What the Fed’s Rate Hike Means for Your Money, Plus the Buy Now, Pay Later and Kalshi Traps SB1908

The Fed just raised rates for the first time in more than three years, and the markets barely flinched. Your mortgage, your CDs, and your next car payment may feel it differently than the headlines suggest. The panel breaks down what a quarter point actually changes, then turns to two newer ways of borrowing against your future self: buy now, pay later apps that run almost entirely on debit cards, and a prediction market that wants Congress to let you borrow money to bet. One episode, three headlines, and one thread running through all of them. What You’ll Walk Away With What a quarter-point hike does to a $50,000 car loan (the answer is smaller than you’d guess)Why your mortgage rate follows the 10-year Treasury more than the Fed, and why that distinction mattersThe three numbers to find in any adjustable rate loan before you decide how much risk it can carryWhy waiting for a “return” to the rates of 15 years ago may be the most expensive plan availableHow “0% interest” buy now, pay later plans make their money, and what a single missed payment costsA simple test for deciding what is worth borrowing against future income and what never isHow a $22 billion prediction market argues it isn’t gambling, and the odds it never mentionsWhat the trader data shows about who actually profits on these platformsThe meteorite that landed on a $300 car, and how much profit it really madeWhy This Matters Now Borrowing has quietly become easier to start and harder to see. A rate move shows up in a payment you might not notice for months, a payment plan splits a purchase into pieces small enough to ignore, and an app turns a market prediction into something that feels like a game. Each one trades future flexibility for something today. If you worry that one overlooked detail could sneak up on you, this is a plain-English look at where those details hide, and which decisions deserve a pause before you click. From the Basement The year-long trivia race enters its final quarter in a dead heat, and the gap that opens up is smaller than anyone’s confidence about it. The question involves a meteorite, a very old Chevy Malibu, and a lesson about waiting for money to fall from the sky. The show also took three tries to start, so you are hearing the one that worked. Resources Mentioned Federal Reserve monetary policy https://www.federalreserve.gov/monetarypolicy.htm: the source for rate decisions and statementsSemafor: Kalshi to allow trading on borrowed funds https://semafor.com/article/09/22/2026/kalshi-to-allow-trading-on-borrowed-funds: the report behind the Kalshi headlineKlarna https://www.klarna.com and Affirm https://www.affirm.com: the two buy now, pay later providers discussedPeekskill meteorite https://en.wikipedia.org/wiki/Peekskill_meteorite: the real story behind today’s triviaAfford Anything https://affordanything.com: Paula Pant's amazing podcastPersonal Finance for Long-Term Investors https://bestinterest.blog/personal-finance-for-long-term-investors/: Jesse Cramer's incredible show See Privacy Policy at https://art19.com/privacy and California Privacy Notice at https://art19.com/privacy#do-not-sell-my-info.

• 0:00Speaker 00

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• 0:30Speaker 01

  My gosh, you boys already know I'm not letting that Ramsey boy come over and play until you clean up your rooms.

• 0:41Speaker 02

  Live from the basement of the YouTube headquarters, it's The Stacking Benjamin Show.

• 0:57Speaker 02

  I'm Joe's mom's neighbor Doug, and man, has there been a ton in the news to cover recently. First, interest rate cuts were expected, but the Fed raised rates? What does that mean for your wallet? Second, new buy now, pay later stats are out, and they're, let's say, concerning. And speaking of concerning, betting app KALCI is in the news with a request to Congress that would allow you to borrow money to bet. I can't imagine what could go wrong with that idea. But that's not all. Our three contributors are all tied as we enter the fourth quarter of our year-long trivia competition. Who's going to stake an early Q4 lead? Well, we're about to find out. And now, a guy who found out a long time ago

• 1:41Speaker 02

  that debt is way more fun getting into than climbing out of, it's Joe Saul Sehah.

• 1:54Speaker 03

  Thanks, Doug, and happy Friday to you, stackers. I am Joe Saul Sehah. Welcome back to The Stacking Benjamin Show. We're super happy you're here with us. If you've been here with us on YouTube, you're having fun watching us restart, restart, restart the show. But this time, we're going to get it right because I'm here with my good friend Doug. How are you, man?

• 2:14Speaker 02

  I am very well, Joe.

• 2:17Speaker 03

  You just try to make sure that we don't have to do this a fourth time?

• 2:21Speaker 02

  I would just like the show to proceed.

• 2:24Speaker 03

  And proceed it shall. How about if we meet the contestants?

• 2:27Speaker 02

  Let's meet all of the people that will be joining us.

• 2:30Speaker 03

  Let's meet all the people. He's from the east side of Michigan. He is a... What is the, the sign when you're born in December? He's a Libra.

• 2:40Speaker 02

  He's a Virgo who enjoys bear skin rugs and canning his own beans.

• 2:45Speaker 03

  Mr. OG is here.

• 2:48Speaker 04

  No, just bears.

• 2:49Speaker 03

  What's your, what's your sign? What's your sign, OG?

• 2:53Speaker 04

  Peace. Peace sign.

• 2:56Speaker 03

  Perfect. But you just like bears? Big fan of bears. Yes. And a woman who has lots of bear encounters in New York City, Paula Pant is here.

• 3:08Speaker 05

  So I'm a Libra. My birthday is in October.

• 3:11Speaker 03

  And she enjoys walks in the sun.

• 3:14Speaker 05

  Exactly.

• 3:14Speaker 03

  And being on live podcasts.

• 3:16Speaker 05

  I enjoy being on live podcasts. I am a Libra. I have never had an encounter with a live bear, grizzly or brown, no bear of any sort.

• 3:28Speaker 03

  It's grizzly or black bears. Brown bears and grizzlies, I found out, are exactly the same thing.

• 3:34Speaker 05

  Ah, I see. Okay. So I have neither encountered a black bear nor encountered a brown slash grizzly bear, nor have I encountered a polar bear.

• 3:43Speaker 03

  Never.

• 3:44Speaker 05

  Never.

• 3:45Speaker 03

  Have you ever taken something that you learned just recently and presented it like it was something that you've known your entire life? Like, oh, duh, grizzlies and brown bears, exactly the same thing.

• 3:54Speaker 05

  Yeah, did you know?

• 3:56Speaker 03

  Like, I learned that a month ago, Paula, and I was going to pass it off like, hey, I've known that forever. But you know somebody I wish I knew forever?

• 4:04Speaker 05

  Who's that?

• 4:05Speaker 03

  He's in Rochester, New York, Jesse Cramer. It's like, man, Jesse Cramer.

• 4:10Speaker 04

  I've got some bear stories.

• 4:12Speaker 03

  Do we want to hear your bear story?

• 4:14Speaker 04

  I don't know. I'm trying to think. Probably the most funny one is just that one morning, this, I think it was in college, I wasn't living at home, but one morning my dad hears something hanging from the bird feeder. And it's, I grew up really rural, so it's not uncommon to see something like a raccoon getting in your bird feeder and like trying to do what he can. And it was a black bear.

• 4:33Speaker 03

  Wow.

• 4:34Speaker 04

  One time in Yellow, no, Grand Tetons, saw a grizzly, like, I don't know, not that close, but still close enough where I was like, really hope he doesn't see me because there's no one going to come help me. So bears are big. Don't mess around with a bear.

• 4:48Speaker 03

  Doug's enjoying the travel show that we've got going here early on in this podcast. Well, we're going to switch from bears to the bear minimum of bear stories. And instead, we're going to talk about some of the recent headlines that have happened. We got three quick headlines. We're going to spend the first half of today's show on the Fed rate hike. What does it mean when the Fed does a rate hike? What does this rate hike mean? What does that mean for your portfolio? What does that mean for taking loans? We're going to dive into that. And then the second half of the show.

• 5:18Speaker 04

  Means you need more of these.

