Friday Flight - Store Brand Surges, 401k Changes, & Inconvenient Conveniences #609

that we discussed this past Monday with Abby Davidson. She talked about relationships, talked about the logic that we often employ when it comes to making some of these bigger decisions in life. Uh, and how we need a little bit of both in order to make the absolute best decisions. Helpful framework for basically thinking about the biggest decisions we make in life, which often involve yeah, relational love interest kind of stuff and also money. Right, Like both of

those things are simultaneously. It works, right, and we drew five winners. We we announced the book giveaway during that episode. All you needed to do was reach out to us with your review that you left over at Apple Podcasts or wherever you listen to your podcasts, and uh, here are the five winners. Todd Are, Mona M, Julian P. Matt D and Maggie Are. We will be reaching out to you, getting your mailing addresses and getting copies of those books on the way to you very soon. Yeah.

Hopefully you'll enjoy that book and will help you make future money decisions with like a little more ease. It's never easy at all, Always a lot of stuff to way, especially when you're making big decisions with people that you love, with people that you're close to. But hopefully, Yeah, I think I love what she said, Matt when she said that, like, well you can make it. Even if you look back, you don't regret the choice in nearly the same way that you might because you had a framework that you

went into with. You made an intentional choice, which is a big part of the problem. Totally fly by the seat of our pants, But exactly it was like about it was about empowering your due diligence process within your decision. Maybe like we just want to make sure that we're making decisions on purpose and not looking back and being like did I how did that happen? That that is

not the position that you want to be in. Yeah, I just want to quickly mention that I'm working on getting the Amazon Prime student rate for for our account, because I totally forgot about this, but like a college student rate. My wife is in grad school. Why in the world, all snap, have I not taken advantage of this? You can buy, you can get like new computers, yes, student rates as well. Well, yeah we got what she got stock up when she got her laptop at the

very beginning of school. We got the we got the student discount rate on a mac because yeah, that's the student discounts abound. I'm realized we were. My wife is getting some clothes on sale and made Well the other day, and made Well has like a student discount like their student discounts all over the place. So if you're a student, don't forget to ask or google it, check and see

if there is one. But yeah, Amazon Prime has it too, So I'm hoping not only to get it for our Prime account, but also for our Prime music, which apparently gets discounted too if if we get the student rate, So I want those unlimited tunes at that student rate. I know right. I will report back, but just awesome reminded all the students out there their student discounts abound, and it's worth it's worth asking, it's worth looking into. But let's move on, Matt. Let's get to the Friday Flight.

A quick sampling of stories we found interesting this week, and let's talk smack at the beginning at the outside of this Friday Fight about Wells Fargo and uh, that's they just got taken a task by the Consumer Financial Financial Protection Bureau. They have the four it's a fourk overall whopping three point seven billion dollars because they're such a terrible bank, and two billion of those dollars are going to customers and a record fine of one point

seven billion is going to the CFPB. And this is not by the way, for new allegations of fraud, but for a slew of abusive practices that Wells Fargo has been engaging in over the past decade, which we have

talked about here on the show. I mean, the worst of what they did came out like six seven years ago, but signing people up for accounts like that they didn't ask for, and I mean just all sorts of abuse for practice their current cuss but I was reading and they have had some issues even up and as recent as this year, like they've had some compliance failures I saw.

So it's like, yeah, they're the most egregious examples of their misbehavior have been in the past, but even like even this year, they are still not doing what they're supposed to be better. But that doesn't mean they're not reformed.

And the director of the CFPV he actually said that Wells Fargo has consistently been one of the most problematic repeat offenders, which isn't you know something you want said about yourself, And he basically said that this settlement doesn't necessarily mean that the bank doesn't still have issues, like you just said, Matt, and so while they've made progress, there's still some rotten stuff going on in that bank.

