Afford Anything - First Friday: The Retirement Rules That Changed While You Weren't Looking

Episode Date: February 6, 2026

#687: Your tax refund might be $300 to $1,000 bigger this year, and that's just the beginning of what's changing with your money. The Tax Foundation estimates most Americans will see significantly larger refunds thanks to seven major tax cuts. The child tax credit increased by $200. The standard deduction jumped by $750 for individuals or $1,500 for couples. The state and local tax deduction cap now sits at $40,000. Seniors get an extra $6,000 deduction, and deductions for auto loan interest, tips, and overtime work all increased. Retirement accounts saw major changes too. Catch-up contributions for high earners now must go into Roth accounts, which pushed thousands of employers to add Roth options to their 401k plans between 2024 and 2026. Kevin Warsh, the new Fed chair nominee, thinks the Federal Reserve has been doing it all wrong. The former Fed governor and Wall Street banker believes the Fed focuses too much on backward-looking data and reacts too slowly. He wants strategic, forward-thinking policy instead of chasing lagging indicators. President Trump clarified he never asked Warsh to lower interest rates and wanted to "keep it pure." The labor market shows serious cracks. Job openings dropped by nearly one million year over year to 6.5 million. Unemployment claims jumped to 231,000 last week. January layoffs hit 108,435 people — up 118 percent from last year and the worst January since 2009 during the Great Recession. Big Tech continues its massive AI spending spree. Microsoft, Amazon, Google, Meta, and Oracle will collectively spend over $500 billion on AI infrastructure this year. Google's spending alone doubled from 2025, reaching up to $185 billion focused on data centers and Gemini development. Learn more about your ad choices. Visit podcastchoices.com/adchoices

Stocks are down, crypto is down, job openings are down, tax refunds are up, spending by the hyperscalers, big tech is up, there's a new nominee for Fed chair, there is a Roth mandate for a certain segment of the population, prediction markets are opening grocery stores, and a prominent member of the personal finance slash behavioral economic landscape is in the Epstein files. We've got a lot to cover. Welcome to the first Friday episode of the Afford Anything podcast. This show covers five pillars, financial psychology, increasing your income, investing, real estate and entrepreneurship. It's double-eye fire.

I'm your host, Paula Pant. I hold a master's in economic reporting from Columbia. And typically, we normally alternate between episodes in which we answer listener submitted questions and episodes in which we interview a guest. There's one exception, and that's the first Friday of every month when we pause to take a big macroeconomic look at what's been happening in the markets in the economy over the past month. So welcome to the February 26th, first Friday episode. A prominent name in the personal finance slash behavioral economics community, a name that many of you will recognize was referenced in the Epstein files 636 times. Dr. Dan Ariely is a prominent professor of business at Duke University.

He is the principal of the Center for Advanced Hindsight, which is a Duke-based lab dedicated to the study of behavioral finance. He is the author of three New York Times bestsellers, including predictably irrational, which is a book that many of you I know have read, and it was his biggest bestseller. He also wrote the upside of irrationality and the honest truth about dishonesty. He wrote an advice column in the Wall Street Journal called Ask Ariely, and he was a guest on this podcast twice in episode 257, which aired on May 18, 2020, and again in episode 273, which aired on August 31, 2020. Those of you who are frequent listeners know my buddy Joe Saul Seahy from Stacking Benjamins. He has also been on the Stacking Benjamin's podcast twice, and he is quoted extensively in Joe's book. Dr. Ariely, his subject matter is how we misthink money, our behavioral biases around the way in which we spend money. According to the Duke Chronicle, quote, the released documents put Ariely's

friendship with Epstein in a nine-year window between 2010 and 2019, when Epstein had a criminal record, although the released files showed minimal correspondences after 2016. End quote. I've looked through the files. There are a series of emails between Ariely and Epstein, the bulk of which were between 2010 to 2016. That appears to be when they had the bulk of their communication based on the emails. It appears that they met up several times during that six-year window. Most notably, there was an exchange in 2012 in which Ariely asked Epstein for the name and email of a redhead that he met through Epstein. Ariely told Epstein that he would, quote, would love to be able to meet her again at some point, end quote.

