4/21/25 Economic Stability, Student Loan Woes, and Samy's Burger Love Affair

The Moneywise Radio Show and Podcast Monday, April 21st 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_Manageme instagram: MoneywiseWealthManagement

• 0:00Speaker 00

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

• 0:09Speaker 01

  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?

• 0:30Speaker 02

  Securities offered through SCF Securities, Inc., member FINRA/SIPC. Investment advisory services offered through SCF Investment Advisors, Inc. SCF 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 Garrow 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?

• 1:02Speaker 00

  Sammy Abiyawi.

• 1:03Speaker 03

  Sammy, good having you, man.

• 1:05Speaker 00

  Yes, very excited for today.

• 1:06Speaker 03

  I'm excited, too. We've got a couple of listener questions, and I think it's always a great way to start out the show. Why don't we get right to it?

• 1:13Speaker 00

  Sure. First one, how would you guys rate the current state of the economy from 1 to 10? What a loaded question.

• 1:20Speaker 03

  Yeah, I mean, so I think it's really important to always distinguish that there is a difference between the economy and the stock market. Those two things don't always line up perfectly, meaning the stock market could be going down, but the economy actually is doing well, or vice versa. The economy is not doing well, but somehow the stock market is going up. And we've experienced both of those scenarios several times within the last few years.

• 1:47Speaker 00

  So I'll probe just with one more question, maybe to help all our listeners.

• 1:52Speaker 04

  To what's the best indicator of the state of the economy? Is it the consumer spending?

• 1:58Speaker 03

  GDP.

• 2:00Speaker 04

  GDP.

• 2:01Speaker 03

  I think GDP is like it's the it's the mother of all economic data points. Was you know how much growth? And I'd look at it as a as a percentage basis rather than just the number. Because you know, people, people don't know, you know, that's right. Between a billion and a trillion. Like, okay, whatever trillions of dollars, you know, that we're a gross domestic product is. But they do understand we've grown at 1% or we've shrunk at 1%.

• 2:25Speaker 04

  Yes, right.

• 2:25Speaker 03

  And then it and then it also is good to compare to our GDP growth to other countries. So you can kind of get an idea of, you know, how we're doing. And it turns out that if you follow GDP, oftentimes you'll interest rates. And ultimately, the markets kind of follow, follow, you know, follow suit. So if we have a growing economy, a growing GDP or expectation of a growth in GDP, generally, the expectation is that the stock market is going to grow as well. So you bring up a good point because right now there is concern that because of the recent pullback in the stock market and because of the uncertainties with the tariffs, that we could be going into a recession.

• 3:08Speaker 03

  And so, you know, maybe, maybe that's why the markets are down near, near correction territory, down near, near 10%. We're on track to having the worst month that we've had since 2022 in the stock market. So that's a long, that's a pretty long stretch. It's three years, you know, worst market in a for a month in three years can, you know, can take a toll on on people's emotions.

• 3:34Speaker 04

  So going back to the listener question about the state of the economy, how how would you rate it in your, in your, in your opinion, Sheri?

• 3:41Speaker 03

  You know, this is going to sound weird, but in my opinion, I think the economy is actually doing well. It and there I would say it's a it's an eight or a nine. But if you, if you can, if you include the stock market and you and you say, well, the stock market is the economy, it's much lower. And so, you know, and the reason I say that is because I don't know of any. I can't, I can't, I can't put my finger on a single data point, major economic data point that really makes me concerned, other than maybe consumer sentiment, or investor sentiment, or consumer confidence, which is, you know, really down. Like, that's not

• 4:22Speaker 03

  good, but it also, all the other factors are good. Our unemployment rate is still incredibly low. We're essentially at full employment.

• 4:30Speaker 04

  Yeah.

• 4:30Speaker 03

  And not only that, but we have, we're still in an economy where there are more jobs than there are people that can fill those jobs.

• 4:36Speaker 04

  And to me, a good reminder of that, too, is, I compare, I mean, how many, what's the population of the United States right now?

• 4:43Speaker 03

  Three hundred million? Three fifty?

• 4:45Speaker 04

  Three hundred fifty million.

• 4:46Speaker 03

  Four hundred?

• 4:47Speaker 04

  About 3.84% unemployment.

• 4:49Speaker 03

  Yeah.

• 4:50Speaker 04

  I think.

• 4:51Speaker 03

  Right.

• 4:52Speaker 04

  Like, I know I talk a lot about Morocco, but that's the data that I have and I know really well.

• 4:55Speaker 03

  Yeah.

• 4:56Speaker 04

  Morocco has forty million in population.

• 4:58Speaker 03

  Yeah.

• 4:59Speaker 04

  Twelve to fourteen percent unemployment rate.

• 5:00Speaker 03

  Yeah, yeah, I mean, that's, that's.

• 5:03Speaker 04

  With an inflation rate in the eights to ten percent.

• 5:06Speaker 03

  I mean, come on, that's like, yeah, that's a whole nother world.

• 5:11Speaker 04

  That's right.

• 5:12Speaker 03

  Right.

• 5:13Speaker 04

  So, so, so, when I, when I put those two in, and two together, I, I still feel good about where we are, as far as our economy, here in the United States. I, I agree with you, the GDP is probably a very good tool to, to, to look at. It's a good indicator. Also, our inflation is down from where we were, twenty twenty-two, twenty twenty-three.

• 5:33Speaker 03

  Yeah.

• 5:34Speaker 04

  We're in the 2.8 to 3.2% range.

• 5:36Speaker 03

  Right, that's, that's like our, our, our historical average, essentially, is where we are over the last eighty years. We're right there.

• 5:42Speaker 04

  Yeah.

• 5:43Speaker 03

  But the problem is with inflation is that, while it's down to a healthy level, we just experienced, for many, and, and, and the first in the generation, a high inflation period.

• 5:57Speaker 04

  Yes.

