too.
26:50 Speaker 00 Definitely to grow them now.
26:52 Speaker 02 So, yeah, no kidding, right? And, and citrus too, you've seen how much, you know, even just buying oranges in the, in the grocery store, it's shocking to me. And, you know, of course, we can all grow oranges easily in our backyards. But that, that inflation, the, the inflation curse is still sticking around. It's still something that is not easing up and the war has just made it worse for the average consumer. There is hope by some people for the new Fed Chair President that has been nominated. In fact, today, he is speaking in front of Congress. Federal Reserve Chair nominee Kevin Warsh has spoke is speaking to the Senate Banking Committee.
27:35 Speaker 02 Tomorrow will release his official words to the Senate and that will become public tomorrow. But Kevin Warsh is interesting character. This is, of course, the Federal Reserve President. The Fed, the Fed in general is, has two mandates. Inflation, keep inflation within 2% and then full employment. And the, the Fed has been struggling to be able to bring down inflation. Because there's other market move market factors like oil, for example. Like the Fed can't really control the price of oil.
28:14 Speaker 02 And, and so the way that the Fed deals with higher costs is they make money more expensive. And that is the, the primary motive, the primary tool that they have for that is to increase interest rates. And that's what they've been doing. In fact, now, I don't know if he's, it's been, it's been a few weeks, Sammy, since we've talked about this on, on the show.
28:36 Speaker 00 Yeah.
28:37 Speaker 02 But they, they've moved from the projections now being to no decreases this year. I think we started out the year with there being two or three potential rate cuts. To now being no to potential rate increase for this year because of the, because of the rising costs. And that's just like horrible news for, for the economy.
28:59 Speaker 00 Yes, yes, especially the, the consumer. I mean, I'm, I mean, when, when you go and you spend on, if you're filling up your tank every week and you're spending an average of an extra forty to fifty dollars a tank, that's four times a month, that's 200 bucks.
29:15 Speaker 02 Right.
29:16 Speaker 00 That's 200 dollars taken away from your groceries, from whatever else you have to spend for a family or somebody that's minimum, making minimum wage.
29:25 Speaker 02 Yep. Yeah. Yeah. Where they, where, where are they getting that money? Well, a lot of them are getting it from their credit card or their borrowing.
29:33 Speaker 00 That's right. That's right.
29:35 Speaker 02 And that's just not a sustainable path for a family or a household.
29:39 Speaker 00 That's why we're seeing a lot of increases in our credit card debt.
29:42 Speaker 02 Yep, yep, and, and, and, yeah, just credit card debt in general is just continues to go up. People just living beyond their means and, and not that they're, I don't think they're living extravagantly. I think that they just, they just, just wages aren't keeping up and costs are going up. So this, Kevin Warsh, by the way, he is and was the youngest appointed Federal Reserve governor. He was appointed in 2006. He was 35. That's the youngest in history. Right now he is 55 years old. So it makes him very young. So if he gets through this nomination process and becomes the, the president, uh, that will make him a very young Federal Reserve president.
30:26 Speaker 02 He is a billionaire already. I didn't, I didn't know this till just this morning. He's married to, uh, the granddaughter of Estee Lauder.
30:35 Speaker 00 Oh, wow.
30:36 Speaker 02 His wife is, is a Jane Lauder. She is the granddaughter and heiress to the Estee Lauder, the makeup company that, that, uh, that does that cosmetic company. So they're already, uh, billionaires in their own right. Uh, and this is a, uh, interesting pick for the Fed.
30:58 Speaker 00 He himself was, was a millionaire with his financial disclosures going into this post or this, this nomination was $200 million of assets.
31:09 Speaker 02 Yeah, which isn't bad, but it's not, it's not billions like his wife. But still hundreds of millions, made his money as an investment banker. He was also the, uh, he was, uh, appointed under the, uh, George Bush, uh, presidency and served as key lieutenant to Ben Bernanke during that, uh, fiasco, the whole bailout and, and financial crisis that we experienced in 2008. So he's got some, some experience there, very well educated, studied at Stanford, at public policy at Stanford and. And then at Harvard Law School was an attorney there was the economic policy advisor
31:51 Speaker 02 for the for the Bush administration. And he also worked through a lot of the deals from the post in Ron corporate scandals that took place and was involved in that Sarbanes Oxley stuff. So, you know, good, good resume, it seems like.
