Trading Secrets - 63: Financial advice you MUST know today w/ expert Rachel Cruze from the legendary Dave Ramsey Solutions Enterprise!

Episode Date: August 1, 2022

Check out The Restart Roadmap: Rewire and Reset Your Career now!   This week, Jason is joined by best-selling author, financial expert, and host of her own show, Rachel Cruze! Since 2010, Rachel has worked for her father, Dave Ramsey, and his legendary personal finance empire Ramsey Solutions. Rachel shares her takes on how to tackle credit card debt and student loans, the current real estate market, pay transparency, and investing. Rachel also gives her insights on where she and her father have different approaches, the psychology behind money management, and growing up in a house with a financially strict father. How can you own nice things and not have the nice things own you?  What would Rachel be doing if she hadn’t joined the family business? Which Ramsey Solution ventures bring in the most revenue and which are the loss leaders? Rachel reveals all of that and so much more in another episode you can’t afford to miss!   Be sure to follow the Trading Secrets Podcast on Instagram & join the Facebook group.   Host: Jason Tartick Voice of Viewer: David Arduin Executive Producer: Evan Sahr   Produced by Dear Media.

The following podcast is a Dear Media production. Welcome back to another episode of Trading Secrets. Today I am joined by Rachel Cruz, a two-time number one national bestselling author, financial expert, and host of the Rachel Cruz show, which I had the pleasure of being on. Since 2010, Rachel has worked for her father's personal finance, legendary empire. You may have heard of him Dave Ramsey. It's called Ramsey Solutions, where he and her and their massive team teaches people to avoid debt, save money, budget, and how to win with money at any stage in life. She's also authored three bestselling books, including Smart Money, Smart Kids, which she co-wrote with her father.

and today we're going to discuss all things money with Rachel, including what her opinions are on today's stock market, the housing market, and what she thinks are the key factors that shape people and how they manage their money in a time like today, which is just mayhem. So Rachel, it is so timely that you're on, and thank you so much for being on this episode Trane Secrets. Yeah, Jason, thanks for having me on. I appreciate it. So for anybody that doesn't know, ransy solutions. I mean, I got to just pump the tires.

I walk up there, didn't know what to expect. I'm doing Rachel's show. It is an empire. I mean, what they have built and the impact they have made in Nashville, Tennessee, and well, well beyond is incredible. And I saw that your dad started this empire and built it in 1992. So that's when you were just a kid. I'm curious, what was it like seeing your dad kind of build this from nothing?

And additionally, what was it like living in the household of a, a pretty strict financial father with a lot of guidance and principles. Yeah, you know, it's funny because I feel like people are like, oh, you're Dave Ramsey's daughter. And they have this idea in their head that, you know, we had like mutual fund birthday parties. And like, we're in budget camps every summer, all this stuff. And honestly, thankfully that it just, it just wasn't the case. Mom and dad did a really great job, obviously, of teaching us how money works.

But they did it in the ebb and flow of life. It was not this legalistic, unauthentic way of presenting money. It was like, hey, this is everyday life. And here's what it looks like. Here are good decisions. Here are bad decisions. Here's why. And then even as kids, you know, when I was younger, like people were given an allowance.

And I was like, we were never given an allowance. We were on commission from as early as five years old. And it was like, if you work, you get paid. If you don't work, you don't get paid. And so that concept in my mind was so normal. So I feel like I kind of grew up in a world, Jason, where what I was taught, I realized when I left home, I was like, oh, this isn't normal. like all the things that everything from yeah investing from a young age to avoiding debt to working hard all of that you know it was kind of this oh wait people are just kind of catching up to these

ideas where i feel like i just lived with them my whole life so that part i think was unique in a sense but i was obviously grateful for that and yeah as far as dad's job his career i mean we were there from the beginning like we were the kids were the first shipping department i always say like with his books like we had to put them in envelopes and have labels we shipped everything out of the living room. I mean, there was a poker table that was basically his office table growing up. And then slowly but surely, it's a true entrepreneur, you know, I grew up in an entrepreneur's home is what it was. So you, as kids, you were drug along to anything and everything going on that the family was doing business wise. That was just life. And so I really

don't think I realized the impact until I started traveling and speaking with him when I was 15 because they started doing these massive events around the country. And at 15, I remember going into an arena and there was like 10,000 people. And I was like, wow, this is a lot of faces and a lot, you know, so it was moments like that that you realize, okay, there's an impact. Something he's saying is touching a nerve. Something he's saying is giving guidance that people are listening and grabbing onto. So that's kind of when I realized, okay, the truth about money and what does that mean? What does that look like? And then as for myself, as an adult, deciding my own career path, okay, what do I want my life to look like? Because it was not this idea that it was just a

shoe in that you're going to work at Ramsey because you're a Ramsey kid. But I really did kind of grow this passion for the money message and talking about money and understanding money in college and even earlier than that. So I kind of just transitioned to this job and I've been doing it for 12 years and yeah, it's great. It's so fun. I love my job just like you love yours. You get to talk about a subject that you're like, it's just, it's fun. I enjoy it. The growth's incredible. And I think what he's done from an impact perspective and what you've done in such a quick time frame is something I want to touch on. Before I do, though, I love the budgeting boot camp. That's just, that's amazing. It's hilarious that people always have that in their mind. I don't know that

I necessarily think about like, oh, you're in budgeting boot camp. One thing I do probably think about, though, is from my understanding and listening to some of his guidance and principles and even like some, like I think of the arguments I've seen that he's gotten in with staff, he's pretty critical with overspending on material things, right? So was that ever like a struggle for you, like, and maybe, you know, you earned a couple bucks and you wanted to get the nice car, the nice watch, or the Louis Vuitton, because I do think that's something that people struggle with today, you know, quite often. And what is kind of like the culture, even in the office space? And for you, with buying those things, like, were you hiding them from dead?

Did you just not have that philosophy? What's your take on that? Okay, so it's a little bit of a misconception. So here's, this is what was said to me growing up, and what I even say to people, because I think it's a great picture, that it's okay to have. nice stuff, don't let your nice stuff have you. So it can have you really in two ways, where the controversy comes in, in our world is it can have you in debt. So when you owe something, you're not owning it. It owns you in a very real sense. And so that your stuff has you. So we are critical of overspending and living beyond your means if you're not living within your means. So if you're taking on debt to go and get the Louis Vuitton purse, or you're going into debt to drive

the BMW, whatever it is, that stuff owns you at that point. So that's a red flag to say, hey, how can you get out of that? And then your stuff can own you in more of, I think more of an emotional way where your identity, you think your happiness, your joy comes from stuff. And if that's your life, you really kind of end up living this rat in a wheel type of mentality because we all know, we all fall for it. I still do. That you think, if I could just have this thing. I've been wanting a Tesla, Jason, for like three years. And I just got one. I ordered it, like, in the fall, and I just got it. And even in that, I'm like, when I just get my Tesla, everything's going to be okay.

Once I get, you know, like, we can still fall for that idea. But the truth is, like, your life doesn't change, really. You are still you in all the good and the bad and the ugly. And your stuff doesn't define that. It doesn't change who you are. So, again, it's okay to have nice stuff. Yeah. Just don't let your nice stuff have you.

