Money Monday with Brian James

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We're talking about fraud, waste abuse.

CHET can't often for the latest. Fifty five krc D Talk Station eight oh five fifty five r c E Talk Station. Very Happy Monday to you. I always enjoy this.

Time of the hour, eight o'clock on Mondays because we get to hear from all our financials Brian James and deal with money Monday, Brian James, Welcome back to the morning show, and Happy Monday to you, sir. Hope you had a wonderful weekend.

Good morning, Brian Thomas, back at you, and hope you're doing well as well.

I am doing great, other than the general frustrations of the political landscape and all the other topics got to deal with every day, most of which I have no control over. But before we get into the topics you have, I just wanted to know because I remember Nathan Backrack and I think, oh, I know, you know. They created what they called, I believe, the greased Palm Index, and they tracked the lobbying dollars the more the lobbying money was spent, and they put it into a particular fund.

Yeah, that's a great observation, and yeah, I'm sure there is. That's not something I pay attention to directly, but I can guarantee you that there is somebody out there that has built a pile of investments around any idea that anyone might might assume is getting a lot of money thrown at it.

So there are all kinds.

Of investment products that focus on industries and things like that.

And as you mentioned, yeah, I'm not sure whatever happened to it either.

Maybe they don't pay attention as much anymore now that they're retired. Yeah, yes, I do recall the idea behind let's go follow who gets money thrown at them and in those different areas, And yeah, of course, anytime there is spending, there's going to be an equal and opposite reaction in the investment underlying value.

No doubt about it. All right, let us move over to the topics you actually present it to me. Appreciate you indulging me on that. Though first quarter GDP growth looks like, according to CNBC, on track for negative growth.

Well go figure.

When you add a bunch of costs in things in terms of tariffs, and we start to get the talking heads and the projections coming out, we're starting to see the possibility of negative growth predictions. So Atlanta FED is now predicting that we're going to see the GDP shrink by about one and a half percent here in the first quarter of twenty twenty five. They're kind of known for this. This particular tracker is always leans toward the volatility side, and it usually becomes a little clearer later

Well, you know, I have to observe. When people's extra money, to the extent they have any disposable income, is being sucked up by increased property taxes and increase energy bills, you're not going to be participating in the economy and keeping our consumption economy going.

Yeah, that's true. It all plays together. All the puzzle piece has got to fit one way or another. So there's a lot of impacts here coming from a bunch of different directions, just all the data we have now, and we have a new administration that is shaping data and looking at it differently. They even saw a reference to the possibility that they may split out government spending from.

The GDP calculation. Yeah, purportedly to.

Get shine a little a brighter light on where the money comes from and where it all goes. But that's going to be yet another indicator we all have to pay attention to when people are still struggling to understand the ones that come out every day.

Now, I would love to know that figure. I'm surprised that hasn't been done yet.

I think it gets done, it just doesn't get broadcast. We talk about GDP every quarter. I mean, there are websites out there. All this stuff is freely available to anybody who wants to dig it out, but the media doesn't pick up on that. We like our simple bullet points and our soundbites and things, and that's always been what is the GDP as opposed to all the different derivatives of the GDP.

So, yeah, those numbers are out there.

It would be good to see how much of our GDP purportedly is grown by actual little government spending, so that we know what the impact is going to be when we choose not to spend that way anymore.

Well, I know, but I mean you think about like the green industrial complex as I called it earlier, that is basically fully supported by the government and government spending. I mean a lot of these companies wouldn't even exist but for the government and fusion of our taxpayer dollars.

Yeah, there's a lot of there's a lot of that out there.

Matter of fact, some of your largest companies, your your sexiest stories of the last decade have come with a lot of government investment and our you know, our President in chief, Elon Musk, is no stranger to that. A lot of the dollars that went into Tesla came from the same came from those same green budgets as well as heaving those that SpaceX has taken a lot of dollars from the federal government because they do a lot of things that NASA used to do.

Yeah, but more efficiently.

That's true. That's true.

