Oh, we're rolling.

We're rolling.

Roon, are we officially live?

Yes, sir.

On Thursday.

Yeah.

The irony is, the next time we do the show and I ask that question, Arun won't be there to answer.

Aw.

Aw.

I'm gonna miss you so much while you're gone.

It's just not the same.

It's okay.

I'll be having a beer.

I don't doubt that.

No, you won't.

Now you won't.

No, you won't.

Next Wednesday.

Yeah.

Hey, well, why not?

You'll have a beer at the in laws.

Yeah, he's doing the.

No, he's doing the work thing.

Oh, I'm at a work conference.

Yeah, work conference.

Beers.

Beers.

Mandatory post.

05:00 post.

Mandatory.

Mandatory.

You're with colleagues?

Team building, bro.

Team building.

How many drinks is too many drinks with colleagues?

Three.

Really?

Yeah.

So what if I went straight to doubles?

So three.

Three doubles.

Still in the two.

All right, well, we got a lot this week on the show, and it's going to be a very data intense show.

A lot of stuff to go over for the real estate market.

Clearly, we're seeing some connotation on what's good and what's bad.

I wanted to parse through the bullshit.

I wanted to get right down to the raw data.

But before we do that, we should.

Probably do a show intro.

Do it.

Talk about who you are.

Talk about who you are.

Who he is.

I mean, it's kind of important.

It's a minor, minor detail.

Yeah.

Welcome back to the number one financial literacy podcast in the world.

Sitting next to me, the man, the myth, the legend, my partner in time, the one and only site, Omar.

Thank you, my man.

Sitting next to me and my last, my partner in crime, Chris Nahibe.

Welcome back to the show, everybody.

And temporarily behind the ones and twos, the man who will be on PTO next week.

Next week.

Jesus.

The one and only DJ Arun, everybody.

Hello, everyone.

I had PTO yesterday.

No, it was a sick day yesterday.

Sick day yesterday.

Yeah, yesterday.

Yesterday was a sick day.

It's okay.

We paid you out anyway.

You're fine.

All right.

Yeah.

For our returning listeners.

Listen, we got something special for you guys.

We do.

We got something special.

Oh, that's right, we do.

Yeah, we got a.

Dude, we got a thing.

And it's the best way you can support the podcast.

So we are still reeling from our loss of our sponsorship with transcend.

But we understand.

No hard feelings.

I'm still obviously very much chemically enhanced, as you might be able to tell from looking at me on video platforms.

I'm being sarcastic.

I'm not that arrogant.

I am that arrogant.

Yeah, I am.

Well, one of the things that just by sheer happenstance, fell into our laps was I've been posting a lot about my pleasurable experience with ice barrel and cold plunging.

I know I sound like a total dude, bro, whenever I say that, and I talk about it a lot, but I've really enjoyed the experience.

Been tagging them a lot just because I've been repping the brand.

I don't know them.

They reached out and said, hey, we're gonna give you an affiliate code.

Here it is.

They said, what do you want the code to be?

And I said, well, said won't get into the cold plunge.

I will now.

Has not.

Historically, yes, has not yet.

Until such time as he does.

The code is my name, Chris.

So if you go to iceberrel.com, comma, you type in my name, the word Chris, you will get 12% off any purchase except for their chillers, which are still kind of in their beta testing phase, and they're still very expensive.

But that being said, you can also click the link in our show notes.

If you want to support the show.

You want to get in the cold plunging.

That's how I got into it.

You do it every morning, right?

Every morning for six minutes?

Yeah.

Yeah.

Six minutes is kind of my go to.

If it's a little bit warmer water, I'll go a little longer.

If it's a little colder water, I'll go a little bit shorter.

But that's my thing.

Yeah.

All right.

Yeah.

If you're watching this episode on YouTube, please subscribe, hit that, like, button, do all the moist goody good stuff, or leave us an honest five star review that we'll read at the end of the next episode.

It does a lot for the show.

All right, let's get into it.

So if you are not watching the video on Spotify or on YouTube, this might be one of those episodes where you'll get a benefit from doing so later on.

I would encourage you to do so because there will be some visuals here and a lot of links.

Also, as a reminder, the links are going to be supplied to all of these articles.

If there's something that you think we are not covering enough or you want more on, there's a lot more detail in some of these articles.

We're not going to be able to cover all of the data here, but I will give you enough of a flavor for you at least to get an idea of whether or not it'd be worthwhile for you to go check it out.

Right.

All right.

This will be a big real estate market kind of episode.

We're going to parse through some of the things that we've called out on previous episodes.

You may recall, I think it was episode 250 where we said, ah, we're right about so many things.

And then 251, we actually talked about how mortgage rates went the opposite direction, what the market was saying it was going to do.

Right.

Mortgage rates went up.

We knew there was going to be some impacts to the real estate market and a lot of what we're going to be talking about now or what those implications seem to have been.

So starting off with a Market watch article, I believe, arun, you could go to the left one article.

Appreciate you.

Thank you.

Higher prices still sting for many american consumers, and they probably will for a while longer, the Federal Reserve bank of San Francisco president Mary Daley told reporters on Tuesday of last week.

We are recording this on October 17.

Though wages are now growing faster than inflation, that recovery hasn't been even daily noted.

The highest earning half of workers have for the most part seen their real wages keep up with costs, she said, while the bottom half of earners have been hit harder by high prices.

Recovery from high inflation is, and I'm quoting here, faster for areas where wages are growing faster and it's faster for people who have marketable skills.

Daily added.

How long will it take before consumers perceptions adjust and pandemic prices seem normal?

Well, historically speaking, and this is a direct quote, historically it takes two to three years, usually two years after inflation has come to rest, not decreasing, not increasing, but come to rest, Daley said.

And that's not going to be the case for everybody.

So the take home salient point here, and I want this to be the resounding theme to the show, is that inflation has not come to rest.

There's still volatility.

And you got two to three years after that volatility is gone before you start to see the pain of inflation go back and normalize.

Well, here's, here's also my issue with this.

I think it's a little misleading.

Okay, how so?

Because we know that inflation is compounding.

Just because inflation is coming down, that does not mean the prices of things are coming down.

No, what she's alluding to here is that if wages, wage inflation, outpaces inflation, yes, wage inflation outpaces actual inflation.

What she's trying to suggest is your wages will come up to make inflation feel less significant to you over time if it's beating inflation.

But that's going to take a severe amount of time because, I mean, how much?

Two to three years after stabilization.

Yeah, that's a long time.

It's a very, very long time.

And I, and I think that that's a little optimistic, given that's why she.

Said it's not the case for everybody.

It is optimistic.

And I think she's discounting the fact that you had a year of 9% inflation.

Right.

Like that's going to take in and of itself a couple of years, assuming you get a 5% salary increase, which is on the high end for most people.

Right.

You need two years of that plus 2% inflation over the course of those two years just to get close to that single year's inflation impact to your wallet.

When.

When we also know that the true rate of inflation, I think we all can agree, was more than 9%.

Oh, it's closer to 20.

Closer to 20.

So that's why I believe this to be a little bit misleading.

At first, I thought you're talking about her whole outfit.

I mean, that, too.

Mary Daly.

Come on now.

Yeah.

And pocket square and everything.

It's.

It's a very interesting choice of aesthetic.

I like it personally.

Yeah.

Is that a denim color show or is that just.

No.

Casual Friday?

Casual Friday, sure.

Yeah.

It's a yemenite.

I was impressed that she didn't go full tie for the interview.

It seems very, you know, very italian.

I like the pocket square, though.

Yeah, yeah, yeah.

Let's go on to the next article room.

We got a lot to go through here, and I want to make sure we have time to cover everything in a reasonable amount of time here.

So this, according to Business Insider discount, the fact that it's business Insider, I don't like them as a resource, but they cited atom data here.

A t t o m.

They're a very reputable data source.

So I figure, you know what?

Let's give this a grain of salt here.

Not to be confused with sexy Adam.

Not know that Adam, for the record, who also was a fan of our oversized t shirts, of which he just got two more, and he'll be getting some more in the mail soon.

Oh, really?

Yeah, I know.

He's been, he's been repping them a lot on his little docuseries.

Yeah.

All facts, no cap.

Yep.

She's a fighter.

