4/8/25 Bears, Bulls, and Piggy Banks: Financial Education Across Generations

The Moneywise Radio Show and Podcast Tuesday, April 8th 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?

• 0:29Speaker 02

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

• 0:39Speaker 00

  Now, let's start the Money Wise Show.

• 0:42Speaker 03

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

• 1:02Speaker 04

  Dustin Weaver.

• 1:03Speaker 03

  Dustin Weaver. Good having you here.

• 1:05Speaker 04

  Yeah, it's good to be here.

• 1:07Speaker 03

  We had a good show yesterday. Sammy and I were talking about the marketplace and the... Which we thought was going to be the demise of the Edward Cinema. It turns out that it's actually getting some upgrades. So, we got a listener message here, a comment that says, "It's about time they put some money into Edward Cinema. I thought for sure it was going to get demolished with the new construction." I want to thank our listeners for participating. Send texts our way. Keep them coming.

• 1:34Speaker 04

  Yeah, absolutely.

• 1:35Speaker 03

  661-396-1000.

• 1:36Speaker 04

  I feel like I had heard something about it maybe being multifamily at one point.

• 1:40Speaker 03

  Well, there's still... I think there still is some apartments that are going in behind it or around it, but not at the property, not at the theater. But, you know, I think there's just some speculation because the fountain is gone. And I haven't been over there in a while.

• 1:57Speaker 04

  I went recently for ice cream.

• 2:00Speaker 03

  Oh, yeah.

• 2:01Speaker 04

  Yeah, the fountain's gone.

• 2:02Speaker 03

  Is Cold Stone still there?

• 2:03Speaker 04

  It is. And they had some nice grass out there. I mean, it's faux grass where the fountain was. Yeah, it looks good.

• 2:09Speaker 03

  Oh, that's good. We got another listener question here, and it says, "Good afternoon, guys. Here's my question. What is a pour-over will, and when should it be used?" So, you know, in real simple terms, a pour-over will is something that is going to catch those things that are in your estate that maybe weren't titled in the trust, but should have been.

• 2:38Speaker 04

  Right.

• 2:38Speaker 03

  And so if it was missed, for example, then it's, it acts as like a safety net for forgotten or missed assets.

• 2:46Speaker 04

  So that's why they call it a pour-over, right?

• 2:48Speaker 03

  Yeah.

• 2:48Speaker 04

  Anything that was missed pours over into the will?

• 2:51Speaker 03

  That's right.

• 2:52Speaker 04

  That's what they're saying, right?

• 2:53Speaker 03

  That's right. So like in case somebody forgets to put something in their trust, they would just want to make sure that it ends up in the trust when they die. So there's, there's some wording that goes into your will and your trust that basically will catch that stuff. So those things pour over into your trust. And again, we'd recommend, if you have, you know, these questions, talk to your attorney or talk to an attorney that does, that deals with this.

• 3:21Speaker 04

  Yeah, and it sounds like this is part of an overall estate plan, right?

• 3:24Speaker 03

  Yeah.

• 3:25Speaker 04

  It's, when you're talking to the attorney, they're putting together several different things and that would be one of them.

• 3:29Speaker 03

  Yeah.

• 3:29Speaker 04

  It wouldn't be on its own. It's not a standalone kind of thing.

• 3:32Speaker 03

  Right. And, you know, the, again, we're not attorneys, but the, the trusts that I've seen, they, they have it. You know, because why, I don't know why an attorney would not want that in there. It seems like a great thing to have. But it is, it is an interesting exercise that sometimes you have to go through. We go through this with clients in determining, you know, when we're, when we're talking about their, their estate planning is what, you know, what making sure that they have those things titled inside the trust because there are some advantages to having, for example, your home already titled in the trust because it makes it much easier for your, for your heirs to deal with the estate when things are set up properly.

• 4:16Speaker 04

  For sure. That's all in an effort to help simplify the distribution of the estate, right?

• 4:21Speaker 03

  Yeah.

• 4:22Speaker 04

  For your heirs.

• 4:23Speaker 03

  That's right. That's right. Well, I want to talk about the headlines a little bit today. You know, it was really interesting. Woke up this morning, markets were up.

• 4:31Speaker 04

  And then.

• 4:32Speaker 03

  In positive territory and then yeah.

• 4:34Speaker 04

  Started to take.

• 4:36Speaker 03

  Ended down. We have now in at least the S and P 500 was down about one and a half percent. I think at one point it peaked up at over three percent in the positive. So in the green ended in the red Dow ended in the red about point eight percent. So about a 320 point drop for the Dow, Nasdaq down 2.15 percent. All major indices were down. Uh, even oil has continued its slide. It's now below $60 a barrel at $58.53 a barrel. Oil is one of those things that will generally follow global economic outlook. If the, if the global GDP is going up or, or perceived to go up. You, you usually see um, the uh, price of oil go up.

• 5:21Speaker 03

  Because there's an idea that it's going to be more of a demand for oil. And we have a limited supply or it takes a while for the supply to catch up. And so probably oil prices go up, but.

• 5:30Speaker 04

  So there's a strong correlation.

• 5:31Speaker 03

  Yeah.

• 5:32Speaker 04

  Between those two.

• 5:32Speaker 03

  That's what I've, that's what I've sort of witnessed. And you know, it's gold is, gold is not doing too bad. It's about almost $3,000 an ounce today, up 24 cents uh, or $24 an ounce. You know, the only reason I kind of follow gold is because one of my favorite shows is the discovery show. Uh, uh, what's it called? I can't remember what it's called. Gold Rush.

• 5:57Speaker 04

  Oh, I haven't seen it.

• 5:58Speaker 03

  It's, it's been on for, I don't know, tons of seasons, but it follows gold miners up in, in Canada and Alaska. Up in the Yukon and it's, it's not like, it's not a super like a heady show. It's pretty, and my wife gives me crap all the time about it. Cause she says all the people sound exactly the same.