That was an email dated September 2012. The emails also reflect that their first meeting took place in 2010 over coffee between Ariely Epstein and somebody referred to as Poppy. They met again at his house in 2012, and then they also met in both February and March of 2013 with the latter again taking place at his house. and then they met again in 2014 at Epstein's house and also in 2015. And then in 2016, an email from Ariely showed that he looked forward to meeting with Epstein, though we don't have confirmation if that took place or not.

Dr. Ariely wrote a response that was published in the Duke Chronicle on February 2nd, in which he said, quote, Epstein told me about the accusations against him and said they were false. At the time, I believed him. As a researcher who studies human behavior, I was curious about him, and a few years later, I met him again in New York. These meetings were always in the presence of others and focused on topics related to decision-making. Nothing in those interactions raised concerns for me or suggested that anything inappropriate was taking place. End quote.

Later in that same piece, Dr. Ariely goes on to say, quote, In general, the contact I had with Jeffrey Epstein was infrequent, largely logistical, often mediated by assistance. I had no connection with his criminal activity and was involved in no financial, professional, or ongoing relationship. End quote. He also clarifies that he mentioned the redhead, quote, as a physical detail solely to help identify who I meant, because I did not know her name. to the best of my memory, that introduction did not occur, nor did I ever meet her again. End quote. That is what we know.

Those are the documented facts as reported initially in the Duke Chronicle. Moving to Economic News. The Bureau of Labor Statistics has rescheduled the release of the January employment report to February 11th. This data typically comes out on the first Friday of the month, but they have rescheduled it to the second Wednesday of the month. month as a result of the partial government shutdown. They have also delayed the release of the consumer price index to the second Friday of the month. February 13. We do, however, have a report for private sector employment from the payroll processing company ADP, which shows that private employers in the U.S. added only 22,000 jobs in the month of January. That is significantly

less than December's downwardly revised number of 37,000 new jobs. Amongsts, among the of these private sector jobs, jobs in the service industry were the bulk of it, 21,000 out of 22,000, while jobs producing goods only saw an increase of 1,000 jobs. The bulk of the jobs were in the education and health services sector. Small businesses had absolutely flat hiring, medium-sized businesses added 41,000, and large businesses cut 18,000, which is how we get to our net number. Regionally, the bulk of the job growth took place in the northeast and the Midwest, while the South and the West saw job losses.

Overall, the ADP report shows a major slowdown in job creation and hiring. That has been consistent over the past three years, and it reinforces the notion that we are in a low-fire, low-hire situation. The unemployment rate is still history. historically low. It has ticked up slightly, but it is still historically low. So not that many people are getting fired, but not that many people are getting hired. It's a very stagnant job market. The six-month moving average of hiring is 48,000, which is substantially lower than it has been during big growth cycles in the past. Now, again, this is all based on private sector data only.

ADP is a private payroll processing company, and they derive their data looking at the aggregate payroll data from their clients, which is quite a large sample size. Their client base covers roughly one-fifth of private sector workers in the U.S. If you've heard Karshton Yeska, the economist, former Fed economist, he's been a frequent guest on this podcast. He once mentioned that he doesn't only look at jobs data. He also looks at unemployment claims. because jobs data is a sample size-based estimate. There can be measurement error. The numbers are frequently revised.

But unemployment claims are claims. There's no methodology. There's no interpretation. A claim is a claim is a claim. What we have seen recently is a rise in unemployment claims. In the past week, it moved up to $231,000, and that is an increase of $22,000 from the prior week. It's also significantly above the four-week moving average of $212,000.

So unemployment claims are up. Meanwhile, there's a different source of data. It's called the Job Openings and Labor Turnover Survey, Joltz data. It doesn't measure employment. It measures job openings. So it's related but different. And the Joltz data shows that there are fewer open jobs. This is as of December.

We don't have the January numbers yet. but as of December, there are fewer open jobs than there were a year ago at the same time. So there were six and a half million open jobs in December, and that is down by nearly a million jobs as compared to the previous year. There's also yet another source of data, and it's released by a firm called Challenger Gray in Christmas. They release data related to layoffs, and the Challenger Gray report shows that 1.2 workers in the U.S. were laid off in 2025, and that is a lot of. is the seventh worst year since 1989.

