Another day, another dollar, and Yahoo Finance is here to teach you how to better spend — or save — that dollar. Wealth! Host Brad Smith talks with an array of experts and chief executives this hour about particular segments of the US economy and how American consumers are faring in today’s financial climate.

Fiverr (FVRR) CEO Micha Kaufman sits down to discuss which industries and what cities are seeing momentous growth in the gig economy, while Acorns CEO Noah Kerner details Americans’ growing fears about becoming homeless due to a growing whirlwind of financial constraints.

The show also hears from Klarna CEO Sebastian Siemiatkowski on consumer spending figures and new Consumer Financial Protection Bureau (CFPB) regulations on buy now, pay later (BNPL) providers.

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 to grow your money on today’s show.

A recent poll shows the majority of Americans wrongly believe the US is already in a recession will dig into the disconnect between the data and how Americans feel about the economy.

And there’s a new rule on Wall Street called T plus one.

We’ll tell you what it means for your money in the market.

Plus worker woes, an expert joins the program to reveal how freelancers are faring in today’s economy and where they’re navigating as well.

But first, let’s get a quick check on the markets.

We’re about 90 minutes into this trading session during a short trading week, the first of the short trading week and the last trading week of May.

As of right now, the Dow Jones industrial average is down by about 4/10 of a percent.

The S and P 500 holding on to gains by the hair of its chinny chin chin.

You’re seeing it up by about two points which equates to 4/100 of a percent.

And the NASDAQ composite that too in positive territory right now by about half a percent.

Well, Americans are feeling a bit better about the economy of late consumer confidence rising during the month of May.

Improving after three consecutive months of declines.

That’s according to the conference board data that was unveiled today.

But the survey also points to concerns about recession with the expectations index that measures short term outlook for income, business and labor market conditions that came in below 80 for the fourth consecutive month.

A threshold.

The conference board says signals a recession ahead.

So is the economy doing well or not?

So here with more of his Yahoo finances, Rick Newman, Rick, it seems like things are holding up, holding up enough for the fed to not cut interest rates but how are consumers and the everyday American feeling out there?

Uh I mean, uh it’s a bifurcated uh mentality.

So you just pointed to a couple of different things there.

Uh The, the conference board index Consumer Confidence Index usually is a little more robust than another one.

We talk about a lot, which is the University of Michigan, Michigan Index.

That index has consistently shown people to be in a recessionary mood and the Michigan index emphasizes inflation more than the consumer board uh index does.

So I think that tells us something right there.

I think how you feel about the economy uh depends very much on how hard inflation has hit you during the last few years.

So if you are somebody uh with a bunch of kids in the house, for example, a lot of mouths to feed and you’ve been dealing with grocery prices.

Um you, you might be feeling pretty bummed out because grocery prices are up by more than income during the last three years.

Uh If you’re uh if you’re not that um sensitive to that type of inflation, if you’ve got some investments in the stock market, you might be feeling pretty good.

I mean, the, the recent eye catcher was this um poll by Harris and the Guardian that found that 56% of people think we are in a recession.

We are not in a recession, we’re not even close.

And in that same poll, 49% said they think the stock market has been down so far this year.

Of course, I would hope Yahoo Finance viewers know it’s been up uh by quite a lot.

It was up last year too.

It’s been a, it’s been a great ride for investors the last six months.

So, um we just got completely bifurcated views on the economy here and it’s been that way for some time that would signal to us here at Yahoo Finance Rick and um tap market for some potential viewers coming our way so we can keep them educated on the daily Rick.

Well, a big rule change aims to help settle trades more quickly.

A rule amendment is active as of May 28th which provides investors with a 50% improvement on buy and sell order execution dubbed T plus one.

So it’s known in full as trading day plus one business day, which means when you sell or buy a security, the transaction will settle a day after the transaction date.

Now, that’s half the time of the usual two days that it takes to settle a transaction.

So if you buy a stock on Monday, which is a trading day, the transaction will settle on Tuesday.

And if you sell a security over the weekend, that it’ll settle on the next business day.

Now, this applies to stocks, corporate bonds, ETF S municipal securities, some mutual funds and limited partnerships that trade on exchanges.

But the big question you might be asking, why is this even matter, Brad?

Well, it makes portfolio assets more liquid and the amendment is actually a continuation of settlement cycle trimming that has taken place since 2017.

That was when the sec cut from T plus three down to T plus two.

Now, one of the reasons this is possible is because of technological advancement, which has provided a smooth entry point for investors to digitally trade with pre funded accounts linked to a bank.

