Josh and Austin are back with the second episode in their “What We’re Reading” series, highlighting current news along with some articles they have been reading. This week the guys dive into long term care, Hertz’ new venture with Tesla, changes to inheriting an IRA, and much more! Listen to their monumental 101st episode now!
Main Talking Points
[0:54] – NAPFA
[2:30] – Josh’s First Highlight: Long-Term Care Insurance
[6:53] – Austin’s First Read: Tesla Shares Up, On News Hertz Will Purchase 100,000 Electric Vehicles
[11:25] – Josh’s Second Highlight: Change to Inheriting IRAs
[16:04] – Dad Joke of the Week
[19:28] – Austin’s Second Read: Nobody Wants Cash Flow
[22:25] – Josh’s Third Highlight: Cyber Security
[26:15] – Austin’s Third Read: Robot Delivery
Links & Resources
Tesla Shares Up, On News Hertz Will Purchase 100,000 Electric Vehicles – CNBC
Nobody Wants Cash Flow – The Irrelevant Investor
009: Don’t Fall For It (ft. Ben Carlson) – The Invested Dads
097: Why Would I Invest in Bonds? – The Invested Dads
Invest With Us – The Invested Dads
Free Guide: 8 Timeless Principles of Investing
Social Media
Full Transcript
Intro:
Welcome to The Invested Dads Podcast, simplifying financial topics so that you can take action and make your financial situation better. Helping you to understand the current world of financial planning and investments, here are your hosts, Josh Robb and Austin Wilson.
Austin Wilson:
All right. Hey. Hey. Hey. Welcome back to The Invested Dads Podcast, the podcast where we take you on a journey to better your financial future. Today, we are continuing our series, where we will be discussing some current news and things we are reading or doing.
Josh Robb:
That’s correct.
Austin Wilson:
Doing.
Josh Robb:
Doing. Did. Done.
Austin Wilson:
Done.
Josh Robb:
Had happened to us in the past.
Austin Wilson:
It already happened.
Josh Robb:
Yes.
Austin Wilson:
So we each have a few different things we’re going to be talking about today. Josh, why don’t you go ahead and get us started?
Josh Robb:
All right. And instead of articles or books or things I’ve been reading-
Austin Wilson:
Because you didn’t read anything ever.
Josh Robb:
I don’t read at all anymore, ever again.
Austin Wilson:
You don’t know how.
[0:54] – NAPFA
Josh Robb:
I’m going to talk about three highlights from a conference I attended just recently. I’m part of NAPFA, it stands for the National Association For Personal Financial Advisors.
Austin Wilson:
So it’s like if you were to take a nap, you’re a napping financial advisor. N-A-P-F-A.
Josh Robb:
That’s really what I am. Yep. And really, what it is, it’s a group of advisors, they all have to have passed their CFP. That’s one criteria. The second criteria is you have to be a fee-only advisor. And so you cannot accept commissions or anything like that.
Austin Wilson:
Which we would say is the best.
Josh Robb:
So that’s the group I’m part of. It’s a great organization. They actually hold advisors to a higher standard. I have to get continuing education above and beyond what my normal is. And they have some ethics and rules that you have to apply by. So it’s a great organization. Love to be part of it. They host these awesome conferences, and this is back to in-person, so it was a nice-
Austin Wilson:
After a year off.
Josh Robb:
Yes. And what was great about this is they bring in speakers for this continuing education, but they also have time for like advisors to get together and talk through problems and issues. So I got three different highlights of some of the stuff I learned in that conference. First one being-
Austin Wilson:
Please tell me it’s the lobster roll.
Josh Robb:
So the conference was in Boston and I tried my first lobster roll.
Austin Wilson:
Two!
Josh Robb:
And it’s expensive and really good. Yeah, they cut it in half and gave me two different versions. So good.
Austin Wilson:
This picture you showed me-
Josh Robb:
It’s expensive, but good. Whew!
Austin Wilson:
I would spend the money right now because one was butter.
Josh Robb:
Butter, lemon.
Austin Wilson:
Butter, butter.
Josh Robb:
Lemon butter.
Austin Wilson:
Lemon garlic. And then the other one was a salad, a lot salad with mayonnaise.
Josh Robb:
Yes. So good.
Austin Wilson:
Oh man. Making me hungry.
[2:30] – Josh’s First Highlight: Long-Term Care Insurance
Josh Robb:
So I learned that’s good, but I also learned long term care. We’ve talked about that in the past. It’s exciting.
Austin Wilson:
LTC?
Josh Robb:
Yep.
Austin Wilson:
I was reading through the note in advance and I thought you were talking about Lite Coin.
Josh Robb:
Oh no. This is not Lite Coin. A long term care insurance is insurance you buy for long term care, meaning care when I’m in a facility or at home needing extra help. And so it’s expensive. And the issue that they were discussing there is in the not so near future, we may see the government initiating new taxes to, in a sense, cover or provide long term care, similar to what they do for Medicare, Medicaid-
Austin Wilson:
Or social security.
