Nicole Lapin
👤 PersonPodcast Appearances
I'm Nicole Lappin, the only financial expert you don't need a dictionary to understand.
It's time for some money rehab.
Today I sit down with the woman that Oprah called the queen of brows, Anastasia Soiree, the founder of Anastasia Beverly Hills.
And if you're wondering to yourself, can brows really be big business?
Well, Anastasia scaled her company to a reported $3 billion valuation.
And today she tells me how she did it.
From growing up in communist Romania to building one of the most successful beauty brands in the world, Anastasia shares the negotiation tactics that she used early on to get partners to take a chance on her and what financial moves she made before taking a bet on herself.
We also talk about the time she fired her own daughter, whether romantic relationships are a distraction in business, and how the heck she cultivated such an amazing celebrity client list that features names like Kris Jenner, Jennifer Lopez, Hailey Bieber, and more.
Plus, we do a very special edition of Bullish or Bearish, where I ask Anastasia to rate beauty trends today.
So whether you're interested in the beauty industry or just profitable businesses, this conversation has something for everyone.
All this after a word from our sponsors.
I am so excited you head up to Big Sur with my husband this fall.
We are celebrating our anniversary.
And while I will miss the little mush so much, we are also really excited to have a little parents time.
We deserve that.
But you know, it got me thinking about this feeling when you walk out of the door for a
what your blaze is doing while you're gone.
Well, it turns out it could be working for you.
I've been hosting on Airbnb for forever now, and I tell all of my friends to do the same because it's an amazing way to make passive income from an asset you already have, your home.
But some of my friends who are super busy worry that hosting on Airbnb would feel like having a second job.
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So whether you're traveling for work or you're escaping the winter, or if you have a second place that just sits empty way too often, your home doesn't have to sit on the sidelines.
Instead, you can earn a little extra cash without adding another job to your plate.
Find a co-host at Airbnb.com slash host.
Imagine trying to become a pro athlete without having a coach.
It sounds crazy, right?
We all need help leveling up in areas that matter to us.
And that's why one of the smartest financial moves you can make is working with a certified financial planner.
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I am not a real client of Domain Money.
Via Money Rehab, I receive compensation and have an incentive to promote Domain Money.
See important disclosures at dmnmny.co.x.
Anastasia Soiree, welcome to Money Rehab.
Thank you so much for having me.
So excited to talk about money because you are the brow queen, but also the money queen and love talking about business and money.
And I think that's so important to open up about because you came from nothing, nothing.
Zero.
That's right.
In Romania, communist society, what was your idea about money growing up?
What stood out to me about that story is that at 12 years old, she said, you can do it.
And I feel that from you.
Like, you are so confident.
And do you still worry about money from growing up, seeing a communist society coming here?
I'm first generation American and also lost everything in the fire in Los Angeles.
So still...
feeling financial trauma is real like it never truly goes away and some stuff that comes up can still trigger old wounds for sure do you feel like there's a day that you wouldn't have enough again or have you gotten over that you know when you come from darkness when you see the light you are happy about and if it's going to be dark again
And you did, but you've had no money and you've had a lot of money.
Which one is better?
Which one brings you more happiness?
When you first came to the U.S., you started working at a salon.
And I love this because the owners benefited from the Equal Credit Opportunity Act and the Women's Business Ownership Act.
I don't think people realize because before that, you couldn't get credit without a male relative.
You worked for two female entrepreneurs at the time.
Yes.
That was revolutionary.
And what did that teach you about getting credit, starting a business?
I think people, when they come here for the first time, it's amazing that your mother was able to be an entrepreneur in a communist society.
Very unusual.
Incredible.
And then coming here, did you even know what a credit card was or a credit score?
We should sponsor you.
Yes.
I think people don't realize, especially immigrant families, that you need a good credit history to get a credit card, but you need a credit card to get a good history because it's like a catch-22.
Exactly.
So you became hugely popular at the salon where you rented the room.
You started building out this celebrity client list.
Then how did you get that word of mouth?
You know, when somebody is starting a business, that's so important.
Yeah, because that's how people ask for a referral.
If you have terrible eyebrows, no one's asking who did your eyebrows.
So over the years, you grew.
So from the supermodels to Jessica Alba and Jennifer Lopez and Kris Jenner and Oprah.
And I think you were at Hailey Bieber's house yesterday.
No, she was at my house.
Oh, okay.
You just continue to build out your client list, it sounds like.
So how did you figure out how to maintain relationships or...
continue to get that word of mouth from these high-end clients.
I think when people are starting a business, they want tips and tricks of do you send birthday presents, texts?
Absolutely, but nobody made it such an empire until you came around.
So you started building this amazing client list, and then you asked the salon basically to do your own thing.
So you were an intrapreneur before you were an entrepreneur, but they said no, and that was kind of a blessing in disguise.
Thinking about my own eyebrows and my own ratio.
Yes.
I really was brow-orexic.
What do you call it?
Brow-anorexic.
For a long time.
But I, yeah.
Thank you so much.
I've been nervous the whole time.
I'm wondering what you think about my eyebrows.
Dream come true.
Hold on to your wallets.
Money Rehab will be right back.
And now for some more money rehab.
So you saved about $5,000 at the time to start your own business.
That was a lot of money at the time.
Yes.
A lot of money.
Now you had a bank account.
And you also had a problem getting rent.
And so when you started to go out on your own, you also were rejected, right, from renting a store.
Because I think people don't just invest in businesses.
They invest in people.
And then you decided you wanted to go into products.
Yeah, because you have to scale yourself.
You're one person.
To grow your business, you have to get it down to a science.
And so you invented this brush that didn't exist, but you didn't patent it.
But you were hell-bent on having Anastasia as the name.
There was no other option.
You added Beverly Hills, but did you think of any?
Wait a minute.
No, I will not steal your trademark.
If you were to start another business, you wouldn't go by the name?
So now there's so many dupes with the brushes.
How do you feel about that?
We are all acknowledging.
We bow down to the OG for sure.
What worries me now, though, too, is that a lot of these dupes are coming from China and they're dangerous.
And they have weird chemicals and stuff.
So when you started, and it sounds like to now, you've said that your favorite hobby is work.
You work and you work some more.
By the way, I say the same thing.
Have you ever felt burnt out?
I struggle with the work-life balance because I think that there's not such a clear delineation.
Work is life, life is work.
Never late again.
We often say money without meaning is just paper.
And so it sounds like you both have found significant meaning.
During that process, what have you learned about working with family?
What would you suggest to other people about working with their child or another family member?
And when you started your journey, you were married.
Yes.
And you were divorced.
We have another podcast on our network where there was an interview that a founder said there's an advantage to being unmarried in business.
Do you think that's true?
You have more time, less distraction.
Hold on to your wallets.
Money Rehab will be right back.
And now for some more Money Rehab.
It sounds like you rely a lot on your daughter and you would potentially rely on a spouse if you had one.
Is it hard for you to trust outsiders?
From 97 to 2018, you bootstrapped.
And then you took on some private equity with TPG.
Yes.
You came to this country without knowing how to write a check.
How did you figure out how to take on private equity?
What was the partner?
Like a banker.
So if you didn't want to sell, why did you decide to take on outside capital?
And what would you suggest to other entrepreneurs thinking about taking on private equity?
But in some cases, they'll try to cut to make a profit.
They'll try to cut areas of the business.
And I think some founders got really nervous about that.
Did you feel like you lost some of the control over the operations?
Yeah.
And what would you go back and tell yourself?
Would you do it again?
And what do you think you would have done differently?
You were the hottest for sure.
Maybe the first, if not one of the first to really explode on Instagram.
18 million followers.
And you grew a lot through user generated content.
People were posting all this grew to I think you're at 18 million followers.
Yes.
At least 18 million.
Creating a community on social is so important for budding entrepreneurs.
Is there something that you learn there about really creating an engaged audience?
And what did you learn about owning that customer?
Because I think some people worry that the platform owns the person.
It sounds like regardless of the valuation in the billions and the millions of followers, you are a worker.
Do you work the same now that you did when you first started?
No matter what's in your bank account now?
I would love to play a game.
Yes.
If you don't mind.
Of course.
Bullish or bearish on different trends in the beauty world.
Okay.
So if you're into it, you're bullish.
And if you hate it, you're bearish.
Okay.
Ready?
Yeah.
Okay.
For brows.
Bleached eyebrows.
Bearish.
You're bold-ish.
Bold-ish, yes.
Okay, laminated eyebrows.
I really like laminated straight up.
But now I'm questioning my life choices.
Okay, soap brows.
A bear.
Totally.
I feel so lucky to be learning about eyebrows from you.
Christy Yamaguchi taught me how to ice skate.
And so now the queen is teaching me.
Brooke Shields had it right from the beginning.
I feel like we're breaking up with filler and Botox.
So bearish.
How about dark lip liner and light lip gloss?
Like in the 90s.
What's a skincare practice that you think everybody should be doing now?
Well, when I lost everything in the fire, the only things that I remembered were my pencil, my medium color, because I didn't know any of my colors, and my soft glam eye palette.
Isn't the best?
The best.
So those were the first things that I replaced.
We end all of our episodes by asking for a tip that listeners can take straight to the bank, as you know.
But I wanted to ask you something personal for me, if you have advice.
You lost your home in the Northridge quake.
Yes.
At what point do you stop thinking about it every day?
I've struggled to move on.
And, you know, I'd love any advice for somebody who's here.
At what point did you feel like you stopped thinking about it?
Did it take, you said a year?
Yeah.
Are you scared of earthquakes now?
You know what I mean?
I think I still have a lot to learn.
So it's not my time because we're here to learn.
And I'm still learning so much.
Literally, what more do I need?
Exactly.
Money Rehab is a production of Money News Network.
I'm your host, Nicole Lappin.
Money Rehab's executive producer is Morgan Levoy.
Our researcher is Emily Holmes.
Do you need some money rehab?
And let's be honest, we all do.
So email us your money questions, moneyrehab at moneynewsnetwork.com to potentially have your questions answered on the show or even have a one-on-one intervention with me.
And follow us on Instagram at Money News and TikTok at Money News Network for exclusive video content.
And lastly, thank you.
No, seriously, thank you.
