5/6/25 Navigating Retirement Accounts, Vehicle Economics, and Peculiar Potty Pilferers

The Moneywise Radio Show and Podcast Tuesday, May 6th 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...

• 1:03Speaker 02

  I'm Emily Wade.

• 1:04Speaker 01

  Hey, Em.

• 1:04Speaker 02

  Hi, y'all.

• 1:05Speaker 01

  Great having you here. Phone lines are up, right, Stephen?

• 1:09Speaker 00

  Yes.

• 1:10Speaker 01

  Okay, nice. We've got actually a couple of messages from listeners.

• 1:23Speaker 02

  Oh, my gosh, I love it. These are the clips that you found over the weekend from Garo, right, Stephen?

• 1:29Speaker 00

  There is a lot of them.

• 1:31Speaker 02

  They're amazing. Okay, in honor of Garo, let's get to some of these messages.

• 1:37Speaker 01

  Yeah.

• 1:38Speaker 02

  Hey, can you ask Money Wise to share what age is 401K withdrawal tax-free? Thanks. Also, is there a four-way rule for early retirement?

• 1:48Speaker 01

  All right, so this is a two-part question, and we'll start with the first part of which is of the question, which is, can you, how do you withdraw from a 401K tax-free?

• 2:00Speaker 02

  Yeah.

• 2:00Speaker 01

  So the answer...

• 2:01Speaker 02

  At what age, right?

• 2:02Speaker 01

  At what age. So the quick answer to that is, there's, there's really no way to withdraw from a traditional 401K tax-free. I'm guessing that what the listener's asking is, or what they meant to say is, how do you withdraw it without a penalty?

• 2:18Speaker 02

  Okay.

• 2:18Speaker 01

  That there is an answer to. So generally, withdrawals... Before age 59 and a half, you have a 10% early withdrawal penalty. Unless you are no longer working with the company, then at age 55. So at 55, if you are separated from service or no longer with the company, it's a 401k. You can pull the money out and not have the 10% early withdrawal penalty. However, you are responsible for the taxes.

• 2:48Speaker 02

  Taxes. Okay. So two different things.

• 2:49Speaker 01

  Two different things. Yeah. So that's, that's important. It's the same thing with an IRA. If you withdraw from an IRA before 59 and a half, or an annuity before 59 and a half, you have, the IRS imposes a 10% penalty on the amount that you withdraw. The, the only way that you could withdraw from a 401k and not pay taxes on it is if it's in a Roth 401k. So Roth 401k contributions are made after tax. That means you're paying the taxes on the money before it goes in.

• 3:23Speaker 02

  Before it goes in there.

• 3:23Speaker 01

  And that, that is how you're getting away with pulling it out tax-free. So you might ask, well, what, what would be the point of putting it in?

• 3:31Speaker 02

  That's what I was going to ask, like.

• 3:33Speaker 01

  Why would you do that?

• 3:35Speaker 02

  See, you're paying taxes either way.

• 3:36Speaker 01

  The, the benefit is that you don't pay any taxes on any of the gains.

• 3:41Speaker 02

  Oh.

• 3:42Speaker 01

  So then you can pull it all out, tax-free, even the gains that that money has included. So a general rule of thumb for those, this just came up recently. We were talking to our son, Jack, about this.

• 3:56Speaker 02

  Oh, yes. Just on Sunday.

• 3:57Speaker 01

  He has, uh, he opened himself up an IRA. And I said, well, Jack, do you, are you doing a traditional? Are you doing a Roth? And fortunately, he says, well, I'm doing the Roth. And I said, oh, good choice.

• 4:11Speaker 02

  Well, I think you said you need to get a Roth. And he said, I already did that, Dad.

• 4:14Speaker 01

  I already did. I already did that, Dad.

• 4:15Speaker 02

  That's what I did.

• 4:16Speaker 01

  And, and the reason why in his situation, he would want a Roth is because he's in a very low tax bracket. He has very low tax burden right now. So you, he doesn't receive a huge benefit to getting a tax deduction for the contribution. He'll benefit more by being able to let it have tax-free growth.

• 4:36Speaker 02

  I see. That makes sense.

• 4:37Speaker 01

  So for others, it might be different. If you're in a high tax bracket. It's a little tricky of a calculation, but if you're in a really high tax bracket, you really want to consider a traditional 401k or traditional IRA because you're getting that benefit right away. You're already in a high tax bracket.

• 4:54Speaker 02

  Right now.

• 4:54Speaker 01

  The idea is that when you retire or later in life, when you would pull the money out, you would be, in theory, you'll be in a lower tax bracket because you're not working.

• 5:05Speaker 02

  Okay.

• 5:05Speaker 01

  So you don't have that work income. Maybe you have other sources of income, but not work. The problem, what makes that decision a little complicated is that many people feel as though our tax rate is going to go up over the long run because of our budget deficits and the debt that our country continues to accumulate.

• 5:26Speaker 02

  Define long run.

• 5:27Speaker 01

  Like over 20 years.

• 5:29Speaker 02

  Okay.

• 5:30Speaker 01

  Sometimes depending on who's in the White House, like when Biden was elected, there were a lot of people that, oh, here comes our taxes. Our taxes rate's going to go up over the next four years, which it didn't. It just stayed with President Trump's tax plan and which expires next year. And so, but you know, that's more of a short term. Sometimes depends on who they think is going to be elected. And generally, people believe that if Democrats, you're going to have higher taxes. Republicans, you're going to have lower taxes. So if, you know, in theory, if we have Democrats win, you know, congressional seats in the White House over a long period of time, then people would say, oh, okay, well, now we're going to have higher taxes.

• 6:11Speaker 02

  Again, theory.

• 6:12Speaker 01

  In theory, yeah. Cause I have a hard time with that because even Republicans are aware of the deficit and the debt, federal debt that we carry. Like at some point, we have to figure out a way to pay for it. And so, you know, tax rates is one of those things. There's just, this is the constant, you know, battle in politics is, you know, tax policy.