Josh Robb:
… or social security. And so they brought, as an example to this, that actually, the state of Washington has he proposed this, in fact, come early November in the next couple, I don’t know, weeks. The eligibility period is closed for you to opt out of this thing in Washington. But in a sense, the state of Washington says, “Hey, we’re going to charge a 0.58% tax on your wages-
Austin Wilson:
On top of what you’re already paying.
Josh Robb:
… on your income. This is a new tax, addition to. And this tax, we’re going to collect, and it’s going to go into this bucket. And it’ll be to provide long term care coverage for everybody that’s in the state of Washington that qualifies.” So they have a couple rules. You have to pay in for 10 years to be eligible, at least 10 years. And then once you’re done and eligible, you get $100 a day for one year.
Austin Wilson:
That’s it?
Josh Robb:
Well, that’s great. That’s awesome. It’s not a lot.
Austin Wilson:
No, that sounds like a terrible deal.
Josh Robb:
Yeah. So we’re recording this in Ohio. We’re in kind of a, I would say, lower cost of living area. But what’s projected right now is about $250 to $300 day for long term care coverage for our area. We’re at a low cost living place. It’s higher for state of Washington, where this is, or other places. And the average stay is about between two-ish years or so. And so this coverage that you’re forced to pay into really does not fully cover you, even for one year worth of long term care. So I think people are still going to need to get their own coverage to supplement this.
Austin Wilson:
But people won’t cause they think they already have it. That’s how it’s going to work.
Josh Robb:
It’s like a lot of other things is, “Oh, I got the coverage. I’m okay.” And they don’t look at the benefits. So just something to keep in mind. Along with this, there’s actually about four other states that are looking into doing something similar. And there’s a bill in Congress that would make a federal tax.
Austin Wilson:
Is that part of the big gigantic bill?
Josh Robb:
Nope. It’s a separate one. It was actually proposed a little while ago, but it’s just been kind of hanging around. Hasn’t got much traction yet. Probably won’t see the light of day this year.
Austin Wilson:
Probably because the math doesn’t work.
Josh Robb:
It’s rough. Now, I will say at least something. I mean, that helps. Because what that does is takes the burden off the rest of your investments, at least for a while. And really, 0.58%, I mean, if you look at it like $100,000, it’s not going to drastically change your take home pay. But for what you pay in, let’s say, for 30 years and what you get for this, it’s really not a great bang for your buck.
Austin Wilson:
Well, it’s the same thing as social security.
Josh Robb:
It is. Yeah.
Austin Wilson:
Social security’s math doesn’t add up either. That’s why it’s…
Josh Robb:
Yeah. And with it, it’s like a public-private collaboration. So although governor’s charging this tax, private insurance companies would be the ones actually providing the coverage.
Austin Wilson:
Oh yeah, gotcha.
Josh Robb:
So it’s kind of a combination between the two. Anyway, long story short, it was very interesting, but you still need to consider long term care insurance, whether it fits for you. And you need to understand if this is coming down the road, “Maybe I need to adjust my insurance. Maybe I actually will have too much if I qualify for this, or if I want to opt out and have my own plan where I’m going to save money.” It’s worth looking into something new. Interesting.
Austin Wilson:
Well, I, unlike you, actually do read-
Josh Robb:
Oh, man.
Austin Wilson:
… because I remember how.
Josh Robb:
Yes.
Austin Wilson:
But Josh, I mustache you.
Josh Robb:
Oh, man. So this whole time we’re recording, if I seem distracted, it’s because I’m looking across to the table, we record facing each other. And Austin’s facial hair is taking a drastic change from what I’m used to seeing.
Austin Wilson:
It’s dramatically improved.
Josh Robb:
The jury’s out, but he has a mustache now. This morning, walked in, first time.
Austin Wilson:
Josh about turned around.
Josh Robb:
And I said, “I don’t know if we can record today with me staring at this, but I’ll do my best.”
Austin Wilson:
That’s right.
Josh Robb:
But you have a question.
[6:53] – Austin’s First Read: Tesla Shares Up, On News Hertz Will Purchase 100,000 Electric Vehicles
Austin Wilson:
I do. So how many cars, specifically Tesla Model 3s, did Hertz put an order in for that was announced today as we’re recording this on the 25th of October?
Josh Robb:
You know, when I think of rental cars, I do not think of high end electric cars. So how many did they order?
Austin Wilson:
100,000 next year.
Josh Robb:
Oh, by-
Austin Wilson:
For next year.
Josh Robb:
For next year.
Austin Wilson:
Well, between now and-
Josh Robb:
From now through the next year?
Austin Wilson:
Yeah.
Josh Robb:
How many cars does Hertz have in total?
Austin Wilson:
That’s what I’m wondering.
Josh Robb:
That’s a lot of electric cars.
Austin Wilson:
That’s a lot of electric cars.