Thank you for listening and for investing in yourself, which is the most important investment you can make.
one of the smartest financial moves you can make is working with a certified financial planner instead of trying to wing it solo domain money cfp professionals don't just hand out generic financial advice they help people get on track for early retirement fix messy investment allocations and figure out the perfect timing for major purchases like buying a house or gosh i don't know growing a family asking for a friend yes i am that friend in fact my husband and i actually just talked to adriana adams head of financial planning at domain on the podcast
And she had this advice around what to do to set our daughter up for financial success.
So as you can probably tell from that, Domain gives you something most people never have, a step-by-step financial plan that actually makes sense and does not make your brain hurt.
So get started today and book your free strategy session at domainmoney.com slash moneyrehab.
I am not a real client of Domain Money.
Via Money Rehab, I receive compensation and have an incentive to promote Domain Money.
See important disclosures at dmnmny.co slash x.
What is your bank doing for you?
And how much is it costing you?
That's a serious question, because if they're charging you $8 a month with zero extra services, I've got to stage an intervention here.
What are you paying them for anyway to hold your money for you?
You deserve better.
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My younger self would have definitely benefited from this.
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It's what they have to offer you, too.
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Plus, they have over 47,000 fee-free ATMs.
So seriously, ask yourself, what is your bank doing for you?
And just how much are they charging you to do it?
And if the math isn't mapping, think about making a change.
Work on your financial goals through Chime today.
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I'm Nicole Lappin, the only financial expert you don't need a dictionary to understand.
It's time for some money rehab.
All right, it is time for a roundup of the biggest stories on Wall Street and how they're going to affect you and your wallet.
Today we're talking about tariffs, recession watch, potential insider trading in the crypto world, and a big Wall Street cautionary tale that has added up to a missing $2 billion.
We'll follow the money trail after I tell you about some of our partners.
Let's start with China.
Last week, China announced that on December 1st, it will be limiting the export of rare earth minerals to the United States.
And a quick reminder, because I've talked about this before on the show, so-called rare earths aren't that rare.
They are just a nightmare to mine.
The process is dirty, toxic, and massively harmful to the environment, which is why most countries outsource it to China.
But these minerals are essential.
They are the backbone of everything from smartphones to microchips and advanced weapons systems.
So, in other words, they power our everyday lives and modern warfare.
China says the move is about national security, and the concern is rare earth elements in U.S.
military applications.
Like samarium, for example, it's a rare earth element used in the production of US F-35 fighter jets and missile systems.
China also announced new restrictions on exporting the equipment used to make EV batteries, a not so subtle move to protect its dominance in the global electric vehicle market.
President Trump fired back with a threat of 100% tariffs on Chinese imports.
For context here, the current tariffs are sitting at around 20%.
Plus, all of Trump's tariffs are under review by the Supreme Court, and they'll hear arguments on November 5th.
So will we see a 100% tariff?
Honestly, probably not.
This will be the return of the taco trade.
Plus, between the Supreme Court and how badly the economy does not want a 100% tariff on goods from China, this proposed tariff is probably just a bargaining chip.
Now, I want to hit pause on the story right here.
We'll get back to the wild market ride that followed.
But this exact moment when Trump fired off that Truth Social post about a 100% tariff is also a key moment in another story.
Just minutes before his post went live, an account on the crypto exchange Hyperliquid
opened a $700 million short position on Bitcoin and Ethereum.
The Truth Social post went live, the price of crypto coins and the stock market in general began to tank, and the trader began closing out their positions.
Estimates vary, but the trader seems to have made at least $160 million off the trade.
The infamous trader reports are saying it's Garrett Jin, a crypto guy who ran BitForex shut down in 2024 after around $56 million deposits vanished.
Now he's back in the headlines with this trading story.
He says there was no insider trading and that he's not even connected to the Trump family.
He said that everyone throwing around insider trading allegations are ignoring the reality that we are escalating tensions between the United States and China.
He just made a good, smart bet.
TBD on that.
The reason this short trade did so well was because the market did not like Trump's announcement of 100% tariffs.
On Friday, the Dow fell nearly 2%, the S&P 500 dropped nearly 3%, and the Nasdaq fell
3.5%, which was not amazing.
But then on Sunday, President Trump posted on social, don't worry about China, it will all be fine, exclamation point.
And Treasury Secretary Scott Besant said that the trade talks between the U.S.
and Chinese negotiators were ramping up.
The stock market came roaring back on Monday, having one of its best days of the year.
And then another bump on the
On Tuesday, the United States and China began charging additional port fees that affect everything from manufactured goods to crude oil.
And that made markets stumble again.
So even with these setbacks, the market has hit high after high.
And it's making some people wonder if there is anywhere else to go but down.
A clip of the financial journalist Andrew Ross Sorkin is making the rounds right now.
that he's pointing out parallels between the U.S.
economy and the economy right before the Great Depression and saying, quote, prices might not feel stable.
Let's decode this for a second because it sounds no bueno.
When he says prices, he's talking about valuations, how expensive stocks are now compared to what companies actually earn.
The simplest way to measure that is a price to earnings ratio or P.E.
Right now, the S&P 500's P.E.
is about 28 times earnings.
That means that investors are paying $28 for every $1 of profit companies are making.
Historically, the average has been closer to $15 or $16, so today's market is almost twice as expensive as normal.
If you look at the Shiller PE, also called the CAPE ratio, it smooths out earnings over 10 years to show a longer-term picture, and that is fitting around 39 to 40 times earnings right now.
For comparison, the only other times it's been that high
1929, 1999, 2021, all followed by major pullbacks.
In the late 90s dot-com bubble, the regular PE peaked around 33 and the Shiller PE hit around 44 before the crash.
So no, we're not saying that a crash is guaranteed, but when valuations stretch this far above average, it means that the market's priced for perfection.
Everything.
profits, growth, interest rates has to keep going exactly right.
So when Andrew says that prices might not feel sustainable, he's saying that the market is running hot and the higher it climbs, the thinner your safety net gets.
Now, the case of the missing $2.3 billion.
It starts in 2013.
A guy named James Patrick found an auto parts company in Ohio called First Brands Group, or FBG.
FBG is the kind of place that sells those DIY replacement windshield wipers to AutoZone and Walmart.
If you have ever been broke like I have, you know those ones.
You can replace your windshield wipers yourself.
You just clip them on, save yourself a stop.
anyway patrick quickly realized that while there's some money in the windshield wiper business scaling it was going to take a long time but he had found a cheat code there were lots of other little businesses just like his around the country selling these niche parts that you don't really think about like windshield wipers replacement rear view mirrors and decorative
gear shift knobs to chains like AutoZone and NEPA.
Patrick discovered that the real money wasn't in selling more product than his competitors, but by buying out his competitors and selling more product that way.
So FBG spent the last decade buying up almost all of its competitors.
And he crushed it.
Last year, it sold its products in-store and directly to customers on five continents, supplied major auto part manufacturers, and employed 26 people,
also did $5 billion in sales.
But like I mentioned, there's not a lot of money in windshield wipers, and yet he expanded.
So how did he do it?
Well, he funded his major acquisition spree with credit.
A lot of credit.
This included $6 billion in junk bonds, which sounds sketchy, but really aren't.
Junk bonds aren't always junk.
They're just high yield interest rate debt.
And for a company with its sales and rapid expansion, it seemed like a reasonable amount of credit and debt.
Cut to over the summer, the company hired an investment bank to help it negotiate the terms of the debt.
During that process, the investment bank discovered that FBG had several billion dollars more in loans from private creditors.
And many of those weren't normal loans.
They were loans against invoices.
Think of it as a payday loan for corporations.
And where it gets extra messy is that FBG was selling the same invoice or really a tranche of invoices to different lenders, which you cannot do.
The math is not going to math that way.
The result is that as much as $2.3 billion remains unaccounted for.
And when I say unaccounted for, I do really mean that they are just the corporate equivalent of the shrug emoji.
One of the parties to the bankruptcy asked, quote, first, do we really know whether FBG actually received $1.9 billion, no matter what happened to it?
Second, would you tell us how much is in the segregated accounts in respect of the factored receivables as of today?
Well, a lot of jargon there, but the lawyer for FBG responded to the email, and this is a direct quote,
Number one, we don't know.
And number two, zero dollars.
Remember James Patrick?
The founders stepped down.
So that's how it's going.
Lastly, the government is still shut down, and the longer it is, the more effects it will have.
The latest impact is in the coastal housing market to get a mortgage on a house in a flood zone.
You must have flood insurance because it is just so risky.
Most private insurance companies simply do not offer flood insurance.
If you want it, you probably have to get it from the federal government via the National Flood Insurance Program.
As of October 1st, that program has lapsed, meaning they are issuing no new policies and not renewing existing ones.
The National Flood Insurance Program is not able to fund itself from the sale of insurance policies.
There are solid economic reasons why most private insurance companies won't offer these policies.
So this means that in some places, prospective homeowners can buy policies from private insurance companies or get their policies extended.
But in many places, these transactions are simply on hold.
The National Association of Realtors estimates that around 1,400 transactions
will be disrupted each and every day of the shutdown.
But even more problematic is that flood insurance policies last for one year.
That means that policies are also expiring every day without being renewed.
This can leave homeowners scrambling.
In a few places, policies can be replaced with more expensive private policies.
But that option doesn't exist everywhere.
So if you're expecting your policy to expire any time in the next month, you do need to think about starting to come up with some strategies
cover the gap right now.
For today's tip, you can take it straight to the bank.
When it comes to insurance, don't set it and forget it.
Flood insurance might be out of your hands, but other policies are totally negotiable.
Check in every year or so to make sure that your coverage actually fits your life and your
Money Rehab is a production of Money News Network.
I'm your host, Nicole Lappin.
Money Rehab's executive producer is Morgan Levoy.
Our researcher is Emily Holmes.
Do you need some money rehab?
And let's be honest, we all do.
So email us your money questions, moneyrehab at moneynewsnetwork.com to potentially have your questions answered on the show or even have a one-on-one intervention with me.
And follow us on Instagram at Money News and TikTok at Money News Network for exclusive video content.
And lastly, thank you.
No, seriously, thank you.
Thank you for listening and for investing in yourself, which is the most important investment you can make.
Today's episode includes descriptions of sexual assault.
Please take care while listening.
For a lot of founders, selling your company is the ultimate dream.
But for Gwen Whiting, that dream was actually a bit of a nightmare.
Gwen's the entrepreneur behind The Laundress, the cult favorite brand that turned laundry into a luxury business without a single dollar of outside funding.
Gwen sold The Laundress to Unilever for a reported $100 million.
But after she left, the recalls started.
