The Impact of the Latest Inflation Data
by SGL Financial
Our 2 Cents – Episode #165
The Impact of the Latest Inflation Data
On this episode of Our 2 Cents, Steve and Gabriel discuss the latest inflation data and its impact on consumers. They also share some fun Valentine’s Day facts and then wrap up the show with a couple ‘Getting to Know Us’ questions.
- Valentine’s Day Fun Facts:
- Did you know chocolate used to be prescribed by doctors? We didn’t either!
- We’ll warm your heart with these fun Valentine’s Day facts!
- The Impact of the Latest Inflation Data:
- The CPI rose by 3.1% in January. We’ll explain what that means, and break down some of the core categories.
- $3 for a McDonald’s hashbrown? Customers have had enough of these rising prices.
- Inflation isn’t the only problem, it’s ‘shrinkflation,’ too.
- Ways to protect your quality of life in the face of rising costs.
- Getting to Know Steve and Gabriel:
- What’s your favorite snack at the movies?
- What fictional character would you like to hang out with?
Request Your Free Consultation Today
847.499.3330
Podcast Transcript
Announcer: You are listening to Our 2 Cents with the team from SGL Financial, building wealth for life. Steve Lewit is the President of SGL Financial and Gabriel Lewit is the CEO. They’re here to discuss all the latest and financial news, trends, strategies, and more.
Gabriel Lewit: Hello everybody. Welcome to Our 2 Cents. You’ve got Gabriel and Steve here back for today’s show. I missed you last week. We took a little week off.
Steve Lewit: Yeah, we did.
Gabriel Lewit: To recover our vocal cords, our inspiration.
Steve Lewit: My throat was all scratchy.
Gabriel Lewit: To come up with new ideas to better provide you with great content each and every week, or just about every week.
Steve Lewit: We spent many hours brainstorming.
Gabriel Lewit: At least 100 hours-
Steve Lewit: At least, yeah.
Gabriel Lewit: … Since last week thinking about today’s show.
Steve Lewit: But we did miss you folks.
Gabriel Lewit: We did, and to welcome you back I want to wish you all a very happy and loving Valentine’s Day.
Steve Lewit: Yes.
Gabriel Lewit: Today is Valentine’s Day that we’re recording this show.
Steve Lewit: And I love it. Well, you know what? I came in this morning and there are Valentine’s Day cookies.
Gabriel Lewit: There are Valentine’s Day cookies. Producer Katie, whom you can’t see, is wearing a heart-shaped sweater.
Steve Lewit: Do we know who baked the cookies though? Those were home-baked cookies.
Gabriel Lewit: We never know. Cookies and snacks just show up on our kitchen counter.
Steve Lewit: On the tables.
Gabriel Lewit: Well, I do know Producer Katie also brought in Dunkin heart-shaped donuts today, which is very thoughtful of her.
Steve Lewit: I did have one of those.
Gabriel Lewit: And I do feel like our office is just bursting with love and joy today.
Steve Lewit: There’s no doubt about it.
Gabriel Lewit: Yes.
Steve Lewit: It’s hard not to want to go around and hug people.
Gabriel Lewit: Which, well, you know you can’t do that.
Steve Lewit: I know. I’m not allowed. I know I can’t.
Gabriel Lewit: But you can wish everybody happy Valentine’s Day and we’re wishing the best to you and yours. I know I’ve got to go and pick up some “Don’t get in trouble on Valentine’s Day” flowers today, so I’ve got that on my to-do list. But otherwise, I figured we could start off today’s show with a little bit of fun. I wasn’t sure if I wanted to start off with inflation data or something fun, and I decided on the fly here. I think rolling into some fun Valentine’s Day facts might be a good starting point for today’s show.
Steve Lewit: Always into fun.
Gabriel Lewit: Yes, indeed. Indeed.
Steve Lewit: What is fun?
Gabriel Lewit: I know you wanted to… Actually, Mr. Always Into Fun wanted to start with inflation data today.
Steve Lewit: I thought it would be more interesting and more current than Valentine’s Day. We’ve been through so many of those.
Gabriel Lewit: Oh my. Yeah. Everyone’s jumping with joy to talk about inflation, right?
Steve Lewit: Well, this is an educational broadcast, you know? But I suppose these fun facts about Valentine’s Day could be educational.
Gabriel Lewit: Well, this is a good lead-in for you. Obviously, we are going to talk about inflation today here shortly. We just got some new inflation data for the month of January that might be interesting for you to be aware of and really plays into some of what we were talking about on our last show, which is where is inflation headed this year? Where are interest rates headed this year is a big question, which of course relates to inflation. So I think helping you to keep tabs on this might be good information for you to have in your financial planning.
