Mortgage rates rise, hot jobs data, retirement savings: Wealth!

Today on Wealth!, host Brad Smith tackles the top trends in the housing market, job market, and retirement saving strategies.

The show kicks off with a recap of the June jobs report, which revealed an addition of 206,000 nonfarm payroll jobs to the US economy. Yahoo Finance reporter Ines Ferré joins to dissect wage growth data and its implications for ongoing inflation trends. Following this, ZipRecruiter’s chief economist Julia Pollak offers insights into the sectors currently attracting the most job interest.

Shifting gears, the program addresses the recent uptick in mortgage rates, marking the first increase since the week of May 30. National Association of Realtors (NAR) deputy chief economist and vice president of research Jessica Lautz weighs in on the potential ramifications for the housing market’s future.

The show concludes with an encouraging note on retirement savings. A new Vanguard report indicates a healthier outlook for Americans, with average balances in retirement accounts surging by 19% compared to 2022 activity. Yahoo Finance contributor Kerry Hannon unpacks the report’s findings.

This post was written by Angel Smith

Video Transcript

Welcome to wealth everyone.

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

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

Hey, on today’s show, we’re taking a look at the labor market with the latest jobs report.

We’ll bring you expert advice for your job hunt and the best way to find an auto loan.

Yahoo finance contributor, Ross Mac will give you the tips that you need to find the best deal in a car loan.

Are you saving as much as you could be?

We’ll break down how Americans are saving so far in 2024 and what it could mean for your retirement plans, all that much more throughout today’s show.

But let’s get back to that.

Jobs reports, 206,000 jobs were added to the US economy in June.

According to this morning’s report, unemployment inched above 4% for the first time in over two years.

4.1% to be exact.

But what did we learn about how much money people in the labor force are earning with more?

I’m joined now by Innes for, hey, hey, Brad.

Yeah.

And wage growth is an important factor to look at because it’s basically looking at how much salaries are rising.

And if that rise means that people have more disposable income to spend, also companies have to charge more for their services and goods to maintain that same level of profitability to make up for the increase in cost of their labor.

Story continues

And that tends to fuel inflation average hourly earnings on a year over year basis increased by 3.9% in June.

That’s better than the prior month reading when the annualized reading came in at 4.1%.

So it shows wage growth is cooling.

In June.

Average hourly earnings for all employees increased by 10 cents or 0.3% to $35 compare that to May when average hourly wages climbed by 14 cents or 0.4% to $34.90 one cent.

So again, decelerating growth in average hourly wages and I’ll tell you which sectors saw the most wage growth month over month, mining and lodging, manufacturing, construction, financial activities.

The sectors where you saw wages actually decline include information that includes publishing, broadcasting, and telecom and also private education and health services and leisure and hospitality actually saw a month over a month decline in wage growth, excellent breakdown there.

And as of some of the jobs data that’s come out this morning.

Appreciate it.

Thank you in the June Jobs Report, we saw gains in government health care, social assistance and construction.

Julia Pollo, who is the Zip Recruiter.

Chief economist is here to discuss the industries that are hiring right now.

Great to see you Julia and thanks so much for joining us here on the show today.

So where are we seeing some moderation and then where are there jobs to be found?

So we’re seeing some moderation on the services side of the economy, the private sector is seeing fewer jobs being added.

Uh And the bulk of hiring now is is taking place in governments and health care.

Uh You know, government hiring is pretty interesting.

Those payrolls have have risen by about 600,000 of the past year.

That’s an extraordinary number uh mostly on the local government side.

Uh Part of this is to do with the fact that it’s an election year.

And so all eyes are on the performance of our local public schools and our police departments.

And there’s tremendous demand on Zip recruiter right now for law enforcement skills.

Interesting.

OK. And so of the demand that you are seeing on Zip recruiter, what are some of the top searches that are being initiated from those that are looking for jobs too?

So the top search right now is actually a blank search.

People don’t know what they’re looking for, they don’t know what’s out there.

Uh We have a lot of new grads hitting the market who uh have, you know, just finished their training programs in the last couple of weeks and uh don’t really know what’s out there.

Uh They need help and guidance and that is why A I is increasingly being used uh in, in jobs search to help people discover jobs and to connect them with opportunities that are a good match for their skills and interests.

What is true, normalization look like in the, in the jobs economy.

We’re having this conversation earlier, 4.1% sure, the, the highest that we’ve seen in about two years or so.

But again, as we were hearing from some of the economists earlier on during the hours that Yahoo finance has been live this morning, that’s just getting us back to normal.

So historically, this is a, you know, very resilient, robust labor market.

We’ve seen job gains of about 100 and 77,000 on average the past three months.

