June 17, 2024

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Money management strategies, pending ether ETF: Wealth!

36 min read

On today’s episode of Wealth!, host Brad Smith explores the consumer landscape, market dynamics, and wealth-building strategies shared by top experts.

Target (TGT) reported earnings that disappointed investors, prompting a deeper dive into the state of the consumer. Yahoo Finance’s Brooke DiPalma delves into the contrasting performances of Walmart (WMT) and Target, dissecting consumer behavior amid the high inflationary environment. Operation Hope CEO John Hope Bryant joins the show to share wealth-building and savings tips, equipping consumers with strategies to navigate these trying times and attain financial security.

Shifting gears to the markets, VettaFi Investment Strategist Cinthia Murphy joins the show to discuss the evolving cryptocurrency landscape, with a potential ether ETF approval on the horizon.

Following a weaker-than-expected existing home sales report, Yahoo Finance’s Dani Romero contributes her latest analysis on the housing market, and what it means for homebuyers moving forward.

For more expert insight and the latest market action, click here

This post was written by Angel Smith

Video Transcript

Welcome to Wealth.

I’m Brad Smith and this is Yahoo Finance’s guide to building your financial footprint.

Our community of experts will give you the resources, tools, tips and tricks that you need to grow your money.

And we’ve got an action packed one here for you today on today’s show housing hurdles, we’re gonna discuss the lazy, the latest housing and rental data and how it could affect your wallet.

And President Biden is forgiving another nearly $8 billion dollars in student debt.

Do you qualify?

That’s the big question you’ll find out.

Plus ahead of Nvidia’s big earnings report, we’re gonna simplify it all for you and tell you why it’s such a big deal for Wall Street, all that and much more.

But first, let’s kick off the show, taking a look at the consumer you target is out with its first quarter earnings report today and it didn’t impress Wall Street.

The company’s executive citing in as a big reason for a decline in traffic and transactions.

And meanwhile, you’ll remember rival Walmart reported last week and they said despite an inflation strapped, consumer shoppers are looking for value, we wanna dig into what these reports from the two biggest us retailers say about the consumer.

And here with more in the details, we’ve got Yahoo Finance’s Brooke Dipalma here.

So Brooke, let’s break it down.

Yeah, good morning Brad.

It really is the tale of two retailers that we’re seeing here target falling in early trading.

Whereas Wal Mart roughly flat at around the open here and really is uh same source sales from target disappoint on the street down roughly 3.7%.

Now, just last week, we saw the same source sales from Wal Mart in the street with the upside of 3.8%.

What this means, consumers are going to Wal Mart for those value deals.

They really are very impressed with the deals, the price point and everything that Walmart has to offer.

We know they’ve been ramping up their assortment and certainly ramping up their offerings in recent years.

Now, in addition to that, to prove that consumers are growing more, take a look at these traffic numbers we saw in the latest quarter target, see traffic fall 1.9% but we saw Walmart increase their foot traffic up 3.8%.

Now Mart has largely been known to gain foot traffic over the past few years, especially post pandemic when consumer wallets became pinched and they saw, hey Walmart is doing all these makeovers, all these store renovations starting to look a lot like a target.

Where am I going to get the best thing for my buck and they’re certainly going to Walmart these days.

Certainly.

And so Brooke, how about targets Ecom perform here from, from what we are tracking and how that is ultimately comparing, what are we seeing there?

Yeah.

Well, if you take a close look at the two of them compare target did see a bit of an uptick in e commerce.

And the Ceo Brian Cornell alluded that increase in digital sales for the first time in more than a year.

I should point out was same day services, drive up in store pickup and same day delivery, pushing those target e commerce sales higher up 1.4%.

Now Walmart also saw Ecommerce sales jumped 2.8%.

Walmart point on the call last week value and convenience is really what consumers are looking for here.

Not only are they looking for low prices, but they want easy pick up.

They want to go in and out of the store quickly or they want to deliver to the house and Target starting to pick up on that.

We saw them relaunch their Target Circle rewards program back in April.

And so they’re certainly looking to catch on to what consumers really want these deal uh these days value and convenience as well.

Yeah, looking for a lot of convenience and same day services too that was cited within the earnings report.

Brooke.

Thanks so much for breaking this down.

Appreciate it.

Well, William Sonoma Stock is on a tear this morning after their latest earnings show, the company surpassing profit estimates and the guidance here.

Now this puts the kitchen and home goods company in line with its pure our house.

That stock is up 23% after their earnings beat as well.

William S snow is actually down right now by about 3/10 of a percent.

It was down lower more than this and seeing more of an outsized impact even prior to the market open.

One of the huge things to remember and kind of a a three pronged approach of this company.

Number one, it’s a gauge on some of the more high income consumers out there.

Given the William Sonoma brand, the Pottery Barn brand, you can even look to the West Dome and the mid century modern forever type of trade that you would be looking at there.

