4/7/25 Popcorn & Portfolios: Market Dips, Theater Upgrades, and Why Two Advisors Are Better Than One

The Moneywise Radio Show and Podcast Monday, April 7th 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

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  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 Gero Ellis padded radio room off Stockdale Highway on ESPN Bakersfield, 1230 a.m., 101.1 FM, and always streaming at MoneyWiseGuys.com. You can text into the show 24 hours a day at 661-396-1000. Today, we're your hosts. I'm Sharad Waite and...

• 1:04Speaker 04

  Sammy Abiyawie.

• 1:05Speaker 03

  Hey, Sammy.

• 1:06Speaker 04

  What's going on?

• 1:07Speaker 03

  Can you believe the markets? Can you believe what's going on?

• 1:10Speaker 04

  I was not expecting this to happen this soon or at this rate. I'll be honest.

• 1:17Speaker 03

  I don't know. I mean, who was expecting this? And right now, so many people scratching their heads, economists, investors, Wall Street, wondering, what is happening? Like, why? What's the point of all of this? Because you can't avoid the fact that the markets are 100% focused right now on tariffs.

• 1:39Speaker 04

  Yes.

• 1:39Speaker 03

  That's all they seem to care about right now is what is the impact of tariffs? What's strange is if you look at a chart today in the markets, the markets opened up down. S and P 500 was down close to 3% or 3.5% right at the open. And then there was a couple of times throughout the day where actually it was in positive territory, just slightly.

• 2:04Speaker 04

  Yes.

• 2:05Speaker 03

  And then came back down. And, you know, looking at the headlines when those... Just before those, the markets went into positive territory. It was basically around rumors that there was going to be a pause on the tariffs.

• 2:21Speaker 04

  90 day pause potential.

• 2:22Speaker 03

  Right.

• 2:23Speaker 04

  Which the White House came out and said, mm mm, we're not doing that.

• 2:26Speaker 03

  Right.

• 2:27Speaker 04

  We're not doing that.

• 2:28Speaker 03

  They're just keep, they're just continue to, the White House at least to say they are committed to tariffs.

• 2:35Speaker 04

  So the President Trump, AKA Dr. Trump, I guess, is a connotation because he's calling that medicine for the stock market.

• 2:43Speaker 03

  Yeah, it's nasty medicine.

• 2:48Speaker 03

  This is, this is what also, you know, what he's saying that this is medicine. And this is what some people theorizes President Trump is trying to do what's called the J curve. This is the, this is a concept, like an economic concept where if you look at how a J, you know, how you spell a J. It's, you know, you have this initial dip, but then it, then it takes off. Then it goes right straight up. So almost like this intentional burning down of certain, of certain parts of the market on purpose. So that then you can, it can go back up. And President Trump has made, made it very vocal that he wants Jerome Powell, the Fed Chair Pres. To lower interest rates or he's going to fire him, which by the way, he can't fire him.

• 3:33Speaker 04

  That's correct.

• 3:34Speaker 03

  But he still is saying, I'm going to fire you if you can't do it. And, and so.

• 3:39Speaker 04

  The lever he has is this.

• 3:41Speaker 03

  Maybe, right.

• 3:42Speaker 04

  I think you and I discussed this about three, four weeks ago about a potential theory. Why we're doing the stuff we're doing today.

• 3:49Speaker 03

  He's like, if the, if I can't make the Fed do it, then I'm just going to disrupt the entire global trade.

• 3:54Speaker 04

  And he's made his point across in the past too, about the policies of Powell and how he dislikes him. And how he's, he needs to be more aggressive with rates.

• 4:04Speaker 03

  It's just, it is just, I don't.

• 4:06Speaker 04

  We might be on to something he shared.

• 4:08Speaker 03

  We might be, but also I know certainly in my lifetime, this is the first time I have seen a president take such a great risk. Playing with the, with the entire global trade structure.

• 4:21Speaker 04

  I want to go back and read his book again, just to see if, hey, maybe I missed a chapter here.

• 4:25Speaker 03

  Yeah. How to burn down the world economy. Markets over the weekend were all nervous, Asian markets all down. And so everything was pointing to the US markets being down as well. And surprisingly, it was down, but not as much as you would think.

• 4:44Speaker 04

  Now, we're a political show. We don't talk about politics, but you think somewhere Kamala Harris is saying, I told you so. Somewhere in a corner.

• 4:54Speaker 03

  I don't know if any president that would have done this and would be, would continue to do this. At least, and I don't believe that President Trump is intentionally trying or wants to destroy the country. I think.

• 5:08Speaker 04

  He knows the value of the stock market. He knows the value of what for him as a president and his legacy that he wants to leave behind is not a stock market in shambles. That I believe.

• 5:20Speaker 03

  Yeah. And I, my, my guess is he really does think that this is the right thing for the country. And that, you know, he's willing to pay the price of all of the, all of the panic right now. Because ultimately he thinks it's going to work out. I just, I just can't understand the economic reasoning behind it. Because it, it, it is a, it is, listen, this country has been the, the, the biggest economic force in, in the history of our species. And it is in large part over the last, you know, 50 plus years where you've, we've had more trade,

• 6:03Speaker 03

  more global trade, more free trade has really spurred enormous economic growth in, in America. At the same time, I recognize that it has brought some imbalances, which is there are certain countries that have now manufacture things much cheaper and much better than we can here. It's turned us into a, a consumer driven economy.

• 6:28Speaker 04

  Yes, right.

• 6:29Speaker 03

  Where we have to buy all of these things. Over the weekend, I heard, I think Latroy sent me a. A video of a finance person, can't remember who he was, but he essentially gave the example of the Italians are really good at making pasta and the Swiss are really good at making watches. And all of a sudden, if the Swiss can't import, or they have to pay more, and now they can't import pasta, now it goes, prices go up and they don't have as good pasta, because now they have to try to figure out how to make it. And same thing with the Italians, now they have to figure out how to make watches and it's going to cost them more money.