• 5:58Speaker 03

  So people are still feeling the pain from it. Even though prices aren't going up as much, they're still reminded every day about how much more we're paying. But the other, the other thing, this is a positive economic data point, is wages. And wages have gone up, and they've actually gone up in a rate. Recently, that's higher than inflation. That's again, comes back to the fact that we have more job openings than we have people to fill them in. So people can still get paid well in certain jobs. And we're talking very generally, obviously, there's crappy jobs out there. And there are people out there that are looking for a job that can't find a job. But on a national level, the economy is doing, is doing well. And the other, the other aspect, and this is, this is what I'm, I'm starting to get more concerned about is,

• 6:44Speaker 03

  I've always said that the United States, while we have our faults, you have to compare the United States to what other countries are going through. And so we're like the least ugly kid on the block. Yeah, we're ugly. We've got some things going on, but we're not as ugly as some of these other.

• 6:58Speaker 04

  I, I, I think I agree with you because I think because we've had it nice for so long. We are expecting perfection out of everything in this country and we are not perfect.

• 7:08Speaker 03

  Right.

• 7:09Speaker 04

  We are not perfect and our economy is not perfect. Our leaders for sure are not perfect. So let's compare ourselves to the rest of the world sometimes. Now, somebody can argue it's like, well, Denmark is the happiest place to be. Well, hey, what? It's available.

• 7:26Speaker 03

  Yeah.

• 7:26Speaker 04

  Go there.

• 7:27Speaker 03

  That's right. Yeah. And see how you feel about it.

• 7:30Speaker 04

  That's right.

• 7:30Speaker 03

  Yeah.

• 7:31Speaker 04

  I mean, we have Danish people immigrating to the United States.

• 7:33Speaker 03

  Yeah.

• 7:34Speaker 04

  That's for sure.

• 7:35Speaker 03

  Yeah.

• 7:35Speaker 04

  Data shows that.

• 7:36Speaker 03

  Yes.

• 7:37Speaker 04

  So I, I'm an immigrant. So if you ask me, where would you go? And I have friends all throughout Europe, shared.

• 7:44Speaker 03

  Yeah.

• 7:44Speaker 04

  Hey, I'm here. I ain't going nowhere. I tell my kid, who is a second generation in the United States, you won the lottery by being born here. So take advantage of it.

• 7:53Speaker 03

  Yeah, no doubt. I, I mean, we're, I'm biased and even you're biased because you immigrated here. But I'm biased. I was born here. But I really do think we're, we're the greatest country. Still the greatest country, general, on all levels, not, not all levels, but on, on, on generally speaking. Now, obviously like Denmark's maybe better at healthcare or whatever.

• 8:14Speaker 04

  Or education or whatever.

• 8:15Speaker 03

  Yeah. Morocco's better at food.

• 8:17Speaker 04

  Yes, yes.

• 8:18Speaker 03

  Architecture, you know, all kinds of, all kinds of, you know, countries have their strengths and their weaknesses. But you have to sort of take the overall. All benefits that we have living in this country, the freedoms that we have. And the ability that we have to be able to move up the socioeconomic ladder. Is is still the best in the world, even though it's still a challenge for a lot of people. It's still the best in the world.

• 8:42Speaker 04

  So I go back to the to me, the answer from my end would be we have strength and we have weaknesses. Right. We have strong job market. We still have good consumer spending. And and for like, let's not forget the S and P, for instance, shared is still at a close on all time high.

• 9:02Speaker 03

  Right.

• 9:03Speaker 04

  Even though we lost what 10 15% in the last two, three months. We're still close to that all time high of whatever he was. It's almost we're still in the 5200 point versus.

• 9:14Speaker 03

  That's right.

• 9:14Speaker 04

  Right. The weaknesses, I high interest rates, which I think you're going to talk about later. And the housing affordability, which is a big problem for us.

• 9:22Speaker 03

  Yeah.

• 9:23Speaker 04

  We need to solve for.

• 9:24Speaker 03

  Yeah, a lot of these are California issues in terms of our real estate. Interest rates now that's a whole. Yeah, we'll talk about interest rates later, but it's a whole other ballgame. It's very much. It's much more difficult to control interest rates than almost anything else. Because because of the nature of how interest rates are set and, you know, it's basically a product of inflation. And and inflation is a product of of supply and demand, which ebbs and flows. And so it's very, very difficult to manage. But so what would you rank it? Sammy, would you give it a number?

• 9:58Speaker 04

  Yeah, seven.

• 9:58Speaker 03

  A seven. Yeah. So average. That's not bad.

• 10:01Speaker 04

  Yeah.

• 10:02Speaker 03

  You know, this brings up a study or a a survey. That was done here recently. It's a global Bank of America survey. That where they they ask global investors on their intention on either increasing or decreasing their holdings of US stock. And since this data has started being collected in 2001. We're at the lowest point right now, meaning there's the fewest number of foreign investors that are expecting to hold US stock than.

• 10:36Speaker 03

  Has been on since this survey started 24 years ago. And 73% of those respondents say they think that US exceptionalism has peaked. So this is, this is troubling to me because it's a perception is reality and perception is everything. And if you have the perception that US, the US market is not the place to go from, from an, on an international level. Like that's, that's the, that's the magic secret sauce that we have in America is that we're able to attract dollars and talent. Where, you know, people want to come here and they want to bring their money here or they want to send their money over here to invest it.

• 11:14Speaker 04

  So is, is that a lack of confidence or is that because the dollar is so strong, they just cannot afford to buy stocks here? And instead they go somewhere else.

• 11:21Speaker 03

  Yeah.

• 11:22Speaker 04

  So instead of buying one stock of one company here, they can buy five.

• 11:26Speaker 03

  That, that's definitely part of it, but the survey points out three catalysts that they think why people are shifting their money away from America and towards overseas. One is the emergence of AI, which, you know, started here in America and we're still the, the world leader. But back in January, Deep Seek came out.

• 11:45Speaker 04

  Yeah.