• 6:35Speaker 02

  Yeah. Who's to blame?

• 6:37Speaker 01

  Who's to blame? Who's going to actually pay the price? And we're just kind of seeing it on the local level in terms of our property taxes and how much is going towards our water and sewer.

• 6:45Speaker 02

  Right.

• 6:45Speaker 01

  There's been a lot of deferred maintenance that now is in the hundreds of millions of dollars. And so we could-

• 6:51Speaker 02

  Have anything to do with these sewer costs going up that we talked about last time I was on the show?

• 6:56Speaker 01

  Yeah. It's exactly, it's just like deferred maintenance. Yeah. And you know, no, no city council member wants to be responsible for, you know, any increases. And so they've just done very minimal increases.

• 7:09Speaker 02

  They're just kicking it down the road.

• 7:10Speaker 01

  Yeah, I'm afraid. We had Lois Henry on the other day and we talked quite a bit about, if you missed it, you can go back and listen to on our podcast. But she did a good job, I think, explaining what is going on and what some of the funny businesses that, that, you know, local politicians are trying to work around to figure out a way to, to pay for this. My guess is we're going to end up borrowing as a city instead of, you know, passing on that cost, which that might be the best thing, but it's going to end up costing us citizens a lot more money. So now we're paying interest.

• 7:41Speaker 02

  Yeah.

• 7:42Speaker 01

  You know, on, on this stuff. So-

• 7:44Speaker 02

  There's going to be some feelings about that, I'm guessing.

• 7:47Speaker 01

  So it kind of along the same topic, I want to finish one more thing about this tax-free or penalty-free withdrawals from your traditional 401k. There are a few other ways that you can avoid a 10% early withdrawal penalty. Remember, you're still going to pay regular income tax, but there are certain exemptions. For example, I mentioned if you're separated from service, meaning you're no longer working and you're at least age 55. You actually, for certain public safety employees, that, that age is down to 50. Also, there is a program called a 72T, which is a way that somebody can withdraw from a retirement account.

• 8:31Speaker 01

  But you have to be very careful about how you make those withdrawals. It has to be fixed withdrawals for at least a five-year period. And so it can be very, very tricky to do that. If there's a permanent disability, again, that's another way that you can withdraw. Penalty free, certain, so if you have medical expenses, if you have unreimbursed medical expenses that exceed a certain amount of your annual gross income. And then, of course, if there's like a divorce, so you have a quadro. So the court order, you know, where you have to transfer money from, which happens very regularly. There's a divorce and

• 9:07Speaker 02

  You don't have a penalty.

• 9:08Speaker 01

  You don't have that penalty, right? Because it's like a court order.

• 9:10Speaker 02

  Okay.

• 9:12Speaker 01

  There are also, if there's been a birth or an adoption, up to $5,000 can be withdrawn penalty free per child within the first year. This is an incentive for Congress to help us, you know, pay for childcare costs. And then certain qualified disasters have been given special penalty free access. This happened here recently with COVID. There was some, Congress passed some temporary ways that you could pull out a certain amount without any penalty. Of course, you're still paying taxes, but you know, consider the Roth version. If you think it meets your scenario, and then as long as you leave it in there for five years, all withdrawals are tax free.

• 9:50Speaker 02

  Okay, interesting.

• 9:51Speaker 01

  The second part of the question.

• 9:53Speaker 02

  The four way rule for early retirement.

• 9:55Speaker 01

  So I, I'm not super familiar with a four way rule. What I, what they may be referencing is the 4% rule. This is a very common rule of thumb in our industry, which is essentially that you, you want to have 4%, you know, withdrawal rate is considered a safe withdrawal rate where your money should last about 30 years. So, you know, if you have, for example, a million dollars in your retirement accounts or your savings, you, you should be able to draw $40,000 a year and that should last you 30 years. So the 4% rule is something that kind of fluctuates a little bit.

• 10:38Speaker 01

  And when we're in a higher interest rate environment, then it could be closer to the 5% rule. I know when I was first in this business over 20 years ago, it was, it was the 5% rule was the, was the, was the, the, the method. But there are some other. Sort of theories out there and most of them that are that might be referencing the listener referencing in terms of this four four way rule. And it's what I my research that I found it's part of the FIRE movement. Have you heard of the FIRE movement?

• 11:08Speaker 02

  No. Oh, wait, wait, wait. Yes, I think so. Well, is this about saving so much money really early on?

• 11:14Speaker 01

  Yes.

• 11:14Speaker 02

  This is our our, um, one of our children's roommates was doing this.

• 11:18Speaker 01

  Yes, like, like, super

• 11:20Speaker 02

  Yeah.

• 11:21Speaker 01

  aggressive, saving. Fire stands for financial independence, retire early. So it's a way that it's it's it's it's almost like a diet. It's like a strict diet, money diet.

• 11:35Speaker 02

  Yeah, it's like, it's like suffer now.

• 11:38Speaker 01

  Yeah.

• 11:38Speaker 02

  For a short period of time to live, live, live life free and unrestricted for a long period of time.

• 11:44Speaker 01

  Like you were saying, we know some people where it's they're very, uh, what's the word? Almost extreme.

• 11:52Speaker 02

  Yes.

• 11:53Speaker 01

  And where you are, you know, you never eat out.

• 11:57Speaker 02

  Yeah.

• 11:57Speaker 01

  When you do eat out, you just like you still go. It was like people can still be social, but they just don't buy anything.

• 12:03Speaker 02

  Yeah.

• 12:04Speaker 01

  You know, they they just sit at the table.

• 12:07Speaker 00

  We have words for that.

• 12:09Speaker 01

  What is it?

• 12:10Speaker 00

  But I can't say it on the radio.

• 12:11Speaker 02

  Oh, okay.

• 12:12Speaker 01

  So part of the

• 12:13Speaker 02

  Steve, I'll put that in the show notes.