So I got a Louis Vuitton sitting right here, Jason, if you want to know, I mean, Tesla, all the things. But again, it's an idea of saving up and paying for it. Yep. And just knowing emotionally, like, that bag is great, but take it away. I'm still Rachel. I love that. I absolutely love that.

And I love the concept you talked about, like, just the idea of what is like the psychology behind why you're spending that? Is there a deeper rooted issue that you're trying to maybe fulfill an insecurity or lack of confidence in something else? And you're actually using your money to make up for that and just analyze. that is huge. A question I have for you, though, because I remember when Caitlin was on dancing with the stars, I'll just never forget this. They put us up in an apartment building. So we're in an apartment building. So no one has ownership. No one has ownership. They're renting. And they

had a valet service. And the cars coming up. I mean, the Lamborghinis, the Maseratis, the Bentleys. I'm like, how are you? Why you have a $300,000 car when you're renting? My question to you is when you get to that step that you're like, I'm at the Tesla's perspective. got the Louis Vuitton, because I can afford it. I'm not using debt to take it. Do you have a golden rule about when you can afford something like a Tesla? Is it a certain amount of cash? Is a certain amount of earnings? What's your rule for yourself and what's the advice you have for someone else if they're thinking? Like, I think I do deserve the Louis Vuitton and I don't have to, you know, go into debt to get it. Yeah, for me, it's not specifically a number, but I think it's this idea

that it's still a very small percentage of your world. And I think that's the big thing. It's all about percentages, right? I mean, if you're worth $2 billion, we're talking about different things in life versus if you're making $40,000 a year. So like, you know, for a guy, you know, that has a $200 or a $200 million net worth, yeah, him buying a Bentley, he can buy five of them and he doesn't even notice. It's like, you know, him buying a biscuit compared to someone that's making $50,000 a year. So it's all about percentages. So for me and my husband, we look at everything, like, hey, what's a small percentage of our world. And I even go through a little bit of the emotional process if I can that I'm like, okay, if I just throw this money on the interstate and let it burn and I still look at

our account, does it freak me out? And if it freaks me out, I'm like, okay, let's just wait a little bit. Let's wait a little bit. But if you get to the point that you're like, okay, that amount, it just doesn't change my life, big or small really at this point. Like, sure, maybe it's a big thing that you're like, ooh, the dollar amount feels big, but a percentage of your world, as long as it's small and it doesn't really affect you majorly one way or the other, I think you have freedom to go and do it. It's a great piece of advice, and it reminds me immediately of what we had, the world's best poker player, Daniel Neganioan, he's won over 50 million bucks playing poker, and he talks

a lot about bank role management and making sure that what you're playing with at the table is such a small percentage of what you have allocated towards your budget with poker, because to exactly your point, Rachel, when it's that small of a percentage, You're not playing on emotion if you win or lose. You're playing on logic strategy and numbers. And it's funny how there are parallels there. Tons of lessons from your father and tons of lessons that you've instilled on so many people. What would you say either growing up or today is one lesson or maybe a strategy that your dad implemented to you growing up that maybe you don't agree with or take a different approach with it?

Oh, good. Well, he hates Tesla's so we can start there. So that's a good starter. Why would you buy a computer on wheels? That's a good one. Yeah, I don't know. I mean, I'd say from a values perspective, I very much agree with him. I think more of our differences are approach.

And so if you've listened to Dave at all, he's wonderful. I don't know if you do the, do you do the an eagram, Jason? Oh, yeah, of course. Yeah. Okay, okay. So he's an eight, like through and through. Yep. So it's just like, and again, it makes great radio.

It may, you know, what that's, I think partly of what's kind of made him successful is this cut and dry personality, and he's going to tell you like it is. And I feel like, I'm more of a friend where I'm going to walk beside you. And I'm in the trenches, you know, he's 65, right? I think he's 65, 63, 62. Oh, gosh, I don't know how my dad is. Yeah, 60, something like that. And I'm like, he's been, you know, sort of out of the game of just like being in the

trenches and life. Like, I have three little kids. We're doing back to school shopping this month. You're at the grocery. Like, I'm in it, like day in and day out. And so there's a level for me where I'm like, when I hear a caller's question or something comes up on social, I'm like, I'm her. Like, I feel like when I see that question or that issue or that problem, I'm like, I get it in real time where he gets sick because he felt bankruptcy when I was young. So like he has pain points from his money journey that he can go back to in a instance.

But I think over years, he's like, just do it. Just do it. And I'm like, it's hard just to do it. Like, you know, because you want stuff and to say no to yourself. It's not fun. So he just, I think his approach and my approach is different. Yeah, the difference is an approach for real. I almost like it, like, when I listen to some of his shows, I'm like,

it's almost like he's like a father figure to people that, like, didn't have that guidance. Like, he'll call people out. He'll yell at them at obviously different stages, different ages, you guys bring different things. One thing I got curious about, especially in a time like today where there's so much social media, there's a lot of entrepreneurial work. There's a lot of side hustle. And there's a lot of individuals just within their current companies. that want to make a bigger splash.

What do you attribute to his success and your success with the impact you're making in small periods of time? Like when you had mentioned that just shortly after he had launched, he's filling up 10,000 people, events, like 10,000 people going to a live event for anyone listening is almost impossible to fill, unless you are like a massive, massive artist selling out stadiums.

So if you have to, like, dissect a little, bit. What are things that he's done and you've done to create that type of splash that quickly? It's a good question. A couple of things. I think one, for his sake, more so than mine, he's just never stopped. And so, like, if there's competition, even in the space, he's like, they're going to be gone in five years. Like, I've seen these people come and go constantly. And he's like, it's the tortoise and the hair a little bit of that thing. Like, you're just going and going and going and going and going and going and going and going. And so I think that, perseverance, the longevity of just simply, simply staying with it.

Honestly, I think I give him a lot of kudos because whether it was the radio industry 15 years ago, because all your big talk shows, you know, were owned by these massive media companies, and we are the only self-sindicated radio show. I think it's number two talk radio show in America right now. And everything really in the top eight is owned by a company. And so from early on, him just kind of calling his own shots and figuring out, okay, what's best for this. So I think the longevity, the perseverance is big. And then also, Jason, the way I think Ramsey, we do a good job connecting money in all aspects of your life, because some

people think of money of just a number sitting in your checking account or your investments. It's more than that. Like your money affects your relationships. It affects your mental health. It affects everyone and everything around you. And so touching those points of money is really important. And so there's this level of inspiration with our plan, but also in instruction. And so having seven steps, the seven baby steps, I think it's huge for people. I mean, if you read any good book about whether it's habits or change, having a guided plan helps people because you're not thinking like, what do I do next? And it's like, here are the seven things you do. In good times and bad times, it's these seven things. So it gives a level of

instruction that I think really does help people. But also that inspiration to the idea that attaching money to other parts of your life and understanding what it does to you, spiritually, emotionally, not just financially. I love that inspiration, instruction, consistency, and then finding pain points of the masses. Those are things that you guys have done, but those are things that are applicable to anyone that's creating any business that you can lay out a plan and do it effectively, and you guys have done that. I mean, some of the numbers that I had saw 23 million plus people tune in to the radio shows, the podcast, weekly videos. Six million plus families change their lives with your guided money plan. You guys have 5,000 trusted pros helping your fans with

taxes, real estate insurance. I mean, 19 national bestselling books. It's wild of the numbers when you look at the business. We're going to get into some money tips that anyone here listening can utilize immediately today. Before we do, while we're on the topic of Ramsey Solutions and the business, when you look at all the success you've had and some of the numbers that I outlined of all the lines of business that you guys have, which is a multitude. in a material amount, a material amount, which would you say from a business perspective generates the greatest revenue for Ramsey solutions and which are more lost leaders? Well, it's funny now because the live event aspect has changed completely, right?