Steve Lewit: Absolutely. Yeah.
Gabriel Lewit: But first, Valentine’s Day facts. Okay, so here we’re going to warm your heart with 34 Valentine’s Day knowledge Facts.
Steve Lewit: We’re not going to do 34, are we?
Gabriel Lewit: Well, probably not. I was actually going to ask you to pick your favorite, because I agree we can’t get through all 34. Okay.
Steve Lewit: But I haven’t read through this, so I have to be honest.
Gabriel Lewit: My goodness. Not prepared.
Steve Lewit: Unprepared.
Gabriel Lewit: Unprepared.
Steve Lewit: That’s why I took last week off, I was unprepared.
Gabriel Lewit: Giving me a hard time.
Steve Lewit: You pick one.
Gabriel Lewit: I’ll start off with one here. 145 million greeting cards are exchanged every year for Valentine’s Day, and that’s according to Hallmark. And over 1 billion Valentines are sent worldwide.
Steve Lewit: That’s a lot of Valentine.
Gabriel Lewit: Like, well, last night my kids were creating little Valentine’s Day cards to give to their friends in school. Nathan had Minecraft Valentine’s Day cards. Audrey had ones with, I don’t know, hearts and unicorns and rainbows and stuff.
Steve Lewit: That’s so sweet.
Gabriel Lewit: But yeah, lots of Valentine’s Day cards and exchanges are given each and every year on Valentine’s Day.
Steve Lewit: That is amazing.
Gabriel Lewit: Now, did you also know that 24% of pet owners give their pet a Valentine’s Day treat?
Steve Lewit: That is amazing. I wonder what the pets give back.
Gabriel Lewit: They give endless oodles of love.
Steve Lewit: Licks and loves.
Gabriel Lewit: Yeah, of course. Hugs, love. Okay, so if you’re thinking… Well, it might be too late by the time you get this, but yes, you can give your pet a Valentine’s Day present and they will probably be very excited and pleased. Not that they would know what it’s for, but they’d just be happy to get an extra treat in their pet bowl.
Steve Lewit: And did you know, I’ve got one here that the most recipient… Recipients? Am I saying this right? The most people that receive Valentines on Valentine’s Day are teachers. They get the most Valentine’s of anybody in the US.
Gabriel Lewit: That’s sweet.
Steve Lewit: That is sweet.
Gabriel Lewit: Yeah. Yeah. They do a lot. Are you saying from the kids?
Steve Lewit: Yeah, from the kids. Yeah.
Gabriel Lewit: Yeah. No, they do a lot for kids.
Steve Lewit: They probably get an assignment the day before. Make a Valentine’s Day for somebody. Let’s do hearts.
Gabriel Lewit: All right, now the inventor of candy hearts, of which I despise, by the way. I’ll probably get flack for this. What did I say I didn’t like the other day? No, this was a couple weeks or months ago. It was the Tootsie Rolls.
Steve Lewit: Yeah. Tootsie. Rolls.
Gabriel Lewit: Yeah. I said I didn’t like them. Well, I’m going to go out there again and I would love to hear from anybody listening on this show if you actually enjoy eating, not getting the candy hearts with the little messages. I like seeing what the messages say, but they are quite disgusting.
Steve Lewit: The little candy hearts?
Gabriel Lewit: The little candy hearts. They don’t taste good at all.
Steve Lewit: You know what they are? They’re like watered-down milk chocolate.
Gabriel Lewit: No, I think they just taste like wax. Like “ugh.”
Steve Lewit: Like “ugh.”
Gabriel Lewit: Yeah.
Steve Lewit: Well, “ugh” is the technical word for wax.
Gabriel Lewit: Well, and this might be why. The inventor of them was producing medicinal lozenges.
Steve Lewit: It’s medicinal wax.
Gabriel Lewit: Yeah. So somehow they went from producing medicinal lozenges to making heart-shaped candy with messages on them. Yeah.
Steve Lewit: Amazing. Well, 250 million roses are grown for Valentine’s Day.
Gabriel Lewit: Mm-hmm.
Steve Lewit: Now, this is really interesting I think, and I don’t know why I was watching it, but I saw this short video on how roses get here to the United States because they’re all imported. I don’t remember the countries. I want to say like Venezuela or something like that, but they pick the roses. They freeze them immediately, then they go by refrigerated trucks into a freezing plane, and then they come here and transported into freezers, and then they go to the stores that you buy a rose in. All that happens within 48 hours, which is amazing.
Gabriel Lewit: That is amazing actually, when you really think about it.
