MakingCents Podcast

[MUSIC PLAYING] EMILY BIGHAM: Hi, and welcome to the podcast MakingCents brought to you by Navy Federal Credit Union. I'm your host, Emily Bigham. And each week I'll be taking your questions to the experts to help you make sense of your money, pun intended. 

 

[MUSIC PLAYING] 

 

Hi, and welcome back to MakingCents, a podcast brought to you by Navy Federal Credit Union. Today we're talking to Brittany Mills, the Assistant Manager In Education Lending. Hey Brittany, how's it going? 

 

BRITTANY MILLS: Hey, how are you? 

 

EMILY BIGHAM: Good. Thanks for coming on today. 

 

BRITTANY MILLS: Thank you for having me. 

 

EMILY BIGHAM: A lot of things have changed, and earlier we were catching up about what's been changing in the student loan area. I find it fascinating because, to me, when I was thinking about going to school, going to college, growing up in the United States, it's everyone needs to go to college. 

 

BRITTANY MILLS: Yup. 

 

EMILY BIGHAM: It's so expensive, but also I think a lot of the benefits are actually being on the campus. And you get more than just an education out of college. So I was curious about what's changed over the past year and a half. I feel like that's kind of a loaded question that we can get into. But in general, just right off the bat, what do you think has changed in the past six months? 

 

BRITTANY MILLS: Well, I think the fact of the campus experience has changed. Lots of people, at the start of the pandemic they had to stay home or go back home. Because they went to school, and now they're saying, oh, everything is shut down. Colleges are shutting down, lots of these schools didn't have online programs available, so it's almost like the schools had no other choice but to just say go home and we'll figure this out as we go. So I feel like a lot of things have changed when it comes to, I can't be on campus with my friends. I have to be online in an online virtual environment. And that was hard for a lot of people if they weren't already used to taking classes online. 

 

EMILY BIGHAM: So what's today's headline in the student lending world? 

 

BRITTANY MILLS: Student loan forgiveness. Are my loans going to be forgiven. That's a big question that students have. And rightly so. I do as well. Everyone does that has a student loan. And so Navy Federal, we're waiting to see what will happen in that landscape. 

 

EMILY BIGHAM: What would that decision change for you? I mean, it seems like there's a lot of uncertainty around that. I feel like the hot word is uncertainty. It's like, oh my gosh, what's going to happen in every aspect of everyone's life? But what would that change for Navy Federal or for you in your role? 

 

BRITTANY MILLS: So we've already changed our strategy when it comes to making sure that members are top of mind. So federal student loans, they come with benefits. And when you refinance those as a private student loan you lose those benefits. And so we made a decision to temporarily pause the refinance of federal student loans so that members could keep their benefits and we can make sure that they have what they need and make the best decision for them at that time. 

 

EMILY BIGHAM: How are you supposed to even make a decision as a student or a parent? Do you start saving for college? You have a son. You have a couple of kids, but I know that your super star football son is looking to go to school in a few years. What's the conversation in your household about college and student loans? 

 

BRITTANY MILLS: So as you just mentioned, I travel with him for football. And just this past weekend we went to Florida. And he actually wants to go to school in Florida. So there's a good chance that he might say, hey mom, I want to go to school in Florida. We're going to have to look at all of our options and see what's available. He may get a scholarship, he may not. I can't sit around and wait for that. So of course we're going to save our money. We're going to look at the options that are available to us, either from the schools that he picks, we're also going to fill out the FAFSA when it comes time, which is the free student loan application for federal loans. Just things that we will need to do to help him get ready. 

 

EMILY BIGHAM: So you mentioned federal student loans. And I very luckily did not have to go through this process so I'm a little bit unfamiliar with it. So apologies upfront if I ask a ton of questions about this. But what is the difference between a federal student loan and a private student loan? 

 

BRITTANY MILLS: Sure. So federal loans, they typically have fixed rates and they don't require credit. And then once the funds are granted through the federal loans, grants or scholarships, if they don't cover the full amount, then you'll go ahead and get a private loan which you can apply for through your bank or credit union. They will determine if you qualify for the amount based on your credit worthiness. Lots of times co-signers do increase the chance of loan approval and lower the interest rate on your loan. 

 

EMILY BIGHAM: OK, so that was a lot of financial speak. So even things as small as fixed rates, and determining your credit, and that they determine for you, I feel like even submitting something as simple as a credit card application can be daunting, because it is putting something out there and then seeing if it gets accepted. It's a lot of emotional stress. 

 

Can you walk me through the real bare bones steps of, OK, so I'm a student in high school, and I've already decided what college I want to go to that's best for me, but I can't afford it. So what is your first step? Should you even be thinking about federal versus private student loan? Can you walk me through first things, first steps? 

 

BRITTANY MILLS: Yeah. First things first is to fill out the FAFSA. A lot of people think, my parents have too much money, I can't apply, or I wouldn't get any money. You definitely want to go to the FAFSA which is the Free Application For Student Federal Aid to determine what you would qualify for. We want you to exhaust all your federal options first. 

 

EMILY BIGHAM: OK, so federal number one. 

 

BRITTANY MILLS: Federal number one. 

 

EMILY BIGHAM: And use the FAFSA. So where can you get that? Is that an application online? 

 

BRITTANY MILLS: Yes. 

 

EMILY BIGHAM: Do you go through Navy Federal's website? 

 

BRITTANY MILLS: That is FAFSA online. I can't think of the website right now, but yes. 

 

EMILY BIGHAM: Google it. 

 

BRITTANY MILLS: Google FAFSA. F-A-F-S-A. 

 

EMILY BIGHAM: Perfect. We'll put it in the show notes. 

 

BRITTANY MILLS: It lets you put up, I think, a couple schools that you choose. And then you can compare those offers once they come back to see what makes sense for you. 

 

EMILY BIGHAM: OK. So first things first, use the FAFSA application. And then once you get those back, you consider, OK, is that enough money to cover it or do I need more money. And how are you supposed to know if you need more money than what someone's told you you can have? Does the school provide that? 

 

BRITTANY MILLS: The school will provide you, I guess a gap letter. Not 100% sure. 

 

EMILY BIGHAM: OK, so-- 

 

BRITTANY MILLS: I'm pretty sure they will let you know what else is owed on your bill. 

 

EMILY BIGHAM: What else is owed on your bill. OK. And then, so when you then decide, OK, I need to go and get more money in a private student loan, is that when members reach out to Navy Federal? Is that when you-- 

 

BRITTANY MILLS: Yes. That's when they shop, which we encourage. Shop for the rates and terms that work for you. Because not every lender is the same. You want to check out that lender's reputation, you want to make sure that-- some lenders require you to pay immediately, so just checking to see what works for you is what's in the best interest for you at that time in your budget. 

 

EMILY BIGHAM: And for some reason in my head I thought that student loans covered tuition and the bulk of those big expenses. But I found talking to people that maybe it covers other things like dorms and books and whatever you need. So what do student loans cover? Or what can they cover? Is it up to the student or is it up to the loan product? 

 

BRITTANY MILLS: It is up to your school. So tuition, dorm room costs, off campus housing, textbooks and supplies, laptops, food, transportation, anything education related expenses that are certified by your school. 

 

EMILY BIGHAM: OK, so the school certifies it. That's interesting. So you have to keep your receipts? This is so interesting to me. How does that work? 

 

BRITTANY MILLS: I think it's up to each individual school. 

 

EMILY BIGHAM: OK. So it's something that you need to talk about with the university. 

 

BRITTANY MILLS: Yep. 

 

EMILY BIGHAM: There's so many things that are involved in student loans that it's really crazy. And is that something that at Navy Federal you guys help people with? Are you kind of the trusted advisor? I know that with mortgages that's something that we definitely, we consider ourselves a trusted advisor. Do you guys do that with covers? 

 

BRITTANY MILLS: We do as much as we can to support the student. But obviously each school is going to be different in what they require. And we also advise them, hey, reach out to your school. Make sure you know what is required of you from them as well. 

 

EMILY BIGHAM: So refinancing. Tell me a little bit about that. 

 

BRITTANY MILLS: Right. 

 

EMILY BIGHAM: Everyone loves a good refi. 

 

BRITTANY MILLS: So refinancing is typically great for someone that have all these loans and they want to consolidate them into one payment, and they want to potentially reduce the interest rate, which in effect will reduce their monthly payment. But at the same time, refinancing, you should also make sure you have the income to support as well as the credit history. 

 

EMILY BIGHAM: So is this after? When are you supposed to think about refinancing? Is it after you're done with school and you have a job? Because I know that your credit matters. In order to build credit and in order to get a lower rate, you typically have to have higher income, or income period. Is that something that you have to wait and do afterwards? Or can you do it when you're in the process, in school? 

 

BRITTANY MILLS: Most lenders require you to graduate before you can refinance. So and at that point you can do it at any time. But again, checking the rates, checking the lenders, knowing what they're being offered is what's in the best interest of you at that time, and making sure that you are getting the rate that you want. Because you wouldn't want to have a lower rate and try to refinance and you would get a higher rate. So trying to make sense. 

 

EMILY BIGHAM: Well, and we're in a very low rate environment right now. 

 

BRITTANY MILLS: Right now, yep. 

 

EMILY BIGHAM: So are people concerned about rates going up and are they looking to refinance? 

 

BRITTANY MILLS: And see, that's where part of the uncertainty is, because of the federal loan component. I believe some lenders are still refinancing federal loans. We are not. I think some people have even stopped considering it for now just to see what happens around-- 

 

EMILY BIGHAM: Put it on pause because you just don't know. And I think that's the smart decision. 

 

BRITTANY MILLS: Exactly. 

 

EMILY BIGHAM: Because if loans start going up, or even inflation will probably impact that a little bit. Also there's a lot going on with the job market right now with employment. I think a record number of people have left their jobs. I don't know if that's because-- I mean, there's a couple ways of looking at that data. So it could be like, OK, for the past year and a half, people have been sitting tight in their jobs, not wanting to leave or try to find new ones, because obviously working from home, or trying to go to a new company and manage a new team, or figure out what's going on while working from home is difficult. 

 

So, is it now that because everything is opening up and people are starting to get out there more, is that percentage higher because people are looking-- they've been putting it on hold and now there's a surge. I had to point to that and I can't remember where I was going with it. 

 

BRITTANY MILLS: Hey, listen-- 

 

EMILY BIGHAM: Because you know how I am. Analyst brain. 

 

BRITTANY MILLS: No, that's fine. But to piggyback off that point, a lot of people, being home, have considered other options for themselves. The great resignation, right? People are actually considering things that are good for them and trying to understand-- making sure that they have that extra income to support whatever they want to do, whether that's refinance or keep their loans the same. 

 

EMILY BIGHAM: Yeah. And I think also the crazy thing about the interest rates, and how we don't know what's going to happen with that, and there's so much fluctuation, I think that there's a lot of hype about that. Because even if interest rates are changing, it's not going to be so quickly that no one's going to have time to think about, OK, what should I do with my finances. Do you guys have any resources online that people can look at to if they have questions about this? Where do you send members when they have questions? 

 

BRITTANY MILLS: We have a couple articles on our website, MakingCents articles that speak along these lines. Just educating them on the different student loans, and refinancing, things like that. So we definitely have the education out there for our members to look at. 

 

EMILY BIGHAM: When do you start to repay student loans? Is that after you graduate as well? 

 

BRITTANY MILLS: Yes. 

 

EMILY BIGHAM: OK. What are your like-- 

 

BRITTANY MILLS: Although, I guess for in school, if you're in school, we allow you to make the $25 payment so that you can help build your credit. 

 

EMILY BIGHAM: Tell me more about that. Because building credit is-- 

 

BRITTANY MILLS: It's very important. 

 

EMILY BIGHAM: Well, it's really important, but it's something that people don't really understand that they can be doing while-- there's just a lot of questions about credit. And I think that you know a lot about credit. You were formerly in credit cards. We miss you. But tell me a little bit more about that monthly payment of $25 while you're in school and what that does to help your credit. How does that work? 

 

BRITTANY MILLS: So yeah, you can choose that option where you can pay $25, and that will help you pay towards your loan. And a lot of people don't realize, but those payments are being recorded and helping your score increase little and little over time. So it does help that student, that when they finally graduate, they can maybe refinance on their own without a co-signer. Because most likely if you're a student, you're going to need your co-signer to support you. 

 

EMILY BIGHAM: So it gives you a lot of financial independence. And you need a good credit to move on in your life. To buy a house, to buy a car, you need to have credit. 

 

BRITTANY MILLS: Exactly. All those next steps and all those big milestones that come after school. So I think it's a good thing that we put on our website. We promote that. It's a good step for credit builders. 

 

EMILY BIGHAM: Is it unique to Navy Federal or do other lenders do this? 

 

BRITTANY MILLS: I believe there are some other lenders that do it, in their own unique way, of course. 

 

EMILY BIGHAM: Right. But I mean that $25 monthly payment, that's something that seems very affordable for people. 

 

BRITTANY MILLS: Very. 

 

EMILY BIGHAM: Is it kind of like a set it and forget it type of thing where you can just set it up and it automatically transfers? 

 

BRITTANY MILLS: So automatic payments are an option for all of our borrowers. So yes, they can do that. 

 

EMILY BIGHAM: And can you pause it at any time if you feel like you really need that $25? 

 

BRITTANY MILLS: Absolutely. 

 

EMILY BIGHAM: That's really cool. That's a great benefit. I like that one. Of the best things that my dad ever did for me was give me a credit card when I went to college. And I love saying that because I know he's probably going to listen to this and be like, oh my god, that was a disaster. But that taught me about building credit and the importance of making sure that-- that monthly payment really matters. And just showing on time payments can boost your credit history, or the opposite, which I think that's why it's important that you guys allow people to pause that. Because if you miss payments that's also takes a credit ding. So this is a good learning tool I think. That's pretty cool. 

 

BRITTANY MILLS: Yeah, we offer options. If they ever run into anything they can apply for forbearance. We can help them. So they just reach out, they apply for it, we'd go over their individual circumstances at the time. 

 

EMILY BIGHAM: So what did forbearance look like in the past year and a half? What happened during the pandemic? What kept you up at night? 

 

BRITTANY MILLS: I didn't know what I was doing. My first real world experience. 

 

EMILY BIGHAM: No one did. 

 

BRITTANY MILLS: During the pandemic we absolutely kept our members top of mind. We helped over 1,800 members with payment relief for their loans. And as always, we're going to continue to monitor their needs, and we adjusted as we needed to to ensure that they were OK, that we got their back, that we're doing this for them. So pandemic was a fun time. 

 

EMILY BIGHAM: Yeah, well I think it taught us a lot too, about the importance of making sure that if you put the members top of mind, it's always going to work out. And I think that's pretty cool. So it says here that you guys assisted over 1,800 members with payment relief. That's a pretty high number. How many members do you guys serve in the private student lending world, ballpark? Is this a big percentage? Did you reach out to them or did they reach out to you? How did that work? Did you just kind of know who needed help? Or did they have to request it. 

 

BRITTANY MILLS: They requested it. And I think ballpark is like 30,000 or so that we have in our student and refi space. So they reached out, we gave them the help that they needed, either online or maybe some called by phone. 

 

EMILY BIGHAM: OK. So I have some questions for you that came from my sister. 

 

BRITTANY MILLS: Sister! 

 

EMILY BIGHAM: Shout out to Caitlin Bigham. Because she and my older brother both went and got their MBAs a couple years ago. And I know for her it was a huge stressor because she had to take out student loans. This was the first time that she had to go through that process. And I just remember it was very stressful and emotional. Not to mention that she's also going to school and figuring out what her internship's going to be in the summer. And she moved from San Francisco to New York City to go to school. And that was a whole thing. I mean New York City, as we know, the prices are really high. 

 

So some of the questions that she had, which I think we already answered, were, do I shop around for student loans and see what rates I can get? And you said, absolutely. So I think that that's a big thing to mention. She asked about refinancing loans after graduation, which you also said, yes. And then something that she mentioned I thought was interesting was, when you are paying off your loans, how do you manage paying off loans versus putting your money towards other investments like retirement accounts, property, stocks. 

 

BRITTANY MILLS: So I believe there's some knowledge out there that I've read, that anything over 6%, your student loan rates, you're better off paying those. Because you would save more money just by paying those. If it's less than that, pay those and you can invest a little here and there in what you're interested in. So I think that's the general guidance that I've seen when I've looked into this. 

 

EMILY BIGHAM: OK. And is that something that Navy Federal money managers can also help with? I'm sure that's something they could help with. 

 

BRITTANY MILLS: I'm sure. 

 

EMILY BIGHAM: At this point, when you look at student loans and how long it's going to take people to pay off your student loans, how daunting to think that you would never actually be able to invest any of the money that you make. I mean, you have to figure out, what are we doing here? How am I going to set up myself for financial success? 

 

BRITTANY MILLS: Especially because right around the time you're graduating you're also thinking about, what does my retirement look like in the future? What does that look like? So I think, yes, finding a financial advisor if you need to, Navy Federal has them. That can help you figure out what the right balance is. 

 

EMILY BIGHAM: What about students who go to trade schools or unaccredited universities? Is there anything different there about the process they need to go through? 

 

BRITTANY MILLS: They can still apply for loans. The advice I would give is just determine what the value is. There may be other options out there for you to take advantage of. There's a lot of online learning, but at the same time people do want that certificate or that completion. So it's really up to each individual person whether they want to take the loan out or just save the couple thousand dollars to pay for what they want. 

 

EMILY BIGHAM: So transitioning a little bit to military, since that is a big part of Navy Federal's audience and membership. The GI Bill. What do you know about the GI Bill? 

 

BRITTANY MILLS: Hey, if you have access to the GI Bill you should definitely use that for your education. If then additional funds are needed, then you can apply for private loans. But at the same time, a borrower's or co-signer's income would be required at that point. 

 

EMILY BIGHAM: OK, so if you can take advantage of the GI Bill, you should do it. 

 

BRITTANY MILLS: Absolutely. 

 

EMILY BIGHAM: Awesome. OK. And I assume that's something that they also just go to the website and kind of-- 

 

BRITTANY MILLS: Mm-hmm. 

 

EMILY BIGHAM: I don't know if it's similar to VA loans in that sense. Is a GI Bill financed through an institution or is it just through the government? Question for Google? 

 

BRITTANY MILLS: Yeah. 

 

EMILY BIGHAM: OK. Well I mean it's a big thing. So I also see some facts here. 9 in 10 borrowers aren't ready to resume federal loan payments in October. That's a high number. That's 90%. What does that mean? Aren't ready to resume? Does that mean-- 

 

BRITTANY MILLS: Well, because of the CARES Act, zero payment, zero interest, nobody is paying. I think I saw something where maybe 1% of borrowers are actually paying their federal loans. We still are doing our $25 payments and people are still paying our loans because we're private lender, obviously, we're not federal. I guess that would be something that they would have to determine on how they would handle. 

 

EMILY BIGHAM: Yeah, so I think that there's still a big emphasis on the importance of college and I think that's also what's so frustrating, is you don't want something like financing to keep you from reaching your potential and getting you to the point where you're so stressed out that you're like, I'm just not going to do it because I don't understand federal versus student versus the uncertainty of forgiveness. What is your advice for people who are on the fence about going to school because of financing concerns? 

 

BRITTANY MILLS: I would say, again, apply for your federal funds. Because you don't know what you will get at that point. After that, then you can look into what other options you have out there, and what's available. You may find that there's a family member that's willing to help you co-sign just to help you further that education. So don't be afraid to go to school because of financing. Apply and then see what happens from there. 

 

EMILY BIGHAM: Apply and see what happens. And also I love the $25 monthly payment to help boost your credit. So I feel like right there there's a positive that you get immediately from doing something like this. When in the process should they start looking into it? When do you have to apply? So if you go to school in the fall, say school starts in August or September, when do you start this process? 

 

BRITTANY MILLS: So I believe the FAFSA opens October 1 of each year. 

 

EMILY BIGHAM: So for the following year. 

 

BRITTANY MILLS: Yeah. So as early as you can, you've got to check the federal timelines, you've got to check your school timelines, states sometimes have guidelines. So once you know, OK, this is what I'm doing, start researching the schools, your state timelines, and all of that, so that you can go ahead and-- 

 

How I want to do it when it's time for me and my son, go find out what school he wants to go to, find out what their timelines are-- keep saying deadlines, I'm sorry, but they're probably the same-- deadlines and timelines, and then from there, I can organize my steps based on what we're going to do. So I can tell him, look, this is what needs to be done, blah, blah, blah, blah, blah. Hopefully he'll take some initiative, we will see. 

 

EMILY BIGHAM: Even if he does, I'm pretty sure you're going to be like, oh, no, no, no, no, thanks honey, but here's what we're actually going to do. 

 

BRITTANY MILLS: Yep, exactly. 

 

EMILY BIGHAM: Good luck to him. 

 

BRITTANY MILLS: You know how it is. 

 

EMILY BIGHAM: I wish him the best. 

 

BRITTANY MILLS: We still like to see it though. 

 

EMILY BIGHAM: A for effort. 

 

BRITTANY MILLS: But that's pretty much the timeline I'm going to be on, is once I know for sure what schools he wants to go to, start getting those dates written down so that I can organize what we're going to do. 

 

EMILY BIGHAM: So a lot of preplanning. 

 

BRITTANY MILLS: Yep. 

 

EMILY BIGHAM: And then, is it ever too late to apply? 

 

BRITTANY MILLS: That, I guess, would be up to your school. 

 

EMILY BIGHAM: Not everyone is Brittany Mills and-- 

 

BRITTANY MILLS: That would be beautiful. 

 

EMILY BIGHAM: --was ready when your child was 8 years old. 

 

BRITTANY MILLS: I'm sure they'll make some exceptions based on what happened in the past year. 

 

EMILY BIGHAM: Well, also because there is some uncertainty. You just never know. So you never know what you're going to get back from your application, and then you never know what exceptions they'll make. But also, what if you're in school and then your situation changes and you need student financing, loans. 

 

BRITTANY MILLS: You can apply. 

 

EMILY BIGHAM: You can apply? 

 

BRITTANY MILLS: Mm-hmm. 