• 5:20Speaker 03

  News about KALCI, the betting app, and news about, well, it's not really, it's a predictive markets app, right? It's not really, it's not betting. That's actually what they want to make sure that you don't call it, is a betting app. KALCI and buy now, pay later, that's all coming up on today's show, plus our friends on YouTube hanging out with us. So we are going to hear from our sponsors who make sure we can bring this to you for the price of zero. We're going to hear from them. And then Paula, Jesse, OG are going to join Doug and I in a discussion about the Fed's recent rate hike and what happens when rates go up. All right, before we go any farther, this is totally me, but tell me if it's you too.

• 6:02Speaker 03

  It was around age 30 that I started feeling different. There were these little things that didn't seem to be connected, exhausted all day, somehow still couldn't fall asleep at night, my stomach holding on to more fat. I felt more irritable. I felt less motivated, more mentally drained than I should be. None of it made any sense. You're doing everything right, but your body just isn't working like it used to. Are you there with me as well? Now, most guys think these are all separate problems, but the truth is they're all linked to the same root issue, high cortisol. Here's what I learned about cortisol. Cortisol is your body's stress hormone. It's supposed to spike when you're under pressure and then come back down.

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  It's like drinking a cup of coffee, except it's a steadier sense than coffee of drive throughout the day. I sleep better, and I like this. Before, before my ankle surgery, my time in the gym was much better. And frankly, my ankle surgery is going really well, too. And I think that's also partly because of Mars Men. For a limited time, stackers, you're going to get 50% off for life, plus free shipping and three free gifts at mengotomars.com. That's men go to Mars for 50% off and three free gifts when you check out after you purchase. They're going to ask where you heard about them. Please, please, please support Stacking Benjamins. Tell them that we sent you.

• 8:12Speaker 03

  Well, you may know that chaos is the name of the game here in mom's basement. What with guests coming in and out, Cooper the cat getting in the way, Doug being, well, being Doug. The holidays make it even worse because it's all about food and big meals. And the problem is prepping for those takes forever. But what about those between meals, right? The meals between those huge, huge bookends? Well, that's where Factor comes in. Factor is made with high-quality ingredients that you recognize and trust with over 175 banned ingredients. You always know you're eating something that's good for you, even when you don't have time. It's ready in two minutes, whether it's lunch between meetings or dinner after holiday shopping.

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• 10:09Speaker 06

  Hello darlings. And now it's time for your favorite part of the show, our stacking Benjamin's headlines.

• 10:16Speaker 03

  All right, guys, I want to start with this. It's been a couple of weeks, but on September 16th, the Fed raises benchmark rate 25 basis points from 3.75 to 4%. The first hike in three plus years and in a unanimous 12 zero vote, Chair Kevin Warsh cited inflation that's quote, "too high and has been for too long." Markets were 90% sure there was going to be a hike, but, but, but let's start with you, OG. We hear this all the time, right? Interest rates go up, interest rates go down. If I'm a regular consumer out there and I hear interest rates go up, does that mean my credit card rate goes up tomorrow? Does that mean my CDs get better rates?

• 11:00Speaker 03

  Does that mean my high yield savings account does better? What exactly does that mean?

• 11:07Speaker 07

  I was off stage for a moment there, so I wasn't paying attention. The question was, what happens when interest rates go up?

• 11:16Speaker 03

  What does that mean? I hear interest rates go up.

• 11:18Speaker 07

  When Fed rates.

• 11:19Speaker 03

  Yeah, the Fed raised rates.

• 11:21Speaker 07

  Yeah, it's the cost at which banks have to borrow money and everything rolls downhill. You know, I mean, you learned this a long time ago. You know what rolls downhill? So this is one of those situations. So you're going to pay higher loan costs. You're going to pay higher borrowing costs, you know, whether it's just credit cards or fixed interest rate stuff. If you got a mortgage in a rate lock two and a half weeks ago or three weeks ago, good for you because it's a quarter point better than it was, would be now roughly. You will get a slight increase in your savings rate, maybe even a full quarter point, but it won't happen generally right away because banks like to increase the rate which you borrow and then sometime later in a month or so, they'll change the rate at which they pay.

• 12:07Speaker 07

  Little, little game they like to play of screw the customer.

• 12:11Speaker 03

  Well, my understanding, Paula, is when it comes to mortgage rate, that's not a, that's not a done deal right away either.

• 12:16Speaker 05

  Yeah, well, the mortgage rate is technically tied to a long-term treasury rates. So the 10-year treasury in particular is what most heavily influences mortgage interest rates. The reason for that, so imagine that you're the bank. You're thinking about either issuing a mortgage or buying a 10-year treasury. Given the fact that even though it's a 30-year mortgage, most people tend to, on average, buy and sell it out of their mortgage after about seven years. People tend to like buy and sell homes in about seven years or refi their mortgage. So you're pegging the cost of a mortgage to an alternative investment that would have roughly around a 10-year duration. And that's why the 10-year treasury is the thing that most influences it. So 10-year treasury, highly influenced by the Fed's rate,

• 13:00Speaker 05

  but it's not a direct one-to-one correlation. So the, the rate of a 10-year treasury also takes into account investor expectations around inflation. You know, there's more than just the Fed rate that goes into the 10-year treasury.

• 13:15Speaker 03

  Yeah, let's go into the things then, Jesse, that are directly affected. Let's say that I have CDs at a bank. Does this mean that my CD rates now are going to be cha-ching? Like it's finally time to get investing in more CDs because the Fed raised interest rates a quarter point?

• 13:31Speaker 04

  Well, most likely, I mean, it probably depends on the terms of your CD, but the one that you already own, I would wager probably isn't going to be affected. It was probably a fixed rate CD that you agreed to some interest rate when you first acquired it, so to speak. The interest rate that you now go to buy today or tomorrow would probably fall somewhere under OG's answer, which is, you know, have they actually raised the rate on their CDs yet? Maybe, maybe not. They're, they're certainly loaning money out at a higher rate, starting right now. Most likely, but depending on, are they actually going to pay you more interest right away? I don't know.

• 14:10Speaker 03

  What if I need a car and I would need to borrow for the car?

• 14:13Speaker 04

  Yeah.

• 14:13Speaker 03

  How does this change my strategy? Does it change my strategy?

• 14:16Speaker 04

  From my point of view, I mean, if we're, if we're really getting down to like nuts and bolts, yeah, I mean, the, the cost of financing your car is going to be more expensive. And so if you need to borrow it to buy that, if you need to borrow money to buy that car, which is a questionable thing to do in the first place. I mean, all is being equal, you'd probably rather not borrow money to buy a car, certainly not at a six or 7% rate. At least that's my thoughts. I think OG might, he's raising his hand and might disagree and that's, yeah. What, what do you think, OG? Would you borrow money to buy a car?

• 14:44Speaker 07

  I think that when it comes to car stuff, people are too locked into a brand. And the reality is, is like different brands have different promotions going on at different times. So you can be very strategic about your borrowing if you had to. I just wanted to frame the, the interest rate change of a quarter percent. You know, if you're buying a car for $50,000 and you're going to finance it for five years, this giant interest rate change that just happened changes your payment by $5 a month. I think the bigger question like you were asking Jesse is, should, should we even be financing an automobile purchase? You know, it's not whether or not the five bucks makes you break it. It's, it's, should I even be doing that at all?

• 15:20Speaker 04

  Yeah.

• 15:21Speaker 07

  And I'm ballparking $5 by the way, so don't ask me if your math is slightly off.

• 15:25Speaker 04

  Someone out there is whipping out the spreadsheet. I really liked what OG was saying though. So you say, OG said, you know what rolls downhill? And that got me thinking about gravity.

• 15:33Speaker 07

  Oh, I know that answer too.

• 15:35Speaker 04

  And that got me thinking about, I mean, so something for listeners, I think to frame, so Warren Buffett would say, interest rates are like financial gravity, like every single financial instrument gets pulled on by interest rates, just like gravity pulls on everything that has mass. And so I just think there's something to keep in mind. It's like, whether we're talking about a loan, a savings accounts, the stock market. If you have some sort of financial instrument, financial exposure, it gets influenced by interest rates. And what the Fed does with their overnight rate is certainly kind of the, probably like the, the biggest impulse that then sends ripples throughout the rest of the, the longer term kind of interest rate ecosystem.

