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Hello and welcome to Small Business Intelligence by Community Investment Corporation, the podcast where we analyze the latest news headlines and address the all-important question of what does this mean to you as a small business owner? We'll share our insights in this regard so you can be better prepared for what might happen in the days, weeks, and months ahead.
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I'm Joe McCaffrey, a business advisor with CIC, and my co-host for this podcast is Louis Silva, the president and CEO of the Community Investment Corporation.
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How are you, Louis? Awesome.
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Good to be back in the studio.
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It sure is, yeah.
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It's been a while.
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It's now officially summer in Connecticut.
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It's another beautiful day outside today.
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My lawn's already dying, though.
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I don't know about you, but- Mine's dead.
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It's dead already? Yeah.
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I probably should water it, but I don't, because then it'll grow, and then I'll have to cut it more frequently.
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Yeah.
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Agreed.
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But, you know, over the years what I've done is I've trained my lawn to grow slowly, so I only need to cut it, like, maybe, you know, half a time, half a dozen times during the summer.
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But seriously, law- you can train your lawn.
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I- I've learned to do that.
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Interesting.
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It's an ev- it's like an evolutionary thing, you know? Got it.
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And I know what you're thinking.
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You know, a dead lawn doesn't grow.
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I think it's actually dormant though.
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Yes.
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Yeah.
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It's not necessarily dead, so.
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Yeah.
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My wife said to me the other day, she's like, "The lawn's dying."
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I s- you know, "We should water it."
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My response was, "Yeah, you're right."
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I, I follow a lot of, uh, landscapers on Instagram to kind of learn tips and tricks on how to keep your lawn looking healthy and whatnot, and yes.
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Yeah.
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It's not dead, it's dormant.
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It's just dormant.
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Yeah.
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Proper terminology.
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So, uh, but, you know, it, um, you know, I didn't, I didn't water the lawn, you know, mostly because there's, you know, no one in the house that's named we.
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You know, it's like when my wife says, you know, "We," that usually means me, and- you know, you know, that's why it didn't get done.
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And, you know, to be honest, my, my wife usually does it, 'cause she cares more about these things than I, than I do.
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You know, it's not to say that I don't, but it doesn't really look that bad, so.
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Uh, but, uh, you know, it also takes a lot of water to keep a grass, to keep the grass green, and we're usually in a summer drought.
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Actually, we're not now.
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I went by our reservoir the other day, it was looking pretty good.
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But, so, uh, by not watering the lawn, I'm, I'm, you know, helping the ecosystem at least, you know.
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Do you ever see those no mow in May people? Yes.
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Yeah.
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At least I'm not like that, you know.
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The grass is growing up over the gutters of the house and- Oh, the bees, you know? Come on.
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There you go.
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The bees.
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The bees are fine, you know.
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Surprised they don't get cited for the blight ordinance.
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But, uh, but no, the weather's been great and, uh, you know, that's a plus for a lot of our small business clients.
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I mean, a lot of, lot of businesses are seasonal and weather dependent.
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When the weather's nice, people spend more time outdoors and they spend money, which is what we wanna see, right? So I'm pleased to report that a lot of clients of, that I work with, they're busy, they're having a good season, so.
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Weather, by the way, is one of the 25 categories that we track for the podcast, and over the last 30 days it's been only slightly negative.
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Mostly because we had...
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You remember that early heat wave we had? Yeah.
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It was, it was pretty brutal.
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And then, uh, you know, we had some weekend rain, but on the positive side, we've, this is, these are, last few days have been some of the best days of the year.
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Sunshine, pleasant temperatures, low humidity.
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And remember, uh, did you see those articles about the El Niño effect? Maybe this is El Niño, and if it is, you know, that's, uh, that's good.
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At least we're not in California and Europe.
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Those guys are getting killed right now, so.
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Yeah, my, uh, I have sever- several family members out in, uh, in France and, uh, one of them sent me a picture yesterday.
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It was 108.
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Wow.
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Yeah.
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Yeah.
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It's pretty hot.
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They're not used to that.
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No.
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They're not.
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Yeah.
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N- I mean, we get, we s- sometimes get that weather, not that we, we like it either, but, you know, it's a little, uh, little less of a shock to our system.
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So anyway, we're back today to talk about the news.
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Um, you know, there's been a plethora of articles lately.
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Uh, and then rat- you know, rather than regurgitate the news, mostly, you know, most of our listeners probably already know about e- everything that's going on anyway.
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So we're gonna talk about what the news means.
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And when you look at the articles in their entirety, we start to see stories.
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Stories begin to emerge.
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Uh, you know, which if you're a small business owner, these are not only interesting, hopefully, but they provide insights about things that you can be doing to enhance your position.
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So that's what we're going to be, uh, talking about today.
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And as we usually do, we'll finish up with Lewis and I sharing our favorite and least favorite articles, as well as our strategic intelligence takeaway of the day.
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So, um, we use G- GPT to help us find, uh, these stories.
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We, uh, we're big users of, uh, of AI here.
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And, uh, here's, here's a summary that GPT gave us of the last month.
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I'll just read it to you just real quick.
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"Consumers are still spending, but they are becoming more selective, more value-conscious, more experience-driven, and more skeptical.
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Small businesses that solve real problems while creating genuine human connection are likely to capture a larger share of the dollars that remain."
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Would you agree with that, Lewis? I would totally agree with that.
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Yeah, I think that kind of summarizes it really well.
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So, um, we're gonna talk about a couple of different, uh, stories and, and, and sect- sections today, one of which is consumer sentiments.
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And I found this to be really interesting.
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Consumers are consistently reporting anxiety, pessimism, f- financial stress, and concerns about affordability.
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Uh, there's a couple articles that, uh, that we picked up regarding this.
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One is, "High-earning millennials and Gen Z-ers feel broke and conflicted.
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"I make a good salary.
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I shouldn't be struggling this much," is one quote from, uh, from somebody.
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Another one was, "Millions of Americans are paper wealthy, wallet poor."
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So they're seeking out the 211 helpline, uh, network just to keep a roof over their heads, food on the table, and lights on.
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Last year, 211 referrals jumped to 19 million, a million more than the previous years, and calls for employment assistance surged by 28%.
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Those are some pretty stark and, and serious numbers.
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So kind of suggests, you know, we're, w- to what we just said, I mean, consumers are kind of feeling not so good, I would say.
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And not so good, um, the rising debt level is pretty, pretty incredible.
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Um, and the rising, uh, level of default on this, on consumer debt is a, is a startling number, and it really starts to paint the picture of where we're at.
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Yeah.
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We're, we're, we definitely, uh, are seeing that in some of the, some of the statistics, so.
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Multiple reports indicate that consumers are becoming increasingly worried about their personal finances, their jobs, and the overall economy.
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And, uh, businesses tend to benefit when consumers feel secure, optimistic, and willing to spend.
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I think that goes without saying, right? Uh, persistent geopolitical tensions often produce the opposite effect.
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Let's be honest, that's what's dominating the news- Mm-hmm has been for the last, uh, for the last month.
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But people become more cautious when they hear constant discussions about political conflict, economic dissatisfaction, and declining confidence, uh, even if their own financial situation has not yet deteriorated.
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I think that's a really good point.
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You know, a lot of people that I know, you know, they've got jobs, they're, they're still working and everything, but they're just being more cautious in their spending.
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Yeah.
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I, I, I, I agree.
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I mean, even, I'm sure you personally are doing the same thing.
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You're- Yeah you're watching every dollar that's spent, and we're doing the same thing as well.
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We've got, you know, one of the things that we're looking at is, okay, we've got travel and vacations coming up, like, how do we maximize and economize- Um, our travel.
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We, thankfully we still have the luxury of being able to do that, but, um, it's not an, it's not a blank check, right? We try to economize and do the best we can to, uh, to save and have a good time and, you know, still, still do what we want to do.
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Yeah.
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No, exactly.
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So, um, consumer confidence is often shaped by a sense of stability and predictability.
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I, I would agree with that, uh, completely.
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Consumers do not spend based solely on what's happening in their wallets today.
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They spend based on how they feel about tomorrow.
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And, uh, you know, when consumers feel stressed, they have s- they have not...
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And they have not stopped, although they feel stressed, they're not parti- stopped participating in the economy.
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In fact, you know, ChatGPT picked this up.
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Americans are acting wealthier than they feel.
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I think that was a really good way to kind of look at it.
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Yeah.
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That, that, that's an interesting comment.
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I'd probably...
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I could see that.
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Yeah.
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I could see that, for sure.
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Yeah.
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So, um, anyway, that's, uh, that kind of sets the stage for, you know, where sentiments are.
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And then let's actually move from sentiments.
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We talked about this in prior episodes where the, what's the difference between how people feel and how they say they feel really is what it's m- more about, and how they actually are acting, which is consumer spending.
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And what we're seeing there is there's definitely economization going on, and small businesses are seeing this.
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They're, they themselves are operating in an environment where nearly every major cost category is riser f- rising faster than their ability to pass along those costs to their customers.
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We, uh, you know, the, uh, do, do we need to talk about beef? I mean, I know you're, you're a big beef household.
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Tomatoes.
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Hey, the cost of eggs are, are, you know, is plunging.
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Eggs are coming down.
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I didn't...
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Yes.
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That one I didn't, I didn't pick that one up, but I, I did see that one.
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But, uh, but one article was, um, here it ca- actually came from a number of different news sour- uh, sources.
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Prices in the US are rising at the fastest pace in years.
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Officials at the Central Bank have embraced the possibility of higher interest rates to get resurgent inflation under control.
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That's something that we, we, you know, we should be expecting.
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I read something the other day said we should expect three increases by the end of the year.
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Does that seem...
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That's a lot.
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I- i- it's a lot.
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Um, I mean, you know- There was an interesting...
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N- I wouldn't say it was interesting.
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Poor choice of word- words there, but, you know, our new Treasury Secretary decided to hold rates steady.
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Yeah.
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Um, right? And I think that's just a cautionary tale that, hey, you know, I, I think there, it's more likely for an increase than there would be a decrease, um- Yeah i- in the coming months.
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I think he only held it s- steady because, you know, they wanted him to lower it, and he's like, "I can't lower it."
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Sure.
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He probably wanted- Yeah to raise it, but, you know, it's like, "All right, we'll just keep it where it is."
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Yeah.
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But I would expect next time it's probably gonna go up.
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Yeah.
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You know, so, uh, you know, many Americans are burning through their savings.
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These are all the things that, uh, were picked up by these, uh, by these articles and, you know, so it's, uh, it's not, it's, it's not looking good in that respect, so.
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Uh, consumers are still spending, but they may be doing so from a position of weakening financial strength rather than growing prosperity.
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So, um, Americans are spending faster than they earn.
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And this came out of, uh, an article that we picked up.
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The personal savings rate fell to 2.6%,
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down from 3.2
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in March.
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This was for April, and then, uh, s- 4.3%
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in January.
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So, uh, that's kind of the lowest level since mid-2022, which was during COVID.
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So, uh, again, not a, not a really good, uh, situation there.
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So why are we talking about these things? Because it kind of gives some, some meaning and color to if you're seeing, you know, consumers, business, in, in your business being a little bit more cautious, this is why.
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This is the reason why.
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So, you know, the, um, the economy is still moving forward, it's, but it's, it's experiencing significant headwinds.
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Consumers have not s- stopped spending, but they are being far more selective about where they spend.
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Every purchase decision is being scrutinized.
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Um, you know, many, many families, this is why I found this interesting, are spending more simply to maintain their current standard of living.
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So just to keep it status quo, it's still, it's costing a lot more, and consumers are devoting more of their budgets to necessities, so.
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Joe, you know, we, there's this concept of broader consumer sentiment, and then you've got your local consumer sentiment.
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You're, you, you talk with many small business owners, um, some of them the smallest of the small, mostly retail, food service.
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How are people feeling that you're communicating with daily here? I hear from, what I hear from everybody is, is much like what we're talking about here.
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Costs for everything are going up, uh, particularly the f- the, the food, uh, businesses and stuff, the beef, the tomatoes, and all that sort of stuff.
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They're, they're feeling that.
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Things like insurance, uh, all those things.
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It just seems everything is going up.
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Uh, labor costs are going up.
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It's, uh, it's just everything is, is, you know...
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And, and at the poi- They're at the point where many of them, they've raised prices probably as much as they can.
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Sure.
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And they can't really raise them anymore.
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And so they're kind of- Yeah, there's a line.
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Yeah, there's a line that you can't cross.
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And so they're at that point, I think.
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And so they're just finding a way to, you know, they're comparative shopping.
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They're trying to get their costs down and stuff like that as, as households are doing.
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It's much the same.
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Yeah.
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You know, but it's really hard to, um...
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You know, you, you like to...
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One of the things we'll talk about at the end is some ideas and, you know, one idea is to have a cash reserve.
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You know, build a cash reserve because the, the coming months are probably gonna be a little, a little rough.
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But it's hard to do when you're barely, you know, making, making a profit.
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Right.
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And, and same thing with, with households and families.
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You know, what's the, what's the common recommendation? You have six months of living expenses, you know, in, in savings or something like that.
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That's hard to do for a lot of people.
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Impossible for many people, 'cause you're just living, you're living on the edge right now.
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So it's the same for the businesses.
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You know, it doesn't really, um, you know, make, make much difference whether it's a business or individual, so.
220
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Um, when consumers perceive that their financial situation is stagnant or becoming more p- precarious, they often shift toward value-oriented spending.
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And, uh, you know, one of the articles that I picked up was, "Americans don't like the looks of things and are growing more worried about their job and their finances."
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And, um, another one was, "This is how close American households are to the financial edge."
223
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This is really interesting.
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In twenty twenty-four, forty-four-- forty-five point five percent of US households did not earn enough to cover their necessities.
225
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A mere one thousand dollar hike in the annual cost of living would leave another three million households unable to make ends meet.
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So that's how close people are to living on the edge, like we were just saying.
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It's a big number.
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It's a big numbers, yeah.
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And again, people are employed, and they're still spending, but they're just being super price sensitive, value-focused, and selective, particularly about discretionary, uh, you know, expe- you know, expenditures and things of that nature, so.
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Um, I thought this one was interesting about the employment thing.
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A record number of young people expect to be unemployed, so the share of people who are under the twenty-one years of age fear long-term job lo- joblessness will, will triple under the next dec- at under the next decade.
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That's what they found.
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So there's a, there's a lot of pessimism there, particularly with young folks.
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I gotta imagine some of that's AI driven.
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We'll talk about that later.
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You know, but some of that may be-- probably it's overblown, but we'll, uh, we'll pick that up later.
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Americans are feeling the, uh, squeeze as disposable income growth has declined for three straight months.
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So disposable income is what you have left over after paying for all your necessities, your rent, your car payment, whatever, your mortgage.
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Um, eroding purchasing power and forcing households to tap savings amid persistent inflation.
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By the way, that's a-- that's something that we picked up in a number of articles, that people are dipping into their savings and/or taking on more debt And, uh, I know that's something that you and I watch closely, 'cause those are, those are leading indicators.
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When you start seeing that, that means people are really struggling.
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And like I said, if, as a small business, you're going to see that in their, in their purchasing behavior, so.
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Yeah, as of late, we've s- seen a combination of both.
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We've seen reduction in liquidity and an increase in debt, which is, you know, that's just a, that's- That's a bad combination That's a bad combination, unfortunately.
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Yeah.
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Um, but it's, it's rampant, and we're seeing that very often these days.
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So here was, uh, here was an article that said, "Five economic signals suggest US consumers are feeling the strain."
248
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So here's one.
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Income growth lagging inflation, rising credit card delinquencies, savings rate slides to 22-year low, more 401loans and hardship withdrawals, cutting gas purchases, and, uh, you know, what, what this said was this is all relevant because consumer spending drives about 70% of the US economy.
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So when you start seeing these things, that's not a good sign for, for things to come, which is why when we look ahead, you know, would say, you know, there's, there's some storm clouds on the horizon probably, so hopefully it won't be too bad.
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But, um, you know, this is, this is kinda what it's all about.
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So yeah, those are, uh, those are the numbers that we're looking at.
253
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So again, Americans are spending faster than their incomes are growing, and, uh, you know, people make decisions, just purchasing decisions based on what their income can buy, not simply how much they, they can earn.
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And again, that's where we're seeing some erosion, is in the purchasing power.
255
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And people are trading down, seeking deals, stretching budgets, postponing purchases, and searching for value.
256
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Not necessarily the cheapest option, but I thought this was interesting, Lewis, the smartest value.
257
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People are really thinking like, you know, really putting a lot of thought into the stuff that they're buying.
258
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It's like, you know, is there a value here? And we saw a lot, I s- I saw a lot of stuff on value.
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We'll, this, this, this theme will come up again.
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Um, you know, one of, one of the questions people are asking is, "Why is this worth my money?" You know, "Why should I buy this?" Right? Sure.
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Much more, much more scrutiny being paid to, uh, to these sort of things than they, than they were in the past.
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Yeah.
263
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So very value-conscious, uh, consumers.
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Uh, let's see.
265
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What else? Uh, I'm just looking at here.
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Um- There's a lot, a lot of points on this value thing.
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I'm just skipping over them 'cause I don't want to beat the point to death.
268
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But, um, here, uh, this is a good one.
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"Consumers remain willing to spend, but they increasingly expect businesses to earn every dollar they spend."
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Wow, that's interesting, isn't it? I mean, it's, it seems reasonable, but- Sure how many times do you think about it in that, in that context? That's, that really puts a different spin on things.
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Right.
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Well, think about the experience, you know, discussion that we've been has- having as of late, right? Yep.
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You know, I think folks are willing to spend, given the proper experience.
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Um, we're seeing an increase in experience-based businesses, and, you know, people are flocking to that because they feel their value is there.
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Yeah.
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Here's another interesting one.
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"Many spending decisions appear to be motivated by a desire for security rather than luxury."
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That's interesting, right? What do they define as security? Well, I would think security, like, would be, like, you know, your necessities or, you know, just things like to, to, you know, protect your, your downside and, and stuff like that.
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Everybody's just becoming much more cautious.
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Mm.
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Right? And, and less free- freewheeling in their, their spending.
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Luxurious, you know, um, you know, luxurious purchases and stuff like that are, are taking a backseat to, to necessities and things of that nature You know, so, but at the same time, I did see that said consumers are still willing to spend on affordable indulgences.
283
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You know, like that cup of coffee you're drinking right now.
284
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You know, you didn't make your coffee at home, you know- Nah so it's, it's a small indulgence, but I know.
285
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That and my cup of fruit, 12 bucks a day.
286
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It's not a cheap- That cup of fruit was good it's not a cheap affair.
287
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It looked good.
288
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So, uh, you know, but anyway, so, um, you know, oh, and so let's, let's talk about this.
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More households appeal to be re- uh, appear to be relying on what some economists describe as survival debt, which is borrowing not to fund new purchases, but to maintain existing living standards.
290
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That's scary.
291
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We see that kinda, you know, we, we try to screen that out in, in the, the, the loans that we do for businesses and stuff, but we see that.
292
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We do.
293
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You know.
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We do.
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There's, there's a lot of businesses that just need a little cash to kinda keep going right now, and, you know, we, uh, w- we try to help them if we can, but, uh, you know, really, we like to invest in, in projects, things that are going to, uh, you know, be accretive to the bottom line and, and, and help the business and stuff like that.
296
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But now I think a lot of it is really just to keep your head above water.
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Yeah, the amount of times I've seen as of late where s- where, you know, a couple will have m- practically no liquidity, they run their entire household off credit cards, you know.
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Income comes in, they pay off their credit cards, and it's this cycle every single month.
299
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Um, but there's no safety net there, right? They, you know, God forbid something happens, one loses their job, their reliance on that debt becomes even greater.
300
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Um, and when you can't support the r- repayment of that, that's when it all starts coming to a head.
301
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Yeah.
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Here was, uh, this is the last one on consumer spending.
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I thought this was interesting.
304
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Consumers are increasingly willing to spend m- money when they believe a purchase solves a real problem.
305
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I thought that was a kind of interesting way of looking at it, you know? Sure, I can see that.
306
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So again, other than the, uh, you know, the small indulgences, it's, it's gotta be, it's gotta be a meaningful purchase that people are making.
307
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So you were just, uh, talking, uh, about, uh, you know, the ex- the experience thing and, and human connection.
308
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That was another thing that, uh, that we picked up on, and, uh, you know, consumers are increasingly favoring experiences over transactions.
309
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And, uh, you know, gravitating toward those experiences.
310
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And, you know, this is interesting.
311
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I have this conversation with a lot of clients and, you know, talking about their, their sales and, and, and ac- activity and stuff, and I say, you know, "Is your Are, are you selling a commodity product?" Meaning it's just simply a transaction.
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Somebody comes in, like, when Like, let's, let's, let's use your, your coffee and fruit example, Lewis, just 'cause it's, it's, it's right now.
313
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But when you go into the, uh, the store, do you know the person behind the counter? Like, do they know you? They do.
314
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So it's not a transaction, right? Nope.
315
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It's You're not just buying a coffee and a, and a fruit cup.
316
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They know you.
317
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They Do they know your name? They know you by name? They know my name.
318
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Yeah.
319
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I, I've been going there for a decade plus, right? It's become my second home.
320
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It's a family.
321
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And if, if you don't- It's consistent.
322
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If you don't show up, they're, they're, they're page, they're, they're, they're, uh, they're texting you like, "Lewis, you okay? We're, you know..."
323
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Last year we went away on vacation for two weeks, and I got a text message saying, "Hey, are, is everything okay?" "How are Yeah.
324
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You okay? Where are you?" Yeah.
325
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You know? Yeah.
326
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So that's, that's kind of what we're talking about here.
327
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So I try to, I try to encourage clients.
328
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It's like don't just, you know, make it a, a commodity transaction that you're selling.
329
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Right.
330
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You know, get to know your clients and, and get them, let them get to know you, and make that personal connection.
331
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That personal connection, even in this day and age, is becoming much, much more important.
332
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And, uh, you know, people are looking for that authentic human interaction.
333
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Yeah.
334
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You know, particularly in the, in the AI age, and we'll get to AI in a second, but, you know, there's a lot of, uh, lot of concern that, you know, people are gonna lose their jobs and, and things like that.
335
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Well, you know, not if the human connection element is still there.
336
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I mean, that's, that's really what it's all about is, you know, people being people, and that's, I think, what people are craving right now.
337
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Yeah.
338
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It's, it's funny.
339
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I'm reading in the summary, right? AI said that genuine human interaction is becoming a competitive differentiator.
340
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Yeah.
341
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And I, and I'd like to say that that's always been the case, right? Humans have always been the differentiator.
342
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But as the world has become more and more evolved from a digital standpoint, isn't it fascinating that AI itself is saying, "Hey, humans are still the difference makers"? Right.
343
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You know? Uh, and you know, when I look at our business- I- it's very much a human high-touch business, right? We cannot make loans happen without the human interaction.
344
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But how do we use AI to make that interaction m- much more favorable, more efficient, more streamlined, and better overall? Um, and it, it's, it's a balancing act.
345
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Um, but we'd be foolish not to think about how we leverage technology to make our lives easier from, from a processing perspective, with the ultimate result of being help- being able to help more people, more small businesses, uh, in the long run.
346
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Absolutely.
347
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And again, with humans driving the bus the entire way.
348
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Right.
349
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We're never gonna, we're never gonna let, you know, any AI engine make decisions or that's just not- Absolutely not we're never gonna do that.
350
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No.
351
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But, but we can use it to help us make better decisions, make decisions quicker, like all that you're just talking about, you know? Yeah.
352
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But- In the investment space, you know, com- computers make decisions all day long from, from a trading perspective, from, from a- Yeah, algorithmic trading invest- Yeah yeah.
353
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That, that's a huge business model.
354
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Right.
355
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Huge.
356
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Huge.
357
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Um, in our world- Not gonna happen not gonna happen.
358
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Yeah.
359
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There's too much, um, uh, information that helps us make informed decisions that we have to bring to the table ourselves as human, right? AI's not gonna tell us, "Okay, what's happening specifically in Hamden, uh, on a day-to-day basis?" You know? I, I use Hamden as an example 'cause our home office is here, but we pound the pavement here.
360
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We know what's going, going on.
361
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We talk to people.
362
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We talk to small businesses.
363
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AI's not gonna know that stuff, right? Right.
364
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So, um, that part of the, the, the transaction, that part of the equation is extremely important.
365
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Yeah, I mean, AI is great for the quantitative data, like- Right you're talking about the algorithmic trading models.
366
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It's all based on, it's quant trading, right? Right.
367
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But there's a qualitative element to, to these decisions that it can't really pick up because it doesn't know it, and we haven't told it that, right? Right.
368
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So there's that.
369
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There's the relationship...
370
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I tell people, I, I did a workshop last night on access to capital in Greenwich, Connecticut, and I was explaining to people and emphasizing the importance of a relationship with your lender, to have that, that, you know, relationship.
371
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They know you.
372
00:23:08,206.001 --> 00:23:09,155.998
They know your business.
373
00:23:09,156.001 --> 00:23:10,265.999
I said, "It's really important."
374
00:23:10,265.999 --> 00:23:22,25.998
And that's really what we're talking about here, is, uh, you know, businesses that help people feel connected, understood, and part of a community appear to be having a growing competitive advantage over purely transactional competitors.
375
00:23:22,75.991 --> 00:23:23,925.993
That's ultimately what we're talking about here.
376
00:23:24,245.99 --> 00:23:32,315.991
You know, so if you're a business owner, and you got customers coming in, and you don't know their name, and you don't know what they usually buy and stuff like that, do yourself a favor.
377
00:23:32,366 --> 00:23:33,165.994
Get to know the people.
378
00:23:33,165.994 --> 00:23:36,246.002
And m- I, I imagine that makes you feel good when you walk in there.
379
00:23:36,246.002 --> 00:23:36,455.99
Absolutely.
380
00:23:36,505.999 --> 00:23:37,685.995
And they're like, "Hey, good morning, Lewis.
381
00:23:37,685.995 --> 00:23:39,36.001
How are you? How's the kids?" Absolutely.
382
00:23:39,36.001 --> 00:23:40,265.992
Right? There's, there's no better feeling.
383
00:23:40,295.993 --> 00:23:40,615.993
Yeah.
384
00:23:40,666.003 --> 00:23:42,355.99
It makes you feel like a person, right? Yeah.
385
00:23:42,355.99 --> 00:23:43,885.991
It even gives me the gooseies, Joe.