32:06 Speaker 00 Yeah, there's a little bit of drama here about the nomination. There's, there's the North Carolina Republican Senator Thom Tillis is refusing to vote for war unless the Justice Department drops in its investigation into Powell over the cost overruns of the Fed headquarters.
32:23 Speaker 02 Oh, really? So he's saying this is a Republican that's saying we need to stop that.
32:28 Speaker 00 Correct.
32:28 Speaker 02 Yeah.
32:29 Speaker 00 Fiasco, basically.
32:29 Speaker 02 Total fiasco. It's a, it's a distraction.
32:32 Speaker 00 Yes.
32:32 Speaker 02 You know, that, that, but, you know, claiming that the Fed was, oh, this is very clear in my memory when, when Jerome Powell was standing right next to President Trump. President Trump was saying, well, they spent these hundreds of million dollars on this building and, and Jerome Powell had the document right there. He's like, no, that's not true. It's right here. That's not what happened.
32:51 Speaker 00 That's the other building, not this one.
32:53 Speaker 02 Right, exactly. And he was just kind of like, well, well, okay, well, we still have a problem. We're still gonna sue, which, you know, the Fed, the Fed doesn't need that distraction.
33:02 Speaker 00 No, no, we, we don't, we have enough. We have enough drama going on, you know, straight of home is now open, now closed, you know, and that, and that drama itself is just creating so much for, for the markets and for our pockets at the bottom line.
33:17 Speaker 02 Yeah. Message here, Sammy, from a listener. It says, it's sad to see some of these young families who work their butt off and working multiple jobs to pay their bills and feed their families. It is sad. It's, it's super, we've got, we have now a generation of people that like my, our kids' generation that is, has grown up in just pessimism and very little reason to give them hope for things changing. And so.
33:53 Speaker 02 There needs to be something.
33:54 Speaker 00 Oh, yeah, no, I mean, we were joking about the tomato prices, but really, look, look, I'll tell you because I'm I'm at the diner now. So the box of tomato just tripled in price. But we use tomatoes in everything, almost.
34:07 Speaker 02 Right.
34:08 Speaker 00 In a burger and in our chili, in our, all of that, right?
34:14 Speaker 02 Right.
34:14 Speaker 00 So it's, it's, and we absorb that. It's not like we keep, we're gonna be keeping a yo-yo in our prices on the menu.
34:20 Speaker 02 Right.
34:21 Speaker 00 But what I see is our people that are working here in the diner. You know, it's, it's, it's not a doctor, it's a minimum wage job, or sometimes we pay extra. But it's still, people are struggling.
34:34 Speaker 02 Mm hmm.
34:35 Speaker 00 You know, and, and, and I see it firsthand. Some people work two jobs in order for them to, or some people go and, you know, they'll, they'll, they'll break up with an ex or whatever. They still live together because they cannot afford separate places.
34:51 Speaker 02 What a nightmare.
34:51 Speaker 00 That's the, that's the type of, type of drama you're seeing, like I'm seeing.
34:55 Speaker 02 Right.
34:55 Speaker 00 Now that I'm involved and, and stuff. It's, it's truly, truly sad and tough to see.
35:00 Speaker 02 Yep.
35:00 Speaker 00 When you have an employee that's like, well, I'm being kicked out, or I don't, I don't have enough to pay for the rent at the end of this month.
35:08 Speaker 02 Yep. That kind of goes along with the boomerang. You've heard about this, the boomerang generation, those, those kids who go away to school for a little bit, but they come back home and they just end up living with their parents well into their, into their 30s. You know, like, nobody wants that, usually.
35:24 Speaker 00 Typically not. I'm telling my kid, he's always welcome.
35:28 Speaker 02 Of course.
35:28 Speaker 00 He's, he's, he said, he said he's gonna build something in the backyard.
35:31 Speaker 02 Well, that's fine. That's fine, too. But, you know, you just don't want them to have to move in and sleep on the couch.
35:37 Speaker 00 That's right.
35:37 Speaker 02 Not, not sustaining.
35:38 Speaker 00 Especially when they have their own life and they want their privacy and all that. So, yeah, I hear you.
35:43 Speaker 02 We're Money Wise. We're gonna take one final break. We'll be right back after this.
