Apple's Smart Glasses, OpenAI Is Worth $500B, & The Government Shutdown

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0:46Visit a Marshalls store near you or shop online at marshalls.com. Public.com presents the Rich Habits Radar, a new Friday episode of the Rich Habits Podcast, where every Friday morning we're coming at you with the biggest headlines impacting you and your money. My name is Austin Hankwitz and I'm joined by my co-host Robert Croak. The three things sitting at the top of our rich habits radar this week include OpenAI, becoming the world's most valuable privately held company, the economic impact of the government shutdown that we're currently experiencing, and Apple pausing their Vision Pro development to now instead focus on smart glasses to rival Meta's new Ray-Ban AI spectacles.

1:32And be sure to stick around for a little bit to hear more about the Buffett indicator, how it's predicting a stock market crash. Or is it? We don't think it is, but we'll get into that later. So Robert, let's dig into our first story. That's right. OpenAI's valuation reaches$500 billion, topping Elon Musk's SpaceX. OpenAI just hit a massive milestone, becoming the world's most valuable privately held company. The company's valuation now stands at$500 billion just three years after it launched its flagship product, ChatGPT, surpassing SpaceX, which clocks in currently at around$400 billion. So that's crazy.

2:11In three years, they could get to that massive of a valuation. Well, what's weird is the AI company is only expecting to generate$13 billion of revenue this year and a net loss in the billions of dollars, according to the Wall Street Journal. So while OpenAI has had the explosive growth when it comes to consumers, right, 700 million weekly active users with ChatGPT and Sora and things like that, they've also taken on some insane financial commitments. We all saw what happened with their Oracle sort of agreement there, agreeing to purchase$300 billion of computing power over five years. And then also they signed a$10 billion chip building plan with Broadcom.

2:51So to help pay for all this infrastructure, you know, they're looking around saying, hey, how do we get more money, which is where NVIDIA comes in. I think it was last week's episode. We talked about NVIDIA investing up to$100 billion into OpenAI, an arrangement that some people on the Internet, including myself sometimes, essentially say just like recycles money. Hey, we'll give you this and then you sell it back to us and we'll give it back to you. It's a little something here. But, Robert, why don't you break down what this means for our listeners and their money? For investors, this is a clear signal.

3:22AI is no longer just an in-the-future fad like everyone was talking about two, three years ago. It's truly becoming a trillion-dollar industry that's reshaping markets, enterprise strategy, and even government policy. Watching OpenAI's partnerships, product launches like ChatGPT5, and its ongoing negotiations with Microsoft give you a front-row seat to where the AI sector is really heading next. Now, here's what's funny, right? While the company has not yet turned a profit, it is fueling this global AI infrastructure boom, locking in these major deals with Oracle, SK Henix, and others, and keeping top talent from jumping ship.

4:01Robert, we all remember, what was it there, a$300-something million signing bonus that Mark Zuckerberg was trying to pay to have someone come over from OpenAI to their meta labs. This is really, really interesting for investors at the moment, hitting a$500 billion valuation. Yeah. And like you mentioned, is it a shell game? Is it a Ponzi scheme? Hey, I'm going to sell you all these chips, but I'm going to give you the money to buy them and then you're going to buy them from me. It's a little crazy out there, but I am still super bullish on where AI is going. all of the sectors that it's disrupting.

4:35And just overall, what we've been talking about for a couple of years now is how it's going to make everything better, faster, and more profitable because efficiencies will come with all of this in the AI sector. Well, we will be talking about efficiencies a little bit later, so y 'all stay tuned. But our next headline that we just need to cover is this government shutdown happening right now. So the U.S. government officially shut down at midnight on October 1st, marking the third shutdown under President Trump and the first in almost seven years. And this happened after Democrats and Republicans failed to reach a deal on a short-term spending plan.

5:13Shutdowns can squeeze the economy in different ways, from missed paychecks for hundreds of thousands of federal employees to the delayed release of crucial economic indicators. So shutting down the government comes at a delicate time for the U.S. labor market right now, which spent the summer stuck in a stall pattern because of slow hiring. Now, without government data personnel on hand, economists and investors are not expected to get the next big indicator, which is taking place today, the September jobs report, right? Today is Friday, October 3rd. September jobs report's supposed to come out.

