How interest rates affect your savings, homebuying: Wealth!

On today's episode of Wealth!, Yahoo Finance's Brad Smith breaks down how to best financially prepare for major life events, from homebuying to retirement.

The Federal Reserve held interest rates at a 23-year high this year while reducing its 2024 rate cut estimate from three to one. Yahoo Finance's Kerry Hannon joins the show to discuss how the Fed's interest rate decision is "great news" for your savings.

Meanwhile, mortgage rates have ticked lower this week to 6.95%, signaling a continuous decline in rates. Yahoo Finance's Dani Romero reports on the housing market's outlook through 2027. Guaranteed Rate Senior Vice President of Mortgage Lending Jennifer Beeston advises homebuyers to do their research and shop around for lenders to secure the most affordable option.

84% of workers would like to see more personalized investment options in their 401(k)s, according to Franklin Templeton. Franklin Templeton Head of Institutional Retirement and Strategic Growth Kevin Murphy explains that Millennials prefer personalization as they balance several financial goals, from paying off student loans to saving up to buy a home. He explains, "It's really about having multiple goals, having a plan in place, making retirement a part of the conversation — not the only conversation. And that's another thing we talk about, is we think it's time to retire the word 'retirement.' It's really more about financial independence."

This post was written by Melanie Riehl

Video transcript

Welcome to wealth everyone.

I'm Brad Smith and this is Yahoo Finance's guide to building your financial footprint.

Our community of experts will give you the resources, tools, tips and tricks that you need to grow your money.

Hey, on today's show, Elon Musk scored a big victory with Tesla shareholders will break down what this means for the stock price and whether or not now is the time to invest and more rates easing a bit further this week, but meaningful declines don't seem to be in the cards any time soon.

We'll break down where rates and prices are heading in the next year plus what's a cash management account?

And why is it the right time and right investment for you.

We break down this with our trustee, personal finance reporter.

We've got all that and much more throughout show.

But hey, our top story today, Tesla shareholders re approving Elon Musk's multi billion dollar compensation package which was struck down by a Delaware judge earlier this year.

Now, there's a lot of chatter across Wall Street about what ripple effects this has for the company shareholders and the value of the stock.

Of course, taking a look at Tesla shares 90 minutes into the trading day.

We're seeing a reversal of some of those earlier gains here with more reaction.

We've got Dave Harden Summit, Global Chief Investment Officer, Dave.

We've had a few guests on Tesla today and everybody having something to say about Tesla a couple different perspectives here.

Let's start things off just setting the tone with what they had to say and then I'll get your reaction on the other side.

OK. We're gonna work on getting that side, Dave, let me just get your reaction to what we saw in the voter uh and the shareholder vote yesterday.

Well, I think that there's a couple of things.

One it does align Musk's interests with the company.

Let's, let's face it.

He's very incentivized now, it encourages him to drive Tesla's growth and it helps to retain him there.

He's not going anywhere and there's a big vote of confidence.

That's the pros the, the negatives here is very easy to see.

This is excessive.

This is a, a very large compensation package.

It's significant dilution possibilities for shareholders and it causes one to want to do things that are risky.

Now, that's nothing new for Elon Musk, right?

So we, we, we know his personality, but it also creates the possibility for income inequality throughout the company.

If someone right above you is making 56 billion and you're making 56,000, there's, there's this large, uh you know, disparity So what does it do to the workers as well?

They just laid off a lot of workers.

So these are kind of the issues at stake right now.

And so Dave, it was perhaps a little bit of a tease for that.

So, here we, we do have it.

Now.

We've had a couple of guests on Tesla today and, uh, we've seen a couple of different perspectives and opinions about where the company is headed.

Let's take a listen and then I'll get your reaction betting against Musk.

It's been the wrong move and I think this has clearly been a turbulent period, but I could see that Cinderella story starting again as we go into 2025 Tesla is the biggest um stock market bubble in world history.

My price target is $15.

So Dave, what say you, where do you fall on this debate?

Well, I don't know if it's going to $15 and I don't know if it's going to the moon per se, but I want to buy Tesla at this time.

