AAR33 - Times Are Changing: Here's How to Get Ahead

22:11Evan Raidt:So try to look at it from a longer perspective too, not just like, oh my goodness, this first year is going to be terrible. just tighten the belt a little bit and then it's going to get easier as you go along.

22:22Andrew Sather:Yeah, I mean we could honestly have an entire episode just covering thinking long term like that but that applies to so many things. Completely, completely agreed. But the next item to move on to here is stagnant wages. Again, many of these I think are going to be very obvious and intuitive to a lot of people but that doesn't mean that we always know the details behind it. We definitely always don't know the ways to get out of it or crawl out from under it. But some stats behind or ideas behind it is that the 90th percentile of income, so essentially the top 10 % of income earners, rose 46 % since from the 80s to 2023, 46%, whereas the 10th percentile, so the lowest 10th percent of earners, only increased 17%.

23:08Andrew Sather:So again, we're seeing just the vast majority of people, because the vast majority of people are going to be in those lower percentiles, just realistically, those earners are increasing their income far, far less over the long run than people who are already earning much, much more. And so the average person out there who's trying to buy a home, who's just trying to buy food for their family, essentially, is increasing their income far, far more slowly than the people who are already wealthy are. And this is obviously while goods and homes are also continuing to skyrocket in costs. It's not that they're saying stagnant by any means.

23:43Andrew Sather:They're increasing like crazy because the large companies who those wealthy people are involved in are increasing their costs because they increase revenue to increase the wealth of those wealthy people as well. And so this is essentially more and more wealth siphoning into large corporations and already wealthy individuals. So, Andrew, what can people do to counteract that horrible, horrible, scary cycle?

24:05Evan Raidt:well i have like a out of the box idea which is on brand for me um but i love your list so can we go through that and then i'll throw in just a random thought save the best for last

24:16Andrew Sather:so my first my first idea here is to is to switch jobs and i know that that's always easier said than done i'm not trying to say well just go switch jobs and double your income that's not my goal here but but for a lot of people out there especially people who are working in in some kind of a field that has taken experience to get into, simply switching jobs will sort of reset that year of experience to the amount that you earn ratio for you. You start into a job and, okay, you've got 10 years of experience, we'll pay you this much. And then you work for a few years and you're only getting maybe a 2 % raise along the way.

24:51Andrew Sather:You go to somebody else and say, now I've got 13 years of experience and they're going to pay you a good chunk more. That is how it works for a lot of fields out there. Not every field, but definitely always being on the hunt for other job opportunities, building good relationships with people at other companies or people who leave your company for other companies can always be a really, really powerful way to increase your income over time. And also learning new skills and certifications along the way, especially when you can demonstrate some kind of tangible effect on your work. It doesn't have to be a number, but has some kind of clear effect on your effectiveness at work can honestly just give you a straight up raise at the company you currently work at because now they're seeing you as almost a new improved employee.

25:34Andrew Sather:But again, if they want to kind of just see it as, well, you're still the same person who worked here a month ago, then go look at some other opportunities and they will see you as a next level up person that you are because of that additional experience and learnings. Another idea that's definitely not always as fun but can still be very, very powerful is picking up some kind of a side gig. And I have an entire episode covering this. AAR07, so episode 7 of the Editing Rate series, covers side gigs in depth, a ton of ideas with an expert in the side gig field. Essentially, he's had a ton of side gigs and seen a ton of success in the long run with those side gigs.

26:13Andrew Sather:Very, very powerful idea, but obviously more of a time commitment. But if you have the time and interest to fit into that, a side gig can be 100 % life-changing. And the last one is to invest and grow your savings. it's obvious that kind of goes along with everything but the fact is if you're not earning as much as you want to earn and your your wages are stagnant like they have been for the vast majority of people for quite a long time whatever you are able to set aside if that wealth is growing and not just stagnating alongside your income then you are going to put yourself in a far far better situation in the long run and there are a ton of stories not to again see situations with rose colored glasses but there are a ton of situations out there of people learning earning relatively low levels of income and not having a very high savings rate, but what they are saving, they're investing well or they're investing consistently and never giving up on it.

