#22 – T+1 Settlement, Q1 Earnings, Retirement Tips, Scams, Loneliness, and Happiness

Wes Moss [00:00:52]:
This past week, I remember talking to some parents that hadn’t quite finished up, but I think pretty much every school now is out. And guess who’s in? Jeff Lloyd here in studio.

Jeff Lloyd [00:01:04]:
Thanks for having me back here on money matters. Guess good to be here. I can’t believe it’s already June.

Wes Moss [00:01:09]:
It’s already June.

Jeff Lloyd [00:01:09]:
Kids out of school already? My kids were already bored this week. Hey, dad, I’m bored. You know, nevermind. We just had Memorial day weekend. We had Monday off down at the.

Wes Moss [00:01:21]:
Lake, and they’re already bored.

Jeff Lloyd [00:01:23]:
Already bored Tuesday. They’re like, well, what do we do now?

Wes Moss [00:01:26]:
Entertainment. One of my sons this week, teenager, Wednesday or Thursday, he goes, can we play golf today? I was like, what? I’m like, I work for a living. I’m working. I’m like, you can shuffle your way down, find a golf course, and go play with your friends. But as much as I would love to play golf with you, no, no, no. My school is not out for summer. There is no summer.

Jeff Lloyd [00:01:49]:
You could drop him off at the course and then come back and pick him up. Yeah, he’s, don’t you think he’s a little more independent? Yeah, he is living a little more independently.

Wes Moss [00:01:58]:
He sent me a picture of a drive that he had. It was a good, I guess it was a good drive. I was like, okay, do that again. Do that 18 more times, buddy.

Jeff Lloyd [00:02:10]:
He’s been watching you play golf, obviously, right, right in the middle of the fairway, 300 yards deep.

Wes Moss [00:02:15]:
I said, let me keep a real score because he’s on the verge of. He, I played with him a couple weekends ago, and it was the first time that it was a, he had a real round. Like with kids. You can have a golf round where they whiff it, they hit it six times. It goes. And it’s kind of, it’s not even a real score, but this is a real score. He, I played a friend of mine and Mike two of our kids, and we gave them two shots a hole. And after the third hole, we were losing so badly, we scratched that.

Wes Moss [00:02:48]:
We said, wait a minute, this is.

Jeff Lloyd [00:02:50]:
Y’all are playing us straight up.

Wes Moss [00:02:51]:
Well, we give him. We did one shot a hole, but it was a real round. It was a real round to golf. So I said, look, just start keeping a real score. You don’t. Don’t. It’s okay. If you have a 30 handicap, it’s okay, but at least it’s a real 30 handicap.

Wes Moss [00:03:07]:
And that’s where we are.

Jeff Lloyd [00:03:07]:
And no more mulligans. You get maybe two off the first take.

Wes Moss [00:03:10]:
Maybe off the first take.

Jeff Lloyd [00:03:12]:
This is real golf.

Wes Moss [00:03:12]:
Now, I don’t think you’ve ever told this story on air, but didn’t you have. This is. You had some charity pro am you were playing with, like, Walter Payton.

Jeff Lloyd [00:03:22]:
I was playing with Jordan, Charles Barkley. We play with Eric Dickerson and Marcus Allen, and they were, like, the featured group in the celebrity golf tournament, raising money for charity out in California. I get paired up with them. We’re on the first tour.

Wes Moss [00:03:37]:
First TP for crowded around.

Jeff Lloyd [00:03:38]:
Yeah, they’re filming it. Crowded tee box, and I’m like, you know, I’ll go first. I’m not very good at golf, but I’m not nervous. Like, let me just go up there and hit it. I got it, and I got under the ball so much on my drive, it went, like 100 yards up in the air and then landed ten yards away. Didn’t even clear the first tee box. I was like, all right, marcus, you go next.

Wes Moss [00:04:03]:
You’re up right in front of Michael Jordan. That’s amazing.

Jeff Lloyd [00:04:06]:
Needless to say, we did not win the tournament.

Wes Moss [00:04:09]:
You know, that’s awesome. And there’s nothing like the fear of standing over a golf ball as a grown man with people surrounding you and watching. There’s something about it just doesn’t go, is everybody. We’re all watch. You wanna watch me tee off? Okay. It’s an amazing amount of fear that little white golf ball has.

Jeff Lloyd [00:04:30]:
I would love to find that clip if it’s recorded somewhere still out there somewhere.

Wes Moss [00:04:36]:
How about this? Economic data this week came in a little later than expected. Interest rates actually backed up a little bit because of that, but really not a huge amount of economic data. Here are the headlines we’ll go through this week that were somewhat important to know. I don’t think that any of these will change lives here or accelerate retirement. But market settlements got accelerated by a day, so that’s one meaning it used to be if you sold a stock, you technically can’t get your money out of that stock for, quote, two days. Now it’s starting. Was it next week or did it already start?

Jeff Lloyd [00:05:12]:
It started this week, May 28, this past week.

Wes Moss [00:05:14]:
So it already started. So you get your money right away. I don’t see this as a big change for most investors because usually money’s accessible within two days. I don’t see it as a big change. I think what it does, it speaks to just how rapid the settlement of, think about millions and millions of stock trades throughout every single day. They need to be fully reconciled. Well, it got so complicated that the stock exchanges had to say, well, you got to give us at least 24 hours to get everything perfect. Now technology makes sense, is so rapid, so good, so quick that they can do it by the next step.