We talk about how she built it, what really happened during the Unilever acquisition, and the fallout that followed.
In the show notes, I'll also link the articles that Unilever responded to so you can see their side of the story.
Gwen also shares what she wishes she knew before she signed on the dotted line and why she's back now in the game with her new venture, The Fill.
We also talk about how Gwen manages professional challenges while dealing with personal ones.
At the end of our conversation, Gwen shares her experience as one of the 567 known survivors of a now disgraced Columbia OBGYN.
It is a brave and important conversation about personal trauma, public accountability, and reclaiming your voice.
The interview right after this.
I am so excited you head up to Big Sur with my husband this fall.
We are celebrating our anniversary.
And while I will miss the little mush so much, we are also really excited to have a little parents time.
We deserve that.
But you know, it got me thinking about this feeling when you walk out of the door for a trip and you wonder,
what your blaze is doing while you're gone.
Well, it turns out it could be working for you.
I've been hosting on Airbnb for forever now, and I tell all of my friends to do the same because it's an amazing way to make passive income from an asset you already have, your home.
But some of my friends who are super busy worry that hosting on Airbnb would feel like having a second job.
And that's when I tell them about Airbnb's co-host network.
Anything you don't have the bandwidth to do, a co-host can handle for you.
They can create your listing, manage reservations, manage guests, provide onsite support, even handle design and styling.
So whether you're traveling for work or you're escaping the winter, or if you have a second place that just sits empty way too often, your home doesn't have to sit on the sidelines.
Instead, you can earn a little extra cash without adding another job to your plate.
Find a co-host at airbnb.com slash host.
One of the smartest financial moves you can make is working with a certified financial planner instead of trying to wing it solo.
Domain money CFP professionals don't just hand out generic financial advice.
They help people get on track for early retirement.
fix messy investment allocations, and figure out the perfect timing for major purchases like buying a house or gosh, I don't know, growing a family, asking for a friend.
Yes, I am that friend.
In fact, my husband and I actually just talked to Adriana Adams, head of financial planning at Domain on the podcast, and she had this advice around what to do to set our daughter up for financial success.
So as you can probably tell from that, Domain gives you something most people never have, a step-by-step financial plan that actually makes sense and does not make your brain hurt.
So get started today and book your free strategy session at domainmoney.com slash moneyrehab.
I am not a real client of Domain Money.
Via Money Rehab, I receive compensation and have an incentive to promote Domain Money.
See important disclosures at dmnmny.co.x.
Gwen Whiting, welcome to Money Rehab.
Thank you.
I'm so happy to see you.
I'm so happy to see you.
It's been a hundred years, it feels like, but it hasn't.
It's been seven?
Six and a half.
That's kind of in dog years, it's a hundred.
I know.
The pandemic happened, you built, you grew, you sold, you...
We got a lot to catch up on sister.
So let's start with when we met, you were building laundress.
The way you described it to me made me a believer.
Your passion about laundry, I had never, not once, not ever really thought critically about my laundry.
And I completely just wanted to buy whatever you were selling.
So I did.
But tell me why you decided to sex up the laundry business.
But you were not an entrepreneur before, right?
I mean, that also wasn't really a word in 2000.
I think there are a couple kinds of founders.
One who wants to be a founder, so they are out there hunting for a business idea.
And another one who has a business idea, so they become a founder.
It sounds like you were...
a little bit of both.
Yeah, and when you started, also the idea of raising money and taking on VC was not as popular.
Well, so you never raised money for the laundry.
You had a SBA loan.
No.
And when you were in those early days, how did you get into the credit card funding zone?
Because a lot of entrepreneurs, if they're going to bootstrap, there are good days, there are bad days.
You have to get scrappy and creative.
Scrappy.
Yeah.
I mean, the way you talk about that is, is similar to how my husband who's an entrepreneur talks about it, just getting through COVID, like through credit cards to try to make payroll.
I bootstrapped my business.
Like it's,
It's a slog every day.
And it sounds like there's a lot of memories that probably stick out to you of the things that you did to try to save money.
I don't know if you've seen the Instagram trend.
That's like the unhinged things I did early in my career.
But do you remember any?
Totally agree.
It's something that I get asked all the time too.
And I'm like, I don't understand how this has gotten to be the thing that every entrepreneur wants to do because I started, I'm sure you started to be your own boss.
So did you have an idea of what you ultimately wanted the outcome to be?
I mean...
And knowing what you know now, what would you tell...
So how did we even get to that outcome?
So 16 years later...
Spoiler alert, Unilever acquired The Launderist in 2019 for a reported $100 million.
I heard that they first approached you.
But they're not like wearing a Unilever polo shirt.
I mean, it's wild because, you know, I think some people have this delusion that they're going to be like discovered on the street back in the day.
Right, exactly.
Like modeling scouts or something.
But that's not a thing in entrepreneurship.
I mean, you joke about the idea that you didn't know about an exit.
Of course, you knew more than you're giving yourself credit for.
But like typically a sale process, you get a banker, you do a process, the whole thing.
Like somebody doesn't just, you know, undercover boss show up.
But it happened.
That's exactly what happened.
So without talking about specific numbers, I know you can't.
So this guy steps outside.
He goes into your store.
You start a negotiation.
So a meeting with the executive team.
Correct.
What was the opening offer?
So it sounds like they got to the terms that you wanted.
Yeah.
And were you truly willing to walk away if they didn't?
Because I think that's where the strength in any negotiation lies when you're truly, truly willing to walk away.
How did you find her?
Or like if another founder, probably not in the same way that it happened to you, but if they get approached for some sort of M&A transaction-
And I know there was so much ick that followed.
But at that point, if we could go back, I'm sure or I'm hoping that you celebrated when the acquisition happened.
That's cool.
And when the wire actually hit, how did you feel?
Did you feel at that moment that you did it?
There are a lot of founders who go through like a depression after selling their company.
You refer to it as selling your baby, which a lot of founders do.
So was there mixed emotions at that point or were you just on cloud nine?
And just for layman's terms, can you explain what an earn out is?
Yeah, it's similar to book sales.
So you can earn back your advance, but you also have to pay for a lot of the publisher's overhead and marketing expenses and la, la, la, la, la.
Did you think that once you were done with that two-year obligation, you would just retire?
Hold onto your wallets, Money Rehab will be right back.
And now for some more Money Rehab.
within the Unilever universe, Ben and Jerry are trying to free their brand from Unilever.
Jerry just quit saying that Unilever is stifling their commitment to social justice.
And in the acquisition process, they said that they would have autonomy, et cetera, et cetera.
What advice would you give to Ben and Jerry?
Well, I really appreciate that you do not mince words about all of these issues with the acquisition.
I think it's so refreshing and so sobering to so many people who might be starting businesses and think that this is the end-all be-all, the dream.
Well, we try to share them or like options, which I sometimes call magical beans, all of these things that you learn through the process that, you know, equity in a company sounds really sexy until, you know, that company raises money and the investors add pref like preferred shares on top of it, and then nobody in common gets paid out.
Yeah, exactly.
We did an episode
Well, speaking of worst case scenario.
So I told you I became
a believer after meeting you.
So I had all the Laundress products, was obsessed, got the black and white...
iron board cover that I love so much.
It burned in the fire recently, but it made ironing fun.
And I truly was all about it.
Then I got an email, I think, that there was a recall in 2022.
And I was like, what the heck?
And I didn't know because you weren't talking about.
The ether.
Just slithered away.
So you weren't there.
There was this massive recall.
Allegedly some nasty stuff in there.
So thinking back, how did that make you feel?
You never had an issue like that, obviously.
Do you get nervous talking about all of this so openly?
Has anyone from the company reached out to you to mend fences or on the flip side, come after you legally?
No, not yet.
Has anyone reached out to you about trying to buy back the company?
No.
Potentially.
Would you ever do that?
Were there red flags?
And any other protections or perks or rights that founders should be thinking about?
Hold on to your wallets.
Money Rehab will be right back.
And now for some more Money Rehab.
When people were just DMing you about the recall, I know you couldn't respond, but once all of this expired, did you ever respond to the people who reached out to you?
So you decided to get back in the game.
How did you come up with the idea for the film?
I know we've talked about this before, but an acquisition, of course, does not have to be an end-all be-all.
It's a really, really important message for founders, especially profitable ones.
Profitable.
I personally agree.
For you, it sounds like the end all be all for your new venture is being profitable and being independent.
Well, sister, while you've been building this new venture, you have been going through a lot personally.
To whatever extent you're comfortable talking about it on the show, you're one of 567, I think, patients sexually assaulted by an OBGYN at Columbia.
That's 567 patients who are involved in the settlement, but potentially there could be more, according to some reports.
Oh, wow.
Which, by the way, I didn't go to this doctor, but that was my OBGYN when I was in New York, too.
Completely shocking when I saw this.
You have written that you didn't realize he was a predator until you saw a commercial.
What happened?
I'm so sorry, Gwen.
And your essay was so beautiful.
You talk about this idea, too, that you want your story to be a catalyst to harness collective power among the women.
So what is working with or talking to other survivors taught you about making your voice heard?
Thank you for doing that.
You're amazing.
You're truly amazing.
And thank you for being so open, honest, unfiltered and vulnerable.
Gwen, as you know, we end all of our episodes by asking guests for a tip that listeners can take straight to the bank.
But with everything that you've just opened up about, I would actually love to hear a tip for anybody who needs to do something good for their mental health while going through business chaos.
Is there something that you've done to protect your peace in the midst of all of these painful experiences?
I'm Nicole Lappin, the only financial expert you don't need a dictionary to understand.
It's time for some money rehab.
Is renting really throwing away money?
That is just one of the real estate topics that I get into today with Paul Mark Morris, real estate investor and host of the podcast Radical Wealth Plan.
And I know that everyone these days with an Instagram account thinks that they are a real estate investor, but Paul is the real deal.
His real estate firm oversees 2,000 realtors who have closed more than $7 billion in deals annually.
So as a real estate guy through and through, he is the perfect person to have the rent versus buy debate with.
As you know, I have a little bit more love for renting than most financial experts.
Paul also gives a full-on masterclass in the art and science of closing a sale.
Paul does what every finance bro has threatened to do since the Wolf of Wall Street.
He sells me a pen.
But actually,
He crushes it.
And as a side note, after the interview, Paul kindly mailed both me and our producer pens, which I just think is the greatest relationship building move.
10 out of 10.
Highly recommend the interview after this.