27:04Andrew Sather:And 30 years down the line, they're a lot more wealthy than a lot of people out there earning triple, quadruple their income to start. But Andrew, what is your God-tier idea? Or your random thought? We'll look at it.

27:17Evan Raidt:I guess I got to zip my mouth because then it's not going to... There's going to be a lot of disappointed folks out here. So I've got young children, so maybe I'm a little bit biased on just the things I hear in my head. But one of the sayings when you're raising kids is it takes a village. And I think one of the benefits to the internet is you're able to learn literally anything you want. And actually I've noticed the content has gotten so good on the internet that you're able to shortcut so much pain because people have taken the time and are passionate and have taught you how to edit a video or how to do random housework, fix your dishwasher, whatever it is.

28:11Evan Raidt:You can find a way. And so this individuality, pick up your bootstraps is something that has been a benefit to some of the changing times. However, I think one of the downsides to that is we get, maybe this is just me, but we get timid of asking people around us in our close-knit circles for help or like, oh, I don't want to talk about money because that's in this box and and we're just on the friends box kind of thing. But it takes a village, right? You start talking about some of the things you're trying to do, and you never know. Maybe one of your friends has another coworker who's really good at this skill, and then look at that.

28:55Evan Raidt:They're able to introduce you to somebody else who has an internship or has a part-time job, and now you can double up on some of those things. So maybe just thinking about it a little bit differently and not being afraid to kind of shake things up, if you're really serious about it, I think sometimes leveraging the village around you, and even if it's small, or trying to maybe even meet new people so you can get more exposed to more people, more ideas, more ways to make money. Because I love how you focus so much on the income side of the equation, which is, I think, top-tier level thinking. There's so much people saying, cut, cut, cut.

29:41Evan Raidt:But really, things really open up when you get from, let's say,$50 ,000 to$55 ,000 or even$55 ,000 to$65 ,000. It's amazing how that snowballs as you get the income side up. So don't be so discouraged when you look at your costs and expenses because if you can get that income side up, it's going to fix a lot of things. and it feels great too.

30:05Andrew Sather:Yeah, I completely agree with all that. And you're definitely right. We tend to focus a lot on this podcast on the individual side of things because that's frankly the actionable, the 100 % guaranteed actionable side of things. You can go sit down after listening to this episode and start a budget. You can guarantee do that. Can we guarantee that you have a friend that can help you out or help you get your budget in line or help you figure out your finances or something? We can't. But a lot of people have a lot of people around them and often some of those people are going to be very very helpful in one way or another and it's not because you're trying to use them or take from them or anything that like you said it takes a village everything many things out there take a village take a lot more effort and know how than one individual is often going to have so don't be afraid to to talk to people around you and be transparent about things and you'll be surprised how transparent back people will be to

30:55Evan Raidt:you uh but i'll put you on the spot do you have an example of that in your life anyone who you'd love to anonymously shout out that helped you take a step ahead, get you one step closer to some of your goals and career or finances or anything like that?

31:12Andrew Sather:I will say that, yeah, it was actually the, I don't think I've actually mentioned this before specifically, but it was the man who helped me originally get into investing, showed me what investing was. I bought a share of GameStop. I've mentioned that before, but we were also very, very transparent about our finances about what exactly we were earning, what exactly we were, you know, I was paying on rent, what he was paying on his mortgage, just what our overall financial situations were in hard numbers, hard percentages, all that sort of stuff, being completely transparent about it. And there was never any judgment.

31:47Andrew Sather:There was never any, you know, sharing it to people we don't want to share it with or anything like that. It was just a completely, oh, okay, yeah, that gives me a better idea of where you stand or where you want to stand, you know? Oh, you're earning, X amount and you want to be at X amount and actually know what those numbers are, okay, well, let me give you some guidance of maybe you need to look down this path. Maybe you need to go get these certifications. And I did try to head down that path. I did get some of those certifications and it did lead me to where I wanted to get. And being very transparent with him, I think, was a very big part of that instead of if I just said, hey, you know, I want to increase my income some.

