Rates to the Hilt (EP.322)

23:27Now, money market funds obviously can't move markets because that's set by the Fed. But even bond buying, the bond market is so gigantic, it can't possibly influence interest rates. What's the financial stock play here besides like a Charles Schwab that would benefit from this? Because those money market funds make pretty decent fees. Those are higher fees than like an ETF. Someone has to be benefiting from this. Is it just every broker is benefiting from this in some way. Plus, they're earning a great spread. They're all charging like 8 % on their margin right now, even though they're paying 5 % in the money markets.

23:58Yeah, what did we say Robbin was getting? So this whole thing that, and I think we've done this bit, so forgive me if I'm repeating myself. This whole thing about bonds won't lend, I mean, banks won't lend when the curve is flat or inverted because they borrow short and then long. Not really true. Sorry. They're earning a great spread right now. It just depends on the demand for loans. Look at your checking and savings accounts. they're not borrowing. I mean, yes, they're borrowing short, but not at rates set by the government. They're still paying zero effectively or close to it. Isn't it also crazy how like, this is like the immaculate handoff for baby boomers.

24:35Like they had this wonderful, I mean, retirees have been complaining for years about the fact that they have no safe yield anywhere, but the stock market went up a ton. Housing prices went up a ton. And now all of a sudden it's like all these baby boomers were retiring. and it's like, here, on a silver platter, here's this 5 % yield for your safe assets. Have at it. I don't think the baby boomers, you couldn't have drawn up a better situation or scenario for the baby boomers from like 1980 to today in terms of how financial markets worked out for them. Low starting yields, high starting rates, 20-year bull market.

25:11Sure, there was a lost decade in there, but then a 15-year bull market and now really high rates. Like you couldn't have scripted it any better for them. See, I really wanted to interrupt there, but as a co-host, I had to let you cook. Thank you. You're welcome. So I'm actually working on a post about this right now. If you are an investor or if you're a lender, right? Slash investor, these higher rates are the best thing since sliced bread. If you're a borrower, this is the worst thing ever. So Ben, is the Fed worsening inequality by raising interest rates? But I thought, but wait a minute. I thought the Fed was worsening inequality when they were lowering interest rates.

25:55So which is it? It's both ways, I guess. But yeah. So interest rates are bad for inequality, whether they're higher or lower, they're just bad. And I'm being facetious, but is there some truth in that? I mean, you can make the argument. Certainly, the argument was made the entire time when rates were low that the Fed was widening the income inequality gap or the wealth inequality gap. And all kidding aside, with rates high now, is it, it's not the same thing playing out? If you're, if you're, if you already have assets, you're already locked in a mortgage, you have money to invest. You're, this is a huge windfall for you.

26:28But if you are borrowing or you are accumulating or you have credit card debt, you're, you're getting destroyed. There's going to be a line in the sand in like 2021 or 2022 in the future. They're going to look back and go, what happened? It's like housing market especially. Speaking of that, I was playing around with Rocket Money yesterday, and I've got many bones to pick with my recurring charges, bones to pick all over the place, a graveyard of bones. With how they're being categorized or what? No, no, no. Hand up this on me. Somehow I have three serious subscriptions. I'm going to call them this afternoon and find out what's going on.

27:06The New York Times is charging me, twice. It's charging my business account and my credit card, my personal credit card. I can't figure out why. I have no idea why. Anyway, I saw an interest charge from American Express. And your credit card interest is like 20 something percent. I'm like, wait, what the heck is this? I'm an auto pay guy. But my new-ish card, which I linked to my old account, my existing account, I never, I guess I forgot to set up the auto pay. So I just assumed that I just assumed, right? Shame on me. I just assumed that it was set up, but I never got a notice that I didn't, I never got an email saying that I, I had a, I had a late charge.

27:48Isn't that weird? So I had a late, I had a late fee for$30 that I called the American express. They take it off. They reversed it. But the interest expense, the interest expense, like that's, we, you know, we can't do that. That's corporate or whatever. $106. And that was probably, I was probably only, I'm probably like, I don't know, 10 days delinquent. Can you imagine the people that, that carry balances over every month and are looking at those charges maybe they just don't look but i can't even imagine let it allow it's back breaking it's back breaking ben what's your number one rule in personal finance pay off credit card debt boom always every month just live off the rewards all right uh the gdp now has estimates for real gdp at q3 at 5.8 this is this is crazy to me it's the fastest non-pandemic quarter in 20 years like so you had the big snapback of the pandemic, but take that out of the equation.