I am so excited you head up to Big Sur with my husband this fall.
We are celebrating our anniversary and while I will miss the little mush so much, we are also really excited to have a little parents time.
We deserve that.
But you know, it got me thinking about this feeling when you walk out of the door for a trip and you wonder,
what your blaze is doing while you're gone.
Well, it turns out it could be working for you.
I've been hosting on Airbnb for forever now, and I tell all of my friends to do the same because it's an amazing way to make passive income from an asset you already have, your home.
But some of my friends who are super busy worry that hosting on Airbnb would feel like having a second job.
And that's when I tell them about Airbnb's co-host network.
Anything you don't have the bandwidth to do, a co-host can handle for you.
They can create your listing, manage reservations, manage guests, provide onsite support, even handle design and styling.
So whether you're traveling for work or you're escaping the winter, or if you have a second place that just sits empty way too often, your home doesn't have to sit on the sidelines.
Instead, you can earn a little extra cash without adding another job to your plate.
Find a co-host at airbnb.com slash host.
What is your bank doing for you?
And how much is it costing you?
That's a serious question, because if they're charging you $8 a month with zero extra services, I've got to stage an intervention here.
What are you paying them for anyway to hold your money for you?
You deserve better.
That's what I love about Chime.
There are no monthly fees, no maintenance fees.
My younger self would have definitely benefited from this.
It's not just the no fees thing.
It's what they have to offer you, too.
If you set up direct deposit, you can get paid up to two days early automatically.
And with qualifying direct deposits, you're eligible for free overdraft up to $200 on debit card purchases and cash withdrawals.
Plus, they have over 47,000 fee-free ATMs.
So seriously, ask yourself, what is your bank doing for you?
And just how much are they charging you to do it?
And if the math isn't mapping, think about making a change.
Work on your financial goals through Chime today.
Open an account in just two minutes at chime.com slash MNN.
Welcome to Money Rehab.
You made me feel like I'm a disc jockey.
Yes.
So everyone asks you, I'm sure, is now a good time to buy?
Is that the number one question that everybody asks?
For you, I think the better question, and we can't get into it now, is, is it a good time to buy for me and my family?
Okay, I want to debate with you.
Renting versus buying.
Should we do it now or should we get to your three rules?
Let's go through your three rules.
And then let's get into it.
So rule number one, if you're investing in real estate, which is different, investing in real estate is different than buying your primary house.
So how did you make a million dollars the day you closed?
I feel like those deals are always more expensive.
It's never what they suggest.
You know, it was over time.
Well, we're definitely having a party at your house, but for somebody who isn't looking for a $5 million steal, let's come back to earth and say, you know, we're out there, we're looking for a place.
The number one rule you have is buy where you know and what you know.
So explain that.
Let's say you are though in a really expensive market like LA or New York and you know that, but you can't afford that.
I'm not sure if that's the best move for everybody, but we can debate it in a moment.
Let's put a pin in it.
Let's go back to number two.
So make sure it's value add.
You're following the cool kids.
So the third one is look for cash flows.
That still applies for your primary house?
And a 1031 exchange, very sexy on TikTok right now.
I do hear a lot of people talk about it with their primary house, but it's intended for investment properties.
Sure.
Can you explain?
Hold on to your wallets.
Money Rehab will be right back.
And now for some more Money Rehab.
Okay, let's get into it.
Yes.
You say- Argue with me.
That buying is almost always better than renting.
A big pro for that is that people say renting is throwing away money.
Sure.
And buying is not.
I'm sure that's one of your arguments.
there are massive tax benefits to owning property i think the idea that renting is throwing away money is just incorrect it buys you flexibility it buys you safety it buys you optionality it buys you shelter i mean nobody says i'm throwing away money because i'm buying groceries or health care i think there's a cost of living there's a lot that you don't get back
from homeownership either.
You don't get back closing costs, you don't get property taxes, you don't get back the insurance premiums that you paid.
And yes, you might get a tax write-off, but that's making the biggest financial decision of your life based on a write-off.
It's like the tax tail wagging the dog.
Or homeowners association fees, if that makes sense, or repairs.
These are things that you never, ever get back.
But we can agree that in the short term, it doesn't make sense because there's a five to seven year breakeven period, right?
So if you're not sure you're staying there as your primary home, it doesn't make sense because you're spending so much in interest, especially in the beginning.
We can do some easy math if you would like.
Let's say you buy a $500,000 starter home and you think you're going to get a bigger, better place in five to seven years.
You put 20% down.
Okay.
So you put 100K down.
And after five years, you've spent $133,000 just on interest and only $26K on principal.
If you took that $100,000 and you put it in the market, instead, you'd have $160,000.
So the real cost is an opportunity cost, especially in the short term.
I mean, that's the only way to make this comparison, right?
So over time, real estate has yielded on average, I know it's very market specific and your properties are special, but 4.5% a year.
Over time, the S&P 500 has yielded 10%.
So if you're looking at an apples to apples comparison, you're going to make more if you take that money and you invest more.
in the stock market.
So if you invest that 100K and never put another dollar in your investment account over that 30 year mortgage, you'd have $1.7 million.
On a $500,000 house with the interest, you're spending close to a million dollars for that house.
So it has to grow a lot.
And oftentimes it doesn't.
I'd love for you to answer.
So let's talk about a specific area.
We pulled the numbers for LA and a lot of metro areas and,
For comparable homes, rent is 30% to 40% lower than a mortgage payment.
So in LA right now, the median rent, $3,000 versus a mortgage, $5,000.
So we talked about the opportunity cost.
If you invested just the down payment and never put in another dollar, you would still beat the return on an average home.
But let's say you added that delta of what you're saving on your rent versus a mortgage and all of those costs that you never get back.
So $2,000 a month.
With no down payment, you would have $4 million at the end.
of 30 years if you signed up for a 30-year mortgage.
If you did both, you'd have $5.7 million.
If you took the $100,000 down payment and the $2,000 that you're saving every month by renting and not buying, then you would make almost six times as much money as you would have spent buying.
What do we say to that?
If somebody will spend that, I mean, ultimately a property is only as valuable as somebody's going to spend on it.
I definitely don't have a crystal ball for sure.
But over time, the S&P 500, so the overall index, has yielded 7% to 10%.
Over time, I'm definitely not in the driver's seat there.
But historically, it allows me to diversify.
So renting, I don't believe, is throwing away money.
It's buying you the option to invest elsewhere where you can also have potentially higher returns and your risk is spread out.
I thought I was in the driver's seat of my house until it burned down.
But insurance premiums are through the roof too, and it's really hard to even get an insurance policy.
I think it's just important to remember that homeowners don't just pay a mortgage.
They pay insurance if they can get it in some areas, property tax repairs, and renters skip a lot of that.
and make sure that it's worth whatever you're missing out on 10% potentially compounding in the market.
We're totally cool.
Are we gonna be friends after this?
Absolutely.
I think it's just really important to not take anything for gospel.
I don't think it's one size fits all for anybody when it comes to financial moves, whether in real estate, in the market, in anything.
So this idea that buying a home is for everybody is not true because not everything is for everybody.
And flexibility, especially if you're moving around, is really, really important.
Sometimes it's not emphasized that five to seven years of breakeven period, you're not going to even make the money back if you sell before that time.
Before we go, can you sell me this pen?
Signing books.
Like a smooth pen to make my handwriting look better than it is.
I hate the smudge thing.
I do like a Sharpie.
I am a Sharpie lady for books.
It's a little fat.
I can't write as many things as I would want.
Yeah, balanced weight, not too heavy.
But something that I could sign a lot of books with.
Right.
But that feels like I'm excited to use it or...
People would notice.
No, because what if I lose it?
Right.
I like the pen.
And I'll tell you why.
Because you asked me what I was looking for instead of just actually selling a pen.
So make it about the person and not the product.
Money Rehab is a production of Money News Network.
I'm your host, Nicole Lappin.
Money Rehab's executive producer is Morgan Levoy.
Our researcher is Emily Holmes.
Do you need some money rehab?
And let's be honest, we all do.
So email us your money questions, moneyrehabatmoneynewsnetwork.com to potentially have your questions answered on the show or even have a one-on-one intervention with me.
And follow us on Instagram at Money News and TikTok at Money News Network for exclusive video content.
And lastly, thank you.
No, seriously, thank you.
Thank you for listening and for investing in yourself, which is the most important investment you can make.
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What is your bank doing for you?
And how much is it costing you?
That's a serious question, because if they're charging you $8 a month with zero extra services, I've got to stage an intervention here.
What are you paying them for anyway to hold your money for you?
You deserve better.
That's what I love about Chime.
There are no monthly fees, no maintenance fees.
My younger self would have definitely benefited from this.
It's not just the no fees thing.
It's what they have to offer you, too.
If you set up direct deposit, you can get paid up to two days early automatically.
And with qualifying direct deposits, you're eligible for free overdraft up to $200 on debit card purchases and cash withdrawals.
Plus, they have over 47,000 fee-free ATMs.
So seriously, ask yourself, what is your bank doing for you and just how much are they charging you to do it?
And if the math isn't mapping, think about making a change.
Work on your financial goals through Chime today.
Open an account in just two minutes at Chime.com slash MNN.
Hey, money rehabbers.
Before we start this episode, I just wanted to let you know that the episode includes some descriptions of compulsive gambling.
If this is a subject that's difficult for you, please take care while listening.
If you or someone you know is struggling with compulsive gambling, you can call the National Gambling Hotline to be connected with local resources at 1-800-GAMBLER.
I'm Nicole Lappin, the only financial expert you don't need a dictionary to understand.
It's time for some money rehab.
In the last quarter of 2023, DraftKings, the sports betting app, reported revenue of $1.2 billion, which is up 44% from Q4 the year prior.
And that is just one app.
With the rise in legalization of sports betting platforms, gambling has never been easier, and compulsive gambling has never had a lower barrier to entry.
Today, I talked to a money rehabber who, as he tells me, does not identify as a gambling addict, but he has had his fair share of highs and devastating lows over a decades-long career of gambling.
Today, he shares how he's building a healthier relationship with money, and we make a plan together that helps him pave the way for a better financial future.
Brandon, welcome to Money Rehab.
I would love to chat about your money goals.
But first, I want to hear about your money story.
You've had a complicated, is that fair, relationship, sometimes difficult, it sounds like, with money sometimes, but have come out on the other side and are now better for it.
Can we go back to where your money story begins?