• 7:10Speaker 04

  Yes.

• 7:11Speaker 03

  And instead, it makes a lot more sense for Italy to say, "We're going to sell you your pasta, we want to buy your watches." And that is, that agreement, those things are all over the world, and the less barriers there are for those, the better.

• 7:26Speaker 04

  And this is not something new. Exchange of goods is not something new. I mean, it's thousands of years. We have, we have things coming from India and China, the spice trade that triggered the Silk Road and fed the Silk Road for thousands of, you can see that road from the moon, actually, from space.

• 7:45Speaker 03

  Yeah.

• 7:46Speaker 04

  That's how long it's been and how engraved it is on Earth's crust. So this is not something new. Globalization is not something new. It's just became a lot faster in the last 50 years especially.

• 7:55Speaker 03

  Right.

• 7:56Speaker 04

  And, and one thing, I mean, I'll give this, I think that the reasoning might be good, "Hey, we want to bring things back here." It's just going to take us some time. It's not going to be overnight where we're going to be able to manufacture an iPhone here in America, because we do not have, I can, I keep repeating this, we do not have the skills that we need for that.

• 8:16Speaker 03

  Nor the materials.

• 8:18Speaker 04

  Nor the materials.

• 8:19Speaker 03

  Yeah, it's just, it's impossible, and you know, you bring up the iPhone, iPhone is still manufactured in India, I believe, most of it is in India, maybe still parts in China, but it's really globally sourced, all from all over the world, all of the different materials that go inside that phone.

• 8:38Speaker 04

  That's right.

• 8:39Speaker 03

  But you look at the magnificent seven, which has gotten so much attention over the years, the impact of these tariffs has decimated the market capitalization value of the magnificent seven. It's near, by the way, it's near a one-year low, all these companies, so for a reminder, we have Apple, Alphabet, Microsoft, Tesla.

• 9:04Speaker 04

  And Nvidia.

• 9:05Speaker 03

  Nvidia.

• 9:07Speaker 04

  Amazon.

• 9:08Speaker 03

  Amazon, yep, and there's one more.

• 9:12Speaker 03

  It's Meta, did I already say Meta?

• 9:14Speaker 04

  No, you didn't say Meta.

• 9:15Speaker 03

  Okay, so between those seven companies, there has been about $2 trillion that's been wiped out. $2 trillion. So, we have a total loss of stock market value since its peak just late last year of $6 trillion. So, like a quarter of the market capitalization loss of the stock market has just been from those seven companies. And these are tech companies, so these, these are all tech companies. And you look at Apple, where so much of their value, they sell a product, but the product is manufactured globally,

• 9:55Speaker 03

  but the technology behind it is all owned and headquartered here, California, in the United States. And so, it, there definitely was some imbalance there when we saw so much money going into just a handful of stocks, especially when those stocks were all riding the AI momentum. And, and so, you know, it's, again, it kind of comes back, if it wasn't for this tariff issue, there would be something else that would be bringing the markets down, because of.

• 10:29Speaker 04

  A correction, maybe, right?

• 10:31Speaker 03

  Yeah.

• 10:32Speaker 04

  Not, not, almost, we called it earlier bearish.

• 10:35Speaker 03

  Not a crash, I mean, this is kind of, this is a big drop, in fact, this is the biggest drop we've seen since COVID, since 2020. We've never seen the markets pull back, I think it's the worst, the worst week since the, the.

• 10:49Speaker 04

  The COVID.

• 10:49Speaker 03

  The worst of COVID.

• 10:50Speaker 04

  COVID was like, what, 38% drop or something over, over 30 some days?

• 10:55Speaker 03

  Over a bit, yeah, but over just like a one-year period, this is about, this is about as bad as we've seen now in five years. But, if you look at history and going back over the last 100 years, the United States has experienced at least a 20% drawback in the stock market. Market between six and eight times. I mean, every six to eight years is when that happens. And so we had our last bear market in 2022. So it's only been, you know, three or three and a half years since we've had this. But, you know, again, you have to go back to averages. There would have been something already building up in the markets because it was.

• 11:39Speaker 04

  Yeah, and the 2022 was a buildup from COVID years because high inflation, aggressive Fed rate hikes that took place and fears of recession. And just going back to bear market, I think you taught me this or you told me this. The definition of it is it takes place when there's a lot of fear around what's going on in the market overall.

• 12:00Speaker 03

  Right.

• 12:01Speaker 04

  Which I think that's what's happening today with the tariffs.

• 12:04Speaker 03

  Yep.

• 12:05Speaker 04

  And it's because it has an impact on the whole global economy. That's why we're seeing the impact we're seeing today.

• 12:10Speaker 03

  Yeah, and if you look at the average bear market decline, it's about 35%. So we are, the markets opened up today, this morning, when they opened up down 3.5%. We were officially in that 20% bear market territory for just a little bit. And then the markets kind of pulled back. I mean, came back up and so we didn't end the day in a bear market territory. But if you're going by the averages, we still have a ways to go. We were like halfway there if we are, in fact, heading into a bear market. And then, you know, you see headlines all over the place now about, oh, recession. Now we're in a recession. We just don't know it yet.

• 12:52Speaker 03

  Because you don't know if you're in recession until later. It takes a while for the numbers to come in.

• 12:57Speaker 04

  So as an ex banker, bankers like to stay ahead of the recession. Why? Because they want to adjust their lending principles, lending practices away because they don't want to make any loans that are not going to get repaid. So if we're going to go into that, you're going to see big banks maybe slowing down their. Lending or lending to certain sectors or making the lending process a little bit more robust, a little bit more, just not difficult to the word, maybe just robust. The underwriting principles are just going to get a little bit more difficult going forward.