• 16:13Speaker 03

  Let's go to those mortgages, Paula, that don't directly correlate, but there's a good chance that people are going to start seeing higher mortgage rates. Does this change your strategy and buying a house?

• 16:24Speaker 05

  It might. So if you are planning on taking out a HELOC, for example, and using that HELOC to buy a rental property, that HELOC is going to be a little bit more expensive. If you are thinking about getting a variable or adjustable rate mortgage or any kind of a variable rate loan, if you already are in one, those variable rate loans are going to rise. And if you're not in one yet, you're a bit playing a guessing game as to are rates going to keep rising or not? But given Kevin Warsh's statement about how inflation has been persistent, given that it was a unanimous vote,

• 17:03Speaker 05

  given that the Fed has a dual mandate around both inflation and unemployment, and we have a historically speaking, a low unemployment rate, there's a decent chance that rates might continue to rise. And so if you're already in an adjustable rate mortgage, that's likely to go up. And if you're not yet in one, you now have a kind of a difficult choice. Like do you lock into a fixed rate mortgage at what is now over 7%? Or do you get a variable rate mortgage with the hope that it might come down, but knowing that you're accepting the, the risk that it might continue to go up if we don't battle inflation adequately?

• 17:40Speaker 03

  Which would you do at this point? Would you lock in this rate on a 30-year or would you take a chance on a, on another adjustable rate mortgage? To try to keep your rate low and just punt another three to five years?

• 17:53Speaker 05

  Yeah, it would depend on the delta between my living expenses and my income. If I had a bunch of wiggle room, then I might take that risk. But if I didn't have a whole lot of wiggle room, then I wouldn't. If you do take an adjustable rate mortgage, one of the chief things to keep in mind, with any adjustable rate mortgage, there is a, a cap. You have a maximum cap as to how bad it can get. So with an adjustable rate mortgage, number one, that rate gets changed periodically. It doesn't get changed daily or weekly or anything like that. Like it gets changed at some type of a periodic interval. So check your loan documents to see what that periodic interval is. Now each periodic interval, it can only go up by a maximum of X.

• 18:34Speaker 03

  X.

• 18:35Speaker 05

  Find out for every periodic interval, what is that maximum of X? And then in total, it can only go up to an absolute max, max, max of Y. What is that variable Y? Which is to say, what is the absolute worst case scenario that it can go to? And if you can live with all three of those scenarios, then it might be a risk worth taking. It's a, can you live with that litmus test?

• 19:05Speaker 03

  OG, in this particular market, with all the people predicting that interest rates were going to go up anyway, and the Fed with their unanimous decision, would you refinance to an adjustable rate loan if you were on the hook or maybe let's say a year away? You're trying to, trying to keep your payments under control and your interest rate under control?

• 19:24Speaker 07

  Well, again, I think if you did the math on it to see what the difference is, you know, I think you'd be surprised to learn that it's not that profoundly different. You know, it's a few bucks for sure. If I was in an adjustable rate right now and it was in the period of time where.

• 19:39Speaker 03

  So you got 12 months to go on your adjustable rate loan.

• 19:41Speaker 07

  It was fixed, yeah, for a period of time. I would let it ride personally, just because now you're trying to decide ostensibly your adjustable rate right now was lower than the current market. So you're gaining ground every month. And so then how many months after do you have to lose ground to be even money? Does that kind of make sense? I would take that gamble. If it was up right now, I would probably switch to a fixed just because certainty is kind of pleasant, especially with like what Paula said, with the forecasting that kind of appears to be on the horizon, or at least the language from the people that are in the decision-making power on this.

• 20:18Speaker 03

  Jesse, people talk about, you know, wow, these rates are high. These rates are high. But we talked about this live at FinCon, these rates ain't high. These are getting back to like historic norms. If I'm a person out there who's trying to stack some Benjamins, do I look at this as a norm? Or do I hope for things to come back down?

• 20:35Speaker 04

  Yeah, it's hard because all of us, we're all wired to, you know, have this recency bias in us that we, we look at the way the last five or 10 or 15 years have been. And that kind of becomes the new normal. It's why so many investors today are like market crap. What do you mean market crash? Market might lose 50%. Like what are you talking about? That hasn't happened since 2008. But right, you know, but these things do happen. And, and yeah, it's, uh, we're coming off of a period of just these historically anomalous, anomalous, anomalous.

• 21:06Speaker 04

  What word is it?

• 21:06Speaker 05

  Anomalous?

• 21:07Speaker 04

  Anomalous?

• 21:07Speaker 05

  Anomalous.

• 21:08Speaker 04

  Anomalous?

• 21:09Speaker 05

  Cause it's an anomaly.

• 21:10Speaker 07

  Use a lower dollar word.

• 21:12Speaker 04

  We're coming off this period of weird, low interest rates. And so I guess, you know, it is hard because in the moment you think to yourself like, wow, this really sucks. You're filled with regret. I'm filled with regret. I really wish I had secured like a 3% mortgage five years ago, instead of the 6.5% mortgage I have right now. But to some extent, I just think from a long-term planning point of view, you know, you just got to deal a little bit with the chipset you're dealt and lock in the things that you know you can treat as certainties. Like there's enough uncertainty in life. There's enough uncertainty in investing. And so to some extent, you just have to deal with some of the certainties that you're given. And yeah, we had these weird low rates for a while. Who knows if we're ever going to get back there again. And you just got to make the best decisions going forward today that you can.

• 21:57Speaker 04

  Predicting the future of interest rates doesn't strike me as a particularly smart, wise thing to do.

• 22:04Speaker 07

  Okay, then that, sorry, Joe, I was going to say, and I like the people who are like, those were the days when everything was shut down and the economy was in shambles and people were dying by the hundreds of thousands. At least my interest rates were nice and low. That was great. Let's go back to those days.

• 22:19Speaker 03

  But let's see the upside.

• 22:21Speaker 07

  Yeah. I think a lot of people like to look at their old money decisions and go, well, I wish I would have done this. It's like, well, you didn't purposefully try to put yourself in a bad situation, right? You made the best decision you could with the information that you had at the time, with the circumstances that you had at the time. I wish I would have put 2,000 bucks a year into a Roth IRA when I started my career in 1999. I didn't. If I'd have known that, what I know now, I would have moved heaven and earth to do that, but I didn't.

• 22:49Speaker 03

  With all these headlines today, we're going to be talking about predictions, playing games, right? And Paula, when I think about then mortgage strategy, let's just talk mortgage strategy for a second. Is the best game then not to play the game to, you know what? I've got these fixed rate loan options. I'm going to choose a fixed rate loan because the second I start getting into adjustable rate mortgages, into balloons, even into HELOCs, I got to play a where do I think interest rates are going game.

• 23:17Speaker 05

  Yeah. The benefit that you get with a fixed rate is certainty. And when you have certainty, you're then able to take bigger risks in other areas of your life.

• 23:28Speaker 03

  Have you ever bought an adjustable rate loan?

• 23:31Speaker 05

  No, I have never gotten an adjustable rate loan. It is for exactly that reason. With certainty, I can then go out and take bigger risks, both by buying rental properties and by being self-employed and then later transitioning from self-employment to, to business ownership, to employing others, right? Both of those carry an enormous amount of risk with them. And my way of looking at risk across a person's life is instead of narrowing it to a single domain, I like to look at it holistically across your life. So how much risk are you carrying in other domains of your life? And where are the areas where you want to reduce risk and/or increase certainty as a counterweight?

• 24:12Speaker 03

  Jesse, have you ever had an adjustable rate mortgage?

• 24:15Speaker 04

  No, no, I've had two fixed rate mortgages. And like Paula alluded to earlier, I'm trying to think. The first one I got was in 2018 and then that one only lasted for, for four years. And then we moved and got a second one in summer of 2022. So we're now four years into our second fixed rate mortgage. Yeah, never an adjustable one. My understanding of adjustable rate mortgages was like, it was one of many factors that led to, I skipped the complicated word there, OG, just for you. It was one of many factors that led to just some real estate 2008 bubble was all these adjustable rate mortgages. And so I just always had an uncomfortable feeling with them.