Steve Lewit: There are 27 planes, jets, coming in every day with boxes and freezer full of roses to satisfy the demand for roses. And what they figured out is that that really upsets the carbon footprints in the world, and you should not buy roses. That was the whole point of-
Gabriel Lewit: Well, I guess you should custom plant your own.
Steve Lewit: Plant your own roses, folks.
Gabriel Lewit: And somehow save them until Valentine’s Day. Yeah. All right, well, I got a question for you, Mr. Lewit.
Steve Lewit: Yeah, man.
Gabriel Lewit: Why is chocolate a most common gift on Valentine’s Day? Do you know the answer to this?
Steve Lewit: Well, chocolate is an aphrodisiac, isn’t it?
Gabriel Lewit: I think it might be, but that is not what the article says.
Steve Lewit: Let me write my own article in that case. Mine will be more interesting.
Gabriel Lewit: I’m going based on the facts here.
Steve Lewit: I promise you mine will be more interesting than yours.
Gabriel Lewit: Well, you’re wrong. Here’s what it says. It says doctors once prescribed chocolate to fix a broken heart, and it says, “One of the most surprising facts is physicians in the old days would recommend chocolate to people who were suffering from a broken heart or pining after a lost love.”
Steve Lewit: Oh, that’s so sweet.
Gabriel Lewit: Yes, indeed.
Steve Lewit: No wonder I love chocolate so much. Had a lot of broken hearts.
Gabriel Lewit: Oh my gosh. That’s depressing.
Steve Lewit: Yeah, it is depressing.
Gabriel Lewit: All right let’s see. Okay, one last fact for you each from each of us here.
Steve Lewit: Is that 35?
Gabriel Lewit: No, that was probably like eight. Okay.
Steve Lewit: I think that’s enough?
Gabriel Lewit: One last one. One last one.
Steve Lewit: What do you got?
Gabriel Lewit: Okay, what do you got?
Steve Lewit: I don’t got. I will have in a second.
Valentine’s Day is one of the biggest holidays for giving flowers. No, that’s not very good. Go ahead. You find one.
Gabriel Lewit: Well, I was going to say here that in-
Steve Lewit: Oh, I’ve got one.
Gabriel Lewit: Yeah. So supposedly I can’t independently verify this. In Japan, women give men chocolate for Valentine’s Day.
Steve Lewit: After they break their hearts.
Gabriel Lewit: Yeah. It is interesting how-
Steve Lewit: “Hey, I broke your heart. Here’s a box of chocolate to fix it.”
Gabriel Lewit: I don’t know, maybe I’m alone here. Maybe it’s me, maybe it’s not. I do feel like Valentine’s Day is more of a one-way holiday in this country-
Steve Lewit: Oh, well that’s-
Gabriel Lewit: … Than it is a two-way holiday, or a one-way the other way.
Steve Lewit: Well, there’s a fact here. That’s the one I picked. Men give more on Valentine’s Day to women than women give to men. There’s only one way of equalizing that, and that is don’t give to a woman on Valentine’s Day. So you might equalize the facts-
Gabriel Lewit: What are you talking… This is terrible advice, folks. You cannot listen to this.
Steve Lewit: But you’d be in deep trouble, but it might be more equivalent.
Gabriel Lewit: Yeah, or maybe you talk with your spouse and say, “Hey, why don’t we each do something for each other,” versus just don’t give your-
Steve Lewit: That’s so adult.
Gabriel Lewit: Oh my goodness. Don’t listen to that. Terrible advice.
Steve Lewit: Terrible, terrible advice.
Gabriel Lewit: Well, speaking of also terrible advice here, but this is the last fact I’m going to share. I’m going to do one last one.
Steve Lewit: All right.
Gabriel Lewit: It says texting is the new Valentine’s Day card. Most people said they will text loved ones on Valentine’s Day.
Steve Lewit: That’s so sad.
Gabriel Lewit: That’s not good.
Steve Lewit: It’s kind of sad.
Gabriel Lewit: I mean, I know you get the emojis, the Bitmojis. You know how they have the little fancy designs and stuff? But hopefully you do more than just a text.
Steve Lewit: “I love you, honey. Got to go back to work.”
Gabriel Lewit: “Have a great day.”
Steve Lewit: “Have a great day.”
Gabriel Lewit: Okay.
Steve Lewit: Yeah. Little emoji smiley face.
Gabriel Lewit: Well, we hope you enjoyed those. I just wanted to start off with-
Steve Lewit: And Happy Valentine’s Day.
Gabriel Lewit: And Happy Valentine’s Day to you, and we hope you get out there and have some time to really enjoy with your loved ones.