Jeff Lloyd [00:05:50]:
Yeah, the technology has evolved and this is the first time they’ve changed in over decades. And it makes sense now that most everything is electronically done. Makes sense to do it one day.

Wes Moss [00:06:02]:
You can sell a stock at your Charles Schwab account, fidelity account, e trade account, use the cash starting the next business day, which it’s about time. With everything we can do today, you would think it would be quick. And it is now and the end of earnings season. And this goes back to just that. This is what matters. We were talking about this maybe last weekend on money matters, and I don’t know why I’d never thought of it this way or expressed it this way. I don’t look at the stock market itself and say it’s going to go up over time. What I truly believe is that companies will get better over time and they’ll pull the stock market.

Wes Moss [00:06:42]:
Essentially, they’ll pull the stock market with it. It’s not the other way around. It’s not that the market goes higher and companies get better. It is the underbelly of what companies are really doing. They have to be producing more earnings per share on average each year for their earnings to grow. And then if earnings grow in aggregate s and P 500, all companies together, that’s what powers the market. So earnings season, that’s why it’s such a big deal. Earnings season rolls around.

Wes Moss [00:07:09]:
That’s really what matters. Now, it’s hard to wrap your arms around it because in any given day you might get 20 different big companies that you know, and six of them did great. Five of them did. The majority just did. Ok. And they met, quote, expectations. And then one or two, like we saw this week with Salesforce’s example, their guidance was less than Wall street expected. Stock was down huge in one given day.

Wes Moss [00:07:34]:
So the overall tie to the market is the real gravity of it. The gravitational pull is earnings, and it’s been a pretty solid earnings season.

Jeff Lloyd [00:07:44]:
Jeff Lloyd yeah, and two things that we look at, or investors look at in earnings season is revenue or sales growth, like how fast they’re growing sales and response to that, how fast they’re growing earnings. And in general, and we’re almost, we’re over 95% done with earnings season. Sales were up on a year over year basis about 4%. So they were up 3.8%.

Wes Moss [00:08:06]:
That’s the revenue number.

Jeff Lloyd [00:08:07]:
And then earnings were up about 8%.

Wes Moss [00:08:10]:
Which is really pretty extraordinary. Earnings up 8%, maybe not extraordinary. I’d say it’s better than good. Earnings up 8%? Better than good. And I like to see the revenue numbers tracking as well. There have been plenty of years that I can remember where companies, instead of, they may have had better earnings, but when you don’t have better sales numbers, all you’re doing is squeezing and you’re getting your margins to be better. So you’re getting more profitable, which is good, but that’s not overly sustainable. You can’t just have a company that has 10% earnings growth, but their sales growth is down five.

Wes Moss [00:08:47]:
That’s not a healthy number. So you really want both. You want sales growing and you want profitability. Slash margins, which again, ultimately trickles down into earnings. You want them getting better at the same time over time. That’s certainly what we have seen this first getting first quarter results. Here we are in June. It seems like a long time ago, but that’s as quick as they can reconcile it.

Jeff Lloyd [00:09:09]:
And kind of like we’ve talked about this broadening of the stock market rally that we’ve seen since late October of last year. If you kind of look at our earnings scorecard, it’s not just one or two sectors that are growing revenue or growing earnings. We’re kind of seeing it in general across the board in multiple sectors.

Wes Moss [00:09:25]:
So as an example, in agri s and P 500 right now, showing 8% earnings growth, 4% revenue growth, or close to 4%. But the consumer discretionary sector, up 27% in earnings. Consumer staples, up almost 6% in earnings. Technology? No shocker, up 26% in earnings. Communications, up 43. Utilities have been an interesting story, up 22% in their latest earnings scorecard. Which leads me to the need for power and the need for power. I’m not going to pretend to understand this, but it is pretty fascinating to look at these trends.

Wes Moss [00:10:05]:
And these are global trends in. Essentially, these are global digital trends and how much electricity or power it uses, or in some cases, space. So we’re talking about the economics. What powers, what does it take to power your smartphone and your lights at home and your computer and all the chips that are whizzing around in any given day to do chat, GPT queries and Google queries. Speaking of, how many watts does it take to just do one Google search? I don’t know. Is Watts correct?

Jeff Lloyd [00:10:44]:
Yeah, that’s a watt hour.

Wes Moss [00:10:45]:
So what does it take to do one Google search? How many watts of power?

Jeff Lloyd [00:10:51]:
0.3 watt per hour for a Google search.

Wes Moss [00:10:57]:
And what does it take for a generative AI search? Remember, there’s Claude, there’s Chech EbT, there’s anthropic. There’s so many of these. There’s PI. What is that?

Jeff Lloyd [00:11:08]:
The new AI powered searches is about ten x, that it’s 2.9.

Wes Moss [00:11:14]:
So imagine if the world, and I’ve done this already, so this is not inconceivable at all. In fact, I think this is where the world is headed. Let’s say I used to do, let’s call it ten Google searches in a day. And when generative AI came out, I maybe did one generative AI search. Today, I do. I would say nine of my searches are through generative AI and one is a Google search. So the amount of power that I’m using or demanding as just an end user has gone up almost ten x. And that’s all happened in just the last couple of months.

Wes Moss [00:11:50]:
This isn’t just a cyclical blip. This is a structural shift when it comes to power usage and the amount of energy needed in a world that has gone from, let’s say, 2015, we have 3 billion Internet users. Today we have 5.3 billion. Or this is. As of 2022, that’s almost an 80% change. Internet traffic has gone from about a half a zettabyte to four and a half zettabytes. That’s a 600% increase over the past seven years. So that’s what a Zeta byte.