 

EMILY BIGHAM: At any time? So it's never too late any time? 

 

BRITTANY MILLS: You can apply and see. 

 

EMILY BIGHAM: OK. That's awesome. Well, is there anything that we haven't covered that you would like to talk about? 

 

BRITTANY MILLS: I would just want to say that, this is to the students and to the parents as well, but we've all been through our own personal challenges this past year. And I would say, please take care of you. Take care of yourself. Whether it's through meditating, creating, connecting, caring for yourself, I think all of that is very important. And if you don't know how or what to do, your school might have resources. There might be resources in your area that you can use. But keeping your mind healthy is just important. And I feel very strongly about that. 

 

EMILY BIGHAM: That's great. And I think the emotion, the stress that comes with debt and financing, reach out to your trusted lender and talk to someone about what you can do to help ease that. Because if we can at least relieve some of that stress, I think that's a big win too. 

 

BRITTANY MILLS: Absolutely. 

 

EMILY BIGHAM: All right. Well, I can't wait for you to circle back with me and tell me what's going on with student loan forgiveness. 

 

BRITTANY MILLS: I know. Maybe I'll be back. Maybe I'll be back. 

 

EMILY BIGHAM: Who knows? You never know. Thanks so much Brittany. It was great to talk to you and I hope you have a great weekend. 

 

BRITTANY MILLS: You too. Thank you. 

 

EMILY BIGHAM: And good luck to your son. 

 

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ANNOUNCER: Navy Federal Credit Union is federally insured by the National Credit Union Administration. This podcast is intended to provide general information and shouldn't be considered legal, tax, or financial advice. It's always a good idea to consult a tax or financial professional for specific information on how certain laws may apply to your individual financial situation. References to and participation with the military community does not constitute organizational endorsement. Navy Federal is an equal housing lender. Navy Federal Credit union are members on a mission. Insured by NCUA. 

EMILY BIGHAM: Hi and welcome to the podcast making sense. Brought to you by Navy Federal Credit union. I'm your host Emily Bigham and each week, I'll be taking your questions to the experts to help you make sense of your money unintended. Welcome to making sense. 

 

Today, we're talking with real estate agent Josh Chapman, he is a local agent here in the D.C., Maryland Virginia area. Josh comes from a military family and has a lot of experience helping service members and veterans find their dream homes. Welcome Josh, how are you today? 

 

JOSH CHAPMAN: I'm doing well, thank you for having me. 

 

EMILY BIGHAM: Thanks for being on. So today's headlines said we are in a housing crisis and not to start off with a dramatic question but are we in a housing crisis? 

 

JOSH CHAPMAN: So do you want me to answer that, yes or no? Because I could make an argument for both. 

 

EMILY BIGHAM: I think maybe that's the point. 

 

JOSH CHAPMAN: Exactly. So let me go with the yes answer first because if people see that headline and I'm sure you know anybody listening who pays attention to real estate probably has seen that. But the way that people interpret that of course, can be very, very different. And I would say yes, in the sense that we need more inventory. 

 

And so it being as much of a seller's market as we're in, where buyers have to get and do just outrageously competitive things to win, yeah, I think one could probably call that a crisis. It depends on how you look at it. Of course, if you're selling that would be the opposite of a crisis, but yeah, it could be perceived as that with low inventory and the fact that it all started with COVID, and has been slowly getting better, but we're still not actually, we're still well below pre-pandemic inventory levels. So why don't we if I get specified inventory crisis. How about that? 

 

EMILY BIGHAM: Yeah, I mean, I think that that's a good point that you bring up too because I think a lot of the focus is on the buyers. The first time home buyers. The fact that millennials happen to have a lot more cash than they used to and they're trying to find their first home but there isn't anyhow no homes for them to buy. What are some of the challenges that people are facing in today's market? 

 

JOSH CHAPMAN: Well, so I think to touch on what you mentioned the specific age group, millennials being well enough capitalized to buy homes probably for the first-- at least the last few years, we've been seeing many more millennials than ever before buying. But because the inventory is so tight, one of the challenges is just being competitive from a financing standpoint. And I go into this later on and talking with your lender, getting that stuff lined up, but even just I'd say eight or seven years ago when I was first getting into real estate, when it was-- it's a competitive area. 

 

Around Northern Virginia, D.C., Maryland, it almost always is but it was nowhere near as competitive as it is now. And you could have a client go out. You could take them to see five, six homes and they could say, all right. I'm going to speak with my lender now or Monday morning I'm going to call my lender, I'm going to get my FHA 3.5% debt which by the way that was how I bought my first home so there's nothing wrong with that loan product. But if you go and do that now, well, all right, half the homes you saw probably are already gone because the deadline was Sunday night or Monday at noon. 

 

You didn't talk to a lender already, the house is already gone. All right. And then the other challenge is being able to be competitive without having overwhelmingly strong finance, but it is still possible. And that's kind of what the news doesn't touch on very often is that even if you're not somebody putting down 20% 30%, you can still compete with all cash buyers. 

 

You compete with people putting down tons of money. You just have to be even more prepared. And I think that's what a lot of people are missing right now and maybe that's the biggest challenge is realizing just how much and how prepared they really need to be. 

 

EMILY BIGHAM: Well what if you can't be prepared? What if you're a service member and you're told that you need to move in x amount of weeks and you have to find out I guess I'm selling my home, am I going to buy a home in the next place and I mean what if you don't have that time to prepare? 

 

JOSH CHAPMAN: That's a good question, too. And I would say to anybody because actually I had a client recently that exact same situation. They were moving here from California, they're getting stationed here, and they were worried about that exact thing. They wouldn't have enough time to figure it out, but the reality is how it is. You can get prepared so fast. If you just spend 15, 20 minutes talking to your lender, you get the docs submitted, you can get a preapproval very quickly, then you talk with an agent in that area, and they're going to be able to tell you, OK, this is what you're pre-approved for and this is what you need. Maybe minimum bedrooms, maybe you have x amount of children or maybe you have to get a yard for your dog or whatever it may be. 

 

All right. Here's the areas we can look at, if these are your minimum criteria and then you go from there. And it can happen in as quick as 24 or 48 hours. I mean, that's exactly what we did with this client he had to move very quickly. So you can still do it and I know that can be a little tougher sometimes if people are overseas or literally on if someone's on the water might be a little hard to gather financial documents while you're traveling or anything like that, but that's the good thing about how quickly things can move is if you at least just start the process early or as soon as you know. It can get done surprisingly fast. It's just you don't want to it once you've already found the home because it might not be that fast. 

 

EMILY BIGHAM: Well, that's a really interesting point that you bring up because I think I don't know maybe 10, 20 years ago people were trying to find their dream home and now it's like well you're going to have to probably build your dream home. So let's think about what's really important here. First of all do you need to buy a house? Is this your first house or second or third, is this your nice to have, if so, maybe not a good time to buy a house. But you know I think that service members specifically are really good at this. It's like, all right. We-- I mean, they're good at managing a crisis. 

 

So if there's a housing crisis but they need to buy a house, they're going to find a way to buy a house. And maybe it's lowering your expectations for what that home is going to be, perhaps it's lowering your expectations for a location, I mean, it can happen. And I think that people tend to forget how different parts of different cities become nicer, become less nice, I mean, there's always going to be fluctuations like this. And I think it's like kind of just setting aside the anxieties about like well what if and more like let's just do it. 

 

JOSH CHAPMAN: That's key though, especially for the demographic you mentioned before. I think we're-- and this is something I talked to a lot of my-- I wouldn't even say millennial clients. It's just what makes up the majority of folks who might be buying their first home, but that could be anybody. I mean, I ultimately buy their first home this year and they were in their 60s. So it can be any age range and I think it's still-- I think the goal going into it can still be the same thing across the board and I think especially with folks who are military and what I always tell folks is look, we might be able to find something maybe it's a brand new home although these days brand new homes are hard to find, but everybody wants the brand new shiny object. 

 

However, normally, if you focus only on the house, as opposed to the location, that's where I see the challenge is down the road. Come up and people are maybe a little more unhappy about the decision later on but most importantly, if you focus on the ability to grow in that house but also the ability for that house to not only be something you live in, but a great investment and you look at it as something where, all right. This is a home I could go into, I could live here right away, but it's also something where maybe I could redo the cabinets. Maybe I could redo the kitchen. Maybe-- any kind of cosmetic updates, things like that. 

 

If you go into it and you find a house that has the opportunity to do those things and let's say a year later, two years later, you thought you were going to be in that area for five years and then you get stationed somewhere else, you get moved. Or if you've got a home that isn't completely remodeled or completely done, you don't have the ability to invest in that house, you could put whether it's 10, 15, 20, $1,000 into it really quickly, sell it, and now you have an exit strategy. 

 

So if you buy a home that has a little bit of work that's still needed, you're buying something that's a little safer for yourself. Because you have the ability to increase the value of the home and get out of it and either make money or potentially just break even as opposed to if you buy something where you can't do any of those renovations. You are essentially waiting and the market is only going to dictate the value of your home. 

 

And so I think military, folks first time buyers, anybody like that, if they look for something like you said lowering expectations is certainly one way to look at it or even just knowing like hey, maybe we don't need to search for the shiniest object or the most new home. Let's just find something that's in the most incredible location that we can find, that's going to make our lives better and our lifestyle will be a lot better. If you focus on that, everything else falls into place and I think that's the way to really, really look at it when you're just getting into first into home buying. 

 

EMILY BIGHAM: So switching gears a little bit talking specifically about loan products, we have a lot I think the VA loan here is our number one loan. It may be federal but I've heard that potentially when you're putting in offers in this competitive time, is it difficult to win with the VA loan? 

 

JOSH CHAPMAN: So that's like the first question. That's like the crisis question. I could say yes. 

 

EMILY BIGHAM: Yeah, it is. 

 

JOSH CHAPMAN: It's like an argument for it. And then I could say no and I could make an argument for that as well. 

 

EMILY BIGHAM: How about yes, it's hard to win but there is a way so-- 

 

JOSH CHAPMAN: Yeah, exactly. Yes with the caveat. So I-- the majority of my clients are military. I think after this week, I think the majority of my buyers that I've closed this year I think it's going to be like over 65% VA. And so it's definitely still possible and it's been the majority of my business and so it is challenging yes, but also still possible and a lot of times have people come to me and they're almost defeated before they even start. 

 

And actually I have a client like that that I'm going out with this weekend, who he's retired Air Force and he and his wife have wanted to look for homes for a while but they keep hearing all of these stories about their friends who are also military, who can't get their VA loans accepted. And what it really comes down to is the way that the sellers perceive them. Or well and/or the listing agents. And so it's very challenging because of all of the misconceptions that are going to surround VA loans, and listing agents who don't know much about them or owners, which they're not real estate professionals so they shouldn't know all about VA loans. 

 

I think it falls more on the agents than anything. They think that if they go with that over a conventional, maybe it's because they're 0% down, or maybe it's just because of things they've heard on the news, that's not going to close. Or it's going to be more challenging. And the way to get those offers accepted though and that's-- we can certainly go into that in greater detail, is to just have an agent as well as a really good lender, who both understand the VA loan and all of the intricacies of the differences between VA loans, conventional loans, FHA, and then being able to explain them to the listing side. 

 

And that's where it all starts is being able to just say, here's why my client is put in 0% down, they're approved for way more than they're buying for. Yes, this home is 650 and they're putting zero down. This person's approved to 900. They are probably even better. They're even more-- you know, these people could probably buy a more expensive home than some of the other people they're competing with, but the listing agent, if they don't understand the differences, they might look at somebody else and go, well, I don't know. I mean, they're putting 10% down. That seems, you know, that seems more secure. And just being able to explain why that's maybe not always the case. That's where it starts. 

 

EMILY BIGHAM: So it's having a relationship with your lender but also having a relationship with your real estate agent who knows the area and who understands what your needs are. I want to talk a little bit about affordability because when you are talking about the 5% to 10% over, let's talk about rates for a little bit because I think that the affordability goes back to the housing rates, and they're so low. So if you think back to when the housing rates were high and home prices were low, that all evens out. 

 

And another thing that I kind of want to get into a little bit is how the mortgage rates do not match what is going on in the economy, necessarily. It's pretty much tied to home buying, right? I mean, for example, the credit card rates, that does not match what's-- 

 

JOSH CHAPMAN: Right. 

 

EMILY BIGHAM: --happening with-- like, the prime rate, I guess is what I'm saying. So if we talk about affordability because you're throwing out high numbers, that seem scary, but people can afford that. They might just know it. 

 

JOSH CHAPMAN: Well, right. And that is kind of one of the other, I think, surprising things I see so much, and it's almost the opposite of what you would think. That's the generational thing that I do see more often. A lot of times, some of my older clients, if it is their first home and they were-- let's say the price is like the one that was just thrown out there. They might look at that and just think, that is so insane. 

 

That's also because even if they didn't own a home, they still remember what prices were 10 years ago, 15 plus years, whereas millennials, a lot of times they're looking at it, and they're looking only at the monthly payment, which, frankly, is-- that's kind of the way you should approach it. You should look at your monthly payment because that's what-- 

 

EMILY BIGHAM: [INAUDIBLE] 

 

JOSH CHAPMAN: Affordability. Exactly, and that's where rates do come in. And you're right. The rates right now, it is kind of detached a little bit from what you see. It's been fascinating to watch for the last year and a half, and don't want to try to-- if go into that too much in the relationship with the bond market, I think-- if anybody's made it this far in the podcast, they'll probably turn off, but-- 

 

EMILY BIGHAM: Or you might attract some different type of listeners. I don't know. I want to talk about the bond market. You know me. 

 

JOSH CHAPMAN: Yeah, let's talk about the 10 year and how that-- yeah, but the reality is it's what we've seen over the last year and a half is just so unprecedented. And I know people are probably tired of hearing that in every aspect of life, but it's so incredibly true when it comes to real estate and lending. And if we go all the way back to March when this first started, 2020, right, when things started getting pretty crazy, right, March, April, and we saw what was almost one of the greatest liquidity crises as far as mortgages go, and rates were all over the place. 

 

Well, then the Fed starts buying mortgage-backed securities. They don't buy enough of them, so then they buy too many of them. This causes rates to go up and down way more than they normally would. This causes huge issues for banks that, again, I'll try not to go too far into, but that-- then once we finally got out of that and banks were able to start lending to people again, restrictions were getting lifted, then rates were so low to really get everything-- getting the economy stimulated. And they're able to have these low rates because of how many of these mortgage-backed securities are being bought as well as some of those other things we mentioned. 

 

And then all of a sudden, you have such a high demand of people who want to either buy or refinance their homes that banks were able to actually increase the rates for mortgages strictly based off of demand, which is insane. That almost never happens, at least to the extent that we saw. It really is mostly correlated with the bond market and some of those other things. 

 

And so that now has started to taper off a little bit. The ginormous backlog of re-fis is getting worked through. At this point, the cat's out of the bag. People know, like, hey, rates are low. If somebody has wanted to lower their rate, at this point, they've probably done it. And if they haven't, the banks at least have the capacity to handle it now. 

 

So then what you see is a lot of people who just want to buy it because of how low rates are, and it's making it really, really affordable. And your-- and I'm blanking right now. You had somebody on your podcast to talk about VA. 

 

EMILY BIGHAM: Kevin [INAUDIBLE]. 

 

JOSH CHAPMAN: Kevin. 

 

EMILY BIGHAM: Yeah. 

 

JOSH CHAPMAN: Yeah. Yeah. Yeah. So Kevin made a really good point about how the benefits of the VA loan are-- the biggest benefit is rate, and it truly is the greatest loan product out there for veterans because you can get the lowest rate without having to do crazy things like having to buy points, or mortgage insurance, and all these other things that the general public does not have access to. And it's a great benefit for veterans, right? 

 

I mean, they should have access to this, and that's what we're seeing in a lot of markets just like ours, right, the DC metro area and just places where there's kind of a heavy military population. The buying demand is just through the roof because a lot of VA buyers are looking at it, and they're going, these homes, even with prices going up crazy numbers like we just talked about, are still so affordable because they could go, all right, sure, if I-- and I'll use 500,000 because that's more of-- I think it's still closer to the median across the country. But if somebody looks at a $500,000 house, and it's increased 10% over the last six months, and now it's at $550,000, even if someone is putting 0% down, their monthly payment from $500,000 to $550,000-- even though $50,000 sounds like a lot of money, and it is-- the monthly payment difference has probably moved around $300 to $350, right? 

 

It's not that much. A lot of people go, oh, well, $50,000 sounds like a lot, but I could stomach an extra $300 to $400 a month. That's manageable, and we have a lot of people saying that all at once. Then we go back to the very beginning of a potential inventory crisis because there's just not enough homes for all of these people who want to buy to buy. 

 

EMILY BIGHAM: Yeah, I mean, and I have a lot of thoughts about the inventory, but I do want to go back to-- I have two questions for you. So refinancing, if you have a mortgage and you're thinking about refinancing, what rate would you say is high enough that you should refinance? 

 

JOSH CHAPMAN: So that depends on-- and now I wonder if Kevin is going to come back and listen to this podcast because he's going to, hm, I wonder if he gets this right, but-- [LAUGHS] 

 

EMILY BIGHAM: We can ask him. 

 

JOSH CHAPMAN: No. No. No. No. So when you say high enough, do you mean-- if you have a rate that is a certain amount, at what point do you think you should take advantage of a lower rate, something that's lower than what you're currently at? 

 

EMILY BIGHAM: I mean, how would know if-- like, say you bought a house, like, three years ago and your rate's a little bit higher than what mortgage rates are right now, like in my mind, I would just talk to my lender. And I would be like, hey, if I were to refinance, what amount of money would I save because I do know that there are some additional costs involved with refinancing, so I just didn't know. If someone had that question, what would you point them to? Would you say go talk to your lender? Are there online resources? 

 

JOSH CHAPMAN: Yeah, so absolutely. You're correct. You talk with your lender, and what you really want to do is-- because hypothetically, if the rate is even the smallest amount below where your current rate is, like, what you could re-fi into is even just a hair below, there's still a situation that exists out there where that could make sense for somebody, right? And that's if somebody is going to have their home for a long time because if it only drops your payment by, like, $10 a month, well then what you have to do is go, all right, if this is going to cost me in closing costs because a lot of people don't realize that when you re-fi, you do have to-- there's title. There's all that. 

 

You're basically closing again, and you can-- a lot of times, you can roll that into the loan. There's ways around that, but, still, it's going to cost money and-- most of the time. And so let's say you only make your monthly payment better by $10 but it costs you $10,000 to do it, OK, well, that'll basically take you 1,000 months to get to the point where that might be worth it, right, whereas if you look at it and you go, OK, this is going to drop my monthly payment by hundreds of dollars, right, and I know I'm going to be in this house for 10 years, all right, it's probably worth it. 

 

But if you say, oh, I'm going to sell my house next year, I just want to drop my payment by 50 bucks until that time, well, your true out-of-pocket costs there is probably not going to make sense there. You're probably going to spend more refinancing your house than you'll actually save in monthly payments, so it all depends on what the lender tells you you can get versus what you're paying. And then you factor in, all right, how much is that going to cost, and what's my short and long-term goals for this home? And if you know kind of how long you want to be in the house for, then you can calculate your break even and figure out, all right, is this good or bad? 

 

EMILY BIGHAM: Another question that I had was related to 30-year versus 15-year mortgages. And if the rates are low, are more people going for the 15-year mortgage because the rates are low, and that would mean your monthly payment maybe is less than what it might be if rates were high? 

 

JOSH CHAPMAN: So I would actually take the opposite angle, and some people would be, right? And I think this is kind of an older generation thing that I see much more often. It's typically my clients who are older that do the 15 years because they're well capitalized enough to handle that larger payment. But if somebody takes a 15-year on a $500,000 house but they could also do a 30 on something at $700,000, most people say, it's around the same, and I'm getting a house that's a lot nicer. I think I'm going to go with that 30 because the rate is so low. 

 

And so that's one of those other things where it's like if it's someone's forever home and they're putting 20%, 30%, 40%, just an absurd amount down, it's all the house they could possibly ever want, and they can afford a 15-year, totally. They're doing it, and it makes sense. But if somebody is just starting out buying or maybe it's their second home, third home, maybe it's-- it's not their forever home, they're still trying to get everything in a home that they really, really want but maybe they're not quite there yet, that's typically somebody who's going 30-year because the rate's low enough, they're not having to pay a ton of interest to the bank, and they're getting closer to not only getting the house they want but they're also-- they're able to get more leverage, right? And the more leverage you can use in a situation like that, by buying a home that's maybe $750,000 instead of $500,000, that's pretty huge because that then sets you up for greater success in the future. That's how you get to that point maybe 10 or 15 years away where then you do get to go do a 15-year mortgage on a forever home. 

 

EMILY BIGHAM: Right, and you can refinance. So, I mean, we've talked a lot about what's happened the past couple years and what's happened within 5, 10, 20, some of the generational gaps and-- but where do you feel the real estate market is going? What's the future? 

 

JOSH CHAPMAN: So this is one of those ones where it's so location-specific, right? And so I can-- I definitely have opinions about-- well, I got opinions about everything in real estate, right, but-- as you know because we talk about it all the time. But I think for the broader market, we're in a really good spot now, and I know there might be some people listening who are probably thinking like, oh, I mean, of course, the real estate agent thinks that it's a good time to be in the real estate market, right? I mean, yes, of course, I am biased. 

 

However, because I am in this, and I do pay attention to it so much, and I enjoy looking up various data points, and information about the housing market, things like that, it's-- what we're seeing right now is so wildly different from what we saw in 2008. And I think that's-- I think you have to almost go backwards a little bit before you can start thinking about the predictions forward, right? And so in 2008 and everything that led up to it, you had a ton of people buying homes they couldn't afford. They were getting loans for homes that nowadays they couldn't even come close to buying. 

 

It wouldn't even be a consideration. They couldn't even write the offers on these homes because no lender would give them a preapproval for it. So you had prices that were going up. It was very artificial. The prices were only going up because they were getting pushed up by fake buyers, essentially. 

 

EMILY BIGHAM: But then really quickly by 2008, you mean the 2008 housing crisis, where there were a lot of subprime mortgages, people basically allowed to buy-- I just-- 

 

JOSH CHAPMAN: Yeah. 

