What Does It Mean to Be Wealthy?

Bob, what do you see seeing from a technical perspective? I think the market's taken a lot of people by surprise, especially, you know, the three of us have been pretty cautious over the last several weeks, given the news that we've heard from from the consumer, the different earnings reports we've heard. What are you seeing from a technical perspective?

Bob Lang  00:44

No question. Lindsey, the markets have really surprised everybody here. And I'm looking at, frankly, at a at a V bottom right here, which is kind of rare. We don't really get those V bottoms. What does that mean? That means the market took a sharp nosedive, down, bounced and basically picked up all that lost territory to create what's like the letter V in the alphabet. So I think that it's interesting that the market has bounced back in the face of what we call the wall of worry. And wall of worry being that people are not convinced or believing that the markets can go up and they can just continue to go up and rise and frustrate most people. Look, Listen, you know, what is the stock market all about? Anyway, it's about frustrating everybody, frustrating the bulls, frustrating the bears, as it continues to move. It zigs when everybody expects it to zag. It Zags when everybody expects it to zig. And, you know, most people, if they are just relaxed and patient and watch what's going on with the markets, with the economy, with fundamentals and so forth, I think they're going to be in good shape. But frankly, you know this, this rally has been, you know, not, not. It's been rather interesting. But we did march, march down pretty sharply in the at the beginning of August and rallying back. But we, this time around, we've had some participation with the small cap, so that that is oftentimes meaning that the market's going to move move higher all the way around, broadly.

Lindsey Bell  02:13

Yeah I mean, it is pretty impressive. We have that big pullback, and we're still up very significantly for the month. Chris, I mean, when you, when you look at that performance, it's, it's, it's kind of like we almost forgot that already happened. What are you seeing, though, from a fundamental perspective, or the fundamentals there to support it? Is there good news? I know, I know the Fed meetings coming up, that's like one of the biggest things that we're anticipating. We're going to talk about it later in the show. But, but what are you seeing? Are the fundamentals there?

Chris Versace  02:42

I think it depends on, you know, like any other time in the market, Lindsay, it depends on what you're looking for, right, what you're invested in, because you can find areas of strength. You can find areas of concern. You know, we talked about this on the last episode of the podcast. But what I think is going to be very interesting, and what we'll talk more about this, I think, in September is the upcoming conference season. And I say that because we're going to have, you know, two months in the can, two and a half months in the can, depending companies will have that much more data. They'll be that much closer to understanding what the Fed is likely to do, you know, and it gives them a chance to kind of, I won't say, reset guidance, but kind of tweak their expectations for the September quarter and really for the balance of the year. And you have to remember it, it's one of those factors why I think September can be kind of a challenging month for folks. Because, you know, institutional investors, the Horde, if you will, they're back from the beach. They're taking a fresh look at the data, they're sharpening their pencils, and they're getting ready for what's to come, you know, but between now and then, I think we're gonna be stuck with some low volume days as we close out August. Lindsey, business as usual.

Lindsey Bell  03:55

Yeah business as usual, although we're getting into September, which is seasonally the weakest month of the year?

Chris Versace  04:01

Yeah, yeah, yeah.

Lindsey Bell  04:02

So that's going to be fun I'm sure.

Chris Versace  04:04

It's not only that, but you know, depending on, on the last couple days, you know, the S&P500 forward multiple on earnings peaked out at 23.4 times. That's the biggest number since 2002 that's, that's almost unheard of. And we're back to knocking on that door. And I would toss it back to Bob. You know, the markets, you know near term overbought, right? Bob. So folks should be a little wary as we head into this seasonally weak month.

Bob Lang  04:34

After this huge rally, we've had Chris and Lindsey from the August 5 lows. Yes, the market is, in the short term, pretty well overbought. But remember, something overbought just conditioned. It doesn't necessarily mean you have to sell because it's overbought. It simply means it's a red flag. It's a warning. We have to raise the flag and pay attention, because we'll have a lot of volatility coming on. Speaking of volatility, Lindsay and Chris. Lot of volatility this week. Why is that? It's because we are in front of a holiday week. A lot of a traders on their desks are gone on vacation. Maybe they've gone to the Hamptons or wherever they go to celebrate for Labor Day holiday. And a lot of B traders on the desk have been instructed to dnh do no harm to their portfolios, and if they can do no harm, then they come out of it after we come back on the other side of September 2, which is Labor Day weekend, and hopefully, you know, things start getting back to normal in terms of volume, in terms of volatility. But for now, I think, you know, the next four or five days, we're going to be seeing a lot of volatility.