32:21Andrew Sather:And he's like, okay, what are you earning? Well, I don't really feel comfortable sharing that. Would probably have stunted a lot more of the conversation a lot earlier. And I've had definitely had other situations, other opportunities with speaking to coworkers where I was very transparent about my situation. And like I mentioned before, they were a lot more transparent back than you expect people to be. People are very cagey about things until they realize that it's a safe space and you can share it back because I've already shared it to you. If you're the one to take a bit of that leap, people will really open up and say, oh, okay, this is a different kind of conversation than I'm used to and I like it.

32:55Andrew Sather:And then they will share a ton back to you and they can have some really good learnings for you and you can have some really good learnings for them. I love that. Yeah, that's amazing.

33:04Evan Raidt:It takes two to tango, right?

33:07Andrew Sather:Yeah, it takes two to tango or entire village to tango if it's a breakdance party or something. But we're actually going to take just a very quick break from the regularly scheduled podcast to discuss an opportunity to hear from you guys i've mentioned this on one previous episode before as well and i know that andrew and dave have mentioned on their side as well but january only of 2026 we're doing a survey for listeners to give feedback on the podcast and every single entry gets entered into a raffle for a 500 amazon gift card and the first hundred entries into the survey get a free ifb mug and coaster and trust me as always you know how obsessed with coffee i am so this is this is a big deal for me and i also want to preface this because I can imagine if I was on the listener side of this hearing this right now I would think well I'm hearing this when it's scheduled it's coming it's coming out after and I'm not the first person to listen to this and this isn't the first time it's being mentioned so I'm not even going to submit to it and trust me I do that all the time when I hear stuff like this opportunities like this come up on podcasts or YouTube videos or something but don't don't assume that there are most people out there listening to this think the exact same thing or they're too busy to do it or something like that.

34:17Andrew Sather:So it is 100 % worth it still entering into it and still giving us that feedback, regardless of whether you feel like you're too late or not. Plus, with the survey, every entry is getting entered into the raffle. It doesn't matter what time you submit to it. It only takes you a couple minutes at most, and you can not only get entered into that raffle, but this is all coming from a very genuine place from us wanting to learn what the listeners want, don't want, is helpful, isn't helpful. this is a very genuine bid of improvement for the podcast. This isn't just some promo to get cloud or something like that.

34:52Andrew Sather:This is genuinely an improvement opportunity. And if you're interested in completing the survey, which we would love for you to do, head over to einvestingforbeginners.com slash podsurvey. That's one word, podsurvey. The link is also available in the show notes as always as well. In terms of conditions. Beautiful. Beautiful. beautiful beautiful moving on to the third item here we have more and more and more and more and more and more debt we're talking around 1.2 trillion dollars in credit card debt is is what we're currently up to or at least that's the latest figure and that figure is not slowing down by any rate at all and you may think okay well you know there's inflation over time so the dollar is valued less so who cares if that number is going up not only is the actual solid debt rate itself increasing at a crazy rate, but also rates of delinquency, so people who failed to repay a debt by their given due date, is also increasing on pretty much all debt.

35:49Andrew Sather:Anything from car loans to mortgages, personal loans, credit cards, all that sort of stuff, delinquency rates are increasing like crazy. A ton of people out there see their credit card as their emergency fund, whether they need to or not. For some people, that's an absolute necessity to live. For some people, that's just essentially financial ignorance, not realizing that that's not the right way to go about things and mentioning that the debt to income ratio is climbing at times past a hundred percent past that at certain times just to clarify what that means the the debt to income ratio is the the amount of debt that somebody has versus their their annual income is or sorry their debt payments that they need to make versus their their monthly income is climbing past 100 you you literally cannot pay off past 100 debt to income ratio so andrew what are some i think this It's probably the most dire one that we're going to go through.