Jeff Lloyd [00:12:22]:
Just a lesson for our audience. One zettabyte is a trillion gigabytes.

Wes Moss [00:12:28]:
Gigabytes, okay. And what’s a gigabyte? A gigabyte is about enough storage to run a smartphone. So call it. Let’s think about 1gb is about what your phone needs. Now, again, some need less, some need double that. But let’s call it a smartphone, and let’s relate this just to try to get some size around this. And this is, we do, for some reason, we like to use stadiums here, because we all kind of can. We can picture a stadium.

Wes Moss [00:12:58]:
Rose bowl is the most famous stadium that holds almost 100,000 people. We’re just going to use that. So, one zettabyte of data storage. If each gigabyte was an apple, how many stadiums would that fill up? Well, remember, it’s a trillion of these just to get to one zeta byte. So it would fill up about 5100 stadiums. Imagine that, the Rose bowl, and you’re just filling it with apples. You’d have to fill up all the way, like a big cereal bowl. You’d have to fill up 5000 Rose Bowls in order to find one zettabyte of data.

Wes Moss [00:13:34]:
That’s just putting into perspective now in real life, because technology is getting so much better and chip sizes have gotten smaller and smaller and hold more and more, it’s probably more accurate to look at it as a grain of rice. I wanted to look at this on a real life scale. And if you use the grain of rice analogy, 1gb represented by a single grain of rice, it would fill up the amount. One zettabyte. Remember, the Internet right now is using four and a half of these. One zettabyte would take up approximately eleven Rose bowl stadiums just for one zeta bytes. Imagine dump. How long it would take to dump all that rice to fill up the Rose bowl.

Jeff Lloyd [00:14:15]:
That seems like a lot of data, don’t you think?

Wes Moss [00:14:17]:
It’s a lot of data. In the year 2020, how many people use the Internet? We were at about 87% of the United States population used the Internet. In the year 2000, the number is only 43. Again, new technological use, more power needed, more money matters. Straight ahead. We keep hearing that inflation is coming down. By the past three years, the common man inflation gauge is still up over 20%. That’s necessities like food, gas, utilities, and shelter.

Wes Moss [00:14:50]:
How can you possibly keep up? Well, one option is income investing. That’s using a combination of growing stock, dividends, bonds for more cash flow, and other areas that can be a hedge against inflation. Look, inflation is tough. Let us help you overcome it. Schedule a time directly with our team@yourwealth.com. dot. That’s your wealth.com dot. I was reminded of something this week, and that is this, which is perhaps much more important than power generation.

Wes Moss [00:15:20]:
And that’s everyone who I know who plays tennis seems to be just doing better health wise. Think about the families that I’ve worked with over 25 years, if somebody calls me and they say, oh, I was just playing tennis, or I played tennis yesterday, I played tennis this week, it almost doesn’t matter how old they are, they’re in great shape. And I reminded a couple years ago we talked about the danish tennis study, but it’s just been over the past couple of weeks that I’ve had these examples of, hey, I was just playing tennis. Wait a minute, you’re in your eighties and you seem no older than when I met you 15 years ago. And it made me think, I gotta start playing tennis.

Jeff Lloyd [00:16:04]:
That’s pretty interesting. Why do you think that is? If I think of some of my friends that play tennis, it’s not like they just play every now and then. It is multiple times a week or month, like they are doing it three or four times a week. It’s not just one off.

Wes Moss [00:16:20]:
Yeah, it doesn’t. It’s because it’s a little bit of an addictive sport, almost like because it’s exercise. You kind of get addicted to exercise. It’s got a little component of golf in it. You kind of want to get better, and the better you get, the more you want to play. And then it’s got this. The other component is, of course, it’s social. And then you start to get together with your friends and people are saying, hey, we should play.

Wes Moss [00:16:42]:
And then you get into a league, and there are more tennis leagues, I think, than there are golf league. So there’s more regular play, maybe. Anyway, it just reminded me of that. And here’s the Study. So this is, listen, we’re talking about life expectancy increasing. If you do one of these SociAl and AcTive Sports, and this comes from the CopenhageN City Heart study. This is done a few years ago, but it was also published in the journal of the Mayo Clinic. And it’s hard to find a study like this, this LongItudinal.

Wes Moss [00:17:15]:
For 25 years, they followed 8600 people from danish people from CopenhaGeN, so 8600 people, 25 years, and followed out what their Health was like relative to what their activities were. And as to be expected, the more active they were, they typically saw longevity increases. So if they were a jogger, on average, lived a little more than three years relative to the rest of the population. Swimmers, three and a half years. Cycling, now swimming, I wouldn’t say is a very social sport, but let’s go to swim meet, which doesn’t happen. You’re a grown up. But let’s call that an outlier, because cycling, almost four years of extra life expectancy, that’s almost always done in groups. Soccer, of course, is pretty social.

Wes Moss [00:18:08]:
Almost five years of longevity. This one makes me laugh a little bit because I haven’t seen anybody do this since maybe a picnic 25 years ago. Badminton adds a little over six years to life expectancy. Jeff Lloyd, when was the last time you played badminton?

Jeff Lloyd [00:18:23]:
I think I was at camp in elementary school. So it’s been, it’s been 30, 35 years since my last badminton match.

Wes Moss [00:18:32]:
Well, this is a plug for badminton.

Jeff Lloyd [00:18:35]:
But hey, I just looked it up. There is a Atlanta badminton club.