It’s actually above what we saw in 2019 when uh we, we had job growth of 100 and 64,000 a month.

The issue now though is that the labor market is slackening.

So in 2019, we saw these kinds of job gains but unemployment was falling because participation wasn’t rising as quickly.

We actually need to add more jobs.

Now, given that the labor market is growing by more than 200,000 people a month or else we will continue to see unemployment tick upwards and that is not good for job seekers and workers.

I think it’s a reason we’ve seen the jobseeker confidence index this month fall to the lowest level.

Uh, since we began measuring it, what should people who are beginning their job searches or perhaps job hopping, job switching expect of the wage front.

So wage growth is cooling, but inflation has cooled faster.

And so workers are actually getting real wage increases again after a 25 month stretch in which their wages were losing value in real terms after inflation.

Uh So the the wage picture I think is quite rosy and encouraging and it’s not necessarily the case that this wage growth will be inflationary uh because productivity growth has been pretty strong.

So hopefully these wage gains are sustainable.

Certainly, you, you know, as you’re kind of looking across the number of companies that are listing or are actively looking for people to come and help them with their perhaps generative A I projects or maybe just to be a police officer, you know, with all of the recruitment that you are seeing and, and tracking across where are companies perhaps coming off of the hiring freeze bench and saying, ok, now we feel comfortable bringing people back into our head count.

So there are several places where we saw overall employment levels actually fall at around 2022 but they’re, they’re, they’re gradually rising.

Now one area is in home building.

Uh that was an area that took a hard knock when the FED rose uh raised interest rates.

But now it’s actually at an, at a high, a post great recession high.

We’re also seeing tech adding jobs very gradually, month of months.

A lot of that is in A I uh but that sector had been pretty stagnant for a while also in response to high interest rates.

You know, just lastly while we have you, uh there’s a lot of implications when we’re getting more economic data trying to spell out a trend of the employment situation of what the fed may do off of all of this data.

What is your best anticipation of what we could see in the back half of this year from the Federal Reserve?

Well, I think at this next meeting, the fed is going to be very seriously debating when to start cutting rates.

And I think there’ll be a large contingent pushing for a September cut.

It’s quite possible that we’ll see a September cut and another one in December in December.

If inflation data keeps heading in this direction, Julia Pollock, who is the zip recruiter, chief economist Julia.

Great to see you.

And thanks again for joining us.

Thanks Brad in the market for a new home.

We break down what you need to know before you take on those open houses this weekend.

That’s right after the break.

Stick with us, buying a home just became a little bit more expensive mortgage rates hitting their first weekly increase since May this week to break down what you need to know if you’re in the market for a new home.

Jessica Lutz, who is the National Association of Realtors, Deputy chief economist and vice president of research joins us now, Jessica.

Great to have you here on the show with us.

Ok.

So where are we seeing perhaps some continued movement in the housing market?

Especially knowing that a lot of consumers are hearing headlines like housing prices at all time, highs and trying to figure out where their best entry point is.

Yeah, so it’s really difficult for consumers today and really discouraging actually as we hit the summer months knowing that interest rates are actually back on the climb.

Now, we don’t know if that’s sustained or if we’re going to see interest rates really in this range for a substantial period of time.

And I, I think this is probably where we’re going to be uh when we think about a home buyer today looking at affordable price points.

This is where they’re having a very difficult time finding housing inventory that has been very tight at very expensive uh price points.

We are seeing that more buyers are in that market uh because they can afford that.

Uh And we also know that people have a lot of housing equity so they’re able to make these expensive trades certainly.

And, and as we’re thinking about how that’s playing into the calculus of buying a new home versus buying an existing home.

Where are you seeing that trade off kind of net out among those prospective buyers?

So when we think about uh the new home market, we know that it had been historically a smaller portion of what it is today.

That being said, we know that right now, uh we need more home building than we currently have.

Housing starts actually have been pretty flat if we think about the last couple of months of data.

So this is not encouraging when we think about the need for more housing starts to come into the market for new housing inventory.

If you think about an existing unit, there’s many people who are locked into these lower interest rates if they financed or refinance their home at 3.5% versus uh about nearly 7%.

Today, we’re talking about a very substantial change in that mortgage payment that they may not be willing to do or cannot pay for that change above $700 a month.

Really?

Do you see affordability getting any better as the fed begins to cut interest rates anticipated in the second half of this year?

Well, it’s all part of the equation.

Certainly mortgage rates.

If we see them coming down even a little bit could be encouraging news for home buyers.

But we also know that home prices are continuing to go up.

In fact, if we see mortgage rates come down.

We could actually see more bidding wars in the housing market today with this really limited housing inventory and that that’s just part of the equation that perhaps some people may not feel encouraged to jump into right now.