28:38And it's 20 years would be the fastest quarterly growth that we've had, which is, it really is amazing. I don't know anyone who in their right mind predicted this. It's impossible. Conor said - So I think that's why the narrative is shifting. It's like, holy cow, the economy really is accelerating. So they're not going to cut rates. Rates are going to stay higher for longer. And okay, you reprice risk assets. Makes sense. Conor said had this, all these are reasonable takes. Inflation is still too high. Fast growth is compatible with cooling inflation due to supply chain improvement. Growth is still too fast to be consistent with 2 % inflation.

29:10Over time, the economy can't handle 5 % Fed funds rate. This all makes sense to me. There's so many different - The last one to me is the most salient point. There's no way. There's no way. So remember we said so much of the debt is already fixed, your mortgage is whatever. I know this is fantasy world, but imagine you repriced everything at 5%. 100%. Imagine you just wiped the state clean and just said, replace your existing debt with current rates. Sunk. And maybe this is the reason that everyone on Wall Street is so worried is because the thinking is, if the economy continues to accelerate, the Fed is going to have to accelerate again.

29:44And that is when something eventually it's going to break. Like, okay, it hasn't broken yet. We had all these extenuating circumstances. Things have been fine. People locked in low debt. Eventually, something's going to have to slow. And I think that's obviously the worry. Duncan's saying I need a financial advisor. I don't think financial advisors are responsible for irresponsible, uh, subscriptions. That should be, well, yeah, I told you got to negotiate with them, but I think, you know, you have automate automatic 401k target date contributions and these things. And like you have a default choice for credit cards, your default should be automatically paid off every month.

30:19And if you want to take that off, you have to go in and turn it off. How's that? That's such a great point. You know, it's, that's like a auto enrollment for 401ks. Yeah, that's what I mean. Yeah, it should. How much money - You should have to opt out, not opt in. How much money do credit card companies make because people don't get automatically opted in? That will never change, but you're right. My sister, her very first credit card out of college, she didn't really know how credit cards worked. And so my dad looked at her bill after like 12 months and was like, Sarah, what are you doing? And she's like, what do you mean?

30:47He's like, why aren't you paying off your credit card every month? And she's like, I don't need to. It's a credit card. You can just kind of let it go. And she had no idea interest was accumulating. And she had the money to pay it off. I bet that's... It just didn't. A lot of people probably don't know about credit card interest. That's on me for being a finance brother, not teaching her the ways. Hand up. This is a great chart from Bank of America. US consumers are still super healthy. Consumer debt as a percentage of GDP is at 2001 levels. Wild. So even with all these rate hikes, it doesn't matter because people already locked it in.

31:23You locked it in. It doesn't matter. You don't feel it. Doesn't this go to our point of, okay, the Fed takes rates to six or six and a half percent if they have to really like snuff this thing out. And we have some sort of slowdown. I still fall on the, like, even if it happens, it's going to be, it's going to be pretty mild. So a recession, a recession would happen, but it would be mild. I think that would be, that would have to be your baseline with the caveat that things can always get worse, but that would, that would have to be the baseline. Things aren't like, people aren't just over leveraged to the hilt this time around.

31:55To the hilt? Right? Is that a thing? Is it to the hills? You might be right. I'm not sure. To the hilt? It didn't sound terribly wrong. To the hilt. All right. To the hilt. I'm going to fact check you. To the hilt. To the hilt is a thing. To the hilt as much as possible. See, we're mortgaged to the hilt. To the utmost degree. Okay, Ben, not only were you right, but you were exactly right. Credit to you. I could hear people saying to the hills with confidence and thinking they're doing it right, but they're not. So you think to the hills is one of those things people say, but they don't know that it's actually to the hilt.

32:23Right. The more you know. I still get a grain of sand and salt confused. But now I know it's sand. No. All right. Wait, is it salt? Yes, it's salt. We've done this before. Oh, God. I really thought it was sand. All right. Are you sure? Take it with a grain of salt.

32:48Okay. I guess that one hasn't sunk in yet. Yeah, your confidence level was pretty high there. All right. I don't know how to square the circle, Ben. Worldwide spending on business travel will top pre-pandemic levels next year and expand to more than$1.78 trillion in 2027, according to the Global Business Travel Association's annual outlook. How and when business passenger volumes will recover to 2019 levels remains to be seen. travel by large corporations remains stuck at about 75 % to 85 % of 2019 volume for US carriers. That's way higher than I would have thought. I would have thought with remote work, it would be like 60 % of pre-pandemic levels.

