5/12/25 Market Updates, Retirement Safety, and the Weight Watchers Surprise

The Moneywise Radio Show and Podcast Monday, May 12th 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 Garo Ellis padded radio room off Stockdale Highway, here is Money Wise. Call or text into the show 24/7 at 396-1000.

• 0:39Speaker 00

  Here is Money Wise. Money, money, money, money.

• 0:43Speaker 01

  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 call or text into the show 24 hours a day at 661-396-1000. Today, we're your hosts. I'm Sharad Wade and?

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  Sammy Abiyawi.

• 1:04Speaker 01

  Sammy Abiyawi. Good having you.

• 1:06Speaker 00

  Yeah, excited for this week.

• 1:08Speaker 01

  I'm excited for this week, too. I'm excited for the show because you and I get to just talk about some things that we're interested in.

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  Yeah, there's a bunch of stuff happening, too.

• 1:14Speaker 01

  Yeah, you think?

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  Over the weekend, especially.

• 1:16Speaker 01

  Big time. Lots of headlines we want to cover, and we've got a few listener messages.

• 1:20Speaker 00

  That's true, too.

• 1:21Speaker 01

  Do you want to read it?

• 1:22Speaker 00

  Sure.

• 1:23Speaker 01

  You want to read the first one?

• 1:24Speaker 00

  I could start there. Yeah.

• 1:28Speaker 00

  I'm sure you guys will go over the markets, but what is going on with the Dow?

• 1:32Speaker 01

  The dumb Dow. Let's talk about it. So, this is always a fascinating recap, I think, for all of our listeners, not just this listener. But there's a misconception, I think, about the Dow Jones Industrial Average versus, like, the stock market versus the S&P 500. They're pretty different. You know, in terms of the, you know, these two different indexes, they, the biggest one being that the Dow is only 30 companies, and the S&P 500 is about 500. It's not always exactly 500, but roughly, you know, it's about 500. So, therein, there alone lies a big difference. You're much more diversified. You have much broader

• 2:17Speaker 01

  range in the S&P 500, in my opinion, than you do in the Dow Jones Industrial Average. The other big difference and probably the main reason why we call it dumb is the index weightings on the Dow Jones is price weighted versus the S and P 500, which is calculated differently. It's calculated based off of market capitalization. So, so let me explain that. Price weighted is the Dow, the Dow just takes the, the price or the value of each individual stock or company and that's what, how much it represents in the total index. So, there could be a scenario, and there have been many scenarios where the Dow Jones

• 3:01Speaker 01

  industrial average is over, is being over influenced by just one or two very small companies.

• 3:10Speaker 00

  I see.

• 3:10Speaker 01

  There's very small companies, but they have a high share price. And those two things aren't always connected, meaning the share price or the value of a stock is not in a direct relationship to the market capitalization or the size of the company.

• 3:29Speaker 00

  Is it, is it safe to say that it is not an indication of the, where the economy is?

• 3:34Speaker 01

  Yeah.

• 3:35Speaker 00

  When you see like large swings, for instance, the Dow going down or sometimes up, could that, what it sounds like, it's not an indication of how the economy is doing?

• 3:47Speaker 01

  It's, yeah, it's definitely not an indication.

• 3:50Speaker 00

  Because the sample that they're using is only 30 companies versus

• 3:53Speaker 01

  Yeah.

• 3:54Speaker 00

  thousands of companies and other indices. Okay.

• 3:58Speaker 01

  Yeah. And the biggest thing being is the Dow could be influenced just by one stock.

• 4:04Speaker 00

  That's right.

• 4:05Speaker 01

  And, and that stock could be a company that's really not, doesn't have a huge impact on our overall economy. It just has a high share price.

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  I see.

• 4:14Speaker 01

  So, the S and P 500, in their wisdom, they decided to make that index market capitalization weighted. So, the, even if you have a high share price, it is, it is going to be in relation to how big you are as a company.

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  That's right.

• 4:30Speaker 01

  So, you, you have a more fair

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  Spread.

• 4:33Speaker 01

  Yeah, yeah, exactly. And I think that that's why overall you see the S and P 500 outperforming the Dow, especially over the last 10 years. The S and P 500 has returned an average of between 10 and 12%. The Dow Jones has been about 8 to 10%. So that's significantly outperforming, an outperformance of the S and P over the Dow over a 10-year period. When talking about, you know, the difference between 1 or 2% is huge in the long run. So, you know, there's, those are the main, the main differences.

• 5:06Speaker 00

  That's a good answer. That's a very good answer.

• 5:08Speaker 01

  The Dow, just so you know, well, we'll talk about kind of some of today's headlines, but as of today, the Dow and the S and P 500 are almost in positive territory year to date. So since January 1st, we've seen quite a swing. A lot of the tariff talk had spooked markets. And now as we start to get more clarity, things are starting to rebound more to where they, how the year started out. On a one-year basis, the Dow is up about 7.5%. And the S and P 500 is up 11.9%. So again, we're seeing just on a 12-month basis,

• 5:49Speaker 01

  the S and P 500 pretty, pretty dramatically outperforming the Dow by 3, almost 4%. So it's huge. It's a big, big difference there. So, great question.

• 6:03Speaker 00

  Yeah, very good question. We have another question, Serge. Should we go on?

• 6:05Speaker 01

  Let's go, yeah.

• 6:06Speaker 00

  Cool. I'm a big fan of the show, and I listen as much as possible, but I was in the hospital the last eight, nine days. Thank you, Stephen, for walking me through how I can listen to the past shows. I know it's a bit straight, but, straightforward, but can you share how I can keep my retirement money safe? Robert W.

• 6:26Speaker 01

  I'd love to get your perspective on this, Sammy, because I think when I, when I hear the word "safe," some, something comes to my mind, but I'm, what comes to your mind when, when they're asking, can I keep it safe? What do you think that means?