If we look at the housing market today, even with interest rates higher, we know that 30% of homes are moving over the asking price.

So if interest rates are cut and then that impacts mortgage rates as well, potentially more bidders hopping in.

And then with that bidding war, you could see the price having even more of a premium on top of it.

I mean, then at what point would we finally see, you know, enough of the property that is sold through and uh for those who may say?

All right, well, I’ll just build a new home if they have that luxury or are able to do so.

At, at what point would you see the the settling of some of that activity and perhaps retrenching to more normalization?

I would say we need to have several years of home building activity that’s quite strong to bring in some equilibrium to the market because the big thing that we have right now is a huge wave of young adults coming into the housing market trying to find their first property at the exact same time that baby boomers are hitting retirement actively in retirement, looking for that perfect home.

As Well, it’s putting a lot of pressure on the housing market right now for limited inventory at the same time that current homeowners are unwilling or unable to be able to move.

All right, I want to end this conversation with some actionable tips for those who are excited.

They’re revved up, they’re going out to some open houses this weekend.

What do they need to be keeping in mind, Jessica?

Well, stay in close touch with your experts.

You wanna make sure that you have your realtor on your side, but you also want to make sure that you’re keeping in close touch with your mortgage broker to make sure that you can afford the homes that you’re looking for.

All right, Jessica Laut, who is the National Association of Realtors, Deputy chief economist and vice president of research.

Good to have you on the program here with us today, Jessica.

Thank you rebalancing your investments for the second half of the year.

We speak to a portfolio manager on how you can set yourself up for success.

That’s right after the break.

If you’re in the market for a new car, getting the right auto loan is important for keeping your budget intact here with some auto loan tips is Yahoo, finance contributor and host of financial freestyle on Yahoo Finance, Ross, Mac.

Hey, Ross, how you doing, brother?

I’m good.

I’m good.

Ok, so what do people need to be keeping in mind as they’re trying to make sure that affordability is being prioritized, but also protection and coverage when they’re making that auto purchase first things first, you gotta know your budget when you’re in the market for a car.

Right.

I think when we start thinking about what we’re spending our money on quite often we’re overspending, especially when it comes to a car.

A good rule of thumb.

Try not to spend more than 10% of your monthly, take home income, right?

And so just to give you an idea, the average car note payment for this year 2024 it for a new car is roughly $723 meaning that a person should be making $7000 take home income, right?

And so obviously that’s not the average.

So as you can see, quite often, a person probably will be overspending when it comes to a car unless they’re willing to live within their means.

Another thing to think about is you have to prioritize your credit score because that could be the difference in paying, you know, thousands of dollars just based on purely the interest rate that you’re gonna get.

Right?

And I think another thing as you’re thinking about your credit score, you wanna say, what could I be?

What could I be doing now?

Leading up until that time I purchased my car, meaning you don’t wanna make any new big purchases.

A K A applying for any new credit.

You don’t wanna be closing down any other credit cards or any credit that you have because that’s gonna just overall make your length of credit history, uh, lower.

Uh, and another thing to think about is just understanding overall what your affordability you need to go into the market saying, hey, you know, there are other costs associated with that car, not just the car note, you got insurance, you get maintenance, you get obviously the interest rate and, and a few other things.

Gas, right?

And so if someone has a dotted their dotted their, I’s cross their t everything secure themselves alone, it’s now the time to head to the dealership.

What are some tips that people should follow to make sure that they stay within their budget when they’re making that purchase?

I love that.

I think first things first go online and get pre approved, going into the dealership.

I love the, the concept of going in there saying, hey, I’ve been pre approved for $60,000 or for whatever the number is.

Right?

And then that gives you the ability to still stay within that range and not, you know, be tempted with a few other things.

Right.

Uh, because when you go in there, you gotta understand that dealer financing often is more expensive.

Right?

I think, you know, the, the car sales might make more money if you’re using dealer financing as opposed to saying, oh, I’m pre-approved.

Here’s my paperwork.

I’m ready to go.

And so that’s something to think about.

Another thing to think about is, you know, understand those add ons, right?

That, that car sales and say, do you want this extended warranty or do you want this or do you want that?

It sounds good, but just understand how quickly you can have, you could go from $50,000 car to $65,000 with a few add ons.

So those are the things that I would recommend.

Right?

Do I need the sport package?

Do I need it?

Is it gonna get me to work faster?

This is just a A to B car.

Ross.

Thanks so much for taking the time.

Great to see you and make sure to check out financial freestyle on Yahoo Finance Mondays 12 p.m. Eastern with the man himself.

Ross.

Mac.

Well, markets, we’ve been tracking them this morning after both the S and P 500 the NASDAQ hit fresh intraday record highs.