And this shortened transaction cycle may make trading just a little bit more efficient so happy trading.

Well, switching gears here, independent contractors are an important part of the American economy and the group continues to grow as workers seek flexibility and employers look to fill temporary roles.

According to fiver, independent contractors make up 4.1% of the US labor force.

Even with the uncertainty in the US economy, 43% increased their revenue in 2023 and 55% expect to earn even more in 2024.

Joining me now with the state of the US.

Freelancer, we’ve got Mia Kaufman who is the fiver ceo, great to see you here this morning.

And thanks so much for taking the time here with us on wealth.

First and foremost, we gotta know in this broader labor situation and employment situation nationally where you’re seeing the state of labor as it pertains to the gig economy and those who are freelancing out there.

Thanks for having me, Brad.

Um So we’re seeing from uh the report is that in general, freelancers that reside in major cities make more than the average freelancer in the US as a whole.

And we, we’ve seen gravitation towards cities in Florida in the top of the chart in terms of freelancer population, but also revenue growth and we’ve seen other fast growing cities um with freelancers including Las Vegas, Houston, W which indicates that freelancers love sunshine, low income taxes and the lower cost of living in these metro areas.

Uh but all in all, we’re seeing tremendous optimism and we’re seeing more people that are engaging with freelancer over time and to connect it to what, what you said about the economy and, and, and, and feeling the recession, what we’re seeing with freelancers is their participation in the pie is just growing.

The combined revenue of uh independent professionals in the US has been about 100 and 91 billion in 2023 which is a nice bump uh from the year before.

It doesn’t mean that there is no ma there is no macro headwind, but it means that more people are participating in independent work and as such, generating more money out of it, where do you see more people being able to take on opportunity?

Are there specific in demand roles and in demand jobs for freelancers right now?

Yeah, absolutely.

Um So obviously, we, we, we called out um a few uh increases in in searches which include uh a trademark attorney with, with almost 4000% increase business statistics with over 2000% increase economics with over 200% increase.

And, and the list goes on, obviously, anything that has to do with digital transformation.

So that might be website development, that might be ecommerce uh set up, that might be anything that is related to A I.

So the integration of A I technologies into their clients products are some of the areas which are um uh skyrocketing in demand right now and just a level deeper into that with regard to A I I mean, this is something that you at fiver are deploying for your own business.

But also trying to figure out, ok, where some of within the workforce, there are more people who are reskilling specifically anticipating what generative A I and artificial intelligence more broadly, what type of inflection point that’s experiencing?

Yeah, you know, if, if, if there’s 11 thing very clear by now is that A I and gen A I are extremely powerful technologies that allow all of us to achieve more and work faster.

That said, we know that gen A I in the hands of highly professional and creative talent produces astonishing results compared to the average person.

In other words, gen A I is accessible for everyone which makes it the new baseline that doesn’t give anyone a competitive edge and getting the advantage always takes a human expert to make the most out of these new tools and technologies, which means that those who muster these new technologies will outperform those who don’t.

So we’re seeing our freelancers are actually getting very well familiar with, with these uh tools and are able to offer things that their customers cannot produce on their own.

Certainly, you know, I have to hustle to my finish here.

But with the time we have left, I’d, I’d love to get your perspective as well on wages that freelancers are experiencing right now and, and where they’re being able to perhaps take on even more revenue because of the type of work or because of the demand profile of their work.


What we’ve seen uh uh from the review is that independent professionals in the top 30 markets earn about 10% more than the US average across the different types of independent profession.

Not now, that doesn’t mean that you need to move uh into one of the, the, the biggest metros, but it seems that they’re gravitating.

So some of the uh talent maybe because they think that they have also physical access to some of uh some of these customers, I believe as I’ve said that, you know, being able to uh become professional at these new technologies while staying very much service oriented.

Um and, and ensuring that you can, you can retain your customers over time are the key areas of, of success that we’re seeing across our platform.

Um And in general, we’re seeing freelancers make more money on average doing what they love with without going through the hustle of trying to win projects, but just focusing on, on their professional skills.

I mean, because just lastly while we have you and, and we’d be remiss if we didn’t take the opportunity to ask at least one business question about fiver in itself, I mean, there’s a lot of people that are tapped into the Yahoo finance platform.

They, you know, they dial up ticker symbol FVRR and they take a look at how the stock is doing.

Perhaps they’ve listened to some of your earnings reports as well.