33:29But it says spending rose 47 % last year to$1.03 trillion and it's forecast to increase 32 % in 2023. How much of that is inflation? Okay. Yeah, but even still. Kind of like looking at the box office rates, like this is the highest grossing thing ever, but you don't adjust for inflation. But I just assumed, I don't know that business travel was like dead forever. What would you have guessed it's down since 2019? 50 %? I would have said at least like 40 years. Who's traveling for business? Yeah, that's a problem. Well, I guess I've been traveling more, but. That's true. What idiots are traveling?

34:03How much of it, how much of it do you think is people like getting an excuse to get out and travel? Cause they just, they, they want to get out and travel again. And it's like, they don't need to, but they want to. There's gotta be a lot of people who that like phone. Like, I got to go to visit the manufacturing plant over here and just get out of the house. The Wall Street Journal had a piece called Banks Don't Love Rich Mortgage Borrowers as much as they used to, saying like they're not getting deals to jumbo loans anymore. But this is interesting to me. So they look at interest on a new car loan by credit score.

34:31And they go deep subprime, which I did not know is a thing. Deep subprime sounds like a movie from the 90s. Does it not? Brendan Fraser probably would have been in it. Deep subprime is much nicer than very poor. subprime, near prime, prime, and super prime. And look at the range of, and they're showing that actually the super prime have risen faster than the deep and subprime. Look at how much higher these rates were for having a bad credit score. This is a way, so we're talking almost 15 % for deep subprime versus 5 % for super prime. Like, you know how they do the FICO score, right? I think it's, so, I looked this up.

35:09One third is like your payment history. So you got docked already because you forgot to make a payment. So your credit score is going to go down. The amount owed is another one. Wait, is that for real? Look at a person's payment. One late payment? No, it's not good. It would have to be a series of them. Amount owed is one third. Length of credit history is like 15%. So get those credit cards right away and pay them off. New accounts opened is 10%. And then types of credit used is 10%. That's how they determine your FICO score. So having a good credit score. Remember you got me the t-shirt? What did it say?

35:39like not to brag, I have a great credit score or something. I did. You bought me a t-shirt. You had me like a printed t-shirt made. I feel like you've never, I've never seen it. You ever wear it? A few years ago. Well, you got me like an XL. So I think I use it as a towel, which someone pointed out large is in the middle, right? You didn't want to be a large because you thought you were on the upper end. Oh yeah. Somebody had a great take. They emailed us and said, Michael, small, medium, large, extra large, extra, extra large, largest smack dab in the middle. Don't discount the number of XXL people out there.

36:18It's true. But I still, I still, I still say large is average, which I guess that's the point he's making. Here's an anecdote about how rates are finally starting to have an impact. Christine Johnson, a marketing manager in Chicago, has been looking with her family of four for a house in the backyard. They wanted to put down 20 % on a million dollar home and take out a jumbo loan. but they could get a rate lower if they put 30 % down and got a conforming mortgage. And that would be like a more of a government backed loan. So they're, they're considering putting the extra cash down. And she says, depending on where the interest rates are, will dictate how, will dictate what we're doing.

36:50Like it's, it's certainly changing behaviors for people. And that, that sort of thing, like paying down a, a loan faster or, or trying to buy down a higher, like that's the kind of thing that eventually feeds into consumption. Even if it's on the edges these days. Slowly but surely, that seeps its way into the economy, right? Doug coming in with the knowledge drop on late payments. A late payment can drop your credit score by as much as 180 points. However, lenders typically report late payments to the credit bureau once you're 30 days past due. So I think I'm in the clear. So you're not delinquent yet?

37:23Not delinquent. I'm just balling. You're not showing up the next Fed's court. This blew my face. So getting back to the car stuff, car dealership guy, reminder that some people are paying mortgages for fancy cars. These are real active car leases in five states. So an Acura NSX, beautiful car, not quite a Honda Accord, but still nice. A 36 month lease,$5 ,600 a month. Wait for an Acura? An NSX. What's that? It's their sports car. It used to be like really nice. It was around in the 90s and they discontinued and brought it back. Very sweet looking ride. I'm not a car guy at all. Who's bragging about an Acura?