According to Challenger grade data, the layoffs in January last month were up 118% year over year as compared to the previous January. In fact, the numbers for January, 26, were so bad that this past January was the worst month since January 2009 when the Great Recession was shaking up the market. stocks are down, as of the time of this recording, particularly for SaaS companies. However, major capital expenditure by the biggest tech companies, the hyperscalers, is already showing signs of growing faster than analysts predicted it would grow in 2026. So back in December of 2025, Goldman Sachs put out a report with a consensus estimate that AI hypers might invest more than 500 billion

in 26. Now, we're going to be a lot of the consensus estimate. Now, we're going to be a lot of, with one month of data in, that number already appears to be too low. Amazon, Microsoft, and Alphabet, combined, just those three companies alone are expected to spend $485 billion in CAPEX in 2026. Meta is expected to spend between $115 to $135 billion and Oracle another $50 billion. Many of these estimates are rooted in real numbers. For example, Microsoft's estimate of $100 billion in CAPX spending in 20206 is based on its annualized run rate of $35 billion in just Q1 alone.

So the AI hyperscalers, they not only did spend a lot in 2025, it is expected to accelerate significantly in 2026. So to put this into perspective, alphabet spending in this coming year is expected to be double what it spent last year. This will be very good for GDP, although of course what's good for GDP is not necessarily good for job growth. Wall Street right now is picking some winners and losers so there's some volatility in the market and Wall Street is decided that SaaS companies are probably going to be the loser in this because if AI allows companies particularly major enterprise companies to build their own custom solutions, then they don't need to be paying these big fees to SaaS companies.

To make one more point on the notion that what's good for GDP is not necessarily good for job growth because that's something new that we're seeing right now that we don't necessarily often see in the past. Historically, GDP growth and job growth have tended to, for the most part, run in lockstep. And what we're seeing in 2026 is the decoupling of those two things. I should say what we expect to see in 2026 is a continuation of a trend that we've already seen in 2025 and 2024, which is a decoupling of those two things, a decoupling of corporate growth from job growth. And if I may take a moment to editorialize, one thing that I've been thinking about a lot lately is, and this is something we've discussed on many First Friday episodes

in the past, is this wide chasm between consumer confidence and economic performance. So the early 2026 consumer confidence reports are out. The conference board released its consumer Confidence Index numbers for early 2026, and they found that consumer confidence has fallen to, in January 2020, 26, consumer confidence fell to its lowest level since 2014. Let me repeat that consumer confidence is at its lowest level in 12 years, according to data from the conference board, which is one of two major trackers of consumer confidence, the other one being the University of Michigan's Consumer Sentiment Index, which has often found similar, they've both had similar findings.

You know, in spite of some recent stock market volatility, we've got stocks, real estate values, gold, and as of last fall, even crypto, at all-time highs, crypto obviously has tanked, and home prices have softened slightly since 2022, but we have this situation where people who owned assets pre-pandemic, buy-in holders who acquired assets pre-pandemic, have done very, very well. But people who own assets are only about 50% of the population. And the other half of the population that doesn't hold any assets is seeing job stagnation, rising prices, and the cost of fundamental life things like a home feeling increasingly out of reach. And so I think that the disconnect between consumer confidence and economic performance

is largely a reflection of who owns assets versus who doesn't. And specifically, who purchased assets pre-pandemic, stocks, real estate, even gold, who purchased those assets pre-pandemic versus who didn't. Owning assets is not just about, quote-unquote, being rich. It is to a certain extent about not being broke. not feeling as though prices are climbing and climbing and climbing and they're getting further away from you and your wages aren't keeping up and there aren't a whole lot of other jobs that you can move into. That is a very tough situation to be in.

But if you have a 401k that's going gangbusters or an IRA that's going gangbusters or a handful of rental properties that have all grown in equity immensely, then you are likely to feel more confident about the future as compared to somebody who holds no assets. It just keeps coming back to the most important thing that you can do in order to not just build wealth, but in order to not be broke, is buy assets, buy stocks, buy real estate, by bonds, by treasuries, by ETFs, by index funds, maybe by a tiny portion of commodities, but by assets. That is the single most important thing that you can do to protect yourself. in a rapidly changing and increasingly uncertain world.