• 6:16Speaker 04

  Right.

• 6:16Speaker 03

  And every other word is a swear word that's bleeped out. So it's like, all she hears in the other room is.

• 6:24Speaker 03

  She's like, how do you watch this? And I was so fascinating to me about how much money, they're really gambling on how much money they're willing to invest in extracting the gold and.

• 6:36Speaker 04

  Yeah, time and money both, right?

• 6:37Speaker 03

  Yeah. And it's like, sometimes it works and sometimes it doesn't and just the. Decisions that they make it super fast. That's really the only reason I care.

• 6:44Speaker 04

  And they're not just highlighting all the good stuff, right? They they show how it can be hard.

• 6:48Speaker 03

  Oh, yeah, yeah. And how sometimes they don't, you know, they they lose. There there've been some characters or some people in the story in the in the story that have now no longer a part of it because they've just haven't done well. That's my guess why. And there's been some spin offs of people who have who've been in the show, but it's really, it's really interesting. But I got sidetracked a little bit just, you know, the markets. This is not a, this is not a pretty time for the market. In fact, with the markets at the losses, with the losses they had today, we're very close to bear market territory, which is that 20% drop. We're, you know, it's, I don't know, 18 and a half.

• 7:26Speaker 04

  Seven, yeah, 17, 18% now.

• 7:28Speaker 03

  Yeah, from its peak, from the peak that we had. You know, it's also, I was looking at a few of these superlatives. According to Yahoo Finance, three straight days of elevated volatility of around 6% and more has only happened three other times in the history of the stock market. 1987, which was the big market crash, 2008, the big financial crisis, and then it happened at the at the the worst of the pandemic during COVID. So this is what some are calling a, a, a nuclear war, economic nuclear war, that's being,

• 8:08Speaker 03

  that's being brought on by these tariffs. And today, I think one of the things that started to turn the markets back into negative territory was the announcement by the White House that they are going to stand by the increased tariffs on China. So to give some

• 8:32Speaker 04

  There was, there was a couple of increases, right?

• 8:34Speaker 03

  Yeah. So initially, it was at 20% and then Trump, during the la, the most recent increase, applied an additional 34%. So it was a total tariff of 54% if China didn't withdraw its tariff.

• 8:56Speaker 04

  And then they responded with adding more, right?

• 8:59Speaker 03

  That's right.

• 8:59Speaker 04

  Almost as a punitive. You know, punishment kind of thing.

• 9:03Speaker 03

  Yeah, it's a reciprocal tariff and that's, that's the, that's the concern and the threat that these tariffs are going to be reciprocated in a negative way from these countries. So China comes back and they're playing hardball. And so now Trump is going to add an additional 50%. So we're talking about 104%.

• 9:24Speaker 04

  That's the number I saw too, 104%.

• 9:26Speaker 03

  104% on tariffs. I think with China just supposed to take effect by midnight tonight. That's, that's just, um, it's, it's a little scary, you know, to, to, to have these types of interactions with our trading partners. You know, it's, I, I mentioned yesterday that the free trade has spurred enormous economic growth by the United States and the fact that we've been able to do this and, and we've been able to lead the world in economic growth has been because we can trade with our partners. And so a lot of this is being temporarily, I think it's temporarily halted.

• 10:08Speaker 04

  And I think temporary is what everybody's hoping for, right? I think this is going to spur a lot of conversations with the leaders of these other countries too.

• 10:16Speaker 03

  Yeah, yeah, that's the hope.

• 10:18Speaker 04

  Part of the hope.

• 10:19Speaker 03

  Yeah, like Japan, for example, today has talked about bilateral talks with the United States to try to figure out, work out some agreement. Benjamin Netanyahu was in Washington today, again, to talk about some of the tariffs. I don't know what the outcome was that, of that was. All of this brings a lot of volatility, brings a lot of fear. We've talked before about the VIX, which is the Fear Index.

• 10:46Speaker 04

  Yeah, Volatility Index.

• 10:47Speaker 03

  The Volatility Index is super fascinating. It's really interesting to, to, to watch. There's been a three day spike in the VIX from April 4th to April 7th. It's been about 118% spike in the VIX.

• 11:02Speaker 04

  And for comparison, where was that?

• 11:04Speaker 03

  That's the, that's the fifth largest spike going back to 2014. And it's, what's interesting is that traders will usually use the VIX as a short term. Broader market fear gauge and the index's extreme volatility or its levels historically have been a indication of a bull market. And after three days where the VIX has spiked since 2014 and if it spiked anywhere between 63 and 175%, the average one-year return for the S and P 500 is totaled about 4.4%.

• 11:44Speaker 03

  So, you know, it's still positive, but that's like half of what the historical return is. Five years after the VIX has spiked, the S and P 500 has averaged 10.2%. So it's almost like it takes, it takes the market some time to recover, get back to sort of its historical averages when the VIX has gone up. And, you know.

• 12:07Speaker 04

  Yeah, I like that we're saying there's short-term and long-term perspectives to keep in mind, right? So year-to-date, S and P 500 down around 15%. But if you look at the one-year number, it's really only down around 4% as it was 12 months ago. And then you take that out five years and we're up 81%. So having that long-term perspective is really important here.

• 12:30Speaker 03

  Yeah.

• 12:30Speaker 04

  Right? This short-term volatility is uncomfortable, but thankfully that's not the end of the story, right? When you're investing for a long period of time.

• 12:39Speaker 03

  Yeah.

• 12:39Speaker 04

  You know, it's not, it's not all down all the time for sure.

• 12:42Speaker 03

  Yeah, it's, you have to, you have to recognize that if you're playing part of the game of the stock market involves there being ups and downs. There's no, there's nobody that plays in that game that has nothing but ups.

• 12:54Speaker 04

  Right.