Cell phones were just getting out.
I had a blue one with sparkles.
What kind of gambling were you doing then?
So only sports gambling?
And also at the same time- $15.28, like $1,520.
Yeah, listen, I've dated people who are very, very into gambling and it definitely can take over.
It never really clicked with me.
Like I never really got it.
It was not my vice or my action, as you call it.
Maybe because I came from like a scarcity mindset around money growing up.
So it's really surprising to me that you say you had a similar upbringing with a scarcity mindset, never had enough money, single mom.
Then what was the draw for gambling?
Why did you feel like you needed to gamble when you were 15?
And then how did that evolve when you got older?
However, there was a time where-
What are you talking about?
What's the biggest bet you've ever placed?
Yeah, it's kind of hard to count cards in a sports game.
How are you cheating?
Unless you're like Tanya Harding.
get or something god forbid but how did you end up funding all this gambling was it through your main hustle your regular job like rent was first but then was everything else toward gambling you had a great relationship it sounds like with your family and friends did you ever ask them for money did you take out more credit cards did you take out loans
How did you fuel this addiction?
Oh, I remember this.
I dated somebody that was into this type of stuff.
It wasn't only the West coast.
It was like Hawaii after that.
Yes.
I use the word addiction, Brandon, but I guess I should ask you, would you say that you were addicted to gambling?
It sounds like you got in some financial trouble here.
I mean, between all these credit cards and loans, were you getting into debt?
And then what was going on with your credit score?
Did you ever go through a breakup because of gambling?
Nobody ever dumped you because of it?
Because you had a whole other relationship, it sounds like, with gambling.
Do you know how much money, all in all, you lost?
So it sounds like that was like a turning point moment for you.
Did you feel like after your mom passed and you left your job and it was COVID, was that rock bottom?
Hold on to your wallets.
Money Rehab will be right back.
And now for some more Money Rehab.
After your mom passed and you left your job and it was COVID, was that rock bottom?
And you cut gambling whole turkey?
So it sounds like you haven't gambled for three months.
Is that right?
Oh, okay.
So this three-month thing is a new mindset or what's the last 12 weeks?
Yeah.
Equifax.
Yeah.
First of all, thank you so much for being so open and honest about your story, Brandon.
It's really refreshing to hear how you have no filter around what happened.
And I think that's really helpful to a lot of people who might be struggling or know about somebody who's struggling.
So we really appreciate that.
And I would love to talk more about this next segment.
part of your journey and I'd love to help you with it.
I'd love to be part of it.
I know you wanted to talk about setting up a plan for your money goals.
I'd love to know what your money goals are before we can come up with a plan.
Look, I can't tell you what they are, only you can tell hopefully me what they are, but at least tell yourself.
Do you know what your money goals are and how you are thinking about those right now?
Yeah, so it's a great question.
Do you know what you would be saving for?
Like, is it a house?
Is it a vacation?
Is it retirement?
And what's your source of income right now?
Let's make a plan.
Okay.
So how much are you making now between the three jobs?
And how much debt do you still have?
You said you paid down half, which is awesome.
Do you know what the interest rate on the debt is?
Oh, so this is like you owe somebody money, not like a credit card.
That's so interesting.
And I'm so glad that you said that because I do know and I do talk about the idea that it is important to actually speak with creditors and not just ignore them.
Like, they're so scary.
It's so scary when they're calling you and hounding you and all that stuff.
But yes, absolutely.
Tell them your story.
Talk with them.
Negotiate with them.
All right.
So you have three grand, a little bit more than three grand in debt.
Damn, I was going to say 20, which is high.
28%.
Damn.
All right.
Hold on.
Okay.
So we take in $3,300 a month.
My suggestion is to take 70% of that toward essentials.
So that's $2,310.
How much is your rent?
And how much is your car payment?
Okay.
And how much you have $200 a month for the lawyer debt thing?
All right.
So we're up to like 2K with all of this stuff.
Did you know that?
Okay.
And so my suggestion is like, how much are you spending on food?
In my budget right now, you have about 300-ish bucks.
So you think 300-ish a month for food works?
I'm not talking like going out and going to the bar because that's in a different category.
But like what it costs to live.
where we're at right now that's how much it'll cost me to live yeah so so rent car like transportation you know utilities basic food health like you have ideally around 23 ish a month for all of that and then my suggestion you have a thousand left i would say
Okay, Tom.
Okay, Kobe, let's go.
That's fine.
And this is totally fine.
And what the great thing about financial plans and goals are is that they change.
They will change.
They're not set in stone.
Life and shit happens.
So we're going to change them again.
But for right now,
Ideally, it's like 70% to the essentials, 15% to the end game, which is what you just told me you want to start saving for retirement and a vacation.
I would say like the other 15% is for extras.
I might think about the vacation being in the extras category, but that for you is 500 bucks.
Can we start to try and save 500 bucks a month?
So because your question is like, how do I save and pay bills, right?
And that's an important question.
And so I think having this parameter, having these guidelines, like, okay, I have 2310.
to pay rent to do everything i need to do i have 500 bucks that i'm gonna save and we can talk about what to do with that 500 bucks and like how to maximize that and start making it grow right because you work really hard for that money i think it should return the favor and then the other 500 bucks which it sounds like right now you're not really into going out and doing fun stuff like you want to use that toward a vacation so you can put that in another interest
What's cool about interest is that you know how it works against you, but it can also work in your favor, which is great.
It can make your money work for you.
So that other 500 bucks, or ideally you could put a little bit more into savings and play with those numbers.
But that's a general guideline that I would suggest for you.
And then put those into something that will start earning you interest.
Oh, God.
I don't know if that's a good one for you.
No, but I'm sure you're going to tell me about it.
I'm scared.
I still am not convinced, but continue.
They have a survivor pool.
Gambling.
people will create positions for you no matter what because i have done it myself okay so just to be clear this is not you going there to gamble this is you getting involved in the business both okay i don't endorse the gambling part but i endorse like actually looking at this and what you've gone through as a potential business opportunity more from the management side
Exactly.
It's your life, Brendan.
Only you have to wake up in it.
So here's what I'd say.
If you can take 500 bucks a month and start investing, do you have a brokerage account?
But now you do.
Okay.
Do you know what a brokerage account is?
Like kidding aside.
So banks and brokerages are different.
Like brokerages would be the Fidelity's and the Schwab's and the Vanguard's and the E-Trade's of the world, right?
Banks like Bank of America.
Cool.
So if you start investing, like over time, the stock market as a whole, not individual stocks, but as a whole, will get you 8% over time.
So we're going to want to take that 500 bucks and make it work for us.
And honestly, when you get in your investing groove, I think you're really going to like it because I know this is a hot take, but investing and gambling do have a lot of crossover.
You know, I'm going to give you two quotes.
First, risk comes from not knowing what you're doing.
And then the second is hunches cost you more than it will gain.
Do you know who said those things?
The first one, risk comes from not knowing what you're doing, is Warren Buffett.
Do you know who that is?
Greatest investor of our time.
The second one came from Stanford Wong, who's an expert on blackjack.
So they're both basically saying the same thing, right?
You should make rational decisions that are backed by real information when it comes to your money.
So you'll see with investing, just like gambling, there are winners and there are losers.
And sometimes the difference between the two is honestly pure dumb luck.
But getting savvy on investing strategies is like counting cards.
I know that wasn't your thing, but legally, the purpose of counting cards is to increase your likelihood of winning, right?
Getting educated on investing does the same thing.
So what if you take that $500 and open a brokerage account and put that into what Warren Buffett suggests, our low-cost S&P 500 index fund?
What do you think?
Thanks, Brandon.
I wish all the guys said that.
How do you feel now?
But the person you are now...
right?
Is not the person you used to be.
So the person you used to be, brokerages and investing and traditional savings and non-gambling endeavors weren't for you.
And that's okay.
But maybe today they are.
And that's also okay.
In fact, it's more than okay.
Yeah, of course.
And I think there's going to be a lot of crossover.
You know, I think you can channel a lot of that gambling energy and like the desire for winning and getting information because I know that with sports gambling, there's a lot of research that goes into it, right?
You're not just like willy-nilly putting money on some game and not knowing what's going on.
If you take that same zest and channel it toward, you know, maybe some more like above board things to do with your money, I'm just...
you know as we're moving into this new chapter it's so exciting um i think you could get really into it i think you could get really into stocks and funds like index funds or etfs which are exchange traded funds which give you like a whole basket of different stocks in there in the same way that you got really into the research for gambling because you can like i said i would also win but just in a different way right and you're right i mean i should use my sustainable way i should say
Okay, I'm not talking past the close.
We're good.
Thanks for coming on.
Yes, we're good.
We're good.
Never talk past the close, right?
Money Rehab is a production of Money News Network.
I'm your host, Nicole Lappin.
Money Rehab's executive producer is Morgan Levoy.
Our researcher is Emily Holmes.
Do you need some money rehab?
And let's be honest, we all do.
So email us your money questions, moneyrehab at moneynewsnetwork.com to potentially have your questions answered on the show or even have a one-on-one intervention with me.
And follow us on Instagram at Money News and TikTok at Money News Network for exclusive video content.
And lastly, thank you.
No, seriously, thank you.
Thank you for listening and for investing in yourself, which is the most important investment you can make.
What is your bank doing for you?
And how much is it costing you?
That's a serious question, because if they're charging you $8 a month with zero extra services, I've got to stage an intervention here.
What are you paying them for anyway to hold your money for you?
You deserve better.
That's what I love about Chime.
There are no monthly fees, no maintenance fees.
My younger self would have definitely benefited from this.
It's not just the no fees thing.
It's what they have to offer you, too.
If you set up direct deposit, you can get paid up to two days early automatically.
And with qualifying direct deposits, you're eligible for free overdraft up to $200 on debit card purchases and cash withdrawals.
Plus, they have over 47,000 fee-free ATMs.
So seriously, ask yourself, what is your bank doing for you and just how much are they charging you to do it?
And if the math isn't mapping, think about making a change.
Work on your financial goals through Chime today.
Open an account in just two minutes at Chime.com slash MNN.
One of the smartest financial moves you can make is working with a certified financial planner instead of trying to wing it solo.
Domain money CFP professionals don't just hand out generic financial advice.
They help people get on track for early retirement, fix messy investment allocations, and figure out the perfect timing for major purchases like buying a house or, gosh, I don't know, growing a family, asking for a friend.
Yes, I am that friend.