Steve Lewit: Can we talk about inflation now?
Gabriel Lewit: Yes. And now with that, let’s talk about inflation.
Steve Lewit: Yes. Okay.
Gabriel Lewit: So, as we talked about just a moment ago, inflation is running hot and is still running hotter than the Fed would like.
Steve Lewit: You bet.
Gabriel Lewit: Okay. So we got some January inflation data here. Let me just find my data sheet because I didn’t remember all of these facts and figures on my own. But here’s the thing. In January, from January 1st through 31st, the CPI, the Consumer Price Index, rose by 3.1%, which on a good note, is a smaller increase than in December or a smaller annual increase than December’s increase. All right? So that’s a good thing, but ultimately the problem is, is 3% the target inflation number that the Fed is looking for, Mr. Lewit?
Steve Lewit: Yeah, and that is the point. The target is 2%, and the Fed was kind of getting complacent at three, three and a half. And then we had all these rumors that because it was holding steady that the Fed might lower interest rates. And everybody was counting on that, and when inflation came in hot, you saw what happened to the stock market. It took a tumble yesterday. I think it recovered today. I didn’t even have a chance of looking. But the interest rates are not going down anytime sooner than people had thought, in fact, much later.
Gabriel Lewit: Yeah, so the consensus is still that interest rates will start to drop later on this year as inflation drops, but it does appear to be staying more sticky and persistent than people had hoped for.
Steve Lewit: Yeah, the Fed is absolutely rooted in getting down to this 2%, and they are not… I was actually surprised there were so many people thinking that interest rates were going to come down because I didn’t see why they should come down, because inflation was still much higher than the Fed planned. And then when it came in hotter, then other people were convinced as well, which is why you had a sell-off in the market. Small sell-off.
Gabriel Lewit: Well, I’ve got an interesting little tidbit story here that I printed off that I wanted to share. So as I browse different news and articles, I sometimes think things will make for a little good snippet on the show. So here’s the title here from CNN, no doubt, no less. “$3 for a single McDonald’s hash brown? Customers are fed up and pushing back.”
Steve Lewit: Yeah. Hey look, welcome to the real world. We go out for-
Gabriel Lewit: Have you ever had a McDonald’s hash brown?
Steve Lewit: I have.
Gabriel Lewit: Do you know the size of the hash brown?
Steve Lewit: They are one bite and over. I mean, literally it’s one bite.
Gabriel Lewit: Maybe two.
Steve Lewit: Or two. It’s like, they’re gone. I’d rather have a heart chocolate shaped thing.
Gabriel Lewit: Yeah.
Steve Lewit: So, this is ridiculous. It really is difficult for people to budget. You and I go out for lunch, right? And lunch used to cost us what? 12 bucks, 13 bucks?
Gabriel Lewit: Each, you mean?
Steve Lewit: Yeah.
Gabriel Lewit: Yeah. So let’s say $25 for the two of us, $26.
Steve Lewit: Now it’s $40 to $45 for lunch.
Gabriel Lewit: Yes, it is.
Steve Lewit: It’s like, whoa, where does that come from?
Gabriel Lewit: Here’s what happens, right? Corporate America, big businesses, when they go to figure out pricing, which a lot of people don’t necessarily know the inner workings of this, they will keep raising prices until…
Steve Lewit: Until people say, “I ain’t buying no more.”
Gabriel Lewit: And people say, “I’m not going to buy anymore.”
Steve Lewit: Yeah.
Gabriel Lewit: And so, it seems to be that with McDonald’s, who, according to this article, has boasted in the past about its ability to raise prices without denting sales, is finally starting to acknowledge that maybe consumers need a break. And apparently the straw that broke the camel’s back here was the $3 hash brown.
Steve Lewit: Yeah, it’s very hard because prices will not go down. Prices may stop rising as quickly as they have, but a lot of people say, “Well, I want inflation to go away so prices go down,” but prices won’t go down. They’ll just stay sticky at the higher level that they are today.
Gabriel Lewit: Well, companies do drop prices.
Steve Lewit: Yeah.
Gabriel Lewit: Car prices come back down. So I would challenge that a little bit. I do think prices will come down, but ultimately they’re going to settle at still a higher point than they were many years ago.
Steve Lewit: Well, that’s what I mean. When you compare it to five years ago or 10 years ago, it’s not going back to that level.