And so we would say you bank with Wells Fargo at your own peril, and really, really you bank with the top the biggest three or four banks, at your own peril, We would say you should switch banks, go somewhere else. We have an article that will link to in the show notes about how you can do that and make it easy on yourself. But if you're banking with Wells Fargo. There's no time like now, no no, no time like the president to not do that anymore. I think that could be an excellent, simple to do

task for folks over the holidays. Right like, for the most part, you're laying low, you're taking it easy. You don't want to be running around, Oh my gosh, like in the crazy cold weather that most of the country is experiencing right now. Like, this is totally something that you can do from the ease of your laptop at home. So you've got that like erin del fireplace on in

the background, you know exactly. But let's keep moving. Let's talk about high prices, because if you saw the most recent CPI numbers, it was nice to see inflation going down overall. One place though, that that wasn't the case is at the grocery store. Food prices they have remained stubbornly high. And to that end, supermarkets are trying some different techniques to ease the pain and to get customers to maybe switch their allegiance to start shopping with them.

A popular method that some stores are doubling down on is to offer more store brands. Were huge fans of store brands and consumers are taking the bait. They're opting for a similar but vastly cheaper alternative Kroger. They say that they're selling more store brands compared to last year. We wanted to point this out because just generally speaking, store brands, they are getting better, they're getting more popular.

There are there are more options for you on the shells. Uh. And if you're a name brand person, we think it's time for you to consider and maybe give some of the store brands a try. Yeah, you might have tried something in the past, but maybe it's maybe it's gotten better, so it's worth a shot again. And if you give it a shot at the right store. By the way, if you give store brands a chance at some of the lower cost grocery stores, you've actually got nothing to lose.

And that's because stores like all the legal they've they've got guarantees on their store brain items which allow you to return them and get your money back all together. And so yeah, they'll refund and replace the item at the same time, which means no sweat off your back. And so yeah, Kroger they've got a return policy that's not quite as generous, but at least they've got one

on store brands. But it's important to mention that there's nothing to lose and lots of your grocery dollars to gain opting for fewer name brains in your grocery cart, and that there was another story this week about how expensive egg prices are getting. It's it's getting pretty absurd, right, But so every every way in which we can save money at the grocery store it matters right now. And store brains are just one of the slammed on easiest ways to do it without having to like clip cubans

and annoy yourself to death. When it comes to saving money, it's just a simple way to to make progress on that. Well. And it's not like they're so specifically with Legal and Aldi. It's not like there's not store brands there. I mean, so there are a lot more. There definitely are, but they're like you last time we're over at Legal Rights Bacon, that's like they're really good stuff. They're totally on sale.

Got a multiple pound and a half packages of that for like six bucks six bucks each of that jump in the in the in the freezer. But yeah, Legal and all these specifically, I think they carry something like four uh, four times more of their store brands versus

the name brands that they carry in the store. And so it's just a way, I mean that is how you're able to save so much money is because by default you can't buy a whole lot of store brands because they don't i'm sorry, name brands, because they don't typically carry a ton of them. By default, you are purchasing the store brands, and those all the legal store brands are by default going to be cheaper than most of the other major grocery store store brands just because

of the kind of business they run. And so store brands are a good idea store brands at the cheapest grocery stores out there isn't even better idea even more affordable Joel, there are gonna be changes that are likely coming to four one k's next year. We're gonna probably know sometime next week, but it definitely looks like this bill. Uh. This is part of the omnibus giant spending bill that's set to be passed by Congress, likely signed by the President.

But it will also include secure two point oh bill, which means that retirement savers are going to be helped out on a few different fronts. First of all, r m d s required minimum distributions on retirement accounts. They're likely to be pushed back to age seventy five from the current age of seventy two over the next ten years. That's gonna be helpful for a lot of folks who honestly are still working. They're talking money away and they

don't want to have to take that money out. And I mean, we're seeing the age of the workforce continue to increase as folks, they're living longer, they're living longer, they continue to be healthy, and they wouldn't want to be a productive part of society. Automatic enrollment in workplace retirement accounts plus annual percentage boosts are set to become law as well, and I think that's gonna be great.