Wes Moss [00:18:39]:
If you’re listening to the bat, you’re lucky.

Jeff Lloyd [00:18:41]:
You are lucky if you are there on a Sunday. This danish study shows you could, I’m going to say six years longer.

Wes Moss [00:18:49]:
If you’re headed to church or brunch or badminton here on a Sunday morning, then your longevity perspective chances obviously have gone up. And then, of course, number one on the list is which what started this whole conversation is tennis. And that adds, again, this is from the Copenhagen Heart study, 8600 folks that are danish folks. Over 25 years added life expectancy for tennis, 9.8 years on average. Pretty incredible.

Jeff Lloyd [00:19:21]:
Now, I know you could play tennis indoor and outdoor, but if I’m looking at most of this list, it also gets you outdoors as well. If I’m looking at badminton or jogging. Swimming. Yeah, that’s maybe indoor, too. But generally, when I think of swimming, I’m thinking outdoor. Cycling, outdoor, soccer, outdoor. I know you could do all those indoor.

Wes Moss [00:19:43]:
I think this is where we met. Didn’t we meet at a kid’s swim meet ten years ago?

Jeff Lloyd [00:19:47]:
We did.

Wes Moss [00:19:48]:
Twelve years ago?

Jeff Lloyd [00:19:48]:
We did.

Wes Moss [00:19:49]:
And, you know, it was outside. You’re just talking about maybe the vitamin D effect, just being outside as healthy. I don’t know. I didn’t publish the study for the Mayo class clinic, but I do know that Tanis adds almost a decade to life expectancy, and it’s a big deal. Which leads us to talking about core pursuits. And core pursuits are what we call hobbies. We’ve done a lot of research around this over the years. We didn’t do life expectancy research.

Wes Moss [00:20:21]:
We looked at, wanted to understand what habits retirees had that landed them in two very different camps, happy versus unhappy retiree camp. And one of our findings, of course, that we’ve written and talked a lot about has to do with the number of different core pursuits that a retiree has. The more of these hobbies on steroids, or what we call core pursuits, the higher the propensity to be in the happy camp, the average happy retiree has 3.6 different unique, special core pursuits. The unhappy retiree has, on average, about 1.9. So almost four and less than two. And it doesn’t have to be tennis, golf, swimming, cycling, soccer, badminton. I think it helps because they not only add to your retirement happiness, but they may give you some extra years as well. But really, hobbies on steroids, they really are one of the absolute essential components to a happy retirement.

Wes Moss [00:21:22]:
What’s interesting about them, and as I’ve been thinking this week about tennis, I haven’t played tennis for, maybe it’s been a long time. I used to play recreationally. Maybe it’s been seven or eight years. I still have a tennis racket in my office. I look at it every day. And it wasn’t until this past week that I thought, wait a minute. All these tennis players are so darn healthy. They’re so vibrant.

Wes Moss [00:21:45]:
I gotta get going. And I saw a friend of mine this week who is a tennis player, and I said, look, I gotta get back into it just for my own longevity. And I guess it’s pretty easy to pick up. It’s, it’s. I would say it’s easier to just pick up out of the blue than golf, wouldn’t you say?

Jeff Lloyd [00:22:01]:
I think so. And, hey, maybe if it’s not tennis, maybe you do a hybrid and you do pickleball. You have been doing that a little bit more.

Wes Moss [00:22:09]:
Yeah, pickles is super. That’s probably the easiest, and that’s why it’s such a rapid growing sport. It is gotta be the easiest sport to pick up. It’s easier than ping pong, and it’s easier than tennis. It’s a hybrid of those two. It’s easier. I’ve seen entirely unathletic people be able to immediately go and play pickleball. In fact, there’s an e trade.

Wes Moss [00:22:31]:
Is it an e trade commercial? There’s two babies that are playing pickleball. Have you seen that?

Jeff Lloyd [00:22:36]:
No, I have not seen that. But I love the e trade babies.

Wes Moss [00:22:39]:
Two grown men playing pickleball against two babies. They can barely walk and they’re playing pickleball. Now, maybe there’s some AI in there or CGI or whatever it is, but that’s about how easy pickleball is. So the point here is that we don’t say, okay, I’m going to retire. I want to stop working. The lights go off from work and the light switch goes on for core pursuits. It doesn’t work that way. Or at least it shouldn’t work that way.

Wes Moss [00:23:03]:
Now, if you have zero core pursuits. It’s okay. It’s never too late to start. It’s never too early or never too late to start saving. Same thing with core pursuits. If you don’t have them, you can go find them and start cultivating them. But it’s a lot easier to start early and have this kind of, this farm team called the bullpen of different core pursuits that you’re doing because you may phase in and out of some. Just like I phased out attendance for the last eight years, I haven’t phased back in, but I’d like to.

Wes Moss [00:23:33]:
And I want to put it on that list of core pursuits for a variety of reasons. It’s athletic. It feels like you’re, you’re. You’re working out without trying to, like feeling it. What’s, what’s more fun to say, I’m going to go do. I’m going to go on a run or go play tennis.

Jeff Lloyd [00:23:47]:
You’re going to go play tennis because unless you’re hitting the ball against the wall, you’re going to get that social activity and that social connectedness by going out with another person or going and playing doubles with a group or going and playing with your lead that has, I don’t know, six or twelve other members.

