December 6th, 2025 - Disruptors

In this episode of the Van Wie Financial Hour, Steve, Adam, and Joey discuss recent market trends, including a potential rate cut and its effects on the economy. They highlight the positive signs in various sectors, such as retail, semiconductors, and jobs, despite negative media portrayals. The team also shares success stories of companies like Netflix and Dell, emphasizing innovation and adaptation in business.

Transcript

Steven H Van Wie 0:01

It's Saturday morning, it's 10 o'. This is the Van Wie Financial Hour. I'm Steve Van Wie.

Adam Van Wie 0:03

Clock.

Adam Van Wie 0:06

I'm Adam Van Wie.

Joey Loss 0:07

And I'm Joey Loss.

Steven H Van Wie 0:08

We are all here as promised before and as usual and hope everybody is recovering nicely from one holiday, getting ready for the next one that's coming around real, real quickly. Man, I can hardly believe it. I can't believe it's December, much less that into it a week. But I checked again on the calendar this morning what it said. Sure enough, not much I can do about it. I guess it's no wonder we all feel like we're getting a little older. Anyway, enough of that. We got a. It's a cheerful time of year, so we'll get into some more cheerful stuff today. As usual, there's a lot going on and some of it impacts the market, some of it doesn't. And really, it's kind of hard to tell some days when you look at it and shake your head, just wonder what people are thinking or perhaps it's if they're thinking. Who knows? Anyway, welcome back to all the regulars. You're the reason we're still doing this and still will be as long as you keep listening. We'll keep talking, as I like to say, from week to week. If you're new to the show and just found it or heard about it or something like that, try to stick around for the hour and we will try to reward you with some interesting news. Probably learn something along the way also. We always do. We learn from you, we learn from each other and so on. So if you want to input to us, then just pick up the phone down 904-222-8255

Steven H Van Wie 1:36

and we will put you right through and talk about whatever it is you want to talk about. Well, it was another interesting week in the market, one that can leave everybody with a little bit of a smile. I'm not sure that it was a blockbuster of any sort, but hey, up is up and green is green. As I say, right?

Adam Van Wie 1:56

It was a nice week. It was calm, it was not crazy. The VIX is down to like 16 that those weeks make me happy because it's just so much less frustrating than seeing wild swings in your account. It was a week of modest gains and it seems like it's been a while since I said that because it's been kind of all over the place in the last month or so. What's driving the market right now, in my opinion, is expectations for a rate cut this coming Wednesday Those expectations have swung pretty dramatically. The market's currently pricing in a 95% chance of a rate cut at the next meeting. But just over two weeks ago the expectation was just 34% for a rate cut at that same meeting. That's a pretty major swing in a very short period of time. And you can see that the market has responded very favorably to that swing in expectations because the last two weeks have been pretty, pretty darn solid.

Adam Van Wie 2:58

But if you look over the last six weeks, you'll see that the market really hasn't done anything while the net result is that it hasn't done anything. We saw a pretty steep decline and a pretty sharp recovery but basically we're right where we were six weeks ago. And yeah, I'm not sure what that means. Maybe we're on the brink of, you know, pushing higher, which would be great, that would reaffirm the current bull market that we're in. And yeah, so we'll see what happens next week. But it, it's definitely going to be interesting. It's, it's very much feels like the calm before the storm.

Adam Van Wie 3:34

Despite the, the news, economic conditions really aren't that bad. And we're getting more and more data points that sort of point to that. Inflation's hovering around its long term historic average of 3% percent and it's trending lower. Jobs are not as plentiful as they were a couple of years ago, but they're still available. Wages are rising at a fairly good pace and we saw a pretty good data point on that this week. The housing market is slow, but prices are not collapsing, they are drifting lower. In fact, they drifted lower in all 20 of the case Shiller Home Report over the last month they were all lower, but it wasn't a substantial amount lower. It also appears as though lower interest rates are coming which should help the housing market. And that's probably the biggest problem facing the economy today. The biggest drag on the economy is most likely housing. I would say one positive sign for the market moving forward is that all three potential headwinds are working as tailwinds right now. Those three things are the price of oil, the 10 year yield and the US dollar index. When those three things are rising, it makes it really tough for the market to rise. However, when Most, when those three things are falling or at a 52 week low like they are right now, it presents a pretty favorable setup for the market to go up. There was some jobs data released this week and it was mixed but it wasn't terrible. First, the ADP report came out and showed that the economy actually lost 32,000 jobs in November. That's the fourth negative reading in the last six months. So that's not great. All of that job loss was at small companies and large companies are actually still growing. So that's an interesting dichotomy in the, in the jobs market right now. Then Thursday, the weekly jobless claims report showed the exact opposite with that reading being the lowest since 2022. So we saw a major decline in weekly jobless claims. That is definitely not indicative of an economy on the brink of recession. There are also some more signs that the economy is stronger than the news would have you believe. Retail and trucking stocks have been taking off over the last few weeks. Take a look at Dollar Tree, Dollar General and Kohl's. Trucking and retail are extremely economically sensitive and would not be breaking out if consumers were strapped for cash in any way. Additionally, semiconductors are leading the way higher in this recent rally and they're not quite at all time highs, but they certainly look like they're headed that way. And that is happening while Nvidia has basically been flat. So that is, that's pretty interesting to see the semiconductor index trading as high as it is without Nvidia leading the way higher because for the last three years it's been all about Nvidia.