So all of those things considered, we’re taking a look at William Sonoma over the past two days, you see that jump originally, but now moving lower as of right now.

And one of the huge things as well in the read in on this company too is that they actually saw across two of their brands uh decrease in the comparable sales there.

So that is something that investors perhaps paying a little bit more attention to getting more color from the company as that call took place.

And then additionally, just lastly here, you gotta think about ultimately what they’re going to do on pricing here and this has been a company that even as they’ve spoken with Yahoo Finance earlier this year doesn’t sound like.

And this, as our executive producer remind us this morning doesn’t sound like they’re going to be increasing prices and they’re pretty ironclad on that.

So we’ll see exactly how that does impact the bottom line, but at least in the outlook on the margin, they gave a little bit of a bright spot there for investors to really kind of be keying in on here as of right now.

So we’ll see exactly how that’s able to pan out for the company.

And we’ve also got a fresh read on the housing market.

Of course, Williamson Noma tracking this too.

Housing market this morning, sales of previously owned homes fell in the month of April as homeowners continue to face pressures of higher mortgage rates and rising prices.

Yahoo, finance reporter Danny Romero has the full breakdown.

Hey, Danny Brad, the housing market is still really frustrating right now.

For buyers, sales of previously owned homes dropped 1.9% in April to a seasonally adjusted annual rate of 4.14 million U uh units.

Now, that’s what the National Association of Realtors reported.

Remember, these sales represents homes closed in February and March.

That’s when mortgage rates were hovering around that 7%.

Now, home prices have not come down at all.

The median sales price is about $408,000 and that’s up 5.7% over the last year.

Now, inventory good news has gone up over the past four months, landing at 1.2 million units.

And this was the last time we saw this high was last October.

And one of the reasons why we are seeing a jump in inventory could be the turnover from new sales, meaning that people who bought a new home s stayed in their new home for maybe about a year or two.

And so that turnover rate is actually factored into the existing home sales market.

So um another interesting part of this uh report was that first time buyers took 33% of the sales in April.

And that is the largest share since January of 2021.

And like we referenced before on this show is that millennials and Gen Zers, especially the young millennials are saving up for that down payment uh later on in life.

And, and they’re just, you know, it seems more financially feasible for this demographic.

So that was really interesting of this report that these first time buyers really are getting more skin in this game home buying game well, has a lot to do with of course, family formation as well.

And then just looking at opportunities that are out there right now and potentially uh some refinancing that could come forward in the future as well.

From that cohort and extremely important to the home buying situation.

Also, a new report out from realtor.com shows the cost the renting apartments is actually dropping across the country.

So, so where can, where can I get a deal?

Where am I commuting in from rent is slowing down on a yearly basis?

Let’s just put that on a on the table right now.

The median price for an apartment fell to $1700 in April.

But where can you find this deal?

It’s the South Austin, Texas comes to mind.

Uh It’s down about 100 and $95 lower from September’s peak of 2022.

And the reason is because there’s influx of supply in that area.

Um A lot of builders got to work during the pandemic to build apartments.

So that has really um added some pressure and put down some of those rent prices.

Another market where you could really find some a good deal is Las Vegas, Nevada, you know, some casino time probably.

And San Francisco, California is another one, but there still remains some pressure, especially in the Midwest like Indianapolis, Milwaukee.

But overall, this is really good news for renters, but I have talked to some experts and they are hinting that there could be some pressure ahead on rents.

The fact that builders have pulled back on multifamily starts.

So there might not be as much inventory being added to the market.

Well, I don’t think we have a Yahoo Finance Austin Texas Bureau just yet so it might be time to break ground there.

Danny, thanks so much.

Appreciate it.

Well, a new report from Cars Commerce is highlighting recent shifts in the auto industry that point to some stabilization and more consumer choice across new used and electric vehicle sectors here.

With more.

We’ve got Rebecca Lindland who is the Cars Commerce, Senior Director of Industry data and insights.

Great to see you here and thanks for hopping on the show with his uh Rebecca.

It, it has been a volatile year for for autos.

Is that gonna be easing or normalizing here in the near term?

Well, thanks for having me on Brad.

You know, it’s been actually a volatile five years frankly for the automotive space, but we do see some signs of stabilization.

So when we look at particularly month over month, when we look at year over year, we are still seeing some large swings, but we’re grateful to see some, some stabilization here.

One of the things that kind of keeps popping up and, and we look at it and say this is our new norm, small is high car prices.

So the average new car is running at about $49,000.

That’s up from around 37,000 in 2019.

So we are seeing these huge increases and what we’re not seeing is any kind of erosion in those prices.

We’re coming down a little bit by a couple of $100 maybe year over year.

But we’re not seeing the thousands of dollars that we would really need to, to get back to those pre pandemic levels.

What, what does it seem in, in the calculus for purchasing a car right now?

For consumers out there that are in the market?