• 12:54Speaker 03

  Even the best traders in the world have periods of time where they have losses or some years where there's losses. And that's just a normal part of the, of business cycles. And business cycles go through expansion and retraction and sectors go through expansions and retractions and therefore you have larger economies that expand and retract and sort of the not, the natural way, I believe it's sort of the natural way to weed out the winners and the losers. It's like, we've given many times the example of a forest fire that you have to have, a forest to be healthy. Naturally goes through fires. It might be really painful to let that happen.

• 13:37Speaker 03

  But naturalists have all confirmed that it's something that is important because you only have certain species, for example, of trees that can germinate, their seeds can only germinate by fire.

• 13:48Speaker 04

  Oh, I had not heard that.

• 13:49Speaker 03

  Yeah, and, and you know, there you have, you have oftentimes overgrowth of certain species of trees that now dominate an area. And of course, animals follow the plant species. And so then you have loss of animal life and it just trickles down and you have all kinds of, of problems and issues. And so you have lightning strikes and you have these natural things that happen. And even the, the native indigenous peoples would learn that, oh, they recognized that after a period of time, they needed to burn down certain areas too, so that certain things could grow back.

• 14:24Speaker 04

  So I've heard the term controlled burn before. Was that an example of something like that?

• 14:28Speaker 03

  That's an example of it. Yeah, yeah. And it's painful, you know, it's a painful process to, to witness to, you know, the, the forest burning and you see all these, these things happening. But if you didn't have that, it's even worse. And so, you know, I, I wish that it wasn't the tariffs that were spurring this pullback, but if it wasn't the tariffs, it would be something else. Prices weren't going to continue to go up. The markets were doing phenomenally well. Like you said, the last, what was the S and P 500 over the last five years?

• 14:59Speaker 04

  Yeah, up 81%.

• 15:00Speaker 03

  81% in five years? I mean, come on. That's, that's pretty good. You take that. And, and we are in many ways, the economy is so much better off than it was, at least during COVID. We have, well, higher interest rates is not fun. One nice thing is now we have people that are getting decent rates on their CDs, on their money market. Whereas before it was nothing.

• 15:23Speaker 04

  Yeah, you're actually getting paid a little bit for. Idle funds or cash on the sidelines, right?

• 15:27Speaker 03

  That's right. Yeah. No, we even see an example of today where the 10-year treasury is going up dramatically. At least the yield is going up and that's again, the flight to safety and, and so it's, you know, there's, there's some goods and bads, you know, that comes, that come with this. If you have a good plan, then you should be just fine, you know? Don't, don't jump ship. Don't, don't shift course. Just stick with the plan in the long term. You know, think long-term and think beyond the turmoil that the tariffs may bring, even if it, you know, even if this lasts a while, just, just think of it. So Stephen, you're waving over there.

• 16:06Speaker 04

  No break yet.

• 16:06Speaker 03

  Oh, okay. Perfect.

• 16:08Speaker 04

  Well, I think we have time for that question about allowances.

• 16:11Speaker 03

  Oh, let's do it. Yeah. I want to talk about this. So Sammy and I were talking about allowances yesterday and so with our kids.

• 16:19Speaker 04

  Oh, right.

• 16:20Speaker 03

  Yeah. And so allowances are, have changed over the years, but I, I did a little study and to see historically what parents have been giving their kids. And it's kind of tricky to, to look into it and to see what, you know, why and what, what the history has been. But essentially it has stayed about the same, the level of income that parents are giving their teenagers. So which, what would you guess? Have you already looked up?

• 16:52Speaker 04

  Well, I'm not, I don't know if it's dollar wise or is it a percentage?

• 16:55Speaker 03

  Yeah, dollar wise.

• 16:56Speaker 04

  What stays the same?

• 16:56Speaker 03

  Yeah. Just basically dollar, dollar wise.

• 17:00Speaker 04

  It's tough to say. I mean, when I was a kid, this is a number of years ago now. Um, it was like, I don't know, five to 10 bucks a week, maybe?

• 17:08Speaker 03

  Uh huh. Yeah. So that would be in the nineties, right?

• 17:11Speaker 04

  Uh huh.

• 17:14Speaker 04

  Eighties and nineties.

• 17:16Speaker 03

  Yeah, and you know, if you if you account for inflation, it would be today, which is close to about $30 a week.

• 17:23Speaker 00

  And is that the average?

• 17:24Speaker 03

  And so that's that's about the average. Yeah, it's about $30 a week. So we're talking about, what, $100, $120 a month?

• 17:35Speaker 03

  So that's about.

• 17:39Speaker 00

  Now, is this kids or teenagers? What are we talking?

• 17:41Speaker 03

  I guess it's all it's all kids. This is, you know, that's a good point, because five year olds, which there is a national average of five year olds that get allowances at $6 a week. It's like, what's a five year old doing with an allowance? When did you start? Or have you do an allowance?

• 17:57Speaker 00

  Candy, right? Ours is not set. It's more variable. And I don't know if that's unique or not, but.

• 18:03Speaker 03

  Yeah. What is it based off of?

• 18:05Speaker 00

  Case by case.

• 18:06Speaker 03

  Yeah. You know. Just how how.

• 18:08Speaker 00

  How often are you asking?

• 18:09Speaker 03

  Yeah.

• 18:10Speaker 00

  What is the report card looking like?

• 18:12Speaker 03

  Oh, yeah.

• 18:12Speaker 00

  See, that's what I do. I do it based on grades.

• 18:16Speaker 03

  Yeah.

• 18:16Speaker 00

  And I did, I believe it was something that you or Gero taught me probably three or four years ago. I think it was when he was when Ryan was in seventh grade, I got him his own little debit card.

• 18:27Speaker 03

  Oh, yeah.

• 18:28Speaker 00

  For a teenager. And then we kind of moved it into where now it's a part of my my bank account. And I can actually see, you know, he has his own card, but it's only to that limit of that card.

• 18:41Speaker 03

  Yeah, you can set those parameters.