Elon Musk is an outspoken leader and I think that there's going to be much more chatter and much more opportunity to get in when you can see clearly that the growth is going to happen.

So the major growth is behind us.

We know that that's very clear, but I think you're going to hear more about that in the future.

So the other thing I would say is this is, you know, 1.6 beta stock, this is an 80 plus pe I know that's not the story here, but there's a lot of unpredictability with Elon Musk.

So if you're a managed risk investor, I would probably hold off on this investment.

If you're a growth investor, I would also probably hold on.

So my thing right now would recommend to hold on Tesla and wait if you're in the shares, I'd probably sell.

Interesting.

Ok, so Dave, this comes back to the importance of, of Elon Musk and Dan Ives was telling us earlier that Tesla is Elon Musk.

Elon Musk is Tesla.

And there's always gonna be the overhang the thought for investors about how much time he's committing to Tesla versus his other entities.

Does this solidify for investors that they're going to get even more of his attention?

Because it's, it's always gonna be divided.

It's never gonna be undivided.

Well, he a absolutely.

It gives him more attention than he's had before.

That is for sure, but he is a serial entrepreneur.

He's a producer, he's a doer, right?

So I don't think this is gonna stop him from wanting to make things happen in other areas of his life and in other companies, that's for sure.

But I do think that this does align his interest.

And so for those that are worried about Lan, worried about keeping him with the company and worried about his focus.

I can see why they approve this to keep him there because it definitely does back.

And so optimists, a lot of people are trying to also figure out does robots change the investment thesis on this company?

You know, there's a lot of opportunity here for sure.

But no, I don't think that does that at this time.

I think that it's more of a wait and see.

Let's see what he does.

He needs to.

He, he's done a lot of uh entrepreneurial things and brought this company to, to be where it's at today.

But what can he do with it from here on out?

That's the question.

You know, even as we, we look here on out, what, what kind of company do you believe this is Dave?

Is it an automotive company?

Is it a technology company?

Is it A I?

Is it a energy company?

Well, with this new package, it's not going to be just an automotive company.

There's not enough room for growth in just automotive alone.

He has to turn to A I, he has to turn to other areas to get the growth that he wants.

We know the vehicle sells where they're at, they're not gonna move that much for his taste.

So this has to be more than an automotive company.

If you're investing for growth.

If you're investing for automotive, then then you're probably in the right space, slow growth ahead.

And, and you mentioned whether or not investors should be investing in Tesla at this juncture.

And you said no.

So where else are the opportunities you would be looking at?

Well, there's a lot of other opportunities.

For example, if you're, if you're really looking to invest in Tesla, you're looking for growth.

And I don't think you've missed out on some of these A I momentum that are, are happening right now.

And let's just take a look at Microsoft Microsoft has high quality earnings.

Microsoft has A I opportunities that is just beginning now to unleash.

And I think the next phase of A I is in the software and unlocking the value of A I within.

Wouldn't it be nice if A I was right in Microsoft, Excel M Microsoft Outlook, Microsoft, you know, et cetera, the software opportunity for A I is just beginning.

And so I think there's other opportunities for growth that are much more prevalent and at hand where Tesla, I think is in the future if Musk can do it.

All right, Dave Harden Summit, Global Chief Investment Officer.

Thanks very much for taking the time here with us today.

I appreciate it.

You're welcome.

Thank you for having me.

Certainly a lot of economic data out this week to discuss what the data is telling us and what it means for you.

Yahoo Finance's very own Julie Hyman is here.

Hey, Julie, hey there, Brad.

So as we take a look at the economic data this week.

You know, the economic data we've gotten this year, a lot of economists have talked about the weakness that we've seen at least the mixed data.

But this week we got some more better news on inflation.

So let's start with the consumer price index, the measure of consumer inflation that came out on uh on Tuesday here and we saw it on Wednesday, excuse me.

And it rose 3.4% year over year.

That's what we got right here.

Uh That gain uh that was the slowest that we have seen in more than three years.

And that was seen as a big measure of relief, right?

3.4% is still an increase to be sure year over year.

That's core CP I, by the way, excluding food and energy.

