Motley Fool Money - Walmart’s Warning, Money Tips for 2025 Grads

Episode Date: May 16, 2025

Even the biggest retailer in the world is planning to pass along tariff increases to customers. (00:21) David Meier and Andy Cross discuss: - The market cheering a short-term solution to trade between the U.S. and China, and Walmart signalling that prices on the shelves are going up anyways. - Cava’s “new factor” helping it continue to put up strong growth and comps numbers in a really tough market for restaurants. - Dick’s headscratching $2B buy of Foot Locker, and the lesson to take away from one of athleisure’s best performers – On Holdings. (19:11) Financial planning expert Robert Brokamp offers his money tips and the financial commencement speech for the class of 2025. (32:46) David and Andy break down two stocks on their radar: Evolve Technology and Booz Allen Hamilton. Stocks discussed: WMT, CAVA, DKS, FL, ONON, EVLV, BAH Host: Dylan Lewis Guests: David Meier, Andy Cross, Robert Brokamp Engineers: Dan Boyd Advertisements are sponsored content and provided for informational purposes only. The Motley Fool and its affiliates (collectively, "TMF") do not endorse, recommend, or verify the accuracy or completeness of the statements made within advertisements. TMF is not involved in the offer, sale, or solicitation of any securities advertised herein and makes no representations regarding the suitability, or risks associated with any investment opportunity presented. Investors should conduct their own due diligence and consult with legal, tax, and financial advisors before making any investment decisions. TMF assumes no responsibility for any losses or damages arising from this advertisement. Learn more about your ad choices. Visit megaphone.fm/adchoices

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We've got a short-term. trade agreement and a head-scratching acquisition, this week's Motleyful Money Radio Show starts now. That's why they call it money. The Full Global Headquarters, this is Motley Fool Money Radio Show. I'm Dylan Lewis. Joining me over the Airwaves, Motleyful Senior Analyst, David Meyer, and our chief investment officer, Andy Cross. Fools, wonderful to have you both here. Hey, Dylan.

Hello, Dylan. This week, we've got the money commencement speech for this graduation season, one retailer shopping in the bargain bin, and of course, the stocks on our radar. are this week. We are going to kick off talking trade. How could we not? We're not going to quite call it a trade deal yet, Andy, but the Trump administration striking a short-term agreement with China. This follows the announcement on terms with the UK. Market obviously happy to see anything that brings tariffs down. What is a long-term investor to do with a short-term trade agreement? Well, that's exactly right, Dylan. It is short-term. It's 90 days. It drops those tariffs imports,

on Chinese imports from 145 to about 30% more or less, and tariffs on U.S. goods from 125 to 10% back into China. So it's sensible, right? It makes sense. The market was looking for this. We obviously saw that relief rally across the board. We've seen it in tech. Tech was up like 8% this week alone.

We saw some retail excitement around that too. It is temporary. It's 90 days. Hopefully we see better spirits reveal for a longer trade agreement. We saw Goldman lowered the recession risk down a little bit from 45%, down to 35%. But listen, Dylan, it's all in how the companies manage this. The best companies will be able to continue to thrive through this, but it does increase the cost of goods sold and the cost structure of many companies.

And we're going to have to hear from them to see what they believe they can either pass on or absorb. I think maybe optimists in the market, David, look, and say, okay, we have one deal or the agreement in principle here for a deal. We have what happened with the UK as well earlier this month. Ideally, these stack and start to build some certainty over time that businesses can operate on and that maybe other negotiations can build on to. I completely agree with what you just said, which is we're looking for certainty. It's still not here yet. First of all, this 145% escalation was ridiculous. So clearly markets love the pause. But a 30% tariff in place is significantly higher than anything that we've seen almost in history and certainly modern history.