We kick off the second half of the year this week and you might wanna rebalance your portfolio to stay on track to discuss.

We’ve got Keith Buchanan Global Investments, senior portfolio manager here with us, Keith.

Great to see you.

All right.

So let’s dive into this the second half playbook.

What does that look like?

Where are there hot areas that investors should maybe be kicking the tires?

Thank you very much for having me.

We uh we the second half of 2024 with, with a nuanced uh cautious approach, um typically coming into a second half of the first half we had with so much of the market cap and, and returns being garnered by just a few stocks.

We’re looking elsewhere in the market.

Uh We feel like those stocks have come in a lot of tension in the market cap.

And honestly, uh the growth that they’ve displayed has been remarkable.

Um But we wanna make sure that there are other spots in the market place uh particularly in, in consumer land, uh and industrials and financials that perhaps might offer opportunities in the second half of the year as those few stocks that have have um again, got a lot of attention from the marketplace has to really grow into those expectations in a way that Keith uh I think we’re having an issue with your audio.

We’re gonna try and get that resolved here very quickly taking a look at the markets as we were just discussing with Keith Buchanan.

The dow right now is lower the loan laggard if you will.

It’s down by about uh 3/100 of a percent, the S and P 500 in positive territory, the NASDAQ composite in positive territory.

We’re gonna go to a quick break.

That was Keith Buchanan Global Investments, Senior Portfolio manager, gonna try and square away that audio for you.

We’ll be right back.

Middle income families continue to remain anxious about the state of the economy with two thirds of families reporting their income falling behind the cost of living though, on the upward swing from this time last year, this is all according to the newest survey from America.

For more.

Let’s bring in Glenn Williams, the CEO of Prime Glenn.

Great to see you and thanks for hopping on the show with us.

All right.

So what are we seeing?

What’s the feel the vibe across middle income families from the data that you’re seeing in America?

Well, Brad, it’s great to be with you.

And as you saw from the headline stat, uh you know, two thirds still feel they’re falling behind.

So I would say middle income families still feel like they’re in retreat financially.

Uh We also detect a high level of stress financially from these families.

And of course, we all know stress is not good for our physical health nor for our relationships.

But within the numbers, we saw that three quarters are cutting back and of course, that is actually good.

That’s what people should be doing is reprioritizing.

The challenge is that half are reducing savings or stopping savings entirely and 30% can uh report continued increase credit card usage.

So what’s happening is they’re shifting priorities.

That’s good when they stop savings but uh or stop spending, but reducing savings and using more credit is not a good trend.

And so those difficult decisions, where are you seeing perhaps the trade off more largely among households.

Well, it’s, it’s an item by item process.

When we sit down with families, it’s always about prioritizing or reprioritizing.

And so we sit down with families and explain to them that as much as they love those streaming services or the newest model cell phone uh that is preventing them from achieving their more important financial priorities.

And the challenge is, is that time is an ally when you’re investing, but it’s an enemy when you’re borrowing.

And so shifting from saving and investing to borrowing is, is is a double negative.

And so that’s what we try to demonstrate that to families and then help them through the process of making those tough decisions on what’s truly important to them and then taking action on this.

Ok.

So with this in mind, I was looking through some of the findings from your middle income financial security monitor here and the majority grasp financial basics but not complexities here.

Can you break that down a little bit further for us?

Uh And, and where there is understanding about perhaps some of the levers that can be pulled at a household level, but the execution and and the complexities are are still perhaps uh daunting at this juncture.

Sure.

Well, as as humans, we tend to think we, we have a general understanding of things but maybe we don’t know the specific process needed uh to really make an impact.

So as we sit down with families.

Clearly, they know they need to be saving for the future, particularly for retirement.

They need to make sure debt doesn’t get out of control.

But we see them in action, we sit down with them and first analyze where they are today and that’s where it exposes that.

What sometimes they think is happening.

It is not exactly what’s happening.

They’re spending more than they think they’re using credit more.

They’re saving less or the amount that they’re saving is not gonna get them where they want to go in time.

And so that’s where the decision starts and, and then we help them with the uh step by step process.

I mean, the first thing is you’ve got to start some savings, even if it’s small, you’ve got to start to reduce your debt.

Uh Even if that’s a small process, you got to protect your family with term life insurance.

So there’s a basic steps and then as families get started, they get a little momentum and then they find out it’s easier to take the next step and the next step, we find out Brad, it’s not usually the information, it’s the personal application of the information to their specific circumstances that confuse families and then it’s the motivation to act and continue to act that families need.

That’s a great point, Glenn, you know, just lastly while we have you here, I was looking through some of the drivers and the lack of financial planning and anxiety and limited time were two of the top that came up in this report from Prime America.