But directionally, the gains year over year in CPIS, you can see here are getting smaller.

So you have deceleration or in inflation or disinflation.

Put another way.

We also saw that on the wholesale level.

So what are the companies that you buy from paying to make their goods and services?

And so that too, we saw producer prices actually falling on a month over month basis, which hasn't happened in a long time as well.

And on a core basis, we also saw a slowing of inflation.

But then today, you also got consumer sentiment and that showed that even if inflation data is decelerating, it's not something that consumers feel real great.

About because they are still seeing, for example, 3.4% higher prices year over year.

So if you look at this number, you've got a seven month low for that consumer sentiment in early June.

It was worse than expected and people are still expecting higher prices as well.

So they're still expecting to pay an inflation rate of about 3.1% not just this year but over the next 5 to 10 years.

So consumers are expecting that higher for longer inflation.

The other thing, Brad, that I found an interesting tidbit in that report is that consumers assessments of our own finances, their personal finance finances was down the lowest since October.

This is even as we see stocks hit new highs, for example, but it seems to reflect perhaps a little bit more uneasy uneasiness about incomes and about the job market.

All right.

So what does all this data mean for the Fed as well?

Yeah, we got to put it all together.

Right.

So the fed, as we heard from Jay Powell on Wednesday welcomes this slowing in inflation in the rate of inflation again.

Just to be clear, prices aren't going down, they're just going up at a slower rate which is what the fed is looking for.

But of those numbers we talked about, you know, the fed watches, inflation watches CP I watches PP I watches the job market, it watches even sentiment.

We've seen the fed react to that in the past.

But the real number that they pay the most attention to when it comes to inflation is PC, which stands for personal consumption expenditures.

What that does that mean?

It is basically just another way of waiting those consumer prices that we pay.

So for example, there are different components that have different weights, housing a little bit of a lower weight in PC.

For example, it's composed a little bit differently.

In April, we saw year over year core PC up 2.8%.

Now we're going to get in a couple weeks.

The next reading on PC, there's been a lot of forecasting based on what we saw from inflation numbers already and the forecast right now, the consensus is 2.6% which would be the lowest in three years time.

So that too would be good news for the fed would mean maybe we're getting a little bit closer to the fed cutting rates which as we've talked about before, affects a whole hosts of things that affect you and me and everybody watching right now from mortgages to auto loans to much more Julie excellent breakdown.

Tease up our next conversation as well.

Yahoo Finance's own Julie Hyman.

Well, as we were mentioning the Federal Reserve or Julie was there, the Federal Reserve holding interest rates at a 23 year high this week while reducing its estimates of rate cuts this year from 3 to 1, these higher rates are good for short term savers due to higher yields and savings accounts like C DS here with more.

We've got Yahoo Finance's Carrie Hannon.

Hey, Carrie.

Hey Brad, great to be here.

Yeah, I mean, savers should be dancing that happy dance, you know, the jig, whatever it might be.

This is great news.

I mean, for right now these are some of the highest rates we've seen for savers for the accounts you just mentioned for money markets for, you know, online savings account, high yield ones.

We've got t bills are looking great money markets.

These are areas that you can just switch some cash over into.

And it's a great, uh, area for peace of mind, particularly for people who are nearing retirement or in retirement because here's what happened, Brad, a lot of people actually slow down, uh, and they don't realize how much they're likely to spend in the early days of their retirement.

And so they don't put enough cash aside.

This is a perfect time to set that cash aside so you can pay yourself, have expenses, living expenses for me a year or two, shifted into some of these accounts and these are the kinds of rates we're seeing.

Ok, there, if you look around, they're over 5% easily.

I saw a one year CD, uh, yesterday for 5.65% and T bills are paying over five or yielding over 5% and they are exempt from state and local tax.

So these are all some really great ways to kind of build a risk buffer.

I like to call it.

So Carri, is it time to dump all your money into the short term savings like C DS or do you need to stay diversified here?

No, no, no.

Hold down.

You know, you gotta hold your horses on this one.

We all still need equities in our portfolio because I mean, hey, we're talking about living to 100 a lot of folks.