So, yes, companies are looking for certainty. And interestingly, if we go to what companies have been saying recently in their earnings, all they are doing is commenting on uncertainty. In fact, some companies have even pulled their guidance. So long term, yes, we need more clarification. We need a resolution because this 90-day pause, this could just revert right back. But I think what as a long-term analyst, you know, what I'm looking to do is to look over the next few quarters and see how the commentary from companies change. Because, again, either customers are going to pay higher prices or company margins are going to contract. Neither one of those are good, but it's probably most likely going to be a little of both. So early in the week,

we had that announcement. Later in the week, we had commentary and earnings out from Walmart. They gave us a guide both for what to expect in terms of their business, but also what to expect on shelves. And David, they made no bones about it. They expect prices to go up this summer for consumers. Yes, we need to seriously think about this. Walmart, the king of low prices, has just said it is going to have to raise some prices on some of its goods. Seriously, think about that. Walmart is one of the most powerful buyers of goods in the world. It can literally almost get any deal that it wants. That's known as a monopsony. It has ultimate buying power, and it could not force suppliers to reduce their prices in the wake of these tariffs. And again, Walmart executives

basically repeated what we talked a little bit about above. The tariff policies do not help our economy at all. And this company has the best data about the health of consumers across a wide variety of income levels. This is, again, I don't want to sound too alarmist, but this is an astounding statement from somebody who prides itself on being a low-cost provider to consumers. Yeah, I mean, CEO, Doug McMillan, Dylan, said the cost pressure from all the tariff impacted markets started in late April and it accelerated into May. So to Dave's point, we're going to see this through the summer. This is hitting everybody, and this is the big daddy, the big gorilla out there when it comes to supply, but they get so much of their product from,

China, that it is impactful to see how they navigate, navigate that. That said, it was still a pretty good quarter they put up. It was. What's interesting to me about this is they're putting those signposts out there and those warning signs, but they are also saying, Andy, we're reiterating our guidance of three to four percent net sales growth. So they expect it to code down to the consumer on a price level and what they see on the shelves, but they aren't necessarily forecasting a hit to the business and what they've laid out financially for investors. Yeah. I think so. I think they can eat some of that, but they're going to have to figure out the pricing around that. They have so many skews. They sell so many things. We don't forget their e-commerce

sales were up 22 percent this quarter, which was an acceleration from not just last year, but from just the quarter we saw in December, their total sales up 2 and a half percent and 4 percent on a constant currency basis with really pretty healthy performance on the comp sales. So like I said, like we talked about, this is really the giant, and we see continued increasing in their membership income was up almost 15%. Their advertising business of 50%. So they have that really breadth, even though they are known predominantly on the retail side in the Walmart stores, they have that breadth that allows them the flexibility that

others just don't have. One of the things that executives commented about was even if there's less buying from lower income cohorts, actually folks at the higher end are trading down. They're coming to Walmart a little more. So that's an interesting paradox that the company is seeing. Yeah, you're seeing the higher income shoppers more at Walmart. So as a percentage of traffic going through, I think you're seeing those higher income, stepping foot in there and saying like, gosh, there are prices in there that I can get at Walmart

that I can't get elsewhere and I need to be able to save money myself. All right, Kava also out this week with some new numbers for the market to digest. David, generally strong results for the Mediterranean fast casual chain, but also taken in part with the other ones that we have. seen from restaurants so far this quarter, kind of a confusing look at what's going on with the American eater right now. Yes, very clear that Kava is growing fast and executing well in an environment where consumer confidence is still waning. The metric that stood out to me the most was a 10.8% increase in same store sales, and that was powered by a 7.5% increase in

visits. To your point, that's very different than what we heard earlier in the month from Chipotle and Domino's who saw visits to their stores, amount of traffic decrease. So I think one of the things to remember here is Kava is earlier in its growth cycle. And opening stores and having younger stores actually really helps right now from the same store sales perspective. And I would be remiss if I didn't say one other thing. I am impressed, but this company has just reached the billion dollars sales mark over the last 12 months. That is impressive. Yeah, interesting, Dylan, their food, beverage, and packaging costs increased to 29.3% of sales. That was an increase of 110 basis points or 1.1%. They add to stake. Stakes more expensive. So they're adding diversifying

the menu, adding that in there, that increased their beverage costs. Their average store revenue went up to $2.9 million from $2.6 million a year ago. That's an increase of 11%. And as Dave mentioned, the same store. And the guidance was pretty strong at 6 to 8%. And store margin around 25%, which is pretty pretty much what they've been delivering. The question is, is that worth the price that you're paying today? I think if you close your eyes and hold Kava stock for the next few years, you're going to do okay. But I think in between now and then, it's going to be pretty lumpy. Andy, you brought up the stake there. and that came up on the conference call. Their team talking about how consumers are into premium items, steak being one, P to chips being another. They are not seeing that order value go down very, very