Gabriel Lewit: And we just heard the president came out, whether you like him or hate him or not, but he came out saying he wants to fight a war against shrinkflation, which is the habit of big companies, especially food producers, to charge the same amount on a bag of chips or… I’ll give you a great example. It annoys me every single day when I open up my bread cabinet. I like bagels in the morning. And one of the companies I used to buy bagels from would have six bagels in the bag that they were charging, say, $5 for. Well, eventually the price went up to like $5.50 and there was only five bagels in the bag.
Steve Lewit: Five bagels in the bag.
Gabriel Lewit: Uh, wait a second.
Steve Lewit: I opened a bag of chips the other day. I could swear there are half the amount of chips in the bag.
Gabriel Lewit: Where are the chips? Where are the bagels?
Steve Lewit: Where are the chips? So we need to start a movement.
Gabriel Lewit: Well, I think the President did in fact say he wants somehow to try to combat this because it really is disingenuous marketing really at its core. People think if you’re not paying attention, “I get my six bagels, $5.50, it used to be $5, no problem.” But the equivalent of that is a much higher rate of inflation because you’re only getting five bagels for even a higher price.
Steve Lewit: Yeah, and in the supermarkets, they do give the price per unit.
Gabriel Lewit: They do.
Steve Lewit: But nobody reads that.
Gabriel Lewit: Very few people. You should read that, as our tip of the day.
Steve Lewit: You should read that, but nobody reads the price per unit. So we get these little bags of nothing and pay the same price.
Gabriel Lewit: Yeah, oftentimes if I’m shopping different size Cheerios, right? There’s small boxes-
Steve Lewit: And the big boxes.
Gabriel Lewit: … Medium boxes, large boxes, and then giant size boxes. If you do look at the price per unit or per ounce, or I forget how they do the Cheerios, but you’ll see that it is substantially lower the higher the volume that you’re buying, which is typical.
Steve Lewit: It absolutely is.
Gabriel Lewit: So that is a good thing to check.
Steve Lewit: Yeah, definitely. Because you could have a big box and get no discount at all.
Gabriel Lewit: You could. All right, so people are fighting back here. People are getting frustrated. There was also a viral TikTok video. Apparently there is a dairy in Connecticut location off of I-95 where a Big Mac meal, one Big Mac meal costs $18.
Steve Lewit: 18 bucks.
Gabriel Lewit: I will say this, I rarely go to Subway because I just don’t like their food that much, but the other day I went to one. This was like a couple of weeks ago, and I got a foot-long sandwich. I did not get the drinks. I did not get the chips.
Steve Lewit: Yep.
Gabriel Lewit: Okay. What do you think this foot-long… I got a chicken sandwich.
Gabriel Lewit: Yep. What do you think this foot-long sandwich rung up at?
Steve Lewit: $6.50. What? Either I’m very right or I’m very wrong. I’m not sure how that laugh is coming out.
Gabriel Lewit: Okay, higher.
Steve Lewit: $7.50?
Gabriel Lewit: Higher.
Steve Lewit: $12.50.
Gabriel Lewit: Higher.
Steve Lewit: No.
Gabriel Lewit: Oh wait, did you say $12.50?
Steve Lewit: $12.50.
Gabriel Lewit: Sorry, I thought you said $10.50. It was $10.22 for a foot-long.
Steve Lewit: 10 bucks. Remember when-
Gabriel Lewit: No chips.
Steve Lewit: Yeah.
Gabriel Lewit: No drink.
Steve Lewit: It’s a $16 meal. $17 for a Subway.
Gabriel Lewit: Subway. Yeah. $5 foot-long is the day of the past, right?
Steve Lewit: Well, here’s the problem, is that the minimum wage, a lot of these folks are getting, what is it, $20 an hour? What’s the minimum wage now, Gabriel?
Gabriel Lewit: I think it’s less than that. I think it’s $16, maybe?
Steve Lewit: Yeah. But a lot of these-
Gabriel Lewit: Producer Katie, can you do us a favor?
Steve Lewit: Yeah. I forgot-
Gabriel; Lewit: And Google what the Illinois minimum wage is.
Steve Lewit: But I was talking to somebody in the fast-food business, said a lot of these helpers are getting $20 an hour. And it’s like, I understand they need that money, but who’s going to pay it?
Gabriel Lewit: Illinois is $14.
Steve Lewit: It’s $14.
Gabriel Lewit: 14 bucks.
Steve Lewit: But very few people are working on minimum wage now.
Gabriel Lewit: Yeah.
Steve Lewit: So, we eventually pay for inflation. And the other thing in that article, Gabriel, that I didn’t see, but I know this as a fact, one of the biggest drivers of inflation is the rise in what they call shelter, which is housing costs and rental and all of that. That’s not good because housing is driver of economic stability in the US.