So if you got that kind of longevity for retirees too, I mean, come on, you've gotta be thinking of the oomph you can get from the equities and we know that that's an important engine to keep our a growing for us over the long term, even if it's 10 years, 20 years.

I mean, the S and P 500 index is up.

I think it's something like 10.7% since its inception annually.

So, you know, think about that stocks are an important part of the equation one sort of um it's, it's a standard thing that people often say you take 100 and 10 minus your age and that's how much should be in equities today.

People are saying because of the longevity, mm let's go with 100 and 20 minus your age for how much you should have in equities, but don't ignore these great rates uh that we're seeing right.

Now for the short term savers.

Carrie, thanks so much.

Appreciate it.

Excellent coverage as always.

Well, we've got all your markets action ahead.

We're just getting started here on wealth.

Stay tuned.

Mortgage rates ticked lower once again this week with the 30 year fixed rate at 96.95% there.

Yeah, nine probably gave some of you guys a heart attack out there anyway, still hovering just below that 7% mark.

So for what the latest numbers could mean for the housing market.

Let's bring in Yahoo Finance's very own.

Rebecca Chen live from the west coast.

Hey, Rebecca.

Hey Brad, that's correct.

The average 30 year mortgage rate declined further below 7% this week to 6.95.

Wow, this is better than what we've seen earlier this month.

It is a lot experts are saying it's still too high for many home buyers and the reason is simple.

Um Borrowing cost is too high for today's home prices.

Experts consumers are looking for a more substantial decline before they return to the market and what that substantial decline will look like.

It is not really a magic number, but experts say they are looking for a trend and this trend will come from the Federal Reserve when and if they begin trimming rates.

But the confidence in that has been quite low among Americans.

A survey by Fannie Mae recently has shown that 30% of Americans actually believe that race will go up over the next 12 months.

And this is higher than those who believe race will go down over the next 12 months.

So there are actually more people thinking that race would increase next year.

But there are some, there could be some light at the end of the tunnel.

Economies from Bank of America are now forecasting about six rate cuts over in 2025 and 2026.

So the way to think about this is the rate cuts that we thought were going to happen in 2020 four is being pushed back over to the later two years.

And when that happens or if that happens, it could bring a lot more relief to home buyers who have been waiting for more affordability in the market.

Rebecca Excellent tee up for our next conversation here.

Yahoo Finance's own Rebecca Chen.

Well, home buyers are grappling with a difficult housing market and wondering when they can see themselves some relief out here in these streets, rates are just below 7% but meaningful declines could still be months away here to weigh in.

We've got Jennifer Beaston who is the senior vice president of mortgage lending at guaranteed rate.

Great to have you here in studio with us today.

Thank you for having me.

So for home buyers out there that potentially have some uh meetings and appointments set up over the course of this weekend and they're also trying to remember how they can negotiate mortgage rates.

How, what is the top tip that they need to remember going into all of these discussions?

Well, there's a couple top tips, but the biggest one would be research the lender.

You're talking to.

A lot of times people are just calling.

Well, what's the rate?

What's the rate?

But they're not asking about the fees.

They're not asking about discount points, they're not asking the questions they need.

So I would say find a lender with really good reviews and then I would talk, talk to the lender way before you're gonna shop and talk to them about the rates, the fees and then compare lenders based off of that because it's more than just the rate.

It's what they're gonna charge you for that rate.

What, what's the common pitfall that you see as people are?

It's, it's of course, emotion, it's the spending uh and trying to make sure that you're not getting taken advantage of out there in the housing market as well.

What are some of the top pitfalls that are, are most frequently repeated?

So, one of the biggest concerns that I'm always telling people about is look, if a lender's quoting you a rate you need to see in writing if there's discount points and if there's fees, because what's happening in the market right now is a client will call a lender.

They'll say, hey, I really want 6% and the lender goes yeah, I got that but they don't say I got that and it's gonna cost you 1012 $15,000.

So I'm looking at loan estimates all the time because I just tell people send them to me, I'll look at it and I'm like, hey, like, you know how much did the lenders say it was gonna cost you for this rate?

And they go nothing.

And I go, well, it says $20,000 right here.