• 12:14Speaker 00

  Yes, I will.

• 12:15Speaker 01

  Part of the four way rule or the some of these pillars, frugality is what, you know, the the biggest one. So spend, obviously spending less than you earn. The more that you save versus spend, the quicker that you'll get to that financial independence. You know, for some people, you want to live below your means and maximize your savings rate. The second pillar would be just earning more. So income optimization, increase your your side gigs, have more, you know, it it was streams of income. Take a full advantage of all your tax advantage accounts like a Roth or a traditional IRA, health savings account.

• 12:56Speaker 01

  Building up, you know, as I mentioned, passive income through, you know, real estate or royalties. And And then the third is investing wisely. So you want to grow your wealth through long-term investing using, you know, generally stocks or a mix of stocks and bonds. And you are generally following low-cost index strategy. So you're really focusing on fees.

• 13:19Speaker 02

  Are you providing like a framework for people who want to practice this FIRE movement?

• 13:25Speaker 01

  Yeah, yeah. These are, these are like the four pillars for the FIRE movement.

• 13:28Speaker 02

  Oh, I see.

• 13:29Speaker 01

  So I don't even know if the listener's thinking of this, but that this is, this is what could be.

• 13:33Speaker 02

  It also sort of depends on the age of the person, right?

• 13:37Speaker 01

  Yes.

• 13:37Speaker 02

  May I provide some counter thoughts to this?

• 13:40Speaker 01

  Well, let me get to the last, the last pillar. After frugality, income optimization, investing wisely is plan for the long haul. So you're making sure you're taking care of your healthcare

• 13:52Speaker 01

  needs that you're either have or going to have. And then, you know, ensuring that your lifestyle and

• 14:03Speaker 01

  identity, identity outside of work all mesh together. And so, yes, go.

• 14:10Speaker 02

  Well, I'm just thinking like,

• 14:13Speaker 02

  doesn't it require sort of a high income?

• 14:16Speaker 01

  No.

• 14:16Speaker 02

  And strict discipline to achieve like early retirement in your 30s or 40s? You need like six-figure incomes from early in your career to do that.

• 14:23Speaker 01

  Not necessarily.

• 14:24Speaker 02

  Really?

• 14:25Speaker 01

  Because what if your lifestyle is really low?

• 14:28Speaker 02

  Yeah.

• 14:28Speaker 01

  Right? So like,

• 14:29Speaker 02

  Okay.

• 14:30Speaker 01

  Some people, you're right. Some people say, okay, they're high earners, but they just end up saving everything because then when they get to retirement or when they get to that financial independence, then they're going to live a little bit more. Now they're going to eat out, you know, a few times a week or whatever. But others are going to be like, no, I just want to, I just want to maintain this very basic minimalist lifestyle. Yeah.

• 14:49Speaker 02

  Yeah. I wonder if financial capital isn't enough though. Because in true retirement, you, it requires social capital, which is relationships, human capital, which is skills and interests beyond your identity. You, you're going to need some time and money for those things.

• 15:05Speaker 01

  Yeah, yeah. It's possible. It just takes so much, it takes a lot of discipline. And I would argue, So we've had this discussion with our

• 15:14Speaker 02

  With our

• 15:14Speaker 01

  The person we know.

• 15:15Speaker 02

  Yes, with our, yeah.

• 15:17Speaker 01

  And, and that is, you know, your, life is-

• 15:20Speaker 02

  There's a cost to everything.

• 15:21Speaker 01

  Yeah.

• 15:21Speaker 02

  Right? You have to determine what cost you're willing to make.

• 15:24Speaker 01

  Yeah, and finding that, that, that balance between, you know, you don't want to sacrifice too much now for the long term. But you do need to save, you need to plan for the long term, but you don't want to do it at the cost where you're just miserable now.

• 15:39Speaker 02

  Suffering, exactly.

• 15:40Speaker 01

  But some people are just so disciplined that they're like, they don't, they don't, they don't, they get enjoyment, satisfaction off of being very frugal and being, you know, very minimalist from the get-go. And, okay, great, you know, knock yourself out. But I think more and more people are living their life to the, to the point where it's not your traditional life, it's not your traditional retirement that a lot of people think of, or you just build up a nest egg, you get to a certain point and now you're just playing golf every day.

• 16:09Speaker 02

  Right, it's shifted.

• 16:10Speaker 01

  It's shifted to where now people are always either kind of, always working in some way. They may move to part-time, or they may move to just consulting or side gigs.

• 16:20Speaker 02

  Yeah.

• 16:20Speaker 01

  And then they are, you know-

• 16:23Speaker 02

  They're keeping themselves, they're mentally active, but have flexibility to have, have a whole different life-

• 16:29Speaker 01

  Yeah.

• 16:30Speaker 02

  -in retirement, yeah.

• 16:31Speaker 01

  That's right.

• 16:31Speaker 02

  Interesting.

• 16:32Speaker 01

  Well, great question. We've got another comment here.

• 16:34Speaker 02

  Yes, we do.

• 16:35Speaker 01

  A question, let's take a break first and we come back, we'll cover that.

• 16:38Speaker 02

  Sounds good.

• 16:38Speaker 01

  Thanks for tuning in, we'll be right back after this.

• 16:40Speaker 00

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

• 17:09Speaker 01

  Thanks for tuning in. I'm Sharad, your host today along with Emily.

• 17:12Speaker 02

  Hey.

• 17:14Speaker 01

  Thank you for sending your message.

• 17:15Speaker 02

  Yeah, we got another one. Should we hit it?

• 17:17Speaker 01

  Let's hear it.

• 17:18Speaker 02

  I've been telling my children for years that they may want to go hybrid when it comes to cars or trucks because gas prices will continue to rise. What are your thoughts on EV cars?

• 17:29Speaker 01

  On EV?

• 17:30Speaker 02

  EV.

• 17:30Speaker 01

  EV cars. This is one of my favorite topics.