• 18:43Speaker 00

  Yeah. And I can put a hold on it. I could, you know, put money into it. So it's it's one of these things over at a local bank that I use.

• 18:53Speaker 03

  Yeah, that's nice. Yeah, that's what I did with one of with my youngest kid is it was a it was a card where you can you can even set where it's a debit card. So they can use it in lots of places. They can use it everywhere if you allowed it to. Or you can set where they can't use it online, or they can't use it at certain stores, or they can only use a certain amount at certain places, which was really nice. But you have to you have to at some point allow your kids to make mistakes with money, or to like, figure it out, figure some things out, because you can only tell them so many times. You know, like

• 19:26Speaker 04

  That's right.

• 19:27Speaker 03

  How to manage, you kind of have to go through and experience. So it's nice that we have these technologies now where that can happen.

• 19:33Speaker 04

  So if I'm following you guys right, is that connected to your own account? It's like they have their own budget.

• 19:37Speaker 03

  Yeah.

• 19:38Speaker 04

  Comes right from your own account.

• 19:39Speaker 03

  Yeah.

• 19:39Speaker 04

  Yeah, what we did, we have a daughter when she was 16, got her set up with her own student account. And then so she puts her own money in there. It's not really connected.

• 19:48Speaker 03

  Oh, yeah.

• 19:48Speaker 04

  I mean, we can send money to it, but it's not debiting from our account.

• 19:52Speaker 00

  Yeah, mine's separate, but when I opened up my bank app, I could see it.

• 19:56Speaker 03

  Yeah.

• 19:57Speaker 04

  Okay.

• 19:57Speaker 00

  So it's separate, but I can transfer money from my account to his and he could do the same.

• 20:03Speaker 03

  Yeah, that's really nice.

• 20:05Speaker 00

  Yeah. When he, so when he's like on the computer, how much money do I have, Dad?

• 20:08Speaker 04

  Yeah.

• 20:08Speaker 00

  Look at the app.

• 20:10Speaker 03

  Yeah.

• 20:10Speaker 00

  Like, yeah, that's right. I was getting sick of that over about a year. He was texting me all the time. How much money do I have? Can I, can I put it on this? Can I put on that? I'm like, all right, man.

• 20:20Speaker 03

  Yeah.

• 20:20Speaker 00

  We'll swap cards with that now.

• 20:22Speaker 03

  Yeah, you can even, at least the one I had, you can set a interest rate on their, on the amount of money that's in there. So, you know, you're paying, it's just coming out of my bank account, but you know, that way they're learning about compound interest. And they're learning, oh, wow, if I don't spend this and it stays in there, I can see the interest that's growing on it.

• 20:42Speaker 04

  Great.

• 20:42Speaker 03

  And then you can set it so that you can pay, you know, it just has a regular allowance that goes in. Or you, you can send money as, as needed if they like get good grades or

• 20:53Speaker 04

  Absolutely.

• 20:54Speaker 03

  Something, there's some, there's some philosophy and I don't know how, you know, every parent does it differently, but you know, you want to give, some parents like to give their kids allowance every week, no matter what, and others have it tied to chores. You know, so it's like, hey, you know, as part of, you know, being part of this family, you got to do, you know, whatever your chores are, your, your weekly chores. And then that's what the allowance is, is tied to. And I think it's really just a personal preference, you know?

• 21:21Speaker 04

  Yeah, I agree with that. I've seen it, seen it both ways.

• 21:23Speaker 03

  Yeah. The point is, you know, it's a good idea to allow your kids to have some experience managing their own money. And there are There are some technologies out there now that allow you to have those protections.

• 21:37Speaker 00

  Absolutely.

• 21:38Speaker 03

  So, there you go. That's our, that's our discussion on allowances. Should we take a break, Stephen?

• 21:43Speaker 00

  Sure, we're all good now.

• 21:44Speaker 03

  All right, we're gonna take a quick break. We'll be right back.

• 21:47Speaker 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.

• 22:18Speaker 03

  There we go. Welcome back to Money Wise. That's Dustin Weaver. I'm Sharad Waite. 661-396-1000 is the number you can text. We got a text here.

• 22:28Speaker 00

  Oh, sorry. I was gonna say, who, who's that?

• 22:30Speaker 03

  Oh, come on.

• 22:32Speaker 00

  No, I'm just kidding.

• 22:32Speaker 03

  Really?

• 22:33Speaker 00

  Diamond, I know you like her.

• 22:35Speaker 03

  I love Taylor Swift. I like her music at least. I don't really know much about her personally. Is she still with the football player?

• 22:43Speaker 00

  Travis Kelsey, yes.

• 22:44Speaker 03

  I'm waiting for that breakup because that's gonna be a great album.

• 22:48Speaker 00

  Yes.

• 22:48Speaker 03

  When it comes.

• 22:49Speaker 00

  It'll be the best one, too.

• 22:50Speaker 03

  Yeah.

• 22:51Speaker 00

  And then he'll put out, put out a hip hop album and...

• 22:53Speaker 03

  What? No.

• 22:56Speaker 00

  That's how it usually goes, so we'll see.

• 22:58Speaker 03

  Oh, yeah. I hope he doesn't do hip hop, does he?

• 23:01Speaker 04

  Doesn't a lot of Chiefs go out and buy a lot of his stuff?

• 23:05Speaker 00

  He was the, uh, number one sold jersey last year.

• 23:09Speaker 03

  He retired now, right?

• 23:10Speaker 00

  No, he actually is coming back for one more year.

• 23:13Speaker 03

  Oh, okay.

• 23:14Speaker 00

  Yeah, he, the, uh, that was the rumor that he was, and he was also gonna, he was supposed to. If the Chiefs would have won the Super Bowl, the, uh, the rumor was he was going to propose.

• 23:26Speaker 03

  Oh, come on.

• 23:27Speaker 00

  Yeah, right in the middle of the field, right after the Super Bowl with everybody watching. And then they choked, so.