That'll be a way to help a lot of folks to invest who just otherwise wouldn't because they either forgot about it or because of inertiare bias, which is a fancy way of saying that they're just being lazy of a catch up contributor destination. When I did in college, that's what they're doing with their retirement accounts. Exactly, but catch up contribution limits they're gonna go up as well. They're gonna be raised by a meaningful amount for folks

over the age of sixties. So in particular for those who are further along, there are going to be a lot of provisions to help those those folks out. And so we will definitely make sure to keep folks posted as this becomes law, for sure. Yeah, So there's a lot a lot of provisions in this bill that dramatically are going to change what people are able to do when it comes to saving for retirement, making it easier

and just more reflexive for a lot of folks. And and one other provision would allow employers to incentivize their employees to save up a small emergency fund within their retirement account if they make under a certain threshold, which which is an interesting new feature. I think math that can help incentivize people to get that rainy day fund that they might not otherwise do if there's a match that kind of propels them in that direction. I think

that's kind of cool. And since four oh one K hardship withdrawals are going up in a meaningful way according to recent statistics from Vanguard, from fidelity from some other four one K providers. This could be a really important part of this bill because yeah, one of the worst things you can do for your financial future, of course, is to raid your retirement account before you get to

retirement age, like stealing from future you. Yes, uh, And so if you go this route, you might be solving a temporary money issue in your life, but you're creating a bigger, long term mess with taxes and penalties and the like, and and just yeah, like, like you said, Matt, stealing for future you. You don't have that money growing for your eventual retirement either, so you're setting yourself up to be working a lot later into your life then you might otherwise want to. And the truth is, like

a four o one K loan is different. It's less egregious than a four oh one K hardship withdrawal. But we'd prefer that you think of retirement dollars as untouchable, even if there are ways in which you can access them. Just because you can doesn't mean you should. And we'll discuss, like we said, more about these changes at some point in January if this bill passes, Because there's just a lot of moving parts and We're not sure how it's all going to shake out at this point, but yeah,

it sounds like there are some some good changes. But as always, human behavior stymies progress, and we don't want to see you styming your own, you know, financial progress

by rating those retirement accounts before it's time. That's right, man, Let's talk about paying for college, because we've talked many times about how five twenty nine plans, how they're not our favorite spot for many folks to be stalking away money if you aren't crushing it right when it like when it comes to your your your own saving into your own retirement accounts where you're maxing out that roth IRA and hopefully coming close to maxing out of workplace plan.

If that's the case, the five nine plans should be off the table for you. But if you are one of those folks who is knocking it out of the park on that front, and you've got kids who are likely to go to private school or to college, a five twenty nine plan actually might be a great account

to consider funding. But there there's an interesting twist. There has been a rule that was changed recently that might impact how it is that you opt to go about saving four those goals and specifically who you might want to have ownership of that account. It's a it's a small it's a it's a it's a new outs here that's worth talking about. Yeah, so this is definitely another like headline that's worth discussing because it's going to impact how and in what way people save for their kids college.

You're right, mad, It's something that we don't recommend for a whole lot of people, but for some people that doesn't make sense. And what some folks don't know is that a portion of what you invest in a five nine plan counts against your kid's ability to receive financial aid. So they're applying for college and the college says, hey, you got all this money in the plan. Uh, you know, and so we're gonna offer you a little bit less money than than we would have because you've saved so well,

there's a little bit of a penalty associated with it. Uh. The more you save, the more difficult it becomes to score free money from the college that they choose to go to. But FAFSA has made some changes that might impact how you choose to invest for your child's college future. And it turns out that money that's allocated in grand hairent accounts is now going to have zero impact on financial aid eligibility for their grand kids. In the past,

that has not been the case. And we've said that you might want to solicit donations from grandparents for plans that you open for your your own kids, but now now effective for the school year, they the grandparents might want to open the five plan of their own volition for the benefit of their grand and their own name, yes, in their name being the owner, for the benefit of the grand kid, because that's gonna allow for maximum financial aid flexibility. And so it's a five twenty nine twist.