different than what we've been seeing with comps declining at Chipotle. Some of that being traffic-driven, but some of that being price sensitivity as well. Domino's saying the lower-income consumers aren't spending as much as well. When you see all this together, are you parsing this and saying the newer concept experience, the growth story is what's helping a lot of consumers look past this, or is there something else going on here? Yeah, they increase prices 1.7% in January. They're not going to increase prices the rest of the year, which I found that very interesting. They got a little price bump in January. It's not going to get that. They're testing out Chicken Swarma in Dallas and Florida, which I hope they come to D.C. Or if I visit Dallas and Florida, I'm excited to test that out because I think you're right, Dylan.

I think customers are willing to try that new experience, and when they try a new experience, be able to explore a little bit into other offerings like they're offering at Kava. So one of the other things that management commented on, and I took a few data points to try to verify if this is correct, and I think it is, is basically their price increases have been less than the rate of inflation, which is not something others have been doing. So the commentary from management is in today's environment, right, we offer a great value proposition, and the numbers back that up.

All right, coming up after the break, we've got a $2 billion buy. We're struggling to understand. Stay right here. This is about full money. The old adage goes, it isn't what you say, it's how you say it, because to truly make an impact, you need to set an example and take the lead. You have to adapt to whatever comes your way. When you're that driven, you drive an equally determined vehicle, the Range Rover Sport.

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The Range Rover event is on now. Explore enhance offers at rangerover.com. Welcome back to Motleyful Money. I'm Dylan Lewis here on air with David Meyer and Andy Cross. And fools, we've got a deal to discuss. Dick's sporting goods is buying Foot Locker for $2.4 billion. And the market reaction, pretty clear here. Dick's shareholders not loving the deal.

Shares down 10% this week on the news. David, what did you think of it? I don't get it. And I think it's pretty clear that the market didn't like the idea, too, based on, you know, where you talked about Dick's sporting good stock being on Thursday, May the 15th. Look, Foot Locker has been struggling for years. And I think it's because buying patterns are changing. And within the deal structure, for management at Dix to come out and say that they're going

to operate Foot Locker as an independent entity, pretty much communicates that this is all about turning foot locker around. And frankly, I don't see that. Sales have been contracting, the cash flow generated from this business has been trending down. I don't see the return on investment. And again, if we go back to where customers are buying their shoes from, it's not necessarily as much in the mall anymore. The direct-to-consumer channel is becoming more and more important to big product makers like Nike and Skechers, on holdings. Name your favorite shoe provider. Yeah, I like the market and I'm skeptical of that this is a good deal. It does give them an international presence.

Dix is not internationally at all. Footlockers, 30% international. So it gives a little bit of that presence. You know, what I was really interested in you guys to hear them talk about Nike, Dave. You mentioned that. Nike was mentioned 21 times on the conference call. Ed Stack said, I think Elliot Hill at Nike and his team are doing a great job. And we're pretty excited about what's going on with Nike.

This is the move back into wholesale or retail. as opposed to direct-to-consumer. Foot Locker is going to be a beneficiary of that move back to a wholesale standpoint. So they're clearly seeing benefits from Nike's turnaround that Elliott Hill is doing and what they're trying to do at Foot Locker. They're only paying about 30% above book value for Foot Locker. Dix is not very inquisitive, so they don't have a lot of goodwill on the balance sheet. So I can kind of see this playing out. That is a very good point, Andy, because the new CEO, his specialty was taking care of the different channels. And so to bring him back, right, that could very well be a catalyst that helps Foot Locker along the way. And perhaps, you know, Dix is getting

a bigger benefit by having more opportunities for Nike to get in its doors. Speaking of direct consumer and sticking in the world of sporting goods, sneaker maker on holdings out with their earnings this week. Andy, this is one of the fastest companies in ath leisure at the moment, and they seem to be continuing to set a very brisk pace. Fattest and fastest in performance, as well as in, like, just the fastest on the track, because on holdings is really truly become this performance brand when it comes to running. I think there were some concerns. Certainly I was, like, oh, my gosh, you know, the consumers slow down.

