Here’s a shock: our least favorite brokerage company is in the news again with some monster hidden fees. Robinhood is accused of charging customers a huge “spread” between the amount option buyers pay and the amount sellers receive. While this isn’t a charge on the statement, it’s a lot of money (nearly double) that other companies charge.
This topic got us thinking: what hidden charges, expenses, and costs exist in our life that we overlook or choose to ignore? How much are all of THESE costs adding up? We have the perfect triumvirate for this discussion. Jen Smith, one half of the Frugal Friends duo joins us (they talk consumption non-stop on their podcast). Roger Whitney chimes in (his Retirement Answer Man helps people control excess costs in retirement or when prepping). OG also joins in, with all of his experience helping clients reach their goals. It’s a wide ranging, fun discussion, from the cost of pollution to hidden Doordash costs we didn’t know about!
Of course, halfway through this episode, we take a break to challenge these contributors to a round of Doug’s epic trivia.
Deeper dives with curated links, topics, and discussions are in our newsletter, The 201, available at https://www.StackingBenjamins.com/201
Enjoy!
Watch On Our YouTube Channel:
Our Topic: hidden fees and overlooked costs in brokerage accounts, financial products, everyday spending, and more
Robinhood Touts Rock-Bottom Fees for Options Trading. Then Come the Hidden Costs (WSJ)
During our conversation, you’ll hear us mention:
- Hidden Fees in Brokerage Accounts
- Real-Life Examples of Hidden Costs
- The Impact of Technology on Spending
- The Hidden Costs of Convenience
- The Dynamics of Financial Planning
- Hidden Fees in Financial Products
- The Cost of Car Purchases
- Quality vs. Cost in Home Renovations
- The Hidden Costs of Free Financial Plans
Our Contributors
A big thanks to our contributors! You can check out more links for our guests below.
Jen Smith
Another thanks to Jen Smith for joining our contributors this week! Hear more Jen on her show, Frugal Friends at FrugalFriends.com.
Pre-order her book Buy What You Love Without Going Broke.
Roger Whitney
Another thanks to Roger Whitney for joining our contributors this week! Hear more from Roger on his show, Retirement Answer Man at RogerWhitney.com.
Check out his book Rock Retirement: A Simple Guide to Help You Take Control and be More Optimistic About the Future.
OG
For more on OG and his firm’s page, click here.
Doug’s Game Show Trivia
- Back in 1957, what was the NASA budget…in 1957 dollars?
DepositAccounts
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Mentioned in today’s show
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Written by: Kevin Bailey
Episode Transcript:
[00:00:00] Joe: Hey, shake and [00:00:01] OG: bake. Cal Woo. Shake Night [00:00:08] Doug: Live from Joe’s mom’s basement. It’s the Stacking Benjamin Show.I am Joe’s mom’s neighbor, Doug, and on today’s show, wait, what? We’re talking about that company. Does Joe know? Oh, he does. Oh, he took his meds. Okay, good. On today’s show, we’re tackling the vort of brokerage companies, Robinhood, oh God. I said it out loud. What hidden fees and expenses are in your budget, in your life, or in your brokerage account.
Our panel will dive in featuring the woman who’s so frugal. She made a podcast about it with a friend, Jen Smith. Plus the guy who says, hidden fees are not the answer to your retirement. It’s the retirement answer man himself. Roger Whitney, and the guy who pities the fool, who stands for Hidden Expenses OG.
Plus these three will also throw down halfway through today’s show, during my epic trivia contest. And speaking of Hidden Now, a guy you gotta hide the donuts from. It’s Joe, Saul-Sehy.
[00:01:30] Joe: Oh man, if there are donuts around and not those abomination cake donuts, we’re all in trouble. Hey, everybody, welcome to. Don’t Like Car Friday for the wind cake. Donuts suck. It’s just, I mean, ugh. What do you need? Glazed? [00:01:43] OG: Are you a frosted guy? Any e claire with the with the filling? What’s your Yes, he boooooo.Yes, he’s spoo. Just gimme the holes. All the
[00:01:50] Joe: No. I really, Roger. I don’t like the fufu donut either. Gimme a straightforward Dunking donut cake donut, you know, like [00:01:57] OG: a [00:01:57] Joe: cake donut with frosting on it. [00:01:59] Jen: Yes. Boston Cream or nothing? [00:02:01] Joe: Absolutely. The Boston Cream, Jen. Okay, I’ll take that. That’s exactly, take that, that is [00:02:04] Jen: the right answer. [00:02:05] Joe: Yes. Welcome to Jen Smith Rocks podcast. I’m Joe Saul-Sehy, average Joe Money on Twitter. And we got a great show today. As you can tell, we’re not gonna get off topic at all. We’re gonna have no squirrel moments about donuts. So hungry. Um, ’cause I really don’t want to talk about Robinhood, Robinhood in the news with some fees.But let’s meet all of these people first. First, the guy across the cart table from me. Mr. OG is here. og, how are you man? What’s up? You know, just Robinhood just feeling good. ’cause we could talk about this moronic company that people continue to keep using for God knows what reason. Can’t figure it out.
’cause it’s the
[00:02:40] OG: company you keep, like me, like, like New York Life, the branding works [00:02:46] Joe: way is Robinhood. They steal from the poor and uh, line their pockets with em. [00:02:50] OG: Emily line their pockets by the rich. Wait, what? [00:02:54] Joe: And the woman who is your frugal friend is here. I already introduced her once, but Jen Smith is with us.How are you?
[00:03:01] Jen: I’m doing great. I’ve never used Robin Hood, but I am excited to talk about it and pretend to be an expert. [00:03:07] Joe: Excellent. Well, we’re not actually talking about Robinhood as you know. Jen, you are an expert in today’s topic. Which is Jen, don’t pay no extra fees. [00:03:17] Jen: Mm-Hmm. I love talking about hidden fees.I go deep, I go deep in this one.
[00:03:22] Joe: We are so excited about that. And the guy who goes deep on retirement, deep, deep to the wall, Mr. Roger [00:03:31] Roger: Whitney’s here. How are you, buddy? I don’t even know what’s going on. The news about Robin Hood, so I’m excited to hear this. Oh, this is [00:03:38] Joe: brand new stuff, Roger. When I saw this, I’m like, really?Again, how can a company f it up this many times in a row? And people, people still get on me. They’re like, well, Robin Hood’s a new company. They’re not a new company. They’ve been around for, I think, how long og? Like nine years now. Years. I was gonna say nine. Nine or 10 years I
[00:03:54] OG: would think. Yeah. [00:03:54] Joe: Yeah.They’ve been around for a long, long time. Well, they’re a new company. No, they’re not a new company. Well, they give you all this cash. Yeah. Okay. But then they take it from you with all this stupidity. They get in trouble with the SEC with stuff that either they should. Anyway, I’m, I’m ranting already about these guys, but Jen, how are things going on?
The Frugal Friends podcast? What’s happening there?
[00:04:13] Jen: It’s great. We are doing a lot of episodes kind of around our new book, buy What You Love Without Going Broke. Oh, you [00:04:20] Joe: have a book coming out, scoreboard out in [00:04:21] Jen: January. Yeah. It’s all about how to align your spending with your values and get more of what you love without going broke. [00:04:30] Joe: I have a copy of Jen’s book and I’ve been flipping through it, and this is gonna be so fun. We’re gonna have Jen on early next year when it comes out. And you and I have another thing in common besides the fact that we’re both cool people and we like Boston Cream, donuts. We have the most awesome agent in the world for our books. [00:04:46] Jen: Heather is an angel and she has helped us a lot through the publishing industry that is much, much different than podcasting. [00:04:53] Joe: So Crazy. Or any digital, [00:04:55] Jen: yeah, any digital industry. It’s so different. [00:04:59] Joe: I’m, I’m surprised you have a smile on your face because I spent most of my time angry. Like what? That slapped you from [00:05:03] Jen: crying, right? [00:05:05] Joe: Yes. And Roger, what’s happening over there at The Retirement Answer Man Podcast lately. [00:05:11] Roger: Well, you’re, you’ll be excited about this, Joe. This weekend is our roundup, our conference, our retirement conference. Oh, I love your conference. This is so fun. You keynoted it two years ago. We’re in the same venue and it’s more than twice as big as when you were there.Oh,
[00:05:25] Joe: it’s such a great group of people. [00:05:27] Roger: Yeah, it’s [00:05:28] Joe: amazing. Great group of people. These are all people that are in your rock retirement club, and not only are they concerned about their retirement, Roger, they’re just cool people. [00:05:35] Roger: This is like the opposite of Robin Hood. If you get the right, who you keep company with, agreed.These are the kind of people to keep company with for sure.