• 17:34Speaker 02

  I'm assuming that includes hybrid because that's what they were suggesting their kids do.

• 17:38Speaker 01

  Well, it used to be when hybrid, I remember when hybrids first came out. It wasn't that long ago. I mean, they've probably been out for a long time, but when you really started to notice it was mostly when the Prius started to get real popular, maybe 15, 20 years ago. I don't know how long the Prius has been around. It seems like a while. I remember thinking, wow, this is really cool technology, you know, fascinating. And it was generally considered more expensive. A lot of models were much more expensive if you're buying a hybrid version versus the standard model. And now we're in an interesting time where you have the standard combustion engine versus the hybrid. And now you have all different kinds of EVs, including plug-in hybrids.

• 18:20Speaker 02

  So many.

• 18:20Speaker 01

  And yeah, lots of different kinds of cars. I really enjoy talking about automobiles just in general in terms of finance because Americans spend a lot of money on cars. And we're not unique. Across the world, people spend a lot on cars. On average, households spend about 15% of their annual income on their, on their transportation.

• 18:48Speaker 02

  What was the percent again?

• 18:49Speaker 01

  15.

• 18:50Speaker 02

  Okay.

• 18:50Speaker 01

  15%.

• 18:51Speaker 02

  That's significant.

• 18:52Speaker 01

  It's significant. It's, if you're in a low-income household, it's, it's a lot more. It's about 30%, so twice as much. So that's because...

• 19:03Speaker 01

  They have less income, right?

• 19:05Speaker 02

  Right.

• 19:05Speaker 01

  Cars are are still expensive. And that, you know, you're still paying for for gas and and all that. And in many cases, it's the gas that's more expensive.

• 19:16Speaker 02

  Yeah.

• 19:16Speaker 01

  Than the maintenance or or the vehicle itself. And if you're money wise, you're, you know, you're buying or you're hanging on to that car for a long time. Or you're buying used.

• 19:28Speaker 02

  Right.

• 19:28Speaker 01

  When you're hanging on to that car for a long time and you're not overextending yourself. And so that's a smart thing to do. I've a pet peeve of mine is when somebody starts to complain about how many repairs their car has. And it has a justification to get a new car.

• 19:44Speaker 02

  Right.

• 19:44Speaker 01

  With a new payment. When their car's paid off. And it's like, you know, if you do the math, even if you have to replace the transmission or the engine, you know, it's several thousand dollars.

• 19:54Speaker 02

  Right.

• 19:54Speaker 01

  How much is your car payment?

• 19:56Speaker 02

  Right.

• 19:56Speaker 01

  The I mentioned that households in America spend about 15% of their annual income for their transportation needs. That amount is just over a thousand dollars a month.

• 20:09Speaker 02

  Okay.

• 20:09Speaker 01

  So that would include, you know, your the cost for the car.

• 20:13Speaker 02

  Car payment, gas, insurance.

• 20:15Speaker 01

  Maintenance.

• 20:16Speaker 02

  Okay.

• 20:16Speaker 01

  Yeah. So, you know, that's that's a lot of money.

• 20:19Speaker 02

  Yeah.

• 20:20Speaker 01

  So that's, you know, over $12,000 a year being spent on your car. It's significantly less if you don't have that car payment. So if you're you're spending 700 or 600 dollars a month. Or saving 600 dollars a month because you don't have a car payment. After 10 months, you saved 6,000 dollars. That means every 10 months, you could replace that engine or that trans that transmission. Which is not going to happen. But if you had to, it's still cheaper than a new car.

• 20:53Speaker 02

  Yeah.

• 20:53Speaker 01

  Or having a car payment that's 600 dollars a month. So, you know, that's just, you know, speaking generally. Now, if we get, if you nail it down to a hybrid versus a standard versus an EV, obviously, you're going to pay more for the hybrid, a little bit more for the hybrid and

• 21:10Speaker 02

  Out of the gates.

• 21:11Speaker 01

  A little bit more for the, for the electric

• 21:13Speaker 02

  Electric.

• 21:13Speaker 01

  Vehicle. However, things are changing rapidly.

• 21:17Speaker 02

  Right.

• 21:17Speaker 01

  There are manufacturers that either have announced or starting to roll out affordable EVs. And that's a game changer because the EV is the cheapest in terms of maintenance, and it's cheaper than the gas that you would have to pay. So, electronic

• 21:39Speaker 02

  And they're getting better range now than they used to?

• 21:42Speaker 01

  Yes.

• 21:42Speaker 02

  And the infrastructure is getting better than it used to?

• 21:45Speaker 01

  Right. So, you have, you know, an EV cost per mile, if you're charging at home, is going to be between three cents and five cents a mile. Whereas, gas right now is between 15 and 20 cents a mile. That's if, you know, we're talking about averages.

• 22:04Speaker 02

  Yeah.

• 22:04Speaker 01

  So, it's much, much cheaper. We're talking about, you know, 80% cheaper to run it than it is, run an EV than a standard

• 22:15Speaker 02

  Mm-hmm.

• 22:16Speaker 01

  A vehicle. Hybrids, you know, you're just going to get better gas mileage. So, it's just, it's going to be slightly better. I've, I've, it's really what you want to do is a cost benefit analysis. You want to see, well, what's the extra cost for the hybrid? Whatever model you're looking at. And then, let's say it's an extra $3,000 or $5,000, that's easier math, for a hybrid versus a standard vehicle. Well, then, you'd have to go back and look, okay, but I'm going to be getting an extra five miles a gallon. And then, you, you, you can do the math, well, how many miles you think you're, you know, you're, you're driving a year, say 12,000 miles a year. So, then, you can, you can figure out where your breakeven is. You know, if you're going to hold that, you have to hold that car and keep that car for many, many years.

• 23:01Speaker 01

  And this, that's been my experience before you get your money back for the extra cost for the hybrid.

• 23:08Speaker 02

  Um, you, and those, those things, you'd have to factor in like your typical daily driving distance and stuff like that, right?