• 11:45Speaker 03

  So there was this, the, the, a bubble bursted somewhat in, in terms of tech and in terms of the US dominance in that world. When China can do it at a, at a reportedly a fraction of the price. It's like, oh boy, maybe the US isn't going to, you know, continue to innovate, you know, and, and, and move us through. And then back in February, there was a shift of US foreign policy towards less support for Ukraine. And guess what that did is it forced Europe to up their spending, specifically Germany and, and some of these European countries, which sadly, war is, is very profitable. And it, and it brings an enormous amount of investment and money into Europe. So we've seen some shift towards, going towards Europe since then.

• 12:29Speaker 03

  And then the third big, big one is, is the, the tariffs news and, and Trump's back and forth and uncertainty that's, that, that's been brought on from the tariffs. Um, the tariff talk. So those, those three things I think are the, are the three catalysts.

• 12:45Speaker 04

  I would, I would, I would agree, and I think, and we're going to, I think we're going to discuss this later in the show about just, just the Federal Reserve and the pressure that is being. shown or is being exercised over the feds to reduce interest rates.

• 13:01Speaker 03

  Yeah, yeah, we'll definitely talk about that. Why don't we do this? Why don't we take our first break of the day and come back? We got another listener question. Keep them coming our way. If you've got any questions or comments, 661-396-1000. That's the number you can text. We're Money Wise and we'll be right back.

• 13:15Speaker 00

  Money Wise Wealth Management is the only locally owned independent firm that uses a comprehensive wealth tax and estate approach. Working closely with a highly trusted CPA and attorney for information on how Money Wise can help you invest and plan for your future. Call 661-847-1000. That's 661-847-1000.

• 13:42Speaker 03

  Welcome back from Money Wise. I'm Sharad and that's Sammy. 661-396-1000. That's the number you can text. Appreciate the comments. We've got one here.

• 13:51Speaker 04

  Yep, we do. I don't know if this is something you would have time to discuss, but I read about them and made even less sense. What is 529 plan fees and how are the changes going to affect us?

• 14:03Speaker 03

  Yeah, great question. So 529 plan is a, it's, anytime you see a number like 401K or 403B, 457, 529, these are all IRS codes. That's all that number is. It's a code that the IRS can use to determine the taxation of an account. And how it is invested can vary, but the core issue and the core principle is, well, if it has these numbers, in this case a 529, and usually those numbers mean that it's taxed differently. It's taxed in a favorable way, or there's some

• 14:46Speaker 03

  preferential treatment to the money that goes into that account. So in the 529 case, these were plans that were set up by Congress to be able to incentivize people to save for college and save for now what has been expanded beyond just college. Now

• 15:06Speaker 03

  There some of the rules that have changed, I don't know if our listeners referring to this, but now it can be used to pay for even kindergarten, you know, private schools, K through 12 tuition. It can, it can be used to pay for other educational expenses. So it's over the years has been expanded to how you can use the money. So what is the tax treatment? Well, that also has shifted a little bit. It is and traditionally has been that you don't pay any taxes on the gains. As long as you're using the money for higher education, you don't have to worry about paying taxes on any of those gains. So that's really nice for somebody for an investment account.

• 15:49Speaker 03

  Because a drag on a major drag on an investment that is outside of retirement account is taxes. Because every year, if it's not inside one of these, you know, preferential accounts, like a 401k or an IRA, then you gotta, you gotta pay taxes on the gains. And that, that means you're getting less return. So you don't have to pay taxes on the money that is in a 529 as long as you're using it properly. Furthermore, starting in 2024, this is part of the 529 changes under the Secure 2.0, is that in 2024, starting last year, 529s can be rolled over into a Roth. That wasn't allowed before, a Roth or a traditional.

• 16:30Speaker 03

  And, and you can roll, not all, but each year a portion of that 529 plan into an IRA. There's always some rules that you need to be aware of. For like, for example, the 529 has to be open for at least 15 years. So they don't want to just people just like working some loophole, you know, and putting a bunch of money in 529 and just putting it into a Roth. And then of course, the annual rollover limits and so on. Contributions made in the last five years cannot be rolled over. And the rollover must go to the beneficiaries Roth, not the account owners. So there's a few, you know, caveats there. And so, you know, I've always been, you know, you know, lukewarm on 529s.

• 17:14Speaker 03

  I think that there can be some better ways for Parents to save for college in many cases. And the other issue is that oftentimes, and I was this way, we didn't really have enough money when we were a young couple and had young kids, there wasn't extra money to put away for college for our kids. And it wasn't until they were later in their years, or you know, in their elementary, past elementary school, like middle school or high school, that we're like, okay, now we can start saving money. And so then it was like, what, so I'm going to get a couple of years of tax, you know, tax deferral on it, and then I am stuck to some of these rules. I'd just rather either use a Roth or or just have a savings account.

• 17:55Speaker 04

  Yeah, or have them borrow their own money and go to college.

• 17:57Speaker 03

  Yeah. And that's actually another thing, like even if you can afford to pay for your kids' college, sometimes it still makes sense to just let them get the student loan and then maybe you have an agreement to help support the student loan. And that way, you know.

• 18:12Speaker 04

  I'm a firm believer of that.

• 18:13Speaker 03

  Yeah.

• 18:14Speaker 04

  It teaches responsibility, teaches a lot of things and.

• 18:17Speaker 03

  Yeah.

• 18:18Speaker 04

  Then there's talk about forgiveness. We want to take advantage of that.

• 18:21Speaker 03

  You know, I wasn't going to bring this up till later, but one in five, there's been a mess with student loans recently, just like you just said. It's kind of been this back and forth about forgiveness and, and then, and then under Biden, there were several like start, stop and starts of what can, you know, stops on payments needing to be made for, for all of, all of, you know, student loan holders and then kind of, you know, COVID changed some of those things. There were all these, these different type of repayment plans. Well, it's just created a lot of confusion to the point now that nearly one in five student loans are in default.

• 19:01Speaker 03

  It's, it, it comes out to nine million borrowers. There's about 40 million people that have student loans. Nine million borrowers are late on their payments, at least 90 days late on their payments. Which is, you know, student loans don't go away.

• 19:17Speaker 04

  No, it's like an SBA deal.