• 24:54Speaker 03

  OG, have you had an adjustable rate loan?

• 24:57Speaker 07

  I have one right now.

• 24:58Speaker 03

  You've one currently? And then your thought process on, on the strategy here with interest rates moving up?

• 25:05Speaker 07

  I mean, just like I said, it's still in the kind of initial term. I haven't even bothered to look at what the max that can adjust is because it's maybe two years away. So it's already better. It's a sixth and a eighth, maybe. So it's already better than what the market is.

• 25:21Speaker 03

  Still better, right?

• 25:22Speaker 07

  Why would I, why would I touch it?

• 25:25Speaker 03

  It's interesting when you're putting your strategy together for a house. Are there a lot of times when you say, you know what, let's take the adjustable rate loan, when you'll advise clients to go that way?

• 25:35Speaker 07

  Oh, from a client's standpoint, I would rarely recommend that, you know, just again, like Paula said, from a risk standpoint, it kind of depends on where you are in your life with other things. I'm okay with the fact that on occasion, this will not work out. I mean, my primary house is a regular fixed, but this is a different property. So it's part of the deal.

• 25:55Speaker 03

  I want to have a little fun here. Where do you think the Fed goes next, OG?

• 26:00Speaker 07

  Can I not answer? Here's my answer. It doesn't matter. My answer is I don't care.

• 26:07Speaker 07

  It doesn't matter.

• 26:08Speaker 03

  Paula?

• 26:11Speaker 05

  I think the Fed continues to raise rates, maybe by another quarter point. If, if, if, if two things happen, if inflation stays in a three handle, meaning three point something. And if the jobs report continually comes back showing strong or at least acceptable job growth.

• 26:33Speaker 03

  Jesse?

• 26:35Speaker 04

  Yeah, it's funny. It's like, where's this inflation coming from at this point? Is it like AI build out and stuff like that? And is that going to slow down anytime soon? And is a little quarter point interest rate hike going to convince the, the hyperscalers to stop building these AI data centers and that kind of thing? So I don't know. I'm with Paula. If I had to make a bet, I would say it'll keep on climbing more.

• 26:56Speaker 03

  Doug?

• 26:57Speaker 02

  I think the Yankees take it in five.

• 27:01Speaker 03

  That's exactly what we wanted. All right. We're at the halfway point of today's show. In the second half, we're going to talk about big news and buy now, pay later. Some interesting stats just hit the streets and we're going to review those. And Kelce in the news last week. It's funny, when I sent the text to our group of contributors, Paula's like, what? Kelce, you did what? This is a good one and I can't wait to see the collective eye roll that everyone has. But before we do that, we got something that definitely isn't eye roll. It is hot, hot, hot here in mom's basement because we've got one quarter to go in the 2026 edition of our year-long trivia competition. Doug, it couldn't get any closer.

• 27:43Speaker 02

  Can't get any better.

• 27:43Speaker 03

  It could not get any closer.

• 27:45Speaker 02

  It's as good as it's ever been right now. We are in the golden age of SB trivia right now because we have a three-way tie, a legitimate three-way tie. Each of our contestants has 10 points.

• 28:00Speaker 03

  Here's the deal. We go with last year's score, which means Jesse, you're going to go first as our champion from last year. OG is in the weird spot this year of going second and Paula gets the benefit of going last. So here we go. Doug, you've got today's question and I think your mic might be a little hot too, bud.

• 28:24Speaker 02

  Hey there, stackers. I'm Joe's mom's neighbor Doug. October 9th marks the anniversary of one of the greatest financial windfalls in American history. And I mean that literally. On this day in 1992, 18-year-old Michelle Knapp was sitting inside her family's home in peak skill, New York, when she heard a huge crash outside. She ran out and discovered that a 26-pound meteorite had fallen from space, smashed through the trunk of her 1980 Chevy Malibu land yacht and buried itself in the driveway underneath. Now that's a bad day, or at least you'd think it was. Michelle had just recently bought that 12-year-old Malibu,

• 29:07Speaker 02

  which even in 1992 means I'm guessing that meteorite wasn't the first thing to make weird noises in the back of that car. Know what I mean? Anyway, here's where things get interesting. That rock was estimated to be about 4.4 billion years old. And suddenly Michelle had two things collectors wanted. An honest to goodness meteorite from outer space and the Chevy Malibu it had just punched a hole through. Eventually she sold them both. Stackers, do you realize what this means? For years, Joe's been telling me that waiting for money to fall out of the sky is not a financial plan. Yeah, well, who's the idiot now, Joe?

• 29:48Speaker 02

  So here's today's trivia question. Michelle Knapp paid $300 for that Chevy Malibu. After selling both the damaged car and the meteorite that hit it, what was her total net profit? I'll be back right after I move the El Camino out of the garage and into the driveway. Come on, universe. Daddy needs to fund his Roth.

• 30:10Speaker 03

  What a great money-making scheme, or was it a great money-making scheme? So Jesse, she paid $300 for the Malibu and then sold the meteorite, sold the car that got hit to collectors. What's her net profit?

• 30:29Speaker 04

  I gotta think the meteorite especially sold for quite a bit. 20, was it 26 pounds? 22 pounds?

• 30:37Speaker 03

  20, how many pounds, Doug?

• 30:38Speaker 02

  He knows the average cost per weight of a meteorite and he's going to do the math.

• 30:43Speaker 03

  He's about to.

• 30:44Speaker 04

  You'd be surprised.

• 30:47Speaker 04

  Take away some inflation.

• 30:50Speaker 04

  You said peak skill, right? So this is a North American meteorite? No, I'm kidding.

• 30:54Speaker 02

  There is a question.

• 30:55Speaker 04

  It's a Hudson Valley meteorite. This is peak skill. Yeah. I'm going to say.

• 30:59Speaker 03

  It took a right turn in Albuquerque.

• 31:00Speaker 04

  I'm going to say her profit was one point.

• 31:06Speaker 04

  Three, two. 1.25 million dollars.

• 31:10Speaker 03

  1.25 million.

• 31:12Speaker 04

  2.25 million dollars.

• 31:14Speaker 03

  That's a good day, OG. 1.25 million.

• 31:19Speaker 07

  I know you guys are going to roll your eyes at this, but actually know a guy that sold meteorite. My hometown. I think Jesse's kind of on to something because I don't know how big it was, but it was a solid six figures, like upper six figures that he sold it for. However, this was in the, call it late 20 aughts. So I got to subtract 20 odd years of inflation.

• 31:49Speaker 07

  I think Jesse's high and I gotta, I gotta play the game to give Paula a little something.

• 31:53Speaker 04

  You're high.

• 31:54Speaker 03

  We all think Jesse's a little high.

• 31:56Speaker 07

  Deal with. Um, I'm going to say, you said one point, uh, some odd million.

• 32:01Speaker 04

  I think you said 1.25.

• 32:02Speaker 07

  Two, five. Two, five. Okay. So I'm going to do the exact opposite. I'm saying, uh, a very smooth, very smooth and buttery $100,000.

• 32:15Speaker 03

  Wow. Goes the opposite way. Still the good money for something that hit a car.

• 32:21Speaker 07

  Yeah. I, I'm playing this as a game. I don't know the answer. I think it's six figures, but I gotta get Paula to decide if she's gonna sandwich me or if I'm sandwiching Paula.

• 32:31Speaker 03

  Paula, who are you gonna sandwich?

• 32:36Speaker 05

  Well, let's see. I also think it was six figures.

• 32:43Speaker 05

  You said 1992?

• 32:45Speaker 03

  I did.

• 32:46Speaker 05

  So 1992, that was right around when the Bear Naked Ladies put out that song, If I Had A Million Dollars. So even back then, a million was considered a lot. Like it was a lot, but it was attainable.

• 33:00Speaker 03

  Can Paula just win right now because she made a pop culture reference?

• 33:04Speaker 07

  I know, right?

• 33:06Speaker 03

  I was just wondering too, if the Bear Naked Ladies, uh, did like, you know, if somebody did a cover of that song, like an up to date cover, would it be if I had a million dollars adjusted for inflation, which would now be 2.6 million?