Wes Moss [00:24:04]:
Here are the top 100 core pursuits in relation to, from a survey. This is a survey from the families that we work with. This is families we work with and employees at capital investment advisors. So let’s see. We’ve got hiking, knitting, quilting, gardening. Love gardening, which I don’t do, but I love the idea of it. Church, college football games, reading, book club, theater, skiing, bridge, bingo, biking, walking, running. I’m not gonna go through all this.

Wes Moss [00:24:38]:
Tennis, golf, sailing. I love this one. Historical reenacting, dinner, murder, mystery clubs. Here’s one. Cowboy poetry.

Jeff Lloyd [00:24:49]:
Hey, there’s. Yeah, cowboy poetry. But just below that, I’m looking at mahjong. Do you know mahjong?

Wes Moss [00:24:56]:
That’s not a game I play. I hear about it. That’s not a game I’ve ever played.

Jeff Lloyd [00:25:00]:
My wife loves it.

Wes Moss [00:25:02]:
Really?

Jeff Lloyd [00:25:02]:
And I feel like it’s growing in popularity again.

Wes Moss [00:25:06]:
Mahjong.

Jeff Lloyd [00:25:07]:
Mahjong.

Wes Moss [00:25:07]:
Is it cards or is it, like a backgammon type thing?

Jeff Lloyd [00:25:11]:
It’s kind of like backgammon and domino’s and kind of a hybrid of that.

Wes Moss [00:25:17]:
How about bonsai tree care? That sounds fun. I don’t know if it’d be one of my core pursuits, but kind of fun. I love this one. Making cheese. You know what one. Remember we did the final four, didn’t travel one. Was it travel cruises?

Jeff Lloyd [00:25:35]:
One?

Wes Moss [00:25:35]:
Cruises won’t travel. Was in the final four. Grilling won as well, or was in the final four. Doesn’t matter what they are. It just matters that you have many of these hobbies on steroids. And of course, we have a quiz for that, a core pursuit finder, which you can find in the tools section on retiresoonerteam.com. for our core pursuit finder. It’ll help you brainstorm, maybe if you’re looking for a brand new core pursuit, more money matters.

Wes Moss [00:26:06]:
Straight ahead. What we’re covering today, earnings. We basically wrapped up earnings season for the first quarter. Nothing more important for the stock market and the longevity of the potential for growth of your retirement portfolio and ultimately your retirement income. Then corporate earnings. They matter. It is the tide. It’s the gravitational pull for markets.

Wes Moss [00:26:31]:
We don’t just believe that markets go higher over time, we believe companies do better over time. That then translates to higher equity prices or markets, at least over time. Not certainly in any, not in perfect linear fashion, but over time. And then, of course, how much? This is a Wall Street Journal came out with again, another there’s new research, or maybe I wouldn’t say new research, a new way to look at the relationship between money and happiness. How much does your salary buy when it comes to happiness? Researchers really can’t agree. We’re going to weigh in on the relationship between the two. Jeff Lloyd, out of the gate, though. What’s our earnings scorecard? How we done this year, if we’re looking at the S and P 500?

Jeff Lloyd [00:27:15]:
Yeah, so we’re over.

Wes Moss [00:27:16]:
We know the stock market itself, s and P 500 has had a pretty strong start to the year, a little rocky the last week or so, but again, higher. But what are earnings doing?

Jeff Lloyd [00:27:25]:
Yeah, we’re just looking at first quarter earnings, and we’re almost, we’re over 95% of the way through first quarter earnings season. And from a sales or revenue growth standpoint, we are about 4% above where we were at this point last year, year over year. And from an earnings perspective, we’re about 8% higher from where we were last.

Wes Moss [00:27:44]:
Year, 8% in aggregate. Now, there are a few places that have fallen back. So healthcare actually had a decline. We saw materials have a little bit of decline in earnings, but then we saw these huge jumps. Utility earnings up 22, 23%. Communications up 43%. Technology 26%. Real estate or reits up 8%.

Wes Moss [00:28:06]:
These are earnings numbers. And then the majority of these industry sectors have seen sales growth as well. We want to see both. You think about the lifecycle of a company. I almost think of a business that was a growth business. It was growing, and then it stopped growing, but just got more profitable. You really could look at the tobacco industry. Think about that, where for years it was growing more and more people were using tobacco.

Wes Moss [00:28:39]:
And then the trend went a different way. It doesn’t mean that those tobacco companies aren’t just as they can still grow earnings. Because they can continue to run the business from a cash flow perspective without a whole lot of actual growth. That’s not what you want to see over the long run. You want to see a company that’s doing both, continuing to increase sales and increase earnings at the same time. And we’re seeing that now. If you look at estimates for 2025. So the estimates for this year are coming in at about 200.

Wes Moss [00:29:12]:
And call it. I’m going to round here, dollar 245 in aggregate earnings for the s and p 500 for next year. Estimates are for 278, which is about a 14% growth rate. When it comes to earnings. Again, that’s what we think. If you had to choose one thing that really matters. What’s interesting, though, let’s see. That’d be.

Wes Moss [00:29:33]:
That’s right, 14% over 2024 after earnings. Expected to grow about 11% for this year, 2024. So 14% next year into 2025. That’s the number we’re looking at now. What’s also interesting is that usually, here’s the way Wall street analysts work. You’ve got one person they’re covering, call it ten companies. And at the beginning of the year, they figure out, they do their economic models, and they say, I think we’re going to have earnings of this, this, and this for my twelve companies. And then Wall street aggregates them all together, and you get an earnings number.

