Spiders, Stocks & Shutdowns — Oh My!
by SGL Financial
Our 2 Cents – Episode #229
Spiders, Stocks & Shutdowns — Oh My!
Spooky season has arrived on this episode of Our 2 Cents! We’re diving into the government shutdown and October market trends that are sure to give you chills. Tune in… if you dare!
- Government Shutdown:
- The Lewits break down the 5 Ws on the recent government shutdown and what this could mean for investors.
- Spooky Trends:
- Halloween spending is projected to hit an all-time high this year. Will you be splurging on extra decorations?
- Is October a scary time for the market?
- Jumping spiders are crawling onto the scene as the hottest new pet — just in time for Halloween.
- Discover what this little blind-box monster is all about and why everyone’s raving over it!
- Listener Question:
- “I spent most of my career earning a steady low six-figure salary, but after joining a startup four years ago, my income is now 3-4 times higher. I’m excited but also unsure how to manage it wisely. I don’t want to waste this opportunity. What would you recommend?” — Tom
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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, welcome back to Our 2 Cents. You’ve got a Gabriel Lewit here who’s a little bit raspier than usual. I might be on my way to losing my voice again, which tends to happened to me once or twice a year.
Steve Lewit: Isn’t this a replay of last week?
Gabriel Lewit: No, last year.
Steve Lewit: Last week.
Gabriel Lewit: Last week I was fine.
Steve Lewit: You were?
Gabriel Lewit: Yeah, I’m not sure.
Steve Lewit: Maybe I was losing my voice last week.
Gabriel Lewit: I don’t know, but yeah, everyone’s kind of getting sick around here. The fall weather is in, the colder temps are starting to creep a little bit in the morning. Just a little bit.
Steve Lewit: Gabriel, what fall weather is in? It’s like summer time now.
Gabriel Lewit: No, this is great weather.
Steve Lewit: I love this weather.
Gabriel Lewit: I think this is perfect fall. It’s like 60s in the morning and 80s in the evening.
Steve Lewit: That is fall weather.
Gabriel Lewit: I think it’s perfect. I would take this all year round if we could get this.
Steve Lewit: Yes.
Gabriel Lewit: I think that’s called San Diego.
Steve Lewit: San Diego.
Gabriel Lewit: We’re here in Chicago so we don’t get that.
Steve Lewit: You took the words out of my mouth.
Gabriel Lewit: Well, we hope you all are doing well. We hope you’re enjoying yourself. Hopefully this weather will continue to last. Give us lots of fun time outdoors before the cold winter months arrive, but today we’ve got news for you.
Steve Lewit: There’s a lot going on, isn’t there?
Gabriel Lewit: Yes, by the time you have listened to this show, it may or may not have been resolved, but the government is now shut down.
Steve Lewit: It will not be resolved.
Gabriel Lewit: In four or five days, probably not.
Steve Lewit: Well, Trump’s last shutdown was 35 days.
Gabriel Lewit: Yes, which generally I think that was the longest one in history, right?
Steve Lewit: 34 or 35 days is the information that I got, but it’s not Trump alone. I mean the Democrats and Republicans have all had their shutdowns.
Gabriel Lewit: Yeah.
Steve Lewit: So, it’s not unusual.
Gabriel Lewit: So, these have happened before. We’re going to talk a little bit about those. It is sort of the news du jour today.
Steve Lewit: Yep, definitely.
Gabriel Lewit: Does du jour mean of the day?
Steve Lewit: Of the day.
Gabriel Lewit: So, news du jour today wouldn’t make sense.
Steve Lewit: Those are your only-
Gabriel Lewit: It’s like the ATM machine.
Steve Lewit: Yeah.
Gabriel Lewit: Automatic teller machine machine.
Steve Lewit: Those are your only French words that you know, du jour.
Gabriel Lewit: Bonjour.
Steve Lewit: Bonjour.
Gabriel Lewit: Du jour and bonjour. There we go. Yeah, so let’s start off with that. We’ve got other stuff for you too. It’s now October. So we’ve got some spooky, not so spooky, but some fun Halloween themed topics for you today as well to round out our show, but government shutdown is news of course so let’s jump into that.