They hear about the buyback authorization for $100 million.

And the first of its kind for fiber as well in this most recent quarter here, walk us into the next growth point that fiber is looking to unlock.

And so I think, you know, you mentioned the the buyback, the buyback represents uh you know, our bullishness about the company and its future.

And we think that right now the the stock is trading well below where it should be given the uh growth uh profile of the company and its high profitability.

Now, we think that there is a lot of macro uh in it.

If you look at the professional staffing market in 2023 that market decreased by 19% while fiber has been able to grow by 7 8% which is a pretty massive offset.

Uh give given the uh the the pretty high headwinds.

And we feel that this uh profile of growth will just accelerate as markets start to normalize.

Uh We, we also see some fear out of uh A I and gen A I and the potential displacement of talent.

We’ve talked extensively about the fact that we’re seeing A I is being net positive for us, which doesn’t mean that some very, very simple task cannot be replaced by A I but A I is generating so many more jobs that you can find on fiver and they’re growing very, very fast.

Certainly, Mia great to catch up with you.

Hope to continue the conversation in the future as well.

You’re watching Wealth on Yahoo Finance the S and P Core Logic Case Schiller index hitting an all time high in March 2024.

The new report, it shows that home prices increased month, over month in all major metro markets.

And here with more, we’ve got Brian Luke who is the S and P Dow Jones indices, head of commodities, real and digital assets here.

Great to have you on here with us, Brian and thanks for taking some time, you know, as we dive into a bunch of the readings that we’re getting economically, how, how significant is this latest data as it pertains to the broader picture here from corelogic case Schiller index showing that new all time high from March.

Yeah, thanks for having me.

I think the fact that we’ve had nine consecutive all time highs and that’s on a seasonal adjusted basis is something that’s uh really tremendous.

Uh We, we saw a period of sustained all time highs coming out of 2020 the COVID cycle, um, housing market was really exploding, but it did taper off a little bit and now we’re coming back to these, uh, consecutive new levels.

So, one of the things I think that you look back is probably not to be afraid of an all time high.

I think over the last year we’ve had 35 all time highs and the S and P 500.

And so the housing market is another asset class that is pushing new limits.

What are some of the regional markets and drivers that you’re tracking right now?

Yeah, we’re seeing broad based gains across the market and really less of a disparity between some regional markets and another.

But one of the areas that’s really grown the fastest is the northeast and that’s a bit of a surprise.

But the last five or six periods we’ve seen cities like New York, Boston, Washington DC, really driving up the values of the home price index that we calculate and that’s what’s really been pushing some of the uh the regional trends.

So we had originally seen a lot of the sunbelt states do very well in 2020 2021.

But if you look at the last 12 to 24 months, the disparity has been in those major metropolitan areas.

So it could be something that more of a return to office uh environment is now putting people back in those cities of tradition, metropolitan areas.

Um But the cities like Tampa, Phoenix and Dallas, that have really the out performers in 2020 2021 have fallen off the pace and some of those laggards during that time are now coming back up.

That’s really interesting because we were speaking with a guest earlier this morning and just about how much perhaps the kind of annexation to city centers could impact the housing market.

Once again, if you see people flowing back into and flowing into suburbs or exurbs, that was a new one for me to learn this morning as well.

How that could and return to office could potentially also be a near term type of boost uh uh small or medium size as it may be back into the housing market as well here as we’re still waiting for even more capacity to be to be brought online as well.

Yeah, I think there’s a lot of trends that are, that are dictating that a lot of that is migratory trends that we’ve seen a lot of the population shift down south.

But those were values and housing markets that were lower valued historically speaking, and a lot of uh people move there for a better of quality of life and so a better quality of living in terms of their affordability of homes.

Uh But now what we’re seeing in the last 12 to 24 months of data is a reversal of that.

So I think that some of the uh our performers, the Sunshine States, they have done very well and they have continued to do return positively.

However, one of the areas that we are really seeing improvement is some of those larger traditional markets.

And so what that’s really dictated is this migration of performance that goes back to those traditional city centers like Chicago, Los Angeles, New York, those larger areas as opposed to some of the smaller markets that were really uh outperforming in, in the 2020 21 periods.

You know, you’ve got a lot of people that are perhaps on the sideline just waiting for the fed to cut rates.

And, you know, at this point, it’s becoming a, don’t hold your breath type of scenario.

But if there is one thing that you believe that the fed may be watching for what would that be?

Especially as they’re kind of looking across homeowners equivalent rents.