Lindsey Bell  05:40

Yeah no, I think that's right. So you know, why don't we take a little bit of a break and let's gear up, because we're going to talk about what could be some of the catalysts for the market in the next month or so. First, we're going to talk about the Fed and interest rate expectations, what they are going to look like for the remainder of the year. Second, we're going to talk about AI, spending and adoption. It's been a hot topic. We saw some volatility around earnings for for AI companies. And thirdly, we're gonna we're gonna wrap it up with a fun topic. We're gonna talk about, what does it mean to be wealthy now, what's your number? Think about it through this break. What is your number to be wealthy? Chris and Bob, we'll see you right on the other side.

Lindsey Bell  06:24

Welcome back, everybody. We're going to dive right into what the Fed said and what they're going to do in the months ahead. All right, guys, we heard from how a Jackson Hole. I think he did a really good job of threading that needle right? He gave the doves what they were looking for and and, you know, I think it, he basically set the tone we are shifting. Course, it's official. He said it that, you know, we're entering the next phase of monetary policy where we're going to start reducing rates. You know, he's ready for it. He cited the cooling labor market. He cited inflation that's closing in on the central bank's 2% annual target. But before he spoke on Friday, the expectations were 100% that there was going to be a a 25 basis point cut. And now there's a little bit of a split. There's actually like this. What I find interesting, a small contingent that's looking for for a 50 basis point cut in September, just under 30% which is, it's notable. I mean, that's a little something. What do you guys think, Chris, let me go to you first. What was your take on Jackson Hole, and what are your expectations for, for rate cuts, for the-

Chris Versace  07:44

I'm gonna give him the grade of no duh. In other words, he did exactly what everybody expected he was going to do. I certainly didn't think he was gonna, you know, shit show. Here's the playbook everybody. This is what we're gonna do at each meeting. So I think he set the tone well. But on the other hand, I have to say that, you know, for the most part, I've been a Powell fan, and I say that because if you really listen to what he says, right, he's pretty much telling you what they're going or not going to do. I think the big issue is the market likes to superimpose its own thinking on Powell's words, that's typically where it tends to get into trouble. But I do agree with you Lindsay, that the big question now is, you know, 25 or 50 in September. But there's a bigger question too that ties to that, is it 100 basis points before the end of the year, which is what the market sees and as of now? Right? Because, you know, we have to evolve as more data becomes available. But as of now, I don't see it. I don't see 100 I could see maybe 50, right? Maybe, maybe 75 but 100 is a big swing, in my opinion.

Lindsey Bell  08:53

Yeah, no, I totally agree with you, too. And Bob, I want to come to you on that same topic too. We've got three meetings before the end of the year. So that means, if we're getting 100 basis points of cuts between now and then, one of those meetings is going to have to show a 50 basis point cut. For me, I think the catalyst to get a 50 basis point cut at any one of these meetings, which I don't think is going to happen, but I think to get that, you need to see a negative jobs print negative not just 50,000 jobs are added like negative jobs.

Bob Lang  09:25

I agree with that. 100% I think if the the jobs report that comes out on September 6, which is August, is is weak, very weak, and that would be something else, because 114 119,000 jobs created in July, if we come up with a negative reading off of that, I think that that would, that would certainly be the impetus to have the committee push a little bit further towards more, more of a stronger message with their rate cuts. But listen, I'm in the same campus, Chris. I think maybe two, two and a half. I mean, if you go back to the June project. Questions the committee came out. And when you look at take an average or composite of what the committee was looking at for where the fed funds are going to be at the end of the year, roughly two and a half rate cuts. And I think that was that was being pretty generous. I think it's more going to be more like in the camp of two. I agree with Chris. I think this. I think his first one is going to be in September. I think the next one is going to be in December. But let's look, let's look at the Fed Funds Futures market for a moment having a really strong, bold prediction of four rate cuts to the end of the year, we have to remember back what happened earlier in 2024 when it was looking like six, seven rate cuts. Seven rate cuts in in 20 in early 2024 and what did the Fed do? They poured cold water all over that. And all of a sudden, in about two and a half months, three months time, the it was dialed back to zero. Actually, actually, if you go back to May, the fed fund futures were predicting zero rate cuts in 2024 so I think the Fed did a really nice job of dousing that enthusiasm with cold water, and now we're back to the same sort of thing again. And will the Fed do that one more time? I think the message from the Fed is, expect rate cuts. What's interesting Lindsay is this, if you look at the timeline out there for rate cuts. The Fed fund futures are looking for close to 200 to 225 basis points in cuts by the end of 2025 I think in November of 2025 I'm looking more at a more gradual approach. I don't think they're going to be done raising or cutting interest rates until 2026 probably March or April of 2026 you're talking about a good year and a half from now, before that, before they completed their their mission here.

