Weird Money Habits That Could Be Costing You

Discover the strange and surprising money habits that many people have, which could be quietly draining their wealth. From avoiding employer retirement matches to chasing past performance, learn how to avoid common financial misconceptions and start building wealth more effectively today. Explore these unusual financial behaviors and get tips on optimizing your money management strategies for better results.

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Transcript:
(00:07) all right let’s not waste any time getting into today on this the greatest Tuesday you’ve had all week welcome to the true wealth radio show Dave Littlejohn in studio today with me Matt Dickson. Matt yes we say this every time have we got a show for you this one will be fun though I think this one’s funny actually it’s fun and funny and I actually like the idea of it um you know when I was think about radio show prep today I had some ideas in mind and I read through some of the thoughts that I had and I’m
(00:38) like gosh you know it sounds like something we’ve done before how about something new something fresh something yeah fresh and the funny thing is none of it’s new but it’s a new take it’s fresh it’s fresh we’ll go with fresh we’ll go with fresh I had uh I spent like a whole bunch of time just I’ve been on the road for like 6 hours in the out of the last 24 right and so lot of podcast time and um those of you that know me I listen to podcasts at like a little past 2x speeds like 2.3 2. so
(01:08) it’s like listening to Chipmunks but you get stuff faster that way and uh that doesn’t wear you out like you’re on a road trip instead of just listening to some music and relaxing you’re like two times the speed give me the PO like just cramming your brain full of information uh no keeps me going I like it wow most people would be like at the end of the car drive you know just hopping out of the vehicle my mind is fried you know the gears have been cranking too fast I do have to switch topics so that I don’t
(01:37) get fried what do you switch between uh I was so I’m reading one I forget the author but I’m listening right so was listening to a book called uh the 46 immutable Laws of Power so that’s an interesting one um it could be used for nefarious purposes I don’t ADV that how many books do you get through in a year uh I don’t know is it a lot is it more than five yes more than 10 yes wow okay so yeah I go through books I didn’t realize you were such a a big like book person so books and then I do a lot of
(02:10) podcasting or I do a lot of topical search do you ever like read the book or is it all audio books I do a lot of so I’m a fairly auditory learner uh but I do a lot of audio I definitely read books too really yeah H yeah it’s a different kind of Engagement um my issue is like when I read I tend to read kind of slower than I want to because I tend to say the words in my head see I’m the opposite I hate audio books can’t stand them but I’m curious have they like started to use AI to do the audio books
(02:43) or are they still paying people to like sit there and read them and record it mostly it’s people who actually read them they have actual narrators and so and the narrator does make a difference if there’s I’m just waiting for like the series exist there’s AI out there I mean they’ve been for a long time some better than others but it’s sort of robotic readers uh the Cadence can be a little awkward at times you’re like that wasn’t really what it’s supposed to sound like yeah but but not on I’ve not had like
(03:13) books that I’ve purchased and had them narrated in a poor way yeah so or well I should say I’ve had poor narrators but I haven’t had them like a computer narration that I paid for that I can tell anyway usually it says oh read by so and so so yeah anyway I I do I like digesting information I get into like I go down rabbit holes for topics to do deep like what probably fairly deep research for some or others they’re like I don’t know what you’re talking about uh and it can be goofy stuff like I’ve
(03:42) learned a lot about ultra light backpacking gear cuz at one point that became a thing for me cuz I like to backpack but I have sleep apnea so I have to carry a cpap with me and so that’s like just dead weight right out of the gate so then you get really clever about how to reduce weight in all kinds of other ways to just make it more tolerable so instead of packing your food you catch your food all sorts of little no we don’t do that usually we pack the food Matt’s a better Hunter I’m more of a gatherer I guess yikes uh could
(04:15) probably there’d be some fishing opportunities there you go that by the way if you really want to know the way to Matt’s heart fishing it’s fishing not fish just so you know yeah Matt doesn’t eat the fish just you I do like tuna though yeah that’s new oh yeah I love tuna like the fresh stuff off the dock tuna Burgers cut it up into little tiny cubes smash it together so good okay well there you go that’s the one fish I’ll eat all the other ones you I I usually have them as tuna melts but you