And even before COVID, like just what people used to, how people would take in content and what they would give up their Saturdays for back in 2004 is a whole lot different than 2022. And so honestly, our live event model generated revenue for years. And then it kind of started at this point that it that it didn't. And so today we still do live events. Like we're going, I think the five cities in the fall. Phoenix, actually, our Phoenix one just sold out. But it's more around, it's around 2,500 people, not 10,000.

Because those arena things are just not, people don't do it. Yeah. And so now we look at those events less on a profit standpoint and more just being able to go out and be with people. because there's a human connection that I think we're missing in culture and anything because the social media, it's wonderful, it's great. But you just miss the human connection and so much of our content is so relational that like when we can go out and do book signings and sit with people and be live with an audience, like we love that. I mean, it's good marketing. It's definitely fuels excitement around the brand.

I mean, I think there's a business aspect for sure. But overarching live events for us now, it does not generate revenue. But we still do it because of some good business practices, but also just to be with people. Yeah. That's so huge. Yeah. Yeah. And then I would say our biggest revenue drivers definitely are probably the business to business

aspects. Our business to consumer does well. But it's funny, the things that are out front, like publishing live events, these things, those aren't the biggest revenue generators. It's usually kind of the back end. And we have subscription models with classes and budgeting tools and all of that. It's kind of those behind the scene things. that are working, that are still helping people that generate more of the revenue so that I feel

like we can go and do the outward facing things that people see all the time. Amazing. Well, stay tuned for the recap. We'll talk a little bit about some of their business to business products and models aligned with their business and consumer. So we'll cover that. Now we've got to get into the topic that everyone is tuning in for just your take on what's going on. I mean, it's mayhem out there, right? We just got the inflation report 9.1%. SMP's down 21% year to date. You see the gas prices up and down and in oil per barrel. That price is fluctuating in a wild world. But then you start to get some of these statistics that show that there is some hope, like unemployment being 3.6%. And what I'm hearing from a lot of the people that

follow and listen to trading secrets and participate in restart consulting is it's like this damned if you do, damned if you don't. If you sit in cash, you're losing money. If you put in the market, it's losing. If you buy real estate now, it's, it's, it's, at an all-time high. So people are confused. What I would love to do with Rachel is just go through a couple quick topics and just get like your go-to strategy for someone listening on these topics if you're good with that. Yes, I love it. Let's do it. So the first one, I know it's your favorite one. Credit card debt. What is your take given the current economic impact? So we got to talk about this. I know. Yeah, so my advice would be all

debt, any debt, credit cards, anything, get out as quickly as possible. There is something about your largest wealth building tool is your income. And when your income comes in and you actually get a say over where your money is going, that's when you're able to build wealth the fastest. But when it's coming in and it's going out to three different credit card payments, student loans, two car loan, I mean, and it's just going out, what you don't have as much left to not just spend on yourself and to give, but also to save and invest. And so when you, when you, look at your income as your largest wealth building tool, it changes your mindset. So for credit card debts, yes, I would get out. Pay off your smallest debt first. I teach that versus the highest

interest rate because again, I think personal finance, it's 80% behavior. It's 20% head knowledge. We all know. We can do the math. We can figure it out. But getting those quick wins, it does something to the human spirit where you're like, okay, when people feel like they're living paycheck to paycheck, or drowning in debt when you can pay off even a $500 credit card bill that's been going months to month to month with you when you focus all of your time and energy you pay it off and it's done there's the sense of hope of like oh wow that really that really happened I really just paid oh my gosh okay I go to the next one the next one and so that I think is is very helpful not necessarily mathematically but again more the behavior change side so

so credit card debt yeah got it And so that's called the Snowballs, which you guys have called that. Yes, versus the Avalanche. So the Avalanche is highest interest rates. Yep. Got it. Snowball versus Avalanche while we're here for one second. So then in general, you would agree that paying out the highest interest rate debt will be.

Numberically, it probably is the most beneficial. But what you're saying is based on the psychology and behaviors, you guys in the research you've done have seen a lot more success with really just focusing on small wins in the psychology. behind the momentum and behavior with Snowball? A hundred percent, yeah, because if we were doing math, we wouldn't be in credit card debt in the first place. I mean, literally, that's a very good point. Okay, Snowball versus Avalanche. We'll talk a little bit more in the recap.

Of course, Ramsey Solutions is Snowball, and they've had a ton of people get out of debt. Okay, student loans. People are questioning, should I take a student loan out? They have these student loans. Should I invest or should I pay them off? What's your take on student loans? And what advice do you have?

Yes, pay them off with all the COVID. everything that's gone through with the COVID bills and relief and all of that, there's been some time. So get on it now. Like start working on it now. And I feel like Sally Mae, she just like moves in and is part of the family for decades for people. So get her out. Get her out as fast as possible. So that's, yeah, my first piece of advice. And then if you are thinking about taking out someone that, again, I'm just not a huge fan. I think that it's a really predatory industry. And I think it's done way more harm than good. And as they're talking about forgiveness, you know, I mean, that's, that's been said in D.C. for years now.

Forever. And I don't wait on D.C. to change more lives. So, like, go after it. But that, I'm like, okay, if you're going to forgive something, then what you're saying is, it's not good. You're trying to get people out of it. So then why are you still implementing these loans? And so it's so difficult because I think that some states, you know, they have free community college. There's in state universities. And now, and Jason, I don't know, we kind of live in different worlds a little bit. But in my head, for majority of Americans that are out getting jobs. The CEO really doesn't care that much about where your degree is from. It's certain industries they do. But overall, it's like you have a degree, you show work ethic, you show

humility, and it's you're going to work hard and help them do the job that they're wanting you to do. That's what people want to see. And so we've fallen for this trap that our pedigree is suddenly going to, and I think millennials were the first big generation that we've experienced this. If I have this sheet of paper, I'm going to become successful. Like that was said to us in high school, you got to go to college, you got to go college. And I'm all for education. I love higher ed. I am all for it. But we just have to be smart about what we're doing. And these students that are coming out with a $90,000 of student loan debt to get an undergrad degree in English, it makes no sense. There's no marketplace value for the investment you just put it. And now you're graduating

underwater financially. You're stressed out. You're trying to find a job. And it's just, it's a disaster. Yeah, we are the most educated generation. And we have half the wealth of the previous generation. Like, that's very eye-opening. I completely agree with you, too. I went to a private school my first year, my freshman year, and then I transferred to a state school. And that private school was in one year more than the sum of three years at the public school. And I completely agree with you. Yes, there are certain very specific niche industries where going to like an Ivy League school is massive within those spaces, but you're talking about like three to five percent of all colleges. And then also, like you talk about price elasticity, right? Well, we see it right now.