5:48And we're filming this on Thursday, but I don't think it's actually coming out. So interesting to say the least. Speaking of job reports, though, Robert, the ADP private payroll report came out earlier this week. I think it was Wednesday when that one came out. And the U.S. labor market is not doing too hot. September private payrolls shrank by 32 ,000 net jobs. So net-net, 32 ,000 jobs went away in September. And they revised August from a net gain of 54 ,000 jobs down to a net loss of 3 ,000 jobs. I don't know the specific stat, Robert. I could be wrong on this one, but I'm pretty sure this is the first back-to-back months of job loss in these private payrolls in like three or four years.

6:33Well, there are definitely cracks that we're seeing in all of these indicators, like the jobs report, CPI, and all these other indicators. But I don't think anyone needs to stress out, freak out just yet. You know, because these shutdowns reduce government spending and programs, and it depresses activity as a result. And Goldman Sachs estimates that the shutdown would shave about 15 basis points off the gross GDP of the United States per week. And Deutsche Bank puts this figure at more like 20 basis points. But if you read the Rich Habits newsletter yesterday, you'll know that the government shutdowns really tend to be nothing burgers for the stock market.

7:12During the government shutdown, it's a coin flip as to what the S &P 500 will do. Green or red, we don't know. It's green right now, which is great. However, over the subsequent year, the S &P 500 is in the green 86 % of the time with an average return of 12.7%. So here's why it matters for you and your money. About 750 ,000 federal employees are expected to be furloughed at a cost of about$400 million per day in lost pay. Services like passport processing, drug approvals, consensus data collection, and certain economic reporting, like we mentioned, the jobs report, right? That's all going to be paused.

7:50But that means investors and businesses are also going to face delays in economic data, regulatory approvals, government contracts, Things that are driving stocks up and down, which is why Robert said it's a coin flip. Depending on how long things are shut down for, the markets could be up, could be down, whatever. So like Robert said, in the short term, it's a coin flip. Depending on how long we're shut down for, the headline news around it, the markets could go up, down, left, right, and in circles. It's hard to have a sort of prediction as to where things are going to go. Yeah, and if you look back at the last long shutdown, I think it was 36 days, and that was under Trump in 2018, I believe.

8:28But most of these shutdowns, we don't know how long they're going to be. They could be five days, six days, eight days, 12 days. Who knows? But the bottom line is this. Government shutdowns are more than political theater. They can have real measurable effects on the economy, markets, and anyone who interacts with federal services. For investors, staying aware of these disruptions is a key to navigating short-term volatility, but they ultimately are usually nothing burgers for investors. So please don't have knee-jerk reactions. Sit tight. This is all part of the market cycle that's happening right now, and we will keep you aware of what we think and what's really going on.

9:07Now, Robert, let's round off with our third headline that is here on our Rich Habits Radar episode. Apple is pausing their Vision Pro to pursue smart glasses. Y 'all remember those crazy gadgets people were wearing on their heads in the big battery pack with the Vision Pro and it's going to be this thing? Now they're putting the pause button on it. So Apple has hit pause on the planned overhaul to their Vision Pro headset to redirect resources toward a more urgent effort, developing smart glasses that can rival metas. So the company has been preparing a cheaper, lighter variant of this massive headset that they came out with.

9:45I think it was in 23 or 24. The codename was N100, and that was going to be released in 2027. But Apple announced internally just last week that they're moving staff away from this N100 product. And now they're going to say, no, no, no. Y 'all need to focus on working on glasses instead. Apple, Apple, Apple. I don't get it. the company is working on at least two types of smart glasses. The first one is dubbed the N50, which will pair with an iPhone and lack its own display. Apple aims to unveil this model as soon as next year, ahead of a release in 2027. Apple is also working on a version with a display, something that could challenge the just released Meta Ray-Ban display.