(04:47) know tuna burger however you want to call it I’m good I’m good with that so look let’s talk about so Matt you we’re not really talking about my um weird uh habits of podcast and reading at 2x plus speeds it’s um yeah the show’s more about like what are some of those bizarre spending habits that people have or just bizarre ways that people handle money and then maybe kind of some of those misconceptions around how money works or just you know yeah here’s another thing I would like to phrase this as it comes
(05:18) out of Behavioral Finance like unbeknownst to Matt but he did this right um behavioral Finance is a study of how people make financial decisions and one of the things that is really fascinating is the concept that we will make normal decisions that are wrong okay so it’s normal to do it but it’s the but the information leads you to the wrong yeah the wrong the wrong outcome if you or the wrong decision but it’s still typical right so like normal meaning it’s common it’s typical but it’s wrong okay U I’ll I’ll give an
(05:55) example out of the gates not on your list right but as an example if you go to a casino and you play around a blackjack and immediately win and let’s say you you know you bet 20 bucks and now you got 40 bucks and so what people will say is oh is it going back to that theory of like this is The house’s money like it’s not mine oh it’s not mine I can bet this one now because if I lose it it’s just the House’s money yeah you go that’s a totally normal way to think it’s totally wrong that is your money
(06:26) now and it’s a whole new set of odds and you’re sitting down and that hand is independent of the other hands and the odds are recalculated and recalibrated that point but people don’t do that in their minds they say whatever rationalization they can conjure to say well I came here to do this and I’m doing it right it’s a I had an entertainment budget and I’m going to stay here for this amount of time until until it’s gone right and by the way casinos count on this right they count
(06:54) on Gambler Behavior which is that most people will continue to double down until they’re gone right right and so as the expression goes casinos aren’t built by winners I had some self-control I was at a casino two weeks ago and I made enough money to leave with like I don’t know 20 bucks and the pay for my like $45 steak dinner so I made like 65 bucks and I’m like you know what I’m good with that I’m walking away I’ve had enough luck I’m going to lose this at some point so I walked away with my $20 and a
(07:26) steak in my belly he says this and then goes and bets on the padr or something yeah no seriously all right but this is not the show about gambling that’s an illustration though about how that’s a normal thing to do but it’s wrong to think it’s the House’s money it’s yours right and so but but we all do that that’s normal so I think there’s there’s a number of things that we can talk about here what are some of the things like I’m not trying to hijack Matt did a lot of good show prep here I’m trying to
(07:56) like how do I hand the reins back over to you be like Matt what do we need to talk about mhm well I mean I can give you some examples of some things that I think people do isn’t you know that might walk and talk like a good idea but maybe it’s not right I’m listening one of the things I’ve seen is people will come in and say hey you know I’ve got multiple investment accounts and I’m you know really reducing my Risk by having all these different accounts and then you start looking at the accounts and you’re
(08:24) like did you realize almost all of your Holdings are exactly the same so it’s really not that different as if you just had one account invested in the exact same thing well or here’s the same I see people that will have one account but they’ll buy several things that are statistically the same thing right they’ll buy five different mutual funds that are 85% common Holdings right oh there’s a bunch of overlap in here so you’re really not any more Diversified you just bought multiple ticker symbols
(08:55) that own the same stuff inside of them right yeah so that is always funny to me that that is funny to me it’s that that misconception of diversification you know a lot of people don’t get what diversification is really about yeah right I mean diversification requires what it really is is a quest for multiple Investments with low cross correlation right like your house is probably not super highly correlated to the S&P 500 right and correlation is how closely linked is something so if one investment goes up does the other one go
(09:28) up at the same time for the same reason if so they’re highly correlated so you’re not getting a lot of benefit to diversification I always say like Home Depot and lows are really similar stores and so they they move in lock step with each other a lot they’re not the same store so there are subtle differences but they have a lot of the same influencing factors right so you’re not getting a tremendous amount of diversification benefit by owning those two stores there’s some right but you’re