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37:49Evan Raidt:Whatnot.com slash sell. We all know how important it is to make smart decisions in our business, our investments, our finances. Getting the best for less matters. Yet how many of us have looked at our life insurance policies lately? You have to ask yourself, is your coverage enough given all the economic uncertainty? Or are you overpaying? Do you have any new health conditions that you might need to be covered for? I've been putting off looking at my life insurance for too long, but now that's going to change because I'm going to select quote. For over 40 years, select quote has been one of the most trusted brokers in insurance, helping more than 2 million Americans.

38:23Evan Raidt:No medical exam, no problem. Select quote partners with providers offering same-day coverage, up to$2 million without needing to visit your doctor. Have high blood pressure, diabetes, or heart disease? SelectQuote has partners with policies designed for many pre-existing health conditions, so you get the protection you deserve. Get the right life insurance for you for less and save more than 50 % at selectquote.com slash beginners. Save more than 50 % on term life insurance at selectquote.com slash beginners today to get started. That's selectquote.com slash beginners. so I would start by saying recognize it's an issue don't guilt shame yourself for having fallen into this because if we look around at how things and the times have changed almost it seems like every single company has tried to button up and make pretty this idea of debt you know oh we'll give you this percent off on discount and you know you'll get these rewards and all this and it's like that's actually kind of manipulative

39:24Andrew Sather:or that couch is just two bucks a month and you can get a couch.

39:29Evan Raidt:You know, you can get Chipotle now and you can split it into four payments, two bucks a paycheck or something.

39:36Andrew Sather:People have to split an entire meal into debt. I mean, what kind of dystopian BS is that?

39:42Evan Raidt:I know, I know. Education, we need to educate ourselves. And then we need to I think, and I'd love for you to speak on this, but I think we need to hate debt with a fear of passion. I think we need to change the way we look at debt. It's not pretty. It's not cute. It's disgusting, and it is dangerous. So hate debt.

40:06Andrew Sather:Yeah, I agree with that. Any debt that is not essentially 100 % necessary. So if it's not a debt for, you know, most people cannot afford a car cash. That's just a fact. Most people cannot afford a house cash. That's just a fact. And so those kind of debts, I think, are very reasonable for someone to carry. But really, any debt outside of that, assuming, again, it's not, well, I literally can't afford to buy this lunch, so I need to do this. That's one situation, and there are a lot more other issues leading into that. But if your situation isn't like that, you should not be going into debt for pretty much anything else.

40:43Andrew Sather:And I think that one way, I was actually speaking to a coworker about this yesterday. I think that one way that debt has been made pretty is it's all in the news about how much debt the ultra-wealthy take on. And they do take on a lot of debt. They use debt as a very powerful tool for themselves. And that is completely valid. That's not a lie. That's not clickbait or anything. The reason that I think this is a problem and leads people down a bad path is they assume, well, they're taking on debt and it's helping them financially, so it'll do the same for me. they're going into debt to buy companies to buy additional manufacturing capabilities to buy new machines or replace the machines at their manufacturing facility to hire on a ton more people than they would maybe be able to in cash or something they use their debt on things that are going to cash flow for them like crazy in the near or far future when we the average person is going into debt a couch is not going to earn you very much money and and chipotle isn't going to earn you very much money.

41:40Andrew Sather:And so we go into debt for things that are more or less materialistic, not to put it down too much, but we're going into debt for things that aren't going to earn us any money. And so those two versions of debt are very, very different. And I think that after seeing it in the news so much, it's so publicized that the ultra wealthy like Elon Musk and And shoot, what's the Amazon guy called? I'm blanking right now. Oh, Bezos. Yeah. It's so in the news right now about Elon Musk and Jeff Bezos of how much wealth they have, but also how much debt they take on that we kind of conflate that with ourselves and the kind of debt that we take on.