There were times even within these past five years where it made more sense to purchase a new vehicle versus a used one because of the lifetime value that you perhaps get out of that deal instead of going used.

What is, what is the kind of mix of the thought process right now?

I think that we’re seeing consumers that are shopping both for new and used.

There’s a lot more overlap these days when it comes to pricing of used vehicles because used vehicles have also increased by over 30%.

So there’s a, there’s more used vehicles that are almost at parity in some cases with a new vehicle.

The best thing in my mind is for consumer to go to a site like cars.com, you can do some of the tools like payment calculators to figure out what really suits your budget keeping in mind that we’re seeing a bit of a shortage on the used car side with newer used vehicles because as you said, more people are keeping their car longer and fewer people are turning in their leased vehicles.

So we’re really seeing a shortage, we had softer sales in the car and that’s feeding into a shortage in used vehicles as well.

What are we seeing in the electric vehicle landscape?

I mean, we’ve continued to hear from some of the major autom automobile manufacturers about how they’ve had to readjust their own timelines and ambitions for really seeing mass production equates to mass purchases and deliveries and whatnot.

So, what is the moderation that we’re seeing there?

Yes.

So we just had Volkswagen announce that they’re not going to bring their ID seven sedan to the US quite yet.

So they’ve just announced that this morning, we are continuing to see volatility in the EV market space and part of that is driven by, as you said, new vehicle launches coming in really a change in strategy in many cases, but we do see a positive for consumers is we’ve gone from this hand raising inventory stock.

So you have to say, hey, I know I want to purchase this vehicle.

I’m gonna put a reservation in and buy it next year.

Now, today we actually are seeing stock traditional inventory.

You can go to a manufacturer and go to a dealership rather and test drive an EV that you may want to consider.

And of course, there’s a lot more choices, there’s so much more variety in the EV space.

So again, we can, we uh we um I’m sorry, we encourage consumers to go onto the site look and see, read about the new evs that are out there because there’s a tremendous this supply.

We also are seeing more used, used evs coming into the market and those prices are also coming down as well.

So there’s a lot of volatility still when we think about the, the EV market, but supplies up by 40%.

So there’s a lot more choices out there.

Rebecca just lastly while we have you here.

When CP I came out last week, I, I posted this graphic that our, our Yahoo finance team created to my Instagram story just talking about all of the places where inflation is and isn’t right now.

And I got a remarkable amount of responses just about the auto insurance side of it.

How is that also changing the type of vehicles that people are willing to buy into and the thought process and consideration going to sign on the dotted line for a car?

Absolutely.

This again, factors in you have to look at the total cost of ownership.

Anytime you’re buying a vehicle, you have to look at things like whether even on an EV side, is it worth charging or is it worth just paying for gas doing all of those types of calculations?

Absolutely.

Factor in your insurance.

We’re seeing huge swings in insurance prices.

And the last thing that I want a consumer to do is to buy a car they can’t afford, right?

Just like in the housing that you’ve been talking about you don’t want to be house poor, you don’t want to be car poor either.

We actually recently released a survey that showed the best valued vehicles and something like the Kia Forte, which has terrific features, great safety retails for just over $20,000.

There’s a four vehicles out there.

You just need to do your research on them.

And I just want consumers to know that a site like cars.com, we’re here for you.

We’ve done so much of this research for you and, and we’re happy to help Rebecca, great to speak with you here today.

Thanks so much for taking the time.

Rebecca Lindland, who is the Cart Commerce, Senior Director of Industry data and insights.

Look forward to checking back in, in the future.

Thank you.

We’ve got all your markets action ahead.

Stay tuned.

You’re watching.

Well, student loan borrowers are probably feeling pretty cheerful this morning after President Biden announced more cancellations of student loan debt.

The Biden administration was gonna raise another $7.7 billion in federal student loans for 100 63,000 borrowers.

And for more on this, I’m joined by Yahoo, finance senior columnist, Rick Newman.

All right, Rick, what do we know about this?

It adds to the student debt relief that Biden has, has been doing on a piecemeal basis.

Uh since the Supreme Court last year struck down his plan to forgive up to $20,000 of student debt for most borrowers.

So, um this has been coming out in Dribs and Drabs.

The big picture here is uh the Biden administration now says they have put forward debt relief for about uh almost five million people.

Uh There are more than 40 million people who have student debt.

But uh Biden has been going after uh the things he thinks he can do on a legal basis that will survive some legal challenges that are out there.

So a lot of people may have sort of stopped paying attention because this is the coming out of piecemeal fashion.

But what people need to do is go to student aid.gov and look for a loan forgiveness on there and then go through the steps to find out if you qualify in general.

What Biden has been doing is this is not um debt relief for people who’ve just graduated for the most part, it tends to be targeted at people who have been paying back their loans for some period of time.

Um And there are a whole different range of programs where you can get debt relief uh based on and uh you if you qualify through your income, if you’ve worked in the public sector, other things like that.