• 33:17Speaker 05

  I actually just did the math. I posted it on Twitter the other day, uh, which is why I thought about that song. I think it's a 2.7 million in today's dollars.

• 33:24Speaker 03

  I was close.

• 33:25Speaker 05

  Yeah. Oh, that hope should have been a trivia question. Geez. I would have nailed that one.

• 33:30Speaker 03

  Well, we follow you on Twitter. We saw us, but we weren't gonna do that.

• 33:35Speaker 05

  Uh, I'm gonna go with $100,001.

• 33:38Speaker 03

  101.

• 33:40Speaker 07

  That's a lot of room for Jesse. You sure you don't wanna nudge that a little higher?

• 33:44Speaker 05

  Yeah, yeah. I think I'll, uh.

• 33:45Speaker 07

  Maybe like 450 or something?

• 33:48Speaker 05

  If I had $450,000.

• 33:51Speaker 04

  Nah, sticking with it.

• 33:53Speaker 03

  Keeping it at 101.

• 33:54Speaker 05

  Yeah, yeah. $100,001.

• 33:56Speaker 03

  Keeping it at 101. That does give Jesse a lot of room. All right. Jesse's at one and a quarter million. Paula, no G at 100,001. Who's going to take the lead here in Q4? We'll find out in just a minute.

• 34:12Speaker 03

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• 36:08Speaker 03

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• 36:52Speaker 03

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• 39:24Speaker 03

  All right, Jesse, you, uh, boy, they said you were high. You were quite high compared to the other two. You're at one and a quarter million dollars. 1.15 higher than anybody. 1.1499 higher than anybody else. How you feeling?

• 39:39Speaker 04

  It's like I'm in orbit, you know, how high I am.

• 39:43Speaker 03

  Feeling good though?

• 39:44Speaker 04

  Galactic. I'm interplanetary.

• 39:48Speaker 03

  It could have been $50 OG, in which case.

• 39:52Speaker 07

  Yeah, no, it's not 50. My gut says it's probably around three to 375. But I wanted to pick a number low enough that Paula might go halfway between me and Jesse and still give me a bunch of room. And, um, and I don't agree with her strategy. I gotta be honest. This does not benefit me in the least.

• 40:13Speaker 03

  Paula, do you think it doesn't benefit OG with the way you did?

• 40:17Speaker 05

  Well, I mean, he has the downside.

• 40:18Speaker 07

  I have zero.

• 40:20Speaker 03

  He does. He has zero.

• 40:21Speaker 05

  Yeah.

• 40:21Speaker 03

  If she lost money on the deal.

• 40:23Speaker 05

  Right. Or she made like, you know, 75,000 or something, which, you know, in 1992 was, was a lot of money.

• 40:29Speaker 03

  This trivia is awesome. If she couldn't sell them and it was minus 300 bucks.

• 40:33Speaker 05

  Right?

• 40:37Speaker 03

  That'd be great.

• 40:38Speaker 04

  I hope that's the answer.

• 40:39Speaker 03

  All right. We're gonna find out if that is the answer. Doug, you've got the answer. Who's taking home the big win, man?

• 40:48Speaker 03

  Hey there, stackers. I'm certified astrophysicist and guy who spent the entire break standing in the driveway looking straight up Joe's mom's neighbor Doug. Nothing yet. I mean, although a bird flew over about five minutes ago, and let's just say the El Camino is now worth slightly less. Before the break, I told you about Michelle Knapp, whose $300 Chevy Malibu was minding its own business when the universe dropped a 26-pound rock through the trunk. Turns out destroying the car was the best thing that could have happened to it. Michelle reportedly sold the meteorite for $50,000, which was a pretty good return for something that came with free shipping. But here's the part I love. The Malibu was suddenly a collector's item, too. That's a

• 41:31Speaker 03

  lesson for anybody trying to sell an old car. Don't waste your money fixing dents. You just need a much better story about how they got there. From now on, I'm telling people the front right bumper on the El Camino is crunched because I rear-ended Ryan Seacrest. Although, I guess technically that would make his car more valuable. You get the point. She reportedly sold the Malibu, the same car she paid $300 for, for another $25,000 after subtracting Michelle's original $300 investment. What was her total net profit? Well, the correct answer was 1.175,300 lower than Jesse's guess, $25,301 lower than Paula, just $25,300 lower than OG's guess,

• 42:16Speaker 03

  which means OG is today's winner because Michelle Knapp's total profit, $74,700.

• 42:23Speaker 04

  Wait, did you say that she sold the meteor for 50K?

• 42:26Speaker 03

  Yeah, 50K.

• 42:27Speaker 05

  Wait a second.

• 42:28Speaker 04

  I thought for sure that was mid-six figures.

• 42:30Speaker 05

  I literally was like, well, if it's $75,000, he's got it. What?

• 42:38Speaker 03

  So close. How many times have you done that, Paula?

• 42:41Speaker 05

  Wow.

• 42:42Speaker 04

  Okay.

• 42:42Speaker 05

  It's like, there's a part of me that knows.

• 42:44Speaker 03

  Some of the stuff that comes out of your mouth, if you just stick to it. It could have been, it could have been. OG takes the lead going into the fourth quarter.

• 42:53Speaker 04

  Okay.

• 42:53Speaker 03

  Reclaims the top end of this. Hey, let's go into the second half of today's show. We got two more headlines. Let's start with this one. Buy Now Pay Later apps. Let's talk about Affirm and what's the other big one called?

• 43:11Speaker 05

  Uh, Klarna?

• 43:12Speaker 03

  Klarna. There we go. Thanks, Paula. I kept thinking Kelsey, because that's coming up next. But Klarna, yes. Buy Now Pay Later adoption climbing fast, driven largely by credit skeptical younger consumers. I'm going to ask you about that in a second. Notably, nearly 90% of Buy Now Pay Later purchases now run through debit cards, the new numbers say, rather than credit cards. So what that means is, if you're running it through a debit card, you're not worried about the interest, right? You're not worried about avoiding a credit card. You're worried about the timing of this purchase. You're either buying it because you can't afford it right now,

• 43:51Speaker 03

  or you want payments at a certain time so that, so that the payments line up. It lets you stack all these small, small loans. So let's start with, is this, Jesse, a harmless alternative to credit, like the way young people seem to be using it? Or is this a dangerous trap?

• 44:16Speaker 04

  Well, the cool thing is, I had a burrito today, and I don't have to really pay for it until next summer. I mean, that's, that's what we're talking about here. We're talking about, essentially, it's a free burrito, if you really want to mince words here. No, I think it's a terrible thing. I think it's really stupid. I think it's pretty bad. I think, would you say, Joe, you said that people are suspicious about credit, and so that's why they're going to Buy Now Pay Later? Well, what are we talking about here?

• 44:40Speaker 03

  Because they want zero interest. They think the zero interest thing is, well, is great, but now they're using it versus a debit card instead of, or they're, they're paying for it with their debit card, so.

• 44:50Speaker 04

  Well, they ought to be more suspicious of the so-called free lunch, just like you ought to be more suspicious of the free burrito. It's not free. You pay for it eventually. And similarly, I mean, I guess maybe in some cases, these Klarna and others are truly offering like teaser interest rates that are essentially zero, just to get people hooked on them. But, but more likely than not, I mean, the interest is embedded in the payments themselves. You know, the $12 burrito actually costs you 10 payments of $1.40. It's $14 total. I mean, right, there's a 17% interest rate embedded in those payments. To you, though, it just feels like 10 even payments or something like that.

• 45:28Speaker 03

  Yeah, there's two different things going on here. With Klarna, those are going to be smaller transactions that are 0%, no interest, as long as you make the payments on time. With Affirm, those are going to be bigger transactions, but they're going to have a fixed interest rate to them. So you can get it today, but there will be an interest rate.

• 45:49Speaker 04

  My understanding, whenever I've seen it offered at checkout, usually what I'll see is you buy it today for 100, or you have four even payments.

• 45:59Speaker 03

  Those are, yeah, those are not the Klarnas. The Klarnas are 100 bucks or 10 payments at $10, and as long as you make them on time, 0%.