Joey Loss 6:20

Man, that's pretty positive if those people are concerned about a bubble or a monopoly or any of those things. A bit of added breadth is kind of a nice thing.

Adam Van Wie 6:26

Yeah.

Adam Van Wie 6:28

As I was looking around this morning, I was finding more positive than negative. Yeah. And that's, that's. You. But you watch the news and it's all doom and gloom as usual.

Steven H Van Wie 6:34

Yeah.

Joey Loss 6:38

Yeah. They just don't. The nuance in the market to look at it and really make a determination of whether things make sense or they seem like they're out of whack. The news isn't built for that.

Steven H Van Wie 6:47

The news is designed these days to be a justification for the opinions of the people delivering the news. That is wrong.

Joey Loss 6:55

That.

Adam Van Wie 6:57

Yeah.

Joey Loss 6:58

Agenda first and then framing facts later.

Adam Van Wie 7:00

Yeah, I, I bring it up though, because we get questions from clients about clients that normally. Like last week I had one just out of the blue. Hey, should we take some off the table? And I'm like, well, okay. I mean that's a discussion worth having. But what is the context? And there, there wasn't any. And I think it's just from watching the news and thinking that things that were in a bubble and that everything's.

Joey Loss 7:24

Overvalued Right, Just an atmospheric sense of fear. Yes, exactly. Yeah. And I think if you're going to look at some data, you know, current trading PEs for the S&P are probably around what, 22, 23. Does that sound about right?

Adam Van Wie 7:38

Yeah, it's right. It's 21 to 23ish.

Joey Loss 7:40

And so that, that is kind of making people feel like those price to earnings are high. But here's where, you know, a couple years ago we were also at 21 to 23. Had disaster happen afterwards. Why did that happen? Well, there was a ton of stimulus propping up that 21 to 23 at that time. Right now you have profits totally justifying 21 to 23. So I think this is a much better environment than we've seen in the recent few years. But people are thinking this is happening again.

Adam Van Wie 8:09

And I don't know the numbers, but take the mag seven out of that 21 to 23 and I bet you it's like 16 to 18.

Steven H Van Wie 8:15

Here's my favorite headline. US Core Capital Goods orders surged in September pointing to manufacturing rebound. On that note, we'll be right back.

Steven H Van Wie 8:26

Welcome back to the Van Wie Financial Hour. I'm Steve Van Wie.

Adam Van Wie 8:28

I'm Adam Van Wie.

Joey Loss 8:29

And I'm Joey Loss

Steven H Van Wie 8:30

And as usual, we do have a trivia question. And as usual, it's sponsored by Paul Lloyd at First Coast Alarm. You can reach Paul at 90463.

Steven H Van Wie 8:42

You know, it's kind of a giving time of the year, so I did a little something on giving, but it's probably not in the most traditional sense. But I found out that about half of Americans with adult children financially support those children today. Half of adults with, with adult children. What is the average annual amount of financial support that parents give to their adult children? Among those who do. So we're only talking about that half of the world. But that's a lot of people. That is a big chunk of people.

Adam Van Wie 9:18

That's a ton of people.

Joey Loss 9:22

Can we send this segment to my dad?

Steven H Van Wie 9:26

No, but I'm going to forget it when I walk out this door, I'll tell you that.

Steven H Van Wie 9:31

That's funny. What does the annual amount on average? And I, I, I'll give you one hint. I think you're going to be surprised and disgusted those two things. Okay, so that's just a little something to feed off of. All right, you guys want to wrap up any more on the market?

Adam Van Wie 9:49

Nope, that was all I had. And in fact, Joey did a little research on a big deal that went down recently. And I think we should talk about that.

Steven H Van Wie 9:58

Yeah. I wanted to make one comment first. I, I read right before the break the US Core capital goods order surged in September, pointing to manufacturing rebound. And I just cannot imagine that that's anywhere near true because you know and I know that the tariffs are going to ruin the whole damn economy because you hear it all the time, so it must be true. Right. Don't, don't listen, people.

Adam Van Wie 10:20

Of course.

Adam Van Wie 10:23

I mean, I'll be honest, the tariffs have shocked me on how little they have had any effect on the economy. Like, you hear people talking about it and it always feels like a reach to point to something and say this was because of the tariffs. Like it's just not. We're not seeing.