Yeah, the all facts, no cap one seems to be a big, big.

Hey, where'd you get this question that he's been getting?

Yeah, so he's gonna talk about pushing some people.

Let's do it.

And then we gotta come up with some new shirts to say, like, mind pump south or something, something on them, we sell them.

Mind pump south would be brilliant.

Yeah.

Total trademark and friendship.

We're mind pump adjacent.

Yeah.

So following home prices are hitting homeowners in these ten states the hardest, with up to 10% of mortgage balances now topping their property values.

Meaning they are underwater.

Yeah.

So this is real home values have gone the other way.

So that just, that just means, right, that the values have gone the other way and the mortgages that are against those properties are now literally at or above what their values are sitting at.

And it's going to be really strange as we go through some more articles here later on, because there is an alarming trend of other things happening which seem to be good for the real estate market, but clearly aren't impacting some states.

And why is that scary for, let's just say the market and lenders.

If mortgage balances are now topping their.

Property values, well, you're underwater.

You basically owe more than the property is worth.

So if you're a consumer and you're in one of these properties, what's to stop you from going, you know what, I'm not going to make this payment anymore.

Yeah.

What's to stop you from just walking away from the property?

Now, the easy answer is if your mortgage payment is still less than what it would be to rent in a lot of areas, right?

Then it's all good.

But if rent continues to fall in some of these areas and more and more properties come online in these areas, you're going to say to yourself, I can go rent $500 cheaper and I'm not burning money, just trying to recapture equity.

Right?

So.

And that's the exact reason why, you know, lenders prefer you to put 20% down when you are getting into a property so that you have more skin in the game and you don't walk away.

It's usually historically considered a safe kind of buffer between where values can go.

But given that you saw home prices increase in single years, you know, 20%, 25% over the course of two years, if values went the other way, that could eviscerate 20% pretty quickly.

So I don't even know that's a really comfortable buffer for some of these areas anymore.

If you're buying top of market, and that is foreshadowing.

We are going to talk about top of market, what that looks like here shortly.

So real estate data provider.

Adam analyzed values for over 155 million properties across the US in the second quarter of 2024 and found that home prices are plummeting in certain areas.

Powerful explanation.

Yeah, plummeting.

Plummeting, yeah.

That's an adjective, kids.

Home price declines can lead to a surge in underwater mortgages or when the amount owed on a home loan exceeds the amount of the home's value.

Adam defines a seriously underwater mortgage as a home with a loan to value ratio of 125% or more.

And let's be clear here, the seriously underwater value of 125, that means, let's say you put 10% down or 20% on the property.

I mean, that means that's a wild swing.

That means that's gone, that ten or 20%, and now you owe 25% more than the value's worth on top of that.

Yeah, exactly right.

And you.

I would.

I would probably guess that a majority of these homes that are that much underwater probably had less money down, probably closer.

It's like the 5% range.

Yeah, I think that's probably true.

Five to 10% is probably.

Probably in and around the range that I would say is average now because people were, I mean, some of the home values.

And this is the problem where realtors will say, hey, you know, the solution, the affordability crisis, is rates go down.

Okay, well, great.

Then people are putting less money down because it's way more home.

This is the problem that you get when values go away.

Exactly.

Underwater mortgages can happen for a variety of reasons.

Economic downturns and natural disasters can result in falling home prices.

Just to be clear here, we've had some pretty significant natural disasters in places like Florida.

Yeah, man.

Again, foreshadowing to some of the data we're going to see here.

Other reasons include rising unemployment, which we have seen.

And there's been a lot of criticism over the job numbers lately.

Right.

And there's been a pretty significant amount, amount of uptick in revisions to job numbers that haven't really gotten reported on.

We covered that in previous episodes as well.

And population declines within neighborhoods when particular industries crucial to local economies suffer, the report says.

Think Elon Musk leaving Hawthorne and taking Tesla and SpaceX to Texas, for example.

Right.

That entire community is going to lose a ton of jobs.

Yeah, right.

And a ton of people living there as a result.

Although many areas of the US have seen healthy home value appreciation in the last few years, some states are dealing with spiraling home prices in seriously underwater mortgages.

Again, that's 125% loan to value, meaning they own, they owe 25% more than that home is worth.

This phenomenon is occurring primarily in southern and midwestern states, which are often lower priced markets, according to Adam and according.

To us, to deal with less fluctuations normally.

Right.

Like, they don't, those property values in the Midwest don't fluctuate like they do out on the coastlines.

Yeah.

So if you want a good example of how I've historically looked at this, and there really isn't a clear source that I can point to, to evidence this, but in my, it's been my experience that property value declines start in the coast, start in.

Start in the, in the Central American.

Central America.

I'm just all over the world today.

They start in central part of the country.

Right.

The Midwest.

And they typically move outward to the coasts.

Right.

And when you have home price appreciation, it typically starts on the coast and move inward to the Midwest.

So now that we've seen the Midwest appreciate and now they're in the depreciating trend, I would expect to see these properties expand outward and have the same ramifications, ultimately hitting places like the west coast, like Texas.

I mean, me, like Florida, me personally, I got, when I get emails from like, Redfin, when you register, like a house is like, this is my house.

Right?

You get emails monthly saying, hey, this is your property's new value.

Because they have, they want to generate their own leads and send it to their own agents, thinking about refinancing or selling, blah, blah, blah, you know, and it tells you the value of your home.

Yeah.

Right now I'm thinking, okay, this is b's is not true value.

And then I see a new listing come online, comparable property to mine.

Significantly.

The listing price significantly different than the email I just received on what Redfin or Zillow saying is my property value.

And I'm seeing what people are actually listing for.

Yeah.

And I'm like, oh, wow, that's where.

Those sites can be very, very problematic.

Yeah.

Arun, can you scroll down a little bit?

I want to, I want to go over the ten states of the hardest.

The hardest hit.

Not.

There you go.

Yeah, perfect.

So there are a number of states here that are, that are really impacted and you're going to hear some of them.

Number one, Louisiana.

Right.

Number two, Mississippi.

Number three, Kentucky for Arkansas.

Five, Iowa.

Six, North Dakota.

Seven, Oklahoma, West Virginia, Illinois and Missouri.

So again, very midwestern focused or center of the country, really.

And I, and I just sold the property in the midwest.

I can tell you there's absolutely cracks that are showing in Oklahoma.

Right.

Just like this right now.

So as somebody who's kind of in the space and done this, I can tell you without question, this is a real intangible thing that me as an investor is seeing firsthand on the ground.

So.

And based on that list, I think number one on that list had a 10% decline.

Okay.

Over 10%.

Over 10%.

Right.

And given what you've seen in the past and what you just mentioned earlier, that begins to trickle outwards.

Yeah.

Right.

Now, we also know properties like in the midwest, they, we just said don't fluctuate as much on the coastline.

So if it does trickle outwards, I would expect even bigger fluctuations.

It really depends.

The larger msas, more people could be different.

Arun, could you do me a favor real quick?

We are roasting in here and I don't think we want to dive.

Heat exhaustion.

Could you flip the ac switch on?

You got it, bud.

You're a little toasty, right?

I mean, it's a little bit.

Yeah, it's a little.

Lights are on.

It's a little.

Little hot.

Little hot tour.

Hot tour.

Bring it back while he's doing that.

So the kabisi letter, obviously one of our favorite follows on X.

Justin.

Us mortgage applications have dropped by 17% over the last week, the most since April of 2020.

At the same time, the refinancing index fell by 26.3%, posting the biggest decline since March of 2020.

These are big numbers.

And keep.

I want you to keep the perspective of dropping the most since April of 2020 and dropping the biggest decline since March of 2020.

Those 2020 dates will come back and be relevant here shortly.

That was the beginning of something pretty big that I can remember.

Yeah.

This comes after mortgage rates have increased for the third straight week.

Right.

We said on the show we didn't expect mortgage rates to go.

We expected them to go up.

The ten year bond tenure treasuries now has hit over 4%, like 4.09 as of today.

Again, it's going to fluctuate a little bit.

But we said that mortgage rates were going to rise.

This is a third straight week of them rising just to further hit home.

The point, my favorite point of all time, we were right.

Yeah, kind of what we're doing.

You ain't wrong when you're right, brother.

We know what we're talking about.