• 46:09Speaker 04

  I guess that's news to me and kind of interesting, because I don't understand exactly where their profit comes from then.

• 46:16Speaker 03

  Oh, let's talk about that. Paula Pant, do you know where their profit comes from?

• 46:19Speaker 05

  Well, if you miss a payment.

• 46:21Speaker 03

  There it is.

• 46:22Speaker 05

  Then the penalties get very severe.

• 46:24Speaker 03

  Yeah, they're not small, Jesse. They are.

• 46:26Speaker 04

  Has it always been that way?

• 46:27Speaker 03

  It is always, for Klarna, it has always been that way. That's been the thing. Hey, 0%. So Paula, is, I'll ask you then the same question. You seem to be a little more familiar with these. I'm sure you use them regularly. What's the?

• 46:40Speaker 05

  Never.

• 46:41Speaker 03

  Well, why not? If it's free money.

• 46:44Speaker 05

  Well, in order to promise that you will never miss a payment, you will never be late on a payment, to promise that degree of behavioral compliance, every I dotted, every T crossed, with such severe consequences, if it's not, that's a hefty promise to have to make in an uncertain future, you know, where you might lose a job, you might have some emergency, medical emergency that comes up. You're essentially committing your future dollars to something where you just don't have, we talked about wiggle room earlier on this show, to something where you really don't have any wiggle room. You know, if things don't work out in the way

• 47:29Speaker 05

  that you envisioned, the penalties are going to be pretty severe. So when we talk about Klarna and Affirm and these Buy Now Pay Later, when we talk about what you purchase with it, we're talking relatively small purchases, retail purchases, groceries, clothing. We're talking fairly low dollar amounts. If you are in such a dire position that you need Buy Now Pay Later to buy some clothes, then there's a deeper problem that we need to address. There's a much, much deeper problem about lack of income that needs to be addressed first. Let's address that. Let's find ways to get you a side hustle, to get you a, some other gig, to get you cheaper

• 48:14Speaker 05

  housing, to maybe get you living on your brother's couch or in your mom's basement for a little while.

• 48:20Speaker 07

  Don't knock it till you try it.

• 48:22Speaker 05

  Yeah, you know, like, there's some deeper things that need to be addressed. If you are in such a dire position that you need Buy Now Pay Later for a relatively small dollar item, and by contrast, if you are in such a good position that you don't actually need it, then why would you put yourself on the hook with risk of such severe penalty for something that you don't actually need? So either, in either case, it doesn't make sense.

• 48:48Speaker 03

  Yeah, either there's a different way, or your definition of need might be a little too wide. OG, is there a problem here with betting, as Paula's talking about? You're really betting your future income here. This piece even talks about how younger borrowers are reticent to use a credit card. Credit card versus Buy Now Pay Later, which one do you think's the bigger devil?

• 49:10Speaker 07

  Well, I haven't seen the data on consumer spending of younger people, whatever that looks like on credit cards, but I do know that credit card balances are somewhat at an all-time high, right? Like, like all-time, all-time, all-time high. But my question on this is a little more devil's advocate-y, maybe? So if it's never good to commit future income to a purchase, like, where does it make sense? Because we just got done talking about mortgages, for example.

• 49:41Speaker 03

  Sure.

• 49:41Speaker 07

  And, or cars. So I think Jesse said, well, not cars, but yes, on mortgage. And if it's, I mean, from a financial standpoint, honestly, if I could take all of my expenses this month and pay for them in future dollars, like way future dollars, like, let's say, 10-year-from-now dollars, that's a really good trade from a finance standpoint. It's a very risky trade from a cash flow standpoint. I understand that there are small purchases, like Paula said, and lower dollar, lower volume type of purchases. But I'm just kind of curious, like, where do we draw the line on, I'm okay with committing my future income to this purchase, but I'm not okay committing my future income to that purchase?

• 50:23Speaker 03

  Where do you draw the line there, Jesse?

• 50:25Speaker 07

  Consumerism, maybe?

• 50:26Speaker 03

  Yeah.

• 50:26Speaker 07

  Yeah. And maybe that's the thing that I see a lot of, is if it's offered to me, it's like, hey, you just bought a pair of Nikes. Do you want to pay this over four payments? It's like, it's like 100 bucks. Like, no.

• 50:36Speaker 03

  Right. Let me change the question. Now that you know that this is interest-free debt, as long as you make the payment on time, is there a way to use this responsibly? Is there a way to use it, to use it to your advantage? Or is OG right? Maybe we need to rethink, Paula, you know, maybe we need to rethink our consumerism.

• 50:54Speaker 04

  Yeah, it's kind of hard because it's just philosophically, it's for the purchases that hopefully you wouldn't need to borrow in the first place. Like, like, again, not to make this the Buffett show, but he does have this quote of just like, you can never get the loan that you desperately need when you want it. Like, banks love to offer you loans when you don't necessarily need them. It's when you really, really need the loan, that's when they say you're not creditworthy. And similarly, if I really need to borrow $25 to buy a couple burritos, that's not the purchase that I need any sort of loan for. What I need a loan for is to buy a $500,000 house. And my understanding is I don't think I can get the 0% rate there. So I do think it just comes down to, you know, the size

• 51:37Speaker 04

  of the purchase that we're talking about here ought not to be big enough to put it on any sort of credit in the first place. Because again, it's on credit. It happens to be free credit until you mess up. And then it becomes, what, did we already talk about it? I mean, what's the exact interest rate that they can start to put on you?

• 51:53Speaker 03

  Very expensive. Doug, do you mind looking up what the interest rate is on a firm? If you miss the payment?

• 51:57Speaker 07

  I mean, I would never do this, but, but, you know, to Jesse, to your point about, yeah, $25 burrito, you probably shouldn't do it. But what if it's like, everything for the entire month? Your entire spending is $10,000 and you get it all at 0% for the next year or the next six months. It's not a $25 burrito. It's your gas bill and your gasoline and your grocery bill. And like, why wouldn't, I'm just playing devil's advocate here. I would never do that. But like, why not just spread it out? And just like, I could keep my $10,000 in my account at 4%. I'm gonna make a few extra bucks.

• 52:27Speaker 04

  Is it an unlimited credit limit?

• 52:28Speaker 07

  I'm not sure.

• 52:30Speaker 04

  That's the other thing. I'm not, you know,

• 52:31Speaker 07

  I mean, for a guy like you, probably.

• 52:33Speaker 04

  Maybe.

• 52:33Speaker 07

  For the rest of us, we'd have limits.

• 52:35Speaker 04

  Stop.

• 52:35Speaker 03

  Well, we also talked on Monday's show about the idea of even with, even with credit cards, buying things that you might not need. Like, if you get used to using a firm, don't you think, Paula, there'd be a, like, if you just get used to using a firm and you see, oh, they take a firm, like, aren't you more likely to say yes to the purchase than if they don't take a firm?

• 52:55Speaker 07

  They probably have like a magazine, like SkyMall. They send you the affirm, the affirm SkyMall magazine. You're like, I never know that I needed a specific ice maker. It makes Chick-fil-A ice.

• 53:06Speaker 05

  Well, I think that, Joe, to your question about, or I guess, OG, it was your question, what's the difference? Like, where do you draw the line? You know, a mortgage versus a burrito? I think the delineating factor is, is it an appreciating asset? Or is it something that depreciates? Like, a burrito, uneaten, depreciates over time.

• 53:27Speaker 07

  Even the ones that you do eat depreciate over time.

• 53:31Speaker 05

  Yeah, exactly. Um, you know, clothing that you buy, like, you talk about a car losing its value the moment you drive it off a lot. Clothes lose their value, like, the moment that you wear it even once, right? They lose the bulk of their value. Brand new clothing, as soon as you wear it, now it's suddenly used clothing, and it has just immediately lost a ton of its value. So a house is the one thing, of all the examples that you listed, even, even a car, a house is the one thing that you buy that is, historically speaking, probabilistically, but not in all cases, but probabilistically likely to be an appreciating asset.