So there is a negative thing, but it's something we've never paid attention to before.

To your point earlier, Yeah, those astronauts are still stranded up in space too. I must observe on that or not. Not a comical note. I feel sorry for those folks, but if you can't do it yourself, you've got to rely on outsourced companies and maybe do it more efficiently. Anyhow, Now, in terms of the first quarter being on track for negative GDP growth, is that an indication that the Fed might lower interest rates?

Could be but not the other thing the FED has to worry about is we want to keep the economy running, but we also have to worry about inflation.

That's really the Fed's job, those two things.

Let's make sure everybody has a job, and let's make sure inflation is under control when you really boil it down.

That's the goal.

So when we're talking about inflation being a factor in all this in the slowdown, that does not indicate that we're going to see further rate cuts anytime soon. And I would say we're I don't think that has changed in the past several weeks because inflation really is it's very sensitive right now. It's not going to take much of an impact of anything, as we've already seen to drive prices back up where we were a few years ago. So I don't think we're at a point yet where

Well other than the real estate market, because if you lower the interest rates and it has an impact on the current real estate interest rate, how else is the interest rate from the FED? How does that impact inflation? Generally speaking?

Well, any cost of anything has to do with what does it cost to produce that good or service it and to begin with So if there's a company out there that has borrowed money to pay its employees, to build its factories, to do whatever it needs to do, then that is a factor that's that will ultimately trickle through. Everything trickles down to the consumers. So you have the producers and the consumers. The consumer's got to pay the bills, including all the taxes. No different than if your property

All right, fair enough, Well, I take an early break here because we want to talk about food prices and inflation, which I think has to tie in with the next topic we'll do in the next segment, which is expect restaurant bankruptcies. So we've seen quite a few of those lates. So let's pause a little bit early. We'll bring back Brian James and talk about those. After I mentioned my dear friends at twenty two three Route forty to Mason eleven, I got a special email from Wendy. She's the owner

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Eight eighteen fifty five KRCD talk station. A very happy Monday too. You go here from the since Anava coming up for our KRC Care segment at eight forty In the meantime, all were financials Brian James offering his insights on money Monday, and sadly something I'm painfully aware of. I do go grocery shopping every week with my wife, and food prices have gone up precipitously, and most notably, I just look at the price of beef quite often.

Doug mc millan's not in a good mood this morning.

So he's the CEO of Walmart, and he's highlighting that strain that's coming up on American consumers due to this. So yeah, we're not shocked at this. I even paying attention to the headlines at all. It's been hard to avoid, whichever side of it you're on, it's been hard to

So we're seeing impact on things.

Like beef and eggs, non alcoholic beverages, sugar and sweets. Sugar is up almost six and a half percent. We're seeing non alcoholic beverages up about four percent, a beef and veal we're looking at to be up about three percent.

Now, these are all facts.

And when we can find these anywhere, I think it's more impactful at least worth talking about.

Brian to what should somebody do about this?

This question comes up all the time and in the course of my day as a financial planner, people want to know, is it time for me to worry about this?

What should I be doing about this? Inflation I keep hearing about.

My question is always okay, what were you spending on all of these items before? Then we can figure out what the impact is going to be. And most of the time, and this is a necessarily bad thing, most of the time people have no idea because we've not kept budgets.

We don't know where we are.

So that's a great first step is to understand where your money's going in the first place, so that you can model out some impact and figure out whether you really need to worry about this or just be mad at the cash register.

Well, I guess part of me. I want to react by saying, Okay, I'm glad sugary beverages are more expensive, and I'm glad people are buying fewer of them because that's a discretionary item. You don't need mountain dew in your life, right, I mean, I'm kind of been on a sugar tear of late. But in the final analysis, if you need nutrition to stay alive, you need certain calories. Hopefully your calories are coming from something that's good for you.

Yeah, and we will see that impact. We've seen that happen before when we've had price bikes. People do tend to change their behavior, and I personally, I don't believe this is part of any engineered a change of behavior by any administration. It's just I think we've got an administration that truly just cares about's let's make this country as successful from a commercial and business standpoint as it possibly can, and they're making decisions to move us in

I agree with you.