What's tariffs going to do to on holdings, which has a big chunk of their business in Americas, although they're very global as well. But overall, it was a really strong quarter. revenues were up 43% direct to consumer was up 45% wholesale was now at 4 is it was up 42%. So these are growth numbers. So very strong on the top line. Direct to consumer is now 38% of sales. That was a little bit of an increase. They raised their sales guidance for the year to 28% from 27%. They kind of tightened up the operating profit margin because of some of those costs. But their sales by region team is what I found so impressive. America's was up 33%.

about 28%, 29%, on a constant currency because of the strong Swiss franc, which they report, which on holdings reports into. Europe, Middle East, and Africa was up 30, almost 34%, but here's the kicker. Asia was up 130%, 129% on a constant currency basis. And now Asia is just slightly smaller than Europe, Middle East, and Africa next to the big behemoths, which is America. So On Holdings is a global brand that is speaking and performing very well. Shoes were up 40%.

That's the real bulk of their growth. Apparel doubled, but apparel is a very small part of their base. They're really known for their shoe technology. And finally, inventories was down almost 5%. They talked a lot about this on the call, managing inventories, really focusing on the brand and focusing on that wholesale network, which is so important as we saw with the acquisition of Foot Locker by Dix. So for On Holdings, revenue tripled over the last four years. The company, solidly profitable. Margins have expanded. David, Andy just painted a pretty rosy picture of this business. I did, too.

Looking at the report and just kind of looking at the outlook, is there anything you'd be concerned about here? I have to be concerned about where future tariffs go. So one of the reason that On is getting a little bit of benefit within the markets is 90% of its shoes are sourced from Vietnam and Indonesia. So, basically less product coming from China, which has less impact. And if we remember after the tariff was announced, one of the most interesting things that happened in the market that day was, apparently Vietnam got on the call or at least got a message to President Trump that they wanted to talk.

And President Trump tweeted out, hey, Vietnam wants to talk. Maybe we'll, maybe we'll, you know, we'll see what we'll. we can do there. And all of the barrel companies and shoe companies that have a lot of business in Vietnam basically, you know, shot up. So that's the, you know, that is the main thing that they have to manage. But to counter that point, also what management talked about, is they're going to be passing along price increases. So let's think about that. This is, again, this is a company that we know is continuing to grow quickly. And on the back, of this, you know, really surprisingly good report, I think we can say the on-brand is really here to

stay. In fact, it's giving them permission to raise prices in this environment. And that's huge, right? Because what that does is that allows them to, one, still be able to meet customer demand, and, two, be able to protect their margin structure just a little bit. And let's not forget, this is a global business, and all this is happening because consumers around the world want its products. That is a phenomenal accomplishment, considering the struggles that Nike and Under Armour have seen recently. On is just not going away. Putting these all together, Dylan, with the Dix and Foot Locker News. So Nike is like 30 to 40 percent share in the U.S. They're probably 50 percent share in Foot Locker alone. And then at Dix, they're probably maybe like a quarter of the

shelf space. And so you think about on holdings now competing against a footlocker Dix combination. As I mentioned, they really are focused on that wholesale or the wholesale distribution network. They're very, I wouldn't say cautious. They're very careful on expanding their own footprint, their own store footprint. They're very successful here in the U.S., but they are taking a little bit more cautious approach. So it will be interesting to see how the Dix's footlocker relationship impacts the likes of on, not just Nike.

Taking a step back here, it seems like you guys, if we're looking at the race metaphor here, are putting on holdings in the gold medal position, maybe putting Nike in a silver metal position, and putting Dix and Foot Locker in the bronze when it comes to this race? Sounds about right to me. I think that's about right. It'll be very interesting. Dickers reports next week, so it'll be very interesting to see what they report

with their Hoka business and how they talk about the whole Dick's Foot Locker acquisition. All right, Andy, David, we're going to hear from you guys a little bit later in the show. Up next, Robert Brokamp steps to the lectern and gives his financial tips for 2025 grads. Stay right here. You're listening to Motleful Money. In a world full of noise, long-term thinking stands out. On the Capital Ideas podcast, Capital Group leaders explore the decisions that matter most in investing, leadership, and life. It's a rare look inside a firm that's been helping people pursue their financial goals for more than 90 years.