• 19:19Speaker 03

  That's right.

• 19:20Speaker 04

  It's a government deal, so you're really not going to be able to shake it off.

• 19:24Speaker 03

  It'll take it, literally take an act of Congress.

• 19:27Speaker 04

  Yeah.

• 19:27Speaker 03

  And, and even then, we've seen that even if Congress approves it, the Supreme Court will knock it down. They'll knock it down like with the student loans. It was a real, it was a real mess that, that, that.

• 19:37Speaker 04

  Even within Congress, some people are, some Congress people are wanting to do the forgiveness. Some people are not wanting to do that. And I want to hold people accountable for borrowing the money. Hey, as an ex-banker, you borrowed the money, man. You gotta pay it back.

• 19:50Speaker 03

  Because even if, yeah, of course, we'd all want to be forgiven of our debt. You know, of course, that would be fantastic, especially, you know, some of these, these young kids. But where did they borrow the money from? Like, there's a bondholder somewhere.

• 20:03Speaker 04

  That's right.

• 20:03Speaker 03

  That lent out that money on the bank's end that like, so grandma's gonna go without?

• 20:08Speaker 04

  Yeah.

• 20:08Speaker 03

  You know, it's like, it's, it's a, it's a tricky, it's a slippery slope. Part of the problem is the government got in this business of basically financing, you know, guaranteeing these loans and financing it and then not being strict enough with the type of education or the type of schools that are offering the education. So you had a lot of schools that got in trouble. And that's where.

• 20:32Speaker 04

  They used the system.

• 20:33Speaker 03

  That they abused the system and those are the ones that have been forgiven. There has been a certain amount of student loans that have been forgiven. And it's been usually because there were some predatory education, like college, for-profit college, that really wasn't doing, wasn't doing anything.

• 20:49Speaker 04

  To do in the first place. Yeah.

• 20:50Speaker 03

  Yeah. So, I mean, that is, that is a complete mess, but, uh, great question. Great question.

• 20:56Speaker 04

  Keep them coming.

• 20:57Speaker 03

  So, uh, we, let's talk about the markets a little bit today, Sammy.

• 21:00Speaker 04

  Yeah.

• 21:00Speaker 03

  It was not another, it was another bad day. We'll just.

• 21:04Speaker 04

  It was.

• 21:05Speaker 03

  Can't sugarcoat it. Uh, S and P 500 down 2.3%. S and P 500, uh, obviously, um, been, you know, taking a beating this year. And certainly, uh, over the last, uh, few months, the Dow is down nearly 2.5%. The NASDAQ down about 2.5%. So these are big numbers that we're seeing in drops in the market today. And, you know, in doing, uh, preparation for the show, Sammy, it appears a lot of this has to do with President Trump's comments on Jerome Powell, our Fed Chair.

• 21:35Speaker 04

  You know, and you said earlier, and I read it yesterday, he, he appointed the guy.

• 21:40Speaker 03

  Right.

• 21:41Speaker 04

  Right in the first place.

• 21:42Speaker 03

  Two thousand seventeen.

• 21:42Speaker 04

  That's right.

• 21:43Speaker 03

  Yeah.

• 21:43Speaker 04

  Now, he's appointed for how many years? Fourteen years, I think, the governors or the chairman is appointed for fourteen years.

• 21:50Speaker 03

  That's right. It's a it's a fourteen year rolling appointment. So it's almost like a life appointment.

• 21:56Speaker 04

  So here here's why it's important for me to not pressure Jerome Powell. And and and even and and that's to keep the independence of the Federal Reserve. Now, I have to, I think I have to say this. One of the only independent, true independent Federal Reserves around the world is the American Federal Reserve. All the other reserves are basically government agencies, meaning they carry the government agenda, political agenda, whatever that is. And we do not have that in the United States. The Federal Reserve was created, what, nineteen thirteen, I believe?

• 22:35Speaker 03

  Yeah, nineteen thirteen, under Woodrow Wilson.

• 22:38Speaker 04

  Yeah, for a reason, just to to help stabilize the markets whenever craziness is happening.

• 22:45Speaker 03

  Yeah, it it it want, the goal was to bring stability to the economy and try to stabilize it. The the the mandates of the Federal Reserve is control inflation and maximum employment. Very simple, straightforward. We want, we want a stable prices and full employment.

• 23:06Speaker 04

  And with no control over, you know, like they control the rates and it affects a bunch of other things, which is the two mandates that they have.

• 23:13Speaker 03

  Yeah.

• 23:14Speaker 04

  Unlike other reserves around the world. You know, and and and the independence of the Federal Reserve here in America is admirable, in my opinion.

• 23:23Speaker 03

  It has created the the largest economy on the planet, the the wealthiest country ever in the history of the planet, and the most stable currency is the key. It's it's it's what's allowed us to be the world's currency because we have that stability and we have that separation from the political cycles and the economic cycles. Now, our political cycles in the United States also are different than some other countries. And that it's every four years for the president, but it's every, you know, essentially every two years we're having major either senate or house.

• 23:59Speaker 04

  Elections.

• 23:59Speaker 03

  Elections. And so the the political cycle is fairly quick and and brief.

• 24:05Speaker 04

  Correct.

• 24:05Speaker 03

  In the United States, so.

• 24:07Speaker 04

  While the economic cycle is not.

• 24:08Speaker 03

  It's not.

• 24:09Speaker 04

  And that's why he is appointed for fourteen years.

• 24:11Speaker 03

  Yeah.

• 24:11Speaker 04

  If you study economics, if you study capitalism, the cycles go in ten to fifteen years, some might argue twenty five years to fifty years. But we need somebody to be in place for a a longer.

• 24:25Speaker 03

  Yes.

• 24:26Speaker 04

  So it does not switch with every president.

• 24:29Speaker 03

  Exactly.

• 24:29Speaker 04

  We'll have the yo-yo effect and that's not good for anybody.

• 24:32Speaker 03

  It's not good. It's it's it. We we want stability and we want a Fed president that is not influenced by politics, but influenced by economic data.