• 54:08Speaker 07

  I think that's a good answer. Yeah.

• 54:10Speaker 03

  I think so, too. Our last topic is the one, this one hit as we record this, it hit late last week. And I just found this amazing. CNN ran that this is going to be the first prediction market election that we've ever had. In other words, we're not just electing people to all these different offices. There's going to be a ton of money on people predicting, AKA betting, who's going to win. And KALCI, the prediction markets platform, and there's other ones as well, has become deeply embedded in 2026 midterm coverage. And it's fighting hard in Washington to stay lightly regulated. Listen

• 54:49Speaker 03

  to this. KALCI is valued right now at $22 billion. And they spent 1.8 million, this is a record, they spent $1.8 million on lobbying in the first half of 2026 alone, for Congress to leave them alone. It's using the FTC federal jurisdiction to position itself as a financial derivatives platform. This is not a betting app, Paula Pant. This is a financial derivatives platform, which lets it sidestep state sports betting and gambling laws. States in the traditional gaming industry say that's exactly the point. It's, quote, "indistinguishable from legal sports betting without any of the regulations

• 55:30Speaker 03

  or taxes." Here's some stats. Well, you know, I'm gonna save the stats during this. But here's the deal. Now KALCI is petitioning the government so that you can now, not bet, because this is not betting, you can now borrow money, Jesse Cramer, you can borrow the, somebody else's money to bet, you can, or excuse me, to predict, to predict where you think this is gonna go. What could possibly go wrong if now I can predict where things are using leveraged cash? Sounds like I can make my win even bigger.

• 56:08Speaker 04

  I mean, as long as I can spread those repayments out over a year at 0% interest rate, what's the big deal?

• 56:15Speaker 03

  Repayments, you mean them repaying me? Them repay after I win?

• 56:18Speaker 04

  Correct. And I assuming that, you know, the, the KALCI's of the world and the buy now pay laters of the world are kind of joined at the hip in some ways, so that I can, my margin is free, I would assume. I am the grumpy old man shaking his fists at the sky when it comes to these things. Like, I just cannot believe we've come this far. And yeah, now that we're calling outright gambling, we're just calling it like, options contracts. I don't know. It's, it's pretty perverse. And it's just interesting to me that this gambling platform has a $22 billion valuation. Where does that valuation come from? Where does that revenue actually come from? I know it's maybe not my place to dictate how other people gamble their money. But it's just, it just seems like such a perverse way to

• 57:01Speaker 04

  run a civilization, as they would say.

• 57:04Speaker 03

  It's incredible, OG. They talk about, they talk about this not being a gambling app. And yet, on TikTok, I see KALCI ads all the time. And it's always every Saturday, whoa, whoa, whoa, how is Ole Miss an underdog versus University of Florida? How is this? I can't believe that it is. Well, you know where? I can predict on KALCI that they're wrong. You're like, wow, that's, that sounds a lot like DraftKings to me.

• 57:32Speaker 07

  I do find it kind of interesting that you can guess on the price of gold in the next 15 minutes. And there's a little countdown timer that shows how much time is left for you to guess. Or what will the news reporter say on ABC News tonight? Like, you can literally gamble on anything that you want. Is, sorry, predict. You can predict market, option trade, whatever the hell they're calling it. Who's gonna be eliminated on Dancing with the Stars in episode four? It's a really stupid way to consume time. That's all I can say about it.

• 58:09Speaker 03

  Here's the stats, OG, that I promised earlier. 51% of prediction markets users already outside of the app have borrowed money. Now you can do it inside KALCI, maybe, assuming that this goes through, right? You'd be able to do it inside KALCI.

• 58:24Speaker 07

  Well, they're saying on margin, though, it wouldn't that be like, basically, like, gambling, sorry, investing, sorry, option trading? What are we talking about? With your own investment money on top of your own investment money? So you get like a levered return? So basically, it's like buying a fourplex rental property, right, Paul?

• 58:42Speaker 05

  Okay. I did some reading into the argument that they make as to how they call themselves not a gambling platform. The thesis of their argument is that in traditional gambling, you are playing against the house. So for example, if you think of like, a craps table or roulette, right? You're playing against the house. And so the house has an edge. And because the house, even if the house only has a very slight edge, the house can stay solvent for a lot longer than you can. And so the house's longer duration, plus the slight edge, even if it's only 51 to 49, you know, it's still at that slight edge,

• 59:25Speaker 05

  they can stay in the game without the risk of ruin, long enough that the house always wins. And that's how gambling works. And prediction markets, the argument that they make is, well, you're not playing against the house, you're, you're betting against each other. And so their thesis is, in investment markets, people bet against each other all the time. Like, you have a buyer and a seller, and they can't agree on what the price of cattle, or oil, or corn is going to be a week from today. And that's why that you have a buy and a sell trade, because two parties fundamentally disagree on the future price of that commodity.

• 1:00:07Speaker 05

  The counterpoint to that is if you are making a bet on the price of corn or cattle or oil, you have a whole lot of research and information at your fingertips. If you're making a bet on who's going to be eliminated from Dancing with the Stars, there's no research that you can do. There's no information. If there is information, it's insider trading, because you've got, your buddy is the producer. Other than insider trading, there is no edge that you can reasonably develop. And that, I think, is the fundamental difference. Sorry, I'm on my soapbox. What was the question?

• 1:00:43Speaker 03

  I like that soapbox, because it does make me wonder, in some of these areas, like if I do some homework, is it better than 50/50? Is there maybe a 70% chance of me winning? 80% chance of me winning if I've done some research into the, into the?

• 1:00:57Speaker 05

  No. I think the inherent aspect of these prediction markets is, assuming it is not insider trading, right? Assuming that you don't have some kind of behind the scenes knowledge, then no, you don't have an edge necessarily. You are betting on events that are completely random. And that is what distinguishes it from buying Lululemon, or Nike, or Coca-Cola, where if you were to spend long enough, like reading all of the SEC reports, and the filings, and all of the publicly available information, and, you know, I mean, there are investors who, like, they want a deep, deep understanding of the soda industry in general, and where

• 1:01:38Speaker 05

  the beverage industry is going to go. And they fly out there, and they talk to executives, and they talk to employees, and they walk the floor, and they read beverage industry trade publications, and they really try to develop a deep knowledge of the space. And that knowledge becomes their edge. Philip Fisher, the investor, called it scuttlebutt. Scuttlebutt is basically talking to a bunch of people on the inside, not insider trading, but just like, talking to insiders to get the gossip.

• 1:02:06Speaker 03

  Get the feeling of the?

• 1:02:08Speaker 05

  Yeah. Get the vibe, get the gossip, get the feeling, so that you, you develop a sense of where this space is headed. And by virtue of doing that, you can then make informed, educated bets. They are still bets, but you can make informed, educated bets on where the space is headed. And that's what investing in a stock is, or in a commodity is. And yeah, with these markets, you just don't have an edge.

• 1:02:33Speaker 03

  Jesse, what's the chance of winning in stocks in a given year? Just over 50%? Somewhere 50, 55%?

• 1:02:40Speaker 04

  In a given year? Well, it depends. I guess if you own like, a big diversified portfolio of stocks, then I think it's, it's closer to like, three quarters. I think three quarters of all years are up. Something like that. And if you own an individual stock, I actually think your, your odds of success are less than 50%. Just the way that the skewness of the stock market goes.

• 1:03:01Speaker 03

  Looking at some more of these Kelsey numbers. 79% of these people, 79% of people have done Kelsey or net negative over the last year.

• 1:03:10Speaker 04

  Yeah. I was going to share, if you know, I was going to say, yeah, I was looking at an article from Inc. from May. This is Polymarket, not Kelsey. Out of more than 2 million users, fewer than 2,000 accounts, that's 1/10 of 1%, fewer than 2,000 accounts took home 67% of all profits. You've got a 10th of a percent who are dominating, and then you've got all the suckers who are doing nothing. And then there's a quote later in the article from a former professional poker player and statistician, who places 60 trades a minute, and modifies his bids and asks 30 times a second. And that stands in a sharp contrast to the young, social media influence users, that the platforms are actively courting, many of whom discover the sites through influencers promoting their wins online. Basically,

• 1:03:54Speaker 04

  it's a whole bunch of poor fish against, you know, a tiny number of sharks.