New quirks is gonna they're gonna have ramifications. By the way, we might be one step ahead of you on this. You cannot change the account holder of the plan that you already have open. You can't transfer the assets that you have in your name to the benefit of your kids to your mom or dad or your mother in

law father in law. So that's important to note. And also just one more minor note on the nine front, there's a proposed legislation that would allow folks to roll over unused five nine funds into a roth high array, and if that happens, we'll like them a whole lot more. They might become uh an account that we recommend a lot more people consider more options if that's something that

you can do. There's certain stipulations around this, but again that that's a part of that secure two point oh bill and they're not that actually passes and if it gets modified, we're not totally sure. It definitely did have some stipulations right as to how long those funds needed, how long that account needed to have already existed before you could roll that over to a roth ira. Yeah. One of the things we hate the most about five

nine plans is how inflexible they can become. And if they have more flexibility, if you can roll it over into a roth Ira, that's going to change the dynamics of how we feel about that account in general. But yeah, likely said, we'll update you, hopefully with more on this front soon. Lots of proposed changes, nothing uh firmly set yet, but now we've got more to get to, including we're gonna talk about some new headwinds facing real estate investors.

We'll get to that and more right after this. All right, we are back from the break which means it is officially time now on our Friday flight to get to our ludicrous headline of the week. And this headline came from the Atlantic, the lie of consumer convenience. I don't like to be in line to Matt, I don't. I don't know either, man. This is gonna be a good

one actually. So I love this article because it kind of calls into questions something most of society, most of us today has seen, a sort of like this unquestionable good, which is modern apps on our phones and services that

make our lives incredibly convenient. I'm sure this probably sounds pretty familiar, right, Like, if anyone out there, if they've tried some of these services and they purport to save you time, and they say they save you hassle talking about apps like instat cart if so, you've probably found it to be you know, maybe like it works, you actually got some groceries, you found it to be pretty novel, maybe you found it to be meat. But also at the same time, uh, there's a good chance you found

it to be lacking. There's probably a good chance he didn't get all of the goods that you wanted to get in the grocery, right, some of the substitutions were just whacking that. That's the biggest complaint I've heard about so many of those services is that somebody says, like I ordered pickles and they gave me cucumbers, and it's like, I know that the same thing, but they're not the same thing originally the vegetable, yes, but completely different. Yeah.

At one point in the article, the writer asked the question, have all of these on demand services that have come to dominate our lives, have they actually made them better or have they just created the illusion of efficiency. I think that's a great question. I think it's one worth wrestling with because oftentimes these these apps and these services that we sign up for the free trials are oftentimes

more trouble than they're actually worth. Yeah. Yeah, I mean, I think if these apps are working for individual listeners

out there, more power to you. But I think the reality and and what this writer was getting through in this article is that they do promise something and then they rarely deliver what they're promising, and or it's just like it's a subpar version of whatever it is at the promise, and so you're like, I'm going to get out of going to the grocery store, but no you're not because there's a few things that the shopper buying on the instant cart that they missed, and so you

still have to go to the grocery store to pickos items up. And it's a big paint not to mention that service has costing you a pretty penny at the same time, but it's not delivering in the way that you hoped it would. And so yeah, we would say that we think that there can be value to paying for convenience in some circumstances. So there's a reason most of us have upgraded from using our two feet to get everywhere two bikes and cars. It's worth the expands

because we're able to get places more quickly. You don't have the d y everything in your life to be frugal. But there's also this subtle line, right that this article draws helpful attention to that that these services they overpromised, they under deliver, and we're told that they're going to make our lives easier, so we can kick up our feet, we can take a break, take a sip, eliminade, read a book, whatever it is, paying just a few extra bucks to have our grocers delivered. Wow, how nice is

this going to be? And how much more free time is it gonna add to our schedule? But now is just a great time to reassess whether or not these services that we're paying for that claim to make our lives easier, whether they're actually paying dividends or not. I think it's great to revisit from time to time instead of blindly continuing to pay for a service that maybe isn't providing as much value in your life as you

thought it was going to. And the writer of the author, she she talks about how off times it seems like what we're striving for is control. It seems like that there's maybe a higher level level of accountability because maybe we have the ability to rate somebody who delivers us the groceries or chooses to skip the thing that they

can't find. Uh. It's also kind of funny that she mentioned how she never leaves a bad review, and so it's like the one thing that actually did give you control, you're completely relinquishing, but you're too soft, you're too nice to do it. Yeah, you're too nice. But I think I know bad review for me is like three stars, May and it's hard for me to even go there.