(09:56) not getting nearly the benefit of if you invested in say I’m not this isn’t recommendation right but like Home Depot and Microsoft right they’re really different companies they have some things that are overlapping but there’s much lower correlation between Microsoft and Home Depot than between Home Depot and Lowe’s okay so good example what else you got um one of them this is where we might kind of stray from Dave Ramsey’s approach but it’s that all debt is bad right and some people live and
(10:25) die by that it’s like I can’t have any debt it’s it’s it’s the worst thing ever and it’s like and I talked to someone recently they had a 0% loan on like a heating and cooling system or something it was financed for like four years and they were freaking out about it and I’m like it’s at 0% like it’s not costing you anything to borrow that money why is that such a bad deal like you can use low interest debt to your benefit and it’s not always bad it’s yeah we could have kind of a beh
(10:59) behavioral conversation around that but here’s my my key takeaway Dave Ramsey is not wrong in that he has this expression when he says look if you play with snakes long enough you’re going to get bit and well that’s true but it it’s also sort of kind of built on a improper conflation that like dead is immediately a snake right um if you have clumsy Behavior or you dance with too much debt yeah I mean if well bad yeah the that is within the bad behavior concept right if you have too much debt or if you don’t pay
(11:35) something off then you yeah you pay interest it dings you for it right if you can’t stay organized I think the larger problem is that the Dave Ramsey crowd he starts often times with people that they’ve already blown it right I’m racked up all this credit card debt it was terrible idea now what and you’re having to retrain from away from terrible decisions and it’s kind of like you can’t say to a recovering alcoholic it’s okay just drink in moderation yeah right it’s like no it’s all or nothing
(12:04) right like that’s it you you there’s no middle ground to this and that’s sort of the way debt gets treated in that scenario with the Dave Ramsey crowd is like if you cannot be trusted with debt then don’t have debt right right I mean I can say this with lots of stuff by the way not just debt my favorite example is Firearms right if you cannot be trusted with a firearm you’re dangerous none you get none right okay but we have a right for a reason right I’m actually a big Second Amendment guy and so I’m like
(12:34) look if you can be trusted with them that’s totally fine it’s that know thyself thing right like if you know that you’re bad with money don’t load up on debt if you know you’re bad with money just don’t have any money no that’s not what we’re saying no get better at it develop skills okay yeah so okay so yeah I mean that’s that’s true like that this idea of painting all Deb is instantaneously evil um and yet you know saying Oh but you can have a mortgage on your house mhm why is that
(13:04) different well it’s asset backed right right that’s the primary thing is loans that are backed by assets versus loans that are unsecured okay so they are not all created equal in your HB back example H it that’s kind of a weird one because it it’s 0% but it is not it is consumer back right they they’re not going to take back your HVAC if you don’t pay in the tradition sense maybe they could try to but like it’d be kind of weird right they may put a lean on other property something like that so in
(13:36) that case I always suggest have the money to pay it off you just don’t need to yeah the other one that I think um is a good one is for the people that just like to hoard money like to keep it under your mattress type of people that’s another one where I’m like pause on this for a sec pause on this idea cuz I think this is worth unpacking like why is money in the mattress kind of an issue but I’m looking at the time we’re running a little long we so let’s we’ll grab a break we’re going to come back
(14:04) and Matt is going to talk about mattresses yes and money to all right soft and everything in between where could we go wrong with this one we’ll find out stick around I’m Dave Littlejohn Matt Dickson you got true wealth on news radio 939 FM and 1240 kqen all right gang welcome back to the true wealth radio show I’m C studio today is Matt Dickson and you can catch up by grabbing the podcast DAV you’ve been listening to too much stuff on two times the speed and now you’re like I’m going to try talking that fast so we can cram
(14:34) more information we got to get it all in there let’s go man besides people can listen faster you can hear faster than you can speak so you got to get it out there cuz their mind’s going to wander if we don’t crank if you want to hear David in two times the speed you can catch our podcast tomorrow right go to Little John fs.