Gabriel Lewit: Well, I will give you the exact data point. You are very close. It was in fact in not that article, but the other article.
So let’s say we’re breaking down this 3.1% January inflation increase. You might be interested to see where are the highest areas of inflation and which ones are the lowest, because the CPI index measures a broader basket of goods and services, and so it can be sometimes helpful to see the underlying results of that.
So you are actually correct, just to piggyback off of what you said, rent brilliant or shelter of primary residents-
Steve Lewit: So brilliant.
Gabriel Lewit: How do you handle it?
Steve Lewit: It’s so hard to be me.
Gabriel Lewit: Goodness. 6.1%. You were wrong though. You said six.
Steve Lewit: Yep.
Gabriel Lewit: So, it’s 6.1.
Steve Lewit: Okay.
Gabriel Lewit: You got to work on that.
Steve Lewit: I’ll work on that.
Gabriel Lewit: So, 6.1% is much larger than 3.1%, so there’s still some issues there that we’re seeing with regards to shelter and rent.
Steve Lewit: Yes.
Gabriel Lewit: Okay. Now let’s see. Other high-flyers, motor vehicle insurance, 20.6%.
Steve Lewit: Through the roof.
Gabriel Lewit: 20.6%. Repairs of household items, 18.2%.
Steve Lewit: Yeah. Now these are everyday things that we need to buy, and these are much higher than the average of 3.1.
Gabriel Lewit: Mm-hmm. And we’ve got admission to sporting events up 13.5%.
Steve Lewit: Oh, I have to tell you this. This morning, I get an ad from the Lyric Opera. You know I love opera. I’m one of the few people in the world that loves opera. I can’t find anybody that loves opera with me, so if anyone wants to go with me to the opera, please let me know.
Gabriel Lewit: I’m imagining we’ll have to have a flood of emails here to respond to.
Steve Lewit: There will be no emails and there will be no lines. But they sent me this thing, get a big discount on Aida, which is one of my favorite operas. Aida. So, I said, “Wow, that’s great.” So, I go in. First of all, the seats are taken and the seats that are left, if I want to go sit in a really good seat because I won’t go to the fourth balcony because you can’t hear anything… You know it’s 350 bucks for a seat? Or 300.
Gabriel Lewit: I thought you said nobody liked opera.
Steve Lewit: And it’s full, which is the amazing part. So, if you take your wife out or a date out to the opera and you sit in nice seats and you have dinner out in a nice restaurant, you’re spending 800 to 1,000 bucks to go out.
Gabriel Lewit: To the opera.
Steve Lewit: To the opera. Well, it’s worth it. If I was singing it would be very worth it. But you were at the car show. How much did it cost you to go to the car show with your son, or with your family?
Gabriel Lewit: Yeah. I’m actually not sure because Dede bought the tickets.
Steve Lewit: But go to a baseball game and you’ll drop five-
Gabriel Lewit: Well, the Super Bowl tickets were up probably a lot more than the 13… What’d I say? 13.5%. Yeah, they were very expensive. The Super Bowl tickets. Congrats to the Chiefs by the way, if you’re a Chiefs fan.
And also, here’s what’s interesting. Juices and drinks are up 29% for frozen, non-carbonated juices and drinks. That’s the highest one in the entire category here.
Steve Lewit: So, I guess the question is, Gabriel, we’re consumers. Our clients are consumers. Very few of us have unlimited amounts of money that we can say, “Oh, well it costs a little bit more. I’ll just live with it.” How do we protect our quality of life in face of these rising costs? And yet, well, wages for many people have gone up, but not nearly as much as inflation. So, what do we counsel our clients and all people? What should they do?
Gabriel Lewit: Well, this is a great question, and obviously it depends on everybody’s unique situation. But the first thing is to make sure that you are going to put your money into something that’s going to beat inflation over time. That’s got to be number one. And so right now, the good news is while interest rates are still high, but inflation is down to say 3.1%, keeping your money in a money market that’s earning 5% is actually, at this exact juncture, beating inflation.
Steve Lewit: Yes.
Gabriel Lewit: But what we were talking about on our last show was about the fact that if you understand the interweaving effects of inflation, the Federal Reserve, and interest rates, that will come down over time.
Steve Lewit: The interest rates?
Gabriel Lewit: The interest rates will come down over time. So will inflation, okay? So, to maximize your growth over time above inflation, you want to take advantage of locking in longer rates. And you’re going to continue to hear that theme from us just based on how widely telegraphed the fact that interest rates are going to come down at some point this year.
Steve Lewit: Yeah. It becomes much more challenging to manage your money not only in the short term… It’s easy to manage money now because interest rates are so high. But if you’re looking long term, I mean it’s just three years ago, what was the interest rate on a CD?