If people bought less sugar and less and less stuff like that, we're probably in a better spot. But the fact that we're seeing inflation increasing on those indicates that and maybe rising the companies. Companies may be buying more. It's not necessarily people buying bags of sugar. It could be companies buying it more at a commodity level and because they feel like that's where they can make their profits.

Fair enough. On that, I got a kick out of his observation that you see people are buying smaller pack sizes than they used to, but with shrinkflation, they were doing that anyway, even if they wanted the family sized bag. The family size bag now only contains twelve ounces where it used to contain eighteen ounces or something along those lines. I just thought that was an interesting comment, given that we all lived through shrinkflation.

Right, Yeah, and it is.

That's another cycle that we see too, when it's harder for companies to make money off of off of the original sizes and things that they were making. One way, and they know they can't push the button and sell more. Another way can be to make it cheaper to sell the same amount by putting smaller projects inside smaller products, inside little packages that they won't notice.

I remember a commercial about that, the guy that saved the company one hundred million dollars a year by taking like one olive out of the olive jar, you know.

Yeah, and airlines make their take the tomatoes off of their off of their rubber chicken sandwiches and saved billions of dollars. Yeah, yeah, it does add up. It does does make sense in the long run. Every little bit counts, all right. Pivoting over to restaurants, and I've observed this also. Carry out has gotten really expensive compared to not that long ago. Even it's an Asian restaurant, and I don't think there was a single entree that was less than

But it was really good.

Oh, I think you're got to say good buffalo sauce with butter in it, which is, you know, good in the long run, but not so much of the schwartz.

So it had nothing to do with the wait staff.

Now this is off the shelf and Kroger I still get it with Yes, they out of trouble, right, James, Well you know this this could be I mean, I understand the COVID they required to borrow money to stay open, and they got you know, debt service on that. I mean, I note the article says this meant companies accumulated debt they had to pay back over time plus interest. Someone wrote us government right next to that.

Oh right, that was me. But there's more competition out there, and there are better products. Going back to Hooters. If you can go someplace down the street that has superior chicken wings, then you're going to go there, right, And that's.

That's what I was hinting at before with these these are older chains. Restaurants do run their courses, and there are some icons that never go away. But if you just look over time, there aren't any restaurants that have been aside from these you know, ridiculously long family owned type stories that have been in existence for one hundred hundred and fifty years. It generally doesn't work that way.

Yeah, and the quality can go down as well, frishes and we end up losing our frishes locally. All right, let's pause. We'll bring Brien James back for one more talk about four oh one k balances. Which direction are they going? Stick around you? Right back?

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He spend two seventy five continues slow from Coleraine Avenue to Wreck before you get to Winton, the rec's end the media and so westbound slow's just a bit to get by. Southbound seventy five, break lights through Lachland, northbound seventy five and extra ten minutes out of Erlanger.

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Eight twenty eight come to an eight twenty nine at fifty five KERCD talk station, A very happy Monday to you, Frien Thomas with more segment with money Monday's Brian James moving over to four oh one K balance is something he knows all about since he's an ancial planner. That's what it is all about. Hopefully everybody's investments are going well. Which direction are we going in four oh one K balances because the market seems to have been doing pretty well late now they've.

Been going up and yeah, that's it shouldn't be too big of a shock.

The market is the market usually goes up and not down.

And we've seen, you know, the market hit an all time high in December and it's touched that twice once in January once in February, So the average balance for a four toh one K retirement accounts about one hundred and thirty one thousand dollars. That's the second highest average we've had on Revered on record, So that's a good thing.

But that does happen when the economy is going okay.

There's a lot of scary headlines out there, but underneath that are a lot of people who are doing okay and making it through. And actually contributions are up too, So we've seen a we've seen a large amount of people putting more and more four oh one K dollars in and that's represented in the fact that we're seeing these balances go up. So when the economy is doing

Well, and I don't know how you Reckon saw more people putting away more money in a four h one K plan. When we talked about the other topics, which is inflation is soaking up a lot more dollars at least in terms of the grocery prices.