386
00:23:43,895.999 --> 00:23:44,175.999
Yeah.
387
00:23:44,476.001 --> 00:23:45,726
No, it's, it's a great feeling.
388
00:23:45,726 --> 00:23:48,816
You know, rather than you just, like, put your, your order in on...
389
00:23:48,845.996 --> 00:23:49,416
Uh, even when you do...
390
00:23:49,416 --> 00:23:51,646.001
Do, do you order it online? N- I don't, no.
391
00:23:51,646.001 --> 00:23:52,395.9993333
I just go straight up to the counter.
392
00:23:52,395.9993333 --> 00:23:53,485.995
Oh, but you could, right? Yeah, absolutely.
393
00:23:53,515.994 --> 00:23:57,905.992
But even still, when you came in to pick it up, they'd still, you know, make you feel like a million bucks, right? Yeah.
394
00:23:57,985.995 --> 00:24:06,742
I feel like my days- Get started on a much better, uh, footing when I go in, get greeted with a smile, have that small little chit-chat to start the day.
395
00:24:06,782 --> 00:24:06,982
Yeah.
396
00:24:06,982 --> 00:24:15,102
It just, it's a just different way to start the day, and it, it makes me feel good, right? And because of that, you don't go just anywhere else to get your coffee and your, and your fruit cup.
397
00:24:15,171.999 --> 00:24:15,641.999
Absolutely.
398
00:24:15,642 --> 00:24:21,101.999
I c- There's a thousand coffee shops around us- Right and, and I choose to go to one specific one every single day because of that experience.
399
00:24:21,142 --> 00:24:22,431.999
And they may not be the cheapest, either.
400
00:24:22,451.999 --> 00:24:22,921.999
It's not.
401
00:24:23,002 --> 00:24:23,272
Yeah.
402
00:24:23,351.999 --> 00:24:23,762
It's not.
403
00:24:23,791.999 --> 00:24:28,31.999
But, but- But you pay for, for that- That's not what- for that quality that's not the ultimate value, right? Correct.
404
00:24:28,072 --> 00:24:29,511.999
So this is kind of what we're talking about.
405
00:24:29,511.999 --> 00:24:34,411.999
So again, if this, uh, you know, try What we try to do on this podcast is help people think of ideas.
406
00:24:34,441.999 --> 00:24:41,572
And, you know, we're not telling you how to run your business, but if you can incorporate some of these ideas into your business, you know, you'd do well to, uh, to do so.
407
00:24:41,572 --> 00:24:43,131.998
So, uh, let's see.
408
00:24:43,131.998 --> 00:24:49,721.998
What else? Uh, customers trust recommendations from friends, local businesses, community leaders, and organizations they know personally.
409
00:24:50,31.999 --> 00:24:55,962.001
So once again, that's We're, we're, we're still talking about connection here, right? It's just so important to have human connection.
410
00:24:56,331.998 --> 00:25:01,241.999
And I remember talking to one client some time ago, and, uh, she, uh, she was really interesting.
411
00:25:01,241.999 --> 00:25:08,661.997
She, she said, she goes, "You know me as a business owner who is very outgoing and, you know, very engaging with people."
412
00:25:08,661.997 --> 00:25:10,432.002
She goes, "That's not really my personality."
413
00:25:10,441.995 --> 00:25:23,552.001
She says, "When I'm home," she says, "I'm like, I'm like a, you know, a real, you know, not, not a recluse, but, you know, a, uh, a, a very, you know, private, quiet type person, you know?" And I'm like, "Well, that's interesting, because that's not the side of you that I see."
414
00:25:23,951.997 --> 00:25:29,711.999
And so what she basically explained to me, she goes, "I have my work persona, and I have my personal persona, and they're different."
415
00:25:29,981.996 --> 00:25:31,082
I thought that was really interesting.
416
00:25:31,142 --> 00:25:44,671.998
Do you know that I can relate to that person wholeheartedly? As, you know, the president of an organization, my, my job is to be outwardly, you know, focused, open to communication with everyone, but there's a sense of, like, freedom of being home and not, like, you know- Yeah.
417
00:25:44,671.998 --> 00:25:45,622
You don't have to be on.
418
00:25:45,631.998 --> 00:25:46,121.998
Exactly.
419
00:25:46,121.998 --> 00:25:46,821.998
I don't have to be on.
420
00:25:46,821.998 --> 00:25:46,899.498
Yeah.
421
00:25:46,899.498 --> 00:25:50,331.997
I can let my guard down- Yeah and, and just kind of be silent and just be with the family.
422
00:25:50,542.001 --> 00:25:51,511.994
It's very fascinating.
423
00:25:51,511.995 --> 00:25:52,801.994
I can totally relate to that person.
424
00:25:52,851.999 --> 00:25:53,31.999
Yeah.
425
00:25:53,51.996 --> 00:25:53,741.996
I feel that, too.
426
00:25:53,741.998 --> 00:25:58,471.994
I mean, when I'm, when I'm doing workshops and, and even doing podcasts and stuff, you know, you're talking a lot.
427
00:25:58,471.994 --> 00:26:00,101.996
I'm not generally a talkative person.
428
00:26:00,101.999 --> 00:26:03,781.995
Like, when I go to social settings and stuff, I like to listen- Sure believe it or not.
429
00:26:03,781.999 --> 00:26:04,991.999
I like to hear other people.
430
00:26:05,151.994 --> 00:26:05,341.994
Yeah.
431
00:26:05,491.998 --> 00:26:09,131.992
And, you know, and, and I ask them questions, and I just Uh, 'cause I'm interested in them.
432
00:26:09,131.998 --> 00:26:15,31.998
I'm a, I'm a people person, right? I'm, I'm interested in hearing what people what's going on in their lives and in their careers and things like that.
433
00:26:15,31.998 --> 00:26:17,522
I find that to be very interesting, particularly if they have a small business.
434
00:26:17,592.004 --> 00:26:17,862.004
Yeah.
435
00:26:17,881.998 --> 00:26:18,811.998
We'll talk all day.
436
00:26:18,961.999 --> 00:26:19,161.999
Yeah.
437
00:26:19,232.004 --> 00:26:20,521.993
You know? So, uh, but no.
438
00:26:20,521.997 --> 00:26:24,242.003
It's just kind of interesting how you can actually train yourself to have two different personas.
439
00:26:24,242.003 --> 00:26:27,232.002
So if you're like, "Well, that's not really me," well, it can become you.
440
00:26:27,622.003 --> 00:26:32,341.992
You know, it may require a little bit of work, but, uh, but, you know, you have to, you have to kind of pivot here.
441
00:26:32,341.992 --> 00:26:45,181.993
So, um, one last, uh, comment on connection, which kind of s- leads into the next section, which is the future may belong to businesses that combine AI-powered efficiency with human s- human-centered service.
442
00:26:45,678 --> 00:26:47,178
That I think is really interesting.
443
00:26:47,178 --> 00:26:49,468
This is what you and I were, were just talking about, right? Right.
444
00:26:49,478 --> 00:26:56,138
In our business, right, we use, we use AI, right? But we don't get rid of that hu- It's still a human-centered business that we're in.
445
00:26:56,298 --> 00:26:56,648
Right.
446
00:26:56,728 --> 00:27:04,717.999
You know? So the, the AI helps us make better decisions or faster decisions or whatnot, but, uh, but it's still very much a high touch business.
447
00:27:04,778 --> 00:27:05,268
Absolutely.
448
00:27:05,268 --> 00:27:09,987.999
And, and, you know, it- I always like to say that garbage in, garbage out too, right? Yeah.
449
00:27:09,987.999 --> 00:27:13,87.999
So the human control is very much the, the ultimate outcome.
450
00:27:13,088 --> 00:27:27,987.997
And, and we were just talking with our producer Luke and our marketing extraordinaire, and, you know, from, from a, from a prompt perspective, us humans need to do a good job of making sure that we're feeding and asking the right questions to make sure that we get the desired outcome.
451
00:27:28,207.999 --> 00:27:28,427.999
Right.
452
00:27:28,437.998 --> 00:27:31,507.998
If we don't do that, then we're You know, it's kind of a wasted use of time.
453
00:27:31,507.998 --> 00:27:33,17.998
It's garbage in, garbage out like you said.
454
00:27:33,47.999 --> 00:27:33,447.997
Garbage out.
455
00:27:33,467.997 --> 00:27:33,677.997
Yeah.
456
00:27:34,277.997 --> 00:27:34,297.997
Yeah.
457
00:27:34,297.997 --> 00:27:35,347.999
You're just, you're just gonna get junk, so...
458
00:27:36,018 --> 00:27:40,528
But, uh, but this was, uh, a question that, uh, that I, that I, that I thought was interesting.
459
00:27:40,538.001 --> 00:27:49,527.998
Consider the following question, how is AI changing my business? As a business owner, give some thought to that question, and if you haven't given any thought to that question, then you should.
460
00:27:49,577.998 --> 00:28:10,348.001
And, you know, maybe it's not necessarily like looking around and like, "Well, how are competitors using AI?" But maybe it's a matter of, you know, you kind of thinking to yourself, "Well, what could I do? How could I use AI to change my business?" And I think for a lot of people, that's a hard question to answer because if you're not familiar with AI, you don't know its capabilities and stuff like that.
461
00:28:10,758.002 --> 00:28:15,408.001
You know, get any high school kid to help you, and they can probably help you answer that question.
462
00:28:15,487.998 --> 00:28:18,187.995
I'm, I'm actually still to this day amazed.
463
00:28:18,207.999 --> 00:28:26,028
We have a, we have a artificial intelligence, uh, expert on our team who works with our clients on, on these types of things, and I'm just amazed.
464
00:28:26,028 --> 00:28:32,317.997
Like, each time he comes up with things, I'm just like blown away by the stuff that, uh, you know, AI is, is able to do.
465
00:28:32,317.999 --> 00:28:38,778
It's still to this, to this day to me, it's still very, uh, very exciting and, and, and very, uh, very eye-opening.
466
00:28:38,917.998 --> 00:28:39,197.998
Yeah.
467
00:28:40,130 --> 00:28:41,170
Team up for August.
468
00:28:41,980 --> 00:28:43,530
Have him come on as a special guest.
469
00:28:43,540 --> 00:28:43,830
For...
470
00:28:43,830 --> 00:28:44,050
Okay.
471
00:28:44,360 --> 00:28:44,780
All right.
472
00:28:44,880 --> 00:28:46,130
I think it's an important topic.
473
00:28:46,210 --> 00:28:46,570
All right.
474
00:28:46,640 --> 00:28:46,910
All right.
475
00:28:46,910 --> 00:28:52,909.999
We'll, uh- We talk about it a lot, but- We do to hear directly from the, the e- the technology expert I think would be eye-opening for many people to hear.
476
00:28:52,919.999 --> 00:28:53,259.999
Yeah.
477
00:28:53,339.999 --> 00:28:54,200
It, it really, uh...
478
00:28:54,230 --> 00:28:56,230
It, like I said, it just, it just blows my mind.
479
00:28:56,540 --> 00:29:01,820
Uh, public skepticism toward AI is growing as people increasingly associate it with higher energy costs.
480
00:29:01,829.999 --> 00:29:02,339.999
True.
481
00:29:02,749.999 --> 00:29:03,769.999
Job displacement.
482
00:29:03,809.999 --> 00:29:04,949.999
Eh, I don't know about that one.
483
00:29:05,259.999 --> 00:29:13,189.999
Misinformation, the, the term I guess is AI slop, and, and privacy concerns, and, uh, that, I, I share that concern about privacy.
484
00:29:13,189.999 --> 00:29:18,589.998
I tell people, "If you're putting anything into AI, you know, take out any personally identifiable information.
485
00:29:18,589.999 --> 00:29:20,840
You know, don't, don't give it anything that's sensitive or..."
486
00:29:21,159.999 --> 00:29:22,269.999
'Cause you just don't know where it's going.
487
00:29:22,270 --> 00:29:30,119.997
It's going out into the, into the stratosphere somewhere, right? Um, small businesses now have access to tools that previously only large corporations could afford.
488
00:29:30,700 --> 00:29:35,979.999
AI ultimately lowers barriers to entry and allows small firms to compete more effectively with larger competitors.
489
00:29:36,119.998 --> 00:29:37,829.997
Hey, you know what? That cut- cuts both ways, though.
490
00:29:37,839.999 --> 00:29:45,010
It also allows easier entry for other small businesses to come into industries, so it can increase the small business competition.
491
00:29:45,259.998 --> 00:29:49,449.996
It didn't pick up on that, but I'm just throwing that out as a, as an additional consideration.
492
00:29:49,450 --> 00:29:54,220.001
So I guess the, the long and short of that is, you know, get on the bus or you're gonna get left at the station.
493
00:29:54,229.999 --> 00:29:55,169.996
It's, uh, it's really...
494
00:29:55,469.997 --> 00:29:59,389.995
It's one of those things that it's like we're, we're, we're changing and we're not going back.
495
00:29:59,389.995 --> 00:30:12,330
I remember, you know, back when I was in college is when electronic spreadsheets start- started to become big, and, uh, I, I was, I was using it actually in one of my classes, and that was a, that was a strategic inflection point in the, in the finance and accounting industry.
496
00:30:12,749.995 --> 00:30:14,219.998
It changed, and it never went back.
497
00:30:14,289.996 --> 00:30:18,509.994
You know, there was, there was no more of these handwritten, you know, ledgers and stuff like that.
498
00:30:18,509.998 --> 00:30:22,949.998
It was all now done on spreadsheets, and like I said, we've never gone back.
499
00:30:22,999.995 --> 00:30:23,279.995
Right.
500
00:30:23,289.996 --> 00:30:23,650.001
It's, it's...
501
00:30:23,659.999 --> 00:30:26,264
And it's gonna be the same thing with AI Yeah.
502
00:30:26,284 --> 00:30:27,944
Um, fa- fascinating.
503
00:30:27,944 --> 00:30:37,624
I was talking to a broker, uh, a couple weeks ago, and, um, his whole business model is, uh, selling properties through a, essentially a, a- an auction platform.
504
00:30:37,624 --> 00:30:41,094
And the, the degree of success that he has with that is pretty fascinating.
505
00:30:41,123.999 --> 00:30:53,464
But you think about the commercial real estate space and how high touch from a human element perspective it is, and yet someone has figured out how to use technology to streamline his business and, you know, to make deals happen.
506
00:30:53,813.999 --> 00:30:58,214
Um, but again, it's one of those things where the market has realized a need for this.
507
00:30:58,263.998 --> 00:31:01,694.001
They've developed it, they're using it, and it's been widely successful.
508
00:31:01,704 --> 00:31:19,363.998
So it's one of those things like, hey, could the, could that s- particular, um, industry start to gravitate t- towards that? And is there ever any coming back from that? Who knows? But that's a- Mm clear example of how, you know, technology, uh, either you jump on it or you don't, um, and, and you get used with.
509
00:31:19,563.997 --> 00:31:23,453.997
You know, real estate's an interesting example because that's an industry I worked in for decades.
510
00:31:23,563.997 --> 00:31:30,024
And, you know, I can tell you that they are not known for embracing technology and being on the cutting edge.
511
00:31:30,893.995 --> 00:31:32,953.997
But this is a good example.
512
00:31:32,963.995 --> 00:31:41,474.001
I mean, even despite that, they have had to, to look at, you know, how to, how to embrace and incorporate AI into their business because it's, it's a necessity.
513
00:31:41,573.995 --> 00:31:41,933.995
Sure.
514
00:31:42,33.995 --> 00:31:45,363.997
It's no longer just like a, hey, it's kinda nice to do that and it's cool.
515
00:31:45,384.001 --> 00:31:47,23.996
It's no longer the shiny new toy.
516
00:31:47,413.999 --> 00:31:49,873.997
It's, uh, it's really become a, a productivity tool.
517
00:31:49,924.002 --> 00:31:52,563.998
And, uh, and that's exactly what it should be viewed as.
518
00:31:52,594 --> 00:31:54,394.001
View AI as a productivity tool.
519
00:31:54,643.995 --> 00:31:55,463.998
And by the way, it's...
520
00:31:55,513.998 --> 00:31:56,683.997
I, I noticed this too.
521
00:31:56,683.997 --> 00:31:59,64.002
I think we're up to version 5.5
522
00:31:59,64.002 --> 00:32:00,234.001
on, on ChatGPT.
523
00:32:00,263.998 --> 00:32:05,624
I forget what version it was when we first started using it, but, you know, this stuff is changing, like, by the day.
524
00:32:05,643.995 --> 00:32:08,104
It's getting more and more powerful, it seems like, every day.
525
00:32:08,373.998 --> 00:32:15,483.995
And the capabilities that it's, it's, uh, it's picking up, it's, uh, it's really remarkable about what it is that, uh, it's able to do, so.
526
00:32:15,853.994 --> 00:32:21,714
Technological revolutions create disruption in the short run, but often generate tremendous economic growth over time.
527
00:32:21,714 --> 00:32:27,883.995
Again, um, when I think of that, that statement, the, uh, the electronic spreadsheet, you know, scenario comes back to mind.
528
00:32:27,884.001 --> 00:32:28,283.995
It was...
529
00:32:28,293.997 --> 00:32:29,413.997
It, it really has...
530
00:32:29,643.995 --> 00:32:32,53.997
I mean, think, I mean, we use Excel every single day.
531
00:32:32,53.997 --> 00:32:32,221.997
Mm-hmm.
532
00:32:32,221.997 --> 00:32:38,814.004
I mean, we use it for so many different things and, you know, it really has been, uh, been, been life-changing in, in many respects, so.
533
00:32:39,384.001 --> 00:32:42,43.996
So how can you use AI? So here's a couple of things.
534
00:32:42,44.004 --> 00:32:45,124.004
AI is allowing entrepreneurs to automate customer service.
535
00:32:45,193.998 --> 00:32:48,43.999
Now, again, automate, I don't know if, if we wanna...
536
00:32:48,203.993 --> 00:32:49,603.994
Uh, you and I have an opinion on this.
537
00:32:49,623.991 --> 00:32:50,504.004
We don't like automating it.
538
00:32:51,44.004 --> 00:32:55,746
I wouldn't let ChatGPT answer all your customer emails without you looking at it.
539
00:32:55,886 --> 00:32:56,116
Correct.
540
00:32:56,116 --> 00:32:57,836
Would you agree? I would totally agree with that.
541
00:32:57,836 --> 00:32:58,666
Because some people do.
542
00:32:58,666 --> 00:32:59,686
I know they do that, right? Yeah.
543
00:32:59,736 --> 00:33:00,046
They just...
544
00:33:00,046 --> 00:33:00,676
Oh, just let...
545
00:33:00,986 --> 00:33:10,395.999
You know, there was one article where, uh, they were using some AI agent to basically, you know, answer emails and, and even phone calls and stuff from people.
546
00:33:10,396.001 --> 00:33:11,266.001
It's like, that's crazy.
547
00:33:11,266.001 --> 00:33:14,656
I would never do that, but, but you can if you want to, but- Yep that's up to you.
548
00:33:14,725.999 --> 00:33:19,406
Believe me, if you've got Copilot, uh, you get an email, and you can totally say, "Copilot, respond to this email please."
549
00:33:19,406 --> 00:33:20,445.999
Yes, and it'll do it.
550
00:33:20,446 --> 00:33:20,955.999
And it'll do it.
551
00:33:21,5.999 --> 00:33:21,576
Yeah, yeah.
552
00:33:21,595.999 --> 00:33:23,585.999
We have that here, so- May not like the result, but it'll do it.
553
00:33:23,585.999 --> 00:33:24,175.999
I mean, we have it.
554
00:33:24,206 --> 00:33:24,785.998
I don't use...
555
00:33:24,816.001 --> 00:33:25,475.998
I don't do that.
556
00:33:25,505.999 --> 00:33:26,345.997
Yeah, nor do I.
557
00:33:26,415.999 --> 00:33:26,625.999
Yeah.
558
00:33:26,625.999 --> 00:33:26,875.998
Nor do I.
559
00:33:26,925.997 --> 00:33:28,415.998
I don't, you know, so, uh...
560
00:33:28,415.998 --> 00:33:32,175.998
But you can use it for marketing, scheduling, bookkeeping, and data analysis.
561
00:33:32,535.998 --> 00:33:38,725.998
Uh, it helps to reduce administrative workload, improve marketing content, streamline customer service, summarize meetings.
562
00:33:38,735.999 --> 00:33:39,805.998
A lot of people use it for that.
563
00:33:40,165.999 --> 00:33:47,85.999
You know, you're on Zoom or whatever, and somebody has an AI agent who's, uh, you know, watch- you know, watching the call and creating notes and stuff like that.
564
00:33:47,95.999 --> 00:33:51,865.999
Generating proposals, analyzing financial data, and automating repetitive tasks.
565
00:33:52,235.999 --> 00:33:56,535.997
Hopefully, that gives you some ideas of, of things that you can, uh, you know, you can look at.
566
00:33:56,545.996 --> 00:33:56,996.001
That's one of the...
567
00:33:56,996.001 --> 00:34:02,726
The, the last one, the repetitive tasks, uh, Matt is our, is our AI guy, and I'll, I'll talk to Matt, see if we can get him on in August.
568
00:34:03,55.998 --> 00:34:05,135.996
Uh, but, uh, what's interesting about that is that's one of the...
569
00:34:05,145.995 --> 00:34:06,435.995
that's the first thing he looks at.
570
00:34:06,445.998 --> 00:34:09,735.999
He'll, he'll say to a client is, you know, "Show me your processes.
571
00:34:09,746.001 --> 00:34:26,905.996
Which ones are repetitive?" And, uh, and then he tries to f- help them figure out, you know, okay, what can we do to automate that process? Not completely, but, you know, introduce some automation to it so that it becomes more, you know, you're just kind of reviewing it and, and checking it as opposed to doing the same thing over and over and over again.
572
00:34:27,356.002 --> 00:34:31,165.995
You know, so that's, that's where it can really be, uh, really be helpful, so.
573
00:34:31,345.999 --> 00:34:37,966.001
The goal is to allow employees to spend more time on higher value work that requires human judgment and relationship building.
574
00:34:38,136 --> 00:34:39,685.998
I think that summarizes it really well.
575
00:34:40,730 --> 00:34:41,660
Point blank, mic drop.
576
00:34:41,670 --> 00:34:44,510
Yeah, I mean, that's, that's like, that's like a good one.
577
00:34:44,520 --> 00:34:44,540
Yeah.
578
00:34:44,730 --> 00:34:47,010
So, uh, okay, so now we have to talk about this.
579
00:34:47,070 --> 00:34:54,129.999
The rapid adoption of artificial intelligence could flood markets with low-quality information, flawed outputs, and unreliable content.
580
00:34:54,740 --> 00:35:00,549.999
So look, we, we use, you know, we, we use GPT here for, for the economic summary report that we put out.
581
00:35:00,549.999 --> 00:35:02,900
It's almost 100 pages, but that's only 'cause there's a lot of...
582
00:35:03,119.999 --> 00:35:08,19.999
There's 25 different sections, and there's a lot of stuff, but I read every word of that, every word of it before...
583
00:35:08,020 --> 00:35:09,620
I never send it out without reading it.
584
00:35:09,689.998 --> 00:35:09,989.998
Yeah.
585
00:35:10,160 --> 00:35:14,19.998
And, and I think this last time I made one small edit change to it.
586
00:35:14,19.998 --> 00:35:16,140.001
It was not material, but you know, I...
587
00:35:16,169.998 --> 00:35:17,330.001
There's eyes on it before we...
588
00:35:17,360 --> 00:35:22,459.998
It will not go out or, and, and be posted on our website or anywhere else unless we've had, we've put eyes on it.
589
00:35:22,599.998 --> 00:35:22,969.998
Yeah.
590
00:35:23,439.998 --> 00:35:23,819.999
It's funny.
591
00:35:23,820 --> 00:35:35,910
I, um, about a month ago or so, uh, about two months ago, we, we were privileged to be granted the opportunity to work with a local developer who, uh, bought a significant piece of property, and he's building commercial condominiums.
592
00:35:36,250 --> 00:35:39,899.998
And, uh, and I'm, I'm looking at Luke 'cause he, he, uh, he assisted me with this.
593
00:35:39,919.998 --> 00:35:40,939.998
But the...
594
00:35:40,949.997 --> 00:35:51,609.998
We needed to create signage so we can co-brand and market this for them, and I needed to create a m- a premium flyer that sort of pitched the idea that, you know, these condos are coming to market.
595
00:35:51,679.996 --> 00:35:56,169.998
Um, you know, please consider using the SBA 504 program 'cause it's the perfect product.
596
00:35:56,609.997 --> 00:35:57,870.001
And I asked chat to do it.
597
00:35:58,560.001 --> 00:35:59,459.999
It was awful.
598
00:35:59,880.001 --> 00:36:00,570.002
Really? Yeah.
599
00:36:00,579.998 --> 00:36:06,949.997
It was terrible, right? So I uploaded all the branding, the imaging, said, "Hey, here's the, here's the scoop on the project.
600
00:36:06,950.001 --> 00:36:08,259.997
Here are the finer details."
601
00:36:08,579.998 --> 00:36:11,79.998
It couldn't have put out a worser prod- a product.
602
00:36:11,79.998 --> 00:36:13,79.997
I mean, uh, it was terrible.
603
00:36:13,389.995 --> 00:36:27,511.999
Um, and I realized at that moment like, hey, like- You can use it for a lot of great things, but sometimes the technology isn't there just yet to really help you leverage, um, what you're trying to do at that particular moment.
604
00:36:27,512 --> 00:36:31,581.999
So I quickly sent it over to Luke, and I- I attached the example of what it created.
605
00:36:31,602 --> 00:36:31,622
Yeah.
606
00:36:32,052 --> 00:36:39,532
And I flat out said, "Hey, this is- this is terrible," right? Um, it's not the quality I expected, it's not, you know, the details I was looking for weren't there.
607
00:36:39,532 --> 00:36:40,918.666
It just was not, wasn't right.
608
00:36:40,918.666 --> 00:36:42,972
Did you re-prompt it? Did you- did you tell it that? Oh, absolutely.
609
00:36:42,972 --> 00:36:44,971.999
I must have asked 30 follow-up questions.
610
00:36:44,981.999 --> 00:36:46,472
Really, and it still- Tweak this, tweak that.
611
00:36:46,512 --> 00:36:46,812
Yeah.