So you really need to check.

Everything is the biggest tip I have check everything even into some of the contracts that you sign with real estate agents as well.

We were discussing this just in the green room a moment ago here.

What, why is this so frequent right now?

Well, because of the nar lawsuit starting in August State agents are gonna be requiring these buyers agreement before they show a house and we're already seeing agents do them.

And my biggest concern and what I'm seeing that's alarming is that these contracts are being sent to buyers without being explained and the buyers are signing them without reading them.

So you've got both commission being locked in with a real estate agent and no one's reading it and this is negotiable.

This is big money that could hurt your wallet.

So that's one of my big fears moving into the rest of this year is what's gonna happen with those agreements.

And so within those agreements, what you should, should you be going through and redlining as part of that negotiation?

Yeah, I mean, look, I would definitely be discussing the commission.

Are you willing to pay the commission before this year?

The concept of a buyer paying a real estate agent's commission was foreign but because of the NAR lawsuit, it's on the platter.

So, you know, a are you willing b how much do you want to pay?

There's no set amount in the industry.

And I think that we really need to do a lot of education about that.

And then lastly time period, um you know, you could have it where you just sign an agreement for one house.

But a lot of agents are sending these out saying, hey, you've got to work exclusively with me for a year.

There are a lot of new time fir new first time home buyers that are trying to figure out, ok, where are we going?

What is the region that we wanna be in?

What is the fair price that seems applicable for that region?

What should they be going through in their own thought process as they're trying to make that first time home purchase in terms of where they're living or in terms of signing a buyer's agreement in terms of where they're living in terms of the type of home.

This is the top consideration.

I mean, look a lot of it's gonna depend on.

Do you need to be close to your job.

That's number one, if you don't need to be close to your job and you can be a remote worker, which is what we saw a lot of in 2020 2021 and two, you know, where do you want to live?

Um Really just taking time to write down your goals before you start shopping because otherwise people fall into, I would almost say a Zillow days where they're just looking at houses everywhere in the country without thinking about school districts, you know, proximity to work.

This feels like a personal attack right now, Jennifer.

Are you home by?

Oh, no.

How many hours are you on Zillow at night?

I mean, look, you just always are on Zillow just trying to figure out what's out there.

I look, I've done it.

I've, I've been at the point where my eyes like I can't open them in the morning.

So I feel you, but you gotta write down a list of your goals and you gotta stick to it.

Don't fall in the days.

Jennifer.

Thanks so much for joining us here in studio.

Appreciate it, Jennifer Beaston, who is the senior vice president of mortgage lending at guaranteed rate.

Thank you for having me.

Well, as mortgage rates come down below 7% again, can consumers expect homes to become more affordable?

Let's dive into the latest forecasts from industry experts on where the national home prices are expected to go through 2027.

Before that, we've got y finances, Danny Romero with the breakdown.

Hey, Danny.

Hey Brad, potential home buyers are trying, who are trying to jump into the housing market are facing many barriers to entry high home prices, high mortgage rates and that limited housing inventory.

But is there hope on the horizon?

Goldman Sachs believes that the rate at which home prices grow will stay at its historical average of 4.5%.

And this year, the investment bank expects home prices to appreciate 3.8%.

Now that is down from its 5.5% appreciation expected back in February.

Now next year, they do expect home prices to appreciate 4.4% and in 2026 4.9% and in 2027 4.9%.

Now remember there could be a regional home price correction during the period.

But on the other hand, Moody's, the credit agency expects home prices to grow 1.5% this year.

And then the next year home prices to appreciate 0.3%.

And in 2026 home prices to grow 0.9%.

Then finally wrapping up in 2027 home price appreciation they're expecting will be about 1.7%.

Now, this is a different picture to go Sachs outlook because Moody's expects that home home sale homes for sale will steadily increase as people who own a home currently will likely sell due to life circumstances.

Moody also expects mortgage rates to move lower.

That will also put some pressure on home price gains, Brad.

All right, Danny Romero, thanks so much tracking all things in the housing market.

Always.

Thank you.

We've got much more on wealth after the break.

You're watching Young Finance.