Steven H Van Wie 10:42

No, well, the analysis is all wrong. People look at tariffs and they say this is about prices and it's not. Tariffs cause unemployment, not price increases. It, it affects how many people can buy things, but it doesn't impact the price. That's a, that's parallel studies that were done, intensive studies over a very long period of time and they arrived at the exact same conclusion. That being because it's the right conclusion.

Adam Van Wie 11:11

But we're not really seeing unemployment go up either. So it's just, it's really shocking to me how little effect they appear to have had. At least in the short term on anything.

Steven H Van Wie 11:19

Yeah.

Joey Loss 11:22

Yeah, I agree. I remember the feeling like, you know, even if, regardless of anyone's stance on tariffs or not, I just remember our feeling in the office. We're like genuinely don't know what is going to look like and feel like very uncertain. Honestly, I can't remember a moment where I was like, this feels like anything.

Adam Van Wie 11:38

No, it's been kind of like a non event.

Joey Loss 11:41

Yeah.

Steven H Van Wie 11:41

When Biden put a 14.7% tariff on Canadian lumber, did anybody feel it?

Adam Van Wie 11:47

No, not really. I don't.

Steven H Van Wie 11:49

One more quick note before we get to Joey. I think this jobs report, the losing jobs report from adp, I don't think people are talking enough about the impact that the government shutdown had on that sort of thing because a lot of these big companies, if you break down that ADP report, big companies were gained.

Adam Van Wie 12:11

They hired and small companies lost.

Steven H Van Wie 12:14

It was all the small people. So if you look at the tens of thousands of people who are on furlough for a while, they aren't going to their places where they buy lunch and they're not going to splurge on this. That and the other thing that maybe from Mary's Coffee Shop to whatever. I think A lot of those people lost a lot of business, and that will be coming back. You'll probably see a whammy effect now with the next ADP report. That's my speculation, but it seems to make sense.

Adam Van Wie 12:41

I don't know if that D.C. metro area is enough to move the needle that much. I mean, because you would. The reason I say that is because I think you would have seen it more during the. The Doge layoffs, and we really didn't see it then either. So if it was enough to move the needle, I think we would have seen it then.

Steven H Van Wie 13:01

Maybe we'll see next time, I think. But yeah, doge has caused 300,000 terminations from the federal government so far. And where I come from, that's called a good start.

Adam Van Wie 13:12

Yeah, I mean, that's about it. Yeah. But that never really showed up in the jobs number, so it kind of. Yeah.

Steven H Van Wie 13:19

Just floated right through. Information.

Joey Loss 13:20

Yeah. In fact, a few weeks ago, we. We were talking about the jobs before, I think, Adam, as one of the weeks you were out of town. And we looked at the. The broad number and then adjusted for the dmv, and it was actually pretty normal. And it had been. And we did determine that it was artificially elevated by the dmv.

Adam Van Wie 13:38

Okay, so it had an effect.

Joey Loss 13:40

It had an effect.

Steven H Van Wie 13:41

Interesting. We're going through things that we've never gone through before that from the pandemic on, there have been so many sort of one offs that happened to the country that we're still not sure what regular looks like anymore.

Adam Van Wie 13:54

It's very true. So tell us about Netflix, Joey.

Joey Loss 13:58

So this is the Netflix store. I'm sure everybody knows what Netflix is. I bet a lot of listeners probably have a subscription. If you were following the news this week, you may have seen that Netflix entered into a deal to buy Warner Brothers for $83 billion. And they were part of a streaming war competition to see who was going to buy Warner Brothers. And they ended up winning, which made me think I just kind of wanted to revisit the Netflix story, which now they're a behemoth, and I imagine this next year they'll be getting some hate. But they were once a very small company, and I think that story is interesting. So here's the Netflix story. It started with a mistake. The year is 1997. Reed Hastings returns a copy of Apollo 13 to his local video store and gets hit with a $40 late fee. He's annoyed. And on the drive to the gym, he asked himself something. Would the gym model work for Movies, flat fees, unlimited access. But an idea is not a business. First they had to see if it was physically possible. Hastings and co founder Mark Randolph bought a greeting card, stuck a Patsy Cline CD inside, and mailed it to Hastings House. It arrived unbroken. And that was their green light. The early days were not technological or glamorous. In 1998, Netflix was just 30 people in a dusty office park in Scotts Valley. Every night at 2am These future tech disruptors were standing in an assembly line, hand stuffing DVDs into red envelopes. They were licking stamps, sorting canvas bins, and racing to the post office before dawn. It was a logistics grind, and they were bleeding money. Desperate, they flew to Dallas to meet with Blockbuster. They offered to sell Netflix for just $50 million. The blockbuster executives allegedly laughed them out of the room. That laughter was the beginning of the end for the old guard. As broadband exploded in the early 2000s, Netflix went digital. By 2010, Blockbuster filed for bankruptcy. Buried under debt and unable to pivot to changing tides. By 2013, Netflix stopped just licensing movies and started making their own house of cards. Proved that a tech company could win Emmys. They built a subscriber base of hundreds of millions, driving their market value to nearly half a trillion dollars. And there came the streaming wars, where every legacy studio, Disney, Paramount, Warner Bros. Built their own digital platform. The market fragmented. Customers were suddenly paying for six different apps, and the studios were burning billions trying to catch up to the leader, Netflix. Netflix, on the other hand, stayed patient. They built a war chest while their competitors struggled with debt. And that brings us to this week's blockbuster announcement. The disruptor has officially eaten the legacy. Netflix has announced the acquisition of Warner Bros. Discovery, the parent company of HBO Max, and a deal valued at approximately $83 billion. For reference, Netflix is worth 426 billion as of yesterday's market close. Randolph and Hastings didn't just build a competitor. They bought a slice of Hollywood history. Harry Potter, Batman, Game of Thrones, they all belong to the red envelope, guys. Now on the journey. The video store didn't just die. It was conquered by a frustrated customer tired of paying late fees.