35:54 Speaker 02 Thanks for tuning into Money Wise. I'm Sharad here with Sammy, taking your questions and comments, 661-396-1000. Sammy, I got a question for you.
36:04 Speaker 00 Yes.
36:05 Speaker 02 The country's largest sandwich shop, what would you guess?
36:10 Speaker 00 The United States?
36:11 Speaker 02 In the United States, yeah.
36:13 Speaker 00 I would guess that gas station in Texas.
36:16 Speaker 02 Oh, I see what you're saying. Yeah. Oh, I mean, like, a number of locations, most number, like, size of the company.
36:22 Speaker 00 It used to be Subway.
36:24 Speaker 02 Yep, yeah. And you think it's been overtaken?
36:28 Speaker 00 It might have, because I looked at their franchising numbers and they were not growing as fast as, for instance, their competition, I forget their name, Jersey Mike.
36:40 Speaker 02 Jersey Mike's. That's what I was gonna get to. That was gonna be my next question is, what's number two? That's Jersey Mike's is number two in the country.
36:48 Speaker 00 I'll be honest with you, I love their sandwiches.
36:50 Speaker 02 Jersey Mike's?
36:51 Speaker 00 Yeah, their turkey with the Mike's way.
36:55 Speaker 02 Ah.
36:56 Speaker 00 Oh, dude. Freshly cut meats and cheeses, and then they do that little rub, whatever's. Italian probably seasoning with some olive oil.
37:06 Speaker 02 I have to admit, I don't think I've ever been to Jersey Mike's. And I know we have a few of them in town, yeah.
37:11 Speaker 05 They're really good.
37:11 Speaker 00 They're really good.
37:12 Speaker 02 Well, they must be doing something, right? They are growing. There are about 3,000 locations of Jersey Mike's, but if you compare that to Subway, it's not even close. Subway has 37,000 locations. Jersey Mike's makes up 10% of all the Subways.
37:32 Speaker 00 Much better quality. I like the young people they employ. They train them well, too, from a customer service. So when you walk in, you always are greeted. I like them. I almost opened a franchise when I was consulting.
37:46 Speaker 02 Oh, really? A Jersey Mike's franchise?
37:47 Speaker 00 Yeah, I started looking at it and stuff, and my buddy was gonna hook me up.
37:52 Speaker 02 Yeah.
37:53 Speaker 00 But...
37:54 Speaker 02 Didn't pull the trigger.
37:55 Speaker 00 No, I consulted for a company called Money Wise, and then they offered me a job.
38:00 Speaker 02 And now you're working in the luncheonette.
38:03 Speaker 05 We've got like 20 Jersey Mikes here in town though, because they're on almost every corner.
38:08 Speaker 00 Yeah, it's it's popular in in Bickersfield. Subway used to be very popular, but Jersey Mike is taking taking over. Not taking over, but I think it's it's taken a lot a bigger market share.
38:17 Speaker 02 It is a fascinating history about Jersey Mikes. It was actually started by a guy named Mike, who lived in on the Jersey Shore, and he bought a shop there. He worked in a couple of years for a couple of years in the shop when he was a kid, when he was 14 in 1971. And then four years later, pulled together enough money to buy, it was called Mike's Subs.
38:40 Speaker 00 If my memory is correct, I think it was $3,000 that he borrowed. He pulled it together from his parents, family, some smaller amount.
38:47 Speaker 02 Wow.
38:48 Speaker 00 Yeah.
38:48 Speaker 05 Is that why they ring the bell when you tip?
38:50 Speaker 00 What's that?
38:51 Speaker 05 Is that why they ring the bell while you tip?
38:53 Speaker 02 Well, the Jersey Mikes, you mentioned he bought it for $3,000. Last year, Jersey Mikes reported revenue of $309 million, so they've done pretty good. It's a 10% increase from the previous year. This is a privately held company. It was bought by Blackstone, the the money manager,
39:14 Speaker 02 several years ago, and the news today is that they are going to go public. There's going to be an initial public offering for Jersey Mikes. And while it has not been officially announced, it has been leaked today that they are going to go public. This is pretty fascinating. I'm always interested in the initial public offering market, because it is a gauge of app of investor appetite and restaurants. Restaurants are under a lot of pressure right now, and so the fact that Jersey Mikes is considering coming out with their stock here shows that they think, or at least some people who would be considered smart in the investment banking world,
39:56 Speaker 02 thinks that this could work out for the company to try to raise money and and expand their company.