You know, as you’re thinking about the small decisions that add up to big solutions or perhaps big savings or smart spending habits.

What are the tips that households can employ right now this weekend?

Even as they’re starting to think about getting into a better financial standing.

Well, I think you hit the nail on the head brad.

It’s sometimes it’s sitting down with families and just demonstrating that they can do something.

It’s not hopeless.

It’s not impossible.

And when we sit down with families, they’ve got to take a look at as we saw in the survey.

It’s things like going out that are optional if you can eat in more often, save a few dollars, use those to, to invest or pay down debt.

Look at your streaming services.

That’s an area that there’s a lot of, of expense that sometimes families don’t even realize they have or they’re not using any longer.

Uh take a look at, at, at your electronic devices.

The expenses there.

So many of these things a generation ago didn’t even exist.

You know, my generation didn’t have to deal with these uh coming through that phase of life.

But now there are things that are optional that people have assumed are mandatory and they need go back and say that’s not as important as the greater priorities in my life.

That’s financial security for my family.

All right, I gotta finish watching a few Netflix series and, and trigger warning was on my watch list uh as well, the movie on Netflix before I cancel those streaming services here, Glenn.

But then I’ll take some of that advice you just gave.

Thanks so much and then pull the plug, Glenn Williams Prime ceo.

Great to see you.

Great to be with you.

Thanks.

Well, markets mixed here today.

After both the S and P 500 the NASDAQ hit fresh intraday record highs, we kick off the second half of the year that happened this week and you might wanna rebalance your portfolio to stay on track to discuss.

Let’s bring in Keith Buchanan Global Investments, senior portfolio manager here with us.

All right.

So let’s talk about this second half playbook here, Keith, where are you seeing some rotation take place and where are perhaps are investors leaning further in to their portfolio trade?

Thank you very much for having me.

We’re looking at the second half of this year as a um an opportunity again, as you mentioned to, to, to rebalance a bit.

We’ve been really concentrating on large cap growth.

We’ve uh been in a position now, class has benefited uh from that positioning.

But now we’re looking to become a little more balanced as uh it’s coming into this earnings season, which we think is critically important.

Every earnings season is important but this one is critically important to this bull market.

We um because of the, the 10 largest names, sp 500 generate very large disproportionate amount of the growth as well.

Um So as those names have performed and have grown into those M forms, we feel like that’s gonna become more and more challenging into the second half of this year into 2025.

Uh So this earnings season is really gonna be a barometer of where those 10, 7 to 10 names or so, uh will contribute to, to guidance and S and P 500 earnings in 2024 and 2025.

Um that a bank get a lot of growth and a lot of that come from those, those top largest names in the SP 500 Keith.

It’s been a uh a hot NVIDIA year could be a hot NVIDIA summer.

Who knows?

I mean, as we’re thinking about some of the specific overcrowded trades that investors have piled in to, were you anticipating that we could see a shift at least in the mindset of where some investors who might have been talking about their own portfolio and trading strategy.

A a at the barbecue over the past couple of days are trying to figure out.

Ok, I’ve seen insiders taking some profits.

Should I be taking profits too?

How can investors know when it is the right time to take profits and reallocate them?

Um We’ve seen you know, large cap growth technology, um artificial intelligence oriented names, um just really become uh make the market really top heavy.

Um And, and we’re looking at spaces outside of that, uh We again, we’ve been positioned for that for some time now.

Um But they’re looking at spaces like um the, the consumer, which is really driving, you know, this market really kept us out of recession for the last four years of, um you know, uh turbulent market environment.

Um The middle to high end consumer is doing a little better than uh those on the ends.

Um We feel like Costco actually is a name that benefits from that um that shift in, in, in spending that remain more steady with the high and middle income earners as well.

But we feel like the steeping of yield curve is will make those names pop up that over the last couple of weeks.

Um Of course, we’re coming into, you know, when those names, the money center banks start to report um and we’re positioned um to benefit from some of that as well.

So we look, we’re looking at financials, some names and, and consumer driven names, uh a couple of industrials as well that might be oriented as, as value stocks.

Um But we feel like our position to take it the mantle of the bull market um A as the top 10 names, uh the f of the magnificent seven, if you will um coming to some earnings stresses that might hamper those performances from those names going forward in the second half of this year.

Keith, what do you believe the prevailing theme for the earnings season that we’re about to go into could be this is growth real, the bottom up expectation is for 9% growth in 2024.

A large portion of that, the majority of that is coming in the second half of this year.

Um without the top 10 sp 500 names, that growth expects it to be about 6%.

So almost a little over a third of that is coming from just a few names.