But another aspect of control that it makes me think of is it seems like maybe the entire generation of folks who are maybe the prime users of these different apps, seem to be wanting like more control over the type of communication that it takes two to interact with some

of these different services. Right, Because you could hail a taxi where you wave your hand and you look at somebody and you tell them more to go, as opposed to just pushing a button on your screen, whether it's groceries, you know, you could totally go in there and do that yourself, as opposed to selecting boxes of the different items you want, or at like a house cleaner, right, like actually talking to somebody getting a quote, You talked to them on the phone, they come out to your

house asking a friend for a reference. Yeah, And so in all these instances, it's like there's a desire almost to remove the humanity from some of these personal, uh, face to face interactions, you know. And in that way, I feel like maybe actual human connection, which is typically a more robust form of communication, is just getting underrated. And it seems like these platforms and the software that is going to alleviate all these problems, but in reality

it's leading to more frustration. Yeah, I think that's true on a lot of fronts. And again, paying for convenience can make sense, right, like lives are busy, and things that can allow us can actually free up some extra time in our lives. Like sometimes it's worth paying for those things, but you gotta know what the tradeoff is. And you also have to think long and hard about whether or not the comedians that's being promised is being delivered.

And and on a related note, by the way, Matt Barry Weiss's new site, The Free Press had an article on how frustrating and ubiquitous planned obts a lescence just becoming And I loved the title of this piece. It was called oh Holy crap, which this time of the year is is fitting. But I can relate to the author's frustrations with cheap goods that unravel or break in what feels like no time flat. And you know, you and I we talked about how to avoid the trap

of planned obsolescence backing episode to sixty six. But if you want the t LDR right, if you don't want to go back and listen necessarily, we would say it's important to do more research on the front end before making a purchase, to repair items that you own whenever you can, to buy more good second hand to begin with,

and then to own less stuf in general. There we can't do anything necessarily as a whole about the reality that some of our appliances, washing machines, refrigerators, dryers or whatever, they're not being made as well as they used to be. But we can be better shoppers and shop less often, um, but plan obsolescence. It's annoying, but it's something I think that we can avoid at least to some degree. That's right. But companies they still want you to buy their crap. Right,

And I'm sure you've noticed this trend. But email marketing it's becoming even more intrusive. The Washington Post there about how some companies out there are basically abusing you, or at least your inbox, in an attempt to get you to spend more money. Information from HubSpot found that thirty three percent of marketers are sending you an email at least once a week. Some retailers out there, like bed, Bath and Beyond, they're sending multiple emails in a single day.

How many coupons do I need? Matt uh. And I'm not against receiving emails, but like be strategic and how it does that you're signing up for for different emails and notifications about discounts, but especially like if you're if you're shopping for something, like I want to receive the information, like I want that to be something that's on my radar. But sometimes like you'll just put something in your cart

at check out you haven't signed up for anything. Then you'll get an email that sucks that annoys me when you go, I think that's a bad marketing practice. And then on top of that, if they're abusing your inbox, it's time to unsubscribe as much as possible. I think we've got to get these things out of our inbox, one because they're annoying and two because they cause us to spend money that we other that we otherwise wouldn't.

And so yeah, just you can do that manually hit on subscribe um through Gmail or wherever you you know, get your email, or you can use a tool like unrolled out me, which can help you tackle that task more quickly. You're not like one off hitting it, but you're like unsubscribing to a bunch of things at once. I think that that can help. That can go a

long way. And for a lot of people, man, fewer emails is a good thing, and fewer temptations to buy things just because they're discounted is a good thing too. Most definitely. Uh, let's get to our last story for today. The Journal they had an article this week about how the rental property game is changing, and it's definitely true. It's it's harder to make the numbers work now when you're considering buying a home in order to start your