Okay, we're going to take a moment to hear from the sponsors who make this show possible. When we return, there's so much more that we still need to cover. We're going to talk about the nominee for the new Fed chair, Kevin Warsh. We'll discuss Davos. We'll talk about 530A accounts. We'll talk about the 401K withdrawal allowance for a house down payment. The credit card interest rate cap. We'll talk about home buying in 2025, which was at its lowest point in 20,

30 years. We'll talk about a mandate to invest in Roth accounts. And we'll discuss tax refunds. We've got a lot. That's all ahead. Local news is in decline across Canada. And this is bad news for all of us. With less local news, noise, rumors, and misinformation fill the void. And it gets harder to separate truth from fiction. That's why CBC News is putting more journalists in more places across Canada, reporting on the ground from where you live, telling the stories that matter to all of us, because local news is big news. Choose news, not noise. CBC News.

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Please sit and stretch. Steep. Flip. Or that. And enjoy. Via Rail, love the way. Welcome back. There's a new nominee for Fed Chair.

This choice took a lot of people by surprise. Kevin Warsh is the nominee. He has a reputation for being a hawk, meaning he is hyper-vigilant about inflation. That makes him a choice that took many people by surprise, given that it is well-known that the White House wants the Fed to lower the interest rate, which, of course, could have some inflationary risks.

Given that the White House wants the interest rate to be lowered, why appoint somebody who has a reputation for being hyper vigilant about inflation? Why appoint that guy to be Fed chair? Well, a couple of things to note about him. So Warsh is quite vocal about the size of the Fed's balance sheet. He thinks the Fed needs to clean up its balance sheet. He doesn't like the Fed's habit of buying bonds in the open market in order to lower interest rates. And so his nomination signals that perhaps an unstated or lesser-known goal of the administration is to clean up the Fed's balance sheet.

Now, there is a risk that by virtue of doing so, by virtue of selling those bonds, that could pressure rates to go higher. So that would be countermeasured through rate cuts. Warsh has advocated for rate cuts. He says that AI is deflationary. We actually dug into that if you want a deep dive into how AI can be deflationary. inflationary, listen to our podcast interview with Zach Cass, which just aired a couple of weeks ago in January. He talks about how AI can make the cost of living cheaper for many of us, most of us, because there are services that we formerly had to pay for that we no longer will need to pay for,

or at least not as much. But because AI, according to Warsh, because AI has a deflationary effect that, in Warsh's view, gives us greater leeway to engage in, in rate cutting, and that very rate cutting can also give us license to shrink the size of the Fed's balance sheet by selling bonds back onto the market. Warsh is expected to become the Fed chair on May 15, which is when the current Fed chair, Jerome Powell's term ends. So Jerome Powell will remain a member of the Fed Board of Governors until his term as a board of governor's member ends on January 31, 2021, 28, but his term as chair ends on May 15 of this year. Meanwhile, the current Wall Street consensus is that analysts are generally expecting the Fed

to implement one or two more rate cuts this year, meaning another 25 to 50 basis points. That's a quarter point or half point over the span of the year. In related news, home buying in 2025 hit its lowest point in 30 years. The 2025 home sale numbers matched the 1995 home sale numbers. The National Association of Realtors reported that existing home sales remain stalled at around $4 million. Currently, as of today, Friday, February 6th, the current average 30-year fixed rate mortgage is at 6.26% according to bank rate. Now, what would happen if that prevailing mortgage rate dropped by just a quarter point from 6. 6.26% down to 6%. Well, according to the National Association of Home Builders, that would bring

1.1 million more households onto the market, which would spur some home sales. Now, I should note that the Fed does not set mortgage interest rates. The Fed only sets the federal funds rate, which is the rate at which banks borrow money from one another, bank to bank, overnight. So it's the overnight lending rate for bank to bank lending. The reason that we often talk about the Fed's interest rate policy is because it's a proxy for the 10-year treasury yield. But it is the 10-year treasury yield and not the Fed's interest rates that determine 30-year fixed mortgage rates, which means that sometimes, even if the Fed drops rates, if the 10-year treasury yield for unrelated events moves in a way that surprises the market, the 30-year mortgage rate will follow. In any event, the National Association of Home Builders released a report indicating that they expect the 30-year mortgage rate to reach 6% by next year, 27.