• 6:38Speaker 00

  Um, two things. Either safe from market fluctuations, or safe from fraud.

• 6:44Speaker 01

  Yeah.

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  Those are the two things that come to my mind.

• 6:46Speaker 01

  Yeah, yeah. Mine too.

• 6:48Speaker 02

  I was thinking that. Safe from family.

• 6:50Speaker 01

  Yeah.

• 6:52Speaker 01

  Because I immediately started kind of making a list of, you know, what is it? What examples have I seen in my over 20 year career in this business of working with retirees? Where have I seen where clients have lost money because of something that was unavoidable? And, you know, basically where have I seen unsafe scenarios with clients and their retirement money? And it's been just that, it's been fraud. The fraud has been more subtle. It's been by family members, or it's been by people posing themselves as financial advisors

• 7:35Speaker 01

  and putting them in something that's really not appropriate. Yeah, some sort of scheme, or just something that's not even legit. Or something that is legit, but it's really not appropriate for the person. And so, I think, you know, knowing those two things, the, what you really want to do is, with your retirement money, if you're going to hire somebody to help you with it, you want that person to have the proper license, or the proper experience and license. But licensing is so important because that tells you who's regulating them.

• 8:16Speaker 01

  It tells you what recourse you may have if there is something that goes sideways. And generally, you have also an ability to see background, you know, if there's any black marks or fines, and at least in our industry that we work in, and we're-

• 8:35Speaker 00

  And this is public info.

• 8:37Speaker 01

  Yes, it's public information, so I think that's good to have that. If it's not, if somebody is touting themselves as a financial advisor, and they're not registered with FINRA or the SEC, then they're probably not a financial advisor. They're saying that they're a financial advisor, but they could be something else. It could be just insurance salesman, or it could be just somebody who's just trying to- Just thinks that they're a financial advisor, wants to say they are. But we have these regulatory agencies for a reason. That's so that it keeps the bad actors out as much as possible. And it gives the investor some protection, some recourse in case there's something that's wrong.

• 9:15Speaker 00

  Yeah, and the fact of what you said, I really like because it's public info. You can do your own research too. If you're going to be talking to someone, the publicly available information about that person, just go and take a look first.

• 9:29Speaker 01

  Yeah.

• 9:30Speaker 00

  And for money wise, for any financial advisor you want to be dealing with.

• 9:34Speaker 01

  Yes.

• 9:35Speaker 00

  That's just good due diligence.

• 9:36Speaker 01

  Yeah, and fortunately, it's really easy. For example, on all our business cards, on all of our, any bio that we have online on our website, there's a link that's called BrokerCheck. And that BrokerCheck link goes, takes you directly to the FINRA website that shows, you know, how long you've been in the industry, if you've had any complaints, if they're, what licenses you have and which states. And it's, you know, your education level. It's very, very helpful. It also has a link where you can go. Because not all financial advisors are registered with FINRA.

• 10:18Speaker 01

  Some of them are registered with the SEC through as investment advisor representatives. It's a whole different system. I A R D is the system that uses for those representatives of registered investment advisory firms. But again, where that information, which you'll find on that U4, that which is that form that those advisors have is their education background, what conflicts of interest there may be, what licensing they have, if there's been any complaints. So that can really help quite a bit, reduce the chances of being taken advantage of. It doesn't necessarily reduce the chance of you getting some bad advice,

• 10:59Speaker 01

  which is the other concern that you said, where you're just, you're maybe invested in a way that's not appropriate.

• 11:05Speaker 00

  That's correct. So that's the other thing I wanted maybe you shared to touch on is having a financial advisor is maybe half of the battle. Maybe the other half is for you to know. And understand your risk profile. Where are you in your retirement plan? Are you close to retirement? Are you far from retirement? All those are gonna help decide what type of strategy you're gonna eventually be part of or have.

• 11:34Speaker 01

  Yeah.

• 11:35Speaker 00

  Right? And a good financial advisor will go and walk you through all these steps.

• 11:39Speaker 01

  Yep.

• 11:39Speaker 00

  So they can put you on that plan. Now, you always say this on the show is to keep your money safe from that perspective, don't time the market, right? Don't try to time the market. It's how long and being in the market.

• 11:55Speaker 01

  Yes.

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  Right?

• 11:57Speaker 01

  Yeah.

• 11:57Speaker 00

  To me, that's when I hear safe. That's what, that's the connotation for me or in my brain.

• 12:03Speaker 01

  Yes, cuz it's safe over what period of time? I mean, no money is safe if you're gonna live to be, you know, if you have to withdraw so much amount of your money over such a short period of time, no money is safe. Like, there's other issues. Now that you have too high of a withdrawal rate, maybe there's a budget issue or maybe there just wasn't enough saved in the first place. But if you have, if, even if that's, let's take that scenario where you maybe didn't save enough as much as you should have for retirement and now you're in retirement, a good financial advisor would go, "Well, I'm sorry, this isn't gonna last you the 20 years that you were hoping. It's gonna last you five years, but let's make it the best five years. Let's make sure it's five and not two or three."

• 12:48Speaker 00

  Mm-hmm.

• 12:49Speaker 01

  And so it would be invested in a very specific way to last five years.

• 12:53Speaker 00

  And that's why I think it's also important, if you're planning on retiring, start talking to somebody as soon as possible. Because you might be, I've seen it, where some people wait until 55 before they talk to somebody and then they're planning on retiring at 62.

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  Yeah.

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  That's only seven years.

• 13:09Speaker 01

  Yep.

• 13:09Speaker 00

  When you should have been planning for that for a longer time, in my opinion.

• 13:13Speaker 01

  Yeah.

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  Or for you to have that comfortable lifestyle that you've gotten used to.