Wes Moss [00:30:07]:
Projected earnings, consensus earnings, $250 total. And what you usually see then, for the rest of the year, those estimates a year out, they just keep coming lower and lower and lower and lower. So there’s revisions lower almost every year. If you look at the reported trend, we call it the spaghetti chart, because it looks like a whole bunch of different lines of spaghetti. Where they start out high at the beginning of the year, and then they trend lower. As analysts rarely increase their expectations, they almost always lower them. So the spaghetti essentially falls off every single year. What’s really strange, I haven’t seen this for a very long time.

Wes Moss [00:30:47]:
The line of spaghetti is going higher. So earnings, instead of getting ratcheted lower every single day or week, you see an analyst report and they’re all put together, collated or aggregated. This year they’ve actually gone up a little bit. So that’s interesting. I don’t know exactly what to point to for that, except for the tailwind of productivity that we have been seeing and we’ve been talking about here for the last month or so. Is it just this general economic productivity rise that we’re seeing that’s benefiting not just artificial intelligence, not just tech, but industry sectors really, across the board? It remains to be seen, but it’s the first time we’ve seen this for a while.

Jeff Lloyd [00:31:31]:
Yeah, we saw that productivity trend line over the past decade or so, just kind of pretty stagnant. And over the last twelve to 18 months, we’ve really seen it take off.

Wes Moss [00:31:41]:
Yeah, it was really, ever since the financial crisis, if you go back to 20, call it 13. Productivity has never been able to break further. Kind of, it’s been hitting a ceiling. It’s never really, we’ve never, we haven’t had a big productivity increase. It’s been anywhere from zero to one, one and a half percent for almost the last 15 years. Now all of a sudden that is in the, call it almost 4%. Call it three and a half percent, call it three. We’re at a 3% productivity growth rate over the last year to two year and a half.

Wes Moss [00:32:16]:
And that’s just new. We haven’t seen that. More output per worker, more output with the same amount of cost. That’s a trend that’s really good. And it should be for earnings in general.

Jeff Lloyd [00:32:29]:
What’s the phrase we like using here on money matters? The army of american productivity. Right.

Wes Moss [00:32:34]:
A lot of people get up every day. A lot of smart people that get up every day. A lot of hard working people that get up every day. And you put that together. You put that together. In the economic system we have, it’s very imperfect. There’s lots of flaws. Every time I go on von Hessler doctrine, which I love to do, I hear about all the, all the terrible things about the economy emails I get.

Wes Moss [00:32:57]:
How could you say the economy’s good? Army of american productivity works over time. I also realized this. Here’s why Americans do not. I’ve been missing this a little bit. I kind of had the answer, I think, half right, but I’ve revised my answer of why Americans don’t feel good. We know that the definite, I’m going to ask you out of this. We didn’t even talk about this this week. What’s the definition of a recession? What do you need to see to have a, quote, recession in the United States.

Jeff Lloyd [00:33:28]:
I’m just going with the maybe textbook answer of two consecutive quarters of negative GDP.

Wes Moss [00:33:36]:
Exactly. Now you can have two. We had, remember we had a blip. Was it a year or two ago where we had a negative 0.1, essentially flat. We had two quarters. And the NEBR, the National Bureau of Economic Research, which is the final arbiter, whether we had a recession or not, said it wasn’t one.

Jeff Lloyd [00:33:56]:
They officially call it a recession or not.

Wes Moss [00:33:58]:
Right? And they did.

Jeff Lloyd [00:33:59]:
They did not.

Wes Moss [00:34:00]:
Now think about this. In America, if you have six months of things going backwards, we’re not growing anymore. We’re an economy going backwards. We are declining for two quarters. That is a recession. And guess what? In recessions, people feel bad. If you think about what has happened, we have had more inflation than we have had wage growth. So people have been going backwards.

Wes Moss [00:34:28]:
It’s not just inflation. It’s the lack of wage inflation. So that you as a family, you could have had a 10% raise over the last, call it five years. But if inflation is at 15, then you are actually in the negative when it comes to how you are feeling. Your budget’s tighter, you got less money left at the month, you feel more squeezed, you have more money anxiety. And that’s it. That’s really it. It’s inflation having not kept up with wages, which means people feel like they’re going back, they’re going backwards, which is exactly what happens in a recession.

Wes Moss [00:35:07]:
And that’s why the majority of Americans still feel like we’re in a recession, even though we just got another positive GDP quarter. If you go back the end of last year, we were at 3.4% GDP almost this whole year. The Atlanta GDP now number has been in the three, three and a half percent range, yet everyone is still unhappy. And it’s because that economically, from on a kitchen table family perspective, you just, you feel like we’re going backwards. And, and that’s the combination. That’s, I think what, for some reason that dawned on me this week, it’s not just inflation. It’s inflation making us feel like we’ve gone backwards, which is really the cousin to the recession.

Jeff Lloyd [00:35:50]:
Well, you kind of almost see it every, where you go. We talk about. You see it at the grocery store, the gas pump, every corner. Prices are increasing, and the American is feeling that on a daily basis.

Wes Moss [00:36:03]:
Well, that may be the case. And we do know there’s this relationship between money and happiness. If we’re feeling money anxiety, it’s a much tougher road to end up in the happy retiree camp. So we’ve studied this over the years, and there are a couple of new studies that were talked about this week in the Wall Street Journal around how much money it takes to, quote, buy happiness. There’s not a whole lot of agreement within the industry. If you think about studies. Daniel Kahneman, the late who just passed away this year. Daniel Kahneman, a famous economist that came up with this relationship, that as we increase what we earn, our happiness levels rise, but only to a certain point.