Josh Robb:
Because that’s the high end. If I’m looking on my list of things to rent from Hertz-
Austin Wilson:
It has to be a premium.
Josh Robb:
… there’s compact, and sedan, and then minivans and SUVs. And so the premium-
Austin Wilson:
It’s going to be a premium.
Josh Robb:
… 100,000 electric Teslas.
Austin Wilson:
They are ordering 100,000 Tesla Model 3s. Now, that is the lowest level Tesla.
Josh Robb:
Oh, yeah. They’re junk. Yeah. Psh.
Austin Wilson:
Well, I guess it’s a $4.2 billion order estimated. So $4.2 billion sounds like about 42 grand a car, which-
Josh Robb:
Maybe they’re getting a group rate.
Austin Wilson:
So Hertz seems like they’re getting a group rate.
Josh Robb:
Possibly.
Austin Wilson:
But if you think about it, that’s a chunk of Tesla production. So I looked at this a couple different ways. What does this mean for Tesla? Well, today alone, now again, we’re recording this on the day it gets announced, the 25th of October, Tesla stock is up over $1,000 per share and around $955 or something like that was the break even point to hit a trillion dollars in market cap.
Josh Robb:
So they’re over a trillion dollars.
Austin Wilson:
So Tesla is now over a trillion dollars in market cap with a share price over $1000 per share. That’s a lot. And up 10-13%, depending on when you’re looking at it, on the day of the release. So that’s huge. Also, over the weekend, Tesla Model 3 was announced as the best selling car in Europe, which is the first for a non-European car company.
Josh Robb:
That’s crazy.
Austin Wilson:
That is crazy. So one of the thoughts that’s kind of letting the bulls bid the price higher on these shares of Tesla is that Tesla could get recurring revenue as rental car companies tend to purchase new again after a couple years.
Josh Robb:
Yeah. They tend to rotate through and sell off their cars. Yep.
Austin Wilson:
Now, one thing to factor in is it might not be as frequent with electric vehicles, specifically the cost of ownership and the maintenance requirements are generally lower. So that could be something to factor in, but it’s sending the shares much higher. But you also need to look at it from the other side of the situation. So what does this mean for Hertz? Well, first of all, I’m a little bitter about it because I drafted the bankrupt Hertz company in my stock draft, Invested Dads Stock Draft, which you can still join today.
Josh Robb:
That’s right.
Austin Wilson:
Fresh hundred grand for the last couple months, beat Josh.
Josh Robb:
Probably.
Austin Wilson:
But I lost my shirt, because while in the real world you would’ve gotten real Hertz shares once they came out of bankruptcy, in the fake game world we’re in, it just gave me $0 purchasing power.
Josh Robb:
Because it didn’t do the transfer.
Austin Wilson:
It didn’t. And they won’t fix it. So.
Josh Robb:
Nope.
Austin Wilson:
I’m a little bitter about that.
Josh Robb:
You’re still kicking butt most than other people.
Austin Wilson:
Still doing okay. Still doing okay. So anyway, what does this mean for the company? Well, the company just came out of chapter 11 bankruptcy. And now, somehow has accumulated the ability to finance $4.2 billion in cars.
Josh Robb:
That’s crazy.
Austin Wilson:
Like within a year.
Josh Robb:
I’m still not comprehending. Where did that come from? Yep.
Austin Wilson:
Within a year, they went from, “We can’t even pay our bills,” to, “Hey, someone believed in us enough to give us a bunch of-
Josh Robb:
Money.
Austin Wilson:
… cash. And now-
Josh Robb:
I’m going to buy Teslas with it.
Austin Wilson:
… or ability to borrow. Yes. “And now we can go buy a 100,000 Teslas.” So what this means is that the rental business must be booming.
Josh Robb:
It is.
Austin Wilson:
Which it is. I traveled some this summer, paid an obscene amount of money for a rental car.
Josh Robb:
Rental car costs are just crazy right now.
Austin Wilson:
It’s crazy. Another thing is that the EV charging station network is going to need improvement with a hundred more thousand rental cars. You’re renting a car, do you still need to take it back with a full charge?
Josh Robb:
Oh yeah. How’s that work?
Austin Wilson:
How’s that work? So we’re going to need a little bit of work, the rental EV stations. And I think that that’s something that was planning, I don’t know about on amended versions, but was planning to be in some portion of the infrastructure bill, that’s who knows the status of that on a day to day basis? And another one is, this is a cool opportunity and I might even take it if I go rent a car, to try a Tesla, just try one.
Josh Robb:
Yeah, that’s true.
Austin Wilson:
So if you want to try a Tesla Model 3, you can just rent one from Hertz and take it around for a couple days. And there you go.
Josh Robb:
Sounds good. I like that.
Austin Wilson:
That is my article number one. All three of my articles are going to be linked in the show notes.
Josh Robb:
And mine are experiences that I had. So no link to me-
Austin Wilson:
A link to your brain, Josh.