They’re trying to figure out where some of those areas of sticker sticker inflation and, and shelter and energy where they actually have levers that they can pull and the right timing to pull that.


So you do look at the, the Saint Louis uh fed, they do track the S and P core education or home price indices.

They track everything from a consumer’s perspective.

Um I think that when you look at some of the elevated rates, we’ve seen that did cause a bit of a pause in the appreciation in the market in the third quarter.

However, we have seen more, uh, positive month, over month returns in the last couple of, of months.

But in terms of the overall benefit for all this equity and homeowners, uh, uh, values is, you know, they have that as a buffer.

If it’s not their first and largest asset investment, it could be their second next to their retirement portfolio.

That’s something that’s going to give them a little bit of confidence in there.

What that is going to dictate for the fed is giving them that ability.

However, they, the homeowners can’t really lock in or, or equitized those that cash unless they sell their home.

Uh, in which case they may want to do that or if they’re downsizing, but there’s no real tool that they can go in and say, I want to peel off a piece of that equity for, uh, retirement for a longer, longer period of time.

And so it, it does give a benefit to the homeowners and therefore translates into confidence, uh, overall the consumer.

Um, there’s not really something that they can pull together and, and, and, and utilize, uh, aside from, um, you know, transacting and selling down Brian, I got a sprint to the finish 15 seconds left here.

If there’s one way that you would describe the summer home buying season is now we’ve had the unofficial beginning of summer already behind us this past weekend.

What would that be?

Well, having strength coming into the summer that we’ve seen in the recent months of data, I would say that that’s going to be, you know, a, a challenge to continue that trend.

However, that’s when most homeowners start to move, they, they schools out and you’ll see a lot of prices, uh, changes taking over during that time.

So it really kind of sees the strength coming into the summer.

Luke S and P Dow Jones indices, head of commodities, real and digital assets.

Americans are delaying their home renovation plans and opting for more affordable options amid high borrowing costs and a housing market recovery that has yet to fully entirely materialize here here with the story that we’ve got Yahoo Finance’s Danny Romero.

Hey, Danny, what do we know Brad becoming a fixer upper is really expensive right now.

Uh Consumers are shifting away from big renovation projects and moving towards those, do it yourself type of projects.

Data from on burns in April showed that consumers are trying to find cheaper alternatives in categories like cabinets, flooring, lighting fixtures, and even counterparts.

I spoke with a homeowner in Michigan that said that he wanted to replace his shower stall and he said that it would cost him about $1000 just to replace that shower stall.

And he also said this is not including uh labor costs into all of this mix.

So instead he found Diy Facebook groups and started posting these pictures on these Facebook groups and in those Facebook group, I mean, I I’m sure, you know, a lot of people go in there and they just start saying suggestions, references.

Um but they just start putting comments in there.

And so he was like, wow, I can actually repair this shower stall for $25 a way better in his budget, let’s say.

Um But obviously this homeowner isn’t the only one.

There’s data from John Burns that said that 36% of consumers are delaying projects for an even further date while 30% of consumers are spending less.

That was according to data in April.

And the reason is building products are so expensive right now and the cost of labor is has also gone up brad, but the slowdown isn’t gonna last forever.

According to experts, there are two catalysts that really will help this market, this industry for one household wealth is so strong right now.

And that really is an indicator for large discretionary spending.

Number two is that experts say that 50% of homeowners are sitting in a home that is 40 years old.

So that means that eventually those homes will need to be replaced and repaired with inside the home.

And so that will also help the home improvement market, some critical structural projects perhaps here, Danny, thanks so much for taking the time to break this down.

Having a strong month here, the NASDAQ and the S and P 500 having their best run since November to break down where you should be potentially cashing into the rally here.

We’ve got Nora Yusuf who is the R BC Wealth Management, Vice President and financial advisor, Nora.

Great to see you and thanks for joining the program with us this morning.

We gotta know, I mean, when people are thinking about, of course, the the age old adage of uh sell in May and go away, it seems like there’s quite a few buying opportunities that investors have really been trying to tap into where are some of the maybe not overcrowded but still ripe opportunities in the market.

That’s all right, Brad, the obvious one is tech with A I in its infancy stages A I is the buzz term.

Now, next will be quantum computing.

We’ve all heard what it can be for productivity and how it’s going to be more impactful than the previous industrial revolutions that naysayers are saying things are frothy.

I don’t disagree but things aren’t as expensive as they were during bubble.

