Year in Review: 2024 Edition

[00:00:03] Welcome to the More Sense Than Dollars Podcast. We're your hosts, Nick and Harry.

[00:00:14] What's up everybody? We're back. We've been away for a little bit, but we're back. Nick,

[00:00:21] are you ready to be back and are you ready for this episode?

[00:00:25] Nick I'm so excited to be back in the studio. We were away for a while. I think we'll touch on that,

[00:00:31] but very excited that we're sneaking back in here for a 2024 wrap up.

[00:00:36] Nick Yeah, we'll go through the top news stories

[00:00:39] or financial news stories, especially those that apply to your personal finance,

[00:00:44] things that happened this year. We've been doing them the last few years,

[00:00:47] gotten good feedback on them because not everybody has time to listen

[00:00:51] and watch all of the news that happens throughout the year. So we did a little bit of a roundup.

[00:00:55] Nick I forget. Nick Yeah, that too.

[00:00:56] Nick A lot of stuff happens in a year.

[00:00:58] Nick Yeah. We should first touch on the hiatus. Coincidentally, I guess,

[00:01:05] Nick A lot of us, we both moved at the same time.

[00:01:08] Nick Mm hmm. And so...

[00:01:10] Nick Another move.

[00:01:11] Nick Yeah, both of us moving in with our girlfriends. And it's been great, but it is a hectic, stressful time.

[00:01:21] Nick And so haven't had time to set up the podcast studio.

[00:01:25] Nick Our setups weren't set up. In addition to all of the other stuff, you had to pack up the mic,

[00:01:29] Nick The camera, the speaker, all that, the computer, the editing station, getting all that.

[00:01:36] Nick It's a lot.

[00:01:37] Nick It's a place. It takes a little bit of time.

[00:01:39] Nick That's our excuse. So let's start with, we just got a really nice wrapped. Everybody loves their Spotify wrapped.

[00:01:47] Nick They do it for podcasts too. And not for the pod, not for pod, they do do it for podcast listeners.

[00:01:54] Nick Oh, creators.

[00:01:55] Nick They do it for podcast creators to give us some stats about, you know, how our show has done the past year on Spotify.

[00:02:03] Nick Yeah, good point. So we wanted to share some of the stats with you because you are the ones making up the stats. And because we're feeling really grateful and it's the holidays and we're just happy to be through another year of this podcast. And for the third or is this the third full year we've been doing?

[00:02:24] Nick I don't know. But we're happy about it and happy to still be growing.

[00:02:28] Nick So do you want to take third full third full year we started in early or mid 2021.

[00:02:34] Nick That's way longer. We looked up some stats way longer than most podcasts run. Anyway, do you want to go through some of the stats some of the things that we heard we were so happy to read these.

[00:02:42] Nick Yeah, we'll share some here. I think we're going to share some of these on our socials when we go live with this episode too. So you can, you know, always check back there to see.

[00:02:51] Nick But we're up 50% on our listener count. This past year, we have 106% more streams. So it over doubled the amount of times people actually listen to the episodes.

[00:03:06] Nick Our follower count on Spotify has increased 61%. I love to see that there's more people signing up to find out when our new episodes drop.

[00:03:15] Nick And we were streamed in nine different countries.

[00:03:19] Nick In 2024, which I know we're a very, you know, we've chosen to limit the scope of our advice to be very US focused, because of the, you know, financial environment can be so different and relies so much on that rules and regulations of your country.

[00:03:37] Nick But still still very cool and very excited to see that there's an international audience that tunes in to our episodes, I think. Not all of it is limited to yeah, people are finding things to pull from what we talk about into their own personal finance. So thank you all so much for listening, and for sharing and continuing to follow and listen and stream and all of that. We're just really grateful.

[00:04:05] Nick All right. So that's what's happened to our podcast this year. Let's get into what happened in the financial news. This year. I think a big thing we saw, we looked back at our 2023 recap, as we were putting this one together, a lot of similar themes and trends, right for 2024, mostly positive, the trends that we saw beginning in 2023. Right?

[00:04:29] Nick Yeah, I think there was a little more uncertainty in 2023 things there, there was still a lot of debate about the soft landing and how are we going to reverse the increasing inflation and what the rate cuts are going to look like, or how the Fed's going to handle the interest rates, they was looking positive, but there was still a lot of uncertainty. 2024 kind of felt like we came out on the positive side of a lot of those questions.

[00:04:54] Nick All the post-pandemic economy.