40:03 Speaker 00 That's why I encourage you to go and get a sandwich before they go public.
40:06 Speaker 02 You think it'll get more expensive? It could get cheaper.
40:09 Speaker 00 Or, or, or just the quality itself. You know, right now it's, you said it's privately held and I think they kept some of the standards that the original Mike had.
40:18 Speaker 02 Yeah.
40:18 Speaker 00 That's some of the popularity because people started looking at Subway and then did, with Subway that tuna, I don't know if you remember the tuna story.
40:25 Speaker 02 I remember the tuna story.
40:27 Speaker 00 Fake tuna stuff.
40:28 Speaker 02 What, did you hear what actually happened with that? How it resulted? Cause there was a lawsuit there about the fake tuna. So there was a company that sued them and said like, we've done testing to prove that there's actually, not only is it not tuna, but it's not even fish. It's not even like a different fish. And this was the, this is the claim in the lawsuit.
40:47 Speaker 00 It's roadkill.
40:49 Speaker 02 Or what is like plant based? I have no idea what it is. They ended up settling that lawsuit though. I think Subway continues to deny that that is the case, but now they're, they're still paying the, the, the, the price for that image that that's not tuna. You know, and they've claimed this is real tuna. It's so interesting.
41:08 Speaker 00 That's, that's interesting, but I do like the sandwich. I encourage you to go try it.
41:10 Speaker 02 The Jersey Mike sandwich? So it's the Mike, what, is there, which one in particular you say?
41:15 Speaker 00 I, I do the turkey.
41:16 Speaker 02 Ah.
41:17 Speaker 00 The turkey with, with Swiss and I do Jersey or Mike's way. So they, they do a little bit of vinegar, oil and a little bit of herbs. They throw on top and it's really tasty.
41:27 Speaker 02 Gotcha. Yeah. No, I'm, I'm, I'm, I'm all for a good sandwich.
41:32 Speaker 00 Yeah.
41:33 Speaker 02 That's for sure. Uh, this, the IPO, of course, now we're starting to gear up for what could be several blockbuster IPOs, including the SpaceX offering that could value the company at over a trillion dollars. That SpaceX IPO is just, is anticipated to come out this summer is another fascinating example of sort of creating a conglomerate out of other companies. Uh, but combining them all into one. And you know, SpaceX of course has some big ambitions with the internet, the global internet and, and now the race to get to the moon and beyond. And I don't know, it's great.
42:15 Speaker 02 I'd like to see that there's some of these activities and economic, you know, that businesses are the economic engine of the of the country. So it's nice to have some of these things happening.
42:26 Speaker 00 Yeah, definitely, especially the advances that I see space with SpaceX. Is the robotic part included in that or?
42:33 Speaker 02 Yeah, yeah, because I think what SpaceX is going to do is it's going to be part of what used to be Twitter. So now it's X Tesla, maybe not Tesla, but X SpaceX and their AI company. Was it X AI? And what's the other, there's another SpaceX company. Well, I guess maybe it's the optimist, like the robots.
43:02 Speaker 02 But yeah, no, there's, there's a, I love the space race stuff.
43:07 Speaker 00 Me too, me too. It's just fascinating to me what's, what's happening. I mean, we've advanced so much, but it's just now, I don't know how many years we went back and around the moon finally.
43:18 Speaker 02 Yeah.
43:18 Speaker 00 That's crazy.
43:19 Speaker 02 Super crazy. This morning, Blue Origin had a snafu with launching. Did you hear about the space satellite thing? I don't know. They haven't, they haven't admitted yet to what they went wrong, but they let the satellite out in too low of an orbit. And it's a, it's a loss to the company. It's a publicly traded company that owned that satellite because they saw a hit to their stock price. These are hundreds of millions of dollars, these things. I want to thank all our listeners for tuning in. If you missed this show or any of our past programs, go subscribe to the Money Wise Podcast. It's commercial free and it's on all major podcast platforms like iTunes, Apple Podcasts or Spotify. And remember these three things, be smart, be safe and always be.
44:00 Speaker 00 Be money wise.
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