42:20Andrew Sather:But those are apples in order. You cannot compare the two of those. And so any debt that the average person could take on, I pretty much agree with Andrew. just see that as absolutely horrible and something that you should avoid at absolutely all costs because it's going to provide next to no benefit for you. And you just need to see it as a 100 % last resort. And then if we talk about the debt that most people have accessible to them, maybe outside of a mortgage or a car payment, is credit card debt. So, so many people out there have credit cards. I'm not actually sure what the exact percentage is, but the vast majority of people out there have some form of credit card, some number of credit cards.

42:57Andrew Sather:and that needs to be simply seen as a tool, not any extra money. I don't give a crap what your credit limit is. You want to get it as high as possible so your utilization percentage is as low as you can get it, but that is simply a payment tool. That is almost a terminal to pay things off. You use it to get the protection of a credit card, get the points, get the benefits of a credit card, but you pay that off as soon as possible. set a routine, set auto pay, whatever you need to set, that you never carry a single dollar from month to month, from statement to statement. That should just be a steady bill that you see as paying and nothing else.

43:34Andrew Sather:And the last mention is kind of a mindset shift of seeing debts like a car or home, the most common debt that a lot of people have, as a bill. And have that mindset when you're signing up. Andrew mentioned this a bit before, of people will get into finding a situation that they can handle up front, but they don't look at the long-term side of things. And it is scary the number of people that I personally met that will see signing up for a new car or even a used car just going into debt for a vehicle as, well, I can afford that down payment, or maybe it's a 0 % down payment or something like that.

44:09Andrew Sather:And oh, that monthly payment, it's a$700 payment. I've got like$2 ,000 in my savings. I could easily afford that. That's no problem. But they just don't have the mindset of seeing that as you're going to have to pay that every single month going forwards. And that needs to be fit into your budget. I'm not saying you need to sit down and have a dollar for dollar perfect budget or anything, but that amount of money needs to be taken out of your paycheck or out of your income every single month. No questions asked. And people just don't tend to see it that way. And so I think seeing debt as a guaranteed bill and looking at it as I'm going to have to pay this for X amount of years in the future, is a very different way than a lot of people look at it.

44:49Andrew Sather:It's much, much more short-term very often.

44:52Evan Raidt:What are your thoughts on paying debt early? Do you see that as another tool?

44:58Andrew Sather:I do see paying debt early as a huge tool. Number one, it's a great protector of your mental health for a lot of people, knowing that you have debt. Opening an account and seeing thousands, tens of thousands, hundreds of thousands of dollars in debt looming there can be a huge drain on your emotional health. And then also, that's kind of another thing that came up in the conversation as well yesterday, is that, again, when people treat debt as a potentially positive thing, like when they see these ultra-wealthy, they say, okay, well, you know, they're probably getting charged 10%, just turn out a number, getting charged 10 % on the debt that they're on.

45:37Andrew Sather:You don't realize that they're earning 80%, over 100 % on whatever that investment was. And so they're easily able to outpace whatever repayment percentage they have on their debt. Again, for the average person, you go into debt on something, you have no feasible way to go earn 50 % on the money that you invest instead. And so the only feasible way I see waiting to pay off debt as being advantageous is if it's maybe lower than 4 % or something, which very little debt is going to be. And the reason I say that is because at that rate, you could throw the money in bonds or in a high-ehold savings account or something and actually easily guaranteed outpace whatever the interest rate is on the debt.

46:22Andrew Sather:But the vast majority of debt is going to be higher than that. And so the vast majority of debt, you have no guaranteed or even close to guaranteed way to out-earn that interest rate. And so you might as well just pay it off as quickly as you can within reason and focus on that instead of trying to invest elsewhere. and assume that you're going to outpace it like crazy. Yeah. Would you agree with that? 100%. Yeah. I don't really have anything to add. Yeah, just take that advice seriously, I would say. Yeah. Beautiful. Now, moving on to the last one, and hopefully the simplest and the one that we definitely have the most content to back up is just that savings rates have plummeted.