 

EMILY BIGHAM: For those who aren't aware of what happened in 2008, we're a little older now than we pretend we are. 

 

[LAUGHTER] 

 

JOSH CHAPMAN: Yeah. Yeah. Well, and so you had a ton of people buying homes that they couldn't afford, and there was very little equity in these homes. 

 

EMILY BIGHAM: Right, but they didn't know they couldn't afford them. 

 

JOSH CHAPMAN: Well, you'd be surprised. 

 

EMILY BIGHAM: I mean, lenders-- 

 

JOSH CHAPMAN: Yes, it was-- well, it's almost like with-- and you can still find this with auto, and auto loans, and stuff. You could just call somebody, and, I mean, we're talking no doc loans. You're not giving any documents or very, very little. You're basically just saying, yeah, this is my income, and, yeah, this is-- yeah, I mean, this is what I make. 

 

Sure. And the lender says, OK, here's your money. And everybody was doing that because they saw home prices going up and going up quickly, which is why I get this question a lot because home prices are appreciating quickly right now. It's very, very different. 

 

And so they're thinking, whatever. If I can't afford it, it doesn't matter because I'm going to make money off this in a year or two years. Everybody thought they were going to be a house flipper, and everybody was buying multiple homes, investment properties. Everybody had these grand ideas of just making tons and tons of money off of every house they bought, so they didn't really care about over-leveraging or buying homes that they truly could not afford. 

 

And now we have the complete opposite, right? Now we're seeing some of the most competitive situations across the country that we've ever seen, and a lot of times the folks who are winning these competitive situations are the folks who have the most capital. They are able to afford these homes 10 times over, and you have a lot of equity. And so the-- I know that in the country, I think in the US, 38% of all homes right now are owned free and clear so no mortgage, right? That's a wild-- that's a very, very high number. 

 

And then there's almost 18 million residential properties that were considered equity-rich, meaning at least 50% equity. And so there are more homes with more equity right now than ever before. So even if prices were to fall 2%, 3%, 4%, 5%, these people aren't hurting. 

 

These are not people who are going to have to scramble to sell and foreclose on their homes because if they sell them, even if it's at a lower price than what they might get today and they sell it for 5% less six months from now, they still make money. The bank doesn't have to take their house. They didn't make as much money as they could have, but the bank doesn't take their home. And if you don't have a ton of these foreclosures and stuff like that happening, it-- the market is a better place for it. 

 

But the other thing is that there is-- we have had decline in inventory for years and years, and that's why prices are going up. They're not going up because you have these basically nonsense loans being given to anybody with a heartbeat. They're going up because of supply and demand. I mean, it's the purest example of that kind of basic economics lesson of supply and demand. 

 

And so that is-- I think that things are going to keep going up. I think that the best way to look at it is very location-specific. Again, talk with a good local agent and lender, but things would-- the amount of homes that would have to hit the market all at once to have any impact on price right now, because of how incredibly high demand is and how wildly low supply, is just almost unfathomable, and so I think that predictions for at least our local market, very, very strong. 

 

And then I think for the country as well with people being able to work from home a little bit more than before and being able to move to a lot of these places that have more affordable cities and things like that, it's going to probably be pretty strong for a while. And what I'm hoping-- this isn't so much as a prediction as it is a hope. I just-- I hope that we're just going to start seeing homes selling for maybe 2% or 3% over ask in some places, instead of 10% over ask almost every time, and competing with just a handful of offers, as opposed to 15 or 20. And I think we're actually already seeing that a little bit, and so I think that's going to continue. But I think it will still very much be a seller's market. 

 

EMILY BIGHAM: So sellers market. So basically, as far as predictions, because sometimes you'll read we're in a housing bubble, or people try to compare to 2008, or they talk about inflation, this and that, so what you're saying is, I mean, it's supply and demand. So there isn't as much supply. The demand is still going to be high. 

 

However, maybe it'll be less of-- the spikes and the rises and falls, it'll be less dramatic and more just, OK, yeah. So, I mean, what advice do you have for any service members or veterans out there who want to buy a home? They need to buy a home. They have a VA loan. What should they do today? 

 

JOSH CHAPMAN: All right, number one thing, and this goes for whether you're using a VA loan and anyone. If you are even considering buying a house, speak with a loan officer immediately, right? And this is not just-- 

 

EMILY BIGHAM: Talk with a loan officer. 

 

JOSH CHAPMAN: Yes, and it's not me trying to plug NFCU. I'm not trying to push people. I'm not saying, hey, call NFCU right away. The reality is that is what you have to do. You have to do that because if you don't do that, you have no way of knowing if the homes you're looking at online, on whatever website you choose to look at homes on, you don't know if you might actually be able to afford those. 

 

And either one of two things is going to happen. You're going to get to the point where you want to go see them, and you're going to see it, and what if you can't afford it? All right, well, that's never a great feeling, or you might go out and look homes, and you might get very disappointed in the homes you see because they're not homes that you want to buy. And then you might say, oh, never mind. I'm just going to give up, but you might actually be able to afford more. 

 

And so it's important to just know where you fall on that price spectrum and what you're comfortable with because once you know what your monthly payment can be and what you're good with as far as monthly payment goes, then you can really start looking. You bring that monthly-- you bring that preapproval to an agent in your market and you say, OK, here's what I'm comfortable with. Here's the type of stuff I want in the house. Where do we start looking? 

 

And I think specific to veterans, though-- and I know I touched on this before, but I think it is really important. I think when it comes to using a VA loan, the really important way of thinking about it is not so much first thinking about the benefits on your side, right, on the buyer side of things. Try to first understand why the selling side might look at it as a disadvantage right up front. That's what your agent has to communicate to the other side. And if they do it from the beginning, that's how you'll set yourself up for success. It's the only way to win is knowing what the other side-- knowing what your competition is doing and knowing how the other side is going to think about it when you present your offer. 

 

EMILY BIGHAM: Well, I mean, that's classic how to win. 

 

[LAUGHTER] 

 

JOSH CHAPMAN: Yeah, but you're a very competitive person. 

 

EMILY BIGHAM: You've given such great advice, and I really appreciate you going into detail and really explaining how everything leads up to this really pivotal point in a service member's life. And I think just understanding the background, just you can kind of cut out the noise that you read in the media. You can cut out the noise that you hear from people who think they know everything but they don't. But also that's a lot of stuff to have to think about constantly, and with the market changing as much as it is and how you have to just be ready to jump on houses when they come up, I think it would be best to just find a real estate agent. 

 

JOSH CHAPMAN: I will add one more thing too. This is something I tell every veteran that I work with. We talk about the financing, appraisal stuff. If you know going into it that you are going to be making the best offers you possibly can, that you are the most comfortable with, and there might still be agents on the other side who just don't get it, right, and you know that that's out of your control, and that it might happen, you're going to be a lot happier going through the process because, eventually, you are going to get through. Sometimes it's the first house. Sometimes it's the third or fourth house. 

 

And as long as you know that what you were doing, and the agent you're working with is rock solid, and they understand the VA loan, and how to convey it to the other side, even if you don't get the first few, you are going to find a good agent on the other side who does get it and who will understand why your loan is not the disadvantage that maybe some of the previous ill-informed agents-- maybe what they did not get. So don't be discouraged. It's still very much possible. Definitely don't avoid getting into the market because of stories you hear about VA loans. Don't avoid trying to make offers just because of the potential for issues. Definitely still get out there and just find a good agent who will make it happen, and it will happen. 

 

EMILY BIGHAM: I like your optimism. It makes me happy. 

 

[LAUGHTER] 

 

All right, last question. 

 

JOSH CHAPMAN: That's part of my job. 

 

EMILY BIGHAM: Last question before I let you go, and it's rapid fire. You can only answer with one word. My condo-- rent or sell? 

 

JOSH CHAPMAN: Sell. 

 

EMILY BIGHAM: [GASPS] Great. 

 

JOSH CHAPMAN: I know I'm going to get-- see, but what a real estate agent thing to say though, see, because without being able to explain why. 

 

EMILY BIGHAM: I don't want to hear it. I don't want to hear it. I don't want to hear it. 

 

JOSH CHAPMAN: I know you don't. 

 

EMILY BIGHAM: I don't want hear the why. 

 

JOSH CHAPMAN: Sell. 

 

EMILY BIGHAM: I trust you. 

 

JOSH CHAPMAN: Sell. 

 

EMILY BIGHAM: Oh, OK, well, that just-- all my anxiety just left and I'm going to sleep well tonight. All right, well, thank you so much, Josh, and, again, I really appreciate you spending time with me this morning. And as always, talking real estate, I love it. It's awesome. 

 

You just know so much about the military and veterans, and you do so much for them. I really appreciate all of the hard work that you do and put into finding them homes, so thanks so much. 

 

JOSH CHAPMAN: Thanks [INAUDIBLE]. No, thank you so much for having me on, and that's really kind of you. I feel like it's always one of the most rewarding things for me, being able to help veterans get into homes. And with parents who were veterans and having to move around so much as a kid, I know how important it is to have a place to really call home, so it's the least that I can do to try and help in any way I can. So hopefully this was good, and if-- I would love to come back on if anybody has any good questions later because real estate's always changing. 

 

[MUSIC PLAYING] 

 

MAN: Navy Federal Credit Union is federally insured by the National Credit Union Administration. This podcast is intended to provide general information and shouldn't be considered legal, tax, or financial advice. It's always a good idea to consult a tax or financial professional for specific information on how certain laws may apply to your individual financial situation. 

 

References to and participation with the military community does not constitute organizational endorsement. Navy Federal is an equal housing lender. Navy Federal Credit Union, our members are the mission. 

[MUSIC PLAYING] Hi and welcome to the podcast Making Cents, brought to you by Navy Federal Credit Union. I'm your host, Emily Bigham, and each week, I'll be taking your questions to the experts, to help you make cents of your money. Pun intended. 

 

This May, during Military Appreciation Month, Navy Federal partnered with Operation Homefront on a special social media campaign asking members to share pictures or stories of themselves or their family members who served. But most importantly, we asked them to share how many numbers of years that they served, because we donated $5 for every year of service shared. And I'm happy to say that after receiving over 1,000 messages and a cumulative total of 14,000 years of service, we were able to reach our $50,000 donation goal. 

 

And today on the podcast we have a very special guest, Robert Thomas. He is the chief operating officer at Operation Homefront, formerly in the US Air Force. Thanks so much, Bob for being on the podcast. How are you today? 

 

ROBERT THOMAS: Hi, Emily. Thanks for the invitation. 

 

EMILY BIGHAM: No problem, glad to have you on. So can you tell me a little bit about Operation Homefront and how you started with the organization? 

 

ROBERT THOMAS: Well, Operation Homefront's mission is to build strong, stable, secure military families, so they thrive, not just struggle to get by, but thrive in those communities they work so hard to protect. So what makes us a little different than some other organizations serving military veterans is we serve the family. And, of course, the veteran, or veterans, that wear a uniform to work every day are key members of the family, but our focus is really on family programs. And if you help a family by paying rent or a mortgage, you're really helping everyone in the family, so that makes us a little bit different. 

 

EMILY BIGHAM: So when it comes to military appreciation, I think you guys are definitely making a well-rounded effort, right? Because like you said, it's not just about those who are serving, it's also about the family. And so you mentioned financial assistance and mortgages. Can you get into a little bit about Operation Homefront and what makes you guys different? 

 

ROBERT THOMAS: Well, we have a whole portfolio of relief resiliency and recurring family support programs that help us accomplish our mission. And each of those programs are targeted on a specific area where military families perhaps need a little help. And by military families, I mean both those on active duty and veteran families. 

 

EMILY BIGHAM: You spoke about the different programs, I think you said relief and resiliency. How many programs do you guys have? 

 

ROBERT THOMAS: Boy, we've got-- we've got about a dozen total programs. We have a handful that are our flagship program. You know perhaps our biggest program is our critical financial assistance program. And that's where we help families who are just in a tough spot financially. And all you have to do is think about what your top bills are every month, and for me, like millions of other Americans, it's I got to pay my mortgage or I got to pay rent, utilities, a car payment, an insurance payment, and perhaps some unexpected bill that pops up out of nowhere, like a home repair. And a lot of families, a lot of military families in particular, don't have a lot of savings. And so when something unexpected happens, whatever that might be, it can really put them in a tough spot very quickly. So what we want to do is we want to be there for those families, provide the assistance that they need, so they get over the tough spot, and they move on to a bright future, rather than doing something crazy like take out a payday loan or run the credit cards way up, and now, it's a downward spiral if you're not careful. So we want to be there for the families. Our military families have been there for us in our time of need, and we want to be there for them. 

 

EMILY BIGHAM: Just the responsible assistance that you guys provide, I think it's really incredible and it's setting service members up for success as well, and their families. And I know you mentioned the critical financial assistance program, but Operation Homefront caught my eye a few years ago. And I live in the area where you guys have some of your transitional housing programs. I want to talk a little bit about that, because that to me is just incredible, the things that you do to actually-- like talk about setting people up for success and the families and taking care of them. Can you talk a little bit about those housing programs? 

 

ROBERT THOMAS: Yes, we have a three transitional housing program. Let's just step through them real quick. The first is our transitional homes for veterans. And for those of us who have been in the military, I kind of think of it like base housing. So Operation Homefront has purchased a portfolio of homes. By 2026, we'll be up to 27 total homes. And what we do is we select families to live in those homes for two to three years, and while they're living in the homes, they'll do all the things that we all should be doing every day, work to pay down debt, increase savings, work on a personal goal. In many cases, those families, their goal is completing some kind of academic degree or technical training program. And then ultimately for most, it's getting that great civilian job. 

 

What we find is a lot of military veterans after they get out, they actually go through two or three jobs before they find that one that becomes their second career. And so we want to provide stable, secure housing for the families. It takes the number one bill they have every month off the plate so they can save dollars and focus on other family priorities without having to worry about housing. 

 

And we pick families that want to reside long term in the locations where the homes are. So for example, we have three homes here in San Antonio, Texas. A lot of folks in the military, especially the Air Force come through San Antonio, very popular place to retire or to start that second career. And the thinking is, we'll put you up in our home for two to three years. You can put down roots, your kids can enroll in school, you can find that great job, you can start that academic degree. And at the end of that period, you don't have to rip it all up like a PCS in the military, when you move across country, lose all your friends, lose your job, start over with a new school, find new doctors in the specialties you and your family need, because the families want to live in these cities already long term. So we pick them families that have a genuine desire to live in those locations. We put them up in the home, and we work to set them up for the future. 

 

Now the best part about this program, I think, is the families are asked to pay a stipend of about $500 a month to get them used to budgeting for housing. And even when you own your home outright, you still have to budget for the escrows, the insurance, all those kind of things, the home warranty we highly recommend. So we ask them to do that. But at the end of the program, let's say at the end of three years, 36 months, we'll give them all the dollars that they contributed to that area back in cash. And so that is a great lump sum that they can use to put down on a house or to service some other family priorities. 

 

But it's a great program. We want to set that families up for success. And anyone who has been in the military knows that that first day when you wake up and you are retired for real and you don't put on a uniform to go to work, it feels completely different. And a lot of folks I know, I'll add my name to the list, you work until the last day, and you try not to think about it, because it's out there in the future, and then all of a sudden it's right on top of you, and you really don't have a great plan. So we want to be there for those families and set them up for success long term. And so I think that's a wonderful program. 

 

We've got houses in about six or seven cities now. We're growing very, very rapidly, trying to find cities where the housing is affordable and military families can live. So for example, we don't have any houses in San Diego, California, because the houses there are unbelievably expensive. So most folks that leave the military cannot afford to live in San Diego, at least not initially. So we try to find locations like San Antonio that are still affordable, because we love for the families to buy their own home when they graduate. It's not a requirement, but we'd like for them to be in a position to buy their own home if they chose to do so. And buying your own home is not the right answer for everyone, but if it is, we want the families to be well-positioned to take that next step. 

 

So that's one of our programs. And of course, all of these programs have the same common themes which are, you're assigned a caseworker, you meet with them on a monthly basis. When COVID is over, we will meet in person three or four times a year, but right now, we're meeting on video calls. Look over your finances, you'll establish a budget, work to pay down debt. All those themes in this program are the same as the other housing programs. 

 

EMILY BIGHAM: I wanted to commend you guys on all the work that you're doing. And coming from the military background, I've lived overseas. I have three siblings, and I know that every time that we had to move, every couple of years, it was always a really big burden on my mom. Even having to move to Japan, you have to figure out, OK in three months we're leaving, so we send half our stuff now and half our stuff later. You know, you have a two-year-old and a 12-year-old, and the two kids in between, you're trying to figure out schools. There's so much that goes on while you are serving in the military that I feel like once you're out, it's kind of like, whoa, what have I done to prepare for this transition? You know the military take such good care of people who are in the military and all the families. To me, the security and the comfort that you guys provide for these military families is something that you cannot even measure. They probably don't even really know how much you're doing for them until maybe they look back, and they're like, whoa, you changed my life. Do you get any of those stories from people who have gone through your program? 

 

ROBERT THOMAS: Yeah, we absolutely do. And like you said, a lot of families-- there's so much going on right around discharge time, you know, your head's swimming. And it takes some time to look back and realize what a challenging time it was for you and your family. So we absolutely want to be there. A lot of our programs are focused on veterans within seven years of discharge. 

 

What we find is, if we can really double-down on those veterans right around discharge time and take care of them and make sure they're off to a bright future, we don't see them again 10 or 15 years down the road in some kind of terrible economic situation. We really want to get everyone started on the right foot. 

 

I get it, I was a military kid myself, just like you were, so I absolutely understand all the challenges. And you know, my dad had just retired when I turned 18, and I joined the Air Force right away. So for me, when I finally retired retired it was completely different. And I still to this day feel like I'm a military guy not wearing a uniform to work every day, because it is different. And I think I'll always be used to the military way of approaching things. But we want to be there and help those families in that transition period, very difficult time. 

 

EMILY BIGHAM: I was in DC a couple of years ago, and I ran into an old family friend in the Metro, and I didn't even recognize him, because he was in civilian clothing. Like someone that I've known my entire life, like very close with this family friends. We lived all over together, and I didn't even recognize. Because I'm like, you're not in uniform! You're completely changed. And you know, he said he had a hard time figuring out what he was supposed to wear in the civilian world, and he had to go to Nordstrom's and get some help. 

 

But you know, it's those little things. It's like you wouldn't even think that those little things are such stressors, but they are. And so I just think it's wonderful what you guys are doing. You mentioned within in seven years of discharge. What are the other parameters, and how can people apply and get in contact with Operation Homefront? 

 

ROBERT THOMAS: Well, each program is a little different. So the transitional housing program, we want to catch families within one year of discharge. We're very much focused on that transition. Our other transitional housing programs are transitional homes for veterans or are transitional housing villages. That's for families going through the medical discharge process. And this, again, is a very tough transition, even more so, because a lot of these veterans were planning on a military career, everything was good, and boom. They're in a training accident, or they go for their annual physical, and the doctor says, Oh, I got your lab results back, we need to do some follow-on tests. And all of a sudden, it's some life-changing news coming out of nowhere. 

 

So we have three of these. We have one in Gaithersburg, Maryland, one in San Antonio, Texas, one in San Diego. They're co-located with the big medical facility. So Balboa, Fort Sam, and Walter Reed in Washington DC. And it allows families to stay together while the service member is going through the medical discharge process. 

 

A lot of times it's very stressful, there may be some follow-on medical treatments that are very demanding, and it allows the families to be together. And in that program, we've got 30 total units, so 10 client units at each location. We pay the rent, we pay the cable, we pay the utilities, and we take that burden off the families. A lot of them have no savings, and it's a very tough time, and it allows families to stay together. 

 

And the families stay there as long as they need to. We want to see their medical discharge process complete. We want to see their VA benefits in place for six months. And we'll work with them to make sure they have a good, solid follow-on housing program. So there's no hard stop to that program. 

 

But that one is just anyone going through the medical discharge process. And every once in a while we have someone that's got a very unique and compelling situation in which case, which is the same in all of our programs, we can kind of provide-- I can approve an exception to policy for really compelling situations that are very unique. 

 

And the last one is transitional housing apartments. This is different yet again. This is for veterans within one to four years of discharge. It's very similar to transitional housing. Right now we're in a beta test. We have two apartments in Delaware. We provide one year of rent and utility-free housing, and we also pay the cable for veterans that are just discharging, and they just need a little stability. They need to be relieved of that big bill every month, paying the rent, paying the mortgage. We put them up for a year, and we provide this a little extra stability, a little debt relief, in the form of them not having to pay rent. And we help them get off to a bright future. So we're hoping to expand that program to other locations in the near future. 

 

Each program targets a slightly different segment of the military population, so the qualifications are slightly different. Now, the best way to know what they are, because I'm certain no one will remember, is go to the website, operationhomefront.org, all the programs are listed there, all the criteria is listed there. And then the best way to know is to apply for the program, and then the caseworker will reach out to you and explain it. So I wouldn't think about it too hard, I would go to the website and apply. I mean that's the best way to know, and then off you go. 

 

EMILY BIGHAM: Great. Yeah, I think that's definitely a good point to make, because sometimes, people are a little bit nervous about applying for things, because they're not sure if it's going to be the right thing, or if they'll hear back, so we'll make sure to put that in the show notes so people know where to go. 

 

So switching gears a little bit, I want to read some of these numbers that I'm seeing here about how much assistance you guys have given, because it is so impressive. So for your critical financial assistance program, you fulfilled 40,000 requests, totaling over $31 million since 2011. That's amazing. And then since the onset of the pandemic, the COVID-19 pandemic, you've seen an increase in requests. And that time you fulfilled over 2,000 requests, providing over $1.3 million in assistance. That's incredible. 

 

And then looking at your housing programs as well, you've provided over $95 million for the permanent homes for veterans. That is a huge number. That's incredible. If people wanted to donate or provide assistance to Operation Homefront, how can they-- how can they get Involved? 