You could customize anything nowadays.

But how can you customize your investments?

84% of workers would like to see more personalized investment options in their 401 Ks.

This is according to Franklin Templeton to discuss the importance of personalization and how it can help you achieve your wealth goals.

Kevin Murphy, Franklin Templeton, head of institutional retirement and strategic growth is here.

Kevin.

Great to see you.

Thanks for coming in the studio.

I mean, obviously this is something that needs to be customized, needs to be personalized because everybody has different personal finance goals and a different perhaps horizon that they're looking at as well.

But as it relates to that employer employee relationship, where do you hear more employees calling for flexibility as well?

Well, yeah, that's uh that's the research that you referenced and, and nice to be here.

Thanks for having me.

Um We've done it for four years now, the voice of the American workplace.

And really what we the catalyst was we wanted to validate.

We, we had a feeling, our clients had a feeling uh how people, you know how participants and how employers are feeling about their overall benefits.

So we set out on a project with the Harris poll in partnership to really dig into how employees are feeling about their benefits.

And this was our fourth year.

Uh The recurring theme we hear each and every year is that personalization has now become non negotiable, absolutely non negotiable.

It's what the, the, the stat that you mentioned in the opening.

That is absolutely the case.

Uh And even more so another 80% um also want more personalized across their entire benefit stack, not just their 401k plan.

So the other stat I reference often is that 45% of millennials have admitted to quitting their job because of the low quality of benefits.

So the way I look at that when I'm talking to employers is this is a talent retention tool and a talent uh attract and retain key talent, especially the millennial generation because they, they need and they want more personalized benefits.

You know, I was just about to ask you the, the difference of the delta between generations here because Gen X was essentially and has come to be known as the the 401 one kind of test case 401k test case generation.

But how has personalization and some of the requests changed generation over generation based on what we're seeing with millennials and now what we're seeing increasingly with Gen Z and then eventually the next generations that come in the future too.

It's a great question because over 10,000 boomers a day are turning 65 right now.

Uh And these retirees, if they had access to a 41 K plan were the early 401k.

Uh So then you, you get to the next generation and for me personally, I'm a Gen X. Um And every day since my first day of work and I also work in the financial industry.

It was contribute as much as your four.

Ok?

You're gonna be sorry if you don't.

And that's not how this generation thinks this generation thinks.

Ok, I need to think about retirement kind of sort of, but I need the here and the now.

And that's really what personalization to us means and what, what we're preparing for as a firm is to really meet each individual according to their life stage.

What's important to them.

If they're in their twenties, they might be interested in paying off student loan debt, they might be interested in buying a car, buying a house.

It's ok to plan a nice vacation.

We, we have to live our life as well, but it's really about having multiple goals, having a plan in place, making retirement, a part of the conversation, not the only conversation.

And that's another thing we talk about is we think it's time to retire.

The word retirement.

It's really more about financial independence, it's about financial independence, meeting individuals along their journey and leveraging technology to deliver it through the workplace in a very convenient and uh simple way.

It's great that you mentioned the technology.

That's exactly where I was about to go next because I think a lot of people just don't even know the access points sometimes.

Or even if you change jobs where things carry over, how are we simplifying the, the delivery of making sure that someone has full insight or full vision into how they're tracking up against their goals.

It's a great question and we're, it's changing at a rapid pace now, the legacy, you know, we're breaking through some of the legacy narrative.

Uh We think that you need to make it very convenient, you need to make it very simple and you need to make it personalized.

And that's why we believe in the voice of the American workplace has, has helped us with this.

And we believe the the really the the workplace has become the financial epicenter for most working Americans.

And there's a few reasons why one, the big one is the trust factor.

There's an inherent level of trust between the employer and the employee.

Employees might not always like their employer, but they trust their employer, they have sensitive data.

Um You can uh this group of employees, the average us worker are not traditional targets of our wealth management uh industry.

You know, they're not high net worth households, their primary savings vehicle is largely going to be their 401k plan.

And the third is the big one.

It's data, we have the data, we can use the data.

We're seeing great advancements in technology, delivering it through the workplace in a very convenient, simple and personalized way.