• 24:42Speaker 04

  And you know what that gives? You know, talked about it earlier, is foreign investors. They look at that.

• 24:47Speaker 03

  That's right.

• 24:47Speaker 04

  And they evaluate that whenever they are making an investment.

• 24:50Speaker 03

  Yep.

• 24:50Speaker 04

  Because they don't go somewhere else. They want to come here because they know that the chairman of the Federal Reserve can't stand up to a president, whatever, whoever the president is.

• 25:00Speaker 03

  That's right.

• 25:00Speaker 04

  You know what? I am not going to listen to that. I'm going to listen to economic data and that's how I'm going to make decisions.

• 25:05Speaker 03

  That's right. Yep. Yeah. That is exactly what has attracted foreign investors is that they know that there is some protections from some some weirdo getting in the office. And and corrupting and trying to manipulate the economy when that president might only run for or be in office for a few years.

• 25:26Speaker 04

  That's right.

• 25:27Speaker 03

  Four years and that passed eight years.

• 25:29Speaker 04

  Yeah.

• 25:29Speaker 03

  And that's that's just nothing in terms of how economic cycles and business cycles work. Now, it it's important to note, it's easy to pick on President Trump, but he's not the only president that has tried to influence the Fed. You can go back to FDR and when interest rates were really low or interest rates were were were high during the Great Depression. He was pressuring the Fed back then in the nineteen thirties to to lower their rates. Lyndon Johnson in the sixties. Was clashing with then Fed Chair William Martin, who was trying to keep interest rates low to fund the Vietnam War and the Great Society programs.

• 26:11Speaker 03

  So, you know, famously, that was when, under President Johnson, he invited Martin to his Texas ranch and just, you know, berated him for raising rates rather than lowering rates. President Nixon, Richard Nixon, in 1970s was pressuring Fed Chair Arthur Burns to keep interest rates low before the 1972 election. And he actually had some sway, President Nixon did, in pressuring Arthur Burns to do that. Obviously, you can see why a president would want interest rates to be low because it boosts the economy. It makes money cheap. That means people can borrow easier.

• 26:51Speaker 04

  It stimulates the economy through leverage and through borrowing, yes.

• 26:53Speaker 03

  The problem, though, and we saw this with Nixon in the 70s, was it did resort and it result in short-term growth, but then ultimately led to the high inflation that we saw in the 70s. Because you can't just keep printing money and just keep expecting everything to be super cheap forever because it's, it ultimately, it can blow up. It can, the economy can overheat. And then when it overheats, then it burns.

• 27:17Speaker 04

  Yeah.

• 27:17Speaker 03

  And it's bad.

• 27:18Speaker 04

  Well, we've seen that in other countries. Look at Turkey.

• 27:22Speaker 03

  Yep.

• 27:22Speaker 04

  You know, in the Middle East.

• 27:23Speaker 03

  Yeah.

• 27:24Speaker 04

  And it's a big economy compared to the surrounding countries.

• 27:27Speaker 03

  Yeah.

• 27:27Speaker 04

  But its economy, it's, I mean, for lack of better words, almost collapsed. But their currency, I mean, you can go with $1, it gives you thousands of liras, Turkish liras.

• 27:37Speaker 03

  Yep, yeah.

• 27:39Speaker 04

  A lot of it has to do with their decisions. And the Federal Reserve being a tool in the president, the Turkish president's hands.

• 27:46Speaker 03

  Yep, yeah. Argentina is another big example of this, where they essentially, the central bank is, you know, being run by politicians who are just trying to stay in office or get elected rather than actually try to stabilize the economy. And it has backfired. This is, I think, why we saw the markets pull back today.

• 28:08Speaker 04

  Correct.

• 28:09Speaker 03

  Because if, if, if, if this is the, if this is the direction that America is going to go, where we want to become like a, you know, banana republic, or we want, you know, we want to, we want to have our politicians in charge of our economic policy, or then it's, it's, I think everybody, most people would agree that that would be disastrous.

• 28:28Speaker 04

  Yeah, I I I would agree. And look, we did not get here by chance. We got here through certain policies, through certain independence, you know, through through multiple things that we put in place as a country, the the, you know, government not being involved in certain things, having Congress as a overseeing things. So we need to get back to what the founding fathers intended to us to have a little bit.

• 28:54Speaker 03

  Yeah.

• 28:55Speaker 04

  In the world we live in today. Maybe with some some some tweaks here and there. I agree with that. But I personally love the independence of the Federal Reserve because comparing it to other reserves around the world, I think we have the best.

• 29:09Speaker 03

  Yeah, yeah, we do. I I I agree. And I still hold out hope that things will settle. It just there's a lot of nerves right now, and I think heightened emotions. We're still within just the first few months of the president of of Trump's, you know, second term here. And I think that there's I'm hopeful that some of these kinks will get worked out and ultimately, you know, we'll have some of these strengths that we have as an economy and as a country come back. Doesn't help, I think, to throw insults at at Jerome Powell, calling him Mr. Too Late, a major loser.

• 29:46Speaker 04

  Mr. Too Late.

• 29:47Speaker 03

  Mr. Too Late and a major loser. I mean, Jerome Powell has done a phenomenal job. He's been, I think, in my opinion, one of our greatest Fed Chairs, considering what he navigated and how we came through COVID and that high inflation. We were uncharted territory. I was very skeptical of any Fed Chair or any President of the Fed being able to bring down inflation as quickly as it did. He took a lot of of criticism for increasing the rates as as rapidly as they did. It seems counterintuitive. What are you going to add insult to injury now? Like, we're dealing with high inflation. Now you're going to make money expensive, too? Well, it worked.

• 30:26Speaker 04

  It worked.

• 30:27Speaker 03

  It worked, and it came back. And we took our medicine. We had to take our medicine as a country. It was the only way that we were going to, you know, slow down and bring prices down. And I I've Still hopeful that we can get these rates down lower, but we want the economic news to tell us that, not our politicians to tell us that. Even if it's your guy, even if it's your guy in the office telling them that, just you don't want that. Trust me, because ultimately your guy isn't always going to be in the office. And think about your not, your person, your team not in the office and putting pressure on, on the Fed. Like it would terrify you. So we just don't want that. I mean,

• 31:08Speaker 04

  And that's, that's why we saw what we saw today in the market, in my opinion.