• 13:18Speaker 01

  Yeah, you want it, you want it, there's just some, there's, you know, you never know. For you specifically, there could be some great tips that can make a huge difference. So the sooner you learn those tips, the better. I've noticed that 401k plans, which is what, how most people are saving for retirement, are getting much better within their apps or the, the, the web access that you have of telling you about things that you should be aware of and bringing things to your attention. Oh, that based on your income, you're, you know, you're X percentage away from meeting your goal. And there's been a, a large shift towards goal, but goal-based planning, which goal-based planning was a very unique strategy of investing when MoneyWise, over 20 years ago, started in this business.

• 14:01Speaker 01

  We started as goal-based planners, you know, being fee-based. And that was a novel idea, if you can believe it or not, which is essentially, your, your planning is all based around a specific goal in mind. So everything that you construct inside a portfolio is geared towards that specific goal. And so it helps the client stay in the seat longer, knowing how closer they are to that specific goal, rather than looking at it and going, well, what was my rate of return? How much did I make? Or how much did I lose? That doesn't really tell you anything towards what really is important to you, which is, is it, is it going to grow or perform in the way that I need to perform to provide the thing that I'm trying to get it to do?

• 14:46Speaker 01

  That's the goal. And that's, that's what, that's what you want to try to work towards. So having, being comfortable with your, your financial advisor, making sure that they're fiduciaries, like we are here at MoneyWise, which is we're fee-based. So you're not worried about just being sold some product. Yeah. But you, you know, you're paying for that advice and you're paying for that service. Stay, you know, especially as we age, becomes much more difficult for us to have confidence in the decisions that we make. We have cognitive decline and society starts to feel like it's, it starts to pass us intellectually and you can get taken advantage of very quickly. So as you age, it's really important to make sure that you're involving your, your close friends and your, or your family.

• 15:28Speaker 01

  Around you to protect you from making any bad decisions with money. Don't feel bad if you get to that point where that's how you feel. That's the real thing that happens. And I know for us is here at Money Wise, when we have a client that's starting to decline with cognitively, we encourage them to start bringing in their kids. You know, or long before then, let's get the beneficiaries involved and let's let's make sure that we all know who the players are in case something goes sideways. So hopefully there's some, a lot of tips there we gave.

• 16:04Speaker 00

  Yes.

• 16:04Speaker 01

  Sammy.

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  Yes.

• 16:05Speaker 01

  Great stuff. Want to keep, please keep your comments and questions coming our way. 661-661-3961000. That's the number you can text or call. We come back, we're going to cover all these headlines plus much more. Don't go anywhere.

• 16:17Speaker 02

  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 Money Wise's 401k Specialist, Justin Leland at 661-847-1000. That's 661-847-1000.

• 16:44Speaker 01

  Welcome to the Money Wise Show. I'm Sharad. That's Sammy. We're your hosts today. 661-3961000. That's the number you can call or text. Man, we've got big moves in the markets today, Sammy.

• 16:56Speaker 00

  That's good.

• 16:57Speaker 01

  It is.

• 16:57Speaker 00

  Positive moves, right?

• 16:58Speaker 01

  Positive moves. Not everything was positive, but pretty much, you know, the major indices were up. Dow is up over 1,100 points. S and P 500 also up big. Looks like.

• 17:10Speaker 00

  Nasdaq was up, I think, too.

• 17:11Speaker 01

  Yeah, Nasdaq was up.

• 17:13Speaker 00

  I think the companies that took a hit were the pharmaceutical companies a little bit.

• 17:20Speaker 01

  A little bit, although, you know, let's talk about that headline today. Well, first of all, let's talk about what the big headline is tariff. The tariff talk.

• 17:28Speaker 00

  Yes, that's a big one.

• 17:29Speaker 01

  That kind of came over the weekend, started to get word that China and the US have have come to an agreement and.

• 17:38Speaker 01

  President Trump started announcing it yesterday or last night. And then today it was official that there is a truce on the trade war between China and the US.

• 17:48Speaker 00

  Yes, sir. Yes.

• 17:50Speaker 01

  No surprise, right, Sammy? I mean, it went a little longer than I thought it would. It really didn't seem necessary for it to go as long as it has. But, uh, but I don't think anybody was expecting this. I wasn't expecting this to last too long.

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  I didn't expect it to last this long.

• 18:10Speaker 01

  Yeah.

• 18:10Speaker 00

  I thought, I thought as soon as the, after liberation day, things like a week after maybe.

• 18:15Speaker 01

  Yeah.

• 18:16Speaker 00

  How was it? It's been three weeks, four weeks now since liberation day?

• 18:19Speaker 01

  Yeah, they'll quit calling it liberation.

• 18:23Speaker 00

  I'm just trying to trigger you.

• 18:24Speaker 01

  That's what it is.

• 18:24Speaker 00

  Trying to trigger you, Shane. Liberation. Liberation. Did I say?

• 18:28Speaker 01

  Liberation from what? Yeah, so the, the US and China have agreed to put tariffs on pause for 90 days. And the US is dropping its, its tariff on most Chinese imports from 145% down to 30%. And China is backing off from their 125% down to 10%. So.

• 18:49Speaker 00

  So I think Timo and Shane are gonna survive?

• 18:52Speaker 01

  I think they're, they're, they're back. They're back.

• 18:54Speaker 00

  They're back. I'm back.

• 18:57Speaker 01

  I, I haven't, I, that's a good question though, because the, that is a separate.

• 19:01Speaker 00

  That's the $800 minimum.

• 19:05Speaker 01

  Yeah.

• 19:06Speaker 00

  That, or threshold. So I don't know how those are gonna be affected.

• 19:10Speaker 01

  Yeah.

• 19:10Speaker 00

  Because I think he treated those little separate and different.

• 19:14Speaker 01

  Yeah.

• 19:14Speaker 00

  Than the rest of the tariffs.

• 19:15Speaker 01

  I think it is separate and different. I haven't, I haven't gotten into the, into the weeds enough to see if that's a, that, that's gonna be dropped, because that certainly is affecting a lot of people that buy in on Timu and Alibaba and that.