Um There will be a lot of attention on the apples and NVIDIA and, and Microsoft.

So the world and rightfully so because as if that earnings growth is five instead of nine, the multiple of the market completely changes.

Um So there’s a lot of riding on this earnings season in particular for those few names.

Um As the SV 500 again, has been priced for tremendous growth frankly over the last second half of this year and next year, uh whether we can fulfill that expectation as yet to be seen to what extent?

Just lastly while we have you Keith to what extent is the general election here in the USA Wrench in portfolios coming into uh what is expected to be another vitriolic type of event here in the US.

Um The politics have, has been uh in a, in a woven in market dynamics for some time.

Now, uh we think this year is gonna be one of those banner years where politics dictates the, the, the movements and fixed income and equity markets, particularly here in the US also from a currency standpoint.

Uh We’ve seen that change since the debate on, on, on Thursday in a pretty dramatic way.

It shifted very hard um uh in a, in a kind of a pro Trump manner on Friday and then some on Monday.

Um, but that so much shifted back.

Um, and, and this week that is really like holiday week, so it’s really hard to have any main takeaways.

Um, but as this second half wears on, we will see that become more and more, uh, a focus of, of the marketplace and, and those bas best that have taken place and be in place, um, depending on the polls will come.

Um, you know, come to a head in November.

Um, I think down ballot as well.

We see some, some shifts as far as where spending could be and what if, um, you know, what parts of the market can benefit from that.

Um, also being an opportunity and pote potentially even a challenge for some parts of the, uh, equity market those best.

Again, it’s, it’s fairly early to, to place the and really have hard takeaways from from where we are right now politically.

Um, we kinda shy away from that until things come into more focus later in the fall.

Uh We think the earnings driver really was pushing markets um back and forth, especially from a monetary policy standpoint as well.

Um We saw the jobs report this morning and how that plays into what the Federal Reserve’s reaction function may be and what, how that might change coming into the fall.

Um That’s a, that’s, we feel like some more predominant uh dictator of the direction of the markets at this point.

Certainly Keith Buchanan Global Investment senior portfolio manager.

Great to see you Keith and thanks so much for joining us today.

Thank you up next, an encore showing of lead this way with the co founder and CEO of Arms Song.

When your sister run new old company hits grocery shelves nationwide when I was a kid and I was like, always trying to like hide my lunch or, you know, I just didn’t want people to come over when my mom was making something particularly aromatic.

Fast forward to today where I get a chance to, you know, proudly put this in front of the the country.

The types of aromatic dishes.

Vanessa Pham once tried to hide from the world are now on full display in vibrant packaging on the shelves of major retailers.

The brand’s colorful journey is also on full display across the internet.

Thanks to fans now tell the world attitude.

Every time I go into the grocery store.

I always gotta take the phone out and do like the selfie video.

It always feels surreal.

Um Some is a sauce and noodles.

Start up partnering with prominent Asian chefs to offer premium authentic flavors.

This isn’t your usual microwavable instant noodles.

You might think of a huge step.

Vanessa and her sister Kim say is part of their personal mission to shake up ethnic ales at grocery stores and bring these dishes to the mainstream.

But the recipe to get here.

Well, it wasn’t a simple one.

A global pandemic Silicon Valley Banks collapse.

And the challenges any 24 year old would face leading a brand new start up all stood in the way of her vision and mission of spreading her values and culture through the love of food.

Tell us what Ansah means.

I mean that in itself just symbolizes so much of the mission.

A song is actually based on a Vietnamese word.

Um And in Vietnamese, it means rowdy, rambunctious, riotous.

It’s actually a negative term.

It’s what our parents would use when they were trying to scold us.

And Kim and I were really inspired by that energy.

What if we kind of turn that on its head and celebrate that aspect of who we are?

Um And a song is all about being proud and loud, especially when the stereotypes of Asian Americans in America is kind of like submissive or docile ansam is, is our true kind of energy and ethos and spirit while hiking in Bolivia in 2018, with her more free spirited sister.

The once risk averse fan decided to lean into what she felt was her true ethos and leave her steady consulting career behind.

We instantly circled around the mission and the industry and the mission is to educate on multitudes within Asian America um honor and celebrate Asian cuisines and flavors and the industry just had to be food.

Because for us, it was a love language.

It was how we first like really learned to engage with our culture as Vietnamese Americans and daughters of refugees with nothing more than what the two sisters had in the bank.

They set out on their mission to create something unique.

Embracing their roots was a catalyst to create Sam as they saw an opportunity to tap into the ethnic food market, which is set to reach $84.7 billion by 2034.