own personal mom and pop landlord operation. Back in fourteen, like after the Great Recession, it was almost like shooting fish in a barrel, right, And if you're looking to to get a solid rental property even two or three years ago, it was possible if you knew what you were looking for, if you knew what you were doing. Now it's it's harder to make the numbers work because of higher price is higher interest rates. They've caused many

folks to to now sit on the sidelines. Um not to mention like repair and maintenance costs are rising as well. With the increased costs of goods. So we're not saying that like that it's impossible to snag a solid investment property to to snag a solid rental one that that makes sense for you over the long haul. But due diligence is going to be more important now than ever to make sure you're crunching the numbers so that this

property is gonna work for you. When we talked about financial flexibility recently, Matt, that's one of those things it's like, well, yeah, buying rental properties makes more sense than some environments than others, and you have to be willing to adjust according to market conditions. And it's also just important to know what you're getting into because rental properties, yeah, sure they can be profitable, but you know they also have the elements

of a part time job many many times. And so we still think that investing in renuntal properties can be a great way to build wealth, but be warned right that you might be looking for a long time before you find one that makes financial sense, where the numbers account, where you feel like it's actually going to make sense, it's gonna be profitable over the long run, and it's not going to take you for a ride in the

short run either. And so if you're looking to get into the vacation rental market, by the way, that's not as advertising as it's been either. Economic headwinds and inflation

appear to be impacting vacation rental owners too. So if you were like, hey, I'm gonna buy this property and turn it into an airbnb, while there are extra considerations that you need to think through before you take the plunge, and the number of listings on those sites are up, which means that the average number of bookings a host receives per month are down. There's just more competition there.

Basically basic supply and demand. I think I saw like at the peak there's something like eighty thousand new additional short term rental properties coming on the market. Yeah every single month. Wow. Yeah, that's crazy, and that's going to impact you if you have one, and so you have to have extra margin built in knowing that supply demand is going to shift over time. The same thing is

true if you're like record rents. This is great as a landlord, but you also have to take into account increasing cause us in other areas and the reality that those rents might not stay where they are forever. So just another reason, by the way, to make sure that you've got plenty of margin, a strong financial backstop before you opt to buy a property, whether it's short term

more for long term leasing. That's right, of course, if you are a guest looking at different properties, this is a good thing, right like this means more competition, more options available for you at hopefully reasonable prices. But if you switch over to host view, uh, this is gonna

be uh, it's gonna be more challenging. Again, not that it's not possible to, you know, house hack or find ways to make your short term rental make money for you, but the numbers just they may not be quite as juicy, They may not be quite as nice as they used to be a few years ago before. There is a massive marketing put push to get more folks to host property, but generally is big, and we think it's a good thing.

We think it's great that an individual can choose to rent out a room or rent out a house while they're on vacation. We think that that can be a really smart use of the resources that are under your ownership. But if you are counting on some of these high rents, some of these high numbers. We just want to make sure that you're Yeah, maybe you're crunching the numbers twice and allowing for a little more margin than what you were initially expecting. I think this is smart. Yeah, be

slightly pessimistic. Don't plan for perfection, right, You don't want to be a perpetual optimist. If you're taking on an obligation like a short term or long term rental, you want to have your eyes wide open and be a little more realistic than often. You want to be a realists. That's right, man. Um. Well, hey, this is our last episode before Christmas, so if you celebrate Christmas, we want to wish everybody out there a merry Christmas and we

hope you are staying warm. You can finding of the resources we may have mentioned during this episode up on our website at how to money dot com. Of course, we'll see you back here on Monday for an ask htm episode Know It and congrats again too. The book winners of the Money and Love Book, we'll get those shipped out to you shortly. And yeah, there's more giveaways to come in Matt for Shack, We've got more more of those socks hanging around that we gotta get out.

We've got to get those socks out. They're delicious, they're well, they look amazing. Socks aren't delicious, not edible, not like, yeah, well what we should get somehow of money edible underwear. That's for all the all the freaks out there. We'll consider it. And on that note, Mary Christmas. All right, well, we'll see you later, Matt. Until next time, Best friends out, Best friends Out,