612
00:36:46,821.999 --> 00:36:49,271.999
Still was not quality.
613
00:36:49,282 --> 00:36:53,641.999
I get frustrated when that happens to me, and, uh, and- and I, and I'll write back like, "This is junk.
614
00:36:53,642.001 --> 00:36:54,751.999
This is not what I asked you for."
615
00:36:54,762 --> 00:36:54,782
Yeah.
616
00:36:54,962 --> 00:36:57,951.998
And it'll reply back, "I- I'm sorry, it seems you're getting upset."
617
00:36:57,951.998 --> 00:36:58,891.999
Yeah, I'm getting upset.
618
00:36:59,102 --> 00:37:00,601.998
You know, 'cause you're giving me crap.
619
00:37:00,611.998 --> 00:37:06,932
So case in point, I sent it to the humans- Yeah who specialize and do this stuff every day, and wouldn't you know, bam, I get what I need.
620
00:37:06,932 --> 00:37:06,947
Right.
621
00:37:06,947 --> 00:37:07,462
Right? Right.
622
00:37:07,471.999 --> 00:37:08,391.998
But yeah, it w- it...
623
00:37:08,431.998 --> 00:37:12,201.998
Just in a great example of, hey, you don't always get what you want.
624
00:37:12,262 --> 00:37:12,412
Yeah.
625
00:37:12,412 --> 00:37:15,951.998
And it could be, the output could be extremely crappy depending on the prompt you write.
626
00:37:15,951.998 --> 00:37:16,1.998
It's a work in progress.
627
00:37:16,1.998 --> 00:37:16,11.998
Yeah.
628
00:37:16,11.998 --> 00:37:17,21.997
You know, it's getting better.
629
00:37:17,032 --> 00:37:17,052
Yeah.
630
00:37:17,81.999 --> 00:37:21,432.001
Like I said, they're- they're making improvements to it and whatnot, but listen, it's still not perfect.
631
00:37:21,461.997 --> 00:37:23,312
And here's an article that kinda speaks to that.
632
00:37:23,321.997 --> 00:37:27,981.997
The AI superstars who say a vibe slop crisis is coming.
633
00:37:27,991.995 --> 00:37:29,482.002
Does everybody understand what, what that...
634
00:37:29,881.995 --> 00:37:31,601.996
AI slop is like exactly what Lewis...
635
00:37:31,662.001 --> 00:37:33,582
Vibe coding is where you basically...
636
00:37:33,831.999 --> 00:37:35,551.995
Actually, it picks it up here in the description.
637
00:37:35,561.995 --> 00:37:45,281.997
The artificial intelligence, uh, supposedly capable of replacing well-paid software developers, that's what vibe coding does, is flooding the world with bad, potentially even dangerous code.
638
00:37:45,281.997 --> 00:37:57,81.998
It's a phenomenon they call vibe slop, a combination of vibe coding, creating software with AI tools by describing it in plain English, and AI slop, the endless low-value AI-generated content all over social media.
639
00:37:57,771.994 --> 00:38:00,641.996
You know, what's funny about that, I was talking to our, our legal team last week.
640
00:38:00,651.999 --> 00:38:06,961.997
We were out to dinner and, um, we were talking about how AI's either helping you or, you know, keeping you back, so to speak.
641
00:38:06,961.997 --> 00:38:17,751.998
And he mentioned, um, about the, there being a court case, uh, in the US where two attorneys, um, prepared all their remarks and their arguments- I heard about that, yeah using AI, and it was terrible.
642
00:38:17,751.998 --> 00:38:18,931.996
And it was wrong.
643
00:38:19,881.996 --> 00:38:19,961.996
It was wrong.
644
00:38:19,961.996 --> 00:38:19,981.996
Yeah.
645
00:38:19,981.996 --> 00:38:20,52.001
It was awful.
646
00:38:20,52.001 --> 00:38:22,161.995
The attorneys got disbarred- Yep and fined.
647
00:38:22,161.995 --> 00:38:23,71.995
I mean, it was incredible.
648
00:38:23,71.997 --> 00:38:30,281.991
But what a case study- Yeah on how to- Well- use AI in, in all the wrong ways.
649
00:38:30,291.991 --> 00:38:32,542.002
What's the lesson here? Trust but verify.
650
00:38:32,542.002 --> 00:38:32,941.991
Correct.
651
00:38:32,942 --> 00:38:34,61.995
You gotta look at the stuff.
652
00:38:34,61.995 --> 00:38:36,551.998
Don't ever put anything out that, that somebody else...
653
00:38:36,561.995 --> 00:38:40,331.998
Would you, would you put something out that, say, an employee of yours did? No.
654
00:38:40,331.999 --> 00:38:40,571.999
You...
655
00:38:40,891.997 --> 00:38:41,741.993
Like, all the stuff I...
656
00:38:41,751.998 --> 00:38:43,172.002
You look at everything I do.
657
00:38:43,172.002 --> 00:38:43,351.999
Absolutely.
658
00:38:43,351.999 --> 00:38:45,661.999
All the blog posts, they r- I run everything by you.
659
00:38:45,662.001 --> 00:38:47,932
You're not gonna let it go out on your platform.
660
00:38:48,221.999 --> 00:38:48,291.999
Right.
661
00:38:48,291.999 --> 00:38:49,711.996
You're responsible for it ultimately.
662
00:38:49,721.999 --> 00:38:49,741.999
Yeah.
663
00:38:49,751.998 --> 00:38:50,871.99
So you're gonna look at it.
664
00:38:51,132.002 --> 00:38:51,901.993
It's the same thing.
665
00:38:51,961.989 --> 00:38:52,331.989
Yeah.
666
00:38:52,511.989 --> 00:38:53,441.989
It's the exact same thing.
667
00:38:53,571.99 --> 00:38:54,821.993
It was fa- I couldn't believe it.
668
00:38:54,831.999 --> 00:38:54,851.999
Yeah.
669
00:38:55,41.991 --> 00:38:59,92.002
But I, I guess I could, but in, in the moment I was just like- Well, it's just lazy, right? Well, that's what it is.
670
00:38:59,102.004 --> 00:38:59,122.004
Yeah.
671
00:38:59,132.002 --> 00:39:03,311.991
They're, they're work- they're overworked, their workload is insane and, you know? Yeah.
672
00:39:03,371.993 --> 00:39:04,51.997
They trusted it.
673
00:39:04,171.996 --> 00:39:04,191.996
Yeah.
674
00:39:04,201.995 --> 00:39:04,981.996
They didn't verify.
675
00:39:05,674 --> 00:39:07,984
All right, uh, enough on AI slop and everything.
676
00:39:08,104 --> 00:39:10,724
So I got, I have two other things I want to talk about on technology.
677
00:39:10,724 --> 00:39:15,414
One, uh, so I met this, uh, interesting woman last night in my, uh, in my workshop class.
678
00:39:15,423.999 --> 00:39:20,744
She, uh, she does, um, uh, like cybersecurity for, uh, for small businesses.
679
00:39:21,104 --> 00:39:22,474
And I said to her, I said, you know, I said...
680
00:39:22,704 --> 00:39:23,663.999
Actually, no, I shouldn't say that.
681
00:39:23,673.999 --> 00:39:24,954
She does cybersecurity.
682
00:39:24,954 --> 00:39:27,804
I said, "Do you work with small business?" She goes, "Very few."
683
00:39:27,833.999 --> 00:39:30,774
She works with larger companies and, and things like that.
684
00:39:31,094 --> 00:39:35,173.999
And she says, "I don't know what it is about small businesses, but I really have not been able to make any traction there."
685
00:39:35,173.999 --> 00:39:36,193.998
I said, "Tell me about it."
686
00:39:36,514 --> 00:39:37,054
I said, "This is..."
687
00:39:37,73.999 --> 00:39:44,794
I talk to clients, and we've mentioned it on this podcast, the importance of cybersecurity, but it's one of those things that nobody takes serious until something happens.
688
00:39:45,184 --> 00:39:50,943.999
And because it's given low priority 'cause of the, uh, cost or, you know, maybe there's a learning factor there, whatever.
689
00:39:50,943.999 --> 00:40:01,323.999
But, you know, I said, I said to her, I said, "You know, there's a huge opportunity there that seems to be, uh, you know, not being, not, not being, uh, you know, uh, capitalized on," and she totally agreed.
690
00:40:01,323.999 --> 00:40:04,53.998
But, you know, this is what, this is what, uh, w- we're seeing.
691
00:40:04,53.999 --> 00:40:08,643.998
Cyber threats have become one of the most significant business risks in the modern economy.
692
00:40:09,13.998 --> 00:40:17,044
The cost of a successful cyber attack can be devastating, including financial loss, operational disruptions, legal liabilities, and reputational damage.
693
00:40:17,294 --> 00:40:22,783.998
Now, I'm not saying this to kind of, you know, uh, you know, drive fear or, or anything like that, but folks, this stuff happens.
694
00:40:22,893.999 --> 00:40:23,384
It does.
695
00:40:23,423.998 --> 00:40:28,3.999
It happens, you know, I, I won't say all the time, but it happens on a fairly regular basis.
696
00:40:28,23.996 --> 00:40:29,173.996
You are, you are a target.
697
00:40:29,503.999 --> 00:40:29,793.999
Absolutely.
698
00:40:29,794 --> 00:40:33,603.997
You know? And, uh, cyber threats are top CEO business fears.
699
00:40:33,934 --> 00:40:46,463.995
Data breaches, ransomware, and phishing attacks are top of mind among chief executives at some of the world's largest companies, surprising, surpassing worries over business risks posed by the war in the Middle East, global trade disruptions, and inflation.
700
00:40:46,474.001 --> 00:40:47,203.999
So that's kind of...
701
00:40:47,563.997 --> 00:40:49,73.995
That sort of, sort of puts it into perspective.
702
00:40:49,93.996 --> 00:40:52,164.001
Now, you might say, "Well, the bigger companies are more of a, of a target."
703
00:40:52,164.001 --> 00:40:58,903.998
They are, but, you know, I tell people, "You know, you're, you're also a ta- don't think you're not a target, you know? You c- you are a target."
704
00:40:58,943.994 --> 00:41:04,423.998
And so be, be smart about this stuff and, uh, you know, I can't, I, I can't emphasize it enough.
705
00:41:04,423.998 --> 00:41:13,833.996
Like I said, it doesn't get as n- uh, m- uh, as much attention as it should, but it's a good opportunity to remind people to, you know, keep, keep your, uh, keep your head about you with regard to that sort of stuff.
706
00:41:13,923.998 --> 00:41:14,273.998
Agreed.
707
00:41:14,890 --> 00:41:18,790
Uh, last thing is, uh, GEO, generative engine optimization.
708
00:41:19,180 --> 00:41:25,610
Uh, businesses need to understand how AI systems determine which businesses, products, or services receive recommendations.
709
00:41:25,969.999 --> 00:41:26,940
Uh, so here was an article.
710
00:41:26,960 --> 00:41:31,569.999
Connecticut businesses are trying to get recommended by AI and finding the rules are unwritten.
711
00:41:32,29.999 --> 00:41:43,719.999
Connecticut businesses are grappling with the new form of search optimization as consumers ditch Google for AI chatbots, but experts warn the old strategies don't work, and no one fully understands how AI decides what to recommend.
712
00:41:44,090 --> 00:41:46,309.999
Um, I don't know if that's completely true, Luke.
713
00:41:46,340 --> 00:41:48,190.001
I mean, it, it- Off...
714
00:41:48,199.999 --> 00:41:50,340
I, I can talk from experience on this.
715
00:41:50,799.997 --> 00:41:55,030
Get yourself a marketing firm that understands how to build the proper website.
716
00:41:55,69.998 --> 00:41:55,239.998
Yep.
717
00:41:55,900 --> 00:41:56,609.999
Dog's name.
718
00:41:56,620.001 --> 00:41:57,120
Hundred percent.
719
00:41:57,120.001 --> 00:41:57,140.001
Yeah.
720
00:41:57,140.001 --> 00:41:57,679.998
Barry Connecticut.
721
00:41:57,990 --> 00:42:03,549.998
Um, uh, you know, obviously that's a shameless plug, but I can tell you, you know, Luke Co.
722
00:42:03,940.001 --> 00:42:17,189.997
redeveloped our website to a much more modern platform, and the amount of times that we're accessed or discovered through a search on chat, uh, you know, ChatGPT or any other type of AI model is, is paramount.
723
00:42:17,199.999 --> 00:42:17,219.999
Yeah.
724
00:42:17,439.997 --> 00:42:19,199.999
And, and it's, uh, it's unprecedented.
725
00:42:19,199.999 --> 00:42:21,229.997
I've- we haven't seen this activity before.
726
00:42:21,590.002 --> 00:42:24,660.002
Um, and a lot of that is making sure you've got the right tools in place.
727
00:42:24,809.996 --> 00:42:25,189.996
Yep.
728
00:42:26,048 --> 00:42:27,628
Good, uh, good, good suggestion.
729
00:42:27,628 --> 00:42:32,598
So I'm, again, I'm not necessarily sure if it's like, you know, a black box and people don't understand.
730
00:42:32,598 --> 00:42:35,098
There, there's, there's things that you can do and, and stuff.
731
00:42:35,098 --> 00:42:38,058
So it's, you know, like, like you said, get somebody who knows what they're doing.
732
00:42:38,538 --> 00:42:40,258
Whoever wrote this article didn't know what they were doing.
733
00:42:41,908 --> 00:42:45,87.999
But, uh, no, no, I'm just kidding.
734
00:42:45,088 --> 00:42:47,457.999
But, uh, but in any event, so you get the point.
735
00:42:47,498 --> 00:42:50,177.999
Uh, last, uh, actually there's a couple last categories here.
736
00:42:50,217.999 --> 00:42:50,877.999
Resilience.
737
00:42:50,887.999 --> 00:43:00,737.999
I don't know there's much really to say on resilience other than, you know, people in, in organizations are proving remarkably adaptable, resilient in, in this, uh, in this w- in this economy right now.
738
00:43:00,768 --> 00:43:02,417.998
I would, I would say that's totally true.
739
00:43:02,417.998 --> 00:43:09,237.997
I mean, it's really surprising to me of all the disruption and stuff that we've gone through and how, you know, the wheels haven't come off the bus.
740
00:43:09,237.998 --> 00:43:14,67.999
So it's, uh, it's a testament to, to people, right? We're living in a rapidly changing environment.
741
00:43:14,487.998 --> 00:43:27,778
You know, operations are increasingly focused on flexibility and preparedness, and if yours isn't, that's a, that's a, that's a suggestion, right? Uh, businesses are now optimizing for resilience, so I think there's probably not much more to say on that point.
742
00:43:27,877.997 --> 00:43:28,237.997
Yep.
743
00:43:28,307.998 --> 00:43:31,238.001
Uh, last, uh, category here, then we're gonna get to our favorite articles.
744
00:43:31,608.001 --> 00:43:37,167.999
Uh, access to capital, our favorite category, Louis, right? Uh, borrowing costs remain historically high.
745
00:43:37,187.995 --> 00:43:40,458.002
Now they're not terrible, but they're higher than they, than they have been.
746
00:43:40,458.002 --> 00:43:49,197.997
So capital does remain available and likely will remain avail- available, but it's expensive, and it's probably gonna become more expensive, uh, and more competitive.
747
00:43:49,197.997 --> 00:43:50,998.001
So here's, here's an article that we picked up.
748
00:43:50,998.001 --> 00:43:59,67.995
Federal Reserve officials signaled that rate hikes remain a possibility as persistent inflation and rising energy prices complicate the path toward lower interest rates.
749
00:43:59,77.994 --> 00:44:03,227.996
So I don't know if it's gonna be three upticks by the end of the year.
750
00:44:03,237.998 --> 00:44:05,347.998
It'll probably be at least one or two, I'm guessing.
751
00:44:05,818 --> 00:44:09,77.995
Uh, so, you know, just something to, uh, to be, to be mindful of.
752
00:44:09,77.995 --> 00:44:12,218.001
So, um, not that you should rush out and borrow a ton of money.
753
00:44:12,218.001 --> 00:44:16,27.999
We're only talking probably a quarter point adjustment, but it's not gonna break the bank.
754
00:44:16,57.998 --> 00:44:20,737.994
But, uh, one other article that was interesting, crowdfunding is helping entrepreneurs rai- raise capital.
755
00:44:20,748 --> 00:44:24,177.996
Some Connecticut businesses are turning to crowdfunding for growth.
756
00:44:24,687.995 --> 00:44:28,967.995
Um, you know, um, I, I just tell people, I talked about this in my, my workshop last night.
757
00:44:28,987.998 --> 00:44:33,737.996
Crowdfunding is great, but it's kinda like, uh, I kinda put it on the same level as a grant.
758
00:44:33,757.995 --> 00:44:34,317.99
Grant look...
759
00:44:34,408.004 --> 00:44:36,157.998
The, the idea of a grant seems great.
760
00:44:36,158.004 --> 00:44:42,518.001
It's like, ooh, free money, and I'm like, "Folks, there's no such thing as free money," 'cause it's gonna take you time to, to, you know...
761
00:44:42,557.998 --> 00:44:46,828.002
And, and oftentimes the amount of money you're gonna be able to raise is small and insignificant.
762
00:44:46,828.002 --> 00:44:48,427.998
It's kind of the same thing with crowdfunding.
763
00:44:48,468.001 --> 00:44:52,247.991
Unless you have a really good campaign, it's, uh, it's a tough way to raise money.
764
00:44:52,248 --> 00:44:55,887.998
So I just throw that out there, just a, a cautionary note on that.
765
00:44:56,498 --> 00:45:05,737.997
Any things to add on access to capital, Louis? Um, the grant topic is an interesting one, right? To your point, there, there, there is no such thing as free money.
766
00:45:05,847.991 --> 00:45:15,118
All the grants I'm seeing as of late have strings attached, meaning if you don't Produce X, Y, or Z, the grant is callable, meaning you've gotta give the money back.
767
00:45:15,128 --> 00:45:15,358
Yeah.
768
00:45:15,608 --> 00:45:43,337.998
Uh, and we're seeing that more and more these days because the, the, the donor, if you will, the, the, the institution giving the money out needs to receive some, some, um, some results in return, right? Um, and unfortunately, I have seen instances where, you know, a company will receive a $25,000 grant, a $50,000 grant for a s- very specific purpose within their business, and they go and use it elsewhere, and all of a sudden now you've gotta repay that money back.
769
00:45:43,698.001 --> 00:45:44,647.999
Um, it, it, it...
770
00:45:45,298 --> 00:45:47,298
I, I'm not surprised to see that.
771
00:45:47,507.999 --> 00:46:01,668
I mean, we, we, at CIC, um, we offer a revolving loan, uh, product, uh, that we administer on behalf of the City of Bristol here in Connecticut, and part of the, part of the key, uh, s- uh, stipulations is, "Hey, this is a loan.
772
00:46:01,707.999 --> 00:46:08,757.997
You've gotta commit to being in the city for 10 years, but if you move out within those 10 years after getting the loan- You owe the money you owe the money."
773
00:46:08,767.997 --> 00:46:09,87.997
Yeah.
774
00:46:09,138 --> 00:46:14,737.999
But if you commit and stay- Mm then once you've paid up to 50% of that principal balance, the balance is forgiven.
775
00:46:14,898.002 --> 00:46:15,078
Mm-hmm.
776
00:46:15,87.997 --> 00:46:16,937.995
But the commitment is 10 years to the city.
777
00:46:16,968.002 --> 00:46:17,228.002
Yeah.
778
00:46:17,228.002 --> 00:46:17,317.99975
You still owe...
779
00:46:17,317.99975 --> 00:46:17,347.999
Yeah.
780
00:46:17,347.999 --> 00:46:19,068
Otherwise, you're on the hook, right? Yeah.
781
00:46:19,068 --> 00:46:22,537.997
Um, so, you know, there's, the, there is no such thing as free money.
782
00:46:22,538.001 --> 00:46:24,367.995
The, everything comes with a commitment.
783
00:46:24,617.995 --> 00:46:27,797.998
Yeah, and, and so these contingencies, this was, uh, this was years ago.
784
00:46:27,797.998 --> 00:46:38,797.995
Connecticut was, uh, you know, was criticized for, um, you know, giving all kinds of grants and, and economic incentives for companies to, to come to the state, and I forget who- which administration it was.
785
00:46:38,807.998 --> 00:46:40,278.001
It may have been the Lamont administration.
786
00:46:40,278.001 --> 00:46:43,748.001
They said, "You know, we're not gonna do that anymore," because they got stung on too many of those deals.
787
00:46:43,748.001 --> 00:46:50,257.997
The commitments weren't, weren't, uh, you know, ad- uh, uh, adhered to, and I g- I don't know if the companies paid the money back or not.
788
00:46:50,257.997 --> 00:46:53,707.996
I mean, I, I imagine they did, but, but that's not what it was all about.
789
00:46:53,707.999 --> 00:46:55,327.997
It was really about the economic development.
790
00:46:55,327.997 --> 00:46:56,517.994
And, and the same thing with the grants.
791
00:46:56,517.997 --> 00:46:58,17.995
They're giving you a grant for a reason.
792
00:46:58,17.997 --> 00:47:08,97.998
They wanna see you put that money to good use, and if you don't, yeah, they're gonna ask you for the money back, but they're more disappointed in the fact that you didn't, it, you know, live up to the commitments that you made to promote economic development.
793
00:47:08,167.998 --> 00:47:08,377.998
Right.
794
00:47:08,397.994 --> 00:47:09,937.999
It defeats the purpose of the grant program.
795
00:47:09,937.999 --> 00:47:11,27.995
It totally defeats the purpose.
796
00:47:11,37.994 --> 00:47:11,67.994
Right.
797
00:47:11,068 --> 00:47:13,217.998
So, you know, it's a, it's a good reminder.
798
00:47:13,217.998 --> 00:47:18,187.995
So there is, again, there's no such thing as free money, you know, no such thing as a free lunch, right? Right.
799
00:47:18,187.995 --> 00:47:20,188
Somebody asks you to go to lunch, they want something from you.
800
00:47:21,57.99 --> 00:47:22,307.99
You know, that's just how it is.
801
00:47:22,307.99 --> 00:47:22,387.99
Yeah.
802
00:47:22,537.99 --> 00:47:28,468.004
So, uh, okay, uh, that wraps up, uh, access to capital, and, uh, all right, let's move on to our favorite section.
803
00:47:28,468.004 --> 00:47:29,588
This is my favorite always.
804
00:47:29,887.992 --> 00:47:31,457.995
Our favorite and least favorite articles.
805
00:47:31,478.004 --> 00:47:33,157.992
I'm gonna let you go first as I usually do.
806
00:47:33,228.004 --> 00:47:34,817.993
I've got one favorite and one least favorite.
807
00:47:34,857.993 --> 00:47:34,947.993
Okay.
808
00:47:34,957.999 --> 00:47:38,548.004
The one favorite was the SBA decoupling, right? Yeah.
809
00:47:39,382 --> 00:47:47,832
As of July 4th, uh, small business owners can now leverage both the 7product and the SBA fi- 504 product up to $10 million.
810
00:47:47,832 --> 00:47:48,191.999
That's huge.
811
00:47:48,212 --> 00:47:50,722
That's a huge moment- Yeah in the SBA product history.
812
00:47:50,722 --> 00:48:04,112
And why that is, um, it, it's because that for forever, um, both of those programs were coupled together, meaning if you had a $5 million 504 loan, you couldn't get any other SBA government guaranteed debt.
813
00:48:04,151.999 --> 00:48:07,611.999
You hit the cap on guara- government guaranteed dollars available to you.
814
00:48:07,941.998 --> 00:48:10,232
Now, the programs have been decoupled.
815
00:48:10,611.999 --> 00:48:13,871.997
Now you can get $5 million in 504, $5 million in 7.
816
00:48:14,211.999 --> 00:48:15,872
That's a huge win for small businesses.
817
00:48:16,401.998 --> 00:48:26,191.998
It's a lot of money, right? Um, what this allows us to do is to go up market and support larger organizations who need access to capital at a much larger scale.
818
00:48:26,621.999 --> 00:48:33,101.997
Um, but this is a great opportunity for those in that space who need to leverage government dollars to do so.
819
00:48:33,112 --> 00:48:33,142
Right.
820
00:48:35,470 --> 00:48:49,460
I, I was, I was at a panel presentation about a month ago, um, actually not even a month ago, but a few weeks ago in the city of Meriden, and, um, the, the one thing I, I mentioned was that there is no better time to leverage an SBA product than today.
821
00:48:49,859.999 --> 00:48:59,090
Why that is, number one, you know, I think the, the agency is doing everything they possibly can to remove red tape to clear the pathway to capital, which is monumental.
822
00:48:59,210 --> 00:48:59,450
Yep.
823
00:48:59,790 --> 00:49:00,410
That's number one.
824
00:49:00,410 --> 00:49:22,119.997
Number two, there is a very significant American First agenda, right? So if you're a small business in the, the country that's domestically based, that's 100% owned by a US citizen, um, you have access to capital that you didn't have before, or at least capital that's much more readily available than it was before, and we're seeing that firsthand.
825
00:49:22,159.999 --> 00:49:25,39.999
We're seeing a significant rise in demand for our loan products.
826
00:49:25,89.999 --> 00:49:29,29.998
Every single day of people come to us in droves looking for financing.
827
00:49:29,80.001 --> 00:49:30,990
Obviously, we can't do it all, but it...
828
00:49:30,999.999 --> 00:49:32,489.999
that is a very promising signal.
829
00:49:32,490 --> 00:49:43,720
People are waking up and saying, "Hey, either I've got an idea and I can execute," or they're now seeing the ability to execute because they have the support there from the SBA, um, point of view.
830
00:49:43,900 --> 00:49:53,949.997
So from my perspective, that, that article, that news is, is huge because it is a telling sign on what's happening in the marketplace and what the, the government itself is doing to support small businesses.
831
00:49:54,29.998 --> 00:49:59,369.998
I won't get into the other agendas like, you know, um, you know, the onshoring of domestic manufacturing.
832
00:49:59,370.002 --> 00:50:02,359.997
There's a whole other slew of initiatives going on, and we could talk...
833
00:50:02,379.996 --> 00:50:03,479.999
I could talk for an hour on that.
834
00:50:03,879.996 --> 00:50:13,419.997
Um, but the reality is, is as an organization who is the face of the SBA here in, in the state, it is a very exciting time for us, and we're executing on all levels.