37:59That's all I'm saying. It's very nice. If you're going to do it, get a Ferrari or something. Don't get an Acura. That's all I'm saying. A Mercedes G63 AMG, 5 ,100. A Porsche 911, 5 ,100. A Land Rover, oh, a Range Rover, 4 ,400. Oh my God. I know that these are really rich people, but would you rather have a Porsche 911 or a vacation home on the ocean or something? This is like the difference here. It's unbelievable. It's so much money. I'm going to assume that these people, I'm going to assume they can afford it. You're not just like casually getting a$5 ,000 car. And honestly, what, if you have that much money, you know, what, what's literally, what's the difference.

38:43But that being said, it's just a staggering amount of money. So congrats to the rich people. That's, that's awesome. Oh, I had a thought that's like, I don't really believe, but I just wanted to talk it out loud. my train ticket was well let's say i don't do monthlies anymore let's see how much a monthly is i think my monthly train ticket used to be like 250 and that's used as many times as you want to get into the city let's just assume that a monthly ticket is 300 that's not a lot that's not an insignificant amount of money and so when prices used to be enough for a car payment when car prices used to start to go crazy, I think people were able to rationalize at least Long Island commuters or New York commuters.

39:28Wait, I'm not paying$300 for my train ticket anymore. So if I'm paying an extra 150 bucks for my car, it's still, you know, it's, I'm still, still in the black. I can see that. So if people are working from home, they probably also need a, uh, an automobile more too. Yeah. So I think that was easy to rationalize. Yeah. It is surprising to me. If you look at the used car prices are coming down, but they're still way, way elevated above 2019 levels. Another tweet from car dealership guy. Severe delinquency for auto loans is the highest since at least 2006. Yet the job market is strong. So basically no one has any idea what's going on.

40:02So this is a percent of asset. What's ABS? Asset-backed securities? Yeah. Auto-based-backed securities? Whatever, something like that. 60 days plus delinquent. And it's over 5%, which is in fact the highest it's been since at least 2009. Or at least in 2006, he says. not surprising. Could there be stress in this market without a broad read through to the economy? And I'm going to say yes. Just think about how insane car prices were. Do you think in the next downturn, whenever we get a recession, there's going to be like wonderful opportunities to buy like used cars and used boats from people that went way over their skis and, and spent too much money and just fire sale prices.

40:45I got to get rid of this stuff. Is that going to be a possibility? Yes. I think so too. I think there's a lot of people who probably overstepped their spending in recent years and are going to have to cut back and sell stuff. All right, Jeremy Schwartz has a take. All right, closing my week, pondering thoughts, which he was great on Compounded Friends last week with Eric Belchunas. That's a good one to combo there as far as ETF and market knowledge. Closing my week, pondering thoughts from an AI professor at Wharton who thinks productivity acceleration from AI will take 10-year bond yields up to 6%.

41:17Why would productivity gains take bond yields so much higher? Because growth is going to be so much higher? I guess so, yeah. Don't you think the hype cycles happen so much quicker these days too where after a while, like, the hype cycles happen and like, this is what we're going to have and this is what we're going to have and then we're going to have this and that stuff doesn't happen. It's kind of like, just kind of, you know, tap drumming your fingers and like waiting for the stuff that like, I'm not saying like the AI stuff is not going to happen, but it's kind of like the hype cycle digests this stuff so fast.

41:46Like this is what's really going to happen. And then you're going to have this and the technology is going to be so great. And then you have this waiting period until it actually happens. Or for some other stuff like crypto, it actually doesn't happen. I think everything moves faster. Yeah, we pull forward the hypes. Okay, here's another rates thing. If you would have told me this, even 12 months ago, hey, inflation is down to 3 % now. Inflation, it fell for 12 months and inflation is three. What do you think mortgage rates are going to be? There's not a single scenario whoever said, oh, mortgage rates are 7.5%.

42:14That would have broken my brain. It makes no sense, right? Mortgage rates are now at their highs, 7.5%. The last time, the 10-year was this level. The 10-year in October 2007 was 4.5%. You know what the mortgage rate was then? 30-year? Say that one more time. So the 10-year now is at the same level as it was in October 2007. What was the 30-year mortgage rate back then? Oh. 5.6. It was 6.25. Okay. for using your mortgage terms. So the spreads are still so much higher today, which again, I think the Fed kind of broke the mortgage market when they bought all those mortgage-backed bonds. Now that's a function of the Fed, right?