[00:05:42] Joe: Well, I feel lucky that I get to keep company with all of you today. Aw. As we talk about Robin Hood in fees. But before we get to that, we’ve got a couple sponsors that make this thing go so that none of our stackers have to pay for it. No hidden fees.Here. We’re gonna, we’re gonna make sure the bills get paid by these companies. So let’s say hello to them and we’ll be right back. Jen Smith is here. Roger Whitney’s here. Oh, G’S here. Doug’s here. Let’s, let’s get into this.
Our headline today comes to us from the Wall Street Journal, and it is written by Alexander Aso Povich. Alexander writes a shocker of a headline to me, a guy who’s always loved Robinhood. Uh, Robinhood touts rock bottom fees for options trading. Then comes the hidden cost. So what they do when it comes to trading options, first of all, most of our stackers shouldn’t be trading options.
Let’s start there, but just in another thing that Robinhood does well, they tell you that, Hey, we’re gonna charge you next to nothing for your option trade. And then they make what’s called the spread. The difference between what you pay and what the other persons get gets almost 7%. Of what the transaction is.
Overall, E-Trade is next. When it comes to high fees, they’re just below 6%. TD Ameritrade, that spread is at 4% Schwab, two and a half Fidelity, about 1.6. Vanguard, uh, I don’t know how this graph works because Ga Vanguard loses money on every option straight, apparently, but makes it up on volume. The vanguard goes, goes and goes the other way.
God bless Vanguard. Oh gee. I wanna start with you because options trading, bond trading, these are areas where companies can really hide fees. Can you, can you talk about this thing that I’m talking about, this spread? How’s Robinhood getting away with so much in hidden fees when it comes to options?
[00:07:43] OG: Well, it’s not just options, it’s really any sort of stock trading.There’s going to be a little difference between what you see the price. So when you, when you see the ticker price for Disney is $50, right? That’s the middle price between what people are paying for it and what people are willing to sell it for. So if you own Disney, you might be willing to sell it for $50 and 1 cent, but somebody wants to buy it for $49 and 99 cents.
So there’s a little bit of a gap there. And then the market makers, or in some case technology, a lot of times technology would actually just come in and say, uh, 50. And so if there’s some manipulation that can happen there and give you a wider spread, and the market maker goes, well, we’ll just say it’s 50.5 and 49.5, and instead we’ll make it 49.75.
Somebody gets that 25 cents in this example, and it’s probably not even 25 cents. It’s probably like 0 cent or some relatively insignificant number in the haircut, in the dollar. To your point, they make it up on volume and that happens a lot more with securities. That’s called the bid as spread. Bid. Ask spread.
Let’s be sure I got the K in there. Yeah,
[00:08:56] Joe: this became a different show in a hurry for a second. There. Aun [00:08:58] OG: eight today. Jen’s like, and I’m gone. And I did not hear. Yeah. Not what I You didn’t hear the K the first time. Yeah. [00:09:04] Doug: Nope. [00:09:04] OG: Big S. I thought that as, I was like, that just came out. Really? I slurred the K at the end. [00:09:09] Doug: Well, and then, and then you emphasize the ass. And so it just made it even more anatomical. It was awful. [00:09:15] OG: Ask, ask, ask. Spread. Anyway, continue. Insecurities where there’s not a lot of volume option trade is an example of this. There might be. Just 10 contracts traded a day on an option contract. That spread can get really abused because there’s not a ton.Disney stock is trading, you know, a billion shares every day. It’s gonna be a little, a little harder to manipulate that ’cause there’s so much transaction volume. But in option trading, a lot of times there’s not a lot of volume, which is why if you’re gonna do an option trade, you have to have a limit price.
I know so many stories of people who just went, oh, I just do a market order, you know, on my, on my trade like I do for, for a stock. And when you do that, you’re basically saying, I’ll take whatever the price is. Well, the market makers are like, well, how’s a dollar 50? And you know, that can end badly,
[00:10:05] Joe: not surprisingly.Options are a lucrative business for Robinhood. This piece states during the first half of the year, the company’s revenue from options. Was $336 million. More than one quarter of its total. Its financial filings show. By the way, this, uh, this all stems from three professors who used their own money and carried out nearly 7,000 option trades at six brokerage platforms.
They are professors at the University of California Irvine, Washington University in St. Louis, and when they published their study, by the way, not shockingly, Robinhood has disputed the findings of, of this study. Not a shock there either. I really did want to talk about Robinhood. I love leading it off with Robinhood because I still can’t understand why people use this company, but Robin Hood’s not the only company with hidden fees.
And then I thought about, as I was coming up with today’s topic, I thought, you know, hidden fees, these gotchas, not just in financial transactions, but in life, transactions just hit us all the time and most of the time were blissfully unaware of it. In fact, there’s a guy later on in this piece that said that he used Robinhood for all his options trades.
Then he saw this and he said, I’m going to Fidelity. I’m moving because I never knew that I was paying this much. But not only hidden fees, there’s also sometimes hidden costs where things look like they don’t cost much money, but they end up costing you in other ways. And I’ll give you an example that OG and Doug wanna hear, and that is I, I recently went to Peru in Chile,
is
[00:11:35] Roger: there gonna be a slideshow? [00:11:36] Joe: I have 85 slides to show you about my recent trip. But on one of the last days after our wonderful trip by Adventures by Disney was done scoreboard. We booked one through Vater, this tour that was gonna take us to a town on the seashore. The trip costs next to nothing, which should have been the first flag because we get on this bus with a ton of other people, they take us halfway.It’s about a 90 minute ride from Santiago to the coast. We stop for half an hour at what is a Bucky’s? Jen, have you been to a Bucky’s?
[00:12:09] Jen: I have seen them, but I have not personally been in one. [00:12:12] Joe: It’s like a gigantic. Roger, you’ve been to a Bucky’s? Oh yeah. Great bathrooms. Great bathrooms, yeah. Dunk. Have [00:12:17] Doug: you been to one?I know OGs been to one. I’ve never been inside one, but I love their products.
[00:12:20] Joe: Yeah. For people that don’t know Buckys, it’s like a Be Nuggets. It’s a gas station the size of a Walmart, right? Pretty much. I mean, they’ve got Seems like it. [00:12:26] OG: Yeah, everything. Are you missing a cowboy hat? You can get one. How about a bathing suit Umbrella. [00:12:32] Joe: Salted caramels. There’s a mandatory stop on this trip of half an hour to the Chilean version of Bucky’s where we just have to walk around inside. And I know the tour operator must be getting paid to make us just sit here and we just walk around. Oh, it was, so we ended up paying with our time because it was a quote, low cost tour, right?It was a quote, great deal. That ended up being not a phenomenal tour. It got better later, but, but that’s an example. So I wanted, I was hoping that you guys could bring some examples of either hidden costs like that or hidden fees that, um, that we should pay attention to. Jen, you’re our guest of honor today, so, uh, why don’t you go ahead and go first.
What’s a hidden cost or hidden fee that drives Jen Smith Crazy.
[00:13:17] Jen: So this is a topic that we talk about on frugal friends a lot because consumption is honestly all we talk about in frugality. We are kind of pigeonholed as the group of people or the niche of personal finance that wants the lowest price at any cost, and it’s always a race to the bottom.We’ve spent six years trying to push back against that ideology when it comes to frugality by kind of stating some of these actual financial hidden costs. So it’s, yeah, time costs with, you know, saving money are obvious, but there are actual financial hidden costs and there’s, there’s other costs too. So we actually divide them between creation, consumption, and disposal.