• 19:26Speaker 00

  Yeah, I read about it two weeks ago when that, the decision came, came out about, you know, putting a moratorium or the, the threshold and putting tariffs on that. And the first thing that came to my mind, I'm like, a lot of Americans kind of like found a loophole. Instead of going to Amazon and some local companies or US-based companies.

• 19:45Speaker 01

  Right.

• 19:46Speaker 00

  They just go straight to the source.

• 19:48Speaker 01

  Exactly.

• 19:48Speaker 00

  And avoid all the markups that Amazon put up and all that.

• 19:52Speaker 01

  Right.

• 19:53Speaker 00

  Hey, but when you're friends with the president, things happen.

• 19:56Speaker 01

  I guess so. So, you know, some of the companies that have done well today off of this trade news are companies that were really hurt by the trade news, specifically big tech mega caps like Amazon, Nvidia, Apple, and Tesla. So, these are, these were big exports from the United States. We're exporting these chips that these American companies make. You can see why they were hurt so much and right now they're benefiting from this news because okay, now they won't, you know, these countries that have to import these chips, they'll be able to import them without that hundred.

• 20:30Speaker 00

  Forty-five.

• 20:31Speaker 01

  Forty-five percent.

• 20:32Speaker 00

  Yeah.

• 20:32Speaker 01

  Increase or whatever the tariff is. And so, you know, that's, that's, that's good. Also today, as you mentioned Sammy, is President Trump signed an executive order that is there to try to lower drug prices sold in the United States. And according to his social media posts, cuts should save about fifty-nine percent. And this is, this is, you know, very fascinating, complex subject.

• 21:04Speaker 00

  It is. It is because I, I, we were offline, I shared with you, I was traveling to Ireland. My wife needed an inhaler.

• 21:13Speaker 01

  Yeah.

• 21:14Speaker 00

  Which we, we pay here with insurance. I think we pay twenty dollars or fifteen dollars copay without the insurance, maybe like ninety dollars. Don't quote me for that number, but when I was over there, I'm not a European citizen or an Irish citizen. I went to the pharmacy and they gave me one. It was four thousand, four euros.

• 21:35Speaker 01

  Four bucks.

• 21:36Speaker 00

  Four euros.

• 21:36Speaker 01

  Yeah. Yeah, so I mean, this is I've

• 21:40Speaker 00

  It's the same. I kid you not. It's the same inhaler.

• 21:43Speaker 01

  So crazy. It it it. There's some. There's some funky stuff that goes on in the United States in terms of how pharmaceuticals are regulated.

• 21:51Speaker 00

  When I hear this, I I feel like we're being taken advantage of. As as consumers.

• 21:57Speaker 01

  Yeah.

• 21:57Speaker 00

  As a country on the top of that, but as consumers, definitely, we're being taken advantage of by the pharmaceutical companies. If I'm being able to, I'm able to pay for four euros or four bucks overseas for the same medication.

• 22:09Speaker 01

  Well, that's part of this executive order by President Trump, which is to order that.

• 22:19Speaker 01

  Two of the biggest purchasers of pharmaceuticals, Medicare and Medicaid. They have to have international price benchmarking. So the pharmaceutical companies are going to have to try to find the lowest prices available in all other countries. Not just the United States.

• 22:38Speaker 00

  See, see, following liberation day shirt.

• 22:40Speaker 01

  Right. This is definitely could liberate a lot of people from a lot of money.

• 22:44Speaker 00

  Trillions of dollars of savings.

• 22:46Speaker 01

  Because just like you said, why not buy that inhaler? If you can buy it in Ireland for four bucks and it's 90 bucks in the United States, why doesn't Medicare or Medicaid buy that from them?

• 22:54Speaker 00

  Now, we're lucky enough that we live close to Mexico before all this immigration and border issues and whatever. A lot of people were traveling to Mexico and buying medication that costs hundreds of dollars just to cross in Tijuana and coming back.

• 23:06Speaker 01

  Right.

• 23:07Speaker 00

  Same medication costs a lot less just across across the border.

• 23:10Speaker 01

  Yeah.

• 23:11Speaker 00

  So why can't we have a long term fix for this? So we can save trillions of dollars, the economic effect of those trillions of dollars on the economy that people are going to be spending is not is not just the savings, but the trickle effect.

• 23:26Speaker 01

  Yes, no, this is not, you know, not a real popular idea. But one reason why pharmaceuticals are cheaper in other countries is because most other developed countries have a single payer system.

• 23:41Speaker 01

  So it is meaning everybody's all part of one healthcare provider essentially. And they are able to negotiate those prices with the drug manufacturers. Whereas in the United States, Medicare has been legally prohibited from negotiating drug prices directly with pharmaceutical companies.

• 24:02Speaker 00

  Yeah, because, yeah, we're not a political show, but I can, I can argue that the pharmaceutical company has a very strong lobby. And that's one of the reasons why they are not able to negotiate.

• 24:12Speaker 01

  I'm sure that has a huge part of it, unlike other countries that have a price cap on drug prices. And the United States does not, they allow a free market pricing.

• 24:24Speaker 00

  This touch, touch, as you know, this touches me. Why? Because we just started this foundation, Thrive and Purpose Foundation. And the purpose of it is truly to help these individuals that are not in the low income, but not making enough to afford certain drugs, which affects. And we, we saw the video of that gentleman that passed away because he could not afford certain drugs. This is a guy that worked all his life, retired and did not have enough income to afford for a simple drug that could have saved his life.

• 24:54Speaker 01

  Yeah.

• 24:55Speaker 00

  Here in America.

• 24:56Speaker 01

  Right.

• 24:57Speaker 00

  Why?