Gabriel Lewit: Gosh, less than 1%.
Steve Lewit: Less than 1%, and there’s no reason why that won’t happen again.
Gabriel Lewit: Well, it could, but ultimately-
Steve Lewit: I doubt if it’ll go that low, but it won’t stay low.
Gabriel Lewit: What’s the other option, right? You can cut back. You can stop eating out. There’s always ways of skinning down your budget, but it’s typically last on everyone’s list. Nobody wants to do that. You don’t want to.
Steve Lewit: Very few people have an actual budget.
Gabriel Lewit: That’s true as well. But yeah, you could always look at your budget and say, “Hey, where can I cut back? What can I spend less on?” Like me, I just won’t pay $11 for a subway foot-long. I just won’t do it.
Steve Lewit: Well, you did.
Gabriel Lewit: Well, the one time. I didn’t realize it was that much. I haven’t gone back since. It just seems like a rip-off to me.
Steve Lewit: Yep.
Gabriel Lewit: That’s ultimately how you get prices to come down, although you can’t clearly call up all 300-plus million people in the US and say, don’t buy this or don’t buy that. But ultimately your actions, if you don’t spend, will have a bottom-line impact one day on these companies and they’ll be forced to start to bring their rates and their prices back down to more realistic levels.
Steve Lewit: And so, companies will continue to raise prices as long as there’s the demand for their product, and the power is in us. We just don’t know it or don’t think if we stop buying, it’ll mean anything, but it does.
Gabriel Lewit: It does.
Steve Lewit: Yeah. It really does. The other thing you can do folks is let’s say you’re on a real budget and you don’t have a lot of maneuver room. I would go through there and identify what are the things you really love to do and make sure that you fund those and get rid of the other stuff that’s important to you, but not nearly as important as what you really love to do.
Gabriel Lewit: Mm-hmm.
Steve Lewit: See what I’m saying there, G?
Gabriel Lewit: Good advice. Great advice. Well, there’s not much else to say about inflation. We’re going to continue to monitor it for you. If you have any crazy stories, we’d love to hear them as well and we can share them on the next show about different stories of $11-foot-long sandwiches or whatever. $3 McDonald… What were they? Hash browns?
Steve Lewit: Hash browns.
Gabriel Lewit: Okay.
Steve Lewit: The two-bite hash browns.
Gabriel Lewit: If you like candy hearts, I would really love to know and please tell me what you like about them. But you can email us at info@sglfinancial.com or you can call us, of course. (847) 499-3330.
Gabriel Lewit: We won’t be judgmental of your taste in chocolate, I can promise you that.
Steve Lewit: Well, that’s not chocolate. The candy hearts. It’s like… I don’t know.
Steve Lewit: I told you. It’s “ugh.”
Gabriel Lewit: Sugar.
Steve Lewit: “Ugh.”
Gabriel Lewit: “Ugh.” Yeah.
Steve Lewit: Yeah.
Gabriel Lewit: Let’s see, what else? We got a couple minutes that we usually fill up here on the show. I guess I could have time here. Hold on. I’ve always got a backup here. Let’s see. Hold, please. Hold, please. Okay, I’m going to do a quick get to know you Steve question, okay? Just one today.
Steve Lewit: I thought we were ending on a happy note.
Gabriel Lewit: Who said this isn’t going to be a happy note?
Steve Lewit: It’s always challenging for me because-
Gabriel Lewit: I’m a have to give you a layup.
Steve Lewit: … I have to reveal private parts of me to the general public.
Gabriel Lewit: Please do not reveal private parts to the general public. Just wanted to put that out there.
Steve Lewit: I’m a little flabbergasted.
Gabriel Lewit: All right. How about I give you an easy one.
Steve Lewit: You’re thinking about that. Okay.
Gabriel Lewit: Well, no, this is how you phrased it. All right. What’s your favorite snack at the movies?
Steve Lewit: Popcorn.
Gabriel Lewit: Really?
Steve Lewit: I could eat a whole box of popcorn at the movies. I love popcorn.
Gabriel Lewit: And that’ll be $42.
Steve Lewit: I was just going to say, have you priced the box? Popcorn is like having a foot-long. No, it’s worse.
Gabriel Lewit: A small soda will be $16.
Steve Lewit: $16, right.
Gabriel Lewit: There you go.
Steve Lewit: What’s yours?
Gabriel Lewit: Well, I don’t go to the movies a ton, but I do like Twizzlers.
Steve Lewit: No, you don’t.
Gabriel Lewit: I do like Twizzlers. What do you mean no?