[00:14:02] OG: Hmm. [00:14:02] Jen: I could just start with like some of the costs associated with the creation of products that’s fueled by overconsumption. And then maybe talk about the other two categories after everybody else gets a. Watch. You invited me here for a reason. A literal [00:14:19] Roger: show takeover. I [00:14:19] Joe: love it. Yeah. Yeah. I was gonna say Roger, Jen.Jen was like, I’m glad we didn’t have the eight, the slideshow of Santiago, because I got my own slides.
[00:14:26] Jen: Yeah, I got my own. I’m go get a donut. [00:14:29] Joe: I’m gonna go get a donut. [00:14:30] Jen: Cool, cool, cool. Um, okay, let’s talk about some of [00:14:32] Joe: these, uh, creation costs. Yes. What are you talking about? [00:14:35] Jen: So, some of the non-financial that we may not think about, these non-visible costs associated with the production of items.It can be environmental pollution, which then translates to some financial costs to, to mitigate that, you’ve got depletion of natural resources. Same story. You have social costs such as forced labor and violation of workers’ rights. That’s happening all across the globe. So you’ve got these hidden costs that aren’t necessarily financial but may have financial repercussions down the line.
But then you have ones that are actually financial. So Change Inc. Did a video on true price. And so they gave this example of how company a discharges waste into a river. And it’s not a big deal. It’s essentially allowed, but a town downstream depends on that river for drinking water. That town now needs to build a water treatment plant, and the cost of this is through taxation and that’s borne by the town’s residents when in fact it should have come from company A.
That’s. Polluting the water in its creation of products. A lot of the hidden fees we see in consumption come through taxation, and, and you see that a lot in the, the disposal of items too.
[00:15:51] Joe: That’s interesting. I saw something while I was on my vacation. Did I, I went to Peru and to, uh, Chile. [00:15:56] Jen: I heard that. The grapevine. [00:15:58] Joe: But, but the amount of plastic that’s just inside of all of us was not a substantial number. Like we have, we have a bunch of plastic that is now inside of us, which is crazy. I was just gonna talk about DoorDash, but Yeah, that’s it. That’s right. I have that on my list. I’ll take that off. Great. Well, well, well, let’s go ahead and start there.og. We were there a few weeks ago on the show, but DoorDash is a, uh, hidden cost. How do you, how so? I mean,
[00:16:23] OG: I mean, I feel, I feel like I didn’t prepare as much as Jen did because. She has a much better slideshow than I do. I [00:16:28] Jen: didn’t prepare. Yeah. I literally [00:16:29] OG: wrote down DoorDash on my sticky note. [00:16:32] Jen: This is just what I talk about every day.She’s like,
[00:16:33] OG: what about the pollution? I’m like, well, yeah, I guess I didn’t boy a little heavy. It’s like labor, but DoorDash, I didn’t really get that, but wait a [00:16:39] Joe: minute. The DoorDash though. DoorDash though, isn’t a hidden cost though, og. I mean, it’s a caustic [00:16:44] OG: move. Fre, oh, bring it. Here’s my hidden cost for DoorDash.Obviously there’s a explicit cost of the driver and a tip and the delivery fee and that sort of thing, but I think the thing that we forget is that quite often the item that you’re buying is priced differently on DoorDash than it is priced retail. Or if you’re there, oh, so if wanna get a burrito bowl at Chipotle, it might, I don’t even know how much they are.
12 bucks maybe. But if you order on DoorDash, it just says it’s 18, and so you just go, oh, you know, that’s the price. You don’t think of that as an extra cost associated with DoorDash. It does get outta hand when you order five of them for your family, and you’re like, wait, why? How did Chipotle cost me $200 all of a sudden?
You kind of piece it together then, but in the moment, I think you look at it and you just go, oh, you know, we’re ordering grilled chicken, or we’re ordering seafood, or, you know, whatever. And a lot of times that price that’s displayed for DoorDash is a different pricing system altogether from the restaurant or for, from whatever.
Quite often you could just call the restaurant directly, get off your keister and go get your own DoorDash and save a bunch of money, still go out to eat, still effectively, you know, not cook and have it at home, but you have to go do the driving to get it.
[00:17:53] Joe: Wow. I didn’t know there was, uh, some difference.It doesn’t surprise me.
[00:17:57] OG: Yeah. [00:17:58] Joe: By the way, back on episode 1554, we had, uh, bill Young, doc G and Paula talked about DoorDash. And another hidden cost is we used to ask our neighbors for help. We used to have tighter knit communities and now we’re like, well, I don’t wanna bother anybody, so I’m just gonna have DoorDash.Uber would do, you know, all these different services. Pick me up. And, uh, Katie for money with Katie did a wonderful piece that we talked about. On this topic,
[00:18:24] Doug: did you use to ask your neighbors to go get you Pizza Hut for you? Like, is that how close knit your community was? That [00:18:30] OG: explains why Joe’s moved a couple times the last couple years, doesn’t it?Like, hey, uh, could you go get me a pizza? I’m just, I’m really hungry.
[00:18:38] Roger: Well, can I share my, my lowest DoorDash moment? I was in an epic. Call of Duty game with my kids. ’cause that’s how we stay connected. And I ran my, and I had, I had finished the bottle of wine and so literally door dashed, just a bottle of wine to my house.Well, that’s safety thing. That’s a door. You should tried to go get wine. That was a safety thing. Thank you, Joyce. Especially after
[00:18:59] Jen: you just finished one. Yeah. Yeah. That’s, that’s, that’s a good use. [00:19:02] OG: That’s the perfect case use of DoorDash. I feel much better about myself now. I thought you were gonna say, I ran outta batteries in my Xbox controller.So somebody had delivered me two double as
[00:19:10] Jen: asap and it was $25. [00:19:13] OG: It was, yeah, it was $27 after. After your tip. Yeah. [00:19:17] Joe: But the wine much more worth it. [00:19:18] OG: Absolutely. Much, much more worth. I [00:19:19] Joe: feel [00:19:19] Roger: better about myself. [00:19:20] Joe: Okay. Yeah. Let’s be clear. Yeah. The hidden costs, the trips to aa roger after, after too many of those moments. [00:19:28] Roger: Roger, [00:19:29] Joe: while we’re [00:19:29] Roger: on you. Let’s keep going. Well, I actually feel ready for Jen’s conversation because I just finished one of Wendell Berry’s books, which is right along the lines of what you’re talking about in terms of environmentalism and also you, uh, um, what’s your name, Joe, about, uh, community.Wendell Berry, you know, talks a lot about losing community. When I think of hidden fees and costs, I think more of time than money, we live in an information economy, right? We know that the internet is almost unusable because every single place that we go on the internet with a few exceptions, are trying to sell us something.
And it’s the beginning of a cycle of transactions that essentially dominates our lives and doesn’t allow us to live a real life. And I think that to me, those are the big hidden fees. Is our time. And we have all information’s designed to sell you. You have email opt-ins, you have email chains, you have things behind payroll.
The algorithms suck you into the next video that literally rob your life. So those are the kind of costs. The kids called this brain rott. Oh yeah. Mm-Hmm. This is the matrix.
[00:20:37] OG: That’s the phrase that the kids use brain. Yeah. You just sit there and like doom scroll on YouTube shorts forever. And it’s like, oh, the kids will, they’ll come down and they’ll be like, oh, Caroline has brain rot.Because she’s just like, that’s usually
[00:20:48] Roger: appearing that I have with my wine brain rot. But I do try to avoid [00:20:52] Jen: it. I prefer bed rott. Bed rot is another popular pastime. [00:20:56] Joe: Oh God. Just staying in bed. Yes. Well, that’s okay. Mm-Hmm. [00:20:59] Jen: Yeah. [00:20:59] Joe: Just hanging out. Sleepy more. I’m on that train. [00:21:02] Jen: Mm-Hmm. [00:21:02] Joe: That’s yes. Absolutely a hundred percent.But you know, brain rott though. That’s not new og. I mean, I remember like my grandma, even d Doug, remember that old rot? Your brain stop watching that you rot your brain. Absolutely. Like I’m sitting there watching MTV in the eighties. That’ll
[00:21:16] Doug: rot your brain. Oh, I got that. When I was watching PBS when I was a kid.PBS will rot your brain way di into National Geographic specials. My parents were conservative. Yeah.