42:54Buying less bonds than they used to. That's why spreads are wider. I think that's part of it. And again, the fact that you're not getting any prepayments because people aren't refinancing now. I don't think the Fed ever thought through raising rates as fast as they did what the unintended consequences would be. Now, they could easily bring that spread down if they wanted to. Apparently, they don't want to. But just the 7.5 % mortgage rates with 3 % inflation. It's too high. It's way too high. And yeah, I don't know how the housing market doesn't. We talked a couple months ago, like, is the correction over?

43:26Like, if this stays higher for longer, like, housing prices have to fall again. They have to, right? I know people keep saying, well, it's easy to see because of the supply and demand. And that was, like, no one. I'm sorry. eventually this has to impact the housing price market. It has to, right? Maybe nothing has to happen, but I don't know. Well, there was, there was an article. I mean, yeah, listen, it's hard to make the argument that it wouldn't, right? Like, I don't want to say that it's not going to impact the housing market, but there was an article in Forbes showing that like 40 % of buyers get help from a family member.

43:57I had that in here. 38 % of recent home buyers under the age of 30 use a cash gift from a family member or inheritance to afford their down payment. I talked about inheritance as the compound recently. And this is the time where if I was a young person, I'd be hitting up mom and dad and being like, listen, I don't want it when I'm 50 or 60. Help me now with a down payment. I, I'm sure a lot of parents are receptive if you have the means. Yes. You'd have to be a couple of interesting facts that show like if housing prices fall, you know, there's plenty of cushion, uh, bank of America, 2.1 % of mortgage properties have negative equity, which is lower.

44:32It's down from 25 % in 2011, which is a crazy high number. Only 0.88 % of home equity is being used in HELOCs currently, the lowest level since 1988. It peaked at almost 7 % a few years ago. So there's plenty of room to maneuver here for people who own houses already. Yeah. Michael McDonough made this great chart, a monthly mortgage payment using the median existing home price, assuming that you put down 20%. This was$577 at its low in 2011. In 2019 or so, I'm just eyeballing this. It looked like it eclipsed$1 ,000. Again, this is a monthly mortgage payment. Now it's$2 ,300. He also broke down your first payment, how much goes to principal, how much goes to interest.

45:24And look at how much more goes to interest now than principal. This is why if you buy a home right now in hopes of flipping it in a couple years, it's like a starter home, you're going to build zero equity if prices don't go anywhere because the majority of your money is going to interest payments now. Right. Yeah, that's a great point. So pre-pandemic, it was like$1 ,000. It's$2 ,300 now. What? Yeah. That is insane. Okay. We got a ton of emails. Oh, damn it. I meant to throw some charts in here. Oh, well. We got a ton of emails. I'm not sure why this triggered such a response, but the KFC versus Taco Bell Pizza Hut thing, KFC is massive for whatever reason, massive.

46:14It's the largest fast food chain in China. Yeah, it sounds like Asia has a really big KFC presence. I don't know. I guess maybe just because it's so different, right, than most of the food they have there, that surprises me. Someone says somehow the colonel took over China better than Mickey D's did. All right. Great quarter, guys. This is a great chart from AlphaSense on who FTAV is. I'm sorry. Who's FTAV? Anyway, neither here nor there. The company call transcripts containing the phrase double-click. This is a bubble. Wait, what am I missing here? What does double click mean? Let's, uh, let me double click on that.

46:58Oh, geez. So if you did this for podcasts, it would be, let's unpack this a little bit. Yeah. That would be the podcast version of this chart. Now, you know, Josh actually said double click last week. I almost said something, but I didn't want to interrupt the flow. Okay. Interesting. I'm, I'm surprised. I didn't know that was even a phrase. Oh, really? Do you not, do you even conference call? I mean, I don't, I guess I must miss, I don't, I've never used that phrase in my life. Let's double click on this. That sounds like a very AOL 1990s thing to say. No, obviously you're not going to use it in your life.

47:30I mean, you're not going to tell your wife, let's double click on this. That'd be very weird. Try it. See what happens. All right. Carl Cantania tweeted from Macy's. We experienced an increased rate of delinquencies. The speed at which the increase occurred for us in the broader credit card industry since our first quarter earnings call was faster than planned. We are working closely with our bank or bank partner city, whatever, to mitigate rising bad debts. Okay. If you just read that and you took my face value, You'd say, whoa, uh-oh, uh-oh. We in trouble here? We in trouble here? Or maybe Macy's just stinks.