835
00:50:14,10.001 --> 00:50:14,250.001
Yeah.
836
00:50:14,250.001 --> 00:50:20,599.998
I had, um, I had an interesting conversation yesterday with one of our, one of our new clients up in, um, in, in Rhode Island.
837
00:50:20,599.998 --> 00:50:22,569.997
You maybe m- maybe know who I'm talking about.
838
00:50:22,760.001 --> 00:50:26,630
They're a manufacturing company, and I said to this, to this gentleman, I said, "This is your time.
839
00:50:26,709.998 --> 00:50:27,749.998
This is your time to shine."
840
00:50:28,129.996 --> 00:50:37,359.995
You know, the, the, the rules and, and, and all the policies and, and system, everything is really geared toward helping you, helping your business grow and expand and stuff.
841
00:50:37,369.994 --> 00:50:41,440
And so that's what I'll be working on helping him with is, uh, is exactly that.
842
00:50:41,470 --> 00:50:43,060
And, uh, really, it's a great time.
843
00:50:43,060 --> 00:50:50,684
I mean, the, the The, uh, the policies and everything that are being changed to make it more favorable for these businesses to thrive, it's, um, it's...
844
00:50:50,714 --> 00:50:54,094
We've, you know, never seen anything like that before, so it's really a good time.
845
00:50:54,404 --> 00:50:54,924
And you know, these are...
846
00:50:55,034 --> 00:50:57,874
We had Catherine Marks on a few, um, it was a couple months ago, I guess.
847
00:50:57,894 --> 00:50:57,924
Yeah.
848
00:50:57,924 --> 00:50:59,744
And we're gonna hopefully have her on before the end of the year.
849
00:51:00,064 --> 00:51:02,113.999
You know, these are great things to talk about with Catherine.
850
00:51:02,113.999 --> 00:51:11,114
I mean, the, the, you know, people don't realize, I think, the great things that the SBA is doing and, and it's really important that we get the word out about those, 'cause not enough people know about it.
851
00:51:11,254 --> 00:51:11,633.999
I know.
852
00:51:11,754 --> 00:51:14,863.999
I keep saying we're, we're the best hidden secret.
853
00:51:14,923.998 --> 00:51:15,593.998
It really is.
854
00:51:15,613.999 --> 00:51:19,723.998
I mean, even like, you know, the, the workshop I did last night, you know, I was the, I was doing it on behalf of SCORE.
855
00:51:19,724 --> 00:51:20,624
I'm a SCORE mentor.
856
00:51:21,064 --> 00:51:22,583.999
And, um, you know, I...
857
00:51:22,584 --> 00:51:26,184.001
It- it's just amazing how few people even know about SCORE- Right which is part of the SBA.
858
00:51:26,494 --> 00:51:33,104
And it's like, it's just, it's just remarkable to me, and you could scream it from the mountaintops, but people still, for whatever reason, they d- they don't hear it.
859
00:51:33,343.998 --> 00:51:37,583.998
As far as the, uh, the 7A and, and, and 504 thing, you know, it's...
860
00:51:37,604.001 --> 00:51:40,874
We're not going to do $5 million, uh, 7A loans here.
861
00:51:40,874 --> 00:51:42,73.999
We're, we're not able to do that.
862
00:51:42,084 --> 00:51:42,114
Okay.
863
00:51:42,114 --> 00:51:43,244
But, but we already...
864
00:51:43,244 --> 00:51:44,913.998
When we do 504s, you could combine...
865
00:51:44,943.997 --> 00:51:45,713.999
Could you? I guess you could.
866
00:51:45,713.999 --> 00:51:47,174
You could combine a 504 and a 7A.
867
00:51:47,183.999 --> 00:51:50,374.002
We're already working with a, with a, uh, with a partner bank on those deals.
868
00:51:50,394.002 --> 00:51:50,604.002
Yep.
869
00:51:50,913.998 --> 00:51:55,113.999
So it just enables us to, to go to a much higher level than, uh, than we otherwise would.
870
00:51:55,303.998 --> 00:51:55,573.998
Yeah.
871
00:51:55,574.002 --> 00:52:00,284.002
So, you know, the, the, the common example that I use, and we s- we see this example happen all the time.
872
00:52:00,284.002 --> 00:52:02,024
Let's say you're a manufacturer, and I keep...
873
00:52:02,424 --> 00:52:04,223.995
Manufacturing is soup du jour these days.
874
00:52:04,574.002 --> 00:52:06,153.995
But let's say you're a manufacturer.
875
00:52:06,153.996 --> 00:52:17,44.001
You have an opportunity to buy an ancillary, um, business to support certain processes in your company, and you need a piece of real estate to then house that m- business that you're about to acquire.
876
00:52:17,733.998 --> 00:52:24,53.996
And let's say the example is it's $7 million, right? $2 million for the business acquisition, $5 million for the real estate.
877
00:52:24,284.001 --> 00:52:27,686
Before this rule change All I could give you was 5 million bucks.
878
00:52:27,716 --> 00:52:27,946
Right.
879
00:52:27,976 --> 00:52:30,646
And that's if you didn't have any other SBA debt already in place.
880
00:52:30,676 --> 00:52:30,916
Right.
881
00:52:30,986 --> 00:52:42,506
Now, that real estate company can now go in, leverage the, the 504 program up to $5 million to buy the real estate, and at the same time, leverage the SBA 7a program to purchase the business and use up to $2 million- Yeah to do that.
882
00:52:42,655.999 --> 00:52:43,285.999
That's huge.
883
00:52:43,286 --> 00:52:44,006
That's monumental.
884
00:52:44,036 --> 00:52:44,226
Yeah.
885
00:52:44,276 --> 00:52:45,796
And I guess the same exists for banks.
886
00:52:45,806 --> 00:52:48,335.999
I mean, the banks had the same $5 million limit on the 7a.
887
00:52:48,376 --> 00:52:48,596
Right.
888
00:52:48,886 --> 00:52:54,476
You know, so now they can do the same thing, combine it with a 504, and it can really take you a lot farther than you could before.
889
00:52:54,515.999 --> 00:52:54,735.999
Yep.
890
00:52:55,126 --> 00:52:56,215.999
You know, so really that's a, that's a huge...
891
00:52:56,215.999 --> 00:53:00,126
And you said that's July 4th, that's, uh- July 4th that becomes effec- Yeah effective.
892
00:53:00,166.001 --> 00:53:01,536.001
That's, uh, that's gonna be huge.
893
00:53:01,565.999 --> 00:53:01,695.999
Yep.
894
00:53:01,696 --> 00:53:01,996
Okay.
895
00:53:02,126 --> 00:53:03,585.998
Are you ready for my favorite article? Sure.
896
00:53:03,755.997 --> 00:53:08,175.998
All right, so one of the things Lewis and I do is before we go on the air, we try to guess each other's- favorite articles.
897
00:53:08,185.998 --> 00:53:09,615.998
I didn't guess those, but go ahead.
898
00:53:09,615.998 --> 00:53:11,855.998
I, and d- spoil my, uh, my guess.
899
00:53:11,855.998 --> 00:53:12,895.999
All right, so mine was...
900
00:53:12,925.999 --> 00:53:14,175.998
Okay, I'll read the article to you.
901
00:53:14,365.998 --> 00:53:18,75.997
"Man is attacked by alligator after fleeing Louisiana police."
902
00:53:18,75.997 --> 00:53:20,605.999
Now, c- tell me if I'm- You carve them, man.
903
00:53:22,696 --> 00:53:28,396
So the driver, who was charged with driving while impaired, suffered non-life-threatening injuries, authority said.
904
00:53:28,765.999 --> 00:53:32,385.995
So I guess the story here, I read the whole story, so this guy was running from the police.
905
00:53:32,706.002 --> 00:53:37,525.999
He jumped in a swamp that was filled with alligators, and the alligators...
906
00:53:38,15.999 --> 00:53:40,965.995
So you know, I just, I just have to laugh when I read stuff like this.
907
00:53:40,965.996 --> 00:53:42,195.996
So this actually prompted me.
908
00:53:42,196 --> 00:53:50,185.998
I went on, I went on YouTube, and I did a search for police dog takedowns, and I spent, like, an hour just, like, laughing my ass off just watching.
909
00:53:50,185.998 --> 00:53:51,775.998
They don't use canines in Louisiana.
910
00:53:51,776.002 --> 00:53:52,450.9975
They use alligators to pound.
911
00:53:52,450.9975 --> 00:53:52,845.998
They use alligators.
912
00:53:55,96.001 --> 00:53:58,156
So that was my, that was my fa- my favorite ar- article.
913
00:53:59,006 --> 00:53:59,146
That's great.
914
00:53:59,146 --> 00:54:01,855.997
Oh, when I saw that, I'm like, "That one, I gotta put that one in there."
915
00:54:02,325.997 --> 00:54:04,586
Now, what does this have to do with small businesses? Nothing.
916
00:54:04,596.001 --> 00:54:05,286.001
But it's funny.
917
00:54:05,955.994 --> 00:54:07,225.996
I would've never guessed that.
918
00:54:09,155.999 --> 00:54:12,758.49925
Here I, here I thought, 'cause I, I know you like eggs, and here I thought you were gonna choose that article.
919
00:54:12,758.49925 --> 00:54:13,925.997
You thought I was gonna do something serious.
920
00:54:13,925.997 --> 00:54:14,756.001
No, no, no.
921
00:54:14,785.996 --> 00:54:18,536
Yeah, now I feel like a total buffoon for not choosing something more comical here.
922
00:54:19,715.996 --> 00:54:23,096
All right, my ne- uh, my least favorite, what's your least favorite? Do you have a least favorite? Yeah.
923
00:54:23,196 --> 00:54:28,256.001
Uh, I, I hated the article about government debt, um, ripple- rippling worldwide.
924
00:54:28,265.999 --> 00:54:31,615.997
That's been such a big- Yeah, that was interesting, yeah topic of discussion as of late.
925
00:54:32,25.994 --> 00:54:36,788
Um, it- And it continues to be a topic, and it'll continue to be a topic for a very, very long time.
926
00:54:36,788 --> 00:54:40,888
But, but I th- I took three key points away from that, that article.
927
00:54:40,888 --> 00:54:51,697.999
One was the debt surge, right? So governments significantly expanded the level of debt during the pandemic, and given the geopolitical things that are happening, it's even, you know, skyrocketed even further.
928
00:54:51,708.001 --> 00:54:55,318
So, um, the debt levels are at historic highs.
929
00:54:55,768 --> 00:54:59,217.999
We've got rising yields, right? So we have bond prices that are falling.
930
00:54:59,567.999 --> 00:55:02,928
We've got governments that are, uh, being forced to issue new debt.
931
00:55:03,317.999 --> 00:55:06,817.999
Um, that creates a significant problem that- there in and of itself.
932
00:55:07,47.999 --> 00:55:13,757.999
And then you've got inflation and policy shifts, right? So the government is expecting higher and t- and, uh, tighter costs.
933
00:55:13,968.001 --> 00:55:27,437.999
They're expecting significant increase, um, i- in certain aspects as it relates to operating a small business, but more importantly, it's keeping interest rates at a relatively high level, meaning, you know, your borrowing costs are still gonna be pretty high.
934
00:55:27,937.998 --> 00:55:41,470
And why that matters, I think, is one- Higher operating costs means, you know, businesses are gonna operate on relatively smaller margins today, so the level of income gets significantly reduced.
935
00:55:41,790 --> 00:55:59,749.999
Or if there's an opportunity to increase your margin, you know, obviously I think small businesses are doing that to a certain degree, right? We talked about there being a line, and somewhat you can't cross it, right? Um, given, given the high operating costs, and we talked about this on the consumer side, you know, it's forcing small businesses to borrow more money.
936
00:55:59,800 --> 00:56:02,599.999
More- they're borrowing more money today than they have ever.
937
00:56:02,909.999 --> 00:56:03,29.999
Yep.
938
00:56:03,050 --> 00:56:08,710
And it kind of, it's, it, it's counterintuitive because we always say the proper time to borrow money is when you don't really need it.
939
00:56:08,720 --> 00:56:08,910
Yep.
940
00:56:08,959.998 --> 00:56:13,589.998
People are getting and accessing capital now because they, there's a critical need for it.
941
00:56:13,659.999 --> 00:56:13,899.999
Yeah.
942
00:56:13,929.999 --> 00:56:20,369.999
Right? So it's, it, it kind of puts small businesses behind the eight ball, if you will, from, from leveraging the capital point of view.
943
00:56:20,999.999 --> 00:56:36,480
Um, and, and I just think that the, people are becoming timid, or small businesses are becoming timid in terms of doing business internationally because, yes, we have a debt problem here in the US, but when you look at other global powerhouses, they too are faced with very similar issues.
944
00:56:36,480.002 --> 00:56:44,420.002
UK, Japan, uh, you know, th- those are just two examples of many that, you know, if you do business with them, they're facing the same issues.
945
00:56:44,420.002 --> 00:56:44,799.998
Mm-hmm.
946
00:56:44,809.996 --> 00:56:50,180.002
So it's, it's, uh, it's pro- it's problematic, and I don't think the issue's going to be resolved, at least not in the US anytime soon.
947
00:56:50,540 --> 00:56:55,739.997
And I think internationally it's gonna be a, a, an issue that continues to sustain for a while.
948
00:56:55,819.998 --> 00:56:56,119.998
Yep.
949
00:56:56,540 --> 00:56:57,419.999
No doubt, so.
950
00:56:58,159.995 --> 00:56:58,629.998
Very good.
951
00:56:58,650 --> 00:57:02,589.996
Um, I'll, I'll read you, um, my least favorite ar- uh, article.
952
00:57:02,589.996 --> 00:57:04,639.998
So it's, it's a little long, but just bear with me.
953
00:57:04,650 --> 00:57:08,719.996
"Hundreds of billions in loans fall- fail to dent global poverty.
954
00:57:09,190.001 --> 00:57:13,280.001
Microfinance aimed to foster prosperity but stoked hardships.
955
00:57:13,349.997 --> 00:57:18,9.998
Loans to shoestring entrepreneurs were meant to c- cure, be a cure for global poverty.
956
00:57:18,440.001 --> 00:57:28,389.999
Led by the a- adage of doing good while doing well, microfinance lenders have advanced hundreds of billions of dollars to poor people, yet two decades later, few of those aspirations have come to pass.
957
00:57:28,400 --> 00:57:33,530
Excessive microfinance lending has set off repayment crises for borrowers.
958
00:57:33,549.994 --> 00:57:38,979.998
Rather than using loans to invest in small businesses, many borrowers spent the money on medical expenses and necessities."
959
00:57:39,379.996 --> 00:57:40,289.995
That's kind of scary.
960
00:57:40,319.991 --> 00:57:44,29.997
"Lenders have little regard for impoverished borrowers' ability to repay.
961
00:57:44,389.998 --> 00:57:55,279.998
Some lenders are giving borrowers more time to make their first payment or providing courses in financial literacy, but at the other hand, some microfi- finance blenders have come under fire for charging interest rates above $400,000."
962
00:57:55,279.998 --> 00:58:09,449.998
Now, this is mostly in, we're talking third world countries and stuff like that, but the topic of microfinance is interesting because we are s- and we're a microlender ourselves here in the United States, in Connecticut and, and in Rhode Island, and, and, you know, we try to help businesses and stuff like that.
963
00:58:09,449.998 --> 00:58:11,549.991
We don't charge 400% interest, nowhere near that.
964
00:58:12,20.003 --> 00:58:14,549.994
Uh, but, uh, but you know, we do provide education.
965
00:58:14,550.002 --> 00:58:21,469.992
We do, you know, we recognize that you just can't give loan, you know, money to people and expect that they're gonna know what to do with it and do well, you know, good things with it.
966
00:58:21,709.99 --> 00:58:23,279.995
I think that was kind of a lesson learned here.
967
00:58:23,279.998 --> 00:58:28,10.001
So, you know, hopefully it's a program that they can fix and not, you know, throw out entirely.
968
00:58:28,354 --> 00:58:32,484
I still believe in the microfinance program, you know, on, on a global scale.
969
00:58:32,524 --> 00:58:44,453.999
And, uh, so hopefully, like I said, it's been a learning, a learning opportunity for, uh, for those in the microfinance business, and they can, uh, they can turn this thing around and, you know, use some of the best practices that, that, that we use here.
970
00:58:44,494 --> 00:58:45,833.999
You know? I think we have a good model.
971
00:58:45,893.999 --> 00:58:46,283.999
Yeah.
972
00:58:46,373.999 --> 00:58:58,284
Uh, I think in the long run, when you look back and you look at the historic charge-off rate, uh, in general, as it re- I- I'll speak from a specific SBA microloan perspective, it's, like, super, super low.
973
00:58:58,324 --> 00:58:58,534
Yeah.
974
00:58:58,534 --> 00:59:05,114.001
Significant component of that or significant, um, reason why that is, is because of the technical assistance- Yep a- aspect of it.
975
00:59:05,114.001 --> 00:59:08,913.999
So I think in the long run, I think we'll be safe, but it's kind of a tumultuous time.
976
00:59:09,104 --> 00:59:09,404
Yeah.
977
00:59:09,593.998 --> 00:59:16,613.998
So anyway, uh, okay, I'm looking at the clock, and, you know, we, we're not g- our teachable, our, our strategic intelligence takeaway...
978
00:59:16,613.999 --> 00:59:17,594.001
I had a whole bunch of stuff here.
979
00:59:17,594.001 --> 00:59:23,464
Maybe I'll do this as a blog post or something so, uh, we can, we can put that out because we're, uh, we're just about out of time here.
980
00:59:23,464 --> 00:59:37,364.001
So do you have any final thoughts, Lewis? No, I think when I looked at sort of the summary we, we, we came up with, uh, when we fed, uh, the model with all the, the articles, to me it was, it was the connection tech- and the technology piece, right? Yeah.
981
00:59:37,423.996 --> 00:59:46,624
If, uh, if you are in the service business, if you are in the production business, whatever the case is, the human element is so consistent throughout.
982
00:59:46,813.996 --> 00:59:47,953.998
Doesn't matter the industry.
983
00:59:48,433.998 --> 00:59:50,23.999
Humans are at the very core of it all.
984
00:59:50,393.998 --> 00:59:50,423.998
Yep.
985
00:59:50,453.995 --> 01:00:00,744
Um, and while, like I said before, um, as we continue to progress in this digital world, leveraging the human m- um, component and the human element, um, is paramount.
986
01:00:00,813.996 --> 01:00:08,213.999
And I, I can't, I can't say it enough, but, you know, us as a, as, as a lending institution, um, you know, that's, that's our difference maker.
987
01:00:08,213.999 --> 01:00:11,858.9985
Our people is what, what makes CIC a great place, right? Absolutely.
988
01:00:11,858.9985 --> 01:00:24,903.998
It's our special sauce, and yes, we leverage technology and we do all the things, but at the end of the day, if we don't have the right people in the right positions, uh, representing, you know, the way, the way we do, you know, it becomes a tough proposition to offer up.
989
01:00:24,933.998 --> 01:00:33,713.997
So I think, I think no matter what, I don't care how AI becomes, um, uh, so powerful, it doesn't eliminate at least people in our world.
990
01:00:33,733.994 --> 01:00:43,852
Um- Yeah and I, and we talk about the fear factor all the time, and I think You know, if you're in a position where you wanna leverage this technology, you have to get over that fear of using the tech.
991
01:00:44,142 --> 01:00:44,312
Yep.
992
01:00:44,332 --> 01:00:48,912
Um, and I know this episode quickly became an AI-based episode and, and it's rightfully so.
993
01:00:48,912 --> 01:00:49,132
There...
994
01:00:49,651.999 --> 01:00:51,552
This stuff is talked about every single day.
995
01:00:51,552 --> 01:00:58,182
There isn't a piece of news that I come across poli- at least not politically, that doesn't have some sort of AI element.
996
01:00:58,191.999 --> 01:01:01,131.999
So- Yeah it, it would be foolish for us not to talk about it.
997
01:01:01,281.999 --> 01:01:01,501.999
Yeah.
998
01:01:01,501.999 --> 01:01:02,1.999
Yeah.
999
01:01:02,1.999 --> 01:01:02,532
No, I agree.
1000
01:01:02,532 --> 01:01:04,832
So, uh, I think this was another good session.
1001
01:01:04,832 --> 01:01:08,631.999
So, uh, oftentimes conversation doesn't end when our podcast episode is done.
1002
01:01:08,632 --> 01:01:12,482
There's still more to say about the things we discussed and the things we weren't able to get to.
1003
01:01:12,482 --> 01:01:24,401.998
This is why in addition to the podcast, we create additional information resources for our small business listeners, including our small business economic analysis by ChatGPT that provides a comprehensive review of every article we collected for the past month.
1004
01:01:24,681.999 --> 01:01:27,712
And then of course, uh, we have our blog post that, uh, that we've been posting.
1005
01:01:27,712 --> 01:01:32,421.999
So you can find all these and other resources on our website at ciclending.com.
1006
01:01:32,861.999 --> 01:01:40,61.998
Be sure to join us next time as we once again examine the current events to extract strategic intelligence that will enhance the value of your small business.
1007
01:01:40,91.999 --> 01:01:40,971.997
I'm Joe McCaffrey.
1008
01:01:41,1.999 --> 01:01:41,721.998
I'm Louis Silva.
1009
01:01:41,941.997 --> 01:01:42,682
Thanks for tuning in
00:00:02,168 --> 00:00:18,977.999
Hello and welcome to Small Business Intelligence by Community Investment Corporation, the podcast where we analyze the latest news headlines and address the all-important question of what does this mean to you as a small business owner? We'll share our insights in this regard so you can be better prepared for what might happen in the days, weeks, and months ahead.
2
00:00:19,384 --> 00:00:27,214
I'm Joe McCaffrey, a business advisor with CIC, and my co-host for this podcast is Louis Silva, the president and CEO of the Community Investment Corporation.
3
00:00:27,244 --> 00:00:28,774
How are you, Louis? Awesome.
4
00:00:29,064 --> 00:00:30,293.999
Good to be back in the studio.
5
00:00:30,343.999 --> 00:00:30,973.999
It sure is, yeah.
6
00:00:30,993.999 --> 00:00:31,413.999
It's been a while.
7
00:00:31,794 --> 00:00:33,443.999
It's now officially summer in Connecticut.
8
00:00:33,444 --> 00:00:35,184
It's another beautiful day outside today.
9
00:00:35,223.999 --> 00:00:36,383.999
My lawn's already dying, though.
10
00:00:36,383.999 --> 00:00:37,613.999
I don't know about you, but- Mine's dead.
11
00:00:37,613.999 --> 00:00:38,973.999
It's dead already? Yeah.
12
00:00:39,183.999 --> 00:00:43,93.999
I probably should water it, but I don't, because then it'll grow, and then I'll have to cut it more frequently.
13
00:00:43,194 --> 00:00:43,214
Yeah.
14
00:00:43,214 --> 00:00:43,524
Agreed.
15
00:00:43,534 --> 00:00:51,704
But, you know, over the years what I've done is I've trained my lawn to grow slowly, so I only need to cut it, like, maybe, you know, half a time, half a dozen times during the summer.
16
00:00:51,754.001 --> 00:00:53,584
But seriously, law- you can train your lawn.
17
00:00:53,584 --> 00:00:54,939.713142857
I- I've learned to do that.
18
00:00:54,939.713142857 --> 00:00:55,2.570714286
Interesting.
19
00:00:55,2.570714286 --> 00:00:57,333.998
It's an ev- it's like an evolutionary thing, you know? Got it.
20
00:00:57,583.999 --> 00:00:58,723.997
And I know what you're thinking.
21
00:00:58,843.997 --> 00:01:00,373.998
You know, a dead lawn doesn't grow.
22
00:01:00,394 --> 00:01:01,343.999
I think it's actually dormant though.
23
00:01:01,343.999 --> 00:01:01,353.999
Yes.
24
00:01:01,353.999 --> 00:01:01,603.999
Yeah.
25
00:01:01,613.998 --> 00:01:03,244.001
It's not necessarily dead, so.
26
00:01:03,253.997 --> 00:01:03,273.997
Yeah.
27
00:01:03,664.001 --> 00:01:05,863.999
My wife said to me the other day, she's like, "The lawn's dying."
28
00:01:05,893.999 --> 00:01:07,094
I s- you know, "We should water it."
29
00:01:07,104 --> 00:01:08,793.999
My response was, "Yeah, you're right."
30
00:01:09,273.998 --> 00:01:16,564
I, I follow a lot of, uh, landscapers on Instagram to kind of learn tips and tricks on how to keep your lawn looking healthy and whatnot, and yes.
31
00:01:16,633.998 --> 00:01:16,873.998
Yeah.
32
00:01:16,883.998 --> 00:01:17,923.998
It's not dead, it's dormant.
33
00:01:17,944 --> 00:01:18,523.998
It's just dormant.
34
00:01:18,523.998 --> 00:01:18,543.998
Yeah.
35
00:01:18,573.997 --> 00:01:19,583.997
Proper terminology.
36
00:01:19,633.998 --> 00:01:26,533.995
So, uh, but, you know, it, um, you know, I didn't, I didn't water the lawn, you know, mostly because there's, you know, no one in the house that's named we.
37
00:01:26,563.995 --> 00:01:32,703.997
You know, it's like when my wife says, you know, "We," that usually means me, and- you know, you know, that's why it didn't get done.
38
00:01:32,704.002 --> 00:01:37,24.001
And, you know, to be honest, my, my wife usually does it, 'cause she cares more about these things than I, than I do.
39
00:01:37,33.996 --> 00:01:40,254.001
You know, it's not to say that I don't, but it doesn't really look that bad, so.
40
00:01:40,813.995 --> 00:01:46,213.996
Uh, but, uh, you know, it also takes a lot of water to keep a grass, to keep the grass green, and we're usually in a summer drought.
41
00:01:46,213.996 --> 00:01:47,33.997
Actually, we're not now.
42
00:01:47,33.997 --> 00:01:48,943.996
I went by our reservoir the other day, it was looking pretty good.
43
00:01:48,963.996 --> 00:01:53,613.995
But, so, uh, by not watering the lawn, I'm, I'm, you know, helping the ecosystem at least, you know.
44
00:01:54,13.999 --> 00:01:56,164.002
Do you ever see those no mow in May people? Yes.
45
00:01:56,893.997 --> 00:01:56,913.997
Yeah.