If this coffee becomes $10 a cup, less people buy it. College is not that way. When the price goes up, because of the supply that the government has offered individuals that are going to school, the price goes up and the demand goes up. So it's creating these issues. Yeah, totally on the same page. I think hoping for someone to pay it off is definitely not the right strategy with anything or any debt you take out. Okay, let's go to investing. This is, I think, the trickiest one of them all, right? Because you sit on cash, you're losing 10% right now. You utilize the cash. Everything's getting crushed. What type of advice would you give to someone that has their debt in order that feels like they're in a good place to start investing? What suggestions or strategies in a time like

this would you give them? Yeah, I mean, we're currently in a bare market. I think it's happened 15 times since World War II. So my overall philosophy, which I kind of go to, ways. I can split down the middle, Jason. There's like a very small percentage of me that loves conspiracy theories, so I can grow down this rabbit hole of like, what's going to happen to our world. I know, I know. But the very more factual data point driven, Rachel, I just believe in the American economy enough to know that like, I just believe we're going to come back from it. I really do. I don't think that this is going to tank. And I don't think we are in this moment. Some people are calling for a great, another great depression is going to happen. I don't

think that. Are we entering a recession? We'll find out here the next week or two. Maybe. Maybe. Maybe, you know, we don't know all of that, but I just, I just believe we're in this weird market right now, but I think 10 years from now, it's going to go up, right? Even sooner than that, but I'm just saying long term. So when I personally think about investing, more on even the retirement side, it's long term, long term. And it's going to be a roller coaster. And the only person I could turn on a roller coaster is the person that jumps off.

So when people freak out, they pull their money out. I'm like, no, no, no, no, stay in it. And again, I'm still being consistent. Winston and I, my husband, we are still investing. We are still putting money towards our Roth and towards our 401K. I mean, and at this point, it's on sale. I'm like, go ahead and just keep buying, even though it's not fun. So trust me, when you look at the numbers, I'm like, oh, it's not fun to see the no growth

and the loss and all that. But over time, investing for me is a long-term play. It is not short-term. And people get hurt when they make short-sighted decisions with their money. And so for me, again, it's that long-term play. Yeah. And I mean, that also goes right with the Great Warren Buffett, right? He's like, be fearful when people are greedy, which was, you know, literally 12 months ago and get greedy when people are, when there's fear on the streets. I mean, it lines exactly with what he's saying. How about especially here in Nashville? I mean, it's crazy, right? We've already seen inflation. We've already seen appreciation in the housing market. Now we have a city that is just blown up from a growth perspective. So we're dealing with the triple threat. We look at house prices right now. And it's wild. They're almost like two, two and a half. what they were three years ago. Do you have any take on either first-time home buyers or people that are looking to buy or sell just in the real estate market? Yeah, you know, I'm not a Debbie Downer

on the real estate market. I don't think there's a bubble. I really don't. I know that prices have gone up. I think it went up, what was it, like 23% into the 2020 alone. I mean, it is crazy, but the supply demand is what drives real estate and the supply is still down. We are half the number of new homes on the market than we were in 2008. So when you look at the side-by-side, comparison of the recession then versus now, it's a different world. And there's five million more millennials within the prime home buying phase of life in the mid-30s than there were in 2008. So the demand is still crazy high and the supply is still crazy low. So I don't see it being this huge bubble that's just absolutely going to pop. Now, well, things go back to appraisal.

Yes, which is happening now, right? The market's softening because of mortgage rates went up. And so you're seeing that. So if you're a seller, have paid. We're going back to normal real estate times where your house will probably be on the market for 90 to 120 days on average. You're not going to get 53 offers in 12 minutes like some people were getting, you know, at getting $200,000 over asking price. Like the craziest stories we heard over the last 18 months in Nashville and most places around America, you're like, what is going on? So that's all, I think that's gone. Like I think that we're kind of settled in. And I think that's good.

I think we need a level of stability. I mean, the fact that it just shot up so quickly felt unstable to me. Sure. Oh, gosh. And again, people get fearful and it's the house they want. So they're going to throw extra money on it, even if they don't have it, even though it stretches their budget and it stresses them out. They're in this bidding war and all of that. So all of that's cooled off, which I'm really thankful for.

So again, if you're a seller, have patience. Your house will be on the market more days than it was. It would have been 18 months ago. Be prepared for negotiation. I think buyers are coming in and actually negotiating again, the price. all of that is still happening. And so, and again, if you're a buyer, get the appraisal, get the inspection, go back to what the world was three years ago in real estate.

And that's what's happening. Now, again, Jason, too, there's pockets around the country that we're seeing fluctuation a lot. So you look at a Houston, for instance, and it's really softened. And it's a lot because of the oil, you know, oil and gas demand, that's where majority of jobs are in Houston. And the fact that that's less now, people are moving out. So you do see these random little pockets around the country.

But you look at cities like Nashville, places in Florida, most places in Texas, a Phoenix. Like you do look at these pockets around that are, again, softening a little bit, but we're not seeing a nosedive in home prices. And I don't think we are. Yeah, totally. So a couple things that you mentioned, I think that makes so much sense is the difference. We'll talk a lot about this guys in the recap, too, but the difference in 2008 to now, right, is just supply. There's not inventory like there was in 2008. And I think the big thing you hit on too is this whole multi-generational thing of multi-generations living in the same home. I read it was like it was over the weekend. I was reading the paper from 1971 to now,

I hope I get this right. And if I don't, I'll correct in the recap. But more than double the American households have multi-generations living in them because of the price of real estate. It's now 18% of the entire U.S. lives in a household with multi-generations, which is more than double than it was in 1971. So there are those people that are trying to grow, build wealth, and move on. It's just when the time is right. So we'll talk more about that. And also we have Jason Oppenheim from selling sunset. He's going to dive into a lot of the stuff Rachel talked about with different cities and primary and secondary cities and the impact that'll have on real estate. So we'll get to that. The last one I want to leave from a tip perspective with you, Rachel,

is when you look at pay transparency and then negotiation tricks. So you have a lot of people that work under your enterprise. You have people that work for you. People might come to you and ask for a raise. You hear a lot right now of pay transparency occurring in the industry. What's your overall take on paid transparency? And then any negotiation tips you might want to leave someone with if they're trying to negotiate for themselves in a time where cost of everything is going up. Yeah, absolutely. Well, I'm all for negotiation, whether it's for your salary at work or you know, you're buying real estate, whatever it is. I think that it's a great tactic to use because if you ask, the worst they can say is no. And, yeah, wages right now are interesting. They're going up so

fast in certain industries. You know, you look at, you know, whether it's IT or computer programming, I mean, there's certain industries. And it's just every two months, you just see these, the national salary, the average. It just keeps ticking up. And so I think that there is, yeah, there is a point that it's like, okay, I want to, I'm, what my market, what my value is, is fair for me to ask for. I think there's that component 100%. But I also do think there's there's this interesting thing in the world that people are jumping so quickly from job to job because I think we can work remotely. There's more flexibility. And they're chasing dollars. They're like, okay, I can get a $20,000 raise here, there, there, there. And I would encourage

