Right now, let's say good morning to the host of How to Money from noon to two on Sunday. Right here on KFI, it's Joel large Guard. So Joel, President Trump says it's time to ditch the pennies.
Hey, I've been saying this for years, Amy, nobody's listening to me.
But well, apparently you got the president's here.
Maybe maybe I doubt it, But this has been a proposal, a bipartisan proposal. Actually, there have been people on both sides of the aisle saying, hey, the penny, it's long overdue to get rid of it. Especially like think about when the good old days, when my grandma would tell me about buying a coke for a nickel, and that's five pennies, right, and so, like pennies actually mattered because you could buy stuff with them. There's like essentially nothing
that you could buy for a penny anymore. Even think about like dollar stores. Most of the dollar stores have gone away from selling things for a dollar because of rising prices, and so you can't really buy as much for a dollar anymore. So the fact that the penny costs more than a penny to make essentially almost four pennies to make a penny, I think it makes sense to get rid of it. And then the next thing potentially on the chopping block is the nickel.
Oh okay, so how you said that to make a penny it costs four cents. How many pennies do they make every year? Do we know?
So that is a good question. Usually what they're doing is they're attempting to make pennies to because there's some of these fall out of circulation. So when you put your pennies, I think there was a billions of pennies churned out last year, maybe three billion pennies. And I think the reason is essentially because when you stick them, when you lose them in your couch cushions or you stick them in some sort of a jar to kind of save up, those pennies fall out of circulation. And
so the US mint has to replace those pennies. So what's it going to look like. It's not that we're gonna like stop seeing pennies immediately. Pennies will still be in circulation. It's just so we will stop minting new pennies to basically, you know, make up for those pennies that we have either lost, not picked up or stuck into a jar.
Somewhere and we can save a lot of money on it.
Yeah, I mean this is a good this is Obviously there's been a lot of focus in these first few weeks of the Trump administration on cost cutting and some ways some people would say really great ways, and other people would say, oh, man, I don't really like what
they're doing over here. I think this is at least one of those things where the vast majority of people can agree on the fact that pennies are essentially worthless and there's no reason to manufacture them anymore, especially as our world gets more and more digital and paying with debit cards. Credit cards are just kind of the norm. Pennies are just kind of more of a pain than they are a solution.
Okay, so if you are still pinching pennies. We were talking about how much is a fair fee for investment companies to take because they need a coot to stay in business, and what is that? Is there a hard and fast number, Jewel.
So there's not really a hard and fast number. But over the past few decades this has only gotten better and better and better. For individual investors, it's become fees have dropped precipitously. And this is honestly, I think we can call it the Vanguard effect because Vanguard was the was the low cost brokerage firm launched by Jack Bogel in the late nineteen sixties early nineteen seventies, and he
kind of invented in some ways the index one. He didn't fully invent it, but he at least brought it into the mainstream in that in particular, in his focus on lowering fees for investors, basically was the lowering tide that lowered all fees. And so Vanguard literally just announced last week they're lowering their fees even more, and they're basically the lowest cost fe brokerage firm in existence, and
they're lowering fees even more. The average fee now on a Vanguard fund is point oh seven percent, which is pretty miniscule. The rest of the industry is point four to four percent, almost half a percent. So the difference between what you're going to pay in fees based on where you're investing could be significant.
Are they expecting others kind of follow suit or are they going to just say, no, we're keeping our fees where they are.
They don't care. They don't care if other people follow suit. But the truth is other people have to, right because this is why like Fidelity, which is another one of my favorite brokerage firms, has launched what they call zero fee funds, Like I don't know, this was probably seven or eight years ago, and so they literally have a few in house funds that charge a zero expense ratio.
And when you think about what this means for investors, the fact that that Vanguard just cut fees by a little bit, well that's big news in some ways, but it's not big news in other ways. The big news is what individuals do with this information. And the truth
is where you invest matters. If you're with a really high cost firm where they charge a lot of money for advice and where they charge a lot of money for you to own a fund that's very similar to what you can get much cheaper at like Fidelity, Schwab
or Vanguard, then you're overpaying. And so this should be just another reminder to everyone out there who is investing, which is great, to check your fees and to make sure more of your money isn't going to pay the fund manager than is going to invest in assets that are going to grow on your behalf for years and decades to come.
Okay, so always ask that question before you make your investments. How much am I paying you?
Yeah? How much am I paying you? And then almost how much does just the fund itself charge? And you can go into the back end of your investment. You know your investment company. You can see Oh wait a second, the expense ray show on this fund. You need to type it into Google. Right, So, like Voo is one of Vanguard's S and P five hundred funds, and I think the expens ray show is like point oh two
or point oh three. It's it's essentially non existent. Go type in those letters from your fund that you're invested in and figure out what the expense ray show is. If it's above point three point four point five, you should be thinking again and seeing if there's lower cost place you can do business. And I guarantee you there is.
Okay, always great advice from our buddy Joel Larsgard, and you can get more information about how to manage your money and other great advice every Sunday from noon to two right here on KFI. It's called how to Money with Joel Larsgard. You can also follow Joel on Instagram at how to Money Joel