Listen to the Capital Ideas podcast from Capital Group, published by Capital Client Group, Inc. Welcome back to Motley Fool Money. I'm Dylan Lewis. Spring semester is over and college students are back home for the summer or taking the stage for graduation and starting their careers. Joining me to talk money tips for recent grads and drop some sage life advice. Motley Fool's financial planning expert, Robert Brokamp. Brough, thanks for joining me. Thank you, Dylan, for having me. Such a pleasure to be here. So I have to ask, we're going to talk post-grad plans, how to set yourself up financially. What was your first job out of college? I was actually an elementary school teacher at a school called Holy Trinity, which was associated with Holy Trinity Church.

And I point that out because if you ever saw the movie The Exorcist, you've seen it because it's right on the same street as the Exorcist's steps. And one of the scenes from The Exorcist was filmed in the church. I was a sixth and seventh grade language arts teacher and religion teacher, not making a lot of money and living in a very expensive city. So you said not making a lot of money. Were you particularly financially aware at that point? or at what point did you start getting on it now being a financial planning expert? That was it. I was making not much money, already had a kid, and I figured, boy, I need to make the most of the little money that I make. So I used a relatively new thing back then called the Internet to find what was then a relatively new company called The Motley Fool.

And that's when I started learning about money. In fact, I met Tom and David Gardner at a book signing in 1997, two years before I actually joined the company as an employee. So I think there's a little bit of inspiration there. You don't have to start out on the financial journey. You can find the financial journey. The internet, I think, has become even more ubiquitous since then. Robert, is that right? Most people know about it, yeah. My financial awakening was at the fool, too.

I had studied finance and had dabbled a little bit here and there, but had done the bare bones of I have a Roth IRA because my parents made me set one up as soon as I was taxpaying age. Good for them. So I got lucky in that I was starting off on a strong foot, but that was because of their savvy, not because of my own. For our summer interns or for our fresh grads that are starting out there, what is the checklist, what is the advice for beginning that process?

Well, I'll start with the summer interns, right? Or anyone with the summer, any kind of a summer job, and it's related to what you just said. Once you have an earned income, you can contribute to a Roth IRA because you do need earned income to contribute to the retirement account. The great thing about it is it grows tax-free as long as you follow the rules. Those rules being that you have to leave the earnings in their to their age 59.5. Now, for the younger folks out there, they're making, I don't want to leave my money alone that long.

But the good thing about the Roth IRA is you can take the contributions out, tax and penalty-free any time. So if you contribute $2,000 and it grows to $3,000, you can take out that $2,000 and just leave that $1,000 alone until you retire. And boy, by the time you retire, it'll be worth a good bit. So that's important to think about. If you are on an internship, and ideally you're working in an internship related to what field you may want to work in, it's important really just to understand the day-to-day of that job to see, is that the type of industry you want to work in? Take advantage of all the opportunities you might have to see what goes on in the company. Talk to anyone who will sit down and talk to you, whether it's a newer person or even as high up

for the CEO, if you could get access to that person, because you want to make those types of connections. And you also want to make a good impression because once you do graduate from college, you might want to rely on someone from that internship to give you a recommendation, or you might want a job with that company. And there have been many situations here at the Motley Fool back when we had an internship program. Someone was an intern. They graduated from college, and then they started their career here at the Motley Fool. One of the things I'll throw out there on the topic of interns, sometimes, depending on the structure, you're 401k eligible. Sometimes you're not 401k eligible, which gives you that first

early introduction, bro, to the rollover and being prepared for that. And just being aware that your financial life will move with your professional life. Yeah. So one of the things I talked about is leaving the money in the Roth IRA, right? And if you take that earnings out before age 59 and a half, you're going to be taxes and a penalty. Same with a 401k, right? This will happen if you're at an internship at a company that auto enrolls people. You're putting money in the 401k, you're getting a tax, break, the money grows tax deferred, but when you leave that company, you should roll it over to an IRA or to a 401k to a new job if that's the situation. If you don't, you will pay taxes in a penalty. In some cases, what companies will do when you don't have a lot of money in there

are usually like less than $5,000 or $7,000, they'll just send you a check. And you're like, hey, great, I got a check. I'm going to cash that check. That's what's going to get tax and penalties. You've got to get that check into an IRA within 60 days. depending on where you look, the number varies, but there are estimates out there for graduates and the average student loan debt. And we're going to be talking to people here who maybe are very interested in putting money to work, but also have the reality of loan payments beginning. How do you think about what to save, what to invest, and what that checklist looks like, the hierarchy for that? I would say, first of all, it starts a little bit with just how you feel about debt, right?