• 23:14Speaker 01

  Right.

• 23:15Speaker 02

  And

• 23:17Speaker 02

  Your access to charging stations, if you're just gonna do electric versus hybrid.

• 23:23Speaker 01

  Right.

• 23:23Speaker 02

  All that kinda stuff.

• 23:25Speaker 01

  Right. You also have now the federal tax credit you can get to $7,500 for EVs.

• 23:32Speaker 02

  Right.

• 23:33Speaker 01

  As an incentive, but you know, you're still, in many cases, you're gonna pay more than that.

• 23:38Speaker 02

  Long-term, the math.

• 23:40Speaker 01

  Yeah.

• 23:40Speaker 02

  You gotta do the long-term math there.

• 23:42Speaker 01

  You also have EVs that have, you have a lot less maintenance costs on them, however, eventually those batteries do need to be repaired and that can be anywhere between eight and 12 years. And batteries are very expensive.

• 23:55Speaker 02

  Right.

• 23:55Speaker 01

  Super expensive to replace, but I'm excited about where the technology is going because these cars are just getting more and more efficient. They're getting higher, longer and longer range.

• 24:07Speaker 02

  Yeah, like moving forward, it seems like the trend shows that is going to be the way to go down the line, you know, like even with, if you're just talking about gas prices, right?

• 24:18Speaker 01

  Right.

• 24:19Speaker 02

  They're gonna fluctuate, but historically the trend increases over time, so it's something to think about long-term.

• 24:26Speaker 01

  I did a quick cost comparison over a five-year period and EVs came out ahead, but just slightly over a gas and over a hybrid. So if you have, for example, if you're paying $7,000 more for an EV versus a gas, so a gas vehicle would be $28,000 and EV would be $35,000. If you look at the, you know, the fuel versus the charging, and then you look at your maintenance cost being a lot less, over a five-year period, your net costs are about $4,000 less on an EV versus a gas.

• 25:06Speaker 02

  Yeah, interesting.

• 25:07Speaker 01

  And a hybrid, they are about $1,500 less on a hybrid versus a gas vehicle.

• 25:15Speaker 02

  Okay.

• 25:15Speaker 01

  So you're, you know, you're gonna pay about $4,000 more, let's say, you know, versus a gas is $28,000, a hybrid would be $4,000 more, $32,000. You have less fuel that you're, that you're using and slightly less maintenance. So this is assuming a 12,000 mile a year. And use of the car. So, you know, there you go. That's a, it's a smart parent there.

• 25:43Speaker 02

  Yeah, it's just definitely like, I, I just feel like that's the way the future is going. But that's just my personal feeling about it, you know? And I know this is, this is a money cost thing, but there's, you know, there's also an environmental choices being made there.

• 25:56Speaker 01

  Yeah.

• 25:56Speaker 02

  Um, in many ways.

• 25:58Speaker 01

  There's definitely a trend from the seventies and eighties to where we are now of how much people are spending on their vehicle. In the seventies and eighties, it was about 10% of total household expenditure was going towards transportation.

• 26:11Speaker 02

  Yeah.

• 26:12Speaker 01

  And, and now it's, you know, it's closer to 15 or 20%.

• 26:16Speaker 02

  Yeah.

• 26:16Speaker 01

  If you're average household.

• 26:18Speaker 02

  How, I, I think I know how it was for you growing up, but in my family, we never bought a, we never bought a new car ever.

• 26:25Speaker 01

  Right.

• 26:25Speaker 02

  It was always a used car. And there was always years and years of repairs and stuff that we were doing on it.

• 26:31Speaker 01

  Yeah.

• 26:31Speaker 02

  Cause financially, that's, that's was the best route.

• 26:35Speaker 01

  That's how, we didn't buy a new car.

• 26:38Speaker 02

  No, I don't think my parents bought a new car until all the kids were out of the house.

• 26:41Speaker 01

  Well, you and I also in our household, like, we didn't buy a new car until at least, I don't know, 10 years, 10, 15 years into our marriage.

• 26:51Speaker 02

  Yeah. 10 or 15 probably.

• 26:53Speaker 01

  Yeah, yeah. I was, it was just, you know, now, now it's a splurge, you know?

• 26:58Speaker 02

  True, true, yeah.

• 26:59Speaker 01

  And it's.

• 26:59Speaker 02

  You also could work on the cars, which is a bonus.

• 27:01Speaker 01

  Yeah. I've, I've had my truck now for almost five years, like four and a half years. I love it. I love my truck. But I am on a waiting list for a hybrid.

• 27:11Speaker 02

  And, and yeah, it's, it's because you want the, the benefits that we just talked about.

• 27:16Speaker 01

  Yeah. What I like, it, it used to be hybrids were for fuel efficiency, which it's true that you get a little bit, but the car that I want, it's only slightly better fuel efficiency. You actually have more power. So it's.

• 27:29Speaker 02

  Well, that's interesting. I didn't realize that was part of the job for you.

• 27:32Speaker 01

  So they're faster, more nimble. They, and they, and the hybrids have, you know, these batteries that are attached to them. So they have, the outlets can like, charge. You know, big things, you know, like my e-bike. I can charge it from the truck, you know, which is really cool. Uh, and so I'm, I'm excited for it.

• 27:51Speaker 02

  Yeah.

• 27:52Speaker 01

  Except for the new car, whenever it gets here.

• 27:54Speaker 02

  Cool.

• 27:55Speaker 01

  All right, we're gonna take a next break right now. Please stick around as we take a very short break. We'll be right back.

• 28:01Speaker 00

  Have you been putting off your finances? Seize the day. Call the Money Wise office at 661-847-1000, or email [email protected] for more information.

• 28:21Speaker 02

  Thanks, Stevie.

• 28:22Speaker 01

  Stevie, DJ Stevie.

• 28:24Speaker 02

  Stevie's my biggest fan.