• 13:35Speaker 03

  So we had a listener question that actually asked this. This is how can the decrease in mortgage originations impact the loan choices available to someone that is in an older financial situation? I think you just answered that, which is banks, if banks are, see that the people are taking less loans, they're basically seeing, let's call it a recession on the horizon, they could have their lending standards be much more strict.

• 13:58Speaker 04

  Especially for that, for, for, he said, an older population, correct? Is that the listener question?

• 14:03Speaker 03

  Right.

• 14:04Speaker 04

  So the great thing about America is we cannot.

• 14:07Speaker 03

  Discriminate.

• 14:08Speaker 04

  Discriminate. However, you can just make things a little bit difficult.

• 14:14Speaker 03

  Right.

• 14:15Speaker 04

  Right? Through, well, I need this piece of information, I need this piece, I need that piece. And people can just like, ah, you know, I'm just walking away. You're going to ask for my first child and my blood work next time.

• 14:26Speaker 03

  Right, right.

• 14:27Speaker 04

  So, but, but, but there are options for older population, you know, the reverse mortgage being one of them. You have to have certain qualifications in order for you to get, take advantage of that. The major one is you have to be 62 years old or older in order for you to take advantage of that. But the reverse mortgage, like especially when you structure it right, might not be a bad idea.

• 14:48Speaker 03

  Yeah, it, I've always thought of a reverse mortgage as a mortgage of last resort because you're, you're essentially paying upfront all of the costs, not all, but a majority of the costs. And you're getting that loan because you don't have the income to be able to pay it back. You want to just let it be paid back on the back end.

• 15:07Speaker 04

  Yeah, so if you have equity in your house and you're 62 and older, retired on a fixed income, and your kids are well off or they don't need a lot of inheritance, you can utilize your equity into that house to your advantage and your lifestyle. Okay, by, by borrowing a reverse mortgage, either through a line of credit, lump sum ahead, whatever, the structure you feel more comfortable with. And then eventually that equity. Uh, if you, if you sell the house, you pay that back. If you pass, then you're whoever is inheriting, sells the house, pays off the mortgage, the interest and any fees that are outstanding, and they can keep the rest of the equity.

• 15:46Speaker 03

  Yeah, I mean, kind of not to bring it too, too much back to President Trump, but some theories again say that this is an attempt, the tariffs are an attempt to lower rates because you're putting pressure on the Fed.

• 16:00Speaker 04

  That's right.

• 16:00Speaker 03

  To lower the rates. And so, you know, it, it could be this weird thing where you have less people right now borrowing because rates are still a little higher than.

• 16:10Speaker 04

  It's very high. I mean, just as a comparison, let's say you're building something, right? You're building your, on a construction loan, your, your construction loan is tied to prime or some type of a variable rate, right? Sofer or prime, whatever the bank is, is offering. So prime plus a spread, you're talking about nine and a half percent, sometimes 10%. Just five years ago, Sherrod, we were building, giving construction loans at 5%.

• 16:35Speaker 03

  Total, all in?

• 16:36Speaker 04

  Yeah.

• 16:37Speaker 03

  So prime was like two?

• 16:39Speaker 04

  Prime was three and a quarter, that's the, you know, and then you add the spread, you're at five, five and a quarter.

• 16:43Speaker 03

  Yeah.

• 16:44Speaker 04

  You know, on, on, on a, during the construction phase, your interest expense during the construction loan is almost 50% less than what you would be paying today.

• 16:52Speaker 03

  Yeah, right.

• 16:53Speaker 04

  So a lot of people are holding back on these large investments and things like that. Now, the market learned or investors learned how to live with that. So we're seeing investments into real estate, but I think we can see more if interest rates go down.

• 17:07Speaker 03

  If interest, oh yeah, no, no doubt. Now that's the Fed's biggest tool to spur economic growth is to lower interest rates, just make money cheaper.

• 17:14Speaker 04

  Yes.

• 17:14Speaker 03

  Now you're, now people have, now the numbers work out. People are willing to take more risk. They're willing to, they're willing to, to borrow and, and try to expand their businesses or build.

• 17:23Speaker 04

  Yeah, and expand the business is another one. I mean, you, you, again, your, your line of credit is tied to prime. Right now, your inventory cost, if you add, if you use a line of credit, is 50% more than five years ago.

• 17:36Speaker 03

  Well, we're gonna do this. We're gonna take a break. We want to thank you for tuning in. We're gonna be right back after this.

• 17:41Speaker 00

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

• 17:53Speaker 03

  Welcome back to Money Wise. I'm Sharad here with Sammy.

• 17:58Speaker 03

  This in the news, this came up a few weeks ago. Somebody was asking about the Edwards Cinema. And there, you know, there's some apartments that are gonna go in there behind, near the marketplace. And then also, they tore out the fountain, or changed the fountain.

• 18:12Speaker 00

  Yeah, they tore it out.

• 18:13Speaker 03

  Tore it out, it's gone. So there's all speculation about Edwards Theater and what was gonna happen to it. And there was an article, local article in, on Channel 23, or I guess they did a story on it. It turns out that not only is it not going away, but they're gonna do some upgrades. Actually putting some money into it.

• 18:33Speaker 00

  Finally.

• 18:35Speaker 03

  Hasn't been a while.

• 18:36Speaker 00

  Oh, yeah.

• 18:37Speaker 04

  Yeah, it's way out there. I think compared to Studio Movie Grill, or even Maya Theater.

• 18:43Speaker 00

  Yeah, it's at the bottom of the totem pole.

• 18:46Speaker 03

  I guess Regal owns Edwards Cinema, and it's one of only 10 theaters nationwide that is getting funding for improvements.

• 18:55Speaker 04

  The article called it historic. It was built in 1997.

• 18:59Speaker 03

  If that's historic, that makes you and I ancient.

• 19:01Speaker 04

  Ancient, man. Ancient.

