1 00:00:00.000 --> 00:00:02.040 Sean Murray: If I was a lender right now, if it was me. Yeah, 2 00:00:02.100 --> 00:00:04.170 it was me like, Sean what would you do? If it was you knew you 3 00:00:04.170 --> 00:00:06.450 were running a lending company a funding company? Yeah, I would 4 00:00:06.450 --> 00:00:11.700 be jacking my rates up. Like, how much higher? More than 7% 14 5 00:00:11.700 --> 00:00:14.790 15%? I don't know if it has to be that high. Right. But I would 6 00:00:14.820 --> 00:00:17.730 I would be jacking them up, I would be looking at 7% be like 7 00:00:17.730 --> 00:00:21.750 holy holy cow, right? I would, I would, I would build in maybe, 8 00:00:21.810 --> 00:00:25.440 you know, one 2% per year in a possible on like, an average 9 00:00:25.440 --> 00:00:28.620 year. But you tell me it's 12%. And on the increase, I say, um, 10 00:00:28.680 --> 00:00:31.890 I would be jacking up my rates. Yeah, that would be my, but then 11 00:00:31.890 --> 00:00:33.810 they're like, Oh, well, how do you compete when other people 12 00:00:33.810 --> 00:00:36.870 aren't doing that? Yeah, I would think that they would have to 13 00:00:36.870 --> 00:00:38.640 eventually, yeah, you can't. 14 00:00:38.850 --> 00:00:41.700 Johny Fernandez: So the game is not waiting for other people to 15 00:00:41.700 --> 00:00:44.850 jack up their prices and kind of follow the game right now, the 16 00:00:44.850 --> 00:00:48.240 plan of action should be for you to kind of take care of 17 00:00:48.240 --> 00:00:50.610 yourself, jack up the rates. And it doesn't matter what everyone 18 00:00:50.610 --> 00:00:51.480 else around you is doing? 19 00:00:51.510 --> 00:00:53.580 Sean Murray: Well, you have to still stay competitive. No one 20 00:00:53.580 --> 00:00:55.770 else is raising the rates and you are then you get no business 21 00:00:55.770 --> 00:00:58.980 doesn't matter that you raised your rates, right. So I think, 22 00:00:59.100 --> 00:01:01.410 you know, it's that weird balance, you just have to wonder 23 00:01:01.530 --> 00:01:06.180 how can Why are there lenders out there who can lend below the 24 00:01:06.180 --> 00:01:09.750 rate of inflation, because their purchasing power, at the end of 25 00:01:09.750 --> 00:01:14.910 the day is going down unless lending is essentially an 26 00:01:14.910 --> 00:01:18.960 onboarding product for their other products, or like a loss 27 00:01:18.960 --> 00:01:21.630 leader where we lend to these customers, but then we sell them 28 00:01:21.660 --> 00:01:24.750 all this other stuff. And so we still lend at these really low 29 00:01:24.750 --> 00:01:27.810 interest rates, because we're selling them, you know, a tool, 30 00:01:27.810 --> 00:01:31.380 a monthly fee, we're giving them a wealth management thing, or 31 00:01:31.380 --> 00:01:34.290 whatever. And we're selling them insurance. And so we don't, you 32 00:01:34.290 --> 00:01:37.950 know, the fact that our lending rates are so low, and it's below 33 00:01:37.950 --> 00:01:39.780 inflation doesn't matter, because it's just an onboarding 34 00:01:39.780 --> 00:01:42.030 tool. But if you're just a pure lender lending below the rate of 35 00:01:42.030 --> 00:01:45.600 inflation, that makes no sense to me. If I was in the market, 36 00:01:45.600 --> 00:01:48.570 competing against other lenders, I would be I would increase my 37 00:01:48.570 --> 00:01:52.080 rates no matter what, first of all, because I would have to be 38 00:01:52.080 --> 00:01:55.560 I would have to I would have to make sure that I wasn't, I 39 00:01:55.560 --> 00:01:59.280 wasn't hurting myself, but I'd have to still think about 40 00:01:59.280 --> 00:02:01.770 remaining competitive against all the other companies who are 41 00:02:01.770 --> 00:02:06.720 not aware of the implications of inflation. I think you read it, 42 00:02:06.720 --> 00:02:09.630 and you're like, oh, it's bad for the economy. Yeah. Oh, Main 43 00:02:09.630 --> 00:02:12.660 Street is suffering. You know what I mean? I'm going to, I'm 44 00:02:12.660 --> 00:02:14.910 going to save Main Street because I'm a lender or funder. 45 00:02:14.940 --> 00:02:16.860 You know, they're hurting because of inflation. Like, hey, 46 00:02:16.860 --> 00:02:19.800 you're a lender, you're the one being affected by inflation. 