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Fifty five krs The talk station.
Eight o five. Here a fifty five PRCD talk station. Happy Monday Time to learn stuff and things about money. It is money Monday Time. Every Monday at eight o five. Can talk to Brian James all Worth financially. He's a financial planner and follows these matters very closely because his job depends upon it. Welcome back, Brian James. Happy Monday to you.
Happy Monday, right back at you. And it is just a great time of year to get out there and enjoy that sunny, gray weather, isn't it.
Oh jeez, yeah, I'm at least we're kind of get some sunnies guys today. It's you know, when it's been so cold, you look outside and the sun's barren dawn and you think, oh, it looks great out there, and you walk out and you're hit with this arctic blast.
That's just it's so deceiving and depressed, I know, I know. Anyway, moving over to I see the across the board, all the futures are down, and some pretty significantly A couple points down s and p five hunter Nasdaq's down three point seventy four futures trading, and any hint or understanding as to why that might be the case currently.
Brian James, Well, I think we're sort of getting to the getting past the honeymoon stage of we've elected a business friendly administration. We've had a little bump from that over the past several weeks, and now we're just getting to a point where realizing that it's not going to be as easy as electing somebody and then just moves
sailing from there on out. We've got some other things we'll talk about here this morning that are going to be coming out just a little bit on the less than happy side as far as business goes.
I started out the show this morning, or at least at some point, talking about this S and P Global Flash Purchasing Managers Index, which reports that the optimism among business people is really really high and they're expecting factory output and hiring it. It actually has risen over the past six months, and really a dramatic increase going all the way back to May of twenty twenty two. So I kind of thought that might be parla aid into an increase in the stock market.
But anyway, Yeah, well, and I think when things like that happen, the headline and the article you're reading, the market reacted to that a week or two ago, so it's just now getting written up by journalists, and so the market is now looking at the pendulum swings back and forth. So then market now is looking at I think things that might be not quite so rosy out.
There, fair enough, and pivoting over to Donald Trump's tax plan. I saw the tax Foundation dot org article. Some of it's good and some of it not so good. Most notably they don't like the idea of these tariffs and suggests that we'll really negate any of the benefits of keeping the tax the current tax rates in place.
Yeah.
So we've got an administration, of course, that wants to stamp its put its own stamp on things, and that as we've seen before, that relates to the relationships we have with other countries and the trade agreements that we have in place. And unfortunately, we've been through it before,
so we've seen what the impact can be. But I think the the main concern right now is that there's nothing One of the big things that Trump ran on was the price of eggs and getting things down and making things easier for American families and businesses and so on and so forth. But right alongside that, he was just as vociferous about raising tariffs on companies that we do business with to affect different things he wants from each of these relationships. And there's really nothing about a
tariff at all that will help lower costs. You're simply increasing the cost of supply and you're tacking money onto the front end of things, and that has to trickle down to ultimately to the consumer. So that's what the market is now starting to see in terms of the impact coming down the stream.
Well, yeah, I mean to the extent they don't capitulate to what Donald Trump wants. And I use the Colombians. Yes, the other day, their president Gustavo Patris said no, you will not repatriate my fellow Colombians in these flights and denied access to the country to these military flights, only to turn around after Trump threatened him with sanctions, So
twenty five or sense sanctions he threatened. He said, they're going to go up to fifty percent if you don't hurry up and start allowing these folks and he did change his tunes almost immediately yesterday.
Yeah, and it was pretty quiet too. He didn't really say exactly what had changed his mind. It was just all of a sudden, the problem went away and there was really nothing standing in the way. So my best guess is that someone internally got to him and said, if we stick on this path, ultimately, you're going to piss off all the voters because you've just literally raised the cost of them getting out of bed and trying to live their lives on a daily basis. So that's
just Columbia. We have yet to get to the big ones. Yeah, but you know, I guess, I guess we can declare that that went the United States way.
So far, so so far well, and I think that's an illustration of maybe they need us more than we need them.
I don't know what in that particular case. Yeah, that's why I said, that's Columbia. We'll see what happens with our other larger trading partner.
Yeah, no doubt. It's most notably China.
Correct.
Yeah, well, we've been down that path before, and there's more going on with China than just a trade and balance. It's the way they do business that we're really trying to adjust our relationship with them, and so we're playing our own games with him. That's playing out as we see in the headlines every single day with who's going to buy TikTok. And first of all, I am not an international business law expert. I still am fuzzy on the idea that the United States can.
Force TikTok to sell.
I believe it's still TikTok's option to simply not deal in the United States, except that's going to cost an enormous amount of money.