[00:21:27] Roger: I just, but this is on hyper speed. Yeah. And with AI coming, it’s going to exponentially get worse where I think the Internet’s gonna be unusable for safe information without some commerce reason behind it. [00:21:41] Joe: I feel like the tech companies, to your point, Roger, have decided that we can’t be bored. We need something to fill every moment. We’re happy to, with our brains, to, to, I mean, look, just go on Netflix and see how could you remember back in the pandemic, those memes where somebody said, I finished Netflix, like I watched all of it.That is impossible. It just isn’t. There’s too
[00:22:01] OG: many channels. There’s too much stuff. Every day, more user content is created on YouTube than is all of recorded television history every [00:22:11] Roger: day, [00:22:12] OG: every day. Yeah. [00:22:14] Roger: And they’re all designed to keep us watching. Michael, you said a great book. Uh, the Scarcity Loop. I mean, it’s scientifically designed Yeah.To manipulate us. Absolutely. And we’re all in it at some level. I think
[00:22:24] OG: that’s a huge hidden cost. Not, not that this is a, a negative cost, but it’s a different cost. You’re talking about community. The school that my kids go to this year said, no exceptions never, never, never from the time the bell rings until the time the bell rings again.No cell phones, period. And, and the first two weeks were like, what? You, I mean, the parents were like, are you kidding? What if they’re, I need to get in touch with my kid. And the kids were like, this is awful. What are we gonna do? Have to talk to people. And then in, you know, week three. It’s kind of calmed down a little bit.
I’ve been off of social for almost three years now, except Reddit, which I’ve added, but I haven’t done Instagram or Facebook or Twitter in almost three years. And I don’t, you know, it took quite a while to kinda get used to it, but a positive cost I guess, of having this is that the teachers reported after three weeks of school, they go, you know what?
It used to be, the classes let out and it was quiet. You could hear like the, the shoes squeaking as the kids were going from class to class. And now it’s so loud you can’t hear, you can’t hear anything because all the kids are talking. They’re, they, they actually have to have conversations with one another ’cause they can’t have their heads down and playing on their phones while they go to the next class.
I think that’s a great thing. It’s not a cost in a negative sense, but it’s, um, but there was a bunch of controversy, kinda what you were talking about Roger, early about technology, like you’re taking it away and what are we gonna do and all this negative connotation. And now I haven’t heard my kids, my kids talk about it in, in weeks.
You know, now that they’re six weeks into school.
[00:23:51] Roger: When you think, when we think about consumption. And Jen, I bet you know this from your research, it’s I could probably spend thousands of dollars sitting here talking to you. The ability to purchase things so quickly is a fee that just [00:24:05] Jen: Mm-Hmm. You know, there’s [00:24:05] Roger: no friction there. [00:24:06] Jen: Yeah. Frictionless payment is a very profitable FinTech niche. We see that a lot. People want you to impulse spend and they, their sole job with their software product is to make it easier to spend without thinking. [00:24:22] Joe: Yeah. Do you know a good example of that? A very good example that Jen is when, let’s say a hypothetical podcast, forgets.A sponsor spot and they are reminded, uh, partway through the segment that this episode’s brought to you by State Farm, just hypothetically in the market for small business insurance. State Farm knows your businesses, your life. State Farm agents are small business owners too, so they know what it takes.
They can help you create a personalized insurance plan that fits your small business needs and budget. Small business insurance from State Farm, like a good neighbor State Farm is there. We should have all sang that together. Let’s do it there.
[00:24:58] Jen: I used State Farm. [00:24:59] Joe: Talk to your local agent today. I was supposed to do that at the top, but I’m rusty ’cause I dunno if you guys know this, but I just got back from Peru and Chile was a great job.Um,
[00:25:07] Roger: can you repeat the part of the stuff where you said all about the [00:25:10] Joe: things? Yeah. Maybe, uh, Jen, let’s talk about specific ones. I like this DoorDash one that OG brought up. I didn’t know there were two different prices that drives me crazy. Any specific product thing, financial or otherwise, where we’re maybe paying a hidden fee. [00:25:26] Jen: Well, Instacart will do the same thing on groceries. If you use it, the grocery store will increase the price if you’re purchasing through Instacart. [00:25:33] Joe: Instacart doesn’t. That’s interesting. ’cause I thought DoorDash was raising the price. You’re saying the institution has a two-tier thing? [00:25:40] Jen: Instacart, I mean, yeah.It’s anytime you’re using a third party Yeah. That it costs the business a lot more to use that. So they’ll kind of, uh, pass it on, compensate by just Yeah. Adding Uber even for a year, added a fuel surcharge to passengers when fuel prices were really high. So that was another fee that you couldn’t get around if you wanted to take an Uber.
[00:26:03] Joe: I do remember that, and I also seem to remember that they left that fee on there much longer. [00:26:09] OG: Mm-Hmm. Than, [00:26:09] Joe: uh, people expected. And finally they had to have a bunch of people pointed out on social media that, Hey, what’s this, uh, fuel surcharge still doing here? [00:26:17] Jen: Yeah. Uh, another specific one is on disposal.So the garbage industry, so like stocks like, like waste management and stuff have outperformed, and this was an article from 2021, but from what I’ve seen, it’s still applicable. The garbage industry has outperformed the market since 2015. People are throwing away more, so as we consume more, we throw away more, and that cost is.
Seen through your utility, you have a extra, instead of in additional water, you also pay for trash disposal. And that’s because your city or county has to pay a tipping fee for every ton of waste they put onto the landfill. ’cause those are typically privately owned, they have to pay. And that, that charge used to be like eight bucks a ton, and now it’s I think like 30 something.
[00:27:06] OG: Wow. [00:27:06] Jen: And the average American will throw about 1600 to 1700 pounds per person. [00:27:12] OG: God, I wish. Uh, and [00:27:13] Jen: that’s the, the main way that landfills make the revenue. But we’re paying for that in our utility bill and we have no choice but to pay it. So the more we consume, it’s everything you consume ends up in a landfill.It might make a pit stop at a thrift store, might make a pit stop at a recycling plant, but a very small portion of things that are recycled actually move on to be usable again. It might make pit stops, but ultimately ends up in the landfill. And we pay for that.
[00:27:39] Joe: I saw our friend, uh, SHA Malaney make that point.At, uh, a Camp Phi, a Camp Phi Southwest. A few years ago he was talking about shopping gets a lot less fun when you walk into a target and you realize that even if people are careful with all this stuff, if you’re careful with it, if you keep it, if you’re good to it, every single thing in this door at some point is gonna end up in the landfill.
And then you look at the number of stores out there and you’re like, oh my God. There’s a ton,
[00:28:02] Roger: ton of stuff, stuff. Well, and another hidden fee to that, that is sort of a second or third order consequence is the idea of low prices. You know, a friend of mine has a, um, a, a mantra Buy once, cry once. If you buy something that is quality, that will last is as durable, you may avoid buying three different things.Oh yeah. Just because they were cheap.
[00:28:27] OG: Yeah. [00:28:27] Roger: Everybody wants cheap, but they, they forget or they don’t notice the cost that it’s gonna break or it’s not gonna be adequate. So they’re afraid to buy quality ’cause they’re still focused on the price that they end up buying more. [00:28:39] Doug: Doug. Yeah. Uh, you know, another I, something about what you just said, Roger made me think about a lot of, I’ll say lower quality furniture stores.It just, that’s what came to my mind for some reason when you said that they’ll have these no interest payments until 2028 If you buy this couch right now. What I think a lot of people don’t realize is that the interest on that loan is accruing the entire time for that whole period that they state.
And if you miss, if you don’t pay that sofa off in its entirety, within a minute of that contract expiring, all of that accruing a bam interest shows up the next day. And a lot of times that can be up to half the cost of what you thought you paid for the sofa. So that’s a potential hidden fee that it feels like, Hey, I’ll let somebody else finance this for $0.