Chris Versace  11:51

Hey, Bob, let me just say this. Those are those you can't even call those forecasts, right? And I say that because, and we all know this to be true, that based on, you know, the rolling data, these expectations are going to get reset and reset again. You talked about it in January, I think what it means for us as investors, and that goes for you to listeners, you know, the upcoming data is going to be important. It's going to be important as we lead up to the September 18, conclusion of the Fed's policy meeting, we're going to get the July PCE price index data. Later this week, we'll get the August PMI data, the August employment report, July construction spending and some other data. You know, just in the next you know, two weeks, some will have a much better sense of the economy. But you know, to put any faith in those numbers out a year from now, when it comes to rate cuts, forget it.

Lindsey Bell  12:45

I mean, I think you did a nice job there, Chris, tying it in a bow. What does it all mean? I think it means volatility for the market going forward. And just to put a pin in it, the Fed will be giving their new dot plot, their their series of economic projections at this September meeting, and they had, they had 4% unemployment locked in for this year. They had core PCE inflation at 2.8% so there's going to be movement in that, and the market's going to react, I think so.

Chris Versace  13:14

No doubt, no doubt.

Lindsey Bell  13:16

Good talk on that, guys. Let's move to another fun topic. Okay, AI adoption, all right. We just got through the earning season, Chris and obviously all eyes were on AI, what? What are companies spending on it? And what is, suddenly, we've got religion on what the return on investment is.

Chris Versace  13:37

Well, yeah. I mean, look, if you trace back to, you know, earlier this year, even a little bit last year, you know, AI became the new buzzword. You know, every company management team started dropping it into their earnings conference call comments. You know, it would be fun. How many times did they say, AI, you know, blah, blah, blah, you know, so it became, I think, kind of an overused term. And, you know, companies had to say, of course, we're doing something everybody else's we are too.

Lindsey Bell  14:10

Even  we're not, we are right.

Chris Versace  14:13

Exactly. I think my favorite one that I like to goof on was Danone, the the European yogurt company, and how they're going to use AI to determine new yogurt flavors. I'm thinking, you know, taste buds. Taste Buds work very well. Why do we need AI? But anyway, anyway, you know, coming out of the the June quarter earnings season, we heard from big tech that they're continuing to spend, I'm talking about Amazon meta Microsoft. Who am I missing? Amazon meta alphabet. Alphabet. Thank you, Lindsay, the that they're going to continue to spend building out their AI and data center capabilities. That's, of course, good for the chip companies, including Nvidia, that will record. Later this week. But you know, when we try to wrap our arms around how big or how much spending is going on IDC? IDC came out with a new report that says that by 2028 the spending relating to IT and business services is going to double, double 632 billion. Now I got to be careful, because I just got on top of Bob for long term forecasts, right? So it's fair enough. I think that, you know, we got to take this a little skeptically, especially since the US Census just came out with a study that said only 5% of businesses are actually using AI recently. So, so there's, so it's kind of a on the come, if you will.

Lindsey Bell  15:46

Yeah it is on the tongue. And, like, I think it's funny, there's a recent survey that also came out that, you know, as I was looking around, that from the Journal of hospitality, marketing and management, and like, you talked about, you kind of joked about people, everybody saying they're using AI in their products, whether it's yogurt or running shoes or actual technology, right? Well, the reality is, in this survey, they found that when AI is mentioned in the marketing of a product, in the marketing of it, mind you, it's you know, it lowers trust from the consumer, which then means that it decreases purchase intent. So that's something to like, keep in mind. And I wonder, like it made me think, like, hey, is there going to be suddenly a new trend of companies that are like, Hey, yo, we're AI free. This is our competitive advantage. I mean, it might work better in consumer product type of companies, but, I mean, there is a trust element to it, right? People don't know what to make up technology. They don't understand.