You mentioned that this can even be a talent acquisition or talent retention uh type or hold the importance of talent acquisition and talent retention as well in this personalization and customization who from an industry or sector perspective is doing this well, hitting it out of the park and and allowing this personalization so that they're not losing employees uh in, in droves.

Yeah.

Uh We see honestly, I would maybe reframe the question.

They are very uh forward thinking innovative advisor, financial advisor that specialize in working with corporate retirement plans have started to implement solution.

Uh Financial wellness is a very largely used term but it's, it's really mis defined.

Um If you, if you use an internet search and you put in financial wellness, you're gonna get 700 million hits in less than a second.

It's not a content problem, it's an engagement problem.

So really the advisers that are out in front of this, engaging with their employers, uh engaging with their employees leveraging technology.

They're the ones that are truly moving the needle because they're meeting individuals where they are on their life stage.

Kevin Murphy, who is Franklin Templeton, head of institutional retirement and strategic growth.

Thanks so much for taking the time here with us today.

Kevin Thanks for having me.

Absolutely, everyone coming up is the upcoming presidential election giving you financial anxiety.

You may not be alone.

We'll have more.

After the break, Americans continue to worry about their own personal finances and electoral politics are not helping.

According to a new study from D A Davidson, 78% of Americans are anxious about their finances within the context of November's election with 60% expecting inflation to rise as a result.

For more on the study, we welcome in Andrew Crowell, who is the D A Davidson, Vice Chairman Wealth Management.

Thank you so much for joining here.

One of the huge things for having me.

Absolutely.

One of the huge things that we're trying to figure out is because we don't have a crystal ball to know who's going to win.

It also comes to some of the down ballot voting as well here and where some of the elected officials could have sway on policy that could impact uh anything from the prices we pay even though the fed is still going to perhaps reign supreme within that trajectory.

I mean, where should voters be placing more of the emphasis on their financial concerns?

Well, it's a great question.

You know, we have an unusual year this year with the presidential election in that it's the immediate president and the immediate past president who are the two front running candidates.

So in uh investors and Americans have some insight as to the policy distinctions between both administrations.

And I think with the the tight election polling so far, uh investors are just uncertain about what the outcome is going to be.

And it was kind of shocking that 85% of those Americans that we surveyed said that they were anxious about the election outcome and and how it would impact the financial markets.

So the uncertainty is palpable.

And so with that in mind, I mean, we're taking a look at some of the survey results here.

It also even extends into data about student loans here.

I mean, what is the net impact that people should be or could be expecting there?

Well, um inflation has been something that we've all felt over the last couple of years and it was fascinating that 42% actually, it was 43% of the people that we polled that have student loans outstanding have been unable to keep up with their payments um since they were reinstated starting in 2023.

Uh we saw other things like 47% of those that we surveyed are, are currently not contributing to their retirement plans.

And then we had almost a 3rd 32% that said they don't even have any retirement savings at all.

So, um persistent inflation is is impacting people in the pocketbook and they're making choices and unfortunately, they may be sabotaging their long term savings uh by, by not contributing during this time period.

And so there's also one stat that really jumped out to me here, 40% of Americans who have a second job, got one in order to afford basic expenses.

This comes back to what we were just discussing in the affordability and, and the cost of living right now.

Just he help us kind of walk through the mindset that consumers are really navigating right now with regard to employment and wages offsetting the higher cost of living.

Well, you, you said at the top of the segment, 60% of those that we polled said that they expect the election outcome to cause an increase in inflation.

Uh Shocking to me.

I, I don't know if that's because they anticipate more fiscal spending or they just persist it.

It's so people are making these choices and it's making it very difficult for the average consumer to, to keep ahead that stat that you cited about second jobs.

42% of those who have second uh jobs took them on in the last year.

This, they're not taking it on to get ahead, they're taking it on just to simply make ends meet.

So we're, this election really may be about inflation and the impact that it's having on the consumer's wallet because people are just trying to, even with in a, in a state like mine in California where we have minimum wage increases going through.

People are still not feeling good about their financial situation.

They're, they're paying more at the grocery store and more at the pump.