Steve Lewit: You don’t like heart-shaped chocolate but you like Twizzlers?
Gabriel Lewit: Yeah, they’re very different.
Steve Lewit: No, you don’t. You’re teasing me.
Gabriel Lewit: I’m not teasing you. I like Twizzlers.
Steve Lewit: It gets stuck in your teeth and everything.
Gabriel Lewit: No, no. It’s one of my go-tos. Now, I can only eat like one or two.
Steve Lewit: Were you the person that ate all the gummy bears that were in our kitchen yesterday?
Gabriel Lewit: I did not.
Steve Lewit: There was a whole bag of gummy bears and they’re all gone this morning.
Gabriel Lewit: You have a longer experience with gummy bears.
Steve Lewit: That was a different time. That was a different kind of gummy bear, folks.
Gabriel Lewit: That’s an inside joke,
Steve Lewit: That’s a long story.
Gabriel Lewit: But no, I did not.
Steve Lewit: But as a Twizzler person-
Gabriel Lewit: Actually, I do like gummy bears too. Usually if I’ve gone to the movies, I like Twizzlers.
Steve Lewit: Okay.
Gabriel Lewit: I like popcorn too.
Steve Lewit: Yep.
Gabriel Lewit: Let’s see. Okay, last question for you here. What’s one thing that you could not live without?
Steve Lewit: Here we go. How do you answer that question? My fingers?
Gabriel Lewit: I don’t mean a body part.
Steve Lewit: That’s one thing. How do you answer a question, “What’s the one thing you could not live without?” My morning coffee? No, that’s dumb. Let me see my car. No. My family? Yeah, I couldn’t live without… How do you answer that? It’s impossible to really answer that question.
Gabriel Lewit: You make this difficult.
Steve Lewit: Cross that off your list.
Gabriel Lewit: All right. You want a different one?
Steve Lewit: Yes.
Gabriel Lewit: Okay.
Steve Lewit: I won’t answer that question.
Gabriel Lewit: What fictional character would you like to hang out with for a day?
Steve Lewit: Fictional character?
Gabriel Lewit: Fictional.
Steve Lewit: Fictional character I’d like to hang out with. Fictional character. Ooh, that’s hard. That is really hard. I was going to say Superman. That might be interesting. Yeah. Superman.
Gabriel Lewit: Superman. Okay.
Steve Lewit: I want to go flying.
Gabriel Lewit: So, he would be carrying you like a baby in a bread basket?
Steve Lewit: Yeah, faster than a speeding bullet.
Gabriel Lewit: Okay.
Steve Lewit: More powerful than a locomotive. More… What is the last one? There’s an… “He’s more powerful…” Faster than or more powerful. What is the end of that?
Gabriel Lewit: Nobody knows.
Steve Lewit: Somebody knows. Can leap tall buildings in a single bound.
Gabriel Lewit: Okay. All right.
Steve Lewit: Oh, the other one would be the Masked Man from Hi Ho Silver. You don’t even know what that is.
Gabriel Lewit: I do not.
Steve Lewit: Folks, tell him about it. Write him in. Tell him about the Lone Ranger.
Gabriel Lewit: I think we were talking about that the other day, right?
Steve Lewit: We did, actually.
Gabriel Lewit: Maybe that’s where that sounded familiar. Let’s see. Well, that’s our show for today.
Steve Lewit: We’re ending on a high note.
Gabriel Lewit: Yes.
Steve Lewit: This is a high note for us, folks.
Gabriel Lewit: Well, Superman, we appreciate your time here on today’s show.
Steve Lewit: And I appreciate yours.
Gabriel Lewit: Well, that’s all we got. If you’ve got questions, of course, about financial planning, how to help work a plan that protects you from inflation now and in the future, if you have questions about really anything, of course, it’s tax time. If you haven’t had us help you with your taxes yet, give us a call so we can get you the tax questionnaire and intake form and the tax upload, document upload process started, of course. But otherwise, we can’t wait to have you on the next show. Call us, email us, talk to us anytime. We’re here for you.
Steve Lewit: Happy Valentine’s Day, everybody.
Gabriel Lewit: Have a great one.
Steve Lewit: See you.
Announcer: Thanks for listening to Our 2 cents with Steve and Gabriel Lewit. For any questions about your finances, give SGL a call at (847) 499-3330, or visit us on the web at sglfinancial.com and be sure to subscribe to join us on next week’s episode.
Prerecorded Voice: Investment Advisory Services are offered through SGL Financial LLC, an SEC Registered Investment Advisor. Insurance and other financial products are offered separately through individually licensed at appointed agents.