47 00:02:19.830 --> 00:02:21.780 What are you doing about it? Yeah, you know what I mean? 48 00:02:21.810 --> 00:02:24.090 Yeah, that's what you got to be thinking about out there. If 49 00:02:24.090 --> 00:02:26.250 you're a lender of funder, how is inflation affecting my 50 00:02:26.250 --> 00:02:28.950 business? It's probably going to hurt you. Well, I know it's 51 00:02:28.950 --> 00:02:29.400 hurting you. 52 00:02:29.490 --> 00:02:33.120 Johny Fernandez: Yeah. No, that's good to know. Great 53 00:02:33.120 --> 00:02:37.770 conversation. I just like how you get so excited about it. So 54 00:02:37.770 --> 00:02:40.410 yeah, some real thoughts about it. Well, cause I know for a 55 00:02:40.410 --> 00:02:42.630 fact because because I've seen this firsthand. You definitely 56 00:02:42.630 --> 00:02:46.290 get excited about topics like inflation. And I remember when 57 00:02:46.290 --> 00:02:50.160 we were talking like this I love this it's like a kid in a candy 58 00:02:50.160 --> 00:02:50.280 store. 59 00:02:50.280 --> 00:02:52.650 Sean Murray: So we have Jack Dorsey who was formerly the CEO 60 00:02:52.650 --> 00:02:55.440 of Twitter and still the CEO of Square who said a few months ago 61 00:02:55.440 --> 00:02:57.540 that there's going to be hyperinflation, now he stands 62 00:02:57.540 --> 00:03:03.330 alone as far as credible people. Yeah, he's stands alone among 63 00:03:03.330 --> 00:03:06.540 credible people who have predicted hyperinflation, 64 00:03:06.570 --> 00:03:08.610 hyperinflation, we're not talking about seven. This is not 65 00:03:08.610 --> 00:03:12.720 hyperinflation, hyperinflation. Hyperinflation is like 40 50%, 66 00:03:12.750 --> 00:03:17.160 you know, plus, where, you know, $100, today is worth $50.0 two 67 00:03:17.160 --> 00:03:19.920 months from now, or something like that, you know, it's crazy. 68 00:03:20.190 --> 00:03:22.800 But here, he was out there predicting it. And we're not in 69 00:03:22.800 --> 00:03:25.200 the hyper inflationary environment, but we are 70 00:03:25.230 --> 00:03:26.940 definitely in a real inflationary environment. You 71 00:03:26.940 --> 00:03:30.270 said 1982, I wasn't even born. So I haven't had 7% of my whole 72 00:03:30.270 --> 00:03:31.020 entire life. 73 00:03:31.110 --> 00:03:35.040 Johny Fernandez: Well, and I think honestly, like, just put 74 00:03:35.070 --> 00:03:38.970 the putting the industry aside on a day to day basis. You know, 75 00:03:39.000 --> 00:03:43.650 going grocery shopping, going to get gas go like simple things. 76 00:03:43.920 --> 00:03:47.130 And like, because I budget, typically my budget, like this 77 00:03:47.130 --> 00:03:50.370 is how much spend on groceries. I go to the grocery store, and I 78 00:03:50.370 --> 00:03:54.240 like leave shocked out my mind. Because the fact that like, 79 00:03:54.480 --> 00:03:57.930 certain things have gone up, or like the sandwich right down the 80 00:03:57.930 --> 00:04:02.550 street here in Brooklyn. I used to get it for $7 750 When an 81 00:04:02.550 --> 00:04:08.700 extra $10 $10 down Yeah. 82 00:04:11.940 --> 00:04:13.410 Sean Murray: What did he do? He jacked up his price. 83 00:04:13.410 --> 00:04:16.830 Johny Fernandez: He did had to. It hurt my feelings. But this is 84 00:04:16.830 --> 00:04:17.580 what I paid for 85 00:04:17.580 --> 00:04:19.199 Sean Murray: it. This is what happens though. Yeah, price is 86 00:04:19.199 --> 00:04:21.149 gonna have to get jacked up. Yeah. So if you're the person 87 00:04:21.149 --> 00:04:24.419 out there saying, oh, no. oh, how can this affect me? No, it 88 00:04:24.419 --> 00:04:24.899 affects you. 89 00:04:24.930 --> 00:04:26.940 Johny Fernandez: Yeah, it's but it's affecting everyone and 90 00:04:26.940 --> 00:04:30.000 everyone should be very well aware that like what used to 91 00:04:30.000 --> 00:04:32.910 budget last year that you before that, it just isn't enough now. 92 00:04:32.940 --> 00:04:38.220 Yeah. Even like, I love red meat, red meats up by alot $20 A 93 00:04:38.220 --> 00:04:40.620 pound in certain stores here in New York City, which is insane. 