• 28:26Speaker 01

  Yeah.

• 28:26Speaker 02

  Well, well, besides you.

• 28:28Speaker 01

  No, thank you.

• 28:29Speaker 00

  It's a close one, though.

• 28:30Speaker 02

  One up.

• 28:31Speaker 00

  I run the fan club.

• 28:34Speaker 01

  Hey, nice, uh, nice op-ed piece in today's paper, Em.

• 28:37Speaker 02

  Oh, thank you.

• 28:38Speaker 01

  Very nice, uh, article about the Woolworths. Of course, your, your, a lot of your, um, day job is

• 28:44Speaker 02

  So much.

• 28:45Speaker 01

  directing the Woolworths project, which is, involves not only the restaurant, but the event space, the offices for Money Wise. Got a lot, got a lot on your plate. You do a great job.

• 28:56Speaker 02

  Thank you. Yeah, I wanted to, um, you know, so many people just don't understand what goes into that. And not only that, but the people that are involved in it. And I just feel like I want to tell everybody that'll listen, all these people who are just working so hard behind the scenes. And so I wanted to just focus on that. It's an important part of what's going on.

• 29:16Speaker 01

  It was really, really nice. I really enjoyed reading it. And it, it's so, I think you're just spot on in terms of, I mean, what we're learning from this project is,

• 29:27Speaker 01

  that's one of the biggest lessons, I think, that we're learning from this project is how much these trades, the different trades are involved, people that have their own specialties, how much it takes, how much brain power, how much intelligence it takes to run a, you know, a construction project

• 29:44Speaker 02

  Yeah.

• 29:44Speaker 01

  like this. And all of the different people, you have not just the project manager, but you have the supervisor, you have

• 29:50Speaker 02

  The engineer.

• 29:50Speaker 01

  Engineer.

• 29:51Speaker 02

  All the subs.

• 29:52Speaker 01

  Yeah, you have the estimators, you have the billers.

• 29:56Speaker 02

  It is endless, the amount of industries that are involved and all of them are local. And all of them, you know, we have to bring into the team and they have to see the vision and and they have to care and all of them do, they care a lot. And I just feel like they don't get enough attention for it.

• 30:14Speaker 01

  It's been a fun part of this Woolworths project is the fact that there's people that are working on it seem to be excited about it. And I think it has, by its own nature, it's self-selected those who should and shouldn't be involved in it. And I don't blame, you know, a contractor for saying, oh, I'm not, I don't want to work in an old building.

• 30:35Speaker 02

  Yes, sure, sure.

• 30:35Speaker 01

  It's not my jam. And so they just don't even bid on it. But those who do seem to really care about it.

• 30:41Speaker 02

  It's true, yeah.

• 30:42Speaker 01

  It's been fun.

• 30:43Speaker 02

  And it's become their whole lives. Many of these people, just like it has become so much of our life, mine especially, but yeah.

• 30:51Speaker 01

  Here's, I have a question for you regarding the Woolworths project downtown. Has there been more or less sort of criminal activities or vandalism on the building over the last, now almost four years than you had thought?

• 31:06Speaker 02

  Way less.

• 31:07Speaker 01

  Way less stuff happening to it? You remember we got our chain link fence stolen?

• 31:11Speaker 02

  Yes.

• 31:12Speaker 01

  That was crazy. It was like, how much feet? Maybe, I don't know, 60 feet?

• 31:18Speaker 02

  60 feet?

• 31:18Speaker 01

  60 feet of chain link fence. We just woke up one day and it was just gone.

• 31:22Speaker 02

  They had just taken it apart and just took it, I guess they needed it for another job site or something, then to their backyard.

• 31:27Speaker 01

  Yeah, I don't know what, but like you'd have to have a big truck to be able to take all those apart and like stack them up. And then it would have taken a while. Of course, you're doing it in the middle of the night. There's nobody around, I guess, but.

• 31:38Speaker 00

  I remember walking, because I go to a Bible study right around the corner. So every Saturday I'd get there a little early and do the walk around and. Scared the living hell out of me. I walked by the backside of Tiki Cove.

• 31:51Speaker 02

  Oh, yeah.

• 31:52Speaker 00

  And I was crossing through and two homeless people jumped out of that

• 31:56Speaker 02

  Dumpster area?

• 31:57Speaker 00

  Oh, no. I swear I almost jumped out of my shoes. It's like, whoa, you guys are quick, man.

• 32:03Speaker 02

  Were they trying to jump to surprise you? Or it was just

• 32:07Speaker 00

  They were getting out at the same time, but they jumped off like Jordan. I was like, whoa. Was not expecting that.

• 32:14Speaker 02

  Yeah.

• 32:15Speaker 00

  But it's beautiful over there, especially the Sunday or Saturday mornings when no one's really downtown.

• 32:20Speaker 01

  Yeah.

• 32:21Speaker 00

  It's just so beautiful, just walking down and around and seeing things I've never seen before. Just businesses and it's beautiful.

• 32:28Speaker 01

  People, like I know, you can get a lot of flack because there's maybe people that are look different than you walking around. But the people, it's so interesting. It's, it just feels so unlike Bakersfield.

• 32:40Speaker 02

  That's what a downtown is, is a diverse group of people from all walks of life. And, and, you know, I think that's an important part of, of what a, what a downtown city is. It doesn't have to be bad.

• 32:53Speaker 01

  Yeah. Well, I was, I was kind of bringing this up because of the story about the stolen.

• 32:58Speaker 02

  Oh geez. Oh, yeah. Yeah. Okay. Well, that was an interesting segue, Sherrod. Thank you.

• 33:03Speaker 01

  I thought it was brilliant, actually.

• 33:07Speaker 02

  Way to bridge that. Okay.

• 33:09Speaker 01

  I had heard this. Stevesy sent this article in.

• 33:11Speaker 02

  This is so interesting. Stevesy, thanks for the hookup.

• 33:14Speaker 00

  Is this the porta potties?