Everyone is so scared of back then before Horseman Stock, Intel, Microsoft Cisco Dell that powered the tech.

So their combined pe was a whopping 80 today.

The magnificent sevens combined pe is about half that and this rally is fueled by established firms with years of profits in the books, long operational track records.

And that’s a stark contrast to back then.

The second I’d point out perhaps less obvious rates, they were experiencing an inverse relationship with interest rates and they took a beating in 2022 as rates were jacked up to combat inflation which peaked over 9% in June of 2022.

Uh It was down most of last year.

It only flipped up positive about 10% at the very end of last, on the idea of the fed starting to lower rates.

And when that didn’t happen this year, it’s back down and still on sale from its all time high.

So remember the key to being a good investor is being a contrarian and seeking out what’s out of favor.

And lastly, I point out dr income, we are at 23 year highs folks on interest rates right now.

So consider seizing that opportunity before the window of opportunity closes on us is that that lowers rates and that means buying up things like treasury bills C DS bonds, particularly municipal bonds if you’re in a high tax bracket.

So that way you don’t get hit with income and potentially state tax taxes.


And so, Nora as we’re kind of thinking about those different elements of the market that investors could be and should be per perhaps evaluating or even uh taking on some positions within where should they be perhaps fading some of their exposure.

Well, you know, everyone’s worried about inflation and yes, we had a good inflation reading last uh uh month here.

But in short, uh the worries aren’t really behind us just yet.

So inflation really is a big part of your decision.

Those last few pounds or two are usually the hardest is the same thing with where we are with inflation and getting down to 2% sounds easier than it is.

Even though we’re hovering in the threes, April was just one data point uh in the right direction.

We had several months that were hotter than expected.

Busting people’s hopes that we would have a fed cut by now.

P ce is what the fed pays attention to CP I is what us consumers feel.

And when you add in back food and energy uh that came in hotter than expected and there’s a headwinds to consider too.

So when you talk about fading away and take this with a grain of salt uh fiscal policy, you know where the money is being spent, we’ve got student loan forgiveness program uh uh in full swing here.

Plus the Chips Act in Infrastructure I believe were scheduled to uh spend over $100 billion by year end.

And folks that is inflationary when consumers typically feel like this.

And and I’m looking at some of the data from the the conference board and the consumer confidence data that came out this morning saying compared to last month, confidence improved among consumers of all age groups in terms of income, those making over 100 K expressed the largest rise in confidence.

But six month moving average basis confidence continue to be highest among youngest the, the under 30 fives and then the wealthiest consumers as well.

What does that all mean?

And correlate for investors who are trying to figure out?

Ok. Where in my own confidence, do I still feel confident purchasing or buying into uh the, the broader markets right now?

Yeah, you know, you brought up a great point, Brad and here’s the thing we want to make sure your risk appetite here is in line with your investments, especially now that people are feeling really confident because we’re in a point in time that is less volatile than usual and that’s dangerous because it tends to lull investors into complacency.

What’s happening is people are just frankly getting too comfortable and confident where we’ve had relatively less vol volatility in the past 18 months where the S AND P 500 was down over 2% only once.

Uh And on average, over the past 20 years, uh we’ve encountered and experienced this at least 12 days each year where the S and P 500 is down over 2%.

So be mindful of that as an investor.

Another thing too, as an investor, you want to assess your portfolio, make sure you’re diversified.

Well, here, why diversification is good?

Uh uh So that this way when the market finally does pull back or you have extra cash to put to work, you know exactly what you’re buying.

Um And the more diversified, you are generally the more consistent, predictable returns you have over time.

Nora Yusuf, it was the R BC Wealth Management Vice president and financial advisor, Nora.

You’re watching Yahoo Finance Consumer confidence ticked higher in May after three straight months of declines.

But consumers are still wary, still anxious about the future here with interest rates high.

Many Americans turning to buy now pay later to help pay for some of those everyday essentials.

39% of us adults have used at least one of these services at check out according to a bank rate survey.

Now the US is putting protections in place to regulate, buy now pay later platforms more like credit cards.

So how will this help vulnerable consumers?

Joining me now, we’ve got Sebastian Sekowski who is the Klarna co founder and CEO Plus our very own Julie Hyman here with us for the conversation.

So, Sebastian first and foremost, and we, we threw a lot at you there at the gate.

But when you think about how the consumer is being defined right now, we’ve seen this move from the consumer’s resilience to the consumer is generally healthy to the consumer is stretched.