• 19:03Speaker 03

  We're just...

• 19:04Speaker 04

  Gotta go back to Babylon, you and I.

• 19:09Speaker 00

  Yeah, this is not, it's not historic.

• 19:12Speaker 03

  Yeah.

• 19:13Speaker 04

  What's historic about it is I used to go there. When I first came to America, I used to go there and watch multiple movies, not just one, Sharad.

• 19:19Speaker 03

  How would you get into the other, just stick around?

• 19:21Speaker 04

  And just go to the next.

• 19:23Speaker 03

  Yeah, they got a name for that, don't they?

• 19:24Speaker 04

  I don't know. Or when the guy comes with the little flashlight, guess what I do?

• 19:27Speaker 00

  It's movie jumpers.

• 19:30Speaker 00

  We used to call those movie hoppers.

• 19:32Speaker 03

  Movie hoppers.

• 19:33Speaker 00

  And what's historic is Woolworths.

• 19:36Speaker 03

  There we go.

• 19:36Speaker 00

  It's in the name, okay?

• 19:37Speaker 04

  That's, that's right.

• 19:38Speaker 03

  I was talking about 75 years. Now, that can be, that can be historic.

• 19:42Speaker 04

  And especially because it's the last one of its kind.

• 19:44Speaker 03

  Yeah, yeah. But, you know, theaters are struggling. They are not doing as well as they were pre-COVID. I'd looked up some numbers. If you look at box office revenue, so total box office earnings in 2024 reached about eight and a half billion. But just before COVID in 2019, it was 11 and a half billion. So we're still like 20% or 25% lower on revenues for movies than we were pre-COVID?

• 20:18Speaker 04

  Yeah, that's, that's, that's sad because I really, I'm a moviegoer. I love going and taking my kid and my wife to the movies.

• 20:24Speaker 03

  You like, still like going to the movie theater?

• 20:26Speaker 04

  Yeah, we, we like the popcorn thing. We like the hot dogs. We like to go into the movies and just watch. You know, we have not have had good luck with good movies lately, but we still, we still go.

• 20:37Speaker 03

  I know. I've been.

• 20:39Speaker 00

  I mean, me and my boy go to the movies probably once, twice a month. And I mean, I, I thought we were on a heat streak. I thought the movies have been great.

• 20:47Speaker 04

  Yeah.

• 20:47Speaker 00

  But I did not watch the new Minecraft movie. I've heard ups and downs. Justin down the hall said, don't watch it. But the last few movies have been really good. I, I liked the Captain America movie. We also watched the, what's the other cartoon one we just watched? But there's, I, I personally like the movies, but I'm a, I'm a man child, so I can watch, you know, adult movies and I can also enjoy the, the kid movies.

• 21:12Speaker 04

  I think the last one, the last one I went to was, was Top Gun. It's been a while.

• 21:18Speaker 00

  Well, yeah, that's been a while. A long time.

• 21:20Speaker 03

  Yeah.

• 21:22Speaker 00

  But I think that a lot of it is because of the streaming apps.

• 21:24Speaker 03

  Oh, 100%. Like, it's so much, it's so comfortable to sit on your own couch. And now the screens are so big and your sound is good. Yeah.

• 21:35Speaker 04

  Yeah, you got your own, yeah.

• 21:36Speaker 03

  It's so much, I mean, I prefer, I still like going to the movies. The last movie I saw was, it was like a specialty. It was the Led Zeppelin documentary that came out just recently. I can't remember who the director was, but it was really good. This was like limited showing. I'm like, okay, that's a movie I wouldn't mind seeing in the theater, IMAX. You know, so it's like, oh, okay, you know, this, and that was really good. But

• 22:00Speaker 04

  Well, I'm glad they're restoring it, Jared. That's, that's

• 22:02Speaker 03

  Me too.

• 22:03Speaker 04

  It needs it. A Southwest needs it, and I'm glad.

• 22:07Speaker 03

  Yeah.

• 22:07Speaker 04

  They're getting to the game of the reclining seats and all that. So that's awesome.

• 22:11Speaker 03

  Yeah. By the way, that Minecraft movie, I've heard it's so bad. That's why it's good.

• 22:17Speaker 00

  Really?

• 22:17Speaker 03

  It's like one of those

• 22:18Speaker 00

  I've heard, I've heard the same thing about the Snow White movie. That it was like the worst Disney movie in decades. And it actually lost money at the box office, which usually doesn't happen if it has a Disney in front of it.

• 22:32Speaker 04

  Yeah.

• 22:32Speaker 00

  But yeah, I've, see, I've heard from a high schooler, of course, Ryan and his friends think it's great. And I've also heard that Minecraft was so bad that they were, that teenagers were actually thrashing theaters all across the US.

• 22:47Speaker 03

  Cause they were mad?

• 22:48Speaker 00

  Well, I guess they made it some type of social media challenge type thing that at a certain scene in this movie, these teenagers are thrashing theaters.

• 22:57Speaker 03

  Oh, boy.

• 22:58Speaker 00

  Yeah.

• 22:59Speaker 03

  That's terrible.

• 23:00Speaker 04

  I was, Stephen told me about that and I told him, if this was in Morocco, they'll get beat in the theater. And then when they get home and tell their dad, they get beat again.

• 23:11Speaker 03

  Minecraft

• 23:12Speaker 00

  That's true.

• 23:13Speaker 03

  Minecraft has already grossed an estimated 300 million globally on its opening weekend.

• 23:19Speaker 00

  Yeah, it was the biggest movie about a video game ever.

• 23:23Speaker 04

  Wow.

• 23:23Speaker 03

  That's so strange.

• 23:25Speaker 04

  It is.

• 23:25Speaker 03

  So there, there, I mean, there's still some, some glimmers of hope for movie theaters, but like the last, like I said, the last couple of times I've been to the movie theater, it's been, I've pretty much been me and my friend. That's it. There's nobody else in there.