I should also add, if you are looking to buy a home either for yourself or as a rental property, a new report has listed the most affordable states, and they are West Virginia, Mississippi, Louisiana, Kentucky, and Arkansas. Those five states have the lowest median home prices with many single-family homes staying under $212,000. A new house bill has been introduced that would allow people to make withdrawals from their 401K without penalties for the purposes of making a down payment or covering closing costs on a primary residence. Under this proposal, which was introduced on January 23rd, individuals could withdraw funds, from their 401ks for up to five years without penalty, and could make a penalty-free 401k withdrawal for the purposes of gifting that money to a relative,

as long as the relative uses the money for a down payment or closing costs. The name of the bill is the Home Savings Act, and it was introduced by Representative John McGuire of Virginia. However, it has no co-sponsors and does not have a companion Senate bill, so its likelihood of getting passed is uncertain. The White House is calling for a one-year cap on credit card interest rates. Under this proposal, credit card interest rates would be maxed out at a maximum of 10% for one year. In order for this to pass, it would require widespread congressional support. The heads of major banks and credit card

issuers are, of course, against this with J.P. Morgan Chase, CEO Jamie Diamond stating that if If this were to pass, many lenders would pull credit lines from consumers. It would likely, according to Brian Kelly, the points guy, who is a former guest on the show, it would likely also have major ramifications for cashback points, miles, other credit card rewards. According to Experian, as of June 2025, the typical American had $6,735 in credit card debt. according to the Federal Reserve, the average interest rate on credit card debt is around 21%. This means that paying off $10,000 in debt over the span of three years would require paying more than $3,500 in interest. According to an analysis by Vanderbilt University, capping credit card interest rates to 10% would reduce consumer interest payments by more than $100 billion.

An analysis by Vanderbilt University found that a 10% caper. would likely result in reduced to lending to customers who have FICO scores below 600, who may then turn towards pawn shops or payday loans. However, it could increase the popularity of Buy Now Pay Later services,

such as Klarna, which are already used by more than 90 million Americans, and Buy Now Pay Later services often split purchases into four payments, and those payments are interest-free. These services primarily make their money from merchant fees, so

they charge the retailers between 2% to 8% of the transaction cost. They do also generate revenue from customer fees, primarily fees for missed payments. You can contribute more to your 401k and IRA this year. We should have covered this in January, but we didn't, so we'll get to it in the February episode. The 401K employee contribution limit has increased to 24,500 this year, and if you are 50 or older, you can contribute an extra $8,000 as a catch-up contribution. So if you're 50-year-older by December 31st,

whatever your age is on December 31st is considered your age for the entire year for the purposes of catch-up contributions. If you're 50 or older, you can contribute a total of $32,500 to your 401k as an employee contribution. And then your employer can also put in a bunch of money. So the total contribution limit, including the employer side, is $72,000. There's also something that some plans allow that are called super catch-ups, and those are for people between the ages of 60 to 63. If your plan allows for a super catch-up,

that's an additional $11,250. The IRA contribution limits are up as well. So in 2026, you can put $7,500 into your IRA. That is an increase over the $7,000 limit, which we had in 2025. If you are age 50 and over by the end of the year, you can also contribute an additional $1,100 as a catch-up contribution. That's a 10% increase over 2025's catch-up limit, which was 1,000. The HSA contribution limits only ticked up slightly. Self-only coverage for 2026 is up $100 extra as compared to last year. So this year, it's 4,400.

Last year it was 4,300. If you have a family HSA, the contribution limit this year is up $200 as compared to last year. So this year it's $8750. Last year it was $85.50. The catch-up, which for an HSA is people 55 and older, remains the same at an extra $1,000. But there is a Roth mandate. That's right, a mandate for one of these accounts, but it only applies to one of these and two. certain people. Who does it apply to and when? We're going to find out right after this word

from our sponsors. Welcome back. If you made more than $150,000 last year and if you're making catch-up contributions into your 401k this year, you are required, required to make those as Roth contributions. This is totally new. There has never been a Roth mandate before. It used to be optional. But starting January 1st of this year, if you're 50 and older, it's totally up to you, whether you want to make pre-tax contributions or Roth contributions or a combination of the two to your retirement account up to the $24,500 limit. But any catch-up contributions that you make must be made to a Roth account. Now, this is for employer-sponsored retirement plans, like this is for your 401k, it is not for your personal IRA. So this does not apply to non-employer-sponsored accounts.