• 31:11Speaker 03

  Yeah, yeah. Hopefully it passes. I'm, I'm, I'm cautiously optimistic about that. We'll take another break here. Sammy, we'll be right back after this quick break.

• 31:20Speaker 00

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

• 31:34Speaker 03

  Welcome back. We're on the Money Wise Show. That's Sammy Abbiawi. I'm Sharad Waite. We're your hosts today. Appreciate the comments and questions. Keep them coming our way.

• 31:43Speaker 04

  We have a follow-up question to our 529. Thank you for covering my question about 529. One follow-up. Have you ever dealt with a parent plus loan? Just wondering if they are better than a private loan.

• 31:56Speaker 03

  Gosh, better or worse, it depends. So a basic breakdown of a parent plus loan versus a private student loan. The major difference is that the parent can borrow the money. So it's a loan that the parents are on the hook for, not the, not the student. So a private loan, the student gets that loan and it's on them. Whereas the parent plus loan, the parent gets it, you know, and then of course it's on the, on the parent, you know, credit.

• 32:23Speaker 04

  Is it disbursed all at once and then you just pay the fees as you go? Is it disbursed over time? How does?

• 32:29Speaker 03

  I'm not sure exactly how the disbursement goes. My guess is that it's paid based off of, well, I know that the parent plus loans are based off of the, what they call your, your cost of admission or a cost of, you know, education. So they look at, Or cost of attendance, I guess, is what it is. So your tuition, your room and board, your books. And then they deduct from that amount any other federal student loans, maybe that the student has applied for, or scholarships. And then that comes out to the maximum amount that a parent can borrow. It is, you know, one of the differences also is there is loan

• 33:12Speaker 03

  forgiveness for the parent plus loans, for the public service loan forgiveness. In some cases, you can get that. You're not eligible for that under the private student loan. And that has affected, we see that occasionally, somebody who works in the public service, like you're a teacher, mostly we see it in working for the school districts, which is a really great benefit, you know, to get that forgiveness after those years of service. And the parent plus loan is the lender is the US Department of Education. So as you mentioned, Sammy, like you borrow money from the federal government, you know, it's like...

• 33:46Speaker 04

  Got to pay it back.

• 33:47Speaker 03

  You definitely got to pay it back. Interest rates currently for the parent plus loan is about 8%. And the private student loan, it's variable and it's fixed. Or fixed, rather. And it varies by the lender and by your credit score. So you're just basically going to a private lender, like a bank.

• 34:07Speaker 04

  Yeah.

• 34:08Speaker 03

  And...

• 34:09Speaker 04

  Fees? How much fees?

• 34:10Speaker 03

  You know, I'm not sure. I'm not sure in terms of, I'm guessing the fees are probably comparable between both of them, between, you know, the private loan and the parent plus. It certainly can be very confusing. You want to do your research if you're a parent that's looking at, you know, at your kid, you know, getting ready to go to college. There are no income requirements or caps over the parent plus loan, whereas, you know, there are with the other...

• 34:42Speaker 04

  Correct.

• 34:43Speaker 03

  Other loans. So, you know...

• 34:46Speaker 04

  I remember when I was a banker, people would ask me the question about what's the best way. And when I'm hearing you talk about the parent plus loan, meaning the parent is actually carrying the debt on versus the student, carrying that risk and what have you. I would say personally, if I am at that age where I'm gonna send my kid to college and I have a little bit of equity, what I used in the past as an advice is I just tell people, if you're gonna carry that responsibility, take advantage of your equity on the home, do a line of credit, eventually fix that rate whenever your son or daughter are done with college, and then start repayment.

• 35:24Speaker 03

  Yeah.

• 35:24Speaker 04

  The downside to that is you do not have forgiveness potential on a HELOC.

• 35:29Speaker 03

  Yeah, and it's a revolving line generally.

• 35:32Speaker 04

  It's a revolving line, it's a lower, lower interest rate, and a lot of the time you can get one with no fees or very little fees.

• 35:37Speaker 03

  Yeah, the fees can be lower.

• 35:39Speaker 04

  If you're gonna be one of those parents that are actually gonna carry the weight of the debt

• 35:43Speaker 03

  Yeah.

• 35:44Speaker 04

  on your shoulder.

• 35:45Speaker 03

  Yeah.

• 35:45Speaker 04

  If you're gonna do the private loan, that's a different story.

• 35:47Speaker 03

  I, I think it, what would be helpful and what I'd recommend any parent do is, is open up a spreadsheet and, and list the different options that you have to finance, whether it's a parent plus loan, or a private loan, maybe a home equity, maybe a borrow from grandma, you know, write down these, your, your alternatives, and then you put, you know, fees, interest rate.

• 36:15Speaker 04

  That's right.

• 36:15Speaker 03

  You put the, you know, overall cost over the term of the loan, and you know, these few points, and then you just do a cost benefit analysis.

• 36:24Speaker 04

  That's right.

• 36:24Speaker 03

  And it's not always straightforward, you know, you gotta, you gotta, you gotta weigh the pros and the cons. I've did this three times with my kids, and it's, it's not a real fun exercise to go through, but, you know, on top of, oftentimes the parent just has the stress of, is my kid going to the right school? Are they getting the right degree? Are they gonna stick with it? You know, are they gonna even find a job, you know, in whatever it is that they, that they think they're gonna go into? Are they gonna change their major, you know, two or three times, like, happens very frequently? It's, it can be very, very stressful.

• 36:59Speaker 04

  It is, it is. I agree with you.

• 37:01Speaker 03

  I'm glad, I'm glad I'm, I'm past that. Sorry, Sammy.

• 37:07Speaker 04

  I have one, so I'm not really like you.