people, look at the culture, too, of the company you're plugging into. So much of our work, this could be by a whole other podcast, but so many hours of our day and our lives are spent in a working environment. And so, yes, I want you to get what you can get market value, by all means and ask for it and talk to your leader about like, hey, what can I do to best serve the company? What are ways that I can bring more value because this is what I'm seeing? I think all those conversations can be had. But I also get a little fearful when people are just jumping for that $10,000 raise here or there, they're there, and you're plugging in to places that are exhausting you and draining you and maybe overworking you or doing things that

you're like, oh, that is just not the culture and the dynamic I want to be in. So when it comes to yeah, looking at your salary and where you're working and all of that. I think it's important to kind of look at yourself as a whole person because you are. It's not just work, Rachel. Work Rachel comes home to home Rachel and mom, Rachel and wife, Rachel. And so I think there's a really important culture factor too that I want people to think through when they're looking at jobs. Yeah. And I think also with the culture factor, I heard some response and retort to something I said and they're like, yeah, but I can't take the job I love it because it pays me less. My challenge and response to them would be like, well, and it's some great topic that we're discussing here is,

have you really analyzed your spending? And if you reduce your spending on X, Y, and Z, and therefore your cash inflow is the same as your current job because you're spending less, but you're happier in the place you know you'll accelerate in a much faster, faster scope, that could be the answer to some of your career issues. So I love that. That was a challenge in response that I've got. And I get a lot of them, and I have just a small, healthy business doing this. You guys have an absolute empire doing this. So I'm sure with all the success you've had, you also will get critics. When you guys analyze, like when you're going through the advice that's given and some of the critics that come in, what would you say is like the number

one thing that people would criticize the strategies you guys deploy and how do you guys respond to that? Because I think in every industry, no matter what anyone's doing, they put something out there and there's always trolls or noise or things. And I'm curious, what's the number one kind of criticism you guys would get? And what's the response from Ramsey's solutions with what you guys do? Yeah, it's a great question. I mean, the thing I'm thinking of is real estate, because literally tonight we're doing a live stream called the Real Estate Reality Check. It'll be different when this air is on your podcast. But we're doing it. And because of the visceral response we've gotten from people, whether it's the fear of real estate, of like, it's going to crash and burn,

and we're freaking out, or what we teach is unattainable. So when it comes to buying just your residence, your primary home, we say to put at least 5% down. If you can put 20 and avoid PMI, obviously that is beautiful and wonderful, 5%. And we teach a 15-year fixed rate versus a 30. And for your payment to be no more than 25% to 30% of your take-home pay. And people hate that.

I hate that formula. And right now when I get it, because where we're sitting right now in 2022, the house you could have gotten in 2019 is a whole lot different of the house you can get right now. And so it is frustrating to feel like you're having to step backwards to what you want in your home. So the real estate formula, yeah, it gets a lot of people twisted up. I love it.

That's the one that's so top of mind. That makes sense and you guys are doing it tonight. Some of the things that Rachel just said, we have some 101 listeners and we have some very complex listeners for the 101 listeners, the P.E. and any of the things she just said. If you were confused on it, stay tuned to the recap. We'll define it all. Rachel, I just have a little bit time with you. So I'm going to do a quick rapid fire. And the first question I got for you, if you hadn't joined the family business, what would Rachel Cruz be doing instead? Oh, great question. I would probably be a political

correspondent for a network. Wow. Interesting. Yeah, I would work for like ABC or CBS or I work for one of the big networks. And I love politics. You definitely have the anchor. position already set down. Okay. Maybe I'm one step ahead. The look, the perfect. Do you think ever in your career, you might make that transition? I don't think so. But like elections,

all of like primaries are coming up in November. I'm like, I can't wait. Every night, I will be glued to the TV, watching numbers come out. I just love it. I love it. That is awesome. All right, if I gave you a million bucks today, you win the lottery, you get a million bucks, what's the first thing you're doing with it? Okay, I know this sounds like whatever, but it's just true. Giving is such a huge part of

our message. And so I think there's an element in me that I'm like, I would give, I would give a chunk first. My husband, there's a few things that we just have passions for in life that I'm like, I would totally, we give to every month, but I'm like, I think I would just kind of give them a shot in the arm and be like, here's some of that. I would go on a great vacation for like a month and just five-star everything, room service, and just not think twice about it. That would probably my first two moves. And then I'd come back and reassess everything else about. And then Dad might yell at you for the spending. And then you'd say, well, they just give me a million bucks.

Well, it's a million bucks. It's a small percentage because it just came in. All right. What do you think is like you look back at your career financially and everything that you have done? What do you think your biggest regret is financially? Oh, gosh, biggest regret financially. Man, you know, Winston and I, with investing, I think we probably could have been a little bit more aggressive early on. Like we kind of did the retirement, the 401K, all of that.

And we've opened up a mutual funds just in the past few years so that we threw extra cash at. And I wish we had probably done that sooner. I mean, as we speak right now, it would be down. But like, I look overall, I'm like, man, what that could have been even, I mean, you know, compound interest. I'm like, even if we had done that four years earlier, that kind of thing, those numbers kind of rattle in my brain always, yeah. Gotcha.

A little bit of risk factoring. All right. The last one I got for you, are there any other business ventures that Rachel currently isn't involved in that you can see. just given the core of what you've already built that you guys eventually will get into or is there anything on the radar? Not specifically, but I do think technology and digital experiences is just where we're going as much as we love in person, relational content and all of that. There's a, there's something about life change that happens in a community. That's why Financial Beach University

our class I think did so well is that you were around people walking through the exact same thing together. And we're trying to recreate that on a digital experience and it's been much harder, much more difficult than what we originally thought. So I'm like, I don't know if there's a platform out there or an idea, if it's a company, I don't know what it is, but if there's some kind of digital way to do an in-person experience and to have that community aspect that could be like a light switch flip, yeah, I would get into that tomorrow. That's pretty cool.

And that obviously is the future. As you're talking, though, I'm thinking about the way that you guys have built what you've built and you've continued to keep the momentum up. and you guys are privately held, family-owned, there's got to be people knocking on your door to want to buy what you have done. I mean, is that a potential for Ramsey an exit to like a bigger conglomerate?

No, it's really not. We have a succession plan that's been in place for about five years. It will continue on for probably the next 15. Wow. Because what's interesting about Ramsey is like, Dave is the face. I mean, he's been the face for years

and he's what, he's been the, so he plays such an interesting role of being CEO running, the thing and being the personality. And that usually doesn't happen. And so what it looks like to really kind of take the core messages of helping people in a really toxic world, whether it's with career or money or mental health, and kind of distributing that knowledge across people. So we have seven of people who do what I do, Ramsey personalities is what we call them, that speak and write on money and also others in different topics. So that's kind of the goal is to transition out of Dave.

So even, you know, the Dave Ramsey show is now the Ramsey show. So there's been some small changes we've made brand-wise to help with that transition. So I don't know. And what's funny, and our family like will or estate or whatever you call it, he had that if we said, if he, you know, if he died or when he dies, not if he dies. Sure. We're all going eventually. Yeah, yeah, when he dies, that even if us kids sold it, we had a closet in there for

about five years, that 90% would go to charity. Wow. And we would keep 10%. And he's changed it over the last two years because he was like, it feels like a weird control thing that I have from the grave with you guys. And I trust you guys enough to like make good decisions. But that's, that was his heart though. I mean, for so long, he's like, this is not to like, yeah, it's not to grow and cash out. That's not the long term play. It's to continue to help people as much as possible because, as you know, our world is wild. So any guidance, instruction, inspiration we can give is really what we're hoping to do

for generations. Ramsey Solutions is here to stay. I mean, you heard it right here right now. You now know that this was a different type of format for our podcast rather than diving into our guest's financial situation. We have our guest helping your financial situation. So with the trading secret, I would like to stick with that theme if we could, Rachel. One trading secret that, you know, someone today could get from you as it relates to maybe wealth management, debt management, just maybe overall your golden rule. What's, one trading secret related to personal finance that you can leave our listeners with? I would say a secret. I think there's such an important mindset that you have to have.