But more importantly, with the 30 year fixed rate reaching a 6.52%, the highest since August, on top of that, the mortgage purchase applications record is recorded.

It's worst September since 1994.

As a result, the mortgage demand index is down 60% since January of 2021 peak and sits at near the lowest level in 29 years.

Mortgage demand is, in fact, collapsing.

Okay, so let me ask you.

So look at that chart.

Look at that.

I know.

Ruhn, chart work is on 100,000 today.

Yeah, he's on point.

Both of you guys sharp today.

Look at you coming in, right?

He's Razor Ramon, brother.

I had a good night's rest.

Raise yours, Razor Ramon.

Look at you.

You're the same guy that says, I don't have time for.

What's wrestling.

Yeah, what's wrestling?

I don't watch WWF.

No, no, no.

So I'll tell exactly how I got here.

Okay.

There is a nostalgia series of the roots of fight clothing line that I like a lot, that they like the Mike Tyson stuff, and they're doing a whole WWE series.

He was one of them, honest.

And Ric Flair was another one.

Rick Flair is a good one.

But, yeah, I used rowdy Roddy Ramon.

Razor Ramon had a special place in my heart.

Rest in peace, right?

Passed away.

So do me a favor.

So when you're, when we're looking at data like this, right, with mortgage applications coming down and refinances now coming down, applications, right.

What does that tell you?

What, why is this information important to know or what could it be signaling?

Well, it's signaling certainly the consumer's perspective on how affordable or unaffordable things are.

We knew there was going to be a pendulum swing where home prices got so expensive that didn't really matter what rates did.

But certainly consumers are, they just can't afford it.

They just cannot afford homes right now.

I was at lunch earlier today with two gentlemen who were very successful.

They both live in multimillion dollar homes in southern California.

They both openly said to me they had kids who were looking for homes, and they said, I could not afford to buy a home in my neighborhood today if I wanted to.

If I wanted to buy today, today's values, today's, I couldn't do it.

And I think that's the bigger sentiment here.

There is something clearly dysfunctional in the real estate market, and it's getting to a point where consumers are expressing that level of dysfunction by just saying, I am not doing it anymore.

Yeah, man.

And you and I had a brief conversation about this yesterday where I don't see this going, getting better anytime soon.

No, we talked about the federal government and the fed in general.

Right?

They have, they have a choice to make, and they always have a choice to make, right?

It's.

Do we put a band aid on the problem or do we really try to fix it?

And we really want to try and fix it.

It's going to have to.

It's going to cause an economic depression.

Right?

Yeah, unfortunately.

Right.

So.

And the only way to fix it is one of two ways.

Either you cause deflation or you just pony up and you, you almost accept the fact that down the road, at some point, not in the next year, not in the next five years, not in the next ten years, but at some point, we will go through hyperinflation.

Yeah.

Maybe not this decade, possibly the next decade, but you're just passing the buckley.

But nobody, nobody from the Federal Reserve wants that on their watch.

They don't want that on their name.

It's not even, it's.

I think it's, I think it's bigger than that.

It's not that they, they want it on their name.

It's the, the people that in charge, the lobbyists in charge, that are really pushing the agenda politically.

Right.

How did, what benefits them more?

Because if you cause an economic depression, asset values go down, stock prices go down, property values go down.

And look, they don't care.

They don't want.

They're not going to be okay with that.

No.

So they'd rather pass the buck and just increase the gap between the top 1%.

Right.

Upper class.

I don't even think it's about per.

Se and shrink the middle class.

I mean, that's just ultimately what's going to happen.

I'm not, I'm not saying they're actively thinking about doing it, but they're accepting that that's just a harsh reality.

A great analog for this is the national debt.

Everybody's passed on the buck on that one.

And it went from.

Okay, okay, okay.

To skyrocketing out of control in a matter of just a couple decades.

Yeah.

And with the national deficit being so big, I don't think anyone really wants to meaningfully tackle the issue because it's just too much of a substantial change in people's lives.

So they just try to look the other way, and it's going to come to a point where there's a meaningful, real unavoidable problem in front of you, and that's the real estate market right now.

Yeah.

I mean, so like, to your point, when I say that you have to, either, they're going to either have to choose between hyperinflation or deflation or some economic depression.

Right.

And if they don't want to have hyperinflation.

Right.

They would have to cut spending.

That's, that's just our history.

We have a spending problem, right?

They spend $6 trillion a year.

They make $4 trillion a year.

All right?

They overspend by $2 trillion.

And the problem is those trillions of dollars accruing interest, even at lower interest rates, that adds up to a huge amount of money.

If I were looking at the country as a person.

Yeah.

I would say you were so far beyond your ability to repay this stuff, you need to file bankruptcy.

No, look, we all know they're never going to pay it off.

Right?

That's why they, that's why the debt ceiling we always talk about continues to grow, right?

Think about it.

If they wanted to stop increasing the debt levels, they would have to cut their spending by $2 trillion.

Okay?

The largest expense the US has right now, right, is Social Security.

That comes in at $1.5 trillion.

What are you going to do?

You're going to cut that?

You can't cut that.

Right?

So what's the next largest?

That's, there's, that's 72 million.

The next largest expense?

National defense.

Yeah.

900 billion.

You're going to cut national defense?

Can't cut that.

So.

And then on top of that, there's some expenses that they can't even cut, like their interest payments.

Can't cut those.

Yeah.

Can't cut those.

So it's a real, it's a real, it's a real problem.

And that's why they've, they've been forced to lean into, ultimately hyperinflation sometime down.

The road, maybe very much so.

And let's, let's talk about how this has impact the real estate market today, and why this is so bad, and why hyperinflation might be the only real outcome of all this.

So, according to Business Insider, once again, borrowing costs are far lower than they were last fall.

The 30 year fixed mortgage rate is down from a peak of 7.8% last November to 6.1% on average, while a 15 year rate has fallen from 7% to 5.3%.

Rates receded ahead of interest rate cuts, which arrived with a bang in mid September, referring to the 50 basis point cut versus the 25.

So in rates receding ahead of interest rate cuts was a fascinating thing.

The market was pricing in the rate cuts, but we knew that to get out of the yield curve inversion, it had to go the other way.

So it was almost like this, like super happy we're getting this response, but it wasn't really responding to actual market activity.

It was just perspective.

That's a great example of behavioral economics.

Behavioral economics.

People were expecting something to happen.

They priced it into the market.

And when it did happen, the market moved the other way just because the happiness wore off.

Right.

Yeah.

I mean, there's economic reasons for it, but that's boiling it down to its basic simplicity.

Mortgage rates should remain near 6% for the remainder of this year, even with additional rate cuts, before ticking down to the high 5% range in early 2025.

Researchers@realtor.com remarked in an October 8 report.

I want to point out one key obvious thing.

Okay.

Researchers@realtor.com whose association, their trade group, the National association of Realtors, has said repeatedly the solution of the affordability crisis is interest rates going down, not home values going down.

Yeah, but even they are saying rates are going to remain near 6% for the remainder of the year.

Right.

And then go down to the 5% range in early 2025.

Really?

I'm not seeing it, chief.

I don't know.

Maybe, maybe not.

But that seems to be avoiding the macro problem, which we've already talked about in at least ten markets.

You've got homes increasing that are severely underwater.

Okay, Arun's pulling up a chart of the 30 year, 15 year interest rates for the mortgage rates versus recessions.

And you can see that they've trended down up until about the point where we said rate cuts happened, and now they're trending back up.

I mean, it's incremental.

It's starting.

It's only been three weeks, but still, you can see that they are, in fact, actually moving up.

So that should help the real estate market that had a frosted over due to elevated mortgage rates.

Accordingly, they're suggesting in this article that the real estate market will improve because rates will go down, is what they're suggesting.

But I don't know that's really a solution.

Arun, go back up for a second, and I'll read the bold portion there.

Rate improvement has not solved for home affordability on the price side.

Okay, well, that's just one portion of the equation, too.

Right?

But I want to be clear here.

Even though an article like this suggests that there is forthcoming relief in interest rates going into the 5% range, as of right now, we've seen pretty significant real estate rate improvement.

And that's what I started off the article reading right down from, you know, 6% down to 5%, you've seen the 15 year and 30 year improve.

And Arun just pulled up that chart.

Yeah.