Chris Versace  16:45

There's also at the risk of using, you know, being a little bit of a potty mouth. I think a lot of folks are thinking some of this early AI is bullshit. I say that because, you know, we're only starting to hear about these large language models, you know, really starting to work, alphabet, Microsoft, perplexity, these other tools coming. So you really have to wonder, like, how is it a vacuum cleaner already has AI built into it? How is this possible? So I think there's a little bit of folks kind of pushing back, going, Yeah, I don't think so. Or this is not the real deal. It's not fully baked. You know, call it what you will. Bob, you were going to say something.

Bob Lang  17:27

Yeah, you know, I, you know, forgive me for being a little bit naive when it comes to AI. I still have not figured out how AI is going to make my life any better. I really, I really haven't I mean, I maybe it's going to speed things up. Is it going to make me smarter? Is it going to get me information quicker? A lot of those things, you know, listen, Chris, I know you and I were around way back in the.com times when what was the big buzzword? It was B to B and B to C, right? Remember? I remember seeing a presentation of Bank of America back in 1999 was going to be a $50 billion market, right? And at back 25 years ago, 50 billion was a lot, and people were were it was way out there. I know we're talking about trillions with AI and that B to B went bust. Now I'm not saying AI is going to go bust here, but I still find find it hard to believe that there is going to improve my life. And then, especially when it comes to stocks and so forth, I just wrote down four names here that I really don't think rely on AI, and they're at New all time highs. When I'm looking I'm looking at you, Costco, Lily, dr, Horton and 3m I mean, where's the where's the AI with these companies, maybe they're using it. Maybe they're buying some of the some of the software or the chips, I don't know, but I don't think that their main businesses, the revenues or earnings, are being driven by AI, am I right or not?

Lindsey Bell  18:52

No you're right. Yeah, Bob, what I'd say is you, you are not alone, believe it or not, there. So Microsoft did a workforce study, and they said that 60% of leaders worry that their organization is leadership lacks a plan and vision for AI. And when you talk to the leaders, 59% of them, they worry about quantifying the productivity gains of AI. And the survey also found that, like individuals, worker bees are bringing their own AI to work, like, that's probably an acronym to byo AI, but like they're bringing their own, but they don't want to tell their bosses, oh, I just like, you know, shaved an hour off of my day, two hours off of my day because, you know.

Chris Versace  19:39

Lindsey, are you saying someone is sitting there like sneaking perplexity or clawed on their phone, getting their work done and then typing it in or or emailing it to themselves? Is that what you're saying?

Lindsey Bell  19:50

Yes, I'm saying that too. And the other thing that this survey found is they said AI is breaking the glass ceiling, meaning that these young, young bucks that actually. Understand AI and know how to use it, and they find it fun to figure out they're like getting promoted very quickly because nobody else knows how to use it.

Chris Versace  20:09

This, this all sounds vaguely like the early days of the internet. Remember, all sorts of ideas were getting funded back then. You know, we're reading almost daily about new AI applications getting funded. And I wouldn't be surprised if we see this follow a similar development curve, probably compressed a little bit, right, you know? And I that actually makes me a little hopeful about the long term applications for AI, because there's all sorts of stuff that we use the internet for that. We never thought we could have back in, you know, us old men days, Bob of 1999, 2000 so, you know, I You Did you think you'd be streaming video? No streaming audio? No. So, so there I there's bound to be applications that come along, um, but it could be a little bumpy ride before we get there. But let me ask you this, though, because I did come across a stat that was kind of mind blowing. We all hear about open AI and everything that it's doing, but there's, there's one firm out there that said that OpenAI could lose as much as $5 billion this year because the cost of running its models, and for frame of reference, that's about a tenfold increase from what they lost in 2022 so I think a lot of these companies need to figure out revenue models. So here's my question to both of you, would you subscribe to a monthly AI service? Call it Gemini from alphabet, Amazon. If they have one perplexity, like I mentioned Claude or a few of the others, what dollar amount Are you willing to spend a month? $5 $10, $20.25

Bob Lang  21:54

I would say for me, it's about what kind of tangible product am I getting?

Chris Versace  21:59

There's no other Bob. There's no other Give me, give me $1 amount.

Bob Lang  22:03

Oh I mean I, I wouldn't say-

Chris Versace  22:06

You could say zero.