[00:04:56] Nick All the post-pandemic economy, yeah.

[00:04:56] Nick You know, that looming recession that a lot of people were guaranteeing was just a few months around the corner, still hasn't hit. You know, it seems like we've landed the soft landing. Interest rates are more under control. Unemployment's doing good. We'll touch on some hard numbers later on. But generally speaking, we saw a lot of positive trends that started in 2023 continued through 2024.

[00:05:22] Nick Yeah, I think we talked about interest rates being leveled off at the end of 2023. And they stayed pretty level through 2024. So the last increase to interest rates was back in August of 2023. Since then, they've stayed relatively stable going into 2024. And as of September 2024, they started cutting rates. So as you know, the federal funds interest rate affects your

[00:05:52] your savings rate, your bank account, your credit card interest rate, your bank loans, car loans, all those things, mortgages.

[00:06:01] Nick So what September, November and December have each had a few cuts to them. And they're saying they might do a few more in 2025 as well, probably only one or two, but still nice to see interest rates coming down a little bit.

[00:06:18] Nick So they had to raise them as Nick said, for all the inflation we had in 2022 2023. And it seemed to have worked. We'll get into inflation. But those cuts, they can ease back a little bit. Mortgages, car loans can be a little bit more affordable for us in 2025.

[00:06:37] Nick So it's going to be easier or not maybe not easier, but loans will be more affordable. On the flip side, you will be making less on your savings account.

[00:06:47] Nick Yeah, that's a bummer.

[00:06:47] Nick Sofi has already sent out a few emails the last quarter of this year dropping rates and they definitely are faster to drop rates when the rate comes down than they increase them when they go up. But overall, probably a good thing that they've come down.

[00:07:05] Nick What about the stock market? That was up again this year.

[00:07:10] Nick Yep. And so I think that's gonna, you know, what we just talked about with the rates is going to have generally, usually a stimulating effect on the economy. And we definitely saw the trend already 2023 continuing 2024 with strong stock market performance. So the S&P 500 was up 29% in 2024. So still a very strong growth that's that's over.

[00:07:35] Nick Sofi is the average you would expect, right?

[00:07:37] Nick Sofi is a lot of the average average you would expect, right? Generally, we say you can count on a 10% growth. You account for 3% inflation that kind of works out to 7% real growth a year.

[00:07:47] Nick Sofi is a lot of the average average. But it's up 29%. And inflation is, you know, under 3%. So that growth you're seeing this year is definitely one of those outlier years.

[00:07:59] Nick Sofi is a lot of the average average. And we've said before, right, that 10% number very rarely is the exactly 10% for a year. It's usually above or below. And then that's where it averages. But definitely a strong year for any of your retirement accounts, any investments in the market.

[00:08:17] Nick Sofi Hope you guys kept, you know, stayed to the course, kept making your monthly contributions and didn't miss out on the growth this year.

[00:08:23] Nick Sofi Yeah, this is one of those years pulling, pulling the average up. And always, we always say that time in the market beats timing the market. But like, if you're waiting to get in, because you're waiting for a dip in the market, this whole year was pretty much an uptick. So you're better off just, you know, investing regularly dollar costs averaging into things. Stop waiting, especially for any long term investments. Stop waiting for dips and things.

[00:08:53] Nick Sofi Yep.

[00:08:53] Nick We had a big jump in crypto this year. We talked about it last year. Still big increases. Bitcoin up. I think as of looking at this the other day, 119% increase.

[00:09:09] Nick Yeah. So, you know, don't hold us to the number. Bitcoin is so volatile that even in preparation for this episode, we've had to change our notes a couple times because the percentage over the year, you know,

[00:09:22] Nick Sofi Even in a few days, the value has jumped or decreased so much it changes that calculation. But it's doubled. You know, we can safely say that over the course of 2024, Bitcoin has doubled again. You know, it did even better last year, I think.

[00:09:41] Nick We've seen like two big things that we seem to attribute that increase to this year.

[00:09:47] Nick Yeah, there is the halving in April. And the short abbreviated version of this is that the rewards that you get for mining Bitcoin, after so many Bitcoins are mined, those rewards are cut in half.

[00:10:07] Nick And that roughly happens every four years. And so 2020 was the last one. We hit that number again in April. And it doesn't really affect the available supply of Bitcoin. If you're just looking at the fundamentals, the halving shouldn't really change the value. But we've talked about it. We're not all machines.

[00:10:30] Nick It's more psychological, yeah.