 

ROBERT THOMAS: OK, well, the best way to get involved is go to the website. We've worked really hard to make the website one stop shopping. So if you go to operationhomefront.org, you can learn all about Operation Homefront, you can get the details on all of our programs, you can learn about the leadership of the organization, and you can see who our donors are. 97% of the homes that we deeded, and we deeded 624 homes, and that's where that $95 million number comes from, because that's a deeded value of all the homes. 97% of the families that are in homes are in that home that we deeded to them, or they use the equity from that home by selling it to buy another home. And so it could be, hey, I got a great job 100 miles away, I got to move. My family got bigger, I need a bigger house. Or my favorite one is, I've been working really hard, and I want to live the American Dream, and I want a nicer house with a bigger yard and a two-car garage. 

 

And these are starter homes. The median value of the homes is about $154,000. So these are not crystal palaces by any means, but they're great homes. They're in good shape, they're in good locations, and we want to set the families up for success long term. 

 

EMILY BIGHAM: Well, and the important thing there too, is that you're teaching them the value of investment and the value of assets. You know what I mean? 

 

ROBERT THOMAS: That's right. 

 

EMILY BIGHAM: And it's tough to ever get ahead or ever feel like you're really secure where you are if you're always paying rent, always having to think about the next bill, and if you're putting money towards a home. Not everyone can afford a home right now, but with your assistance, they're able to do that. But just learning the importance of investing and then being able to see that non-equity and being able to graduate to another house, I think not everyone learns that. But I think with military housing, and again it goes back to the military always taking really good care of people and living overseas and living on bases and providing assistance for housing, that's a piece of the puzzle that is probably missing for a lot of people when they're transitioning. 

 

ROBERT THOMAS: It is. The way I like to think about it is you can have this great job, you can be in a great city, close to friends and family, you can find the perfect medical care that you and your family need, the perfect school, but until you have safe, stable, secure housing, none of your dreams can really come true. So housing, and the way I think about it, it's a foundational requirement. 

 

And part of the program, that two years, is teaching the families how to be homeowners. The last thing we want to do is deed them home, and then they don't pay their taxes and their home-- and they lose it. So a lot of our families have never owned a home, no one in their family has owned a home, so a lot of the time is spent teaching, providing some training on, hey, what are your escrows? What are your taxes? How does a tax assessment work? When do I have to pay it? What's the difference between home insurance and a home warranty? What's a homeowner association, and why do I have to comply with that? All those little things, and then part of it is upkeep. If you don't reinvest in your home, like you said, if you don't keep it up, pretty soon something bad's going to happen. 

 

So that two year period, a lot of that is spent coaching the families on how to be homeowners, because once we pass the deed to them, it's theirs free and clear, and they've got to take care of it. 

 

EMILY BIGHAM: That's great. I love that. I want to talk a little bit about you, because you have a very interesting career. You spent 31 years in the Air Force. Thank you so much for serving. That is my life. 

 

[LAUGHTER] 

 

But I want to talk a little bit about the Air Force and what you did in the Air Force and how you got into Operation Homefront and what drew you to this community. 

 

ROBERT THOMAS: Well, I was a pilot in the Air Force. My father was in the Air Force, and he was a pilot. So growing up, I had one goal, and that was to be an Air Force pilot, just like dad. And I feel very comfortable in the Air Force. To this day, when I'm on a base, I just feel a level of comfort I don't feel in my own neighborhood. It just feels like home, no matter where I'm at. 

 

And after a while, like any military person will tell you, you can't do your primary specialty, you got to-- you got to go up the food chain and have bigger jobs and different responsibilities. So I was really fortunate. I got to fly for a very, very long time. I had six command tours. I ended up, and a great way to finish, which was in charge of the Air Force Officer Training School and ROTC programs, making sure the next generation is ready to go at 145 colleges and universities and deciding who gets scholarships, for example. Unbelievable, because all these young people are so smart and so capable. 

 

I was really-- one of my last briefings I gave. It was fun. I was briefing the four star and the three stars at the table, and I was at one star at the time, and I said, hey, sir. Truth be told, I know what your GPA was in school, because I've heard you talk about it numerous times in speeches. I know what the three star's GPA was, because I was his roommate. I know what mine was, and truth is, none of us would be competitive for commission today, because the kids are so smart. 

 

Anyway, I really enjoyed my time in the military. And then I think, at the end, I ran into my old boss who is the CEO of Operation Homefront, at a big meeting and asked me what I was up to, and, ultimately, he asked me if I was interested. But as you think about it as a commander, at times, you're talking about the big plan, and you're talking about some military stuff like you might see in the movies, but that's a very small percentage of the time. 

 

Most of the time, in my case, I was in the Air Force, you spend your time taking care of your airmen. And the way I look at it is if you take care of your airmen, you give them decent housing, their paycheck, good medical care, take care of the family, good on-base schools, you know they're going to be able to focus on the mission. And there's nothing worse than being downrange on a deployment and a young airman is worried about the safety of their family back home or the medical care their kids are getting, they can't focus on their jobs. 

 

What worked for me and what works for a lot of successful commanders is you focus on your airmen, and they'll take care of you. And so this job was just a natural extension of that. I'm doing the same exact things I did on active duty in many cases, taking care of airmen that have hit a bump in the road, they just need a little bit of help, and we want to work to make sure they can take care of themselves. I mean this isn't charity outright where I'm just going to give you this cash stipend. No, I'm going to help you out. I'm going to make sure that I give you the assistance you need so you don't get in this situation again. And I'm going to applaud you when you have that bright future and the house on top of the hill later on. 

 

EMILY BIGHAM: And I think that's where it goes. And when you're providing a little bit of assistance, and you're like, OK, well, you know I'm going to give you this, but then I need to see that you're making the right choices with it. And I think that's another important part of what you guys do is not only do you provide the assistance, but you know you're also like, hey, I want to see the documentation. I want to see that you have your VA benefits all ready to go, because people can say they do, but then maybe they don't. And I think you're looking out for their best interest when they're maybe on a very emotional point in their life. I don't know if you guys have certain things in the Air Force, but it's one of those like teaching moments I feel like. And something that I try to also do at Navy Federal. 

 

Back to the transition from the Air Force to Operation Homefront, did you do anything in between those two? When you were transitioning out of the Air Force, was there a time in between that, or how did you go for you? 

 

ROBERT THOMAS: No, this is my first civilian job. So I think that if it all works out, when I'm said and done, I'll have had two jobs in my life, Operation Homefront and the US Air Force. But it was a difficult time. Like a lot of military families, I was going to-- I retired on the 31st of December, because it had to do with a calendar year, and strength issue, but I didn't want my kids to have to change schools again. 

 

I mean, your military listeners will get it. So I sent the family to Delaware so the kids could start school on time and wouldn't have to change schools yet again. My little boy had been, by the time he was in sixth grade, he had been to five different elementary schools. So the poor guy, you know the last thing I wanted to do was to do that to him one more time. So I finished up at Maxwell Air Force base, and then I joined the family in Delaware. 

 

We got a small condo to live in, because I wanted to be able to say yes to any opportunity that popped up. And so I didn't want to buy a house and be anchored to a certain location. I wanted to be able to move if I needed to. I didn't want to burn my last military move. 

 

And I was applying for jobs all over the place. I applied for a job in Alaska, which I thought would be just fantastic. I was looking at possibly going downrange again as a contractor. And then, fortunately, I ran into my old boss, who was very familiar with me, I had two tours with him, and asked me if I was interested in the nonprofit space. And, of course, I said, you know, absolutely. I'm actually ready to go and do just about anything. But when I heard more about the position, I thought, man, I think I could really do a good job in that position. 

 

So I ended up at Operation Homefront and moved back to San Antonio seven miles from where I was born at Fort Sam Houston. You know, I never thought that would happen, but here I am, right back where I started and working with military families every day. So it's just a wonderful job. 

 

EMILY BIGHAM: It probably makes you feel good, right? You're continuing to give back to the military. I love working at Navy Federal, because I just love helping the military. And if I'm not going to be in the Navy or in the military, then I think the second best is Navy Federal. 

 

But also remind me, I need to introduce you to my dad, because he would definitely move to Alaska if he had the choice. He's actually going on a fishing trip next month. He does this like big fishing trip in Alaska with all of his friends, and they just, I don't know, fish for like 10 days, and he doesn't even eat fish, but has the best time. So we'll have to connect on that. 

 

Yeah, two jobs. That's pretty amazing. And your former boss is very smart, because you are the perfect person for this role. Again, thank you for your service, and thank you for everything you're doing for the families. 

 

So I know we talked a lot about Operation Homefront, a lot about how you got into Operation Homefront. What are the plans for the future for Operation Homefront? 

 

ROBERT THOMAS: We want to be there for the military families in the areas where they need help. So we've got to be flexible. I think families are going to always need some financial assistance. I can't see the day when there's no longer a need for that program. 

 

We do want to be there in the housing space for the reasons I talked about, because that housing is so critically important to every single issue you do. I mean, try to think of a situation where you can be successful if you don't have safe, stable housing. It just doesn't happen. So we want to be in the housing space. 

 

We want to be there in the recurring family support space. Our two big programs are Back to School Brigade, where we give backpacks full of school supplies to military kids. Our big partner there is Dollar Tree. And we want to be there in the holiday meal space, where we give families a holiday meal. And in those recurring family support programs, we focus on our junior enlisted pay grades. So pay grades E1 to E6, because they have the smallest paychecks in the Department of Defense, they tend to have young children in the house. 

 

And those programs are really financial relief programs in a lot of ways, because the families are going to make sure the kids have the school supplies they need, even if it means cutting back in other parts of the budget. So we want to be there for the families, give the kids a backpack full of school supplies, provide some financial relief to the families, and just say thank you for your service. 

 

EMILY BIGHAM: That's amazing. I was able to participate in the holiday meals with Operation Homefront a few years ago, and it was such an amazing experience just to see the happy kids and the families, and everyone coming in, and just take advantage of all the little games and the different activities that you guys had. And then being able to leave, you know the parents are walking out with a full holiday meal, all the things you could possibly need. So everyone comes in, and everyone leaves happy. And it was a really fun activity. 

 

ROBERT THOMAS: A funny story, well not a funny story, but the program started way back at Fort Drum, and there was an executive from Beam Centauri, the makers of Jim Beam whiskey. He was standing in line behind a young military spouse at the grocery store, a couple of small kids, trying to keep the kids under control checking out, and you know, you've been there before, all of a sudden, the total of all the food you bought is way more than you realized. And this young mom, she didn't have enough money in her checking account to cover it. And so the exec from Beam stepped up and said, you know, I'm going to take care of this for this family. 

 

And then he took that back to the boardroom and said, hey, there are military families out there that are really struggling, and they want to do something special around the holidays, we've got to get more involved. And so that's how the program started. And traditionally, it started out around the Christmastime, New Year's time, and now it's really covering all 12 months of the year. And we try not to have all the programs in the fourth quarter, but we try to have some in the summer, some around Mother's Day, we had a big Mother's Day program this year. But we want the military families be able to enjoy something a little bit special at certain times of the year. And for many families, they just don't have the budget to do that. So it allows us to step in and give them a little something extra. 

 

EMILY BIGHAM: Yeah, it's really nice. I had a good time at that holiday meals activity, and I'd like to keep-- I would like to do it next year and in the future. We're going to wrap up here in a little bit, I know that I've had a lot of your time, and I really appreciate you coming on. We've covered a lot here, you guys do a lot. And I just wanted to mention one more time that the best place to apply for assistance or to help Operation-- or to get involved and provide assistance to you guys is on your website operationhomefront.org. Are you on social media as well? Facebook, Instagram? 

 

ROBERT THOMAS: We are. You can find all the links right on the website. Once you register for the first program, any of our programs, now you're in the system, so to speak. So now when you come back, let's say you register for the back to school program, when you come back to register for the holiday meals program, you're already in the system. So now it's just one or two mouse clicks away. So the website is the key to success. Just go to the website, get in the system, see how we can help you out. I mean, we always would like to do more, but like every nonprofit out there, you know, we have to live within our means, so to speak, but we do want to help as many people as we can, and the website is the key. 

 

EMILY BIGHAM: Well, and again, to tie it back to Military Appreciation Month, thank you again for all the things that you're doing. We appreciate Operation Homefront and everything you're doing for the military. Is there anything else that you would like to touch on or cover before we wrap this up? 

 

ROBERT THOMAS: Well, I'd just like to thank Navy Federal Credit Union, and they've been a partner with ours since 2015. For a long time, they've contributed directly to our critical financial assistance program, they've contributed to back to school, they contributed to holiday meals, they're one of our partners that make all the other things possible. So I just want to give credit where credit's due and thank Navy Federal for all they're doing for our military families through Operation Homefront and through their normal business operations every day. 

 

EMILY BIGHAM: Wonderful. Thank you so much, and thank you so much for being on the podcast today, Bob. And I hope you have a wonderful Memorial Day weekend. 

 

[MUSIC PLAYING] 

 

ROBERT THOMAS: All right, you too, Emily. Thank you for giving us the opportunity to tell everyone a little bit more about our programs, and we hope they apply so we can give the families the help they need. 

 

EMILY BIGHAM: Absolutely. Take care. 

 

[MUSIC PLAYING] 

 

NARRATOR 1: Navy Federal Credit Union is federally insured by the National Credit Union Administration. This podcast is intended to provide general information and shouldn't be considered legal, tax, or financial advice. It's always a good idea to consult a tax or financial professional for specific information on how certain laws may apply to your individual financial situation. References to or participation with the military community does not constitute organizational endorsement. Navy Federal is an equal housing lender. 

 

NARRATOR 2: Navy Federal Credit Union. Our members are the mission. 

 

[MUSIC PLAYING] 

[MUSIC PLAYING] EMILY BIGHAM: Hi. And welcome to the podcast, MakingCents, brought to you by Navy Federal Credit Union. I'm your host, Emily Bigham and each week I'll be taking your questions to the experts to help you make sense of your money, pun intended. 

 

Hi, and welcome back to MakingCents. Today on the show we have Robert Frick. He is our corporate economist here at Navy Federal. Bob, how are you? 

 

ROBERT FRICK: I'm having a good day. How about you? 

 

EMILY BIGHAM: Oh, I'm having a good day as well. The sun is shining. Weather's turning around. I feel like people's attitudes are turning around. And feeling good. 

 

ROBERT FRICK: Yeah, good. We just had our driveway topped. It's nice and black and perfect and smooth. And when you live in upstate New York as long as I do it, that's like the epitome of home remodeling is having a nice driveway. So I am unnaturally happy about my new driveway. 

 

EMILY BIGHAM: Nice. That's awesome. Yeah and I wonder how long it's going to take until the pollen starts to coat it because I was feeling really good about my very crisp clean new car and then two days later it was covered in pollen. But I did just get it washed so it was kind of like you just feel so good about having something just redone or washed or taken away and you can start fresh, I kind of feel like that's the attitude of the United States right now. 

 

ROBERT FRICK: Now you totally ruined my good feeling because I realize I'm going to have a yellowish green driveway now probably for the next three years. So thanks. 

 

EMILY BIGHAM: Well, you know what, I mean, hey. We also have those afternoon thunderstorms. It is the spring on the East Coast. So every day it'll clear it up. But so I do have a little bit of an agenda for us today. Typically Bob I like to just kind of chat with you because I feel like you and I just have so much to talk about and I love all of the topics that you cover here at Navy Federal. And before I kind of go over the agenda, do you want to for the listeners who are maybe first time listeners or we haven't spoken in a very long time, do you want to talk a little bit about what your role is at Navy Federal? 

 

ROBERT FRICK: Sure. So I mean corporate economist. And I talk a lot to the media about our view of all things that we do. Auto loans, mortgages, interest rates, all that stuff. I also do a lot of internal reporting and I speak to people around the company about the one specific to their particular businesses. I was a business journalists for 30 years and that's my background. And kind of how I got into this role is I used to cover all of these things that we do home, auto, credit cards. 

 

EMILY BIGHAM: I was thinking about why I have so many topics that I want to cover when I talk to you and I think it's because you take on so many different perspectives when you're pulling together the various reports or just the different things that you do. Because not only are you covering what's going on in the economy at a high level so we can make sure that our lending products are gauged in the right direction, but also you think about the consumer. And in the past year consumer sentiment has probably been all over the place a little bit. Can you talk a little bit about what you've seen there on the consumer side? 

 

ROBERT FRICK: Oh yeah. 

 

EMILY BIGHAM: Economics? 

 

ROBERT FRICK: Yeah. Well, consumers were very depressed for a long time. We actually never hit the bottom that we did right after the housing bubble because that crash actually affected many more Americans it just wasn't as steep as the COVID crash. But just in the last month and I'm sure we're going to get back to this theme over and over again, consumer sentiment is way up. It isn't back quite to pre-COVID levels, but it's going to get there in the next couple of months I feel sure. Because vaccines are out, the weather's warmer, people have an incredible amount of money. Not everyone, but most Americans are in good financial shape right now because of all the stimulus. 

 

EMILY BIGHAM: I've done a lot of research on this lately and I've been listening to other economists as well talk about this and it's a little bit confusing to me the consumer sentiment. I mean, it makes sense that given all of the cash that the government's been handing out consumers are happy. They do have a lot of money like you said. But is that almost a false sense of security because that is money that is just being printed by the government? 

 

ROBERT FRICK: Well, that gets into the whole idea of deficit spending. All this is going to come out to bite us that we're another $5 trillion in debt. And I actually just did a very short position paper, white paper, on that. And it is true that our level of debt has only been this high right after World War II when we went into debt to pay for the war. But there's a huge difference because interest rates are so low now the US government is actually paying less on its debt than it was five years ago even though we've added trillions. So you have to balance those two things. 

 

Yeah, our actual level of debt is higher, but what really counts is how much do we have to pay in interest? And that's relatively low. So the future is uncertain. So I'm not going to say it's never going to be a concern, it probably will be a concern, but not in the next few years at least. 

 

EMILY BIGHAM: Right. So I was thinking about that as well because it seems like short term things seem really good. But when you are a consumer or a small business owner and you're trying to plan strategically maybe five years, 10 years, is that a cause for concern? Like how are you supposed to make large financial decisions like a mortgage that's going to be a 30 year mortgage, how can you feel secure in those big financial decisions? Or for instance my parents are thinking about selling their small business. My dad's a physician and they've been going back and forth on this. And I think they're just a little bit reluctant to make a big decision either way because they're not sure again what's going to happen in the next three years, five years. Do you have any advice for people in that topic? 

 

ROBERT FRICK: Well, we are at a time right now in which there's a lot of uncertainty because we've never been in a time like this. We've never had to recover from such a deep depression. We've never been coming back from a pandemic and we're not out of that yet, although we're making good progress. So there's a lot of uncertainty. I get that. What does the next three years look like? In the next three years looks good. For one thing, we're going to be getting jobs back although it's probably going to take a couple of years until we get back to pre-pandemic levels. 

 

For another thing, yeah, we went into a lot of debt. But that's not going to bite us in the next few years. And that means that people are going to have a lot of money. The things I worry about is how is the economy going to restructure? So if I, for example, own commercial real estate that wasn't retail at least I'd be pretty concerned right now because a lot of people have left their offices never to return. On the other hand, there's a lot of great opportunities right now. You mention small business. There have been more small business filings, filings to open small businesses, in the last six months than at any time in recorded history. So a lot of people see that they're going to be able to rebuild. And that's America, right? That's the entrepreneurial spirit. 

 

A lot of people see that they're going to either be able to restart their own business, start a slightly different business, or start a new business to take advantage of all this money and all the boom times. Which are certainly going to be this year where we're going to have at least a 6% GDP, which is historically high, and into next year. So if I were making decisions right now I would wait two years and then after that who knows. But we never know what's going to be three years out. I mean, a year and a half ago we had no idea there's was going to be a pandemic. So good things can happen, bad things can happen. But we know the next few years are going to be good. 

 

EMILY BIGHAM: So back to the topic of new businesses. The amount of new businesses that were started I guess during the pandemic, was that a direct reaction to the PPP loans? 

 

ROBERT FRICK: No actually that was something different. Really what it was was people recognizing-- now this is America's entrepreneurial spirit that businesses have to change. They're going to be new business opportunities. I may have closed my business, but I'm going to reopen it again in a different guise. Yes, there are certain segments of small business which are really been hammered. Restaurants, for example. But there are other aspects of small business. I mean, internet commerce which are absolutely booming. And if you're in one of those businesses or if you're starting one of those businesses, the next few years are going to be a great time to launch a new venture. 

 

EMILY BIGHAM: Is that kind of what you mean when you say economic restructuring? So for example, if you have a small business that you started 20 years ago and maybe now is a good time or the opportunity to pivot into something that's a little bit more relevant. 

 

ROBERT FRICK: You should at least retool. I have a couple of friends who are small business consultants, small to medium sized business consultants. And what they've been counseling their people to do is take a breather. Get your PPP loans if you need them just so you can kind of tread water for a while. But think about what the new economy is going to look like. And for a lot of them that means their whole sales function is going to change. It's going to move to the internet. So they're going to be hiring a lot of programmers. 

 

A lot of them, if they can, are thinking about if they make a product which is used in the home or might be used in the home really play that up because people not only have been nesting while they've been at home during COVID, there is going to be I think and a lot of people think it's going to be much more focused on the home, where you live, how your home is. I have a cousin who owns a hot tub business. And they are booming right now. They can't be doing more business. And you'd think that would be letting up now, but it's not. 

 

EMILY BIGHAM: I wish I had space for a hot tub. Let me tell you. 

 

ROBERT FRICK: I wish I had a wife who wanted a hot tub. 

 

EMILY BIGHAM: [LAUGHS] 

 

ROBERT FRICK: We have the space. 

 

EMILY BIGHAM: That's funny. 

 

ROBERT FRICK: But not the will. 

 

EMILY BIGHAM: Well, I think people just spend so much time at home. Like I'm sitting we're at home right now and I'm recording this podcast. And I'm kind of looking around like, god, I've been looking at that couch for like 13 months now. And it's a nice couch, I'm kind of sick of looking at it. So I wonder if that's part of it. But then also what's going to happen when people start going back to work? How is that going to impact the economy? The price of oil is going up. There's a lot of things that I want to be really positive about, but at the same time there are some concerning reports that are coming out. I mean, first of all, we have the rising cost of goods. But then also if it's transitory and it's coronavirus and we're kind of a global economy at this point imports, exports, the rising cost of oil. If there are other countries who are impacted by a second wave or if they take stricter measures than the United States, doesn't that impact us also? So how much control do we even have over inflation and rates at that point? 