Now, originally, this rule was supposed to go into effect back in 2024, but at the time, a lot of workers didn't have access to a Roth 401K. So the IRS actually granted a two-year transition period, which gave many employers time to prepare for the Roth catch-up contribution rule to go into effect. And so over the span of the last two years, many employees suddenly got access to a Roth 401k for the first time. So check with your employer because even if three, four, five years ago, you didn't have access to a Roth 401k, which was common. Many employers did not formerly offer Roth 401k. Your retirement plan might now include that because of the Roth catch-up requirement. By the way, for anybody who's new to the show and is wondering what we're talking about,

very quickly, Roth contributions are after-tax contributions, meaning you pay taxes on the money in the year in which you earn it, but then all of the growth, the dividends, the income, the capital gains, all of that grows tax-exempt. By contrast, traditional contributions are tax deferred on the income in the year that you make it, but then you pay taxes at the end when you withdraw that money. So when we say that catch up contributions for people who made over 150,000 are now in your 401k mandated to be Roth, what we're saying is that you are required to pay taxes on that income this year, but that money can then grow tax exempt forever, or for as long as you're alive. And then it gets complicated after that when we talk about inheritance, but that's a different

topic for a different day. In any event, if you make a high income and you're over 50, it looks like you will be building out a stronger piece of the, you know, we talk about the tax triangle where you want a combination of tax deferred, tax exempt, and taxable assets in your portfolio. So if you make a high income and you're over 50, you're going to be building out more of that tax exempt angle of the triangle. The majority of people are going to be getting a bigger tax refund this year. The OBBBA reduced individual taxes by an aggregate $129 billion. When that happened, tax withholdings didn't change. So most of that money has been withheld from paychecks, which means of the $129 billion in tax reductions, about $100 billion of that, so the vast majority is turning into refunds.

The Tax Foundation estimates that refunds for a typical filer could be between. $300 to $1,000 higher this year than it is in a typical year. Now, this is because of seven major tax cuts, and those include the child tax credit, the standard deduction, the state and local tax deduction, and extra $6,000 deduction for seniors, higher deductions on auto loan interest, and higher deductions on taxes for tips, and on overtime work. There are new accounts, tax-advantaged accounts, for every. every American child born between January 1st of 2025 last year and December 31st of

28. These tax-advantaged accounts are seated with an initial $1,000. The account is fully in the child's name, and the parent or legal guardian is the sole custodian until they turn 18. Parents and guardians or other family members also have the option to deposit up to $5,000 per year into these tax-advantaged accounts. Now, depending on your political persuasion, there are three different names

that people frequently use when they refer to these accounts. On one side of the political aisle, these are referred to as Trump accounts. On the other side of the political aisle, they are referred to as Invest America accounts. And among financial nerds, these accounts are referenced by the IRS code,

which is 530A. So, you know, you've heard of the 529 plan or the 403B. So this is the 530A. So here's how it works. When you file your taxes, you make an election which enrolls your child. At that point, a financial institution will receive your funds and they will activate your account. And it will be initially seated with $1,000 from the U.S. Treasury. And there are a number of private donors who have also offered additional CESA

funds for certain accounts, depending on zip code largely. The money in this account is required to be invested in broad market index funds. You cannot use this money to buy individual stocks or take a flyer on Bitcoin or anything like that. This $1,000 from the U.S. Treasury is mandated to be invested in low-fee broad market index funds. Now, you don't have to contribute anymore. You can just leave the initial $1,000 seed there, and that could be the end of it. Or, if you want to, you can contribute up to $5,000 per year.

All of the money grows tax deferred, similar to a traditional IRA. And when the child turns 18, the account is theirs. So they have the option to either continue letting it grow or the option to withdraw the funds at the age of 18 to use for paying for college, paying for trade school, buying a home, starting a business. There are no use restrictions so they can use that money on whatever they want. Now, as I mentioned, a number of companies and philanthropists have also offered additional funds to cede certain accounts. So Michael and Susan Dell, Ray and Barbara Dahlio, as well as Uber, Visa, BlackRock, Dell, MasterCard, Charles Schwab, SoFi, just to name a few, that's not a comprehensive list.