So there are a whole range of programs, nobody can keep track of all of them.

So go to that website, Student aid.gov and find out if you qualify.

Does this seem like it’s moving the needle among voters as we get towards November.

I mean, we’re still, you know, a, a ways off from it at this juncture, but we’re closer than yesterday.

We’re man, I have no idea.

Brad.

Um, you know, a couple of things to say about that.

Uh, first there are basically polls every day and, and let’s remind everybody the polls that matter are the ones in six or seven swing states that are going to decide this election.

That is Georgia, North Carolina, Pennsylvania, Michigan, Wisconsin, Arizona and Nevada.

Um The latest polls show Trump and Biden.

Uh, the two likely candidates uh are very close, close, Trump basically has a small lead at this point, but it’s still far out from the election.

Uh I mean, even though we in the media have to talk about it all the time, a lot of voters aren’t really thinking about who’s going to get their vote if, if they happen to be undecided, um, until, uh, you know, September or October.

So, uh, we’re still a ways out but this election like the election in 2020 is very likely to be decided by a very small group of voters in just those handful of states.

So, uh, it is very important to both candidates that they literally go after every voter they can.

And I think that means we’ll probably see more student debt relief coming from the Biden White House before we get to November.

All right, Rick, thanks for continuing to track this and break this down for us.

Appreciate it.

See you, Brad.

See you.

Well, credit card debt in the United States has never been higher.

With the latest figures from the New York Fed putting total credit card debt at $1.12 trillion.

That same study shows that 15% of Gen Zers have maxed out their credit cards.

So how did this all happen?

Analysts at the New York fed attribute some of this to young adults who on top of the inflationary costs that we’ve all been feeling are being burdened with very high student debt factor in shorter credit histories and the lower credit limit.

And you get more extra maxing out their cards or missing payments to help us understand why this trend is happening and what can be done about it?

We’ve got Naon Scheff, who is the split it ceo?

All right, we’re gonna get to your business in a moment here, Nan and, and thanks so much for hopping on with us, but you hear figures like this.

What goes through your head.

Firstly, thanks for having me.

The real story.

Brad is the Phantom debt that’s in the market today that’s driven by buy.

Now, pay later plans and programs.

There’s $50 billion worth of that debt that’s unreported and because it’s unreported, it has a ripple effect on credit card repayments and exaggerates the situation that is certainly fueled by inflation and high interest rates.

How does this have a longer term ramification as well on the credit worthiness for uh a large group of a generation, if you will, that is now having some of these maxed out credit cards impact their scores.

I think uh I think it’s gonna have a seismic impact.

Uh We just did a survey and it noted that one third of individuals that sign up for a buy now pay later plan do not know that they’re originating a new loan.

And as you know, those plans are not being reported to the credit bureaus.

So it’s hidden from the ecosystem.

You probably also noticed today.

Um in line with your question that the CFP B announced that they’re gonna regulate by now, pay later on par with credit cards, which tells you that we need more responsible lending in this space.

Ok.

So let’s go a little bit more into your business as you know, as a player within this by now, pay later or split it into payments type of space.

What’s different about split it versus some of the other comparable industry competitors.

A lot of people might think about a firm or a Klarna or something like that.

Very, very fine and formidable competitors.

We’re very different Brad.

Um that the primary difference between us and other buy now pay later is we’re not originating a new loan and because we’re not originating a new loan, we’re using existing credit that consumers have on their credit cards.

So if you try to make $1000 purchase and you don’t have enough of a credit limit, we, we won’t approve you for the transaction.

And as such, we feel that we’re a lot more responsible because we’re already governed by the credit card regulations and the fact that we’re not allowing consumers to what’s called loan stack, I think makes our proposition a lot simpler and a lot more responsible for consumers have mansions.

And so that considered as well, what, what is the revenue model or, or even the profitability pathway look like for, for sustained profitability for split it?

Yeah, so because we’re not spending millions of dollars on marketing and our write offs are significantly lower because we’re not originating new loans.

We have a very clear pathway to profitability.

Number one, all of our installment plans are 0% to the consumer.

We only charge the merchant and the merchant offers the 0% plan to the consumer.

So based on our volume, based on our trajectory, we’re very confident that within an 18 month period will be profitable.

Um Number two, because our revenue model does not uh focus on consumer fees and hidden fees.

It’s uh much more um uh but it it’s, it’s much easier for merchants to adopt and ensure that their consumers are getting a very fair buy.

Now pay later program on their websites.

Naon Scheffer was the split it, Ceo.

Naon, thanks.

So much for taking the time here with us today.

I really appreciate it.

Thanks, Brad.

Certainly, everyone coming up, Ethereum or Ether, whatever you’re calling it in your home, call it jump in this week after the sec signals, an ETF may be coming.

We’re gonna explore how you can play in the crypto space with ETF S. Should you so choose.