That shows pretty significant improvement.

We only had a micro three week tick up.

And yet the things they're saying are going to improve, aren't improving.

Right.

Right.

It's actually going the other way.

So to the next portion there Ruhn.

Many owners are currently locked into rock bottom mortgage rates that were common in the late two thousand ten s and early 2020s.

In fact, realtor.com recently found that 84% of homeowners are on mortgages with a rate below 6%.

So this is going to be interesting.

So we know a lot of people out there are suffering from high debt levels.

Right.

And typically one thing that historically people have done is tapped into their equity.

Right.

To take care of some of that debt.

Now, that's, this is a real problem now.

So if, if wages haven't kept up, okay, and people are still struggling financially and rates aren't going to come down, can people really even afford to tap into their equity?

Because it might.

Meaningful question.

I don't think it's going to make sense financially for a lot of people when they actually start doing the math and doing the numbers like, oh, I'll just pull out, let's just say 100 grand to cover my credit card debt.

Right.

And then you now see what you're refinancing at to that rate, and you're like, holy crap, it's cheaper for me to just pay this minimum payment.

It might be near term.

Yeah, yeah, near term.

So you're gonna have to wait.

It's not a good situation that we're setting ourselves up for.

Yeah.

So it's actually kind of scary that some people won't even be able to tap into.

So this is a theory once again provided by realtor.com.

so consider the source.

When mortgage rates retreat to lower levels.

Realtor.com believes that metropolitan areas with a higher percentage of homes on a mortgage will be impacted most since buyers can get more options as listings surge.

Conversely, cities where a large number of homes are already paid off may not see some of the same increases in transactional activity as mortgage rates fall.

Basically saying, if you don't have a mortgage in your property, why would you put another one on it?

Right.

If you pull up that chart for.

Me real quick, we found, we looked at that once, right?

It was like 40% of homes out there had no debt on it.

Of homeowners.

This is the chart for it.

So percentage of homes owned outright, typically in 2010, was below 35% and has now increased to well above 40%.

And that's amazing.

Good for them.

Good for them, good for them.

And at the same time, percentage of homes with debt has actually gone down from between 65 and 70% down to just between 60 and 65%.

So there is meaningful improvement in the percentage of homes that are owned outright, but that doesn't include foreign buyers, institutional buyers, the age demographic of buyers.

So I would argue that that is not necessarily a true indication of the market.

And again, this is all being presented by realtor.com data.

Why are they presenting it?

They're presenting it to provide an optimistic view of the market to their base.

So let me ask you, as someone that considers themselves a real estate investor, all right.

And you're out there.

The name of the game on the investment, real estate side, everything that I've seen, it's a leverage game.

It's.

It's.

It's figuring out, you know, how much leverage, how much you can leverage in your cash flow position, as long as the property's cash flowing, how much you take out, put into another property, so on and so forth.

Right.

Do you.

Would you.

Are you actively trying to pay off.

Your house right now?

No.

With the mortgage rate that I have on it now, I've got a 2.71% 30 year fixed mortgage.

So a lot of people ask this question, like, I know.

I actually know people that have asked me and said, should I pay off my house and then go invest in real estate, or should I just begin investing in real estate?

That's a messed up question because it's so subjective to what you're currently dealing with.

So, yeah.

Help people understand.

Yeah.

So if my case, I have a 2.71% 30 year fixed mortgage rate.

I owe, I think on my.

On our home, I think I owe, like, 200 grand.

Okay.

Home is worth close to a million, which is ridiculous.

It shouldn't be that I bought it for, like, 325.

So I'm not wild making it crazy.

Like.

So I look at this property and think to myself, okay, if I invested anything, I should be getting back more than 2.7%.

Right?

Right.

So that I should expect that as a bare minimum.

If I'm not getting that, then I would argue, what kind of investment am I making where I'm making less than 2.7% per year?

Right, right.

There's checking accounts out there that can get you more than that.

So.

And that's how you have to look at things where I think a majority of people that are trying to get into this space, they're just thinking, like, they're thinking about the debt payment monthly versus.

Versus, like, the.

Yeah.

You also get a tax write off for your interest deduction on your primary owner, your primary property.

Yeah.

So there are, if you take the 2.7% that I'm being charged for the mortgage, and you add in the fact that that is an interest deduction from me at the end of the year, the portion that goes to my interest payments.

And keep in mind, when you get a new mortgage, most of it goes towards interest.

A little bit goes towards principal, and it slowly reverses over time.

As you get closer to the 30 year payment and you pay it off, you're almost entirely principal in sight.

Amount of interest.

I'm getting an interest deduction as a result of this against my income, my earnings.

Yes.

So my net benefit to me is actually quite healthy in having the mortgage.

There's a tax reason for me having it.

Yes.

So for most people, it's not gonna make sense from at least an economics perspective to pay that off.

Now, if it makes you feel any better that you're not having a mortgage payment, fine.

But there's a better, and I hate to use this word cause it's so stigmatized, arbitrage of your money.

Oh, right.

Now, if I took $200,000 in cash and I went and put it into a cd, I could get more than 2.7%.

Right.

I would be making more this way with the mortgage that I would.

Paying off the mortgage.

Yeah.

And I think.

I think that thought process gets lost on a lot of people because they're just thinking about, I just want to own this thing free and clear and not have to worry about, you know, my house anymore.

Yeah.

And this.

There's a whole generation of people who want to get in the real estate game, and they're older, younger.

It's all the demographics all over the place.

And I feel for them because they see all these people who own a ton of real estate.

Right.

They go, oh, my God.

Like, this guy owns all this real estate.

It's making all this money.

What they don't realize is, dude, like, my.

One of the last investment property that I bought in Oklahoma, and it's been a couple of years because it's gotten less economically attractive for me to do.

So.

We read the article on a previous show about how banks are making more money off these properties now than you, because the average cap rate of a single family residence rental is about 4.4% across the country.

It's a big average, but that's the average.

And the average interest rate, as we just read, is north of 5% in the 6% range, that bank is making 6% off of you, you paying the interest, and you're making about 4.4% on average off the property.

And there's always exceptions.

There's outliers.

Don't be wrong.

So, yeah, I knew that was coming, and I knew it wasn't economically viable.

If I have a 3.5% mortgage on my last investment property, and the property I bought for 20, 30% less than you can buy it today, because of the appreciation and value, I had the benefit of a great interest rate environment and a great time to buy.

And unfortunately, I would not buy that same property today at today's interest rates and or at today's values.

So people who want to get in the game are like, this doesn't make any sense.

How did you know, Chris, do this?

And it's like, because I did it at a different time with different circumstances.

Right.

And people lose sight of that because people on social media are constantly saying, now's the time to buy.

Buy now.

Right?

Well, not always.

If you're buying your home and it's you doing that versus renting, yes, that may be a pretty decent mantra to say to the masses, okay?

But for an investment property, that is not the case.

So then that's something else that I wanted to get into with.

So maybe you can help explain this better than I could.

Some people that I have spoken to about this topic, they like to understand better when they're thinking about investing in real estate.

Generally speaking, the real estate investors that are going into it are looking to improve their cash flow position.

And a lot of people lately who I've been speaking to that want to now begin dabbling into investing in real estate somewhere in the midwest, let's just say, right, they're just looking at it as an appreciation position where the asset that I'm buying into will appreciate at some point in time.

I've never recommended that.

I don't like, they don't care about what the payment is now they're just thinking about, someday I'll be able to sell it and make more money.

Don't do that.

That's not, that's not this avenue of investment.

Right.

The Chinese, as a macro generalization, took that tact with their money where they felt I, their money being in real estate was better than putting it into a checking savings account.

Under the same logic.

And if you go to certain cities in China, there are entire ghost towns now of unfinished builds where these people lost essentially all their money.

And that's just one very visible example of it.

But in the United States, if you're sacrificing your personal cash flow, meaning you're coming out of pocket every single month to buy this property in the hopes of equity upside appreciation, you were doing it wrong.

Your mindset is wrong.

That is not the way to do this.

That's not the way this game is played.

No.

And unfortunately, there are real estate investors who do that.

Like, I know a real estate investor who's worth over $100 million, and he will tell me, I will buy properties like this from time to time now because number one, I have the cash flow to carry.

We've talked about them before.