• 37:09Speaker 03

  No, but still, you got it. It's coming up, coming up before you know it. And headline news today, and we already brought this up to you, but Chipotle is gonna try to open up a store down in Mexico.

• 37:22Speaker 04

  Wow.

• 37:23Speaker 03

  You know, I put this on the list of skeptical moves. I'm very skeptical.

• 37:28Speaker 04

  If they make it there, they can make it anywhere.

• 37:30Speaker 03

  You bet they can.

• 37:31Speaker 04

  That's the new slogan for Chipotle.

• 37:34Speaker 03

  You know, Chipotle, Taco Bell, part of Yum's brand, has tried this twice and failed.

• 37:40Speaker 04

  In Mexico.

• 37:41Speaker 03

  In Mexico, which is like a no-brainer. Like, I could tell you, I could tell you that that is not Mexican food. I mean, it kind of looks, there's some similarities, but, I mean, you, I, you know, I lived in Mexico for a couple of years, and a burrito in Mexico is a small donkey. It is not a tortilla wrapped and stuffed with beans and rice.

• 38:02Speaker 04

  What?

• 38:03Speaker 03

  Nobody knows what a burrito is down there. It's a fully American invention. It's not a, you know.

• 38:09Speaker 04

  We upsized the taco. We called it a burrito.

• 38:13Speaker 03

  That's what it is. And when I would explain it to people down there, I would say, do you guys, what's a burrito? And they're like, what do you mean, little donkey?

• 38:19Speaker 04

  See, what you just, what you just shared with me is our inventive side in this country. That's why we're gonna be okay.

• 38:25Speaker 03

  Oh, yeah. Yeah, for sure.

• 38:27Speaker 04

  We will always figure something out.

• 38:28Speaker 03

  Yeah. Yeah, we invented the corn dog. I mean, come on.

• 38:31Speaker 04

  Yeah, the California roll.

• 38:36Speaker 03

  It was a little interesting, though, about this Chipotle, because Chipotle is using a company that, essentially, this, I can't remember the name of the company, but they focus on taking US franchises and taking them overseas and expanding them internationally. For example, actually, if you look at Chipotle and this company that's done this, there are 58 locations in Canada, 20 in the UK, 6 in France, 2 in Germany, and 3 in Kuwait, and 2 in the United Arab Emirates.

• 39:11Speaker 04

  Where In-N-Out just opened its first store.

• 39:14Speaker 03

  Oh, really?

• 39:15Speaker 04

  I think so, yeah.

• 39:16Speaker 03

  In the United Arab Emirates? Well, I could see that, actually.

• 39:21Speaker 04

  Oh, yeah. Lines were long, I read.

• 39:22Speaker 03

  Ah, that is just mind-blowing to me. You go In-N-Out? You a believer?

• 39:27Speaker 04

  I'm a believer. Yeah, I go to In-N-Out after on Friday afternoon when we close the office, there's always a burger for me there.

• 39:35Speaker 03

  That's nice.

• 39:37Speaker 04

  Eventually it's gonna be at the Woolworths once we open, but for right now, it's In-N-Out.

• 39:41Speaker 03

  Yeah.

• 39:42Speaker 04

  When I first came to this country, I used to go to In-N-Out with a little piece of paper. On that says double double with grilled onions because I could not speak English. I kid you not, my brother-in-law wrote me the note because at that time it was, I think, two dollar and fifty cents or almost like three dollars. It was cheap and good and I, hey, that was my introduction to American burgers.

• 40:04Speaker 03

  Oh my gosh, that's hilarious. I just met somebody last week who was telling me that during COVID, they made it a goal to make at home and perfect the In-N-Out burger. To the point that they stopped the guy in the parking lot, that like the delivery guy that had the buns and everything, and they got the actual buns from him, like bought some from him, from like the delivery person. Paid him like a hundred bucks or whatever, he gave me a bag of buns, you're like, there you go. You know, bought the buns and they said they just worked at it, worked at getting the meat just right, getting the sauce, that you know, the lettuce exactly how they did. So it took them, took them a little while, but they, they ultimately just nailed it and had the exact replica of it in In-N-Out.

• 40:47Speaker 04

  You know, recently, recently, Mary Ann took me to Chili's. And I had the, I had the ten dollar burger.

• 40:53Speaker 03

  Yeah, I've heard it's good.

• 40:55Speaker 04

  It's better than McDonald's.

• 40:56Speaker 03

  Yeah, and about the same price.

• 40:57Speaker 04

  Same price.

• 40:59Speaker 00

  So there's, there's a show called Fast Foodies, my, my wife watches and they do that. They actually have three, you know, famous chefs and they pick out their favorite fast foods. I brought that up because the In-N-Out one, but they will replicate and show you exactly what they use to make those. Yeah, it is.

• 41:18Speaker 03

  That's interesting. Is it, it's beyond just like burgers, they'll do all different items and stuff?

• 41:23Speaker 00

  They'll pick, they'll have a guest on and say, well, you know, what's your favorite fast food? And then they'll, the three different chefs will make it, replicate it.

• 41:30Speaker 03

  Oh my gosh.

• 41:31Speaker 04

  Olive Garden salad.

• 41:32Speaker 03

  We gotta get, hey, by the way, Richard Yoshimura, the chef that's at the Woolworths and the soon to be opening up. Lunch and at the last one in the world will be on the show on Wednesday.

• 41:43Speaker 04

  That's right.

• 41:43Speaker 03

  So in two days. I'm excited. Two more shows. I want to ask him about that.

• 41:48Speaker 04

  Talk about a mad scientist when it comes to sauces.

• 41:51Speaker 03

  Seriously.

• 41:52Speaker 04

  I mean, I wouldn't say that, you know, but to him, but.

• 41:56Speaker 03

  He's a food nerd.

• 41:57Speaker 04

  Oh, my God.

• 41:58Speaker 03

  Total food nerd.

• 41:59Speaker 04

  Not like, I mean, like to the answer to the me, me, he was like, my recipe is all in the head. It's just paprika, cumin and this and throw things. Him, he's like, he, he, he weighs everything.