Bob Lang  22:07

I'm gonna say zero, because, you know, I mean, listen, I mean I, I can. I can go with, I can go with a monthly subscription to Netflix. I can go with the monthly subscription to the Apple Store. Because these things are tangible. These are things that are going to help me feel better about myself and improve my life. I can even go for a an Amazon Prime subscription or a Costco subscription. These things, these things, work to help me I again. I'm still trying to figure out how AI is going to improve my life here.

Lindsey Bell  22:36

Chris, Bob is aging himself out of this conversation.

Chris Versace  22:43

Old man, Bob, how do you turn this on? What does this do?

Bob Lang  22:46

How did I suddenly get old?

Lindsey Bell  22:49

We're lucky. He logged into this podcast. I think.

Chris Versace  22:52

I think you're right. Yeah. So, so what about you? Lindsay, are you intrigued at this? Would you? Would you sample one or more of these?

Lindsey Bell  22:59

Yeah, so I am intrigued with it. I've used free versions of all the different you know, ais that are out there. I'm also like a slow to adopt type person. But what I would say is it depends on what I'm using it for. If I'm using it for work, I expect my employer to pay for it. Okay, so that is number one and number two, if you think about it, everybody's getting hyped up. You like it to pull a stock into it. Everyone's getting hyped up for Apple, because that's going to be really the first consumer interface usage of AI that people are going to be able to easily understand. But the problem with that is is when people think about buying their cell phones already, they're very expensive if people don't understand AI. Getting back to even that survey I talked about, if they don't understand how to use AI, they don't understand the benefits and the detriments to it there, they might not be so anxious to hop on. Of course, you have your early adopters to buy the new phone. People care about the camera, right? They care about like, the battery life, you know, so I don't know what that impact is. And Tim Cook's been, like, reserved. He's like, it's too early to tell, because I think there are analysts on the street that are talking about how this is the big opportunity for Apple.

Chris Versace  24:12

I think that's an opportunity for them to drive another subscription business model at but I think to Bob's point, you know, I think the vast majority of folks are kind of scratching their head, going, sounds, sounds interesting, but how am I going to use it? Use this and you know, I'm happy to, you know, dive into new technology. I'm part of the Alpha, you know, beta user group, so I'm always happy to test these things out. But, you know, I don't need AI to rewrite my email. Like, thank you very much. I can handle that right. I don't need that. So I think the real key here is for not only apple, but these other companies to show use cases, right, real world use cases that the average you know, Jane, Jane or Joe can use, that might help foster this adoption. Other than. That I think it's just going to take a long time.

Lindsey Bell  25:03

Bob, let's add Let's wrap it up. What does it all mean from from a capital spending perspective to a consumer usage and marketing perspective? What does it mean for investors?

Bob Lang  25:14

Well, I think the AI revolution here is still a land grab. I think a lot of these companies out there, they're trying to grab as much real estate as they can, right? And much like the gold rush days back in the 1850s when I was a young guy, it was the same sort of thing going on, people trying to grab as much land as they could before it went away. I think the jury is still out, though, on how it's going to benefit, but the spending seems to be pretty big and pretty bold. It's very real. And you know, if, if the predictions are true, it's going to be a huge revolution for some of these companies. I just we're just still in the early days of thing, days of things, and taking some risk right now for some of these companies is what they do. And I think that eventually this is going to, probably going to pay off in a nice way, probably about 20% of it less than what it's people are really hyping it up to be though.

Lindsey Bell  26:11

Makes sense, Chris. You have anything to add?

Chris Versace  26:15

I just want to know what the x is so I can figure out what x minus 20% is. That's all.

Bob Lang  26:23

I'll let you know later.

Lindsey Bell  26:24

You can let us know next week. Alright, let's get on to our final subject of the day. What does it take to be wealthy? Guys? Charles Schwab, they released a new survey that found that Americans believe it takes $2.5 million to be considered wealthy these days, that's higher if you're a boomer. It's lower if you're a Gen Z er, but I mean, if you think about that number, 2.5 million, so it's a big freaking number, it's up 14% by the way, from last year. Last year, Americans believed it only took $2.2 million but when you put it in the context of retirement savings, the savings rate in this country that has fallen since pre pandemic levels. What is like? What is your take on this? Chris, Is it achievable? 2.5 million? And it is that the number? What's your number?