We’ve got a segment for the crypto curus coming up.

If the surging this week after the securities and exchange commission known in your hood as the sec signals, they’re ready to move on an ETF approval for the currency under certain criteria.

Now, this comes as Bitcoin surges to 71,000 thanks to increased spot ETF buying as part of the ETF report brought to you by invest QQQ joining me.

Now we’ve got Cynthia Murphy verify investment strategist to break down how crypto ETF S could be or should be your next play here.

All right.

So for those who are curious about how to play crypto within their ETF portfolio here, what are the top considerations they should be keeping in mind, Cynthia, hey, Brad.

Uh you know, there’s a lot going on in this space and, and a lot that we didn’t expect to be going on in this space this week.

So, you know, if you are a crypto enthusiast or you’re interested in crypto space, obviously, 2024 was the year for spot Bitcoin ETF approvals, those products are out there.

They’re tried, tested and demand has proven to be really, really robust, not only in retail channels but also in the institutional channel which I think surprised a lot of us.

So if you want to dab into crypto as an advisor or as even retail through an ETF, those spot products are out there today.

There’s also futures products that have been in the market for a couple of years already.

That’s all good, you know, well, and done.

What’s, what’s at stake here now is the arrival, potential arrivals, Ether ETF.

So the next level, the next wave of crypto product in ETF wrappers and that’s what we’re, you know, in pin and needles is watching.

Is it going to happen this week?

We were assuming it wasn’t going to happen.

It all came so quickly it took, you got to remember, it took about 10 years for regulators to be ok with the spot Bitcoin ETF S and now five months in, we’re talking about Spot Ether ETF S but we’re watching this week, whether these are gonna be tools that are gonna be approved for investors everywhere.

I is it immediately clear where if we see massive inflows into crypto specific spot ETF S like we’ve seen with Bitcoin or like we’re about to see potentially with Ether or Ethereum, where else in the ETF landscape is set to see perhaps some outflows as there’s more of perhaps uh fanfare or attention that gets drummed up for the Cryptocurrency touching ETF S. You know, I love that question bred because it actually touches on something we’ve all been puzzling about all year, which is gold.

ETF S. So gold has been phenomenal, really, really strong performer as an asset.

We keep reading about central banks all over the world buying gold like crazy, you know that sticky inflation story is still a supporter of the space and you know, everybody probably on gold for, for safety for gains and yet we don’t see the demand show up in the ETF S as much as you would expect given the performance.

And one of the conversations we’ve been having is, is it because there’s other options of the crypto being one of them?

So it’s been kind of interesting that the pursuit for alternatives in a portfolio, the diversification, you know, which is like the risk management for, you know, risks that we don’t see typically has gone into gold.

But now crypto is emerging as an interesting other option, same with commodities a little bit.

But it’s been kind of fascinating to see, you know, where these flows end up going into just lastly while we have you here, Cynthia Copper copper is up over 27% this year.

I mean, there’s been a ton of fanfare around this and it’s precious metals really.

And then the counterparts, the gold and silver also up this year.

Is this a space that investors should look more into right now.

Yeah, metals have been a great story this year.

And on the copper side is that industrial metal story, I mean, copper is key to just about everything we’re trying to do from energy transition to industrial manufacturing, all sorts of things.

So copper is a really, really strong metal for, for the future of where we’re headed in terms of energy production and all of those things.

So it makes sense that it’s really strong.

But you gotta remember, you know, things like industrial models like copper, they’re very dependent on economic growth.

So we have to continue seeing like uh you know, GDP growth, economic activity in order for industrial models to remain as a strong player.

Cynthia Murphy, who is the verify investment strategist Cynthia.

Great to see you.

Thanks so much for hopping on with us.

Thanks for having me.

Well, we haven’t stopped talking about NVIDIA all week and for good reason this afternoon, we finally get the results that investors have been waiting for from the chip giant.

But why is NVIDIA so important to investors and the market here to break it down for us?

Yeah, finance his very own Akiko Fujita.

Hey, Akiko, hey there, Brad, you’re certainly right.

NVIDIA has been at the heart of the A I trade with the stock up more than 90% year today going into these latest results.

And the reason investors have been so bullish on NVIDIA is because they make the most advanced chips that are used to run A I.

Today, we are talking about chips known as graphics processing units or GP US that are capable of processing many pieces of data simultaneously and they are key to machine learning.

Now, when it comes to the most advanced chips used for A I. NVIDIA has a dominant position with a MD far behind in second place.

And because of that, NVIDIA is seen as a bellwether on where A I demand is.

All of that led to huge gains for the company’s stock.

Take a look.

NVIDIA makes up just over 5% of the S and P 500 but it’s accounted for nearly 20 5% of the index’s returns year to date.

And when it comes to earnings, Nvidia’s share amounts to 23% of the S and P and Brad.

Of course, a lot of investors hoping that number goes even higher with those results coming out later tonight.