• 1:03:59Speaker 07

  Couple of pros, and everybody else is a sucker.

• 1:04:02Speaker 04

  Yeah.

• 1:04:03Speaker 03

  18 to 21 year olds, over the past year, traded an estimated $5.4 billion with a B dollars on Kelsey. 18 to 21. That, that small demographic. But, oh gee, hey, you know what? I mean, there's some stuff we can learn from this. Gamify it, right? If you gamify your savings, if you're in savings mode, and you're trying to begin getting the savings habit, turn it into a game. Make it fun. Make it, you know, have the, like Cheryl in my weekly meeting, we have pancakes or wine, depending on what time of day it is. Put some music on, you know, keep it to 20. Like, the gamification of Kelsey, I think is what's driving the charge here.

• 1:04:43Speaker 07

  Yeah. I mean, look, it's, it's a form of entertainment. If it's your vibe for a little bit of entertainment, have at it. If you're trying to get rich doing it, you're a fool. And it's never going to happen in a million years. Even the most safe bets, eventually screw you, basically. It's no different than going to the casino. Like, people go to the casino, and they just have fun, drink a couple beers, play the craps.

• 1:05:09Speaker 03

  It's great.

• 1:05:09Speaker 07

  You're, you're enjoying what you're doing, and you're just, it's social. This is not social, unfortunately, which takes away all the cool part of the casino. And you have the same outcome, which is, you make a few bucks, and then you lose a bunch of money, and then you throw the op in the trash and go, I'm never doing that again.

• 1:05:25Speaker 03

  I love it. Every time I hear somebody call Kelsey investing, in fact, on Kelsey commercials, I've seen people go, oh, I invest $100 a day, or I invest 50. You don't invest? What are you talking about? All right. Three, three interesting headlines. What happens with the Fed moves? We covered that. Thank you, guys. And then in the second app, buy now, pay later, and predictive markets. Oh, boy. Oh, boy. Just if you're using either one of these, or if you have a friend using either one of these, I think you need to listen to Jesse Paula and OG today. All right. Let's find out what each of you guys are doing. It is the second weekend in October. What do you got going on, OG?

• 1:06:05Speaker 07

  I am just coming back from a week of amazing golf in Northern Michigan, that

• 1:06:13Speaker 03

  Oh, fall colors.

• 1:06:14Speaker 07

  I will never invite Jesse Cramer to ever again. Because he turned me down once. And once you're on the do not fly list, you're on the do not fly list for life.

• 1:06:24Speaker 03

  Well, there you go, Jesse. You had your big chance. Better you than me, by the way.

• 1:06:30Speaker 03

  But OG says I wouldn't get invited anyway, so.

• 1:06:33Speaker 04

  It was hard to turn down, but, you know, I had to make a hard.

• 1:06:37Speaker 03

  Two young kids at home?

• 1:06:38Speaker 04

  Yeah, yeah, exactly. It was just one of those ones where, I know, I know.

• 1:06:42Speaker 03

  Spending all those chips to hang out with OG, I wouldn't do it either.

• 1:06:44Speaker 04

  I know. And now I'm on OG's list for life, which apparently means we just can't hang out. Like, oh, no. I don't get to hang out with OG for the next 50 years. Oh, no.

• 1:06:53Speaker 03

  That is bad. That, that actually is worse than you know. You have no idea how, after a few adult beverages, how OG becomes the, well, let's, let's put it this way. He's the king of karaoke.

• 1:07:06Speaker 04

  Oh, I'm missing out.

• 1:07:08Speaker 03

  Right. Jesse, what's going on at Personal Finance for Long-Term Investors podcast?

• 1:07:13Speaker 04

  Let's see. Second weekend of October, we just released an episode inspired by a friend of Stacking Benjamins, Dr. Daniel Crosby.

• 1:07:21Speaker 03

  What a nice man.

• 1:07:22Speaker 04

  Inspired by some of his research. Dr. Crosby's on my list. I got to get him on the show sooner than later. He's not on this particular episode, but I leveraged his research, and just loved some of the stuff he's put out there. And, and so put out an episode based on some of his really cool, kind of behavioral psychology stuff. It's a good one.

• 1:07:38Speaker 03

  I thought you were going to say, we just use his, his research, and we don't quote him ever. I have these interesting things from an unnamed source. And that's at Personal Finance for Long-Term Investors, where only the finest podcasts are found, such as the Afford Anything Show.

• 1:07:56Speaker 05

  Yes. And on the Afford Anything podcast, we have an interview with Jared Dillian. He was on the ETF desk at Lehman Brothers in 2008, when Lehman Brothers collapsed.

• 1:08:06Speaker 03

  Oh, something went bad there in 2008?

• 1:08:08Speaker 05

  Yeah. In one day, he lost half a million dollars of his own money. And he joins us, he shares that story, talks about being at Lehman during the collapse, and then talks about how to reduce volatility in your portfolio.

• 1:08:26Speaker 03

  I'm sorry. Somebody that's lost just a ton of money becomes an expert in volatility.

• 1:08:31Speaker 05

  Yeah. Well, it's, it's because he learned the hard way.

• 1:08:33Speaker 03

  Oh, sure.

• 1:08:34Speaker 05

  You know? Yeah.

• 1:08:35Speaker 03

  No, I'm laughing, because it's like, I'm going to, this is never going to happen again. I'm going to know more than any human being in this topic.

• 1:08:41Speaker 05

  Exactly.

• 1:08:43Speaker 03

  That's great. Wow. Good stuff happening at the Afford Anything podcast. Well, thanks to everybody who hung out with us on YouTube. You guys saw a fun episode today, as we struggled to get the bus running, but we finally did. And if you know somebody who needs maybe some help, because they're constantly on their phone with the prediction markets, or coming home with buy now, pay later stuff, you definitely want to queue them into this episode. Or somebody who has an interest rate decision, coming up on a car loan, a CD, maybe, or a mortgage. You'll learn how that works. All right. The one thing, we know how this podcast works, is this. Doug, what should we learn at the end of today's episode? What should our takeaways be?

• 1:09:27Speaker 02

  Well, Joe, take some advice from Paula. There's a decent chance that rates may continue to go up. If you've got some wiggle room in your monthly expenses, this may be a time when you can take some risk on an adjustable rate loan. Second, remember what Jesse said about uncertainties in investing. We may never see the anomalous, the anomalous, animalistic low rates of 15 years ago. Locking in now can help stabilize your financial weirdness. But the big lesson? When Joe asks you to go do some research on a financial topic, he's going to take his sweet time coming back to you. He's just trying to get you out of the room for a while, so we can eat all the Cheetos.

• 1:10:13Speaker 02

  Thanks to the Jesse Kramer for joining us today. You'll find Jesse's Personal Finance for Long-Term Investors podcast, or as we call it, the Filthy Podcast, wherever you find podcasts like this one. Trust me, it's out there. You'll love it. We'll also include links in our show notes at stackingbenjamins.com. Thanks to Paula Pant for hanging out with us. You'll find her fabulous podcast, Afford Anything, wherever you listen to finer podcasts. And last and least, thanks also to OG for joining us today. Looking for good financial planning help? Head to stackingbenjamins.com/OG for his calendar. This show is the property of SB Podcast LLC, copyright 2026, and is created by Joe Saul

• 1:10:58Speaker 02

  Sehi. You'll find out about our awesome team at stackingbenjamins.com, along with the show notes, and how you can find us on YouTube, and all the usual social media spots. Come say hello. And oh, yeah, before I go, not only should you not take advice from these nerds, don't take advice from people you don't know. This show is for entertainment purposes only. Before making any financial decisions, speak with a real financial advisor. I'm Joe's mom's neighbor Doug, and we'll see you next time, back here at the Stacking Benjamin Show.

• 1:11:38Speaker 02

  What do you suppose they call that? A novelty act? I don't know, but it wasn't too bad. Well, that's a novelty.