47:58I think their same-star sales were down. People are going to be blowing up their credit card scores or their credit scores. 8 % year over year or something like that. So Jeff Mackey had a great thread. Macy's is hard to take seriously. Hikes shrink allowance after physical count, which raises a lot of questions. Looking for a down 7 % comps takes credit card delinquencies up. This is what garbage retail accounting looks like. Anyway, he has a whole thread on it. So glad that we have people like that setting the record straight on some shenanigans. You're a bad company. Don't blame Macro. Don't blame Micro.

48:33Have you ever been to a department store in recent years? Yes. A depressing place. I can't believe that we ever actually had to shop like that before the internet. The last time I was in a department store, I called you. I don't know why. I get anxiety shopping. I'm not sure why. It's so much easier to shop online these days. like when I was younger, this is another like walking to Hill, walking up the Hill, uh, both ways to school kind of thing for me as a middle-aged person before school would start. My mom would take me to Macy's or what's called Marshall's or whatever back in the day. And by all my clothes, Macy's was not called Marshall's as a separate store.

49:06Marshall Fields. Oh, the original was Marshall Fields. You know that if you're a Midwest guy. Yeah. So now I shop on Instagram, by the way, what's this, what's this brand called? is this homage homage homage homage homage there's so many ways to say it yeah homage yes this is where i shot you were up to the hit you're up to the hills in instagram shirts i am i am out to the hilt uh speaking of instagram the other day oh we were talking about like oh uh alexa here's here's what i use alexa for alexa set a timer for 10 minutes when i'm cooking the kids It's white mac and cheese. That's what I use it for.

49:48That is not bad. Or Alexa, play, whatever. See, she's talking right now. I guess she's not connected to the internet. See, I don't even use it upstairs. Here's where voice, and I was talking about how Amazon burned billions of dollars on voice. Here's where voice excels. For the companies, for the companies. Because they listen in on you. Dude, I used to think that was nonsense. Like, oh, like 90 % of the time, and I do still believe this, like 90 % of the time when people think that they're being spied on, They just don't remember that like either they search for something or their spouse search for something and it's on their record.

50:24But we've got, we had like a fruit fly infestation out of nowhere. They just came hard and heavy. And I saw an ad pop up on my Instagram. And as I was telling my neighbor about it, and then it came back inside, I'm scrolling through. I'm like, what the, what? what so i asked robin i said hey did you buy any fruit fly deterrent did you search she's like no why so i told her anyway listen i bought it and it works so thank you for spying on me but nevertheless how would you explain that the funny thing is i don't even get mad about it anymore it's like eh whatever this is the price okay no i didn't they're listening okay yeah maybe they hear some embarrassing things but thank you for serving up that fruit fly thing or i guess an alternate explanation that is probably more reasonable is other people in my neighborhood are experiencing the same thing and are buying fruit fly stuff.

51:17So they served it up like on a local thing. Maybe Alexa detected the fruit flies in her house for you. You didn't use your electric zapper on them, your bug zapper. Oh, I've been zapping to high smithereens, but there's too many. The noise is so, the noise is so, yeah, it's a great noise. All right, let's get rid of this. What's this? Oh, this credit card thing. Okay. I got a credit card thing in the mail from city the other day. It's like city simplicity card, 0 % intro APR for 18 months, 21 % after that, but 18 months on balance transfers to or purchases for me. How are these credit cards able to still roll out 0 % credit cards?

51:52I look, there's no other. So my finance brain says, why wouldn't I put every single one of my purchases on this credit card and just put all the cash into five or 6 % T-bills for 18 months. And that's way higher than I could get from a credit card reward. I feel like there's got to be some fine print in here that you missed. 18 months, 0 % intro. I mean, I don't know what they, maybe they would give you a low limit on it or something, but that seems like. Oh yeah. Yeah. You know, that's probably what it is. Yeah. You probably have a thousand dollar limit. And I mean, there's no other, there's no other rewards you get with it, but that like in a high rate environment, that 0 % credit card.

52:26Like if you're thinking about doing a renovation or something, why wouldn't you use this kind of thing for a while, at least before tapping into your home equity or whatever it's, whatever you're thinking, right? That. Well, because I'm saying the cap is probably a thousand bucks. Okay. That maybe it has to be it. That's the only thing I can think of. Uh, Ben, I saw a chart from fidelity. Whoa, whoa, whoa. You can't post demographic charts. Sorry. Well, I said what I wanted to serve this up to be a good co-host and see if you had any thoughts. The percentage of population older than 55. It's 27 % in the United States, 30 % in Canada, 36 % in Germany, 39 % in Japan.