(14:49) com look under the educate tab Matt talk to me about mattresses well per you know on my end I really like a memory foam mattress some people like to me about money in the mattress oh money in okay well some people really actually you know still do that method where it’s like I’m just going to stockpile my cash I’m going to hide it from people I’m going to yeah I mean it could literally be cash in a safe it could be you know cookie jar sock drawer whatever I do I’m going to say this Aster I do like having a
(15:20) certain amount of cash always on hand and the reason for that is if I see something that’s a crazy good deal and it’s like I need four grand I want to be able to just grab that money and go buy it without having to worry about is my bank open it’s funny you know we have different thought processes around this I keep cash around because I might need to pay a babysitter yeah you’re like I’m not using that money to buy another boat I’m just paying the babysitter I’m not getting another boat right I’m going to
(15:49) have friends with boats well you know I also look at it like what if there’s a gun that someone’s selling and it’s a Sunday evening I guess that’s true it’s not the same friend with a boat versus friend with a gun like yeah you you got to have that cash on hand you never know what type of opportunity this is definitely a rural community when you’re like you know somebody might just be selling a gun yeah seriously although I chuckle about that I did end up with a a great utilitarian Browning shotgun that
(16:17) has been uh the word utilitarian and Browning should never be used in the same sense well in this case it is right it’s just a it’s a great like you know pump action simple you know it’s a finely crafted tool David yes put that in a gun safe with a dehumidifier keep it well oiled it’s going to hold its value yes and that’s actually what happens so glad we had this talk okay um back to the mattress conversation so why is this such a like why do you think it’s a bad idea because number one you can lose it
(16:49) a lot easier you could lose it in a fire you could lose it in a theft like there’s a lot of Steal mattresses huh well funny story in Europe there was a guy who literally put his entire life savings in his mattress like he was sleeping on the money sleeping on it okay and so the guy dies and he had been dead in the place for a while and they came in and they pitched the mattress they pitched him and then The Heirs come in to look at belongings they find the note hey my entire life savings is in the mattress it was over a million
(17:28) dollars of physical cash stuffed in a mattress and that mattress went to the dump and the money was never found and the funny thing about it is where does the liability lie in the person who can’t talk anymore well it’s one of those that that’s exactly where the lawyer mindset goes is well did somebody have permission to throw the mattress away well yeah and who gave them permission because was that an authorized or was did somebody just improperly dispose of property and yeah uh which means all this means to me
(18:02) is a couple things one better treasure map or mattress come on like not a fire safe something simple here’s another thing to think about purchasing power right inflation as of late has been really bad that was my best Trump voice for you it’s been really bad it’s been horrible inflation is taking our country it’s destroying it we need to get it back and and and it was at that point that this clip went viral you’re welcome for that I need to I got to figure out a better one I would I would try to do
(18:40) like Jordan Peterson or something and I would just butcher it so I’m like you know moving on so so if inflation’s bad and your money’s just sitting there doing nothing you’re sliding backwards your $100,000 might now only be able to purchase $90,000 worth of stuff whereas if you would have at least had it in some high yield savings or high yield money market account making 5% well if inflation’s 5% you made 5% this is lar you broke even this is my funny thing it kind of rings truer in our area right I
(19:17) mean see somebody watching or listening to this in another area is going to be like you serious man but uh the idea of what do you keep in your safe this is where gold and guns actually preserve value better than money in the mattress yeah okay uh and they in theory have a more they’re more tradable at the end of the world right so if you’re truly a prepper those are better assets for Preppers I think I might be more of a prepper than yeah the gun hoarding thing’s a problem it is I’m just going to say it
(19:51) come on there’s um you know you you only have so many places to strategically leave ammunitions in event of a like Red Dawn or something I don’t even know what we would call it I have an ammunition hoarding problem too especially if it’s on sale like I just got another what was it 500 rounds ordered this is a little like trying to say fireworks are an investment the ammo is an investment if you watched the price you can’t trade it I mean you can sell it later so gosh there was guys that were buying
(20:24) literally we so far off script right just you guys know no by by all means carry on I think our listeners actually care I I like this is I’ve never really done this before but like you know I’ve had the crazy idea of could you like what would be the legality around creating a Munitions and Firearms trust that had fractional ownership so that you could essentially invest in the asset class with specificity right right because historically speaking it’s really gone up right if you and if you don’t believe me here’s the interesting
(20:58) thing watch this election cycle and watch some of these like I don’t normally make a whole lot of predictions um but here’s the thing if you see um a Harris presidency look for gun prices to Skyrocket if you see a trump presidency gun prices should remain stable or possibly decline mhm yeah right and and if you the the answer is simple right if people believe there’s a threat that guns will be removed then will go into hoarder mode and start buying them up as quick as possible so real I’ve watched