[00:10:31] Nick The oceans influence a lot of financial markets. And...

[00:10:36] Nick The attention and I guess the awareness that the halving creates about restricted supply in the future does tend to drive people to want to get more.

[00:10:47] Nick And there's also the effect that every time we've had a halving, it has gone up in value.

[00:10:54] Nick But just the speculation of thinking it's going to go up can make it go up.

[00:10:58] Nick It's mostly a psychological problem on causing that increase.

[00:11:02] Nick But when you know it's happened before, it becomes kind of a self-fulfilling prophecy.

[00:11:07] Nick So that was a big driver of it.

[00:11:09] Nick But there's also a big expectation that the Trump administration will be crypto friendly.

[00:11:17] Nick This, you know, we'll see where this goes.

[00:11:19] Nick I think Trump likes to say a lot of stuff.

[00:11:21] Nick Not a lot of it comes true.

[00:11:22] Nick But he has spoken favorably about crypto over the past year.

[00:11:28] Nick And with him winning the election, I think there is an expectation that that could have a positive impact on crypto adoption.

[00:11:39] Nick So that's the stock market, crypto.

[00:11:42] Nick We saw some good things around wages, unemployment, inflation.

[00:11:48] Nick Let's get into these a little bit.

[00:11:50] Nick We have seen, based on reports from the Department of Labor, that wages have actually outpaced inflation over the last 18 months.

[00:12:02] Nick It was a big sticking topic in the election.

[00:12:06] Nick And the campaigns deal, who would better deal with the inflation as it's been coming down.

[00:12:13] Nick And a lot of people feeling the sting of things costing more, but their wages not going up at the same rate.

[00:12:22] Nick That was the perceived feeling.

[00:12:23] Nick The data says that wages are outpacing inflation.

[00:12:28] Nick What do you think could be causing that discrepancy?

[00:12:32] Nick Yeah.

[00:12:32] Nick Well, some of it is that the reality is that for a lot of people, that's not the truth.

[00:12:37] Nick Yeah.

[00:12:38] Nick Right.

[00:12:38] Nick We're talking on average, they have outpaced inflation.

[00:12:41] Nick That doesn't mean, again, like we talked about, average for the stock market.

[00:12:45] Nick Usually you have big up years and big down years.

[00:12:47] Nick You're not usually hitting a 10%.

[00:12:49] Nick So there's a lot of people who have outpaced that inflation, but there's a lot of people that haven't.

[00:12:55] Nick And I think the other thing that that statistic doesn't fully capture is whose salaries are outpacing inflation.

[00:13:03] Nick And my suspicion is that there's a lot of people in higher socioeconomic statuses that have their wages increased faster.

[00:13:13] Nick And there's probably a lot of people not doing so well financially who haven't outpaced the inflation.

[00:13:18] Nick So there's that fact.

[00:13:21] Nick Those could be pulling the average up, right?

[00:13:24] Nick Yeah.

[00:13:24] Nick Yeah.

[00:13:25] Nick Yeah.

[00:13:25] Nick Yeah.

[00:13:25] Nick Yeah.

[00:13:26] Nick Yeah.

[00:13:28] Nick Yeah.

[00:13:28] Nick So there's also a psychological piece of this too, though, which is that people tend to, you know, when good things happen to them, we attribute 100% of that to our own actions and that, you know, we were the sole reason that that good thing happened.

[00:13:44] And when bad things happen, we tend to externalize that and look for other reasons and fully point to another external factor.

[00:13:55] So the reality is a lot of people got raises and maybe say you got an 8% raise, you know, good year or whatever.

[00:14:04] But they're thinking, oh, man, if inflation wasn't at 5%, like if only inflation wasn't at 5%, I would really be able to take advantage of this 8% raise I got.

[00:14:15] But the reality is if inflation was at 0%, they probably would have got a 3% raise.

[00:14:23] Yeah, they take that into account when they give the raises.

[00:14:25] Right.

[00:14:25] Part of your raise is a cost of living adjustment, keeping you up to date with inflation.

[00:14:31] And then part of that raise is merit-based.

[00:14:32] But we tend to disregard the part of it that is tied to cost of living or just external.

[00:14:39] You know, you would have got that no matter what.

[00:14:41] Makes sense.

[00:14:42] So there's a perception there, too, where people, even though they got big raises, feel like some of it is being stolen from them due to inflation.

[00:14:50] Yeah.

[00:14:51] But inflation is down this year.