Adam Van Wie 17:03

Yeah, that's a good story. I mean, that's kind of like the classic American success story.

Joey Loss 17:09

I was thinking of your American success stories.

Adam Van Wie 17:11

Yeah, read this, definitely. That's. That's really cool.

Steven H Van Wie 17:14

That's not a millionaire series, though. That's a Giga Billionaire series. And speaking of which, big billionaire, we're going to get on a little later in the show. We're going to talk about what Michael Dell has done with his wife and how he got where he is. And it too is an absolutely incredible story.

Adam Van Wie 17:34

It is, and I also brought that article, but I, I was listening to a podcast this week and they were using the Dells as sort of an example of how. And. But it, it actually fits the blockbuster story exactly about how these things happen. And it usually involves the legacy person laughing at the, the startup and ignoring them because they don't think it's a threat. And then eventually it becomes bigger. Another one, Amazon is another great example.

Steven H Van Wie 18:07

It's a good one. I agree with that, too. But Bill Gates is my favorite story. Way back when, Bill Gates had been dabbling around in computers and software and such, and he, he took his idea and, and nascent software, I guess, down to Fort Lauderdale to meet with the IBM people and he told them that he didn't need money up front or anything, but he would license his operating system to them for every computer that they sold. And they, they agreed readily and they sent him home. And he could probably hear them laughing as he was leaving the building because, quote, everybody knows the money's in hardware.

Steven H Van Wie 18:58

Kind of like me in the year 2000, driving off the Lexus parking lot in, in a hybrid and listening to all the salesmen laugh about this idiot who just bought a hybrid when gas was a buck 60. Fifteen years later, I'd say it paid for itself pretty well. And I loved it.

Joey Loss 19:16

Yep. What's the saying? I'd rather get a dollar from a million people than a million dollars from one person. Something like that.

Steven H Van Wie 19:22

That's, that's keeping your eggs in different baskets, isn't it? I don't have time to get into this right at the moment, but I want to talk about Kyle Busch, which is someone you all know. I think NASCAR is about as, as popular here as any place in the world. I want to tell you what happened to him and why it's relevant to you and how to avoid it. So we'll do that right after the break, which will be very shortly. About 30 seconds left. Other than that, if you got any stories about Thanksgiving or anything like that, give us a call. We can chit chat about them, but we, we've managed to make this holiday season quite a bit of fun so far, and it looks like it's just beginning. Hope everybody's happy and safe out there, and I wouldn't want to be traveling either. And what a mess. So there's a lot to be thankful for these days. All right, we're going to Take a short break, pay some bills. We'll be right back. Don't go anywhere. This is the Van Wie Financial Hour. 

Steven H Van Wie 20:20

Welcome back to the Van Wie Financial Hour. I'm Steve Van Wie.

Adam Van Wie 20:22

I'm Adam Van Wie.

Joey Loss 20:23

And I'm Joey Loss.

Steven H Van Wie 20:24

And we do have a caller on. We'll get right to. But I wanted to remind everyone what the trivia question is. First half of Americans with adult children financially support. We're getting a buzz in our headphones. Thank you. Financially support those adult children. What's the average amount that those people pay annually to their. To support their adult kids? With that said, let's. Good morning, Lane.

Lane 20:52

Hey, good morning.

Steven H Van Wie 20:53

Yeah, good morning.

Lane 20:55

Post Thanksgiving and soon to be Christmas.

Steven H Van Wie 20:59

Thank you. We're trying to cure a little buzzing problem. I don't know if you can hear.

Adam Van Wie 21:03

It, but we're getting buzzing our headphones.

Lane 21:06

It was brief, but now gone.