(21:34) that happen so many times it’s it’s a it’s a one of those things that’s sort of politically linked and it’s so it’s difficult to handicap because right now polling data is difficult to be to rely upon mhm right so that’s why it’s kind of interesting as well what factors would contribute to these things I’m not saying to go make bets on firearm stocks I’m just saying there’s an interesting piece of data to watch and this is probably what this probably what’s going
(22:02) to play out not investment advice okay glad we had that talk um so Bottom Line cast under the mattress we think that there are other ways to store value in tangible goods yeah and uh that might protect you better against inflation than cash which does not protect against inflation yeah I mean can you really blame people though you’re taught to put your pennies in a piggy bank and just let it sit there so yeah that’s there’s so much going on in there but all right here’s another bizarre one for you
(22:35) though okay listen I’m listening this might not be a misconception this is more kind of just bizarre but people that buy the extended warranty okay rarely does that really work out in your favor I saw like a stat that uh the average consumer spends about 10 to 15% of the products value on that extended warranty and they’re almost never used mhm so you’re just paying more for the product M so that’s one way to kind of save some money buy that ex right uh I’m just not uh and it’s interesting because the we could have a
(23:13) whole long conversation about insurance and the concept that underlies it in the first place right like Insurance should be renting protection for risk that you’re not otherwise willing to absorb you realize you accidentally just went into the second idea that I had for bizarre spending habits and it was literally over insurance and I’m like just go with the risk and if you have to spend $30 again and well and how many times do you forget you even have an extended warranty all the times you’re like yeah no I’m the worst about that
(24:12) stuff that’s why I don’t do it right you’re going to buy an extended warranty be prepared to have to get a Sharpie out and write on it I have an extended warranty for this product it’s yeah you better have like a file of warranties and it better be really well organized so you can well how many times do you go to use the warranty and it’s like well under these conditions and this and that and this and that and you’re like gosh darn it I don’t even qualify for the warranty that I bought yeah and that
(24:36) that that is the hard thing about these Insurance scenarios in the first place right is that they just there’s a lot of caveats and gotchas and here’s a simple explanation for why the insurance company is not interested in losing money either no right so they’re going to make sure that if they’re ensuring a claim they’re specific about how you know and so that’s that’s just part but yeah I think that people often times they just and they use insurance for the wrong reasons like insurance is a
(25:07) lottery ticket right I don’t know how many times I’ve seen people that have uh life insurance and they’re retired and I go well what’s it for and they go well um because when I die my kids are going to get it and I’m like so do you need it it’s like no they paid for everything they’re just keeping it around well I paid for it so long I don’t want to let go right and it’s like well you know it’s going to be gone in five more years right the term expires like what are you paying
(25:35) for this for it’s a lottery ticket now if you die that’s what it is because your use case for the insurance it’s supposed to be either income replacement or it provides for State liquidity right if you owe estate taxes like what are we doing here I love that you use the word Lottery because that also happened to be the next lead in you did it two times in a row David how is this possible are you cheating uh honest you can be honest about this I’m going to honestly do this I’m going to say we need to take our break cuz
(26:07) we’re running into Chad long all right and then when we come back first Matt had to talk about mattresses now we’re going to make him talk about the lottery not to be played for investment purposes as I understand it stick around we’ll be right back I’m Dave Little John and at Dixon you got true wealth on news radio 939 FM and 1240 KQ that’s funny no that was just a I think I used lottery for something else earlier today we were filming a video and I was like you know you need to do this and this and this and this and this
(26:35) or just win the lottery but one of them was like how do you make your kids Rich well win the lottery and give it to them so why would you do that no no just you know long term put put the money in put a little bit in over a long period of time and it’ll work out that’s funny why are people so convinced that we need to be able to like get rich instantly so could you like answer me that question like why and well I know the answer cuz that would be better right right cuz then I’d have it now but you wouldn’t
(27:00) have developed any of the skills that are required to like make the money and then hang on to it like every time almost every time lottery winners get a bunch of money and then they just blow it because they have no skills whatsoever to manage these things and it was never like earned right just like same thing with inheritance right if you get a bunch of money and you’ve never learned how to manage it or build it what do you do you squander it and you’re like now I don’t have a bunch of money anymore so golly goodness
(27:31) this just a mini rant to put on the you know we don’t even you know we record this stuff and I don’t even know does anybody watch it we get like four views I mean they people listen CU they tell us does this part go on it can yeah if we talk about it they’ll leave it in there if it’s if it’s something fascinating it’s like sure why not well everything we say is fascinating Okay I uh I I’m not so convinced that that’s true I will say this your scripting is working out just fine on