Wes Moss [00:36:50]:
Then a researcher at the University of Pennsylvania, Matt Killingsworth, came out and said, no, no, no, I think that’s wrong. His take on this was that the more you make, the happier you are. The more you make, the happier you are. There wasn’t really a cap. So guess what? The two of them, Kahneman and Killingsworth, decided to powwow. And they got together to see, well, which one of them is right. And what they ultimately came up with is that, yes, more money or more income does lead to more happiness to some extent, but not in all categories. So there’s no perfect silver bullet answer here, but essentially more money leads to more happiness when it comes to earnings, and then it trails off at a certain point.

Wes Moss [00:37:33]:
But it’s still, it doesn’t necessarily stop increasing happiness. One of the funny quotes in this was it has something to do with rich people that said something to the effect that it’s, maybe the level is at a million dollars a year or maybe it’s higher, but there’s not that many of those folks, and those folks don’t want to take surveys.

Jeff Lloyd [00:37:56]:
Yeah, they said it’s very hard to do work on the very rich. There’s not many of them and they don’t like to answer surveys.

Wes Moss [00:38:02]:
That’s about right now. The way I’ve broken down this, and we did this in, you can retire sooner than you think. Back in, I think, 2013, before this big dispute happened, we essentially said that there is what I call the diminishing marginal returns for every new dollar of happiness. And that in the beginning, each new dollar does create a bunch of happiness. But then it starts to trail off. And you should almost look at his percentage terms. Still works. More money is more happiness, but in a diminishing way.

Wes Moss [00:38:45]:
You can almost think about it as a progressive. How progressive income tax works in the beginning, let’s say you earn $50,000 a year, you get to keep most of it, you get to keep 90% of it. Then if you earn $500,000 a year. You only get to keep about 70% of it. You earn 5 million a year. You only get to keep about 55% or so. It’s still more money if you make 5 million versus 500,000, but the proportional amount is less. And I think we’ve been saying this for a long time, west, you’ve been.

Jeff Lloyd [00:39:13]:
Saying this for over a decade now. And my question is, where’s your Nobel prize?

Wes Moss [00:39:19]:
Well, I don’t know if they got their Nobel Prize for this. They’re just Nobel Prize laureate type level people. I’m not going to say that’s us here, the whole team, Jeff. It’s not me. But we did do this and came to this pretty much this exact conclusion about ten years ago. Wonder if he read. You can retire sooner than you think. Hmm.

Wes Moss [00:39:41]:
Anyway, I think, and really, Mallory did a lot of that with surveymonkey. Maybe she should get a Nobel prize. Loneliness in America. Supposedly the american worker is more lonely than they’ve ever been. Maybe this is. I think we’re pairing this with. We talked a little bit about tennis, a social sport that makes people live longer, almost ten years longer. So more meetings, more faceless chats.

Wes Moss [00:40:07]:
In the United States, evidently, we’ve got more meetings than ever, fewer work friends, and it’s fueling an epidemic of isolation. And this is easy to combat, but it seems to be a very real problem. So more than 40% of fully remote workers say they go days without leaving the house. That seems awful. I would be depressed if I didn’t leave the house. Those who work in office spend nearly a quarter of their time in virtual meetings, face to face meetings, only 8% of the time. Americans have tripled the time. Now, this one is.

Wes Moss [00:40:45]:
I get it. They’ve tripled the time spent in meetings just since 2020. So if you feel like you’re in more meetings, it’s because you are. Your meetings have tripled. And I get this because everyone, you had to go to all these new meetings during COVID when everything was shut down and you were virtual. And if you added ten meetings to the workweek or you added 20 meetings to the workweek because we had to virtually get together, you have not taken away those 20 since the pandemic has ended. You may be taken away one or two, but you haven’t taken away the 20, the added. And that’s why we have got this still pile, this landfill of meetings that we’re still contending with, and people don’t like it.

Wes Moss [00:41:29]:
Most importantly, I think this is the most interesting from this research is that if you go back to the pre Covid days, so go back to 2019. Almost 80% of workers said they got to know their coworkers on a personal level. 80%, which, again, makes sense if you’re working with somebody. 80% of folks. That number is all the way down to 67% today. We know fewer and fewer and fewer of our coworkers on a personal level. And this just goes back to work from home. There’s really no other answer about it.

Wes Moss [00:42:07]:
It’s too many meetings, whether and most of them are not face to face. And it’s less and less people that are in the office. And that number, if you look at the first quarter of 2024, that number keeps rising for fully remote, this is interesting. So it was, we’re up to almost 20% now of people. Where is a Gallup survey that are fully, fully remote and that has continued to climb over the last couple of years. Hybrid keeps going up, fully on site. Just obviously has gone down over the last couple of years. So we’ve got less people in the office.

Wes Moss [00:42:48]:
And I don’t know if it’s a great trend, but it’s the reality of the world we live in. Yeah.

Jeff Lloyd [00:42:52]:
So we’re looking at first quarter data showing about 20% of workers are fully remote. I think I remember looking at some of this data data a year or two ago, and if you go back pre pandemic, that quarter.

Wes Moss [00:43:04]:
Oh, these are quarters. I’m sorry, these are quarters. So this is just versus last year. Fully remote, top and fully on site. That’s down year over year.

Jeff Lloyd [00:43:13]:
But you’re seeing the trend of still taking upwards of fully remote. But looking at the data a couple of years ago, pre Covid, fully remote work was like, in the single digits, maybe in low single digits of people who were fully remote, not even coming into the office.