Does that create a sort of a psychological burden for you? Do you feel, uncomfortable having debt. If that is the case, I am inclined to say pay that off as soon as possible unless you're in a situation where you are eligible for 401k in which you receive a match, which is basically free money. You should at least get that match before you direct any money to paying off the debt. Now, if you feel like I'm comfortable with debt and it's a low interest rate, low single digits, I think you could be uncomfortable stringing out that debt longer and then saving more. Historically, the stock market has returned 10% a year on average. You hardly ever see 10% in an actual year. You'll see many great years, many less great years,

but over the long term, you ideally should be earning something that exceeds the typical interest rate on student loans. I know for the last couple years, the student loan environment has been a bit of wait and see. The factors affecting whether people are going to make repayments have been changing a little bit. Anything that people should have on their outlook for that? I would say that the days of hoping to have your student loans forgiven are at least temporarily over. I'm sure there are people that have been putting it off, hoping that loans will be forgiven, and then now they're now talking about garnishing wages, maybe garnishing Social Security for student loans. I think it's just best to pay it off, at least pay the minimum payment.

Now, there are situations, jobs, companies that will help you pay it off. In some situations, you have to stay with the company for a certain amount of time. If you're part of that type of program, I think it makes sense to participate and only pay as little. But I would not count on a great forgiveness in the future. So we fit IRAs, we hit 401Ks, we fit student loan debt, anything else on the financial checklist. Just some rules of thumb that I think people should consider once they are entering the job for. First of all, there's a good budgeting rule of thumb that is basically you devote 50% of your after-tax income to necessities, things like mortgage, healthcare, groceries, 30% to discretionary purchases like entertainment, dining out, vacations, and then 20% to savings. And then underneath that, once you graduate from college and you're getting a paycheck, like, well, how much can I afford to spend on housing, which is going to be the biggest item in your budget?

A good rule of thumb is to keep it to less than 30% of your budget if you can. I know that's harder in some more expensive cities. And then the next biggest item on most people's budgets is transportation. And that basically comes down to buying a car. And a good rule of thumb there is the 2410 rule, which is basically put 20% down, do not extend payments for more than four years, and keep your monthly payment to 10% or less of your monthly gross income. And also, keep a car for 10 years.

years if you can. So you pay it off in four years, and then that money you were sending to pay off the car, get into a high-year-old savings account, keep saving that money over the next six years. So by the time you need to buy another car, you already have the cash waiting to be spent. It's like you're staring at my driveway. I've got a 2014 Subaru hanging out. Outstanding. Well past the decade and thriving. Okay. So to bring us home here, I'm asking you to indulge me a little bit. You've prepped a mini commencement speech. What do you have for us and for the graduating class of 2025? Okay. Dear graduates of 2025, this may be one of the few times in your life that you'll be

encouraged to be foolish. Mottley Fool was founded more than 30 years ago by brothers Tom and David Gardner and their friend Eric Wright Home. What started out as basically a project in a backyard shed is now a website with millions of visitors every month and they chose the name of the Motley Fool to stand out to be different, maybe even rebellious, little countercultural, The name comes from Shakespeare, and the message was and is that you can manage money on your own and, you know, have some fun along the way without the help of Wall Street, who back then were, and to some extent still are, the kings of the wealth management industry, but not particularly benevolent kings, they're often charging high fees for mediocre results.

I'm here to tell you to take control and maybe be rebellious, to be foolish with your money, because if you do just what the average American does, you will struggle to accomplish the financial goals that I'm sure you have. Let's start with investing. According to a Schwab survey, the older generations, the boomers, the J-Xers like me, didn't start investing until their 30s. But you can start right now with very little money, as little as 25 bucks. You could open an account with a discount broker, buy even one share of stock, or even better if you're just starting out by one share of the Vanguard Total Stock Market Index Fund, you'll then be a legitimate part owner of every publicly traded company in America. If you start saving $100,000,

a month at the age of 22 and earn 10% a year, which is the long-term average of the stock market, you'll have almost $750,000 by the time you're 65. What if you put it off for a decade and don't start investing until you're 32? You'd have less than $300,000. Investing right now at such a young age, and eventually accumulating that money would put you in the minority of people in America. In other words, you'll be a bit countercultural and very foolish. Of course, to invest, you first have to save.