Adam Van Wie 21:08

Okay.

Steven H Van Wie 21:09

Okay, good. That's fine. All right. Well, start again. Good morning.

Lane 21:18

I'm thinking a popular topic about Florida is, quote, affordable housing. And if anybody listening is connected with local or state government.

Lane 21:33

I wish they would get real. And look at the poor teacher, deputy first responder. That probably makes around 50 grand. And you guys are the math experts. So you know what? $1300 either in rent or mortgage per month. And these guys go around say, well, we're going to help affordable housing. So we'll put in.

Lane 22:00

We'Re going to give a green light to the developers. We're erasing all the regulations and developers can develop anywhere. And the next thing you know, you got 340 $450,000 houses popping up as a result of that. And it's like, what's affordable about that? You know, where's my $200,000 house that the deputy can afford? So they're lying to us. Which brings me to the answer to your trivia. I'm going to guess 50 grand a year. That's too some of those. Where do these people can they live?

Steven H Van Wie 22:36

Well, you're high, but you're on the right track. I'll put it that way. It's, it is expensive to live out there. And you're absolutely right. Affordable housing is a problem. And everybody who talks about it seems to come up with an idea that won't work.

Lane 22:40

Okay.

Adam Van Wie 22:53

Yeah. The problem is one, government can't create affordable housing. It's not possible. And two, you can't, you can't build a single family home for 200,000 in most of the country anymore. More labor and the cost of materials is just going to drive the price point higher.

Steven H Van Wie 23:08

Well, in New York, they're solving it. They're just going to take those places from people and let poor people live in them. That's affordable.

Adam Van Wie 23:16

That seems like a great solution.

Joey Loss 23:18

And the third reason that's such a challenge is most of these policies that we see come out with affordable health care, affordable housing, anything like it. The metrics on which they base how people get benefits are so simple that they just don't capture people who have real need. And the irony is they create opportunities for people that have millions in assets but have low taxable income to benefit from things like this. We just have to get more thoughtful about how we structure any of these affordable programs.

Lane 23:49

Yes, sir. Responsible politicians find one of those.

Steven H Van Wie 23:52

Good luck. Oxymorons are bound, don't they?

Joey Loss 23:55

Yeah.

Lane 23:56

So Steve gave me the opening, so I'll have to brag about Thanksgiving.

Lane 24:01

So off we go to Dean Hatchie. By the way, look, that one up in Gainesville. I've been there for a week. No jogging.

Lane 24:12

Bread, banana pudding and you know, pecan pie.

Mike 24:16

I lost three pounds.

Adam Van Wie 24:18

Wow, nice.

Steven H Van Wie 24:19

I'm sure someone found them.

Lane 24:23

But okay, so.

Lane 24:27

I'm a Lanzolotti mba, you can believe that. And so that sets the stage for you to pay attention to management decisions. And over the years, I cannot imagine what goes on in boardrooms.

Lane 24:47

One case, I'll give you two quick examples. One, I was involved in personally

Lane 24:54

in my sordid past. I was with a woke entertainment company and they would take a sheet of plastic and pay somebody to draw and ink in colors and make cartoons.

Lane 25:14

And they made money doing that. That's fine. One day.

Lane 25:19

A couple of young men from General Electric in Daytona, I think it was, showed up and they said, look what you can do with computers. You can put that stuff together. You can control every aspect. And you're not kidding. They laughed at him. They were highly insulted. They actually enraged and they kicked him out. And of course, years later, you know, it's all computer graphics. These guys could have let him into the ground floor. But you know, what can I say? Same outfit, by the way, that told George Lucas to get lost.

Steven H Van Wie 26:00

That's a great move.

Lane 26:01

Yeah, yeah. But then the next one is to follow your lead on the tech companies. The there is a documentary out. It's old, I don't know how to find it. I have to look for it. But I, I believe focused on Xerox. And in the olden days, Xerox was playing around. Now there is nobody listening to the show. This Morning that has not had their hound hand on a computer mouse sometime within the last 24 hours, I'll guarantee that. And so Xerox was messing around with this little computer mouse and.

Joey Loss 26:03

So.

Steven H Van Wie 26:36

Yep.

Lane 26:44

They were playing with the graphics interface on computers and they said, this ain't going nowhere. And I believe they invited both Gates and Steve Jobs in. Or one of them. They invited in and said, here's a bunch of junk we're getting rid of. You know, we'll sell this patent to you.

Lane 27:11

And you know you want it. And I, I think maybe it's just one of the guys was there and then he called the other one and said, you will not believe what I just saw. And of course they jumped on it and the rest is history. So, you know, and how can, how can a board member of Sears Roebuck watching the growth of Amazon and how they did it and everything out in the open? I mean, what does Amazon do that's patented and unavailable to the competitor? And they sat there and watched it happen. They should all fired anyway. That's me. That's my thing for this morning.