 

ROBERT FRICK: That's a really good question. And the answer is not much. And the Fed for years was trying to get inflation up to 2% and they just couldn't do it. They kept rates low. They kept shoveling money in. And they couldn't get inflation up to their target. And 2% is kind of like a really good pulse. That's like 60 beats a minute, right? It's not too high, it's not too low. It shows the economy is on an even keel. 

 

So the Fed really can't control inflation that much. They can use kind of these rules like inflation goes up, they jack up interest rates and that slows down the economy. And that's kind of like giving medicine to a patient. The medicine works but the patient dies. It's just not a good strategy. So the Fed is changing that strategy. 

 

But you mentioned just speaking about inflation. It's not high yet. We just had an inflation rat this month or this week rather. It's not up. It's low. It's not even 2% yet on an annualized basis. So the inflation barons are saying all this bad hyperinflation is coming. There's no evidence that's going to happen. And you mentioned international. Globalization keeps our prices low. Think about this. When we import goods from India, China, Mexico, Vietnam, those are cheap goods. And that essentially means we're importing deflation. 

 

Above and beyond that, we're exporting jobs which is not good. Right? We're exporting jobs to places like India. I happen to know someone who is in charge of essentially collapsing a back office unit of 40 people in Virginia and opening a unit of 40 people in India working at 1/10 of salary. So not only are we importing cheap goods which keeps inflation low, we're exporting higher wages which keeps inflation low. Again, that's not good for the people lose their jobs. 

 

But if we're just talking about inflation, I'm not worried about inflation. It may spike. It may go up to 3% for a couple of quarters. Fed's going to hold firm. And then when the economy boots up, there's always inflation because there's shortages and prices get bid up. Rental car prices are going through the roof. When airlines really start flying again, airline tickets are going to be fabulously expensive. 

 

EMILY BIGHAM: Oh, they already are. Let me tell you. 

 

ROBERT FRICK: Are they? OK. 

 

EMILY BIGHAM: I just flew back from San Diego and the price of my ticket, I was like, I am upset. The last time I came here it was so cheap and there was no one on my flight. 

 

ROBERT FRICK: Right. 

 

EMILY BIGHAM: This time it was way more expensive and there were people on my flight. Which, you know, it's a good sign that people are out and about and like you said spending money. But it was just so funny. I was like, yeah, people probably forgot what normal life was like and now you're going to be seeing-- I mean, the line at Trader Joe's the other day was like wrapped around. It was shocking. 

 

ROBERT FRICK: Well, if you drive south as often as we do we have two of our three daughters now live in Wilmington, North Carolina. And my wife just took a trip down to see our daughters because she's vaccinated. I am not so I had to stay home. And she got caught up in an hour and a half gridlock. And she was complaining about it and I said, yeah, but you know that means the economy's coming back. So it's a double edged sword. 

 

EMILY BIGHAM: It is. It is a double edged sword. But it is really nice to see that people are out and about and spending money and going to restaurants. And that's how it's supposed to be. That kind of environment and atmosphere is what makes people happy. 

 

ROBERT FRICK: And there's so much pent up demand for that stuff. They call it revenge spending. And I'm not sure that's a good term, but the idea is people who are so hungry for services travel, restaurants, et cetera, et cetera, in-person commerce basically face-to-face commerce and travel, they're just ready to spend. The issue is they're not going to be able to spend because a lot of those services aren't going to be quickly available. Or as with airfares, when they do come back they're going to be so high that people aren't going to want to spend on them. And obviously they'll come down in time. So there's a lot of things that are going to keep-- this gets back to your inflation question. There's a lot of things that are going to keep people from spending as much as they want and that's also going to keep inflation low. 

 

EMILY BIGHAM: So I understand the part about different services not coming back. And I mean, that makes sense to take time to hire. And I think I saw that the job openings number is at a record level as well. So to me that means that businesses are coming back and they're posting jobs. But people are not taking those jobs. I do think that that's going to become a competitive market. 

 

ROBERT FRICK: I think people look at the the JOLTS number, those job openings numbers and read them wrong. And you can have crazy high and crazy low job openings numbers and they don't really mean much of anything. You have to really parse those numbers. So the fact that there's a lot of openings out there and people say, oh well, there's no one there to get them. There's no one there to take them. Well, by in large that's not true. A lot of times people just post a job and they're just fishing for someone to hire. And they don't even expect to hire them or they have to post it because HR says they have to post it. 

 

So I don't look at those JOLTS numbers now and think people don't want to work or people don't have the skills. It's not an epidemic of problem. It's not an epidemic kind of problem. It's just what happens when an economy boots up again. It solves itself in time, it always does. The thing I worry about as far as jobs goes is there's a certain number of people, 70% of workers, who have good jobs. Remember my example people work in back office operations. This is for a big consulting accounting firm. Those are gone. Office worker jobs are gone and [AUDIO OUT] because only a portion of the people who don't work in offices anymore are going to go back. People are going to need to be retrained, education and training. And that takes time. 

 

Also, there's a lag between when people realize their job is gone for good and when they really get on their horse and start looking for a different job and get new training. That takes time. So that's why it's going to take at least a couple of years for us to get the jobs back that we lost. Not because the economy isn't reopening fast enough, it's because the nature of work has changed for many Americans. 

 

EMILY BIGHAM: Well, you bring up a really good point. Well, first of all, I would like to say that you are definitely calming my nerves because a lot of the things I've asked you about you don't seem to be very worried about so that makes me really happy. And I need to find similar I guess resources or sources to read. I need to read what you're reading so I can sleep at night. But as far as the different jobs that are coming back, have we seen a rise in automation in the past year just because of the fact that human beings weren't necessarily able to do certain jobs because of the restrictions? Have they found ways to use technology instead? And is that replacing human beings in that? 

 

ROBERT FRICK: That's common. And you go to CVS or even a lot of grocery stores and there's self checkout. 

 

EMILY BIGHAM: It's good too. I mean, the self checkout has really improved. 

 

ROBERT FRICK: Yeah. I have to agree. Self checkout and Apple Pay, man, that is wonderful. And there's a lot of automation. And industrial automation, that started years ago. And that's going to continue. It's not going to accelerate particularly. I have a lot of contacts all across the country in different forms of commerce. And I talk to people in manufacturing. One of them is my old roommate from college. And I asked him about how's their automation going? And they're pretty much fully automated by now. And the people they hire have computer skills to set up the machinery that's going to do the work. And they have quality control experts. So you have statisticians. 

 

So the days of them hiring someone to slap a weld on a pipe or bend a pipe or fabricate something, those days are gone. But the employment level is gone. But the people who work there now have high skills which are transferable and they're constantly getting upgraded. And that's a much better job. I mean, I used to work in Rochester, New York and there was two big automotive parts manufacturing plants there. And I'd go there and I'd interview guys and women there and they just were miserable. And their jobs seemed miserable to me. And when their jobs started changing and becoming more technical and a lot of them would get say associate engineering degrees, two year engineering degrees, which allowed them to do higher skilled technical work within manufacturing plants, much happier. Much more money. And those who didn't want to do that, they had to go on to other jobs. Sometimes lesser jobs, sometimes different jobs. 

 

So I'm not worried about automation so much as I am just these huge changes in how people are going to be working. Again, office workers going to be way down. Big shifts in health care workers. You can pretty much go down the line and you can see which occupations are going to be most affected by COVID. And my back of the envelope calculation is probably about three or four million Americans up the back who aren't going to have those jobs. I mean, restaurant workers. There aren't going to be as many restaurants because we've gotten used to take out. 

 

I don't know about you, but now that we've spent a lot of time and money in our house, I'd much rather get good take it out and sit out on our deck and have a couple of friends over than go through the restaurant experience which is hit or miss. Right? I mean, I love a good restaurant. 

 

EMILY BIGHAM: Well, I mean for me it's less about my wanting to stay at my house it's so nice, it's more about my not so great cooking skills and the fact that I'm sick of cooking for myself to be honest. I've tried. I've tried to make that one of the things that I improve while I'm at home and spending all this time at home, but I just have the same things that I go to. And it is really nice to have different cuisine. So I mean, that is good news about the jobs. But if I were in someone's shoes who lost their job due to COVID and then let's say I'm not going to get it back because of technological advances, but what should I be doing? I mean, yeah, you can say, oh, well, just go and learn some new skills or up your skill sets. Well, how? How do you do that and where do you start? And do you have to go through formal training? 

 

ROBERT FRICK: The first thing and this is a behavior problem, especially if you have a passion for certain kind of work, you have to get over the fact that you love your job but your job or your industry no longer loves you. And so you've got to move on. You've got to do something different. I was in the newspaper business in the 1990s. And the newspaper business was collapsing as the internet was rising. And I got the best piece of advice I ever wanted to get I could ever have hoped for. Because an analyst said, look, you can get another job. You can go be a business editor somewhere else. But then that job's going to disappear unless you move up to the New York Times, which I didn't want to do. You're always going to be sitting on a shrinking iceberg. It's time for you to get out. 

 

And I went into magazines after that. And that lasted for about 15 years and then that iceberg started to shrink. But if you can't find a job or the job you find doesn't pay as much as it did before COVID, don't expect that's going to get any better at least no time quickly. The thing to do is just get online and Google where the jobs are. And start at your local community college or see if there is a course you can take online and reskill. But make sure when you reskill that once you get that skill, there's going to be job ready for you when you get out in six months or a year or a few years. 

 

I've been giving that advice for many, many years. There comes a point in which you're basically in a situation that is not going to work for your personal prosperity. Sometimes it's where you live. Again, I was in upstate New York in Rochester. And tens of thousands of Kodak jobs disappeared and were never going to come back. And tens of thousands of Kodak workers wished they would and sat around and collected unemployment. And then finally either moved out took lesser service jobs or reskilled. And the ones who reskilled were definitely the happiest. I've had to move many of them and I know a lot of them. But they made that decision. 

 

Sometimes you can't make incremental changes and expect to have a big improvement in your life. Sometimes you have to make big improvements in your life to expect big changes. And a lot of Americans are going to be facing [AUDIO OUT]. In fact, I tweeted the other day, Robert Frick NFCU, that I wished journalists, again, I used to be one, I wish business journalists would start doing stories on people who have essentially been COVIDed out of a job and what they're doing to change professions. So I'm right there with you. That's a really good question. And that's the best answer I can give. And the answer, there's no easy solution. Play the lottery. Win the megamillions. But there's no easy solution. Sometimes you have to make a big change and even take some risk in order to improve your situation. 

 

EMILY BIGHAM: I think part of it too is that people are used to getting things immediately. 

 

ROBERT FRICK: Yes. 

 

EMILY BIGHAM: And that kind of goes back to automation, technology, take out. I mean, you can see where the driver is on the app delivering your food. So people are used to just immediacy. And I know I tend to be a little bit impatient. But I do know that when it comes to my job and skill sets and things like that, I'm always looking for ways to pivot. And I know small incremental changes or improvements will eventually get you to where you need to be. I think people expect immediacy. Even with things like the stimulus checks, that was a direct deposit into your bank account for most people. And it's passed and all of a sudden see a ton of money in your account. 

 

I mean, how are you supposed to go-- and that also goes back to the psychology behind it. Right? I mean, you get that immediate feeling and the dopamine and the serotonin and all of that. And then you have to think about, OK, well now I'm looking for a job. And I've had to do this many interviews and these people didn't call me back. And that's just something that you have to do. That everyone has to do. So I'm going to switch topics from that. I'm staring at this whiteboard that I have where I have all of these things I want to talk about. But I do want to pivot a little bit to housing because this whole renting versus buying, the housing market, the soaring price of houses, rates are still low. What's going on there? 

 

ROBERT FRICK: Well, the bottom line is after the housing crash 2008, 2009 a lot of home builders went out of business. In the decades of the 2010s, so basically the last 10 years, fewer houses were built in the US than were built during the worst decade to that point, which was the 1940s when everybody was building stuff for the war effort. So there's a tremendous dearth of homes in America right now. And people want homes. There's still millions of Americans who are really in tough shape. And we have done I think as an institution everything we can to help our members who are down on their luck financially. But there's still millions of Americans who are down on their luck, but most Americans aren't. 

 

And most Americans are making more money now than they did before the pandemic. So there are a lot of people with a lot of money. They're buying what houses there are. Those can't build them fast enough. They're restricted because lumber, land zoned for building, and labor, the three L's we call it, are all working against building houses more quickly. So we're not going to build ourselves out of this anytime soon. So the housing situation is not good. 

 

I saw an amazing statistic, which I should have known because I talked to our mortgage people, but it's something like a third of houses bought haven't even been built yet. People have bought the land and contracted with a builder. Like my oldest daughter, she and her husband essentially became their own general contractor. They bought a lot from someone who couldn't afford the payments anymore and they hired a builder and they built this beautiful house. That's getting harder and harder to do. 

 

So I don't have any good news when it comes to housing. There's been a lot of forbearance's, people don't have to pay the rents. That's going to end. If you want a house, you have to be incredibly aggressive. And the thing I tell people is if you can't afford the house you want, buy a house with potential. The house I'm standing in right now, it wasn't nearly as nice as the house we left in upstate New York because housing in the D.C. area is so expensive. There are a lot of things we looked at and cringed. 

 

Well, over the years we've redone everything. And it's a nice house now. And we didn't have the money at first and we just had to save, but we got into a house and now our house has tripled in value as all houses around here have done in the last 20 years, 25 years. So mortgage rates are not going to get any lower, but mortgage rates aren't the biggest thing you need to be thinking about right now. You need to be thinking about a house you can afford and buying it before prices go up even more. Prices were up 15% in the last year. That's incredible. I mean, that is housing bubble rates. 

 

EMILY BIGHAM: Is it bubbled or is it demand? 

 

ROBERT FRICK: Well, yeah, that's a good question. And I was just going to say there's a scarcity and that's supply and demand. So the supply is low. And the demand is strong, but it's not crazy like people flipping houses and stuff in the 2002 through 2005. So it's not crazy bubble stuff. If there were more houses on the market, I'd say we were in a housing bubble right now. And there may be some contraction. 

 

EMILY BIGHAM: Well, so is it also potentially like a shift of-- and I have no idea there's even a way to measure this, but it could be there are people who are in their current home and they've also purchased a new home and they're waiting to move in. But then how do I even phrase this question? The percentage of I guess the rate of people who are looking to buy or have bought a new home and are moving, is that just really, really high abnormally high? 

 

ROBERT FRICK: That really isn't a factor. Americans are moving at the lowest rate in history right now. 

 

EMILY BIGHAM: OK, never mind. 

 

ROBERT FRICK: Yeah and there are a lot of reasons for that. A lot of baby boomers are retiring, they'd like to move but they can't because the place where they wanted to move, the housing prices have gone up. But also COVID has had a real-- I believe, and there's scant evidence to support this point of view, but I just have some anecdotal evidence. People around my age, I'm in my 60s so, have been super paranoid about COVID and rightfully so. And so they've been sheltering in place and not even thinking about moving. 

 

We have neighbors across the street two doors down good friends of ours who've been planning their move forever and they're moving to North Carolina the Raleigh area and they are finally moving in a couple of months. But what they had to go through, they bought a house that was still under construction. They sold their house here. There going to be kind of living I think in one of their sisters homes for a while. But they've had to jump through all these hoops just to make this work because they've delayed because of COVID. And both of them are older than I am in their later 60s. So they got their shots and now they feel safe to move. 

 

I have a feeling and we'll see if it's true or not that we're going to see a lot of existing homes come on the market this spring with vaccinations. I wish I could say that because COVID levels were so plummeting, but they're not unfortunately. COVID levels are actually up and COVID deaths are actually up. Obviously not at levels we've seen before, but that's worrisome. There are a lot of reasons for that but I think we'll get licked by the end of the year but COVID's still an issue. 

 

EMILY BIGHAM: Well, and that's another thing that is again, something I think that might be in the back of people's minds. Is like, OK, well, I want to take this big step to finding a new job and learning new skills. But that uncertainty part of it, I mean, that's just killer for a lot of people. 

 

ROBERT FRICK: I think COVID is an uncertainty for some people. I really think we're going to see, I know we're going to see a boom 2021 and I bet it extends into 2022. It depends on what industry you're in. It depends on if you have a job or not. It depends if you're one of those people with more savings as opposed to people who have exhausted their savings and have run up debt. It depends on your individual situation. But I would not let if you have a job and you're in a fairly stable industry, I wouldn't worry. If you don't have a job and are worried that your job is gone for good, I'd start looking for a new profession. 

 

EMILY BIGHAM: Well, Bob, you've made me feel a lot better today just let me tell you. So we should have these conversations more often. 

 

ROBERT FRICK: I can't believe it because usually the roles are reversed. I'm the doomsayer and you're saying, why are things so bad, Bob? But no, things are good. Six months ago I predicted that we'd have fewer jobs in December and everybody thought I was crazy. And we did it. And I predicted that along with the third COVID wave we were going to see a tremendous spike in people losing their jobs and we did. But now everything has changed. We've seen a real sea change in the economy. And that's going to continue for at least a year. 

 

EMILY BIGHAM: Another thing that you predicted on the last podcast was well, I think you did mention the fact that in 2021 we would see the economy bounce back and it has. We were talking about the third stimulus and we did get that. Do you think there's going to be another stimulus? Do you think it's going to be necessary to get us to whatever that next step is in this proposed economic boom? 

 

ROBERT FRICK: I don't think we need a third stimulus. Though I do think we need to probably extend unemployment benefits to millions of Americans who are going to run out of them in August and September. But I do hope that the parties get together and fund, not go into debt, but fund an infrastructure plan or plant because the US is a C minus country as far as infrastructure goes. And it really hurts us. Plus the jobs that we create that will be created are good trade jobs. We need carpenters, pipe fitters, we need our manufacturing companies to make heavy equipment get a big boost. All that's going to be terrific for the economy is going to build good blue collar, middle class jobs. And we need many more trades workers in the middle class. We've lost so many of them. And that isn't good for the economy in general. 

 

And broadband is something that we should be ashamed about. The fact that we don't have broadband in a lot of rural areas when pretty much every other developed country does. Why do people who live in a rural area get second rate internet? That's really harmful to them in so many ways, including education. 

 

EMILY BIGHAM: You make a really good point. And I do look forward to seeing that type of stuff, the infrastructure. I was reading something about and I don't even know if this is relevant, but water shortages in California and Oregon. And I just couldn't believe it. I think there's a lot of things that have been overlooked that we haven't been taking care of necessarily and it looks like maybe we are now putting more of an emphasis on just doing the basics the correct way. 

 

ROBERT FRICK: Right. Well, in California the infrastructure would be to build snow machines because your folks don't have enough snow out there which is why water is so low. And I don't know the reason for that, climate change or whatever. But we have to build infrastructure that addresses that. How can we have the same cities, the same quality of life using fewer resources? Those are infrastructure questions. And water is one of those things where you have it or you don't. And the only thing you can do is just build more efficient systems. 

 

EMILY BIGHAM: And sometimes you have to pause in order to fix things. I think we're always like rush, rush, rush. And talking about the impatience of people because some things are automated and some things are so fast that the minute that you don't get a response right away or get what you want right away, everyone's in a tizzy. And I'm glad that we're looking towards doing those things those basics in the correct way. 

 

ROBERT FRICK: I hope the two sides get together and we can pull it off. I really do. I don't think people understand that for every dollar you spend on infrastructure and I mean traditional infrastructure, you're going to get at least a dollar and a half back in the economy. And people are critical of-- I won't put my thumbs up on every type of infrastructure. But Pre-K-- my wife is just leaving a multi-year job as director of a preschool. The kids get and so the benefits the economy gets through pre-K education is been documented over and over again. 

 

And we're one of the worst countries when it comes to having mandatory pre-K programs available. You don't have to send your kids, but most people do. And that means their kids start first grade just right out of the gate and become great learners. And don't we want that for our kids? And don't we want that for the economy? 

 

EMILY BIGHAM: That's a good point too. And then the impact, we won't know the impact of this past year on kids who have been schools. But I haven't heard of such wonderful things across the board. 

 

ROBERT FRICK: I know. And it really depends on your kid. I have a granddaughter and this kid is like up at dawn. She actually wears her school uniform to go in front of her computer and be in her virtual classroom all day. If I had to do that at her age, she's nine, I would have flunked out. I would have been selling newspapers or apples on the corner because I don't have the kind of discipline she has. I was a pretty lousy student in general at her age. But some kids are going to do fine, some kids are going to excel, but many, many kids have lost a year. And that's tragic. 

 

EMILY BIGHAM: Yeah. I guess it does depend on and also depends on your home environment. I can't imagine people who their mom and dad are both working from home and the kids are also trying to do online schooling. I just I really cannot imagine that scenario. And so I think that that's probably another reason why we're seeing such optimism is because we are heading into summer. It just feels like everyone's going to get a break. 

 

ROBERT FRICK: Yeah. One of the great things in the last jobs report was all the teacher jobs have come back. I mean, state, local teacher jobs. You know 50,000, 100,000, 150,000. And that's just the beginning. And so by certainly the fall all the teachers are going to be back and we'll be back at full staff. And both my parents were teachers so I have a soft spot for teaching, but man, we don't pay teachers enough. And the fact that so many of them have lost their jobs and have been on assistance for all these months I feel real badly. I'm grateful that they're going to be coming back. 

 

EMILY BIGHAM: Yeah. I think that everyone is going to be grateful come fall. I mean, it seems like the summer kids will get a break from school and then a lot of the larger companies have been saying that they're going to have workers coming back into the office. So that gives people a bit of time to plan which I think is good. I think announcing that early is probably a really smart move so people can get their home life situated. 

 

ROBERT FRICK: Yeah. Well at Navy Federal, many of us will be returning. Some of us will probably be only going in a couple, three days a week. And I think that's great because I think we found efficiencies. I know with what I do, I miss going into work but I also if I couldn't stay home two or three days a week, I'd miss kind of the efficiency of rolling out of bed and just working like 7 to 5. And just really crushing it. You can't do that when you're in the office. You really can't. 