Josh Robb:
… to my experiences.
[11:25] – Josh’s Second Highlight: Change to Inheriting IRAs
Austin Wilson:
What is number two?
Josh Robb:
All right. So another session I-
Austin Wilson:
Number two.
Josh Robb:
… attended that I really enjoyed, and it’s extremely boring probably to some people, but it was exciting. Just recently, we had a change to how, when people inherit IRAs, and we’ve talked about this in another episode. But when you inherit an IRA, there is now a 10-year timeframe that you have to get the money out of an IRA. Whether it’s a Roth IRA-
Austin Wilson:
This is boring.
Josh Robb:
I know right?
Austin Wilson:
Whew!
Josh Robb:
I’ve put everybody’s sleep. But the concept there is you used to be able to stretch it, right?
Austin Wilson:
Yeah, yeah, yeah. Yeah.
Josh Robb:
If I inherited an IRA before 2020, I would be able to say, “Okay, for the rest of my life, I’m going to take a little bit out per time those required distributions, but as based on my life expectancy.” The government changed the rules. The IRS arrested now says you have 10 years from the year after the death to get all the money out of that IRA. And so what that does is shortens that timeframe. Because let’s say I’m 20 when I inherited an IRA, and my life expectancy is to 80, that gives me 60 years to get that money out. Now, I have 10. So it really-
Austin Wilson:
Much shortens.
Josh Robb:
… compresses those taxes too. Because every distribution out of a regular IRA is taxable. And so for 10 years, I got to figure out how much I want to take per year. There’s no rule. You could do it all in the last year. You can do it a little bit per year, whatever you want.
Austin Wilson:
You’d probably look at your tax brackets and play that game.
Josh Robb:
Yeah. So the concept is, what do you do with these new inherited IRAs? So there’s some concepts that they’re talking about, one of which is making sure that… Let’s say I’m 55 when I inherit it, and I know I’m going to retire at 60. Well, I could not take any withdrawals those first five years because I have income. And then when my income goes away, take distributions for the next five years to reduce the overall tax burden. There’s strategies like that. But what they were talking about in this was a pre-planning before the death of things that you can do. And I’m not going to go through all of it, but a couple just to highlight is one is you do split beneficiary. So let’s say it’s a husband and wife, and together, they have both have some IRAs and accumulated a wealth. And they say, “You know what? If something were to happen to one spouse, the other spouse, they’re financially well off that they don’t need all the money.”
You could make the IRA like a 50/50 beneficiary. 50% to your spouse, 50% to, let’s say, the kids. So if you were to pass, half the money goes to your spouse. She could still live on it. She could take it as her own IRA. So she has no 10 year rule. The half goes is to the kids, starts their 10 year rule, but only on half the money. So it’s less taxes on them. And then when the second spouse is to die, that money, plus whatever she had, but that money is then starts a new 10 year. So you’re stretching those by creating multiple 10 year windows. Just something interesting. Again, it comes down to planning and working through what works best for your scenario. That’s one.
The other is to keep charity in mind. So when you give to charity through IRAs or just in general, there’s no tax involved. And so who you name in your estate can really adjust that. There’s things you can do before you pass away and giving to charity where you can create certain types of trusts, that once a certain timeframe is done, that either the income goes to the beneficiaries during that timeframe, or the lump sum at the end goes to the beneficiaries and the charity gets the income. There’s all these different fun things you can do tax planning wise.
But though there are some things to look into to say, “Can we move some other assets out of the estate to offset some of this tax burden that they’ll experience?” So long story short, more planning is needed, especially if they reduce the estate tax limits. Right now, it’s over $11 million per person, $22 for a couple. They’re thinking of moving it down to $6 million per person or $12 for a couple.
Austin Wilson:
That’s a lot lower.
Josh Robb:
Yes, it’s cutting it in half. It’s going to cause some issues, especially when you look at maybe if you own farmland or property, things like that, that all’s added into your state. So long story short, planning is key. Thinking through the things before it happens. I can’t tell you how many times I read articles, going back to reading. I do read-
Austin Wilson:
Ooh, he does read a little bit.
Josh Robb:
… every once in a while, of famous celebrity is passing away without even a will. And everything just-
Austin Wilson:
They have millions and millions and millions.
Josh Robb:
… goes into probate. Where were the people around them that was supposed to be helping them plan these things? It’s crazy.
Austin Wilson:
If you are a famous celebrity with lots and lots of money-
Josh Robb:
Have at least a will.
Austin Wilson:
… and you don’t have anything, we don’t do wills, but we know people who do. And we would love to help you.
Josh Robb:
Oh, geez. It’s just the concept of that. I mean it all becomes-
Austin Wilson:
Invest with us. Check it out on our website.
Josh Robb:
… public. It all becomes public knowledge is the crazy part.
[16:04] – Dad Joke of the Week
Austin Wilson:
Yeah, I know. Yeah. That’s crazy. So Josh, you have something else for me?