No, it is absolutely their prerogative. And you know, honestly, I think the way the law was written, in the way it was passed, Donald Trump doesn't even have the authority to extend the band because there is no active buyer in play. That was a contingency for the ninety day. He had a ninety day extension provision in that bill. So if there was someone sitting across the table from TikTok and negotiating at the time the band went into effect,
then he could hold it off for up to ninety days. Well, there isn't, and there wasn't yet He's still held it up. So I mean, if they went into court and challenge his order stopping the ban from kicking in. I think whoever challenged it would win because there's no active buyer right.
At some point it has to be it has to go down the way. It's written in black and white on a piece of paper, and there there is no basis for how. We can't see how this is going to come out yet, but it's not matching up with the way the law was written. So but that's just an example of what we're going to the kind of battles we're going to see over the next four years as this kind of global business order sorts itself out over time.
What's your take on the exempting overtime pay from income taxes. I think I saw that in the rundown and I'm just scratching my head, you know, because he wanted to exempt taxes or rather tips from taxation, and as well not exempt he's also exempt social Security benefits from income taxes. You know, honestly, Brian James, I'm one of these people. There shouldn't be any exemptions or anything. There shouldn't be any carve outs or provisions in the tax co that
manipulate our behavior. I'm a flat tax guy, just pay a percent and call it a day, and don't fill out these massive forms and have to deal with a fifteen gazillion page income tax code. That's part of the problem of doing business. I mean, the tax laws are almost impossible to navigate.
Well, I'm getting a message here that the into It people would like to have a word with Brian Thomas about his opinions he's sharing on air because they really like their turbo tax product that keeps people plenty confused and stuck to the idea that things have to be
more complicated. Now, now I agree with you. I mean, I'm a simplification person, and at this point things have gotten so far beyond the ability to kind of control and predict I would be very willing to try an entirely new tax system just to see if that can simplify things for people and make it more fair. Now you asked my opinion of the idea of taxing this and not taxing that. Those different headlines that are coming
down the plant. First off, those have to get approved, right, these are these are still political promises at this point, and I would say that my biggest frustration with this, while the benefits to people who are receiving those things are obvious. It doesn't do any good at all if we don't offset with the spending side of things. Yeah, we're simply reducing the amount of income we've got to pay our bills. That's not going to help in the
long run. That's simply a campaign promise. So I really want to see an adult version of how this is all going to come out.
Hey man.
And look, someone wrote in big capital letters spending because the conclusion from the tax Foundation article was that they estimate their proposals would increase the ten year budget deficit by three trillion dollars. And lord knows, we don't need a bigger budget deficit. And three trillion dollars is a lot of money last time I checked. And anything we can do to stop that from happening should be done.
And that's where spending comes in. We can really cut spending and curb that sizeable deficit.
Right. One of the other impacts we just got done talking about it is remember, tariffs are going to have an effect here too. Tariffs and taxation are all somewhat hand in hand when we're talking about making sure this country has the ability to stay afloat. From a finance perspective, tariffs are going to hurt are going to hurt people
at the bottom of the line here. And if we're again, if we're simply running up more and more debt because we don't we want to be able to have the headline that we're not taxing groups who are struggling, then we have absolutely got to find a way to not spend those taxes in the first place. I haven't heard a single peep yet about the things we are not going to do anymore to kind of save on those different items.
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Fifty five KRC dot com.
When the Wildfires eight nineteen fifty five KRC detalk station. It's Monday Money Monday. That's what we're doing right now with Brian James will allwor Financial moving over and you know, everybody's looking around for the day when mortgage rates are going to drop so people can afford to own homes. And I guess we're looking at what roughly seven percent current mortgage rates.
Yeah, so seven percent current mortgage rates. And that's been that way since about mid twenty three. So mortgage rates in this recent cycle. The average peaked around seven point eight percent in October of twenty twenty three, and we fluctuated around that ever since then. We've right now, we're kind of we've hit a plateau, right about seven percent or so, is what I'm hearing, and it's it's having impacts on, of course, people's decisions of whether to buy
that bigger house or move to the next neighborhood. And you know, the things that we used to take for granted, we had low interest rates for so long that people would make decisions for their lives and their families without regard for what these uncontrollable numbers. What the impact was. Now I'm hearing about people making decisions to well we have to stay put a few more years. We just we can't give up this three percent four percent interest
rate on our mortgage. Sure, So I'm not going to take this job opportunity, or we're going to stay in the smaller house. You know, I've been doing this for thirty years, and I have not had conversations like this because we've been so spoiled for so many decades.
Yeah, I imagine so, and you know, I'm sorry. I lived through super high mortgage rates. You know, my wife and I bought our first home. I've pointed out before we got a seven to twenty three balloon and had to do We paid three points to get it down to eight and an eighth. So it seems to me that the interest rate is not the thing that's the big problem, more so than the cost of homes went
through the blanking roof. There's not an available supply of decent homes in an affordable realm, and COVID of course caused that as well. People were buying up real estate left and right, and so in inventory is not sufficient to meet demand. So I think we need more affordable sized homes, and I think more people could still buy in spite of the fact the interest rates currently seven percent, right, And.