In fact, my husband and I actually just talked to Adriana Adams, head of financial planning at Domain, on the podcast, and she had this advice around what to do to set our daughter up for financial success.
So as you can probably tell from that, Domain gives you something most people never have, a step-by-step financial plan that actually makes sense and does not make your brain hurt.
So get started today and book your free strategy session at domainmoney.com slash moneyrehab.
I am not a real client of Domain Money.
Via Money Rehab, I receive compensation and have an incentive to promote Domain Money.
See important disclosures at dmnmny.co.
I'm Nicole Lappin, the only financial expert you don't need a dictionary to understand.
It's time for some Money Rehab.
Money Rehab
Well, it would have been time for our weekly update where I share a roundup of the biggest headlines on Wall Street and how they affect you.
But then the government shut down and that is pretty breaking news.
So today's episode is going to be all about why Washington is out of the office and what it means for your wallet.
If you've been watching the headlines or just trying to renew your passport lately, you probably know by now that the U.S.
government officially shut down at midnight Wednesday, October 1st.
Why did this happen?
So here's the TLDR version of a government shutdown.
As we know, Congress makes the laws, creates projects, allocates money to fund these laws and projects, and generally runs the business of the country.
Then they have to pass a budget.
It is completely backwards, but more on that later.
The budget pays for everything from military salaries to food assistance to air traffic control to national parks.
If Congress doesn't agree on how to allocate the money by the deadline, September 30th, then we hit a funding lapse.
And when that happens, the government shuts down.
And that has happened before.
The federal government didn't pass the budget to pay for the stuff it had already approved.
So here we are.
And if you're wondering, no, we don't have to do it this way.
It is as weird as it sounds.
Most other countries sign off on funding for laws, public works, projects and programs at the very same time that they sign off on the legislation.
But us?
We picked the hard way.
This is the 22nd government shutdown in U.S.
history.
The last major one was in 2018 to 2019, and it lasted for 35 days.
So obviously, a government shutdown is not good for the United States.
So there has to be something really sticky in order for us to get to this point.
And there is.
If you caught my interview with Senator Warren, you probably already know what I'm going to say.
Even though Republicans control the House and the Senate, they still need seven Democratic votes to pass the budget.
But Democrats are holding out until they have some needs met, specifically more health care spending.
Democrats are asking to reverse the cuts to Medicare and other health care programs and that the tax credit for health insurance premiums is extended.
This specific tax credit lowers health insurance costs for people who buy coverage through the Affordable Care Act marketplace.
According to 2024 data, about 96 percent of the marketplace enrollees, roughly 19 million Americans, use this tax credit.
Without it, around 15 million could lose their health care and another 24 million could see their premiums jump by 75 percent.
Republicans say health care subsidies can be dealt with later.
Democrats say they need to be addressed now.
And until they find common ground, the lights are off.
Technically, it's only parts of the government that aren't considered essential.
But even in, quote, partial shutdowns, there is a lot of disruption.
Let's talk about what's staying open, at least for now.
In the open category, we have Social Security and Medicare.
You still get your check, but you should expect delays on new applications or service requests.
Your mail is also safe.
The U.S.
Postal Service runs independently of Congress, so your letters and Amazon returns are safe.
SNAP and WIC, the government's food aid programs, will initially keep going, but the longer the shutdown drags on, the more likely it is they will run out of money.
In the last shutdown, the Coast Guard wasn't paid, even though they were expected to keep patrolling American coastlines and putting their lives on the line.
Here's another hard one.
Airports.
TSA and air traffic control workers are on the job, but they're not getting paid, which historically leads to sick outs and delays.
So in the pause or delayed category, we have passport and visa applications, mortgage processing for loans backed by the FHA, USDA or VA.
The NIH is also halting new clinical trials and most non-essential lab work.
Then there's flood insurance through the National Flood Insurance Program.
This insurance is not being issued right now, which delays about 1300 home sales per day.
Lastly, student loans.
Disbursements, aka payments, continue.
But most of the Department of Education is furloughed, so it will be impossible to get a real person if you need support.
Government shutdowns always hit federal workers the hardest, and it seems to be worse this time.
In an unusual move, the Office of Management and Budget is threatening the mass firing of federal employees whose work is not funded.
If you're wondering why the OMB would take such an aggressive step, here's an actual quote from Russell Vought, the director of the Office of Management and Budget.
He said, quote, We want the bureaucrats to be traumatically affected.
When they wake up in the morning, we want them to not want to go back to work because they are increasingly viewed as villains."
We want their funding to be shut down.
We want to put them in trauma.
End quote.
What the actual what?
So what has this trauma looked like so far?
It's basically one out of three bad options.
Roughly 750,000 federal employees or 40 percent of the federal workforce are now on unpaid leave.
Federal employees deemed essential like Border Patrol agents, law enforcement and hospital staff are required to work without pay.
With the exception to that, once there is a resolution, they will get paid for the time spent working during the shutdown.
But many contractors, people who do the same work as federal employees but don't get the same protections, won't get back pay when this ends.
By the way, members of Congress still getting paid.
Different budget process there.
Let's add that to the list of the systems that could vastly be improved.
Vote for me for president.
But seriously, if you're a federal employee or a contractor affected by this, I am so sorry.
No one should ever have to work without pay.
If you or someone you know is feeling stressed right now, call your landlord, mortgage lender, credit card company, anyone you owe money to and explain the situation.
Many will work with you if you're up front.
And don't forget, track your hours if you're still working so you can get paid later.
If you're not a federal employee or contractor, you might not feel financial effects immediately, but you can expect delays if you're going through any financial process that intersects with the government.
So that's delays in federal loan processing, mortgages, student loans, small business loans.
If you haven't gotten your tax refund yet, you probably won't be getting it anytime soon.
And interestingly, we'll also see delays in government data releases.
There was a big jobs report supposed to come out this Friday, which probably is not going to happen at this point.
And as we know, the jobs report is crucial to the Fed's decision making process around interest rates.
Also, the 2026 Social Security COLA cost of living adjustment could be delayed if the Department of Labor does not release inflation data on time.
And that affects 74 million beneficiaries.
Of course, no one knows how long this thing is going to last, but it's going to be at least three days, if not longer, because the Senate is adjourned for Yom Kippur and won't return until Friday.
Both parties are proposing short term funding bills, but none of these proposals address the root cause.
They just kick the can a few weeks down the road.
Let's zoom out here.
This isn't just about one budget bill.
It's about a broken system.
As of today, the U.S.
national debt is hovering around $35.9 trillion, and the government is expected to run a budget deficit of $1.7 trillion this fiscal year.
A big chunk of our budget, around 70 percent, is tied up in mandatory spending like Social Security, Medicare and interest on that debt.
That leaves Congress fighting over the remaining slice of the pie, about 30 percent, to fund everything else.
This is more than political theater.
It's a signal to the rest of the world that we simply can't get our fiscal house in order.
And it could make borrowing more expensive in the future for the government and for us.
For today's tip, you can take straight to the bank.
Guys, I really try to keep this last tip in the episode unique and clever, but I cannot help but plug what is probably feeling pretty obvious right now, but really, really bears repeating.
It is so important to keep an emergency fund.
This is a chunk of money that would cover your bare bones expenses for three months or better yet, six months.
You want this money in a place where it can grow, but not in an investment that will be difficult to cash out if you need it.
A CD would keep your money locked up too tight.
A stock could fluctuate in value.
So not that, but a high-yield savings account, that's perfect.
Money Rehab is a production of Money News Network.
I'm your host, Nicole Lappin.
Money Rehab's executive producer is Morgan Levoy.
Our researcher is Emily Holmes.
Do you need some money rehab?
And let's be honest, we all do.
So email us your money questions, moneyrehab at moneynewsnetwork.com to potentially have your questions answered on the show or even have a one-on-one intervention with me.
And follow us on Instagram at Money News and TikTok at Money News Network for exclusive video content.
And lastly, thank you.
No, seriously, thank you.
Thank you for listening and for investing in yourself, which is the most important investment you can make.
i am so excited you head up to big sur with my husband this fall we are celebrating our anniversary and while i will miss the little mush so much uh we are also really excited to have a little parents time we deserve that but you know it got me thinking about this feeling when you walk out of the door for a trip and you wonder
what your blaze is doing while you're gone.
Well, it turns out it could be working for you.
I've been hosting on Airbnb for forever now, and I tell all of my friends to do the same because it's an amazing way to make passive income from an asset you already have, your home.
But some of my friends who are super busy worry that hosting on Airbnb would feel like having a second job.
And that's when I tell them about Airbnb's co-host network.
Anything you don't have the bandwidth to do, a co-host can handle for you.
They can create your listing, manage reservations, manage guests, provide on-site support, even handle design and styling.
So whether you're traveling for work or you're escaping the winter, or if you have a second place that just sits empty way too often, your home doesn't have to sit on the sidelines.
Instead, you can earn a little extra cash without adding another job to your plate.
Find a co-host at airbnb.com slash host.
What is your bank doing for you?
And how much is it costing you?
That's a serious question because if they're charging you $8 a month with zero extra services, I've got to stage an intervention here.
What are you paying them for anyway to hold your money for you?
You deserve better.
That's what I love about Chime.
There are no monthly fees, no maintenance fees.
My younger self would have definitely benefited from this.
It's not just the no fees thing.
It's what they have to offer you, too.
If you set up direct deposit, you can get paid up to two days early automatically.
And with qualifying direct deposits, you're eligible for free overdraft up to $200 on debit card purchases and cash withdrawals.
Plus, they have over 47,000 fee-free ATMs.
So seriously, ask yourself, what is your bank doing for you and just how much are they charging you to do it?
And if the math isn't mapping, think about making a change.
Work on your financial goals through Chime today.
Open an account in just two minutes at Chime.com slash MNN.
I'm Nicole Lappin, the only financial expert you don't need a dictionary to understand.
It's time for some money rehab.
If you got part one of my conversation with Senator Elizabeth Warren yesterday, you know that we went deep on insider trading in Congress, the current proposal that would make the system a whole lot more fair, and what it means about our system if the proposal isn't passed.
Well, today we're talking about the most nuanced financial issues of the current moment.
We talk about trading apps like Robinhood and the line there between regulation and financial freedom.
And we also talk about the new narrative that Democrats are anti-business and the line between governance and free markets.
There are a lot of lines here, and it's important to get into all of them.