Steve Lewit: Yeah, it’s big news that the government is supposed to pass a budget on October 1st and they never do.
Gabriel Lewit: Yeah, so here’s the idea, right? Government agencies are funded annually by a dozen appropriations bills that need to be passed by Congress, and these are often grouped together into one large piece of legislation known as an Omnibus Bill, and the goal is to pass this to ensure all these government agencies have the funding that they need.
Steve Lewit: Yes.
Gabriel Lewit: I don’t know because my article doesn’t tell me exactly how many people, percentagewise need to approve this, but the point is, it’s got to be bipartisan. It can’t just be one side generally just deciding this, I think it’s 60 senators. What is it? Hold on, we’re looking it up. Do you know offhand?
Steve Lewit: Well, it’s a congressional approval.
Gabriel Lewit: Yeah, of Congress.
Steve Lewit: So that’s a good question. I do think it’s 60.
Gabriel Lewit: I think it’s 60.
Steve Lewit: Something like that.
Gabriel Lewit: It’s not just a simple majority, right? So yeah, 60 vote threshold. Okay, so point is I think when they voted 55, 54 voted yay and the rest voted nay. So voila, what happens? Government shut down and now we have to figure out what does that mean?
Steve Lewit: Well, it means so many things. I have a client yesterday was telling me they’re off to the national parks in Utah and they may not be able to get in.
Gabriel Lewit: Well, I’ve got a list here. So that could be possible, right? So general impact of a shutdown is non-essential services are paused. Hundreds of thousands of federal workers furloughed or working without pay, even though members of Congress and the president still receive salaries. I know people think that maybe they shouldn’t if the government shut down.
Steve Lewit: Well, you would think that. Now, furloughed means that they get the pay when the budget is approved. It is not like they lose that pay.
Gabriel Lewit: So yeah, would the travel and the parks be considered non-essential? We’re going to get to that here, but national parks, it says the status is uncertain. In 2018, 2019, they remained open, but very understaffed.
Steve Lewit: Yeah, there were lines. There were crazy lines.
Gabriel Lewit: Large levels of trash, vandalism and there are many legal disputes over funding, and some people think that going to the parks or opening the parks when they don’t have staff is unsafe and harmful. So you don’t know if you’re on your way to the national park today, see what happens.
Steve Lewit: Check it out, make a U-turn. Might be making a U-turn on the highway.
Gabriel Lewit: There could be. Now travel and transportation, air traffic controllers and TSA workers must work without pay.
Steve Lewit: That’s really-
Gabriel Lewit: Just what you want is your disgruntled air traffic controller, right, when you’re heading off into your airplane today.
Steve Lewit: Yeah, grumpy saying I’m working today and not getting paid. This is great.
Gabriel Lewit: Fortunately, I think if you’re an air traffic controller, hopefully you just have a passion for your job and keeping people safe, and that’ll keep you going for a certain amount of time.
Steve Lewit: If you’re not focused on keeping people alive, you shouldn’t be an air traffic controller.
Gabriel Lewit: Yeah, you don’t want them really just phoning it in, okay? Passport services may stay open, but could be slower due to fewer staff. So I think you’re going to see that theme a lot.
Steve Lewit: The IRS shuts down.
Gabriel Lewit: Does it here? I don’t know if I saw it on my list.
Steve Lewit: It should be on your list.
Gabriel Lewit: Well, okay. Well, I see it on here.
Steve Lewit: It’s on my list.
Gabriel Lewit: I had a lot of other things on my list. So yes, I think you are correct here, right? IRS shuts down, but they plan to stay open for the first five days of a shutdown. So more on that, we’ve got, let’s see, federal workers and military members will not be paid during the shutdown. US Postal Service mail delivery shall continue.
Steve Lewit: Yep.
Gabriel Lewit: We talked about national parks. National Weather Service will continue. FEMA and disaster relief will continue.
Steve Lewit: So, if there’s a big storm, they wanted to at least alert people that the storm is coming. Thank goodness for that.
Gabriel Lewit: So, we’re not going to go through the 90-point checklist of who’s open, who’s not open, but those are some of the key things that often happen. People will still receive their social security checks. I know that comes up a lot.
Steve Lewit: And Gabriel, everybody worries what will happen with the stock market when the government shuts down? So what does the data say?