• 24:58Speaker 01

  Right. So many, like I said, it's pretty complex. You have, you know, a lot of these old laws that have been in place. And you also have, United States has a unique intellectual property protections that gives these companies long periods of time to have market exclusivity. So they can have these non generic drugs. Once they go generic, usually you'll find it's affordable for, for most people. It comes way down and you don't have to, you know, pay that high price. But it's that period of time where the pharmaceutical company is allowed to, to have exclusivity on it. They can, it can be very, very expensive.

• 25:34Speaker 00

  Yeah, that's true. They have years, right?

• 25:37Speaker 01

  Right.

• 25:37Speaker 00

  Yeah.

• 25:38Speaker 01

  We're also one of the few countries in the world that allows direct to consumer advertising. So there's only one other country that has this ability to have these, what I think are the most unknown. Annoying commercials, yeah.

• 25:51Speaker 00

  Oh, like the ones on TV where it's like, hey, it helps you reduce this, this, this. Oh, by the way, side effects, there's like nine of them.

• 25:57Speaker 01

  Yeah.

• 25:58Speaker 00

  Including potentially killing yourself.

• 26:00Speaker 01

  Yeah, right. They're horrible, right? They're all the disclaimers that they have to have and it's always just like the same imagery and so, you know, not only is it annoying to have to watch, but this increases the demand for the brand name drugs, even though there are cheaper.

• 26:17Speaker 00

  Alternatives.

• 26:17Speaker 01

  Equally alter- yes, alternatives that are just effective.

• 26:20Speaker 00

  As effective, that's right.

• 26:21Speaker 01

  And so it drives them out because they don't have the marketing budget to have the fancy commercial with the weird disclosures and weird names, you know, it's so there, you know, like I said, it's, it's complex. Of course.

• 26:34Speaker 00

  So this is a positive. I, I see this as if instituted, if, uh, this is great.

• 26:42Speaker 01

  Uh, yeah, I, I'm actually very surprised that, from this president who is, you know, very, pretty far right. And, um, and, and anti, you know, socialism, this is definitely a move towards, to, towards single payer healthcare. You know, attacking the pharmaceutical company in this way is definitely a step towards reducing the costs and bringing us more towards that system. Which is the only way I think that we're going to be able to get our costs down.

• 27:10Speaker 00

  Yeah, because as the cost keeps climbing, I mean, you and I know this, you know, and every business knows this. The cost of insurance just keeps climbing every year, 12%, 15%, right? And, and, and it's just not sustainable long-term. We have to have certain solutions, right? I mean, we need to lose weight as a, as a country. We need to take better care of ourselves. We need to do, we need to have cheap medication and, and access to doctors. All of the, the above, we need to have.

• 27:38Speaker 01

  Yeah, and we are the wealthiest country in the world that spends the most amount of money on healthcare and on a medical research and we're way down the list on being the healthiest country in the world. We're not even, I don't think we're in the top 10 anymore. And it doesn't make any sense.

• 27:56Speaker 00

  You see those videos from the sixties and the seventies of kids in high school doing gym classes?

• 28:03Speaker 01

  Oh.

• 28:03Speaker 00

  Seriously, everybody's like so fit, everybody can run a marathon.

• 28:07Speaker 01

  Yeah, wearing their short shorts.

• 28:08Speaker 00

  Yeah.

• 28:11Speaker 00

  I call them the Kareem Abdul Jabbar shorts.

• 28:13Speaker 01

  Oh, yeah. They come back.

• 28:15Speaker 00

  They're making a comeback. They're making soccer.

• 28:18Speaker 01

  Yeah.

• 28:19Speaker 00

  I watched the European soccer. Well, European kind of like tend to have their own style.

• 28:23Speaker 01

  Yeah.

• 28:23Speaker 02

  I picked up my son from high school and they're, a lot of the kids were the shorty shorts.

• 28:27Speaker 01

  Yeah, the John Stockton shorts.

• 28:29Speaker 02

  John Stockton.

• 28:30Speaker 01

  John Stockton was the one that was ahead of his time, like.

• 28:33Speaker 00

  He was.

• 28:33Speaker 01

  He was wearing the short shorts when they were back then, you know, in the early 90s, it was all long, super long shorts.

• 28:40Speaker 00

  Yep. Yep.

• 28:41Speaker 01

  John Stockton didn't care.

• 28:42Speaker 00

  No. Well, hey, with that game that he had.

• 28:46Speaker 01

  Which one?

• 28:46Speaker 00

  Like he, no, like his game, how he played the game.

• 28:49Speaker 01

  Oh, yeah. Oh, his game. Oh, yeah.

• 28:51Speaker 02

  He didn't have to worry about anything. He had the mailman.

• 28:53Speaker 01

  That's right. I think he even said, I think that may have come up one time too, where they asked him about his shorts and he came back with it.

• 29:01Speaker 00

  Yeah. Look at the board. Look at my stats.

• 29:04Speaker 01

  Yeah, that's exactly. Well, we got off course. We got off course here. Let's take a quick break right now, Sammy. When we come back, we've got a lot more headlines to talk about. We're Money Wise.

• 29:12Speaker 02

  Are you nearing retirement and currently working with a financial advisor? Are you not sure if you're invested appropriately? Call our offices at 661-847-1000 to sit down with a Money Wise financial advisor for a no obligation assessment.

• 29:35Speaker 01

  Welcome back to Money Wise. That's Sammy. I'm Sharad, your host today, taking your calls and messages. Weight watchers went out of business. Who's going out of business, Sammy?

• 29:46Speaker 00

  Weight watchers is?

• 29:48Speaker 01

  Weight watchers.

• 29:48Speaker 00

  Wow. I thought it would never, in America, it would never go out of business. It has so much business.

• 29:53Speaker 01

  You would think, and I think they do have a lot of business. The other, the bigger problem is they have a lot of debt.

• 30:00Speaker 00

  Yeah, almost what?

• 30:01Speaker 01

  One and a half billion.

• 30:03Speaker 00

  One and a half billion dollars of debt. How much debt is in interest expense a year?