47:01Andrew Sather:And I actually didn't know the figures behind this until I looked it up, and I was kind of surprised. but early 90s or earlier than the 90s, people were saving 8 % to 10 % of their income. Now, obviously, that's not the entire past. I'm not saying that that covers the entirety of history or anything, but at that point, at this time that a lot of us see as quite prosperous, people were saving 8 % to 10 % of their income, and that's a solid place to be. Today, the average is around 4%. And 4%, though definitely not zero and infinitely better than zero, is not very much of your income to be able to save.

47:32Andrew Sather:And for most people, that is not going to be nearly enough to get you to retirement or to afford a house or even cars or anything. That rate of savings is simply just going to keep you afloat, save you from emergencies here and there. And that's all it's really going to do you. It's not going to build up long-term wealth. And also the mindset of not only is this half of the money you're putting in up front or putting in each month or whatever on a recurring basis, but that is also far, far less compounding. And so that difference of 50 % or however you want to see it, that gap is going to widen and widen and widen over the long run as things compound or as the savings that you don't have would also essentially be compounding.

48:14Andrew Sather:And so you're going to lose out on more and more wealth over the long run. And for me, the main biggest, arguably only way to change this other than just going and increasing your income and saving all of that additional income that you earn is going out and budgeting. And this is the one time, you know, one place that I would say maybe cutting back in some places will be helpful. But also a lot of the times when people sit down and do a budget, they will be able to cut back on things that they didn't even really need because maybe they didn't realize that they were even spending on or they didn't realize how much it was.

48:45Andrew Sather:And so often, if you're going from not having a budget to having a budget, you can find places to cut back that isn't going to be, I'm eating ramen five times a week or something. It can be realistic, reasonable ways to take down your spending without restricting yourself too much.

49:04Evan Raidt:yeah i love that so let's say you're somebody who budget is a b word and it just makes you want to barf how can how can somebody take the first step towards getting over that and maybe leveraging some of the great things that are around us to help make that easier yeah stuff like for example just

49:23Andrew Sather:to shout out us real quick we definitely have plenty of content towards budgeting if you just search investor for beginners podcast budgeting you'll definitely find it we also have a really great beginners tool online that is a budgeting outline that I also have an entire episode detailing how to fill out, how I've filled it out, how I've used it personally and how it's personally helped me. And you can find that at einvestingforbeginners.com slash budget. It's a very simple, just like Google sheet or Excel outline that you just fill out a few lines and it's going to get you to a really good place.

49:52Andrew Sather:And that's a very simple place to start. And the other part of it is just seeking education elsewhere as well. Seeking how other people do their budgets, how they handle their finances. And I always tend to look for people who are as transparent as possible within reason. People who aren't just saying, oh, you need to cut out your Starbucks and that'll change everything. Any people that are that vague or that putting you down or something, I don't think are going to give the most valuable content. But if you find other people out there who cover how to slightly cut down on spending, slightly increase your income slightly shift some things over to savings that weren't there otherwise making all of those small changes is going to add up and like we mentioned before those you know two three four percent or whatever that change is going to compound over time and that'll make a huge difference in the long run so i would say even if you sit down and start working on a budget and it doesn't feel like it's going to do very much you feel like you're just making minor changes trust me that even those minor changes in the long run are going to make a massive difference and that often those changes that you make up front are going to be a lot less painful and difficult to make than you think they are.

51:02Andrew Sather:Do it. Please, please, please do it. It's the first step for everybody to make. Well, that's going to conclude today's episode. I really appreciate everybody who tuned in. As always, please feel free to comment below or email me at evan at theinvestingforbeginners.com with any questions or comments you have or how you feel about any of these points today. And remember, financial freedom is built one smart move at a time. Keep it simple, keep it steady, and at any rate, I'll see you next time. Peace.

51:27Evan Raidt:The information contained is for general information and educational purposes only.

51:32Andrew Sather:It is not intended for a substitute for legal, commercial, and or financial advice from a licensed professional. Review our full disclaimer at einvestingforbeginners.com.

52:10Evan Raidt:We'll see you next time. This deal for$149 or less is like your phone at 1%. It's about to power down. Limited time offer for new clients on federal returns. Participating locations only. Terms at jacksonnewitt.com slash 149.