Josh Robb:
I do. I have a dad joke.
Austin Wilson:
From?
Josh Robb:
It’s from Reddit. You had to help me figure out how to work Reddit, but I figured it out, and I’m good to go now. The dad joke though relates to-
Austin Wilson:
You went to the library and you were like, “Can I find a newspaper from Reddit?”
Josh Robb:
Can I need to read a Reddit? So you were talking about Tesla? Do you know why Tesla’s are so pricey?
Austin Wilson:
Well, it’s proprietary electric vehicle technology. It’s premium.
Josh Robb:
Austin, this is a joke.
Austin Wilson:
Course it is. Oh, then no.
Josh Robb:
Why do Tesla’s cost so much? Because they charge a lot.
Austin Wilson:
Ah, they charge a lot.
Josh Robb:
Because they’re electric vehicles-
Austin Wilson:
Oh, of course.
Josh Robb:
… so you charge. That’s why.
Austin Wilson:
So here’s a question, you know how you plug in your phone every night when you-
Josh Robb:
I don’t, because I have a Samsung and it lasts longer than that. Go ahead. You probably plug it in every night.
Austin Wilson:
I plug my phone in every night.
Josh Robb:
Yes. Go ahead.
Austin Wilson:
So you have a Tesla, you have 350-400 mile range in some of the high end stuff. Good range. Do you charge it every night just in case or do you not?
Josh Robb:
I would have to ask them, does that affect the battery life?
Austin Wilson:
Because I think it’s better if you plug it in and leave it plugged in, but don’t but have a setting that doesn’t overcharge it, but leaves it.
Josh Robb:
I’m sure that’s built in. That’s got to be built in.
Austin Wilson:
It has to be.
Josh Robb:
That’s got to be built in.
Austin Wilson:
Otherwise, those batteries wouldn’t last very long. So I think I would probably be a plug-
Josh Robb:
Have it always plugged in just in case I got to go somewhere a long ways away, just in case.
Austin Wilson:
My one mile to work. So anyway-
Josh Robb:
So if you only drove it to and from work, it’d be like a year.
Austin Wilson:
Like a year.
Josh Robb:
I’d charge it once a year.
Austin Wilson:
Man, I’ll tell you what. I could be a cyber truck guy if they were affordable. If they can make a cyber truck that is-
Josh Robb:
For $10,000.
Austin Wilson:
Yeah. That’s as affordable as a used Honda Pilot-
Josh Robb:
Yes. I’m in.
Austin Wilson:
… ooh. Sign me up. There’s a bunch of poles on Twitter and stuff that are, “What is the thing holding you back from going electric?” There’s no electric cars that are nice and reliable, that will cost wise, be even in the neighborhood.
Josh Robb:
Right. And long distance travel. I still can’t get around that.
Austin Wilson:
I know. The charging network’s not there.
Josh Robb:
The convenience of it. Well, just even the timing and convenience of getting from house to vacation with four kids and doing it in the most time efficient way. Because the longer you’re in the car, the grumpier people get. And so if I’m charging for 30 minutes, even on a supercharge thing, that’s 30 minutes.
Austin Wilson:
See, what I don’t understand is why it is so difficult to get a vehicle that charges on its own. Think about this. They use this, this technology exists. Energy recovery-
Josh Robb:
Oh, like momentum?
Austin Wilson:
Yeah. So energy recovery. So you-
Josh Robb:
Braking.
Austin Wilson:
… Tesla, listen up. Just get this together. As you’re breaking, you can harness the energy. As your wheels are turning, at any point in time, you should be able to run some sort of prop off of that wheel turning inertia to charge the battery somewhat. So-
Josh Robb:
I don’t know.
Austin Wilson:
… if I just cracked the code for electric vehicles-
Josh Robb:
You would think-
Austin Wilson:
… I’ve made them self sustainable.
Josh Robb:
Yes.
Austin Wilson:
You never have to charge them.
Josh Robb:
But what you do, you put a wind turbine on top. And as you move and the wind spins the turbine, you charge your battery.
Austin Wilson:
But I seriously think the solar panel roof things are real deal.
Josh Robb:
Oh yeah.
Austin Wilson:
That has to be a thing. Solar panel the whole top of your car. It has to be.
Josh Robb:
I’ve seen those. I mean, they’re not Teslas, but they’re very small motored vehicles. But yeah, you’re right.
Austin Wilson:
So anyway, I’m saying there’s room to work. Tesla, if you’re listening, I got you.
Josh Robb:
Yeah. You’ve got some ideas.
Austin Wilson:
Give me a call.
Josh Robb:
Good ideas.