• 30:08Speaker 01

  More than they can handle.

• 30:09Speaker 00

  Hundred billion dollars?

• 30:10Speaker 01

  Yeah.

• 30:11Speaker 00

  Probably.

• 30:12Speaker 01

  Probably more than that.

• 30:13Speaker 02

  There was a comedian on Saturday Night Live over the weekend that got into this and said, it's all right. They all, they always gain it back.

• 30:21Speaker 01

  That's good. That's really good.

• 30:24Speaker 00

  Hundred million dollars of interest expense annually.

• 30:28Speaker 01

  Just from their-

• 30:28Speaker 00

  That's what's causing, what's causing this, uh, drama.

• 30:32Speaker 01

  That and, well, I mean, they would be able to handle that if they had more in sales, but there has been an uptick in, um, in-

• 30:39Speaker 00

  Weight loss drugs.

• 30:40Speaker 01

  Weight loss drugs. Ozempic.

• 30:42Speaker 00

  Ozempic.

• 30:43Speaker 01

  Yeah. Look, see even, see those ads even work?

• 30:46Speaker 00

  I'm telling you. I'm telling you.

• 30:47Speaker 01

  They got the catchy jingle?

• 30:48Speaker 00

  Yes.

• 30:49Speaker 01

  That GLP-1 drugs like Ozempic and others are taking over and they're moving over the, they're moving aside the Weight Watchers system, which I'm actually really like the Weight Watchers system, which is essentially just using points.

• 31:07Speaker 00

  Yeah.

• 31:07Speaker 01

  Based on how many calories or how much carbs you're, you're taking in and you get a certain amount each day. And you can save up those points if you want, so that you can splurge on that treat.

• 31:18Speaker 00

  Yes. Calorie counting is what you describe.

• 31:20Speaker 01

  Calorie counting, basically. Yeah.

• 31:21Speaker 00

  So now we could do, I mean, I, I think besides just the weight loss drugs shared, there's apps that are pretty advanced right now.

• 31:28Speaker 01

  Yes.

• 31:29Speaker 00

  That you could, that you could sign up for, that could help you with a lot of discounting calories. There's, a lot of my friends use these. And they're able to lose the weight without all the pressure of weight and going to meetings and things like that.

• 31:41Speaker 01

  About 10 years ago, before I knew you, Sammy, I was about 80 pounds heavier than I am now. So I was, I would consider myself overweight. I definitely felt overweight. I didn't feel healthy. And I finally decided I was going to do something about it and that's exactly what I did. I used an app at the time. I'm sure they're even better now. But it was such a, it was basically journaling what you ate.

• 32:06Speaker 00

  Yes.

• 32:06Speaker 01

  And you could, it could recognize some of the stuff that you were typing in so that it would tell you how many calories, how many, how much protein, how much carbohydrates.

• 32:14Speaker 00

  Yeah.

• 32:14Speaker 01

  And it would just, and you would set, okay, well, I want my daily allowance to be whatever, you know, 2,000 calories or, you know, 1,900 calories a day. And then it would, you know, keep track of that for you and you'd have to just keep logging in and, and for me, it doesn't work for everybody, but for me, it's, it, it like hacked my brain into- Paying attention to what I was eating.

• 32:40Speaker 00

  Yes.

• 32:40Speaker 01

  The biggest thing for me was, okay, I could, I'm gonna put in this Snicker bar, whatever, you know, three hundred calories. And then it would also track my movement, so I would put in when I'm, when I would exercise. And I was like, you have to work out how much to burn three hundred calories?

• 32:55Speaker 00

  That's the trigger. That's the mind switch.

• 32:58Speaker 01

  Yeah. You start to just like, put a value on what you're taking in.

• 33:02Speaker 00

  It's an hour on the treadmill?

• 33:04Speaker 01

  Yeah.

• 33:04Speaker 00

  That's how many pushups? That's how many pullups?

• 33:07Speaker 01

  I'd rather not do the treadmill and then not, just skip the, skip the candy bar. And then, you know, then I'm not killing myself so much.

• 33:16Speaker 00

  Yeah, I mean, it's, it's surprising. Seriously, it's surprising to me, but with, with what you said, which is the debt. See, debt, if used, sometimes could, could, could, could affect you negatively. In this case, it is because hundred million thousands of interest expenses, now they are going through a reorg and hoping to slash that to half, hopefully.

• 33:37Speaker 01

  Well.

• 33:38Speaker 00

  Or less.

• 33:39Speaker 01

  That, that, they were probably, they were over leveraged, expecting, you know, sales to always go up and things to always, you know, for them to use the money that they were borrowing from to, to provide a, a stronger stream of income. It didn't work out. And that's a great lesson for all of us, right? You don't, you, that's why you wanna have, you don't wanna be over leveraged on debt and you wanna, you want to make sure that you're managing that appropriately and that you've got your emergency savings set aside.

• 34:08Speaker 00

  That's right.

• 34:08Speaker 01

  I think for a lot of these publicly traded companies, which Weight Watchers is a publicly traded company, they essentially have an ATM that they can access by the, by the capital markets because their shares are out there. They can issue more shares or they can issue bonds. And so it's, it gets, they get, fall into this trap of feeling like there's this endless amount of money and they're just gonna be keep, be fine and it's not good.

• 34:30Speaker 00

  And also, the clientele is shifting too. As people are aging, maybe getting off, the new generation does not, they're not gonna do Weight Watchers. They have their apps, they have ChatGPT, ChatGPT can create a plan for you that you could, there's multiple ways that you could do this for free almost.

• 34:46Speaker 01

  Yes.

• 34:47Speaker 00

  Without the, like I said, the pressure of the meetings and you have to have whatever, somebody to talk to, they call them sponsors, all that is out the door because you have. An app that could service as Weight Watchers for you.