Chris Versace  27:19

Well you know, I'm like everybody else. I'm working with my, you know, financial folks to figure that out. It's kind of a moving target, depending on what you want to do. It's also a question of, Do you want to be, quote, wealthy or just comfortable? But I would say that you know something, you know, it's also some other moving parts too, like, what's happening with Social Security, you know, what? What's your investment portfolio look like? What kind of dividend income are you kicking off? You know, it's, in my opinion, Lindsay. It's very tough to come up with a specific number, but I would say that, you know, that $2 million range probably isn't a bad number, you know, plus or minus depending on where you want to live, like if you live in a New York City, doing 2 million bucks is not going to cut it right. If you live in Boise. Boise, that might work out just very well for you. But my other reaction on this Lindsay is that you know the disconnect between what that expectation is and what people actually have saved that's fantastic for us. And what does it mean? Because, you know, folks are going to have to tune in and pay attention to what we're talking about.

Lindsey Bell  28:29

No, absolutely. I think investing is a very important part of reaching your retirement goals. It's nearly impossible without it doesn't mean you're going to be a multi millionaire overnight, but no, no thoughtful, methodic ways of investing makes sense, but Bob, what about you? What is your thought on the state of of the consumer reaching these wealthy targets? If, if I look deeper into that Schwab survey, 21% of Americans say that they think they are on track to be wealthy 21% and when they grade themselves, they ask them to grade like themselves, A, B, C, D, F, failing, you know, based on how much they've saved, how much they've invested, how much they educate themselves about personal finance, how well prepared they are for retirement, most of them grade themselves pretty, pretty high, like they have belief that they're doing the right thing. I mean, they there's some room for improvement. They believe, but overall, they think they're doing all right. What's your take, Bob?

Bob Lang  29:36

Well, first off, I'm glad you said it was 2.5 million instead of 2.5 billion. That would be quite, a quite a bit of a difference over there. But, you know, there's a lot of billionaires out there. I think that two and a half million is probably pretty good if you're, if you're, if you're approaching that retirement age in the late maybe in your late 60s. You know, I think you have to also consider a. Of the demographics and the longevity of lifespan people living much longer. I mean, we have a lot of people who are not just octogenarians, but they're septogenarians, I guess that not in living into their 90s, even longer than that. So you have to make that stash that that pile of money, of cash, of investments, work for you for as long as you possibly can, right? And so if you, if you add in the wealth and the retirement function, does it? Does it come out to be about two and a half 3 million? I think it's pretty good if you're, if you're, if you're looking for a lifespan, to be in the in the late 80s, early, early 90s. But how do you get there? You know? I mean, my kids, like Chris's kids, are just getting started with their careers, and, you know, they don't have very much money saved up, but they're asking me, which is a really positive thing, Hey, Dad, you know, what do I do to get get going, and what, what goals should I be making for myself, and how much should I be saving every single month? And that, you know, is encouraging to me, because, you know, I'm going to spend all my money. I'm not gonna leave any of it for my kids. No, that's not true.

Lindsey Bell  31:18

Wait, wait, are Chris and I in the will, maybe we come into-

Chris Versace  31:22

Not yet. We got, we got to get sponsors. We got to get going here, Lindsay. We got to crank this thing up.

Lindsey Bell  31:27

That's right,

Chris Versace  31:30

the let me just that. Let me use that quick break Lindsey. Because as I'm hearing Bob talk, I'm just thinking about this. You know, when we talk about wealth in this survey, how is it being defined, and how to, how do home prices fit into this? Do, you know?

Lindsey Bell  31:44

Well, so that's what I was, you know, they won't. They say 2.5 million. And I think from Charles Schwab's perspective, they're thinking as net, net, uh, net worth. And I think as an individual, they, they don't really see it that way. So I was looking to at some of the retirement numbers you pulled, and I was thinking that housing, home values have gone up so substantially over the last several years even stock prices, right? And so because of that, I think people's net worth, despite what you see in in a retirement account, is a lot higher than what what is just simply on paper. People forget that that's an asset that they have that can fund their retirement lifestyle. I mean, when you ever we all have kids here, like you're living in a house that you know houses children too, and other family members. When you when you get old, you probably don't need that much space. So I think that's an important question, Chris.

Chris Versace  32:40

Yeah, you know it's, I think his name is Harvey Dent, who was very big on using demographic analysis. And he joked, I think he joked that you don't save any real money until your kids are out of the house.

Lindsey Bell  32:56

I believe that. I believe that there's a reason too. And in the survey, you see that it's the Gen Zers. They they believe that the the level of wealth for them, their goal, their goal is $1.2 million I believe, whereas like boomers, the older, the older you get, the higher that number gets. Like boomers, they say 2.8 million is the number to be wealthy. So 1.2 versus 2.8 is pretty interesting.