 

EMILY BIGHAM: Yeah. I think it's also the balance though. I find myself doing really crazy hour. I mean, I wanted to though. Everyone was working crazy hours to try to help everyone and help members. And then I think teams are really good at helping out when one team member couldn't necessarily be online certain hours and because of kids or whatever. I think everyone at Navy Federal really stepped up in that way. But it was hard to find a balance. It really was. Especially for someone like me where I really truly, I really do love my job and I learn something every day so I'm very engaged. And if something comes up and it's 6:00 PM, I don't care I want to work on it because I just I want to and it helps members. And it sound so cheesy but that's a really big deal. 

 

ROBERT FRICK: No. It doesn't sound cheesy to me at least, it doesn't sound cheesy at all. But if you're in a company that is always looking for new business and if your real estate has changed and if your client needs a change, it's been a real struggle. And I think that's something that has been hurting the economy in the last year. 

 

EMILY BIGHAM: Well, Bob, this has been a lovely conversation. I have kept you way too long. But I want to kind of end it on a positive note, not that this hasn't been truly positive, but I want to bring it back to your outlook for the next few years and some of the optimism that you had. The fact that existing home sales this spring is going to pop, some of those other, give me some of your natural optimism for the next few years. 

 

ROBERT FRICK: Well, I'm neither optimistic or pessimistic. I'm sarcastic. 

 

EMILY BIGHAM: So you're dramatic. 

 

ROBERT FRICK: Right. I'm dramatic. No, I'm realistic, Emily. I'm a realist. 

 

EMILY BIGHAM: OK. Well, that's what people say about me too, dramatic and I'm a realist. 

 

ROBERT FRICK: You say it better than I do. So I'm a realist. A year ago I was pointing at the economy and saying, man, things are really going to get bad. A lot of people were saying, oh, you're exaggerating. I wasn't exaggerating. And then last time we spoke I said, it's going to come back but we hadn't seen any signs of it yet. The first quarter is going to be the quarter in which we turn the quarter. And that's exactly what happened. 

 

Unfortunately, I wasn't the only person saying that. Many people were saying that. But we were all right. When you look at all the January numbers that are coming in, retail sales, jobs, even consumer price index, it's all up. It's all positive. It all shows that the service sector is coming back. And the service sector consumer spending on services is the biggest part of the economy. It's like 45% of the economy. Goods says another 25% that you have manufacturing, imports, exports. Blah, blah, blah. 

 

But all these things are what actually happens in the business cycle and people shouldn't be alarmed by it. People should be grateful that we're finally out of this quagmire that we've been in for so long. 

 

EMILY BIGHAM: Yeah. For a while it felt like phew, was it ever going to end? Well, Bob, it was so great talking to you today. And for listeners who want to find more about your insights, where can they read your stuff? Where can they find you? 

 

ROBERT FRICK: I've really got into Twitter. So Robert Frick NFCU. I generally tweet-- today I had five tweets. There's some of them about the economy, there's a lot of news today, some of them are just snarky. But all my snark has a purpose because for example I poked fun at people who are worried about high inflation today. And I got kind of a rise. I wasn't trying to troll anyone, but I got a rise out of it. So I would say please follow me on Twitter especially if you remember I guarantee I'll follow you back. I have a lot of great conversations with members in messaging on Twitter. That gives me a lot of great insights. And that would be my number one thing. And if you really want my feed, the best way to do it is through Twitter. 

 

EMILY BIGHAM: OK. So @RobertFrickNFCU. So it's R-O-B-E-R-T F-R-I-C-K N-F-C-U. Well, now you're probably going to be tweeting and trolling me because I was being so dramatic about inflation. But I was just confused. And I think the short term long term gives a lot of really good perspective. So Bob, thank you so much. Is there anything else that you would like to say before we wrap this up? 

 

ROBERT FRICK: I think you have completely vacated everything in my brain, Emily. 

 

EMILY BIGHAM: Me too. I'm exhausted. 

 

ROBERT FRICK: Yeah, I'm exhausted. So thank you very much. This has been great as always. 

 

EMILY BIGHAM: All right. Go drive down your driveway. 

 

ROBERT FRICK: OK. 

 

EMILY BIGHAM: All right. It was good to talk to you, Bob. 

 

ROBERT FRICK: Yeah, see you later. 

 

- Navy Federal Credit Union is federally insured by the National Credit Union Administration. This podcast is intended to provide general information and shouldn't be considered legal, tax, or financial advice. It's always a good idea to consult a tax or financial professional for specific information on how certain laws may apply to your individual financial situation. References to and participation with the military community does not constitute organizational endorsement. Navy Federal is an equal housing lender. Navy Federal Credit Union, our members are the mission. 

 

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EMILY BIGHAM: Hi, and welcome to the podcast, MakingCents, brought to you by Navy Federal Credit Union. I'm your host, Emily Bigham. And each week, I'll be taking your questions to the experts to help you make sense of your money-- pun intended. 

 

Hi, and welcome back to my conversation with Kevin Driscoll, Vice President of Advisory Services at Navy Federal Financial Group. In part one, we discussed retirement planning. And now, we'll get into investing in today's world. 

 

Job security is a big deal because you can't even think about an investment until you've had job security. 

 

KEVIN DRISCOLL: Yeah, I think you're exactly right on that. Job security during a pandemic, job security during any of the internet bubbles, or any-- the Great Recession, it's always a concern. Your employment-- you have to feel comfortable in your employment. 

 

As a business owner, that's a double-edged sword because you're also a business owner, and you're an employee of that business as well. So you may have established a retirement plan for both you and your employees. And you're going to have to make some decisions in some tough markets. Maybe you forego-- No, I-- 

 

EMILY BIGHAM: Sorry. 

 

KEVIN DRISCOLL: It's OK. Maybe forego a contributing-- 

 

EMILY BIGHAM: No, this is an emotional topic for people, so I'm really trying to-- I know that we do have a lot of military members. But for people who don't, this is probably even more important. And putting your eggs all in one basket, we were talking about this earlier, do not rely on your job as your only source of income and your only thing that you have going. Make sure that you diversify. 

 

And if you don't have money besides your job, what are some steps that members can do? And I know that is a tough question. It's very situational, and that's why I'm kind of encouraging it. Because that's when you probably do need to go seek help the most, is when you're in that sort of-- 

 

People who already have the investments, already have the house, already have the stocks, I'm not sure that they need a ton of help. They definitely need guidance, and they're taking big risks. But what about for people who-- they lost their job, and they don't have the balanced portfolio? 

 

KEVIN DRISCOLL: One of the very first things people should start doing when they get their first job, get employed is have an emergency fund. And the bigger you can build an emergency fund, the more you're able to react to events like the pandemic. You know-- 

 

EMILY BIGHAM: The rainy day fund sort of thing? Or is that a little bit different? 

 

KEVIN DRISCOLL: That's a little bit different. The rainy day fund may be something that is used by many people during the Christmas time, you know? It's, OK, I'm going to-- people feel like they can jump into the rainy day fund and pull money out of it. But if you name it the emergency fund, that's a little different story. 

 

EMILY BIGHAM: Right, it's like the happy cash fund. 

 

KEVIN DRISCOLL: That's right. So just the terminology of what you're calling these accounts can make a difference in what you're going to use it for. 

 

EMILY BIGHAM: Are they in different places? Because I would imagine that it's probably a good idea that when you're setting aside money, you don't necessarily have to set it aside in a Roth IRA. You can have different accounts where this is my rainy day fund, or my whatever, and this is my emergency fund. 

 

Is there a difference between one that's just sitting there waiting for you and you don't get any penalties for when you actually take it out, versus I feel like an emergency fund? Is that almost like a-- You know, we have a lot of different accounts here at Navy Federal, and a lot of different things that you can put cash into. 

 

So is an emergency fund maybe something that potentially, if you take anything out of it, you get docked for it? Is the difference just in the name, or is it in the place that you keep it? 

 

KEVIN DRISCOLL: So there's a couple of rules of thumb. And many people don't like rules of thumb. I like rules of thumb. 

 

EMILY BIGHAM: I like rules, makes it easy. I come from a military family, though, so I'm very-- I need rules. 

 

KEVIN DRISCOLL: Yeah. 

 

EMILY BIGHAM: Tell me what to do. 

 

KEVIN DRISCOLL: Right. So the period of time that you might need that money, the shorter that period of time, the fewer penalties you want to erode that. As an example, if I put $1,000 into a savings account at Navy Federal, if I take that out, there are no penalties. If I put $1,000 into a five-year certificate of deposit, there is a penalty for taking that $1,000 out, but you're only going to lose some of the interest that had accrued. You're not going to be below your $1,000. So as you-- 

 

EMILY BIGHAM: But what does that mean? 

 

KEVIN DRISCOLL: As you prioritize your buckets-- it's really good, actually, to have penalties on long-term money. So if you invested in Tesla-- 

 

EMILY BIGHAM: Whoa, whoa-- it's good to have penalties-- whoa, whoa, whoa. OK, so what does that mean? 

 

KEVIN DRISCOLL: So you talked about Apple. You talked about Tesla. Some of those Google, Facebook-- if I'm invested in those for retirement, the penalty of taking money out is actually lack of growth. If I take money out of Apple today, 10 years from now, it may be worth twice what it is today. So the penalty on taking money out today is really hurting my future use of that money that I put into Apple. 

 

EMILY BIGHAM: So if you own stock right now and you sell it later, it doesn't really matter-- so OK, hold on. I'm trying to think about it at a really, really high level. So if you own stock today and then it grows, if you take the money out now, then when you say penalty, you mean the amount that you get taxed on it? Sorry, I'm-- 

 

KEVIN DRISCOLL: So from a investment perspective, you can use the word penalty and attribute it to many things. There could be literally-- you look up in the conditions and terms of the account, and it says penalty, $50 for transferring your account. That's a penalty. 

 

But you can also say that a penalty is by taking money out prematurely, because then it's not growing. So you're penalizing yourself from not keeping it in there and allowing it to grow. So if I put $5,000 away for my retirement that will double to $10,000, will double to $20,000, $40,000, $80,000, if I take that money out before it has a chance to double and double, I just penalized myself. 

 

EMILY BIGHAM: So you have to wait-- OK, I know I have so many questions about this. But I have kind of been trying to balance my portfolio. And so you know, I have a little money in stocks, and I have a certificate that I actually got here at Navy Federal-- I think, actually, Martin, I think it was a project you worked on. It was the 10 year, 3%-- whatever, I don't even know. 

 

See, that's the problem-- I don't even know. I just put money there. And you know, when somebody gets a marketing promotion and it seems like a really good deal, how do you know if it's a good deal? And then to your point-- I promise it does connect back to what you were talking about. 

 

But when we talk about penalties and all of those types of-- the language that we use here when we're working versus people who are reading about it, what are the keywords to look for, and where can you go to-- do you have to go to a disclosure or disclaimer? Or how-- is it going to be very obvious? And is this specific to Navy Federal, or anywhere that you get a product? That was like, 50 questions. If you want to read the fine print, where can you go? 

 

KEVIN DRISCOLL: I think today, that there's more transparency today than there's ever been. You think about your 401(k)s and the fees that are paid on 401(k), that the transparency of those fees is far greater today than it's ever been. The transparency of what are the penalties if you were to-- have to break your certificate before maturity, that's right on the credit union's website. 

 

Everything is there for the consumer today to find out if there is a penalty to that investment imposed by the financial institution. So don't hesitate to look for it if you're thinking about money for a rainy day, if you're thinking about money for an emergency, if you're thinking about taking money out to help put kids through college, or whatever it may be. You really need to go to that website of that financial institution. And nine times out of 10, it's going to be easy to find. Transparency is really important in today's market. 

 

EMILY BIGHAM: All right, yeah-- that was a good answer to my 50 questions about what if you're confused, and you don't know. But I do want to go back to the question about a credit union versus a bank. Are there differences in the products that are available and the penalties? Or is the penalties specific to what type of investment regardless of where you get? 

 

KEVIN DRISCOLL: Well, the huge difference, I think, from a credit union to a bank is member first. For the credit union, it's always thinking about the member-- you know, how will this affect the member? Versus the bank, its shareholders. So we always have to improve the share price of the stock. We have to make sure that the investors of that bank are taken care of. 

 

So it's really important from a credit union's perspective, especially Navy Federal, when we talk about specials, certificate specials that you may have taken advantage of that Martin told you about-- 

 

EMILY BIGHAM: Yes, thank you, thank you to both of you. 

 

KEVIN DRISCOLL: Yeah, it's really-- 

 

EMILY BIGHAM: I don't know what they do, but I trust you guys, so. I guess that's the point, right-- trust? 

 

KEVIN DRISCOLL: Exactly. So the credit union really is giving back to the member. They're giving back to the member in higher certificate rates and lower lending rates. So if you have to use a credit card, chances are the interest rates that you're paying on revolving balances are lower at a credit union than they are at a bank. May not be true 100% of the time, but as a guide, that's what I believe, is that you'll find member-centric products at Navy Federal Credit Union. 

 

EMILY BIGHAM: Yeah, I mean-- and this has been a really great conversation for me personally. I really try to put myself in the member's shoes. And sometimes, when we're talking about all these really big-picture things, it's good for a certain audience. And then I have to remember like, wait, but I have questions. And I'm sure other people have these questions. 

 

So I really appreciate you coming online today and chatting with me. And is there anything else that you want to talk about? I'm here. 

 

KEVIN DRISCOLL: I do want to go back to a comment you made, because I think that's a misnomer, kind of what people think. Have I accumulated enough money to go talk to somebody? And I think that's-- I think you need to talk to anybody, whatever situation you're in. Having a financial advisor, having that conversation with a financial advisor just because you just got started, or you're 10 years from retirement, don't think about the amount of money you've accumulated. 

 

Because you're 100% right, that is going to-- say, you know what, I really haven't accumulated enough. I'm going to go talk to somebody. And it's going to look like I don't have a lot of money. 

 

And in your situation, it may be that you have a lot of money because you want to retire at a different level than your neighbor. You want to retire differently. You want to have priorities of travel. You want to have priorities of visiting grandkids. So don't think about the money. 

 

Don't think about, do I have enough money? If you have any amount of money that you've accumulated, it's a good time to go talk to a financial advisor. 

 

EMILY BIGHAM: Mm-hmm. Well, it's always a good time, right? 

 

KEVIN DRISCOLL: Absolutely, don't be intimidated by others. 

 

EMILY BIGHAM: A strategy that I've used, or something that I've kind of realized is if you feel like you're wasting money, and you're like, you know, I really don't need-- But then again, you don't really have anything else to spend the money on. so you're just kind of like, eh, you don't have to think about it too hard-- that's when I feel like it's really good to have one of those set-it-and-forget-it type of accounts, or where part of your paycheck goes in. 

 

When you think about an investment, sometimes, I think people think saving, which means holding on to money. But it could also mean going and purchasing that car that you want, and that you've been waiting for. But you know what, just go ahead and do it if you have the money. And then you'll be more concerned about the money that you have left. And it will help you think more about what are you spending this money on. 

 

Does that make sense? I don't know-- 

 

KEVIN DRISCOLL: Absolutely. 

 

EMILY BIGHAM: I feel like that's probably a mid-career-- 

 

KEVIN DRISCOLL: I think-- and I talk to my kids. I have grown children, and-- 

 

EMILY BIGHAM: What does that mean? Am I grown? Am I a grown child? 

 

KEVIN DRISCOLL: They're in their 30s, and are married, and have families. I talk to them about the pressures, just like you talked about. Sometimes, it's good to have pressures of a loan, pressures of how much money I have left in the account. Because you're not willy-nilly spending money because I don't have anything else to spend it on. 

 

So having pressures of I have a loan payment coming due next week-- well, I can make coffee at home today. I really don't need to go to a coffee house and spend $5 on a cup of coffee. I can make it myself. 

 

So I don't think that those pressures you talked about are bad. Because they keep us in check. 

 

EMILY BIGHAM: Yeah. 

 

KEVIN DRISCOLL: They keep us financially sound. 

 

EMILY BIGHAM: I'm going to go back to another military child haunting thing. So I had that wake-up call when it came to car payments. So I was living in California, and I'd moved out to the East Coast. And my dad had helped me buy a car. 

 

And for a while, we were both paying for it, but it was like a set-it-and-forget-it type of thing. And then he did warn me. He was like, one day, this is going to be cut, and you're going to have to pay for the rest, and you need to be managing it. 

 

And I was like, OK-- completely forgot. Well, I didn't forget. But then when the time came, I hadn't planned for when I had to start making those payments. And that was a wake-up call. And that was like, all right-- 

 

And thankfully, you know, I was managing the rest of my money fine, and wasn't going nuts. But I didn't realize how much I needed to think about it until I was almost at that little brink. So it's probably better to wait for those types of wake-up calls than the big wake-up calls. 

 

And it's maybe going to practice a little bit with that, too-- like, set aside money and be like, OK, can I budget with this amount of money this week? Like, what is my threshold? 

 

KEVIN DRISCOLL: Yeah, it's funny you mention that, because as we get a little bit older, those wake-up calls we had earlier in life help us avoid wake-up calls later in life. And so those are good scars. Those are really good situations that will develop some of your later decision-making. 

 

EMILY BIGHAM: Kind of like the app, the Digital Investor app, right? 

 

KEVIN DRISCOLL: That's right. 

 

EMILY BIGHAM: That's kind of like-- it's almost like training wheels. And you can kind of play with that a little bit and see like, OK, where were the smart decisions, the not smart decisions based on how well you're doing, or-- 

 

KEVIN DRISCOLL: Yeah, I think you're right. But I also think that as people put money into an application like Digital Investor, it's not something that you should go into-- I have $1,000, and I don't care if I lose 20%. I don't care if I lose 200 bucks. 

 

It's something that may turn into future success for you. It may create enough revenue, it may create enough of an asset to help you meet a goal. You may be saving for sending the kids to college in five years or 10 years. 

 

And if you have less money because you're just playing around with it, it's hard to tell your child, well, you can only go to school for three years. I know I told you four, but you can only go to three because I lost your money just playing around. So it's really important to take your investments very seriously, even on an app like Digital Investor. 

 

It's a learning tool. It's something that-- it is learning with training wheels on. But it's not something that-- We work too hard for our money, I guess is what I'm saying, Emily. 

 

EMILY BIGHAM: Yeah. 

 

KEVIN DRISCOLL: [? I worked ?] too hard for my money to throw 20% of it away because ah, it was just learning. 

 

EMILY BIGHAM: So going back to my question about the risks, and what are the big risks, it's almost like, as long as you're paying attention and you feel like you're-- you feel comfortable with it, and you've talked to people, and you've done your own research, you understand what's important to you, you can sleep at night, you've talked to [? someone at ?] NFFG and you have a balanced portfolio, then I think as long as you have-- It's almost-- what do they call it-- almost like a planned risk, or-- is there a word for it, when you think about-- you're taking a risk, but you're almost-- Like, people who take big risks, they always say like, well, I didn't really take a big risk because I did so much-- 

 

KEVIN DRISCOLL: Educating. 

 

EMILY BIGHAM: --planning and prep for it. 

 

KEVIN DRISCOLL: Yeah, educated risk. 

 

EMILY BIGHAM: I guess-- yeah, that's I guess what I'm trying to say. 

 

KEVIN DRISCOLL: Yeah, absolutely. I mean, we talk about that with members all the time. What is an educated risk, and what is an uneducated risk, you know? And so if you want to put money, for example, into a certificate that pays 1%, and inflation is 2%, your risk is that that money is not going to keep up with inflation. It's not going to buy as much tomorrow as it did today. 

 

If you're comfortable with that risk, it's an educated risk. Go ahead, take it. If you want to put it into a balanced portfolio, and you know it may go down, it may go up, I'm comfortable with that risk. So an educated risk is really what you want to do as you move into retirement. Take educated risk versus uneducated risk, because the uneducated risk is-- that's tough. 

 

EMILY BIGHAM: That'll keep you up at night, for sure. 

 

KEVIN DRISCOLL: Yeah, that's tough to bounce back from, yeah. 

 

EMILY BIGHAM: Well, I've definitely kept you too long. But I've really been enjoying this conversation. I've learned so much. 

 

And it's funny, thinking back to an hour and a half ago, and I was like, how are we even going to talk about a plan for retirement during a pandemic? Like, every word in there-- plan, retirement, pandemic-- all those words are scary to people. So I really appreciate the fact that you've been able to kind of help me understand and make sense of all of it. 

 

And just to make sure, is there anything else, any last words that you want to get in there or say? Where can they find you? Where can the people find you? 

 

KEVIN DRISCOLL: People can find-- NFFG through-- 

 

EMILY BIGHAM: Well, yeah. 

 

KEVIN DRISCOLL: --through the credit union's website. We are available simply by typing in NFFG into the search within the credit union's website, and our pages will come up. But NFFG, like you said earlier in the conversation, is a wholly owned subsidiary to the credit union. And we-- 

 

EMILY BIGHAM: What does that mean? 

 

KEVIN DRISCOLL: That means that because many of the products that we offer for our members involve risk, they're not protected by NCUA. The risk that you may have less money is real if you make an investment in Apple. It may go down. 

 

EMILY BIGHAM: Do you have to apply for a Navy Federal membership and an NFFG membership, or one comes with the other? 

 

KEVIN DRISCOLL: You do not. So you don't necessarily have to be a member of Navy Federal Credit Union to work with NFFG, although probably 99% of our clients that we work with are Navy Federal Credit Union members. Being a wholly owned subsidiary, we are a CUSO, a Credit Union Service Organization. So we benefit the members of the credit union. 

 

EMILY BIGHAM: So you operate a little bit differently, which is why you're separate from Navy Federal, and why you don't have to be a member? And I only ask that question because I know that there's a lot of questions about the business side of Navy Federal, the business solutions. And you do have to apply for Navy Federal membership, and then you have to become a business member. 

 

So just wanted to make that distinction in case that was a question. But that's great. Well, thank you Kevin so much for again, joining me in this. I know this went way longer than it was supposed to. But that's great, because there are so many interesting things to think about and questions, even though retirement's an interesting word. 