Yeah, yeah.

And number two, I like the speculative upside in these equity plays because that gives me that, my one time kick.

But for him, he's not relying on that to make money one day.

No, no, no.

That's just a.

This is a nice speculative investment, and if it pays out, great.

If I lose the money, that's okay, too, right?

Most people who get into the game, they can't afford that, and that shouldn't be their thought process because you lose your job tomorrow, you still got to pay that mortgage payment.

Exactly.

Now you lose your job and lose.

A property that'd be the equivalent of, like, look, you've never began investing in anything.

And you're like, I'm gonna go.

Let me go dabble into dodge.

Dogecoin.

It's like, wait.

Yeah.

Listen, why don't we get into the s p 501st before we start dabbling into some of this extra stuff?

I read an interesting stat the other day.

I didn't bring it up on the show that the majority of, like, seasoned investors have a pretty healthy amount of cryptocurrency.

And the largest majority of ownership wasn't actually with the retail, like, crypto trader bro guys.

It was with the institutional guys.

Now, dude, I'm telling you, it's being handled in a way where it's very frustrating because, for instance, I'm still on the side where I'm not.

I don't buy into the whole cryptocurrency thing.

Okay.

I think it's very clear on the show.

Right?

Too speculative.

You don't have diamond hands?

I got no.

Yeah, I got paper hands.

Yeah.

Paper bag hands.

Yeah.

Not even paper hands, but I never even got in, so.

Yeah, you can only have paper hands if you're in and you quickly get out.

Right.

But, like, if you.

If you were to go on CNBC's website, now, you go look at the articles, right.

Without fail, always at the very bottom.

When will bitcoin hit a million dollars?

Yeah.

And it's just like it's that kind of press, I feel like that keeps the game going.

It's like it gives it a legitimacy.

That should not be there.

I'm the guy who says to himself, I don't mind missing this out.

I don't mind missing out on this.

I don't mind missing this whole thing.

Someone can say like, oh, Chris, you missed out on the opportunity for a lifetime.

You didn't buy bitcoin.

I'd be like, all right, I.

I like web three.

Like, I'm a big believer in the technology, you know?

But also our position is justified too, though.

It's not like we're irrational.

Wait, what was the other thing called?

Not cryptocurrency.

Those little gifts, memes.

Nfts.

NFT.

Those.

Those are gone.

Oh, those are gone.

There's no value.

The real value in nfTs.

And people really screwed this up.

Tokenization of certain items on a daily basis has a tremendous amount of value being on the blockchain.

Okay.

If you get a receipt from anything like Louis Vuitton, like a bag or like a car, your title policy to your home, your title to your car, anything that you want to represent to the world that you own should be on a blockchain.

Yeah, it should be that.

That should be an NFT.

That's a great case study for an NFT.

And I sell you my car instead of handing you a paper that I wrote my name in the back of, and you have to take it to DMV.

I literally transfer you a vis a vis my phone, the NFT in ownership, and now the blockchain shows that I transferred it to you.

And you own it.

Yes, that's the way it should be.

Our mobile numbers should all be our crypto wallet numbers.

Yeah.

Right.

And you could send and receive anything from your mobile number.

And that can be tracked openly in the public record.

Why?

Because who owns things should be of public record.

And if you don't want people to know you own all these assets, because you're conspiracy theorists.

The government's watching, bro.

They already know.

Right.

And you just change.

Give it an alias name.

Like Richard Overham.

Yeah, there you go.

But Richard overham, the whistleblower.

Yeah, the whistleblower.

Yeah.

Dick over him.

They were all phallic jokes.

Brilliant guy.

I have a feeling I would like that guy a whole lot.

I know, but this is the thing about the blockchain that blows me away.

And like the fact that, think about it this way, I use my american express card almost everywhere, and all the receipts are essentially tied to it, right?

Mm hmm.

What's the difference?

Yeah.

Why can't I just have all my receipts tied to public record?

Chris, I don't want everybody to know that I'm going to get a massage or I'm doing this or I'm doing that.

Okay, fine, I hear you.

But that's the best use case for an NFT.

Yeah, you.

You own a Louis Vuitton bag.

Somebody buys a bag from you, you transfer them.

The NFT with the bag.

Yeah.

Now they know that it's authentic.

Ideally, yeah.

They should be able to trace it back to when it was sold to you at the store.

Or sold the person who sold it to you at the store.

You know what I mean?

Or some Jordan ones.

Or some Jordan ones.

I mean, that's the best use case.

All this other stuff is just completely nonsensical.

Yeah.

Oh, bro, have this garbage pail kid, bro, buy it for $1 million.

And it's like, okay.

Yeah.

I mean, how do we go from garbage pail kids to crypto punks?

I don't know, man.

And then not even, like, artistic drawings that are unique?

It's not for me.

The one thing I told somebody once, and I'll never forget this, when we talk about nfTs, back in the day, he had a board ape yacht club like thing, right?

And I was talking to him, he was early in the game, and he was trying to explain to me why, like, it was unique to him.

Was it the guy that was on the show?

No, different guy.

Okay.

And I'm like, cool, can you show it to me?

And he's like, yeah, man.

And he sends me a screenshot of it.

And I was like, okay, wait, I'm confused.

You can send me a screenshot?

And he's like, yeah, you know, I mean, I own rights to the image.

So I made it my screensaver, took a screen, a shot of my phone as a screensaver with time on it.

I own it and send it back to him saying, I own it now, too.

He's like, bro, you're missing the point.

I'm like, I feel like I can use it.

That's the whole thing, right?

I'm using it right now.

I don't know.

It makes no sense.

Like, no, no.

Crypto police roll through.

Got me.

Right, exactly.

It wasn't like a crypto trademark group that came through and was like, oh, red flag.

Yeah.

Like, who's gonna police this.

It's the Internet, bro.

Never made sense to me.

I mean, I've seen a lot of social media accounts with a lot of memes, and no one's calling the police.

Look, I'm nothing.

I'm not that bougie.

So back.

Back in the day when at the last house that we were at, in my office that we had, I would have printouts of Alec monopoly artwork that I printed.

I don't care.

I know they're not real.

I don't care.

I think the image is cool.

Yeah, that's the point.

And I framed it.

That's art, baby.

Yeah.

Yeah, I know.

I'm not sitting here acting like it's real.

It doesn't have to be.

Yeah, it doesn't have to be.

The point is, I like the arthem.

Yeah.

Yeah.

Very few people actually have a Picasso in their house.

A lot of people have Picasso in their house.

You know what I mean?

Yeah.

Yeah.

Yeah.

Yeah.

Yeah, yeah.

Yeah.

So the next article was a bit of a late ad, and I'm not gonna read the entire thing.

There's a lot of text here.

I'm gonna give you kind of the highlight points, but suffice it to say that I was sent this article by a listener to the show, and I found it to be interesting because it's one of those things you wouldn't see in the mainstream media about housing.

This is from Wolf street, the most splendid housing bubbles in America.

September update.

Prices drop in 26 of 28 big metros, even San Diego and Los Angeles.

One new high, 19 metros below 2022 peaks.

Austin, San Francisco, Phoenix, Denver, Salt Lake City, Portland, Seattle, Dallas, Honolulu, and Nashville.

Okay, so let's.

Let's talk about what this data really means and how much of a change has been some.

Somebody inevitably is gonna listen to me.

Chris, you're still above, you know, 2020 peaks is 2022.

Pre pandemic levels or pandemic.

Yeah.

Follow the direction here.

Okay.

It took time to get here.

It's gonna take time to go the other way.

Yeah.

So, again, active listings have been surging for months in practically every major market across the United States, including, informally, hot markets such as Florida.

And keep in mind, like we spoke about, top of the show, natural disasters have a tendency to mean more properties for sale.

Oh, yeah, for sure.

So sellers are grappling with an unexpected phenomenon.

While inventories are piling up, buyers are on strike because prices are too high, even though mortgage rates have dropped a bunch over ten months through mid September.

And we covered that.

And now they're on the other uptick.

So frame of reference here.

Okay, so basically, what they're saying is now buyers are on strike because prices are too high, and mortgage rates, even though they dropped over the last ten months, are now going back up the other way.

So.

Yeah, it makes it that much more unaffordable.

Exactly.

So this.