46
00:01:56,913.997 --> 00:01:57,803.998
At least I'm not like that, you know.
47
00:01:58,343.998 --> 00:02:01,924
The grass is growing up over the gutters of the house and- Oh, the bees, you know? Come on.
48
00:02:01,954 --> 00:02:02,286.0002
There you go.
49
00:02:02,286.0002 --> 00:02:02,690.0006
The bees.
50
00:02:02,690.0006 --> 00:02:03,924.001
The bees are fine, you know.
51
00:02:04,543.998 --> 00:02:06,643.998
Surprised they don't get cited for the blight ordinance.
52
00:02:06,664.001 --> 00:02:11,573.999
But, uh, but no, the weather's been great and, uh, you know, that's a plus for a lot of our small business clients.
53
00:02:11,603.996 --> 00:02:14,743.995
I mean, a lot of, lot of businesses are seasonal and weather dependent.
54
00:02:14,743.995 --> 00:02:24,343.997
When the weather's nice, people spend more time outdoors and they spend money, which is what we wanna see, right? So I'm pleased to report that a lot of clients of, that I work with, they're busy, they're having a good season, so.
55
00:02:24,633.995 --> 00:02:30,943.995
Weather, by the way, is one of the 25 categories that we track for the podcast, and over the last 30 days it's been only slightly negative.
56
00:02:30,954.002 --> 00:02:31,863.999
Mostly because we had...
57
00:02:31,874 --> 00:02:33,684.001
You remember that early heat wave we had? Yeah.
58
00:02:33,743.995 --> 00:02:34,923.998
It was, it was pretty brutal.
59
00:02:34,924.003 --> 00:02:41,734
And then, uh, you know, we had some weekend rain, but on the positive side, we've, this is, these are, last few days have been some of the best days of the year.
60
00:02:41,734.001 --> 00:02:44,93.999
Sunshine, pleasant temperatures, low humidity.
61
00:02:44,94.001 --> 00:02:50,294.003
And remember, uh, did you see those articles about the El Niño effect? Maybe this is El Niño, and if it is, you know, that's, uh, that's good.
62
00:02:50,294.003 --> 00:02:51,563.991
At least we're not in California and Europe.
63
00:02:51,564.002 --> 00:02:53,503.999
Those guys are getting killed right now, so.
64
00:02:53,573.997 --> 00:02:58,994.003
Yeah, my, uh, I have sever- several family members out in, uh, in France and, uh, one of them sent me a picture yesterday.
65
00:02:58,994.003 --> 00:02:59,663.992
It was 108.
66
00:02:59,814.002 --> 00:03:00,214.002
Wow.
67
00:03:00,214.002 --> 00:03:00,273.994
Yeah.
68
00:03:00,273.994 --> 00:03:00,703.994
Yeah.
69
00:03:00,713.996 --> 00:03:01,223.998
It's pretty hot.
70
00:03:01,273.994 --> 00:03:02,43.99
They're not used to that.
71
00:03:02,83.991 --> 00:03:02,313.991
No.
72
00:03:02,830 --> 00:03:03,300
They're not.
73
00:03:03,410 --> 00:03:03,600
Yeah.
74
00:03:03,600 --> 00:03:10,970
N- I mean, we get, we s- sometimes get that weather, not that we, we like it either, but, you know, it's a little, uh, little less of a shock to our system.
75
00:03:10,970 --> 00:03:13,350
So anyway, we're back today to talk about the news.
76
00:03:13,750 --> 00:03:16,800
Um, you know, there's been a plethora of articles lately.
77
00:03:17,210 --> 00:03:23,269.999
Uh, and then rat- you know, rather than regurgitate the news, mostly, you know, most of our listeners probably already know about e- everything that's going on anyway.
78
00:03:23,269.999 --> 00:03:25,59.999
So we're gonna talk about what the news means.
79
00:03:25,480 --> 00:03:28,409.999
And when you look at the articles in their entirety, we start to see stories.
80
00:03:28,420 --> 00:03:29,560
Stories begin to emerge.
81
00:03:30,010 --> 00:03:37,49.999
Uh, you know, which if you're a small business owner, these are not only interesting, hopefully, but they provide insights about things that you can be doing to enhance your position.
82
00:03:37,49.999 --> 00:03:39,639.999
So that's what we're going to be, uh, talking about today.
83
00:03:39,639.999 --> 00:03:46,519.998
And as we usually do, we'll finish up with Lewis and I sharing our favorite and least favorite articles, as well as our strategic intelligence takeaway of the day.
84
00:03:46,519.999 --> 00:03:50,830
So, um, we use G- GPT to help us find, uh, these stories.
85
00:03:50,830 --> 00:03:53,789.997
We, uh, we're big users of, uh, of AI here.
86
00:03:53,819.998 --> 00:03:57,290
And, uh, here's, here's a summary that GPT gave us of the last month.
87
00:03:57,589.998 --> 00:03:58,980
I'll just read it to you just real quick.
88
00:03:59,260 --> 00:04:06,209.997
"Consumers are still spending, but they are becoming more selective, more value-conscious, more experience-driven, and more skeptical.
89
00:04:06,529.997 --> 00:04:13,709.995
Small businesses that solve real problems while creating genuine human connection are likely to capture a larger share of the dollars that remain."
90
00:04:14,209.997 --> 00:04:15,699.995
Would you agree with that, Lewis? I would totally agree with that.
91
00:04:15,699.995 --> 00:04:17,799.997
Yeah, I think that kind of summarizes it really well.
92
00:04:17,800.001 --> 00:04:26,690
So, um, we're gonna talk about a couple of different, uh, stories and, and, and sect- sections today, one of which is consumer sentiments.
93
00:04:26,719.999 --> 00:04:28,319.996
And I found this to be really interesting.
94
00:04:28,319.998 --> 00:04:34,979.995
Consumers are consistently reporting anxiety, pessimism, f- financial stress, and concerns about affordability.
95
00:04:34,979.995 --> 00:04:38,319.997
Uh, there's a couple articles that, uh, that we picked up regarding this.
96
00:04:38,319.998 --> 00:04:42,729.995
One is, "High-earning millennials and Gen Z-ers feel broke and conflicted.
97
00:04:43,19.995 --> 00:04:44,119.998
"I make a good salary.
98
00:04:44,120.001 --> 00:04:47,969.998
I shouldn't be struggling this much," is one quote from, uh, from somebody.
99
00:04:47,969.999 --> 00:04:51,849.995
Another one was, "Millions of Americans are paper wealthy, wallet poor."
100
00:04:52,398 --> 00:04:58,468
So they're seeking out the 211 helpline, uh, network just to keep a roof over their heads, food on the table, and lights on.
101
00:04:58,898 --> 00:05:06,138
Last year, 211 referrals jumped to 19 million, a million more than the previous years, and calls for employment assistance surged by 28%.
102
00:05:06,968 --> 00:05:09,217.999
Those are some pretty stark and, and serious numbers.
103
00:05:09,228 --> 00:05:16,278
So kind of suggests, you know, we're, w- to what we just said, I mean, consumers are kind of feeling not so good, I would say.
104
00:05:16,537.999 --> 00:05:20,618
And not so good, um, the rising debt level is pretty, pretty incredible.
105
00:05:20,628 --> 00:05:32,028
Um, and the rising, uh, level of default on this, on consumer debt is a, is a startling number, and it really starts to paint the picture of where we're at.
106
00:05:32,287.999 --> 00:05:32,637.999
Yeah.
107
00:05:32,767.999 --> 00:05:36,518.001
We're, we're, we definitely, uh, are seeing that in some of the, some of the statistics, so.
108
00:05:37,137.998 --> 00:05:43,657.999
Multiple reports indicate that consumers are becoming increasingly worried about their personal finances, their jobs, and the overall economy.
109
00:05:44,238 --> 00:05:48,937.999
And, uh, businesses tend to benefit when consumers feel secure, optimistic, and willing to spend.
110
00:05:48,937.999 --> 00:05:54,288
I think that goes without saying, right? Uh, persistent geopolitical tensions often produce the opposite effect.
111
00:05:54,288 --> 00:05:58,358
Let's be honest, that's what's dominating the news- Mm-hmm has been for the last, uh, for the last month.
112
00:05:58,368.001 --> 00:06:09,17.997
But people become more cautious when they hear constant discussions about political conflict, economic dissatisfaction, and declining confidence, uh, even if their own financial situation has not yet deteriorated.
113
00:06:09,48.002 --> 00:06:10,797.997
I think that's a really good point.
114
00:06:10,807.996 --> 00:06:17,657.995
You know, a lot of people that I know, you know, they've got jobs, they're, they're still working and everything, but they're just being more cautious in their spending.
115
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Yeah.
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I, I, I, I agree.
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I mean, even, I'm sure you personally are doing the same thing.
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You're- Yeah you're watching every dollar that's spent, and we're doing the same thing as well.
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We've got, you know, one of the things that we're looking at is, okay, we've got travel and vacations coming up, like, how do we maximize and economize- Um, our travel.
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We, thankfully we still have the luxury of being able to do that, but, um, it's not an, it's not a blank check, right? We try to economize and do the best we can to, uh, to save and have a good time and, you know, still, still do what we want to do.
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Yeah.
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No, exactly.
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So, um, consumer confidence is often shaped by a sense of stability and predictability.
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I, I would agree with that, uh, completely.
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Consumers do not spend based solely on what's happening in their wallets today.
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They spend based on how they feel about tomorrow.
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And, uh, you know, when consumers feel stressed, they have s- they have not...
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And they have not stopped, although they feel stressed, they're not parti- stopped participating in the economy.
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In fact, you know, ChatGPT picked this up.
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Americans are acting wealthier than they feel.
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I think that was a really good way to kind of look at it.
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Yeah.
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That, that, that's an interesting comment.
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I'd probably...
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I could see that.
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Yeah.
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I could see that, for sure.
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Yeah.
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So, um, anyway, that's, uh, that kind of sets the stage for, you know, where sentiments are.
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And then let's actually move from sentiments.
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We talked about this in prior episodes where the, what's the difference between how people feel and how they say they feel really is what it's m- more about, and how they actually are acting, which is consumer spending.
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And what we're seeing there is there's definitely economization going on, and small businesses are seeing this.
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They're, they themselves are operating in an environment where nearly every major cost category is riser f- rising faster than their ability to pass along those costs to their customers.
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We, uh, you know, the, uh, do, do we need to talk about beef? I mean, I know you're, you're a big beef household.
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Tomatoes.
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Hey, the cost of eggs are, are, you know, is plunging.
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Eggs are coming down.
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I didn't...
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Yes.
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That one I didn't, I didn't pick that one up, but I, I did see that one.
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But, uh, but one article was, um, here it ca- actually came from a number of different news sour- uh, sources.
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Prices in the US are rising at the fastest pace in years.
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Officials at the Central Bank have embraced the possibility of higher interest rates to get resurgent inflation under control.
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That's something that we, we, you know, we should be expecting.
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I read something the other day said we should expect three increases by the end of the year.
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Does that seem...
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That's a lot.
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I- i- it's a lot.
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Um, I mean, you know- There was an interesting...
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N- I wouldn't say it was interesting.
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Poor choice of word- words there, but, you know, our new Treasury Secretary decided to hold rates steady.
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Yeah.
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Um, right? And I think that's just a cautionary tale that, hey, you know, I, I think there, it's more likely for an increase than there would be a decrease, um- Yeah i- in the coming months.
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I think he only held it s- steady because, you know, they wanted him to lower it, and he's like, "I can't lower it."
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Sure.
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He probably wanted- Yeah to raise it, but, you know, it's like, "All right, we'll just keep it where it is."
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Yeah.
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But I would expect next time it's probably gonna go up.
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Yeah.
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You know, so, uh, you know, many Americans are burning through their savings.
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These are all the things that, uh, were picked up by these, uh, by these articles and, you know, so it's, uh, it's not, it's, it's not looking good in that respect, so.
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Uh, consumers are still spending, but they may be doing so from a position of weakening financial strength rather than growing prosperity.
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So, um, Americans are spending faster than they earn.
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And this came out of, uh, an article that we picked up.
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The personal savings rate fell to 2.6%,
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down from 3.2
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in March.
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This was for April, and then, uh, s- 4.3%
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in January.
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So, uh, that's kind of the lowest level since mid-2022, which was during COVID.
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So, uh, again, not a, not a really good, uh, situation there.
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So why are we talking about these things? Because it kind of gives some, some meaning and color to if you're seeing, you know, consumers, business, in, in your business being a little bit more cautious, this is why.
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This is the reason why.
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So, you know, the, um, the economy is still moving forward, it's, but it's, it's experiencing significant headwinds.
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Consumers have not s- stopped spending, but they are being far more selective about where they spend.
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Every purchase decision is being scrutinized.
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Um, you know, many, many families, this is why I found this interesting, are spending more simply to maintain their current standard of living.
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So just to keep it status quo, it's still, it's costing a lot more, and consumers are devoting more of their budgets to necessities, so.
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Joe, you know, we, there's this concept of broader consumer sentiment, and then you've got your local consumer sentiment.
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You're, you, you talk with many small business owners, um, some of them the smallest of the small, mostly retail, food service.
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How are people feeling that you're communicating with daily here? I hear from, what I hear from everybody is, is much like what we're talking about here.
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Costs for everything are going up, uh, particularly the f- the, the food, uh, businesses and stuff, the beef, the tomatoes, and all that sort of stuff.
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They're, they're feeling that.
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Things like insurance, uh, all those things.
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It just seems everything is going up.
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Uh, labor costs are going up.
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It's, uh, it's just everything is, is, you know...
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And, and at the poi- They're at the point where many of them, they've raised prices probably as much as they can.
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Sure.
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And they can't really raise them anymore.
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And so they're kind of- Yeah, there's a line.
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Yeah, there's a line that you can't cross.
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And so they're at that point, I think.
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And so they're just finding a way to, you know, they're comparative shopping.
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They're trying to get their costs down and stuff like that as, as households are doing.
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It's much the same.
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Yeah.
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You know, but it's really hard to, um...
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You know, you, you like to...
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One of the things we'll talk about at the end is some ideas and, you know, one idea is to have a cash reserve.
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You know, build a cash reserve because the, the coming months are probably gonna be a little, a little rough.
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But it's hard to do when you're barely, you know, making, making a profit.
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Right.
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And, and same thing with, with households and families.
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You know, what's the, what's the common recommendation? You have six months of living expenses, you know, in, in savings or something like that.
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That's hard to do for a lot of people.
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Impossible for many people, 'cause you're just living, you're living on the edge right now.
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So it's the same for the businesses.
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You know, it doesn't really, um, you know, make, make much difference whether it's a business or individual, so.
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Um, when consumers perceive that their financial situation is stagnant or becoming more p- precarious, they often shift toward value-oriented spending.
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And, uh, you know, one of the articles that I picked up was, "Americans don't like the looks of things and are growing more worried about their job and their finances."
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And, um, another one was, "This is how close American households are to the financial edge."
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This is really interesting.
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In twenty twenty-four, forty-four-- forty-five point five percent of US households did not earn enough to cover their necessities.
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A mere one thousand dollar hike in the annual cost of living would leave another three million households unable to make ends meet.
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So that's how close people are to living on the edge, like we were just saying.
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It's a big number.
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It's a big numbers, yeah.
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And again, people are employed, and they're still spending, but they're just being super price sensitive, value-focused, and selective, particularly about discretionary, uh, you know, expe- you know, expenditures and things of that nature, so.
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Um, I thought this one was interesting about the employment thing.
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A record number of young people expect to be unemployed, so the share of people who are under the twenty-one years of age fear long-term job lo- joblessness will, will triple under the next dec- at under the next decade.
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That's what they found.
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So there's a, there's a lot of pessimism there, particularly with young folks.
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I gotta imagine some of that's AI driven.
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We'll talk about that later.
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You know, but some of that may be-- probably it's overblown, but we'll, uh, we'll pick that up later.
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Americans are feeling the, uh, squeeze as disposable income growth has declined for three straight months.
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So disposable income is what you have left over after paying for all your necessities, your rent, your car payment, whatever, your mortgage.
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Um, eroding purchasing power and forcing households to tap savings amid persistent inflation.
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By the way, that's a-- that's something that we picked up in a number of articles, that people are dipping into their savings and/or taking on more debt And, uh, I know that's something that you and I watch closely, 'cause those are, those are leading indicators.
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When you start seeing that, that means people are really struggling.
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And like I said, if, as a small business, you're going to see that in their, in their purchasing behavior, so.
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Yeah, as of late, we've s- seen a combination of both.
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We've seen reduction in liquidity and an increase in debt, which is, you know, that's just a, that's- That's a bad combination That's a bad combination, unfortunately.
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Yeah.
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Um, but it's, it's rampant, and we're seeing that very often these days.
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So here was, uh, here was an article that said, "Five economic signals suggest US consumers are feeling the strain."
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So here's one.
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Income growth lagging inflation, rising credit card delinquencies, savings rate slides to 22-year low, more 401loans and hardship withdrawals, cutting gas purchases, and, uh, you know, what, what this said was this is all relevant because consumer spending drives about 70% of the US economy.
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So when you start seeing these things, that's not a good sign for, for things to come, which is why when we look ahead, you know, would say, you know, there's, there's some storm clouds on the horizon probably, so hopefully it won't be too bad.
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But, um, you know, this is, this is kinda what it's all about.
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So yeah, those are, uh, those are the numbers that we're looking at.
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So again, Americans are spending faster than their incomes are growing, and, uh, you know, people make decisions, just purchasing decisions based on what their income can buy, not simply how much they, they can earn.
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And again, that's where we're seeing some erosion, is in the purchasing power.
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And people are trading down, seeking deals, stretching budgets, postponing purchases, and searching for value.
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Not necessarily the cheapest option, but I thought this was interesting, Lewis, the smartest value.
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People are really thinking like, you know, really putting a lot of thought into the stuff that they're buying.
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It's like, you know, is there a value here? And we saw a lot, I s- I saw a lot of stuff on value.
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We'll, this, this, this theme will come up again.
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Um, you know, one of, one of the questions people are asking is, "Why is this worth my money?" You know, "Why should I buy this?" Right? Sure.
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Much more, much more scrutiny being paid to, uh, to these sort of things than they, than they were in the past.
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Yeah.
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So very value-conscious, uh, consumers.
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Uh, let's see.
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What else? Uh, I'm just looking at here.
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Um- There's a lot, a lot of points on this value thing.
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I'm just skipping over them 'cause I don't want to beat the point to death.
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But, um, here, uh, this is a good one.
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"Consumers remain willing to spend, but they increasingly expect businesses to earn every dollar they spend."
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Wow, that's interesting, isn't it? I mean, it's, it seems reasonable, but- Sure how many times do you think about it in that, in that context? That's, that really puts a different spin on things.
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Right.
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Well, think about the experience, you know, discussion that we've been has- having as of late, right? Yep.
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You know, I think folks are willing to spend, given the proper experience.
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Um, we're seeing an increase in experience-based businesses, and, you know, people are flocking to that because they feel their value is there.
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Yeah.
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Here's another interesting one.
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"Many spending decisions appear to be motivated by a desire for security rather than luxury."
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That's interesting, right? What do they define as security? Well, I would think security, like, would be, like, you know, your necessities or, you know, just things like to, to, you know, protect your, your downside and, and stuff like that.
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Everybody's just becoming much more cautious.
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Mm.
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Right? And, and less free- freewheeling in their, their spending.
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Luxurious, you know, um, you know, luxurious purchases and stuff like that are, are taking a backseat to, to necessities and things of that nature You know, so, but at the same time, I did see that said consumers are still willing to spend on affordable indulgences.
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You know, like that cup of coffee you're drinking right now.
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You know, you didn't make your coffee at home, you know- Nah so it's, it's a small indulgence, but I know.
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That and my cup of fruit, 12 bucks a day.
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It's not a cheap- That cup of fruit was good it's not a cheap affair.
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It looked good.
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So, uh, you know, but anyway, so, um, you know, oh, and so let's, let's talk about this.
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More households appeal to be re- uh, appear to be relying on what some economists describe as survival debt, which is borrowing not to fund new purchases, but to maintain existing living standards.
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That's scary.
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We see that kinda, you know, we, we try to screen that out in, in the, the, the loans that we do for businesses and stuff, but we see that.
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We do.
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You know.
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We do.
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There's, there's a lot of businesses that just need a little cash to kinda keep going right now, and, you know, we, uh, w- we try to help them if we can, but, uh, you know, really, we like to invest in, in projects, things that are going to, uh, you know, be accretive to the bottom line and, and, and help the business and stuff like that.
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But now I think a lot of it is really just to keep your head above water.
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Yeah, the amount of times I've seen as of late where s- where, you know, a couple will have m- practically no liquidity, they run their entire household off credit cards, you know.
298
00:18:20,977.995 --> 00:18:24,888.002
Income comes in, they pay off their credit cards, and it's this cycle every single month.
299
00:18:25,178 --> 00:18:32,467.998
Um, but there's no safety net there, right? They, you know, God forbid something happens, one loses their job, their reliance on that debt becomes even greater.
300
00:18:32,928 --> 00:18:38,208.001
Um, and when you can't support the r- repayment of that, that's when it all starts coming to a head.
301
00:18:38,387.999 --> 00:18:38,737.999
Yeah.
302
00:18:39,288 --> 00:18:41,447.995
Here was, uh, this is the last one on consumer spending.
303
00:18:41,447.996 --> 00:18:42,377.998
I thought this was interesting.
304
00:18:42,377.998 --> 00:18:47,647.999
Consumers are increasingly willing to spend m- money when they believe a purchase solves a real problem.
305
00:18:48,178 --> 00:18:52,428
I thought that was a kind of interesting way of looking at it, you know? Sure, I can see that.
306
00:18:52,497.999 --> 00:18:59,478.001
So again, other than the, uh, you know, the small indulgences, it's, it's gotta be, it's gotta be a meaningful purchase that people are making.
307
00:18:59,478.001 --> 00:19:06,318
So you were just, uh, talking, uh, about, uh, you know, the ex- the experience thing and, and human connection.
308
00:19:06,318 --> 00:19:13,447.997
That was another thing that, uh, that we picked up on, and, uh, you know, consumers are increasingly favoring experiences over transactions.
309
00:19:14,104 --> 00:19:16,844
And, uh, you know, gravitating toward those experiences.
310
00:19:16,844 --> 00:19:18,274
And, you know, this is interesting.
311
00:19:18,274 --> 00:19:29,573.999
I have this conversation with a lot of clients and, you know, talking about their, their sales and, and, and ac- activity and stuff, and I say, you know, "Is your Are, are you selling a commodity product?" Meaning it's just simply a transaction.
312
00:19:29,573.999 --> 00:19:35,704
Somebody comes in, like, when Like, let's, let's, let's use your, your coffee and fruit example, Lewis, just 'cause it's, it's, it's right now.
313
00:19:35,704 --> 00:19:40,763.999
But when you go into the, uh, the store, do you know the person behind the counter? Like, do they know you? They do.
314
00:19:40,944 --> 00:19:42,594
So it's not a transaction, right? Nope.
315
00:19:42,653.999 --> 00:19:45,894
It's You're not just buying a coffee and a, and a fruit cup.
316
00:19:46,134.001 --> 00:19:46,813.998
They know you.
317
00:19:46,844 --> 00:19:49,33.998
They Do they know your name? They know you by name? They know my name.
318
00:19:49,103.998 --> 00:19:49,503.998
Yeah.
319
00:19:49,583.998 --> 00:19:53,144.001
I, I've been going there for a decade plus, right? It's become my second home.
320
00:19:53,144.001 --> 00:19:53,923.999
It's a family.
321
00:19:54,103.998 --> 00:19:55,154.001
And if, if you don't- It's consistent.
322
00:19:55,233.999 --> 00:19:59,843.998
If you don't show up, they're, they're, they're page, they're, they're, they're, uh, they're texting you like, "Lewis, you okay? We're, you know..."
323
00:20:00,213.999 --> 00:20:04,813.997
Last year we went away on vacation for two weeks, and I got a text message saying, "Hey, are, is everything okay?" "How are Yeah.
324
00:20:04,813.997 --> 00:20:05,684
You okay? Where are you?" Yeah.
325
00:20:05,693.998 --> 00:20:06,604
You know? Yeah.
326
00:20:06,713.999 --> 00:20:08,623.999
So that's, that's kind of what we're talking about here.
327
00:20:08,653.997 --> 00:20:10,754
So I try to, I try to encourage clients.
328
00:20:10,763.998 --> 00:20:15,433.998
It's like don't just, you know, make it a, a commodity transaction that you're selling.
329
00:20:15,433.998 --> 00:20:15,493.998
Right.
330
00:20:15,493.998 --> 00:20:20,473.997
You know, get to know your clients and, and get them, let them get to know you, and make that personal connection.
331
00:20:20,474.001 --> 00:20:24,873.999
That personal connection, even in this day and age, is becoming much, much more important.
332
00:20:24,913.996 --> 00:20:28,393.998
And, uh, you know, people are looking for that authentic human interaction.
333
00:20:28,404.001 --> 00:20:28,424.001
Yeah.
334
00:20:28,773.996 --> 00:20:37,664.001
You know, particularly in the, in the AI age, and we'll get to AI in a second, but, you know, there's a lot of, uh, lot of concern that, you know, people are gonna lose their jobs and, and things like that.
335
00:20:37,664.001 --> 00:20:40,923.997
Well, you know, not if the human connection element is still there.
336
00:20:40,934 --> 00:20:46,683.999
I mean, that's, that's really what it's all about is, you know, people being people, and that's, I think, what people are craving right now.
337
00:20:46,733.995 --> 00:20:47,23.995
Yeah.
338
00:20:47,163.996 --> 00:20:47,873.995
It's, it's funny.
339
00:20:47,873.995 --> 00:20:53,393.996
I'm reading in the summary, right? AI said that genuine human interaction is becoming a competitive differentiator.
340
00:20:53,393.996 --> 00:20:53,593.996
Yeah.
341
00:20:53,593.996 --> 00:20:58,094
And I, and I'd like to say that that's always been the case, right? Humans have always been the differentiator.
342
00:20:58,453.997 --> 00:21:08,493.994
But as the world has become more and more evolved from a digital standpoint, isn't it fascinating that AI itself is saying, "Hey, humans are still the difference makers"? Right.
343
00:21:08,513.994 --> 00:21:18,756
You know? Uh, and you know, when I look at our business- I- it's very much a human high-touch business, right? We cannot make loans happen without the human interaction.