[00:14:53] Remember last year we were talking.

[00:14:55] It had come down at the end of 2023.

[00:14:57] Yeah.

[00:14:58] But I think it started around 6% or something last year.

[00:15:02] Remember, it was getting very high post-pandemic while rates were low through the pandemic and post-pandemic.

[00:15:07] It's down to less than 3%, which is healthy.

[00:15:12] Right?

[00:15:12] Yeah.

[00:15:12] We've talked about a little bit of inflation is good.

[00:15:15] You don't want deflation or stagflation or anything.

[00:15:18] So that's pretty close to that healthy range.

[00:15:21] I think, what do they usually want?

[00:15:23] Two to four is pretty good.

[00:15:25] Yeah.

[00:15:25] I think that's what the Fed wants.

[00:15:27] Two to three, right?

[00:15:29] Yeah.

[00:15:29] I thought it was – it depends.

[00:15:30] They'll say, you know, they'll round it differently.

[00:15:33] We're seeing 2.6 at the end of 2024.

[00:15:36] So we started – I looked back.

[00:15:37] Started 2023 at 6.4.

[00:15:40] Brought that down to 3.1 by the end of the year.

[00:15:43] And now we're at 2.6.

[00:15:46] So you can kind of see, you know, how big of a decrease there was last year because of those rate increases that were still happening.

[00:15:55] And now that they have stalled the rate increases and even now started to decrease and start doing some rate cuts, it's not decreasing as fast.

[00:16:07] You know, we've gone from 3.1 to 2.6 over the course of a year instead of a whole three percentage points.

[00:16:13] I guess because they're pretty happy with where that is as a baseline.

[00:16:18] But even though inflation is down, it doesn't mean prices are going to go down necessarily.

[00:16:23] Like those companies that took advantage of inflation and increased prices by even more than the inflation rate.

[00:16:29] Right.

[00:16:30] They're not going to drop them.

[00:16:31] It just means that prices will increase more slowly.

[00:16:35] Right.

[00:16:35] And I think it also does reduce the opportunity for those companies that used inflation as a cover for price gouging.

[00:16:46] When inflation actually isn't that high and we can pretty confidently say month over month it's going to be 2-3%,

[00:16:54] it's a lot tougher for McDonald's to raise their prices 10%.

[00:16:58] They'll try.

[00:16:58] Oh, it's inflation.

[00:16:59] Like it's pretty obvious when it's not happening everywhere who's abusing that.

[00:17:07] Like Harry said, stuff's not going to come down, but we shouldn't see things going up as fast.

[00:17:14] Unemployment's been down.

[00:17:16] It's low.

[00:17:17] It trended slightly upwards in the second half of 2024.

[00:17:21] But overall, like it's come down so much since the pandemic and we hope that stays low.

[00:17:29] We want everybody to have jobs.

[00:17:31] So it's nice to see that coming down.

[00:17:33] And we've seen some job reports come out over the last few months that, you know, so many are being created.

[00:17:39] So that's good to see.

[00:17:41] Yeah.

[00:17:41] I saw an interesting question recently about why.

[00:17:46] And I think some of these questions are driven by the news attention recently on unemployment and some of these numbers.

[00:17:53] But the question is why is like a 4% unemployment rate good?

[00:17:58] You know, like why aren't we aiming for a 0% unemployment rate?

[00:18:03] And this is something that we probably could do an entire episode on if we really wanted to dig into it.

[00:18:10] But I thought it would be interesting here just to point out at 0%, it means there's no one looking for jobs.

[00:18:17] And so it's impossible for...

[00:18:20] There's no open roles.

[00:18:21] Everybody's stuck and placed in a job.

[00:18:23] Yeah.

[00:18:23] Right.

[00:18:24] Typically, the only way a company A could find new employees at that point is if company C went bankrupt.

[00:18:33] Oh, yeah.

[00:18:33] You know, like you're waiting for companies to fail to free up.

[00:18:37] But then there's also just the reality of life and that most people or not everyone goes directly from one job to a second job.

[00:18:46] If you move, you know, maybe you are planning for a big move and you knew you were going to quit your job, rely on some savings.

[00:18:54] Do you handle that process of moving and finding a new job?

[00:18:57] So there's just all sorts of reasons why you might be in between jobs by choice and not being forced to.

[00:19:07] So I want to say if you look at the numbers and say, oh, unemployment is 5% or 6%, why is that low?

[00:19:12] Well, it's because there's a cushion built in there to make sure that...