[19:28] – Austin’s Second Read: Nobody Wants Cash Flow
Austin Wilson:
Elon, give me a call. We’ll do a podcast. We’ll have you on. So my second article is titled Nobody Wants Cashflow, from The Irrelevant Investor, which we want this to be relevant, but he has a funny catchy title for his blog. But it’s Michael Batnick of writ Ritholtz Wealth Management. And he’s one of the co-hosts of the Animal Spirits Podcast, which a lot of people listen to. We’ve listened to it quite a bit. It’s pretty good stuff. So first of all, his colleague and co-host of the Animal Spirits Podcast, Ben Carlson, we did interview early our podcasting careers. And when we talked about his book, Don’t Fall For It. So we’ll link that episode in the show notes, check that out. But in general, this article was talking about how there are actually 26 consumer staple stocks with market caps greater than $10 billion that have a higher dividend yield than the 10 Year Treasury. 26 large US consumer staples companies with dividend yields higher than the 10 Year Treasury.
So first of all, a couple caveats. Yields are extremely low for bonds in general right now, so the comparison’s a little tricky. But consumer staple stocks are very stable. They have very predictable, not volatile cash flows, and even stock price movements for that matter, than other areas in the market, like technology and things like that. And they also usually have a higher dividend yield because of those predictable cash flows. So his example that he talked about in this article was, “Hey, would you rather own, for the next 10 years, a bond that pays you these microscopic interest payments, and then you get your money back at the end, or would you rather own Walmart, which is a company that has raised its dividend for 48 straight years?”
Josh Robb:
That’s crazy.
Austin Wilson:
And to me, what that says is, “TINA-
Josh Robb:
There is no alternative.
Austin Wilson:
… there is no alternative to stocks.” Especially in the inflation world we’re living in. So when you think about fixed income, now, we just had an episode on bonds. So if you want to know how bonds work and how inflation’s impacted them-
Josh Robb:
How exciting they are.
Austin Wilson:
It’s pretty exciting. It was actually a really good episode. 53 minutes on bonds and no one fell asleep.
Josh Robb:
That we know of.
Austin Wilson:
No one fell asleep that we know of. It’s not been reported to the state highway patrolmen from people driving. But if you’re in your autopilot Tesla, you don’t worry about it.
Josh Robb:
That’s right.
Austin Wilson:
You can just enjoy it with your hands on the wheel, but autopilot mode. So anyway, low interest rates and high inflation are terrible for bonds in general, but dividend growing companies are great. So what this is telling me is that, in general, the numbers are saying that bonds aren’t that attractive right now compared to stocks. They do have a place in your portfolio, as we talked about in that episode for volatility purposes. But in terms of return, no, no, no, no, no, no, no, no, no. Stocks are the way to go.
Josh Robb:
Makes sense.
Austin Wilson:
That’s all I’m saying.
Josh Robb:
We’ve talked in the past, and understanding volatility, the different risks. Volatility and risk are not the same thing. And we’ve talked about them past. Yep. Good.
Austin Wilson:
Risk is really that you outlive your money.
Josh Robb:
That’s the biggest risk for most people. Yes.
Austin Wilson:
So risk is not that your money goes down before you need it.
[22:25] – Josh’s Third Highlight: Cyber Security
Josh Robb:
Yep. All right. My third topic, and this is one that was very exciting, and I think relevant for everybody, is cyber security.
Austin Wilson:
Wait, is this, speaking of Tesla, is this like the bulletproof glass on the cyber truck?
Josh Robb:
That’s right. Cybersecurity.
Austin Wilson:
Cybersecurity.
Josh Robb:
Throw a rock. And it may crack on the main stage when everybody’s watching. But cybersecurity, and we’re talking getting hacked, getting any kind of your identity theft, accounts, transactions-
Austin Wilson:
Viruses.
Josh Robb:
… viruses.
Austin Wilson:
Malware.
Josh Robb:
… What they call that? Ransomware, where your screens get locked and you got to pay money to get unlocked.
Austin Wilson:
In Bitcoin.
Josh Robb:
All that. I mean, that could happen to anybody. They’re targeting just about anybody. And there’s a lot that goes, again, a lot that went into it. And whether from a business side of things versus personal, but the key takeaways I wanted to share where one is, if you’re just aware and think through the actions, you can stop the majority of the initial kind of data gathering they’re trying to do. So in other words, if you get a email, or a text, or even a phone call asking information, you’re just not sure about it. If that little warning flag comes up-
Austin Wilson:
Just don’t do it.
Josh Robb:
… and it seems a little off, just don’t do it. No company will get mad at you for saying, “You know what? I’m not comfortable. Let me call back the number that I have.” They’ll be fine with that because they understand, all right? The people who will not like that are the ones trying to steal your data and they want you to only talk on this line. So if someone calls you or you get an email, and you’re just not sure about it, don’t use that return number. Don’t use the number down in the email address.
Austin Wilson:
Use the one on that-
Josh Robb:
Look it up, find the one you’ve used, or look on your paper, or wherever you have it. And call that number, explain what you have, and then ask to talk to somebody.
Austin Wilson:
Yeah. It’s not rocket science.