Gabriel Lewit: Well, the data’s pretty simple. There’s not necessarily a big correlation between the government shutting down and the stock market.
Steve Lewit: Yeah, it is really curious. You would think the market would react negatively to that, and it doesn’t necessarily.
Gabriel Lewit: Well, there is some data which could in very small case, potentially be correlated, but not necessarily directly, which is October, which we’re going to get to in a second later on in our show, is considered a scary month, quote-unquote. Scary meaning very volatile.
Steve Lewit: Volatile.
Gabriel Lewit: We use scary in my Halloween theme for today. Scary month for the markets because it’s got higher than normal volatility, but there’s no direct data that says that’s caused by government shutdowns, which tend to occur sometimes here as this one is in October.
Steve Lewit: Yeah.
Gabriel Lewit: So, what does that mean for you? For your investments, should you panic and sell to cash? No. Should you make vast changes? No.
Steve Lewit: It means nothing.
Gabriel Lewit: It basically means nothing from your investment perspective, and in all cases here, if the historically longest delay here was 35 days before everything gets figured out, this will likely all be resolved before you really even realize it hopefully.
Steve Lewit: Well, it’ll get resolved. The question is when and at what expense, but the point that Gabriel is making folks is that if you have a well-developed portfolio, diversified thought out and it’s goal-oriented, purpose-oriented, you’re not going to react emotionally to this government shutdown and saying, “Well, things are going to pot and I better get out of the market.” Or I need to make some changes.
Gabriel Lewit: Yeah, so I mean that’s about all we really wanted to say about this. What is it? We will keep tabs on it. It might impact you. It probably won’t for the majority of people. Parks might be impacted if you’re on your way to the forest preserve or the national park today. Yeah, maybe that’ll impact you.
Steve Lewit: I guess it’s more emotionally upsetting that our government is not working properly, and that’s just part of the deal. Government hasn’t worked properly in a long time.
Gabriel Lewit: Well, there’s a reason when they say it’s politics or politics. It’s political. They bicker back and forth and they hopefully hammer things out.
Steve Lewit: Who said that? People said it.
Gabriel Lewit: People say politics or politics. Yeah, maybe one day that’ll be a quote from Gabe, but I don’t think so. I think somebody else already said it.
Steve Lewit: Somebody else is going to be looking up your name. Gabriel Lewit, who is that? He’s a genius.
Gabriel Lewit: It does not have a single definitive origin attributed to one person. It’s a folk aphorism or common saying used to cynically dismiss the unsavory or unprincipled aspects of political maneuvering.
Steve Lewit: So let me say this about politics. Politics is politics.
Gabriel Lewit: Politics is politics, yes. See, I told you, I didn’t just make that up. I’m not that smart.
Steve Lewit: Yeah, that’s a good one. I like it.
Gabriel Lewit: All right, well with politics being politics, that’ll be in our rearview mirror here for today. Let’s move on. Two other things. Okay, well month of Halloween month is upon us. It’s producer Katie’s favorite month of the year. It is my kids’ I think favorite month of the year. It is also producer Gabby’s favorite month of the year. So behind the scenes, I don’t know if we introduced them enough, but we’ve got Katie and Gabby on our team that support us on the show doing valuable research. They help us come up with talking points, put the emails together, try to keep us on track as best they possibly can. So a little shout-out to Gabby and Katie here today, especially given their favorite month is October.
Steve Lewit: I’m very excited for them. I really am.
Gabriel Lewit: Yes, what you all don’t know, which is kind of about us here, producer Katie, she grows pumpkins.
Steve Lewit: You grow pumpkins?
Gabriel Lewit: She grows pumpkins in her backyard because her favorite month is Halloween and if you come to the office, there’s a pumpkin at the front of the office that was homegrown by producer Katie.
Steve Lewit: Is it home carved?
Gabriel Lewit: Yeah, I’m waiting for her to join one of those world’s largest pumpkin competitions where it’s like a 4,000-pound pumpkin that they got to take a semi-truck.
Steve Lewit: Those are cool.
Gabriel Lewit: You got to step up your game here a little bit.
Steve Lewit: Yeah.