(28:04) the show yeah although I think we have four segments and we’re a whole segment behind at this point are we wait we’re not in the are we oh yeah we this is our second break so I guess we have this segment and one more break so you have to talk about lottery tickets and all of segment three I got that I believe in you we’re good yeah I mean if you guys have noticed Matt is systematically taking over because he is I think well I know he’s younger we’re pretty sure he’s smarter he seems more
(28:40) motivated except in the morning and the evening and at lunch time other than that he’s super motivated yep I have Windows I’ve got about or if there’s like an opportunity to go fishing it’s like hey can we get this stuff done I’m fishing I did wake up at 5:00 in the morning to go fishing the other day see I I don’t know what gets you out of bed at 5:00 in the morning besides fishing nothing maybe an airline flight to go fishing like hey got to fly to Hawaii so you go deep sea fishing for two I was so
(29:14) mad that I had to wake up at 3:00 in the morning or whatever it was to catch a flight I’m like no one should be awake at this time it’s so weird I can wake up at 6:30 and just drag just just can’t hard even move but if I wake up at 5: in the morning to go fishing I’m like gliding on Ice it’s like I’m like I don’t get it I envy brain how excited you get around it the brain response is wild it’s like heroin no all right welcome back to the Tre well show where you got to catch the
(29:53) podcast you or probably the video probably breaking David behind the scenes behind the SC well yes cuz Matt is um ludicrous wild all we know about Matt is that he is he doesn’t want to wake up in the morning but if it’s for fishing he doesn’t have any trouble with that nope nope it’s true my wife doesn’t understand it I don’t even understand I don’t understand it you know there’s like these coaching environments when they say well what gets you out of bed in the morning and I’m like
(30:25) necessity right like really no like no no my bed is really like I’m warm and comfortable and I’m like oh I’ve finally reached you know this peace status so usually it’s like what why do you get up necessity there’s something about when you get up well before dark right and you’ve got that quiet time you’re driving to the river then you get in the boat it’s still dark it’s perfectly quiet you might hear a bird or two you motor up you get to your spot you start fishing in the dark and you get to just
(30:53) gradually watch the light come into the day there’s something about that whereas you wake up and it’s already light outside and you’re just like I don’t know try it that’s all I can recommend so this is where we would differ where what I would be doing would probably be like up as the sun is ju before the Sun is up and I would want to like paddle out in the ocean and go surfing or something like that that could be fun too yeah I think it might be the intermittent fasting as well cuz if I
(31:22) get up at 5 and I go fish until 8 well I haven’t eaten anything and your body’s up earlier and I don’t know it just gives you more energy I think that could be it too well Mysteries to be solved on another radio show going need you to talk to me about lottery ticket lottery tickets Matt yeah they’re lottery tickets are an investment right well if you’re a good Gambler maybe they are but you never never say that it literally says it on the ticket not to be played for investment purposes no that’s that’s one that I’ve never
(32:01) understood I’ve never played Powerball bought a lottery ticket any of it I’m like I mean I’ve played before because the novelty of the possibility even though it’s effectively zero but you at least realize that it’s not going to happen oh yeah no I mean it’s it’s a zero it’s literally like a you’d be it’s like voting so that you complain like if you’re conservative in Oregon and you and you vote and like you’re going to lose and then but if you don’t vote you
(32:29) don’t get to complain right you’re just buying a right to complain same thing with terrible attitude right you got to vote you got to vote well think about it this way say you invest $20 a week in into the lottery right um I’m looking at a stat here that that could be worth about $56,000 in 30 years if you got a flatline return of 7% that’s insane how much money you’re just sort of flushing away you just Flushed Away a brand new pickup truck yeah just because you wanted to have a hope and a prayer
(33:04) something of course over 30 years that pickup truck probably going to be $1.7 million you’re not kidding the way they going go in the last six years pickup truck prices have doubled yeah legitimately it’s just like are you kidding me yeah okay but we’ve got a lot more to cover David so other other normal things that are not good that are that are wrong like they it’s the wrong decision but it’s normal let’s talk about maybe some like kind of misguided investment type strategies
(33:36) that people have okay um so this one’s kind of a weird one kind of throwing I’m so guilty of this and then I’m like no do you hoard gift cards not on purpose not on purpose no but um I actually have one sitting on top of my fireplace mantle it’s one of those prepaid visas I don’t know if there’s anything on it and I never want to go use it because I’m afraid that it’s going to bounce it a zero and but there’s probably money on it right and so if you look at the stats about three billion in gift cards think
(34:07) about this for a second right billion Starbucks is a bank because what are you doing or Dutch Brothers right oh I bought a gift card I gave them money in advance they’re not paying me interest for it and they have an immediate margin because you know that the product that they have is going to cost them less than what they sell it to you for m mhm so what a brilliant idea right let’s just collect the money from you in advance and you could Finance us so they’re just kind of like little Banks yep or maybe big Banks