• 35:02Speaker 01

  Yes, there's certainly inexpensive ways that you can say that you can lose weight. Here's the other thing Sammy, the cost of not losing weight, according to a George Washington University study that was done in 2010, it's the annual extra medical cost for an obese individual is about $1,500. Actually, that was $1,500 in 2010. So in today's dollars, it'd be between 18 and $2,000 today. That's more a year. So let's cut it in the middle, about $2,000 more a year that you pay for being overweight.

• 35:43Speaker 01

  This is because you have certain health conditions that come with that, like type 2 diabetes, heart disease, hypertension, you have more doctor's visits, more medications, you have certain indirect costs because your loss of productivity, that can range between $500 and $4,000 a year depending on your occupation. Studies also suggest that overweight individuals earn 3% to 6% less on average. So you have those costs. You also have a lifestyle cost. So you have more frequent clothing replacement. You have higher fuel costs. You have specialized furniture or modified equipment that you have to have.

• 36:26Speaker 01

  And we're talking about obese, like way obese. Then you have those extra costs. So that on top of what the average person spends on healthcare a year.

• 36:38Speaker 00

  Which were the highest in the world. The United States is the highest in the world.

• 36:42Speaker 01

  The highest in the world, $13,000 a year. So over $1,000 a month is the average cost that a person spends, Americans spends on healthcare.

• 36:51Speaker 00

  So you said 13,000?

• 36:55Speaker 01

  Yeah.

• 36:55Speaker 00

  So we're talking about trillions of dollars.

• 36:59Speaker 01

  Trillions, yeah.

• 37:00Speaker 00

  For the whole population of the United States.

• 37:02Speaker 01

  For sure.

• 37:03Speaker 00

  So.

• 37:07Speaker 00

  Obesity on just a percentage of the population is probably in the mid forties, close to fifty percent.

• 37:15Speaker 01

  Yeah.

• 37:16Speaker 00

  Of United States population.

• 37:18Speaker 01

  I think it's might be a little higher than that.

• 37:20Speaker 00

  So that's my, the statistic I, I saw.

• 37:23Speaker 01

  Yeah.

• 37:23Speaker 00

  But, I mean, judging by the streets, especially when you live in Bakersfield, yes, probably that's the case.

• 37:28Speaker 01

  Yeah.

• 37:28Speaker 00

  Um, and the impact on, on the financials, impacts on the pocket is, is, is huge. Now, compared to the US to the rest of the world, especially the other developed countries, we're almost two and a half times. We spent almost two and a half times the amount of money on healthcare compared to other countries.

• 37:48Speaker 01

  Other developed countries.

• 37:49Speaker 00

  Yes.

• 37:49Speaker 01

  Yeah. And, and yet we have the lowest, if not the, the lowest of life expectancies for developed countries.

• 37:58Speaker 00

  That's right.

• 37:58Speaker 01

  Not all of them. We're talking about, you know, members of, of, of, there's about forty developed countries across the world. So we're number one in healthcare spending, but we're the bottom five for life expectancy. We're the worst among our nations for infant mortality. We're among the worst for obesity and chronic conditions. And then access and affordability, we're among the worst. So we're spending the most and we have the worst statistics.

• 38:24Speaker 00

  Yep.

• 38:24Speaker 01

  It, it, it's really, it goes to show, like, that one of the big lessons here, that money doesn't just solve the problem. This is a bigger problem than just, than just throwing money at it.

• 38:34Speaker 00

  No, no, it's, again, it's like everything we talked to, it's about educating the minds and starting early in our schools. We talked about financial education, we talked about health education as well. I think we need to do a much better job educate, educating our youth. And also, I mean, you can educate all you want to, Sherrod, but sometimes you get back to the house and if the house does not have that, then it is what it is.

• 38:57Speaker 01

  Yeah, right. Coming back to Weight Watchers going out of business, you know, I don't know what the, what, what the cost was for joining Weight Watchers. But if you look at the, at the direct medical cost for being overweight, being between, let's call it two thousand, on average, two thousand dollars more a year. Seems like it would be a deal if you're. Spending that or less. And plus, you have all these other indirect savings that come along with, you know, living a healthier lifestyle.

• 39:24Speaker 00

  It's the rat race you get into.

• 39:26Speaker 01

  Yeah.

• 39:26Speaker 00

  You know, we talk about lifestyle, you know, the race, the, the, how your mind works.

• 39:32Speaker 01

  Yeah.

• 39:32Speaker 00

  Going back to how you retrained your mind about counting calories and maybe not even counting calories anymore. It's just, hey, I'm not going to put this in my stomach because later I don't want to be on the treadmill for two hours.

• 39:42Speaker 01

  Correct. Yeah.

• 39:44Speaker 00

  Right?

• 39:44Speaker 01

  There is, it is totally, there's a rat race, not a rat, we're not all rats, but we're definitely like, you get into this mindset where you're just, you're going and going and going, you get, you know, then it's just easier to go through the drive through and you're eating junk food and.

• 39:58Speaker 00

  Forty three dollars per month.

• 40:00Speaker 01

  Oh, really? I mean, come on.

• 40:02Speaker 00

  The digital app, uh, it's forty three dollars.

• 40:04Speaker 01

  Forty three bucks a month.

• 40:05Speaker 00

  If you sign up for the three months, it's less. If you sign up for the 10 months, it's less, of course. I mean, it's because.

• 40:11Speaker 01

  Yeah.

• 40:12Speaker 00

  But it's an app. I mean, seriously.

• 40:13Speaker 01

  Right.

• 40:14Speaker 00

  And you can have that for free.

• 40:16Speaker 01

  You can.

• 40:17Speaker 00

  Somewhere else.

• 40:18Speaker 01

  Yeah. I mean, you could have something as simple as just tracking it with a piece of paper and a pencil, right?

• 40:22Speaker 00

  Yeah.

• 40:23Speaker 01

  Writing down each day what you're eating and.

• 40:24Speaker 00

  That's right. That's right.