10:31The Apple version has been planned for 2028, but the company is now looking to accelerate development. Apple's glasses will rely heavily on voice interaction and artificial intelligence, two areas where it hasn't excelled yet. Amazon and Google are also racing to launch a range of AI-powered hardware. We saw ChatGPT's OpenAI partnered with a former designer from Apple, John Ive. He designed the MacBook, the iPhone, the iPod, right? He's a wonderful hardware designer. They had a cool partnership announced I think it was during the summertime. So a lot of big tech right now is racing to figure out what we can do between AI, hardware, and how can we combine the two of them.

11:13So what does this mean for your money? It seems like AI software was only the beginning. Now the race is embodied AI, the hardware. So think glasses, watches, pins, and other devices that allow us all to interact with AI in a seamless way. In my opinion, Meta has knocked this one out of the park. Their glasses with the new screen, they're insanely cool. And if you ask me, Meta is eating Apple's AI lunch right now. So in my opinion, Apple is still in this AI funk where they've fallen behind. They don't know where to go next. You know, they spent all this money on the EV sector over a billion dollars a year.

11:54Then they scrapped it. now they're scrapping the Vision Pro glasses and starting over from the goggles going to the glasses. I just think they're really struggling. And I'm glad we're covering it because I just don't think it's a good place to put my money right now. And they really need to figure out the direction of the company. Yeah, they are in a tricky situation. I couldn't agree more. And I agree with what you said earlier. I really do think that Meta is eating Apple's AI lunch. emphasis on AI lunch, right? You know, they've got their new, I think it was the edits app or something where you can like, you know, do videos on your AI stuff with Meta and then they got Llama and they've got the Meta Smart Glasses.

12:34Now they also just, I just saw too, Robert, Meta is doing some stuff with advertising. And so they figured out that if you want to create better ads for your company and you want to run ads better, you just like prompt it and it will create the ad for you. kind of like what Icon did. So now I guess Icon's out of business. But I guess what I'm saying is I totally agree. Meta is eating the AI lunch of Apple right now. And Apple's sort of in this situation where they got to just figure it out. They're trying to do the hardware stuff. They thought the Vision Pro. They thought the Apple Intelligence.

13:04I haven't used Apple Intelligence once on my phone. I got this little widget where I just swipe over on my phone and chat GPT pops up. I talk to it instead of Siri. It's night and day. And they're even getting a lot of pushback on the new phone release. If you think about that, I have seen nothing positive about it. All of these problems and people complaining about the quality of the phone case, the issues with everything. So I don't know. My opinion is like yours, Austin. I think Apple is not a good one for me right now, and that's why I'm staying away. And if you look at MetaStock from the start here of 2023, the stock price is up 503%.

13:40You look at Apple stock from the start of 2023, which is really, again, when this AI stuff came out. They're up only 98%. So that's a 6x on your money with Meta and only a 2x on your money with Apple. So that's what's so cool about the stock market, Robert. You can have these opinions. Oh, I don't think Apple's doing well. Oh, I think Meta's doing great or whatever. And you can put your money where your mouth is. That's what's so cool about being able to invest and find these nuggets and really try and build our portfolios around theses that we care about. So Robert, let's now jump into our rapid fire.

14:14I've got three headlines that I brought to the table here. And as a quick reminder for y 'all hanging out at home every week, Robert and I find three headlines that we think are interesting to us. We just come at like a little show and tell action and we let you guys know what's going on. So the headlines that I'm bringing, the first one is the Buffett indicator and how it thinks that we're going to be in this market bubble or whatever. The second one are rate cuts. Talk about that. And the third one is the new Sora app that is going to come for TikTok and Instagram Reels and YouTube Shorts. It's this new thing that OpenAI is doing.

14:47So let's walk through some of these, Robert. So Warren Buffett's indicator says that the markets are ready to pop. Here's why I think it's wrong. And I'm not over here trying to say I'm smarter than Buffett. But I do say that the Buffett indicator has not really been adjusted for globalization and what's happened over the last, let's call it like two or three decades with the S &P 500. So the Buffett indicator for y 'all that don't know what I'm talking about is simply dividing the total U.S. stock market capitalization by U.S. GDP. So if it sits around 100%, right, a one-to-one division there, the stock market, in the eyes of Warren Buffett, is fairly valued.