 

And a couple of things that we talked about-- so we talked about some of the products. But I think rather than getting really into the products, you'd mentioned the Roth IRA is one of the most popular. And then also Digital Investor, if you're kind of looking to play in the stock market a little bit. But what it really comes down to is managing stress, and also just making sure that you have a plan. And there's no better way to do that than to talk to someone who's an expert, and someone who knows you, which is-- 

 

This has been a really great conversation. And thank you so much. I hope you have a wonderful rest of your day, and-- 

 

KEVIN DRISCOLL: Thanks for having me. 

 

EMILY BIGHAM: --and thank you everyone, for tuning in. This is Emily Bigham. I'm your podcast host for MakingCents. And you can download and subscribe to MakingCents anywhere you get your podcasts. 

 

[MUSIC PLAYING] 

 

ANNOUNCER: Navy Federal Credit Union is federally insured by the National Credit Union Administration. This podcast is intended to provide general information and shouldn't be considered legal, tax, or financial advice. It's always a good idea to consult a tax or financial professional for specific information on how certain laws may apply to your individual financial situation. References to and participation with the military community does not constitute organizational endorsement. Navy Federal is an Equal Housing Lender. 

 

ANNOUNCER: Navy Federal Credit Union-- our members are the mission. 

 

[MUSIC PLAYING] 

[UPBEAT MUSIC] EMILY BIGHAM: Hi, and welcome to the podcast "Making Cents," brought to you by Navy Federal Credit Union. I'm your host, Emily Bigham. And each week I'll be taking your questions to the experts to help you make sense of your money. Pun intended. 

 

For people who have just tuned in, I'm speaking with Kevin Driscoll. He's the Vice President of Advisory Services at Navy Federal and Navy Federal Financial Group, actually, NFFG, for short. We're talking about how to plan for retirement during a pandemic. You know, Kevin, to your point when you asked me, what is the question that you're asking? 

 

I really don't know what the questions are to ask. Because it may seem obvious. But why are Americans more worried about retirement now than previously in years past? 

 

KEVIN DRISCOLL: I don't believe that Americans are more worried today about retirement than other points. From a historical perspective, I think that the environment that we're in with the pandemic is different than it's ever been. 

 

In our lifetime we haven't experienced a pandemic. But wow, there's other things that we've experienced, right? We've experienced the Great Recession. 

 

We've experienced internet dotcom bubble. Those were times that many of us were really nervous about retirement. Just throwing another thing another thing in there makes it just something to be nervous about. 

 

EMILY BIGHAM: There was a poll that came out recently that said that nearly three in five American adults are more concerned now than they were last year. I think that the obvious answer is probably the pandemic and things of that nature. But at the same time, I think that people have been forced to leave the workforce. They're not sure if they're going to be able to enter back into the workforce. 

 

Now, I know that that's changed a little bit in the past couple of weeks. What is your take on what's happening right now? And are there any changes about retirement that members can be thinking about now? 

 

KEVIN DRISCOLL: I think the biggest thing for members to think about is really that retirement period that we all will enter some point in our lives. Retirement really isn't a point in time, right? 

 

EMILY BIGHAM: Right. 

 

KEVIN DRISCOLL: I mean, decide to exit from the workforce either prematurely or as planned. But whether you enter or leave the workforce prematurely, as planned, you're going to be out of that workforce for 20, 30, 40 years. So your retirement planning can't be based on a single event of a year or two years. Right? Because it's got to last for 30 or 40 years. 

 

Just like we build our wealth, we're building wealth, we didn't acquire wealth, for most of us. I'm building wealth a little bit at a time. I think that's the same way that we have to approach retirement. 

 

EMILY BIGHAM: Yeah, I think that's my overall issue with the whole plan for retirement. Because the word plan and then retirement, those words don't really mix. How can you plan for retirement once you're forced to retire? 

 

It's like, at that point, is it too late? Perhaps that's why people are so stressed out about it. Is the question of oh my gosh, the panic mode's set in. And is it too late? And my question to you would be when is too late or when is too early? 

 

KEVIN DRISCOLL: It's never too late and it's never too early. Planning is essentially giving yourself options. The way that you plan, whether it's in your personal finance, your retirement life, you plan for the worst but expect the best. 

 

You have to have a positive attitude of what's around the corner. But you also have to plan for the unexpected. You may not have anticipated the effect of the pandemic on your time frame of retirement. It might have forced you to retire early. 

 

But you're also entering into a phase of retirement that's going to last 20 or 30 years. So you have to plan for the next unexpected. You can't go into it thinking, oh, I didn't plan so I'm out of options. 

 

EMILY BIGHAM: What if you have already been planning and you've set yourself up with this great retirement plan. What are indicators that maybe you should make a change in your retirement plan? Whether that is to pull back, to add more money, let it go? 

 

KEVIN DRISCOLL: Most of the answer to that can only be answered by that individual investor. The individual investor, I think, has to be able to sleep at night. That's the key to retirement, is the ability to sleep at night. 

 

EMILY BIGHAM: It's the key to life. 

 

KEVIN DRISCOLL: The key to life, exactly, Emily. 

 

[LAUGHTER] 

 

If you can't sleep in late at night because of investment decisions you've made, you need to change them. You need to change them. Our health is dependent upon many factors that we don't control. So when we're in fear of what's around the corner, from a pandemic perspective, from a financial perspective, I can't sleep, insomnia, whatever the cases may be, it's time to make a change. 

 

EMILY BIGHAM: It's time to call Navy Federal. Right? 

 

KEVIN DRISCOLL: That's correct. 

 

[LAUGHTER] 

 

EMILY BIGHAM: That'll be the retirement and your stress. 

 

KEVIN DRISCOLL: Right. That's where having somebody as a life coach, a financial planner or a financial advisor to bounce ideas off of, I think that's the key. This is what I'm afraid of. This is what keeps me up at night. 

 

EMILY BIGHAM: Right. 

 

KEVIN DRISCOLL: Then you can have that conversation. So again, back to that building wealth philosophy, I think one of the things that we should not do when we enter a life event like a pandemic, is to make rash decisions that are either an all-or-nothing decision. 

 

I think that we can make decisions that are a little at a time. So if you're nervous and you want to get out of your investments, that's fine. Get out of them the way you got into them, a little bit at a time. So if you want to get out of 25% of your more risky investments, that's perfectly appropriate. It's going to help you sleep at night. 

 

But if you get out of 100% of your investments at the wrong time, it's almost like buyer's remorse. When the market rebounds, you have the V-shaped recovery, W-shaped recovery. Whatever that may be, you're going to be kicking yourself saying shoot, I think I got out the wrong time. 

 

EMILY BIGHAM: I think it's probably also good to think about your strategy behind it. A plan is one thing. Then your strategy's another thing. 

 

It's like, where do you want to be at the end of this? That sounds really scary when you think about retirement. I just mean, you know, how do you want to feel about it? 

 

I think probably being agile and reviewing it every once in a while. I guess, what are some indicators that people could research or read about? Or even talk to NFFG about? Indicators that it's time to reconsider the strategy? 

 

KEVIN DRISCOLL: I think just the fact that the clock turned to 2021 is a reason to review your strategy. 

 

EMILY BIGHAM: New year, new you? 

 

KEVIN DRISCOLL: Yeah. Every time a outside influence pushes your investments greater than 10% or there's a 10% loss in your investment, waiting for those triggers may be the wrong move. So having a periodic check on yourself and your investments, and working with your financial advisor, I think that's the key, is not to wait for events. But plan ahead of time. 

 

EMILY BIGHAM: I want to switch gears a little bit and go into the actual different products. Because we've spoken about investments. There are retirement products and retirement accounts. So can you talk a little bit about some of the most popular products? 

 

KEVIN DRISCOLL: I think there are different products for different people. But there is one particular type of an account that benefits many, many, many, many of us. And that's the Roth IRA. The Roth IRA, to me, is the most flexible account that there is. 

 

The Roth IRA allows you to react if there's a pandemic. Just because a-- 

 

EMILY BIGHAM: In what way? oh, sorry. Didn't mean to cut you off. 

 

KEVIN DRISCOLL: That's OK. 

 

EMILY BIGHAM: I'm just very curious myself too. I'm like, in what way? Tell me all the things. 

 

KEVIN DRISCOLL: Some of the IRS provisions about a Roth IRA allows you to withdraw your contributions first and leave the gains in the account. Hypothetically, somebody that invests $5,000 a year for five years into a Roth IRA, their basis on that account, or what they put in is $25,000 after five years. And let's say the account's worth $30,000. They're able to take-- if they have an emergency, they can take $10,000 out of that account and it's not a taxable event. 

 

EMILY BIGHAM: What's the bottom line? The Roth IRA, what is the overall benefit? Am I getting more money in the end? Am I getting less money taxed? 

 

KEVIN DRISCOLL: That's a great question. The biggest benefit to the IRA, to the Roth IRA, is flexibility and future tax-free money after age 59 and 1/2. 

 

EMILY BIGHAM: So meaning when you take the money out of the account after the age of 59, you get taxed less? 

 

KEVIN DRISCOLL: Zero taxes. There will be zero income taxes. 

 

EMILY BIGHAM: Oh, OK. 

 

KEVIN DRISCOLL: So 0 is less than 10. 0 is less than 24. 0 is less than-- 

 

EMILY BIGHAM: I mean, that's big. 

 

KEVIN DRISCOLL: That's a big deal. 

 

EMILY BIGHAM: I need to get into this. 

 

KEVIN DRISCOLL: Right. So the disadvantage is, when you put the money into the Roth IRA, you can't deduct it from your taxes. You definitely need to put it on your income taxes and let the IRS know you did it. But it doesn't help you that year, 2020, I put $5,000 into a Roth IRA is not going to reduce your taxable income today. But when you retire you'll owe $0 on not only the contribution you put into it, but no income tax on the gains either. 

 

EMILY BIGHAM: But if you're not yet 59 and you retire, you're excluded. Right? Is there anyone that's excluded from the Roth IRA? Or can anyone take advantage of the product? 

 

KEVIN DRISCOLL: No, there are exclusions based on income levels. Once you get above a certain income level you cannot contribute to a Roth IRA. But there are provisions. 

 

There are great opportunities within the tax codes to convert traditional IRA dollars into Roth IRA dollars. And you have to be careful of that. Because there's some immediate tax consequences. 

 

So you really need to talk to a tax professional if you're going to consider that. But there are ways for many of us to get into Roth IRAs and have the flexibility and then tax-free money in retirement. It's pretty cool. 

 

EMILY BIGHAM: Yeah. I had another question about it. But then I answered my own question with why don't you just go talk to someone at Navy Federal about it, about your current situation? Because I feel like that's probably what you're going to say to my next question. But after the Roth IRA, is there another most popular product or another product that you'd recommend? 

 

KEVIN DRISCOLL: Well, I think today, the best recommendation for many of our members is a balanced portfolio. If you look at the interest rate environment today, it's a very low interest rate environment. So it doesn't benefit savers very much. People that are saving money, the interest rate environment on a Certificate of Deposit is very, very low. Less than 1%, for the most part. 

 

But if you're taking out a loan or a mortgage, this is great. It's a great time to borrow money. But if you're saving it, not so much. So having a little bit of risk in there is an opportunity for you potentially to beat inflation and have your money maintain the buying power that we need it to make as we go into retirement. 

 

EMILY BIGHAM: When you say balanced portfolio what do you mean exactly? Just different products? And when you say investments do you mean stocks and homes? Do you just mean retirement products? 

 

KEVIN DRISCOLL: I'm going to say yes to all that, Emily. 

 

EMILY BIGHAM: I'm really trying to extract it. Because it's a lot. There's a lot to learn there. 

 

KEVIN DRISCOLL: Sure. 

 

EMILY BIGHAM: Yeah. So balanced portfolio is all of the things. 

 

KEVIN DRISCOLL: Yeah. Most of us have heard the phrase don't put all your eggs in one basket. That's very true. Some of us learned a hard lesson in the real estate bubble. 

 

Because housing prices couldn't go down. So putting more money than should be allocated into the real estate market, for some, may have been a mistake. 

 

But if you have some in stock, some in bonds, some in cash, some in Certificates of Deposit, some in real estate, you're really balancing out. So this year, maybe stocks don't do well and real estate does well. Then the following year something else does well and something else doesn't do well. Having the balance of all those investments in your portfolio of assets is the key to future success. 

 

EMILY BIGHAM: Some of those things are a little bit pricey. So for someone who's just starting out or even doesn't have a lot of income, how are you supposed to have a balanced portfolio if you can't necessarily jump into all those places? Is there another way to have a balanced portfolio? 

 

Or what should you start with? What's safe? Because those are a lot of big-ticket items. I'm just curious as to how many people can really take advantage of all those. 

 

KEVIN DRISCOLL: Yeah, for some of them you're right. They're difficult to get into. But in today's digital world, there's opportunities. Like at NFFG, we have a digital investor. 

 

Somebody who's new to investing, or even somebody that's experienced in investing, you can buy what we call fractional shares of any investment. So if you had $10 and you want to invest in Apple you can buy $10 worth of Apple on our digital investor product. 

 

EMILY BIGHAM: I'm writing that down right now. I'm getting in. 

 

[LAUGHTER] 

 

I'm just kidding. 

 

KEVIN DRISCOLL: Google, Facebook, all those technologies, it's an opportunity for many investors to get started and many investors to learn about investing. 

 

EMILY BIGHAM: Where do you go to find about that, the website? 

 

KEVIN DRISCOLL: Yeah. 

 

EMILY BIGHAM: Is there an app or a website? 

 

KEVIN DRISCOLL: Exactly. On our website. NFFG's website. There's a link to Digital Investor. It really helps out those that either they know what they're doing and it's a great tool for do-it-yourself investor, but it's also a great tool for that person who's a little bit apprehensive about jumping in. 

 

So you can do $10 a month. You can do $20 a month. You can buy fractional pieces and parts to companies that you're familiar with. A lot of us, that's the comfort level in investing. I know that there's a Home Depot around the corner from my house. So can I buy $10 worth of Home Depot? Absolutely. 

 

So if you have a comfort level and you believe in where the companies are headed and where you believe they're going, where they've been historically, you can invest in those for as little as $5, $10. 

 

EMILY BIGHAM: So you can kind of play with it a little bit, use your intuition, and put some money in maybe your favorite products or favorite clothing or technology, and just see what happens. I find it really interesting that no matter what you read, it's almost like, think about the people that you're around. And pay attention to what's going on and where the world is heading. 

 

You can look up news articles for that. But sometimes you just never know. But at the same time, it's not too much of a concern if you're just putting in $10 at a time. 

 

If you look at Apple stock or Amazon stock or Tesla stock, it's just like, oh my gosh, this is so intimidating. And I can buy half a share and not eat for a week. That's a lot for people. That's pretty cool that you can have almost a balanced portfolio within the Digital Investor. 

 

KEVIN DRISCOLL: What's really interesting about that, Emily, is that with the power of growth and the power of compounding, that $10 turns into $20. That turns into $40. It turns into $80. 

 

The more times you have an opportunity for your money to double, the more successful you'll be in retirement and anything else. For those investors who are just getting started, don't stop putting that $10 in. 

 

Don't stop. It's a good habit, right? So investing periodically is really going to benefit that person by continuing to put in, on a periodic basis, that $10 or $20, whatever they're trying to do. 

 

EMILY BIGHAM: We have a lot of interest in this Digital Investor here in the studio, including myself, but which it's OK. We're getting questions from the audience. 

 

KEVIN DRISCOLL: Anthony's got a big smile on his face though. I can't see it behind his mask, he's also interested. 

 

EMILY BIGHAM: Oh yeah, I think we've hit the mark here. It's a bunch of old millennials here who are like, ooh, we can do it now. We didn't hit the Apple stock because we were like, I don't know, teenagers. But now we can get in. Anyway, back to my question, actually it's not my question, but from the audience, how would you set that up? 

 

KEVIN DRISCOLL: Yes, you have to be a Navy Federal member to have a Digital Investor account. Because actually, once you open up the account, you're able to access it through Navy Federal, your digital app, your phone. Once you link in to your Navy Federal account, you can then go over to your Digital Investor account. Yes, you have to be a Navy Federal member. But-- 

 

EMILY BIGHAM: What happens if-- excuse me. So can you invest in stock through different apps? Say Robinhood? 

 

Or just directly through I'm not really quite sure where, and then also invest through this app? Can you have multiple accounts and multiple apps, I guess? I think people at home, in the past year I heard, are getting a little interested in these types of things. It's interesting to know that even if you do have stock somewhere you can still use this product at Navy Federal. 

 

KEVIN DRISCOLL: Having more than less is the better answer to that. As we started the conversation talking about retirement, we moved and morphed a little bit into Digital Investor. I think as we get closer to retirement, one of the detriments to creating a successful plan is having too many of those accounts that you talked about. 

 

So if you have Robinhood and you have Digital Investor and you have all the other ones, trying to put it all together to create a comprehensive plan for retirement makes it more difficult. That's where a financial advisor really comes in. Because they're able to see all that stuff. They're able to help you bring it all together, to create and modify that financial plan that'll help you into retirement. 

 

EMILY BIGHAM: Hmm, all right. That's very interesting. Love that one. What about for people who have been, say, on the other side of the spectrum as far as retirement planning goes? 

 

You're approaching your late 50s. You're starting to think about actual retirement. You've had your plan set up for a while. 

 

Are there any things that you should be thinking about? Any milestones to wait for? The whole taxes thing is very confusing to me. 

 

But I'll leave that one to the experts. But yeah, what are some of the things that late-- I don't even know how to say, late retirers? --people entering retirement should be thinking about? 

 

KEVIN DRISCOLL: You mentioned taxes. That's very daunting and something that makes us all a little bit nervous. But really, the most efficient retirement is a tax-efficient retirement. 

 

Working with a tax professional as well as financial advisor, learning which account you're going to take money out of first, for how long. So that you're not going into retirement taking money out of your 401(k) that makes a taxable event for you. If that throws you into a tax bracket, you end up paying more taxes then you should have, that that's something to watch out for. 

 

Going into retirement, the thing that you mentioned as being a little nerve racking, is something that you really have to pay attention to. So back when the 401(k) was first designed, everybody jumped in. What that's caused us to have is the majority of our assets are in tax-deferred accounts. 

 

As we take money out of those accounts for retirement, it's giving money, part of that money, back to the IRS for taxes we didn't pay as we were accumulating that wealth. Well, the IRS wants the money as you go into retirement. So making sure you're taking money out of the right account at the right time, it's a little more difficult than just I need $100, I need $1,000. You got to make sure it's out of the right account, the right tax, really. 

 

EMILY BIGHAM: In the grand scheme of things, if you're thinking long term about retirement, but then also paying attention to what's happening on a daily basis about the economy, with the pandemic, I'm sure that once things settle down a little bit and people are a little bit more comfortable and more certain about the way that the world is going-- lost my train of thought there. But I guess there's always going to be something, right? So how do you plan for those always-something moments and then also know that you're on a steady path to success? 

 

KEVIN DRISCOLL: I think planning for those unexpected moments should be part of every plan. You think of football. Football analogy, right? There's the RPO run with the pass option. 

 

They're thinking I'm going to run this. This play is going to be a run. But the quarterback also has the option to pass it if they see an opening for a pass. 

 

That's what you have to go into your retirement planning, is that I'm going to plan that every year is going to be positive. But you've got to have an option. What's that fallback option if there is negative influences in the market? 

 

EMILY BIGHAM: What's the riskiest thing you can do? 

 

KEVIN DRISCOLL: I'll go back to my original answer on that. That's making rash decisions. 

 

EMILY BIGHAM: I'm not saying it's "don't do this." I'm just saying. 

 

KEVIN DRISCOLL: The riskiest thing is to-- 

 

EMILY BIGHAM: Not do anything? 

 

KEVIN DRISCOLL: Blow up your plan and say I'm going to-- 

 

EMILY BIGHAM: Not have a plan? 

 

KEVIN DRISCOLL: Yeah. I'm going to jump out of all my investments. I'm going to sell my house at the peak. I'm going to jump out of my retirement investments. I'm just going to put it all in cash. Cash really isn't going to help you outpace inflation. 

 

So as things get more expensive, it's something you're going to need more cash than less, the longer you live. 

 

EMILY BIGHAM: Right. Let's say you don't have any of those things what is the riskiest thing you can do? 

 

KEVIN DRISCOLL: Not have a plan. 

 

EMILY BIGHAM: Because if you have those things, I imagine you've planned. Right? 

 

KEVIN DRISCOLL: I don't necessarily agree with you. 

 

EMILY BIGHAM: There's no bad first step, I guess is what you're saying? 

 

KEVIN DRISCOLL: Exactly. 

 

EMILY BIGHAM: Don't be afraid to just enter into it? 

 

KEVIN DRISCOLL: Absolutely. You know, it's starting to exercise, just start. Starting to invest? Just start. 

 

EMILY BIGHAM: Right, don't wait. 

 

KEVIN DRISCOLL: Once you've made that initial investment, it's very easy to then work with a professional that says, great job. You got things started. Now, let's make some tweaks and adjustments and create what you have as a base and make it into a more formalized plan. Because what we plan as a individual pre-retiree, because we're all pre-retirees until we enter that stage, so what we plan as a pre-retiree can be tweaked and adjusted. But just get started. 

 

EMILY BIGHAM: Yeah. There's a podcast that I think is really funny called "Diet Starts Tomorrow." It cracks me up every time. Because they don't even really talk about dieting. 

 

It's more just like, I don't know if it's an American way or just a way of thinking of oh, we'll start it tomorrow. It's like it, mm, could be another pandemic tomorrow. I hate to say that. I shouldn't joke about it. 

 

But you're right. And even though it is good to go to a professional and an expert to really hone out your plan, it doesn't mean that you have to wait for anything. So let's say that today I want to start planning for retirement. 

 

I don't have time to talk to anyone for another two weeks. What can I do today? And what should I do tomorrow? 

 

KEVIN DRISCOLL: Emily, it really depends upon what you're trying to accomplish. Some people really want to, before they go talk to a professional, they want to learn. They want to feel confident when they go into that first meeting. 