• 40:26Speaker 01

  Well, there you go, Sammy. Hopefully, uh, we give some good advice there. Let's just take our final break of the day. We come back, got a little bit more to talk about. We're Money Wise.

• 40:33Speaker 02

  Don't forget, Money Wise is more than a radio show. We're an independently owned, local wealth management firm with 60 plus years of collective experience. Our financial advisors are here to help you, Kern County. Together, let's be smart, be safe, be money wise.

• 40:54Speaker 01

  Welcome back. We're the Money Wise Show. I'm Sheridan. That's Sammy. You're the listener sending in questions and comments.

• 41:03Speaker 01

  Good song, huh? Uh, Sammy, we got a listener question.

• 41:06Speaker 00

  We have a question. Are the tariffs the real reason that a lot of long time businesses like Rite Aid and Burger King are closing? Or is it just the media putting a spin on the headlines? Daily Dan.

• 41:16Speaker 01

  Thank you, Daily Dan. Uh, you know. In this case, if you're just gonna look at Burger King and Rite Aid, it's all media hype.

• 41:28Speaker 00

  Yes.

• 41:28Speaker 01

  It has really not a whole lot to do with the tariffs.

• 41:31Speaker 00

  No.

• 41:31Speaker 01

  You have to remember the tariffs, a lot of the damage for the tariffs took place in the markets, in the stock markets because of anticipation for the, for the unknowns and the uncertainty that, that was surrounding this. Now, yes, now since the tariffs have been implemented, certainly we've seen like the ports have slowed down. We're starting to see prices go up and certainly the prices have gone up with a lot of goods. But those prices didn't kick in until the inventory went away.

• 42:03Speaker 00

  That's correct.

• 42:03Speaker 01

  There was a run up on it. So a lot of manufacturers started shipping everything to try to get ahead of the tariffs.

• 42:09Speaker 00

  That's right. And people importing things too and building up the, yeah, yeah, I agree with you.

• 42:13Speaker 01

  And, and so, you know, if you look at, which interesting I saw in just this morning in the news, that the, the, the amount of times that tariff was mentioned in calls, in earnings report calls, has gone up substantially. And specifically in the consumer sector, they saw the biggest rise of mention in tariffs with their earnings calls than I think any other sector. So they appeared, the, the, the term or the topic tariffs appeared 64 calls in six months, compared to 10 calls in the previous six months, only in 10 calls.

• 42:55Speaker 01

  So we saw like a five fold increase in, in how tariffs was mentioned by these companies that are in the, especially in the consumer sector. But that's because they're, they're like, they're always forward thinking. They're always trying to plan about how this is going to be. Rite Aid has been having problems for

• 43:12Speaker 00

  Yeah, so I, I used to be a banker and I used to finance, finance Rite Aid for real estate investors and they lease them back to, to Rite Aid for 20 years. And these are like, the investor finishes the project, building a Rite Aid for five million bucks. By the time the lease is signed, that project is worth now $10 million, trading at a 4% cap.

• 43:34Speaker 01

  Yeah.

• 43:35Speaker 00

  That's what one of the causes that's causing problems for Rite Aid is the brick and mortar spaces that they had. They've got too many.

• 43:42Speaker 01

  Yep.

• 43:43Speaker 00

  Okay, too many, they're they're paying too much in rent and leases and they don't need all those spaces. They're at every corner. They're not a Starbucks. You don't need medication every day.

• 43:53Speaker 01

  Right.

• 43:54Speaker 00

  Right? So they and they were trying to be that corner store for neighborhoods and stuff. It's just not penciling out. So the cost of labor, rent, and just running the brick and mortar space is just too high. And people now, especially during COVID, they relied a lot on online purchases, right? And that kind of like sped up the process of going down for Rite Aid and the likes of Friday. That's Rite Aid, okay?

• 44:18Speaker 01

  Yeah.

• 44:18Speaker 00

  For me Burger King, which I love, by the way, they they have a good burger.

• 44:23Speaker 01

  What do you what's your go to there?

• 44:25Speaker 00

  I don't know, Gabriel is the one that remembers that, but I there's one burger I like there.

• 44:30Speaker 01

  Uh huh, yeah.

• 44:31Speaker 00

  To me, but I walk in and I'm like I'm walking into the sixties.

• 44:35Speaker 01

  Yeah, right.

• 44:36Speaker 00

  And a lot of the time the service is slow, right?

• 44:39Speaker 01

  Yeah.

• 44:40Speaker 00

  And it's not the best service. Yeah.

• 44:45Speaker 01

  That we were saying off the air that that these franchises, especially fast food franchises, they there is a there is like a a life a life cycle that they go through where they, you know, right when they're brand new, it's kind of flashy and exciting. And then, you know, you go five, 10 years or things start to date and not look attractive. And you have to come up, they have to revamp the menu, have to come up with different pricing and.

• 45:12Speaker 00

  Yeah, and and that happens. You you reach a certain space in your life cycle. And then the management has to change, new ideas need to come. Locally here on Stockdale, the Burger King, unlucky unlucky for them. They were across the street from N and N.

• 45:25Speaker 01

  Yeah, oh, yeah, yeah, that good luck.

• 45:28Speaker 00

  Not a very location, location, location. I don't think they went to that marketing class.

• 45:31Speaker 01

  Yeah, well, I don't think they had any relation to the terrorists, but.

• 45:36Speaker 00

  I don't think so.

• 45:37Speaker 01

  Uh Burger King is Burger King is specifically trying to uh uh bring things back. They've got a reclaim the fire initiative where they're going to spend hundreds of millions of dollars in new advertising and remodeling their stores and. All of that stuff, so.

• 45:53Speaker 00

  Hopefully, hopefully they can catch up.

• 45:55Speaker 01

  Yeah, I hope so, too. They're right up down the street from us and I think I've been there twice in the last 10 years.

• 46:02Speaker 01

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• 46:12Speaker 03

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