344
00:21:19,106 --> 00:21:27,965.999
But how do we use AI to make that interaction m- much more favorable, more efficient, more streamlined, and better overall? Um, and it, it's, it's a balancing act.
345
00:21:28,255.999 --> 00:21:41,65.999
Um, but we'd be foolish not to think about how we leverage technology to make our lives easier from, from a processing perspective, with the ultimate result of being help- being able to help more people, more small businesses, uh, in the long run.
346
00:21:41,196 --> 00:21:41,286
Absolutely.
347
00:21:41,286 --> 00:21:43,586
And again, with humans driving the bus the entire way.
348
00:21:43,645.999 --> 00:21:43,875.999
Right.
349
00:21:43,905.999 --> 00:21:49,795.997
We're never gonna, we're never gonna let, you know, any AI engine make decisions or that's just not- Absolutely not we're never gonna do that.
350
00:21:49,825.999 --> 00:21:50,115.999
No.
351
00:21:50,175.998 --> 00:21:56,905.999
But, but we can use it to help us make better decisions, make decisions quicker, like all that you're just talking about, you know? Yeah.
352
00:21:57,046 --> 00:22:04,516
But- In the investment space, you know, com- computers make decisions all day long from, from a trading perspective, from, from a- Yeah, algorithmic trading invest- Yeah yeah.
353
00:22:04,715.998 --> 00:22:06,405.998
That, that's a huge business model.
354
00:22:06,456 --> 00:22:06,486
Right.
355
00:22:06,636 --> 00:22:07,106
Huge.
356
00:22:07,186 --> 00:22:07,676
Huge.
357
00:22:07,956 --> 00:22:10,415.998
Um, in our world- Not gonna happen not gonna happen.
358
00:22:10,425.998 --> 00:22:10,445.998
Yeah.
359
00:22:10,456 --> 00:22:28,755.995
There's too much, um, uh, information that helps us make informed decisions that we have to bring to the table ourselves as human, right? AI's not gonna tell us, "Okay, what's happening specifically in Hamden, uh, on a day-to-day basis?" You know? I, I use Hamden as an example 'cause our home office is here, but we pound the pavement here.
360
00:22:28,755.999 --> 00:22:30,366.001
We know what's going, going on.
361
00:22:30,366.001 --> 00:22:31,85.995
We talk to people.
362
00:22:31,86.001 --> 00:22:32,745.998
We talk to small businesses.
363
00:22:32,796 --> 00:22:34,555.998
AI's not gonna know that stuff, right? Right.
364
00:22:34,555.998 --> 00:22:39,635.998
So, um, that part of the, the, the transaction, that part of the equation is extremely important.
365
00:22:40,55.995 --> 00:22:44,465.999
Yeah, I mean, AI is great for the quantitative data, like- Right you're talking about the algorithmic trading models.
366
00:22:44,465.999 --> 00:22:46,325.999
It's all based on, it's quant trading, right? Right.
367
00:22:46,675.998 --> 00:22:54,766.002
But there's a qualitative element to, to these decisions that it can't really pick up because it doesn't know it, and we haven't told it that, right? Right.
368
00:22:54,815.997 --> 00:22:55,535.994
So there's that.
369
00:22:55,535.998 --> 00:22:56,526
There's the relationship...
370
00:22:56,546 --> 00:23:07,635.994
I tell people, I, I did a workshop last night on access to capital in Greenwich, Connecticut, and I was explaining to people and emphasizing the importance of a relationship with your lender, to have that, that, you know, relationship.
371
00:23:07,635.997 --> 00:23:08,206.001
They know you.
372
00:23:08,206.001 --> 00:23:09,155.998
They know your business.
373
00:23:09,156.001 --> 00:23:10,265.999
I said, "It's really important."
374
00:23:10,265.999 --> 00:23:22,25.998
And that's really what we're talking about here, is, uh, you know, businesses that help people feel connected, understood, and part of a community appear to be having a growing competitive advantage over purely transactional competitors.
375
00:23:22,75.991 --> 00:23:23,925.993
That's ultimately what we're talking about here.
376
00:23:24,245.99 --> 00:23:32,315.991
You know, so if you're a business owner, and you got customers coming in, and you don't know their name, and you don't know what they usually buy and stuff like that, do yourself a favor.
377
00:23:32,366 --> 00:23:33,165.994
Get to know the people.
378
00:23:33,165.994 --> 00:23:36,246.002
And m- I, I imagine that makes you feel good when you walk in there.
379
00:23:36,246.002 --> 00:23:36,455.99
Absolutely.
380
00:23:36,505.999 --> 00:23:37,685.995
And they're like, "Hey, good morning, Lewis.
381
00:23:37,685.995 --> 00:23:39,36.001
How are you? How's the kids?" Absolutely.
382
00:23:39,36.001 --> 00:23:40,265.992
Right? There's, there's no better feeling.
383
00:23:40,295.993 --> 00:23:40,615.993
Yeah.
384
00:23:40,666.003 --> 00:23:42,355.99
It makes you feel like a person, right? Yeah.
385
00:23:42,355.99 --> 00:23:43,885.991
It even gives me the gooseies, Joe.
386
00:23:43,895.999 --> 00:23:44,175.999
Yeah.
387
00:23:44,476.001 --> 00:23:45,726
No, it's, it's a great feeling.
388
00:23:45,726 --> 00:23:48,816
You know, rather than you just, like, put your, your order in on...
389
00:23:48,845.996 --> 00:23:49,416
Uh, even when you do...
390
00:23:49,416 --> 00:23:51,646.001
Do, do you order it online? N- I don't, no.
391
00:23:51,646.001 --> 00:23:52,395.9993333
I just go straight up to the counter.
392
00:23:52,395.9993333 --> 00:23:53,485.995
Oh, but you could, right? Yeah, absolutely.
393
00:23:53,515.994 --> 00:23:57,905.992
But even still, when you came in to pick it up, they'd still, you know, make you feel like a million bucks, right? Yeah.
394
00:23:57,985.995 --> 00:24:06,742
I feel like my days- Get started on a much better, uh, footing when I go in, get greeted with a smile, have that small little chit-chat to start the day.
395
00:24:06,782 --> 00:24:06,982
Yeah.
396
00:24:06,982 --> 00:24:15,102
It just, it's a just different way to start the day, and it, it makes me feel good, right? And because of that, you don't go just anywhere else to get your coffee and your, and your fruit cup.
397
00:24:15,171.999 --> 00:24:15,641.999
Absolutely.
398
00:24:15,642 --> 00:24:21,101.999
I c- There's a thousand coffee shops around us- Right and, and I choose to go to one specific one every single day because of that experience.
399
00:24:21,142 --> 00:24:22,431.999
And they may not be the cheapest, either.
400
00:24:22,451.999 --> 00:24:22,921.999
It's not.
401
00:24:23,002 --> 00:24:23,272
Yeah.
402
00:24:23,351.999 --> 00:24:23,762
It's not.
403
00:24:23,791.999 --> 00:24:28,31.999
But, but- But you pay for, for that- That's not what- for that quality that's not the ultimate value, right? Correct.
404
00:24:28,072 --> 00:24:29,511.999
So this is kind of what we're talking about.
405
00:24:29,511.999 --> 00:24:34,411.999
So again, if this, uh, you know, try What we try to do on this podcast is help people think of ideas.
406
00:24:34,441.999 --> 00:24:41,572
And, you know, we're not telling you how to run your business, but if you can incorporate some of these ideas into your business, you know, you'd do well to, uh, to do so.
407
00:24:41,572 --> 00:24:43,131.998
So, uh, let's see.
408
00:24:43,131.998 --> 00:24:49,721.998
What else? Uh, customers trust recommendations from friends, local businesses, community leaders, and organizations they know personally.
409
00:24:50,31.999 --> 00:24:55,962.001
So once again, that's We're, we're, we're still talking about connection here, right? It's just so important to have human connection.
410
00:24:56,331.998 --> 00:25:01,241.999
And I remember talking to one client some time ago, and, uh, she, uh, she was really interesting.
411
00:25:01,241.999 --> 00:25:08,661.997
She, she said, she goes, "You know me as a business owner who is very outgoing and, you know, very engaging with people."
412
00:25:08,661.997 --> 00:25:10,432.002
She goes, "That's not really my personality."
413
00:25:10,441.995 --> 00:25:23,552.001
She says, "When I'm home," she says, "I'm like, I'm like a, you know, a real, you know, not, not a recluse, but, you know, a, uh, a, a very, you know, private, quiet type person, you know?" And I'm like, "Well, that's interesting, because that's not the side of you that I see."
414
00:25:23,951.997 --> 00:25:29,711.999
And so what she basically explained to me, she goes, "I have my work persona, and I have my personal persona, and they're different."
415
00:25:29,981.996 --> 00:25:31,082
I thought that was really interesting.
416
00:25:31,142 --> 00:25:44,671.998
Do you know that I can relate to that person wholeheartedly? As, you know, the president of an organization, my, my job is to be outwardly, you know, focused, open to communication with everyone, but there's a sense of, like, freedom of being home and not, like, you know- Yeah.
417
00:25:44,671.998 --> 00:25:45,622
You don't have to be on.
418
00:25:45,631.998 --> 00:25:46,121.998
Exactly.
419
00:25:46,121.998 --> 00:25:46,821.998
I don't have to be on.
420
00:25:46,821.998 --> 00:25:46,899.498
Yeah.
421
00:25:46,899.498 --> 00:25:50,331.997
I can let my guard down- Yeah and, and just kind of be silent and just be with the family.
422
00:25:50,542.001 --> 00:25:51,511.994
It's very fascinating.
423
00:25:51,511.995 --> 00:25:52,801.994
I can totally relate to that person.
424
00:25:52,851.999 --> 00:25:53,31.999
Yeah.
425
00:25:53,51.996 --> 00:25:53,741.996
I feel that, too.
426
00:25:53,741.998 --> 00:25:58,471.994
I mean, when I'm, when I'm doing workshops and, and even doing podcasts and stuff, you know, you're talking a lot.
427
00:25:58,471.994 --> 00:26:00,101.996
I'm not generally a talkative person.
428
00:26:00,101.999 --> 00:26:03,781.995
Like, when I go to social settings and stuff, I like to listen- Sure believe it or not.
429
00:26:03,781.999 --> 00:26:04,991.999
I like to hear other people.
430
00:26:05,151.994 --> 00:26:05,341.994
Yeah.
431
00:26:05,491.998 --> 00:26:09,131.992
And, you know, and, and I ask them questions, and I just Uh, 'cause I'm interested in them.
432
00:26:09,131.998 --> 00:26:15,31.998
I'm a, I'm a people person, right? I'm, I'm interested in hearing what people what's going on in their lives and in their careers and things like that.
433
00:26:15,31.998 --> 00:26:17,522
I find that to be very interesting, particularly if they have a small business.
434
00:26:17,592.004 --> 00:26:17,862.004
Yeah.
435
00:26:17,881.998 --> 00:26:18,811.998
We'll talk all day.
436
00:26:18,961.999 --> 00:26:19,161.999
Yeah.
437
00:26:19,232.004 --> 00:26:20,521.993
You know? So, uh, but no.
438
00:26:20,521.997 --> 00:26:24,242.003
It's just kind of interesting how you can actually train yourself to have two different personas.
439
00:26:24,242.003 --> 00:26:27,232.002
So if you're like, "Well, that's not really me," well, it can become you.
440
00:26:27,622.003 --> 00:26:32,341.992
You know, it may require a little bit of work, but, uh, but, you know, you have to, you have to kind of pivot here.
441
00:26:32,341.992 --> 00:26:45,181.993
So, um, one last, uh, comment on connection, which kind of s- leads into the next section, which is the future may belong to businesses that combine AI-powered efficiency with human s- human-centered service.
442
00:26:45,678 --> 00:26:47,178
That I think is really interesting.
443
00:26:47,178 --> 00:26:49,468
This is what you and I were, were just talking about, right? Right.
444
00:26:49,478 --> 00:26:56,138
In our business, right, we use, we use AI, right? But we don't get rid of that hu- It's still a human-centered business that we're in.
445
00:26:56,298 --> 00:26:56,648
Right.
446
00:26:56,728 --> 00:27:04,717.999
You know? So the, the AI helps us make better decisions or faster decisions or whatnot, but, uh, but it's still very much a high touch business.
447
00:27:04,778 --> 00:27:05,268
Absolutely.
448
00:27:05,268 --> 00:27:09,987.999
And, and, you know, it- I always like to say that garbage in, garbage out too, right? Yeah.
449
00:27:09,987.999 --> 00:27:13,87.999
So the human control is very much the, the ultimate outcome.
450
00:27:13,088 --> 00:27:27,987.997
And, and we were just talking with our producer Luke and our marketing extraordinaire, and, you know, from, from a, from a prompt perspective, us humans need to do a good job of making sure that we're feeding and asking the right questions to make sure that we get the desired outcome.
451
00:27:28,207.999 --> 00:27:28,427.999
Right.
452
00:27:28,437.998 --> 00:27:31,507.998
If we don't do that, then we're You know, it's kind of a wasted use of time.
453
00:27:31,507.998 --> 00:27:33,17.998
It's garbage in, garbage out like you said.
454
00:27:33,47.999 --> 00:27:33,447.997
Garbage out.
455
00:27:33,467.997 --> 00:27:33,677.997
Yeah.
456
00:27:34,277.997 --> 00:27:34,297.997
Yeah.
457
00:27:34,297.997 --> 00:27:35,347.999
You're just, you're just gonna get junk, so...
458
00:27:36,018 --> 00:27:40,528
But, uh, but this was, uh, a question that, uh, that I, that I, that I thought was interesting.
459
00:27:40,538.001 --> 00:27:49,527.998
Consider the following question, how is AI changing my business? As a business owner, give some thought to that question, and if you haven't given any thought to that question, then you should.
460
00:27:49,577.998 --> 00:28:10,348.001
And, you know, maybe it's not necessarily like looking around and like, "Well, how are competitors using AI?" But maybe it's a matter of, you know, you kind of thinking to yourself, "Well, what could I do? How could I use AI to change my business?" And I think for a lot of people, that's a hard question to answer because if you're not familiar with AI, you don't know its capabilities and stuff like that.
461
00:28:10,758.002 --> 00:28:15,408.001
You know, get any high school kid to help you, and they can probably help you answer that question.
462
00:28:15,487.998 --> 00:28:18,187.995
I'm, I'm actually still to this day amazed.
463
00:28:18,207.999 --> 00:28:26,028
We have a, we have a artificial intelligence, uh, expert on our team who works with our clients on, on these types of things, and I'm just amazed.
464
00:28:26,028 --> 00:28:32,317.997
Like, each time he comes up with things, I'm just like blown away by the stuff that, uh, you know, AI is, is able to do.
465
00:28:32,317.999 --> 00:28:38,778
It's still to this, to this day to me, it's still very, uh, very exciting and, and, and very, uh, very eye-opening.
466
00:28:38,917.998 --> 00:28:39,197.998
Yeah.
467
00:28:40,130 --> 00:28:41,170
Team up for August.
468
00:28:41,980 --> 00:28:43,530
Have him come on as a special guest.
469
00:28:43,540 --> 00:28:43,830
For...
470
00:28:43,830 --> 00:28:44,050
Okay.
471
00:28:44,360 --> 00:28:44,780
All right.
472
00:28:44,880 --> 00:28:46,130
I think it's an important topic.
473
00:28:46,210 --> 00:28:46,570
All right.
474
00:28:46,640 --> 00:28:46,910
All right.
475
00:28:46,910 --> 00:28:52,909.999
We'll, uh- We talk about it a lot, but- We do to hear directly from the, the e- the technology expert I think would be eye-opening for many people to hear.
476
00:28:52,919.999 --> 00:28:53,259.999
Yeah.
477
00:28:53,339.999 --> 00:28:54,200
It, it really, uh...
478
00:28:54,230 --> 00:28:56,230
It, like I said, it just, it just blows my mind.
479
00:28:56,540 --> 00:29:01,820
Uh, public skepticism toward AI is growing as people increasingly associate it with higher energy costs.
480
00:29:01,829.999 --> 00:29:02,339.999
True.
481
00:29:02,749.999 --> 00:29:03,769.999
Job displacement.
482
00:29:03,809.999 --> 00:29:04,949.999
Eh, I don't know about that one.
483
00:29:05,259.999 --> 00:29:13,189.999
Misinformation, the, the term I guess is AI slop, and, and privacy concerns, and, uh, that, I, I share that concern about privacy.
484
00:29:13,189.999 --> 00:29:18,589.998
I tell people, "If you're putting anything into AI, you know, take out any personally identifiable information.
485
00:29:18,589.999 --> 00:29:20,840
You know, don't, don't give it anything that's sensitive or..."
486
00:29:21,159.999 --> 00:29:22,269.999
'Cause you just don't know where it's going.
487
00:29:22,270 --> 00:29:30,119.997
It's going out into the, into the stratosphere somewhere, right? Um, small businesses now have access to tools that previously only large corporations could afford.
488
00:29:30,700 --> 00:29:35,979.999
AI ultimately lowers barriers to entry and allows small firms to compete more effectively with larger competitors.
489
00:29:36,119.998 --> 00:29:37,829.997
Hey, you know what? That cut- cuts both ways, though.
490
00:29:37,839.999 --> 00:29:45,010
It also allows easier entry for other small businesses to come into industries, so it can increase the small business competition.
491
00:29:45,259.998 --> 00:29:49,449.996
It didn't pick up on that, but I'm just throwing that out as a, as an additional consideration.
492
00:29:49,450 --> 00:29:54,220.001
So I guess the, the long and short of that is, you know, get on the bus or you're gonna get left at the station.
493
00:29:54,229.999 --> 00:29:55,169.996
It's, uh, it's really...
494
00:29:55,469.997 --> 00:29:59,389.995
It's one of those things that it's like we're, we're, we're changing and we're not going back.
495
00:29:59,389.995 --> 00:30:12,330
I remember, you know, back when I was in college is when electronic spreadsheets start- started to become big, and, uh, I, I was, I was using it actually in one of my classes, and that was a, that was a strategic inflection point in the, in the finance and accounting industry.
496
00:30:12,749.995 --> 00:30:14,219.998
It changed, and it never went back.
497
00:30:14,289.996 --> 00:30:18,509.994
You know, there was, there was no more of these handwritten, you know, ledgers and stuff like that.
498
00:30:18,509.998 --> 00:30:22,949.998
It was all now done on spreadsheets, and like I said, we've never gone back.
499
00:30:22,999.995 --> 00:30:23,279.995
Right.
500
00:30:23,289.996 --> 00:30:23,650.001
It's, it's...
501
00:30:23,659.999 --> 00:30:26,264
And it's gonna be the same thing with AI Yeah.
502
00:30:26,284 --> 00:30:27,944
Um, fa- fascinating.
503
00:30:27,944 --> 00:30:37,624
I was talking to a broker, uh, a couple weeks ago, and, um, his whole business model is, uh, selling properties through a, essentially a, a- an auction platform.
504
00:30:37,624 --> 00:30:41,094
And the, the degree of success that he has with that is pretty fascinating.
505
00:30:41,123.999 --> 00:30:53,464
But you think about the commercial real estate space and how high touch from a human element perspective it is, and yet someone has figured out how to use technology to streamline his business and, you know, to make deals happen.
506
00:30:53,813.999 --> 00:30:58,214
Um, but again, it's one of those things where the market has realized a need for this.
507
00:30:58,263.998 --> 00:31:01,694.001
They've developed it, they're using it, and it's been widely successful.
508
00:31:01,704 --> 00:31:19,363.998
So it's one of those things like, hey, could the, could that s- particular, um, industry start to gravitate t- towards that? And is there ever any coming back from that? Who knows? But that's a- Mm clear example of how, you know, technology, uh, either you jump on it or you don't, um, and, and you get used with.
509
00:31:19,563.997 --> 00:31:23,453.997
You know, real estate's an interesting example because that's an industry I worked in for decades.
510
00:31:23,563.997 --> 00:31:30,024
And, you know, I can tell you that they are not known for embracing technology and being on the cutting edge.
511
00:31:30,893.995 --> 00:31:32,953.997
But this is a good example.
512
00:31:32,963.995 --> 00:31:41,474.001
I mean, even despite that, they have had to, to look at, you know, how to, how to embrace and incorporate AI into their business because it's, it's a necessity.
513
00:31:41,573.995 --> 00:31:41,933.995
Sure.
514
00:31:42,33.995 --> 00:31:45,363.997
It's no longer just like a, hey, it's kinda nice to do that and it's cool.
515
00:31:45,384.001 --> 00:31:47,23.996
It's no longer the shiny new toy.
516
00:31:47,413.999 --> 00:31:49,873.997
It's, uh, it's really become a, a productivity tool.
517
00:31:49,924.002 --> 00:31:52,563.998
And, uh, and that's exactly what it should be viewed as.
518
00:31:52,594 --> 00:31:54,394.001
View AI as a productivity tool.
519
00:31:54,643.995 --> 00:31:55,463.998
And by the way, it's...
520
00:31:55,513.998 --> 00:31:56,683.997
I, I noticed this too.
521
00:31:56,683.997 --> 00:31:59,64.002
I think we're up to version 5.5
522
00:31:59,64.002 --> 00:32:00,234.001
on, on ChatGPT.
523
00:32:00,263.998 --> 00:32:05,624
I forget what version it was when we first started using it, but, you know, this stuff is changing, like, by the day.
524
00:32:05,643.995 --> 00:32:08,104
It's getting more and more powerful, it seems like, every day.
525
00:32:08,373.998 --> 00:32:15,483.995
And the capabilities that it's, it's, uh, it's picking up, it's, uh, it's really remarkable about what it is that, uh, it's able to do, so.
526
00:32:15,853.994 --> 00:32:21,714
Technological revolutions create disruption in the short run, but often generate tremendous economic growth over time.
527
00:32:21,714 --> 00:32:27,883.995
Again, um, when I think of that, that statement, the, uh, the electronic spreadsheet, you know, scenario comes back to mind.
528
00:32:27,884.001 --> 00:32:28,283.995
It was...
529
00:32:28,293.997 --> 00:32:29,413.997
It, it really has...
530
00:32:29,643.995 --> 00:32:32,53.997
I mean, think, I mean, we use Excel every single day.
531
00:32:32,53.997 --> 00:32:32,221.997
Mm-hmm.
532
00:32:32,221.997 --> 00:32:38,814.004
I mean, we use it for so many different things and, you know, it really has been, uh, been, been life-changing in, in many respects, so.
533
00:32:39,384.001 --> 00:32:42,43.996
So how can you use AI? So here's a couple of things.
534
00:32:42,44.004 --> 00:32:45,124.004
AI is allowing entrepreneurs to automate customer service.
535
00:32:45,193.998 --> 00:32:48,43.999
Now, again, automate, I don't know if, if we wanna...
536
00:32:48,203.993 --> 00:32:49,603.994
Uh, you and I have an opinion on this.
537
00:32:49,623.991 --> 00:32:50,504.004
We don't like automating it.
538
00:32:51,44.004 --> 00:32:55,746
I wouldn't let ChatGPT answer all your customer emails without you looking at it.
539
00:32:55,886 --> 00:32:56,116
Correct.
540
00:32:56,116 --> 00:32:57,836
Would you agree? I would totally agree with that.
541
00:32:57,836 --> 00:32:58,666
Because some people do.
542
00:32:58,666 --> 00:32:59,686
I know they do that, right? Yeah.
543
00:32:59,736 --> 00:33:00,046
They just...
544
00:33:00,046 --> 00:33:00,676
Oh, just let...
545
00:33:00,986 --> 00:33:10,395.999
You know, there was one article where, uh, they were using some AI agent to basically, you know, answer emails and, and even phone calls and stuff from people.
546
00:33:10,396.001 --> 00:33:11,266.001
It's like, that's crazy.
547
00:33:11,266.001 --> 00:33:14,656
I would never do that, but, but you can if you want to, but- Yep that's up to you.
548
00:33:14,725.999 --> 00:33:19,406
Believe me, if you've got Copilot, uh, you get an email, and you can totally say, "Copilot, respond to this email please."
549
00:33:19,406 --> 00:33:20,445.999
Yes, and it'll do it.
550
00:33:20,446 --> 00:33:20,955.999
And it'll do it.
551
00:33:21,5.999 --> 00:33:21,576
Yeah, yeah.
552
00:33:21,595.999 --> 00:33:23,585.999
We have that here, so- May not like the result, but it'll do it.
553
00:33:23,585.999 --> 00:33:24,175.999
I mean, we have it.
554
00:33:24,206 --> 00:33:24,785.998
I don't use...
555
00:33:24,816.001 --> 00:33:25,475.998
I don't do that.
556
00:33:25,505.999 --> 00:33:26,345.997
Yeah, nor do I.
557
00:33:26,415.999 --> 00:33:26,625.999
Yeah.
558
00:33:26,625.999 --> 00:33:26,875.998
Nor do I.
559
00:33:26,925.997 --> 00:33:28,415.998
I don't, you know, so, uh...
560
00:33:28,415.998 --> 00:33:32,175.998
But you can use it for marketing, scheduling, bookkeeping, and data analysis.
561
00:33:32,535.998 --> 00:33:38,725.998
Uh, it helps to reduce administrative workload, improve marketing content, streamline customer service, summarize meetings.
562
00:33:38,735.999 --> 00:33:39,805.998
A lot of people use it for that.
563
00:33:40,165.999 --> 00:33:47,85.999
You know, you're on Zoom or whatever, and somebody has an AI agent who's, uh, you know, watch- you know, watching the call and creating notes and stuff like that.
564
00:33:47,95.999 --> 00:33:51,865.999
Generating proposals, analyzing financial data, and automating repetitive tasks.
565
00:33:52,235.999 --> 00:33:56,535.997
Hopefully, that gives you some ideas of, of things that you can, uh, you know, you can look at.
566
00:33:56,545.996 --> 00:33:56,996.001
That's one of the...
567
00:33:56,996.001 --> 00:34:02,726
The, the last one, the repetitive tasks, uh, Matt is our, is our AI guy, and I'll, I'll talk to Matt, see if we can get him on in August.
568
00:34:03,55.998 --> 00:34:05,135.996
Uh, but, uh, what's interesting about that is that's one of the...
569
00:34:05,145.995 --> 00:34:06,435.995
that's the first thing he looks at.
