The Rachel Cruze Show - Reacting to the Top 5 Money Predictions for 2025

Episode Date: January 8, 2025

💵 Start your free budget today. Download the EveryDollar app!   In today’s episode, I’ll react to the top five money predictions for 2025 and share my thoughts on what they mean for you.    Next Steps:  🎥 Watch my video 5 Numbers You Must Track to Build Wealth.   Connect With Our Sponsors:  🏥 Learn more about Christian Healthcare Ministries.  🔒 Get 20% off when you join DeleteMe.   Listen to More From Ramsey Network:  🍸 Smart Money Happy Hour  🎙️ The Ramsey Show   💸 The Ramsey Show Highlights  🧠 The Dr. John Delony Show  💰 George Kamel  💼 The Ken Coleman Show  📈 EntreLeadership    Ramsey Solutions Privacy Policy  Learn more about your ad choices. Visit megaphone.fm/adchoices

So we've seen a lot of predictions lately about what's going to happen in 2025 with the stock market, interest rates, inflation, I mean, just the economy in general. So, listen, some of it is good news. Some of it not so good. And so today I'm going to react and tell you my honest thoughts about some of these financial forecasts and what they mean for you and your money. Now make sure to hit the like button and subscribe, and let's get started. prediction number one, the rising AI stock prices. So AI has continued to be on the rise. I mean,

it's really hot right now. And some people were even questioning, hey, is AI even going to thrive in this world, you know, as we know it? And sure enough, it has. But according to Forbes, that many experts believe AI will prove itself fueling higher earnings, expectations, and in turn, higher stock prices. So here's the deal. These are the deal. These are the companies are coming out more and more around AI. And I think that, you know, this technology is not necessarily bad. I mean, if anything, I think it could be more efficient in all of it. But you also want to make sure when you're putting your money into anything, whether it's a new industry or a new company, always be a little bit cautious, okay? I always like to put my money, because remember,

this is your hard-earned money. You went to work, spent hours working, made a paycheck after taxes. So you want your money to be put somewhere that you know is going to be good. And so for me, having a long track record is always key. So again, AI is still very, very new. So putting your money into just AI stocks in general, I'm always a little bit cautious. Now, if they were in the mix of a bunch of other stocks, then definitely, but never do single stocks. So never look at a single company and just say, hey, it looks like they're on the rise. I'm going to put all my money in there. Don't put all your eggs in one basket. All right. Speaking of AI, prediction number two, a boom in AI-driven personal finance tools. So according to Forbes, emerging AI-powered apps have

already been starting to carve out their own lane in the personal finance space. So again, I mean, I think this is great. If we can lead on technology to help us in any way, it is fantastic. But you have to remember, AI is not going to solve your money problems. You're the one that's going to solve them. So whether it is a tool up there that's going to help you organize your money. I think that's all great, but I do want you to be in the middle of it. That's one reason, you know, with every dollar our budgeting app, I love it so much because you still have to be in there. Yes, it helps you calculate and see what's going on in each category. It is so helpful to have a tool. I'm all about having, you know, technologies assist you in this

process, but your money's not going to change unless you change. So you need to be in there and really doing the work as well because that's what's going to create long-term change. And my fear is a little bit that if AI takes over so much, it's going to be making decisions almost for you without you being the decision maker. So just be cautious about it. But again, I'm all about some new technologies helping us with our money. And every dollar is the app that I use. So I'll put a link down below because it is the best budgeting out there to help you overall with your money. And there's going to be a lot more features, which is very exciting. So make sure to check it out. All right, Prediction number three, lower mortgage rates.

So according to an article from Fortune, some housing industry trade groups and agencies are now forecasting lower interest rates in 2025. Amen. Hallelujah. And all of you looking to buy a home are saying, thank God. Now, the Mortgage Bankers Association has forecasted that the average 30-year fixed-rate mortgage will decline to about 6.2% in the first quarter and eventually fall to, to 5.9% by the end of the year. Fannie Mae predicted that mortgage rates will be around 5.9% in the first quarter, slowly declining and ending the year at 5.6%. Now, of course, we don't know. These are all educated guesses. But again, when you actually can forecast and somewhat look at the impacts of mortgage rates and the economy and what's going on with the Fed,

again, some people have, you know, their pulse on it. And I wouldn't say it's absolutely going to happen because it's still in the future. But it's good to know. And I do think as the economy continues to heal, we are going to see rates lower and hopefully continue to see inflation lower and all of that works hand in hand, which is fantastic. And again, I know buying a house has been such a sore spot for a lot of people because of how expensive everything is now. And rates aren't helping. So listen, if you are ready to buy a house, go ahead and buy a house. Like if you are debt-free, you have an emergency fund. You have at least 5% to put down for a down payment. You know, your mortgage payment every month is, is around 25% of your take-home pay.