Gabriel Lewit: All right. So yeah, so what about Halloween here? Well, some fun news, right? Spending this year on Halloween is expected to reach record highs. I don’t know if you noted that. So if you’re driving past your local strip mall that usually has an empty building, it’s probably now filled with a seasonal Halloween store as they always are.
Steve Lewit: All the empty spaces.
Gabriel Lewit: Yeah, exactly. You can walk in there and fill your shopping cart to your heart’s delight with all manners of things. Sounds like the risk of recession here and the tariffs are not impacting the plans for people here to spend absorbent amount of money on Halloween.
Steve Lewit: Well, are you getting dressed for Halloween?
Gabriel Lewit: I don’t typically get dressed for Halloween now.
Steve Lewit: I did.
Gabriel Lewit: What do you mean, like last year?
Steve Lewit: No, when you were young and a little whimper boy.
Gabriel Lewit: A what?
Steve Lewit: A little whimper of a boy.
Gabriel Lewit: A whimper of a boy, okay. All right. Well, yeah, here’s the data.
Steve Lewit: I think I was a sorcerer once.
Gabriel Lewit: Well, why stop now?
Steve Lewit: I don’t know, my inner child is not demanding it from me.
Gabriel Lewit: All right, well you could change that.
Steve Lewit: Doesn’t your inner child want to get dressed up with your kids?
Gabriel Lewit: Well, let’s move on here to the data here on the finance, okay? We’ve got National Retail Federation says-
Steve Lewit: Shut down again.
Gabriel Lewit: Americans are expected to make 13.1 billion worth of Halloween related purchases in 2025 up from 11.6 billion last year, and they anticipate it will break the previous record of 12.2 billion in 2023.
Steve Lewit: We do like to have fun, don’t we?
Gabriel Lewit: Yeah, so I will say we’ve contributed to this cause this year. My wife at the behest of my son has bought a few additional Halloween decorations this year. We now have if you drive past our house, we have some gravestones littering our front yard, so it looks like a mini little cemetery. So that was probably like 30 bucks. So we’re contributing to the cause.
Steve Lewit: Well, we have a client that was interviewed and videoed by CBS and WGN and everything last year, who every year, sets up his entire front yard. It’s quite amazing what he does. I mean it’s got all kinds of mechanical things and signs and all the people in the community come and watch it. We should post that address so people can go and look.
Gabriel Lewit: Yeah, I don’t know if he’s doing it again this year. He tends to, right?
Steve Lewit: I just talked to him, he is.
Gabriel Lewit: Yeah, well so basically if you are feeling in the spirit this year, go out there, join your peers, buy some extra stuff. Send us your Halloween pictures if you tend to decorate, I’d love to see the photos, right? I could share maybe in our next newsletter, I’ll have to take a picture, maybe I can share what my house is. It’s not that impressive, okay? I’m just putting it out there, but it’s cute.
Steve Lewit: It’s okay.
Gabriel Lewit: We’ve got some little ghosts flying around and some little happy Halloween little stick figures that are sticking out somewhere.
Steve Lewit: Do you go trick or treating?
Gabriel Lewit: Do go trick or treating with the kids, right?
Steve Lewit: You let them eat the candy?
Gabriel Lewit: Yes, of course.
Steve Lewit: No fear of any silly people that do bad things.
Gabriel Lewit: No, if it looks like a normal wrapped candy, we let them eat it. I think you’re thinking of I don’t know, way back when, but what they don’t like is when people give them a pencil and an eraser.
Steve Lewit: Yeah, don’t do that folks.
Gabriel Lewit: A toothbrush. Yeah, it’s like, “Come on, don’t do that.” I had to talk my wife into not giving out this ultra healthy organic candy this year. It’s like nobody wants that.
Steve Lewit: No, they dig in for the musketeers.
Gabriel Lewit: Nobody wants giggles instead of Skittles, right?
Steve Lewit: Definitely.
Gabriel Lewit: Yeah, Three Musketeers, not my favorite. Got to put it out there.
Steve Lewit: Not mine either. You know what we got in the back? We got the little peanut butter cups, which I love.
Gabriel Lewit: Reese’s?
Steve Lewit: Reese’s.
Gabriel Lewit: Yeah, Reese’s are always a top hit.