Of course, this
[00:29:25] OG: is other people’s money, right? [00:29:27] Doug: And I’m supposed to do that. The guys in Stacking, Benjamins told me to use other people’s money. But, uh, but if you don’t have the discipline to make those payments regularly, then uh, you could be squad pretty hard if you don’t pay it off. Yeah. With like an as spread, a bid as spread.A big as spread. Yeah.
[00:29:49] Roger: I knew that was gonna come back. [00:29:52] Joe: Ask. It was, it was, it was right there. I think on that gross note. Oh, I [00:29:57] OG: didn’t, I didn’t know that there was, that You didn’t get the bid part either. You guys heard big and as Yes. Oh yeah. Oh my. You Josh. So that was, uh, that was, I gotta, I gotta really work on my radio voice because that, that, that, that makes it even worse.Oh, I didn’t, I didn’t put those things together. It was spectacular. It was so true,
[00:30:15] Jen: though. I didn’t bat an eye because I was like, yeah, you’re right. Yeah. [00:30:18] OG: Hey, there’s a big spread. You never know. [00:30:20] Joe: This whole website’s dedicated to that. All right. We’re gonna let our audience go wash while we take a break here, like we do the middle of every Friday for our year long trivia competition.And, and normally this is, uh, mom, og, and Paula. And, uh, we will, um, well, uh, uh, Jen, as I mentioned, you’re the guest of honor, so would you rather play for mom or for Paula?
[00:30:44] Jen: I feel like last time I came on, I was playing for Paula, so maybe I’ll play for mom. [00:30:51] Joe: Well, Roger, that means to you, uh, being our other guest of honor, good news, bad news for you playing for Paula.Do you want the good news or the bad news?
[00:30:59] Roger: Well, I suck at this game every time I’m on, so I feel bad for Paula. [00:31:03] Jen: Same, same. That’s why I chose mom. I was like, I can’t do that to Paula again. [00:31:06] Roger: Paula, don’t be mad at me. [00:31:08] Joe: Well, the good news is Roger, there’s no reason to feel bad for Paula ’cause she does pretty crappy on her own at this game.She has eight points so far this year. Uh, Jen mom has 10 points. OG at 15, getting pretty close with, with just Uhy. Three months to go to wrapping this thing up early. So, uh, Jen, no pressure, but you gotta help mom. Close that gap. I know
[00:31:32] Jen: mom’s gotta stick together [00:31:34] Joe: And Roger, if uh, Paula’s gonna make a move, it’s up to you, big guy.And the other good news for you, Roger, you get to go last because Paul is in last. You get to guess last, so you get to hear Jen in the middle and OG is gonna guess first, but that means we need a question. And Doug, what’s our question today?
[00:31:54] Doug: Hey there, stackers. I’m Joe’s mom’s neighbor, Duggan. Today’s a big day in Benjamin’s, Stacking history, an actor who stacked lots of Benjamin’s. Charlton Heston was born on this day, way back in 1923. He famously starred in a film called Planet of the Apes, which you’re not gonna believe this. It was about a guy who rocketed to a planet where, and I know this is gonna shock you.There were of all things apes. Wow. Speaking of rockets, today is also the day Sputnik made it into orbit back in 1957. That’s right. Just like nascar. All these years later, they just piloted this thing in circles around the earth over and over again. Everybody was just watching to see if it crashed, but because we don’t do Russian trivia here.
Sorry, Vladimir, let’s give you this one. Back in 1957, what was the NASA budget in 1950 $7. I’ll be back right after I go sign up for Space Camp, man. I love
[00:32:59] Joe: that as a kid. Well, Doug may come back a little disappointed when he finds out, uh, space camp might, might not allow him to go, but, oh gee, you’re gonna be first.1957, the budget in 1950 $7. What was NASA’s budget?
[00:33:19] OG: So this was before Kennedy and Kennedy’s. Big thing was, you know, we gotta, we gotta get to the moon by the end of the decade. That was his anchor that he put there. There was a lot of Cold War stuff going on. 57. I think we were embarrassed by the fact that the Russians were in space before us.I think that was the kickoff to this of like, oh crap, we gotta kinda get after it. So this is the annual budget for nasa, the line item on the annual budget on the 1957. Only in the
[00:33:50] Roger: treasury priest. Nik or post Nik? This is the same [00:33:54] OG: year. 1957. Mm. Good lord. So the what do we have a hundred trillion in debt right now?So this is like
[00:34:06] Roger: your slideshow. [00:34:07] OG: 1950 $7 divide by 55. Oh my god. Um, carry the, it’s like [00:34:15] Jen: always sunny in Philadelphia. Like Yeah. [00:34:18] OG: Seem limitless. Where like the guy’s got all the numbers, like that’s like, what’s going on? [00:34:22] Joe: Yeah. I’m sure that’s what’s going on in your head right now. A hundred percent sure. [00:34:26] OG: Um, I’m gonna say that the budget for nasa, don’t worry.Our listeners
[00:34:29] Joe: love this part. [00:34:31] OG: Nineteen hundred and eighty, nineteen hundred and fifty seven was a mirror.$7,495,398. Oh my God. Really? This is my way to make it. So Doug doesn’t have to, just Doug just goes and OG wins.
[00:34:56] Joe: Wow. Uh, what do you think, Jen? 7.5 million roughly? [00:35:05] Jen: Um, I’m gonna go 12 million. [00:35:09] Joe: You’re not gonna take five hours to give us the reason why [00:35:13] Jen: I, in my head, originally thought 57 million, and then OGs guess was so low that I was like, okay, I’ll just do a million a month. [00:35:23] Joe: Just a cool million a month, you know? Yeah. I could change to Gaelic. Yeah. Yeah. [00:35:27] Jen: Duh. I feel. I feel like that’s reasonable. [00:35:30] Joe: If you started with 57 million, then NASA is pretty damn frugal at 12 million. Right. The frugal friend would go, well, [00:35:36] Jen: I, I remember it being a pretty low budget, like from what I learned about history, like it was pretty frugal.Yeah.
[00:35:42] Joe: Watching Tom Hanks with the duct tape and, and the Apollo 13 movie. [00:35:46] Jen: Yeah. I assume that’s what it was like. Uh, yeah. Yeah. [00:35:50] Joe: Well, Roger, what do you thinking? You got seven and a half ish and you’ve even me og I’m not gonna say all those numbers. Seven and a half million. Uh, Jen’s got 12 million. What do you think? [00:36:02] Roger: I was at 58 originally, Jen. Wow. So we are pretty close together, but I’m just gonna have to, I’m gonna do the prices right. Strategy. I’m just gonna have to go One set higher. One set higher than Jen than [00:36:13] Joe: Jen. 12,000,001 penny. Yeah. There we go. Well, is Roger, sorry, Jen, right to take the upside. By the way, Paula pant, her gut feeling is almost always wrong.I can tell Doug’s doing the math.
[00:36:26] OG: Doug’s like got the abacus out. Like he’s like,I’m
[00:36:33] Roger: thinking Abacus [00:36:34] Joe: Roger’s got wellbeing. A petty, I love the sun effects. Jen is 12 million OG at 7,495,398. Who’s right? We’ll be right back.og. You anchored everybody who was thinking 57, 50 8 million. They came way down after you said 7,495,398. How do you feel about that number because they still think that you’re low.
[00:36:58] OG: Yeah, I mean, I have absolutely no fing clue, but I feel like there could be some, some chicanery going on here of like. There was no NASA in 1957.It didn’t start until Sputnik. It’s zero. And we didn’t kick it off until they, you know, so they only like, I love that. You know? That’s smart. I think there is
[00:37:17] Joe: precedent. Doug. We have done that before. We’ve played that game. Jen, I guess the good news since Roger took the upside is you still got between 10 and $12 million. [00:37:26] Jen: Okay. Anytime anybody says that to me, I’ll take it. [00:37:29] OG: And you still got between [00:37:31] Joe: 10 and 12, [00:37:32] OG: didn’t really work out, but you got between 10 and 12 million. So [00:37:35] Jen: I’m not too good for that. [00:37:37] Joe: I mean, Jen from one author to another, you do have that big book Deal money. I mean, come on. [00:37:41] Jen: Oh yeah, I’m rolling in it. I got LASIK with my first advance.That’s about all that paid for. I was like, I’m gonna need eyes to write this book.