[00:19:17] Or the target has a cushion built in so that we don't paralyze growth and employee movement because there's no spots available.

[00:19:27] And I think we are, as of November, December in the U.S., right around 4% right now.

[00:19:31] For context, like at the beginning of the pandemic, it was like 15% and then fell through 2020, 6%.

[00:19:40] So 4%, like Nick said, is actually okay.

[00:19:46] What do we make of these tariffs?

[00:19:50] Should we be worried yet?

[00:19:52] Trump, throughout his campaign and since his election, has threatened tariffs.

[00:19:59] For anyone who is not familiar, it's a tax on exported goods.

[00:20:03] Sorry, exported for the other country, imported for us.

[00:20:08] So it makes foreign goods more expensive to domestic customers.

[00:20:16] And the idea is to strengthen U.S. manufacturers of goods and services so that they're more appealing to customers in the U.S.

[00:20:29] The idea is that it would help the U.S. economy.

[00:20:33] What do you think?

[00:20:34] What do we make of these?

[00:20:35] Is it definitely happening?

[00:20:38] It's interesting.

[00:20:39] I guess, first I'll say that it helps.

[00:20:42] I think a big distinction here is that it helps American manufacturers.

[00:20:46] It helps American companies.

[00:20:48] It doesn't necessarily help American consumers.

[00:20:52] No.

[00:20:54] Because what, you know, if we have a U.S. good and a Chinese-made good that are equivalent,

[00:21:00] and say the Chinese one costs $5, the U.S. version costs $10,

[00:21:06] tariffs can be used to raise the cost of the Chinese-made good to $15.

[00:21:12] The U.S.-made good is still going to cost that $10 it cost before,

[00:21:18] because that's what they need to charge to make a profit on it.

[00:21:21] And so you may have shifted sales from the Chinese-made good to the U.S.-made good,

[00:21:26] but to the end consumer...

[00:21:28] I've had to spend more.

[00:21:30] Right.

[00:21:31] The cost for that good has gone up from $5 to $10.

[00:21:33] They used to have the choice between a $5 item and a $10 item.

[00:21:37] Now they have the choice between a $10 item and a $15 item.

[00:21:41] Right.

[00:21:42] So we saw one piece of data that said it could cost consumers up to $1,200

[00:21:47] in lost purchasing power.

[00:21:50] I guess we'll see which ones come to fruition,

[00:21:52] and by how much.

[00:21:53] Are they just threats?

[00:21:54] Is it just negotiation?

[00:21:56] Yeah, we have seen post-election,

[00:21:59] we've already seen a lot of people in Trump's camp start to soften their stance a little bit,

[00:22:07] or even suggest that the tariff rhetoric is a negotiation tactic or an anchoring point,

[00:22:14] and it's there to scare the negotiating parties into submission or into being more willing to make favorable deals.

[00:22:27] So there is some awareness from the Trump camp that if all of the tariffs he has suggested during the campaign were to be implemented,

[00:22:37] it would be disastrous for U.S. consumers.

[00:22:39] So there remains to be seen what could happen there.

[00:22:43] But in areas like electronics, automobiles,

[00:22:47] there is a really strong potential that purchases in those areas are going to be hit pretty hard

[00:22:53] if some of these tariffs get implemented.

[00:22:56] Yeah, so we'll keep you updated through the administration next year

[00:23:01] and see which ones actually come to pass.

[00:23:04] But for now, we don't know.

[00:23:09] So those are some of the top stories of 2024.

[00:23:12] Obviously, a lot more happened,

[00:23:14] but those are some big ones that could affect you as a listener personally.

[00:23:18] That's why we picked those out.

[00:23:21] Anything else to add, Nick?

[00:23:24] Just thank you.

[00:23:24] No, it's that I hope everyone, you know, we're recording this in between,

[00:23:29] you know, in the midst of the holiday season in the U.S.

[00:23:31] We're right between Thanksgiving and Christmas.

[00:23:33] So I hope everyone has had some time off,

[00:23:37] eaten some good food, got to spend time with some loved ones,

[00:23:40] and looking forward to some R&R as we go into 2025.

[00:23:46] Yeah, happy holidays to everybody.

[00:23:47] We'll be back in the new year, so happy new year in the meantime.

[00:23:51] Thank you all very much for listening,

[00:23:53] and we will see you in 2025.

[00:23:56] Bye, everybody.

[00:23:57] You've been listening to the More Cents Than Dollars podcast.