53:06Expected to rise. A lot of people keep talking about this like it's going to be the end of the world economically speaking and these places are in trouble. My default is we'll figure it out. Well, guess what? What about when 60 is the new 40? That's true. People are living longer. I think that and obviously the baby boomer population is a big part of it, but. I don't put a lot of credence in here, as you know. All right, we got an email from a listener in response to Ben's post about like not needing as much as you might think in retirement. Basically, people who have a lot of money don't end up spending it all.

53:37They rarely do or come close to it. So I did a follow-up piece on this, but the big takeaway that was pretty eye-opening is like, listen, I'm almost 60 years old. Everything that I wanted to do with money for the most part, I've done. Been there, done that. I took trips. I had a nice car. I bought a nice watch, whatever. That stuff doesn't move the emotional needle at 60 the same way it does when you're, say, 40. And so I think people severely underestimate that. Now, it's a balancing act. But I think in large part, this is why people just don't spend the way that they do when they're 70, 80. I don't know.

54:14It sounds obvious to me, but maybe it's not obvious. Your conclusion of, so spend some more when you're young and you can enjoy it or want to enjoy it? Because I agree. when you get to that age and you're kind of set in your ways, you probably, there's certain things you just don't want to spend money on anymore. And I actually heard from one frugal millionaire one time who told me like, he, he, he built a huge nest egg and he couldn't spend it and he didn't want to. And he's, he's giving some away, but he said, I gave myself certain rules. Like if I'm traveling, I, I'm always going to pay for first class.

54:41He's like, I cut back on so many other things, but if I'm traveling, I'm going to, so I think find little conveniences like that to treat yourself on, I think helps. But there was another one who said, this guy had, he emailed us. He said he has a$4 million net worth. He says, I see so many things about how much money you'll need in retirement. I have no idea how to answer the question. I don't expect to. So we keep saving and saving because digesting what life will be like without kids' expenses, limited to no mortgage and lots of free time. I just want and need more. If that results in my kids inheriting a lot of money, so be it.

55:08I just think the retirement discussion has so many variables. People don't like to admit they don't have a clue about. And that's where a lot of the concern around money comes from. So I think part of it is just there's so many unknowns out there and people just want the safety net and they, they, they can't get rid of the personality thing. I totally get that. But like, once you get to a certain age, you're like, I'm not going to spend that much money. I'd rather just, you know, leave it to my grandkids. True. And that's fine. If you want to like, yeah, give it away to charity or give it to your grandkids or whatever.

55:38But I think you should also like enjoy yourself a little. Like, I think it's okay. If you've spent your whole life working and, and, and slaving away and saving money over time, like find little ways to treat yourself. Don't you think that we, at least speaking for myself, I am at the age where I think I am, this is like peak money enjoyment for me. Yes. Where I'm able to do things with money that I wasn't when I was younger, that at some point will not be special because that's how human beings work, right? The things that were once a luxury become normal or just the excitement wears off. So I think I'm in like, I'm, I'm, I'm peaking right now and hopefully my peak lasts many years, but I know, I know it won't always be this way.

56:17That's also why I've been okay to pull forward some expenses that like that with my kids now, so I can enjoy this stuff with them now. Cause I know in the future they're going to be too busy or not want to hang out with me and my wife. And you're going to be, you're going to be older and grumpier. So, so I'm, I'm okay pulling forward some of those expenses and not thinking through like, Oh, if I would have just saved this money, what would it be worth in 30 years? That that's why being a parent has led me to pull forward a lot of that stuff. One more feedback thing. We got a lot of feedback on dishwashers too, regarding dishwashers.

56:44Oh, that's a great email. Do work without rinsing, but you can't use pods. I highly encourage watching this video. The host breaks down a dishwasher. So that's how it works. TLDR, dishwashers have a pre-wash mode before the wash. And when using a pod, there isn't soap for the pre-wash. You need soap in a made location. Wait, lost me. There's a wash before the wash? Pre-wash. So you need like the dish deterred. He says use powdered detergent. And the dishwasher works amazingly well. So those pods are, maybe it makes your life easier, but they don't work as good. So it drives me nuts. when Robin will put like something with sauce in the sink and she just refuses to rinse.

57:21How many times do I say, just please rinse? Because in the morning, I'm like scraping it off, you know? But do you ever get like the pods leave, like half the pods still in the thing when it's done? I have a pretty high hit rate, but I think I'm willing to go the extra mile and do this pre-rinse or whatever because it's annoying. I'd rather, listen, if I don't have to rinse dishes, this is fantastic. But in the past, you would pour the powder in, and now it's the pod. So maybe you got to go back to the pour stuff. Yeah. I'll try it out. I'll try it out. All right, recommendations. Ben, what do you got?