Steve Lewit: Those are the best.
Gabriel Lewit: Well, yeah, if you’ve got plans, let us know.
Steve Lewit: Take pictures.
Gabriel Lewit: Love to see those.
Steve Lewit: We’ll post them.
Gabriel Lewit: But moving on with our Halloween theme here, right? Is October a scary month for the S&P 500? That’s a big question that sometimes has been asked, and the quick answer is yes. Historically, October has been a very volatile month for US indexes, and with eight of the 15 largest moves of the S&P 500 being registered during the month of October.
Steve Lewit: And I have yet to read a good theory of why.
Gabriel Lewit: Yes. Well, in general from a seasonal analytical point of view, the S&P 500 tends to trend up during October and Q4 in general, but there is of course more volatility than the average month in the month of October. Okay, so look, there’s not any exact science. You can’t take this article we’re sharing with you and go out there and sell your stocks because the volatility doesn’t just mean down, folks. I think that’s something that’s worth mentioning, right? Volatility can go up. It just means higher than normal moves either up or down is what volatility is, okay?
Steve Lewit: That’s a good point because a lot of people think volatility is only downwards. Very volatile, that’s bad. Well, volatility is the difference between upwards and downwards. It’s not one way or the other. It’s the difference between the two. So that’s an excellent point for today.
Gabriel Lewit: Yeah, and so if we take a quick trip down memory lane, right? We’ve got some key dates here, right? October 1929 was the Wall Street crash of 1929, including Black Thursday, October 24th and Black Tuesday, October 29th, and of course Black Monday on October 19th, 1987. All right, so some of the biggest moves here.
Steve Lewit: That one I don’t remember, 29.
Gabriel Lewit: Well, yes, you don’t remember 1929. Personally, I don’t think most people probably do, okay? But they probably heard of it. All right, but here are some of the biggest moves, okay? 10% or more. Let’s see here. This is the Dow Jones actually is what this data is picking, okay? We’ve got here March 15th, 1993. 1933 was up 15%. If we look at all the updates. Then you had October 6th, 1931, up 15%. October 30th, 1929, up 12%. Right, so if we were to go through all of these, kind of the biggest up days, single up days, right? October 6th, October 30th, October 13th, 2008s, October 21st, 1987. Most of these biggest up days were in October, and we’ve got some of the six biggest down days. October 19th, 1987, 22.6% down. October 28th, 1929 as we mentioned. So yeah, basically most of these really big up days and down days for whatever reason have happened in October.
Steve Lewit: Yeah, and here’s the problem. What’s the problem?
Gabriel Lewit: I don’t know.
Steve Lewit: We don’t know if it’s going to go up or down.
Gabriel Lewit: Well, I don’t know if it’s a problem, but yeah, we don’t know. So yeah, S&P has some similar data points here as well, okay? So nothing specifically here that I want you to take from this other than don’t be surprised, because I think this year is shaping up potentially with this shutdown, right? There could be some volatility even though long-term the shutdown doesn’t really have a big impact on the markets, right? Maybe that is one of the causes of a higher than normal October correlation to choppy markets.
Steve Lewit: Could be. There’s no data that says that, but logically you would think it does.
Gabriel Lewit: Yes, you just don’t know. Okay. All righty ohs. Well, in the spirit of Halloween, we’re going to do one little topic here, and then we’re going to get some listener questions for today, which we haven’t done in a little while. You’re looking at me and blinking. I don’t know why you’re looking at me and blinking.
Steve Lewit: Yeah, because you said we’re going to do one topic here in the spirit of Halloween.
Gabriel Lewit: One more topic.
Steve Lewit: And I’m not sure what it is.
Gabriel Lewit: I think you do know.
Steve Lewit: Oh, I do know. Yeah, I’m so excited about this. Okay, folks, this is the most exciting thing that we can talk about today.
Gabriel Lewit: Well, some of you, you may not find it to be as exciting as Sir Steve is here.
Steve Lewit: Have you seen one?
Gabriel Lewit: Yes. Okay, so what is the one that Steve is talking about? Well, apparently people are now keeping jumping spiders as pets.
Steve Lewit: Yes.