Steven H Van Wie 27:26

Yep.

Joey Loss 27:55

Well, that's why Walmart is still such an enduring company is because they're one of the few that was humble enough to notice. Oh, boy, we got to buy jet.com or we're going to be out of this game.

Lane 28:06

Wasn't that fun to watch that you could see him wake up? They said, we're not going to let this happen.

Steven H Van Wie 28:09

Yeah, yeah.

Adam Van Wie 28:11

Definitely.

Joey Loss 28:12

I'm sure there was a moment of laughter a couple years before, but then they were.

Steven H Van Wie 28:15

Yeah, the guy who did all that was happening retiring. Suppose he can afford to retire.

Joey Loss 28:23

In this economy.

Steven H Van Wie 28:24

Yeah.

Lane 28:28

Anyway, thank you gentlemen for great, great information, but I just had to throw that out.

Steven H Van Wie 28:32

Thank you. I appreciate the colorization of my comment.

Steven H Van Wie 28:38

Take care of yourself.

Lane 28:39

So I'll let you all brag about your weight after Thanksgiving. So anyway, thanks, gentlemen.

Steven H Van Wie 28:46

I did hit an all time low yesterday.

Adam Van Wie 28:48

I actually maintained my weight during Thanksgiving.

Joey Loss 28:50

I was gonna say, between me and Lane, we only gained 7po.

Steven H Van Wie 28:55

Aren't you glad he took his share of it? Or almost.

Adam Van Wie 28:58

Whatever.

Steven H Van Wie 28:59

Didn't work, did it? All right, everybody knows Kyle Busch around here, right? Kyle and Samantha Bush say that a Pacific Life Insurance agent led them into a misleading insurance scheme and that scheme has cost them eight and a half million dollars. Yeah. And it was all about purchasing complex life insurance policies marked as safe retirement plans.

Adam Van Wie 29:23

Whoa.

Steven H Van Wie 29:34

And.

Steven H Van Wie 29:36

I think that they invested about 10.4 million in premiums and they lost about 8.58 of it.

Adam Van Wie 29:45

Whoa, now how is that possible?

Steven H Van Wie 29:48

You. Well, things just didn't seem to work out like they had in their illustrations. They, they illustrate all these wonderful returns on their investment, except they never pan out. But.

Adam Van Wie 30:04

Okay, I get that. But at the same time, usually those things don't return as much as promised. But they don't lose 8 million like 80% of your principal either. That's not the norm.

Joey Loss 30:14

Right.

Steven H Van Wie 30:16

Underclose undisclosed costs, false promises of guaranteed returns. The net out of pocket loss exceeds 8.58 after accounting for the policies remaining. That's crazy, isn't it? It's nuts.

Joey Loss 30:28

I mean the problem is those create a liquidity issue for, for families. There's nothing wrong with life insurance when it's used the right way. The problem is people use it as a, a cure all. It's Swiss army knife. But it's really just precisely excellent at one thing and very bad at a lot of other things. Just like a portfolio is. Portfolio is really good at a couple specific things.

Steven H Van Wie 30:50

There's some good, there's some good products out there for people who can afford traditional long term care that are based on life insurance. So having a good life insurance agent can be very helpful to people with money. But don't listen to them. If they start talking about retirement products, you're not going anywhere.

Adam Van Wie 31:09

Yeah. And if you hear like it's cyber week income any. Oh, hello. Whoops. That was weird. Yeah. If your insurance salesman starts talking about tax free retirement income, run away.

Joey Loss 31:21

Or if you hear the words infinite banking, it's time to step out of the move.

Steven H Van Wie 31:26

The, the notion of. Well, there's one website they email me all the time, so I'm just going to tell you. It's called bank on yourself. And it's a croc. It's all I can say. They're from that area of Florida where all this stuff emanates from down in the Fort Lauderdale area. I don't know if that's coincidence.

Adam Van Wie 31:34

Yeah. Yeah.

Adam Van Wie 31:44

There's so many little reels on Tick Tock and, and all over the Instagram that say like well really wealthy people do this. And then they describe some elaborate life insurance stuff scheme.

Steven H Van Wie 31:56

Fully funded life insurance. You can just borrow your own money back tax free for the rest of your life until it runs out total. Oh, I forgot they didn't say that part about until it runs out. They don't have to apparently. All right, there's enough of that more fun stuff. As soon as we get back from a short break. Don't go anywhere. This Is the Van wie Financial Hour. 

Steven H Van Wie 32:16

Welcome back to the Van wie Financial Hour. I'm Steve Van Wie.

Adam Van Wie 32:18

I'm Adam Van We.

Joey Loss 32:19

And I'm Joey Loss.