57:55All right, we watched The Whale on Paramount Plus because there's just nothing else to watch right now. And I think we're going to be in a bear market for content for a while. But there's everything to watch. Didn't we just talk about this? Yes, but I'm saying new stuff. Have you? All right, go ahead. So we watched The Whale with Brendan Fraser. And this is a Darren Arnofsky movie. and so this is a film and not a movie. This is the kind of movie they make because they want someone to get an Oscar. Like, and his performance was great, but I didn't say anything the whole movie and my wife at the end goes, I know you didn't like it.

58:24And I said, I think she liked it more than me. And I said, why do you say that? She said, you don't like sad movies. And this was a sad movie. And it's the kind of movie that is depressing and it gets more depressing and another sad thing happens and it's kind of like, come on. Seriously? I love sad movies. Really? Yeah. I'm a big emotion guy. And I like this movie a lot. You liked The Whale? I did. When did you watch it? On an airplane. You like, okay. I just, I can't wrap my head around. It was a well done movie. I just, not for me. Okay. I'm surprised. I was going to say you should not watch this.

59:01No, I liked it. Okay. Your movie taste is just, it's like a roll of the dice for me. Like I can't ever tell something you're going to like. You know what I spent the last week watching? and like four times Robert's like, are you really doing this? I went down the garbage fish rabbit hole. I was talking about, they were talking about the podcast. So I watched like, I didn't watch Open Water or 47 Meters, but I watched 47 Meters, the Uncaged by accident. This is a sequel. I thought I was watching the original. I watched the sequel. I watched The Reef. I watched the one with Blake Lively. The Blake Lively one's not bad.

59:35What was that called? The Reef. I don't know. They're all blended together. That was a good one. Okay. I've never heard of any of these movies, But... The Shallows. Okay, yeah, that was it. Yeah. I can't believe you liked The Whale. I did like The Whale. Although I don't... I feel like I don't love Darren Aronofsky movies. What else did he do? I did like... He did the Black Swan one. Yeah, I liked that one. Oh, film. See, it says films. Yeah, he's a film guy. Oh, The Wrestler. Great movie. Requiem for a Dream. Mother, I did not watch. I have no interest in that. I didn't like Pie. How about that?

1:00:07Actually, I never saw that one. All right, what do you got? I watched... two things on top of all the fish movies. The Johnny Man Zeldach was pretty good. I mean, it was quick, but, and he had a quote there that I believe very strongly is true. He said, when I got everything that I wanted, it was the most empty I felt inside. And I know people refuse to believe this, but this seems to be like a common thing. If you are very driven for money, fame, whatever, whatever your purposes that you're obsessed with. Once you get it, like the chase is the fun part. Yeah. And then once you get what you want, it's not everything that you expected.

1:00:49It's like, it's like a massive, massive psychological blow. I know you're not a big college sports guy, but he was an amazing college quarterback. And I'm not surprised he was a bust in the NFL. I don't know why I watched this one, but I watched the Johnny Depp, Amber Heard doc. What's that on? Netflix. Okay. I was saying this to Josh. You know, it's incredible about Netflix. you don't, the shows that are top 10, they just pop up. It's not like, you don't like see advertisements. There's no marketing. The advertising is on the platform itself. That's it. It's genius. They just, they advertise on the platform and it works.

1:01:22So I watched it. They should probably add more top 10 lists. Like they have the top 10 movies and TV shows up. But if they added more top 10 lists, it would drive more. If they could drive more stuff if they wanted, I feel like. So the biggest takeaway from, for me from watching that is just how vile social media is. And there's a strong opinion. Basically, everyone took Johnny Depp's side because he's famous, I guess, and other factors. Which is kind of surprising because he's not a great guy by all accounts. No. And there were parts where she admittedly did not come across well. But it was so one-sided.

1:01:57So, so one-sided. And the social media, just people spending their entire lives following this and making money off. It was just really gross to watch. And not great. You remember my in my Don't Fall For It I wrote about Hunter S. Thompson and Johnny Depp and how Johnny Depp blew through all his money and he was spending three million dollars a month on wine. Wow. Pretty good. Wow. Not bad. Guy likes to party. Okay. See he would drive the Acura NSX. AnimalSquaretsPod at gmail.com We'll see you next time.

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