Gabriel Lewit: Okay, this is the hot news coming in here that jumping spiders, especially the Phidippus regius, the regal jumping spider have become trendy pets thanks to social media showcasing their cute behaviors.
Steve Lewit: They’re very sweet. They were so sweet.
Gabriel Lewit: I don’t know this probably because I’m not on social media as many of you may not be. I think producer Gabby is in the know here with all the jumping spider madness, but apparently demand has skyrocketed meaning some breeders went from selling a few spiders a week to thousands, all right?
Steve Lewit: I hope they don’t get loose.
Gabriel Lewit: Apparently, some of the people buying these were previously arachnophobes, okay? And doing this to I guess eliminate their fear of spiders.
Steve Lewit: Yeah, now folks you’ve got to understand who’s bringing this message to you is the man that killed a spider in his office yesterday.
Gabriel Lewit: Yeah, well I don’t like spiders. If they’re in my house, I don’t like them. I port them out of there.
Steve Lewit: Well, you could have carried the little spider out in a cup.
Gabriel Lewit: Well, if you Google these, Google the regal jumping spider, you’re going to see they have these little faces.
Steve Lewit: They’re beautiful.
Gabriel Lewit: But I will tell you what, let me put it this way. If you were in the middle of the night and your dog jumped on your bed, which when I had my dog, he would do this and he would just stick his face in my face and I would wake up in the middle of the night and just see a giant dog face staring at me. That’s kind of scary, even though you know it’s your dog.
Steve Lewit: Yes.
Gabriel Lewit: Could you imagine if you woke up in the middle of the night and your pet spider was just staring at you, sitting right on your nose?
Steve Lewit: These faces are great from long distance, but if you get close up, they’re really scary.
Gabriel Lewit: I will not be joining the club of people buying pet spiders.
Steve Lewit: You’re not going to be trendy then.
Gabriel Lewit: All right, but here’s the thing, folks. Okay, if you’re interested, it’s called the regal jumping spider. You Google it, they got cute little faces. Okay, I can see it from a distance. They’re kind of cute.
Steve Lewit: And they’re colorful.
Gabriel Lewit: You can buy one for 30 bucks.
Steve Lewit: They don’t bite.
Gabriel Lewit: Okay, they’re currently sold out.
Steve Lewit: They’re currently sold out, is that right?
Gabriel Lewit: Yes. They’re low-maintenance pets. They need small enclosures with a little bit of water and live food.
Steve Lewit: What’s live food? Fish, dogs, rabbits?
Gabriel Lewit: Bugs? Yeah, it costs 30 to $100 each. You can get one apparently at PetSmart as well. Oh, they eat live prey only. Fruit flies, mealworms and roaches.
Steve Lewit: Oh my God.
Gabriel Lewit: So, you also have to have those stocked around the house.
Steve Lewit: I have to stock roaches in my house to have a jumping spider.
Gabriel Lewit: Yes, and it says handling, generally safe. Biting rare only if provoked and the pain is similar to a bee sting.
Steve Lewit: How do you provoke a spider?
Gabriel Lewit: Why do you want this as a pet? I don’t know. Cuddling, it says not really, too fragile to pet, but you can interact gently if you’d like. Okay.
Steve Lewit: Don’t you wonder how these trends affect, get into play?
Gabriel Lewit: I don’t know, I just think people are bored, right? So they go on social media and they click something and it’s like, “Oh, that’s cool.” And then a bunch of other click, and they’re like, “Oh, that’s cool.” Right? Just something new to new and novel.
Steve Lewit: How about the toy your kids are buying now?
Gabriel Lewit: Well, this isn’t so much my kid, but we’re going to back this up with I think a better pet if were so inclined to call it one.
Steve Lewit: Safer.
Gabriel Lewit: Okay, this is also trendy if you’re not up on the know here. It’s called the Labubu.
Steve Lewit: Labubus.
Gabriel Lewit: Okay, so there are also very many people, millions and millions of people buying this thing called a Labubu. If you haven’t, it’s not a booboo like on your arm, it’s a Labubu.
Steve Lewit: Folks, if you have grandkids and you want to make them happy, you buy them a Labubu.
Gabriel Lewit: Yeah, so I don’t know what you’d call it. I’d say if I glanced at it, I’d say it looked kind of like a monkey or something, but not really.