I think but another factor here, comparing those two time frames too. When you bought your house, we had just come out of you're speaking in the early eighties there, I believe, in oh nineties, okay, all right, so well similar points. We had just come out of a recession, uh in the but the eighties were fairly strong economically speaking, and we, like you said, we didn't have the high prices of houses that we do now. And so the math, the metrics are just completely different in terms of how
you're going to make that decision. But I think I think we've just come out of a period where, again, people were so spoiled. We we I think kind of became a little convinced that three percent mortgages are normal, not the absolute bottom rate we've ever seen in history. And I think that's causing a bit of hesitation with people thinking we're going to get right back down there
pretty quickly. But as long as inflation is hanging around, I don't I don't see that coming really anytime soon, simply for the fact that we have to keep an eye on inflation and we've done everything we can to get rates back down from you know, intrace themselves back down from the eight nine percent range, speaking of the the federal reserve rates back down to the close to
three percent rate. But that still is leaving mortgages because there's still a component of demand that drives where mortgage.
Rates sit as well.
So we got little ways to go there, and I think maybe some people are hanging on a little bit too long to the idea that it has to get back down to three percent before I can make a decision to affect my family.
Well, do you recommend or is there a suggestion that people not pursue like an adjustable rate mortgage. I mean, if you think the interest rates have maxed out and are going to ultimately drop, I know that might be a dangling care for some people to consider, but it's like me, going with the seven to twenty three. We figured the rates would be down by the time we had to refinance or lock it in after seven years,
and of course that's in fact what happened. So what's your thoughts on adjustable rate mortgages?
So, yeah, I mean I think they can be I think, by the way, what you're referring to is these are called arms adjustable rate mortgages. There can be a five year ARM, you can have a ten year ARM. Seven year basically means that you lock in your rate now and it's going to be somewhere in the ballpark of a market rate, but it will adjust to whatever that
market rate is after that period has ended. So if we are sitting at a period which we kind of are right now, where we feel like rates will be lower in the future, Again, we're not talking six months from now, We're talking several years by an ARMED, then you can benefit by putting a mortgage in place that will drop if rates have dropped at that time. And yeah, I'm a fan of that. It's a little bit of a different thought process. I didn't want anybody to do
an ARM. You know, three four years ago, we were sitting in the opposite situation where rates were extremely low and your adjustable rate was going to go up on you in five years, yep, And we had people kind of in a bit of a panic making sure they got it paid off or refinanced before that ARM came due. This is a little bit of the opposite where it can be. There are tools out there if you're thinking
differently than three four years ago. There are tools out there that can help you, and I think it's a good thing to do as long as it works within your overall financial plan, which sometimes has more to do than just money.
Indeed, we'll pause R and I'm bring Brian back to talk brief. I'm sure about the thirty two hour work week, and then also apparently looking at your phone may cost you opportunities at work. Don't do that one more with Brian James this Monday. Monday, I'll be right back after these brief words.
Fifty five KRC the talk station.
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A twenty eight fifty five caracity talk station Brian Thomas and Brian James doing money Monday. Buddy Levy with the book Realm of Ice and Skies up next. He's into Arctic exploration history and that's what that's about.
Brian James.
Real quick, before we get away from the real estate topic. It's just I saw an article about real estate insurance has just really gone through the roof. We apparently had two consecutive years of double digit increases in premiums and it just sort of it just brings into focus. Just because you can afford the mortgage payment, you got to remember maintenance upkeep insurance, which is a variable that it's going to you know, maybe go through the roof.
Energy bills.
I mean, who knows how much the price of energy is going to be, but you got to pay the heating and air conditioning bill every month, keep your electricity on. I mean, it's just so much more than I think people perceive you as a financial planner. Is this the type of thing you walk through your soon to be maybe a home purchasing client. It's through to analyze this what it's all going to cost on a monthly basis or an annual basis.
Yeah, absolutely, And I would say we also talk about that with our current home owning clients because we're in an environment we haven't seen before. So you know, it's one thing to look at what is the cost of me living my life right now? But the whole point of a financial plan is to have a feel for what it's going to look like in the future. And one of those elements is the fact that homeowners insurance and things like that are going to get more and more expensive.
Property tax.
Oh yeah, that's another one, right, You got a one.
Third increase in your property tax. Can you manage that?
Oh, it's just.
It's it's just a spiral as the value of things go up. Right that the value of your house as a whole has gone up, but so has the value of the plywood and the two by fours and all the other stuff in there. So your insurance company is looking to ensure not what you paid for your home, they're ensuring the replacement cost. So if something happens to your house, it gets wiped off the face of the earth, what would it cost to put that house back in place, which is going to be a heck of a lot
more than what you actually paid for it. Therefore, that trickles all the way down into the premium. So that's something to pay attention to to make sure you have a handle on what those expenses might be in the future.