And again, it kind of goes about to that long-term play. But I just see specifically where we are right now with the market and seeing people's decisions. So many decisions are based out of fear. They're freaked out and they're worried. And you make a lot of bad financial decisions. Actually, I think Warren Buffett said it when you're fearful and when you're drunk. You make really bad money decisions with both of those. So really, if you can, gathering facts over feelings, and there's a lot of feelings out there. And when you make decisions based on that, again, I think you're going to make some bad long-term decisions with your money. So a secret, I would say, as much as you can, yes, the feelings are there and they're real, but you have to look at data points and look at truth.

A lot of people are throwing tons of ideas out there and tons of predictions and all of that. but you have to base it on fact. Facts are your friends during all good and bad times. But really, I think the biggest figure is look at facts. You know, and that's even when you're picking out a mutual fund. Look at the track record. What's it doing, you know? It's not, oh, that feels good.

You know, when you're picking a real estate agent, pick a badass real estate agent. Don't pick Uncle Harry's friends who he gets his haircut with, right? Like you want to look at facts and data points and your big decisions with money and even small ones, but really your big ones. So facts over feelings would be my secret. That is such a good one. And it's so intuitive and it's also so timely. The amount of like articles that I have received from friends in the last week just given what's happening in the market that's creating, you know, so it's a media headline that

goes to them. It creates a feeling like you just said. The feeling creates an action of some sort to them. And they also send it to me. And my response to all them is, guys, by the time Wall Street or CNBC or MSNBC, that your Bloomberg is writing about it. It's well already priced into the market. So don't make a change now because you just read it. And that's such a great example of the feelings and facts. I love it. It's a great way to end. Rachel, anybody that wants more of what's going on in your

world or your show or your books, where can they find everything? Yeah, you can go to rachelcruise.com. I have a podcast, the rachelcruise show, which you've been a guest on. Thank you, Jason. And yeah, and my books are anywhere, books are sold. Awesome. Well, informative, insightful, and we needed this in a very timely fashion given what's going on. So thank you so much for being on this episode, Trading Secrets. Absolutely. Thanks for having me, Jason. Ding, ding, ding. We are closing in the bell with the one, the only, the beauty of all beauties,

the curious Canadian on the Rachel Cruz episode. Now, this was a totally different approach to trading secrets, but one we wanted to test with you guys, because there is so much turmoil in the financial markets right now. So did we get into the weeds on Rachel Cruz and what dollar amount she makes? No, but we learned all about her take on all the most pertinent things that impact every single person that's listening to this podcast and David and myself in some capacity. So we got her take on a lot of things. I threw in my take on some things, but I'm going to give you more in this recap about things that you can take into your actionable life.

But that being said, I got to stop talking because the one the only, the curious Canadian is here with us. David Arduin, Rachel Cruz episode, what you think? How are you? What's top of mind? I'm great. Thanks for asking. Before I get into the episode, I got to say, it's just so great to see you back home in Nashville because after your 50th cancel flight, what seems in the last 30 days, I was getting worried about you. I'm not going to lie. You had a wild weekend in Toronto, a lot of drinking, a lot of this, a lot of partying, and then some missed flights. I'm worried about you. It's good to see you home. It is so good to be home. David, I am like literally shot. So guys, listen to this story. briefly, if you didn't see my Instagram. We literally, Caitlin and I don't go to the Toronto airport because we hear the disasters over there. So we cross the border drive back to Buffalo. Our flights get canceled. They put us on two separate flights. One for Caitlin that leaves that night. Me that leaves the next night. We call to get her on mine, too full. Me to get on hers, too full.

So I'm sitting there in Buffalo, literally staying overnight while she's going home. I tried to go to bed last night. Literally, David, I'm not kidding you, I slept from 7 p.m. to 9.30 p.m. And then from 9.30 to 4.30, my wake up call, I didn't sleep one minute. So I'm shot over here if I'm sound a little tired, but we're still going to bring some detail to you guys and some good insight as relates to finances. And I have just been ripping down biosteal all day. Like, I don't know, David, if you've ever heard of this stuff, but clean hydration. This is like, this is my formula to coming back to life now that I'm in Nashville, Tennessee. I mean, here's the first thing.

You mean, you do a lot of research for your podcast. You're asking the curious Canadian if I've heard of Biosteel before. Why are you so? Why do you say that with such, like, you say that with such rigor? I don't know if you know, but BioSteel is like the number one hydrating drink for all hockey players in the world, including the NHL. In fact, I'm pretty sure that Biosteel is now the official hydrating sponsor of the NHL ever heard of it, not a big deal.

And if my team could be sponsored. buy biosteel, I'd be like the coolest, like the king coach of all time. So biostil is the goat, man. It's been, it's been around for a long time in Canada. I had no idea. And that's probably why you got your hands on. I had no idea. This is the NHL. The NHL's drink show. Wow. Unbelievable. Yeah. So this, for me, everyone's talking about this because they're like, it's the instant clean hydration, stay hydrated formula. So this is what I've been using. But so do you, do you like, do you get bios steels like sent to you? Like, are you a sponsor, David? I could be bowel still. Shout out.

send me some, send me some drinks. All right, Bilesteen hydrated. But no, it's elite. It is always been known as like, you know, a little, you know, it's, it's the elite of the elite. So don't go after all the trash. It's the best hydrating in the game. I'm on track.

I'm good to see. My nutrition coach tells me I'm on track. Thanks, David. Exactly. I'm good to see your back to life. So now we can get into this episode. And Bial still kept you hydrated. So you made it through.

And now you have some, some oomph for this episode. I'm back. Let's go. Love it. Okay. So first things first. you bring a financial literacy, someone who knows everything about the market and finances. And I'm thinking I'm going to have to dodge bullets and financial terms in this episode,

like I'm from The Matrix. But I actually think it made a lot of sense to me, did pretty good. But I do have some definitions. I do have some things I need some clarity on. I mean, how many times did I say, stay tuned to the recap. Day Curious Canadians is going to be coming through with the questions. I swear I had all of them written down too. So we're on the same page here.

So are you ready to get into it? Should we do this? Rapid fire. Let's go. All right. So one of the things that she talked about was you were talking about her revenue streams and she talked about a loss leader. You said, you know, what are some things that are some of your biggest revenue streams?

And what are your lost leaders? What do you mean by lost leaders? Okay. So loss leaders are something that you do in your business model, but it's great for your brand and bringing in new clients and making a splash of some sort. but you're actually not making money on it. So it is a product you lead with that makes incredible impact to your business for greater

reasons, but on that specific product, you don't make money on it. Would you say that this podcast is a lost leader for you? No. No, I wouldn't. I would say because, you know, we've been able to monetize the podcast pretty well. So it's definitely not a loss leader. So that would not be an example of a lost leader. Now, she said a lot of her B to C stuff, our lost leader.