How would you define the consumer based on what you’re seeing at Klarna?

Well, I think it’s almost interesting because like one of the key elements of the buy operated products that we offer is zero interest.

And so to some degree, we’re seeing, you know, a continuous acceleration of our growth and, and preference among us consumers due to the fact that actually from that stretch, a lot of that stretch comes from the higher interest rates on the credit cards and other lending products, right?

And actually to some degree binocular becomes a more attractive offer.

So it’s slightly difficult to distinguish like what is, you know, are we maybe seeing a stronger growth and a stronger sentiment among our consumers than what you see in general in society?

Due to that fact?

Well, and Sebastian, we just showed some figures on the screen that your default rates are still very, very low.

I do wonder if you all have had to make any adjustments in how much, um, credit you are, you know, issuing out there.

Are you approving fewer by now, pay later loans as you are getting more folks who are applying and you know, are, are you seeing a lower quality uh of credit consumer who’s trying to apply.

It’s a great question.

Look, I think a lot of things that are not really understood about by the durations we issue are so short, they’re 30 days, the balances are $150 compared to a credit card of $6000.

We don’t offer revolving, which is how most people build out the significant parts of debt.

And so, and it’s fixed installments.

So the fact is that like the losses are always lower and when we want to change underwriting methodology, we do it in real time and 50% of our balance sheet are underwritten according to new standards in just 60 days.

So the ability agility to adopt to macroeconomic changes is much, much, much higher.

So Sebastian, if I, sorry, so I just wanted to pick up on something you just said.

So I guess what I’m asking is, have you changed your underwriting standards this year as the months have gone on?

You know, because of what you’re seeing out there?

No, I mean, we made the major changes already back in 2022.

And since then, we’ve actually rather seen, you know, slight relaxation of underwriting more recently because we see that our populations are doing really well, losses are 20 30% below industry standards.

And again, the good thing is we get so fast feedback loops, right.

So if we would see even a slight increase in losses that we would attribute to macroeconomic shifts.

Then we could also make changes much faster.

You know, one of the pieces of data that we continually track is coming out from the conference board, came out from the conference board today here.

And within the conference Confidence survey data, they talk about the number of people that are tracking a possible resurgence in recession and the concerns around that as it relates to Klarna, you know, what are the utilization levels, the utilization rates that you would kind of compare now versus the past too and, and kind of how does that measure up?

Um I think it is actually has been on the improving side.

I was more concerned around Christmas time to be fair.

I felt that like when I was looking at consumer sentiment in the U SI wondered how much of the US sales of Christmas was driven by, you know, a tough discounting by the retailers as, as opposed to like sentiment.

My impression in the our impression looking at our numbers for the last six months is not that you’re seeing that worsening trend that you read in other places in media and so forth, right?

So we’re not seeing that, but again, I’m not entirely sure to what degree it’s basically also consumers choosing Clona and of that, of that purpose because they see us being a more attractive product in a higher interest market.


I do wanna ask you about that CFP B new sort of rule, um ruling if you will.

Um I know in a blog post you guys talked about that you didn’t think it was necessarily applicable these credit card standards for buy.

Now, pay later companies.

And I wonder what you think the biggest sort of misapprehension is about buy now, pay later versus credit cards.

What do you think?

Maybe regulators aren’t understanding and what do you think?

Maybe consumers don’t understand?

Well, I think first of all, it was like, it’s not like it’s entirely unregulated what it is, it just falls into the same type of regulation that your electricity bill and your phone bill and other things like that have been.

And the reason we have never been concerned with potentially, you know, over extending yourself on your carrier bill to the same extent that we’re worried about your credit card is it doesn’t charge interest rates, you pay it back very quickly and, uh, you know, within 30 or 60 days and the exposure, I mean, the average order value may be 100 and $50 100 dollars.

And that’s exactly the same for the type of credit that we issue.

So it is a um, a more healthy form of credit.

It’s a better alternative to using credit cards and, and that’s where sometimes it gets misunderstood me.

But with that said, at the same point of time, we welcome these changes that the C PB suggested because there are basically good standards that anyone lending money should apply in our opinion, uh about making sure there’s good consume inflation.

I’m not an anarchist.

I don’t believe that like, you know, a market should operate without any rules.

So I think it’s good to have some rules and it also makes sure that like every player in the market is, is behaving appropriately and with the best interests of the consumer.

So there’s a balance there.

But I think again, what’s critical to us, we need more competitive uh credit card and banking products we need, that’s why we’re seeing excess profits in the banking industry.