• 42:11Speaker 03

  Yeah, yeah.

• 42:12Speaker 04

  And I'm like, wow, that's impressive.

• 42:14Speaker 03

  Yeah, it's, I'm really excited to talk to Richard and have him on the show.

• 42:17Speaker 04

  Yeah, that's great.

• 42:18Speaker 03

  Couple of shows down the line. All right, we're going to take our final break of the day. Thanks for tuning in. We'll be right back after this.

• 42:23Speaker 00

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

• 42:47Speaker 03

  Thanks for tuning in. We're Money Wise. That's Sammy and I'm Sharon, your host today.

• 42:54Speaker 03

  It was, uh, news hit this morning, Sammy. Pope Francis passed away.

• 42:59Speaker 04

  Yeah, it was news to me because I saw pictures of him in the balcony.

• 43:03Speaker 03

  It's like yesterday.

• 43:04Speaker 04

  Yeah. It's like he said goodbye. That's weird.

• 43:07Speaker 03

  It is weird. That's true. Was he waving?

• 43:10Speaker 04

  I didn't see that.

• 43:12Speaker 03

  Well, yeah, you learned in our all staff meeting this morning, huh?

• 43:17Speaker 04

  That was cold.

• 43:20Speaker 03

  Pope Francis, he was the first Jesuit Pope in history, which there's been a bunch of popes over.

• 43:25Speaker 04

  How many both have, both have, I don't.

• 43:28Speaker 03

  I don't know. How many?

• 43:29Speaker 04

  It's a, it's a sight. I went to, I visited Rome and, and I went to, to underneath the cathedral. And I saw the where they are buried. It's a site like truly it's an experience. A lot of history.

• 43:42Speaker 00

  Two hundred and sixty-six.

• 43:44Speaker 03

  Two hundred and sixty-six.

• 43:45Speaker 04

  Wow.

• 43:46Speaker 03

  It's been going on. The papacy has existed for nearly two thousand years. Uh, you know, it's interesting is Pope Francis being the first Jesuit Pope in history. The Jesuits are, uh, historically kind of stay away from high ranking church offices. They're more about humility and simplicity, advocacy for the poor. And so obviously it's no surprise Pope Francis, and I don't think any of the, well, maybe early on, but none of the popes are paid. It's, you know, they just, they have their room and board taken care of, but there's no, no money that, you know, that they receive. Um, you know, Pope Francis, you know, I, I don't, I have, I actually have no idea how he was overall viewed.

• 44:30Speaker 04

  I, I don't have an opinion of him. I, I don't have an opinion of him growing, growing in a country like Morocco. Um, my favorite Pope, just because when I was seven years old, I visited Morocco and I saw him live was Jean-Paul the second.

• 44:45Speaker 03

  Yeah.

• 44:45Speaker 04

  Uh, he's always been my, my, my favorite. I grew up in Morocco, which is a Muslim country, but I did go to Catholic school. My parents put me in Catholic school because it was the best school. They did not subject us to any Catholic things or what have you. They did not teach us Catholicism or anything, but it was the best school from an educational standpoint.

• 45:03Speaker 03

  Do you know if it was a Jesuit school?

• 45:05Speaker 04

  No, it was, uh, no. Jesuits tend to be, to give up a lot of the materialistic things in life.

• 45:12Speaker 03

  But they, but they also tend to, um, emphasize education, social justice, interfaith dialogue. They founded over two hundred universities and thousands of schools worldwide. Still makes them one of the largest male religious orders on the planet. There's about fifteen thousand Jesuits worldwide today. Um, so it could have been, it could have been a, uh, a Jesuit school. You just didn't, you know, they didn't, you didn't require you to learn anything about.

• 45:39Speaker 04

  I can, I can research that. It's called Don Bosco, which is throughout the world, not, not just in Morocco.

• 45:44Speaker 03

  Oh, wow.

• 45:44Speaker 04

  Yeah, it was throughout the world. And maybe it is a Jesuit school now listening to you. Yeah.

• 45:48Speaker 03

  Could be.

• 45:49Speaker 04

  Now he met with J D Vance.

• 45:51Speaker 03

  Yeah, like yesterday.

• 45:52Speaker 04

  Yes.

• 45:53Speaker 03

  Yeah, it's really, I mean, we all knew he was ill.

• 45:56Speaker 04

  Yeah, he was old. He was what? Eighty-eight years old?

• 46:00Speaker 03

  He was, I don't know.

• 46:02Speaker 04

  Yeah, I think he was eighty-eight years old.

• 46:04Speaker 03

  Yeah.

• 46:05Speaker 04

  It's old.

• 46:06Speaker 03

  It is, you know, the Catholic Church has enormous influence worldwide.

• 46:13Speaker 04

  Yes.

• 46:13Speaker 03

  It's definitely one of the, you know, world, you know, major religions. You know, the estimates show that it's one of the wealthiest, if not the wealthiest church on the planet. Obviously, just the Vatican's assets, you were at the Vatican, you actually visited it?

• 46:29Speaker 04

  Uh huh.

• 46:30Speaker 03

  So, I mean, you just.

• 46:31Speaker 04

  It's just beautiful.

• 46:32Speaker 03

  It's gorgeous everywhere.

• 46:33Speaker 04

  Beautiful, beautiful and just eye opening, a lot of history. If you want to see the impact of Catholicism, I travel tomorrow to Philippines. My wife is from.

• 46:42Speaker 03

  Oh, yeah. Heavy influence there, same thing in Mexico.

• 46:46Speaker 04

  That's why it's called Philippines, King Philip.

• 46:48Speaker 03

  Oh, yeah?

• 46:49Speaker 04

  Uh huh.

• 46:50Speaker 03

  There you go. We learned a lot today. We learned about politics, we learned about religion, we hit all, all the major points. I want to thank all of our listeners for tuning in. If you missed any of these shows, go wherever you listen to your podcasts and you'll find us there and subscribe. Also, remember these three things, be smart, be safe and always be money wise.

• 47:10Speaker 02

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