Currently in the U.S., the average household saves less than 4% of their income. Yet studies show that people should be saving 10% to 15% just for retirement, let alone for things like a house and a car. So do all you can to sock away at least 20% of your income. I know it may not be possible at all times, but make it your goal. Even if you can get most of the way there, you'll be doing better than most other Americans. And more importantly, you'll eventually be financially independent, doing what you want and when you want.

One of the biggest decisions you're going to make is whether you will get married and to whom. And it will be a huge factor, perhaps the biggest, in your day-to-day happiness. Unfortunately, more than 40% of marriages end in divorce, and one of the biggest causes of divorce is money. And that's because many couples didn't talk about their beliefs about saving, investing, debt, or about their priorities before they tied the knot. So before you get married, make sure you and your fiancé are on the same page about money. And you can start by doing an online search for something we call the Fully Wedgame, which features questions you and your partner can answer together to see how much you're financially aligned.

I'll end here by citing the graduation speech of one of the world's great rebels, and that is Steve Jobs, who co-founded Apple in his bedroom and his parents' house when he was 21. He dropped out of college, but he still kept attending classes, including a calligraphy class that influenced the future typeface and fonts of Apple products. He also spent time just kind of wandering around India seeking enlightenment. At a commencement speech, he gave at Stanford in 2005, he said that he learned at the age of 17 to live each day as if it were his last. Job said, quote, your time is limited, so don't waste it living someone else's life. You'll be trapped by dogma, which is living with the results of other people's thinking. Don't let the noise of others' opinions dry out your

inner voice. End of quote. And of course, one day was Steve Jobs last. He died in 2011 at the way way too young age of 56. So it's important to save money for your future. It's also important to not save everything for your future. Save enough to fund your goals, but please, please have plenty of adventures along the way. So I'll close with the final two sentences of job speech, which you got from a countercultural magazine called The Whole Earth Catalog. And those sentences are, stay hungry, stay foolish. Thank you. Robert Brokamp, I tip my cap to you. Wise words as always, and a pleasure as always. Thanks for joining me today. Thanks, Dylan. Listeners, that's advice you can take to the bank, but it's not all we've got for you this week.

After the break, David Meyer and Andy Cross come back with me to talk about the stocks on their radar this week. Stay right here. They'll listen to Mom for Money for Money. These days, I'm all about quality over quantity, especially in my closet. If it's not well-made and versatile, it's just not worth it. That's honestly what I love Quince. The fabrics feel elevated, the cuts are thoughtful, and the pricing actually makes sense. Quince makes high-quality wardrobe staples using premium fabrics like 100% European linen, silk and organic cotton poplin. They work directly with safe ethical factories and cut off the middlemen, so you aren't paying for brand markups or fancy stores, just quality clothing. Everything they make is built to hold up season after season

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Go to Q-I-N-C-E.com slash Motley for free shipping and 365-day returns. Wentz.com slash Motley. Enjoy a song. It's later than you think. As always, people on the program may have interests in the stocks they talk about, and the Motley Fool may have formal recommendations for or against, so don't buy us something based on what you hear. All personal finance content follows Motifool editorial standards.

It is not approved by advertisers. Advertisement is our sponsored content provided for informational purposes only to see our full advertising disclosure. if you're listening to the podcast version of this week's radio show, check out our show notes. I'm Dylan Lewis, joined again by Andy Cross and David Meyer. Who was last segment, I asked our colleague Robert Brokamp for his money tips for college grads, and he dropped the banger financial commencement speech we all probably needed to hear when we were in our early 20s.