15:23Right now, we sit at 200%, which is sounding alarm bells for a lot of these value investors. Now, the reason why I think this is not that big of a deal is because 40 % of the S &P 500 revenue every year comes from abroad, right? That is trillions of dollars in revenue that's not being accounted for in the U.S. GDP measurements and are instead going to China, Europe, and other emerging markets. So the Buffett indicator is cool. Keep an eye on it, right? But I'm not going to be running for the hills because it's sitting at 200 % right now. The next thing on my radar is rate cuts. Robert, you know, we just got a rate cut in September and now markets are pricing in up to two, maybe three more rate cuts this year.

16:02So according to the CME FedWatch tool, investors are now pricing in between three and four rate cuts to take place in 2025. Federal Reserve is now laser focused on keeping unemployment as low as possible and not focused on this rising inflation narrative anymore, which means by cutting interest rates, they're going to encourage borrowing and spending, hopefully catalyzing businesses to invest and hire, ultimately cushioning the job market. We saw that the ADP private payrolls was in the negative in September and got revised down in August. So yeah, I think rate cuts are a good idea. Now the last thing on my radar is the Sora 2 coming out from OpenAI.

16:40It's their next generation video audio generation model. It's been rolled out with a companion social app, new social media app called Sora, S-O-R-A. Go download it. I don't have an invite code. If you have one, DM me on Instagram so I can get invited. But it's explicitly designed to compete with short form video platforms like TikTok, Reels, and YouTube Shorts. So you don't need a camera, you don't need editing skills, or even you have to show your face. The barrier now is you just prompt it, right? So before you had to shoot a video and upload it, right? Maybe You had to figure it out. But now with Sora, you generate and remix using AI as that primary tool.

17:21You type in, let me see Robert Croak chug a Red Bull while standing on the side of a cliff in Malibu. And Sora is going to pull it up together. And then Robert can post that in this new social media app. It's going to be fun, man. It's going to be really fun. It is going to be incredibly fun to watch the next two years of advancement with AI. So I love your coverage of Sora. just because things are changing so quickly and companies that we use right now today will likely be gone in two years if they don't adapt quickly because all of this AI and software and everything is moving so quickly. So I want to get into my rapid fire.

17:58I've got a couple that I think are really interesting and good for everyone to keep an eye on. And my number one is FICO stock surged 20 % in yesterday's trading session after it announced Wednesday that they were integrating a direct licensing program that gives resellers the option to calculate and redistribute FICO scores directly to the customers. So what does this mean? This shift will drive transparency and lower costs tremendously for mortgage lenders and brokers and anyone in need of these customer FICO scores in the real estate industry. And it's not great news for the other reporting agencies like Equifax, Experian, and TransUnion.

18:39So keep an eye because their stocks are way down. FICO stock is way up and this is going to be really great to make things easier on people in the real estate industry Because they won't have to pay as much to get these FICO scores My second radar point is the u.s. Government is taking a five percent stake in lithium america's corp This will help the u.s. Have less dependency on china for lithium resources for ev batteries renewable energy iPhones, cell phones, all of the above. And I think this is a really smart play, another really smart play, for the U.S. manufacturing in the coming years to get that dominance back because we just have too much dependency on some of these precious metals and things like lithium to China, and we're trying to beat them in this big, big race in AI and future technology.

19:31I think this is really smart for the U.S. government because Lithium Americas Corp has some really big mines across the country, and I think it's a really good move. And my last point today, we've been talking about Robinhood a lot, and Robinhood's CEO says that tokenization is a freight train and will eat the financial system. We've been talking about this for quite some time, how tokenization is happening right before our eyes, And Robinhood currently has over 200 digital offerings for U.S. company shares and is also dabbling in the tokenization world with private companies like SpaceX and OpenAI.

20:10So keep your eye on Robinhood's stock and the tokenization sector as a whole. It is definitely changing the future of investing fields like real estate, fine art, and even collectibles. You hear the term RWAs. That just means tokenization in real world assets, which I think is important for everyone that's investing in crypto and some of these sectors to keep an eye on. Yeah, so I want to go back to the FICO one real quick, because essentially what that means to how I understand it is FICO was selling these scores to the trans unions, the Equifax, the Experian, and then the mortgage lenders would have to go through those three major bureaus to get the FICO scores.