Josh Robb:
Those little things save a lot. Because what they need is some information before they can do a lot of stuff. The other thing is, as frustrating as it is, change your passwords periodically. Don’t reuse passwords. And if you get an alert that something, for instance, if a website you use has their data stolen, make sure you change that password and don’t use that password anywhere else. Those are the little things.
There was the big hack on the utilities, the electrical oil, the oil company. And that was a result of a travel company’s website being hacked. They used that same password in there and it was actually a terminated employee. They just never scrubbed his login stuff. It’s horrible.
Austin Wilson:
It’s crazy.
Josh Robb:
It’s just the little things. But for you personally, security is just take a little time to think through, “Is this right email and can I verify that somewhere else?”
Austin Wilson:
And there are just so many things that companies aren’t actually going to ask you either over the phone or on an email.
Josh Robb:
Yeah. Especially if you’re not the one initiating the call. For instance, if you call our firm or any financial institution, bank, anything like that. You call in, they’re going to verify who you are. But if they’re calling you-
Austin Wilson:
They shouldn’t be asking.
Josh Robb:
… they should not be asking you those questions.
Austin Wilson:
Exactly.
Josh Robb:
And most places probably won’t call you, they’ll respond by letter or whatever. But we call our clients, a lot of banks call, ask questions, but they’re not going to ask you for their social security on the phone. There’s no reason why they need that, calling you for anything. So just keep that in mind. It was very good. Very interesting. The other thing you said is a big takeaway is nowadays, most cell phones you can get to data plans. He’s like, “Don’t use public WiFi. You don’t know who else is sitting on there. There’s a lot of smart people that can steal data through public WiFi.”
Austin Wilson:
Airports. It’s terrible.
Josh Robb:
He’s like, “Use your phone’s tethering where you can use that as a hotspot, because the phone’s data is a lot more secure than those WiFi networks.
Austin Wilson:
Oh yeah.
Josh Robb:
And so that was his other takeaway. That it’s pretty easy for most people to just use a hotspot instead of jumping on public WiFi.
[26:15] – Austin’s Third Read: Robot Delivery
Austin Wilson:
Absolutely. My third article, which is an article again, is from ARC Investment Group. Now, ARC is an investment firm led by Cathy Wood, who’s become very, very famous. She’s all about innovation.
Josh Robb:
So ARC, like Kathy wood. Okay. Gotcha.
Austin Wilson:
Ah. Actually, it was named after the Arc of the Covenant.
Josh Robb:
And her last name is Wood.
Austin Wilson:
And her last name is Wood. Which, what was the type?
Josh Robb:
Gopher wood.
Austin Wilson:
Gopher wood. That’s exactly what I was thinking. What was the type of wood Noah used to make the arc?
Josh Robb:
Gopher.
Austin Wilson:
Gopher wood. Even though that’s a different arc than we’re talking about.
Josh Robb:
Yes, totally different.
Austin Wilson:
Covenant.
Josh Robb:
Offset it.
Austin Wilson:
Gold.
Josh Robb:
Yep.
Austin Wilson:
Anyway, so aside from that, Kathy Wood’s firm, ARC, they publish research all the time. They’re all about innovation. So one piece that they published recently that I read was that robot delivery of groceries could cost 40 cents per trip.
Josh Robb:
That’s crazy.
Austin Wilson:
Okay.
Josh Robb:
What’s the distance there?
Austin Wilson:
You let me get there.
Josh Robb:
Well, you tell me.
Austin Wilson:
So companies that are already doing some sort of rolling robot delivery right now. Dominoes, you get your pizza delivered. FedEx, Kroger, Walmart, some Chinese companies called Alibaba, JD.com and Meituan, they’re all using some form of delivery robots. Now, if you’ve been to Bowling Green-
Josh Robb:
I was going to tell you, I’m pretty sure Bowling Green has this.
Austin Wilson:
… it sketches me out.
Josh Robb:
They’re driving around these little things.
Austin Wilson:
I know. It is freaky, but they’re legit.
Josh Robb:
It’s cool.
Austin Wilson:
They’re kind of legit.
Josh Robb:
I want to follow one or try one sometime, but I know there’s never that I’m in Bowling Green that I need a delivery.
Austin Wilson:
Think they can get it to deliver from Bowling Green all the way down here?
Josh Robb:
Driving down 75, a little robot trucking along.
Austin Wilson:
So recently, ARC thought sidewalk robots could get sidewalk food delivery down to 6 cents per mile, but they note that legal regulations may slow the roll out of these systems, because a lot of neighborhoods and municipalities aren’t super thrilled about having robots all over their sidewalks. Sounds like a tripping hazard or a lawsuit.
Josh Robb:
Man, you know what though? You figure they got to be pretty durable. Right?
Austin Wilson:
You’d hop on.
Josh Robb:
So if I’m tired of walking and this robot’s-
Austin Wilson:
Just hop on.
Josh Robb:
… heading the same direction as me, I’ll just hitch a ride.