Steve Lewit: A little stuffed toy happy face.
Gabriel Lewit: It’s got a weird face with teeth and hair and ears.
Steve Lewit: But here’s the deal. You buy them in a box and you don’t know which one you’re getting.
Gabriel Lewit: Yeah, so the fun part about this is they’re blind boxes, right? So you buy something, you don’t know what you’re going to get, and it could be a cuter one. It could be an uglier one. There’s secret editions.
Steve Lewit: Collector editions.
Gabriel Lewit: Yeah, so apparently they’re all out of stock too.
Steve Lewit: Labubus are out of stock.
Gabriel Lewit: So, you can’t buy your Labubu or your regal jumping spider.
Steve Lewit: I was just going to get one.
Gabriel Lewit: I saw, but yeah, so apparently, yes, you could cuddle them. They don’t bite. They don’t spit at you.
Steve Lewit: They don’t jump.
Gabriel Lewit: They’re not as scary looking. They don’t jump on you and you don’t even have to feed it, okay? So I would argue I’d go for the Labubu versus the regal jumping spider.
Steve Lewit: I think they’re cuter than jumping spiders.
Gabriel Lewit: Yeah, but that’s just me. Okay, you can make your own choice.
Steve Lewit: How much do they cost when they’re available, Gabby?
Gabriel Lewit: All right, well we’re going to get a price point for you here in a second, but I think they can vary from some of them could go for hundreds of dollars, I think, right? But 20 to $40 it looks like in general.
Steve Lewit: Why can’t we invent something like that and become billionaires over silly stuff?
Gabriel Lewit: You ask that a lot. Why can’t we invent? Well go and invent something, man. No one’s stopping you.
Steve Lewit: I’m not the inventor type.
Gabriel Lewit: Well then why are you asking why can’t you invent it if you want to?
Steve Lewit: Well, I really count on you and your creativity.
Gabriel Lewit: Oh, you just want me to invent something for your benefit.
Steve Lewit: And for me to participate in the wealth.
Gabriel Lewit: Well, I’ve got nothing for you. What I do have for you though are a couple of listener questions that have filtered in over the last few weeks.
Steve Lewit: My government has been shut down twice today.
Gabriel Lewit: All right, so of course we love to get some questions from you. So our question today comes from Tom. Okay, Tom says that he’s recently had a pretty steady salary up until the last few years, and all of a sudden he is making three to four times as much as he used to make because of the startup company he’s working for is doing quite a bit better, and he wants to know what to do with the extra money.
Steve Lewit: Sure.
Gabriel Lewit: Okay, so again, if all of a sudden you start doing much better at work, maybe it’s sales based, maybe it’s bonuses, all of a sudden you have a lot more money than you used to have, are there some best practices of what to do with this? Tom, I do think there are.
Steve Lewit: There are, but first congratulations, Tom, on the big race.
Gabriel Lewit: Yeah, and I have a few other clients as well that are in this same boat, so I think it’s a great question. Sometimes it’s two spouses and each one gets a big promotion. It could be windfalls. Yeah, one company got bought up by private equity and started paying everybody more. This is a good thing.
Steve Lewit: To that end, I have a very young client. She is 24 in AI, and she was making 60,000 just getting in. They just raised her to over 200,000.
Gabriel Lewit: Yep, that’ll happen in AI.
Steve Lewit: It’s huge. It’s just huge. So what do you do, Tom? What does Tom do?
Gabriel Lewit: Well, he’s working for a startup.
Steve Lewit: No, I meant what does he do with his money?
Gabriel Lewit: Oh, okay. What does he do is what you’re asking.
Steve Lewit: What does he do? I’m not going to say what does he do do? Because that’ll sound incorrect.
Gabriel Lewit: Oh, man. Well, Tom, the first thing you should think through is this going to be a permanent increase in your salary or your compensation, okay? If you think that this is a very high probability of being a permanent increase, right? You’re making a hundred grand a year, now you’re making 300. Well, you could start to change your lifestyle around this higher level of income if you wanted to.
Steve Lewit: Revise your budget.