• 23:33Speaker 03

  And now he has to wait another year, potentially.

• 23:35Speaker 00

  Probably, uh, never happen.

• 23:38Speaker 03

  All right. You have that message, Dustin?

• 23:40Speaker 04

  Nope.

• 23:40Speaker 03

  You want to, nope. Okay, I got it. I'm going to read it here and we'll answer this. It says, can you guys break down the difference between the bulls and bears? I don't under, I don't understand it, but with the crazy markets, I'm hearing it everywhere. Yeah, you're, you're hearing it because-

• 23:55Speaker 04

  That's the basketball and football team in Chicago.

• 23:59Speaker 03

  That's right. They're both in Chicago. Chicago. I never made that connection.

• 24:03Speaker 04

  That is true.

• 24:04Speaker 03

  Never thought about that. But the reason why you're hearing it a lot is because the markets right now are barely touching into that bear market territory, which is defined by a 20% or more drop from its high. And that is something that doesn't occur as frequently as you would think. Bull markets occur about every six to eight years, if you go back to, over the last 100 years. And they are, the average length of time that a bull market lasts, 3.8 years.

• 24:43Speaker 04

  Is that right?

• 24:44Speaker 03

  That's right. That, again, that's an average. So that, that can be really deceiving because you have, for example, the longest bull market. What would you guess, Dust? I'm really putting you on the spot here, but-

• 24:55Speaker 04

  Well, I know there was some volatility, but after March 9th of 09, we had a nice run up in the market overall.

• 25:02Speaker 03

  Yeah.

• 25:02Speaker 04

  For a lot of years, right?

• 25:04Speaker 03

  Yeah. Well, yeah.

• 25:05Speaker 04

  Was that it?

• 25:06Speaker 03

  That was, oh yeah, we're, we're talking about bull markets. Yes. Yes, that's it. It was about 11 years, 2009 to 2020. So you have an average length of almost four years. So the last bear market, which a bear market is a, a down, a downward drop-

• 25:24Speaker 04

  Of what, 20% or more?

• 25:25Speaker 03

  20% or more. And that was in 2020- Two. And so.

• 25:32Speaker 04

  Do you know why they call it a bull or a bear? You heard the story behind that?

• 25:36Speaker 03

  I want to hear what your story is.

• 25:37Speaker 04

  So the way that I heard it was a bear, if he was going to attack you, usually is swiping down.

• 25:41Speaker 03

  Oh, yeah.

• 25:42Speaker 04

  And then a bull, if they're coming at you, you know, they put their head down, but then rear up with the horn to get you. So they're, it's, just think of it, how are they going to attack me? Up or down?

• 25:53Speaker 03

  Right. A bear is going to swipe down. That's how I remember it in my head.

• 25:57Speaker 04

  Pushing up with his head.

• 25:58Speaker 03

  With its horns and it's going to go up. But I also read that 18th century bear skinned traders would sell their, their, their stock, like their stock of bear skins that they had, hoping to buy it back later at a lower price.

• 26:17Speaker 04

  Okay.

• 26:18Speaker 03

  So they were like the early short sellers were these bears and that kind of, so that, that, that was the bear market, right? That they're, they're expecting the prices to go down. So they sell their, their stuff, hoping to buy it back at a cheaper price later.

• 26:32Speaker 04

  So then why the bull? Is there a story on the other side?

• 26:35Speaker 03

  Yeah. So then the story on the other side is that because they were calling it a bear market, that the bull became the natural opposite of the bear. You know, which I'm not sure why that would be, I guess it probably comes to what you were saying where they said, well, how does a bear attack? It swipes down. What swipes up? A bull is going to like, like fling it up.

• 26:57Speaker 04

  Either way, it's a good way to remember it.

• 26:58Speaker 03

  Yes. The average bear market is about nine, the average length of a, of a bear market, nine months or nine and a half months with the average loss being 36%. 36%. That's, that's actually higher than I would think. Again, it happens about every four, about every four years on average. The worst bear market that we've had.

• 27:25Speaker 03

  What would you guess? I got put me on the spot again, but this is

• 27:27Speaker 04

  Well, in recent history, we got, you know, oh, seven, oh, eight through March of oh nine.

• 27:33Speaker 03

  Go back a hundred years.

• 27:35Speaker 04

  How bad was it?

• 27:36Speaker 03

  The Great Depression, eighty-six percent drop.

• 27:39Speaker 04

  Yeah.

• 27:39Speaker 03

  That was the worst, worst bear market from nineteen twenty-nine and nineteen thirty-two. And the average, I didn't mention this, but the, the bull market, the average return, a hundred and seventy-seven percent. So that would be a hundred and seventy-seven percent over roughly four years.

• 27:56Speaker 04

  Wow.

• 27:57Speaker 03

  So really interesting. Great question, listener. That's, that's, it makes sense why you're hearing a lot about bulls and bears.

• 28:05Speaker 04

  That's right.

• 28:06Speaker 03

  In today's news, Dustin, we've mentioned this, that Walmart has given some information out to the public about its Walmart Plus subscribe, subscription service.

• 28:20Speaker 04

  Yeah. What are they saying?

• 28:21Speaker 03

  They're saying that right now, they have nearly fifty percent of the people that use Walmart online that purchase their goods on, online through Walmart, Walmart's app or website. About half of them subscribe to the Walmart Plus membership service. But what's shocking is that they have said that those people who are, are subscribers, on average, they shop twice as much and spend nearly three times the amount as normal customers that are buying online.

• 28:56Speaker 04

  So when we say shop twice as much, we're saying as often, like,

• 29:00Speaker 03

  Yeah.

• 29:00Speaker 04

  you know, times per month or times per week.

• 29:03Speaker 03

  Right.

• 29:04Speaker 04

  They're coming back to shop twice as much and they'll spend three times.