I want to know, going over to you, Andy, best piece of non-financial advice for someone donning the cap and gown this May. I would say, like, if you have a chance to experience as much as you possibly can, as early as you can after graduation. In school and after school, try it. Try all different kinds of experiences. And don't be afraid to fail. That's just a big thing. Like, go out there. You fail. You fail with some friends. You go on to the next thing. David, similar. Are you going to say go for it, fail? Are you going to say, no, Andy's wrong. Succeed. You have to succeed all the time. No, Andy is spot on. What I told my daughter and what I told her friends when they asked me,

do not be afraid to take risks when you're young. That's when you should be taking risks to try things. Try things. Now, don't let it kill you, right? Don't let it be catastrophic, but do not be afraid to take risks now. It gets harder when you get older. We tend to be financially minded here on the show, and there is the classic advice. The dollars you invest early are worth more. I'm going to caveat that with some non-financial advice. fun costs less when you are young. It is easier to have a good time for less money when you're younger. You've got to balance that lifetime value and figure out where it makes sense for you. Don't be afraid to spend a little bit and enjoy it as well. All right, let's get over to stocks on our radar this week. Our man behind the glass, Dan Boyd, is going to hit you with a question.

David, you're up first. What are you looking at this week? So I am looking at a company called Evolve Technology, and the ticker symbol is EVLV. This is a $750 million small cap that's changing the way public and private buildings manage their security. So the company sells security hardware and software that scan people as they enter buildings. So, as you might imagine, its biggest customers are sports venues. One cool thing is that AI is actually an incredible catalyst for the company going forward, given how much data its systems collect. So 2024 was an absolutely terrible year for the company.

It was investigated by the FTC on how it markets its technology, and that resulted in the CEO being replaced. But with that in the past and new CEO, John Katsirsky at the helm, I look forward to hearing how the company will grow from $100 million in revenue in 2024 up to some much bigger number in the future. Dan, this name is a new one to me, Evolve Technology, ticker EVLV. You got a question? Yeah.

I mean, with a small market. cap of less than a billion in a recent FTC investigation. My question for David is, what are you doing, man? What is this? What are you bringing me? So I'm actually bringing you a company that whose hardware is different than the typical metal scanners that are outside of venues. And I'm also bringing you a company whose customers love it. One, throughput times are faster, which means people get in, get to get a good experience before, before they even get in the door. And it still provides plenty of safety. Yes, there was an issue in terms of how they market, but you cannot argue with the product and the software that this

company delivers to its customers. They love them. Andy, David's showing off his engineering background there, getting into the gears on the product. You got a tall order this week. What's on your watch list? Well, I'm not a consultant and have never been a consultant, but I'm looking at another consultant, Booz Allen Hamilton symbol BAAH. The consultants have really been just hammered over the past few months, including Booz Allen Hamilton, because of their ties to the federal government. Booz Allen business is almost all tied to the government.

They're a consultant that provides management and tech services to the federal government. It's one of the largest AI providers inside the federal government and has one of the largest cybersecurity operations globally. But with all the activity and all the conversation around Doge and worries about cutbacks, especially in defense, and civil agencies like Homeland Security and Justice and others that Booz Hamilton has long, this is a hundred-year company, has long called a client and then the Secretary of

Secretary of Defense signing a memo of $5 billion in defense contract cutbacks. Things are not looking particularly bright for the likes of Booz, Hall and Hamilton, and other consultants. Yet they have still a very large backlog of $39 billion. They have a book to bill ratio of $1.4. that's the highest we've seen in six years. They have an expanded partnership in AWS. The SOX rebounded a little bit.

They report earnings next week. Team, I'm excited to hear what they have to say about those cutbacks and about their client interest in more demand for Booz Allen services. Dan, a question about Booz Allen Hamilton, ticker, BAH. Not really a question, Dylan, more of a recollection. Back in the old days when I was dating, I ended up dating a few women who worked at Booz Allen Hamilton, and unfortunately, it didn't work out with any of them.

So I don't know. Is that a black mark against them? Could be. It's not. You get a little dividend yield. You know, they've increased 16% per year for the last five years, Dan. Wow. Dan, I don't know if the dividend yield is going to be enough to overcome your dating experience.

Is Evolved technology the one going on your watch list this week? It is, Dylan. Dan, appreciate you weighing in. David, Andy, appreciate you bringing your stocks. That's going to do it for this week. Smaltly, Food Money Radio Show. The show is mixed by Dan Boyd. I'm Dylan Lewis.

Thanks for listening. We'll see you next time.