Gabriel Lewit: Well, yeah, I mean ratchet yourself up a little bit if you feel so inclined, right? So great, you want a bigger house, you can do it, right? You want a nicer car, you could do it, but the risk is doing those things if this is not money that’s going to stay there for you permanently, what’s the risk if this going to revert itself in two, three years, Mr. Steve?
Steve Lewit: Well, the risk is you’ve ratcheted yourself up in lifestyle, and folks, it’s easier to ratchet yourself up than to ratchet yourself down.
Gabriel Lewit: Nobody likes to ratchet down. Everybody likes ratcheting up.
Steve Lewit: In fact, in economics as a whole theory called the Duesenberry Hypothesis, which is all about ratcheting up and not being able to go backwards.
Gabriel Lewit: I mean just think about it. I mean all of a sudden it could happen on any level, right? If all of a sudden your local county starts throwing a big bash every year and then they have to take that big bash away, you’d be pissed. You’d be like, “My kids were looking forward to that.” Right, or now they don’t have the clowns at the bash, right?
Steve Lewit: So, you definitely want to be careful if you ratchet up, but at the same time, part of those funds need to go into savings.
Gabriel Lewit: Yes.
Steve Lewit: I’m going to just say that outright.
Gabriel Lewit: 100%. I think that’s a wise move, right? Assuming you don’t feel you have what you need yet for your retirement savings, put some of that, a good percentage of it, and this is one of my general rules of thumbs. I do have a few rules of thumbs that I like. I don’t have a ton of rules of thumb, but one of them is if you make more money, spend some of it, great, but save some of it too, right? Whatever percentage, it could be 10%, it could be 20%, it could be a third. The more you save, actually you’re going to feel less guilty, you’re going to feel better about then spending the rest of it, but also if you do decide to ratchet up your savings and then you want to maintain that lifestyle through retirement, there’s a very good chance you’re going to need to save more anyways to be able to pay for that. So saving a good portion, spending a little bit, finding some good balance there might be the best decision in your card stop.
Steve Lewit: If you have a 401k, which I suspect you do, make sure you’re maxing that out so you get the full complement of a match if there is one, and then you can choose if you have more money and more savings. I don’t know what your budget is or how much other wealth you have, but you might invest a little more aggressively in the market if you have extra funds. How old is he? Does he say?
Gabriel Lewit: No, I don’t have it in front of me here, but probably kind of upper-mid-career.
Steve Lewit: Yeah, so you might consider a different type of investment. There’s lots of options when you get a raise, but the biggest issue is the folks that win the lottery, they get a big raise, and I think the figure was 40% of dead broke after five years. So don’t do that, Tom.
Gabriel Lewit: Yeah, don’t go squandering at all on a new Ferrari and double the size in Price House and then all of a sudden realize, oops, I don’t have any of this extra money left over, but yeah, hopefully that helps give you some quick direction. The key I think overall is making sure it fits into your plan. That’s of course true for any and all big financial decisions in life. So that’s what we’re here to do. We can help you with your planning short term, long term. Let us help guide you through those questions. If there’s anything we can do to support you there, you can give us a call here at 8474993330 or go to sglfinancial.com. Click contact us or you can email us info at sglfinancial.com. Hopefully we covered a wide range of interesting topics for you today. We’ve got the jumping spiders, the Labubus, go look those up.
Steve Lewit: I was really going to.
Gabriel Lewit: Buy some.
Steve Lewit: I was going to buy a Labubu today.
Gabriel Lewit: Send us your Halloween pictures.
Steve Lewit: They’re all sold out.
Gabriel Lewit: We’ll keep a tab on the market outlook on the economy.
Steve Lewit: Katie has a Labubu.
Gabriel Lewit: Okay, great. Let’s end the show here, Steve.
Steve Lewit: Oh, okay. All right.
Gabriel Lewit: And if there’s anything we can do for you, please let us know anytime. So bye now, have a wonderful rest of your day.
Steve Lewit: Stay well everybody. I’m ending the show.
Gabriel Lewit: Okay.
Steve Lewit: Bye.
Announcer: Thanks for listening to Our 2 Cents with Steve and Gabriel Lewit. For any questions about your finances, give SGL a call at 8474993330 or visit us on the web at sglfinancial.com and be sure to subscribe to join us on next week’s episode.
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