 

There are so many digital tools available today, to learn about retirement planning. So all of them are good. All of the online educational tools to help educate yourself about whatever you're trying to accomplish. 

 

In this case, we're talking about retirement. So jump in. Start learning. Start learning what some of the terminology is, so you feel much more confident and comfortable in those discussions when you're talking with a financial advisor. 

 

[UPBEAT MUSIC] 

 

ANNOUNCER: Navy Federal Credit Union is federally insured by the National Credit Union Administration. This podcast is intended to provide general information and shouldn't be considered legal, tax, or financial advice. It's always a good idea to consult a tax or financial professional for specific information on how certain laws may apply to your individual financial situation. 

 

References to and participation with the military community does not constitute organizational endorsement. Navy Federal is an Equal Housing Lender. Navy Federal Credit Union, our members are the mission. 

 

[UPBEAT MUSIC] 

 

[MUSIC PLAYING] EMILY BIGHAM: Hi, and welcome to the podcast Making Cents, brought to you by Navy Federal Credit Union. I'm your host, Emily Bigham, and each week I'll be taking your questions to the experts to help you make cents of your money. Pun intended. And just for the audience who is just now tuning in, thank you so much for joining us on Making Cents. I am speaking with John Barton. John, thank you so much for being on the podcast today.

JOHN BARTON: Hi, it's my pleasure. Thank you for inviting me over.

EMILY BIGHAM: So while we're on the topic of service members transitioning out of service, tell us your story.

JOHN BARTON: Yeah, I guess mine's more of the typical story. Although it was about a decade ago and there weren't as many opportunities as there are now. But I was transitioning off reserve duty after a time on active duty. And the idea was, oh wow, this should be pretty easy. I can hang the uniform up, put the boots in the closet, and immediately start getting to work with this plethora of schools that I've been to and all this amazing training.

And my focus in the Marine Corps was weapons. I was in weapons company and I was an 0351 by trade, but then I'd gone on to develop my skills at division schools. So I had all this amazing knowledge of weapons and weapons systems, which had absolutely zero, zero credibility in the outside world, unless I wanted to be a gunsmith somewhere at some random gun store.

So I found that I was woefully unequipped to handle the work environment. Then went unemployed for a while, long enough to burn through anything I'd saved from my time on active duty. And so, yeah, it was tricky. So I dove in and went to my Rolodex to try to figure out who I knew that wore a uniform or I served with that might possibly be out in the civilian world.

And through some mutual friends and some random universe intervention, I bumped into a Sergeant Major, who I had heard about, but had never served with. And he was working in film and TV business. And he and I spoke, got into a conversation, which sparked a really long, amazing friendship. And through him, that opened doors in the film and TV world. And that's where I maneuvered over into.

But it had nothing to do with anything other than the fact I had been a really good Marine and I knew a lot about guns. So it was funny how I was able to transfer skills that were completely inapplicable to the civilian world into something that was very sought after in the civilian world, it was an interesting career choice that had nothing to do with a day-to-day thing. Hollywood's a weird group, this fantasy world that people get into. And I would have never wanted to be anywhere near it. And happenchance and karma took over.

EMILY BIGHAM: Sorry, I don't mean to jump in there, but I did want to ask you about this idea that the veterans are speaking a different language than the business leaders who might hire them. And I have a stat here that says, like 2/3 of veterans feel that way. And after talking to you, it sounds like that's maybe not the case. That there are a lot of transferable skills that veterans don't even know they have. Do you have any tips maybe for resume building or what veterans should be looking for for jobs?

JOHN BARTON: Absolutely. I think that you should have an open mind and I think you should look at your military experience, not just the specifics, like your MOS and the schools you've been to, but look at it as a broad package of managerial skills and troop leading skills that transition into leadership skills outside in the civilian world. And that's always your first step.

In the military, we're trained leaders. So the civilian world, and especially in lower, middle, and upper management, they're looking for trained leaders more than anything else. They want people that can hit the ground running and grab people, people gravitate to them. And they're effective in their communication and their discipline in terms of how that relates to the bottom line for any particular company. And this is outside of whether or not vets want to go into business for themselves.

So I think when I started working with vets with their resumes, when I started getting into mentorship, the hard part was saying, OK, look this is you on paper and this is great. Because we're taught in the Marine Corps to go through our resume building as if we were taking all of our skills and applying them directly into a civilian resume make for job sets. And that's fine and some of that does translate over. And some of that does translate over into if you want to pursue a higher level degree.

Some of our classes and schools do translate into college credits and that can be translated into a degree in certain aspects and certain colleges agree with that.

EMILY BIGHAM: So you mentioned--

JOHN BARTON: Oh, go ahead, yes.

EMILY BIGHAM: I'm so sorry. I just had an idea that I really wanted to touch on. So you mentioned the fact that a lot of businesses are looking for trained leaders and that's a quality that the military leaders who are transitioning have. I wonder if that's maybe something having to do, and I don't want to say confidence, because I don't think it's confidence.

I think it's maybe that that veterans need to understand the connection between the trained leaders that they are in the military and how that relates over to the trained leaders in the business world. Because I think that there's a lot of things there that are similar, but it's difficult to understand if you've never been in a corporate setting. So do you encounter that ever? And how would you coach through that?

JOHN BARTON: I do. I think what I found it the most interesting is that, oddly enough, a lot of veterans coming off active duty or reserve duty that come into the corporate world, their first notion is to be, not meek, but they tend to hide behind some of their more robust communication skills.

I've been in conference calls and meetings where veterans were present and I never knew, because they were sitting and watching the room and anticipating and picking their targets and picking their battles to fight. And that's definitely a skill we're taught. But I think that more vets should embrace this idea that they were trained communicators when they wore a uniform. They're trained in their abilities to communicate succinctly, think, and digest problems accurately and come up with good solutions.

And if you never communicate that in the corporate world, if you sit there and say, well, no one wants to hear from me. I'm just a vet. I never went to business school or I never did-- that's doing do it yourself a disservice. And yes, there is a language barrier. The corporate side, they can talk differently. But our world, as you translate in, it's not as hard as mixing oil and water. I believe it's like mixing two different colors of water. And what you come up with is a hybrid.

And so as a veteran, look back to your basics, look back to your communication and your attention to detail. And then develop your style, your leadership style that you may have already had when you were in, or maybe it's a hybrid style that you're adapting to the corporate world. Now, of course, there are things you don't want to do. We've got to keep our swearing down to a minimum. And I think we need to tone down any of our more robust rhetoric. But in the end, the skills that you learned, even going so far back as boot camp, are very applicable being a corporate leader.

EMILY BIGHAM: So I'm reading your bio here, which is great by the way. It's very long, you've done a lot of things. Congratulations.

JOHN BARTON: That's a blessing and a curse.

EMILY BIGHAM: There's a part, [LAUGHING] So there is a part here that says that you encourage out-of-the-box Marine Corps-style leadership principles. I'm so curious to hear about some of these out-of-the-box leadership principles.

JOHN BARTON: Well, years ago I had someone referred to members of the Marine Corps, we're just the civilians multitool, we're the civilians Leatherman. So there's so many different tools within our quiver that can be directly applied to how we work in the corporate world, but also how we become veteran entrepreneurs. And I spent a lot of time and lessons learned of what we call the asymmetric warfare school and division schools.

And we talk about, well, if you have a hammer and in an ice cube, well, you can easily beat the ice cube into submission. Or there are different ways to let it melt and there's different ways to utilize what it produces. And it's no different than if you're faced with some problem in the corporate setting. A veteran has to look at it and think, well, the easiest outcome might not be the best. The easiest solution might simply be the hardest to communicate through in the civilian world.

But I'm just trying to think of an analogy where we used our guerrilla warfare tactics in a civilian application. But there aren't any good ones. But there was a saying that I heard at boot camp. And granted, I was at boot camp about 20 years ago. It was improvise, adapt, and overcome. And in essence, that's what asymmetric and counter-guerrilla warfare is. And so, I think vets can use their out-of-the-box thinking more in the civilian world to create different types of hybrid results than they ever could in the military.

In the military, our background is still housed in a foundation of discipline and specifics to our branch and MOS. Well, you can think in terms of-- you don't have to think in your MOS or you don't have to think in those specific structured terms when you're out in the corporate world. You have access to Google. There are many times in the field when I was setting up booby traps and doing cool stuff, where I had no access to Google and if I had, there were all kinds of really cool things I could have learned that they didn't teach in our regimented school system.

EMILY BIGHAM: Kind of sounds like a process. So it's the process at which you problem solve. And can you repeat those three words one more time?

JOHN BARTON: Improvise, adapt, and overcome.

EMILY BIGHAM: I love that, that's great. That sounds like--

[INTERPOSING VOICES]

JOHN BARTON: Oh, go ahead.

EMILY BIGHAM: No, I was going to say that it sounds like for any veterans that want to start a business, I know that's definitely a popular career move for veterans. That would solve a lot of problems.

JOHN BARTON: Yeah, beyond a doubt. Again, it goes back to this multitool concept. Where you can be-- the military teaches you to just mission accomplishment. And there are so many different methods to do this. And to complete the mission objective we're armed with training. So it was another expression we learned when I was going through our martial arts training program, which was one mind and weapon.

And so you can apply that to just anything you do as an entrepreneur. So if you have the head knowledge, if you can become a duty expert in what it is you want to accomplish, what the next amazing great thing you want to bring to the world is, and you just look at it like so how do I head think my way through this? And that's singly the most important tool that you have is your ability to think through the issue.

EMILY BIGHAM: And improvise.

JOHN BARTON: Adapt and overcome.

EMILY BIGHAM: I love that. So switching gears a little bit, I want to talk about resumes and how veterans can tailor their resumes to civilian positions to make their military experience applicable to a more corporate job. This is something that you mentioned in a military personnel office that's applicable to human resources. I don't even know if that maybe sometimes the terminology or the jargon used in the corporate world even registers if you haven't been in it.

JOHN BARTON: I don't think it does either. So as I said about a decade ago when I was first transitioning out, there were so few resources for veterans. And now especially with the tools that the Navy Federal offers and the SBA offers, there's certainly more elements out there that can help guide and let veteran entrepreneurs prosper. Which did not exist a decade ago. And was much more difficult.

But the resume is tricky. So outside of the entrepreneurial side of the fence, if you want to do something amazing in the work environment, there are tons of opportunities. And so I'm going to draw back to my original story, which I talked about my friend who was the captain and he was the XO of 2nd Battalion, 5th Marines. Well, he now has a Master's degree in marketing, which he did his entire education on Camp Pendleton, while he was on active duty. And he applied everything that he was learning and training into a civilian mindset, a corporate mindset as he was going through these online schools. And I think he did some in-course classes, but mainly it was online as he completed his degree.

So he started learning the civilian terminology and adapting it to his resume early on. He took things like, of course, I've done the same thing. When I went to NCO school, that's just an upper management certification course. So he looked at that and he said, well, I've done this training block as an officer, I've done this training block as an enlisted Marine, and I've done this training block, and those translate into the corporate designations of these. And so he used any advanced school he went to, any leadership school he went to, and plugged it into the corporate side of the fence.

Now, it's funny because he's been telling me that a lot of the corporate side, because so many veterans have gone into the corporate workforce that they're actually changing terminology to reflect more the attitude of the incoming service member. And so it's easier for that side to go, OK, well, this person went to Non-Commissioned Officers course, so we don't have to send them to a basic managerial position. They've already got the managerial leadership skills in tact from the government. So we could just send them to something on our side that teaches them the basics of how we work.

EMILY BIGHAM: What about the job environment? So we've talked a lot about the skills and how those are transferable, but is the job environment ever difficult?

JOHN BARTON: Oh, it can be. I think now it's more difficult than I've ever seen it. It was pretty tough around 2009, '10. Right at the height of the recession. I think there was a lot of people just being very discouraged. Nobody was hiring. If you were an entrepreneur trying to get out there and get your product or service out there, nobody was funding. That was tough.

I think it's really tough now, because even what's happened currently, if the banks are funding, if the credit lines are liquidable, and you're able to get out there and let's say you want to start the next big company. We're still limited by social distancing. I live in Los Angeles, we just had a whole new series of stay at home orders put in effect. So this pandemic is really tricky for us.

Outside of that, in times when things are a little bit more successful and the economy's on an upturn, which I believe we're going to see here real soon, it's a dog-eat-dog world where the competition is really intense. And so you have to navigate your way through a competitive corporate environment much more so than now. So yeah, I think that there's definitely some give and take. The environment, the work, what's happening in the world, politics, they all interfere with how vets are getting out into the workforce.

EMILY BIGHAM: Are you seeing any-- I know that you have a couple of businesses, and you also speak at various schools, and you have other programs that you're involved in. Have you seen anything, I guess, in your businesses related to COVID that have made you have to alter the way that you are operating? And how you've overcome that using a tactic from the military.

JOHN BARTON: Oh yeah, yeah. We've had to refocus everything that we're doing, especially on the film side. So I do more consulting work and service work in the film business. There has been nothing. We've only just started going back to productions as of a couple of months ago, and even then it's at about 20% or 30% of where it was just a year ago.

I just finished a project out in the New York area and the direct impact is how we interact with each other on a set. Now, many people have not been to a movie set, some people have. Those that have know that there could be anywhere between 200 and 600 people on a set at any given time or in various locations throughout a movie crew. So it's a huge grouping of people and that's well outside of your director and your principal cast.

Well, I deal directly with directors and cast members. I do a lot of production work behind the scenes, but mainly I'm up there in front trying to make sure everyone looks great. Well, there's new rules in place where I can't even go up and adjust an an actor's weapon in a sling, I can't go up and adjust a uniform, there's nothing I can do with that actor without going through a series of COVID protocols to get to hands-on. And they even discourage it even if we go through those protocols.

Every day we have to go through a questionnaire, a COVID written test. At the end of business we have to document whether or not we felt ill or we're getting headaches or anything like that. And take those hundreds of people and they're all put under a microscope daily and we have a check and balance that goes into making sure that, A, that we're not getting sick, but in particular with our actors on set.

If you have a $25, $30 million actor and you give him COVID, or her COVID, be ready for the lawsuit that's going to come. So I understand there's definitely protocols in place for what we do and how we do it now. Part of that's directly affecting creativity. The film side of this is a creative business at the end, so people have to work creatively with each other to come up with something cool.

For me, I do a lot more stuff on-set. We did this job in New York. I would have to talk to the actor via our phones in between takes. So he'd have his phone in his pocket, I'd have my phone, and we would talk and I'd say, look, adjust your thing to look like this. And I'd have one of my staff dressed up in an identical suit, whatever he was wearing, to make sure that he could make the adjustments. All right, I need you to walk like this. And I'd have my staff member walk like this and then the actor would emulate. And it was tricky, we've never had to do that before.

EMILY BIGHAM: Yeah, that is tricky. And that's another way that you can use that skill of adapting that you said you learned in the military. And I think that's something--

JOHN BARTON: --Right back to adapting.

EMILY BIGHAM: I've experienced that here at Navy Federal. I really miss the in-person and being creative and coming up with solutions or problem-solving. Problem-solving through what kind of relief we're going to give members for COVID. That's not as easy to do when you have to call someone or set up a meeting, just it's easier to do when you're with people. That's when the real creativity and you just kind of start to get on a groove.

JOHN BARTON: Oh, you hit the nail on the head. The individual veteran on their own is powerful, but when vet get in groups that actually can hybridize and brainstorm, that's really when true power comes out. It's true across the board with everyone that shares a creative vision, of course. But I work with groups of veterans and I'm not just out here on my own doing my own thing. I work with a great, amazing support staff. I have people and networks all over the place.

And when I run into a situation I have people I can call, and I can work through problems and talk about things. It's interesting how much we rely, even as veterans, on that face-to-face, interpersonal connectivity. And to watch COVID erase all that. It's unfortunate.

EMILY BIGHAM: Yeah, well, erase it, but maybe you just find another way to get the job done.

JOHN BARTON: For sure. Again, it goes back to mission accomplishment. Yes, that is our primary goal. Can you be as effective in the COVID times? Yeah, I think you can get close. But I think we're all looking forward to those days we go back to work and we can actually shake a hand and then create those interpersonal bonds that make everything that much better. I think that we're an amazing species and we just work better together.

EMILY BIGHAM: Right. Well, part of me thinks that if now more than ever, veterans are more well equipped to handle the stresses in the job market that a lot of people, they haven't had these types of hardships enter their lives. And maybe the veterans can help the civilians that are in the workforce to overcome it.

JOHN BARTON: Well, look, case in point. I know we're probably crunched for time. But I witnessed numerous instances of veterans helping people with the COVID protocols. Especially on donning and doffing equipment, like masks and gloves. I can remember going through every level of mock training you could think of. And so, especially if you just boil it down to a boot camp scenario where everyone goes into the gas chamber.

At some point you've been tear gassed. You know how to put a gas mask on, you know how to take a gas mask off, you know how to put gloves on, you know how to take gloves off. I watched all these vets, I don't even know what MOSs they all had, but they all knew how to take gloves on and off really well.

And so they going around each crew member and helping them, because a lot of civilians on a movie set or in any corporate environment, I guess, haven't had to work an entire 12 or 14-hour period with gloves interfering with their day-to-day. And yet in the military, that's just a common thing. So it's interesting to see that level of group help that was taking place with these 60, 80 people learning that, oh wait, you can't take gloves off like this? I didn't know that. So I thought that was pretty spectacular.

EMILY BIGHAM: Yeah, even the small things like that. So we are a little bit crunched for time, well not crunched for time, because I can talk all day about this.

[LAUGHING]

EMILY BIGHAM: But give me a cut off time.

JOHN BARTON: Yes, yes, I'm sorry.

EMILY BIGHAM: Is there anything else that we haven't talked about that you want to get out to the veterans who are transitioning into civilian jobs?

JOHN BARTON: I would say, like we had said earlier, there's many paths through the forest. So whether you decide, as a veteran, that you want to be the next big tech mogul or you want to just be an amazing upper manager at McDonald's, all of this is great. And it depends on where you want to take yourself. Because not everyone is cut out to be an entrepreneur. It's tough, there's a lot of risk, the chances of going broke are pretty much 90% certainty in certain instances.

So there's all these different levels of why you should do something and why you shouldn't. So I say, look, follow your passion. You're passionate about going into business for yourself, then you need to become an amazing duty expert and what you want to do and how you want to do it and learn from other veterans that are doing it. I always make my door open to people for mentorship, because I believe that I've learned some interesting, valuable, costly lessons in my life, and I'm happy to share the pitfalls of that journey. It's funny--

EMILY BIGHAM: And successes.

JOHN BARTON: Successes are a great. Successes are great. But you have to-- the successes are easy to navigate. Everyone's happy. You're making money, everyone's having a great time. How do you navigate the failures and the pitfalls, especially in today's COVID times, can really determine the ethical path you take as a business owner and even as an employee. And it can guide your future prosperity.

There are great ways to navigate speed bumps and there are really crappy ones. So I think that veterans can learn from each other in how we navigate our way down that bumpy road. Because, honestly, these days, at least for the interim, we're going to be down some bumpy roads.

EMILY BIGHAM: Yeah. Who knows, who knows what's going to get thrown at us next.

JOHN BARTON: Yeah, for sure. We've already had pestilence and floods, we've had record hurricanes this year. What's next? What's [INAUDIBLE].

EMILY BIGHAM: I think on the East coast we're due for big snowstorms.

JOHN BARTON: Oh yeah, that's coming. I just saw it on the news, you'll get that tonight.

EMILY BIGHAM: No I'm not prepared. Oh my goodness. Well, thank you so much for joining the podcast today and it would be great to talk to you again about specifically entrepreneurs or veteran-owned businesses. I think that would be a really good topic to really get into, especially the experience that you've had.

JOHN BARTON: Yeah, it's my pleasure. There's some real heavy meat and potatoes in a good veteran entrepreneur talk.

EMILY BIGHAM: Yes, and some good beer I heard too.

[LAUGHING]

JOHN BARTON: Yes, our beer is quite good. People do like it.

EMILY BIGHAM: Gets the job done.

JOHN BARTON: COVID has really put a damper on our beer-making, let me tell you. But we are looking forward to 2021 for sure. A little bit, we're going to-- again, we have to improvise and adapt and overcome the crisis. So we're rebranding a little bit. But we're going to have beer for the masses here pretty soon, once again.

EMILY BIGHAM: Very exciting. I'll have to make a trip up from Coronado next time I'm down.

JOHN BARTON: You're always welcome, always welcome.

EMILY BIGHAM: If I make it through this blizzard that's coming tonight. I'm just kidding. So where can listeners find you?

JOHN BARTON: Well, you can go to our main corporate portal, which is thewarfightergroup.com. Of if you're interested in just our beer, you can go to the Warfighter Brewing Company and we can answer your questions there.

EMILY BIGHAM: And for resources for veterans?

JOHN BARTON: They can always call me direct.

[LAUGHING]

EMILY BIGHAM: They have to come buy beer.

JOHN BARTON: Well, I tell you those conversations are best had over a pint. So any time, they can reach out to me at any of our email addresses. Anyone that needs help with any questions they have in regards to work or entrepreneurship, please don't hesitate to reach out to me. My numbers are public, my emails are public, and I'm happy to answer any questions.

EMILY BIGHAM: All right, well, thank you, John, so much for being on the podcast. And for those of you who are listening-- and hopefully we'll talk soon. And for those of you who are listening, make sure you subscribe to Making Cents wherever you get your podcasts. And give us a rating, drop a comment, or email us that makingcents@navyfederal.org. That's M-A-K-I-N-G-C-E-N-T-S @ navyfederal.org. Where we're making your financial health our mission. Take care, John.

JOHN BARTON: Thanks a lot, you too.

ANNOUNCER: Navy Federal Credit Union is federally insured by the National Credit Union Administration. This podcast is intended to provide general information and shouldn't be considered legal, tax, or financial advice. It's always a good idea to consult a tax or financial professional for specific information on how certain laws may apply to your individual financial situation. References to and participation with the military community does not constitute organizational endorsement. Navy Federal is an equal housing lender. Navy Federal Credit Union, our members are the mission.

[MUSIC PLAYING]