Bob Lang  33:25

That's the differential that has to get filled, right? I mean, obviously there's a lot of time there that for for the Gen Xers to or Gen Zers to get catch up. But, I mean, that's a huge gap, right? 2.8 to 1.2 that's a huge gap.

Chris Versace  33:39

Yeah, yeah. You know, there's one stat that I uncovered when, when getting ready for this conversation. And this is shocking, but the median retirement savings for an American household. You know what it is, Bob? Is it 87,000 Yeah, I know you can see the notes. There's no way you were going to guess that. Yeah, it's 87,000 so you know, when you think about that number, and again, it's just the average trying to get close to that to two and a half million dollar number. Boy, that's pretty daunting. But, you know, I think what you said, Lindsay, is spot on, that folks need to be investing to grow their nest egg. You know, you don't necessarily have to put 1000s upon 1000s of dollars away every month. You can get started in a very easy fashion, just, you know, putting some money away, starting with a, you know, a simple index fund, or a couple mutual funds, or even an ETF. And then as you get a little more comfortable, and I'm sure this is something we'll talk about on future podcasts, you can start to wade into individual stocks, maybe as you get even more comfortable, you can start flirting with options or something else, right? Of course, you got to be mindful of your own you know your own needs, your disposable income, as well as what most important, your own risk tolerances are.

Lindsey Bell  35:01

Yes I was going to finish your sentence for you if you didn't. But no, I think it's, it's, it is, it's, it's just important to, you know, I think maybe I can just sum it up and like, what does it all mean? It's really, what does it mean is, is that financial education and financial literacy is, is so, so important, because I think we've become a country of it doesn't matter. I'm just going to work forever, like we were starting to accept that mantra because of what Bob talked about living a lot longer, and what you talked about not having enough saved. And so I think that we need to start to, like, reverse that mindset to, you know, I am going to retire and live out my golden years in the best way possible, and that's being financially secure. And that also means, you know, what we do every day is try to, you know, make the case for investing early and often, because it's, it is, you know, the saying as it goes is, it's about time in the market, not timing the market. So that's my summary. Why don't we go to a quick break here? We'll come back with our big takeaways. All right, welcome back everybody to what does it mean the podcast you heard a lot from Chris Bob and myself about where interest rates are going what AI spending means and what the number is to be wealthy, Bob, let's start with you. What's your takeaway? What did you learn today?

Bob Lang  36:30

Well, I learned that I have a lot more savings to do. Otherwise, I'm not. I'm never going to retire. I'm going to keep working until I I'm in that pine box, hopefully, hopefully not. But I have a lot, I have a lot more savings to do. But, you know, some of the numbers that you, that you talked about, you know, Chris talked about here, they're eye popping. They're they're really very sobering statistics here, right? People are just not ready and prepared to retire or become, you know, be considered wealthy two and a half million dollars. Is that considered wealthy? I don't know, but certainly you have to take the wealth and the retirement hand in hand. And I just think that people, their their expectations are very, very high, but their reality is, is far from it. And I think that that, that in and of itself, is tells us, you know that more people need to to be invested. They need to be learning more about it and education that you talked about as well too. So that's, that's where I'm that's, that's what I learned today.

Lindsey Bell  37:33

Yeah. And you know what? I think that the folks listening to this are in the right place to close that gap between that two and a half million dollar or whatever their retirement goal is and where they are today. But Chris, what was the biggest thing that you learned? What was most surprising about our conversation today?

Chris Versace  37:48

I think that Bob valuing Netflix more over the potential disruptive future value of AI, you know, I knew he was an old man. Now it's just confirmed.

Lindsey Bell  37:59

Yeah, that kind of shocked me too. Right now, we know who we're working with anyway. For me, the biggest takeaway I had really, was, was it there? Really? We've been talking about this for several weeks, volatility in the marketplace, that the volatility has all been one on one side so far, in the last couple weeks, anyway, on the upside. But there are a lot of things that are going to move the market, especially when it comes to the anxiety around the Fed interest rates, inflation and the jobs data. So we've got a fun month ahead of us in the month of September, you know? So with that, I think we could just go ahead and wrap it off. Thanks for joining us for this episode of What Does It Mean the podcast, we will see you right here next week at Advisorpedia.