570
00:34:06,445.998 --> 00:34:09,735.999
He'll, he'll say to a client is, you know, "Show me your processes.
571
00:34:09,746.001 --> 00:34:26,905.996
Which ones are repetitive?" And, uh, and then he tries to f- help them figure out, you know, okay, what can we do to automate that process? Not completely, but, you know, introduce some automation to it so that it becomes more, you know, you're just kind of reviewing it and, and checking it as opposed to doing the same thing over and over and over again.
572
00:34:27,356.002 --> 00:34:31,165.995
You know, so that's, that's where it can really be, uh, really be helpful, so.
573
00:34:31,345.999 --> 00:34:37,966.001
The goal is to allow employees to spend more time on higher value work that requires human judgment and relationship building.
574
00:34:38,136 --> 00:34:39,685.998
I think that summarizes it really well.
575
00:34:40,730 --> 00:34:41,660
Point blank, mic drop.
576
00:34:41,670 --> 00:34:44,510
Yeah, I mean, that's, that's like, that's like a good one.
577
00:34:44,520 --> 00:34:44,540
Yeah.
578
00:34:44,730 --> 00:34:47,010
So, uh, okay, so now we have to talk about this.
579
00:34:47,070 --> 00:34:54,129.999
The rapid adoption of artificial intelligence could flood markets with low-quality information, flawed outputs, and unreliable content.
580
00:34:54,740 --> 00:35:00,549.999
So look, we, we use, you know, we, we use GPT here for, for the economic summary report that we put out.
581
00:35:00,549.999 --> 00:35:02,900
It's almost 100 pages, but that's only 'cause there's a lot of...
582
00:35:03,119.999 --> 00:35:08,19.999
There's 25 different sections, and there's a lot of stuff, but I read every word of that, every word of it before...
583
00:35:08,020 --> 00:35:09,620
I never send it out without reading it.
584
00:35:09,689.998 --> 00:35:09,989.998
Yeah.
585
00:35:10,160 --> 00:35:14,19.998
And, and I think this last time I made one small edit change to it.
586
00:35:14,19.998 --> 00:35:16,140.001
It was not material, but you know, I...
587
00:35:16,169.998 --> 00:35:17,330.001
There's eyes on it before we...
588
00:35:17,360 --> 00:35:22,459.998
It will not go out or, and, and be posted on our website or anywhere else unless we've had, we've put eyes on it.
589
00:35:22,599.998 --> 00:35:22,969.998
Yeah.
590
00:35:23,439.998 --> 00:35:23,819.999
It's funny.
591
00:35:23,820 --> 00:35:35,910
I, um, about a month ago or so, uh, about two months ago, we, we were privileged to be granted the opportunity to work with a local developer who, uh, bought a significant piece of property, and he's building commercial condominiums.
592
00:35:36,250 --> 00:35:39,899.998
And, uh, and I'm, I'm looking at Luke 'cause he, he, uh, he assisted me with this.
593
00:35:39,919.998 --> 00:35:40,939.998
But the...
594
00:35:40,949.997 --> 00:35:51,609.998
We needed to create signage so we can co-brand and market this for them, and I needed to create a m- a premium flyer that sort of pitched the idea that, you know, these condos are coming to market.
595
00:35:51,679.996 --> 00:35:56,169.998
Um, you know, please consider using the SBA 504 program 'cause it's the perfect product.
596
00:35:56,609.997 --> 00:35:57,870.001
And I asked chat to do it.
597
00:35:58,560.001 --> 00:35:59,459.999
It was awful.
598
00:35:59,880.001 --> 00:36:00,570.002
Really? Yeah.
599
00:36:00,579.998 --> 00:36:06,949.997
It was terrible, right? So I uploaded all the branding, the imaging, said, "Hey, here's the, here's the scoop on the project.
600
00:36:06,950.001 --> 00:36:08,259.997
Here are the finer details."
601
00:36:08,579.998 --> 00:36:11,79.998
It couldn't have put out a worser prod- a product.
602
00:36:11,79.998 --> 00:36:13,79.997
I mean, uh, it was terrible.
603
00:36:13,389.995 --> 00:36:27,511.999
Um, and I realized at that moment like, hey, like- You can use it for a lot of great things, but sometimes the technology isn't there just yet to really help you leverage, um, what you're trying to do at that particular moment.
604
00:36:27,512 --> 00:36:31,581.999
So I quickly sent it over to Luke, and I- I attached the example of what it created.
605
00:36:31,602 --> 00:36:31,622
Yeah.
606
00:36:32,052 --> 00:36:39,532
And I flat out said, "Hey, this is- this is terrible," right? Um, it's not the quality I expected, it's not, you know, the details I was looking for weren't there.
607
00:36:39,532 --> 00:36:40,918.666
It just was not, wasn't right.
608
00:36:40,918.666 --> 00:36:42,972
Did you re-prompt it? Did you- did you tell it that? Oh, absolutely.
609
00:36:42,972 --> 00:36:44,971.999
I must have asked 30 follow-up questions.
610
00:36:44,981.999 --> 00:36:46,472
Really, and it still- Tweak this, tweak that.
611
00:36:46,512 --> 00:36:46,812
Yeah.
612
00:36:46,821.999 --> 00:36:49,271.999
Still was not quality.
613
00:36:49,282 --> 00:36:53,641.999
I get frustrated when that happens to me, and, uh, and- and I, and I'll write back like, "This is junk.
614
00:36:53,642.001 --> 00:36:54,751.999
This is not what I asked you for."
615
00:36:54,762 --> 00:36:54,782
Yeah.
616
00:36:54,962 --> 00:36:57,951.998
And it'll reply back, "I- I'm sorry, it seems you're getting upset."
617
00:36:57,951.998 --> 00:36:58,891.999
Yeah, I'm getting upset.
618
00:36:59,102 --> 00:37:00,601.998
You know, 'cause you're giving me crap.
619
00:37:00,611.998 --> 00:37:06,932
So case in point, I sent it to the humans- Yeah who specialize and do this stuff every day, and wouldn't you know, bam, I get what I need.
620
00:37:06,932 --> 00:37:06,947
Right.
621
00:37:06,947 --> 00:37:07,462
Right? Right.
622
00:37:07,471.999 --> 00:37:08,391.998
But yeah, it w- it...
623
00:37:08,431.998 --> 00:37:12,201.998
Just in a great example of, hey, you don't always get what you want.
624
00:37:12,262 --> 00:37:12,412
Yeah.
625
00:37:12,412 --> 00:37:15,951.998
And it could be, the output could be extremely crappy depending on the prompt you write.
626
00:37:15,951.998 --> 00:37:16,1.998
It's a work in progress.
627
00:37:16,1.998 --> 00:37:16,11.998
Yeah.
628
00:37:16,11.998 --> 00:37:17,21.997
You know, it's getting better.
629
00:37:17,032 --> 00:37:17,052
Yeah.
630
00:37:17,81.999 --> 00:37:21,432.001
Like I said, they're- they're making improvements to it and whatnot, but listen, it's still not perfect.
631
00:37:21,461.997 --> 00:37:23,312
And here's an article that kinda speaks to that.
632
00:37:23,321.997 --> 00:37:27,981.997
The AI superstars who say a vibe slop crisis is coming.
633
00:37:27,991.995 --> 00:37:29,482.002
Does everybody understand what, what that...
634
00:37:29,881.995 --> 00:37:31,601.996
AI slop is like exactly what Lewis...
635
00:37:31,662.001 --> 00:37:33,582
Vibe coding is where you basically...
636
00:37:33,831.999 --> 00:37:35,551.995
Actually, it picks it up here in the description.
637
00:37:35,561.995 --> 00:37:45,281.997
The artificial intelligence, uh, supposedly capable of replacing well-paid software developers, that's what vibe coding does, is flooding the world with bad, potentially even dangerous code.
638
00:37:45,281.997 --> 00:37:57,81.998
It's a phenomenon they call vibe slop, a combination of vibe coding, creating software with AI tools by describing it in plain English, and AI slop, the endless low-value AI-generated content all over social media.
639
00:37:57,771.994 --> 00:38:00,641.996
You know, what's funny about that, I was talking to our, our legal team last week.
640
00:38:00,651.999 --> 00:38:06,961.997
We were out to dinner and, um, we were talking about how AI's either helping you or, you know, keeping you back, so to speak.
641
00:38:06,961.997 --> 00:38:17,751.998
And he mentioned, um, about the, there being a court case, uh, in the US where two attorneys, um, prepared all their remarks and their arguments- I heard about that, yeah using AI, and it was terrible.
642
00:38:17,751.998 --> 00:38:18,931.996
And it was wrong.
643
00:38:19,881.996 --> 00:38:19,961.996
It was wrong.
644
00:38:19,961.996 --> 00:38:19,981.996
Yeah.
645
00:38:19,981.996 --> 00:38:20,52.001
It was awful.
646
00:38:20,52.001 --> 00:38:22,161.995
The attorneys got disbarred- Yep and fined.
647
00:38:22,161.995 --> 00:38:23,71.995
I mean, it was incredible.
648
00:38:23,71.997 --> 00:38:30,281.991
But what a case study- Yeah on how to- Well- use AI in, in all the wrong ways.
649
00:38:30,291.991 --> 00:38:32,542.002
What's the lesson here? Trust but verify.
650
00:38:32,542.002 --> 00:38:32,941.991
Correct.
651
00:38:32,942 --> 00:38:34,61.995
You gotta look at the stuff.
652
00:38:34,61.995 --> 00:38:36,551.998
Don't ever put anything out that, that somebody else...
653
00:38:36,561.995 --> 00:38:40,331.998
Would you, would you put something out that, say, an employee of yours did? No.
654
00:38:40,331.999 --> 00:38:40,571.999
You...
655
00:38:40,891.997 --> 00:38:41,741.993
Like, all the stuff I...
656
00:38:41,751.998 --> 00:38:43,172.002
You look at everything I do.
657
00:38:43,172.002 --> 00:38:43,351.999
Absolutely.
658
00:38:43,351.999 --> 00:38:45,661.999
All the blog posts, they r- I run everything by you.
659
00:38:45,662.001 --> 00:38:47,932
You're not gonna let it go out on your platform.
660
00:38:48,221.999 --> 00:38:48,291.999
Right.
661
00:38:48,291.999 --> 00:38:49,711.996
You're responsible for it ultimately.
662
00:38:49,721.999 --> 00:38:49,741.999
Yeah.
663
00:38:49,751.998 --> 00:38:50,871.99
So you're gonna look at it.
664
00:38:51,132.002 --> 00:38:51,901.993
It's the same thing.
665
00:38:51,961.989 --> 00:38:52,331.989
Yeah.
666
00:38:52,511.989 --> 00:38:53,441.989
It's the exact same thing.
667
00:38:53,571.99 --> 00:38:54,821.993
It was fa- I couldn't believe it.
668
00:38:54,831.999 --> 00:38:54,851.999
Yeah.
669
00:38:55,41.991 --> 00:38:59,92.002
But I, I guess I could, but in, in the moment I was just like- Well, it's just lazy, right? Well, that's what it is.
670
00:38:59,102.004 --> 00:38:59,122.004
Yeah.
671
00:38:59,132.002 --> 00:39:03,311.991
They're, they're work- they're overworked, their workload is insane and, you know? Yeah.
672
00:39:03,371.993 --> 00:39:04,51.997
They trusted it.
673
00:39:04,171.996 --> 00:39:04,191.996
Yeah.
674
00:39:04,201.995 --> 00:39:04,981.996
They didn't verify.
675
00:39:05,674 --> 00:39:07,984
All right, uh, enough on AI slop and everything.
676
00:39:08,104 --> 00:39:10,724
So I got, I have two other things I want to talk about on technology.
677
00:39:10,724 --> 00:39:15,414
One, uh, so I met this, uh, interesting woman last night in my, uh, in my workshop class.
678
00:39:15,423.999 --> 00:39:20,744
She, uh, she does, um, uh, like cybersecurity for, uh, for small businesses.
679
00:39:21,104 --> 00:39:22,474
And I said to her, I said, you know, I said...
680
00:39:22,704 --> 00:39:23,663.999
Actually, no, I shouldn't say that.
681
00:39:23,673.999 --> 00:39:24,954
She does cybersecurity.
682
00:39:24,954 --> 00:39:27,804
I said, "Do you work with small business?" She goes, "Very few."
683
00:39:27,833.999 --> 00:39:30,774
She works with larger companies and, and things like that.
684
00:39:31,094 --> 00:39:35,173.999
And she says, "I don't know what it is about small businesses, but I really have not been able to make any traction there."
685
00:39:35,173.999 --> 00:39:36,193.998
I said, "Tell me about it."
686
00:39:36,514 --> 00:39:37,054
I said, "This is..."
687
00:39:37,73.999 --> 00:39:44,794
I talk to clients, and we've mentioned it on this podcast, the importance of cybersecurity, but it's one of those things that nobody takes serious until something happens.
688
00:39:45,184 --> 00:39:50,943.999
And because it's given low priority 'cause of the, uh, cost or, you know, maybe there's a learning factor there, whatever.
689
00:39:50,943.999 --> 00:40:01,323.999
But, you know, I said, I said to her, I said, "You know, there's a huge opportunity there that seems to be, uh, you know, not being, not, not being, uh, you know, uh, capitalized on," and she totally agreed.
690
00:40:01,323.999 --> 00:40:04,53.998
But, you know, this is what, this is what, uh, w- we're seeing.
691
00:40:04,53.999 --> 00:40:08,643.998
Cyber threats have become one of the most significant business risks in the modern economy.
692
00:40:09,13.998 --> 00:40:17,044
The cost of a successful cyber attack can be devastating, including financial loss, operational disruptions, legal liabilities, and reputational damage.
693
00:40:17,294 --> 00:40:22,783.998
Now, I'm not saying this to kind of, you know, uh, you know, drive fear or, or anything like that, but folks, this stuff happens.
694
00:40:22,893.999 --> 00:40:23,384
It does.
695
00:40:23,423.998 --> 00:40:28,3.999
It happens, you know, I, I won't say all the time, but it happens on a fairly regular basis.
696
00:40:28,23.996 --> 00:40:29,173.996
You are, you are a target.
697
00:40:29,503.999 --> 00:40:29,793.999
Absolutely.
698
00:40:29,794 --> 00:40:33,603.997
You know? And, uh, cyber threats are top CEO business fears.
699
00:40:33,934 --> 00:40:46,463.995
Data breaches, ransomware, and phishing attacks are top of mind among chief executives at some of the world's largest companies, surprising, surpassing worries over business risks posed by the war in the Middle East, global trade disruptions, and inflation.
700
00:40:46,474.001 --> 00:40:47,203.999
So that's kind of...
701
00:40:47,563.997 --> 00:40:49,73.995
That sort of, sort of puts it into perspective.
702
00:40:49,93.996 --> 00:40:52,164.001
Now, you might say, "Well, the bigger companies are more of a, of a target."
703
00:40:52,164.001 --> 00:40:58,903.998
They are, but, you know, I tell people, "You know, you're, you're also a ta- don't think you're not a target, you know? You c- you are a target."
704
00:40:58,943.994 --> 00:41:04,423.998
And so be, be smart about this stuff and, uh, you know, I can't, I, I can't emphasize it enough.
705
00:41:04,423.998 --> 00:41:13,833.996
Like I said, it doesn't get as n- uh, m- uh, as much attention as it should, but it's a good opportunity to remind people to, you know, keep, keep your, uh, keep your head about you with regard to that sort of stuff.
706
00:41:13,923.998 --> 00:41:14,273.998
Agreed.
707
00:41:14,890 --> 00:41:18,790
Uh, last thing is, uh, GEO, generative engine optimization.
708
00:41:19,180 --> 00:41:25,610
Uh, businesses need to understand how AI systems determine which businesses, products, or services receive recommendations.
709
00:41:25,969.999 --> 00:41:26,940
Uh, so here was an article.
710
00:41:26,960 --> 00:41:31,569.999
Connecticut businesses are trying to get recommended by AI and finding the rules are unwritten.
711
00:41:32,29.999 --> 00:41:43,719.999
Connecticut businesses are grappling with the new form of search optimization as consumers ditch Google for AI chatbots, but experts warn the old strategies don't work, and no one fully understands how AI decides what to recommend.
712
00:41:44,090 --> 00:41:46,309.999
Um, I don't know if that's completely true, Luke.
713
00:41:46,340 --> 00:41:48,190.001
I mean, it, it- Off...
714
00:41:48,199.999 --> 00:41:50,340
I, I can talk from experience on this.
715
00:41:50,799.997 --> 00:41:55,030
Get yourself a marketing firm that understands how to build the proper website.
716
00:41:55,69.998 --> 00:41:55,239.998
Yep.
717
00:41:55,900 --> 00:41:56,609.999
Dog's name.
718
00:41:56,620.001 --> 00:41:57,120
Hundred percent.
719
00:41:57,120.001 --> 00:41:57,140.001
Yeah.
720
00:41:57,140.001 --> 00:41:57,679.998
Barry Connecticut.
721
00:41:57,990 --> 00:42:03,549.998
Um, uh, you know, obviously that's a shameless plug, but I can tell you, you know, Luke Co.
722
00:42:03,940.001 --> 00:42:17,189.997
redeveloped our website to a much more modern platform, and the amount of times that we're accessed or discovered through a search on chat, uh, you know, ChatGPT or any other type of AI model is, is paramount.
723
00:42:17,199.999 --> 00:42:17,219.999
Yeah.
724
00:42:17,439.997 --> 00:42:19,199.999
And, and it's, uh, it's unprecedented.
725
00:42:19,199.999 --> 00:42:21,229.997
I've- we haven't seen this activity before.
726
00:42:21,590.002 --> 00:42:24,660.002
Um, and a lot of that is making sure you've got the right tools in place.
727
00:42:24,809.996 --> 00:42:25,189.996
Yep.
728
00:42:26,048 --> 00:42:27,628
Good, uh, good, good suggestion.
729
00:42:27,628 --> 00:42:32,598
So I'm, again, I'm not necessarily sure if it's like, you know, a black box and people don't understand.
730
00:42:32,598 --> 00:42:35,098
There, there's, there's things that you can do and, and stuff.
731
00:42:35,098 --> 00:42:38,058
So it's, you know, like, like you said, get somebody who knows what they're doing.
732
00:42:38,538 --> 00:42:40,258
Whoever wrote this article didn't know what they were doing.
733
00:42:41,908 --> 00:42:45,87.999
But, uh, no, no, I'm just kidding.
734
00:42:45,088 --> 00:42:47,457.999
But, uh, but in any event, so you get the point.
735
00:42:47,498 --> 00:42:50,177.999
Uh, last, uh, actually there's a couple last categories here.
736
00:42:50,217.999 --> 00:42:50,877.999
Resilience.
737
00:42:50,887.999 --> 00:43:00,737.999
I don't know there's much really to say on resilience other than, you know, people in, in organizations are proving remarkably adaptable, resilient in, in this, uh, in this w- in this economy right now.
738
00:43:00,768 --> 00:43:02,417.998
I would, I would say that's totally true.
739
00:43:02,417.998 --> 00:43:09,237.997
I mean, it's really surprising to me of all the disruption and stuff that we've gone through and how, you know, the wheels haven't come off the bus.
740
00:43:09,237.998 --> 00:43:14,67.999
So it's, uh, it's a testament to, to people, right? We're living in a rapidly changing environment.
741
00:43:14,487.998 --> 00:43:27,778
You know, operations are increasingly focused on flexibility and preparedness, and if yours isn't, that's a, that's a, that's a suggestion, right? Uh, businesses are now optimizing for resilience, so I think there's probably not much more to say on that point.
742
00:43:27,877.997 --> 00:43:28,237.997
Yep.
743
00:43:28,307.998 --> 00:43:31,238.001
Uh, last, uh, category here, then we're gonna get to our favorite articles.
744
00:43:31,608.001 --> 00:43:37,167.999
Uh, access to capital, our favorite category, Louis, right? Uh, borrowing costs remain historically high.
745
00:43:37,187.995 --> 00:43:40,458.002
Now they're not terrible, but they're higher than they, than they have been.
746
00:43:40,458.002 --> 00:43:49,197.997
So capital does remain available and likely will remain avail- available, but it's expensive, and it's probably gonna become more expensive, uh, and more competitive.
747
00:43:49,197.997 --> 00:43:50,998.001
So here's, here's an article that we picked up.
748
00:43:50,998.001 --> 00:43:59,67.995
Federal Reserve officials signaled that rate hikes remain a possibility as persistent inflation and rising energy prices complicate the path toward lower interest rates.
749
00:43:59,77.994 --> 00:44:03,227.996
So I don't know if it's gonna be three upticks by the end of the year.
750
00:44:03,237.998 --> 00:44:05,347.998
It'll probably be at least one or two, I'm guessing.
751
00:44:05,818 --> 00:44:09,77.995
Uh, so, you know, just something to, uh, to be, to be mindful of.
752
00:44:09,77.995 --> 00:44:12,218.001
So, um, not that you should rush out and borrow a ton of money.
753
00:44:12,218.001 --> 00:44:16,27.999
We're only talking probably a quarter point adjustment, but it's not gonna break the bank.
754
00:44:16,57.998 --> 00:44:20,737.994
But, uh, one other article that was interesting, crowdfunding is helping entrepreneurs rai- raise capital.
755
00:44:20,748 --> 00:44:24,177.996
Some Connecticut businesses are turning to crowdfunding for growth.
756
00:44:24,687.995 --> 00:44:28,967.995
Um, you know, um, I, I just tell people, I talked about this in my, my workshop last night.
757
00:44:28,987.998 --> 00:44:33,737.996
Crowdfunding is great, but it's kinda like, uh, I kinda put it on the same level as a grant.
758
00:44:33,757.995 --> 00:44:34,317.99
Grant look...
759
00:44:34,408.004 --> 00:44:36,157.998
The, the idea of a grant seems great.
760
00:44:36,158.004 --> 00:44:42,518.001
It's like, ooh, free money, and I'm like, "Folks, there's no such thing as free money," 'cause it's gonna take you time to, to, you know...
761
00:44:42,557.998 --> 00:44:46,828.002
And, and oftentimes the amount of money you're gonna be able to raise is small and insignificant.
762
00:44:46,828.002 --> 00:44:48,427.998
It's kind of the same thing with crowdfunding.
763
00:44:48,468.001 --> 00:44:52,247.991
Unless you have a really good campaign, it's, uh, it's a tough way to raise money.
764
00:44:52,248 --> 00:44:55,887.998
So I just throw that out there, just a, a cautionary note on that.
765
00:44:56,498 --> 00:45:05,737.997
Any things to add on access to capital, Louis? Um, the grant topic is an interesting one, right? To your point, there, there, there is no such thing as free money.
766
00:45:05,847.991 --> 00:45:15,118
All the grants I'm seeing as of late have strings attached, meaning if you don't Produce X, Y, or Z, the grant is callable, meaning you've gotta give the money back.
767
00:45:15,128 --> 00:45:15,358
Yeah.
768
00:45:15,608 --> 00:45:43,337.998
Uh, and we're seeing that more and more these days because the, the, the donor, if you will, the, the, the institution giving the money out needs to receive some, some, um, some results in return, right? Um, and unfortunately, I have seen instances where, you know, a company will receive a $25,000 grant, a $50,000 grant for a s- very specific purpose within their business, and they go and use it elsewhere, and all of a sudden now you've gotta repay that money back.
769
00:45:43,698.001 --> 00:45:44,647.999
Um, it, it, it...
770
00:45:45,298 --> 00:45:47,298
I, I'm not surprised to see that.
771
00:45:47,507.999 --> 00:46:01,668
I mean, we, we, at CIC, um, we offer a revolving loan, uh, product, uh, that we administer on behalf of the City of Bristol here in Connecticut, and part of the, part of the key, uh, s- uh, stipulations is, "Hey, this is a loan.
772
00:46:01,707.999 --> 00:46:08,757.997
You've gotta commit to being in the city for 10 years, but if you move out within those 10 years after getting the loan- You owe the money you owe the money."
773
00:46:08,767.997 --> 00:46:09,87.997
Yeah.
774
00:46:09,138 --> 00:46:14,737.999
But if you commit and stay- Mm then once you've paid up to 50% of that principal balance, the balance is forgiven.
775
00:46:14,898.002 --> 00:46:15,078
Mm-hmm.
776
00:46:15,87.997 --> 00:46:16,937.995
But the commitment is 10 years to the city.
777
00:46:16,968.002 --> 00:46:17,228.002
Yeah.
778
00:46:17,228.002 --> 00:46:17,317.99975
You still owe...
779
00:46:17,317.99975 --> 00:46:17,347.999
Yeah.
780
00:46:17,347.999 --> 00:46:19,068
Otherwise, you're on the hook, right? Yeah.
781
00:46:19,068 --> 00:46:22,537.997
Um, so, you know, there's, the, there is no such thing as free money.
782
00:46:22,538.001 --> 00:46:24,367.995
The, everything comes with a commitment.
783
00:46:24,617.995 --> 00:46:27,797.998
Yeah, and, and so these contingencies, this was, uh, this was years ago.
784
00:46:27,797.998 --> 00:46:38,797.995
Connecticut was, uh, you know, was criticized for, um, you know, giving all kinds of grants and, and economic incentives for companies to, to come to the state, and I forget who- which administration it was.
785
00:46:38,807.998 --> 00:46:40,278.001
It may have been the Lamont administration.
786
00:46:40,278.001 --> 00:46:43,748.001
They said, "You know, we're not gonna do that anymore," because they got stung on too many of those deals.
787
00:46:43,748.001 --> 00:46:50,257.997
The commitments weren't, weren't, uh, you know, ad- uh, uh, adhered to, and I g- I don't know if the companies paid the money back or not.
788
00:46:50,257.997 --> 00:46:53,707.996
I mean, I, I imagine they did, but, but that's not what it was all about.
789
00:46:53,707.999 --> 00:46:55,327.997
It was really about the economic development.
790
00:46:55,327.997 --> 00:46:56,517.994
And, and the same thing with the grants.
791
00:46:56,517.997 --> 00:46:58,17.995
They're giving you a grant for a reason.
792
00:46:58,17.997 --> 00:47:08,97.998
They wanna see you put that money to good use, and if you don't, yeah, they're gonna ask you for the money back, but they're more disappointed in the fact that you didn't, it, you know, live up to the commitments that you made to promote economic development.
793
00:47:08,167.998 --> 00:47:08,377.998
Right.