94 00:04:41.340 --> 00:04:44.520 Sean Murray: Yeah, I mean, if you if you just follow some of 95 00:04:44.520 --> 00:04:46.770 the conversation among among FinTech companies, they'll tell 96 00:04:46.770 --> 00:04:49.740 you that, essentially, it's been in the money out there. Yeah. 97 00:04:49.800 --> 00:04:54.480 Trying to trying to chase deals. Yeah, so many different Wall 98 00:04:54.480 --> 00:04:56.670 Street firms just want to put out as much money as possible 99 00:04:56.700 --> 00:04:58.950 because there's too much money in the market. That's why we 100 00:04:58.950 --> 00:05:01.980 have inflation. Yeah because there's so much money in the 101 00:05:01.980 --> 00:05:05.160 market, people don't know what to do with it all in order. And 102 00:05:05.160 --> 00:05:07.740 now you have people who want to borrow are like, Oh, I don't 103 00:05:07.740 --> 00:05:10.590 know, it used to be one person want to give me money now 10 do, 104 00:05:10.590 --> 00:05:12.300 they're all desperate to give me all their money because they all 105 00:05:12.300 --> 00:05:15.600 have too much money. So what do I do as the borrower? Now I want 106 00:05:15.600 --> 00:05:17.670 the lowest rate. And all these people were like, well, I can't, 107 00:05:17.850 --> 00:05:20.850 I can't lend at a low rate. I have inflation like, oh, I guess 108 00:05:20.850 --> 00:05:23.790 I'll go with your competitor. Right. And so you end up with 109 00:05:23.790 --> 00:05:26.640 low rate deals, where the only person who wins is the borrow, 110 00:05:26.670 --> 00:05:28.740 you know, when it's a great time to be a borrower, if you can get 111 00:05:28.740 --> 00:05:32.070 a low interest rate. Borrow, if you're buying, like crazy if 112 00:05:32.070 --> 00:05:33.900 you're a if, if you can get a lower rate. 113 00:05:33.930 --> 00:05:37.410 Johny Fernandez: Well, this translates into buying a house, 114 00:05:37.410 --> 00:05:38.160 for example, 115 00:05:38.280 --> 00:05:41.400 Sean Murray: Borrow, yeah, get as many houses as interest rates 116 00:05:41.400 --> 00:05:44.430 are now or to 2.5 Get all the houses you can get. Because 117 00:05:44.430 --> 00:05:46.230 think about it, the value of your house is going to go up 118 00:05:46.230 --> 00:05:49.170 with inflation. Yeah. So your $500,000 house is going to be a 119 00:05:49.170 --> 00:05:52.500 million dollar house. And if you borrowed at, you know 3% and 120 00:05:52.500 --> 00:05:56.250 inflation goes up to 10%. Man, you're you're you're doing 121 00:05:56.280 --> 00:05:59.370 awesome. They value the house just went up so significantly. 122 00:05:59.460 --> 00:06:01.590 And here. You are still paying this, you know rinky dink 3% 123 00:06:01.830 --> 00:06:04.500 rate on your house. Yeah, I buy house doubled. 124 00:06:04.620 --> 00:06:07.830 Johny Fernandez: I learned I refinance. I went down four 125 00:06:07.830 --> 00:06:11.280 points. Really? Yeah, it was why 126 00:06:13.890 --> 00:06:14.910 Sean Murray: The lender that's 127 00:06:15.540 --> 00:06:17.490 Johny Fernandez: Gonna borrow it's a great time. But 128 00:06:17.520 --> 00:06:19.110 Sean Murray: Because they haven't, there's so much money 129 00:06:19.110 --> 00:06:20.760 out. That's why we have inflation. There's infinity 130 00:06:20.760 --> 00:06:23.580 money around, nobody knows what to do with it all. If you're an 131 00:06:23.580 --> 00:06:27.390 average person saying, What do you mean so much money? You 132 00:06:27.390 --> 00:06:30.090 know, how hard it is? For me, I can't pay my bills on noon. You 133 00:06:30.090 --> 00:06:32.820 know, yeah, I just got to tell you at the at the higher levels, 134 00:06:32.850 --> 00:06:35.070 I get, you know, the average people you know, like, like us 135 00:06:35.070 --> 00:06:38.940 and stuff, right? Whatever. So it was, you know, at least for 136 00:06:38.940 --> 00:06:41.100 myself, we're not swimming in we're not swimming in dough, but 137 00:06:41.100 --> 00:06:43.590 when you get higher up the chain, yeah, they have so much 138 00:06:43.590 --> 00:06:47.190 money. They don't know what to do with it. Yeah, it's infinite 139 00:06:47.190 --> 00:06:50.040 and it's everywhere. And we just had all these billion and 140 00:06:50.040 --> 00:06:52.440 trillion dollar packages and is is swimming and people don't 141 00:06:52.440 --> 00:06:54.570 know what to do. And that's why we have inflation, we're gonna 142 00:06:54.570 --> 00:06:57.660 have more inflation. It's great time to be a borrower. You know, 143 00:06:57.750 --> 00:07:00.990 difficult time to be a lender, but you got to you got to react 144 00:07:00.990 --> 00:07:03.420 in such a way so that your company is still profitable. 145 00:07:03.450 --> 00:07:04.320 Yeah, for sure.