This strike that they're on ain't gonna get any better anytime soon.

It's going the wrong direction for them.

Since the rate cut, mortgage rates have risen again, but at around 6.6%, remain a lot lower than they'd been.

Right, right.

So the lower mortgage rates have brought out the sellers, but not the buyers, who remain on strike because prices are too high.

And so prices, even in markets such as San Diego, have started to succumb to gravity.

Wow, look at that.

Science based real estate finance.

We give it.

We give it all to you, dude.

Come on, man.

I mean, we're out here.

Go buy a cold.

Plunge 12% off iceberg.com.

Honestly.

You're welcome.

Yeah.

Are we going to post the show link or the link in the show notes?

No, but I've got to.

You know how we used to transcend before the show, and it was, like, 45 seconds of, like, us doing, like, a little bit of a, you know, kind of commercial like setting?

Yeah.

Yeah.

I want you to close your eyes and visualize this.

Okay.

All right.

Frame opens up.

Boom.

Ice barrel 500 hooked up to a chiller.

You hear the peaceful, tranquil sounds of the water running through it.

I'm excited.

Trickling, right?

Yeah.

The camera widens up, and behind the ice barrel is said Omar in a bathing suit.

Done.

He walks up to it.

He gets in.

He frees your ass off.

You have a miserable experience.

Cause you can't handle it.

You're not a man like me.

Oh, okay.

Right, right.

Flashes to me getting in.

And I'm handling it like a boss.

Yeah, yeah, yeah, yeah, yeah.

Be a man.

Buy an ice barrel.

I love it.

Show starts.

Show starts.

I will.

I'm willing to record this promo.

And that's why it's promo code, Chris.

Yeah.

Not said yeah.

For every listener that buys one, I'll make.

I'll make it a full degree colder every time it's cold, bro.

You don't do that.

I know.

We started the high, though.

Yeah, you don't do that.

What are you starting at?

No.

Number 55.

55, bro.

What you mean?

I'm not going.

Starting in the thirties, bro.

I'll buy five of them just so you freeze your ass off.

All right.

Well done.

I was.

Finished the article yet?

Let's go back up a little bit.

Yeah, I want to read a little more about that one because there's a couple more meat and potatoes there.

Right there.

A little bit harder.

There you go.

All right.

So down from the prior month, prices of single family houses, condos, and co ops sagged in September from August in 26 of the 28 metros.

As we noted, the two exceptions were Baltimore, where prices were unchanged.

So flat I, and the vast majority of New York City metropolitan area, where prices rose 0.3%, which in my mind is incremental at best to a new high, according to data from the Raw Zillow Home value index.

I don't know why they call it the Raw index, but, you know, I.

Mean, that just makes it sound more efficient.

It sounds like the raw.

Yeah.

This according to said's raw opinion.

That's Bradley Martin's podcast, right?

Yeah.

Raw talk.

Raw truth or raw talk?

Don't disrespect Bradley like that.

No disrespect to him.

Raw truth.

I mean, that's pretty good.

Come on, man.

Raw truth is pretty good.

It's not that good.

All right.

Well, all this couldn't come at a worse time for Americans.

Why?

Well, according to a survey released in the New York Federal Reserve by the New York Federal Reserve, the number of Americans who live in fear of missing a credit card payment jumped to its highest since the early days of the pandemic.

This according to the street, those who think they might miss a minimum payment in the next 90 days rose to 14.2% in September from 13.6% in August.

Scary times, man.

That's a.

That's a big chunk.

Almost 20% of the population are getting closer to it anyway that think they're.

Going to miss a minimum payment.

The minimum payment?

Yeah.

Not good.

There are two notable things which stand out.

Number one, the age group most worried about missing their minimum payment on their credit card is the one in its peaking early earning years.

I'm sorry, it's peak earning years, 40 to 60 year olds, years old.

So I blows my mind.

The ones who are most worried about making payments are the ones making the most money at this point in their life, or at least should be making the most money.

Yeah, they call your money making years.

Yeah, 40 to 60, which I'm in the middle of, and I'm at 44.

I don't feel like I'm in that.

Are you in your peak, bro?

No.

Hell no.

This is it.

Hell no.

This is it from for you?

Right here?

Athletically?

Not even close.

I mean, I don't know, man.

It's saying.

They're saying it's your peak.

Number two, the income level where the worries have increased the most was on the high end.

Those with annual household income above $100,000.

Keeping up with the Joneses, man.

That's it.

That's it.

You're right.

Trying to keep up with their lifestyles.

Yeah.

Not good.

Americans had 1.14 trillion in credit card debt to juggle as of the end of the second quarter.

January, February, March, Q 1, April, May, June, Q 2, July, August, September, q three.

That number is currently north of 1.36 trillion, last I checked.

Rough approximation may be revised down, but it's.

It's getting higher.

Yeah, man.

Yeah.

Lenders have taken notice.

Third quarter results from the nation's banks show the industry is stashing away even more cash to cover loans that could go bad.

Even though times are good with a healthy labor market and interest rates on the decline.

Are times really good, though?

Are, is there really a healthy labor market, though?

I mean, that's what the jobs report says.

You believe that jobs report?

Small manner of debate.

So, I mean, banks and lenders, they have models, right?

For how much they have, they have to set aside for economic loss, models for bad debt.

So they are clearly seeing that we really need to set aside more because we know where this is going.

So the models are based off of three statistical metrics, loss given, default, probability of default, and expected loss.

These three things go into models that are stress tested by the major banks to give them their reserves set aside.

And it's very algorithmic.

They use historical performance data of their portfolios.

They use outward macro consumer data, how consumers performed in some situated situations.

It puts together this Monte Carlo like analysis based on some of the scenarios presented by the Fed and the other regulators, and it spits out, hey, you should have this much set aside in reserve just in case something goes wrong.

And that number is getting a lot higher.

Yeah, but there's always a problem with some of those models, right?

Like you can account for a certain amount of rate, for a certain amount of rate to be increased, the fed funds rate, but then they might raise it on you even more than they said they would.

Arun, just found the next article that I have coming up about Gen Z and why are so many companies firing Gen Z employees?

And he highlighted the whole thing.

I could just see him back there, ruined.

You were feeling some type of way about that, weren't you?

No, just using it for the show notes, copy and pasting the title.

Okay.

I thought you were, you know, offended because you felt like you're Gen Z adjacent.

He's not Gen Z.

Millennial.

No, he's millennial.

But he feels like he's adjacent.

Like, you know, because.

No, he sipped with it cuz he's on.

He understands all the social media.

Yeah, yeah, he's that guy.

Like, he's poppy culture.

He is poppy culture.

So he's like, these are my people, bro.

Right?

My people.

Yeah.

Why you disrespect my people?

I'm not, I'm just reading articles, bro.

I'm just out here.

We out here.

Okay, well, yeah, I know that this has been a lot of overwhelmingly difficult to hear data.

Real estate market going the wrong direction.

Credit card market going the wrong direction.

I figured, you know when you watch the news back in the day and it was like all bad news, bad news, bad news.

And they're like, oh my God, look at this squirrel riding like a little jet ski by being pulled in this remote.

Like.

And that's where they end the show.

They end the show and you're like, aw, you feel good at the end of the show because you saw that one little squirrel doing the thing.

Yeah, I'm gonna do that to you now.

Okay.

Signature bites.

Free umbrellas, library rooms instead of teller windows.

I'm sure some of you have heard about the Citibank lounges and some of the things.

What's the other one that they have?

The Capital one.

Capital one has lounges, too.

Well, these are among the features of new financial center branch concepts being rolled out by the one and only JPMorgan Chase in New York City and San Francisco on Wednesday.

Part of a larger strategy to reach a new brand of wealthy customers known as the Mass affluent.

Damn, why you gotta call them that?

The mass affluent?

Come on, why can't you say just.

Rich people who don't give a fuck?

JB, God damn it.

Mass affluent.

That sounds like a disease, Uncle Jamie.

Y'all, you could do better than this site.

I was at the doctor last week, man.

They tested me.

I tested positive for mass affluence.

I'd be like, damn, bro.

Yeah, I kinda get it.

I know you got some mass ass fluence.

I got a lot of mass ass fluence.

Yeah.

Not affluence.

Affluence.

Who signed off on this?