794
00:47:08,397.994 --> 00:47:09,937.999
It defeats the purpose of the grant program.
795
00:47:09,937.999 --> 00:47:11,27.995
It totally defeats the purpose.
796
00:47:11,37.994 --> 00:47:11,67.994
Right.
797
00:47:11,068 --> 00:47:13,217.998
So, you know, it's a, it's a good reminder.
798
00:47:13,217.998 --> 00:47:18,187.995
So there is, again, there's no such thing as free money, you know, no such thing as a free lunch, right? Right.
799
00:47:18,187.995 --> 00:47:20,188
Somebody asks you to go to lunch, they want something from you.
800
00:47:21,57.99 --> 00:47:22,307.99
You know, that's just how it is.
801
00:47:22,307.99 --> 00:47:22,387.99
Yeah.
802
00:47:22,537.99 --> 00:47:28,468.004
So, uh, okay, uh, that wraps up, uh, access to capital, and, uh, all right, let's move on to our favorite section.
803
00:47:28,468.004 --> 00:47:29,588
This is my favorite always.
804
00:47:29,887.992 --> 00:47:31,457.995
Our favorite and least favorite articles.
805
00:47:31,478.004 --> 00:47:33,157.992
I'm gonna let you go first as I usually do.
806
00:47:33,228.004 --> 00:47:34,817.993
I've got one favorite and one least favorite.
807
00:47:34,857.993 --> 00:47:34,947.993
Okay.
808
00:47:34,957.999 --> 00:47:38,548.004
The one favorite was the SBA decoupling, right? Yeah.
809
00:47:39,382 --> 00:47:47,832
As of July 4th, uh, small business owners can now leverage both the 7product and the SBA fi- 504 product up to $10 million.
810
00:47:47,832 --> 00:47:48,191.999
That's huge.
811
00:47:48,212 --> 00:47:50,722
That's a huge moment- Yeah in the SBA product history.
812
00:47:50,722 --> 00:48:04,112
And why that is, um, it, it's because that for forever, um, both of those programs were coupled together, meaning if you had a $5 million 504 loan, you couldn't get any other SBA government guaranteed debt.
813
00:48:04,151.999 --> 00:48:07,611.999
You hit the cap on guara- government guaranteed dollars available to you.
814
00:48:07,941.998 --> 00:48:10,232
Now, the programs have been decoupled.
815
00:48:10,611.999 --> 00:48:13,871.997
Now you can get $5 million in 504, $5 million in 7.
816
00:48:14,211.999 --> 00:48:15,872
That's a huge win for small businesses.
817
00:48:16,401.998 --> 00:48:26,191.998
It's a lot of money, right? Um, what this allows us to do is to go up market and support larger organizations who need access to capital at a much larger scale.
818
00:48:26,621.999 --> 00:48:33,101.997
Um, but this is a great opportunity for those in that space who need to leverage government dollars to do so.
819
00:48:33,112 --> 00:48:33,142
Right.
820
00:48:35,470 --> 00:48:49,460
I, I was, I was at a panel presentation about a month ago, um, actually not even a month ago, but a few weeks ago in the city of Meriden, and, um, the, the one thing I, I mentioned was that there is no better time to leverage an SBA product than today.
821
00:48:49,859.999 --> 00:48:59,090
Why that is, number one, you know, I think the, the agency is doing everything they possibly can to remove red tape to clear the pathway to capital, which is monumental.
822
00:48:59,210 --> 00:48:59,450
Yep.
823
00:48:59,790 --> 00:49:00,410
That's number one.
824
00:49:00,410 --> 00:49:22,119.997
Number two, there is a very significant American First agenda, right? So if you're a small business in the, the country that's domestically based, that's 100% owned by a US citizen, um, you have access to capital that you didn't have before, or at least capital that's much more readily available than it was before, and we're seeing that firsthand.
825
00:49:22,159.999 --> 00:49:25,39.999
We're seeing a significant rise in demand for our loan products.
826
00:49:25,89.999 --> 00:49:29,29.998
Every single day of people come to us in droves looking for financing.
827
00:49:29,80.001 --> 00:49:30,990
Obviously, we can't do it all, but it...
828
00:49:30,999.999 --> 00:49:32,489.999
that is a very promising signal.
829
00:49:32,490 --> 00:49:43,720
People are waking up and saying, "Hey, either I've got an idea and I can execute," or they're now seeing the ability to execute because they have the support there from the SBA, um, point of view.
830
00:49:43,900 --> 00:49:53,949.997
So from my perspective, that, that article, that news is, is huge because it is a telling sign on what's happening in the marketplace and what the, the government itself is doing to support small businesses.
831
00:49:54,29.998 --> 00:49:59,369.998
I won't get into the other agendas like, you know, um, you know, the onshoring of domestic manufacturing.
832
00:49:59,370.002 --> 00:50:02,359.997
There's a whole other slew of initiatives going on, and we could talk...
833
00:50:02,379.996 --> 00:50:03,479.999
I could talk for an hour on that.
834
00:50:03,879.996 --> 00:50:13,419.997
Um, but the reality is, is as an organization who is the face of the SBA here in, in the state, it is a very exciting time for us, and we're executing on all levels.
835
00:50:14,10.001 --> 00:50:14,250.001
Yeah.
836
00:50:14,250.001 --> 00:50:20,599.998
I had, um, I had an interesting conversation yesterday with one of our, one of our new clients up in, um, in, in Rhode Island.
837
00:50:20,599.998 --> 00:50:22,569.997
You maybe m- maybe know who I'm talking about.
838
00:50:22,760.001 --> 00:50:26,630
They're a manufacturing company, and I said to this, to this gentleman, I said, "This is your time.
839
00:50:26,709.998 --> 00:50:27,749.998
This is your time to shine."
840
00:50:28,129.996 --> 00:50:37,359.995
You know, the, the, the rules and, and, and all the policies and, and system, everything is really geared toward helping you, helping your business grow and expand and stuff.
841
00:50:37,369.994 --> 00:50:41,440
And so that's what I'll be working on helping him with is, uh, is exactly that.
842
00:50:41,470 --> 00:50:43,060
And, uh, really, it's a great time.
843
00:50:43,060 --> 00:50:50,684
I mean, the, the The, uh, the policies and everything that are being changed to make it more favorable for these businesses to thrive, it's, um, it's...
844
00:50:50,714 --> 00:50:54,094
We've, you know, never seen anything like that before, so it's really a good time.
845
00:50:54,404 --> 00:50:54,924
And you know, these are...
846
00:50:55,034 --> 00:50:57,874
We had Catherine Marks on a few, um, it was a couple months ago, I guess.
847
00:50:57,894 --> 00:50:57,924
Yeah.
848
00:50:57,924 --> 00:50:59,744
And we're gonna hopefully have her on before the end of the year.
849
00:51:00,064 --> 00:51:02,113.999
You know, these are great things to talk about with Catherine.
850
00:51:02,113.999 --> 00:51:11,114
I mean, the, the, you know, people don't realize, I think, the great things that the SBA is doing and, and it's really important that we get the word out about those, 'cause not enough people know about it.
851
00:51:11,254 --> 00:51:11,633.999
I know.
852
00:51:11,754 --> 00:51:14,863.999
I keep saying we're, we're the best hidden secret.
853
00:51:14,923.998 --> 00:51:15,593.998
It really is.
854
00:51:15,613.999 --> 00:51:19,723.998
I mean, even like, you know, the, the workshop I did last night, you know, I was the, I was doing it on behalf of SCORE.
855
00:51:19,724 --> 00:51:20,624
I'm a SCORE mentor.
856
00:51:21,064 --> 00:51:22,583.999
And, um, you know, I...
857
00:51:22,584 --> 00:51:26,184.001
It- it's just amazing how few people even know about SCORE- Right which is part of the SBA.
858
00:51:26,494 --> 00:51:33,104
And it's like, it's just, it's just remarkable to me, and you could scream it from the mountaintops, but people still, for whatever reason, they d- they don't hear it.
859
00:51:33,343.998 --> 00:51:37,583.998
As far as the, uh, the 7A and, and, and 504 thing, you know, it's...
860
00:51:37,604.001 --> 00:51:40,874
We're not going to do $5 million, uh, 7A loans here.
861
00:51:40,874 --> 00:51:42,73.999
We're, we're not able to do that.
862
00:51:42,084 --> 00:51:42,114
Okay.
863
00:51:42,114 --> 00:51:43,244
But, but we already...
864
00:51:43,244 --> 00:51:44,913.998
When we do 504s, you could combine...
865
00:51:44,943.997 --> 00:51:45,713.999
Could you? I guess you could.
866
00:51:45,713.999 --> 00:51:47,174
You could combine a 504 and a 7A.
867
00:51:47,183.999 --> 00:51:50,374.002
We're already working with a, with a, uh, with a partner bank on those deals.
868
00:51:50,394.002 --> 00:51:50,604.002
Yep.
869
00:51:50,913.998 --> 00:51:55,113.999
So it just enables us to, to go to a much higher level than, uh, than we otherwise would.
870
00:51:55,303.998 --> 00:51:55,573.998
Yeah.
871
00:51:55,574.002 --> 00:52:00,284.002
So, you know, the, the, the common example that I use, and we s- we see this example happen all the time.
872
00:52:00,284.002 --> 00:52:02,024
Let's say you're a manufacturer, and I keep...
873
00:52:02,424 --> 00:52:04,223.995
Manufacturing is soup du jour these days.
874
00:52:04,574.002 --> 00:52:06,153.995
But let's say you're a manufacturer.
875
00:52:06,153.996 --> 00:52:17,44.001
You have an opportunity to buy an ancillary, um, business to support certain processes in your company, and you need a piece of real estate to then house that m- business that you're about to acquire.
876
00:52:17,733.998 --> 00:52:24,53.996
And let's say the example is it's $7 million, right? $2 million for the business acquisition, $5 million for the real estate.
877
00:52:24,284.001 --> 00:52:27,686
Before this rule change All I could give you was 5 million bucks.
878
00:52:27,716 --> 00:52:27,946
Right.
879
00:52:27,976 --> 00:52:30,646
And that's if you didn't have any other SBA debt already in place.
880
00:52:30,676 --> 00:52:30,916
Right.
881
00:52:30,986 --> 00:52:42,506
Now, that real estate company can now go in, leverage the, the 504 program up to $5 million to buy the real estate, and at the same time, leverage the SBA 7a program to purchase the business and use up to $2 million- Yeah to do that.
882
00:52:42,655.999 --> 00:52:43,285.999
That's huge.
883
00:52:43,286 --> 00:52:44,006
That's monumental.
884
00:52:44,036 --> 00:52:44,226
Yeah.
885
00:52:44,276 --> 00:52:45,796
And I guess the same exists for banks.
886
00:52:45,806 --> 00:52:48,335.999
I mean, the banks had the same $5 million limit on the 7a.
887
00:52:48,376 --> 00:52:48,596
Right.
888
00:52:48,886 --> 00:52:54,476
You know, so now they can do the same thing, combine it with a 504, and it can really take you a lot farther than you could before.
889
00:52:54,515.999 --> 00:52:54,735.999
Yep.
890
00:52:55,126 --> 00:52:56,215.999
You know, so really that's a, that's a huge...
891
00:52:56,215.999 --> 00:53:00,126
And you said that's July 4th, that's, uh- July 4th that becomes effec- Yeah effective.
892
00:53:00,166.001 --> 00:53:01,536.001
That's, uh, that's gonna be huge.
893
00:53:01,565.999 --> 00:53:01,695.999
Yep.
894
00:53:01,696 --> 00:53:01,996
Okay.
895
00:53:02,126 --> 00:53:03,585.998
Are you ready for my favorite article? Sure.
896
00:53:03,755.997 --> 00:53:08,175.998
All right, so one of the things Lewis and I do is before we go on the air, we try to guess each other's- favorite articles.
897
00:53:08,185.998 --> 00:53:09,615.998
I didn't guess those, but go ahead.
898
00:53:09,615.998 --> 00:53:11,855.998
I, and d- spoil my, uh, my guess.
899
00:53:11,855.998 --> 00:53:12,895.999
All right, so mine was...
900
00:53:12,925.999 --> 00:53:14,175.998
Okay, I'll read the article to you.
901
00:53:14,365.998 --> 00:53:18,75.997
"Man is attacked by alligator after fleeing Louisiana police."
902
00:53:18,75.997 --> 00:53:20,605.999
Now, c- tell me if I'm- You carve them, man.
903
00:53:22,696 --> 00:53:28,396
So the driver, who was charged with driving while impaired, suffered non-life-threatening injuries, authority said.
904
00:53:28,765.999 --> 00:53:32,385.995
So I guess the story here, I read the whole story, so this guy was running from the police.
905
00:53:32,706.002 --> 00:53:37,525.999
He jumped in a swamp that was filled with alligators, and the alligators...
906
00:53:38,15.999 --> 00:53:40,965.995
So you know, I just, I just have to laugh when I read stuff like this.
907
00:53:40,965.996 --> 00:53:42,195.996
So this actually prompted me.
908
00:53:42,196 --> 00:53:50,185.998
I went on, I went on YouTube, and I did a search for police dog takedowns, and I spent, like, an hour just, like, laughing my ass off just watching.
909
00:53:50,185.998 --> 00:53:51,775.998
They don't use canines in Louisiana.
910
00:53:51,776.002 --> 00:53:52,450.9975
They use alligators to pound.
911
00:53:52,450.9975 --> 00:53:52,845.998
They use alligators.
912
00:53:55,96.001 --> 00:53:58,156
So that was my, that was my fa- my favorite ar- article.
913
00:53:59,006 --> 00:53:59,146
That's great.
914
00:53:59,146 --> 00:54:01,855.997
Oh, when I saw that, I'm like, "That one, I gotta put that one in there."
915
00:54:02,325.997 --> 00:54:04,586
Now, what does this have to do with small businesses? Nothing.
916
00:54:04,596.001 --> 00:54:05,286.001
But it's funny.
917
00:54:05,955.994 --> 00:54:07,225.996
I would've never guessed that.
918
00:54:09,155.999 --> 00:54:12,758.49925
Here I, here I thought, 'cause I, I know you like eggs, and here I thought you were gonna choose that article.
919
00:54:12,758.49925 --> 00:54:13,925.997
You thought I was gonna do something serious.
920
00:54:13,925.997 --> 00:54:14,756.001
No, no, no.
921
00:54:14,785.996 --> 00:54:18,536
Yeah, now I feel like a total buffoon for not choosing something more comical here.
922
00:54:19,715.996 --> 00:54:23,096
All right, my ne- uh, my least favorite, what's your least favorite? Do you have a least favorite? Yeah.
923
00:54:23,196 --> 00:54:28,256.001
Uh, I, I hated the article about government debt, um, ripple- rippling worldwide.
924
00:54:28,265.999 --> 00:54:31,615.997
That's been such a big- Yeah, that was interesting, yeah topic of discussion as of late.
925
00:54:32,25.994 --> 00:54:36,788
Um, it- And it continues to be a topic, and it'll continue to be a topic for a very, very long time.
926
00:54:36,788 --> 00:54:40,888
But, but I th- I took three key points away from that, that article.
927
00:54:40,888 --> 00:54:51,697.999
One was the debt surge, right? So governments significantly expanded the level of debt during the pandemic, and given the geopolitical things that are happening, it's even, you know, skyrocketed even further.
928
00:54:51,708.001 --> 00:54:55,318
So, um, the debt levels are at historic highs.
929
00:54:55,768 --> 00:54:59,217.999
We've got rising yields, right? So we have bond prices that are falling.
930
00:54:59,567.999 --> 00:55:02,928
We've got governments that are, uh, being forced to issue new debt.
931
00:55:03,317.999 --> 00:55:06,817.999
Um, that creates a significant problem that- there in and of itself.
932
00:55:07,47.999 --> 00:55:13,757.999
And then you've got inflation and policy shifts, right? So the government is expecting higher and t- and, uh, tighter costs.
933
00:55:13,968.001 --> 00:55:27,437.999
They're expecting significant increase, um, i- in certain aspects as it relates to operating a small business, but more importantly, it's keeping interest rates at a relatively high level, meaning, you know, your borrowing costs are still gonna be pretty high.
934
00:55:27,937.998 --> 00:55:41,470
And why that matters, I think, is one- Higher operating costs means, you know, businesses are gonna operate on relatively smaller margins today, so the level of income gets significantly reduced.
935
00:55:41,790 --> 00:55:59,749.999
Or if there's an opportunity to increase your margin, you know, obviously I think small businesses are doing that to a certain degree, right? We talked about there being a line, and somewhat you can't cross it, right? Um, given, given the high operating costs, and we talked about this on the consumer side, you know, it's forcing small businesses to borrow more money.
936
00:55:59,800 --> 00:56:02,599.999
More- they're borrowing more money today than they have ever.
937
00:56:02,909.999 --> 00:56:03,29.999
Yep.
938
00:56:03,050 --> 00:56:08,710
And it kind of, it's, it, it's counterintuitive because we always say the proper time to borrow money is when you don't really need it.
939
00:56:08,720 --> 00:56:08,910
Yep.
940
00:56:08,959.998 --> 00:56:13,589.998
People are getting and accessing capital now because they, there's a critical need for it.
941
00:56:13,659.999 --> 00:56:13,899.999
Yeah.
942
00:56:13,929.999 --> 00:56:20,369.999
Right? So it's, it, it kind of puts small businesses behind the eight ball, if you will, from, from leveraging the capital point of view.
943
00:56:20,999.999 --> 00:56:36,480
Um, and, and I just think that the, people are becoming timid, or small businesses are becoming timid in terms of doing business internationally because, yes, we have a debt problem here in the US, but when you look at other global powerhouses, they too are faced with very similar issues.
944
00:56:36,480.002 --> 00:56:44,420.002
UK, Japan, uh, you know, th- those are just two examples of many that, you know, if you do business with them, they're facing the same issues.
945
00:56:44,420.002 --> 00:56:44,799.998
Mm-hmm.
946
00:56:44,809.996 --> 00:56:50,180.002
So it's, it's, uh, it's pro- it's problematic, and I don't think the issue's going to be resolved, at least not in the US anytime soon.
947
00:56:50,540 --> 00:56:55,739.997
And I think internationally it's gonna be a, a, an issue that continues to sustain for a while.
948
00:56:55,819.998 --> 00:56:56,119.998
Yep.
949
00:56:56,540 --> 00:56:57,419.999
No doubt, so.
950
00:56:58,159.995 --> 00:56:58,629.998
Very good.
951
00:56:58,650 --> 00:57:02,589.996
Um, I'll, I'll read you, um, my least favorite ar- uh, article.
952
00:57:02,589.996 --> 00:57:04,639.998
So it's, it's a little long, but just bear with me.
953
00:57:04,650 --> 00:57:08,719.996
"Hundreds of billions in loans fall- fail to dent global poverty.
954
00:57:09,190.001 --> 00:57:13,280.001
Microfinance aimed to foster prosperity but stoked hardships.
955
00:57:13,349.997 --> 00:57:18,9.998
Loans to shoestring entrepreneurs were meant to c- cure, be a cure for global poverty.
956
00:57:18,440.001 --> 00:57:28,389.999
Led by the a- adage of doing good while doing well, microfinance lenders have advanced hundreds of billions of dollars to poor people, yet two decades later, few of those aspirations have come to pass.
957
00:57:28,400 --> 00:57:33,530
Excessive microfinance lending has set off repayment crises for borrowers.
958
00:57:33,549.994 --> 00:57:38,979.998
Rather than using loans to invest in small businesses, many borrowers spent the money on medical expenses and necessities."
959
00:57:39,379.996 --> 00:57:40,289.995
That's kind of scary.
960
00:57:40,319.991 --> 00:57:44,29.997
"Lenders have little regard for impoverished borrowers' ability to repay.
961
00:57:44,389.998 --> 00:57:55,279.998
Some lenders are giving borrowers more time to make their first payment or providing courses in financial literacy, but at the other hand, some microfi- finance blenders have come under fire for charging interest rates above $400,000."
962
00:57:55,279.998 --> 00:58:09,449.998
Now, this is mostly in, we're talking third world countries and stuff like that, but the topic of microfinance is interesting because we are s- and we're a microlender ourselves here in the United States, in Connecticut and, and in Rhode Island, and, and, you know, we try to help businesses and stuff like that.
963
00:58:09,449.998 --> 00:58:11,549.991
We don't charge 400% interest, nowhere near that.
964
00:58:12,20.003 --> 00:58:14,549.994
Uh, but, uh, but you know, we do provide education.
965
00:58:14,550.002 --> 00:58:21,469.992
We do, you know, we recognize that you just can't give loan, you know, money to people and expect that they're gonna know what to do with it and do well, you know, good things with it.
966
00:58:21,709.99 --> 00:58:23,279.995
I think that was kind of a lesson learned here.
967
00:58:23,279.998 --> 00:58:28,10.001
So, you know, hopefully it's a program that they can fix and not, you know, throw out entirely.
968
00:58:28,354 --> 00:58:32,484
I still believe in the microfinance program, you know, on, on a global scale.
969
00:58:32,524 --> 00:58:44,453.999
And, uh, so hopefully, like I said, it's been a learning, a learning opportunity for, uh, for those in the microfinance business, and they can, uh, they can turn this thing around and, you know, use some of the best practices that, that, that we use here.
970
00:58:44,494 --> 00:58:45,833.999
You know? I think we have a good model.
971
00:58:45,893.999 --> 00:58:46,283.999
Yeah.
972
00:58:46,373.999 --> 00:58:58,284
Uh, I think in the long run, when you look back and you look at the historic charge-off rate, uh, in general, as it re- I- I'll speak from a specific SBA microloan perspective, it's, like, super, super low.
973
00:58:58,324 --> 00:58:58,534
Yeah.
974
00:58:58,534 --> 00:59:05,114.001
Significant component of that or significant, um, reason why that is, is because of the technical assistance- Yep a- aspect of it.
975
00:59:05,114.001 --> 00:59:08,913.999
So I think in the long run, I think we'll be safe, but it's kind of a tumultuous time.
976
00:59:09,104 --> 00:59:09,404
Yeah.
977
00:59:09,593.998 --> 00:59:16,613.998
So anyway, uh, okay, I'm looking at the clock, and, you know, we, we're not g- our teachable, our, our strategic intelligence takeaway...
978
00:59:16,613.999 --> 00:59:17,594.001
I had a whole bunch of stuff here.
979
00:59:17,594.001 --> 00:59:23,464
Maybe I'll do this as a blog post or something so, uh, we can, we can put that out because we're, uh, we're just about out of time here.
980
00:59:23,464 --> 00:59:37,364.001
So do you have any final thoughts, Lewis? No, I think when I looked at sort of the summary we, we, we came up with, uh, when we fed, uh, the model with all the, the articles, to me it was, it was the connection tech- and the technology piece, right? Yeah.
981
00:59:37,423.996 --> 00:59:46,624
If, uh, if you are in the service business, if you are in the production business, whatever the case is, the human element is so consistent throughout.
982
00:59:46,813.996 --> 00:59:47,953.998
Doesn't matter the industry.
983
00:59:48,433.998 --> 00:59:50,23.999
Humans are at the very core of it all.
984
00:59:50,393.998 --> 00:59:50,423.998
Yep.
985
00:59:50,453.995 --> 01:00:00,744
Um, and while, like I said before, um, as we continue to progress in this digital world, leveraging the human m- um, component and the human element, um, is paramount.
986
01:00:00,813.996 --> 01:00:08,213.999
And I, I can't, I can't say it enough, but, you know, us as a, as, as a lending institution, um, you know, that's, that's our difference maker.
987
01:00:08,213.999 --> 01:00:11,858.9985
Our people is what, what makes CIC a great place, right? Absolutely.
988
01:00:11,858.9985 --> 01:00:24,903.998
It's our special sauce, and yes, we leverage technology and we do all the things, but at the end of the day, if we don't have the right people in the right positions, uh, representing, you know, the way, the way we do, you know, it becomes a tough proposition to offer up.
989
01:00:24,933.998 --> 01:00:33,713.997
So I think, I think no matter what, I don't care how AI becomes, um, uh, so powerful, it doesn't eliminate at least people in our world.
990
01:00:33,733.994 --> 01:00:43,852
Um- Yeah and I, and we talk about the fear factor all the time, and I think You know, if you're in a position where you wanna leverage this technology, you have to get over that fear of using the tech.
991
01:00:44,142 --> 01:00:44,312
Yep.
992
01:00:44,332 --> 01:00:48,912
Um, and I know this episode quickly became an AI-based episode and, and it's rightfully so.
993
01:00:48,912 --> 01:00:49,132
There...
994
01:00:49,651.999 --> 01:00:51,552
This stuff is talked about every single day.
995
01:00:51,552 --> 01:00:58,182
There isn't a piece of news that I come across poli- at least not politically, that doesn't have some sort of AI element.
996
01:00:58,191.999 --> 01:01:01,131.999
So- Yeah it, it would be foolish for us not to talk about it.
997
01:01:01,281.999 --> 01:01:01,501.999
Yeah.
998
01:01:01,501.999 --> 01:01:02,1.999
Yeah.
999
01:01:02,1.999 --> 01:01:02,532
No, I agree.
1000
01:01:02,532 --> 01:01:04,832
So, uh, I think this was another good session.
1001
01:01:04,832 --> 01:01:08,631.999
So, uh, oftentimes conversation doesn't end when our podcast episode is done.
1002
01:01:08,632 --> 01:01:12,482
There's still more to say about the things we discussed and the things we weren't able to get to.
1003
01:01:12,482 --> 01:01:24,401.998
This is why in addition to the podcast, we create additional information resources for our small business listeners, including our small business economic analysis by ChatGPT that provides a comprehensive review of every article we collected for the past month.
1004
01:01:24,681.999 --> 01:01:27,712
And then of course, uh, we have our blog post that, uh, that we've been posting.
1005
01:01:27,712 --> 01:01:32,421.999
So you can find all these and other resources on our website at ciclending.com.
1006
01:01:32,861.999 --> 01:01:40,61.998
Be sure to join us next time as we once again examine the current events to extract strategic intelligence that will enhance the value of your small business.
1007
01:01:40,91.999 --> 01:01:40,971.997
I'm Joe McCaffrey.
1008
01:01:41,1.999 --> 01:01:41,721.998
I'm Louis Silva.
1009
01:01:41,941.997 --> 01:01:42,682
Thanks for tuning in