those are all people and companies that have offered additional funds. All children in the U.S., born between 2025 to 20208, who have a valid social security number, are eligible to participate. To illustrate the payoff, let's just run through some hypothetical numbers. That initial $1,000 seed contribution invested in a diversified portfolio of low-cost index funds, in a tax-deferred account, assuming that the market performs at historical, S&P 500 averages. This means the initial $1,000 seed contribution will grow to $6,000 by the time the child turns 18. If parents, guardians, other family members or friends choose to make additional contributions,

if you make the maximum contribution of $5,000 per year, then the child will have $271,000 by the time they turn 18. On January 20th, the White House issued an executive order banning large institutional investors from buying single-family homes. The order states that within 30 days, the Treasury Secretary shall define, quote, large institutional investor and, quote, single-family home for the purposes of implementation. And within 60 days, a variety of federal services, including HUD, Veterans Affairs, and the FHFA, the federal. Federal Housing Finance Agency shall issue guidance to prevent large institutional investors from acquiring single-family homes that could otherwise be purchased by owner-occupants. The order also requires property managers, quote, managing agents of single-family home rentals, participating in federal housing assistance programs, end quote, to disclose to HUD if there

are any changes in ownership or control so that large institutional investors can't loophole their way into it. Now, technically, the order does not directly ban institutional investors from buying the homes, but it limits conventional mortgage guarantees for those types of transactions. In 2022, large investors defined as companies that own 50 or more properties, large investors in 2022 peaked at 3.5% of the single-family home market. Currently, they now account for about 2% of single-family home purchases in the past year in 2025. However, there is geographic concentration around that activity, largely in the Sunbelt metros, the major metropolitan areas in the Sunbelt region.

So while activity is 2% nationwide, it is disproportionately concentrated in certain locations. Crypto has tanked. Bitcoin as of a couple days ago actually dropped below $61,000. That's more than a 50% decline from its all-time high at $126,000, which was on October 6th, 2025. To phrase that another way, in the last four months, the value of Bitcoin has dropped by more than half. It is now, as of the time of this recording, up just over 71,000. This type of volatility is quite normal for Bitcoin. In fact, this is Bitcoin's ninth decline of over 50% since 2010, according to blockchain news. SpaceX has merged with XAI. XAI is a smaller AI company that is primarily known for the GROC AI chatbot. This mega merger values the companies at 1.25 trillion and has led to a bunch of memes around people joking about the fact that that the social media platform X is now a spaceship company. And in another funny twist, the prediction markets now have grocery stores.

Kalshi and Polly Market, which are two of the big prediction betting markets where you can bet on everything from the Super Bowl to how many inches of snow are going to fall. Kalshi and Polly Market are both opening temporary grocery stores in New York City. Kalshi showed up first. They set up shop in the East Village in Manhattan at a place called Westside Market, and they offered shoppers $50 worth of free groceries. Polly Market saw that and said, hold my beer. We're going to go even bigger.

So they decided to open up their own free grocery store, a pop-up store. It'll be open for five days from Thursday, February 12th at noon until Sunday, February 15. they'll be giving away free groceries. In addition to that, they also donated $1 million to the Food Bank for New York City. Speaking of Polly Market, one of the most interesting bets that took place in the last year was a bet on the question, quote, will Jesus Christ return in 2025? You could wager yes or no on Polly Market. Most of the money came in on no.

And that was, as we all know now, that was the winning bet. And if you timed that bet just right, meaning if you placed a no bet in the month of April of last year, you would have received an annualized profit of 5.5%, meaning betting against the second coming of Christ in 2025, that bet would have outperformed treasuries. But don't worry, if you missed 2025, you can still, and I am not endorsing this, I'm not suggesting it, but you can still make that bet in 2026. currently. Betters on Polly Market are giving the return of Jesus in 2026 a 2% probability. Again, please do not use betting markets. I do not endorse gambling, but I thought that would be

a fun story to end today's episode. Thank you so much for being part of the Afford Anything community. I hope you learned something. I hope this has given you food for thought. If you enjoyed today's episode, please share it with friends, family, neighbors, colleagues, your loved ones, your liked ones, your tolerated ones, share this with the people in your life, because that is how you spread financial information. My goal is to present finance and economics to you in a manner that is as factual, as unbiased, as neutral as possible. Although, if I do have a bias, I am super pro-index funds. I will make no secret of that, very, very pro-low-cost index funds, pro buy and hold and pro ownership of assets.

So I hope that this episode has inspired you to own assets and to discard your liabilities. Thank you again for being part of the Afford Anything community. You can subscribe to our newsletter. It's completely free. Affordanithingcom slash newsletter. My name is Paula Pant. This is the Afford Anything podcast,

and I'll meet you in the next episode.