And investors saw the opportunity too as a number of them including the co founder of the luggage company, Away Jen Rubio, founder of the online wedding platform, Zola Shanon Ma, and former Whole Foods executive turned VC founder, Ellie Trusdell of New Fair Partners helped fund the Fam sisters vision for fam embracing her personality.

Well, that, that was how she learned to lead the brand.

Do you see yourself as more of a risk forward uh leader?

Now, do you feel like you’re tapping in to that mission.

I would say that the person who I was when we were first building arms song is very different than the person I am today.

I think my proud and loud has actually been embracing who I am, which is very sensitive, very empathetic, lots of feelings um And learning to see that that’s a huge strength as a leader.

If I don’t make myself wrong for that or suppress that.

You also founded the company at such a young age.

I think you were what?

24?

I was 24 a baby.

How did you push through that noise and say I may be young, but I’m making a difference.

I would say the loudest noise was actually my own self doubt at the time.

And so, so much of this journey has been actually working with my kind of inner narratives and dialogue.

And now I think I’m kind of my own hype woman.

So a hype woman with a core team who have helped her create not just food products but an environment fueled by the brand’s identity and F’s own energetic outlook, something she has embedded in the culture.

Everybody here is incredibly talented, incredibly driven and I think enlivened by the mission of Arms Song.

And I absolutely lean on the team.

I think, you know, a strong leader, abs must and should trust and empower those that work with them.

I learn from the team every single day.

Mm Sam’s journey in starting Sam has definitely been a learning experience as they sought out the right manufacturing partner which they found in Chicago back in Brooklyn.

Another huge lesson came their way how to launch a specialty food business in the middle of a global pandemic.

When we started out building ENS, we were just wide eyed, we didn’t know what could come.

And before we even launched the first big challenge game, do we launch in the midst of this pandemic at the start of it or do we pause and wait it out?

And what we realize is that folks during this time are gonna be at home, they’re gonna be wanting to feel a sense of connection and home and we felt like that’s what arms song is all about.

And I think we did make the right decision despite some folks warning us uh that it could be uh a difficult time.

Who were those folks, those investors, those people who backed you?

How did you push over that?

One of my philosophies as, as a leader is, you know, you’ve got this whole kind of network of folks, whether they’re investors or, you know, other folks.

And I believe it’s so important to, you know, take in their input, their advice and their experience like a sponge.

But at the end of the day, coming together with, you know, your, your team, centering your values and finding the best path forward for the company is really you know, that power is yours.

We decided this was the time that we wanted to bring this company to the world.

Just three years after launching during COVID fan faced another major obstacle.

Regulators shut down Silicon Valley Bank.

The FDIC has taken control of the bank deposits.

So what’s the fallout, the ripple effects leaving the start up without access to their capital right before the brand was scheduled to launch their second product line.

Saucy Noodles.

Nothing can really prepare you for that type of, you know, uncertainty.

I immediately had to figure out what our options were.

And at the same time, Kim and I started working together on how we wanted to communicate what was going on to our community.

We wanted to center our values around transparency um and around bringing them in.

Fam and her sister were transparent with their community in a way that you might expect from the young founders on social media.

We did not know what would happen in the coming days.

And so we put our heads together that Saturday morning and wrote something from the heart running a proud and loud business doesn’t always mean being celebratory.

So let’s talk about how SV B’s collapse poses a major existential threat to many small businesses, including a song, I think while we were still very scared and nervous, we felt deeply heartened by the people that showed up for us.

Talk about what values you hold closest to you as a leader, one of the values that I’ve really centered in my journey as a leader is being heart forward, which is something that I don’t think was necessarily historically celebrated in leadership.

You know, it was about being, you know, decisive, being kind of just like leading with certainty and confidence sometimes at the expense of your humanity.

And I, I feel like at the early stages of my journey, I tried that on and I was always making mistakes when I was in that, you know, headspace and being something that I wasn’t.

And so the last couple of years, I’ve started to accept more of who I am in my leadership.

If I’m, you know, working on something in my own journey, I, I’m open to sharing that and I hope that that kind of invites people to feel confident and accepted in who they are at arms.

So too, when your team thinks of you as a leader, what do you hope is the message that you’re getting across?

I really hope that every, everybody at Aal feels valued for who they are and what they bring to the table and that they feel they have room to learn to sometimes make mistakes.

It’s about celebrating your truth and exactly what makes you, you, I want to be the type of place where people are learning and expanding, but also feeling great pride in their kind of natural strengths fam and or team are determined to fill a white space, think cava and how it’s setting out to fill the white space, fast casual Mediterranean food or what Chipotle has done for fast casual Mexican cuisine.

And now am Sam aims to fill the void for premium authentic Asian flavors in the packaged food market.

That market is expected to grow around 50% globally by 2030.