• 23:40Speaker 00

  I've seen a couple of movies that were, it was packed, that we were elbow to elbow with other people. And then I've also seen movies that me and Bubba were the only ones in the theater. And I talked to a, a local manager at a movie theater and then also that they were saying, you know, after they started serving alcohol in a lot of theaters, it was big for like the first couple of months and then it's kind of died off. Where now that they're spending more money on the alcohol and trying to pump up these beverages, that next chapter that they've already started, started working on in California is edibles.

• 24:16Speaker 00

  They'll start selling marijuana dispensaries in the movie theater.

• 24:21Speaker 03

  Yeah, here's your gummy and go sit down and watch your movie.

• 24:23Speaker 00

  Relax, we'll wake you up in a couple hours.

• 24:25Speaker 04

  That'll be good, that'll be good with Bollywood movies, three hours long.

• 24:31Speaker 04

  With all the dancing and stuff, I think those, that would work.

• 24:34Speaker 00

  We'll have to get the D box seats to wake them up at the end of it, shake it.

• 24:38Speaker 03

  Well, since 2019, approximately 3,000 movie screens have closed across the United States. So there's just under 40,000 movie theaters in the United States. So, you know, almost 10% of movie theaters have closed for good.

• 24:50Speaker 04

  Yeah, that's, that's, that's, yeah.

• 24:53Speaker 03

  The, uh, well, we'll say the, uh,

• 24:54Speaker 04

  It's like a rite of passage almost. You're in high school, you got your first date, you go to the movies.

• 24:59Speaker 03

  Yeah.

• 24:59Speaker 04

  You try to extend that arm over the chair.

• 25:04Speaker 03

  Yeah. All right. We're going to take another break. Thanks for tuning in. We'll be right back after this.

• 25:09Speaker 00

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

• 25:36Speaker 03

  How good is the Money Wise show?

• 25:39Speaker 03

  I'm sure that's Sammy, Dancy Sammy over there.

• 25:42Speaker 04

  Love this song.

• 25:44Speaker 03

  I've got some comments.

• 25:45Speaker 04

  Yeah, we have some comments. I'll read the first one, Sherrod.

• 25:47Speaker 03

  Yeah.

• 25:48Speaker 04

  "Thank you for covering my questions, even though I know sometimes it may be a bit uneducated and I'm sure you have to repeat these answers all the time. I enjoy your show and here in the end of yesterday's show, where I believe it was Dustin and Justin that mentioned that even financial advisors have a financial advisor."

• 26:05Speaker 03

  Yeah, yeah. I think Dustin and I were talking about that. And Sammy, you served as my financial advisor.

• 26:13Speaker 04

  Yes.

• 26:13Speaker 03

  Pretty much, even though at the time, you know, when we first met, you were working for a bank, but you were basically consulting business owners. And you had a couple decades worth of consulting business owners, which I'm, I'm a business owner. And, and I had mentioned to you, Sammy, you're, you're my financial advisor, man.

• 26:34Speaker 04

  Yeah.

• 26:34Speaker 03

  You helped us with the, the financing for the Woolworth Building, which involved You had to know everything about my, not my, just my personal finances, but all of the business, all of the businesses that I have. And so

• 26:49Speaker 04

  And I remember you telling me that and it was kind of like a light bulb going on for me because I was like shy and a little holding back about my advice. I'm like, here's this dude with 20 plus years of financial.

• 27:00Speaker 03

  Right.

• 27:00Speaker 04

  And I had to tell him like, hey, I'm gonna tell you this. I don't know how you're gonna feel. Like, hey, Sammy. Even financial advisors need a financial advisor. I'm like, oh, that's a really good point.

• 27:10Speaker 03

  Yeah. And I remember you gave me good, solid advice. And it was just, it wasn't, it wasn't, it would be something that I would tell somebody.

• 27:18Speaker 04

  Correct.

• 27:19Speaker 03

  But I think we, this isn't just for financial advisors. I think almost any industry, there's a hesitation to open yourself up to other people that are in your profession because you can get this sense of, you know, maybe you weren't, I don't know. Maybe it's insecurity.

• 27:37Speaker 04

  Exactly. Insecurity is.

• 27:38Speaker 03

  Like, I can imagine, like, going back to your banking days, you know, if you had, I don't know, I don't know, maybe it was different for you.

• 27:45Speaker 04

  No, no.

• 27:46Speaker 03

  It was a good example, but you're like, well, I'm not, you know, I'm not gonna talk, you know, talk to you about the issues that we have going on in our bank.

• 27:52Speaker 04

  No, I loved, I loved, I loved these round tables that bankers had. And when I went to banking school in University of Washington, I was able to connect with people all throughout the United States, which was awesome. Now you're not dealing with just bankers in your market, competitors. You can ask a friend of mine in Seattle, hey, how are you approaching this? What are you doing for this? And you get like an answer. I'm like, oh, okay. This is a good principle. I think I can apply this.

• 28:15Speaker 03

  Yeah.

• 28:16Speaker 04

  It's, to me, seeking advice, I don't have a big ego. I'm a student. So it works for me.

• 28:22Speaker 03

  We have, I'll say we, but financial advisors in general can have fairly large egos.

• 28:29Speaker 04

  Banker, bankers too. I agree with you.

• 28:31Speaker 03

  You know, it's just like anytime you're dealing with money and, you know, you've been doing it for a long time. And so I've, it's been something that I've, I've just noticed over the years. It's probably not a fair judgment on my part, but I too also participated in round tables with, or discussion groups with other financial advisors outside of town. Like, go, go somewhere else where you're not, nobody's in competition. And you can really just open up and talk about your practice, talk about what you're doing, what you, you know, what struggles you have. It's so helpful. It's incredibly helpful, therapeutic. Yeah. Good message. So thanks for that.