Hey man, one of the reasons get a financial planner, all right. I saw Bernie Sanders proposed it and I think it got laughed out of the room as a suggestion. But a couple of weeks ago, or a week or so ago, some progressive senators were pushing for the federal thirty two hour work week. I know there's lots of articles around about bringing them back into the office to work, and a lot of federal workers are really angry about that and maybe just going to quit their jobs because
they don't want to show up to work. But thirty two hours, as opposed to a full forty hour work week.
Yeah, and I think that the important detail there. It's a thirty two hour work week proposal, but the important thing is without loss of pay. So, in other words, we're going to reduce output by twenty percent, but we're not going to reduce the income that these folks make. Now, this is not super popular. I don't see it seeing the light of day anytime soon. Even Elizabeth Warren came out, who's usually relatively in line with Bernie Sanders, she came
out and thinks it's a terrible idea. She said, it's she thought it was an insult to the work that her staff puts in. So I don't think there's gonna be a whole lot of popular And it was never going to see the light of day anyway. But even among the progressive side, I don't think it's going to be all that popular. The last thing the progressive side can afford to do is to work less. If they truly believe then the different things they're trying to push more.
Which was just a general reaction, like what nerve you have to even suggest this at this moment in time? All right, pivoting over to our final topic today with Brian James from All words financial. Looking at your phone too much your work could cost you opportunities. Saw this Washington Post article.
Yeah, this used to be a thing we worried about with our kids, right, So now it has snuck into the adult world, of course, and I don't think it's gonna be too much of a surprise. But about fifty eight percent of US adults say they now realize that they use their smartphones too much, up from thirty nine percent in twenty fifteen, and some other surveys indicate that people are acknowledging. About two thirds of people acknowledged that they use their phones multiple times during the work day.
And I would have to point out, ironically, some of them probably answered the survey that had nothing to do with work, but it popped up while they were looking at it. Now I know one thing that happens, but I do have important notifications that hit my phone as our staff communicates with each other to help our clients and so forth. What I have to be careful of
is when that notification hits. I know it's an important one because of the way I've set my phone up, but I have to make sure that I ignore all the stuff that might be there. But is not important, because that's how we get sucked into the vortex of getting distracted and I'll deal with the issue at hand and then oh, look, there's better check what's coming out of Washington right now. Got to know that right at
this exact moment. So it can be very tempting to especially when we're in the news cycle that we're in now, where there's information coming fast and furious that does have an impact on us, but we can't do anything about. So my suggestion would be the use the built in tools. Whether you're an Android user or an iPhone user, Android offers something called digital well Being that will help you manage as often as your phone distracts you, and will help you keep an eye on how much you're spent,
how much time you're spending. iOS has screen time apps, all these things have built in tools to help you keep track of it. But it's discipline. It's like anything else. Brian Thomas. You have to pay attention. You have to be willing to make the sacrifice. It will help you in your career. The last thing you want to do is have your boss catch you snoozing on your phone, or heaven forbid, one of the other headlines in here. It's now happening during job interviews. Your interview is just
about over. If you're hiring manager, Seese, you check your phone for no good reason.
I can't believe someone would actually do that. See, you know my family. You need permission bastly from my wife if you plan on bringing your cell phone out at the dinner table, and you better damn will have a compelling reason to do it. It has to be extraordinarily important. Otherwise you keep your phone in your pocket, you don't use it at the dinner table. And yeah, we go out to dinner and it's just it's room full of people that aren't talking with each other. They're staring at
their cell phones. I think we all need to engage in a sense of self awareness. I like the idea of the app. You said that the tracks the amount of time you spend on it, because I think people realize how much time they spent on their phones and sort of stepped out them out of side of themselves and looked at themselves staring at their phone all the time, they probably would cut down on the amount of screen time.
Yeah, I think that if we use these tools for the right purposes, you can get a better picture of how you look from an arm's length away. You know, no different than if I start tracking my calories with an app on my phone. I will definitely at least acknowledge that I need to be a better adult than I.
Have to.
Brian James. I appreciate our conversations every Monday. Monday, Money Monday, Money Monday with Brian James. Thank you to you and the folks that all Worth Financial for loading you out every Monday. Good to hear from you, Brian. I hope you have a wonderful week. We'll talk next Monday.
We got one.
We'll talk to you in February.
I take care. Buddy Levy or the book Ram of Ice and Sky. He'll be on the program next. We'll learn all about the Arctic exploration. I'll be right back.
This is fifty five KRC, an iHeartRadio station. In Today's Marketers Report, Kate Cronin