• 29:08Speaker 03

  Three times as much. So they're not only visiting the website more to buy more, but they're spending more when they do buy versus somebody who is not. Which leads me to think, if you want to save money, don't get, average person, don't get the subscription. Because

• 29:26Speaker 04

  Well, it's like which, which comes first, right?

• 29:28Speaker 03

  Yeah.

• 29:29Speaker 04

  The subscription or? The shopping.

• 29:32Speaker 03

  Yeah.

• 29:32Speaker 04

  To have it.

• 29:33Speaker 03

  That's, that's, that's the issue because you have the, there, there's a few different, I think, biases that are, are, are coming into play and consumers fall victim to these all the time. It's similar to like a credit card. Credit cards can be fantastic if you're not paying fees and you're not paying interest, but on average, people are paying a ton of fees and a ton of interest.

• 29:58Speaker 04

  Which was the points, right?

• 30:00Speaker 03

  Yeah.

• 30:00Speaker 04

  Yeah, that's what you're saying.

• 30:01Speaker 03

  Right. Which is, which is fine if you are that small percentage of the population that doesn't pay any interest and doesn't pay any fees. Great. Get the points. Now you're beating the game, but the credit cards-

• 30:13Speaker 04

  To pay the 28% interest plus, yeah.

• 30:15Speaker 03

  Which is what most, most people are doing. They're carrying some balance. So they're paying, yeah, 28% on it. And so you can, you can, you can sort of hack, there, there's life hacks that you can do. And one of them would be like the subscription services for shopping. You, you may be enticed by the fact that Walmart Plus is offering free shipping that, which is usually the biggest discount that people receive by, by, you know, subscribing. So it's, it's a hundred dollars a year or 12.95 a month, but there also comes with it some other perks like you can, um, you can get Paramount Plus subscription

• 30:58Speaker 03

  service. And I mentioned the free shipping. So you, but if you're joining it so that you can then, like, you wouldn't normally get Paramount Plus, then don't, don't do it. Like, you know, or you wouldn't normally purchase enough where the shipping would matter, like the free shipping. Like go ahead and pay for the shipping, save the hundred dollar annual fee, but more importantly, you save the, the psychological forces that come into play that make you think that you can, you, you could and maybe even should buy more than you should, than you, you may need to.

• 31:37Speaker 04

  Having the membership might, uh, what you're saying might cause you to- Potentially shop more often or spend more money.

• 31:42Speaker 03

  Yes, and a lot of that comes from loss aversion. There's the natural loss aversion that we have as humans where you don't want to miss out on any discounts or fees. You know, and so people hate losing more than they love gaining. So if a discount or a benefit like free shipping is only available through membership, they'll spend more to avoid feeling of missing out on a deal. You just, nobody likes it, that that FOMO feeling. And you also have this sunk cost fallacy, which is, you know, I pay for this membership, so now I need to get my money's worth. So I'm, I'm, I'm just gonna purchase a bunch of things because it's not gonna cost anything for shipping.

• 32:25Speaker 04

  I know I've done that at Costco, you know, you upgraded that premium membership, what executive membership, I think they call it. Well, you wanna spend enough to cover your membership, right? Yeah, that's how they get you.

• 32:37Speaker 03

  You know, the sunk cost fallacy causes consumers to justify additional spending to make up for or maximize the cost of the membership, even if the purchases aren't necessary. And you, you also have, maybe the Costco, I've seen this with Costco, to a commitment or a consistency bias. It's just, I'm a member now and this is, this is who I am, you know, I, I, I spend a lot of money on things to shop. Cause I'm a Costco executive member, you know?

• 33:06Speaker 04

  There's a lot of thought that goes into the marketing with all this stuff, right? I mean, they put that $4.99 chicken at the back of a store for a reason. You show up just to get that for dinner, you get to walk by everything else, right? Two times, you gotta go to the back of the store and then the, uh, the registers on the other side, right? They want you to see everything.

• 33:24Speaker 03

  You think about it on the way there and you're hooked on the way back. You also have, we've talked many times on the show about anchoring bias, which you don't know. Retailers do this all the time. They show the regular price and then they have their, the, the current discounted price. And so you, you think, oh wow, this is like normally 50 bucks, but I could get it for 35 bucks. So you fixate or you anchor on the original price. And you see the discount just as this big win. Even if the $35 is more than what they would want to spend on that product in the first place. You naturally are anchoring to that higher price. So you, your brain is telling you that it's a deal.

• 34:03Speaker 04

  Right.

• 34:04Speaker 03

  When it's not a deal, it's not a deal. This always drives me crazy about grocery shopping. Some grocery stores are really good about showing the price. And then underneath the price, it will show the price per unit. So that you're not going, if you look at the price only and you don't look at the price per unit. Oftentimes you think you're getting the cheapest product, the cheapest deal. When you're not generally getting the cheapest.

• 34:31Speaker 04

  I always appreciate it when they do that, right?

• 34:33Speaker 03

  Yeah.

• 34:33Speaker 04

  They're looking at if you have three different sizes of whatever product, ketchup, mustard, whatever, it doesn't matter.

• 34:41Speaker 04

  To your point, you can compare it quickly that way, right?

• 34:43Speaker 03

  Yes.

• 34:44Speaker 04

  Like, oh, it's 18 cents an ounce versus 15 or whatever it may be.

• 34:48Speaker 03

  Yeah.

• 34:48Speaker 04

  Yeah, no, that's a good tool.

• 34:49Speaker 03

  It's a super good tool. I wish it, I wish it was, I thought there was years ago, there was some law that was passed that made it.

• 34:55Speaker 04

  Oh, was that right?

• 34:56Speaker 03

  Required, but there must be a loophole because grocery stores sometimes will have them and sometimes they don't. And sometimes some of the products have that per unit price. And when they do have the per unit price, besides just the overall price, it's tiny font. So I always have to get down my old man crouch and like, look at it like, what is that?