I'll also ask her about some of the most urgent headlines in American economics today, billionaire influence, the vibe session, how to help the 99% get ahead, and whether or not she's ready to throw her name back in the ring for president in 2028.
I said this yesterday, but it bears repeating.
I know we've got listeners across the political spectrum.
You might not agree with everything Senator Warren says, and that's OK.
But remember, this is someone who used to be a Republican, who spent decades studying bankruptcy and financial markets, and who has taken on some of the biggest names on Wall Street.
And I genuinely believe her when she says she cares about the middle class and helping everyone afford the American dream.
So take with that what you will.
And as always, if you have any thoughts, I want to hear them.
Hello at MoneyNewsNetwork.com.
Now, here's part two.
I alluded to the fact that I know this all too well.
I was in credit card debt myself, which is why I started this work to try to help people who might be struggling as well.
And we don't learn this stuff in school.
But once I got out of debt, I was really hell bent on investing and growing my wealth.
You have some beef, Senator Warren, with Robin Hood.
Tell me about that beef.
Because, you know, this idea of democratizing investing is really important.
I'm first generation American.
The idea of investing was brand new to me.
So starting investing for the first time and seeing my money grow for me was very exciting.
Where is the line, though, between democratizing wealth opportunities and potentially regulating?
So you're essentially saying that Robinhood, for example, does all sorts of pay for order flow behind the scenes, which it sounds like you're alluding to, or confetti on the app that makes it much more exciting to take on more risk.
So what's the answer there?
I mean, we
Let people drive cars even though they can get into an accident, but we have licenses and seatbelts and airbags.
Well, I don't think a lot of people realize how much you love markets.
I do.
And you left the Republican Party years ago because you said they stopped being the party of markets.
Yeah.
Which I think is so interesting.
With more of a shift now in the Democratic Party, more to the left, can you explain how Democrats, you believe now, are more the party of markets?
So if there's not a true leader in the Democratic Party now, some say AOC, some say Gavin Newsom.
What about you?
Money Rehab is a production of Money News Network.
I'm your host, Nicole Lappin.
Money Rehab's executive producer is Morgan Levoy.
Our researcher is Emily Holmes.
Do you need some money rehab?
And let's be honest, we all do.
So email us your money questions, moneyrehab at moneynewsnetwork.com to potentially have your questions answered on the show or even have a one-on-one intervention with me.
And follow us on Instagram at Money News and TikTok at Money News Network for exclusive video content.
And lastly, thank you.
No, seriously, thank you.
Thank you for listening and for investing in yourself, which is the most important investment you can make.
i am so excited you head up to big sur with my husband this fall we are celebrating our anniversary and while i will miss the little mush so much uh we are also really excited to have a little parents time we deserve that but you know it got me thinking about this feeling when you walk out of the door for a trip and you wonder
what your blaze is doing while you're gone.
Well, it turns out it could be working for you.
I've been hosting on Airbnb for forever now, and I tell all of my friends to do the same because it's an amazing way to make passive income from an asset you already have, your home.
But some of my friends who are super busy worry that hosting on Airbnb would feel like having a second job.
And that's when I tell them about Airbnb's co-host network.
Anything you don't have the bandwidth to do, a co-host can handle for you.
They can create your listing, manage reservations, manage guests, provide onsite support, even handle design and styling.
So whether you're traveling for work or you're escaping the winter, or if you have a second place that just sits empty way too often, your home doesn't have to sit on the sidelines.
Instead, you can earn a little extra cash without adding another job to your plate.
Find a co-host at Airbnb.com slash host.
One of the smartest financial moves you can make is working with a certified financial planner instead of trying to wing it solo.
Domain money CFP professionals don't just hand out generic financial advice.
They help people get on track for early retirement.
fix messy investment allocations, and figure out the perfect timing for major purchases like buying a house or gosh, I don't know, growing a family, asking for a friend.
Yes, I am that friend.
In fact, my husband and I actually just talked to Adriana Adams, head of financial planning at Domain on the podcast, and she had this advice around what to do to set our daughter up for financial success.
So as you can probably tell from that, Domain gives you something most people never have, a step-by-step financial plan that actually makes sense and does not make your brain hurt.
So get started today and book your free strategy session at domainmoney.com slash moneyrehab.
I am not a real client of Domain Money.
Via Money Rehab, I receive compensation and have an incentive to promote Domain Money.
See important disclosures at dmnmny.co.
I'm Nicole Lappin, the only financial expert you don't need a dictionary to understand.
It's time for some Money Rehab.
Today, we're going to get into a topic that I am so, so heated about.
Insider trading in Congress.
And to break it all down, I have a very special guest who has long advocated for congressional stock trading to be banned.
Senator Elizabeth Warren.
You've seen Senator Warren in the headlines.
She's been the senator of Massachusetts since 2013.
And in 2020, she ran for the Democratic nomination for president, but withdrew.
And as we know, President Biden got the spot on that ticket.
But before she was in Congress, she was one of the fiercest watchdogs for consumers during the 2008 financial crisis.
In fact, she was the driving force behind the creation of the Consumer Financial Protection Bureau.
And whether you think Doge had a point in slimming the CFPB or not, it is true that the CFPB has helped return over $20 billion to Americans who were cheated over by big banks or shady lenders.
She's also a former Harvard Law professor and a little-known fact, even though she's a very vocal advocate for liberal issues, she was a registered Republican until the mid-90s.
Okay, let's address the elephant in the room here.
No pun intended.
I know that not all of you listening agree with Senator Warren politically, and that's okay.
But here's why I think you should stay with me for this episode anyway.
What we're talking about today is not red or blue.
It is green.
Because when members of Congress get to trade stocks on information the public does not have, that is not politics.
That's a rigged system and you deserve to know about it.
And tomorrow you'll hear the second part of our conversation where we dig into whether stock trading should come with a warning label.
So whether you lean right or left or somewhere in between, listen to this conversation with an open mind and let me know what you think.
You can always send feedback at hello at moneynewsnetwork.com.
I am always open to any and all conversations.
All right, let's get into it.
Senator Warren, welcome to Money Rehab.
Thank you.
I am delighted to be here with you.
So excited to have you.
I know we only have you for a short time, so should we just get into it?
You bet.
I'm ready.
I would love to talk about something that is really boiling my blood these days, which is potential insider trading.
What?
We just get right into it because we had Senator Gillibrand on the show.
And when she was here, she said one in three members of Congress trade stocks, but only one in seven disclose it.
And they beat the market 17 percent.
So I'm thinking either members of Congress are the greatest investors of our time or the system is rigged.
And right now it's a slap on the wrist, right?
The violations of the Stock Act are only $200.
So what should it be right now?
The Restore Trust in Congress Act.
This is bipartisan.
So it proposes a blind trust plus potential 10 percent penalty.
Is that what you think?
Should be.
You said that you invest in mutual funds.
I'm glad that you made the distinction of index funds because there's a lot of different kinds of mutual funds, of course.
So you could be on the Armed Services Committee, but you could have defense mutual funds or you could have sector specific energy funds or agriculture funds.
And that seems like a conflict as well.
Yeah, and we've seen it with the president.
We've seen it with Marjorie Taylor Greene.
We've seen it also with Speaker Pelosi.
And so we've seen... Just stop it.
This bipartisan approach to literally, say, restore trust in Congress.
This feels like if this doesn't pass...
then is Congress basically admitting its own corruption?
I haven't seen this much drama with the Fed in quite some time.
Do you think the Fed was going to turn into a major motion picture?
Right?
Wow.
It feels like a reality show.
The president has been leaning hard on J-PAL to cut days.
That doesn't mean that all elected officials shouldn't talk to the Fed.
You've written letters before he was renewed, right, as Fed chair.
But there's a difference.
Or where is the line between oversight and interference?
But historically, you mentioned the 80s.
We're in a good range right now.
Hold on to your wallets.
Money Rehab will be right back.
And now for some more Money Rehab.
Where do you think unemployment should be?
We're hovering around 4%, which is pretty much the target historically.
So I think the headline number is what we've seen for inflation and jobs are right around the ideal targets.
But you're saying double click, look beneath the headline number, which is the more concerning target.
leading indicators potentially to economic turmoil versus a vibe.
I think people have a vibe session.
We're not seeing the recession in the numbers, but they're not feeling great about the economy.
I just worry it's such a slippery slope because we lived through 2008.
Oh, I hear you.
And rock bottom interest rates were very addicting.
But we did that because we saw death in its eye.
We were close to financial Armageddon.
And so this idea that we keep trying to go back to rock bottom interest rates is dangerous.
That's the first part of my conversation with Senator Elizabeth Warren.
Stay tuned to tomorrow's episode where we talk about the line between democratizing investing and regulation when it comes to trading and whether Senator Warren will take another run at president.
So stay tuned for tomorrow's episode.
Money Rehab is a production of Money News Network.
I'm your host, Nicole Lappin.
Money Rehab's executive producer is Morgan Levoy.
Our researcher is Emily Holmes.
Do you need some money rehab?
And let's be honest, we all do.
So email us your money questions, moneyrehab at moneynewsnetwork.com to potentially have your questions answered on the show or even have a one-on-one intervention with me.
And follow us on Instagram at Money News and TikTok at Money News Network for exclusive video content.
And lastly, thank you.
No, seriously, thank you.
Thank you for listening and for investing in yourself, which is the most important investment you can make.
I'm Nicole Lappin, the only financial expert you don't need a dictionary to understand.
It's time for some money rehab.
It's time for a roundup of the biggest stories on Wall Street and how they're going to affect you and your wallet.
Today, I'm covering the biggest air travel drama that you haven't heard about yet, why the job market is in this weird no hire, no fire limbo, where exactly we stand with interest rates after the Fed's big meeting, and why Joe Biden might actually need some money rehab.
All this after the break.
What is your bank doing for you?
And how much is it costing you?
That's a serious question, because if they're charging you $8 a month with zero extra services, I've got to stage an intervention here.
What are you paying them for anyway to hold your money for you?
You deserve better.
That's what I love about Chime.
There are no monthly fees, no maintenance fees.
My younger self would have definitely benefited from this.
It's not just the no fees thing.
It's what they have to offer you, too.
If you set up direct deposit, you can get paid up to two days early automatically.
And with qualifying direct deposits, you're eligible for free overdraft up to $200 on debit card purchases and cash withdrawals.
Plus, they have over 47,000 fee-free ATMs.
So seriously, ask yourself, what is your bank doing for you?
And just how much are they charging you to do it?