(34:38) honestly Starbucks is huge right well if three billion goes unredeemed like how much of that is Starbucks because I feel like Starbucks is like one of the heaviest hitters with the gift cards like yeah give this to someone you love surely they love Starbucks this is kind of where like my Amazon gift cards they don’t go unredeemed cuz they just go into the hot and when it’s time I just have like the credits until they’re gone I am a sucker for Amazon the same way that you’re a sucker for Costco I’m the
(35:07) same way with Amazon oh well I’m guilty Costco is my favorite store I’ve even said it publicly that doesn’t make it my favorite store you must like the adventure right like you like the adventure of like what am I going to find in this store I like the adventure of I don’t have to move it just shows up at my house I didn’t even yeah I I you know I am a girl Dad I’m the only mail in the house sometimes you just need to go into a bulk store where there’s coolers and batteries yeah it’s like I
(35:37) mean like there’s tires that are taller than me and I’m like oh yes this is what I needed right it’s like you just need that sometimes oh my God and I can also pick up you know like dinner so yeah you can save a lot of money if you’re smart yeah you can also waste a lot of money if you’re not right like I bought 5 lbs of Las but I’m only going to eat one of it and pitch the rest in the garbage  money we uh I can’t tell you how much um like spinach doesn’t get consumed cuz well it’s the same as 5 lbs of spinach
(36:10) is the same as one pound in the grocery store create like a Costco sharing program yeah I’m GNA buy the spinach and I’ll trade you for those socks that you’re you bought a 100 pack of socks thank I really like socks oh my gosh okay man deep we again give cards and all right oh this one’s so easy it doesn’t even take a long time though run run it down so what do you got people that don’t invest for the free money from their employer in a retirement plan if your if your company AES offers a
(36:43) match to your retirement plan you should take it right mathematically you should take it because consider this for a moment if I put 2% in and they match me 2% I now have 4% I doubled my return right yep if I cashed out and paid the penalties I’d still have more money than I started it’s crazy right so you’re like you you just got to do it right get the match it’s free money yeah okay so we’re not discussing that anymore just figure it out and if you can’t figure it out oh man your life’s going to be
(37:16) really hard because like really you passed up on free mhm I mean free to you right the employer’s paying for it but free to you and you walked away from that oh man I can’t help you here’s another good one for you hit me chasing past performance I got an example I’m going to ride an example into this one okay I had someone recently who was like all right I’m going to make a huge investment and I’m going to just buy Nvidia stock because it’s making money and I’m like have you seen what it
(37:46) already did right like you’ve already 35% off peak yeah yeah and I’m like H like you really want to jump in after it’s already had its run and a lot of people do that they just look at what performance well last year and then they go buy that thing and it’s like you want you want another true story yeah please so this really happened um I had in a former life before this firm so this is U more than 14 years ago okay but uh in a former life I had somebody come in that wanted to invest and they were
(38:17) retired and they were looking for a retirement income stream and they brought to me a real estate investment trust mutual fund that they wanted me to purchase for the them because it had annualized returns of over 17% and they calculated their retirement income stream based on those returns no I I I will tell you I did refuse them as a client and said I don’t believe that this is a realistic expectation it was I was a lot younger it was hard to do right but I remember just saying I I it’s not that I can’t do it for you I
(38:53) won’t do it for you I think it’s malpractice the year was 2007 ooh o that tells us the ending so you can skip that point yeah and so I don’t know how that played out because they sort of disgruntled the left and said I’m fine I’ll find somebody else to do it for me and I said very well but it won’t be here you know investors who tend to chase that past performance statistically really don’t actually do that great they tend to Trail like one to 2% lower average returns than the people who just there’s been a lot of
(39:24) long-term studies about that too return chasing doesn’t work it’s interesting because there’s some short term studies that suggest that Trends tend to persist for a little while but but looking in the rearview mirror uh so if you can find the current performer it tends to do okay but I’m not suggesting you should chase that because the the the current winner is next season’s loser I got one more good one for you D do you yeah is it do we should we wait until the next segment I think we should because we’re gonna
(39:53) we’re gonna hit pretty heavy when we come back from this break all right then we’ll do this we we’ll grab the break all right when we come back Matt’s got one more good one yeah heavy hitter heavy hitter stick around we’ll be right back I’m Dave Little J and Matt Dixon yeah true wealth on news radio 939 FM and 1240 kqen yeah is this the point where we make that pathetic plea like if you would just subscribe and send it to friends we can propagate this message which is what if you could do Financial
(40:26) still have some fun doing it and here’s the crazy thing what if it fit Under the Umbrella of stewardship which is actually like the big deal for us in all of this it’s like how can you do this we have these shirts that we say ethical capitalist on them right and when people ask like Matt what’s an ethical capitalist is that actually a question yeah how would you define ethical capitalist I think it’s wanting a free market but not such a free market that it goes out of control and people do such greedy things if they slit each