Steven H Van Wie 32:20

And we will go to the phones. But I wanted to make one quick comment. We probably. Well, we might get to Michael Dell today. It might be next week. But I just wanted to talk about success again, Mike. Michael Dell started constructing computers in his Dorm Room in 1984 from standard components. He put that to work and informing his company, which was not called Dell at that time, but that doesn't matter. In his first full year of business in 1985, his company grossed $73 million.

Adam Van Wie 32:55

That's great.

Steven H Van Wie 32:56

And I'm here to tell you that's not easy. Good morning, Mike. What's happening?

Mike 33:01

Hey, guys.

Mike 33:06

Well.

Mike 33:09

Somebody else was talking. I'm sorry.

Adam Van Wie 33:12

Okay. Do you still hear it?

Mike 33:16

No, we're good. Okay, so let me try to get through a few things quickly. Here's an amusing one. I went for a pet scan in a trailer yesterday next to Beaches hospital. And as we know, when you do a pet scan, it involves radiation. So after it was over, I go back to the car and I'm hitting the remote. Nothing's happening at all. Now, of course, someone would say, like my friend said, mike, your battery's going bad. And I go, I've had no trouble with this battery at all. As a matter of fact, when I got home, I pulled the car in the garage. It's 45ft to the mailbox, and it's clicking back and forth with no problem at all. So my theory is, and I'm sticking with it, that the radiation, because you still have it for a while, affected the wireless signal in the remote.

Steven H Van Wie 34:21

That's fascinating.

Mike 34:23

That's what I thought. I thought that was amazing. So I just sat on the curb there and hoped that enough would dissipate so I could get in the darn car and eventually detox a little.

Joey Loss 34:39

What's that?

Steven H Van Wie 34:39

You detoxed a little?

Mike 34:41

Yeah, exactly. Exactly. Okay. Now, very quickly, if you care to opine, I know you're going to touch on Michael Dell and there's some criticism out there about what he's doing. I know that sounds a little harsh, but personally.

Mike 35:03

I don't know. This idea of giving kids money teaches them right away that, hey, the government will give you things. That's just a personal opinion. What I did want to ask, though, is I've always been a little uneasy and not happy about the president or any president taking 15% of intel or AMD. But not Micron. I'm just wondering how you feel about the government investing in public companies like we do.

Steven H Van Wie 35:41

It's a complicated subject and I've got opinions all over the place on it. In general, you're right. Specifically if it's a short term thing to recoup some money for the government, because what we're doing might involve some risk. I can live with it, but it's got to be controlled very carefully.

Adam Van Wie 35:58

Yeah, I don't, I don't love. I don't love it either. If there's like a sovereign wealth fund or something that owns ETFs that hold every company, I'm fine with that. I don't like them picking winners and losers or even the appearance of them picking winners and losers.

Joey Loss 36:13

Yeah, I think it muddies the water, but when it comes to regulation, I think it makes it a little bit confusing if they have a vested interest and also they're regulating trade on these companies or who can be so powerful.

Steven H Van Wie 36:25

And what keep the private sector private for the most part, that's pretty hard and fast.

Adam Van Wie 36:30

Even if nothing shady happens, the appearance of that potential makes it bad.

Joey Loss 36:35

Right.

Mike 36:37

I agree with you gentlemen.

Mike 36:40

Now to the trivia. First of all, I'm just amazed 50% of parents or adults give to their adult. I don't know. I'm from a different generation. I grew up playing softball and football in the 50s and 60s in Brooklyn. I don't remember any adults

Mike 37:02

taking care of or parents taking care of their adult children. I'm sure there were circumstances where the parents were sick and they came home to help, but I'm just amazed at what goes on you and me, country.

Steven H Van Wie 37:18

I didn't want help, so there. And I didn't get it anyway. What, you want to take a shot at the trivia?

Mike 37:24

I do, I do. And in full, full disclosure, I saw this in an article that said that on average it's $1474.

Mike 37:37

But you ask for an annual figure. So if I multiply, my answer is going to be 17,006 88.

Steven H Van Wie 37:46

And that is actually the right number.

Adam Van Wie 37:51

And also insane.

Steven H Van Wie 37:52

Also insane.

Mike 37:54

I agree.

Steven H Van Wie 37:55

Beyond comprehension.

Mike 37:57

Could I. Very quickly, Adam, are you the one that when it goes to charity, you pick the charities?

Adam Van Wie 38:03

Yeah. Yes, that is correct.

Mike 38:06

How do you go about that, if you don't mind my asking?

Adam Van Wie 38:09

Well, I usually just give to the charity that we always give to, which support St. Jude's because it's very meaningful to me. So hopefully that's one that doesn't offend anyone. Usually people are okay with that.

Mike 38:23

Okay, well, let's give this one to them also.

Adam Van Wie 38:28

Okay, great. We'll do. Thank you.

Steven H Van Wie 38:29

We love that.

Joey Loss 38:30

Thank you.

Mike 38:31

You got it. Take care.