And while Ansam doesn’t disclose its finances publicly, the suggested retail price for its saucy noodles and its cooking sauces range from 4 to $5.

Since launch, the brand has sold 4 million products and expanded its presence over 2000 stores without losing sight of its roots.

Fam isn’t satisfied yet though far from it, she wants in her own words, proud and loud Asian flavors to be mainstream.

I want to see a song become a cultural force.

A household name that continues to honor Asian American communities and flavors and culture every single day.

I want us to be in homes across the country but still hold that ethos and that heart that we do today, an ethos and heart that Fam and our sister inherited from their parents who as refugees weren’t able to take the same kinds of risks.

Your parents must be so proud of you.

What do you think?

They think about all that you have done?

They tell us all the time which I really appreciate.

They tell us that we are honoring our family history by the work that we do and because they’re refugees and they’ve, you know, built the life we have today.

I, it is my, you know, biggest life stream to honor them and do right by them.

If there is one moment that really felt like, wow, I made it.

We did it.

What would that moment be?

It’s when we’ve shown the people who helped to get us here, what we’ve done.

And so it’s really my grandparents, we were featured in a spread in Vietnam and it’s written in Vietnamese.

So I cannot wait to bring it to them because they can read it and really understand that.

And that will be the moment.

I think when it really hits me, you know what we’ve accomplished, we’ve all heard Americans are struggling to save for retirement, but are they the average retirement account balance increased by 19% last year?

That’s compared to 2022 and more than four in 10 people raised the amount of money they set aside into their 401k accounts according to a Vanguard report to discuss the study.

Yahoo Finance’s very own carry.

Hannon is here.

Hey, Carrie.

Hey Brad, great to be here.

Yeah, I mean, we all hear so much doom and gloom about people not saving enough for retirement or being woefully behind that.

This just was very encouraging to see uh Vanguard take a look back at 2023 and they saw some really positive optimistic trends.

People were saving more and people were contributing more to their accounts.

And so, you know, let’s break down what this happened.

Uh What, what sort of is behind all of this and the biggest trend is auto enroll in auto escalation.

And what that means is employers automatically put people into their, their um employer provided retirement account, their 401k and then they raise it up each year.

So it kind of gets away from that inertia of people not making that decision to get rolling and to increase the amount, this has done a huge amount in pushing people to save more.

And I think it’s a really great trend, employers have also doubled the amount uh that they contribute as a match uh to 4% or more.

It used a decade ago.

It was about half of that.

So that’s fantastic.

Um news as well.

And the second thing that’s behind it, Brad in many ways is target funds.

I mean, target funds have become, you know, they absolutely rule the day now and most people are in these target funds which as, as the listeners know and the viewers know it’s set and forget, right?

You, you make your investment and then as the markets go up and down and as you age, they gradually reduce your risk.

Say you say you’re going to retire in 2035.

Then as you get towards that date, it goes from equities down to more fixed income and it really helps people not trade as much, which is quite good for these accounts because there’s not a lot of shaking up.

And for younger workers, vanguard um, has found that it’s super helpful because they used to be not um invested enough in equities.

And so as a result, they lost out on growth and this helps them get in at a better, a better sort of composition of their retirement account for their future.

So that’s great news.

They um another study I looked at transamerica showed that, you know, younger workers are actually starting to save for retirement at age 20.

Gen Z and that compares to 25 for millennials.

And you know, uh gen X started at 30 or so.

So we’re seeing a movement to start saving earlier, which I absolutely love.

Um Now, before I get too crazy, I gotta say there was one sort of caveat to the, the vanguard report I need to mention is that more people than ever uh rated their retirement account.

So this is a small percentage, but I’ve got to tell you it’s worth looking at and a concern and they did it mostly probably prompted by inflation for medical bills and housing expenses.

But as we know, if you do that, if you buy, if you withdraw from your retirement account for these things, and there are some exceptions to this rule.

But, but you generally are if you’re not 59.5, you’re gonna pay a 10% penalty and you’re gonna pay tax and that money is gone.

So those are just a couple of things that, that, that kind of percolated out of that.

And my final point is that even though I’m so excited to see these positive numbers for once, the fact is half of Americans still do not, uh who work in the private sector do not have access to an employer provided retirement plan.

And what that means is they really do have to voluntarily, you know, jump in and get going Carrie Han and a lot of gems from that study.

Appreciate you breaking it down for us.

Thanks so much, Kerry.

Thanks Brad.

Certainly, everyone.

That’s it for wealth.

I’m Brad Smith.

Thank you for watching.

Stay tuned here on Yahoo.

Finance for market domination with Jared Bry and Josh Lipton that comes up at 3 p.m. Eastern.

You don’t want to miss it.