And if the math isn't mapping, think about making a change.
Work on your financial goals through Chime today.
Open an account in just two minutes at Chime.com slash MNN.
It sounds crazy, right?
We all need help leveling up in areas that matter to us.
And that's why one of the smartest financial moves you can make is working with a certified financial planner.
Domain money CFP professionals don't just hand out generic financial advice.
They help people get on track for early retirement, fix messy investment allocations, and figure out the perfect timing for major purchases like buying a home.
What I love about their approach is that they don't do cookie-cutter financial plans.
They actually dig into what you're trying to achieve and optimize everything around your specific goals.
Here's what you need to do.
Book a free strategy session to see if they're a good fit for your situation.
Zero pressure, just real advice tailored to where you're at financially.
You can get started today at domainmoney.com slash money rehab.
And here's what I totally respect about them.
They use transparent flat fees so you know exactly what you're paying up front.
No sneaky percentage fees eating into your returns or surprise charges that derail your financial progress.
Your financial plan isn't some one and done document.
As your life changes, they're right there helping you adjust your strategy so you stay on track towards your money goals.
Domain gives you something most people never have, a step-by-step financial plan that actually makes sense and doesn't make your brain hurt.
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Let's start in the skies.
Air travel had a very messy week.
Last weekend, flights across Europe and the UK were thrown into chaos after a massive cyberattack.
Electronic check-ins went down, which meant passengers had to check in manually.
The result was long lines, handwritten tickets, and general airport mayhem.
The backlog rippled across the globe, canceling flights, messing up schedules.
Who's behind the attack is still under investigation.
We also don't know the final price tag of the disruption because airlines are still dealing with the fallout at the time I'm recording this.
But make no mistake, the meter is running.
Meanwhile, closer to home, Spirit Airlines is in crisis mode again.
The airline filed for bankruptcy for the second time in less than a year and announced plans to cut capacity by 25 percent by November.
To get there, Spirit had slashed routes and furloughed workers, including 1,800 of their 5,200 flight attendants.
In statements to the press, Spirit blamed its money troubles on growing income inequality.
OK, so they didn't use those words exactly.
But if you read between the lines, that is basically what they're describing.
Their problem is simple.
Budget conscious travelers, their bread and butter, are cutting back on discretionary trips while wealthier travels are splurging on luxury experiences.
That leaves a budget airline like Spirit unwanted.
It's not looking good for Spirit.
After their first bankruptcy last year, Spirit was delisted from the New York Stock Exchange.
After their second bankruptcy, they put up a page on their investor relations website to explain the restructuring to quote-unquote stakeholders.
The problem?
The link is dead.
Which is such a big red flag, it's almost funny.
This trend, the budget market being squeezed at the same time that the 1% are spending more than ever, is something we've seen for a while in the luxury goods market.
So seeing it in the travel industry makes this look less like a trend and more like a pattern.
Could it mean that budget car brands could start to struggle while luxury manufacturers thrive?
Maybe.
It's definitely something for investors to keep an eye on.
All right, let's talk about jobs data.
Last week, we covered how a higher percentage of long-term unemployed Americans are college educated.
This week, we've got another round of employment data to unpack, plus Fed Chairman Jerome Powell's own words on what the heck is going on.
Now, I graduated in the thick of the Great Recession, and it was brutal.
No one was hiring, and many in my generation are still making up for lost time.
Fast forward to today, and honestly, I see Gen Z grappling with similar issues.
Namely, a pretty challenging job market.
We talked about some of the root causes of these last week, but the two biggies are AI and a big pool of former federal employees looking for work.
The short story is those very entry level roles that college grads used to land to get a foot in the door increasingly automated.
And you know who has a lot more experience than recent college grads?
The roughly 300,000 federal workers who've left government jobs, whether by choice or not.
And now they are out hunting, too.
That's a lot of experienced people in the same applicant pool as brand new grads.
Also, the market is kind of frozen.
The term no fire, no hire is suddenly getting tossed around a lot, meaning companies aren't laying people off, but they're not bringing in new blood either.
The numbers also show that struggle is not universal.
The jobless rate is hitting men harder than women.
College-aged women are holding on with about 4% unemployment.
For college-educated young men, it is 7%.
What's striking is that this is the same unemployment rate as young men without a college degree.
Normally, that college degree is supposed to be the ticket to better job prospects.
So this is unusual.
DronePow summed it up with kind of a diplomatic statement, saying we're in a, quote,
interesting job market.
That's for sure, Jay Powell.
Adding that, quote, kids coming out of college and younger people, minorities are having a hard time finding jobs, end quote.
So if you have sent out thousands of resumes and have heard nothing back, don't lose hope.
It's not just you.
This freeze can't last forever, though.
As we know, there has been a lot of Fed drama this year.
President Trump has been beefing with Jay Powell hard, even though Jay Powell is a Trump appointee.
Let us not forget.
It's easy to forget these days, but money rehabbers never will.
The president has soured on Jay Powell because until this month, Powell refused to slash interest rates this year.
Trump's response has been to threaten to fire him and try to replace the Fed board with his own handpicked members.
Now, he cannot fire Jay Powell, but he's working on getting a new team in there.
He's made his first Fed appointment, Stephen Myron.
Now, a single appointee didn't move the needle very much.
Myron was looking for a cut of 0.75%, claiming that leaving the interest rate too high will drive up unemployment.
The Fed did cut by 0.25%, which is fine.
As more Trump appointees start filling seats at the Fed, I guess we're all about to get a real world test on how low interest rates can go and how the Fed handles it if inflation starts to creep back up again.
And lastly, it turns out that even presidents can use a little money rehab.
Let's check in on President Joe Biden, who, despite decades of public service and a pretty dope post-White House book deal, is in a surprisingly precarious financial position.
Let's break it down.
When Biden left the White House in 2024, he wasn't exactly rolling in it.
Public disclosures show that he still has a mortgage on his Wilmington, Delaware house.
Originally, the mortgage was taken out in 2013 with a 3.4% interest rate.
This is what got picked up in so many headlines, which is really funny to me because the main narratives were like, Joe Biden won't pay off his mortgage until he's 100 years old.
But if you do the math, it just means that President Biden got a pretty standard 30 year mortgage at a sweet rate.
Good for him.
Presidents, they're just like us.
But the headlines weren't entirely wrong.
President Biden does seem to have some financial problems.
These headlines were just picking up on the wrong ones.
Here's where it actually gets messy.
There's a $250K home equity loan on his Rehoboth Beach vacation home and a $15,000 bank loan due by 2028.
Biden also has a line of credit of up to $50,000 with an interest rate floating between 5 and 8 percent.
But that might not be all.
Behind closed doors, Biden reportedly confided in friends that he was staring down about $800,000 in personal debt, partly due to loans on the $2.7 million Beach House, as well as costs related to Hunter Biden's legal issues and to support his daughter, Ashley, who recently filed for divorce.
And to just double click on the real estate part, property taxes on his beach house also jumped by 20 percent this year, which probably felt like it was adding insult to injury for the president.
President Biden also has been spotted recently flying commercial, which has led to some people like myself, honestly, to ask, WTF is going on with President Biden's finances?
While President Biden still does have money coming in, he receives around $416,000 annually from Uncle Sam thanks to his decades in public service, about $250,000 as a former president, plus $166,000 from his time in Congress and as a VP, according to the National Taxpayers Union Foundation.
In 2023, the Bidens earned just under $620K and had somewhere between $632,000 and $1.38 million in accounts, plus some modest investments.
Jill Biden, however, stepped back from her $100,000-a-year teaching gig to take an unpaid role with the Milken Institute.
So the next question is, is this normal?
I mean, what kind of income streams do presidents normally get when they leave the White House?
The short answer is speaking and book deals.
After leaving office, Barack and Michelle Obama scored a historic $60 million book deal and launched a production company with Netflix.
Bill Clinton has reportedly raked in over $100 million through speeches and consulting, and some estimates suggest that George W. Bush earned $7 million from his book Decision Points in its first year alone.
But President Biden has struggled to drum up the same kind of business for himself.
Biden's speaking fee is reportedly between $300,000 and $500,000, but takers have been few and far between.
His speaking agency lists...
cost savings options like virtual events and off-peak bookings.
And while that is perfectly normal for the speaking bureaus, it doesn't really scream high demand to me.
The demand issue seems to be corroborated.
One Democratic insider was quoted as saying bluntly, he is not a draw.
Part of that might be due to Biden's longstanding speech impediment, which while he's worked through it, still impacts public perception, especially for an explicit speaking event.
In book land, Biden is reportedly hard at work on a memoir described as the Life and Times book rather than a tell-all book, which he sold for $10 million.
But that pales in comparison to the $60 million deal for the Obamas.
And it's also possibly lower than Kamala Harris's deal for her book, 107 Days, which is literally hot off the presses today.
It just went on sale yesterday.
While no official figures have been released, reports suggest that publishers offered her around $20 million for her post-election memoir.
That is double Biden's own deal, despite her having spent far less time in the national spotlight.
And this is going to sound even more harsh, but Biden's memoir isn't expected to sell all that well.
The Bidens pulled in less than $3,100 in royalties.
Yes, $3,100 from four titles last year.
I know that in a world of a bazillion celebrity brands, it might feel like the well-known will always be well-off.
But the truth is, fame doesn't always equal fortune.
And for President Biden, the road to financial stability after the White House is looking more like a slow climb than a golden parachute.
But if we've learned anything from this show, it's that even presidents need a solid financial plan and a little money rehab never hurts.
For today's tip, you can take straight to the bank.
When a company files for bankruptcy, common shareholders are last in line, meaning your stock can go to zero.
If you're holding shares in a struggling company, watch for Chapter 11 news and be prepared to act fast.
Sell while there's still volume or brace for your shares to be wiped out during the restructuring.
Bankruptcy isn't just a business story.
It's your exit sign as an investor.
Money Rehab is a production of Money News Network.
I'm your host, Nicole Lappin.
Money Rehab's executive producer is Morgan Levoy.
Our researcher is Emily Holmes.
Do you need some money rehab?
And let's be honest, we all do.
So email us your money questions, moneyrehab at moneynewsnetwork.com to potentially have your questions answered on the show or even have a one-on-one intervention with me.
And follow us on Instagram at Money News and TikTok at Money News Network for exclusive video content.
And lastly, thank you.
No, seriously, thank you.
Thank you for listening and for investing in yourself, which is the most important investment you can make.