And Akiko, we know that NVIDIA makes most of their money from data centers and then they reinvest a lot of that too.

What are data centers?

Why are they so important for A I?

And what’s the latest updates there?

So in the simplest terms, data centers provide the building blocks for our tech infrastructure.

It is computing and storing, storage resources allow for the delivery of applications.

We use the data that gets stored and processed when it comes to artificial intelligence data centers are critical to training and deploying complex machines, learning models and algorithms.

Now, with that set A I technologies require huge amounts of computational power storage space, low latency networking to train and run A I models.

And Nvidia’s graphics card are considered the most fastest and the most efficient for NVIDIA.

And that’s led to huge gains for the company.

When you look at the revenue breakdown, 78% of their revenue now comes from data centers and we’ll see if that number holds after the bell today.

All right, we’re gonna be watching shares of NVD A immediately after that report drops.

And uh, Akiko thanks so much for keeping tabs on this one for us.

Appreciate it.

We’ve got much more on wealth after the break.

Everyone, you’re watching Yahoo finance, 47% of Americans feel financially free according to a Bank of America study that’s up from 42% a year ago.

But when parsed by gender and race, people feel even less optimistic.

I spoke to Lorna Sabia, who’s the Bank of America head of retirement and workplace benefits about this.

And here’s what she had to say.

The difference between men and women is actually market.

And so 58% of men feel financially well, only 36% of women feel financially well, 36% and 35% for Black African American and Hispanics as well.

So I’m always concerned about, yes, the top line is important but unpacking that and really understanding the demographics of a particular company are equally important.

So how can women and people of color start to feel more financially stable here with me is John Hope Bryant operation.

Hope Ceo John.

Great to have you here in studio with us today.

Honored to be with you.

Absolutely.

So let’s dive into this.

I mean, there were some pretty alarming statistics that really talk about the disparity between gender and ethnic groups feeling different here in their own financial preparedness.

What’s the first step that many groups can start to take and where financial literacy gaps can also start to be narrowed as well.

Well as you know, I wrote a book that is now a best seller now called Financial Literacy For All.

And I think in, in a, in the biggest group buying that book are African American and people of color, which is quite inspiring uh in economics and business book, you know, and I think people won’t understand how stuff works now because they understand they will live in a free enterprise democracy.

I I found it interesting, the report from the young lady from Bank of America uh because she did unpack it and I think she unpacked it because she’s a woman.

And in 1972 a woman could not get a credit card.

Now.

She works for Bank of America.

But in 1972 she wouldn’t have uh in 1972 she couldn’t get a bank account or a credit card or get a loan without her husband cosigning it now because women were involved in the economy.

25% of the economy are women.

Almost $7 trillion a year are women.

So if we were backwards on what we call de and I today or inclusion, women would not be involved in the economy.

We have not brought people of color in the economy.

We’ve not taught them the memo.

This was my, my third book, How Free Enterprise and capitalism works.

And as a result of that people, they’re not dumb and they don’t, they’re not stupid.

It’s what they don’t know that they don’t know that’s killing them.

But they think they know they’ve confused making money with building wealth, you make money during the day.

That’s why we call it making a living.

But we build wealth in our sleep.

That stocks bonds only 18% of African Americans.

Last time I checked, invest in the stock market.

41% of us own a home.

The number one way you build wealth in America is home ownership compared to 75% of our mainstream counterparts.

So there, so, so the the data is, is on the on the surface of it quite encouraging because financial fluency is increasing.

But we have the first generation of people over 65 in our lifetime.

Those are white.

Well, fluent baby boomers really looking for retirement.

Uh The people coming into the economy, 40% of, of America today are black and brown and in 10 years, this country will be a majority of minorities.

But are they prepared for the economy?

So I, and as you look underneath this data, II, I need to read the report to tell you what it says, which is that you have this huge gaps, you have these huge lapses between those who are very comfortable.

The tale of two cities, really the t of two worlds and people who are like, what’s that?

Right?

And, and, and we gotta get people who are, what’s that into?

Where am I going pretty quickly?

Otherwise, in 20 years, we’ll be speaking Mandarin, meaning that we won’t be lead the leader of the free world uh economically and there’s never been a leader of the free world that wasn’t the economic leader at the same time, think France thinks Germany thinks UK.

So we got a lot of work to do to do in 10 years to bridge the gap in this report.

Uh And it’s no longer academic or, or anecdotal demographics are destiny.

And uh you know, hopefully we can address a couple other issues that are side bar to this in this interview, but this is critical data and which is why we’re in Delta Airlines, by the way, doing all the financial coaching for their employees.

And we’ve spoken with Ed Bastian in the past he’s actually highlighted that as as well.

He’s a great guy, by the way.

So when I first went to Delta, they like, we don’t have a problem.

We’re cool.

We have fidelity.

And I said no, no, they’re helping your pilots and your six figure income earners invest money.