We need more competition and we need products that are healthier for consumers that are easy to use and easy to also on board.

And that’s been the problem, it’s been too hard to switch, which is why we’re seeing excess profits.

And so when you start introducing a lot of friction, the downside you have, you may try to do that to protect consumer interest.

Uh And uh but at the same point of time, you’re also reducing competitiveness in the market.

Once again, I wanted to ask you about a new announcement you guys made about cutting down your sales and marketing spend um in the first quarter by 12%.

You did that in part through the use of A I. Um you know, basically internally, you’re creating A I generated images and such for some of your campaigns.

And I think this is interesting, not just clar specific, but sort of the ripple effect that A I is having on say, ad agencies, for example, and other the ecosystem in ways that we don’t necessarily understand quite yet.

And that’s why we, I mean, because we already made an announcement that got quite a lot of attention back in Jan Feb around the fact that, you know, as a consequence of our A I customer service chat bot, we had had a significant reduction in errands that were handled by agents.

About 70% of all of our errands are handled by that.

And that meant that about 700 jobs of a reduction of need of clag.

Now again, these people were employed by companies that employ 200,000 people.

They were in the short term, basically work for other clients of those customer service companies.

But in the longer run, it is obviously going to have implications for those kind of jobs.

And we felt that we wanted to encourage politicians and society to think about this practically and not hide the fact that it will have implications on those kind of jobs and that, you know, we think society should take some careful consideration about what to do about that.

I think this, this announcement is similar in the sense that we see that it will have implications on freelancing jobs in, in photography, in and copying, creative in translations, not to say the least.

And we want again to share because you get a lot of noise, you get a lot of like nice announcement online.

You see something on X but then you realize like it’s a nice demo but it’s hard to put in practice.

But we are starting to see what we can actually hear.

And here are some examples and metrics of how we’ve actually put into practice.

It’s actually working and in this case, about $10 million of savings generated through uh being able to use the technology.

That way, do you anticipate on top of the $10 million in savings that you’re talking about here cutting the sales and marketing spend by 12% in Q 1 2024 that you would look to this technology in other parts of the business and that it could also impact the overall head count make up for Klarna.

No, absolutely.

I mean, we, we have, and we’ve said so internally as well since August September, we stopped hiring.

So, um we are, and as a tech company, we have a nutrition rate that’s kind of natural, about 20% leave every year, which is kind of typical for tech companies.

So that means if we stop hiring, we shrink as a company by 20% on an annual basis and that’s what we’ve been seeing.

So we we are shrinking.

We’re gonna be 20% at least 20% smaller uh in the next six months from when we did this six months ago, we stopped recruiting.

So that’s definitely the case.

I mean, again, I am a big believer that what we’re going to see is a kind of a singularity moment in business where there will be businesses who at the core have learned how to apply these technologies in order to create businesses that move at a 10 X speed to the incumbents and those businesses will start emerging and accelerating ahead of a lot of the competition.

And in my opinion, it’s my responsibility to our employees, to our shareholders, to our customers, to, uh you know, aspire to be one of those companies and use those technologies in such a fashion.

Um And so that’s what we’re trying to do.

And we think that’s definitely, I think, I think that singularity moment is maybe 6 to 12 months away when we will start seeing those truly A I companies uh accelerate ahead of competition in different sectors and industries, some really comprehensive thoughts there and strategy on both the corporate front, as well as the consumer front.

Sebastian Zikos, who is the Klarna co-founder and CEO and our very own Julie Hyman as well here.

There’s no question that millions of Americans are concerned about their finances.

And according to a new report from Acorns, for many Americans, the situation seems dire.

According to their 2024 money matters report, nearly 25% of Americans are worried they may experience some level of homelessness to help us dive into some of the numbers from this report is Noah Kerner, Acorn, Ceo Nora.

I mean, I, I’m just kind of flabbergasted at the amount of people that believe that they may go homeless because of their financial situation.

I mean, what’s playing into this as the data is telling you from the survey?

I think we’re in a time where savings is not really promoted and what is promoted is spending, trading, borrowing all these kinds of culprits that get people into trouble that get everyday consumers into trouble.

And obviously, the American system is constructed around growth, growth, growth, and spending, spending spending.

So the question is, how do you get people saving, saving, saving?

Because that’s really what people, especially everyday people need to be doing a lot more of and that’s what we focus on at Acorn.

So when we did this study to find out, not by the way, not just that 1/4 of Americans are, are, are scared that their current financial situation could land them in homelessness.