So that is things that they might create that you, David, can use and buy for like 30, 40 bucks. That based on their cost structure, they're not making big profit on. But once they have, you've paid your 40 bucks and you've used their instructional program. With that, I now have you as a buyer. I have your email. I have your text line. I have you listening to the radio show. I have, I'm going to sell you, you know, live tickets.

I'm going to do this, this, and that. That's the loss leader, that instructional program. Where they make a ton of their money on that B-to-B side we talked about, I believe when I was doing some investigation on just like their website, I think where they make a lot of it is when David wants a mortgage, when David needs financial advising, when David needs insurance, when David needs anything related to his personal finances, they have these partners that they work with closely that they would refer.

So if David buys this $40 instruction video, where they don't make that much money, but then David refinances through their mortgage people and through their insurance people and buys real estate through them, that's where they can make a lot of money. A little B2B, a little B2C talk, not a big deal. One of the things that she talked about

in terms of their loss leaders, which used to be a big revenue stream was live events, and now it's more of a loss leader for them, but she talked about the importance of the human connection that they get on their live shows. You've experienced some live events on the book tour, and obviously the things you're doing in Toronto with Caitlin this weekend, And just touch a little bit on how you've seen like the impact of the human connection

and in the events that you do kind of for your brand and your awareness and just building those relationships. First of all, there's nothing like it. I mean, being in person is the absolute best. And I think when you sit so much on social media and you put stuff out there and you see some likes that are great, like a bunch of likes or a little likes or a bunch of comments, you lose touch of it and it becomes a number. And when you really get to connect with these people and hear their stories and understand

why they're there and get the feedback, good, bad, and see their energy, it totally charges you up. Like, what you're doing is making an impact, and it's making moves, and it's putting smiles on people's faces. And so there's just no substitute for being live and for being in person. And I'll tell you this, we are something we're working on is a Trading Secrets Boot Camp. So we don't have any information on it yet. I don't have any details, but it's either going to be the high-level blueprint is it's going to be in quarter four, quarter one of next year. And it's going to be a one-day full financial boot camp hitting all topics. So that's where we're at.

More to come. In-person? In-person? Live in-person. Yeah, fire me up for that. I'll be there. All right. We're going to move over to a student loan conversation that she had, which we've talked tons about student loans and the amount of money that student loans in this country and the percentage of people that have them.

Her advice was to get rid of student loans as fast as possible. Do you agree or disagree with this? Okay, so the student loan issue in this country is crazy because I talked about the whole price elasticity thing. I mean, it has absolutely gotten out of control. One thing that people should be aware of is there's $1.75 trillion in student debt. And the biggest concern I have right now about student debt is that it has an impact on your credit.

It has an impact on your financial well-being. 11.1% of people haven't paid their student loans in 90 days or they're delinquent. That has a huge impact. So there is where I agree with her. Where I disagree a little bit is I think, and this goes to the credit card model two, I think the avalanche model makes sense. I think accelerating pay down on your highest interest rate is what makes sense, whether it's student debt, personal loans, credit card debt, likely will be the credit card debt. Now, she made a really good comment. Because I said, well, of course, if you're looking at the numbers, you definitely want to use the avalanche model, which they don't promote. They promote Snowball.

And she said, I agree with that, but if people knew the numbers, they wouldn't have gotten themselves into that situation in the first place. And so my only retort in the recap would be, I think a lot of people get in those situations because they don't know the numbers. But now that you're in that situation, let's learn the numbers. Avalanche model allows you to pay down the highest interest rate. That will save you the most money, period. Now you hear it. Now you understand it. You didn't know it before.

Go do it. One thing I'll tell people, too, is if you have student loans and you think the government is going to forgive it, don't be thinking, don't be listening to the media. Go to studentaid.gov, okay? That's studentaid.gov. They give you a phenomenal breakdown of understanding what forgiveness means, cancellation, discharge, how to actually apply if you are eligible for any. type of student loan forgiveness, but the big ones to call out, if you do public service work,

they have public service loan forgiveness, teacher loan forgiveness, close school discharge, Perkins loan cancellation or discharge. They have disability discharge, discharge due to death, discharge due to bankruptcy. That's very rare cases. They have borrower defense to repayment, false certificate discharge. I'm going to take a little break there because the list goes on. Just go to student a.gov. If you're in a situation, where you're thinking my debt could be forgiven, canceled, or discharge, and all the forms for application are right there. All right.

That's a lot of different terms there that I was dodging bulls before in the Matrix. I just got hit in the face with those 40 of them. You know me. Do you think I'm a snowball or avalanche guy with my debt? I think you're probably more of a snowball guy because the snow. Snowball's momentum, right? It's kind of like your workout game. You get one good workout in and David just goes fire.

Hell, I get two good workouts, three good workouts. It'll be eating healthy. He'll look ripped up. so snowball's all about momentum pay down small debt so you feel good avalanche is more like i'm going to save more money this is way more logical i'm going to pay what is the highest interest rate but you you catch me for a snowball guy big biggest snowball guy in the league right here uh it's all about the small wins baby you know got to convince yourself that you're doing well maybe you know it's better on the mental let's move to a really quick one here i should know this i think i know this she talked about the stock

market a little bit she said you know it's a bear market uh defined bear market, and is it spelled bear like with the bear? Okay, so bear market is actually the bear, and then there's the bull. Bull is good, bear is bad. When they do diagrams, literally, it's like a bear fighting a bull, the animal. So yes, right on point. What it is quickly is essentially, look at the S&P 500, that's an index. When you see that it's down 20% or more

for at least a two-month period, that's a bear market, especially if it's coming off highs. So we came off of highs. S&P 500 was at the top it's ever been. So we came off highs, and now if you look at this year, right? So we're talking all of 2022, which is now seven months. I said two months before, seven months, S&P 500 is down over 20%. So that means we're in a bear market. The second part is a thing everyone is going to hear in the news.

And I know you asked for quick, David, but this is really important. Recession. That will be the number one word you hear in the next week. So a recession means when you have two quarters, of fallen year-over-year GDP. So when the GDP has decreased over a 12-month period, what happens, two quarters in a row, you're in recession. So the first quarter, we know a quarter is three months.

So from January, right, first quarter, from last first quarter of 2021, the GDP went down 1.6%. So that means our full economic output over a year for the first quarter went down 1.6%. By the time this podcast comes out, We're recording now last week we will have had the new GDP number

for the second quarter and if that number is down year over year again there'll be two quarters in a row decreased economic output and that puts us into what is technically called a recession. Is there a term that we hear more in life

that nobody knows what it means than GDP or am I just a complete outlier out there? Every time I hear GDP I nod my head I have no I couldn't even tell you what it stands for. Well take a guess we're here what do you think at GDP? stands for.

Domestic something? You're hot. Domestic product placement. Okay, that's pretty good. The 4Ps of marketing? So it's GDP defines is defined by gross domestic product. No one will say that.