That’s not what I’m talking about.

Pandemic hit.

They had a, a billion dollars of withdrawals, emergency withdrawals on 401k.

I get a call from the head of hr saying, when can you start?

We’re, we, we’re, we’re stunned by this.

This was a ramp workers and the flight attendants and the people who are living from paycheck to paycheck and now those people are contributing money to their, their savings account.

They’re more financially uh secure.

The, by the way, the airline is booming in profits.

We can do well and do good at the same time.

And so a lot of people right now are trying to figure out even with an inflationary environment, how they can continue to build wealth, how they can prioritize wealth building as part of a regular practice for themselves.

What, what is the first step that they can take with that regard right now?

Well, first of all, you got a address, the thing that’s addressing you, if you don’t deal with your money, your money is gonna deal with you and it’s not gonna deal with you in a positive way because if you have low self esteem and low confidence you’re gonna end up using your credit card for therapy.

All right.

So first thing we gotta do is understand that money is emotional.

It’s not a math class and, and that we live in a free enterprise.

Democracy.

And so you gotta get, you gotta be obsessed with financial literacy like you were the right to vote.

It is, this is a civil rights issue of this generation every week.

Sit down.

Uh And of course, I would encourage you to take my book, sit down with your family once a week at the kitchen table and unpack the the money conversation that the lights will come on by themselves.

The car note the the the rent every everything going on in our lives.

Let’s talk about that.

So we understand uh where that is get your credit score up because that’s the cost of living.

That’s the cost of literally doing business if you have an 18% auto loan uh in a secondary car dealership because your credit score stinks.

That’s not, that’s not a Mercedes anymore.

It’s a Mercedes payments and it’s gonna implode on you.

So if we can get your, we get our credit scores up at operation 54 points in six months.

The debt down $3800 savings up $2000 for somebody making $48,000 a year.

That means now I can walk you into the bank branch.

We’re the only nonprofit allowed to operate out of a bank branch in us history and get the bank to say yes to you for access to capital when they were, we’re gonna say no.

So the issue that used to be racial, maybe in the 20th century, you’re not be decline, you’re gonna be declined because I don’t like you.

Now, the computer at midnight doesn’t know what race you are.

Get your credit score above 700 which is what we’re doing.

And the computer just says yes.

And by the way, at prime interest rates, so become a homeowner, don’t rent as soon as possible.

Get a life insurance policy when you’re in good health in your twenties and thirties, uh, for, you need a million dollar policy at, uh, you know, a few, uh, like less than 100 bucks a month, 50 bucks a month if you’re in good health, uh, get, uh, uh, get, get the earning of tax credit.

If you’re listening, if you’re watching this and somebody in your family makes $60,000 or less, the government owes you a check.

If you make $38,000 and you have three Children, the government owes you $6500.

Give or take.

And it’s retroactive for three years if you never filed.

So, if so for somebody watching this, they might have fallen off their seat because that’s almost $20,000 of free money that the government owes you.

As a, as it’s not a handout it’s a reward for working called the Earned Income Tax Credit.

So my coaches work with you to get your, to get your budget straight.

Stop going to Starbucks.

I love Starbucks, but I mean, it’s a $9 latte.

I mean, machine at home.

Somebody’s gotta cut that out after, after amount of time.

You know, I, I gotta hustle to my finish here with the amount of time that we have left here and I wanna hit on a few things.

Number one tips for college grads right now.

I mean, you think about the number of people that are coming out of school, massive amounts of debt and they need tips as well for as they’re entering into the workforce and trying to best game out their financial future, but also their employment future too.

Yeah, I love you asked this question.

If you hang around nine broke people, you’ll be the 10th.

So watch your circle.

Relationship capital is everything.

Why am I saying that all these folks obsessed with staying at home and working at home, you know, uh uh because of the pandemic, I wanna work from home.

No, no, no.

That’s the generation I mentioned the baby boomers who are now retiring.

They’ve already got their relationship capital.

The boss already knows them.

They’re chilling at home doing remote work because their credentials are not being questioned.

You take your rear end into the office when they’re, when everybody’s trying to stay at home, you go into the office where nobody’s there and walk by the boss’s office 10 times a day until the boss says, look, come over here.

Who are you like?

What do you and take the and whatever assignment they are?

You just say yes, build relationship capital with the boss, impress them with that job with that assignment and the chances of you getting a promotion uh uh are very, very high because we deal with people.

This world is about relationship capital more than anything else.

So you combine the financial coaching I mentioned through operation hope, get your debt down your savings, up your credit, tight credit scores so that you’re, you’re financially tight, but also get your aspirations up in ways like simple things like going into the office, find that opportunity that nobody else is looking at and all of a sudden you have now rising aspiration, rising income and rising net worth and your stress really goes down to your life.

We gotta go only 30 seconds left.

I mean, major year for elections as well.

And we’ve seen de I perhaps be the biggest pawn now that’s resurfaced once again here.