• 33:15Speaker 02

  This is the porta potties. So this KGET reported this last week. This is crazy. Okay. So local thieves made off with over $10,000 worth of portable toilets and hand washing stations. So apparently it was this elaborate scheme. They targeted three different porta potty companies at once and coordinated them all to be delivered on the same day to the same fake baby shower.

• 33:37Speaker 01

  Oh, was it fake baby shower?

• 33:39Speaker 02

  Yeah.

• 33:39Speaker 01

  Oh my gosh.

• 33:41Speaker 02

  The haul included a 61 porta potties and 14 hand washing stations. One of the companies was able to recover seven of the units after they posted about it on Instagram. But by the time they got the units back, the thieves had already even removed the company logo. So now. Companies are considering security deposits and GPS trackers for their porta potties.

• 34:04Speaker 01

  Ah.

• 34:05Speaker 02

  And so they said the investigation continues. No suspects identified yet. But I guess there was another dozen units rented in Arvin by the same mysterious customer. So it's like a, it's like a, um, it's like a, um.

• 34:20Speaker 02

  Well, what's the word?

• 34:22Speaker 01

  Like a ri- like a, a ring?

• 34:24Speaker 02

  Yes, yes.

• 34:25Speaker 01

  Like a theft ring?

• 34:26Speaker 02

  Like a porta potty theft ring. So I have some, I have some, um, quips for you.

• 34:31Speaker 01

  Okay.

• 34:31Speaker 02

  Are you ready?

• 34:31Speaker 01

  Yeah. Oh, oh, boy.

• 34:34Speaker 02

  This is from AI.

• 34:35Speaker 01

  Okay.

• 34:36Speaker 02

  Looks like someone in Bakersfield took portable toilets to a bit too literally.

• 34:42Speaker 01

  That's pretty good.

• 34:43Speaker 02

  That's such a fake laugh. No, that was a fake laugh from you, but let me try again.

• 34:47Speaker 01

  No, portable. I get it. Potty potties, they were really literally portable. The thieves took that too little. I get that. That's nice.

• 34:53Speaker 02

  Okay, let me try another one.

• 34:54Speaker 01

  Okay.

• 34:54Speaker 02

  This has to be the most elaborate scheme to avoid paying for bathroom renovations. That one's not too great.

• 35:00Speaker 01

  That's kind of, yeah.

• 35:00Speaker 02

  Okay. GPS trackers on porta potties? That's what I call a movement tracking system. It's not very great, huh?

• 35:09Speaker 01

  No.

• 35:11Speaker 02

  Okay, one more.

• 35:11Speaker 01

  Okay, but make it good, please.

• 35:15Speaker 02

  Listen, I'm giving you a taste of your own medicine. So you just need to sit there.

• 35:19Speaker 01

  Okay.

• 35:20Speaker 02

  Three companies hit at once? This was definitely a coordinated duty call.

• 35:24Speaker 01

  There we go.

• 35:24Speaker 00

  That's the winner.

• 35:25Speaker 01

  The duty call. I was, I wanted something about poop or duties and do, do, do.

• 35:30Speaker 02

  I tried to clean it up a little bit. There were some, yeah.

• 35:33Speaker 01

  There were some naughty ones in there?

• 35:34Speaker 02

  Yes.

• 35:34Speaker 01

  Oh, too naughty for the air, huh?

• 35:37Speaker 02

  Well, I just decided to keep it.

• 35:39Speaker 01

  Okay, keep it clean, keep it family friendly.

• 35:41Speaker 02

  But isn't that crazy?

• 35:42Speaker 01

  Yeah, yeah, that is crazy. I mean, what people will steal. And then where does it end up? Like, where did our chain link fence go? Where did these go?

• 35:50Speaker 02

  Maybe they were gonna, they're gonna start their own portable company.

• 35:53Speaker 01

  Yeah, but.

• 35:53Speaker 02

  Potty potty company.

• 35:54Speaker 01

  How, I mean, how, how, I guess if there's no like. Way to track it and they're just going to set up some business out of town somewhere.

• 36:02Speaker 02

  What if it's the lightning in a bottle festival coming up and they were.

• 36:06Speaker 01

  We gotta get these porta potties in. It looks like it was over $11,000 worth of.

• 36:10Speaker 02

  10,000 it said, yeah.

• 36:12Speaker 01

  Yeah. Well, one of the services said 11,000.

• 36:15Speaker 02

  Okay, okay, well.

• 36:16Speaker 01

  All right.

• 36:17Speaker 02

  Anyway.

• 36:18Speaker 01

  Okay, final break of the day. We're Money Wise. Don't go anywhere.

• 36:21Speaker 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.

• 36:52Speaker 01

  Welcome back to Money Wise. I'm Sharad. That's Emily.

• 36:55Speaker 02

  Hello.

• 36:56Speaker 01

  Appreciate your comments and questions. Got another one here.

• 36:59Speaker 02

  Ooh, I missed it.

• 36:59Speaker 01

  Yeah, do you want me to read it?

• 37:00Speaker 02

  Oh, here it is. Might be a good time to go electric, especially if we're looking at higher gas prices in the future. Do you think electric cars will start raising prices if gas continues to go up, like when it gets to $10 per gallon?

• 37:13Speaker 01

  Yeah, I don't, I don't think electric car manufacturers are going to raise prices because of gas prices. If anything, they'll just get, they should get cheaper and cheaper because of economies of scale and because technology just gets better. Like the BYD, the Chinese company, they've got, I can't remember what it is. It's under $10,000, I want to say US dollars that they're selling a EV for. There was a recent, is it Stack? It was a recent Jeff Bezos, the company, EV startup, backed startup that's coming out with a compact truck that I think is going to be below 25,000. So they're starting to get cheaper and cheaper.

• 37:52Speaker 02

  It should probably just continue on that trend, right?

• 37:54Speaker 01

  Yeah. What, what would happen is if gas gets up to $10 a gallon. You're going to see a lot more people move towards EVs.