Everyone will say GDP. And all you have to think about is it's a measurement of economic output. So the market value of all, every single industry in United States, the goods that we create, the services that we produce, it's a measurement of all the goods and services, the final goods and services that are output by our country's input, which is like work and manufacturing. And so it gives us an understanding of what the economic output is by the entire country of the United States over a period of time. Does that help at all?

yes no it helps i i had an idea of kind of what it stood for in terms of like an overall scope i just like you say the word and you're like oh yeah jdp yeah for sure yeah so it makes it makes sense when you break it down like that so the last questions i have have to do with uh when you guys touched on the housing market something that i think is top of mind in conversations you used to talk about the weather all the time now you talk about the housing market oh my god it's a crazy market um i want to touch on that i know you tease jason hopenheim i know we have them in the bank, and we're going to release him soon. So this kind of flows into that a little bit.

It was great to finally hear someone talk about how they didn't think that we were in a bubble for real estate. And it sounds to me that's, you know, as a new homeowner who thinks he built a lot of value by buying when he did, it makes me feel good. Do you, the facts and the data that she, you know, applied to that kind of made sense. Do you agree with her? Do you think that we're in the bubble that's going to pop or do you think we're okay for a little bit?

Well, here's the thing. So we know GDP came out last. week right before we recorded this. So that's a big one. And we know the interest rate increase is going to come out this week too. So when I say this week, it's actually last week. The interest rate increase came out. We're predicting that last week the interest rate came out and it's an increase of 0.75%. So by the time this episode airs, we'll know if it was or wasn't, I think it will be at least 0.75. The problem with that is interest rates go up. Therefore, when we go to borrow money, the cost of that money is increased because it's more expensive and therefore less people have buying power

and affordability. And what happens then is there's less people that are bidding on homes. And she talked about it and I talked about it. We've already seen that soften. There's already more inventory, less appraisals, less bids, and we know that prices are slowly going down. So I think what her argument was is really important. There's not much inventory right now. So before and 2008 when there was a huge crash, there was so much supply. There's not as much supply, which will protect, it will actually protect the value of real estate. But let's not forget 2008, houses in Florida were selling for like $75,000. Like, we're not talking about a pullback. We're talking about one of the biggest house and crashes we've ever seen in the country's history.

So do I think we'll see 2008 repeat? No. Do I think we'll see material, material impact in the real estate market, I think we will, and we're already seeing it. But I don't think it's going to last longer than two, three years. Do you think that coming out of COVID and everyone spending so much time in their homes, that people have a new, like, overall idea of what a value of a home is, and maybe that is also driving up prices? Like, I know you talk interest rates. I know we can talk supply and demand. I know you can talk about inventory. Do you think that the overall mental idea what the value of a home and how important a home is because people spend all their time in their homes during COVID has anything to do with an uptick in overall home values or no. Dave, I think that

is such a brilliant point. I think it's a brilliant point. But my response to that would be look at the rents of the biggest cities. Like New York City rents right now are out of control. People cannot like literally even get a place in New York City. They are up 65 percent. increase since COVID, 65% increase. And your average individual is seeing that's in a New York City apartment right now, like they're already renting, they're seeing over double digit increases in rent. So yeah, I think people put a lot of value on the homes. But I also think with inflation and the pump of stimulus and everyone having, you know, more money, they're spending more, they're doing more, their living life they always wanted to, jobs are paying more. The impact

becomes when we see the market tank, we see interest rates go up, we see inflation staying, then people start to realize, whoa, I'm getting, how am I going to pay for that next department? How am I to pay for my taxes? How am I going to afford this stuff? We haven't hit that point. Hopefully we don't. But if we do hit that point, it'll get ugly, it'll get ugly quick. I also write a stat that we are, the generation, you're and I generation is the first generation

to out-populate the baby boomers. and the average age of our generation is around 33, 34 years old, and the average first-time home buyer in our generation is around 32 and 33 years old. So if you take the fact that we're the biggest generation and we're just buying homes at the first time over the next 10 years, the demand for us wanting to buy homes should still be high, which should help the housing market instead of collapse. So we'll find out. The last definition that I have for you is if you pay 20% of a down payment, you avoid PMI.

I should know this. I paid over 20% down payment for my house. I don't know what PMI is. So hit me straight with it and then we can wrap this up. Well, I think this is a good topic because PMI is a big impact of risk. And I think what will happen is if banks start to see that there are issues within the market, they're going to have to be more careful with their lending. And when they're more careful with their lending, there again going to be less buyers.

And that could impact the actual value of real estate. But private mortgage insurance is what PMI is. And essentially what it is is it's a way to manage risk. So if you're not putting at least 20% down, you will have to pay for this insurance. And this insurance decreases the risk for the lenders so that when they do give someone all this money in a market where the price points of homes are so high and they're only putting down 2 to 3% or, 5%. It gives them insurance should that person default. So it's a strategy that allows people first-time home buyers to get into a house because they don't have to come up with 20% of the actual price point of the home. They can just put down 5%. But as a result of it, you have to pay this insurance because

it increases your risk when you put less down payment into a home, right? Because if you're putting less money into the home. That means the bank is holding more of the mortgage. They're holding more of the credit and the chances of you defaulting and not being able to pay increases. So the PMI helps bridge that gap. Does that, did I explain that? Does that make sense? Yeah, it makes perfect sense. And I hope that the people listening to this, it makes sense to them too. We've had so many people in the reviews and in the comments. First of all, the reviews are popping off. Let's just call a spade to spade. Like the reviews are popping off. People are in them. We're reading them. We get excited. We screenshot all of them talk about them. Thank you for that.

But people have been wanting something like this, a financial literacy to touch on the real estate market, to touch on credit card debt, to touch on student loans, to touch on all these things. I hope you guys really enjoy it. And I'm learning a lot, as you can tell, which is a good thing. It's a good thing for my 35-year-old Canadian brain to ingest some knowledge every once in a while. I love it. And we're going to start doing this more often if we get your feedback and you guys say this is what you want. So we are checking these reviews aggressively. I see Janelle J on Saturday gave us an amazing podcast. Lucy Kirk gave us an amazing podcast review. That's Lucy Legs Beer. Wow, what an incredible Instagram handle. Right after that, we had

Coup Loves Nemo, another beauty. Adaldo 1015. So guys, we're seeing the reviews. We're seeing them. We appreciate them. Give us the five stars. Let us know if you want more relevant personal finance type advice in these episodes, and we will make sure that we will continue the great guests. We'll continue the great conversation, but we will bake this in. So thank you for tuning into another episode of Trading Secrets. So we also have Jason Oppenheim from selling Sunset. He'll be on in the coming weeks to talk all about the real estate market. If that got you going. And then we also have Lowe from Laguna Beach, a wild entrepreneur who tells us all the ins and outs of Laguna Beach and the business after it. David, you got anything else before we close?

I don't. I'm just glad you're home. I'm going to Canada tomorrow, people. I will be there first time of four years. The curious Canadians going back to Canada will cover that in the recap, the trip, any issues. And remember, the exchange rate is favorable right now for the Americans. It's like one to where you put a buck down. You get a buck 30 back. So enjoy it. Everything's 30% off, baby. It's going to be dangerous in the casino for me. I love it. Thank you for tuning into another episode of Trading Secrets. One, hopefully you couldn't afford to miss. Money playing on me making that money and money living that dream making that money money money pay on me making that money living that dream