How could that change the broader economic landscape landscape that we see here in the US?

Yeah, you had me come back because the reality is the dividers can’t win.

We, we, you, you, we, we live in the large economy in the world and and is a diverse economy and the only way we’re gonna continue to be the leader of the free world is if everybody is involved in it, which means that shutting down den I programs is actually bad for business.

Has nothing to do with moral issues.

It has to do with the fact you gotta prepare people for the economy so they can contribute to it.

Uh It at scale.

We again, I wrote something called the Business plan for America.

People can watch this can go download it.

There’s nothing but data, it’s all math and by the time you get to the bottom, you go wow.

I mean it it to be blunt if if a black person succeeds there, even the racist wins because the economy when the economy grows, all boats rise.

So so the colors are really green.

Now it’s not black or white or red or blue is green and we, and so the the leader who unites us and who finds AAA future of economic prosperity for all and repairs the ladder.

So we don’t resent rich people.

We wanna be them wins.

John o’bryant Operation Hope Ceo joining us here in studio on Yahoo Finance, John.

Thanks so much.

My pleasure.

Appreciate it everyone.

Melinda French Gates is one of the most influential philanthropists in the world and she’s soon stepping down from her job running the Bill and Melinda Gates Foundation to focus on her own venture capital firm.

In our latest episode of lead this way our own.

Brian Zazi had a chance to sit down with her and hear more about the vision to fund companies run by women and women of color.

Take a look.

I am mostly through pivotal ventures using philanthropic dollars to invest in human beings who are changing the world.

And I really look at four key sectors, technology because it is changing our lives politics because that’s where our policies and laws are made.

Finance because that’s where the power is and then culturally also the storytelling because I think that helps bring society along to start to see everybody else.

Is there a guiding principle you use uh to help make some of these investments.

I look at who are the change makers in the world?

Are they willing to work in partnership with others and in teams because no one person is going to change a sector.

It takes lots of different vantage points.

So I look for partners who are brave and bold and willing to lead with a new idea and will they do it in partnership with others?

You can watch the full episode of lead this way with Melinda French Gates tomorrow during the 11 a.m. Eastern time hour of wealth.

You don’t wanna miss it.

We’ve got more wealth after the break.

Not all big ticket purchases are created equal, for example, you probably are sleeping on your $1000 mattress much more often than you’re wearing your $1000 tuxedo So with consumers tightening their wallets, thinking in terms of cost per use rather than just cost could be a good way to prioritize your retail purchases.

For more.

We bring in Yahoo, finance contributor, Ross Mac.

All right.

Break down the decision making process here for us, Ross.

Hey, Brad, thanks for having me.

Listen, anytime we’re in any time of economic uncertainty, I think I live by philosophy and that is say first spin last, right?

And I think it’s quite evident that, you know, we just had target report and when it’s all said and done, right?

Consumers are actually filling it, right?

Consumer sentiment is slightly down when it comes to spending on discretionary items, we’re seeing inflation persist for longer.

And so when it comes to actually thinking about cost per use just as over cost, it’s all about saying how can I prioritize my spending?

Right?

I think we can afford anything.

So as long as it’s within budget, but when you’re living in a world where maybe you have a little uncertainty, I think you should then say, do I actually need this?

Am I gonna use this?

Am I, you know, am I buying new shoes which I might wear only when I’m going out or is, or am I buying, you know, those undershirts and underwear and things of that sort where I’ll actually get more wears out of it.

But when it’s all said and done, I think as we’re moving forward.

We have to be saying I wanna prioritize essentials over just some of those luxury items in times where, you know, unfortunately, inflation is starting to persist and it’s gonna be high for a lot longer.

And I think as we’re going to those department stores, you know, don’t also don’t fall victim to those buy.

Now, pay later where I would only recommend it.

So as long as you’re paying it back with, there’s no interest component.

If it’s ok back within three months, three equal payments, maybe that’s good.

But I don’t think we should be carrying any balance whether it’s credit card or buy.

Now pay later when it’s interest accruing.

All right, you, you got me on the Sneakers front.

That felt like a personal attack there, Ross.

But I, I guess racking up L’s on the Sneakers app is perhaps just part of my financial plan.

Thanks so much.

That’s it.

It’s a good thing when you see that you didn’t get it.

Exactly, Ross.

Thanks so much.

Appreciate it.

All right, my man, let’s do a final check of the markets real quick here as we’re taking a look at the Dow, the S and P 500 the NASDAQ as of right now seeing a little bit of red on the screen as the Dow is down 2/10 of A percent S and P 501 10th of a percent NASDAQ flat just barely to the downside there.

And that’s it for a while.

Everyone.

I’m Brad Smith.

Thanks so much for watching.

Stay tuned.

Market Domination with Julie Hyman and Josh Lipton coming up at 3 p.m. eastern time.

You do not want to miss it.

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