And uh as, as we said, they're unfortunately making decisions not to contribute to their 401k savings, at least almost half of them are not.

And, and so let's just name the two leading candidates right now.

Biden and Trump, in one case, Biden is seen by many as the person who's in the White House where a lot of this inflation is taking place.

Whereas Trump is meeting with top CEO S and they're trying to evaluate to what extent inflation could get worse because of tariffs that might be enacted or added on to.

So all this in mind, where do you believe Americans are placing even more emphasis?

Well, I think they're placing more emphasis based on what we can tell right now in just that either administration is going to be spending and either administration is going to be putting pressure on both wages and also on, on everyday expenses through their policy.

So it's, it's a question of uh will investors take a long term approach and take a look at their own personal financial situation and make a decision to prioritize their own saving for the future?

Uh If starting later doesn't help you get ahead as much as starting early and being consistent with it even if your initial contributions are smaller.

So I think uh investors and Americans as they go to the the polling place this fall, they're really going to have to take a look at their long term future and which candidate they believe is going to best help them get to their own financial goals through their policy actions.

And, uh, you know, whereas a few years ago it was all but a foregone conclusion, we thought that in 2025 a lot of these tax cut and Jobs Act provisions were going to be sunsetting now.

It's not so certain.

And so we've seen some of our investors running to make some estate planning changes just because they know what the limits are now and they want to take advantage of them now because they don't know if they're going to change in the future or not.

So, it's really a question of, uh, do I have my own personal financial plan in place?

Am I working it with an advisor?

And I'm by being intentional about making decisions today that will help me achieve my longer term financial goals no matter who's in the White House.

Certainly, Andrew Crowell, who is the D A Davidson, vice chairman of Wealth Management.

Thanks so much for taking the time here with us today.

Andrew.

Thank you, Brad.

Certainly, everyone.

We've got much more on wealth after the break.

You're watching Yahoo Finance?

Well, I hope everybody out there has a checking and a savings account.

But have you ever heard of a cash management account?

It basically combines the features of a checking and savings account into a single account and typically offered at a brokerage or investment firm and it could streamline your banking to break this down for us.

We've got Yahoo Finance's very own.

Molly Moorhead here with more.

Hey, Molly.

Hey Brad, great to see you.

Um I think of these accounts as for people who have investment accounts at places like a vanguard or fidelity.

And so having Ac ma lets them do their banking all in the same place.

And the account is gonna include a lot of the same features as a bank account, like a debit card check, writing, you can pay your bills out of the account and it's usually not gonna have any kind of monthly fee associated with it.

So what's the difference between a cash management account?

And uh of course, what we had seen historically, other accounts, checking and savings, particularly the main difference uh as you mentioned is that it's housed at a brokerage or an investment firm.

So you're not going down to your local bank branch to do your banking.

Um But it also is gonna earn interest.

Uh There are of course some interest bearing checking accounts out there, but it's not typical.

And then um this account acts like a, like a combo of checking and savings where at a bank, those would be two separate accounts.

So what are the pros and the cons of a cash management account?

Uh uh the cons, I would say again, no, in person banking, if you like to walk in and talk to a teller and ask about the different products available.

This is not um offered with this type of account.

It's really all managed online.

And uh another potential drawback is that you might find better interest rates at other places, a high yield savings account at an online bank might pay a better a py than a cash management account.

Um But the pros are that they offer higher insurance limits.

So the FDIC insurance that you get with a bank account is capped at $250,000.

But with this account, the investment firm that manages it for you, partners with a bank to house the money and they can offer a higher uh FDIC limit.

So if you've got, you know, a high balance, all of your money will be insured.

And then again, I think it's that simplified all in one money management.

Uh You use the word streamline, it just kind of lets you do everything from one place.

Yeah, we finance his own Molly Moorhead, Molly.

Thanks so much for helping us end off the show.

Strong here.

Appreciate it everyone.

That's it for wealth.

I'm Brad Smith.

Thanks so much for watching.

Stay tuned for more contamination with Julie Hyman and Josh Lipton that's coming up at 3 p.m. Eastern time.

You do not want to miss it.