It doesn't even roll off the tongue right.

Mass affluence.

Mass affluent.

It just.

It sounds like what happens during the.

Pandemic do they have secret handshakes?

They for sure got a shot.

What's up, bro?

Yeah.

The two locations of the first of 30 such financial centers, JP Morgan plans to open across the country between now and the end of 2026.

That's a lot.

In just two years.

The other locations coming in Massachusetts, Pennsylvania, Florida, Illinois, and Texas.

Notably absent for the list, though.

California.

Right.

Weird.

The goal of these centers is to attract customers with more than $750,000 in deposits and assets.

The starting point for the so called mass affluent segment that the bank hopes to serve in a new offering known as JP Morgan.

Private client.

Fun fact.

Not a new offering.

They've actually had private client services for a long time.

They had private client branches?

Yeah.

Now they're trying to roll out the branches to cater to them.

So now you don't go in gen pop like everybody else.

You've got your own special facility.

Yeah.

How many, how ball and are you to where?

How many people have, like, requested for their own branch?

Or they're like, I can't be waiting in line behind this guy who's trying to cash a check.

Come on, bro.

He's wearing shorts.

You don't have an umbrella?

I mean, how often do they go into branches, though, realistically, don't they have, like, a point of contact that handles all this shit for them?

Everything's done digitally.

Yeah.

So why y'all need all this?

Well, that's the irony, is their other branch model, I don't know if you've seen the new rollouts.

You walk in, this one person in the branch, and it's.

This person's job is to walk you to an ATM and say, here, it.

Can handle your request.

The first time I walked in, I walked in with Hugo.

We worked with Hugo.

I walked in with Hugo, and I'd never been in.

Shout out to Hugo.

I know you're not listening.

Mira Pendejo, wait for you.

He'll get the joke.

That being said, he literally walks in, and he does pretty well for himself.

He's got quite a lot going on.

And I'm walking inside, it feels like it's a giant ATM room.

It doesn't feel like a normal branch.

Lots of bright colors and stuff.

There's one person just standing there, and I'm like, okay.

And he's totally normal.

Hugo's not young and hip, right?

You know, it's not him.

And he's like, oh, yeah, I need to make a deposit.

And I'm like, okay.

And this girl is waiting, walks him right to an ATM and goes, here you go, sir.

Presses a button for him to get him started, and he goes, this is a guy who barely responds back to my text messages, doesn't like technology.

Like, I feel like this is the opposite approach.

I feel like he loves it.

People who would want to be included in the mass affluent, if you will, right?

They want that concierge service.

But here's a fucked up thing, though.

They don't want to be directed to a fucking atm.

They want someone to do everything for them.

They want to do.

They want.

Here's what they want.

They want the speed of that type of service.

Yes, but they don't want to touch anything.

Right.

I just want to walk in and say, here you go.

Yeah.

Put this in that account.

My name is.

Yeah, say it.

Omar, right?

Make it happen.

Kevin.

Have a, Kevin.

Yeah.

Oh, really?

Looked it up.

What is this?

Yahoo finance?

Who are the mass affluent individuals?

Massive.

Hey, we made it.

Yeah.

Have, have between a hundred thousand and a million liquid assets.

Oh, yeah, I got $10.

Maybe we add all three of our accounts together, we can get with an.

Annual income above 75,000.

So did we make it?

Wait, bro, how many people have household income of, let's just say $76,000 and have a million dollars liquid?

This is why this is not.

This is very confusing.

This is very confusing.

Come on, JP.

Between 100,000 and a million, though.

I mean, it's just even then, bro.

Your house, your household, okay?

This is not liquid.

We're not talking about retirement accounts.

If you have a job and you've inherited some shit, come talk to me.

Yeah, we got you.

I mean, you're not looking at the data, bro.

Like, give you an umbrella and some chocolates.

Yeah.

Oh, that's how they rope these people in.

Look, let me give you an umbrella, some chocolates, and I'll take your money while you're here.

But they put that there.

But they know this.

That's not for them.

Right?

It's way.

It's, it's.

It's different.

It's a little different.

I just love the library rooms instead of teller windows.

The library rooms.

Yeah.

They want, like a night of Roxbury, right?

The outside is gonna be the club, the inside.

What is, bro, we literally just had a conversation about night the Rocksbury on the way over here.

We were trying to bet, like, were they playing Iranians or Armenians?

I think it was Armenians.

And could you make.

Could you make it too?

He didn't believe me.

He was like no brother in West Hollywood, man.

No, downtown.

Yeah, but I was like, we both agreed that you couldn't make that movie today.

No, you couldn't.

You can't.

You can't have two white guys playing Armenians.

Although is catan.

But here's the thing.

Maybe they get away with it because they were part of the SNL crew.

When it's done anymore, when it's done for, like, comedic purposes, I feel like you gotta let it go.

I don't think you can do that anymore.

I think you can.

I think, honestly, they should.

I have no problem.

I'm like 43% middle eastern.

Assumption.

I don't fucking my numbers.

Wow.

You wanted.

You just.

My numbers came up.

Hold on.

I saw what you just did there.

You're like, I'm only 43%.

Majority of me is not, bro.

I just got my DNA results updated.

I don't know why this happens all the time.

They update it.

They sent it to me email yesterday.

I'm a different person every time I send me results.

Like, why can't I be from, like, same countries?

Because 90% of their board members left.

Didn't you hear?

It's fucked up.

I don't know, man.

But they're like, oh, and by the way, you've got some Irish in you.

I'm like, where?

How?

This is.

That's why I'm not a ginger dude, bro.

That's why the board members left.

They're like, this.

Testing results are inaccurate.

23 million.

Your mom.

How did I become Puerto rican?

Goddammit.

I'm out of here.

Your mom's american.

My mom is french or white.

German?

Dutch white.

See that?

That's the racist generalization I expect from you.

I was gonna say american.

I was like, well, you're Dutch American too.

Yeah.

That's so many jokes I can't make right now.

Yeah, we talked about this on, I think, two episodes ago.

You should be able to say white.

That's not.

It's not racist to say, oh, your mom's white.

That's acceptable.

That doesn't mean anything, though.

British white.

Yeah.

Yeah.

Let's play this game.

Ready?

British white.

Canadian white.

Australian white.

Afghan white.

Asian.

White.

Asian.

You know this?

No way.

Robust.

I'm documenting it as white.

I'm not trying to compete with the Asians on the test.

This is the thing I don't understand.

Like, why.

Why are we picking colors to describe people in the first place?

Right?

Cause then you get to a certain.

Certain colors, you can't say, well, look.

First of all, all right, I'm gonna be okay.

This is gonna be, I'm gonna try to navigate this.

Hold on.

You gotta be careful.

You don't want a second edit on your name.

No, I don't.

I don't wanna second edit it.

But why can't we say Nigerian?

Why can't we say Dominican?

Why, why?

You can't say that.

You can't say somebody's nigerian.

We describe people by color, which makes no.

Oh, yeah, I know.

Historically, that's what.

Right, right.

Which is stupid.

I.

But haven't we gotten past stupid?

Yeah, yeah, yeah.

Okay.

But no, what if you're referencing something and you don't know where they're from?

Yeah, but there's difference between me going like, okay, what ethnicity is said.

Yeah, I'm not gonna go, he's kind of taupe.

Yeah, yeah.

You know what I mean?

Like, I'm just saying, like, why do we still use those terms?

Yeah, I shouldn't, like, why don't we.

Just go, oh, he's Puerto Rican now.

Somebody goes, oh, what does he look like?

Well, there's puerto rican people that are lighter skin.

There's probably darker skin.

I mean, there's Iranians who are asian looking.

Yeah, right there.

There's Russians.

That, it never ceases to amaze me.

I'll go.

Have to understand that some people don't know things.

Like your mom, I didn't know she was german or whatever she is, right.

I was just like, oh, she's, you.

Can'T universally describe someone's ethnicity by the color of their skin.

Yeah, there's an entire mongolian looking, like russian community.

But also, like, what are you trying to gather from that description of the color of their skin?

Right.

Like, what you're really trying to tell me is what does this person look like?

Yeah, exactly.

But even then, like, if you, if you say, hey, someone's black, does that mean they're light skinned?

Isn't dark skin?

Does that mean they have their attributes.