Wes Moss [00:43:29]:
I think this is an easy fit. Humans need social connectivity. It doesn’t fully happen. It doesn’t happen if you’re on a two dimensional screen. So you gotta be in the office. You gotta. Even if it’s great to work remotely. And I’ll work a couple days a month out of the house.

Wes Moss [00:43:48]:
And I like it, but it would be. It’s no good to never be in the office. So I think it’s very simple. You gotta be in the office three days a week. That’s my very simple solution for all of America.

Jeff Lloyd [00:44:01]:
You know what I like in the office? I like that water cooler talk gathering around the water cooler, breaking down. What you did during the weekend or what you’re going to do during the weekend.

Wes Moss [00:44:11]:
And evidently that’s good for you according to this.

Jeff Lloyd [00:44:13]:
Or are you at the water cooler complaining, oh my gosh, I’m going to three times as many meetings as I was pre pandemic.

Wes Moss [00:44:20]:
Is that it? That’s the conversation that should be happening. The what do we have next year? Most common scams using big brands. And this was from the report from the FTC consumer Sentinel network, shows where the most scams you’re getting, a lot of these are, these are either email or text for the most part. And they’re coming from well known brands and it’s, it’s tricking people. I mean, best Buy is number one on this list. Best Buy slash geek squad, 52,000 occurrences in 2023, three for a total of total loss. Was this 15 million or 15?

Jeff Lloyd [00:45:02]:
Yeah, 15 million.

Wes Moss [00:45:04]:
Amazon, PayPal, Microsoft were the top three brand, top four companies that scammers were impersonating. The most money lost was from Microsoft and then that was 60 million. Publishers Clearinghouse, 49 million. I don’t see publisher Clearinghouse.

Jeff Lloyd [00:45:22]:
I didn’t know publishers Clearinghouse was still around. But also someone asked in the studio if Geek Squad was still around.

Wes Moss [00:45:30]:
The answer is yes, Geek Squad is still around. And I have gotten that. I’ve had so many emails from the Geek squad.

Jeff Lloyd [00:45:38]:
Yeah. If you haven’t reached out to the Geek squad and you hear from the Geek squad, chances are that’s a scam.

Wes Moss [00:45:45]:
Figures are based on fraud reports of the consumer Sentinel network classified as business imposters, tech support scams and prizes. And I think it’s the reason. I know Clark Howard talks a lot about avoiding fraudulent activity. It’s just so prevalent today. It’s so easy for a scammer to change a phone number and make it look like a legitimate company. Just remember, if anybody’s ever asking you to do something quickly and it relates to money or a gift card or it’s crypto, anything, currency, it’s 99.9% of the time. It’s got to be a scam. Be very careful.

Wes Moss [00:46:20]:
Talk to somebody you trust. Be patient before you ever send money anywhere and get, you know what’s also, here’s the opposite of generative AI and tech at the speed of light. Talk to an actual human that, you know, that could solve a lot of issues. Here’s what I had not ever heard before in over a decade of research in this. So yes, money leads to happiness to a certain extent. But guess what? Happiness leads to money. Jeff Lloyd, maybe that’s why you are so rich.

Jeff Lloyd [00:46:53]:
We need to delve into that a little bit more because a lot of people talk about money buying happiness, but not the other way.

Wes Moss [00:47:00]:
Nobody ever does it the other way around. Guess who did? The proceedings of the National Academy of Science. That’s who did. Published in Science Daily, found that adolescents who reported, so kids who reported higher levels of happiness earn significantly more money in their thirties compared to their less happy peers. So it’s the other way around. So happiness actually bought higher levels of income, specifically, the happier individuals earned. Approximately, and I guess this was statistically significant and that’s why they published it, approximately 10% more income than those who had lower happiness levels. Interesting.

Wes Moss [00:47:38]:
The study also highlighted that the correlation of this happier people earning more money held true even after you control for family background, education, and other socioeconomic variables. So again, looking at it kind of in the inverse way, we’ve never looked at it that way.

Jeff Lloyd [00:47:57]:
I kind of think of that as looking at it in the glass half full lens, right through the happiness. Not just how much money am I making, am I bringing happiness to my job?

Wes Moss [00:48:09]:
You’re always a happy guy, though. That’s what it is. You’re just a positive happy guy in the science, and science daily nailed it. So that was that. That’s interesting. With that, let’s see what else. I think earnings, probably the most important thing of this week. Either that and picking tennis up again.

Jeff Lloyd [00:48:25]:
Yeah. I was going to wish you luck in your tennis match. May it. Leaders of life.

Wes Moss [00:48:30]:
Well, it’s, I think it’s 9.8 or 9.79.79, .7 according to the Copenhagen Heart study. But I’ll take it. Don’t hold me to it right away. This is one of the, I just got the idea in this past week dawned on me. Wait a minute. What are these, all these tennis people running around? They’re so healthy.

Jeff Lloyd [00:48:50]:
If you come in the office on Monday and we’re gathered around the water cooler and you’re kind of limping or you’re wearing a brace, I know that you played tennis well.

Wes Moss [00:48:58]:
Give me a little bit. I have to warm up to these ideas, but I’ll do that with that. Thanks for being here, man. Appreciate it. It’s been a fun Sunday. If you would like to find me or Jeff Lloyd and the money matters team, it’s easy to do so you can find us at the new and improved your wealth. That’s your yourwealth.com. have a wonderful rest of your day.

Mallory Boggs [00:49:24]:
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Mallory Boggs [00:50:12]:
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