[00:37:49] Joe: It’s exciting. Roger, you know with your book, Joe’s like, you got an advance. Yeah. What a what? You got what? What’s an advance? I know you got money for your book. You guys are getting paid. I got Boston Cream, donuts. [00:38:00] Jen: I got those too. [00:38:01] Joe: Roger, with your book, you know all that book Money, I mean. Roll it in it. [00:38:05] Roger: I am. That’s why. Yeah. [00:38:07] Joe: Yeah. 12 million in one penny. How you feeling? I’m feeling good. It’s got all the upside [00:38:11] Roger: other than this little hiccup thing about it might not have been established. That scares me a little bit. Ooh, plot tickets.Well, let’s
[00:38:18] Joe: see. Uh, Doug, uh, were you playing around? Who’s gonna win this thing? [00:38:26] Doug: Hey there, stackers. I’m trivia. Rocket driver and the guy who’s always ready for reentry. Joe’s mom’s neighbor, Doug. I don’t know what that means, but you know, it sounded funny, so I went with it. Here was today’s totally Sputnik denying trivia. What was US space program’s? NASA’s budget, way back in 1957. In 1950 $7.Well, sure. NASA didn’t exist. But the NACA sure did. That was the National Advisory Committee for Aeronautics, which was the predecessor to nasa, and they sure as hell had a budget og the answer, well, I can’t tell you that just now would’ve been $940 million in today’s dollars, but I will tell you that back in 1957, OG was off by just $81,505,000.
In some change, Jen slash mom was off by $77 million. And Roger and Paula, well, they were off by $76,999,999 and 99 cents because the real answer is a cool $89 million in 1957. Making Roger and Paula our winners, and now back to our hidden fee discussion.
[00:39:54] OG: They like me, they really like [00:39:56] Roger: me. [00:39:57] OG: I I get your point, Josh.Point of note. Um, did I not hear you say that NASA was not in existence in 1957? It was a space agency, thus they had no budget. How am I wrong? It? Rebranded.
[00:40:08] Jen: Same company, but rebrand. [00:40:10] OG: No, just a rebranding. You know, all Same company, same people. I need a stacker judge rule. Yeah, just a rebranding. [00:40:15] Jen: You know about rebranding. [00:40:16] OG: We need to, you know, [00:40:17] Jen: Paul, [00:40:19] Joe: Paula, Paula slash Roger wins. And the good news for you, Jen, is that since you said 57 million, and Roger said he was thinking 58, he would’ve gone $1 higher. Anyway. Yeah. I, I [00:40:29] OG: need, I need some stacker love here on, um, some judges need to review this ruling. I. I think the officials got this one wrong. [00:40:37] Jen: Do you demand a recount [00:40:38] OG: too soon? [00:40:40] Roger: Said the Florida woman, you know, the s and p index was not 500 stocks before 1959, so we still call it the s and p. So. [00:40:48] Doug: Thank you, Roger, [00:40:49] Roger: rebrand [00:40:50] Doug: and og. It’s not like, I mean, Paula would have to win every single trivia from now till the end of the year to even threaten your current lead.So just chill the F out.
[00:40:59] Jen: Yeah, yeah, [00:41:01] Joe: yeah, yeah, yeah, yeah, yeah. [00:41:03] Jen: Sorry, mom. [00:41:04] Joe: Hey, let’s bury that discussion and get back to our scintillating discussion about hidden costs, hidden fees, and um, let’s go. Uh, Roger, gimme one. That’s just more straightforward, um, financial stuff. What’s a financial product where we really need to watch out for the hidden fees?A financial
[00:41:23] Roger: pro, oh, by far, indexed universal life insurance or annuities. Any insurance products. Those [00:41:29] OG: are so great, Roger, for me to sell to you with [00:41:33] Roger: all the guarantees and you can’t lose money, and they’re better than 4 0 1 Ks. There are so many hidden fees that cause the result not to come out the way that you think it is. [00:41:44] Joe: Do you know what’s funny for me, Roger, is that, well, I totally agree with you. The biggest got you of all in those products are the, you can’t get out fee. The fee that Oh, the back end. Yes. Yeah. The fee, they don’t slap on you. They have all these fees internally, so they’re going to, uh, be a leach on your financial statement.But if you try to get out, the fees are even worse. Which means you’d rather let the leeches just feed off you
[00:42:10] Roger: for a while. Oh, a hundred. Yeah, a hundred percent. They all, I was including that in there as well. It’s just put money into a product that’s gonna grab it. You know, A million different hands are gonna go into it. [00:42:19] Joe: Yeah. OG a financial product. [00:42:24] OG: You know, not necessarily a financial product, but kind of, we talked about this last week or earlier this week, depending on banking, right? We talked about how interest rates change and how they will adjust, not in your favor. You know how like the, the play monopoly, and this is bank error in your favor, collect $200.That doesn’t happen in real life. A couple weeks ago, interest rates went down a half a percent. Yay. If you’re borrowing money, boo. If you have money. But immediately the next day we got all the emails going, Hey, uh, half a percent lower. Okay. That that checks. However, we’re gonna lower the returns on your savings gap.
Yeah. I mean, hey, we all half a point lower. Everybody got that? Well, but wait a second. Does that mean all of my borrowing also went down half a percent? Oh no. We’ll do that sometime. And then when people complain, like you were talking about the Uber thing, right? I thought about that immediately. It’s like, well, they’re gonna keep the borrowing costs as high as they can.
And lower the giving costs very quickly and then just say, oh, oh, this. Oh yeah, I guess we could adjust this a little bit. You know? And all of a sudden, you know, that spread that difference between what we were borrowing, the cost of borrowing and the cost of saving, it got wider. And that cost is entirely born by the consumer.
If you’re borrowing money, obviously if you’re, if you’re not borrowing money, this doesn’t affect you as much, but that’s a sneaky thing. I think everybody thinks, Hey, interest rates went down half a percent. My credit card interest is down half a percent. It’s like, no, not until enough people complain to Amex, then they’ll lower half a percent.
So yeah, kind of a financial, and if you try to
[00:43:57] Jen: refinance to lower your interest, they’re gonna charge you a fee to refinance. Yeah. So that diminishes your savings. [00:44:04] OG: Or they say, well, I know that the Fed went down, but see, our rates are not tied to that. We use this other thing that isn’t that, so it went down, but only by a quarter point.You’re like, what the f.
[00:44:17] Roger: What about title insurance? Just a random thought. There we go. Title insurance. As a percentage of the property. You need to [00:44:23] OG: insure your title, don’t you, Roger? For not 1%. Not 1%, but insurance title need to insure it. Do you from all the people who are trying to steal your title? [00:44:38] Jen: I used to love to steal a title back in college.So fun. It was awesome. We’d go out on
[00:44:44] OG: a Friday night and be like, yo, this is what we’re gonna do. Right? I. [00:44:47] Joe: I’d steal the title, call myself, doctor, from time to time. Is that what we’re talking about? No. Stole those two. Maybe something else. You brought up a good one though, Jen. The number of hidden fees that can exist in a mortgage refinance or just getting a mortgage can be massive.Oh
[00:45:01] Jen: yeah, it’s, it’s sickening. Like even I was buying a car a few years ago and from dealership to dealership there were so many hidden fees that didn’t have title recording fees. Yeah. Didn’t have definitions that everyone could even agree on. I went, I had like the same minivan at two different dealerships.One had higher mileage and had like, but leather seats, adaptive cruise control, and the other one had lower mileage, but it was more base, so same price. At one dealership it was $4,000 more expensive because of fees. And then at the other dealership. It was just the price that was advertised. So like really where you, where you purchase a car even makes a big difference in how much you pay.