20:52But now FICO is selling their scores directly to those resellers, the mortgage, the credit, like all that, like the people that are trying to sell debt. Essentially, they need to know a FICO score. Now they're going to get it straight from FICO and no longer from the three credit bureaus. Yeah. And adding transparency, I think, is even more important than cost, which the cost will go down. But I love this from a mortgage space because you'll have more transparency on what your FICO score really is and what affects it. So I think this is huge news that I've not seen anyone mentioned up to date.

21:26All right. Well, speaking of businesses, we've got a cool Q &A section here in these episodes where we get questions from you all as it relates to small business ownership, side hustles, earning more money. If you are someone out there who has a question about entrepreneurship or any sort of variant of earning more money, ask us a question. These episodes are dedicated to answering questions like that. someone like Robert who's had hundreds of millions of entrepreneurial revenue generated with his business. I'm an entrepreneur as well. So we're over here just trying to give you guys as much value as we can with these entrepreneur Q &A episodes.

22:01So first question comes from Cheyenne L. She says, Hi, Robert in Austin. Thank you so much for the valuable content you provide every week. Thanks to you. I'm a 29 year old debt free and just recently finished building my base. Let's go Cheyenne. Cheyenne says, I'd like to ask about raising funds for a small business slash side hustle. I want to start a small business that requires$25 ,000 in equipment to get going. Right now, I have a four-month emergency fund in my$100 ,000 base, but no other liquid funds. My question is, how should I get the$25 ,000 that I need to launch the business? Should I take the next year to save up, or should I take out a loan?

22:39If I go the savings route, is it wise to pause retirement investments in order to save up for 12 months? I can't get the equipment I need on a payment plan, but the credit score is hovering around 800. So if I took out a loan, it would be at the best interest rates out there. Once I get the equipment, I'm planning to operate the business primarily on weekends, keeping my nine to five and project being able to make a thousand per month in the slow season and 7 ,000 in the summer and fall. What the heck is this business? I love that. If you can make 7 ,000 off of a 25 ,000 investment, I love that.

23:10It's probably a food truck. Yeah, that's probably true. Okay. So my take is you've got$100 ,000 invested. You are saving and investing already here. If you wanted to go borrow the$25 ,000 from a local credit union at our call it 5 % or 6 % interest rate, maybe 7%, but hopefully not anything more than that, go for it. Go get that equipment. Go start the side hustle. Get your$1 ,000 per month slow season up to 7 ,000 per month in the fall. Tactically speaking, there's a couple ways you could do this. One is to go to a local credit union and get a business loan, a personal loan, line of credit, something of that nature at the 5%, 6%, 7 % range.

23:50You probably also could, and I wouldn't suggest this, but depending on how much you have invested, you could also take a loan out against your portfolio. Those are at very low interest rates right now, close to about 4%. But again, if your portfolio goes down, you get a margin call and they sell, it's a lot of headaches. So I probably would not go down that road. I'd go to a credit union that you know and trust and are a customer of and get the best interest rate possible. Robert, what's your take? Yeah, I like those. Those are really good options. And there are so many different grant programs.

24:19You should look up in your area, in your zip code, what type of community grants are out there, what kind of localized grants are out there. There are so many programs you'd be shocked for small business owners on top of just SBA loans. You might even be able to go to like Chase and open a new business account. And as long as you have the right coding, you have your proper operating agreement, you have everything in order. You have your EIN number. There's a lot of times you can go get a no doc loan from Chase for twenty five to fifty thousand dollars. So those are some other options you can get as well because you have a good credit score.

24:57That helps everything in being able to get funding, especially because you only need twenty five thousand dollars. Yeah, I like how this is only$25 ,000. And if you stretch that out over like four or five, six years, the monthly payment is super manageable. And the only reason why I'm like actually encouraging that, because I normally don't tell people to start businesses with debt, I just think it's a bad idea, is because you have your base built and you are investing and you're doing everything right, right? This business blows up and you are, you know, bad news bears. Well, one, you could sell the equipment, hopefully for close to what you bought it for.