• 38:02Speaker 02

  Right.

• 38:02Speaker 01

  And that should bring the price down.

• 38:04Speaker 02

  Right.

• 38:05Speaker 01

  Because now you have more demand. But which means people, manufacturers start supplying more.

• 38:11Speaker 02

  Right.

• 38:11Speaker 01

  And the battery technology will get better and better. And the battery is really the most expensive part of an EV. So that's a great question. Hey, another one bites the dust. Rite Aid is declared bankruptcy. Now, you probably think when I'm thinking, didn't they just declare bankruptcy? Yeah, they did.

• 38:31Speaker 02

  How does that work? Oh, I see.

• 38:33Speaker 01

  They just, it didn't work. So whatever they.

• 38:36Speaker 02

  It didn't work.

• 38:37Speaker 01

  Chapter 11 that they filed in 2023, which was they basically.

• 38:42Speaker 02

  A certain kind of bankruptcy?

• 38:43Speaker 01

  Yeah, a certain kind of bankruptcy where they restructure everything. So a bunch of lenders took over from the company, took over the company. And in the last now almost two years, they have not been able to turn things around.

• 38:55Speaker 02

  Oh, so that was sort of just the last ditch effort.

• 38:58Speaker 01

  It was the last.

• 38:59Speaker 02

  Kind of bankruptcy.

• 39:00Speaker 01

  Yeah, I mean, they were, I think they were really hoping to, you know, change the course of Rite Aid and, you know, and improve what was going on. But the first bankruptcy that they had in 2023 was because of the, largely the opioid litigation. They had over 1,600 lawsuits claiming that they were improperly filling opioid prescriptions. And which led to billions of dollars in liability. So they had just huge billions of dollars of debt. They were, you know, their history is really fascinating. They started in 1962, the Rite Aid did. And they were, you know, pretty successful. They had, you know, thousands of stores.

• 39:43Speaker 01

  I think they, they were, I remember when they were acquired or tried to be acquired by CVS and, or actually Walgreens tried to acquire Rite Aid in 2015.

• 39:56Speaker 02

  Yeah.

• 39:56Speaker 01

  But then a couple of years later, the, the deal was blocked. Antitrust or FTC blocked the deal. And so they've just sort of been struggling, you know. Limping along and not quite keeping up with the x with the level of the of other competition like CVS and Walgreens. So Walgreens.

• 40:18Speaker 02

  Interesting.

• 40:19Speaker 01

  Walgreens and CVS are way bigger. They're about 1,200 Rite Aid stores in the country today, and it's obviously shrinking. Now they're going to sell off these assets. And there are none overseas. Walgreens has 8,700, about 8,700 US stores. CVS has over 9,000. And both of those stores have a lot globally. So Walgreens has over 12,000 outside of the US and CVS has 9,000. CVS is probably the more financially profitable. It's more diversified. Walgreens has a little bit more challenges. They're stable.

• 40:56Speaker 02

  I was gonna say, I wonder, like, I always, in my head, just sort of booked them all together, Rite Aid, Walgreens, CVS, but apparently, some of them are doing something right.

• 41:06Speaker 01

  Yeah, yeah, or they're certainly more stable or more profitable, and they have a lot more stores, so that maybe that that helps.

• 41:13Speaker 02

  Was this Walgreens was founded in 1901?

• 41:16Speaker 01

  What?

• 41:17Speaker 02

  And CVS in 1963.

• 41:18Speaker 01

  Holy smoke.

• 41:19Speaker 02

  When did you say, uh, Rite Aid was?

• 41:21Speaker 01

  Was 1960...

• 41:24Speaker 02

  Okay.

• 41:25Speaker 01

  Uh, no, at 19, uh, 68. No, 1962. So the same year as Walgreens, huh?

• 41:31Speaker 02

  CVS was 64, no, 63. Walgreens was 1901.

• 41:37Speaker 00

  What about Long's?

• 41:39Speaker 01

  Oh, yeah.

• 41:39Speaker 02

  Or, or Thrifties, Thrifties.

• 41:41Speaker 00

  Thrifties, yeah.

• 41:42Speaker 01

  I miss Thrifties. Well, they still have Thrifties inside, were they inside Rite Aids, right?

• 41:47Speaker 02

  Were they? Yeah, Thrifties was inside the Rite Aids, so those are going bye-byes.

• 41:50Speaker 01

  Uh, bummer. Hey, we've got to give a shout out before the end of the show here. Give Big Kern is today, right? Today is the day. We would encourage anybody out there that is looking to give to local charities. This is an amazing opportunity. You go to givebigkern.org, and that's where you can find the group of local nonprofits. You don't have to give money, although I'm sure most of them will take your money. It's a great opportunity if you're just looking for volunteer. Places to volunteer, then you can give your service in lieu of money.

• 42:24Speaker 02

  Great opportunity.

• 42:25Speaker 01

  Last year, they raised a million and a half dollars.

• 42:29Speaker 02

  Broke their record.

• 42:30Speaker 01

  Broke their record by a big shot, by a long shot. And it's, you know, many of the organizations that we find.

• 42:38Speaker 02

  There's over 150 organizations and all the money goes directly to Kern County's unique needs and challenges. So it's a wonderful opportunity to give. It doesn't have to be a ton. It could be a little bit.

• 42:48Speaker 01

  Five bucks, 10 bucks.

• 42:49Speaker 02

  Last year, that 1.5 million came from thousands of individual donors, so.

• 42:54Speaker 01

  Well, thanks so much, Em. Thanks for helping out here. Want to thank all of our listeners. Go to MoneyWiseGuys.com. You can find these podcasts. And remember these three things. Be smart, be safe, and always be money wise.

• 43:04Speaker 03

  Securities offered through LPL Financial, member FINRA, SIPC. Investment advisory services offered through LPL Financial. LPL Financial and Money Wise Wealth Management are independently owned and operated.