Of, does that mean they're american?

Yeah, I mean, it doesn't, it doesn't really help at all.

African thing blows me away.

We don't go like, oh, Chris, he's north american.

Yeah, yeah.

Like, give somebody an entire fucking continent.

Yeah, don't do that.

Like, why are we doing that?

Sure, they don't like it either.

Come on.

I mean, they know anybody.

No, no one likes that.

Somebody, if you get labeled african, and first of all, if you're not african, you're kind of like, well, first of all, I'm american and I'm just black.

I guess someone goes, oh, Kevin's British.

Yeah.

Britain is small, african.

Encompasses Africa.

Encompasses a lot of other countries.

Right, right.

North African, moroccan.

Right, right.

But if I said that person's african, that would be.

None of this makes any sense.

And we've all accepted it as, like, normalized culture.

What does French Montana call himself?

He's moroccan.

But does he call himself french?

Is he moroccan?

Yeah.

I didn't know that.

Yeah.

Yeah.

You didn't know that.

You didn't see the music video?

What?

Why is the music video reference point.

For when you say you went back home and, like, he did a whole music video?

Yeah.

You know, I only listen to my Molly Cyrus, dude.

Good.

I said French.

See?

Does he call himself French, or does he call himself african?

I don't know.

Well, I guess we could get back on topic if you wanted to.

What do you think of Ruhn?

Very confusing.

Or we can wrap up, rattle for.

Come on.

He's got.

He's got.

Look how many articles he's got left.

There's only r1 article left, isn't there?

How many left you got?

You still have poppy culture, bro.

Nah, we can skip pop culture today.

This one's interesting.

You want to do the.

Why are so many companies firing Gen Z employees?

Yeah, it was a long ass.

I'm only going to read one.

Let me read one paragraph from this kid.

Okay.

How do you even come across inc.com dot?

So I saw the headline, why are so many companies firing Gen Z employees?

And I thought, this is kind of bold, right?

Yeah.

And I wasn't going to.

I only read this for my own personal just edification.

I wanted, as an employer, I wanted to kind of understand these things.

But this kid, Carter Abdullah, he's a software engineer.

He encapsulated just so much of my thoughts on this that I was like, damn, bro, this is a powerful.

I should read this, right?

Right.

So the subtitle here for the ink magazine.

Why are so many companies are firing Gen Z employees?

The eldest of the generation, born between 1997 and 2012, are landing and losing their first jobs out of college.

But it's not because of work ethic, right.

And it really comes down to they want something.

So I'm gonna.

I'm gonna read a little bit of this.

Not the whole thing.

Okay.

Yeah.

Gen Z's entrance into the workplace hasn't been entirely smooth.

Roughly 60% of companies have cut Gen Z employees that they hired this year.

Hire them and cut them this year.

According to education and career advisory platform Intelligence.

Of the 966 businesses surveyed, 75% expressed that their young workers had unsatisfactory performances.

Respondents believe that their post grab new hires lack motivation 50% and professionalism, 46% and have poor communication skills 39%.

All of this is weighing on employers as they think about hiring postgrads next year.

15% are either unsure or planning not to hire post grads in 2025.

Readiness for the workforce and workplace and past negative experiences were two of the main reasons for the hesitation, according to the survey.

So this kid, 24 years old.

Wow.

Responds, I'm not gonna read all this.

I'm only gonna read this one full paragraph from this kid.

I thought this was, and there's a lot more here.

And if you're interested in this topic, this article is fantastic.

It's in the show notes.

Hell yeah.

I work more than 40 hours, way more than 40 hours, he says, which is shocking to most of his followers.

The sentiment he says he, he more often hears from his generation is that working after 05:00 p.m.

is unacceptable, and most people only want to do what's required, not an ounce more.

So, for context, this kid works as a software engineer, but also has his own social media influencer based business, and people are blown away at how much time he's putting in.

He's doing dual, right.

But he's also accepted that working after 05:00 p.m.

is his normal thing, which we talk about on the show a lot.

This guy is like, you know, he's me.

Right.

Um, anyway, in his mind, that approach might create a, quote, good work life balance, but it isn't what's going to lead to a life with a ton of disposable income and vacations.

Abdullah points out that social media may have misled his generation about the kinds of lifestyles that are attainable, like million dollar vacations and weddings on Lake Como.

The people who have those things usually had a period of no work life balance, so.

Well articulated.

That's a picture of the guy on the left there.

Yeah.

I mean, look, I don't know anything about this kid other than the fact that I read this.

23,000 followers on, on, on LinkedIn.

And, yeah, he works for Nvidia, by the way.

Yeah, he's a developer.

This is a smart person, right?

He gets the lay of the land, and he goes on to say a lot more, articulate things.

But that encapsulated some really profound thoughts and does resonate with what we tell people on the show all the time.

And here he is, 24 years old.

He gets it, man.

Yeah, I wonder, I wonder how that, you know, what experiences he came across.

To actually get it because he cites his parents.

He cites his parents.

Parents.

Oh, that's great.

Yeah, he cites his parents.

It's a good article.

There's a lot about him.

There's a lot of other people of his same age demographic who really explain things in detail.

But I found his quotes to be fantastic.

Very self aware and very clearly driven.

And he's not like, hustle culture per se.

He's like, look, like you just gotta work hard.

These periods of no work life balance are very normal.

No, no.

There's a difference between hustle culture and actually, like, grinding to make a name for yourself to understand your industry.

Right.

And I guess, like, making or proving your stripes.

Right.

So kudos to him.

I mean, I got it.

I gotta hear that.

I think everybody over at Nvidia now is considered a millionaire.

You know, they all get hired with stocks.

They get stocks and invests over, like, four years.

Right.

And since 2019, stock price has increased over 2300 percent.

Yeah.

That is such a great way.

That's the draw for the tech industry.

Right.

That's how they, that's how they lure people in.

People in.

That should be the draw for every company.

Like the.

Every company should be aiming to build that level of.

Of commitment to the company to build something for one another.

Essentially, if you get hired there and you get hired early enough, you have loyalty, you have happy employees, employees who get just like, buying a property.

You get cash flow from your job working there, but you also get the equity from the increase over time in these types of things.

And he's jacked.

I was the Abdullah kiddeh go to.

Or he's flexing.

Look at this.

That's what drew you in, is him flexing?

Yeah.

What do you mean?

What drew you in?

The tattoo on his leg.

How did you catch that?

I catch everything, baby.

I catch everything.

I always go to teardrop in the leg first and everything else second.

Oh, yeah.

Let me.

Let me see where.

If you're really beefy or not.

Yeah, yeah, exactly.

If you really do train legs.

There's a lot of pictures of his face.

Yeah, he's.

He puts himself out there.

Yeah.

He's a questionable mustache, though.

Clearly an Alex Ramosi fan.

Oh, yeah, yeah, yeah, I'm getting the.

Yeah, there's her.

I'm getting that vibe.

I am getting the vibe.

Yeah.

All right, arun.

Well, yeah, I think we feel pretty warm and fuzzy about this episode.

Yeah, yeah, I liked it.

I liked it a lot.

Hopefully the listeners got something out of it.

Arun, did you get anything out of this?

Yes, I did.

Besides PTO.

Invest in homes right now.

Yeah, yeah, exactly.

I thought the conversation about understanding how to utilize real estate as an asset investment class, I think that was valuable.

Okay, we'll see.

Yeah, last episode didn't do too hot.

So shame on all of you listening and watching.

Go back and listen to the previous episode 251.

Not because you need to, but because we need you to.

Yeah, we would love for you to.

And go buy a goddamn ice barrel.

Yeah, get yourself an iceberg off.

I need to do it, too.

I need to create some space.

There you go.

Yeah.

Oh, dude, you got anything?

No, sir.

All right.

Is this coming out next Tuesday?

So, happy Halloween, everyone.

Oh, yeah.

Happy.

No way.

Well, happy Halloween.

The week after this.

Yeah, this is.

This is coming out on the 22nd.

Yeah, exactly.

Which is right before the Halloween.

The next episode will be after Halloween 29th.

Bro, come on, do the maths.

Seven plus two.

This is a financial literacy podcast.

Perhaps we should back it up and just do math.

Oopsie daisy.

Yeah.

Good night, everybody.

Bye.