• 35:16Speaker 04

  There's another technique that's on the opposite side of that. That's a little annoying and I won't pick on the particular store. You might be able to figure it out, but you go to buy soda, for example, they're like, oh, well, here's the price. But if you buy four, here's the price. But if you're also a member and buy four more, you know, here's another price. There's all these games you feel like you have to get a bachelor's degree and.

• 35:37Speaker 03

  I was just talking about that at home. My wife said, babe, will you pick up a Monster on the way home? I don't drink them, but sure. And I get there and they're like, well, you know, you can get one for five or five for 10. I'm like, oh, God.

• 35:51Speaker 04

  Yeah.

• 35:53Speaker 03

  Yeah.

• 35:53Speaker 04

  Do I need to get all of these?

• 35:55Speaker 03

  You, I, I think sometimes you do. There are some products that you know you're going to use. And then there's other products, you get a bunch of it and it sits in your pantry and then you give it away. Or it's just wasted. We waste so much food in this country. A couple of other of these biases, the default effect or the status quo bias, which is this, this idea that it's easier just to keep using the service. Walmart has figured this out, that most people that become subscriber stay a subscriber because you just, you just tend to stick with it. You continue to, to spend out of inertia rather than like careful consideration. And social proof is another bias where you, you kind of tell yourself, well, I know everyone is using this or a lot of people are using this.

• 36:38Speaker 03

  And like a lot of people are a member of Costco, so it must be worth it, you know? How can all these people not be, you know, smart?

• 36:45Speaker 04

  I mean, I see the Amazon truck everywhere. Doesn't everybody have Prime? Amazon Prime.

• 36:49Speaker 03

  Oh, yeah.

• 36:49Speaker 04

  Everybody's on Prime, right?

• 36:50Speaker 03

  Everybody's on Prime, it seems like. And that's the same thing. We weren't on Prime for years until, you know, we started, okay, yeah, this is definitely worth it. You know, we're, we're using it enough, but I think, I guarantee that I, myself and many others are falling prey to all of these biases that we're talking about. Because you're going, you're justifying your membership and it's free shipping and it's just so easy to click that button. And now you can get it like same days and many products you can get.

• 37:20Speaker 04

  It has gotten faster.

• 37:21Speaker 03

  Same day, so much faster.

• 37:23Speaker 04

  Yeah.

• 37:23Speaker 03

  It's insane. Like, I gotta have that now.

• 37:26Speaker 04

  And that's not just the large distribution center they brought here that's causing that, right?

• 37:30Speaker 03

  No.

• 37:30Speaker 04

  Many.

• 37:31Speaker 03

  They have these many ones.

• 37:32Speaker 04

  Distribution.

• 37:32Speaker 03

  Yeah, like the old Kmart where Kmart, oh, for Wilson, that's a, that's a distribution, Amazon distribution center. And I also see that a lot of Amazon deliveries are just people, they look like Uber drivers. They're like in normal cars. Have you seen this?

• 37:46Speaker 04

  Oh, yeah.

• 37:47Speaker 03

  It's like, wow. Yeah, Amazon is in the game for sure.

• 37:51Speaker 04

  Definitely know how to sell.

• 37:52Speaker 03

  All right. Hopefully that helps. We're going to take a break right now. We come back, got a little bit more to cover. Don't go anywhere.

• 37:57Speaker 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. That's 661-847-1000.

• 38:25Speaker 03

  Welcome to the Money Wise Show. Thanks for tuning in. I'm Sharad here with Dustin. Want to let our listeners know, you can catch myself on First Look with Scott Cox tomorrow morning at 7:30 a.m. on Kern Radio, 96.1 FM. And also, I will be on KBak Eyewitness News with Aaron Pearlman at 8 o'clock in the morning. And then-

• 38:51Speaker 04

  What are you doing at 8:30?

• 38:53Speaker 03

  And then at 8:30, I'll be in the office. And then we'll be back live tomorrow on this show from 2 to 3. Myself and LaTroy are going to be sitting down with Dr. Richard Gerhart. He's a professor of economics at Cal State University Bakersfield. He's our expert economist. It's always great having Dr. Gerhart on because we can, especially now's a great time to have him on.

• 39:18Speaker 04

  Oh, definitely. Yeah, timely.

• 39:20Speaker 03

  Very timely. He knows about tariffs. And I think we talked about them last time he was on because it was, you know, the threats were happening. And now they're actually happening. So it'll be good to break down the tariff news with Dr. Gerhart tomorrow on this show. And then tune into Scott's show and Aaron Pearlman's show on TV, on television, KBak Eyewitness News.

• 39:42Speaker 04

  I didn't hear the last one with Dr. Gerhart. Was there anything that stood out?

• 39:46Speaker 03

  Yeah.

• 39:46Speaker 04

  Anticipating the tariffs?

• 39:48Speaker 03

  Yeah, it was, you know, that he's not, he's not, he's not on the fringe when it comes to what economists feel about tariffs, which is it's a tax. Tariff is just a tax. And it's a, you know, it's a 19th century tool that is not conducive to economic growth or stability. It is a tool that has been used effectively in the past for, to drive behavior. And, you know, it's been used for, for like, you know, I guess geopolitical reasons and protections with certain sectors.

• 40:30Speaker 03

  You know, or even just protections for the country, but.

• 40:34Speaker 04

  We'll have to tune in tomorrow and listen.

• 40:35Speaker 03

  Yeah, yeah, you gotta do it. You gotta do it if you're not meeting with a client.

• 40:39Speaker 04

  Right.

• 40:39Speaker 03

  Uh, so this is interesting, Dustin. I know, um, you know, my guess is you're not a huge lottery player. So maybe you didn't hear this, but Mega Millions Lottery is about to change again. They've changed this a few times over the years. But starting today, I believe, tickets for a multi, for this multi-state game are now going to be $5 instead of $2.

• 41:06Speaker 04

  That's quite the change.