• 29:05Speaker 04

  Well, I have a second, or this one is a question, Sherid.

• 29:07Speaker 03

  Yeah.

• 29:09Speaker 04

  Steve, I think this is what he wants to say. Steve, I have a question for the Money Wise gurus. Due to age, I've started taking RMDs. In light of current hopeful buying opportunities in the market slash everything on sale, which money market fund would you recommend to purchase new funds from? A regular taxable money market account? Or a regular IRA money market account? I'm thinking better to pull from the taxable money market account, so eventually will only be taxed on gain and not entire amount. On the other hand, using the IRA account could help reduce RMD for the year. Your thoughts? Thanks, Mike. Really enjoy the show and podcast and thanks to for all your expertise.

• 29:50Speaker 00

  He said, "Go Finns."

• 29:52Speaker 03

  Go Finns.

• 29:53Speaker 00

  You can read that.

• 29:55Speaker 03

  Yeah, great. Thank you, Mike, for this question. And it's really a complicated question. Essentially what it is, it's a similar question we get to. I'll really simplify it. Do you contribute to a traditional IRA or you do contribute to a Roth IRA? A lot of it depends on your current tax situation and what you foresee the future tax situation being. So there's a lot of moving parts there, a lot of moving parts, because you have to predict what your future tax, either your future tax obligations are going to be. Or for some people, it's not so much of a tax issue for them, it's a tax issue for their beneficiaries.

• 30:41Speaker 03

  So if you have two accounts, one is an IRA and one is a non IRA. Well, if your beneficiaries inherit that IRA, and I'll just keep it simple, it's a traditional IRA or a 401K, it doesn't matter. Then your beneficiaries, unless it's your wife or your husband.

• 31:00Speaker 03

  They will have to receive that money and take all of that money out of that account and pay taxes on it within a 10-year period. So that can be a very high tax burden for some kids. For other kids, they may not be in any sort of tax liability situation where over a 10-year period, they wouldn't pay any taxes on that. I see. And so, a lot of people are building up their nest egg to pass on. And so, if you're going to do that, then it depends on what your beneficiary's tax, what you think your beneficiary's tax situation is going to be.

• 31:40Speaker 03

  Now, for, I would say, the majority of us, we're accumulating money, or now, let's talk to our listener specifically, he's already in required minimum distribution age. That means you're over age 73. That means, I hate to tell you this, best case, I mean, not best-case scenario, but on average, you're not going to live more than 10 years, roughly. It'll be a little less if you looked at nationwide life expectancy at 78 for men, then, okay, on average, you've got maybe another seven years left in you. So, this comes down to, this is what Gero has always said, too, "If you can tell me exactly when you're going to die, I can give you the perfect financial plan." That's right.

• 32:24Speaker 03

  "Tell me when you're going to die, and we'll set this up just perfectly." So, you have to gauge, you know, you have to ask that question, "How long do I think I'm going to be around? What is my tax situation going to be here in the future? And what is it right now?" So, it may make sense right now to pull from the IRA, for example, because you don't have any income other than your required minimum distribution. So, it really wouldn't cost you much in taxes at all to pull from the IRA. In that case, pull from the IRA. If you want to buy, okay, buy. I'm assuming also, based on the question, they're seeing an opportunity in buying stock. They're probably talking about taking money from a money market and putting it into equities. That's what I understood. Yeah, which we've gotten a few of these calls today.

• 33:08Speaker 03

  You know, we've gotten a mix of calls over the last week of people saying, oh, my gosh, I'm nervous. Should I reduce my risk? And then we've gotten several calls into the office saying, oh, my gosh, stocks are on sale. I should buy now. And that might be the case for some people. For some people, it might make sense to do that.

• 33:31Speaker 04

  That's right. Depends on your risk profile. Depends on your financial plan that you had put together. Maybe you can adjust it. Maybe you need to just leave it alone.

• 33:38Speaker 03

  Yeah.

• 33:38Speaker 04

  Because I think what I always try to remember is what you say. It's not time in the market, but it's time in the market or some version of it.

• 33:46Speaker 03

  That's it. That's exactly it. And so the longer you're in it, the better you are. If you, you know, if you're in that position where you can do that. There's also some really great tools that we have access to, not just money wise. I think other financial advisors have some of these tools too. But ours is really good. And the one that we use helps to find that break even or that cost benefit analysis on converting from a taxable to a non taxable account or vice versa. And or converting your traditional IRA into a Roth IRA. And we, you know, we have to input a few different things into the program and then have a discussion. And it's really great, really handy.

• 34:31Speaker 03

  Then you can sort of make that judgment call of what makes most sense for you over that period of time.

• 34:38Speaker 04

  And I don't know if we have time.

• 34:40Speaker 03

  Yeah, let's do it.

• 34:41Speaker 04

  Just another comment, any updates on Gero? It's another listener question, just asking.

• 34:48Speaker 03

  Yeah, no, it's, we should just do a regular Gero update, you know? Um, Gero is, uh, I guess you could say Gero is doing well.

• 35:00Speaker 03

  Gero, you know, it was a massive, a massive event that, that happened, the stroke that Gero went through. And Gero's still going through therapy and, and is still, I think the best thing about Gero are his spirits. He seems to be still very much Gero. However, there is some plateauing in terms of his ability to get back movement on the right side of his body and, which is the, the, the part of the, of the brain that was impacted by the stroke. And, and more, more difficult, I think were the most difficult thing being is Gero's

• 35:39Speaker 03

  struggle with being able to communicate and vocalize his, um, his words.

• 35:46Speaker 04

  Yeah.

• 35:46Speaker 03

  Even though he's there, he's all there in terms of being able to hear and understand. It's, it's being able to send, to, to get the, the words out.

• 35:57Speaker 04

  Yeah.