One third of young people are scared that their current financial situation could land them in homelessness.

And I think while you have issues like cost of, of living, inflation, debt underpinning all undergirding, all of that, what you have is lack of savings, lack of safety net.

And that’s really what acorns was constructed to do to help people save and invest for the long term not to help people trade to put people into diversified portfolios of ETF S stick with it over the long term and invest save and invest even just the smallest amount of spare change that you can afford.

And if you do that every day and you stay committed and you stay disciplined, then over the long term, it will pay off and people will be in a situation where they’re not having this kind of anxiety.

You know, it’s interesting.

I mean, a lot of our parents out there probably told us uh when we were growing up, hey, be happy with what you have or hey, we have food at home.

Those were some of the small savings reminders.

But what is the biggest mindset shift that people can make right now in order to promote savings on a personal level that can help alleviate some of their financial stresses, just get started right away.

Don’t wait.

I mean, inertia is probably the biggest problem among all these other issues.

But the, but the inertia, you know, in society where people just don’t take that step to take control now.

So I would say if you’re sitting around thinking about this or if you feel like you’re not in a great position with your money, just take that step now and start saving as much as you can and, and investing as much as you can every day.

And that will not only change your functional life, it will change your emotional mindset.

And this is one of the things that, you know, that we study a lot at acorns.

We don’t just focus on the products.

We also focus on the emotions and the anxieties, you know, and, and, and what, what often amounts to lack of hope and a feeling that you don’t have peace of mind because you don’t have that money there for you when you need it.

You know, it’s interesting while we have you the just financial considerations among different generations and how they’re making sure that they’re managing that.

I mean, they, they’re all in very different stages.

Millennials, for instance, are essentially in some of their or entering into the peak earnings years.

Some of them, at least on the geriatric millennial scale might already be in those peak earnings years.

You’ve got boomers who are trying to figure out, ok, the retirements, uh if we’re in it, if we’re getting towards it, uh how do we make sure that we have enough?

And then you’ve got the Gen Zers who are just doing really good at entering in the work face and workplace and, and roasting millennials at the same time, all of these things considered who is doing the best on a relative basis?

That’s a great question.

I don’t know that anybody is doing the best on a relative basis.

Right now, I would say that the best thing you can do if you’re a parent, the best thing you can do for your kids is to start investing in them immediately.

Obviously, if you start at birth, right, $5 a day invested at birth all the way through retirement at an 8% compound rate becomes over $4 million.

And if you’re 18 and you do the same thing you have over a million dollars at retirement.

So I think these are the things that have to start happening.

I mean, when you look at people in their fifties and sixties, I think the average amount that people have saved for retirement is something close to $100,000 for everyday people uh in, in America right now.

And obviously that is just not, that doesn’t work.

So I’m not sure there’s any group that’s doing better than others.

I will say when we look at the data and and again, not to not to promote acorns too much.

But when we look at the data sliced by how acorns customer feel versus how the rest of the population feels, we have a 10% lift in people’s sense of security and people’s sense of financial well being that happens from using the product.

I think that comes from a combination of taking control, starting to invest, save and invest small amounts of money making sure you have emergency savings and also getting smarter because with acorns, you’re learning every day about how to, how to be more thoughtful with your money.

Turning now to a topic on many Americans minds retirement.

Earlier this month, we shared new data from the New York fed that more and more Americans do not expect to work beyond their early sixties.

Well, nearly 2000 Yahoo finance readers jumped online to share some opinions and here to highlight some of those thoughts is our very own, Carrie Han and carry.

Well, they were not amused with me saying that it wasn’t particularly realistic to think about retiring before 62.

These people were saying, hey, come on, we hated our job.

The second theme was that, hey, you know, I had a traditional pension.

Now, remember only about 11% private employers now offer a traditional pension.

But they had that security so they could with social security step away.

We had plenty with, you know, uh, my wife and I were both able to step away from work because we started early and in fact, that can happen, you know, fidelity just came out with their big 401k millionaires.

Uh, you know, jump to record levels.

And these are people and who’s a 401k millionaire who’s been saving for 26 years, the average age was 59 and get this one.

But I gotta say the final thing is that I did hear from readers who said, you know what I did retire early and I regret it and I regret it because guess what, I miss my job.

So, you know, we got to take all these things into consideration when we think of early retirement.

Love your work, love your job and you won’t work a day in your life.

You can stay tuned for market domination with Julie Hyman.

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