• 41:07Speaker 03

  It's a big change, right? What do people get for that? Well, they get the increase from the minimum jackpot to a much higher jackpot of $50 million. So that's the starting jackpot.

• 41:22Speaker 04

  Each time.

• 41:22Speaker 03

  Right. There is also a slight increase in the odds to win.

• 41:30Speaker 04

  So is it one lightning bolt instead of two?

• 41:32Speaker 03

  Yeah, you brought up a perfect point. This is one of my favorite topics to go over is the, the odds went from approximately one in 303 million to now one in 290 million. Okay? So get this, Dustin. Have you heard these odds before?

• 41:50Speaker 04

  I know they're bad.

• 41:51Speaker 03

  They're, they're, they're beyond bad. So the, the odds of winning the Mega Millions jackpot, which by the way, it's like 40 plus states that participate in this. So there's a lot of people that do this. The, the, the one and now new better odds of 290 million is a little bit worse than the odds of being killed by an asteroid. The odds of, it's the odds of being killed in an asteroid are one in 200, 120 million. So

• 42:26Speaker 04

  That's happening?

• 42:27Speaker 03

  That happens. Yeah. Or, I mean, it doesn't happen that often. There has been somebody here in the United States, it was like in the 50s, she got struck by an asteroid, came through her roof.

• 42:36Speaker 04

  Well, it's gotta be more than that if it's, if it happens more often, right?

• 42:39Speaker 03

  Well, it's just the odds of it happening. So it doesn't mean that it ever will happen. It's so rare that it never even happens. So it essentially, it's almost, you're almost twice as lucky to win the lottery than you are being killed by an asteroid.

• 42:55Speaker 04

  So I wonder if the change in prices impacts the budget that people will have, right? Are they buying a certain number of tickets or is it, well, my budget is 20 bucks, so.

• 43:05Speaker 03

  That's a good question.

• 43:06Speaker 04

  I used to get 10, 10 tickets and now I get four.

• 43:09Speaker 03

  Yeah. I, I'm guessing, well, what lottery organizers are saying is this is going to drive up more. That's going to get more proceeds. But, you know, that's, that means people are going to spend more money.

• 43:21Speaker 04

  You mess around with those people that buy a certain amount of lottery tickets and they go to the register and they're like, what?

• 43:27Speaker 03

  Right.

• 43:28Speaker 04

  Yeah, no kidding.

• 43:29Speaker 03

  It's just more than twice as much. Well, the odds of being struck by lightning is about one in 1.2 million. So that means you're over 240 times more likely to be struck by lightning than to win the lottery.

• 43:41Speaker 04

  Yeah.

• 43:41Speaker 03

  Way more, way more likely. How about being killed by a shark is one in four million? That means you're 72 times more likely to be killed by a shark.

• 43:52Speaker 04

  Than to win.

• 43:52Speaker 03

  Than to win mega millions. This is interesting. The odds of dying on an airplane, still, you know, pretty, pretty, pretty low odds. But it's, you know, one in 11 million. That's kind of like.

• 44:07Speaker 04

  Safer in a plane than on the road.

• 44:09Speaker 03

  Ways, way safer.

• 44:11Speaker 04

  Yep.

• 44:12Speaker 03

  But it's still, you know, it's still a little, I mean, I never worry about crashing in an airplane, but one in a million, one in 11 million is way better than one in 290 million.

• 44:25Speaker 04

  Right.

• 44:26Speaker 03

  That means commercial plane is two, 26,000 times more.

• 44:35Speaker 03

  Likely to die on a, on a plane crash than you are to win the, win the lottery.

• 44:42Speaker 00

  That's terrible news.

• 44:43Speaker 03

  How about the odds of making a half court shot in basketball? This is not a player.

• 44:47Speaker 00

  Better. Not a player?

• 44:49Speaker 03

  Not a player.

• 44:50Speaker 00

  So not Steven?

• 44:51Speaker 03

  Well, Steven, I know the odds are gonna be high. You're not, uh, who's the big, who's the big guy? Uh, Steph, Steph Curry?

• 44:58Speaker 00

  Steph Curry.

• 44:59Speaker 03

  Steph Curry, that guy, that guy's, I don't know, the odds are probably more than half.

• 45:03Speaker 00

  I thought you were gonna refer to the Bulls game last week, but yeah.

• 45:05Speaker 03

  Oh, that was cool. That was super cool. One in 50 to one in 100 for, oh, one in, one in 50.

• 45:14Speaker 00

  Is this like when they have the half, halftime, um?

• 45:16Speaker 03

  Yeah.

• 45:17Speaker 00

  Competitions?

• 45:18Speaker 03

  The halftime competition. So if you look at lay, lay players, one in 50. Wow. That's, that's not bad.

• 45:24Speaker 00

  I mean, crazier things have happened. I saw a half court or, um, you know how they do, uh, they'll pull people out of the crowd and, you know, just play random games at halftime?

• 45:33Speaker 03

  Uh huh.

• 45:33Speaker 00

  And, uh, two brothers did a layup drill last week and one of them tore an ACL just doing a layup drill.

• 45:40Speaker 03

  Oh, I heard about that. I heard, I didn't watch the video. It was too creepy. Uh, the odds of hitting a hole in one, amateur hitting a hole in one is one in 12,500. That means you're 23,000 times more likely to hit a hole in one than win the lottery.

• 45:55Speaker 00

  Wow. That actually, I thought it would've been worse than that, honestly.

• 45:59Speaker 03

  Hmm. Yeah. No kidding.

• 46:01Speaker 00

  One in 12,000?

• 46:02Speaker 03

  Uh, being born with identical quadruplets is one in 15 million.

• 46:11Speaker 03

  So basically don't buy a lottery ticket. You're not gonna win. Somebody will win, but it won't be you.

• 46:18Speaker 03

  All right. Well, tune in tomorrow. If you missed this, wherever you listen to your podcasts, you can find us and also remember these three things. Be smart, be safe, and always be money wise.