• 35:58Speaker 03

  And that's where the, that's where the, the struggle is. Um, and I don't think I'm giving away anything private because they're, they're, that if you're, you're on social media, there's been a lot of really great social media posts with some updates about Gero, including his ability to oftentimes still sing and, and, and can, and can complete a sentence if he's singing the sentence, right?

• 36:24Speaker 04

  That's amazing.

• 36:24Speaker 03

  If it's, if it's music.

• 36:25Speaker 04

  That's just amazing.

• 36:26Speaker 03

  Yeah. Yeah. Which is really, really touching, but as, as we said, we always introduce this show as the Gero Ellis padded radio room. That's, that's a...

• 36:35Speaker 04

  And for the first year, we're going to have employee of the year. So the president award is named after the Gero Ellis president award. It's going to go to a special employee of Money Wise this year.

• 36:45Speaker 03

  Yeah. Yeah. And that's, that, that, that Money Wise that most exemplifies the, our Money Wise values. Gero and myself are co-founders of Money Wise and he'll always be part of this company. So thank you for thinking of him and, and for, um, all the well wishes that we've received for Gero. All right, we're going to do this. Please stick around. We've got one more quick break to take. We'll be right back.

• 37:09Speaker 00

  Off your finances, seize the day. Call the Money Wise office at 661-847-1000, or email [email protected] for more information.

• 37:30Speaker 03

  Welcome to the Money Wise Show.

• 37:34Speaker 03

  I'm Sharon, that's Sammy. Thanks so much for tuning in today. Really appreciate your comments and questions. Got one right now. Here Sammy, you got it?

• 37:42Speaker 04

  Yes, I do. Hey, Money Wise, I had a question. I got about 8,000. I'm currently saving for a house, but with the stock market doing bad, should I buy stocks instead or buy a house? Also, if I decide to buy stocks, can someone at Money Wise help me with that?

• 37:57Speaker 03

  All right, so good question. The, I'll simplify the question, rephrase it. You know, do you buy a house or do you buy stock? Well-

• 38:06Speaker 00

  When's the best time to buy a house?

• 38:07Speaker 03

  And when's the best time to buy a house? Steven knows the answer. When you need a house and when you can afford a house.

• 38:13Speaker 00

  Yes.

• 38:13Speaker 03

  And then you want to make sure that you're going to be in that home at least for a few years. You don't want to buy a house if you know you're going to have to move or your job isn't stable, you know, beyond a few years. Why? Because if you hold a home for at least a few years, it's called three to five years, the odds of it being more, worth more in the future than when you buy it are pretty high. Not guaranteed, but if you're talking about one or two years, okay. I mean, we just went through, not just, but the Great Recession from 2008. We saw home prices start to go down in here locally in Kern County.

• 38:55Speaker 03

  And we saw a dramatic drop in home prices. We saw a huge increase in foreclosures. And that lasted-

• 39:01Speaker 04

  Almost a decade.

• 39:02Speaker 03

  Almost a decade, yeah. There were homes, my neighbor who bought, our neighbors, when we moved in, we moved where we lived down in 2009. So it's right at that, right at the bottom, you know, almost the bottom of the housing market. And there were those who bought the home, it was in, it was in 2005 that the neighborhood was built up. So we, in four years, basically, people had lost over half of the value in their homes. They didn't regain that for another, almost five years. So literally, they bought it, if you bought at the peak in 2005, some people were not out of, of, didn't have positive equity for almost 10 years.

• 39:47Speaker 04

  That's right.

• 39:47Speaker 03

  So I'm not saying that we're that place now. I don't, I don't, I don't, we're in a much different market now. We haven't seen rates, home prices go up as dramatically as they did in, in the early 2000s. But we, you still want to just buy a house when it makes sense for you financially. And you, by doing that, you will find that there are other benefits besides just the value of that home that, that help you financially.

• 40:18Speaker 04

  And that's what a lot of people sometimes forget about, and you know, you're gonna get some, some interest write-off. If you're, if you're a single earner, if you don't have any tax shelters at all, owning a house can help you.

• 40:31Speaker 03

  Yeah.

• 40:31Speaker 04

  With, with some, some tax write-offs.

• 40:33Speaker 03

  It, it's, I mean, we have to be careful there, because sometimes, now because of the high standard deduction.

• 40:39Speaker 04

  That's true.

• 40:39Speaker 03

  You know, you have to have more than 24,000.

• 40:42Speaker 04

  That's right.

• 40:42Speaker 03

  Of deductions, but you know, it doesn't take much to do that with some of the prices of some of these homes. But you, what the biggest benefit is, you have an automatic piggy bank. Every month, even that first payment, a little bit of that payment's going towards equity. It's not all just going towards interest. In the beginning, most of it's going towards interest. And then by, you know, as the time goes on, more and more is going towards the principal. And that's just a little, that's a little piggy bank there for you. It's, it's security. It, it can be there for an emergency, in the event that something happens. It's something that you can tap into. And it also just brings, you, if you're renting, you have to compare it to renting, because you have to live somewhere. So you have an expense somewhere.

• 41:24Speaker 03

  And if you're renting, all of that money is going towards. To somebody else's mortgage, you're not getting any equity. And then the worst thing is, is that those price, you have no control over the increases.

• 41:36Speaker 04

  That's right.

• 41:37Speaker 03

  When you buy a home, it's generally stays pretty flat.

• 41:40Speaker 04

  Yeah, you have a fixed payment based on a fixed mortgage, based on a fixed rate for at least thirty years.

• 41:46Speaker 03

  Right.

• 41:47Speaker 04

  Taxes typically, they might fluctuate here and there, but for the most part, they're pretty stable. And your insurance cost is the only variable in that, in that expense.

• 41:56Speaker 03

  That's right. And so, you know, you have to, you have to, you have to compare that. I could see somebody thinking, well, I'm, the stock market's done ten percent over the last hundred years, done ten percent a year, or it's averaged ten percent. So homes have not, homes have not done that, not even close to that. But there's, there's other benefits in the, in having that home. It's, it's the savings of not paying an increased rent every year.