You got the one with
[00:45:51] Doug: more base though, right? Because that’s sweet when you’re rolling down the highway and you got more base and it’s just like the other cars are violating [00:45:57] Jen: cloth seats. Big base. [00:45:59] Doug: Yeah. [00:46:00] Jen: Deaf children. Like not born that way. Is that close? [00:46:02] Roger: Is that the same as bid Ask. [00:46:05] Jen: The bid ask spread between these two minivans was large. [00:46:11] Joe: It was a bid ask spread between the prices of those vans. Well, yeah. Well, and and that is interesting. Getting a car, I mean I’m, I was just trying to play, and it’s not gonna come up, I can’t find it, but from the classic movie Fargo, right? You gotta get the Scotch guard, like all the fees or the people. I remember going into a dealer when I bought this.Really? I. Inexpensive car, and I wanted to pay cash. I think a car was gonna be 6,000. It was sitting out on this used lot. They were infuriated. They were like, no, no, no. You gotta, you gotta finance it.
[00:46:45] OG: Yeah. [00:46:45] Joe: Because as we’ve talked about before, you guys know they, they’re not gonna make any money on the car.They’re making the money on their deal with the financing. The last time
[00:46:52] OG: we went to buy a car, we bought a minivan on New Year’s Eve. That’s a great time to like, what else there to do? Let’s go shop for minivan, sweetheart. Ooh. The guy’s like, all right, cool. So we just need your social and we can, uh, get the paperwork going.I’m like, you don’t need my social to buy a car. He’s like, yeah, yeah, we do. I’m like, no, you don’t. He’s like, yeah, yeah. It’s a company policy. I’m like, I don’t give a crap about your company policy. You don’t need a social security number to buy a car. I have a big bag of money and I’m gonna give it to you, and then you’re gonna gimme the keys to the car.
This is how this is all gonna work. You know? It was all back and forth about like, why are you not financing this? That’s where we got to, right. It was like, well, we. We wanna run your credit so that we can wind you and dine you about the big ass spread. About the uh
[00:47:43] Joe: oh, no. [00:47:44] OG: Oh no. You’re gonna be great. Oh no. Can’t wait for the show to come out. [00:47:48] Joe: Oh, no. [00:47:49] Jen: Yeah. I actually did finance this van, so I, I’ve bought a car in cash at a dealership and I financed and [00:47:56] OG: double dipped. I like it. Baller move. [00:47:59] Jen: I know. I’ve tried, I’d like to try everything. This time I financed and I negotiated down so much, but still, like even after a couple hours of negotiating at the more expensive dealership, like I just could not.I, I wanted, I almost said yes just ’cause I’d spent so much time there. So there was a time cost like that. Some cost. Cost. It’s
[00:48:21] OG: also part of the, part of the sales process. [00:48:22] Jen: Mm-Hmm. [00:48:23] OG: Wear you down [00:48:24] Jen: Uhhuh. Even if [00:48:25] Roger: you pay cash, you can’t get out of there quick. [00:48:27] Jen: Yes. Yeah. So the experience was the same. There was no advantage either way, but I had to just take it.It was actually easier to get out of there when I financed than it was to pay cash. Wow. Honestly. But it
[00:48:40] Joe: was, that says a lot, [00:48:41] Jen: right? I had to like pick myself up and like leave this dealership after like, so much sunk time in order to choose the one that had the transparent pricing, which I thought was a gimmick.Honestly. They say it in the advertising, but it wasn’t, it was actually transparent pricing.
[00:48:59] Joe: You know, in a past episode, Len Penso brought up a good cost. When you talk about negotiating Jen, he was talking about negotiating, not with car dealers, but with. Construction people working on your house, like handyman.He had a handyman that was gonna do a job for him and he just beat the guy up and beat him up and beat him up and beat him up. And finally the guy said, oh yeah, I will do that for this low, low, low cost. He goes, it was the Shoddiest work. The guy didn’t want to come out and fix it. He said, that’s when I realized that low cost provider not always gonna be.
And, and you brought this up earlier, Jen, that being frugal does not mean being cheap, right? You can’t shrink your way to greatness.
[00:49:37] Jen: Yeah, absolutely. We’ve just finished up a two year renovation on a fixer upper that we bought, and we had the really low cost. Unfortunately, that was all we could find. We didn’t wanna take the lowest cost, but we literally had to take what we could get.And then compared to once we fired him, the other, the people that cost more and the work was night and day different and it was worth paying, not the highest price. ’cause we had somebody come out that wanted to put a plastic tub in and charge us $15,000. Right. So we didn’t go with them. Yeah. The franchise.
But looking around and taking the next affordable, you know, not the cheapest, but the second or third least expensive option. And we even, we got those two guys from referrals from real estate investors, so it’s Right. Wow. You know, like you just, it’s really, uh, in the Tampa Bay area, it’s really take what you can get out here
[00:50:33] Joe: right now.So. Wow. Wow. Roger, let’s go back to financial products for a second. Did of you guys know if Primerica is still a thing? I don’t know, are they? Oh yeah, they are. That’s a
[00:50:44] Roger: thing. Doug says yes. [00:50:46] Joe: Primerica is still Jen, do you know what Primerica is? No. Roger. You know Primerica, right? So Roger with Primerica, you will get a free financial plan.You will get a free financial plan. And Primerica is not the only one. But Primerica being multi-level marketing. So Jen, multilevel marketing,
[00:51:06] Jen: I have heard of it [00:51:07] Joe: with financial [00:51:07] OG: planning, with life insurance. It’s great. Not Not financial planning. Oh yes. Let’s be clear. [00:51:12] Joe: Yeah. Roger, what happens when you buy a free financial plan through Primerica, you’re gonna get sold a product [00:51:18] Roger: of some sort.That’s the hidden cost of financial planning. Well, it’s everything. You get what you pay for. Right. And in financial services especially, the industry is always trying to figure out how do we serve the masses. Unfortunately, this is the way that you serve the masses because the engine is the sale of financial product.
And so that’s how we get Primericas. To serve the masses, to get rid of that incentive. It’s gonna be coaches. It’s not gonna be the industry that solves it. It’s gonna be financial coaches that are outside the industry because of all these hidden costs of just junk that they get sold in order to get that free plan.
Free plan. Yeah. And
[00:52:01] Jen: you know what’s worse is that financial plan, so much of it is still done face-to-face. Whereas in tradition, like traditional MLMs, you buy most of your products online. So it’s weird. Like network marketing for makeup and shampoo and all that is weird now. But face-to-face financial planning is not weird.Even though you can do so much of it online. So you can still have these financial product MLMs, because it’s not weird and people are more easily tricked into them
[00:52:32] Joe: because they’re sitting down at a table with this very nice person. Mm-Hmm. I remember somebody telling me me way back when I was a financial planner.They’re gonna do it for free. I’m like, nobody does anything for free. Why do you think they’re doing it for free? They’re like, oh. ’cause they’re really nice. You should have been. They were so nice. I’m like, well, yeah, they’re nice, but they still have to get paid. They still have to eat. Like if you don’t know how somebody gets paid, you need to do more, do more research.
Speaking of MLMs, you know, this just gets down to entrepreneurship in general. I’m not as anti MLM as I see some people are online. It’s just a way of distribution, right? It’s just another distribution channel. But my general rule is when there’s a low barrier of entry, you’re going to pay huge time cost to get ahead, and there’s gonna be a lot of people lying about the products, right?
They’re gonna be lying about the sale. So when you’ve got some MLM low barrier to entry, lots of people can sell it. Lots of people competing against each other to sell it. They’re not even gonna sell the product. They’re gonna sell you on having to do nothing because of the fact that it’s low barrier to entry.
When you go try to buy a McDonald’s, much higher barrier of entry, it’s gonna cost you a ton of money and you’re gonna get rid of a lot of the competition. People are gonna see the arches. They’re either gonna come or they’re not gonna come. Roger.
[00:53:42] Roger: I think this structure ports over to the internet and content marketing.Oh, good point. It is, you know, you are the product, whether it’s Facebook, but you’re also the product for financial information. Click on my email list and then upsell to the course, then upsell to the club, and then upsell, upsell, upsell. That is the business model of it. And there’s always gonna be conflicts of interest, even with the Primerica guy.