Yeah, fair point, But that's what I was hinting at before.

There are a lot of people out there who were doing just fine.

We're in an economy, Brian, where we were in a country where we worry about the profit margin of our public traded companies. There are a lot of people who get hurt by that. There are a lot of people who make a lot of money off of it. I'm not here towag in on whether that's good or bad. But if you're somebody who's got the ability to put away more money than you spend every month, then you've been in a great environment really for the last several years.

Allowing it to grow and not relying on it.

The average contribution nowadays is about fourteen percent, which really that's an eye popping number, and I want to read a little more into that to see where that came from. But that's what's being highlighted here in the article.

Well, as every good financial planner, I'll tell you should at least put something in it for no other reason then to make sure you get if you have one, the employer match. I mean, that's just sound financial planning right there.

Yeah, absolutely, that's free money that's sitting there on the table waiting for you to take it.

Now.

Of course, you have to make sure that you can pay your bills. None of this matters if you can't pay your bills. If you're running up credit card bills in for the sake of building up your four O one K, in the end, that's going to balance out and kind of work against you.

So it all comes down to budgeting.

And as I've been teaching my kids and their friends as it has come up, you have got to find your way to get yourself in a situation where you can spend less than you make. Do that for thirty five forty years and you'll be just fine, regardless of what the headline. And that's true for everybody as of right now as well.

My wife and I've been trying to do that since when we first met. I think it's in my West Side genetics to spend less than we make. Just searching everywhere whenever you can save some money, even if it's just a small amount, all that adds up over the long haul. I mean, it really is. I remember just struggling with the reality when we were living in Chicago. You know, we had a budget for our house, and I've talked about the interest rates and you know, the

Got a similar story there too, related to housing. So we moved into a house in the early two thousands, and it would have been you know, normally probably your second home, and you know, then you kind of graduated one little more space, want a bigger house or whatever. But we got lucky and landed in a neighborhood with a bunch of absolutely fun, wonderful people, and none of us have ever left.

So that occurred to me.

As I've done financial plans for my clients. A lot of times, I'm seeing mortgages where they bought a house in their late forties early fifties, presumably for that reason, got bored, wanted different change of scenery.

I didn't do that, and.

I'm realizing now that our house is almost paid off and I'm not going to have that mortgage hanging over my head. And that's the reason. It had nothing to do with a conscious decision. It just worked out, But it had to do with the fact that we simply didn't have the desire to move because of the people that were around us. That not everybody has that fortunate situation. But there is a very very mathematical impact to not having a mortgage for the rest of your retirement.

Amen into that, and Acto I pointed out earlier in my psychologically speaking, not having a mortgage was always just critical to me because I can't stand the concept of owing money. I just I just can't stand it. I mean, there have been periods on my time in my life, Well, you had to have a credit card balance. It was just required, you know, you had necessities and you didn't have the money in the bank, and it just loomed

Yeah, and that's when we do financial plans, it all worth well, we'll build into the plan a quote unquote spending goal of getting that debt paid down. Mortgages aren't necessarily the scariest thing. It's not the worst, not the end of the world if you have one. But if you're about to retire with thirty thousand dollars in credit card debt, then we need to sit down and have a and have a little bit of a come to Jesus conversation, because that kind of thing is going to

Well, that's the beauty of having a financial planner. It's like having a responsible adult telling you what to do. And what not to do right. It's your You're the job is to be like a surrogate parent.

That's absolutely true.

As a financial I'm a human too. As a financial planner, I make the same mistakes. I just know exactly the impact of the bad choice I'm about to make sometimes.

Brian James, appreciate your assistance every week with these issues and bringing things to our attention and providing some sound financial advice. I'll look forward to another edition of Monday Monday next Monday. Have a great week, my friend.

Thank you, sir. Have a good week.

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