• 42:22Speaker 04

  That's right.

• 42:22Speaker 03

  And that increase goes up and that increase follows inflation. So that's, that's where the real benefit is. And then, you know, there's other ancillary benefits that you have a roof over your head that you own,

• 42:36Speaker 04

  That you own.

• 42:36Speaker 03

  That you control and that's your property. You know, you can do stuff with it. And that's, that's incredibly valuable.

• 42:43Speaker 04

  It is.

• 42:43Speaker 03

  So you want to catch our very own Justin Leland, he's going to be on television tomorrow on KGET Sunrise, six thirty in the morning, tune your TVs, channel seventeen, KGET, Justin Leland will be there. We were talking about teenagers, I don't know what, what came, oh, you were talking about

• 43:01Speaker 04

  Movie theater.

• 43:01Speaker 03

  Movie theater shenanigans. I did the mistake of chat GPTing what, what current teenage trends are happening. The broccoli haircut, have you guys heard of this?

• 43:12Speaker 00

  Oh, yeah.

• 43:13Speaker 03

  Characterized by tapered sides and layered curls on top.

• 43:16Speaker 00

  Is that the Patrick Mahomes haircut?

• 43:18Speaker 03

  Oh, gotcha.

• 43:18Speaker 04

  So my, my kid is twelve year old and he's got that. So I went to, so I, I, I went to the mosque last Friday. And every kid between the age of ten and eighteen has the same haircut. So I took a picture from the back and I showed it to my kid. See, this is the haircut.

• 43:33Speaker 03

  The broccoli.

• 43:34Speaker 04

  That's what he has. He has the same exact one.

• 43:37Speaker 03

  So let me ask you this, Sammy, you're, you're having close to having a teenager.

• 43:41Speaker 04

  He's already a teenager.

• 43:42Speaker 03

  Is he thirteen already?

• 43:43Speaker 04

  He's twelve, but he's going on eighteen.

• 43:45Speaker 03

  Oh, yeah. Oh, he's going on twenty.

• 43:46Speaker 00

  Yeah, I was gonna say.

• 43:48Speaker 03

  So teenagers self-reported spending on average for 2024, $2,263. That's a nationwide average for teenagers self-reported, what they spend.

• 44:00Speaker 04

  2,000?

• 44:00Speaker 03

  Yeah, 2,200 bucks. So almost 200 bucks a month is what the average teenager is, has self-reported that they spend, that they spent during that year.

• 44:12Speaker 04

  Does that count their subscriptions to gaming and stuff?

• 44:15Speaker 03

  Yeah.

• 44:15Speaker 04

  Because I'm at 50% of that right now.

• 44:18Speaker 03

  Yeah, it includes gaming. I think the most of it is food. Food and clothing are the two biggest expenditures for teenagers in the United States.

• 44:28Speaker 04

  Don't forget the haircut.

• 44:30Speaker 03

  Accessories and personal care, that's 10%. Uh, but it is interesting, you know, you look at that, um, there's always, you know, a question about, uh, like, um, an allowance, you know, giving a kid an allowance.

• 44:45Speaker 04

  When did you start giving your kids allowance, sure?

• 44:47Speaker 03

  We started it pretty early, uh, pretty young, you know.

• 44:51Speaker 04

  We're thinking about doing that now for, for Gabe.

• 44:53Speaker 03

  Yeah.

• 44:54Speaker 04

  At 12, you know, he's, he's pretty, pretty good.

• 44:57Speaker 03

  Yeah.

• 44:58Speaker 04

  For the most part, he's pretty good and he's a saver, you know, and he spends his money and he donates some, some money too. So I'm very proud of that.

• 45:05Speaker 03

  Yeah.

• 45:07Speaker 04

  But.

• 45:07Speaker 03

  That's what's nice. I'd like for them, I'd like for our kids early on, around 12 or 13s, definitely, I don't think it's, it's too early, give them a sense of, of how they can manage their own money, you know, and.

• 45:19Speaker 04

  His mom was asking me, maybe you should add him to your credit card and that way you can control how much.

• 45:23Speaker 03

  Okay, yes.

• 45:24Speaker 04

  By the time he's 18, he's got a credit.

• 45:26Speaker 03

  Yeah. So here's, here's a great hack is you add them as an authorized user on your credit card, but you don't have to give them the card, right?

• 45:33Speaker 04

  Correct.

• 45:34Speaker 03

  It's just to build up their credit. You can just, you can just keep the card, but then that helps build up their credit history.

• 45:39Speaker 04

  That's what she was telling me and I'm looking into that now.

• 45:41Speaker 03

  Yeah, that's smart. The other thing is I, I, I signed up, uh, at least by the time my, my youngest was, was old enough, there are now lots of different types of debit cards where you have all kinds of parameters, like restrictions that you can put on.

• 45:57Speaker 04

  That's what I did.

• 45:57Speaker 03

  And it'll alert you. Certain purchases are made, subscriptions, things like that. But they do need to learn how to use

• 46:03Speaker 04

  That's right.

• 46:04Speaker 03

  digital card, you know?

• 46:06Speaker 04

  I agree. I agree.

• 46:07Speaker 03

  And you can, you can easily set up the, you can even put like savings limits and things on it. It's really nice. There's a few of them out there.

• 46:16Speaker 04

  Good. Good. Good show, Jared.

• 46:17Speaker 03

  Great show. I loved having just you and I, Sammy. Just got to do the whole thing exactly how we wanted. Want to remind our guests, if you've missed this or any of our past programs, subscribe, subscribe to Money Wise Guys Podcast, commercial free and all podcast platforms like iTunes, Apple or Spotify. Remember these three things. Be smart, be safe and always be money wise.

• 46:42Speaker 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.