Like, if all those things check off, go ahead and get into the market. Remember, you want to date the rate, marry the house. The house is going to be there long term. You can always refinance. But the thing about the housing market that we have seen and predicted years ago and it's continued to be true is like there wasn't a big bubble, right? Prices didn't drastically fall. They continue to go up.

Now, not as drastically as we've seen over the past few years, but they continue to be what real estate has always been. It's an investment, a really good investment. So your housing value will continue to go up. Houses will continue to get more expensive. So if you are ready, it is time to get in. Okay, before I share the rest of my tips, I want to tell you about one of our sponsors,

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and Goldman Sachs predicts that it will continue to rise to 3,000 per Troy ounce by the end of 2025. But here's the deal, again, people who sell gold, cherry pick, certain timelines, you know, where the price of gold went up. And when you're looking for a return over time, it's just not great. The long-term investments in commodities, again, are just, they're not there. It's not as great of a rate of return. And they're actually pretty fear-based. So when the economy itself starts to struggle, you'll see commodities like gold or silver continue to spike up. And so the thing is, always I go back to because a lot of people that get into gold are like, well, if something

ever happened to the market, we're going to need gold. And if something happens to the U.S. stock market, you guys, and it went down and it was dunzo, we would be more in like a hunger game situation and you're going to be looking for bows and arrows, not gold, okay? Like water is what we're looking for. And so just always remember that. And when you go to areas of like really complete destruction, like their economy is completely dunzo because of, you know, a natural disaster. again, people aren't trading gold. They're like, I need bottles of water. I need safety.

Like, that's what people are going to be looking for if everything hits the fan. So gold overall, mathematically is not a great investment. And then one of the reasons to get it is just in case something happens bad, but usually if something bad happens that bad, gold's not going to be what you're going to be run into. So always remember that. All right, prediction number five is the stock market growth. So the president and senior portfolio manager at client first wealth, legacy, and a state planning, sounds very important, believes that the SMP 500 will go up 14.5 to 19.6% by the end of

2025. Also, a partner and chief investment officer for running point capital advisors thinks the S&P will grow between 7 and 11%. Now, some experts are not as optimistic. There's a managing partner of SRM private wealth, and he is predicting a negative 5% to just a 5% growth. So, Yeah, it's all over the map a little bit. But here's the deal. When it comes to investing, you guys, it is the long game. We are not looking at a singular calendar year when it comes to investing. Investing is for the long term. Now, if you're about to retire in 2025, then yeah, you're going to want to take a closer look and make some decisions with your investment professional on when the best time is if the market starts tanking down like the last guy predicted.

But if not, you guys, overall, most of us, this is a long-term play. So always be investing. 15% of your income into retirement accounts. And the market is going to do this always. Okay. And there are some days. I remember there was a day in 2024 and it just like went down pretty significantly. Everyone freaked out, freaked out, freaked out. And within five days, it was back up. So like, and no one was reporting that. So remember, it is a roller coaster ride. Stay on the ride. Don't jump off. You'll get hurt if you pull your money out in a down market, finish out the ride because that is what your mindset is with investing. It is long term. So here's the deal, you guys.

There's a lot of noise. There's a lot of predictions out there about what's going to happen in the future. But the truth is, nobody knows. Yes, we can make some educated guesses based on data and what's happened in the past. And that's good to do. I mean, I think it's fine to look and read of what people are talking about or what they're seeing. We don't have a magic eight ball or a crystal ball to protect the future. So remember this.

Trends will come and go. But what is tried and true is really the old-school ways of handling money. and those always work. So always remember to go back to common sense ways of handling your money. When you live on less than you make, when you save for a rainy day, when you are a generous person, all of these things over time are going to be for your betterment. But if you want to be better with money, regardless of what the future holds, check out this video to see five numbers you must track to build wealth.

Or if you're listening on podcast, make sure to click the link below. All right, you guys, remember to take control of your money and create. create a life you love.