Lane 38:32

All right.

Steven H Van Wie 38:32

Take care.

Steven H Van Wie 38:36

Well, Adam, I suppose you feel picked on now, don't you? Because I don't give you 18,000 bucks.

Adam Van Wie 38:40

Why is that?

Adam Van Wie 38:46

No, I'm okay with that. I really didn't want it either. I'd rather earn my money.

Steven H Van Wie 38:50

Yeah, and I remind everybody that you can give cash to any one person up to 19,000 a year starting in January. And you don't have to even file any paperwork and there's no taxes on either side. That doesn't mean you ought to do it with your kids. Yeah, how's that? Got another one too. You. Let's get to you. I want to say one thing and then I'll ask you if you get time. Otherwise, next week they're about to allow a qcd, a qualified charitable distribution, to go to a donor advised fund, which I think could be an incredibly wonderful.

Adam Van Wie 39:07

That's not a good idea.

Adam Van Wie 39:26

Oh, wow. Yeah, that's awesome.

Steven H Van Wie 39:28

All right, let's look into that a little bit this week and then you guys both know a lot about donor advised funds that I don't know. And we'll talk about that next week.

Adam Van Wie 39:36

Yeah, we're opening one next week for our clients, so. Yeah, good. But I did want to talk about something else. Let's. This is. I just thought this was interesting. There. There are now 24 million millionaires in the United States. And that number grows by. Grew by a thousand a day in 2024. A thousand new millionaires a day. That's crazy.

Steven H Van Wie 40:00

That is unbelievable.

Joey Loss 40:01

Is this net worth a million? Okay.

Adam Van Wie 40:03

Net worth a million. Yep. A recent poll found that 74% of millionaires in America work with a financial advisor, compared to just 34% of non millionaires who work with a financial advisor.

Adam Van Wie 40:19

So I'm guessing that there's a little bit of self selection there in that people who are highly motivated tend to make decisions like that that they know will. Will help them financially. But also I think there's a little bit of cause and effect that if you work with an advisor, you're more likely to hit that million dollar target. And maybe I'm being a little bit self serving when I say that, but I really believe that.

Steven H Van Wie 40:40

Yeah, but you've got two guys right in the same room with you who agree with you completely.

Adam Van Wie 40:44

Exactly. And no bias at all.

Steven H Van Wie 40:46

What are the odds? Yeah, 100% of the people in this room.

Adam Van Wie 40:50

Weird. What I thought was really interesting in the study was the percent of those millionaires that consider themselves wealthy, and that is just 36% of those 24 million people who consider themselves to be wealthy.

Steven H Van Wie 41:04

As we commented during one of the breaks, million just doesn't buy what it used.

Adam Van Wie 41:08

Really doesn't when you think about it.

Steven H Van Wie 41:11

And this has been a topic of much discussion lately. Every million gives you an income of 40,000 a year. You can live on 40,000 a year.

Adam Van Wie 41:20

Yeah. That's not a lot of money.

Adam Van Wie 41:24

Well, and the other thing in here is you might have bought a $200,000 house that appreciated to $1 million, giving you like 800,000 of, of equity. And then you might have 100 and, you know, in assets and 100 in your retirement account. And you're not wealthy, but you're technically a millionaire. Yeah. So there are many ways to become a millionaire that would not involve being very wealthy. Yeah.

Steven H Van Wie 41:48

Yeah. I, I am constantly amazed by how many people that work, that we work with. Our client base have gone over that mark. And we, we meant millionaires in our practice.

Adam Van Wie 42:03

It's just lately it's been quite a few. Yeah.

Steven H Van Wie 42:06

And it's happening, of course, with the tailwind from the market, but also savings vehicles and, and that sort of thing. But we're talking about a million in, in managed funds that, that has nothing to do with home equity or anything like that. And they are the exact same people that I can't remember his name wrote about when he said the millionaire next door.

Adam Van Wie 42:29

In fact, that reminds, we had a meeting this week with a, with a multi millionaire and the topic of the discussion was, would you please spend some more money? Because that, the same attitude that gets you to become a millionaire also makes it hard to go and live off that money that you have then saved. And for many people, not everyone is like that. But more often than not, the millionaire next door doesn't want to spend that money. And it's, you work your whole life, let's enjoy it. You know, people always think your financial advisor is going to tell you no, but that's not always the case.

Steven H Van Wie 43:05

So how many times in all the years that we've been doing this have people heard me say, live well along the way? And I absolutely believe that because one of these days you're going to wind up 75 years old and you won't know how you got there and you. And I look back over the 75 years of my life and sure, there's some regrets in there. But not that many, as if I had never done anything. So still having a really good time, 53 years married and all that. So, you know, if you want to call that a good example, do it. I certainly like to think so. And I love all of you who are listening. We'll see you next week at the same time. This is the Van Wie Financial Hour until next week.