Austin Wilson:
You could double dip.
Josh Robb:
Yeah, that’s right.
Austin Wilson:
You could double dip.
Josh Robb:
Pay to go.
Austin Wilson:
And you put a little scooter stand thing on it.
Josh Robb:
That’d be great.
Austin Wilson:
We may have just also cracked the codes on that.
Josh Robb:
That’s crazy.
Austin Wilson:
It’s like ride sharing-
Josh Robb:
But okay. So-
Austin Wilson:
… with a robot.
Josh Robb:
Roughly, if they forget regulation, 6 cents a mile to deliver for these robots.
Austin Wilson:
That’s their like super bullish case if everything went their way with taking regulations and stuff out of the thing. Now, so that this was a little bit ago, they published that piece. But now, ARC says that a delivery robot for a company called Nuro could deliver for about 37 cents, while the same delivery for a human driver would cost $2.40 cents. That is a huge difference.
Josh Robb:
That’s a good savings. Yeah.
Austin Wilson:
That’s a huge difference. And they went on to extrapolate some statistics. If every household in the US were to use robot delivery for groceries at the average of 1.6 trips per week to the grocery, which is average.
Josh Robb:
Those half trips are what kill me every time.
Austin Wilson:
I know. That’s where you get just candy or whatever on the way out the door. We’re looking at a $4 billion market opportunity. And those numbers are even more staggering if you add in takeout and stuff on top of groceries.
Josh Robb:
That’s true.
Austin Wilson:
So I am a proponent of Instacart. It’s not free, but time is money. And I think if Instacart were to get onto this robot delivery thing. Now, I apologize in advance the robot who has to deliver to my house, because my sidewalks are so jacked up because I have a really big tree.
Josh Robb:
Oh yeah, might fall over.
Austin Wilson:
But that would be awesome. Start saving people some money.
Josh Robb:
I mean, again, I got six people in my house.
Austin Wilson:
That’s a big grocery.
Josh Robb:
Yeah. How many robots are following behind?
Austin Wilson:
It’s a Hyundai Santa Fe or whatever.
Josh Robb:
A train of robots.
Austin Wilson:
Just a driverless car.
Josh Robb:
That’s true.
Austin Wilson:
So anyway, that is my third article. Lots of interesting things going on right now.
Josh Robb:
Crazy.
Austin Wilson:
Lots of innovation going on right now. Lots of just crazy things in the world in technology. But Josh, good trip. Sounds awesome.
Josh Robb:
I had a great time.
Austin Wilson:
I’m still taking the highlight to be the lobster rolls for me, but-
Josh Robb:
That was up there.
Austin Wilson:
… I’m foodie. I’m a foodie and I love lobster. So that’s awesome. Two reminders. Number one, it’s not too late to enter our second half Stock Draft.
Josh Robb:
A foodie who doesn’t like blue cheese.
Austin Wilson:
That’s because blue cheese is rotten food. Why would I eat more rotten food than when it was original cheese?
Josh Robb:
I don’t know, just telling you.
Austin Wilson:
So we mentioned it earlier, but it’s still not late to enter our Second Half Stock Draft competition, check it out. And there’s information on social media and our website how to do that. Number two, as always, check out our free gift to you. It’s a brief list of eight principles of timeless investing, overarching investment themes meant to keep you on track to meet your long term goals. That is free on our website. Josh, how can people help us grow this podcast?
Josh Robb:
Yep. Make sure you subscribe. Every Thursday, you’ll get our newest episode sent directly to you. Leave a review on Apple Podcasts. It’s always great. Helps more people find us. If you have any thoughts, questions, or want follow up from any of those crazy things we talked about, shoot us an email at hello@theinvesteddads.com. And then also if you know someone who loves our last articles that we talked about, send them this episode.
Austin Wilson:
All right. Well until next Thursday, have a great week.
Josh Robb:
All right. Talk to you later.
Outro:
Thank you for listening to The Invested Dads Podcast. This episode has ended, but your journey towards a better financial future doesn’t have to. Head over to the investeddads.com to access all the links and resources mentioned in today’s show. If you enjoy and we had a positive impact on your life, leave us a review, click subscribe, and don’t miss the next episode. Josh Robb and Austin Wilson work for Hixon Zuercher Capital Management. All opinions expressed by Josh, Austin, or any podcast guest are solely their own opinions and do not reflect the opinions of Hixon Zuercher Capital Management. This podcast is for informational purposes only and should not be relied upon for investment decisions. Clients of Hixon Zuercher Capital Management may maintain positions in the securities discussed in this podcast. There is no guarantee that the statements, opinions or cast provided herein will prove to be correct. Past performance may not be indicative of future results. Indices are not available for direct investment. Any investor who attempts to mimic the performance of an index would incur fees and expenses, which would reduce returns. Securities investing involves risk, including the potential for loss of principle. There is no assurance that any investment plan or strategy will be successful.