But there probably are really amazing Primerica guys that are, and gals that are trying to do the right thing that disclose and are more transparent about it. So as an example, go back, just circle back to Robinhood. The fact that Robinhood makes money on the spread isn’t as much of the issue as how they try to obscure that and say they don’t.
If I do option trade at, uh, fidelity, they’re making money on the spread too. The bid offer spread is everywhere. It’s not just exclusive to Robinhood, it’s more of how they’re managing the conflict and some people are more open about it than others. I like how finally
[00:54:53] Joe: we get to the end of the episode, somebody has the, has the wherewithal to change the word to offer instead of ask.Should have done that
[00:55:01] Jen: earlier. [00:55:01] Joe: Not cool. Roger not cool. Should have done that earlier. I think it’s a great place to leave it. Thank you so much for a great conversation, Jen. I like how early on you widened it up too. There’s lots of ways that we pay. We pay so many. We pay in our taxes. We pay in consumption.We pay in so many different ways, not just in the straightforward gotchas that we think we have. Doug, you remember the Jim Gaffigan bit about how even water’s not free. That’s how they get you. Yeah. Yeah. When you make the ice, you gotta buy that plastic tray. That’s where they get you. They get you on the tray, they give you the water for free, but then they get you.
So fun. Speaking of fun, let’s find out what’s going on in all of your fun lives. Oh, og. First weekend in October. What are you doing this weekend?
[00:55:41] OG: Oh, I have a very exciting trip to Midland, Texas and uh, I’m gonna hang out there for a couple of days and then, uh, and then come home next week and next week I’m play in a golf tournament.So that’s really the more fun, exciting thing. I do my trip and then come back and, uh, play some golf for a few days.
[00:55:54] Joe: Midland, Texas reminds me that David tell joke about Dayton, Ohio Doug. You know which joke I’m talking about? I don’t [00:56:00] Doug: know that one. ’cause I only listen to clean comics, Joe. I don’t listen to Right. [00:56:04] Joe: Look at your nose. Come out. I recall you and I listening to David tell together, but anyway, he’s naughty. Yes. David tell says, you know what’s fun to do in Dayton, Ohio? Get the fuck out. [00:56:16] OG: Wow. That’s what’s fun. Midland is a much nicer town than that. Uh, I will, I will admit he bleeped [00:56:23] Joe: it out, but that sounds like fun.What’s happening? Let’s talk to our guests. We’ll have, uh, Jen gets to go last. Roger, what’s happening at the Retirement Answer Band This weekend?
[00:56:35] Roger: Yeah. This month on the show, we are exploring how to think and great mental models to improve your decision making when it comes to any kind of financial planning.There’s plenty of information on what to think about and all the technical aspects of thinking about it, but nobody really focuses on how do you think about things in an organized way to get to better decisions.
[00:56:57] Joe: You gave a wonderful presentation on this topic at Campfire [00:57:01] Roger: a year ago when we were together.I think how you think about things is where it’s at, the process you use to get to, ’cause almost every decision is not black or white. It’s a judgment call. And so it’s really important that you do it in an organized way. Yeah, yeah.
[00:57:15] Joe: Still on that topic, it’s funny going through that just in, in high school, I remember great mentor teacher I had talking about everything.To your point, Rogers a judgment call. Your goal is, is not to get a hundred percent evidence, but to get that evidence as close as possible. So the leap is not very far. Build a case, build a case, build a case,
[00:57:32] Roger: build a case. And there’s a little mind tricks you can use like as an example, you know, the, the perennial question of what is the meaning of life, right?If you understand some mental models, you can reframe that question of, well, how do I live a meaningful life is probably a little bit more productive.
[00:57:48] Joe: I don’t think anybody who heard this show speaking a mental model is going to ever forget what the bid ask spread is. I think everybody’s gonna remember that for the rest of time.Jen, thanks for hanging out with us again. I know it’s about to get busy for you. What’s happening right now at Frugal Friends?
[00:58:06] Jen: Yeah, so we are doing a lot of interviews and promotion of our new book, buy What You Love Without Going Broke, and that’s at Buy What You Love book.com. And that doesn’t come out till January 7th, but after you pre-order it.In the meantime, we’ve got some really great episodes. We’ve got one that just came out, how to Vote With Your Dollar, uh, with Gigi Gja and talking about kind of setting our minds back to a steady ground in this upcoming season and, and how we interact with our money is, is really as impactful as how we vote.
And we got one coming up on how influencers are lying to you about their lifestyle No way. And how it’s costing you what.
[00:58:46] Joe: No. [00:58:47] Jen: Love that one. [00:58:48] Joe: Say it Ain’t so. I love that one too. I think of some very specific influencers, uh, when you say that, but, but that is at the Frugal Friends Podcast, where Find your podcasts are distributed [00:59:01] Jen: anywhere you’re listening to this podcast, I know you’ll be able to find The Frugal Friends podcast. [00:59:06] Joe: Absolutely. Pause right now. Subscriber file, frugal Friends, and The Retirement Answer Man and, uh, wish og, uh, much. Hope and love as he heads to Midland, Texas. I don’t know. I’m just making it up. [00:59:20] OG: Thoughts and [00:59:20] Joe: pers. Yes, that’s, that’s ’cause Midland, Texas is a great place. And Midland, I was just kidding actually.Really cool. Midland, Texas. Great. And Dayton. That wasn’t my joke. Dayton does suck. That was David Tell it was David tell’s joke. Dayton sucks. I love you two
[00:59:32] OG: Dayton, Midland, Texas is awesome. [00:59:33] Joe: Oh my God. Doug, get me outta this. What, what, what should be on our to-do list today. Doug. Well, Joe, [00:59:38] Doug: let me help you out here first, take some free, no hidden fee advice from Jen.Remember when she said the, well, Jen, you just tell us
[00:59:48] Jen: there are hidden fees associated with everything to consume, and really the only way to avoid these hidden costs is to make sure we are matching our consumption with only what we value, not what other people are telling us to value. [01:00:02] Doug: And second, don’t forget when Roger totally blew your mind when he said buy once, [01:00:08] Roger: cry once.That’s gonna allow you to buy gear for doing something really cool rather than just accumulating stuff. You’re gonna end up helping your house. You’re gonna have less stuff. You’re gonna end up helping the environment and the world.
[01:00:21] Doug: But the big lesson, don’t try to get Joe’s mom to watch Planet of the Apes.She says that movie’s just a bunch of monkey business. Ha.
Okay. Thanks to Jen Smith for joining us today. She is got a new book coming out early next year, and believe it or not, are you sitting down for this? You can pre-order it. Hey Jen, couple of questions for you. What’s it called? How do you pre-order it? And what’s the 14th word on page one 10?
[01:00:53] Jen: It’s called Buy What You Love Without Going Broke.You can pre-order it at Buy what you love. book.com. And duh.
[01:01:03] Roger: Lucky guess good guess. That’s a good guess. She [01:01:06] Joe: goes to the mathematically, uh, probably [01:01:09] Doug: correct answer. Mm-Hmm, damnit. Alright. You know what? We’ll also include links in our show notes at Stacking benjamin.com and thanks to Roger Whitney for hanging out with us today.You know, he has his own amazing podcast called The Retirement Answer Man, and you can find that wherever you listen to finer podcasts. And finally, thanks also to OG for joining us today. Looking for good financial planning. Help head to Stacking Benjamins dot com slash OG for his calendar. The show is the property of SB podcasts LLC, copyright 2024, and is created by Joe Saul Sea High.
Joe gets help from a few of our neighborhood friends. You’ll find out about our awesome team at Stacking Benjamins dot com, along with the show notes and how you can find us on YouTube and all the usual social media spots. Come say hello. Oh yeah, and before I go, not only should you not take advice from these nerds, don’t take advice from people you don’t know.
This show is for entertainment purposes only. Before making any financial decisions, speak with a real financial advisor. I’m Joe’s Mom’s Neighbor, Duggan. We’ll see you next time back here at the Stacking Benjamin Show.
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