(40:56) other’s throats yeah I I would say uh ethical capitalists are when both parties benefit from the deal yeah right like like a like a fair exchange of mutual benefit is ethical capitalism right it’s not gouging the other person where they feel like they’re you know you know the transaction is that kind of hold their their nose or because they don’t have a better alternative you know no no you it’s a like both people feel like they’re in a better spot because of it that’s that’s where you
(41:24) want to be yeah all right hey gang welcome back to the home stretch of the true well show I’m in the studio with Matt Dixon and we are covering what you had a big example you guys got to grab the podcast to figure out like the rest of the context here big example of misguided savings and investment strategy yep here’s one that this is was this performance chasing or is this a whole new thing well this is kind of like diving in almost to like you’re planning you’re you’re like doing financial planning for yourself right
(41:54) okay yeah so you’re like planning out your future and this is this is a sad one but I bet you’ve seen it someone overestimates their future inheritance they’re like you know what I don’t got to take care of things today because yeah parents are real well off and I’m going to be just fine and then guess what they spent it all or there wasn’t as much there as you think and then you wind up banking on it and it’s not there or maybe you just weren’t that great of a person and they just said we’re going
(42:30) to donate it to this charity over here because we like that idea better than giving it to you ouch I I will say that fortunately that’s not been a common theme with folks in our practice that does make sense though right if you consider for a moment the people that come to financial professionals there there’s there’s broad sweeping generalizations here but folks that come early if usually they’re developing their own plan and so they’re not counting on an inheritance per se or if they are there’s a lot more information
(43:01) and they’re being strategic about how they plan for it right right now there is a group of people that shows up to financial planners at the 11th hour and hopes for a Hail Mary savior right like hey I’m retiring in two weeks this is what I got can you make sure I can do this and then you ask that question do you got an inheritance because yeah and you’re like I mean sometimes the answer is simply well no or or people that will show up and say say well aren’t you like a stock broker can you make me a whole
(43:30) bunch of money with this and it’s like they’ve got you know a modest sum and they really expect very outrageous returns like you know 50% annualized returns or something and I’m like yeah no no I can’t you I saw this guy on the Internet it’s like well maybe you need to talk to them but we can’t do it right right which is funny because if you’re watching this on the internet you’re like yeah know some other guy on the internet can promise you impossible returns that’s not our Jam yeah they’re
(43:55) probably trying to sell you something yeah I mean how many times have you seen that like hey follow me I know I had I made 30% last year and I’m going to show you how to do it and you’re red flag yeah yeah I mean boy there’s so much that that’s the story for we should chalk that up as as a future show right which is the whole like when the why things don’t always scale like why Warren Buffett can’t make 100% returns every year anymore right but they used to and there’s actually some rational
(44:23) reasons for why and Warren Buffett plays a lot more defense than he does offense it’s not just that it’s a scale game when you’re investing billions you can’t like a tiny like you pick a100 million doll company can triple in value it doesn’t move the needle so they don’t spend any time on on those really small Investments anymore that leaves opportunities for other investors to do really good investigative work to discover those things but they’re just not going to be on the radar of
(44:48) institutional managers yeah so anyway we digress so um one of those overestimating future inheritance is a problem here’s a fun funny one um I’m going to let you describe it but it it actually does kind of it it irritates me that we have this All or Nothing culture about this one are you talking about credit cards I am yeah I mean here’s the thing I’ve never once not paid my credit card bill in full right and I might have set up to autopay like it literally pulls from the bank and just pays it I get so much cash
(45:24) back if the main place I’m shopping is Amazon and I have an Amazon credit card I get 5% back and then I get like one or 2% back on gas so it’s like why not use it I’ve paid for almost all of my family’s airline tickets with just a credit card with with the credit card points for the last three or four years when we take vacations see there’s a there’s a reason to have it but it goes back to once again you know if you’re going to shoot yourself in the foot because you’re not going to be able to
(45:51) manage it don’t have it but it doesn’t mean that they’re horrible there there’s other stuff people don’t think about that come with credit cards too like here’s one of my favorites I have a business card and if I pay the cell phone bill with that card it includes handset Insurance here’s a weird one for you you ready for a weird one yes when I went to buy a vehicle one time I have a really high credit card limit and I had a bunch of cash ready to do the down payment but I looked at that and I said
(46:23) wait a minute why don’t I do the down payment on the credit card and get get all those points and the pay off the card and I did it and I racked up so many points that month and I’m like sweet so and really that’s ki